Monday, July 04, 2005

happy 4th of july weekend to the folks in america!

many happy returns of the day, or words to that effect

for a sobering thought, here's clyde prestowitz's book, a review in the nytimes

alarmist, isn't it? this is the democratic perspective, atlanticist indeed. if the jobs were going to europe or if it was germans investing in the us rather than japanese or chinese, i think there would be much less worry.

even a fairly sensible person like paul krugman was getting excited about the chinese bid for unocal. i say, sell them whatever they'll pay good money to buy. the japanese ended up getting poor value for their investments in the us in the 1980s, and the chinese are likely to do the same.

incidentally, vsnl just completed its purchase of the tyco undersea cable.


san said...

Thanks for the post, Rajeev. I read that Krugman article, too. It's also useful to note that even during the height of Japanese acquisitions in the USA during the 1980s, their American holdings were far less than those of the UK. But the Japanese got picked on more, because they're a little more visible and identifiable than Anglo-Saxons. Remember that movie/novel by Michael Crichton? "Rising Sun," I think it was -- as if the Japanese were the Andromeda Strain or something more virulent.

Indians are now facing similar xenophobia, because we too are rising fast. I'm glad VSNL was able to buy Tyco's fiber network without too much hassle. Indians can provide Americans better value for their money, and it needs to be pitched more. Even smaller and medium-sized businesses will be made more competitive, by being able to obtain cheaper services from India that might otherwise be beyond their reach. For instance, a small home-office entrepreneur might be able to cheaply obtain a remote secretarial call-answering service from India that he might not otherwise be able to afford. By allowing more small businesses to proceed into the bigger leagues, India's cheap services will give more fluidity to the American economy. Would you rather have an economy which has 100 employers offering 100,000 jobs -- or would you rather have an economy with 1000 employers offering 100,000 jobs? Even if the number of jobs on offer remains the same, having these jobs distributed among a larger pool of employers will naturally benefit the workers, since there are a greater number of employers competing for job-seekers.

san said...

Here's another article in The Economist about outsourcing.