And the weak suffer what they must?

The 1991 reforms may have left the majority of educated Indians better off, but the current global economic and political churn may not spare them

It has been over 25 years since the kickoff of India’s economic reforms in 1991, which has been rightly highlighted as one of the most momentous events to have taken place in the living memory of this country. 

Unlike the majority of India’s current workforce, I grew up, completed my education and started my career well before 1991, and when I was a student, many of my teachers attempted to foist on me and my classmates the leftist leftovers of India’s experiment with five-year economic plans, first with Jawaharlal Nehru and his statistician P.C. Mahalanobis’s socialist plans and then the licence Raj that followed. 

The changes wrought by the P. V. Narasimha Rao government in 1991 have been path-breaking for India’s economy. We have emerged from suffering the ‘Nehruvian rate of growth’ (a kinder term than ‘the Hindu rate of growth’ that many used to describe India’s pre-1991 economic growth) to seeing growth approaching double digits in at least a few of the last 25 years. The average Indian today is much richer than his or her parents ever were. 

The social Darwinism caused by economic liberalization—where only the fittest survive—also has a dark side. Yanis Varoufakis, a noted Greek economist, who was his country’s finance minister during the country’s well-documented financial crisis, has written a splendid tome on how historical events since around the end of World War Two were the real genesis of the crisis. In his book, entitled And The Weak Suffer What They Must?, he argues that Germany failed to stand by Greece during his country’s debt default, as Germany should have, given that it itself had been rescued in the years immediately after World War II by the Marshall Plan (named for the then US secretary of state George Marshall). 

The Marshall Plan pumped billions of dollars into a Germany destroyed by the war, and forced other European nations—Greece among them—to forgive Germany’s defaults on its pre-war loans and much of its war reparation payments. Delving into ancient Greek literature, from which the book’s title is taken, Varoufakis also quotes the ominous response to the interlocutors who espouse the principle that the weak suffer what they must. The response reads “This principle does not affect you less—since your own fall would be visited by the most terrible vengeance, watched by the whole world.”

In a column in Mint, Manas Chakravarty makes a compelling point that while the 1991 reforms have left the majority of this country better off, they have also increased the divide between the haves and the have-nots. He focuses on the fact that there has not been a very large increase in the number of jobs in the organized sector, and that unless we find a way to give the masses of have-nots a way to get a decent share of the dividend of liberalization and allow them to make a decent living, social unrest may be the unfortunate result. 

Chakravarty was referring to the uneducated and underprivileged youth of our society, but I fear that this issue may also leach into the organized sector soon enough. Most of today’s technology services workforce—a much vaunted contributor to employment in cities such as Bengaluru, Hyderabad, and the National Capital Region—began their careers after the boom in the information technology (IT) and business process outsourcing (BPO) services sector post 2000, and are used to a work ethos where fat pay packets, yearly raises and quick climbs up the corporate ladder are taken for granted. 

This has, in turn, led to a sense of entitlement among these younger workers, which I don’t blame them for having. Why would they have any other way of thinking when bereft of the experience of frugality that some of us underwent when we were younger? They have also been isolated from the experiences that many of their uneducated, and therefore marginalized, contemporaries have had. Their education has made them, thus far at least, part of the strong and not part of the weak.

In an earlier column, I argued that the contractual construct between IT and BPO services firms and their employees is changing, and the Mint has reported that net new hiring in the sector is on the decline. Changes are beginning to take place within this part of India’s engine of growth where automation and other technologies are beginning to threaten the employment construct. 

Economic nationalism—of the kind that Varoufakis eloquently describes in his book—is also on the rise. If even a fraction of Donald Trump’s current rhetoric turns into trade barriers, this will, at least in the short run, impact the large white-collar services workforce that counts American firms among its clients. Faced with the double-whammy of automation and protectionism, services firms will be forced into becoming platforms (IT services marketplaces) for buyers and sellers to collaborate and not employers recruiting and retaining talent with fat raises each year.

This will disenchant even the educated youth who have managed to secure what they thought was lucrative employability for a lifetime. If a machine can do a job better and more cheaply than a human, the human will be replaced, no matter how educated that human may be. Such is the relentless march of capitalism. 

But if the human is one who is educated, it is also more likely that he or she is one who has the talent and capability to organize. Trade unions at what are largely white-collar enterprises may become de rigueur over the next few years.

Siddharth Pai is a technology consultant who has led over $20 billion in complex, first-of-a-kind outsourcing transactions. He now works as an advisor to Boards, CEOs, and investors to help them strengthen and execute their global technology strategies in an increasingly uncertain and volatile world. 

*This article first appeared in print in the Mint and online at www.livemint.com. For this and more, see: