An article today in the New York Times talks about the long-term pitfalls in investing in India. They say that there isn't the human capital to feed the IT growth. The schools for engineering and technology are great, but the primary schools are dreadful and 40% of the population drops out in grade school.

Let's talk about this a bit. Behind the numbers is the social system in India, where most people can't afford an education. And that is exactly what would have to change. But what are the obstacles? A social system called the caste system. In it, most people are on the bottom and have no way to rise to a higher class level. Most people are in dreadful poverty.

So for this to change, high caste young people would have to go to school with low caste people in grade school. Then, when they are all competing in later grades, high caste people are going to have to accept that their children lost to some low caste kids. In young adulthood, Indians will have to accept Untouchables as co-workers and supervisors.

Econo-Girl has been to India. She doesn't see this as happening. Econo-Girl worked with an emigre from India once. He told the whole team how he paid the maid back home $2.50 a month. A MONTH! We offered to take up an office collection to give her a raise, but he wouldn't accept it, saying that if you gave them more money they just got spoiled.

Econo-Girl came to believe, after her trip to India, that the social mores surrounding economic activity is as important as the activity itself. In the States, we don't look to your family name before deciding on your promotion (for the most part). You have to deliver the goods. We don't defer to rank or age. And it is that flexibility that makes America great, and keeps it that way.


lewis_medlock said...

..........as much as they hated Great Britain, they seem to have adopted some bad habits from the Brits.
Some say had the British army had a better officer corps, they might have won....and we'd be British yet.
But in order for one to become a regular officer in the King's Army one had to be of the proper family.
So much for competetiveness and esprit de corps. Just show up and you get your (lieutentants) bars.
What a way to run an army.

Econo-Girl said...


Of course you're right. And despite that obvious fact, people will cling to their old systems for dear life. That's why I think India is not going to be an economic powerhouse.

The Lazy Iguana said...

America has a hidden caste system. People born into money never have to do squat - and the money just keeps pouring in. The born rich people never had to work one single day.

The peoblem is that the born rich people aspire to positions of power. So they run for office. Then when they get into office, they claim to "understand" middle class america - which they clearly do not. Yet the idiots think they do.

And your family IS important here. Would George Bush be president today if his last name were "Ishkabibble" or "Smith" or "Jones"? Probably not.

The rich in America have just as much disdain for the middle class as the people at the top of the caste system have for the untouchables.

Need more proof? Go try to join that "exclusive" country club. God forbid a person who makes less than $250,000 a year and does not buy a new car every three years play golf with the important people!

lewis_medlock said...

on the flip side of that , lazy, take mr golf pro and run him down to e.130th street in cleveland, hand him a basketball and tell him to make friends.

stand back and watch what happens.

it works both ways.

working class here (well paid, but still working class) and folks dont like to mess with folks unlike them....
the rich do it with $$$ figures, the poor do it with their hands.

Econo-Girl said...

Yes, the US has a class system, but it is not nearly as rigid as India's. And since 1980, it has gotten worse. Remember the GI Bill? Where every soldier could go to college? That's gone, and so is the opportunity for many to get a higher education.

After WWII, it was necessary to open up the education ranks because educated workers were needed for the new economy. That's no longer the case. So one of the primary avenues to college was closed. After all, does middle class America really want EVERYONE to have access to college? On an equal footing? Then the children of middle class parents would have even more competition for precious college slots. And some of them wouldn't make it. Can't have that.

Anonymous said...

Everyone should have access to college. Well, rather, access to apply to college. Who makes what college should be based strictly on merit and intelligence.

India is simply running an irrational society. It is a shame.

However, why are we concerning ourselves with them? Have we not more pressing issues to attend to?