From: Arun Mehta <amehta@giasdl01.vsnl.net.in>
Date: Thu, 15 Aug 1996 01:00:48 +0800
To: "'cypherpunks@toad.com>
Subject: re: National Socio-Economic Security Need for Encryption  Technology
Message-ID: <1.5.4.32.19960814130043.00311c1c@giasdl01.vsnl.net.in>
MIME-Version: 1.0
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At 08:33 13/08/96 -0700, James A. Donald wrote:

>the fact that an engineer who is subject to the power of the Indian
>government is not worth very much, as is demonstrated by the fact
>that companies with Indian engineering teams often spend a lot of money
>to get their employees out of India.
>
>Demand for Indian programmers is less than supply not because capital
>has somehow failed to flow to India, but because an engineer in India
>is not free to produce the value that engineers elsewhere are free
>to produce.
>
Whoa! In economies that are highly de-coupled, incomes and prices
can easily find quite different equilibria. Of course, the
situation changes when trade increases. If you visited Italy in
the mid-'70s, prices were much lower than, say, in Germany.
Somewhere in the late '70s and early '80s, prices (and I hope
wages too) rose to "international" levels.

Why hasn't it happened in India? One reason for sure is that
despite all the talk of free trade, free movement of people does
not take place. Otherwise, plumbing, gardening, and all kinds of
services could have been provided in Western countries by
Indians, reducing supply and raising wages in India. 

It really  doesn't have much to do with "the power of the Indian
government" (except that I wish they had negotiated better at
GATT so that when the free flow of goods was talked about, the
flow of services was also treated at par). India has its faults,
but it still is a relatively democratic and free country. And
yes, capital has "somehow failed to flow to India,"  and for this
the restrictive policies of government are to blame.
Arun Mehta Phone +91-11-6841172, 6849103 amehta@cpsr.org
http://www.cerfnet.com/~amehta/  finger amehta@cerfnet.com for public key