What Slumdog Millionaire can teach us about economic stimulus

Perhaps the only people who don't like the hit movie Slumdog Millionaire are those who compete against it at awards shows. After all, it's already cleaned up at the Golden Globes, and the BAFTAs, and it's poised to repeat these feats at the Oscars.

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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• thousandaire
• india
• latika
• jamal
• reform
• free trade
• globalization
• slums
• wealth
• free
• shikha dalmia

[TresobYr]

I love that "liberal" economics in India means the opposite of "liberal" economics in the States.

America needs to be more liberal in the Indian sense.

[kittyprydekissme]

I like seeing a video that points out that Bush did NOT deregulate anything, and that his administration presided over a HUGE increase in Government control of the economy. I wish more people would get that message out there. It drives me insane when people on TV complain about Bush's 'laissez faire' policies causing current economic problems. It really shows how stereotypes of Right-Wing Republicans completely override reality in people's minds.

[WestSkier11]

New Zealand is a great, great example of a heavily socialistic country becoming one of the freest market economies in the world.

[CripplingDuality]

Any true libertarian ought to be profoundly disgusted with Indian cops. They are sadistic, corrupt, powermad bullies.

[thomaserossi]

@eviloprah - "until corporations are dismantled" Spoken like a true Liberal Fascist. According to you, tearing down the businesses that provide a million people with jobs is considered a great economic boon. BTW, Liberal Fascists were Fabian Socialists. But you wouldn't know this either unless I told you. Also, if you watch the video again the woman speaking about India is the one that brought up Fabian Socialism. Not that you know any of this. Instead, you come here with BS analogies.

[apothecarynngfkt]

that good watch?v=R02tbrZSO3I

[eviloprah]

I understand Reasons point here and like many of your videos. Comparing INDIA to AMERICA is like comparing pineapples and motor oil.

Deregulating the US anymore than it already is would be disaster until corportations are dismantled from their current state.

[GinsingSullivan]

Voluntaryist radio! FreeTalkLive. com

[Trollmaster21]

respect to you too bro. There's those (like most Republicans) I can't stand, and there's people like you whom i respectfully disagree with, and welcome an honest debate among patriots.

And I'm sure we agree on a lot, anti gun control, anti US world police type stuff, and reform of the failed drug war.

And I thought lots of what Ron Paul said was totally right on, and would have welcomed and supported him as president, despite some disagreements.