The pundit and the money tree

While Friedman cautions that the dangers of outsourcing should not be overstated, he repeatedly raises the specter of people's jobs being sent overseas unless the American education system is overhauled or workers reinvent themselves. To prove his point, he cites a Forrester Research study that estimates that three million jobs will be sent abroad by 2015. But this translates into an annual loss of 300,000 jobs. Currently, there are 135 million jobs in the U.S. economy. So why is he making such a big deal out of this tiny fraction? And he exaggerates the importance of jobs being created in the developing world due to technological innovation, even as he admits that the high-tech sector employs just 0.2 percent of the workforce in India, his main example.

The jury is still out on whether Friedman's beloved globalization will bring any relief to the world's deprived. "Trying to sell trade policy as a high-powered way for helping the poor--you can't do it with intellectual honesty," Gary Hufbauer, an economist with the pro-trade Institute for International Economics, recently told The Wall Street Journal.

When it comes to India, Friedman's favorite, free market policies have failed to reduce poverty any faster than the state-oriented policies before them, according to independent estimates. The free market has done worse in some respects. The rate of improvement for key health indicators in India, such as life expectancy and infant mortality, slowed in the 1990s. This deceleration came about because of policies carried out as part of the neoliberal agenda, such as freezing public health expenditures, removing price controls on essential drugs, and subsidizing private hospitals at the expense of public ones, according to an article in The Hindu newspaper by Professor Gita Sen of the Indian Institute of Management at Bangalore. Thousands of farmers have committed suicide in rural India in the past few years partly as a result of "price uncertainty due to trade liberalization and rise in costs due to domestic liberalization," according to a study quoted in Economic and Political Weekly.

As for the United States, a country that Friedman proudly holds up as the role model for the world, Berkeley economist David Levine recently pointed out in The New York Times that "being born poor in the U.S. gives you disadvantages unlike anything in Western Europe and Japan and Canada." Plus, overall poverty is higher in the United States. The U.S. poverty figure (17.1 percent) for 2000, for instance, was significantly higher than for most European countries. France, Germany, and the United Kingdom had poverty rates of 7.0 percent, 9.8 percent, and 11.4 percent, respectively. Canada and Japan were lower than the United States, too, with a poverty rate of 10.3 percent and 15.3 percent, respectively.

One problem with Friedman is the extremely narrow net of informants who feed him notions that reinforce his beliefs. Friedman's Indian corporate buddies keep on supplying him half-truths and distortions that he accepts as gospel because they fit into his worldview. And even when he has a sensible person as the source, such as Nobel-winning economist Amartya Sen, he fails to get the right information from him. So Friedman and his sources lay all of India's problems on the supposedly socialist policies it followed till 1991. But Sen has said elsewhere that the "tendency to describe our past up to 1991 as some kind of left-wing Nehruvian socialism" is "really a monstrous absurdity." Friedman's analysis contains such errors throughout, making you wish that he had spoken with more people who know reality outside the corporate boardrooms and office parks in India, individuals like journalist Palagummi Sainath or development expert Jean Dreze, who has co-authored a number of books (with none other than Amartya Sen) on the mixed record of economic liberalization in India.