A "beautiful and terrible" story

Noah Smith captures gracefully how industrialization is spreading around the globe. His economic techno-optimism can feel cloying -- but he's onto something here.

In my last post, I predicted how manufacturing would spread to India and other developing countries in South and Southeast Asia. Basically, India will start out doing low-value assembly work using imported tools and components, and then gradually work its way up the value chain. Right now, in terms of its position in the supply chain, India is about where China was in the early 2000s.

Viola Zhou and Nilesh Christopher have a wonderful article about what Indian industrialization looks like on the ground. They traveled to a Foxconn factory in southern India, where Apple has shifted some iPhone production in order to diversify out of China. They found that many of the engineers that have been brought over to train and supervise the Indian factory workers are themselves Chinese. Much of their reporting focuses on the interaction and culture clash between the factory’s Chinese and Indian workers.

The story that emerges is a very familiar one. The Chinese supervisors think the Indian workers are slow, lazy and undisciplined — just as the British once thought of German and Japanese workers, when those countries were first industrializing. Industriousness is learned; it proceeds from industrialization. The people who first come to work in the labor-intensive factories are mostly women, looking for independence and an escape from rural life (and probably advantaged by having small fingers). The Indian factory girls are recognizably similar to their Chinese predecessors, or their British forebears centuries ago.

The Mill Girls of Lowell, Mass. via the National Park Service

This is the universal tale of industrialization, and it’s a beautiful and terrible one at the same time. It’s a story of ruthless labor exploitation, urban ennui, and harsh working conditions. But it’s also the story of workers escaping what Marx called “the idiocy of rural life”, finding their own way in the world, making money and winning their independence. And it’s the story of a country that is primed to become much richer in the near future. 

We know how this story typically ends, too. Indian factories will become more automated; salaries will rise and assembly line jobs will become fewer and more technical. Indians will move into higher-paying service jobs with better conditions. Indian companies will move up the value chain, learning how to make tools and components, eventually creating their own brands and competing with China and the rest of the industrialized world. And then Indian engineers will be off to the next poor country — Bangladesh? Ethiopia? Nigeria? — to start the whole process over again.

So far, across the globe, most humans have welcomed abundance and forgotten the miseries along the way. That seems to be who we are.