Tue, 10 May 2005

There is not a fixed amount of work

If you travel to India, one of the first things you see are women sweeping the streets. They use a little "corn" broom which is about three inches in diameter, and two feet long. It's about as inefficient as you can get short of sweeping with your bare hands.

No doubt the reason they don't use more efficient brooms (e.g. put it on a stick and weave the broom wider) is because that would put some sweepers out of work. There is, after all, only a certain amount of street to sweep. I think that India is, in general, under the thrall of an economic misconception. It's not just India, of course, but world-wide. It's not an old misconception, like the flat earth theory. It's a current misconception.

It's the idea that there is a fixed amount of work.

I believe that Ashutosh Sheshabalaya in his book Rising Elephant is falling prey to the same misconception. He somehow thinks that there is a fixed amount of work, a fixed amount of jobs, a fixed amount of wealth, and if India becomes wealthy, that the US must suffer. Even if a job disappears in the US, and an equivalent job appears in India, that does not mean that the US economy is harmed in any way. First, we're getting the same job done for less money. Second, we've freed up someone to do a new job, a better job, a more highly-paid job.

You want our jobs, India? You can have them. We have plenty to share. We'll just make more.

Update, 11/3: Got a reply from Tosh Sheshabalaya. This is very good, because it shows that he's not just interested in throwing an opinion out there. He's seeking to close the loop between reader and writer. Rather than a lecture, he's looking for a conversation. Good job, Tosh!

He repudiates the idea of a fixed amount of work, and attributes that to the reviews. His main point seems to be that India is doing very well, and stands to do much better. He's right! But that doesn't mean that we'll do poorly just because India is doing well.

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