Mumbai is a fascinating place. It is place where the rich and the poor live cheek to jowl, where the so-called first world, the second world and the third world co-exist in the same geographical space. In a manner, it is a microcosm which reflects the global economic condition.

The co-existence of the first world and the third world in Mumbai is made possible by a stratification in the vertical dimension. The boundary is approximately around 20 feet off the ground level. Above that, you have the first world; below, the second and the third world live, with the third world spilling on to the streets.

Around where I live, you will find enormous high-rises. A couple of dozen 20-storey buildings dot the landscape. Here live the residents of the first world, people who have air-conditioned cozy living rooms and bedrooms, fat cars, massive bank balances, all sorts of gadgets and gizmos fill their huge apartments, have expensive parties and go on foreign vacations. They live above the invisible 20-foot divide. Below that live the struggling unwashed masses. They are literally unwashed because they have little access to basic utilities such as running water and toilets. About 50 percent of Mumbai lives in slums. They are the laboring class and their labor is valued very low because of the iron law of supply and demand: the supply is so plentiful that the market price for their labor is astonishingly low. This fact works very favorably for the first world residents of the high-rises which basically means that all labor intensive activities is not expensive in Mumbai.

Lower Mumbai (below the 20-foot vertical divide) has the same relationship to Uppper Mumbai (above the 20-foot vertical divide) as India or other over-populated third world country has to the developed first world countries. Lower Mumbai supplies cheap labor to Upper Mumbai. Third world countries supply labor to first world countries by exporting labor intensive goods and tradeable services. Upper Mumbai enjoys the fruits of the over-population of Lower Mumbai as much as the first world enjoys the fruits of the over-population of third world countries.

This far the story is simple but uninteresting. Now we come to the interesting part: when the rich descend below the 20-foot vertical divide. They find they are in the third world. This descent is necessitated by the need to move from one part of the first world to another part of the first world. The roads and the entire transportation system is in Lower Mumbai. That explains the sorry state of the transportation system. Not just the transportation system, the sewage and garbage system as well.

Around where I live, the roads are … well, they are not really roads. They are more or less narrow open tracts of dusty land paved over haphazardly which serve a million purposes for the residents of Lower Mumbai. The sewage system consists of open gutters and canals with stinking black masses of stagnant sludge carrying god alone knows what from where. Their primary purpose as far as I can tell is to serve as a breeding ground for disease bearing insects.

Lower Mumbai is where Upper Mumbai dumps its garbage. (Again, the same story as the one where the rich countries export their toxic waste to poor countries and get all dirty manufacturing done in poor countries.) The residents of LM sort through that garbage and use what they can and leave the rest to be where it landed. The garbage piles up in the creeks and open canals which occassionally I suspect flow into the sea during the monsoons.

I think it is instructive to inquire into the nature and causes of this division between lower and upper Mumbai, into the nature of public and private goods, into externalities, into what is clearly an instance of the tragedy of the commons. This I will take up the next time.