The Indian Economy Blog

November 8, 2005

Empowerment, Not Slavery

Filed under: Miscellaneous,Outsourcing — Amit Varma @ 12:10 pm

A version of this piece was first published today in the Wall Street Journal as “Self-Delusion.” (Free link this week, but subscription from the next.) It was written a couple of weeks back, and has its genesis in this post of mine.

Organized slavery ended decades ago, but to go by the criticism of some leftist commentators in India, one would imagine that it is alive and flourishing in the world’s largest democracy.

Recently it has become especially fashionable to hit out at call centers, or business processing outsourcing (BPO) units as they are officially known. A study published by an institute that comes under India’s Labor Ministry compared conditions in Indian BPO outfits with those of “Roman slave ships.” Chetan Bhagat, the author of a new book set in one such unit, “One Night @ The Call Center,” recently claimed that call centers are “corroding a generation.” It is common, almost clichéd, to hear call-center workers referred to as “cyber-coolies.”

All this criticism is terribly misguided. Contrary to being a form of economic imperialism, as its critics claim, India’s BPO industry is an indication of what is possible for a country to achieve with free markets. India’s call centers make use of one of its comparative advantages — cheap, English-speaking labor. More importantly, it empowers the estimated 350,000 people who work in this industry, instead of “stripping them of their dignity,” as a common canard goes.

The people who work in these call centers — indeed, in any company in India — do so out of choice, not coercion. They make that choice on the basis of the options available to them, options which are now far wider than they were a decade ago. When this writer was in college in the early 1990s, it was next to impossible for a young graduate to get a job on the basis of his degree alone.

Today, a working knowledge of English suffices. In the socialist decades after independence a middle-class man could save up enough to buy a house and a car only when he was in his 30s, or even 40s. Today, young people in their 20s can do so. Many of them use their time in the BPO industry to better their lives substantially. Some support families, others save up to go abroad for further education. Some simply make money, a goal apparently anathema to grizzled socialists.

Why, then, the criticism? One of the natural consequences of socialism is that a few stand in judgment of many, and make their choices for them. As India has moved away from the Fabian socialism it embraced on achieving independence in 1947, more and more people have been empowered by an ever-widening array of choices. Socialists in India have seen the Soviet Union collapse, the Berlin Wall fall, and India begin to liberalize. Their beliefs have traditionally been strengthened by what behavioral psychologists call the confirmation bias – accepting only the evidence that seems to support their worldview. Alas, such evidence has been vastly diminished in the last two decades. So they resort to reflexively lashing out at anything related to free markets.

India’s leftist “intellectuals,” and those who aspire to fill their shoes, view the world through a utopia-tinted lens, a utopia that is entirely their own construction. When they examine their own policies, they do so on the basis of the ideal world they are meant to result in, and not the mess they create in the real world. And when they criticize the choices people make in the real world, they do so on the basis of the choices they would have in this utopian socialist paradise.

These “intellectuals” do not condescend just to BPO workers, but to all those Indians whose aspirations are not aligned with theirs and who, typically, have more choices available to them because of free markets. To them, shopping malls are bad because they turn people into consumerist buying machines. They disparage the large number of television channels as being filled with Western junk, ludicrously proclaiming that the one state-owned channel India had two decades ago was better. They do not accept that increased choices are a sign of progress, and condemn the way other people choose to live their lives, insulting them by denigrating their choices.

But times are changing, and such self-righteousness is increasingly being exposed for the self-delusion that it is.

40 Comments »

  1. I think the call centre phenomenon is a welcome phenomenon even if its sustainable only in the short run. While in Bangalore, I came across a couple of call centre employees from rural Kerala and West Bengal with no fancy degrees to their name. It was heartening to see them earn a decent living and be able to support their poor parents back home. Ultimately it becomes a question of opportunity cost .. what would these ppl have done had they not worked in call centres? I guess clearly something of lesser value.

    I also don’t see why ppl harp on the unhealthy lifestyles of call centre employees.. a typical MBA from any college who joins any i-bank or private equity firm or a consultancy firm also has quite an unhealthy lifestyle. The days of 9 to 5 jobs have gone with the wind.

    Lastly, the fact that certain leftist (pseudo) intellectuals have criticised BPO, malls etc, only indicates their closed minds and refusal to accept change. As I pointed out in an earlier comment, anyone who has read Marx or Engels wud find Indian Marxists to be clueless about Marxism. Marxist philosophy does not stand for irrational narrowmindedness.

    Comment by Aniket — November 8, 2005 @ 1:32 pm

  2. Just because Leftists side with this argument doesnt mean the argument is wrong! The reasons why the Left sides with this argument and the reason why people like me (ardent capitalists) side with it might be completely different.

    Pray, tell me, why should you ignore the individual freedoms being infringed upon by the fact that BPO employees are required to change their names, adjust their cultural mindsets and put on terribly fake accents – do they have a choice as people? Do they have a choice as employees?

    Unionization is not about leftist politics, its also about ensuring collective freedom and responsibility. To praise the Devil as being the rescuer when the only other option is the Deep Blue Sea, i.e. unemployment, is hardly the argument to make.

    BPO is a productive industry that is empowering a lot of individuals. On the other hand it is also forcing progress rather than seeking evolution. You ignore this and appear to be quite misguided yourself when you say “All this criticism is terribly misguided”. Probably “Some of this” instead of “All” would have been more accurate, less blind and put you more open to other opinions.

    Comment by Pranay Manocha — November 8, 2005 @ 2:23 pm

  3. Amit, incidentally you’re also being a tad hypocritical when you dismiss the people making arguments made against BPOs. Your earlier post here.

    Comment by Pranay Manocha — November 8, 2005 @ 2:29 pm

  4. Pranay, as usual, you’re building a straw man to fight. Whoever said or implied “Just because Leftists side with this argument … the argument is wrong”? Not me. The anti-BPO argument is wrong on its own merits, and the reasons have been spelt out.

    Also, different BPO units have different requirements, and in every single instance, the workers do have a choice — they can reject it and go work elsewhere. Those requirements are being made by the BPO unit to the worker because they’ve been made by their clients to them, and the absence of the requirement would mean the absence of the job. So whether the fellow chooses to refuse the job or the requirements are scrapped, it’s the same for him. In that situation, it is surely better for the choice to exist than for the choice not to exist.

    Also, you’re again building a straw man when you talk about unions. I haven’t mentioned them at all. But as you do mention them, here’s my position on unions: I have no opposition to them as long as people are not forced to join them. They must have a choice in that matter as well. No coercion.

    As for BPO working conditions not being good, if indeed that is the case, only one thing can solve it: competition. They’re beating everyone else who is competing for the same labour hands down. So clearly, relatively, the conditions can’t be all that bad. Not a slave ship, certainly.

    Comment by Amit Varma — November 8, 2005 @ 2:39 pm

  5. Pranay, regarding comment 3, I’m not being hypocritical at all. I’d be hypocritical if I dismissed the arguments solely because of who makes them, but instead, I am dismissing them by taking apart the rationale of the argument itself, and then I am, separately, discussing the left.

    Paras 3, 4 and 5 of the piece focus on the argument itself, and why it is wrong, without reference to who is making them. The later paras give a perspective of why these flawed arguments are being made in the first place. These are separate exercises.

    Comment by Amit Varma — November 8, 2005 @ 2:45 pm

  6. I find the arguments about putting on a ‘fake accent’ etc a tad facetious. What’s next? Fake smiles by air hostesses? Fake courtesy by hotel employees? Fake courtesy by consultants?
    I think the choice between the so called devil and the deep blue see is still a choice .. lets not talk philosophy here .. BPO is a legal way of earning subsistence .. and justifies the opportunity cost (otherwise why wud ppl go for it?).. period

    Comment by Aniket — November 8, 2005 @ 5:18 pm

  7. Self-delusion

    Amit Varma of the Indian Economy Blog has made the Asia Wall Street Journal today:Organized slavery ended decades ago, but to go by the criticism of some leftist commentators in India, one would imagine that it is alive and flourishing in the world’s …

    Trackback by PSD Blog - The World Bank Group - Private Sector Development — November 8, 2005 @ 6:11 pm

  8. Amit: Thanks for another great article!! I am only worried by the last statement ” But times are changing, and such self-righteousness is increasingly being exposed for the self-delusion that it is”.

    I am afraid, there is a long way to go to reach that goal. As can be seen by comments on this post itselt, many people (many of them sincerely) are still believers of the leftist theology.

    Comment by Vivek G — November 8, 2005 @ 6:19 pm

  9. The customer service job is rough. It’s the same everywhere in the world including america. What’s most difficult is to be in a pleasant mood all the time. Changing your name or accent is nothing.

    Even in america, where white collar jobs are plenty, nobody called a customer service job ‘slave ship’. In india, of course, marxist thinking is dominant. I have wondered what guides marxists and the headline in the following link says it all:

    http://www.thehindu.com/thehindu/thscrip/print.pl?file=2005102719480400.htm&date=2005/10/27/&prd=th

    Comment by sv — November 9, 2005 @ 6:18 am

  10. Indian culture has been more accepting of choices that people make,
    Even the fabian socialism was never fully applied to india(and i can thank every one who fought for that)
    Its in india after all you see asetics who may have a BS from IISC Phd from Cambridge and MBA from SLOAN who is walking around naked in uttaranchal.
    Its opposite of consumerism its a strain that has existed in india for a while. ITs awesome
    _GGK

    Comment by Guru Gulab Khatri — November 9, 2005 @ 7:28 am

  11. Vivek: I’m afraid you’re right.

    SV: Thanks for the link!

    GGK: Hmmm. All I can say is that there is nothing called consumerism. It’s a bogey term. Do you know anyone who’s “consumeristic?”

    Comment by Amit Varma — November 9, 2005 @ 11:49 am

  12. Pranay is absolutely right about Amit not practicing what he preaches. If he was true to his arguments , his OP-ED would have stopped after paras 3,4,and 5. But since this is the left party in question, he whetted his knife and then went after the Left. In fact, since he has done this mistake, I”ll also take the liberty of some speculation. I believe that the motive of writing this article stems from his antagonism for the Left. He has drawn several unnecessary references in the last 2 paragraphs of the article. Would he have written this article if say George W. Bush would have called call centers as slave ships? Ahem! No. Just like in the case of global warming and the Iraq war, he would have have either conveniently skipped it or carefully dug out some article from some paper in support of his views. This is amply manifested in his blog where he conveniently skirts issues like the controversy of the Iraq war, how Bush lied to the American public and takes even the slightest opportunity to have a dig at people like George Galloway of the Left.

    But I completely support the arguments in the initial portion of the article.

    Comment by Akhilesh Kulkarni — November 9, 2005 @ 4:58 pm

  13. Akhilesh

    What on earth do global warming, the Iraq war and GWB have to do with this post?

    BTW, am impressed that you’ve managed to get inside Amit Varma’s head and figure out what he would have done. ESP?

    Comment by Prashant Kothari — November 9, 2005 @ 5:33 pm

  14. Akhilesh, I’d request you stick to the topic and not get personal.

    Also, you haven’t understood the concept of ad hominem. Had I said that Argument X is wrong because Person Y is making it, it would have been ad hominem, and hypocritical of me. But when my reasons for Argument X being wrong are independent of Person Y, it isn’t ad hominem. What I also say about Person Y subsequently is irrelevant to that. That’s basic logic.

    Comment by Amit Varma — November 9, 2005 @ 6:41 pm

  15. [...] enter brouhaha, we move forward. On to Amit Varma, who has an excellent post on the issue, first published in the WSJ yesterday.

    [...]

    Pingback by DesiPundit » Slave Ship And The Call Center II — November 9, 2005 @ 7:59 pm

  16. “Pray, tell me, why should you ignore the individual freedoms being infringed upon by the fact that BPO employees are required to change their names, adjust their cultural mindsets and put on terribly fake accents – do they have a choice as people? Do they have a choice as employees?”

    Eh? Next thing you know, actors will be complaining about being slaves and insisting on using their own names in films. Loss of freedom is such a ridiculous argument. And comparing BPOs to slaves is an insult to African Americans who used to be “real” slaves. And many of them, even today, would probably give an arm and a leg to get back these call center jobs which previously used to be theirs.

    Comment by gawker — November 9, 2005 @ 9:25 pm

  17. Amit, I can see the debate getting polarized. According to some everything is wrong with BPO industry and according to a few others everything is right with it!

    Have you ever looke at the attrition rate in the BPO industry, and I ask you to look at the NASSCOM data. Does it gives you any indications?

    I know it is not easy to maintain objectivity when someone calls BPO indusrty ‘Roman Slave Ships’ but without going to the extremes, they do seem to have their own serious problems, as reflected in unusally high attrition rates. They may be an economic necessity for many, but the employees vote with their feet when they get another opportunity. Anyway, that is what I feel.

    Comment by Mridula — November 9, 2005 @ 9:32 pm

  18. “BPO employees are required to change their names, adjust their cultural mindsets and put on terribly fake accents”…

    Speaking from first-hand experience, since I run a BPO — the name change/ accent issue is slowly becoming less prevalent. My company doesn’t do this sort of stuff (of course, we’re not a calll center).

    Prediction: Within a few yrs, this sort of stuff (name change/ accent faking) will be the exception.

    Also folks need to realize it’s a two-way cultural exchange… see this, for example http://www.informationweek.com/blog/main/archives/2005/11/little_holiday.html

    Comment by Prashant Kothari — November 9, 2005 @ 11:03 pm

  19. The left has this profound arrogance despite claiming to speak for the dispossessed. As pointed out by several people on this thread, people are exercising free choice when they join a call center with all the requirements – they are doing so because the alternatives (a clerk at LIC?) are dead-ends. Are all these people collectively making bad choices as the left-wing ‘intellectuals’ imply?

    Congratulations on continuing to expose the hypocricy of the left.

    Comment by amitabh — November 10, 2005 @ 12:36 am

  20. If attrition rate is a problem, the labor market will resolve the issue. If the treatment of employees become a significant problem and businesses cannot find talented replacements, then BPOs will do something to retain talented employees.

    Comment by sv — November 10, 2005 @ 1:04 am

  21. I really questioned the validity of the studies conclusions in a recent post. You stated the case much better than I did!

    Comment by Tim Stay — November 10, 2005 @ 8:31 am

  22. Sv, ‘if’ attrition rate is a problem? It is a problem and see Nasscom data, the rate is anywhere from 30% to 40% by various estimates.

    Comment by mridula — November 10, 2005 @ 9:33 am

  23. Mridula, why is it an issue if the attrition rate is high? People have choices, they exercise them, that is a good thing. Their voting with their feet is also excellent, it incentivises everyone to lift their standards. It also indicates that their choices are expanding. Fantastic.

    What irks me is that some people would rather that these choices not exist at all. It is one thing to have a personal opinion of how bad call centers are or how much malls suck, but quite another when these opinions, stated with seeming authority in a public space, can actually impact policy, and reduce the choices of others. Now, I may not want to work in a call center, and I may not want to shop in a mall, and it is my prerogative to do none of those things. But it would be wrong of me to try and impose my preferences on others, as the Indian Left, implicitly or explicitly, tries so often to do. That is the issue here.

    Comment by Amit Varma — November 10, 2005 @ 11:58 am

  24. [...] under Technology, India, Globalization, Free-Markets, Indian Economy Amit Varma writes on The Indian Economy Blog: Recently it has become especially [...]

    Pingback by Conditional Stability » “Sweatshops” in India — November 10, 2005 @ 1:01 pm

  25. There are two sides to this situation. Yes, in a sense we are doing cheap labor for the rich nations in providing them with what they can’t do themselves for the same price and on top of that a lot of call center workers are abused (verbally) by the customers that they are trying to help. But, at the same time I also have to agree that the process has opened up opportunities for other interesting things and raising the living standards of the people.

    I, for one don’t have much hopes on the position of call centre in India. There are already countries like Brazil and Puerto Rico that are opening up their policies to allow for establishment of call centres and they have the advantage of falling in the same timezone and it is said that 99% of the population speaks english that is very close to the American accent.

    What India does have as an advantage through this whole process are the other aspects that arrived through this. The BPO industry which is not just the customer service part of things, but also the accounting, the management,research and development, side of things will put to good use the talent pool in India and get them updated on how things are done in the global workplace. What we indians have as a disadvantage is the fact that what most people learn in their university education and graduate from are trends that are no longer in use and considered obsolete. The outsourcing of business processes will get them upto-date on the trends and customs of the workplace. We can almost think of this whole process as a big apprentice opportuntiy to prepare ourselves to compete. That’s what we can bet on.

    Comment by Vijay — November 10, 2005 @ 1:12 pm

  26. Amit, thanks for your measured response. I thought even NASSCOM worries about attrition because it increases the cost to the company, among other things. But I guess, this is not the place to debate about it.

    I entirely agree with your second part of the comment.

    Comment by mridula — November 10, 2005 @ 1:47 pm

  27. I see that Amit has already weighed in about the high attrition rates in the BPO/ITES industry. I guess attrition rates are as much a function of opportunities in the job market as they are of job satisfaction, aren’t they? In fact, the former is probably the more important factor. A decade or so ago, thoroughly disgruntled public sector bank employees, for example, would have had to stick to their jobs even if the job sucked. I’m positive that the attrition rates in these banks, particularly in managerial positions, has gone up with the banking/finance boom. Again, attrition rates are generally very low in PSUs – now I’m not sure that is indicative of anything much (except inertia, may be).

    Comment by Nanda Kishore — November 10, 2005 @ 4:02 pm

  28. Mridula, whether attrition is bad for call centers is an entirely separate question from whether call centers are bad for India. But the attrition itself indicates that there are many choices around, and that’s a good thing.

    Comment by Amit Varma — November 10, 2005 @ 5:42 pm

  29. As Amit mentioned, high attrition means lots of people are exercising their choices, hardly a slaveship situation. May be the people are moving to BPOs with better working conditions. Ultimately, these BPOs with better working conditions will be able to retain talented employees and survive in the business. The bad BPOs with harsh conditions will see very high turnover rates and thus will be soon out of business. My point is, it’s a labor market issue and the market will resolve the issue. Obviously, there is no room for government regulation and control here.

    Comment by sv — November 10, 2005 @ 8:54 pm

  30. Amit, by necessity of the people you were making a counter argument to, your article too seemed quite one sided, initially. But I can see to the extent it was inevitable. But yes, I believe in having choices, more the better. Much more than a BPO job would be even more welcome.

    SV, do not put that ‘slave ship’ thing in connection with attrition, I never said I support that lousy statement.

    You know SV what is the beauty of Economics? It makes messing up with human lives a detached ‘labor market phenomenon’ which does not has even a connotation of dealing with ‘human lifes’ and no I am again not saying BPOs are slave ships. It is much better that people become ‘Steve’ and be under CCT rather than starve.

    Comment by mridula — November 11, 2005 @ 10:19 am

  31. Mridula, there is no single monster called the labour market phenomenon that externally “messes up human lives”. Those humans excercising their choices to work and/or continue working at a place *is* the labour market phenomenon.

    Comment by sumeet — November 11, 2005 @ 12:09 pm

  32. Mridula, a “labour market phenomenon” that comes about because of expanded choices and results in improved work conditions impacts “human lives,” not robots. Its irrelevant what terminology one uses. Is it good, or is it bad? You agree that having more choices is a good thing. Well then…

    Comment by Amit Varma — November 11, 2005 @ 12:20 pm

  33. Sumeet, you are right, I agree that their are humans driving the labor market. Now why we do not pose the question that fellow human being are letting work conditions be such that people are complled to leave in numbers. If they are fellow human beings, they can also be given names. And it is not irrelevant to me.

    It is a slightly different question that the ‘labor market’ correcting it with the ‘invisible hand of market?’ or what was the exact phrase that Adam Smith used and economists are so fond of using?

    Amit, I like putting a few questions regarding capitalism, so that we do not become complecent, I enjoy captialsim because it usually comes with democracy and choices, but that doesn’t mean everything is hunkydory with it. Anyway, I already said a lot and thanks for not chasing me out with a broom. I am not sure, but this is probably my first prolonged interaction here.

    Comment by mridula — November 11, 2005 @ 2:14 pm

  34. Completely agree with you about the fact that it has opened up a lot of oppurtunities for fresh graduates. But look at the downside-A decade ago, a Physics graduate who might have done post graduation and ended up in research (for lack of any viable alternative) would today settle down in his BPO job.So, in a way it fosters a culture of underachievement.
    Note: I am not demeaning the kind of work done in BPOs but believe that research in science will be more beneficial, especially given the huge shortage of pure science researchers in India.

    Comment by Ravi — November 12, 2005 @ 6:21 pm

  35. “A decade ago, a Physics graduate who might have done post graduation and ended up in research (for lack of any viable alternative) would today settle down in his BPO job.So, in a way it fosters a culture of underachievement.Note: I am not demeaning the kind of work done in BPOs but believe that research in science will be more beneficial, especially given the huge shortage of pure science researchers in India. ”

    Ravi

    1) How many research jobs are available to physics graduates, in the first place? It’s far more likely that the physics graduate is looking at unemployment/ clerical position in a bank versus a BPO…

    2) Regardless, why blame the BPOs for a dearth of jobs for physics graduates?

    Comment by Prashant Kothari — November 12, 2005 @ 7:13 pm

  36. Prashant,
    Point taken about the first comment.
    About your second comment, my conjecture is that the size of the labour pool(not the number of jobs available) will be smaller than what is required ( despite the number of jobs available to physics researchers being fairly limited in number )

    Comment by Ravi — November 12, 2005 @ 7:33 pm

  37. Call center workers and their working conditions

    Amit Verma writes about call centers in India and the working conditions there. He takes the contrarian view and says that call centers are not forcing a whole generation into slavery(as the common refrain goes). Nicely written. The comments are inte…

    Trackback by Corelations — November 15, 2005 @ 5:07 am

  38. Late arrival: I just came across this post so excuse me if Im out of context.

    As far as consumerism is concerned, its alive and thriving everywhere if you live in a staunchly capitalistic economy like the one here in New York and its vicinity. There is a culture of propaganda here that, consciously or unconsciously, drives every individual choice, often at the cost of health, sanity and peace of mind. I mean, if the influence of constant badgering from marketing was limited to certain areas, things would be ideal. But when your health choices, personal life and even morality is governed by what the media tells you, I think its time to sit up and reevaluate terms like consumerism.

    Comment by Shalini — May 5, 2006 @ 8:42 pm

  39. Education in the modern sense far outruns the ideal of mastery over a particular field or discipline that we used to hold. A Physics graduate working in a call centre gets well-required exposure and financial freedom to pursue choices that either would not be available to him because of financial constratins or would escape him simply because he is unaware of the ocean just next to his pond.

    True learning today means the capability to unlearn anything that has been rendered obsolete and relearn things you never thought you would need. I mean, come on, there are already doubts on Einstein’s theory of relativity being correct in its entirity. Isnt that proof enough that the time to go out and explore your choices and expand your horizons, especially for Indians, is RIGHT NOW?

    Comment by Shalini — May 5, 2006 @ 8:51 pm

  40. I know this is very late, but I will comment nonetheless.

    Why would a physics graduate not go into research, and instead opt for a BPO job? Pay. (glamor maybe a factor but lets count it as a tipping factor rather than a substantial one).

    Ravi, Amit and others. If BPO jobs foster “underachievement” (read: require less skills – innate or ingrained) then why are physics research positions underpaid? Surely BPO jobs are not overpaid – I mean cost arbitrage is still the major factor in outsourcing. The answer is, yes again, lack of free markets – in Indian education – but I digress. So the answer is not to curb free markets in the BPO space, but to increase free market penetration in other spheres competing for a common labor pool.

    And yes, I do agree with Ravi that India as a nation is losing out for lack of scientific research – atleast until the point whereby we can import technology and use “non-over-priced” labor (who decides the base for cheap and expensive labor anyway). But for that we need to open the system, rather than close opportunities for individuals and thereby infringe on their liberty – apparently thats not a crime at all for the Left as well as the Right – CPI-M to Shiv Sainiks.

    Comment by Harsh — December 21, 2006 @ 12:07 am

RSS feed for comments on this post. TrackBack URL

Leave a comment

Powered by WP Hashcash

Powered by WordPress