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