Baumol Effect

Hey man, what’s up nowadays?

Nothing much.You know, just sitting on my arse all day and spending the parents’ money when I get off it.


It ain’t cool man. Look at you with your own money and living on your own and going out and meeting people and partying every weekend.

Hey Rajiv! how are you?

Nice meeting you (spoken hurriedly while looking at a receding back).


Hey Idiot, doing anything these days?

No man, same old.

That’s sad, why don’t you do something?

You see man, IIIT has left me facing a dead-end. The alley that leads up to this dead-end is a very narrow one and the car I’m driving is very large. So it’s only natural that it takes time for me to reverse and join the freeway and you know, get back to doing stuff.

Why don’t you write for a newspaper?


Hey dude! what are you going to do now?

Prepare for Civils, go to Delhi perhaps.

Aren’t there any other exams?

There are.

Why go to a college like IIIT and do engineering then?

Don’t know.


It’s been 3 months since college ended and almost all my batch-mates have moved on. During this time, I have never once felt envious of those enrolled for further studies, be it how esteemed their institute may be. There have, however, been days when I felt I’d have been better off working and earning money and spending money.

Those days however were before I came to know about unemployment benefits in the USA. 1200$ or Rs. 55,000 per month is what they come up to. That’s almost higher than what is considered a good salary for us beginners over here. An employed (below-par) American, meanwhile, earns in a week what an (above-par) Indian earns in a month. For all I know, the Indian works twice as hard, braving temperatures twice as high and traffic twice as worse, while not getting any action (if you know what I mean).

Of course, you will be jumping up and down to point out the difference in the costs of living, and of course, it is true that with 55,000 rupees you can live quite handsomely, whereas be only marginally better than a vagrant with 1200$. But what’s also true is that electronic goods cost the same there and here. What this essentially means is, an American can buy the same appliances with a week’s salary what an Indian can with a months’ salary. Right now, I need money for goods, all the services I desire are provided for. So, why will I ever take up a corporate job in India?

Baumol effect: The idea that services become relatively more expensive as economies develop, and that manufactured goods become relatively less expensive. (borrowed from the dictionary of economics)

Those comic strips you come across featuring beggars with iPads while having no money for food, aren’t that far-fetched afterall. At least, not as ludicrous as my whims 😛


5 thoughts on “Baumol Effect

  1. Be careful you dont serve the contradiction, you know what i mean then dont sit in Indian services. Get your arse hanged onto some foreign ambassy.

    people talk all the shit after they earn a good engineering degree cheaply in India. Oh lord! praise U.S. for whatnot!!

  2. No matter how many times we watch flight club we still dont loose this fucking love (or need) for goods 😛

  3. impressive once again. once you are on the free way (which i am pretty sure you will be), there will be no stopping you (no sarcasm implied). when you clear the civils, do remember me 😀 ( it counts a lot when you know an IAS in india :D)

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