Wednesday, January 1, 2014

The Power of Free Markets: An American Maid Earns More Than an Indian Lawyer and Accountant Combined

US markets are a lot less regulated than markets in India (For the time being) and it shows. From WSJ:


  1. By putting the stink to the Indian diplomat, the USA just impoverished her maid's family back in India. The maid would have lived free with the diplomat and lives better than she could have in India. All of her money would have been sent back to India to support her family.
    It's hard for most Americans to understand this because we are Manichaeans, everything is black and white and we usually have everything bassackwards because of our zeal for self-righteous and self-congratulatory actions.

    So this maid's chance to pull her family out of the gutter was ruined by American do-gooders. Isn't funny how much harm the do-gooders in this world cause? Not really. It's sad.

    1. American do-gooders such as the shakedown artists at Access Immigration and Safe Horizon are part of the problem, but the maid's greed was the spark that lit this fire.

      Have no fear for her family. They're out of the gutter and all in the US now, and I have no doubt they'll end up with citizenship. Nor do I have any doubt that, in addition to a civil suit and applications to various state and federal victims funds, her lawyers are plotting TV appearances and a book deal. Greed will be rewarded.

    2. Did the maid drop the dime on her boss? I missed that detail. If that's the case, to heck with her.

    3. Yes. In June 2013, she went out to buy groceries but never came back. Ms. Khobragade tried to file a missing person case with NYPD, which involved contacting the maid's husband in India (who refused to cooperate in the filing). A week later, Khobragade was contacted by a lawyer from an organization called Access Immigration, and the shakedown began.

      There's a lot more to this story than the American media has provided.

  2. It's hardly the power of markets. It is mostly the power of passport or the random luck of being born in a country whose average productivity is very high. It is the high average productivity of America which increases the opportunity cost of people within the US, thus allowing low productivity people like housemaid who are protected from competition from similar maids in India, by their passports,to earn a relatively high wage. The cheap telecommunications bandwidth cost reduced the protection for US programmers on the margin. But there still exists a large gap. Thank the capital formation and your passports as well. If labor were to be truly mobile neither lawyers or programmers would earn so much

  3. Not to worry, soon we will all be on the Indian pay scale. It's now just a matter of time...

    [Problem is we still won't be able to afford a lawyer - or food for that matter.]

  4. American lawyers are overpaid. The US legal system is full of make-work bullshit and selective enforcement of bullshit regulations. Get rid of that and the lawyers will have to honestly earn their pay instead of being pet dogs that get well fed to help keep the crony capitalist power centers intact.

    Remember how these gangs of overpaid lawyers dealt with mortgage fraud? John Corzine? And talking of law, don't you all know that Obamacare is constitutional? And the NSA spying is legal?

    Remember how many people %-wise are in jail in the US vs in India?

    1. According to David Galland from CaseyResearch, "The US has the highest population of lawyers per capita (1:265)".

      It's a miracle these lawyers are so highly paid. Supply - demand anyone? Or is it merely a case of abusive protectionism?

  5. Actually, US salaries ALSO derive from the power of unfree markets viz. artificial restrictions on immigration, labor laws, ability to arbitrage across borders because of military might that forces trade on unequal terms; limitless printing propped up by B-52s as needed.

    If the US had free immigration, its salaries would drop immediately. That's why it doesn't have it.
    They will probably rise again as it becomes more entrepreneurial, but that will never happen, because as long as there is welfare, immigration will be limited and will not be as productive as it should be.

    Yes, India is hampered by socialistic regulation in many areas. But in some areas the US is far worse.

    Especially on a personal level.

    One feels hindered by red tape in India. One doesn't feel oppressed by constant surveillance, PC, and militarization of even day-to-day activities. There is more hustling and self-reliance, just because the government is so unreliable.

    Just remember that 24/7 surveillance also means that the USG is involved in IP theft from companies all over the world.

    Just imagine all the theft of ideas, research, inventions by the people in charge of spying. That's got everything to do with business success these days.

  6. I don't know how you can say something like "US markets are a lot less regulated than markets in India". In reality, it's far less black-and-white. Practically every middle-class person hires one or two maids at home. One to clean stuff, and if the couple both work, another maid to cook or perhaps, baby-sit full-time. Do you know how many regulatory hurdles we have to jump before we can hire them? Zero. Compared you, we pay paltry amounts for medicines. Taking these $ figures and comparing them as if they mean *anything* is idiotic.