Books

Meltdown scenario

Three Billion New Capitalists by Clyde Prestowitz; Basic Books; Price: Rs.492; 320 pp

New York Times columnist Tom Friedman’s bestseller The Earth is Flat published in 2004, first spelled out the implications of the revolutions in telecommunications and computers which have fortuitously benefited emerging China and India most. The Earth is Flat reviewed on this page (EW October 2005) informed the world that in the wake of these two marvellous technological breakthroughs, it makes sound business sense for American and western corporates to outsource manufacturing and back-end service operations to these two populous Asian nations where labour costs are often a mere 10-20 percent of what they are in the US.

Suddenly the job of the automobile assembly line worker in Detroit which pays $20 (Rs.900) per hour isn’t safe anymore. In the new age of telecom, the internet and e-mail, it can be done by an equally skilled Chinese or Indian worker who would be delighted if he was paid Rs.900 per day. Almost overnight the playing field, which since the start of the industrial revolution (circa 1750) had been heavily tilted in favour of the industrial nations of the West, has become flat. That was the essence of Friedman’s message which also heralded the promotion of India and China from bit to important players on the world stage.

Three Billion New Capitalists written by Clyde Prestowitz, an international trade expert and former US commerce department official harps on the same theme but also offers US industry and government advice on how to cope with the competitive surge from Asia, when for the first time since the rise of America to super power status after the First World War (1914-18), its hegemony and economic prosperity, is imperiled. This book differs from Friedman’s bestseller in its prescription. Whereas Friedman stressed upgradation of American education and research as the most appropriate response, the burden of Prestowitz’s prescription is greater government involvement in policy formulation and cooperation with US industry. According to him, there’s an unprecedented serious challenge to America’s hitherto taken-for-granted industrial hegemony, with the BRIC (Brazil, Russia, India and China) nations having recently experienced economic liberalisation and deregulation and generating the eponymous three billion capitalists.

Unlike post-independence India in which government involvement and interference in industrial development was — and despite professed liberalisation is — ubiquitous, in the US, government is ideologically committed to market economics in which the unseen hand of the market determines investment flows and industrial policy. But according to the author, simplistic market-driven capitalism has outlived its usefulness in a globalised world in which BRIC governments are actively involved in industrial planning and development, doling out handsome incentives and allurements to American and Western industry to move manufacturing and service operations to their countries.

"So even as the US government proclaims its devotion to laissez faire and retains no mechanism for considering industry structure issues… the absence of US policy amounts to a policy to put (manufacturing) plants in China. Because we so hate having US bureaucrats pick winners and losers (in industry), we outsource the job to Chinese bureaucrats, all the while reminding ourselves of the glories of the free market and complaining when the Chinese don’t comply with our wishes," writes Prestowitz.

Although essentially a wake-up call to the American government, policy pundits and industry leaders in the US, this cogently argued work also has a lot to offer government know-alls and industry leaders in this country. It speculates intelligently about the likely global fallout of the US — the world’s largest economy ($ 11.7 trillion) which boasts twice the GDP of the next largest economy (Japan $ 4.6 trillion) continuing to run a trade deficit of $ 2 billion per day. Runaway unrestrained spending by Americans whose imports from around the world exceed export earnings by $ 700 billion per year is possible only because the dollar is the world’s reserve currency, i.e all countries around the world accept payment (and maintain national reserves) in the American greenback which in the early 1970s was unilaterally delinked from gold.

This arrangement provides the US government the unique advantage of recklessly printing dollars to pay off foreign creditors. And since these dollars are held as offshore reserves, they don’t create inflation within the domestic US economy. But what if, confronted with the widening US trade deficit and the failing export capability of American industry, the rest of the world — particularly China, Taiwan and India which have large dollar reserves — lose confidence in the dollar and switch to say, the Euro as the reserve currency? In a chapter ominously entitled ‘The End of the Dollar’, Prestowitz discusses this nightmare scenario. Moreover since the US is the world’s largest importer of manufactures and crude oil, industry worldwide will suffer huge loss of business which could trigger a global recession.

Reading this prescient and highly readable work of diligent research, it is impossible to disagree with the author that the global economy is in the throes of an unprecedented flux. The message is that all national governments need to thoroughly review their economic policies and outdated development prescriptions to survive. Although essentially written for hands-off government officials in Washington DC, Three Billion Capitalists also contains useful advice for policy mavens and myopic industry leaders in this country. There’s a 27 page chapter titled ‘Serviced in India’ which outlines the huge opportunity available to India which hosts the world’s youngest population, in the emerging global market for services. But though Prestowitz is bullish on India, a prescient minority living here is better aware that unless this country’s massive youth population is provided serious education and training for participation in the emerging global marketplace, there’s an even chance of this asset becoming a huge national liability if it transforms into a massive army of anarchists.

The central theme of the book is the somewhat frightening emerging global socio-economic scenario on the brink of a possible meltdown. Reckless borrowing and spending by American households and government who seem to have abandoned the Puritan ethic which made America great, could trigger a worldwide recession unless new policy responses on the lines suggested by the learned author, are widely debated, refined and initiated.

User-friendly guide

The Cambridge Guide to English Usage by Pam Peters; Cambridge University Press; Price: Rs.475; 608 pp

Once upon a time there was a race between England and France to establish their national language as the medium of international diplomacy and commerce. But sometime in the early 1960s the French threw in the towel and since then English — perhaps American English — is the undisputed language of international trade, law and diplomacy although language chauvinists in several parts of India seem blissfully unaware of this reality.

And perhaps the main factor behind the triumph of English is that it is a constantly evolving and inclusive — rather than a sniffy, pedantic — language. Therefore a huge numbers of words from foreign languages including bandobust, cummerbund, gherao and bibi from Hindi-Urdu are now part and parcel of the world’s premier and continuously evolving language.

But the downside of this continuously evolving language which has undoubtedly united India — never mind the anguished bleats of vernacular chauvinists and unconvincing supranationalists — is that correct usage has become a tricky business, particularly for writers, journalists and communicators. For instance none of the above could hope to survive professionally if they used words like Negro, cripple or gay (denoting cheerful) — all of which like many others were perfectly acceptable a few decades ago.

Therefore for the multiplying tribe of writers, communicators, editors, academics — ever at risk for using the wrong word — The Cambridge Guide to English Usage by Pam Peters is a valuable resource. An A-Z reference guide, it provides useful advice on contemporary English usage and style, with more than 4,000 entries covering spelling, grammar, punctuation and the larger issues of appropriate usage, effective writing and argument. The more than 4,000 headwords include the new vocabularly of electronic communication and the internet (e.g website, megabyte, etc).

"The Cambridge Guide to English Usage is written for English users in the 21st century. It takes a fresh look at thousands of questions of style and usage, embracing issues that are time-honoured yet still current, as well as those newly arising as the language continues to evolve," writes Pam Peters, an associate professor of linguistics at Macquarie University, Australia in the preface.

Of the 4,000 plus headword entries the ones on appropriate word use are perhaps most helpful. What’s the difference between the usage of thank you and thanks? Thank you is the standard and neutral way of expressing one’s gratitude, and thanks is more informal and works as a friendly acknowledgement or a brisk refusal. Spelling and punctuation are recommended on the basis of popular international usage. For example, Muslim is recommended as opposed to Moslem. The stopless PhD is usual in British and Australian English and recommended by Scientific Style and Format for scientists the world over.

The Cambridge Guide also addresses questions of grammar and punctuation — noun, verb, clause, dangling participle or split infinitive, sequences of tense, dash, colon, semi colon and comma. Aspects of writing and argument (e.g when is it ok to use I? What does it mean to beg the question? Should we italicize Latin abbreviations?) are also discussed.

With the US emerging as the world’s sole super-power, American English usage correctly receives consider-able attention. Transatlantic differences in English usage are addressed in detail with reference to grammar and style. References to Canadian, Australian and New Zealand English abound as well.

Perhaps it’s just as well that Peters is an Australian rather than British academic. This distinction perhaps accounts for her descriptive and analytical rather than prescriptive tone and style. A user-friendly guide on contemporary English usage, it is a must-have for writers, journalists, editors, teachers, students, communicators, and for every school and college library, particularly in countries where English is a second rather than the native language. It could save communicators many an embarrassing faux pas.