Globalization - (3)
Another post in the series... necessitated by the comments in response to Globalization - (1) and Globalization - (2). I am also crafting a post on the idea of the welfare state, and my opinion thereof, necessitated by new comments on Socialism - An Opinion. One other post in this very invigorating discussion is Moving the People. (Hint: so read them all - articles and comments - before you pitch in!)
And now to business... this post is basically a letter to my dissenting Dad... gets a little personal too, but we are talking about rather touchy things... and I'm sure we'll all take it the right way...! Come to think of it - on reading it after I finished just now, I see a resurgence of my Ayn Rand roots. Funny, that...
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Dad,
You've brought up some excellent ideas on what comprises development. So before I jump into a proper rant, let's go back to the data (Once again, gathered from the CIA World Factbook). I'm going to be quoting the values for some of the measures you have enumerated (whatever I could readily find).
India is well over a billion people, the United States, just over 295 million. The median ages for both countries are 24.6 and 33.6 respectively - we have a younger populace. Life expectancy at birth in India is about 64 years - women are a little longer lived (65) than men (63). In the US, life expectancy is about 77 years - again, women live longer (80) than men (75). The infant mortality rate in India is about 56.3 deaths per thousand births (a little lower for girls at 55.7 than for boys at 56.9). In the US, there are only 6.5 deaths per thousand - 7.2 for boys, and 5.8 for girls. Any other measure will show us that the standard of living, of healthcare, is better in the US.
I'm not going to argue that the US is better off because it is capitalist and globalized. I believe the two nation's histories, while bearing some imperial similarities, are unique and incomparable. So let's not even go there! This was just a comparison for its own sake.
I have no problem with using more human measures to define development, instead of just PPP GDP (which is a measure of buying power, and arguably does impact these measures... but leave that be). Instead of discussing whether GDP or the other measures are the right way to go... I propose a compromise - Why don't we worry about both?
A slight sidebar is needed here - You seem to have completely ignored my four points on why I support Globalization on a global scale - a. Escalation deterrent, b. Lack of alternative to the prevalent global financial setup, c. The balance in benefits and creation of value, and d. the chaos factor. In that sense, you have not read what I wrote at all, and have responded with socialist dogma.
In particular your response to the socialism post (I quote): "Socialism, however unsustainable its political models may have been, promotes this principle. Welfare of even the weakest faction is the spirit behind it. Capitalism thrives on the ‘survival of the fittest’ motto. Profit is the spirit behind it. A country like India that has weaker sections totaling to a whooping 60% can not possibly to go the Westerners’ way, unless it is ready to strike off its large majority of poor population as ‘expendable’." This reads totally like a by rote discourse of dogma.
These are the very points I was debating - that capitalism doesn't have to be unmitigated "survival of the fittest", that profit is not a bad word. And of course we cannot strike off our populace as expendable - we especially don't, since they have a voice and can vote - something impossible in a socialist state - but the truth is the politics of your generation made it more about special interests and caste and gender in spite of claiming to be progressive socialists. Everytime you talk about alleviating the lot of dalits, or adivasis, or women, you are giving them a label to hide behind. You are giving them a special interest banner to wave in your face and demand something thoroughly regressive or undeserved.
Anyway... let me not get carried away here. I do have to thank you for at least conceding that socialism is not feasible because of unsustainable political models. And that while maybe its "spirit" was in the right place, its reality wasn't.
But in all other things, you really haven't answered the fundamental questions I asked. You end one of your comments with "Hence, I think, it is necessary for the developing nations like India to find suitable alternatives to the globalisation and the so called free economy." And you have had quite a few years of protesting and congregating and social forum-ing to do just that. And you haven't been able to!
Now going back... since you (or the WSF/ NAPM lobby) haven't come up with a viable alternative to replace the global financial system and the dollar standard and interconnected economies, (other than the protectionism idea, which we know from experience totally sucks), it falls to me to state an obvious fact of life: The world is irrevocably globalized.
So now, why can't we worry about both GDP and the human measures? Why can't we talk profit and welfare? Why can't we enhance the common Indian's buying power, and simultaneously ensure that when he takes his pregnant wife to a hospital for a delivery, he is reasonably sure he will walk home with a healthy baby? Why can't we have supranational integration and a globalized economy, hand in hand with a progressive welfare regime within the nation (and with UN help)?
My belabored question to you is, why can't we work within this system, accept its realities, and then fight practical, feasible battles for the good of the oppressed, rather than a silly idealogical battle for a dead, impractical philosophy? Here's my punchline: Socialism has had its day, as has protectionism, and they have obviously lost. Now, why don't you encourage us, this generation of capitalists, to take the compassion and well meaning that first made you err on the path of socialism (and gave us this world gone totally to the dogs) and make it work? Instead of branding us intellectual slaves of the imperial west, I say work with us, or get out of the way.
Think of it, dad. This discussion is all very well... but weren't you happy when I left Aurangabad? Not once did I hear you say, "Son, I want you to stay here and work to alleviate poverty." You say I belong to an industry that does not benefit the nation. When did you ever tell me not to ask for a bigger pay hike?
Not once did I hear you complain when globalization gave you the opportunity to buy a nice little car of Italian make, or a cheap large screen TV made in Holland, even as you fought it tooth and nail. Not once did I hear you tell a dam-displaced farmer to take his future into his own hands and start something enterpreneurial. I remember those people coming to you time and again, interested only in the reparations they were to get but never did, even as you talked about sustainable development to their deaf ears. Not once did I hear you tell my sister to forget the much maligned "profit motive" and invest her dollars in rebuilding India. Or, for that matter, to not give birth to her kids in the US and make them American rather than Indian citizens.
That, sir, is the hypocrisy of socialism - of your ideology. Sacrifice, welfare, poverty alleviation and a denial of self interest characterize it, but wait till the Socialist gets home and can't find it within himself to deny his kids a good life, complete with Pepsi, ice cream, and escapist movies. And we have both seen the selfless activists who in the twilight of their lives grew bitter and resentful and disillusioned because they were not given what was due for their selfless work. But don't you see... their expectation of a "due recognition" is called evil by the ideology they served!
It's not their fault - You know why? Because socialism is trying to deny a fundamental human nature - selfishness.
And selfishness is good, I say, but selfishness at the cost of another is anti-social, and therefore evil. Profit is never a bad thing - it is in fact a characteristic essential to any enterprise - without it, the said enterprise is not feasible. But profit does not always come at the cost of another - and is not always evil. And profit is not always measured in terms of only money! It will be measured in terms of value.
Yes, there is value to a free inoculation campaign that I am being taxed for - it can only be done by the government, and we will absorb the "loss" on our accounts because disease eradication is an undeniably profitable exercise. But I say to you, handicapping an entire social segment and making them addicts of welfare is not the way to go. I say to you, that if the idea of privatizing Indian Railways, or building the Narmada Dam, are evil capitalism in your book because of their impact, why didn't you also declaim the nationalization of Air India, or the disgusting mess that is the collectivist sugar industry - as acts of unmitigated, evil, socialist hubris?
Why don't you give compassionate capitalism, clean profiteering, and good selfishness a chance? Why don't we all, stop being socialists and capitalists, and become realists instead? (And I'll be a capitalistic realist for sure).
Anyway... I guess that's all I have to say for now!
Love,
Hrishi
8 comments:
I have to agree with Hrishi on this one Mr. Raghavendra. Capitalist economies by and large are successful because people cannot hide behind labels and excuses. Everyone has to work hard and make the best of things - if the government makes opportunities available fairly to one and all. The sad thing with socialism is that it kills the incentive to innovate. There develops the attitude of "why should I do it" if I don't benefit and have to just give it all away to everyone around - including those sitting on their butts. Altruism goes only so far. Even here in the US, socialism was adopted, albeit on a smaller scale, in the name of "welfare". But "welfare" had to be reformed and people's butts had to be kicked to make them go back to work in the 90s. Labels and excuses allow the lazy ones to remain that way.
I disagree with him in that there is this if the government ... in my statement. A corrupt government with special interest control that supports capitalism will not work. In the name of capitalism, atrocities can still be committed. However, in support of limited socialism, there are countries like Canada and some Scandinavian countries that have a good balance of socialism and capitalism. There, in times when a fraction of the people are affected by the market, they have buffers and mechanisms in place to rely on, that can ameliorate the human misery.
Yes, it can be agreed upon that a country like India should have a system commensurate to its own tradition and its own needs. It does not have to go for a Russian or Chinese model of subjugative socialism, or an American model of exploitative capitalism. The younger generation has to think over what the design of that system should be. But, equity, sustainability, efficiency, accountability, and justice have to prevail. Otherwise the rulers and the people will carry on to nurture a relationship of masters and slaves, whether it be socialism or capitalism.
- Vijay Raghvendra (Diwan)
And on your post 'Globalisation 3', Hrishi, I have something to say. But that, as I had mentioned earlier, will appear in my own blog Janapadodhwansa.Love.
- Baba
Btw Hrishi,
I’d read your blog quite carefully. I didn’t comment para by para because I thought the sum total of what I had to say would cover those four points. One cannot say in a generalized way that restrictions lead to disputes and harm. Escalation also cannot be attributed solely to restrictions. It must be kept in mind that the present process of globalisation and free trade is a race between unequals. In such a race the same rules cannot be made applicable to both the parties. Hence the restrictions.
Alternatives, as I have said in the comment before this, are not ready. But we have to try and seek those, instead of blindly following the westerners’ suite.
The governments’ interventions necessary for balancing the benefits can work, again only if there are restrictions. This is where my apprehension towards profit comes in. Experience tells us that profit is one such thing that does not stop at the just levels. In real life profit gets shared only to earn more profit. Take Bofors OR the Food for Oil cases, for example. Allegedly large amounts of money, beyond the scope of any land’s law, were accepted by Indian leaders during these deals. Who offered those amounts? And why? It is the profiteers’ way of sharing the profits to get a deal made that always corrupts its stakeholders. How can one achieve the balancing of benefits then?
And yes, I accept that I fell prey to the lures of buying an MNC manufactured car or television, when I did not need those or rather could not afford those. I know I shouldn’t have bought those. But this is what exactly happening here. My case is no different from a market labourer who craves to spend the fifth part of his weekly wages to buy a bottle of Mirinda for his kid. Such overwhelming is the effect of the promotion of products (that are not related to the needs of the people) shelled out in the globalised economy.
Hrishi,
Have spent the last 45 odd minutes going through the 5 posts and accompanying comments - fascinating discussion.
I agree with you , though this not a well researched view, in feeling that a balanced capitalist society is probably the best hope for development.
I want to focus on some of the things said about the power / lack thereof of capitalism and its role in development.
I want to write about six things
1. Agency theory
2. The role of business
3. The role of government
4. How business and capitalism stand today and how they are evolving
5. Shortcomings of business / capitalism - the finite nature of resources
6. The need for thoughtful capitalism
Ronald Coase introduced the concept of transaction costs - costs that are incurred everytime an economic transaction is made - this could be buying of fertlizer by a farmer or buying a tractor to take his produce to the market.
Transaction costs play a very important role in determing the optimal / most efficient organization to achieve a particular task at hand.
Taking this forward, the next question is which activities can be most optimally performed by government and which by business (laissez faire capitalism).
To start off with, think of goverment and business as black boxes into which resources (natural, financial, human , knowledge etc) go in and output (development - to start off with ) comes out.
There are three things inside each of these black boxes: The purpose of the entity as stated and felt by its members (the vision) , the idealogy or the philosophy (the strategy) and finally its modus operandi - its processes (lets assume people belong to processes).
Its really late at night - I wil continue this one tomorrow.
Nirat - like I said on phone before, Welcome to the party, pal! (a la John McLane)... Let's see what your MBA fuelled business perspective brings to this discussion. Eagerly awaiting your take.
In the meantime, am hard at work on the welfare state post myself... and on a proto-idea for bringing a realistic investment project aimed at 1) profit, and 2) development of some local economy as a tangible output of this discussion.
Am looking forward to your article on the welfare state. Have you read this book -
"The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits"
by C. K. Prahalad. I have read a paper that describes some of the ideas from this book. It is an interesting viewpoint, one that supports the fact that capitalism and poverty need not go hand in hand.
Well... the welfare state article will take a little time - I'm going on vacation for around a week and want to take the time completely off anything even remotely resembling work.
I've heard of Prahlad - but haven't read the book. Will try and find it at the library. Thanks for the recco.
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