In India a budget to be proud of

The free marketers are crying foul. In his budget speech on Monday, Minister of Finance, Pranab Mukherjee disappointed them by not detailing a plan for allowing foreign investment in the insurance sector, for privatization of public sector companies and of education.

Even as Mukherjee was making his budget speech, the Sensex of the Bombay Stock Exchange dropped.

To a large extent, big business led to its own disappointment by its euphoria after the re-election of the government of Prime Minister Manmohan Singh. Share prices soared on the stock markets as investors believed that the UPA, freed of its dependence on the Left parties, would now pursue a reformist agenda.

The term “Reformist” has usually been defined by business and the pro-business media in terms of free market policies that liberalize cross-border capital flows, open new sectors to private investment, and make labor markets more flexible (read ease out labor unions).

The evening after Mukherjee’s speech, the pro-business The Wall Street Journal is making a spectacle of itself, claiming interestingly that Mukherjee’s budget was ” a pretty dreadful spectacle”. Newspapers are expected to report and analyze, and not espouse causes, but that is a subject for another post, another time.

What industry and media like the WSJ mis-understood is that the Congress party, which is the main partner in the coalition government, has traditionally had a stand of its own on social policy, which is social democrat and far from pure capitalist.

Mukherjee used the budget speech to remind viewers that India was protected from the global financial meltdown because its large banks are government controlled and did not expose themselves to speculative activity, and stocking up on CDOs. He credited his former leader, the late Indira Gandhi, for nationalizing the banks when she was Prime Minister of the country.

By his focus on inclusiveness, on rural development, on expanding the economy through stimulus spending, Mukherjee has sent out a strong signal that social democracy is not dead in India.

By refusing to privatize education, and by in fact making a budgetary allocation for new IITs, Mukherjee is making the point that Pt. Jawaharlal Nehru’s strategy to spend on education and research as core competencies is still relevant.

Mukherjee’s budget in fact creates the opportunity for the emergence of more people from out of the pale of poverty, into becoming beneficiaries (and consumers) of the economic boom. The question is; will foreign investors decided this is a good market opportunity for them ? Or will they continue to demand what seems to be quite impossible in a country that is moving to its social democractic roots ?

There is some concern about the deficit in the budget, but at times of economic crises, deficit financing and government spending is the way out to stimulate the economy and create jobs. The challenge for Mukherjee is to rein in inflation when it happens, by a reduction of the deficit, and other appropriate fiscal measures.

There are also issues such as the implementation of the programs that aim to bring India’s vast rural poor into the mainstream of economic development. There will undoubtedly be leakages, corruption, and some of the money will not reach the target group.

But unbridled capitalism won’t solve that problem. Civil society and good politics can.

MySpace not responsible for assault on minors: US court

Internet servers like MySpace cannot be held liable when minors are sexually assaulted by people they first meet on a website, a California appeals court ruled in an opinion filed late on Tuesday, according to this report from Reuters.

The court seems to be saying, to use a metaphor from physical life, that if I rent a house to a person who commits a crime against a minor, or to a person who initiates a crime on those premises, I cannot be held liable.

I think that is reasonable from a purely legalistic standpoint, except in cases where a landlord is found to be actively abetting or aiding or profiting from the crime or its initiation.

But what if the landlord in this case saw the tenant lead an unknown minor girl to the house ? Should he just ignore it, as he is not legally liable, or should he just ask around, or drop in on his tenant just to show he is watching ? How much effort is good enough ?

Please note: this is no longer a point of law, but a matter of conscience.

To be sure, the landlord can try to smoothen out his ethical discomfort by blaming the parents who allowed the minor child out with the stranger in the first place, or by blaming parents who do not keep enough checks on the whereabouts of the children.

Or he may worry about intruding on the privacy of the tenant.

The landlord is within the law, but is his conscience clear ? If a crime does happen in his premises, he is not legally liable, but is his conscience clear, unless he puts in his best efforts to check what is going on ?

Social networks can’t be hauled to court for a crime committed or initiated by someone else on its premises, says the Second District Court of Appeal in Los Angeles.

“The idea is, you hold the speaker responsible not the soapbox,” Electronic Frontier Foundation (EFF) spokeswoman Rebecca Jeschke told Reuters.

The ruling, if adopted by other courts around the world, shifts the onus dramatically to citizens.

The public will have to be far more aggressive to get social networking sites to put in place security measures for minors, or prevent minors altogether.

Social networks are no longer liable for this role in a court of law, but they could be liable in a court of public opinion and action, liable for a failure of conscience.

Social networks can in certain circumstances be hauled before the court of public opinion and citizen action, made all the more easy on the Internet.

People with a conscience may, for example, decide to pull out of a social network because it does not protect minors enough, if its controls for preventing minors on its site are not strong enough.

Or people may decide to boycott products or services that are advertised on social networks that are found not to have a conscience.

To the other denizens of MySpace and other social networks; do we watch out for any signs of criminal activity and report it ? We are equally responsible as the people running the social network.

India needs English education for all

Education is the way out of economic backwardness for India’s large number of poor. Needless to say access to capital at reasonable rates, subsidies, health and other services are as important.

In this post my focus is on education. A number of state governments are enforcing state vernacular languages as the medium of education with scant regard to the relevance of this education in the job market.

They forget that India would not have emerged as an outsourcing hub but for a quirk of history, the decision by the British to introduce English as the language of education in the country.

We should be equally concerned about protecting our local culture and language. The McHomogenization of Indian culture is not at all desirable. But the classroom may not be the place for the protection of culture at this stage of India’s economic development.

The Wall Street Journal in this article has argued that the denial of English education to the masses is in a sense a form of domination, to keep the people subjugated.

“In fact, much of the political class remains opposed to English medium education supposedly because they fear the loss of local culture and language,” WSJ writes. It’s more believable that it’s because an ill-equipped population of voters is a malleable population of voters,” it added.

In the state of Goa in western India, a majority of the people backed Konkani as the mother tongue of the state, because it was the language spoken by most people But when it came down to the implementation of the language as a medium of education, parents fought back in favor of English.

They had by then realized that the official language issue had helped Konkani protagonists to perpetutate their roles as culture czars and educationists.

These protagonists re-wrote the language in the name of standardization, and expected children to learn a language that was by now quite different from what they had been used to speak at home. The script was also different.

Clearly there is a need to separate the politics of language from the relevance of a particular language in the new economic scheme of things. The education system, whether we like it or not, is geared to producing people suitable for employment in our factories and offices.

A few of us may have some discomfort about this mechanistic and production oriented metaphor of education. But to India’s poor, this is right now probably the only education that is relevant.

Savitabhabhi and the right to smut

News reports from India’s ContentSutra have it that http://www.savitabhabhi.com a porn cartoons web site has been banned by the Indian government.

While we all stand for freedom of speech, I am not sure that we should extend it to the right to publish smut.

What is cute about an online celebration of a sister-in-law who has the hots ? That incidentally was the theme of http://www.savitabhabhi.com, and some of the morally neutered media, US and Indian, gushed over it.

On this point I differ with the ultra-liberals who would argue that it has to be freedom at all costs, even if the freedom is exercised at the expense of good taste, or could endanger our kids who are also online.

Extending the liberal point of view further, this would add up to freedom to be solicited by pedophiles and other maniacs.

The fact is that if civil society is befuddled with confused liberal notions, somebody has to stop the smut online. If civil society does not have the way and means and the will to do it, the government does it.

The government has decided to take up the issue, and ban http://www.savitabhabhi.com. Hopefully, they will extend it to other pornographic sites. Else they would quite justifiably be seen as arbitrary.

I am not comfortable with the government deciding what should be made available to readers online, because the mandarins may misuse it, and they are not sophisticated enough to take a nuanced view.

That the government intervened however reflects the people’s inability to take a call as a concerted group, which is once again a reflection of the breakdown of consensus in civil society and the body politic.

Instead of relying on the liberal reflex, people worldwide have to take a serious view of the proliferation of smut and other things dangerous on the Internet. Just as we practively try to avoid crime on the streets, we should proactively try to stop criminal activities on the Internet.

As on the streets, there is the danger of fascism on the Internet. Governments also tend to want to curtail all freedoms in the name of curbing pornography, as in the case of China’s controversial filtering software for PCs.

But we have to find a middle-path for the sake of decency, good manners our sanity and that of the younger generation. We have to agree, or else the government will have to step in to tell us what is right.

P.S: A web site Savesavita.com has sprouted on the Internet to save the porn site….yet another example of misplaced liberalism.

India’s economic boom is lopsided

It is fashionable among India’s new business elites to talk about the boom in the economy, but a lot of it has been awfully lopsided.

About 600 million people, or 60 percent of India’s population, live off the land, according to CNN. Majority of farmers depend on rainwater for crops — irrigation, electricity are a luxury.

Yet presumably in a bid to attract investors, Indian business and investment analysts have trumpeted India’s economic boom. Their comments often reflect a divide in urban/rural perceptions, a lack of knowledge about what goes on outside the cities.

Rather than provide a counter-balance to such skewed perceptions, the Indian media has by-and-large gone along with the urban point of view.

The same business classes are also planning to get the private sector into education, healthcare, and insurance, little realizing that private services are not a substitute for government. If government services are bad, fix it…….let’s not talk about privatization as a panacea.

The few instances of privatization in these sectors in India have shown that the costs of the new privatized services are way beyond India’s poor who are not only in its villages but also in towns.

The boom in India, which has been largely confined to its cities, and particularly in its outsourcing, retail, and telecom industries has created a new class that demands the best in schooling for its kids, the best in food, the best in healthcare, quite regardless of the price.

But these schools, hospitals, and other services are beyond the reach of the poor both in the cities and the towns, further accentuating the huge economic divide in the cities. School fees in some of the better private schools would add up to over US$3000 a year. That is a cost that is way beyond a woman working as a maid in the city who would earn less than US$500 a year, at the peak of her career.

The moves to have private services in education and healthcare and other areas are therefore designed to serve the new elites, and cannot compensate for government action.

While there is no objection to the elites pampering themselves like their counterparts in the U.S., there is a case for the government to set up more of its services. In these sectors there is case for more government.

The poor also have their aspirations for a better quality of life, and if that is not satisfied by government, it will find other avenues, in some cases in increased loss of faith in the system and criminality.

If the political class, corrupt and suspect, have already contributed to an erosion of faith in the system, self-serving prescriptions from parvenu Indian elites can only increase the alienation.

The day the baker in my town closed shop

There was once a baker in the town I lived in. He and wife and two daughters each evening mixed the dough, let it ferment, and in the wee hours of the morning lit his oven with firewood to bake fresh and fluffy breads. He then delivered the labor of his love to his customers in the town on a bicycle, with a rubber horn heralding his arrival at the crack of dawn. His job done, the baker went to sleep.

Competition and modernization caught up with the baker and his family. He toyed at one point with mechanization, but that required capital. An entrepreneur who knew very little about the art of making breads, but had a lot of capital, started a mechanized bakery which offered breads that were very cheap, and yes excited the local consumers who were told they were made hygienically, made in accordance with modern global practices, and even had vitamins added to the dough.

Soon the entrepreneur was supplying to a number of towns and cities in the state, and re-located his factory in a cheaper town. To make his operations more cost-efficient, he began delivering bread to my town every three days. Preservatives in his breads kept them going that long.

Our neighborhood baker in the meanwhile folded up his business, and to avoid the ignominy (as he saw it) of working as an employee for the mechanized bakery, took to home delivery of newspapers. All this has happened in the last about ten years or so.

To be sure, there will be a section of folks who will say that worrying about the baker is useless sentimentality as modernization, free markets, and development have to wipe away what is inefficient and outdated. Implicit in this theory is the bias that what is dated is essentially not worthy stuff, unless it is an antique that can be packaged and auctioned to collectors.

Somehow I don’t think that I am alone in my sentimentality for the baker. Even commerce is playing on it. These days bakery chains are talking about the virtues of whole wheat breads, and oven fired breads, and fluffy breads. We had them when the traditional bakers were around, and we didn’t value them enough to preserve them.

The upshot is that free markets and competition cannot be counted on to meet our gastronomical, emotional, and community needs. Supermarkets will kill corner stores, large book chains will kill traditional small book stores, mechanized manufacturers will kill businesses where people work with their hands.

Some of these cornerstones of the past will however come back some ten years from now with a vengeance, this time positioned as boutique stores, designed and priced for the rich. The unassuming and functional corner bookstores or retail store will come back in a new avatar, with another owner, and a lot of snobbery and affectation that will drive off traditional customers.

Civil society has to protect what it values, whether it is the corner store, the local bakery, the vegetable cart, or the local vendor of victuals, by actively supporting these enterprises, buying from them. We are not doing them a favor, but keeping our sanity through this whirlwind of change.

Preserving small businesses has a lot to do with preserving our culture as well. Our culture is not only about owning expensive paintings and listening to music (these days more spectacle than participative). It is about the common relations, the institutions, the people that make up our life. The corner shop where one can stop for a bit of the local gossip, the baker who knows everyone around for mile, and other such notables where part of a community, of the fabric and culture of a society which is fast giving way to impersonal businesses.

Preserving traditional businesses also has to do with empowerment of the people who run these businesses. As the businesses close the self-employed join the ranks of the factory employed.

People also stop taking ownership of what they produce, and that reflects on quality. Once a year, the baker I spoke about used to gift his regulars with a cake stuffed with raisins and nuts. It was his creation, he was proud of it, and the kids loved it. It was not delivered with a large corporate logo in a fancy box, and there were no photo ops for the media. No, this gift reflected a man’s dedication to put in his best efforts to thank his fellowmen for their support.

It was about community, humanity. The baker was one of many who participated in a way of life that is not inexorably doomed to die away.

Coming up for air

I am back…..and this time I don’t care if millions of people don’t read this blog.

I am blogging again to keep my sanity in a world where we are indundated each day by marketing hype, cant and bluster in a world where truth has become like the plasticine, the clay our children play with.

It is a world where executives of banks that have taken TARP bailouts are using their company jets for private excursions, according to the Wall Street Journal.

It is a world where the gods of the financial Mount Olympus believe they should get a bail out, and they do get it courtesy US President Barack Obama, if only to save the economy.

A world where the new regulations for the finance industry proposed by Obama sounds like a lullaby, rather than a warning against future misbehavior. It won’t put speculators to sleep, but maybe all of us until the next bubble bursts.

It is a world where corruption and doublespeak continue not only in Iran or China but in democratic countries like the US, Europe and India.

It is a world where norms of decency and civility are fast dying out, and getting replaced by individualism and anomie.

I need to blog, to come up for air.

Nandan Nilekani: a dangerous flirtation

Nandan Nilekani is the best among India’s businessmen. But just because he has run a company well, it does not translate into core competence to do a government job well, more so when the job is in welfare.

India’s elite and the media will predictably welcome the move to induct people from the IT industry into government, and from that standpoint Prime Minister Manmohan Singh may score a big point with some of the urban intelligentsia.

Unfolding however is a far more dangerous trend, that of hard core free-marketers, who have made their fortunes from private enterprise, wriggling their way into government, and trying to influence policy. Their prescriptions are almost always built around privatization of vast swathes of the economy, of the education sector, of healthcare, and probably even the air we breathe.

It is the only language a businessman knows. It is also the most fashionable political ideology which many educated people thoughtlessly spout. But it is not an ideology that addresses the needs of the teeming poor. It is a self-serving ideology of the super class.

That the IT industry introduced stock options and high salaries does not reflect its social conscience, but again a high market demand for engineers which pushed up their salaries and perks.

Free market ideology cannot solve a country’s problems as the current economic crisis in the US and Europe has shown.

The country needs as leaders not business people, but people who know how the masses think and feel, and who are also accountable to those masses for those votes. Handpicked technocrats, particularly of the free market variety, will not do.

Like traditional aristocracies, the elite in the IT industry is trying to perpetuate their prominence beyond business, and beyond retirement, by selling the myth that IT professionals can bring a new and positive perspective to government.

From the mouths of children

One of my daily routines is to tell a story at bedtime to my child. I decided to tell her about Che Guevara, the man in Latin America, who wanted to help the poor by throwing out the rich and cruel landlords, and the evil dictators. “You have got it all muddled up pop,” my child protested. “That is Robin Hood you were talking about, and he and his men no longer exist.”

I then picked up one of her books to begin to read. The story we were reading was about a young man, called Jeff, who when not at work, was sought after by kids and adults in the neighborhood for his infectious sense of humor, his innumerable anecdotes, and his uncanny ability to take a dig at himself.

Jeff, it turns out, was a favorite because he was always around to help kids fix up their broken toys. He also helped the elder in the neighborhood with their chores, when he could

My child, interrupted me midway to ask, “These days, where do we find a person like this ?”. “Read me something about people we know”, she demanded.

Vowing to be as close to reality as possible, I began:

There was a man called Kirk who was the head of a company. He wore swanky suits, and was driven to work every morning in a luxury car. He was a man of many words, usually about his company, and its products, and how well they sold. In fact, he never passed up an opportunity to talk about these things.

His duty was to make money for the people who owned the company – they call them shareholders – and he did that very well.

He must have been an important man, because he had lots of people working for him. Everybody laughed when he said something funny. There were a lot of newspaper reporters and TV camera men running behind him. He was a “thought leader” and what he said was considered very important. He was always dressed right, always with a smile for the cameras.

He had people – they call them a public relations firm – that reminded newspapers all the time about his company, his work, and yes, his thought leadership. He traveled a lot, worked a lot, his company organized functions where he gave speeches a lot, he was away from home a lot. His company rewarded him with vacations in exotic locations, lots of money……..

My child was snoring before I could finish the story. She never asked me again to read to her at bedtime.

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Thoughts on Che Guevara and the cruelty of capitalism

The pain and cruelty generated by the free market and capitalism is no single person’s fault. As most people will tell you, it is the “invisible hand” more efficiently balancing supply and demand, including the demand and supply of  factors of production, even if one of those factors – human beings – can often feel pain, joblessness, insecurity, and powerlessness.

The capitalist world at large absolves itself from the pain and cruelty by blaming it on “the system”. It is the way things are, and sorry you just lucked out. Sorry you lucked out and lost your job when some US companies decided to send your job to India or China, because they were only following capitalist principles of finding the lowest cost factor of production.

You could take some cold comfort in the theory that this is just a structural adjustment, and that progressively the American economy will move to higher value-added jobs, for which incidentally you were never skilled. Tell that to your hungry kids when they are whining for the food you can no longer put on the table.

The Indians and the Chinese are now on a spending spree, yes on acquired tastes like Cabernet and caviar, and all things branded. The American worker should not crib, apologists say, because they are these days buying all things American, and helping boost the US economy. Unfortunately all things American are not longer manufactured in the US, but in China.

Take ten years from now, Indian workers, including software engineers may also find their jobs on the block, as companies move to lower cost locations, or expand to other markets.  Once again the theorists of capitalism will tell them that their pain, their powerlessness are only temporary effects of a structural change.

Have you ever wondered why the Latin American revolutionary Che Guevara inspires many people in a vague sort of a way, even 40 years after his death ? It is not that these people support Marxism, or for that matter some of Che Guevara’s controversial actions,  including his summary executions of supporters of General Fulgencio Batista in Cuba after the Marxists seized power in 1959.

Che Guevara and revolutionaries like him strike a mild sympathetic chord in many of us, because despite the odds, they did what we may never do.

Instead of being powerless victims of a cruel system, they chose to question and to overthrow the feudalism coupled with neo-capitalism in parts of South America.  And they were not alone. In other countries around the world too there have been people who have stood out to fight systems that are unjust and oppressive.

Today it may be the turn of  people in capitalist societies, aiming to restore their power and autonomy. As citizens, people  have the right to influence the political process so that the wealth that is generated is distributed more equitably, and people are empowered.

This is not about overthrowing the capitalist system. It is not about “economic populism” which Alan Greenspan, former chairman of the US Federal Reserve Board, says has caused many an economic disaster in Latin America.  This is about moderating the system – getting governments to spend more on the welfare of their people, getting capitalism to get less rapaciously greedy, and protecting vulnerable sections of society who have neither the skills nor the capital to compete.

Take the plight of workers in capitalist economies. Currently in most of these economies, if the CEO of a company cuts staff,  the company’s shares spike on the stock market, and later the CEO’s salary also jumps. The CEO can now keep fewer staff and make them work longer,  many of them driven  by the fear that their jobs could be lost. The CEO and his top management have benefited, and so have the shareholder, and you as the consumer. But you as a worker are out of a job, no longer able to participate in the orgy of consumption.

Do companies have to maximize profit at the expense of workers, or are they doing so mainly because a lot of industries are not unionized ? The pet argument is that if CEOs are not given the freedom to do as they please, they will lose out to competing companies. Lost in this dogma is the possibility that you can still pay and treat your people better, without making your products costlier, and still winning in the market.  You can do that by shooting for reasonable profits, rather than exorbitant profits !

If the stock market would put less pressure on CEOs to generate profits, CEOs could continue to please the consumer, and yes, even the worker. CEOs may even allow trade unions and higher worker empowerment.

The cult of  equity, and the celebrity status accorded to CEOs who help drive that stock up, has also translated into wide disparities between the salaries and perks of the CEO and his top management and the rest of the organization. Can’t that gap be perhaps reduced, so that the rest of the organization also benefits from capitalism ?

Apologists for capitalism will say that the key strength of capitalism is that you too can strive to be CEO. That line is cold comfort to the unemployed guy on the dole. Others will say that the outrageous salaries earned by CEOs and top management are an incentive to perform. Pray do only CEOs need an incentive to work ? What about the stiff who catches a bus or train to work each day, with nothing to look forward to except his daily routine ?

Nothing about what has been outlined so far is fool-proof. It may not work, or there may be people who don’t want it to work. But it is only by thinking of empowerment, thinking of humanizing  the system, and organizing around these principles, that the process of change can begin.

Che Guevara is more than a handsome face on a T-shirt. His example dares us to dream of empowerment, of taking control of our lives.

Marxism may be dead as an ideology, but revolutionaries like Che Guevara can inspire us to think about ways of countering our powerlessness in a capitalist system.

 

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