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To Whom It May Concern (You): On Sunday, I discussed the ongoing challenges facing a country with a declining birthrate, a workforce under pressure, and rising entitlement spending. The natural investor response should be to turn our attention to nations with rising workforce numbers and more sustainable debt-to-GDP ratios. Australia, thanks to its immigration policies, has been a natural candidate. Economic freedom is strong, it’s a resource-friendly nation, and I’ve had no problem adding the abrdn Australia Equity Fund (IAF) and its 10.3% gross yield (and 8% discount) to our Chokepoint Portfolio. But what about a nation that’s really growing? Where the population continues to swell, and there’s ample optimism about its labor force? Well... for right now. India looked like the answer with 1.44 billion people. The most populous country on earth, as of 2024 with a median age of 28... Compare that figure to 49 in Japan, 46 in Germany, 39 in the United States, and 39 in China. More than 65% of the population is of working age, and that share continues to rise. The Indian economy has been growing at over 6% annually in real terms. The denominator in the Debasement Index... moving in the right direction. While the developed world prints money to service obligations to a shrinking workforce, India has been generating output growth driven by actual, working humans. That’s the story everyone tells. How the next century belongs to India. And for 30 years, that story proved valuable…
India built a $283 billion IT services empire on a simple arbitrage... Western corporations needed cognitive labor, and India could supply it at a fraction of the cost of U.S labor. We watched call centers, software development, exporting, and legal process outsourcing. Then, data entry, financial back-office operations, medical transcription… TCS, Infosys, Wipro, HCL... these companies employed 5.4 million people and became the backbone of India’s middle class. India became the bottleneck… the chokepoint… Every Western company that needed affordable human intelligence routed it through Bangalore, Hyderabad, Pune, and Chennai. But then the bottleneck started to open. AI doesn’t need to be routed through India right now... An AI agent doing the work of a product manager... scheduling, summarizing, coordinating, analyzing... doesn’t care about time zones, labor laws, or the cost of living in Karnataka. It runs on a server for roughly $0.40 an hour in cognitive tasks. A junior developer in Bangalore bills at $15 per hour. The spread that built an empire is being compressed from both sides. In the 2024-25 hiring cycle, India’s major IT exporters hired only 70,000 to 80,000 fresh engineering graduates, according to the Economic Times. The normal intake was at least 150,000. That is a 50% to 60% collapse in entry-level hiring in a single year. TCS... the largest IT services company in India, with 612,000 employees... laid off 12,000 workers in 2025, according to Reuters. That was the largest layoff in the company’s history. Oracle cut 10% of its Indian workforce as part of an AI-driven restructuring. Despite people trying to put rosy projections on this…Industry analysts estimate that AI could take away up to 500,000 Indian IT jobs over the next three years. India’s urban unemployment rate rose to 7.1% by June 2025. Youth unemployment... ages 15 to 29... spiked to 19%. And this could really pick up… it’s so significant that the Bank for International Settlements chimed in last week. On February 17, the BIS published Bulletin No. 121... “Economic impact of AI in emerging market economies.” The BIS found that emerging markets like India have a larger share of workers in low-skill cognitive and clerical roles... precisely the occupations most susceptible to AI automation. The report noted…
The modeling is worse. If AI preparedness gaps persist, the BIS estimates that advanced economies will gain more than two additional percentage points of real GDP growth over the next decade compared to emerging markets. That’s a huge issue… India’s great advantage... 1.4 billion people, median age 28, massive English-speaking workforce... was valuable because human cognition was scarce and expensive. The entire business model was that you needed smart people, and they had affordable smart people. AI is making smart people affordable everywhere. I now have a PhD in my pocket. The demographic dividend was a cognitive arbitrage. And AI is closing the spread. India still has a young population and is projected to grow. But the advantage that converted those demographics into middle-class prosperity... the outsourcing pipeline that funneled Western dollars into Indian salaries... is narrowing. When I went to Hopkins, I initially wanted to write my thesis on what would happen if the world found an energy solution that rendered oil production obsolete and the security impact on the Middle East, a region with a very young male population. My thesis advisor told me to ignore that idea… Well, 16 years later, we’re facing a similar situation… only it’s not energy. It’s everything. This is a reminder that not every tailwind survives contact with technology. The demographics are real. The question is whether the economy they were supposed to power still needs what India was selling. And now, we’re about to find out what real disruption looks like… Focus on the real chokepoints… and look for bottlenecks to start widening worldwide. This is a “Napster moment,” and the genie can’t go back in the bottle. Stay positive, Garrett Baldwin About Postcards from the Edge of the WorldThe Postcards Doctrine holds that wealth, power, and stability do not persist through innovation, morality, institutions, or financial sophistication, but through control of chokepoints that remain productive across regime change. Civilizations rise and fall. Ideologies rotate. Technologies obsolete themselves. Financial instruments are rewritten, repudiated, inflated away, or nationalized. What survives is not what performs best in good times, but what continues to function when systems fail, rules change, and authority resets. The doctrine begins with a simple observation: extraction always migrates toward what people cannot avoid. Early on, extraction flows through trade. Then finance. Then regulation. Then platforms. Then metered access. Eventually, it settles on inputs that cannot be substituted, deferred, or digitized. Postcards are sent from the edge of these transitions. Each one documents a moment when the system tightens, when optionality narrows, and when value stops flowing to innovation and starts flowing to ownership. Enjoy.
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