This Economist article says basically that Bihar, one of the poorest Indian states, has a corrupt government. It says nothing at all, about "global economic pressures." In fact you haven't cited a single problem that has anything to do with globalization.

The section you highlight claims that wages are falling for migrant agricultural workers in a few states, due to *mechanization*. You're not really opposed to the mechanization of agriculture, are you?

Would it change your mind to learn that on average, wages *of agricultural workers* in India are rising rapidly? That poverty is falling dramatically in India, even in Bihar? That more kids are in school? That child malnourishment is falling dramatically All this is true. I have references on my blog, or see this article for a nice summary.

Your statement, "average wages can be rising in India, even as wages for the working poor drop," is very misleading because wages for the working poor have not been dropping. They've been rising rapidly.

What part of wages falling in Punjab due to mechanization and a labor surplus don't you understand?

Again, I agree that average wages can rise, yet many workers still see their wages fall. It's the unevenness of growth that is the issue.

Nathan,

I'm glad to see you've backed off your initial claim about "global pressure to lower wages," and are really just concerned about the "unevenness of growth" in India.

The article you cite seems to suggest that the obvious response to uneven growth in India is increasing public investment and fighting corruption in India's poorer states. This makes sense to me, while blaming globalization for the mechanization of agriculture makes no sense at all.

I also don't understand why you believe that wages are falling for agricultural workers in Punjab, when your evidence is just a few anecdotes, and the evidence on the other side consists of careful surveys that show rapidly falling poverty in Punjab, and India as a whole.

To repeat, not only are "average wages" rising in India, but *poverty* is falling rapidly. And this is poverty by India's definition, which means roughly a dollar a day.

chef ragout's comments are so cliched and commonplace that the most surprising thing is that nathan newman did not anticipate them better.

in fact india has been making steady progress in living standards since at least 1950. that livings standards are rising under privatization and globalization only proves that these policies are not complete failures. it does not make them sucesses. according to a UN report in 1998 life expectancy in india has increased as follows.

1950-1954: 38.7
1955-1959: 42.6
1960-1964: 45.4
1965-1969: 48.0
1970-1974: 50.3
1975-1979: 52.9
1980-1984: 55.0
1985-1989: 57.6
1990-1994: 60.1
1995-1999: 62.3 (projected)
2000-2004: 64.2 (projected)

according to the world bank life expectancy was 63.4 in 2002 which is higher than it has been before but less than the projected 64.2. so if anything privatization and globalization have caused living standards to increase less than they would have otherwise.

2pik,

I agree, India's rapid progress is well-known, and it is surprising that Newman doesn't seem to be aware of it. Cliches often have the merit of being true.

Whether India's progress has accelerated or merely continued under globalization is, I agree, an open question. But I don't think there's a reasonable argument that there's been a slowdown in the tremendous gains made by India's poor.

chef ragout,

whether india's progress is a accelerating or decelerating depends on whether you trust real GDP more or life expectancy more. i trust life expectancy more because it is easier to measure and harder to fudge but real GDP also has value. overall though i do not think privatization and globalization have greatly hurt or helped india. i certainly would not call india the poster child for globalization and privatization unless globalization and privatization have had very sad results elsewhere which may in fact be the case.

Chef Ragout keeps making sweeping statements on the great advantages of globalization for India, but has not yet offered any PROOF. It is entirely possible for AVERAGE wages to increase in a country, but have the poor experience a decrease in their wages. It is in fact happening in the US right now.

SlcInCNY,

Yes, it is theoretically possible for average wages to rise, but the wages of the poor to fall. However, that is NOT what has happened in India. Since 1980, there has been a dramatic fall in poverty in India. Other measures (e.g., child malnourishment, life expectancy, the wages of agricultural workers) also show that there has tremendous improvement in the lives of the poor.

See my blog for proof, especially the links in this post.

"A sharp rise in rural and, particularly, urban inequality and only a marginal decline in poverty have characterized the post-reform period. The rise in inequality is explained in terms of an increase in the relative share of output going to capital as compared to labour, a drop in the rate of labour absorption and the rapid growth of the services sector. The rise in inequality has diminished the poverty-reducing effects of higher growth. The reforms have also been characterized by widening regional inequality. This is especially true in the case of the incidence of rural poverty, but also, to a lesser extent, urban poverty. Statistical convergence among states in terms of inequality, poverty and real mean consumption is weak. ...

Poverty rose in the immediate aftermath of the reforms. Growth picked up, but the
level of poverty remained stubborn (partially because of higher inequality and stagnation in
the agricultural real wage), although there was some reduction in urban poverty. The decline
in the crucial area of rural poverty was lower than that during the 1980s and quite unsteady.
Rural poverty actually rose in 1995-96, and urban poverty in 1997. Gains in real mean
consumption have been higher for the urban sector than they have been for the rural sector."
--Raghbendra Jha, Reducing Poverty and Inequality in India: Has Liberalization Helped?.

That doesn't sound like the cliche, that sounds like a mixed bag. I don't know what CR is referring to when he refers to globalization: "increasing public investment" isn't a neoliberal prescription, the mechanization of agriculture can be related to neoliberal reform in policy regarding MNC agribusiness, and the question to ask is what does globalization have to do with education and child malnourishment?

Anyway, India has not followed the path set out by the Washington consensus - the set of reforms usually referred to as "globalization", which has been a gross social failure most places it's been tried. This has been possible not a little because it's an independent nuclear power able to disregard most prescriptions from the IMF. Hence it maintains some very high levels of trade protection, and outside the highly abusive EPZs and a deplorable child labor situation (partly a globalization problem) there has been a relatively sound legal framework and recognition of labor rights in India, hence the "lack of flexibility in labour markets ... has tended to cushion workers from the unemployment implications of the reforms".

That safeguard is under increasing attack: while they still have the general strike in India they're striking for the right to strike these days. Obvious case in point being that labor protections and rights are highly restricted to non-existent in the EPZs. They're not getting shot at like they are in Columbia, but they are losing ground to neoliberal "reform", which demands among other things the creation of flexible labor markets in developing economies, e.g. urban slums filled with the hungry poor.

let us also keep in mind when talking about india's "rapid progress" that india's progress has not been any more rapid than that of a "failed" country like egypt.

buermann,

The only reason that the study you cite finds modest--instead of substantial--reductions in poverty since 1990 is that it ignores the data for 2000. See the article I linked to in an earlier post for why this is a mistake. Or see this article, which also points to several alternate measures that also show a decline in poverty of about 1 percentage point a year in the 1990s.

Also, the article you cite provides some more evidence for India's rapid progress in recent decades. It shows agricultural wages remaining flat from 1964-1974, and then taking off, growing 75% faster than inflation from 1974-1995. This is quite good: almost 3% a year in real terms.

To answer your question about what this has to do with education and child malnourishment: when the poor earn more they and their children eat better, they can better afford to send their children to school instead of to work. When average incomes rise, there is more money for the government to invest in education and to redistribute.

By globalization I just mean increased trade. It certainly isn't incompatible with increased public investment. The Economist magazine certainly seems to think that globalization is compatible with increased public investment, as does the World Bank (whose whole purpose is lending for public investment). You're attacking a straw man when you say that globalization implies right-wing economics at home.

And you seem to be really stretching to find reasons to criticize globalization. You link to an article that says that there are some multinational corporations in India whose subcontractors employ child labor (but have promised to stop). What is this supposed to prove? The relevant question is whether there is more or less child labor in India than there used to be. The fact that so many more kids are attending school suggests that child labor is dropping rapidly. And are you really suggesting that the Indians aren't capable of mechanizing agriculture without being forced to by multi-national corporations?

By the way, I'm not the only one who thinks that the insinuation that Indians shouldn't mechanize agriculture and shouldn't trade with the rest of the world is kind of offensive. Here's a link to a blogger working in rural development in India who's "shocked" by the NY Times article that started this discussion off and asks Shouldn't India be Productive?

2pik,

Maybe you can find some measure by which Egypt's progress has been as rapid as India's (though I doubt it and you haven't posted it). But overall, India has seen much greater gains since about 1980 than has Egypt.

"By globalization I just mean increased trade"

You're not talking about anything in particular then. Fine.

"the World Bank (whose whole purpose is lending for public investment)"

See Erwin Blumenthal, re: Mobutu Sese-Seko's public investment fund, for how much verasity I put in the word "public" as applied here. Is it to develop "public" infrastructure for foreign capital? Who benefits from the debt accrued by tax payers? The WB has undertaken reforms in recent years in response to widespread criticism, both in and out, is it enough? What happens when the next financial crisis hits?

"[child labor, etc] What is this supposed to prove?"

It doesn't prove anything, it was an observation. There's no enforcement mechanism for labor standards in the trade bodies: promises like flowers come and go, if they're broken they'll simply bloom again next year.

"And are you really suggesting that the Indians aren't capable of mechanizing agriculture without being forced to by multi-national corporations?"

Which hat are you pulling this out of? And when do I get to start stuffing your mouth full of straw and lighting it on fire?

The article I linked to was from 97, and so could not ignore data produced in the future. The article you direct us to reads something like an experience I had divining god out of owl droppings once when I was stoned out of my gourd. If only I were an economist I could do that all the time.

But if the national account gives more pleasing results than NSS data because it includes non-profit expenditures in addition to household data it's hard to see how this demonstrates that trade liberalization contributed to the more pleasing results, presumably the reason you cited the article, rather than the non-profit activity. If the economists are still hedging on what the basic facts of the matter are I see no reason to place any bets.

The article you linked to (by Jha) was from 2002, not 1997. It actually *reported* data for 2000, which show that there have been large reductions in poverty. Jha dismisses the data, but the other research I cited has shown to be reliable. There are least half a dozen separate measures which confirm the poverty reduction.

If you want to clarify your statement that "the mechanization of agriculture can be related to neoliberal reform in policy regarding MNC agribusiness," fine. I would guess that mechanization of agriculture has little to do with MNCs, and is mainly a result of Indians wanting to produce more food.

Sorry about the dates CR, my reading retention is subpar.

As both reports point out the 99-00 NSS data isn't compatable with early surveys without a great deal of munging, Jha apparently being too lazy for it, and post-munging the various sets of data their "conclusion that India has probably maintained its 1980s rate of poverty reduction in the 1990s" doesn't preach to what you believe to be "rapid progress" and a poverty rate that's "falling dramatically". It suggests uneven progress with an as yet unexplained sudden dropoff in the last two years of the decade, averaging out to about the same rate as the previous decade, which, considering the growth in per-capita GDP, isn't particularly impressive. The two reports aren't that dramatically different.

"I would guess that mechanization of agriculture has little to do with MNCs, and is mainly a result of Indians wanting to produce more food."

If by "mechanization" you mean the Green Revolution advocated by the World Bank and the agri-business cartels and persued by India since the 40s, then India is not an independent producer of fossil inputs necessary for fuel and fertilizer, and the new designer seeds require a payout to patent holders. This all involves MNCs.

A lot of people are convinced the methods involved are ecologically unsustainable, produce heavy pollution from the extensive and increasing use of pesticides, and reduce productivity in the long run compared to modern organic methods due to environmental damage. Higher ag productivity itself is something of a tin god, famines and malnutrition in the 20th century have been more the result of inadequate distribution than insufficient production. And yes, the process is the result of Indians wanting to produce more food, which is what happened, and they were very successful in developing the process. When the environmental impact and increasing input requirements are taken into account there's some debate over productivity.

chef ragout,

you are a caricature of all that is wrong with the blogsphere. egypt's progress has not been as rapid as india's. it has been significantly more rapid.

life expectancy in egpyt
1980: 55.5
2000: 68.3
2002: 68.9 (increase of 13.4 years)

life expectancy in india
1980: 54.2
2000: 63.0
2002: 63.4 (increase of 9.2 years)

data provided by the world bank

2pik,

Egypt and India aren't comparable. You suggested this comparison, not me, but you haven't said why it is a reasonable comparison.

In fact, comparing Egypt to India makes little sense. Egypt was a much wealthier country in 1980, with a GDP per capita 150% larger than India's. So as a society, Egypt had 2.5 times as many resources available to spend on health care, safe drinking water, food, and so on. Hence it is shocking that Egypt had about the same life expectancy as India in 1980. I'd imagine that this means Egypt had a very poor health care system in 1980. In any event, something very bad must have been going on in Egypt for it have no better health outcomes than much-poorer India.

From 1980-2000, India grew much more rapidly than Egypt, catching up with the U.S., while Egypt was falling behind. But Egypt had started so far ahead of India that their GDP per capita was still 65% bigger than India's. Hence, it is not at all surprising that Egypt had a higher life expectancy in 2000.

BTW, the statistical error you're making is called "regression to the mean."

GDP per capita
(as a percent of U.S.)
India
1980: 5.5
2000: 7.5

Egypt
1980: 13.6
2000: 12.4

Source: Penn World Tables.

real gdp is more of a deceiver here than an enlightener.

life expectancy egypt vs india
-
1950-54: 42.4 38.7
1955-59: 44.9 42.6
1960-64: 47.4 45.4
1965-69: 49.7 48.0
1970-74: 52.1 50.3
1975-79: 54.1 52.9
1980-84: 56.6 55.0
1985-89: 61.0 57.6
1990-94: 63.9 60.1
1995-99: 66.3 62.3

source: UN

as we can see india was gaining on egypt until about 1980 after which point egypt pulled further and further ahead. ironically you seem to think that 1980 was when india took off.

a better way to compare india progress would be this: in 1980 india's life expectancy was ranked 103th out of 150 countries, in 2000 it was ranked 99th out of 152 countries. so india's progress has been slightly better than average but certainly not exceptional.

2pik,

Real GDP is highly relevant. The fact that Egypt has a 150% higher GDP than India in 1980 meant that "as a society, Egypt had 2.5 times as many resources available to spend on health care, safe drinking water, food, and so on." I worried I was being pedantic when I pointed out this obvious point, but I guess not.

Real GDP is a strong predictor of life expectancy across countries. Since Egypt was wealthier in 1980, and remained wealthier in 2000 (even with India rapidly catching up) it's to be expected that Egypt's life expectancy would be longer.

You still haven't justified your Egypt/India comparison, but I agree looking at ranks is somewhat better. But you have no basis for saying that climbing four ranks is "not exceptional." How many other countries climbed four or more ranks?

The closest data I could find on the web was mortality for children under 5, which is surely very highly correlated with life expectancy. In 1990, India ranked 148th out of 191 countries. In 2000, India ranked 140th out of 194 countries. I suppose that you'd say nothing spectacular, right? Except that only 19 of 191 countries climbed more ranks than India.

Really, though, climbing ranks in life expectancy or child mortality seems like a pretty crappy indicator of progress. The four countries that decreased the most in child mortality rank are Libya, Oman, Bhutan, and, you guessed it, Egypt.

So you've been comparing India to a country that's the fourth best in the world (by your silly measure) not to a "failed" country as you said initially. You'd do better to focus on other measures, like how much food the poor have to eat. By this measure, India has made very rapid progress.

buermann,

When the papers I cited earlier say that India has maintained its 1980s rate of poverty reduction in the 1990s, that means that India has made rapid progress in reducing poverty. There doesn't seem to be much dispute that India's poverty fell rapidly in the 1980s, and these authors are saying that this rapid reduction continued into the 1990s.

It's true that India's poverty measurement hasn't been consistent over time, but the studies I cited have carefully tried to make the data as consistent as possible, and they find rapid reductions in both decades.

As it happens, the author *you* cited as a skeptic (Jha) also has a more recent paper where he suggests examining food consumption in the NSS data as an alternative to poverty, since the NSS has measured food consumption more consistently over time. Food consumption and India's poverty line are conceptually very similar, since India basically defines poverty as enough to eat plus a little more.

Jha finds that the % of people eating less than a minimal calorie level (2400 cal for a man) has fallen rapidly in rural India:

1987-88 55%
1993-94: 28%
1999-2000: 11%

Here's the abstract:

CALORIE DEFICIENCY IN RURAL INDIA IN THE LAST THREE QUINQUENNIAL ROUNDS OF THE NSS
Raghbendra Jha

ABSTRACT
This paper computes calorie deficiency indicators for the rural sector in India for the quinquennial National Sample Survey (NSS) rounds of 1987-88, 1993-94 and 1999-2000. Calorie requirements according to sedentary, moderate and heavy levels of work are used. There appears to be a substantial drop in the incidence of calorie deficiency according to each of these norms. However, regional inequality in calorie deficiency has persisted over time.

chef ragout,

the problem with real gdp is that it cannot reliably be measured especially for unindustrialized countries. so saying x has a higher real gdp than y does not mean much.

i do not think comparisons involving two countries are very useful. egypt was just an example although not a bad one since the two were very similar in 1980.

my guess is that about 30 countries would have increased 4 or more ranks (you can do the math). but india was a low ranked country in 1980 so just by regression to the mean we would expect it to increase its ranking.

i never said egypt was a failed country only that it was a "failed" country. but do not think i am holding egypt up as economic model. probably a main reason for egpyt's rapid progress has been massive US aid.

food available to the poor is not a good measure because it is less reliable than life expectancy and not very relevant unless it contributes to life expectancy.

a summary of my argument is: india has made steady progress in living standards since at least the 1950s. however as measured by life expectancy india's rate of progress has declined more than expected over the past 5 years. this probably due in part to privatization and globalization.

disclaimer: i do not oppose privatization or globalization. a transition is often harmful in the short run even if it is beneficial in the long run.

as if to prove my point the latest news is that india's pro-privatization pro-globalization ruling BJP-led coalition has lost the national election to a congress-led coalition. the communist party of india had its "best performance in years" according to reuters. obviously the indian people have had enough "exceptionally rapid progress". said santram a farmer "what 'india shining' are we talking about? we are dying hungry here". "india shining" was the slogan used by the BJP to highlight india's supposedly exception progress in living standards in recent years.