"Chopped Liver" Getting More Expensive

óAnother India Success Story

"Indian Services Giant Hits $1 Billion Mark," by Saritha Rai, New York Times, 14 April, p. W1.

You read this great article about how Infosys Technologies, the "bellweather of the Indian software services industry," has just posted more than $1 billion in annual sales, and you say to yourself: this is why the U.S. and India are such firm security partners in global affairs, right? I mean, these guys are becoming huge in the global economy, connecting India as a whole to the Functioning Core of globalization like nobody's business. So much to offer, so much to exploit, so many business deals to be made.

We all know trade follows the flag, meaning our strongest security partners tend to be our strongest trade partners. But did you know that investment flows follow the flag even more? That's right, our strongest investment partners (we invest there and they invest over here) are overwhelmingly the same states with whom we have the strongest security relationships.

So what happens when New Core powers like China and India arise, sucking up our foreign direct investment (India far less so until recently, when their insourcing of foreign capital took off) and becoming significant trade and business partners? Does the flag follow all that trade and investment? Or does the U.S. chose to declare Pakistan a "major, non-NATO ally" instead (whole lotta trade there?) and reward China with a regional missile defense system aimed at them (ahem, I mean Pyongyang!)?

The Pentagon's New Map needs to be the negative of Wall Street's new map: where Wall Street is going is not where the Pentagon should be planning for war, and where the Pentagon is planning for war, rest assured that Wall Street has already opted out. Wall Street' map is about growing the Core, whereas the Pentagon's map is about shrinking the Gap, with the Core's help. India and China should be two of our strongest allies in coming years and decades as we wage this global war on terrorism and shrink the Gap. Simply put, our "flag" needs to look around and realize where all that trade and investment is going, cause we've got it backwards with these two New Core states.