Recently at Reason.tv: What Slumdog Millionaire can teach Americans about economic stimulus

Have you seen the Oscar-winning smash Slumdog Millionaire? It's a great love story, to be sure, but there's some fascinating economics in its backdrop of a rising India.

The film follows an Indian orphan named Jamal who grows up and hits it big on the famous game show Who Wants to be a Millionaire? In important ways, Slumdog tells the story of India itself-a poverty-stricken underdog with its own rags-to-riches tales. British rule ended in 1947, and the economic woes America faces now are nothing compared to the widespread malnutrition and starvation India faced then.

Indians were enthusiastic about self-rule, but "the problem was that the Indian political leaders had this very Fabian Socialist idea," says Shikha Dalmia, a senior analyst at Reason Foundation and native of India. "And that completely thwarted the entrepreneurship of the country."

For decades would-be entrepreneurs staggered under the weight of corruption and bureaucracy. Want to import a computer for your business? You'd have to get permission from a bureaucrat. Want to sell food from a small cart? You'd need all kinds of licenses. 

But in the 1990s, India emerged as a high-tech powerhouse. What changed?

"In the 1990s India started liberalizing its economy," says Dalmia, "and it did three things: cut taxes, liberalized trade, and deregulated business." Although they failed to cut the kind of red tape that entangled Slumdog's orphans, the reforms did make it easier for more Indians to start businesses and hire employees.

"One IT company doesn't just employ computer professionals," says Dalmia. "It also needs landscaping services, cleaning services, and restaurants. There was this tremendous spillover effect that allowed people to lift themselves out of poverty."

Since the early 1990s, India has cut its poverty rate in half. About 300 million Indians—equivalent to the population of the entire United States—escaped the hunger and deprivation of extreme poverty thanks to pro-market reforms that increased economic activity.

Yet here in America we're turning away from market reform. Says Dalmia, "It's just this great conundrum that at the same time that deregulation and markets have produced such dramatic results in India, they are falling into suspicion in America." Dalmia's prescription for India is at odds with what politicians have chosen to "stimulate" the United States. "What India needs to do is continue apace with its liberalization effort, but expand it to include the poor. Release them from the shackles of government corruption and government bureaucracy."

"Slumdog Thousandaire" is written and produced by Ted Balaker. The director of photography is Alex Manning.

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  • Billy!||

    So what your trying to say is that economic reform allowed the damn Indians to steal all our jobs.

    Protectionism is the only thing that'll save this great nation. Yes we can.

  • ||

    Wow, it was a truly amazing move! I am glad it won all those awards!

    RT
    www.anonymity.eu.tc

  • ||

    Wife and I saw this movie friday and we had heard how good it was but really knew nothing about the story. It turned out to be a very clever way to tell the story and we enjoyed it very much.
    I did come away with one observation...the poor in this country (US) sure have it great!

  • Stacy||

    Didn't get to see this movie. :(

    I'm glad Milk won some stuff, too. Raising awareness for gay rights and how stupid it is that the fight is still going on . . . hopefully people realize there are some "problems" with the government/our rights. . ..

  • ||

    I think Hit and Run keeps reposting this because they want an excuse to post a picture of the lovely Freida Pinto, which of course is probably the best excuse for a post ever.

  • miche||

    Fabulous movie and I like seeing "Jamal's" handsome face- he looks like my husband in his yearbook photo. ;o) Oh, and Nick, you missed a thousandaire in there.


    I'm glad Milk won some stuff, too. Raising awareness for gay rights and how stupid it is that the fight is still going on . . . hopefully people realize there are some "problems" with the government/our rights. . ..



    I've not seen Milk but plan to soon. I am sad that Sean Penn used the podium as a political pulpit. (I think the film sounds like it was a great raising awareness tool though.)

  • ||

    Didn't Milk out a bunch of people? I seem to remember him not being a particularly nice guy in some ways.

  • mark||

    Yep, India is such a fantastic Tech that companies are bailing back to the US faster than you can say, 'screwed the entire database up 10 ways to Sunday' It seems that either the corporate culture is too different or there's a massive mis-communication between American companies and the outsourced contractors in India. That or they've selected some really really bad contractors to work with.

    Either way, it's been a boon to some American companies who've managed to poach back the business lost recently. In the tech sector at least, expect this trend to continue.

    Of course, American companies have to show themselves to be good enough to hold the contracts once they get back, and I hope that the protectionism doesn't take root. After all, I'd rather get a contract because we're better, rather than because the government made it cheaper to use an inferior product.

  • ||

    One of the best movies ......eva!

  • ||

    These are interesting connections between Slumdog Millionaire and the current U.S. economy. While I would say that the movie is more about cultures, love and the reality of India's poor, I would agree that there are some economic points that are completely pertinent to today's situation.

    Besides this, the film is actually a British film--directed by Danny Boyle. Great Britain won many awards from the Academy last night, most noticeably the numerous Slumdog ones and Kate Winslet's award for Best Actress. But there were others. Fox Searchlight certainly struck gold as well. Take a look at this video I found earlier today. It summarizes the "real" winners at the award show:

    http://www.newsy.com/videos/oscars_winning_perspectives/

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