If only Britain had joined the euro

If Gordon Brown had chosen to join the single currency 10 years ago, both the European Union and Britain would be stronger now

• 
• • Will Hutton
  • The Guardian, Thursday 13 June 2013 19.30 BST

Gordon Brown with Paul Boateng and Dawn Primarolo in June 2003, just after his ‘not yet' decision on joining the euro. Photograph: Sean Smith for the Guardian

Ten years ago this week Gordon Brown said no to joining the euro. It is an anniversary on which Bank of England governor Mervyn King, Ukip's Nigel Farage, Unite's Len McCluskey and the Guardian's Larry Elliott, along with most of the British economic establishment, can all agree. On this, Brown was right.

Elliott set out the establishment consensus in a classic piece this month on his alternative history of what would have happened had Britain joined. Essentially, he says, there would have been a bigger boom in the runup to 2007 and a more disastrous bust. Britain would now be struggling to maintain its membership as anti-EU sentiment mushroomed, prompting its eventual exit, dramatising the inherent unsoundness of yoking disparate economies into one inflexible currency.

But there is a more optimistic, alternative history. The first obvious point is that Britain could have joined the euro only if a referendum had been won. A victory would have depended on it being an obvious good deal, with the pound entering at a competitive rate and the euro's structure, rules and governance reformed to accommodate British concerns and interests. The European Central Bank would have needed to look more like the US Federal Reserve, with more scope for fiscal and monetary activism. The Germans would doubtless have insisted, in return, that the EU banking system be more conservatively managed.

The last decade would have been very different. What none of the mockers of the euro ever acknowledge is the economic doomsday machine that Brown created through not joining. By not locking in a competitive pound, Britain suffered a decade of chronic sterling overvaluation, made more acute by the City of London sucking in capital from abroad to finance the extraordinary credit and property boom of those years.

Imports surged and exports sagged; the economy outside banking, which made goods and services to be sold abroad, either stagnated or shrank. Much of the best of UK manufacturing was auctioned off to foreigners. Today we find that, despite a huge currency devaluation, there are just not enough companies to take advantage of it: too much of the rest of British capacity, thanks to foreign takeover, has become a part of global supply chains that are indifferent to exchange-rate variation. Our export response has been feeble; evidence of the economic orthodoxy's inability to devise policies and structures that favour production.

Inside the euro, at a highly competitive exchange rate, Britain's exports would instead have soared, and its traded goods sector would have expanded, not shrunk. Regional cities would have boomed around sustainable activity rather than property and credit. The euro's rules would have meant a less reckless fiscal policy, and banks would have been more constrained in lending for property. They would have had to lend proportionately more to fast-growing real enterprise, reinforced because the new rules would have required them to lend in a more balanced way.

Britain would have entered the 2008 crisis with a far less unbalanced economy, a stronger banking system and international accounts, and a government deficit much less acute. And the reformed eurozone could have responded much more flexibly and cleverly than it did.

In any case, both Britain and Europe are now wrestling with depressed economic activity caused by overstretched bank and company balance sheets – and the exchange-rate regime is hardly the cause of this distress. Germany and the stronger EU countries are plainly wrong in their overemphasis on austerity as a solution, but surely right to argue that the only long-term solution is for the whole of Europe to move to their productivist, stakeholder capitalism.

British mainstream commentators see the obvious fissure between the stronger European north and the weaker south as proof positive that the euro is fatally flawed. But suppose countries like Greece or Ireland rise to the German challenge? Already there are encouraging auguries in both. If so, notwithstanding excessive austerity, they could weather the crisis, and become stronger.

There is plainly a chance one or more countries could leave, but there is a greater chance the system in some form will hold – it is in too many countries' interests to avoid failure. Then expect a pan-European recovery to begin in the second half of the decade that will gather strength in the 2020s.

Inside the euro for the last decade, the economic and political debate would have necessarily moved on. Having won a historic referendum decisively affirming Britain's future in Europe, the Blair government would have had to think in European terms about how to produce, invest, innovate and export. Sure, there would have been problems. But Britain outside the euro in 2013, with endless spending cuts, the biggest fall in real wages for a century, 500,000 people relying on food banks, and a weak unbalanced economy, is hardly a land of milk and honey.

Emboldened by his referendum victory, Blair could have sacked Brown before the disastrous second phase of his chancellorship and lacklustre prime ministership. Blairism would have morphed into a new form of European social democracy, fashioning British-style stakeholder capitalism. UK politics would not have moved so decisively to the right, with conservatives preaching free-market Thatcherism while the left clings to a bastard Keynesianism – united only in their belief, against all the evidence including Britain's export performance, that floating exchange rates are a universal panacea.

A single currency demands disciplines and painful trade-offs: but floating exchange rates after a financial crisis are a transmission mechanism for bank-runs and beggar-my-neighbour devaluations. Magic bullets do not exist. Had Britain joined, both we and Europe would have been better placed, and Larry Elliott would now be writing about how better to get Britain to innovate and invest under a fourth-term Labour government. A better world all round.

They might be living in caves, but it's not the homeless who are hiding

Our urban skins get ever thicker to the soaring numbers of people living on the streets. My solution? Keep building up that sense of comfortable numbness

Grace Dent in The Independent

Homeless men and women close to Stockport, Greater Manchester have been found living in a cave system, huddled in sandstone hideyholes amongst rubbish and food scraps, close to whatever they use as a toilet. Imagine an otherwordly scene from Lord of The Rings, but instead of Hobbits and  quests to overcome the dark lord Sauron, actual human beings like you and me and the simple quest to stay alive.

Wellspring, a local homeless charity, say that compared to rough sleeping in the town, the cave-dwellers at least find their new home safe and dry. Britain’s homeless problem burgeons, becoming more complex year on year. Plain facts: the financial crisis of recent years has driven up unemployment to 7.8 per cent. Meanwhile, the cost of living has risen along with house prices, and numbers of homeless people have rocketed. In London homelessness rose by 16 per cent in 2012-13, meanwhile parts of Greater Manchester saw rises of as much as 40 per cent.

When I saw pictures of the cave people in the greater Manchester area, my immediate gut-reaction was to write about them – because no one in modern Britain should live in a cave –  but within minutes I questioned whether it was really a story at all. Deep down, who would actually care? Perhaps it’s not the ever-plummeting level of squalor in which we permit human beings in Britain to live that’s of most interest here. What’s interesting is the ever-effective numbness of “the haves” – myself included when faced with “the have-nothings”.

In truth, I often spend a few moments – for the sake of my sanity – trying not to care remotely about the homeless. That girl who sits on the pavement near my house, staring at the floor, day after day, holding a paper cup for change, she’s not homeless really is she? No, most probably she’s part of a begging gang. I can ignore her. I’m very busy. And the skeletal man on crutches who sits in the Tube doorway, sometimes weeping, well I’ve seen him get on the number 158 bus so he must be going somewhere. That’s it, not homeless. Guilt absolved. And that crowd of men and women drinking themselves to death publicly, like a ghoulish piece of performance art, erecting their cardboard bedroom in the doorway of my local library, well, what can actually be done for them? Nothing, I think. In fact part of me is irate at them for messing up the aesthetic splendour of a newly stonewashed building. And will no one think of my house price?

At one point such fetid thoughts would never have crossed my mind, but the downturn has been long, the homeless keep multiplying, and our urban skins become ever thicker. So like most bleeding-heart liberals I am pained by the cave people of Stockport, but am yet to go into full St Francis of Assisi mode, and fling open my own front door.

Instead, I sit patiently waiting for “something to be done”, such as the industrious hammering up of the “affordable homes” that several Governments in my lifetime have promised. Obviously, in truth, builders and councils have no true interest in building dirt-cheap accommodation. That’s why flyers for luxury two-bedroom executive apartments, for £250,000, flood my letterbox daily. Neither do I envisage a full-throated “Golly, we were wrong” return to public housing by the Conservatives – or Labour having any muscle to do anything, especially as these days socialists love owning homes too.

Broadly speaking, I would say the Government has no real concern or plans for the rising numbers of rough sleepers, as the impoverished don’t fit in with ideals of enterprise or self-interest. Obviously, several ears may have pricked up when an advertising agency experimented with making homeless people  into 4G hotspots, in Texas, last March, but attention dwindled soon after. Furthermore I hold no hope of the homeless wangling their way onto half-buy schemes, of which the paperwork is more flummoxing and the cost more expensive than a regular mortgage. Do I have any solutions? One-bedroom stackable pods, built by charities (aka The Nimby armageddon)? Wide-scale homelessness “boot camps” where thousands of jobless graduates, trained in social care, help people in a life quandary? OK, that’s a bit kumbayah isn’t it? And, now I’ve written it down, perhaps a tiny bit Third Reich too. So, indeed, my current approach to homelessness is to build on my ongoing, ever-comfortable numbness, possibly leading one day to my simply stepping over a corpse on the way to ASDA mumbling “Oh, what a shame! Something must really be done.” If anything, Stockport’s cave people might be making a point. They’re isolated from help, but at least they’re avoiding our hand-wringing and ultimate hypocrisy.

To fix whistleblower, bank moves from verse to worse

ALOK DESHPANDE in The Hindu

  

The HinduEmbarrassed by revelations about its curious dealings with corporate clients, the Bank of Maharashtra has declared war on whistleblowers. File photo

 

Union leader Devidas Tuljapurkar faces victimisation and possible dismissal by the Bank of Maharashtra, as it suspects him of being the whistleblower behind a story in “The Hindu” on July 7, 2012.

For one unfortunate whistleblower, things have gone from verse to worse. Embarrassed by revelations about its curious dealings with corporate clients, the Bank of Maharashtra has declared war on whistleblowers. And since it can’t pinpoint them, the bank has gone after internal critics on novel grounds. It has chargesheeted a Union leader and ex-Director of the BoM for acts “prejudicial to the interests of the Bank.” That is, for publishing 19 years ago, a poem it calls ‘vulgar and obscene,’ in the Union’s in-house magazine, ‘Bulletin.’ That poem is the basis of the Bank’s charge sheet against a worker with an impeccable service record.

In 1984, the Marathi poet Vasant Dattatraya Gurjar wrote a satirical poem titledGandhi Mala Bhetla Hota (Gandhi met me) which shook the literary world with its polemical content. In 2013, Devidas Tuljapurkar, General Secretary of the All-India Bank of Maharashtra Employees Federation, faces victimisation and possible dismissal by the bank, ostensibly because the Bulletin, of which he was editor, carried that poem in 1994!

The real reasons for going after Mr. Tuljapurkar appear to have little to do with poetry and seem far more prosaic. He has been a thorn in the flesh of his management. Both, as an alert employee and, for a while, as Workman Director on the bank’s Board. He has also drawn the RBI’s attention to the BoM’s odd handling of some corporate accounts and advances which, he charges, are being favoured at the expense of BoM’s main depositors — lakhs of small farmers, working people and retired employees. But the BoM leadership has something more against him. They suspect him — with no basis or proof — of being the whistleblower behind a story in The Hindu, July 7, 2012. That story exposed how the bank had granted a Rs. 150-crore loan to a defaulter owing BoM Rs. 40 crore by greatly weakening the terms of the original sanction letter. The defaulter company was a part of the United Breweries (UB) group headed by Vijay Mallya. The expose embarrassed Bank Chairman and Managing Director (CMD) Narendra Singh, sparking a whistleblower witch-hunt.

But no whistleblower was found. And after several transfers of senior officers within the bank, the search hit a dead-end. Ironically, it was an unthinking action of the Reserve Bank of India that handed the BoM management a scapegoat: Devidas Tuljapurkar.

Mr. Tuljapurkar told The Hindu, “Last October, I wrote a letter to RBI Governor D. Subba Rao highlighting questionable corporate advances and imprudent banking decisions of BoM at the instance of CMD Narendra Singh.” The letter, written in his capacity as a Union leader, was backed up with facts and documents. Having served as a Director on the Board of BoM from 2004 to 2009, he was very familiar with the rules and procedures.

However, the RBI failed to protect his identity as a whistleblower. In one of those unthinking acts of bureaucracy, the RBI routinely forwarded Mr. Tuljapurkar’s letter to the very BoM management that it exposed, for their comments. The bank had found its scapegoat and Mr. Tuljapurkar’s ordeal began. “Since I had written a letter to RBI, the management assumed that it was also I who had leaked that story about gifting a Rs. 150-crore loan to Mallya’s company. They wanted to corner me, so they started scanning my history,” he says.

And all they could come up with was a poem from 1984. Vasant Gurjar’s poem is a political satire that is scathing about the followers of Mahatma Gandhi who, in the poet’s view, were merely serving their own interests. In 1994, the poem was published in the ‘Bulletin’ the house magazine of the Union. In March 1995, an organisation called the ‘Patit Pavan Sanghatana’ filed a complaint against the Bulletin for publishing the ‘obscene’ and ‘vulgar’ poem. As editor of the Bulletin, Mr. Tuljapurkar was made an accused in the case.

This May 3, 19 years later, the BoM management issued an internal charge sheet against Mr. Tuljapurkar. It accuses him of ‘publishing such an inflammatory, vulgar, obscene and objectionable material in the magazine “Bulletin” meant for bank employees …” And claims that circulating that issue of the Bulletin on the BoM’s premises (in 1994) was “prejudicial to the interests of the Bank.”

Interestingly, the ‘State Performances Scrutiny Board, Government of Maharashtra’, headed by well-known Marathi poet F.M. Shinde, has a very different take on the poem. In January 2011 the Scrutiny Board made it clear that the poem is neither obscene nor vulgar. “What Gandhi had envisioned about Swarajya is nowhere to be seen. The poet has expressed this in satirical form,” Mr. Shinde had said.

Apart from ignoring the Board’s view, the BoM seems to take no notice of the Supreme Court’s order in the case against Mr. Tuljapurkar. “After the FIR in 1995, we approached both the sessions court and the High Court to discharge me from the case. But that was rejected and our appeal is pending in the Supreme Court,” he says. “The apex court, in its order dated July 7, 2010, stayed all proceedings in lower courts in this case and the actual trial has not even started in any court.”

The charge sheet accuses Mr. Tuljapurkar of not disclosing this pending litigation against him while serving as the Workman Director of the bank and for knowingly making ‘false statements’ in the forms of the bank. BoM CMD Narendra Singh took personal interest in the entire matter, says Mr. Tuljapurkar. The CMD placed the 19-year old case before the board meeting in January this year, recommending action against the union leader.

All this sidesteps the truth that Mr. Tuljapurkar’s name was mentioned in the FIR as editor of the Bulletin and not in any ‘personal capacity.’ It also ignores the fact that even charges in the case are yet to be framed. Calls, faxes and emails from The Hindu to Mr. Singh have so far drawn no response.

Meanwhile, an outraged All India Bank Employees’ Association (AIBEA), to which Mr. Tuljapurkar’s union is affiliated, has called for an agitation across the entire BoM on June 17. “We demand immediate withdrawal of the charge sheet slapped against him and thorough investigation of loans sanctioned by the bank to various corporates ever since the present chairman took charge,” CH. Venkatachalam, General Secretary, AIBEA, told The Hindu. He added that the BoM being a public sector bank, every citizen had a right to express concern about its financial health. “We shall fight back any attempt at victimisation.”

If the departmental inquiry against Mr. Tuljapurkar proceeds the way bank management wants, it could result in his dismissal. A whistleblower exposing the questionable actions of a public sector bank could be dismissed for publishing a poem in 1994. He is also a man who, while a director of the bank, transferred all the money he received as sitting charges for Board meetings to the Union’s account via cheque, accepting no monetary benefits as a director.

“I wrote to RBI because I found Mr. Singh’s financial moves unhealthy for the bank’s future. Hence I’m being targeted and victimised. They aim to make an example of me so nobody in future will dare raise his voice. It has to be stopped,” he said.

I'm an everythingist – craving new experiences, but unwilling to put the work in

Everythingism is the deadly combination of perfectionism plus narcissism plus utter laziness – which explains why I haven't read Crime and Punishment

• 
• • Sophie Heawood
  • The Guardian, Tuesday 11 June 2013 18.30 BST

Crime and Punishment: details available on Wikipedia. Photograph: CBW/Alamy

When I was pregnant, someone told me that she read Dostoevsky novels to her baby, both in the womb and after he was born. Apparently, at about two months old, he would respond with delight every time he heard the character names he had heard so many times in utero.

Massively annoyed by this insufferable woman and her competitive wankery, I resolved to go home and do exactly the same thing. Only I had never read any Dostoevsky, and wasn't sure that I could be arsed, in my seventh month of gestation, to begin a literary journey into desperate horse-flogging Russians and Siberian internment camps. So I went straight to the Wikipedia page for Crime and Punishment and skipped to the list of character names instead.

"Raskolnikov! Svidrigailov! Dunechka!" I barked at my foetus for no discernible reason, the laptop balanced precariously on my bump, while my internal smugometer wavered somewhere between pride and existential despair. A little like the characters in the books. Perhaps.

It was some time after this that I took a long, soft look at my slapdash, half-arsed approach to life, and realised that I am an everythingist. This is a word I have invented to describe the sort of person who is greedy for the benefit of all new experiences, but unwilling to put the work in to fully commit to any of them. An everythingist leaves no experiential stone unturned, which means doing absolutely everything by halves. It is the deadly combination of perfectionism plus narcissism plus utter laziness. It will get you nowhere in the end. Halfway there at best. Every time an everythingist's mother opens her mouth, the words "oh just bloody well get on with it" come out.

Here's how to tell if you, too, are an everythingist. Do you clutch your phone in your hand at all times, like a beacon against the cold, a magic talisman with its promise of otherness, betterness, of more attractive people desirous of your company elsewhere? Does it ensure you are unable to quite go with a plan or be in the moment because of all the other plans and moments where you might be, cheating on yourself with your other selves? Does your phone give you FOMO (AKA fear of missing out) for the party you're not at, even when you're at it? Did the news that Prism could be spying on all of our data give you a giddy rush when you thought that one of the lockdown powergeeks might be looking in and realising that you – you! – are the chosen one? Do you tend to fall asleep in your clothes, just in case the revolution should begin outside your bedroom window in the night?

Do you, like me, think that fairytale endings will magically happen to your life – ie, you will fall in deep rewarding love and raise daughters with Rapunzel hair in a beautiful Welsh farmhouse one day, writing novels on a typewriter, milking your nanny goats at dawn? Of course, this all will have to happen magically as you absolutely refuse to give up nightclubs and the closest you have come to milking your nanny goats at dawn was all a case of mistaken identity and that restraining order for going within a 40-metre ring of the late-night Turkish greengrocers is a gross infringement on your civil liberties, which you will sort out as soon as you find the bit of paper they wrote it on.

The everythingist can't be tied down by a job and so they work freelance (ie are self-unemployed). They don't want to be restricted by narrow labels like straight or gay because they believe their sexuality to be a fluid concept (i.e. they keep getting dumped). They are breathlessly addicted to their youth, despite being 12 years older than their parents were when they had them; can't read a book to the end because they've already started two more; and they need to know, at all times, that they could, in theory, if they wanted to, at any point, run away to Rio de Janeiro.

The everythingist works from home, revelling in their freedom to go for a walk in the sunshine while other sad jobsworthy losers are stuck at their desks with not so much as a freelancer's liedown to look forward to. The everythingist has been planning this walk in the sunshine for 17 days now, having been quite distracted by all the freelancer's liedowns that it is their right and freedom to enjoy. In their lunch hour. I mean, why not? It's not as if there's any lunch.

If you are not an everythingist, and you're one of those people who gets stuff done and gets over it – I realise now that you have the greatest freedom of all. The freedom to finish things, and not have all your half-read books, half-written books and half-experienced experiences clanking around your neck like shells. I can only apologise for how I used to giggle at you for being boring and keeping lists and being on time while I dashed over half an hour late to meet you, hopes and dreams blinding my eyes so that I couldn't read a bus timetable. I'm so sorry now. For everything.

Pick 'em early? The fate of young English talent.

Jon Hotten in Cricinfo 

Brian Close: the youngest male cricketer to play Tests for England  © PA Photos

Enlarge

It was a day for history at North Marine Road. Yorkshire, like the venerable Almanack, are celebrating their 150th anniversary this year. Sunday was also 50 years removed from the first of Geoffrey Boycott's 151 centuries in a Roses game at Bramall Lane, an occasion marked with the presentation of a framed scorecard. And then there was Matthew Fisher, all of 15 years and 212 days old, the youngest player to appear in a competitive county game since Charles Young, who turned out for Hampshire against Kent in 1867, aged 15 years and 131 days.

There is an inevitable melancholy about this great wash of time, refracted through the boys at either end of it. Young, a left-hand allrounder who was born in India, played 38 games across the next 18 years before slipping away into history. No one knows when or where he died, or the circumstances surrounding his end. He was here and then he was gone. We're left with his wickets and his runs and his odd little record, which may stand forever. Fisher is from an entirely different world and a more focused and intense game, yet prodigies always carry with them a chance of unfulfilment that can be unsettling. 

Fifteen, you think, that's just too early, isn't it, however good you may be. For a start, it is such a brief span. Boycott had been retired for 11 years by the time Fisher was born, and no doubt Geoffrey could (and perhaps has) told the young man how fleeting those years can feel.

Yorkshire know a prodigy when they see one. Their 2nd XI keeper Barney Gibson was 15 years and 27 days old when he played against Durham University. Tim Bresnan got a Sunday League game as a 16-year-old. They had the young Sachin, of course, and before him Kevin Sharp, who seemed set for greatness after making a double-hundred for Young England and appearing in the first team at 18.

Then there was Brian Close, a man whose legend exists on different terms to those that his precocity seemed sure to dictate. Born in the same town, Rawdon, as Hedley Verity, he played Under-18 cricket at the age of 11, appeared for Leeds United and England youth as an amateur footballer and was considered bright enough to have attended Oxford or Cambridge had he chosen that path. Instead he became the youngest man ever to play for England in a Test match, in July 1949 at the age of 18, whilst in the process of completing the "double" of 1000 runs and 100 wickets in his first season (another record). Had the world known then that Close would make his final Test appearance almost 27 years later it might have imagined a new Leviathan had come, yet he played just 22 times for England.

In its place, Close's fame is based around his unyielding toughness, the brilliance of his captaincy (six wins and a draw in his seven Tests as England skipper; sacked after being accused of time-wasting in a game for Yorkshire) and his ability to nurture young players both in cricket and in life. Perhaps some of that understanding came from his earliest years, and the burden that they bestowed. He was by almost any measure a wonderful player, almost 35,000 runs, 1171 wickets and 800 catches batting left-handed and bowling right, and yet his first season casts its long shadow.

We are programmed to think that the earlier a talent emerges, the bigger it must be. That is not always the case. It will certainly not be rounded enough to offer anything other than promise, and promise is ephemeral stuff, available only for the briefest of moments. Matthew Fisher has promise, and our good wishes. What he needs most now is simply time.

The Indian way, No way

by Dinesh Thakur in The Hindu

The national culture of unquestioned obedience to authority along with an acceptance of shoddiness must not be used as an excuse to overlook violations of corporate ethics, says the Ranbaxy whistle-blower

During my tenure at Ranbaxy, I was surprised by the unchallenged conformity to the poor decisions of senior leadership. Ranbaxy was my first Indian employer following my tenure at two different American corporations. Reflecting on this experience from cultural and comparative perspectives highlights the organizational peril of such behaviour.

It is in our culture to respect authority. We are taught from childhood to listen and obey our elders. We grow up with the notion that our managers, the function heads and business heads within our respective organisations, know more than anyone else. Hierarchy is revered, authority is seldom questioned. Those who dare to ask questions are renegades.

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Asking questions

My investigation into the discrepancies between Ranbaxy’s records and the data filed with regulatory agencies in 2004 showed me how wide the questionable behaviour was within the organisation. It was systematic. It had penetrated the DNA of the organisation.

I often asked myself how was it that smart, well-intentioned people tolerated systematic fraudulent behaviour? This question led me to the Milgram Experiment, which was conducted by the Yale University psychologist, Stanley Milgram, in 1961. In the 1971 paper summarising its results, he stated:

Ordinary people, simply doing their jobs, and without any particular hostility on their part, can become agents in a terrible destructive process. Moreover, even when the destructive effects of their work become patently clear, and they are asked to carry out actions incompatible with fundamental standards of morality, relatively few people have the resources needed to resist authority.

Why is this important? In my view, as much as we value and respect our traditions, it is imperative that we not lose sight that being a “renegade” — a nonconformist — is acceptable when motivated by honourable intentions. It is acceptable to think that managers possess neither omniscience nor omnipotence. Our colleagues who are at the lowest rung of the corporate ladder sometimes know more than we do about an issue. It is important to encourage them to question authority, even if we find it uncomfortable and disconcerting.

The other aspect of my search for answers led me to introspection. What kind of society have we become? D.G. Shah, the secretary general of the Indian Pharmaceutical Alliance, recently penned an elegant op-ed that called out our culture for tolerating corruption, even with needs as basic as drinking water, personal hygiene, food and medicine. Why is it that we have come to accept poor governance, corruption, incompetence and entitlement as facts of life?

Compromise

I think it has a lot to do with how we lead our daily lives. Despite an exhaustive search, I have not been able to find proper translation for the concept of jugaad. It seems to exist only within our society. While Wikipedia describes it as a term applied to a creative or innovative idea providing a quick, alternative way of solving or fixing a problem, I think it misses two important aspects that I have experienced during my tenure working in India. First, there is an implicit understanding that because the solution needs to be quick and creative, it is acceptable to make a compromise on the quality of what is produced. Second, because we focus on making “it” work just-in-time, we never think of making the solution last. That leads to poor quality.

Not 100 per cent

The other pervasive attitude is the notion of chalta-hai. It is very hard to describe this attitude to someone who has not experienced life in India, but to those of us who have lived here, we know what it is. We have come to accept that if it is 80 per cent good, works 80 per cent of the time, and does 80 per cent of what it needs to do, it is acceptable. This attitude manifests itself in almost every facet of common life in India.

Clearly, we are now beginning to see the results of our approach with jugaad and our attitude with chalta-hai. They are not pleasant. Recent events hold a mirror to our face and ask us whether we like what we see. I certainly don’t.

As Jayson Blair, the disgraced former reporter at The New York Times, said, “Rarely are our choices in life presented as a major dramatic question. One step at a time, [they come as] minor choices, that may not even seem related to the ultimate outcome. Once that fear [of getting caught] disappears with the minor choices, it is easier to cross that big ethical line.”

It is not the big ethical line that we need to worry about. Rather, we need to worry about all the thousands of little situations we are presented with in our daily lives, to which the easy answer seems to be jugaad or the attitude of chalta-hai.

Unless we develop an attitude of “do it right the first time” and inculcate this expectation into our daily life, we will continue to see the same image in the mirror every time an event like the one on May 13 holds it up to our face.

The truth about Richard Branson's Virgin Rail profits

I once called Richard Branson a carpetbagger. A new report reveals that I was correct to say he built his business empire with millions from the taxpayers – only it's worse than I thought

• 
• • Aditya Chakrabortty
  • The Guardian, Monday 10 June 2013 20.00 BST

Richard Branson: 'subsidy junkie'. Photograph: Sipa USA/Rex Features

Just over 18 months ago on this page, I called Richard Branson a carpetbagger. Surveying his greatest business hits, from trains to planes to cable, my piece noted a common method: the Virgin boss liked to move into industries sheltered from too much competition, pull subsidies out of taxpayers and then cash out.

That was the story of Virgin Rail (now 49% owned by Stagecoach); of Virgin Atlantic (where the same role is played by Singapore Airlines) and it certainly fits Virgin's takeover last year of Northern Rock, where Branson was really the frontman for the serious money from America and Abu Dhabi.

Sir Richard was not best pleased. Faster than you could say "stroppy tycoon on the phone", a response in his name appeared in the Guardian, accusing me of a "vicious" attack full of "vitriol". But admirable hand-waving aside, he did not rebut my argument: that for all of his talk of enterprise and getting employees "really motivated and steamed up", Branson has built his business empire with millions from you, me and other taxpayers.

Well, last Friday a report was published that, I'm sorry to say, proves me wrong. He's an even bigger subsidy junkie than I thought.

Produced by academics at Manchester University's Centre for Research on Socio-Cultural Change (Cresc), and published by the TUC, the study looks at how Britain's railways have fared over two decades of privatisation. It's a hefty publication – more than eight months in the making, running to 166 pages and with more detail on the rail network than any commuter will ever need.

But it boils down to one key finding: the only way Branson and the vast majority of train barons make their profits is through handouts from the taxpayer. And while you may know about the direct payments taken by Virgin and others, the Cresc team has also analysed another, indirect transfer from the public purse to private hands. By now, it's worth £30bn – yet it is barely acknowledged either by Network Rail or Westminster.

Let's deal with the open-air subsidies first. If you tot up all the direct subsidies Branson's west coast mainline service received between 1997 and 2012, and convert them to today's prices, you get a sum of £2.79bn handed over by us – before a single ticket has been sold. And it is certainly before you factor in the service's upgrade (worth around £9bn, and paid for by the public), and the fleet of Pendolino trains (again, largely subsidised by the government).

By 2012, Virgin Trains enjoyed spanking new rolling stock, a more frequent service and a superfast line that whisked passengers from London to Manchester in just two hours. With all that going for it, plus a booming economy up till 2007 and rising fuel prices, the company couldn't help but pull in the customers.

Most of the improvements were subbed by taxpayers, with Virgin paying the state an agreed amount in the last two years of the franchise. Yet Branson and his shareholders could declare a cumulative net profit of £538m and trouser £499m in total dividends. No wonder some canny infants like to play with train sets.

These sums are what got Virgin interested in rail in the first place. In his biography of Branson, Tom Bower records a phrase used by the billionaire's lieutenants while weighing up the west coast deal: "It's a licence to print money. Can't go wrong."

But there is another undisclosed source of cash enjoyed by Virgin and the rest of the industry. Network Rail has been cutting the track access charges levied on the train companies. Under its predecessor Railtrack, the fees were worth around £3bn a year; they're now nearly half that, at just over £1.5bn a year. This is an indirect subsidy given by the public to the train operators, and Virgin is the third-biggest recipient. So important is the handout that, were it taken away, Cresc estimates the company would have made a loss of up to £257m last year alone.

Just so there's no doubt on the numbers, the Cresc report was shown to the Association of Train Operating Companies weeks before it was published. The trade body had time to dismantle the maths; but while it evidently doesn't like the conclusions, it hasn't repudiated the figures. Years of indirect subsidies have left Network Rail £30bn in the red. This is debt guaranteed by the public, although very few people know about it.

What all this resembles is a looking-glass version of capitalism. The public are handing money to private businesses for them to take a clip and pay us back the rest. Just in case that wasn't ludicrous enough, remember that Virgin's parent company is listed in British Virgin Islands, a sunny tax haven that is a stop pretty far from Wigan. And as we've seen repeatedly with the east coast line, the ones who don't make a profit can simply walk away, dumping their service back in public hands. Heads they win, tails you lose.

Branson is not the sole offender here; he's simply the most flamboyant representative of a completely rotten system for siphoning money from the public into private hands. The entire industry, as Treasury adviser Shriti Vadera put it in 2001, is peopled by "thinly capitalised … profiteers of the worst kind". And as a former investment banker, she'd know what those looked like.

But the Virgin boss also loves to shout about the virtues of private ownership of public good. At the moment, he's lobbying hard to take control of the east coast mainline. If successful, he'll doubtless try to replicate his previous sweet deal, state-subsidised Pendolinos and all. And just like now, it will be us paying for it.