Monday, 9 March 2009
Ethics, Economics and Global Justice
Rowan Williams
In a conversation a couple of months ago at Canary Wharf, a senior manager in financial services observed that recent years had seen an erosion of the notion that certain enterprises necessarily took time to deliver and that therefore it was a mistake to look for maximal profits on the basis of a balance sheet covering only one or two years. There had been, he suggested, a deep and systemic impatience with the whole idea of taking time to arrive at a desired goal – and thus with a great deal of the understanding of both labour and the building of confidence. Either an enterprise delivered or it didn't, and the question could be answered in a brief and measurable time-span.
For all the rhetoric about accountability, getting your money's worth, the effect of such assumptions in all kinds of settings has been a spectacular failure to understand the variety of ways in which responsible practice might be gauged – whether in relation to investment in actual production or in relation to new financial products, whose sustainability and reliability can only be proved after the passage of time. Very much the same kind of impatience has also been part of the tidal wave of assault on the historic professions – including the law, teaching and academic research and some aspects of public service. The short-term curse continues to afflict the voluntary sector in the absurd timescales attached to grant-giving; but all that is material for a lecture in its own right …
But in connection specifically with the financial crisis, the main point is about what appropriate patience might look like where various financial and commercial enterprises are concerned. The loss of a sense of appropriate time is a major cultural development, which necessarily changes how we think about trust and relationship. Trust is learned gradually, rather than being automatically deliverable according to a set of static conditions laid down. It involves a degree of human judgement, which in turn involves a level of awareness of one's own human character and that of others – a degree of literacy about the signals of trustworthiness; a shared culture of understanding what is said and done in a human society.
And this learning entails unavoidable insecurity. I do not control others and I do not control the passage of time and the processes of nature; even the processes of human labour are limited by things outside my control (the capacities of human bodies). My lack of a definitive and authoritative or universal perspective means that I may make mistakes because I misread others or because I miscalculate the levels of uncertainty in the processes I deal in. And the further away I get from these areas of learning by trial and error, the further away I get from the inevitable risks of living in a material and limited world, the more easily can I persuade myself that I am after all in control.
Although people have spoken of greed as the source of our current problems, I suspect that it goes deeper. It is a little too easy to blame the present situation on an accumulation of individual greed, exemplified by bankers or brokers, and to lose sight of the fact that governments committed to deregulation and to the encouragement of speculation and high personal borrowing were elected repeatedly in Britain and the United States for a crucial couple of decades.
Add to that the fact that warnings were not lacking of some of the risks of poor (or no) regulation, and we are left with the question of what it was that skewed the judgment of a whole society as well as of financial professionals. John Dunning, a professional analyst of the business world, wrote some six years ago about what he called the "crisis in the moral ecology" of unregulated capitalism (in the editorial afterword to a collection of essays on Making Globalisation Good, p.357); and he and other contributors to his book discussed how "circles of failure" could be created in the global economy by a combination of moral indifference, institutional crisis and market failure, each feeding on the others. Yet warnings went unheeded; people's rational capacities, it seems, were blunted, and unregulated global capitalism was assumed to be the natural way of doing things, based on a set of rational market processes that would deliver results in everyone's interest.
This was not just about greed. At least some apologists for the naturalness of the unregulated market pointed – quite reasonably in the circumstances – to the apparently infallible capacity of the market to free nations from poverty. It may help to turn for illumination to an unexpected source. Acquisitiveness is, in the Christian monastic tradition, associated with pride, the root of all human error and failure: pride, which is most clearly evident in the refusal to acknowledge my lack of control over my environment, my illusion that I can shape the world according to my will. And if that is correct, then the origin of economic dysfunction and injustice is pride – a pride that is manifest in the reluctance to let go of systems and projects that promise more and more secure control, and so has a bad effect on our reasoning powers.
This in turn suggests that economic justice arrives only when everyone recognises some kind of shared vulnerability and limitation in a world of limits and processes (psychological as well as material) that cannot be bypassed. We are delivered or converted not simply by resolving in a vacuum to be less greedy, but by understanding what it is to live as an organism which grows and changes and thus is involved in risk. We change because our minds or mindsets are changed and steered away from certain powerful but toxic myths.
Now, you could say that ethics is essentially about how we negotiate our own and other people's vulnerabilities. The sort of behaviour we recognise as unethical is very frequently something to do with the misuse of power and the range of wrong or corrupt responses to power – with the ways in which fear or envy or admiration can skew our perception of what the situation truly demands of us. Instead of estimating what it is that we owe to truth or to reality or to God as the source of truth, we calculate what we need to do so as to acquire, retain or at best placate power (and there is of course a style of supposedly religious morality that works in just such an unethical way). But when we begin to think seriously about ethics, about how our life is to reflect truth, we do not consider what is owed to power; indeed, we consider what is owed to weakness, to powerlessness.
Our ethical seriousness is tested by how we behave towards those whose goodwill or influence is of no "use" to us. Hence the frequently repeated claim that the moral depth of a society can be assessed by how it treats its children – or, one might add, its disabled, its elderly or its terminally ill. Ethical behaviour is behaviour that respects what is at risk in the life of another and works on behalf of the other's need. To be an ethical agent is thus to be aware of human frailty, material and mental; and so, by extension, it is to be aware of your own frailty. And for a specifically Christian ethic, the duty of care for the neighbour as for oneself is bound up with the injunction to forgive as one hopes to be forgiven; basic to this whole perspective is the recognition both that I may fail or be wounded and that I may be guilty of error and damage to another.
It's a bit of a paradox, then, to realise that aspects of capitalism are in their origin very profoundly ethical in the sense I've just outlined. The venture capitalism of the early modern period expressed something of the sense of risk by limiting liability and sharing profit; it sought to give limited but real security in a situation of risk, and it assumed that sharing risk was a basis for sharing wealth. It acknowledged the lack of ultimate human control in a world of complex processes and unpredictable agents and attempted to "negotiate vulnerabilities", in the terms I used a moment ago, by stressing the importance of maintaining trust and offering some protection against unlimited loss. By sharing risk between investor and venturer, it also shared power.
The problems begin to arise when the system offers such a level of protection from insecurity that risk comes to be seen as exceptional and unacceptable. We take for granted a high level of guaranteed return and so come to prefer those transactions in which the actual business of time-taking and the limits involved in material labour and scarcity of goods are less involved. It has been persuasively argued that things begin to go astray, morally, in the early and intimate association between capitalism and various colonial projects, in which abundant new natural resources and abundant new reserves of labour (notably in the shape of slavery) could be counted on to minimise some kinds of risk.
In the post-colonial climate, it has been the world of financial products that becomes the favoured basis for both personal and social economy. A badly or inadequately regulated market is one in which no one is properly monitoring the scarcity of credit. And this absence of monitoring is especially attractive when governments depend for their electability on a steady expansion of spending power for their citizens. Increasingly, to pick up the central theme of Philip Bobbitt's magisterial works on modern global and military politics, government rests its legitimacy upon its capacity to satisfy consumer demands and maximise choices – its capacity to defer or obscure that element of the uncontrollable which in earlier phases of capitalist production dictated the habits of mutual trust and shared jeopardy, the habits that made sense of the otherwise morally controversial idea that the use of money was itself in some sense a chargeable commodity, something that needed to be paid for.
Maximised choice is a form of maximised control. And it presupposes and encourages a basic model of the ideal human agent as an isolated subject confronting a range of options, each of which they are equally free to adopt for their own self-defined purposes. If an economy resting on financial services rather than material production offers more choice, a government will lean in this direction for electoral advantage, since its claim to be taken seriously is now grounded in its ability to enlarge the market in which individuals operate to purchase the raw materials for constructing their identities and projects.
As I hope will be clear, this is a deeper matter than just "greed". It is a fairly comprehensive picture of what sort of things human beings are; and to recognise it as a reasonably accurate model of late modern "developed" society, especially in the north Atlantic world, is not to suggest any blanket condemnation of market principles, any nostalgia for pre-modern social sanctions and so forth – only to begin to sketch an analysis of where and how certain quite intractable problems arise.
As already indicated, the modern market state, in Bobbitt's sense of the term, the state that promises maximised choice and minimal risk, is in serious danger of encouraging people to forget two fundamentals of economic reality: scarcity as an inexorable truth about a materially limited world, and concrete productivity and added value as the condition for increasing purchasing power or liberty, and thus sustaining any kind of market. The tension between these two things is, of course, at the heart of economic theory, and imbalance in economic reality arises when one or the other dominates for too long, producing an unhealthily controlled economy (scarcity-driven) or an unhealthily hyperactive and ill-regulated economy (based on the simple expansion of purchasing power).
But forget that tension and what happens is not stability but plain confusion and fantasy. We have woken up belatedly to the results of behaving as though scarcity could be indefinitely deferred: the ecological crisis makes this painfully clear. We have woken up less rapidly and definitively to the effects of displacing labour costs to undeveloped economies. The short-term benefits to local employment in these settings and in lower prices elsewhere cannot offset longer-term issues about security of employment (jobs will move when labour is cheaper in other places) and thus also the problematic social changes brought by large-scale movement towards new employment patterns that have no long-term guarantees. One effect of this pattern is the creation not of a new consumer class but of a new group of urban paupers in unstable developing economies – a phenomenon visible in some east Asian contexts.
The move away from a realistic focus on scarcity and productivity/added value and towards the virtualised economy of money transactions has been deeply seductive, and, over a limited time-frame, spectacularly successful in generating purchasing power. Given that credit is not something that is naturally 'scarce' in precisely the same sense that material resources are, inadequate regulation can, as already noted, foster the illusion that the money market is effectively risk-free; that money can generate money without constraint.
In contrast to an economic model in which the exchange of goods is the basic process being analysed or managed, we have increasingly privileged and encouraged a model in which the process of exchange itself has become the raw material, the motor of profit-making. But, to repeat the point made so many times in the last few months, the problem comes when massively inflated credit is "called in": when the disproportion between actual, measurable material security and what is being claimed and traded on the market is so great that confidence in the institutions involved collapses. The search for impregnable security, independent of the limits of material resource, available labour and the time-consuming securing of trust by working at relationships of transparency and mutual responsibility, has led us to the most radical insecurity imaginable.
This is not the only paradox. In a recent essay in Prospect, Robert Skidelsky discusses why it is that a globalised economy has produced a resurgence of protectionism and nationalism, not to mention the political and economic domination of a single state, the US. We have, he suggests, been seduced into thinking that the mere lack of frontiers in global technology means that we accept a common destiny with other societies and are firmly set on the path to integrated economic operations. "Globalisation – the integration of markets in goods, services, capital and labour – must be good because it has raised millions out of poverty in poorer countries faster than would otherwise have been possible (p.39)." But the Whiggish idea that all this represents an irreversible movement towards an undifferentiated global culture and that a world without economic frontiers is natural, inevitable and by definition benign, rests on several very doubtful assumptions, rooted in an era that is passing – an era in which it was taken for granted that we began from a position of grave scarcity and moved towards unimpeded growth. But we are now in a position of "partial abundance" (i.e. a generally higher standard of living globally) which at the same time is more conscious of the limits of our material and environmental resources. As a result, globalisation is less obviously good news for the "developed" world. "The economic benefits of offshoring are far from evident for richer states," says Skidelsky (ibid.): jobs drain away to places where labour costs are cheaper, and we end up paying more to foreign investors than we earn in international markets. And the temptation for such wealthier economies is thus towards protectionism, with all its damaging consequences for a world economy. It is one of the most effective ways to freeze developing economies in a state of perpetual disadvantage; it makes it impossible for poorer economies to trade their way to wealth, as the rhetoric of the global market suggests they should.
Skidelsky argues that we need to take steps to reduce the attractions of relocating and "offshoring" in the first place, so that countries can focus afresh on their own processes of production so as to keep both internal and external investment alive. As he says, the present situation favours economic agreements that give little or no leverage to workers and that have minimal reference to social, environmental or even local legal concerns. Learning how to use governmental antitrust legislation to break up the virtually monopolistic powers of large multinationals that have become cuckoos in the nest of a national economy would also be an essential part of a strategy designed to stop the slide from opportunistic outsourcing towards protectionism and monitoring or policing the chaotic flow of capital across boundaries.
We have yet to see how much of this is deliverable, but the thrust of the argument is hard to resist, either morally or practically. Morally, protectionism implicitly accepts that wealth maintained at the cost of the neighbour's disadvantage or worse is a tolerable situation – which is a denial of the belief that what is good for humanity is ultimately coherent or convergent. Such a denial is a sinister thing, since it undermines the logic of assuming that what the other finds painful I should find painful too – a basic element of what we generally consider maturely or sanely ethical behaviour. Practically, protectionism is another instance of short-term vision, securing prosperity here by making prosperity impossible somewhere else; in a global context, this is inexorably a factor in ultimately shrinking potential markets.
And the wider agenda sketched by Skidelsky means also that commercial concerns would be prevented from overturning the social and political priorities of elected governments. The arguments around unrepayable international debt a decade ago repeatedly underlined the destructive effects of imposed regimes of financial stabilisation that derailed governmental programmes in poor countries and effectively confiscated any means of shaping a local economy to local needs. And we hardly need reminding of the distorting effect on a national economy – and public ethics, too - of being seen as a pool of cheap labour and a haven for irresponsible practices.
Several writers have said that a reformed and revitalised WTO ought to be able to move us further towards the monitoring I mentioned a moment ago. Some would be more specific and argue that for this to work effectively, there needs also to be some regulation of capital flow and exchange mechanisms, and this is where a variety of commentators from very diverse backgrounds see the "Tobin tax" proposals as having a place taxing currency exchanges in ways that would serve national economies. We should also need some mechanisms by which it could be guaranteed that a recognisable proportion of "savings", locally generated profits in a national economy, could be ploughed back into investment in local infrastructure, so that we should not constantly have to deal with the consequences of new money in a growing economy roaming around looking for a home and ending up fuelling the pressure on banks to lend above their capacity so as to keep the money moving.
Most such moves would, of course, require a formidable, perhaps unattainable level of global agreement and global enforceability; short of this, they could be counterproductive. But the debate on what kinds of international convergence are possible and necessary is a crucial one. The basic question that Skidelsky and others are posing, however, is how the market as we know it can be restructured so as to make it do what it is supposed to do – i.e. to offer producers the chance of a fair and competitive context in which to trade what they produce and become in turn effective investors and developers of the potential of their business and their society.
The last few months have seen an extraordinary and quite unpredictable shift in the balance, with international financial transactions losing credibility and national governments coming into their own as guarantors of some level of stability. It is a rather ironic mutation of the idea of the market state: when it comes to the (credit) crunch, populations want governments to secure their basic spending power, even if it limits their absolute consumer freedoms. There is also a point, recently underlined in the debate in the Church of England's General Synod on this subject, about securing justice for future generations: any morally and practically credible policy should be looking to guarantee that future generations do not inherit liabilities that will cripple the provision of basic social care, for example. Unregulated 'freedom' in the climate of destructive speculation is not the most attractive prospect, certainly not compared with a guarantee that assets will not be allowed to drop indefinitely in value. The only way of 'maximising choice' is to make sure that it is still possible to choose and to use something, and to secure the possibilities reasonable choice for our children and grandchildren, even at the price of restricting some options. Without that restriction, nothing is solid: we should face a world in which everything flows, melts, dissolves, in a world of constantly shifting and spectral valuations.
If we try to draw some of this together into a few governing principles, what might emerge? The non-economist is bound to be intimidated by the complexity of what we confront, but, as has been said, "we are all economists now"; the specialists are not more conspicuously successful than others in mapping the territory, and this at least encourages some tentative proposals from the sidelines, however broad and aspirational. Certainly, over the last century and a half, Anglican theologians have from time to time taken their courage in their hands and attempted to outline what an ethically responsible economy might look like, and I am conscious of standing in the shadow of some very substantial commentators indeed, from F.D.Maurice to William Temple.
In the background too is the formidable legacy of Roman Catholic social teaching, expressed in some powerful statements from the British and American Bishops' Conferences in recent decades. So with this heritage in mind, I shall suggest five elements, in descending order of significance, that might provide the bare bones of an economic culture capable of delivering something like an ethically defensible global policy.
(i) Most fundamentally: we need to move away from a model of economics which simply assumes that it is essentially about the mechanics of generating money, and try to restore an acknowledgement of the role of trust as something which needs time to develop; and so also to move away from an idea of wealth or profit which imagines that they can be achieved without risk, and to return to the primitive capitalist idea, as sketched above, of risk-sharing as an essential element in the equitable securing of wealth for all.
(ii) As many writers, from Partha Dasgupta to Jonathon Porritt have argued, environmental cost has to be factored into economic calculations as a genuine cost in opportunity, resource and durability – and thus a cost in terms of doing justice to future generations. There needs to be a robust rebuttal of any idea that environmental concerns are somehow a side issue or even a luxury in a time of economic pressure; the questions are inseparably connected.
(iii) We need to think harder about the role – actual and potential – of democratically accountable governments in the monitoring and regulation of currency exchange and capital flow. This could involve some international conventions about wages and working conditions, and cooperation between states to try and prevent the indefinite growth of what we might call – on the analogy of tax havens – cheap labour havens. Likewise, it might mean considering the kind of capital controls that prevent a situation where it is advantageous to allow indefinitely large sums of capital out of a country.
(iv) The existing international instruments – the IMF and World Bank, the WTO and the G8 and G20 countries – need to be reconceived as both monitors of the global flow of capital and agencies to stimulate local enterprise and provide some safety nets as long as the global playing field is so far from being level. They need to provide some protective sanctions for the disadvantaged – not aimed at undermining market mechanisms but at letting them work as they should, working to allow countries to trade their way out of destitution.
(v) Necessary short-term policies to kickstart an economy in crisis – such as we have seen in the UK in recent months – should be balanced by long-term consideration of the levels of material and service production that will provide an anchor of stability against the possible storms of speculative financial practice. This is not simply about "baling out" firms under pressure but about a comprehensive look at national economies with a view to understanding what sort of production levels would act as ballast in times of crisis, and investing accordingly.
Aspirational these may be; but what I hope is not vague here is the moral orientation that lies behind all these points. Ethics, I suggested, is about negotiating conditions in which the most vulnerable are not abandoned. And we shall care about this largely to the extent to which we are conscious of our own vulnerability and limitedness. One of the things most fatal to the sustaining of an ethical perspective on any area of human life, not just economics, is the fantasy that we are not really part of a material order – that we are essentially will or craving, for which the body is a useful organ for fulfilling the purposes of the all-powerful will, rather than being the organ of our connection with the rest of the world. It's been said often enough but it bears repeating, that in some ways – so far from being a materialist culture, we are a culture that is resentful about material reality, hungry for anything and everything that distances us from the constraints of being a physical animal subject to temporal processes, to uncontrollable changes and to sheer accident.
Implied in what has just been said is a recognition of the dangers of "growth" as an unexamined good. Growth out of poverty, growth towards a degree of intelligent control of one's circumstances, growth towards maturity of perception and sympathy – all these are manifestly good and ethically serious goals, and, as has already been suggested, there are ways of conducting our economic business that could honour and promote these. A goal of growth simply as an indefinite expansion of purchasing power is either vacuous or malign – malign to the extent that it inevitably implies the diminution of the capacity of others in a world of limited resource. Remember the significance of scarcity and vulnerability in shaping a sense of what ethical behaviour looks like.
It is true that modern production creates markets by creating new "needs" – or more properly, new expectations. Human creativity moves on and human ingenuity constantly enlarges the reach of human management of the environment. That isn't in itself an evil; but a mature perspective on this would surely note two things. One is that there is always some choice involved in what is to be developed – and thus some opportunity cost. Not everything can be produced according to the dictates of desire, and so there will still be the need to sort out priorities. Second, we cannot ignore or postpone the question of what we want enlarged management of the environment for. The reduction of pain or of frustration, the augmenting of opportunity for human welfare and joy – again, these are obviously good things. They are good because they connect with a sense of what is properly owing to human beings, a sense of human dignity. And thus if the way in which they are secured for some reduces the opportunities of others, the pursuit of them is not compatible with a serious commitment to human dignity.
All this amounts to a belief that pursuing ethical economic growth, while not systematically hostile to new demands and new markets, while indeed acknowledging the way in which new markets can and should help to secure the prosperity of new producers, necessarily means looking critically at our lifestyle. To make it specific, and to use one of the more obvious examples, it has become more and more clear that lifestyles dependent on high levels of fossil fuel consumption reduce the long-term opportunities of basic human flourishing for many people because of their environmental cost – not to mention the various political traps associated with the production and marketing of oil in some parts of the world, with the consequent risks to peace and regional stability. Growth as an infinitely projected process of better and cheaper access to fossil fuel-related goods, including transport, would not be an impressive ethical horizon. The question which present circumstances are forcing rather harshly on our attention is how self-critical we can find it in ourselves to be about our lifestyle in the more affluent parts of the world – not in order to adopt a corporate monastic poverty but in order to arrive at a sense of the acceptable limits to growth in the context of what might be good for the human family overall and the planet itself.
The five broad principles sketched above could only be fleshed out against a background in which people recognised that talking about the need for growth made no sense except in relation to a world of complex social and political relationships and of limited material resources – a background of willingness to ask not what might be abstractly possible in terms of increasing the range of consumer goods but what might be manageable as part of a balanced global network of forces, basic needs, mutual respect and so on.
Basic to everything we might want to say about the financial crisis from the religious point of view is the question, "what for?" What is growth for? For what and for whom is wealth important? If it is essential to invest in certain kinds of productive ventures, how does this relate to the broader and longer-term imperative of securing the funding of social care future by way of sustainable shared resources, accumulated wealth? And so on. But behind such questions as these is the unavoidable issue of what human beings are for; or, to put it less crudely, what the content is of ideas of human dignity and where we look for their foundation or rationale. The principles outlined a moment ago require a context not only of geopolitical and social analysis, not even of pragmatic recognitions of the limits of material resources or the opportunity costs of certain financial decisions, but of a comprehensive sense of belonging in a world – and a world that is neither self-explanatory nor self-sufficient, but is transparent to a deeper level of agency or liberty, that level that is called God by the religious traditions of humanity.
In Christian belief, the world exists because of a free act of generous love by the creator. God has made a world in which, by working with the limitations of a material order declared by God to be 'very good', humans may reflect the liberty and generosity of God. And our salvation is the restoration of a broken relationship with this whole created order, through the death and resurrection of Jesus Christ and the establishing by the power of his Spirit a community in which mutual service and attention are the basic elements through which the human world becomes transparent to its maker.
The realising of that transparency is, for religious believers of whatever tradition, the beginning of happiness – not of a transient feeling of well-being or even euphoria, but of a settled sense of being at home, being absolved from urgent and obsessional desire, from the passion to justify your existence, from the anxieties of rivalry. And so what religious belief has to say in the context of our present crisis is, first, a call to lament the brokenness of the world and invite that change of heart which is so pivotal throughout the Jewish and Christian scriptures; and, second, to declare without ambiguity or qualification that human value rests on God's creative love and not on possession or achievement. It is not for believers to join in the search for scapegoats, because there will always be, for the religious self, an awareness of complicity in social evil. Nor is it for believers to make light of the real suffering that goes with economic uncertainty and loss – no less real for the formerly affluent Westerner faced with redundancy than for the powerless farmer or woman worker enduring yet another change for the worse in a battered and injured African or Asian economy.
But the task is to turn people's eyes back to the vision of a human dignity that is indestructible. This is the vision that will both allow us to retain a hold on our sense of worth even when circumstances are painful or humiliating and sustain the sense of obligation to the needs of others, near at hand or strangers, so that dignity may be made manifest.
In conclusion, let me suggest three central aspects of a religious – and more specifically, Christian – contribution to the ongoing debate, which may focus some more detailed reflection:
(i) Our faith depends on the action of a God who is to be trusted; God keeps promises. There could hardly be a more central theme in Jewish and Christian scripture, and the notion is present in slightly different form in Islam as well. Thus, to live in proper harmony with God, human beings need to be promise-keepers in all areas of their lives, not least in financial dealings.
(ii) As we have noted more than once already, the perspective of faith understands human beings as part of creation – not wholly in control, though gifted with capacities that allow real and significant powers over the environment, bound to material identity and unable to escape material need. Living in faith is living in awareness of this created and limited identity without resentment or fantasy.
(iii) Living as part of creation brings with it a sense of the common destiny and common predicament of humanity. But more specifically, the scriptural understanding of our calling, especially as set out in the letters of St Paul, sees the ideal human community as one in which the welfare and giftedness of each and the welfare of all are inseparable. What is good in God's eyes for human beings not something that is altered by differences in culture or income; we can't say that what is unwelcome or evil for us is tolerable for others.
So: trustworthiness, realism or humility and the clear sense that we must resist polices or practices which accept the welfare of some at the expense of others – there is a back-of-an-envelope idea of where we might start in pressing for a global economic order that has some claim to be just. It can't be too often stressed that we are not talking about simply limiting damage to vulnerable societies far away: the central issues exposed by the financial crisis are everyone's business, and the risks of what some commentators (Timothy Garton Ash and Jonathon Porritt) have called a "barbarising" of western societies as a result of panic and social insecurity are real enough.
Equally it can't be too often stressed that it is only the generosity of an ethical approach to these matters that can begin to relate material wealth to human well-being, the happiness that is spiritual and relational and based on the recognition of non-negotiable human worth. There is much to fear at the moment, but, as always, more to hope for – so long as we can turn our backs on the worlds of unreality so seductively opened up by some of our recent financial history. Patience, trust and the acceptance of a world of real limitation are all hard work; yet the only liberation that is truly worth while is the liberation to be where we are and who we are as human beings, to be anchored in the reality that is properly ours. Other less serious and less risky enterprises may appear to promise a power that exceeds our limitations – but it is at the expense of truth, and so, ultimately at the expense of human life itself. Perhaps the very heart of the current challenge is the invitation to discover a little more deeply what is involved in human freedom – not the illusory freedom of some fantasy of control.
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Sunday, 8 March 2009
What do you thinhk? - Kerala Madrasas: Charting A Different Course ?
By Yoginder Sikand
07 March, 2009
Countercurrents.org
Writings about India's madrasas generally focus on the most ultra-conservative or reactionary of these institutions, of the sort that churn out fatwa-hurling mullahs characterized by bone-chilling views on politics, women and non-Muslims. This owes principally to a distinct prejudice on the part of many observers—non-Muslims as well as many Muslims themselves—as well as to lack of personal knowledge of and interaction with the ulema and students of such institutions on the part of many of those who glibly write about them. It also stems from to a marked, although thoroughly mistaken and misleading, tendency to regard traditional north Indian madrasas as typical and representative of all madrasas across the country.
Unbeknown to many, the system of madrasa education in Kerala is markedly different from the traditional north Indian system. It is well-organised and fully integrated with the secular system of education, thereby enabling Muslim children to receive religious as well as secular education simultaneously. It also enables would-be ulema to gain a basic modicum of knowledge of modern subjects, not leaving them totally bereft of this as in the case of many traditional north Indian madrasas.
One of the major Islamic organizations in Kerala is the Jamaat-e Islami. Like the Sunnis and the Mujahids—the two other major Islamic groupings in Kerala (each of which is divided into competing factions)—the Kerala Jamaat has a vast network of part-time madrasas (corresponding to north Indian maktabs) and full-time Arabic Colleges (similar to senior madrasas or dar ul-ulums in north India that train would-be ulema). Says Muhammad Ali, secretary of the Majlis ul-Taleem il-Islami, the Kerala Jamaat's Islamic education wing based in Calicut, 'We run 21 Arabic Colleges across Kerala and some 200 madrasas. In addition, 73 regular schools, mostly English-medium institutions that are till the tenth grade level, are affiliated to the Majlis, with some 40,000 students, including several non-Muslims, on their rolls. Eighty per cent of their teachers are women, and more than half are non-Muslims. They are independently registered and are locally managed. We believe that both Islamic as well as modern education are necessary for Muslim children. The fees that they charge are low and, for most families, affordable.'
Unlike in the Urdu-Hindi belt, where would-be ulema often have no familiarity with modern subjects, the Arabic Colleges under the aegis of the Majlis require prospective students to have finished at least the tenth grade in regular school. Some of these Arabic Colleges are affiliated to government-run universities, and offer a regular BA course, with Islamic Studies as a subject along with other Arts subjects, while the rest are specialized Islamic institutions that offer the afzal ul-ulema degree but which also require their students to study English. Graduates of the former generally go on to do a degree in education and take up jobs as Arabic language teachers in government schools, Kerala being the only state in India where government schools offer Arabic as a subject. Several of them also seek jobs in the Gulf, as translators and office staff in business-houses and government offices. The specialized Islamic institutions aim at training professional ulema. Nine of the Majlis' Arabic Colleges are specifically for women, while the rest are roughly equally divided between co-educational and men-only institutions.
The 200-odd madrasas that the Majlis oversees are managed by local committees, which collect donations locally to pay for their teachers and other expenses. Most of the madrasas charge only a nominal fee of Rs.5 a month, but several do not charge anything at all. The majority are co-educational, and have both male as well as female teachers. Muhammad Ali estimates that some 40 per cent of the madrasa teachers are women, the proportion of women Arabic College teachers being around half of that. Madrasa timings are adjusted in such a way as to enable their students to attend regular school as well. 'This is why', says K.K.Muhammad, another senior Majlis functionary, 'the dualism characteristic of Muslim education that is so stark in north India, between madrasa-educated and school-educated children, is largely absent in Kerala.'
In contrast to the Urdu-Hindi belt, where each madrasa is free to set its own syllabus, the madrasas run by the Majlis follow a common curriculum. Almost eighty Islamic Studies, General Knowledge and Arabic language textbooks for madrasa students have so far been prepared for students from the kindergarten to the tenth grade level by a team of Majlis specialists that includes educationists as well as Islamic scholars. Presently, almost all the books are in Malayalam, and a few in English, but efforts are now being made to prepare a complete set of books in English and Hindi as well, the latter intended to be used in madrasas in the Urdu-Hindi belt. Periodic workshops are also organized to update the textbooks. In addition to the madrasas run by the Majlis, some madrasas in Kerala that are not affiliated to the Kerala Jamaat also use these books.
A major bane of the madrasa system in the Urdu-Hindi belt is the complete lack of any system of teachers' training as well as the absence of a uniform evaluation system. In contrast, the Majlis organizes regular district- and state-level teachers' training and orientation courses. The Majlis' Muallim Welfare Fund provides financial assistance to needy teachers for medical expenses, debt relief and education of their children. The Majlis' Examination Board also sets papers for quarterly, half-yearly and annual examinations for students studying at various levels in all its madrasas, thus ensuring a uniformity of standards that is sorely lacking in most madrasas elsewhere in India. Papers are evaluated centrally, by the Board. As an incentive to students, the Majlis conducts the annual state-wide Majlis Talent Search Examination, with bright students being given awards. The Majlis Festival, organized every year at the district- and state-levels, brings together students of madrasas and schools under the aegis of the Majlis to participate in a range of art, literary and cultural programmes and sports events.
Muhammad Ali and KK Muhammad both opine that there is much that managers of madrasas in the Urdu-Hindi belt can learn from the well-organised system of madrasa education in Kerala. However, language remains a problem, with few Malayali ulema knowing good English and there being almost no north Indian ulema who understand Malayalam. To add to this is the problem of the thoroughly misplaced, little talked-of, but, at the same time, undeniable north Indian superiority complex, with the experiences of Muslims outside the Urdu-Hindi belt hardly given any attention by those who claim to be leaders of the Indian Muslims as a whole. Clearly, that complex must be exposed and critiqued, for the Kerala experience can provide valuable lessons for Muslim organisations elsewhere in India to learn from.
The author works with the Centre for the Study of Social Exclusion and Inclusive Policy at the National Law School, Bangalore
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Thursday, 5 March 2009
Major City frauds uncovered by police
March 5, 2009
By Robert Verkaik and Mark Hughes
Detectives and SFO reveal inquiry into big 'Ponzi' scheme and several 'mini-Madoffs'
A spate of Bernard Madoff-style scams that threaten to bring misery to thousands of investors is being investigated by police and the Serious Fraud Office, The Independent has learnt. Bogus investment schemes have been uncovered by investigators focusing on crime resulting from the credit crunch.
One senior officer has called them "mini-Madoffs", a reference to the US fund manager Bernard Madoff, who is accused of profiting from a £30bn pyramid investment fraud – or Ponzi scheme – which paid investors returns from their own money, or cash paid by subsequent investors, rather than from the scheme's profits. The Serious Fraud Office (SFO) is still investigating Mr Madoff's activities in Britain.
In an interview with The Independent, Richard Alderman, the director of the SFO, said he expected other alleged cases of "fraud on investors" to be made public soon. One allegedly involves a "big Ponzi" fraud, similar to that used by Mr Madoff, he added, without revealing further details of the case.
The SFO is also offering advice on how to avoid falling victim to a Ponzi scam. Mr Alderman said: "Clearly, in view of our interest in Bernie Madoff and Sir Allen Stanford [the Texan financier accused of fraud], people are talking to us about red flags for hedge funds, because as the stories unravel it is very interesting to understand the structure of what happened and what could have been picked up by people through due diligence."
He warned: "We are finding that people are talking to us about that and we are learning from them. We are not sharing operational detail but sometimes it is right that we feed back what we learn when we can. There is a lot more we can do on that; what kind of things due diligence could pick up."
Most Ponzi schemes – named after Charles Ponzi, who became notorious for using the technique in America in the 1920s – claim to offer 20 per cent returns and collapse quickly, but Mr Madoff's returns were 10 per cent.
Because he offered his investors a modest but steady and consistent income from their money, he was able to keep up his pretence for nearly 50 years. However, his scheme relied on a healthy stock market, so that depositors would be unlikely to collectively remove their money. When the world's financial markets tumbled and people did try to draw out their funds en masse, his scheme collapsed.
Detective Superintendent Bob Wishard, of the City of London Police fraud squad, said: "The growing number of frauds in the City and the deepening recession has prompted speculation that Britain could soon see its first £1bn fraud. I'm not aware of anything as big as £1bn, but there are undoubtedly some huge investment frauds going on – mini-Madoffs – that, in the fullness of time, will come to our attention."
Mr Alderman said the "ripple effect" of credit-crunch fraud was bringing misery to thousands. His organisation is investigating a range of financial crimes and is shortly expected to announce developments in cases involving investments, mortgages and fraudulent trading.
He added: "Some of them are ones where we have been asked to look at something that has gone on, and we are conducting a preliminary investigation. With others we are digging deeper. Some of it we have identified it ourselves. At least one [case] comes from a whistleblower. We are talking about quite large-scale fraud as a result of the credit crunch."
He promised to take tough action in cases that justified prosecution, and said: "This is the year in which I am expecting delivery. This calendar year is the year I want a lot of cases in the public domain out in court. Some corporates, some individuals, some cases involving individuals and corporates. I am expecting to send out some very strong messages as a result of what we are getting out into court."
The SFO has conducted a review of credit-crunch fraud which has identified the scale of the problem facing regulators. One particular area of concern, Mr Alderman said, was large-scale mortgage fraud involving "professional agents" such as solicitors and surveyors. It was clear, he said, that the recession had placed huge pressures on failing businesses. "It can give rise to temptation for businesses that are in great difficulties. And what we have seen before is that there are temptations to make various assumptions in their accounts," he explained.
"The obvious one is the over-recognition of revenues in the accounts: booking in year one all of the revenues that you hope to obtain from a contract over a series of years – things like that; going way beyond any prudent accounting principles.
"We see that, and we see the temptation for people to keep trading when they are effectively insolvent. The result is that they are not able to succeed in doing that in a recession, and lots of people lose out."
One senior officer has called them "mini-Madoffs", a reference to the US fund manager Bernard Madoff, who is accused of profiting from a £30bn pyramid investment fraud – or Ponzi scheme – which paid investors returns from their own money, or cash paid by subsequent investors, rather than from the scheme's profits. The Serious Fraud Office (SFO) is still investigating Mr Madoff's activities in Britain.
In an interview with The Independent, Richard Alderman, the director of the SFO, said he expected other alleged cases of "fraud on investors" to be made public soon. One allegedly involves a "big Ponzi" fraud, similar to that used by Mr Madoff, he added, without revealing further details of the case.
The SFO is also offering advice on how to avoid falling victim to a Ponzi scam. Mr Alderman said: "Clearly, in view of our interest in Bernie Madoff and Sir Allen Stanford [the Texan financier accused of fraud], people are talking to us about red flags for hedge funds, because as the stories unravel it is very interesting to understand the structure of what happened and what could have been picked up by people through due diligence."
He warned: "We are finding that people are talking to us about that and we are learning from them. We are not sharing operational detail but sometimes it is right that we feed back what we learn when we can. There is a lot more we can do on that; what kind of things due diligence could pick up."
Most Ponzi schemes – named after Charles Ponzi, who became notorious for using the technique in America in the 1920s – claim to offer 20 per cent returns and collapse quickly, but Mr Madoff's returns were 10 per cent.
Because he offered his investors a modest but steady and consistent income from their money, he was able to keep up his pretence for nearly 50 years. However, his scheme relied on a healthy stock market, so that depositors would be unlikely to collectively remove their money. When the world's financial markets tumbled and people did try to draw out their funds en masse, his scheme collapsed.
Detective Superintendent Bob Wishard, of the City of London Police fraud squad, said: "The growing number of frauds in the City and the deepening recession has prompted speculation that Britain could soon see its first £1bn fraud. I'm not aware of anything as big as £1bn, but there are undoubtedly some huge investment frauds going on – mini-Madoffs – that, in the fullness of time, will come to our attention."
Mr Alderman said the "ripple effect" of credit-crunch fraud was bringing misery to thousands. His organisation is investigating a range of financial crimes and is shortly expected to announce developments in cases involving investments, mortgages and fraudulent trading.
He added: "Some of them are ones where we have been asked to look at something that has gone on, and we are conducting a preliminary investigation. With others we are digging deeper. Some of it we have identified it ourselves. At least one [case] comes from a whistleblower. We are talking about quite large-scale fraud as a result of the credit crunch."
He promised to take tough action in cases that justified prosecution, and said: "This is the year in which I am expecting delivery. This calendar year is the year I want a lot of cases in the public domain out in court. Some corporates, some individuals, some cases involving individuals and corporates. I am expecting to send out some very strong messages as a result of what we are getting out into court."
The SFO has conducted a review of credit-crunch fraud which has identified the scale of the problem facing regulators. One particular area of concern, Mr Alderman said, was large-scale mortgage fraud involving "professional agents" such as solicitors and surveyors. It was clear, he said, that the recession had placed huge pressures on failing businesses. "It can give rise to temptation for businesses that are in great difficulties. And what we have seen before is that there are temptations to make various assumptions in their accounts," he explained.
"The obvious one is the over-recognition of revenues in the accounts: booking in year one all of the revenues that you hope to obtain from a contract over a series of years – things like that; going way beyond any prudent accounting principles.
"We see that, and we see the temptation for people to keep trading when they are effectively insolvent. The result is that they are not able to succeed in doing that in a recession, and lots of people lose out."
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Monday, 2 March 2009
As capitalism stares into the abyss, was Marx right all along?
Stephen King:
We may avoid a 1930s Depression but the best we can hope for may be a 1990s Japan
Monday, 2 March 2009
"Modern bourgeois society ... a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells."
Those of you with revolutionary zeal will immediately recognise these words. Penned by Karl Marx in 1848, they form part of the Communist Manifesto. Marx, like Adam Smith before him, had a historical view of society's development. Capitalism, with its bourgeoisie, had replaced feudalism, but capitalism, according to Marx, would be replaced by communism. Capitalism was inherently unstable, as Marx noted later in the same paragraph:
".....the commercial crises... by their periodical return, put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity – the epidemic of over-production."
Whatever else one thinks of Marx, he certainly knew a thing or two about the business cycle. Were he alive now, he would surely claim his theories were being vindicated. We are, after all, witnessing the most remarkable collapse in economic activity around the world. Take Japan. In November, industrial production fell 8 per cent. That was bad enough. In December, production dropped another 9 per cent. That was even more remarkable. January's production figures, though, are simply eye-wateringly awful, showing a further 10 per cent decline. Production, then, is down almost 30 per cent in just three months, a pace of decline unprecedented in Japanese post-war economic history.
Or how about the US, where we discovered last week that national income contracted in the final quarter of last year at an annual rate of more than 6 per cent, the biggest drop since the early 1980s. Then there's Taiwan, where exports have been in freefall in recent months. Not to mention dear old Blighty, where the economy might end up shrinking by approaching 4 per cent this year.
The pace of decline in global economic output is extraordinary. On virtually any metric, we are seeing the worst global downturn in decades: worse than the aftermath of the first oil shock in the mid-1970s and worse than the early-1980s downswing, when the world economy had to cope with a doubling of the oil price, the tough love of monetarism and the onset of the Latin American debt crisis. Moreover, this time we cannot use the resurgence of inflation as an excuse for lost output: the credit crunch in all its many guises has seen to that. Instead, we have a world of collapsing output combined with falling prices: a world, then, of depression.
For many years, Marxist ideas appeared to be totally irrelevant. The collapse of the Berlin Wall in 1989 brought to an end the era of Marxist-Leninist Communism, while China's decision to join the modern world at the beginning of the 1980s drew a line under its earlier Maoist ideology. In western economies, Marxist ideas were at their most potent after the First Word War when the likes of Rosa Luxemburg could smell revol-ution in the air and as the Roaring Twenties gave way to the Great Depression of the 1930s. I'm not suggesting we're entering revolutionary times. However, it seems increasingly likely that the economic landscape in the years ahead will be fundamentally different from the landscape that has dominated the working lives of people like me who entered the workforce in the 1980s. We've lived through decades of plenty, where incomes have risen rapidly, where credit has been all too easily available and where recessions have been mostly modest affairs. Suddenly, we're facing a collapse in activity on a truly Marxist scale. It's difficult to imagine the world's love affair with free markets being sustained under this onslaught. The extreme nature of this downswing will change our lives for decades to come.
The first change relates to the allocation of capital. Increasingly, policymakers are accepting that market forces, left to their own devices, will lead to a race to the bottom. The dangers are becoming greater by the day. Interest rates are close to zero while prices and wages are in danger of declining. If deflation takes hold, real interest rates on cash will start to rise, creating perverse incentives in capital markets. Why bother to buy equities or corporate bonds if you are nicely rewarded for hanging on to an entirely risk-free piece of paper?
The efforts to stop this vicious circle are increasingly focused on bypassing the banking and financial system. As central banks widen the assets they are prepared to purchase to maintain the flow of credit to the economy at large, they are increasingly getting into the capital allocation game. They, and not the market, will at the margin decide whether companies and households are creditworthy. And as governments increase their spending plans to ward off a catastrophic loss of demand, they, rather than companies, will decide on how our savings should be allocated.
The second change relates to an increased national bias in the allocation of capital. As Nicolas Sarkozy, the French President, pushes to offer government funding to French car companies on condition they don't outsource French jobs abroad, as US Congress signs off a stimulus package with more than a hint of a "Buy American" policy, and as the UK Government pushes to encourage bailed-out banks to lend domestically as opposed to internationally, we appear to be turning our backs on the previous world of heightened cross-border trade and capital flows. While these flows have undoubtedly been volatile, they have nevertheless allowed emerging economies, in particular, to gain a foothold on the development ladder. Are we about to cast these countries asunder in our desperate attempt to fix our domestic problems?
The third change relates to interference in the price mechanism. When it comes to Sir Fred Goodwin's pension, this isn't so surprising, but the price mechanism extends far and wide. At the microeconomic level, we'll enter a world of subsidised loans with murky political undertones. At the macroeconomic level, countries may take the opportunity to manipulate their exchange rates in an attempt either to gain a competitive advantage or to "default" to foreign creditors.
Some of these changes may be absolutely necessary to prevent an outright collapse in global economic activity (although the rise in protect-ionist pressures is surely a retrograde step). They also suggest, though, that there will be no return to "business as usual" for market forces. The cost of avoiding depression is a heightened level of state intervention on a scale unimaginable for those who believe in the virtues of free markets. While such intervention may help prevent the worst ravages of economic collapse, it will ultimately do little to foster the entrepreneurial spirit and risk-taking behaviour which have, in the past, contributed so much to rising living standards. We may avoid a 1930s Depression but, increasingly, we may find the best we can hope for is a 1990s Japan. Not quite a Marxist revolution, then, but certainly a lasting sea-change in economic performance.
We may avoid a 1930s Depression but the best we can hope for may be a 1990s Japan
Monday, 2 March 2009
"Modern bourgeois society ... a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells."
Those of you with revolutionary zeal will immediately recognise these words. Penned by Karl Marx in 1848, they form part of the Communist Manifesto. Marx, like Adam Smith before him, had a historical view of society's development. Capitalism, with its bourgeoisie, had replaced feudalism, but capitalism, according to Marx, would be replaced by communism. Capitalism was inherently unstable, as Marx noted later in the same paragraph:
".....the commercial crises... by their periodical return, put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity – the epidemic of over-production."
Whatever else one thinks of Marx, he certainly knew a thing or two about the business cycle. Were he alive now, he would surely claim his theories were being vindicated. We are, after all, witnessing the most remarkable collapse in economic activity around the world. Take Japan. In November, industrial production fell 8 per cent. That was bad enough. In December, production dropped another 9 per cent. That was even more remarkable. January's production figures, though, are simply eye-wateringly awful, showing a further 10 per cent decline. Production, then, is down almost 30 per cent in just three months, a pace of decline unprecedented in Japanese post-war economic history.
Or how about the US, where we discovered last week that national income contracted in the final quarter of last year at an annual rate of more than 6 per cent, the biggest drop since the early 1980s. Then there's Taiwan, where exports have been in freefall in recent months. Not to mention dear old Blighty, where the economy might end up shrinking by approaching 4 per cent this year.
The pace of decline in global economic output is extraordinary. On virtually any metric, we are seeing the worst global downturn in decades: worse than the aftermath of the first oil shock in the mid-1970s and worse than the early-1980s downswing, when the world economy had to cope with a doubling of the oil price, the tough love of monetarism and the onset of the Latin American debt crisis. Moreover, this time we cannot use the resurgence of inflation as an excuse for lost output: the credit crunch in all its many guises has seen to that. Instead, we have a world of collapsing output combined with falling prices: a world, then, of depression.
For many years, Marxist ideas appeared to be totally irrelevant. The collapse of the Berlin Wall in 1989 brought to an end the era of Marxist-Leninist Communism, while China's decision to join the modern world at the beginning of the 1980s drew a line under its earlier Maoist ideology. In western economies, Marxist ideas were at their most potent after the First Word War when the likes of Rosa Luxemburg could smell revol-ution in the air and as the Roaring Twenties gave way to the Great Depression of the 1930s. I'm not suggesting we're entering revolutionary times. However, it seems increasingly likely that the economic landscape in the years ahead will be fundamentally different from the landscape that has dominated the working lives of people like me who entered the workforce in the 1980s. We've lived through decades of plenty, where incomes have risen rapidly, where credit has been all too easily available and where recessions have been mostly modest affairs. Suddenly, we're facing a collapse in activity on a truly Marxist scale. It's difficult to imagine the world's love affair with free markets being sustained under this onslaught. The extreme nature of this downswing will change our lives for decades to come.
The first change relates to the allocation of capital. Increasingly, policymakers are accepting that market forces, left to their own devices, will lead to a race to the bottom. The dangers are becoming greater by the day. Interest rates are close to zero while prices and wages are in danger of declining. If deflation takes hold, real interest rates on cash will start to rise, creating perverse incentives in capital markets. Why bother to buy equities or corporate bonds if you are nicely rewarded for hanging on to an entirely risk-free piece of paper?
The efforts to stop this vicious circle are increasingly focused on bypassing the banking and financial system. As central banks widen the assets they are prepared to purchase to maintain the flow of credit to the economy at large, they are increasingly getting into the capital allocation game. They, and not the market, will at the margin decide whether companies and households are creditworthy. And as governments increase their spending plans to ward off a catastrophic loss of demand, they, rather than companies, will decide on how our savings should be allocated.
The second change relates to an increased national bias in the allocation of capital. As Nicolas Sarkozy, the French President, pushes to offer government funding to French car companies on condition they don't outsource French jobs abroad, as US Congress signs off a stimulus package with more than a hint of a "Buy American" policy, and as the UK Government pushes to encourage bailed-out banks to lend domestically as opposed to internationally, we appear to be turning our backs on the previous world of heightened cross-border trade and capital flows. While these flows have undoubtedly been volatile, they have nevertheless allowed emerging economies, in particular, to gain a foothold on the development ladder. Are we about to cast these countries asunder in our desperate attempt to fix our domestic problems?
The third change relates to interference in the price mechanism. When it comes to Sir Fred Goodwin's pension, this isn't so surprising, but the price mechanism extends far and wide. At the microeconomic level, we'll enter a world of subsidised loans with murky political undertones. At the macroeconomic level, countries may take the opportunity to manipulate their exchange rates in an attempt either to gain a competitive advantage or to "default" to foreign creditors.
Some of these changes may be absolutely necessary to prevent an outright collapse in global economic activity (although the rise in protect-ionist pressures is surely a retrograde step). They also suggest, though, that there will be no return to "business as usual" for market forces. The cost of avoiding depression is a heightened level of state intervention on a scale unimaginable for those who believe in the virtues of free markets. While such intervention may help prevent the worst ravages of economic collapse, it will ultimately do little to foster the entrepreneurial spirit and risk-taking behaviour which have, in the past, contributed so much to rising living standards. We may avoid a 1930s Depression but, increasingly, we may find the best we can hope for is a 1990s Japan. Not quite a Marxist revolution, then, but certainly a lasting sea-change in economic performance.
Management metaphors are out for the count
By Lucy Kellaway
Published: March 1 2009 20:09 | Last updated: March 1 2009 20:09
Published: March 1 2009 20:09 | Last updated: March 1 2009 20:09
The gloves are off. The creators of business metaphors have been pulling their punches for more than a decade but have now come out swinging. There is a new metaphor in the management ring and, just in case you are too punch-drunk after so many idioms to have guessed what it is, here's the knockout blow: it's boxing.
The latest Harvard Business Review contains an 11-page article telling us that the best way to survive financial meltdown and global recession is to be like Muhammad Ali when he met George Foreman for their Rumble in the Jungle in Kinshasa, Zaire.
What the renowned boxer's performance teaches us about thriving in turbulent markets is that we must all be agile and we have to absorb blows. The point is helpfully summarised by various charts, diagrams and a two-by-two matrix with agility up one side and absorption along the other.
Curiously, the HBR doesn't mention any of the things about boxing that immediately come to my mind when I think of it. In boxing, you get beaten to a pulp – which must ring a bell with anyone who is now working on the economic front line. In boxing, you are quite likely to wind up with brain damage if you go on doing it for long enough – and, if things get much worse in the economy, this too may come to ring a bell.
Recently, I read that this bloody sport has become newly fashionable as an activity doled out by the authorities to young delinquents to distract them from drug-taking and knife crime. However, to discover that boxing is now the very latest fashion for management theorists is more surprising still.
The HBR article brings to an end 15 years of peace, love and political correctness by the purveyors of management metaphor. It is the first evidence I have seen from the management guff industry that "soft" is finally on its way out and "hard" is on its way in. Since I started following these things in the early 1990s, there have been three different sorts of metaphors wheeled out by gurus to help explain and prescribe business behaviour, all benign. The first were musical metaphors. There was the idea of a company as an orchestra, with the chief executive as the conductor. Each knowledge worker scraped away at her fiddle or blew his horn, and the maestro waved a thin stick to bring them together in perfect time and harmony.
This metaphor was popular for a while but, as the internet grew, gurus got groovier and decided that classical was out and jazz was in. The great leader must not tell his players how to play but let them jam, be creative and let it all hang out. Presently, even this seemed too square, and in 2002 a Swedish writer said that the CEO should be like a DJ, mixing records to match the mood on the dance floor.
Even more popular than music as a metaphor has been sport. Most of these have been based on the idea that business is a team effort (which we know it isn't, really). Football, rugby, rowing, cricket and baseball have all taken their turn as trendy management theories. For one crazy moment, even the downbeat Sven-Göran Eriksson was rebranded as a management guru.
The only team sports I have never seen a theory based on are synchronised swimming and lacrosse, but I dare say such theories exist somewhere. Sports without teams also get a look-in in the metaphor market, in particular golf, and a weird sled race with huskies that came into vogue a few years ago.
The third, and daftest, seam of management metaphor comes from science. The idea of a business as a stream of DNA always struck me as moronic. The point about a person's DNA is that it does not change. The point about companies and business conditions is that they do. It may be more plausible for gurus to talk the language of evolution and describe companies as complex adaptive systems – or it might be helpful if I could understand what they were driving at. A metaphor is meant to simplify, not to obfuscate.
Finally, there have been some outliers that fit none of the three categories: management as akin to being a top chef in a big kitchen, and management likened to animal behaviour. There have been ape theories, geese theories and even frog theories. The softest – and most famous – was the wretched mouse with the wretched cheese in the parable, Who Moved My Cheese?.
All of these metaphors have one thing in common: they are perfectly useless. I defy anyone to show how any of them has helped us understand how businesses behave or help us get better at running them.
Metaphors can be helpful in grasping something when the thing is terribly complicated. So, when Einstein was explaining relativity, he used a train and a clock to help us understand something that would otherwise have been beyond most of us.
By comparison, business – or the theory of business – is terribly simple. We know what we need to survive in troubled times, and it does not take 11 pages of boxing parallels to tell us. We need to cut costs. We need to take fewer risks. We need to conserve cash. We need to pull out of markets in which we are not successful. We need to fly economy – or not at all. There are two things that we don't need to do: float like a butterfly or sting like a bee.
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Sunday, 1 March 2009
Slumdog: Dilemma of a new India
| 1 Mar 2009, 0151 hrs IST, Deepak Chopra |
| After its sweeping win at the Oscars last Sunday, Slumdog Millionaire seems like the movie everyone wants, and perhaps needs. It has all the ingredients of escapist fare from the Great Depression — a populist hero who overcomes all odds to get the girl and the money. There's an added element of self-congratulation for the West: by seeing this movie, you can see India without getting your hands dirty or offending your nose, and cheer it on. Cinderella didn't walk through tenements and sectarian violence to reach her prince. But in this fairy tale, a concession must be made to modern realities. Dev Patel is symbolic of India here and now, fulfilling its wildest economic aspirations while being conscious of the darkest aspects of social decay and despair. If we follow the metaphor to its logical conclusion, India will get the money and the girl by rising above its slums. Perhaps that's why Slumdog has created an uneasy reaction in Mumbai and the rest of India. Rising above isn't the same as solving. Many well-born educated Indians have looked westward for a long time, which is easier than looking inward. They know more about the streets of London and New York than the teeming lanes of the ghettos in their own city. This is true, of course, among rich elites everywhere, not just in South Asia. Watching Dev cross the social line is triumphant, but it reminds you that there is a line. (Obama crossed the racial line in triumph, also, but notice how much heat his Attorney General, Eric Holder, took when he suggested in less than polite terms that America needs to be more honest and courageous about the whole problem of race.) Like fairy tales, symbols can pacify deep anxieties. India dreams of being a millionaire, but it lives with the anxiety that it's really a slumdog. Or, that the slumdogs will one day rise up against the millionaires. You can read the tea leaves any way you like. Another uncertainty attends the film. Having been made on a shoestring budget, Slumdog managed to outgross any number of big-budget Hollywood films. Last week, it ranked fifth on the US box office while its nearest Oscar rival, The Curious Case of Benjamin Button, was no longer in the top ten. Brad Pitt, being a megastar, has pulled his film to $122 million, compared to Slumdog's $98 million, but is that really competitive? Ten movies on the scale of Slumdog can be made for the cost of one blockbuster that has yet to pay back its cost. The whole movie industry is watching closely, and the developing world is watching back even more closely. After two decades of action flicks with move-your-lips scripts that were primitive enough to appeal to immature male psyches, here is Asia — via the UK — sending back something sophisticated, poignant, and universal. It's like the ultimate retort to colonialism: the coolie and the wallah have more smarts than the sahib. Indians feel uneasy about that, too. Will the sahib turn his back and shut them out? Do South Asians have enough self-respect and stature in the world to at last forget that the sahib ever existed? We may know the answers in the near future. Bollywood didn't conceive Slumdog. It still purveys mindless entertainment, for the most part, interspersed with small independent films that challenge the West for thoughtfulness and freshness. It's not for lack of talent that India didn't produce Slumdog. But questions of vision and courage do arise. Past history and ingrained inhibitions make it hard for Indian artists in any field to be as frank and true to life as they should be. They have yet to seize freedom. If Slumdog is a viable symbol, the future it points to is just being born. An out-of-the-way picture can dare to be universal, which means that India may dare to be universal one day. The dispossessed people of Asia are suddenly aware that they have a place at the table where previously only the rich dined. Both developments are encouraging. Meanwhile, one can marvel at the bald fact that a Bollywood-style anthem, 'Jai Ho,' won the Oscar for Best Song, while Bruce Springsteen wasn't even nominated. The first Academy Awards of the recession turned out to be, as one headline proclaimed, the first outsourced Oscars of all time. The writer is a bestselling spiritual writer |
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Saturday, 28 February 2009
How Credit Unions Survived The Crash
By Ralph Nader
27 February, 2009
Countercurrents.org
While the reckless giant banks are shattering like an over-heated glacier day by day, the nation's credit unions are a relative island of calm largely apart from the vortex of casino capitalism.
Eighty five million Americans belong to credit unions which are not-for-profit cooperatives owned by their members who are depositors and borrowers. Your neighborhood or workplace credit union did not invest in these notorious speculative derivatives nor did they offer people "teaser rates" to sign on for a home mortgage they could not afford.
Ninety one percent of the 8,000 credit unions are reporting greater overall growth in mortgage lending than any other kinds of consumer loans they are extending. They are federally insured by the National Credit Union Administration (NCUA) for up to $250,000 per account, such as the FDIC does for depositors in commercial banks.
They are well-capitalized because of regulation and because they do not have an incentive to go for high-risk, highly leveraged speculation to increase stock values and the value of the bosses? stock options as do the commercial banks.
Credit Unions have no shareholders nor stock nor stock options; they are responsible to their owner-members who are their customers.
There are even some special low-income credit unions, though not nearly enough to stimulate economic activities in these communities and to provide "banking" services in areas where poor people can't afford or are not provided services by commercial banks.
According to Mike Schenk, an economist with the Credit Union National Association, there is another reason why credit unions avoided the mortgage debacle that is consuming the big banks.
Credit Unions, Schenk says, are "portfolio lenders. That means they hold in their portfolios most of the loans they originate instead of selling them to investors, so they care about the financial performance of those loans."
Mr. Schenk allowed that with the deepening recession, credit unions are not making as much surplus and "their asset quality has deteriorated a bit. But that's the beauty of the credit union model. Credit unions can live with those conditions without suffering dire consequences," he asserted.
His use of the word "model" is instructive. In recent decades, credit unions sometimes leaned toward commercial bank practices instead of strict cooperative principles. They developed a penchant for mergers into larger and larger credit unions. Some even toyed with converting out of the cooperative model into the shareholder model the way insurance and bank mutuals have done.
The cooperative model, whether in finance, food, housing or any other sector of the economy,does best when the owner-cooperators are active in the general operations and directions of their co-op. Passive owners allow managers to stray or contemplate straying from cooperative practices.
The one area that is now spelling some trouble for retail cooperatives comes from the so-called "corporate credit unions", a terrible nomenclature, which were established to provide liquidity for the retail credit unions. These large wholesale credit unions are not exactly infused with the cooperative philosophy. Some of them gravitate toward the corporate banking model. They invested in those risky mortgage securities with the money from the retail credit unions. These "toxic assets" have fallen $14 billion among the 28 corporate credit unions involved.
So the National Credit Union Administration is expanding its lending programs to these corporate credit unions to a maximum capacity of $41.5 billion. NCUA also wants to have retail credit unions qualified for the TARP rescue program just to provide a level playing field with the commercial banks.
Becoming more like investment banks the wholesale credit unions wanted to attract, with ever higher riskier yields, more of the retail credit union deposits. This set the stage for the one major blemish of imprudence on the credit union subeconomy.
There are very contemporary lessons to be learned from the successes of the credit union model such as being responsive to consumer loan needs and down to earth with their portfolios. Yet in all the massive media coverage of the Wall Street barons and their lethal financial escapades, crimes and frauds, little is being written about how the regulation, philosophy and behavior of the credit unions largely escaped this catastrophe.
There is, moreover, a lesson for retail credit unions. Beware and avoid the seepage or supremacy of the corporate financial model which, in its present degraded overly complex and abstract form, has become what one prosecutor called "lying, cheating and stealing" in fancy clothing.
Ralph Nader is a consumer advocate and three-time presidential candidate.
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Friday, 27 February 2009
The world's strangest laws
Did you know it's illegal in France to name a pig Napoleon? Or that in Ohio you're not allowed to get a fish drunk? Alex Wade celebrates the spirit of the silly season with a list of the world's most ridiculous laws
(Kham/Reuters)
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Thursday, 26 February 2009
Priyadarshan the Malayalam film maker on Slumdog Millionaire quoted in the Financial Times
Priyadarshan Nair, an India film-maker, complained strongly that the film makes a mockery of India. "It's nothing but a mediocre Bollywood film, which has used references from several Hindi films very smartly," he wrote in the newspaper India Today at the weekend.
"India is not Somalia. We are one of the foremost nuclear powers in the world, our satellites are roaming the universe. Our police commissioners' offices don't look like shacks and there are no blind children begging in the streets of Mumbai."
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"India is not Somalia. We are one of the foremost nuclear powers in the world, our satellites are roaming the universe. Our police commissioners' offices don't look like shacks and there are no blind children begging in the streets of Mumbai."
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Sunday, 22 February 2009
Babri Mosque Demolition: Why On December 6?
By Ashok Yadav
21 February, 2009
Countercurrents.org
Was it a mere coincidence that the Babri mosque was demolished on December 6? Of course, there are strong reasons to believe that the event was not an act of spontaneous mob frenzy but rather an outcome of a high-level conspiracy. No wonder the issue was utilised by the Sangha Parivar to generate communal euphoria across the length and breadth of the country. Moreover, this euphoria was manufactured and nourished sequentially and saw its logical culmination in the ultimate levelling of the mosque. However, the pertinent question is: what drove the saffron forces to chose this particular date for their heinous act? What was so exceptional about this particular date that it overrode all other options in the 366 days of that year (1992 being a leap year)? A scrutiny of this question, I posit, would unveil the true character of Hindu communalism or Hindutva.
As we are all aware the class struggle between the exploiters and exploited sections continues unceasingly in all human societies. Though at certain critical junctures in history this struggle manifests itself in violent forms most of the time it is fought unabated at the psychological level. This psychological war is fought between the collective/folk memory of the people and the institutionalised memory by the oppressed. The strategy of the ruling classes everywhere and at all times has been to efface this folk memory of the people which is nothing but an historical record of the resistance offered by the people and their heroes to the powers that be. Of course, the oppressors are aware that the oppressed sections get more agitated listening to the tyranny meted out to their ancestors than the fact of actual oppression that they face themselves. Hence the powerful use all the instruments at their disposal to erase this collective memory—from the organs of the state to all the institutions of indoctrination (education) and propaganda (media/cinema). They are also often successful at that.
On the other hand the subject classes strive to eternalise this collective memory by bequeathing it to the successive generations through its own literature, culture, art and folk traditions. In our own times the autobiographies being penned by Dalit authors exemplify this best. They also celebrate and observe the decisive dates in their history or those associated with their leaders (their birth and death anniversaries for instance) to keep the flame of their cause alive. How this memory of tyranny unleashed against their ancestors inspires the oppressed to do something remarkable can be glimpsed in one of the statements by Vivian Richards, a renowned Black cricketer from Antigua in West Indies. Vivian Richards, as we all know, was not only a sportsman par excellence but also a vocal crusader against racial injustice. He once said: Every member of my team is haunted by the memory of white oppression faced by our ancestors for centuries. When we do lethal fast bowling or bat explosively against them it is as if we are extracting revenge from them for those misdeeds and consequently restoring prestige for our race.(Source: Student Federation of India's journal Student Struggle's issue published sometime in 1984-85. Independent translation based on recall of the quotation. )
Hence, we can see how this collective memory often acts as the chief weapon in the armory of the oppressed sections. However, there are certain memories which the powerful can never erase despite their best efforts. In such cases they take recourse to adulterating this memory and channelising it for their own nefarious ends. I contend that on December 6, 1992 when the Babri mosque was razed to the ground similar efforts were made. But I will come back to it later. First a few words on the true character of Hindutva.
The paramount feature of the Hindu faith is the caste system. Moreover, the ideology of Hindutva only nurtures and sustains this system. In Gita, which is accorded the highest place in the corpus of Hindu scriptures, God animated as Krishna states that the varna system is His creation. Besides, all the scriptures of Hindu faith unequivocally support the caste system. It can be further asserted that those sitting pretty at the top of the varna hierarchy have their dominance, superiority, privileges, heaven, salvation, or for that matter everything, secure so far as the varna system operates. How the superiority of the twice-born and their social, political, economic and cultural hegemony can be perennially maintained seems to be the primary concern of the sanatana dharma. Otherwise why do proponents of Hindutva go berserk on the question of 27% reservation for the Other Backward Classes (OBC's)?
The real history of India is yet to be written. The central role of the struggle against the caste system in the historical development of this land has not yet been rigorously investigated. This will only become a reality once the Dalit-Bahujan masses undergo a process of Cultural Revolution or, dialectically speaking, it is the very writing of this history that will inaugurate the Cultural Revolution for Dalit-Bahujan masses.
The history of India is an account of the struggles against the caste system. The emergence of Jainism, Buddhism, Sikhism or the influx of Islamic and Christian faiths and their acceptability would not have been possible but for the caste system. One may also propose that it is this very exploitative system which is responsible for the historical stagnation of the productive forces and development of knowledge and science in this country. This historical stagnation was however, consciously or otherwise, arrested by the advent of the British colonial state. In this respect the formulations of Karl Marx, Raja Rammohun Roy and Jotiba Phule bear remarkable similarity. In the mediaeval ages many a dalit-bahujan took a sigh of relief at the demolition of the Hindu temples by the Muslim invaders as these temples were also centres of social monopoly power which was no less oppressive and exploitative than the state power. In these temples the entry of shudra-atishudra was prohibited quite unlike the mosques, churches. gurudwaras or monasteries which were more or less open to general masses and they could pray there collectively without a thought of high and low pervading caste society. Even during the heydays of the struggle against British colonialism the banner of revolt against social imperialism was hurled high by people like Jotiba Phule, Narayana Guru, Periyar, Shahuji Maharaj and Babasaheb Ambedkar. Organisations like Bihar's Triveni Sangha multiplied in all parts of the country.
The developments since Independence also narrate the story of this struggle—the protagonists being Dr. Rammanohar Lohia, Karpuri Thakur, Kanshiram, Annadurai, BP Mandal and VP Singh.
The anti-caste proclivities received a great boost when VP Singh government announced its decision to implement the Mandal Commission recommendations. In the wake of this move by VP Singh the challenge posed by Dalit-Bahujan masses to the caste elite multiplied many times. Thus they unleashed the genie of kamandal to counter the politics of Mandal. Advani subsequently stormed the nation on his 'Ram-rath' leaving behind a trail of blood wherever the rath crossed. When Laloo Prasad finally arrested him BJP withdrew support from the VP Singh government thereby 'chastising' him for attempting the unpardonable. Communal polarisation and galvanisation by the Hindutva forces gained momentum resulting in the ultimate demolition of the Babri mosque. No wonder, the 'Brahmin' and Brahminist Prime Minister PV Narasimha Rao kept himself busy with an afternoon siesta on a wintry day and by the time he woke up the mosque had been razed to the ground.
There seem to be many reasons behind the demolition of the mosque. First, to counter the influence of Mandal by the velour of demolition. Second, to transform the feeling of defeatism plaguing the Hindu psyche due to repeated defeats at the hands of invaders (a consequence of the divisive caste system one may add) into a feeling of glory. Third, to dilute the social contradictions and caste struggle arising out of the assertion of the dalit-bahujan masses by a wider Hindu resurgence and unity. Fourth, the consolidation of the Hindu vote bank by arousing communal passions for BJP in order to achieve the ideal of the so-called Hindu Rashtra and so on. However, when we investigate the reason behind a particular choice of date (December 6) we are informed of at least one more reason.
In the twentieth century the major challenge to Hindutva has been indisputably presented by Dr. BR Ambedkar. This challenge is more ideological than political. Along with Dr Ambedkar two other names can be shortlisted for having contested Hindutva effectively—namely, E.V. Ramaswamy Naicker (or Periyar) and Dr. Ram Manohar Lohia. It is unfortunate that Periyar's influence remained restricted to South India only. Dr Lohia's slogan pichda pawe sau mein sath (let the backward bag sixty out of hundred) effectively challenged the political power of the proponents of Hindutva. The process of social change and consciousness that we witness in North India today, especially in UP and Bihar, would have been scarcely possible without the contribution of Lohiaite ideology. However, one can surely find grounds to critique the contradictions and inconsistencies in his thought regarding Hindu religion, philosophy and tradition. Despite his powerful slogans this lacuna in his thought severely hampers the march of the caravan of social justice towards any meaningful destination. A harmonious integration of Lohiaite and Ambedkarite ideology is therefore imperative to give the much required edge to the politics of social justice.
The Saffron brigade trembles when it hears the names of Ambedkar or Periyar. Afterall, it is they who have bitterly exposed the reality of Hindu faith and have established beyond doubt that this faith is nothing but Brahmanism or the varna system. Both urged their followers not to stop before the complete destruction of this religion. While Periyar swithched to atheism for this purpose Ambedkar advocated disowning of Hinduism and adoption of Buddhism respectively. It is another matter that even Buddhism is silent on the concept of God.
Despite being a constitutionalist Dr. Ambedkar often finds a pride of place in the league of the world's greatest revolutionaries. He stood up to combat a system that had been reigning undeterred in this country for the last three thousand years. He could not have urged the voiceless and powerless untouchables leading a life worse than animals for attempting an armed insurrection. That is why he was a constitutionalist. By investigating meticulously the Hindu religious scriptures and authoring powerful tracts (like Riddles in Hinduism, Annihilation of Caste and Revolution and CounterRevolution in Ancient India), and, also by such powerful symbolic gestures like setting Manusmriti on fire and articulating and voicing the concerns and demands of the untouchables in round table conferences and such forums, he laid bare the hypocrisy, contradictions and inhumanity of the Hindu religion and society in front of the whole world. He did not even deter from engaging in a vitriolic polemic and conflict with a personality like Gandhi in order to secure an independent identity and place for Dalits in the Indian political landscape. On the one hand he managed to pocket a few concessions for the dalits by making his way into the Constituent assembly, on the other he also criticised the Indian Constitution on various counts in no uncertain terms. When he became the first law minister in independent India, he strived and struggled to ameliorate the condition of Hindu society, and especially the pitiable condition of its women, by drafting the 'Hindu Code Bill' and making efforts to get it passed in the Parliament. However, his efforts came a cropper due to the influence of fanatic Hindus in the Congress party and government which were against modern and radical reforms. Now he saw no point in continuing as a member of Hindu society. During all these years he had been postponing the actualisation of his call to leave Hindu religion that he gave twenty years back. All this time he had been genuinely working at reconciliation with his adversaries. But now he could take it no longer. He converted to Buddhism with lakhs of his followers and reestablished the faith that had been exiled from the country of its origin some fifteen centuries back due to the inexcusable crime of challenging the caste system. In other words, Dr. BR Ambedkar now donned the mantle of a modern Buddha.
Until the day the Indian society liberates itself from the tentacles of the caste system his legacy shall continue to inspire the dalit-bahujan masses. It would be a parochial stance if we recognise Ambedkar only as a champion of shudras-atishudras. He is the leader of all Hindus because his primary concern was to liberate the entire Hindu society by breaking innumerable divisive caste walls. The path of liberation, for a Brahmin as well as a scavenger, from this inhumane caste system is ingrained in the theoretical insights of Ambedkar.
This is the only reason why Dr. Ambedkar's life, actions, thoughts and struggle pose such a great challenge for Hindutva. His ideology is a guide to action for the dalit-bahujan masses. However, the efforts to destroy his legacy continue to proliferate. It is to meet such sinister objectives that books like Worshipping False Gods are written by Saffron theoreticians like Arun Shourie. Surely, for them a memory which cannot be erased, a legacy which cannot be vanished, can be surely mitigated by aduleration, illusions and sleight of hand pure and simple.
On December 6, 1992 when the dalit bahujan of the nation was observing the death anniversary of Dr. Ambedkar, remembering his struggle against the brahminical system for establishment of a society based on equality, fraternity and liberty and taking pledge in his name to carry forward the struggle that Dr Ambedkar waged, at that very moment, quite simultaneously, the Sangha Parivar was engaged in demolishing the Babri mosque with the aid of thousands of its cadres and supporters. A countervailing 'Hindu glory' was being forged opposed to Dr. Ambedkar's memory and legacy. Hindutva was making unholy inroads into the dalit-bahujan psyche generally permeated with Dr Ambedkar's legacy till then. By demolishing Babri mosque an attempt was being made to violate and pollute the great memory of Dr Ambedkar. A conspiracy was being enacted to erect a symbol of Hindutva pride, inherent in the demolition of Babri mosque, parallel to Dr Ambedkar's memory, so that every year when on December 06 the dalit bahujan would assemble to commemorate Dr Ambedkar's life and struggle, the anniversary of Babri mosque demolition would also be there as a parallel force to counter Dr Ambedkar's legacy. The demolition of Babri mosque on the same date as the death anniversary of Dr Ambedkar would never leave the commemoration of Dr Ambedkar's death anniversary as uncontaminated. The demolition of Babri mosque on December 06 was an intense psychological war against the dalit-bahujan which was no less lethal or violent than the organised and frequent pogroms against dalits and Muslims.
One may well ask why was Ambedkar's birth anniversary (14 April) not chosen as a date for demolition? The answer is simple. In comparison to his death anniversary his birth anniversary is widely celebrated with much vitality and grandeur. It would have been a risky proposition because then their anti-Ambedkar ideology would have been brought out into broad daylight. They could not have afforded such a big risk at that time. Babri mosque is after all not the last mosque to be levelled. There are other mosques on their hit-list as well. Whenever they find themselves powerful enough to take such a risk they will show the temerity to do so. Why only Ambedkar there are many other icons that give sleepless nights to the Hundutva forces.
In the end, the explanation rendered above is purely theoretical. No concrete proof was available for this assumption. However, later I happened to discover a somewhat similar proof in some extracts of Malay Krishna Dhar's book Open Secrets: India's Intelligence Unveiled published in Outlook (Hindi, 7 Feb 2005):
" On 25th December K. N. Govindacharya called me on phone and expressed his desire to come over for dinner to my house along with two of his friends…After dinner the conversation continued till midnight. I shivered from what I got to learn from my friends. They gave me sufficient indications that the Sangha Parivar was not obverse to the demolition of the mosque and putting in its place a temple-like structure…Why in December only? I asked. Gurumurthy promptly replied that I should read history once again. Did not Mahmud Gaznavi destroy Somnath temple in December 1025?"
It is strange that the author did not ask why only on a particular day in December. It is also possible that the author may have asked the question and would have been promptly replied back that because it is the death anniversary of Dr. Ambedkar, and that he did not share this part of the conversation with his readers for the fear of completely unmasking the mindset of the saffron brigade. Who knows?
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The public may soon forget that there is such a thing as an honest broker
Stanford caught out – at long last
Published: February 20 2009 20:01 | Last updated: February 20 2009 20:01J.K. Galbraith once proposed a measure of the economic cycle called the "bezzle": the inventory that has been purloined from investors. In fat years, the bezzle grows as auditors relax. In the lean years, it shrinks as investors become cautious. The allegations against Bernard Madoff and, now, Sir Allen Stanford suggest the bezzle is large – but shrinking.
Mr Madoff's alleged $50bn Ponzi scheme appears to have been a classic confidence trick. Rather than demanding money upfront, he seems to have encouraged investors by suggesting they pour their cash into his funds gradually. By turning some investors away, he seems to have reassured his customers that they were benefiting from some kind of specialised inside track. In truth, he may just have been building the steadily increasing flow of money he needed to keep going.
Sir Allen runs institutions that are alleged to have misled investors about their exposure to risky, illiquid assets. But like a salesman who always drives a new car, Sir Allen made a show of his wealth to inspire confidence. Broiled a brilliant lobster-pink by the Caribbean sun, the Texan Terry-Thomas landed a golden helicopter at Lord's cricket ground and offered a $20m prize for a limited-overs competition hosted at his Antiguan stadium. The caddish billionaire's mere presence was a large part of his companies' guarantee of solvency.
There were real warning signs about both men. In both cases, analysts were suspicious of the returns they were claiming. In both cases, these men dominated their companies and used peculiarly inconspicuous auditing firms to check them. Yet so long as they were able to post high and metronomic returns, they evaded serious scrutiny.
Indeed, the US Securities and Exchange Commission investigated both men's companies, fining them for relatively minor transgressions – seeming to miss the wood for the trees. The case against Sir Allen was brought only after the public criticisms of a Venezuela-based analyst. Mr Madoff was turned in by his sons. Mary Schapiro, the SEC's new chairman, seems to be inheriting a toothless watchdog.
In a complex and opaque industry such as finance, a strong regulator is essential to make sure – at the bare minimum – that market participants are telling the truth. Fears that there are losses across the sector from multibillion dollar thefts that are still waiting to be uncovered by the regulator will exacerbate recent market volatility.
A strong overseer is also essential if people are going to have the confidence to invest. If the financial sector is not to be regulated into oblivion after the crisis, moreover, there must be popular acceptance that bankers are worth having. Yet if financial fraud is believed to be tolerated, this will not be possible. The public may soon forget that there is such a thing as an honest broker.
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Friday, 20 February 2009
India's nuclear submarine plan surfaces
Siddharth Srivastava
NEW DELHI - Expressing fears about cross-border terrorism in the wake of the November 26 Mumbai attack and keeping a close eye on China's military expansion, India announced plans this week to hike its defense budget by 34% to 1.4 trillion rupees (US$30 billion) and last week revealed that its project to build three nuclear-powered submarines is nearing completion.
"Things are in the final stage now in the Advanced Technology Vessel [nuclear-submarines] project. There were [mainly technical] bottlenecks earlier ... they are over now," Defense Minister A K Antony said on February 12.
The Advanced Technology Vessel (ATV) project is part of India's $3 billion plan to build five submarines and complete what it calls
a "triad" of nuclear weapon launch capability - from air, land and sea. India is concurrently developing the K-15 ballistic missile, which can be nuclear-tipped and launched from submarines.
Defense sources have told Asia Times Online that New Delhi has been actively seeking out assistance from France in the implementation of the ATV project, and that Russian engineers are already involved. The sources said that the sea trials of the nuclear-powered submarines should begin this month and that the submarines should be operational within the next three years.
The secretive ATV nuclear backed ballistic missile submarine (SSBN) project began in the late 1970's and is being implemented at a secret dry dock in Visakhapatnam, India's Eastern Naval command base. Observers have said that the submarines are a critical addition to India's weapons capabilities.
In a grim reminder of the possible dangers facing India from the sea, India's Naval chief Admiral Suresh Mehta warned this week that terrorists could smuggle "dirty" nuclear bombs via the nation's ports as they lack adequate security measures. Terrorists also used a sea route to infiltrate Mumbai.
Nuclear-powered submarines with their greater speed, power, range and the length of time they can stay submerged compared to conventional diesel-electric submarines are effective for sudden strikes as well as fast and stealthy protection from attacks.
New Delhi has been concerned about Beijing's strengthening of bilateral ties with Islamabad, particularly given recent tension on sea projects such as at the Gwadar port. China has also been developing ties with Sri Lanka and Myanmar to deepen its control over a complex energy-security conflict being aggressively played out in the region.
Given the ongoing tussle between India and China to control the waters of the Indian Ocean, the New Delhi government has been put under tremendous pressure from the navy to ramp up India's sea power. China has already spoken of creating three ocean-going fleets to patrol the areas of Japan and Korea, the western Pacific, the Malacca Strait and the Indian Ocean.
The ATV project has been in the spotlight as India's other attempt to procure a nuclear submarine this year received a setback when Russia "indefinitely" postponed delivery of the Akula-II class Nerpa nuclear submarine, citing incomplete sea trials and a lack of funds.
Further, the Amur shipyard in Russia's far east, where the sub is being built, is yet to finalize a new team following an accident in November in which 20 members were killed. The accident has led Indian media to describe the submarine as "cursed".
India has been looking at developing underseas capabilities to launch nuclear weapons, after gaining some competence in land-based nuclear delivery platforms for the domestically developed ballistic missiles Prithvi and Agni.
India has already developed a submarine-launched supersonic missile, a modification of the BrahMos cruise missiles, an achievement previously limited to only advanced nations such as the US, France and Russia. Ship and land launched versions of the BrahMos are being introduced in the navy and army.
The state-controlled Defense Research and Development Organization is also undertaking a joint development project with Israel Aerospace Industries to develop a surface-to-air missile which can be launched from land and ships.
Upgrade and renovation of India's navy will be an important aspect of India's US$50 billion defense modernization exercise. Under the plan, the projects code named 75 and 76 entail the production of 24 underwater vessels valued at US$20 billion to meet the challenges across the Indian Ocean.
In 2007, construction of the highly-advanced Scorpene submarine began at the upgraded Mazgon Dock in Mumbai as part of a US$3.5 billion deal for six such French submarines. As the Scorpene deal involves transfer of technology, it should be beneficial for both nations as India gains new technology and French firms gain a possible foothold in the big Indian market.
But significant delays are now expected in India's acquisition of the aircraft carriers Admiral Gorskov from Russia and two that are being developed at home. In early 2007, India purchased the 36-year-old US warship the USS Trenton (re-christened INS Jalashwa) with a gross tonnage of 16,900 tons for US$50 million.
The Trenton is the first ever US warship owned by the Indian Navy and the second largest that India possesses after the INS Viraat aircraft carrier. The Indian Navy plans to add 40 new warships to its fleet and the government plans to invest over 500 billion rupees (over US$12 billion) over the next 10 years on warships.
The government has encouraged the private sector to play a bigger role in the nation's defense, and India's largest engineering and construction firm Larsen & Toubro has announced plans to build defense warships and paramilitary vessels at a proposed facility in Tamil Nadu.
After the rude awakening of the Mumbai terror attacks, others branches of the military are also now pushing for more upgrades and additions.
The Indian Air Force, for example, is seeking 42 fighter squadrons up from the current 32 or 33 squadrons (each with 14 to 18 jets), to offset the phasing out of older Russian planes. The army, which has been allocated a large piece of the military outlay, is seeking more tanks and howitzer field guns.
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NEW DELHI - Expressing fears about cross-border terrorism in the wake of the November 26 Mumbai attack and keeping a close eye on China's military expansion, India announced plans this week to hike its defense budget by 34% to 1.4 trillion rupees (US$30 billion) and last week revealed that its project to build three nuclear-powered submarines is nearing completion.
"Things are in the final stage now in the Advanced Technology Vessel [nuclear-submarines] project. There were [mainly technical] bottlenecks earlier ... they are over now," Defense Minister A K Antony said on February 12.
The Advanced Technology Vessel (ATV) project is part of India's $3 billion plan to build five submarines and complete what it calls
a "triad" of nuclear weapon launch capability - from air, land and sea. India is concurrently developing the K-15 ballistic missile, which can be nuclear-tipped and launched from submarines.
Defense sources have told Asia Times Online that New Delhi has been actively seeking out assistance from France in the implementation of the ATV project, and that Russian engineers are already involved. The sources said that the sea trials of the nuclear-powered submarines should begin this month and that the submarines should be operational within the next three years.
The secretive ATV nuclear backed ballistic missile submarine (SSBN) project began in the late 1970's and is being implemented at a secret dry dock in Visakhapatnam, India's Eastern Naval command base. Observers have said that the submarines are a critical addition to India's weapons capabilities.
In a grim reminder of the possible dangers facing India from the sea, India's Naval chief Admiral Suresh Mehta warned this week that terrorists could smuggle "dirty" nuclear bombs via the nation's ports as they lack adequate security measures. Terrorists also used a sea route to infiltrate Mumbai.
Nuclear-powered submarines with their greater speed, power, range and the length of time they can stay submerged compared to conventional diesel-electric submarines are effective for sudden strikes as well as fast and stealthy protection from attacks.
New Delhi has been concerned about Beijing's strengthening of bilateral ties with Islamabad, particularly given recent tension on sea projects such as at the Gwadar port. China has also been developing ties with Sri Lanka and Myanmar to deepen its control over a complex energy-security conflict being aggressively played out in the region.
Given the ongoing tussle between India and China to control the waters of the Indian Ocean, the New Delhi government has been put under tremendous pressure from the navy to ramp up India's sea power. China has already spoken of creating three ocean-going fleets to patrol the areas of Japan and Korea, the western Pacific, the Malacca Strait and the Indian Ocean.
The ATV project has been in the spotlight as India's other attempt to procure a nuclear submarine this year received a setback when Russia "indefinitely" postponed delivery of the Akula-II class Nerpa nuclear submarine, citing incomplete sea trials and a lack of funds.
Further, the Amur shipyard in Russia's far east, where the sub is being built, is yet to finalize a new team following an accident in November in which 20 members were killed. The accident has led Indian media to describe the submarine as "cursed".
India has been looking at developing underseas capabilities to launch nuclear weapons, after gaining some competence in land-based nuclear delivery platforms for the domestically developed ballistic missiles Prithvi and Agni.
India has already developed a submarine-launched supersonic missile, a modification of the BrahMos cruise missiles, an achievement previously limited to only advanced nations such as the US, France and Russia. Ship and land launched versions of the BrahMos are being introduced in the navy and army.
The state-controlled Defense Research and Development Organization is also undertaking a joint development project with Israel Aerospace Industries to develop a surface-to-air missile which can be launched from land and ships.
Upgrade and renovation of India's navy will be an important aspect of India's US$50 billion defense modernization exercise. Under the plan, the projects code named 75 and 76 entail the production of 24 underwater vessels valued at US$20 billion to meet the challenges across the Indian Ocean.
In 2007, construction of the highly-advanced Scorpene submarine began at the upgraded Mazgon Dock in Mumbai as part of a US$3.5 billion deal for six such French submarines. As the Scorpene deal involves transfer of technology, it should be beneficial for both nations as India gains new technology and French firms gain a possible foothold in the big Indian market.
But significant delays are now expected in India's acquisition of the aircraft carriers Admiral Gorskov from Russia and two that are being developed at home. In early 2007, India purchased the 36-year-old US warship the USS Trenton (re-christened INS Jalashwa) with a gross tonnage of 16,900 tons for US$50 million.
The Trenton is the first ever US warship owned by the Indian Navy and the second largest that India possesses after the INS Viraat aircraft carrier. The Indian Navy plans to add 40 new warships to its fleet and the government plans to invest over 500 billion rupees (over US$12 billion) over the next 10 years on warships.
The government has encouraged the private sector to play a bigger role in the nation's defense, and India's largest engineering and construction firm Larsen & Toubro has announced plans to build defense warships and paramilitary vessels at a proposed facility in Tamil Nadu.
After the rude awakening of the Mumbai terror attacks, others branches of the military are also now pushing for more upgrades and additions.
The Indian Air Force, for example, is seeking 42 fighter squadrons up from the current 32 or 33 squadrons (each with 14 to 18 jets), to offset the phasing out of older Russian planes. The army, which has been allocated a large piece of the military outlay, is seeking more tanks and howitzer field guns.
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Former nun tells of sex and suffering inside Indian convent
By Andrew Buncombe in Delhi
Catholic Church stung by autobiography recounting harassment and abuse
A former nun's tell-all story which details illicit relationships, sexual harassment and bullying in the convent where she spent three decades is causing ructions in the Catholic Church in the south Indian state of Kerala.
In Amen – an autobiography of a nun, Sister Jesme says when she became a nun she discovered priests were forcing novices to have sex with them. There were also secret homosexual relationships among the nuns and at one point she was forced into such a relationship by another nun who told her she preferred this kind of arrangement as it ruled out the possibility of pregnancy.
"I did not want to make this book controversial. I want to express my feelings and to explain what happened to me... I want people to know how I have suffered," she told The Independent last night, speaking from the town of Kozhikode. "People say that everything is OK, but I was in the convent and I want them to know what goes on. I have concerns for others."
Sister Jesme, who quit last year as the principal of a Catholic college in Thrissur, alleges senior nuns tried to have her committed to a mental institution after she spoke out against them.
In her book, she says that while travelling through Bangalore, she was once directed to stay with a purportedly pious priest who took her to a garden "and showed me several pairs cuddling behind trees. He also gave me a sermon on the necessity of physical love and described the illicit affairs that certain bishops and priests had". The priest took her to his home, stripped off his clothes and ordered her to do the same.
She also alleges that while senior staff turned a blind eye to the actions of more experienced nuns, novices were strongly punished, even for minor transgressions. She was not allowed to go home after she learnt her father had died. "I was able to see [the body of] my father barely 15 minutes before the funeral," she writes. "The [response] of the superiors was that the then senior sisters were not even lucky enough to see the bodies of their parents."
When she resigned as a college principal, she claimed convents had become "houses of torture", saying: "The mental torture was unbearable. When I questioned the church's stand on self-financing colleges and certain other issues, they accused me of having mental problems. They have even sent me to a psychiatrist. There are many nuns undergoing ill-treatment from the order, but they are afraid of challenging it. The church is a formidable fortress."
The allegations are not the only controversy to rock the Catholic Church in Kerala. Last summer, a 23-year-old novice committed suicide and left a note saying she had been harassed by her Mother Superior. Reports suggest there have been a number of similar suicides. And in November, police in Kerala arrested two priests and a nun in connection with the killing of Sister Abhaya in a notorious 1992 murder.
Last night, a spokesman for the Syro-Malabar order of the Catholic Church, Dr Paul Thelakkat, dismissed Sister Jesme's allegations as a "book of trivialities". "It's her experiences, but these are things that might creep into a society of communal living," he said. Asked if the church would be shocked by the allegations, he replied: "Absolutely not. The church knows about these things."
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