Cricket and DRS - The Best is not the Enemy of the Good

by Girish Menon

The anonymous source who once wrote, 'To err is human; to really foul things up requires a computer' was spot on when it comes to cricket and its Dreadful Review System (DRS). After tragicomic incidents in the just concluded Ashes test, the world, as represented by Adam Gilchrist, has begun to appreciate India's 'Luddite' approach to the DRS. This writer feels that cricket and technology both need to evolve a lot before they can become mutually compatible and enhance the spectators' and players' experience.

Firstly, umpires in cricket need to adjudicate only on events based on facts and eliminate those decisions based on opinion or interpretation. The first casualty of such a change will need a repeal of the LBW law. Cricket should find a way of penalising those batsmen guilty of using unauthorised means of impeding the ball. For example one could modify the 'three strikes' rule in baseball and rule out any batsman who has illegally impeded a cricket ball three times. Thus this decision will be based on fact and will not rely on the convoluted law that explains an LBW decision. Along similar lines, all decisions made by umpires need to be evaluated on the fact-opinion dialectic and ways to eliminate opinion based decisions need to be found.

If this is done, then adjudicating a cricket match can be mechanised. However, the current level of technology in cricket leaves a lot to be desired both on the validity as well as the speed perspectives. The validity of the technology has been debated ad infinitum and I feel that once technology is used for fact based decision making then its validity will be convincing to even Luddites.

However currently used DRS technology has a problem with speed. Gordon Moore's axiom about a microprocessor's power doubling every eighteen months does not seem to hold true with the technology suppliers to the cricket industry. How else does one explain that Hotspot was not available to adjudicate on the Trott decision because 'its resources were concentrated on processing the earlier delivery'.

Thus cricket's struggle with DRS arises not only because of the shortcomings of technology but also because of some of its anachronistic traditions. While Voltaire has been quoted as saying, ' The best is the enemy of good', in the case of cricket and DRS Voltaire may be wrong. So both cricket and DRS need to evolve before the sceptics can be convinced about technology based decision making, until then some may even prefer human howlers.  

Profit has never been a company’s only duty

Businesses must look after their shareholders - but they should also work in the public interest

It is not enough to be a good corporate citizen, for share ownership carries with it power and responsibility Photo: AFP/Getty Images

By Jesse Norman in The Telegraph

8:20PM BST 16 Jul 2013

The issue of taxation is never far from the headlines, and doubly so in times of austerity. So it’s hardly surprising that the likes of Google, Starbucks and Goldman Sachs have come under fire in recent years for under-payment of tax.

But how much tax should a company pay? At first glance, the answer is obvious: only as much as the law demands. The economist Andrew Lilico put the point well recently: “The assets of… a company do not belong, per se, to the company’s employees… it’s not for the managers or accountants of a company to decide that shareholders ought to pay some extra tax, not legally required of them, and then do so on their behalf.” Not only that, any claim to the contrary is an attack on private property itself: “It is, as it were, to say that all money belongs to society collectively, and 'we’ have an intention as to how much you get to use yourself and how much goes to the state, and if you avoid tax you end up using more of society’s collective money than it intended for you to use.”

This line of thought is extremely seductive, and very widely held. But it is mistaken, both in principle and in law.

First, the law. The Companies Act 2006 requires directors to promote the success of the company, but with regard to six factors: the likely long-term consequences of a decision; the interests of employees; relationships with suppliers and customers; the firm’s impact on the community and the environment; its reputation for high standards of business conduct; and the need to act fairly between shareholders. The effect is precisely to prevent managements from automatically pleading a duty simply to maximise shareholder value. While they don’t have a free hand, they do have a genuine choice as to how aggressively to avoid tax.

But the deeper point is this. Unlike small businesses, or the vast majority of the working population, larger companies (and especially multinationals) have enormous scope to avoid tax. In the absence of common, binding global standards, that scope has expanded alongside the complexity of tax law. 

For many of these firms, tax is effectively optional. In avoiding it, they are using their size to advantage themselves over purely domestic competitors – as anyone who has tried to compete with Amazon can testify. When decent people are outraged by companies that adopt labyrinthine legal structures to avoid tax —whose main effect is to enrich the lawyers and accountants —what angers them is a belief that this power, this choice, has been abused.

So, again, how much tax should these companies pay? Patently, the law cannot answer that question. But neither can economics. For economics sees companies merely as bundles of contracts, which allocate different financial incentives to shareholders, directors, managers and employees.

This can be a useful analytical tool, but it falls short of setting proper standards of behaviour. Indeed, it does the opposite: there is increasing evidence that people exposed to purely financial stimuli become more greedy, more short-term and more individualistic. Since really effective management is about inspiration and teamwork over the long term, monetary incentives often undermine, rather than reinforce, success.

In fact, all power – private and public – brings with it responsibility. In the words of the great American judge Benjamin Cardozo, “a trustee is held to something stricter than the morals of the marketplace. Not honesty alone, but the punctilio of an honour the most sensitive, is then the standard of behaviour.” So it is not enough just to be a “good corporate citizen”.

This insight demands a shift of perspective, from the language of law and economics to one of stewardship and ownership. It is a shift with profound consequences. Within companies, it implies a long-term focus resilient enough to resist market pressures just to meet quarterly earnings targets. It implies a sense of personal responsibility – indeed, contrition – from management that has been largely missing from recent arguments over tax, or the causes of the banking crisis. It also demands a degree of modesty in how directors and managers reward themselves. And it invites companies to reconsider the privilege of limited liability, and the connection – which existed from the earliest chartered companies on – between corporate activity and the public interest.

But the idea of stewardship does not end there. For share ownership also carries with it power, and so responsibility. A recent review by Professor John Kay has done much to advance such ownership; it could be greatly assisted by a vigorous collective response from fund managers. And Parliament has its own role to play in reinforcing these values. It must ensure a clear, stable yet flexible framework of law within which companies can operate; and it must ensure effective enforcement, and prosecution, when the law is broken.

What really matters, however, are shared public standards. Lew Preston, as head of JP Morgan, once circulated a memo to all staff: “It has come to my attention that some employees have been preferring the interests of their own departments to the interests of the bank as a whole. Henceforth this will be grounds for immediate dismissal.” That’s more like it.

Jesse Norman is MP for Hereford and South Herefordshire

Mystery of American who woke up speaking Swedish is solved

Charlotte McDonald Gibson in The Independent on 17/07/2013

A medieval re-enactment society in Sweden claims to have solved the mystery of an American who awoke in a California motel room earlier this year insisting his name was Johan Ek and communicating only in Swedish, despite an ID card naming him as US-born Michael Boatwright.

Members of the Swedish branch of the Society for Creative Anachronism, however, knew him by yet another name: Strongbow, a keen participant of the group's jousting team.

"He was pretty good at jousting - one of the better performers," SCA member Johan Cassel told The Local, an English-language Swedish news website.

The American lived in Sweden in the 1980s, Mr Cassel said, where he picked up the language.

"He could speak pretty good Swedish, although you could hear that he came from an English-
speaking country. He had an accent," he said.

Mr Cassel also recalls 'Strongbow' being friendly with a man called Ragnvald Göransson Ek, so speculates that was where the name 'Johan Ek' came from.

Mr Boatwright, 61, was found unconscious in motel room in Palm Spring in February. Doctors at the hospital treating him say he is probably suffering from a condition known as Transient Global Amnesia, a disruption to the short-term memory.

Cricket - Andersen, England's Saviour

Angus Fraser in The Independent.

So who is the best fast bowler in the world – South Africa’s Dale Steyn or England’s Trent Bridge match- winner James Anderson? Statistically, it is a no contest. Whatever way you look at it Steyn’s figures are far superior to those of Anderson. But would Alastair Cook, the England captain, exchange his spearhead for any other fast bowler in the world? The answer would be a big, loud, resounding no.

It was clear at Nottingham that Anderson is Cook’s go-to man, the fast bowler he believes will produce a moment of inspiration or supreme skill when his team needs it most. Cook trusts Anderson implicitly. He knows he is the man who can make him look good as a supreme captain. Between the pair a field and plan  are set, Anderson bowls to them and they produce results. It sounds easy but consistently bowling to a plan is a talent very few bowlers possess.

And this is why I couldn’t give a damn about the rankings and who people think is the best. The table is a bit of fun but the conclusions the mathematicians reach are largely irrelevant. I am sure in their calculation Anderson gained more points for knocking over New Zealand’s top order in seamer-friendly conditions at Lord’s in May than for dismissing Australia’s lower order at a steaming-hot, pressure cooker Trent Bridge on Sunday. We know what was more valuable and all that is important is that James Anderson is British and he  continues to win games of cricket for England.

Of far greater interest is what actually makes Anderson the world-class performer he is. Fast bowlers need a number of assets and characteristics to compete in a game that is largely geared to favour batsmen. It is, for example, extremely advantageous for a fast bowler to be tall, fast and intimidating. Yet these are not the resources that stand out in Anderson’s profile. At 6ft 2in he is not small but many of England’s other bowlers – Stuart Broad, Steven Finn, Graham Onions, Chris Tremlett and Boyd Rankin – tower above the 30-year-old. Neither is he lethally quick. Anderson generally checks in at between  80 and 85 mph. He doesn’t snarl like Merv Hughes either.

Although Anderson is a wonderful athlete it is his personal rather than physical qualities that make him stand out. Cricket history states that the great Sydney Barnes was an unbelievably skilful bowler yet it is hard to believe he possessed greater qualities than Anderson.

Nowhere were Anderson’s skills highlighted more than during a Sky Sports Masterclass filmed last year. Now I thought I had pretty good control of a cricket ball but during this session Anderson was producing staggering precision – attention to detail I struggled to comprehend. The fact that he was able to control which way the new ball swung by a simple, last-minute movement of the wrist; that he could deliberately hit the seam of the ball on an intended side and also release the ball with the seam wobbling, a skill that means the ball could move either way, was breathtaking. It was fascinating and illuminating to watch a master showing and explaining his craft.

But a fast bowler would be ridiculed and hopelessly exposed if he did not have a big heart and an unbreakable desire. Bowling is an unbelievably tough job, especially in the climate the first Ashes Test was played in. Anderson will have pushed himself as hard as he did at Trent Bridge on numerous occasions in the past and had very little to show for his efforts. But the reason why you go through the tough, unrewarding days is because you believe that somewhere along the line you will get what you deserve, and Anderson received just that in Nottingham.

The lesson to be learnt for many aspiring young fast bowlers and coaches is that Anderson’s rise to the top has not happened overnight. I clearly remember him making his England debut in a one-day  international against Australia at the MCG in December 2002. The Ashes were already lost and England were on the wrong end of a mauling from  Adam Gilchrist and Ricky Ponting, who both scored hundreds in a total in excess of 300.

Anderson went for 46 in six overs but even then there seemed a spirit in him. He was not overawed by a huge crowd and great players. Gilchrist became his first international wicket when he bowled him for 124.

He then spent the next five years on the periphery of the Test side and with coaches trying to change his bowling action. I recall interviewing him at New Road, Worcester ,when he was at his most frustrated. We just sat talking bowling for an hour or so, and I take no credit for what has happened since.

At the time Anderson was obsessed with taking wickets and he chased them recklessly. To him they were all that counted. It was the only way he felt he would force his way in to the England side. I told him he was going about things the wrong way, and that what he should attempt to do was bowl consistently well and to trust the game. The number in the maiden column was just as important as the number in the wicket column. The aim should be to bowl with consistency so that even on a wicketless day he was still doing a job for the team. It is not a coincidence that Anderson now consistently concedes fewer than three runs per over, offering his captain control as well as a cutting edge.

As impressive as anything is his adaptability. As he proved this week he is a threat in any conditions and on any type of pitch. This is achieved through conventional or reverse swing, by subtle changes of pace and angles or by simple seam movement. Basically, he is the complete package.

The England team know what an asset they have and, when possible, will handle him like a Ming vase. Without him this Ashes series could take a different road to that many predicted.

Cigarette packaging: the corporate smokescreen

Noble sentiments about individual liberty are being used to bend democracy to the will of the tobacco industry

BETA

• 
• • George Monbiot
  • The Guardian, Monday 15 July 2013 20.39 BST

'Lynton Crosby personifies the new ­dispensation, in which men and women glide between corporations and ­politics, and appear to act as agents for big ­business within government.' Photograph: David Hartley / Rex Features

It's a victory for the hidden persuaders, the astroturfers, sock puppets, purchased scholars and corporate moles. On Friday the government announced that it will not oblige tobacco companies to sell cigarettes in plain packaging. How did it happen? The public was overwhelmingly in favour. The evidence that plain packets will discourage young people from smoking is powerful. But it fell victim to a lobbying campaign that was anything but plainly packaged.

Tobacco companies are not allowed to advertise their products. Nor, as they are so unpopular, can they appeal directly to the public. So they spend their cash on astroturfing(fake grassroots campaigns) and front groups. There is plenty of money to be made by people unscrupulous enough to take it.

Much of the anger about this decision has been focused on Lynton Crosby. Crosby is David Cameron's election co-ordinator. He also runs a lobbying company that works for the cigarette firms Philip Morris and British American Tobacco. He personifies the new dispensation, in which men and women glide between corporations and politics, and appear to act as agents for big business within government. The purpose of today's technocratic politics is to make democracy safe for corporations: to go through the motions of democratic consent while reshaping the nation at their behest.

But even if Crosby is sacked, the infrastructure of hidden persuasion will remain intact. Nor will it be affected by the register of lobbyists that David Cameron will announce on Tuesday, antiquated before it is launched.

Nanny state, health police, red tape, big government: these terms have been devised or popularised by corporate front groups. The companies who fund them are often ones that cause serious harm to human welfare. The front groups campaign not only against specific regulations, but also against the very principle of the democratic restraint of business.

I see the "free market thinktanks" as the most useful of these groups. Their purpose, I believe, is to invest corporate lobbying with authority. Mark Littlewood, the head of one of these thinktanks – the Institute of Economic Affairs (IEA) – has described plain packaging as "the latest ludicrous move in the unending, ceaseless, bullying war against those who choose to produce and consume tobacco". Over the past few days he's been in the media repeatedly, railing against the policy. So do the IEA's obsessions just happen to coincide with those of the cigarette firms? The IEA refuses to say who its sponsors are and how much they pay. But as a result of persistent digging, we now know that British American Tobacco, Philip Morris and Japan Tobacco International have been funding the institute – in BAT's case since 1963. British American Tobacco has admitted that it gave the institute £20,000 last year and that it's "planning to increase our contribution in 2013 and 2014".

Otherwise it's a void. The IEA tells me, "We do not accept any earmarked money for commissioned research work from any company." Really? But whether companies pay for specific publications or whether they continue to fund a body that – by the purest serendipity – publishes books and pamphlets that concur with the desires of its sponsors, surely makes no difference.

The institute has almost unrivalled access to the BBC and other media, where it promotes the corporate agenda without ever being asked to disclose its interests. Because they remain hidden, it retains a credibility its corporate funders lack. Amazingly, since 2011 Mark Littlewood has also been the government's adviser on cutting the regulations that business doesn't like. Corporate conflicts of interest intrude into the heart of this country's political life.

In 2002, a letter sent by the philosopher Roger Scruton to Japan Tobacco International (which manufactures Camel, Winston and Silk Cut) was leaked. In the letter, Professor Scruton complained that the £4,500 a month JTI was secretly paying him to place pro-tobacco articles in newspapers was insufficient: could they please raise it to £5,500?

Scruton was also working for the Institute of Economic Affairs, through which he published a major report attacking the World Health Organisation for trying to regulate tobacco. When his secret sponsorship was revealed, the IEA pronounced itself shocked: shocked to find that tobacco funding is going on in here. It claimed that "in the past we have relied on our authors to come forward with any competing interests, but that is going to change ... we are developing a policy to ensure it doesn't happen again." Oh yes? Eleven years later I have yet to find a declaration in any IEA publication that the institute (let alone the author) has been taking money from companies with an interest in its contents.

The IEA is one of several groups that appear to be used as a political battering ram by tobacco companies. On the TobaccoTactics website you can find similarly gruesome details about the financial interests and lobbying activities of, for example, the Adam Smith Institute and the Common Sense Alliance.

Even where tobacco funding is acknowledged, only half the story is told. Forest, a group that admits that "most of our money is donated by UK-based tobacco companies", has spawned a campaign against plain packaging called Hands Off Our Packs. The Department of Health has published some remarkable documents, alleging the blatant rigging of signatures on a petition launched by this campaign. Hands Off Our Packs is run by Angela Harbutt. She lives with Mark Littlewood.

Libertarianism in the hands of these people is a racket. All those noble sentiments about individual liberty, limited government and economic freedom are nothing but a smokescreen, a disguised form of corporate advertising. Whether Mark Littlewood, Lynton Crosby or David Cameron articulate it, it means the same thing: ideological cover for the corporations and the very rich.

Arguing against plain packaging on the Today programme, Mark Field MP, who came across as the transcendental form of an amoral, bumbling Tory twit, recited the usual tobacco company talking points, with their usual disingenuous disclaimers. In doing so, he made a magnificent slip of the tongue. "We don't want to encourage young people to take up advertising ... er, er, to take up tobacco smoking." He got it right the first time.

How Indian aviation was destroyed

Kingshuk Nag in Times of India

Have you read the history of India? If you have, you must be familiar with the conflict of the English and the French on the Indian soil in the 18th century. The fight was to seize control over the Indian markets. Now in an encore of sorts, two airlines from the Gulf region, but belonging to different sultans, are fighting for control of the Indian aviation sector. Help may have come to them, maybe inadvertently, from civil aviation minister Ajit Singh and former civil aviation mantra Praful Patel.

Ajit Singh is in the news these days for trying to ram down the Jet-Eithad deal, through which this Abu Dhabi-based airline will get access to the lucrative Indian market (Indian passengers going abroad) and enable the airline to boost its revenue.

The deal is being looked into, with the Prime Minister’s office having raised some objections, but Ajit is confident of pushing through the deal and has even called on the UPA chairperson Sonia Gandhi to explain everything to her.

The deal was preceded by something unusual: at the end of April, the GOI (which means the civil aviation ministry, which essentially means Ajit Singh) suddenly increased the traffic rights with Abu Dhabi (number of passengers who could fly to Abu Dhabi from India through Indian carriers) to 36,670 per week. This raised eyebrows – including that of the Parliamentary standing committee on transport, tourism and culture which wondered why flying rights were being extended because Indian carriers did not have the capacity (in terms of fleet) to carry these many passengers per week to Abu Dhabi from India. But now with the benefit of hindsight, we are wiser. Under the Jet-Etihad deal, the latter company took up 24 per cent stake in Jet Airways. Incidentally, the Abu Dhabi-based company paid a premium of 32 per cent to acquire these shares. Although Jet will get Rs 8,574 crore in foreign investment due to this deal, analysts aver that the deal has clauses which will in effect turn over the management of the company to Etihad. Thus Etihad will ride piggy back on Jet to transport Indians.

Ajit Singh’s piloting the Etihad deal will have the effect of enabling it to catch up with Emirates Airlines (the official airlines of the UAE). Emirates Airlines dominates the market to the Gulf with 30 per cent of the passengers flying out of India to that area using Emirates to go there. Now Etihad will get a chance to capture part of this traffic and provide stiff competition to Emirates Airlines.

For those not well-versed with aviation matters, the fight between Emirates Airlines and Etihad will not be just for traffic from India to the Gulf but also for onward traffic to Europe and North America. Readers may have noted that a decade ago when Indians went to Europe and North America they often changed flights at Frankfurt. But nowadays, passengers mostly change flights at Dubai. Why? Because Dubai is the hub of the Emirates Airlines and this airlines flies passengers out to Dubai, from where they board onward flights to Europe and North America. This brings enormous business not only to Emirates Airlines but also to Dubai as a place (reason: duty free purchases at the airport and some passengers taking a break in Dubai for a few days, etc). Now within a year or so, Indian passengers will also fly through Abu Dhabi for their journey to Europe or North America and benefit the economy of Abu Dhabi. It is obvious that with its small population: the middle-east market (that is, local origin or Arab passengers flying out of the middle-east) cannot help to create mega hubs for neither Emirates Airlines at Dubai or Etihad at Abu Dhabi and bring tremendous benefits for their respective economies. Both of them can only grow if they can exploit the huge Indian traffic that flies from India to the Gulf and to Europe and North America.

Ajit Singh’s action may have the effect of providing level playing field for Abu Dhabi-vis-a-vis Emirates  But the man whose actions resulted in out of the ordinary benefits to Emirates was Praful Patel, who was civil aviation minister for seven years from May 2004 to January 2011. He is the man whose tenure, analysts say, saw the beginning of destruction of the Indian aviation sector. This is even as Emirates got empowered and Dubai became a global hub.

When Praful came to the civil aviation ministry with the formation of the UPA government, Air India was the market leader in India with 42 per cent market share. A proposal had been mooted by the earlier NDA government to augment the fleet of Air India by 28 but the deal had not been finalized. When the proposal came to Praful he raised the numbers to 68 with one stroke of the pen and raised the cost to Rs 50,000 crore. All this was done without any revenue plan or even a route map to deploy so many additional aircraft. The beneficiary was Boeing from whom 27 Dreamliners were proposed to be bought. The Dreamliner was then only on the drawing board. The additional secretary and financial adviser in the civil aviation ministry V Subramanian opposed the move but he was shunted off. Analysts also questioned why an airline with a turnover of Rs 7,000 crore should place orders of Rs 50,000 crore with no idea of how to use the planes. This would only put a huge debt burden on the airline and damage it badly. Interestingly the Comptroller and Auditor General (CAG), which looked at the deal later, reported: “The acquisition appears to be supply driven ... the increase in number does not withstand audit scrutiny, considering the market requirement ... or forecast of the future, also the commercial viability projected to justify the acquisition...”

Caught on the wrong foot due to this acquisition, Patel did something else which virtually rang the death knell for Air India. He merged Air India and Indian Airlines arguing that this would create a much larger aviation entity that could compete better and also utilize the new aircraft which had been ordered. But in the event, this has had the effect of creating a monstrosity and mounting losses. Even today the new entity – which is called Air India – is plagued by severe HR problems arising out of the merger.

As if this was not enough, the airline was forced to vacate (no one till day knows why) its lucrative routes where foreign airlines and even airlines like Jet stepped in. As a good example, in October 2009, Air India decided to opt out of the Kozhikode-Doha-Bahrain route. This was one of the highest-revenue-earning flights of the airline and it was a route which was 511 seats short per week. No reasons were given for the withdrawal and in a short while foreign airlines moved in to exploit the readymade market. The airline’s unions protested but to no effect. Interestingly as early as May 2005 in a confidential memo to the cabinet secretary, the then managing director of Indian Airlines (the merger had not taken place then) complained that the Indian Airlines was being forced by the civil aviation minister and his officer on special duty to take financially damaging and commercially unviable decisions. These included forcing IA to make way for other operators. The MD said that he was forced to seek flight slots for the airlines in the UK and USA during the winter schedule (when traffic was lesser) even as other airlines were allowed to fly to the destinations in summer. Nothing came of the complaints: the managing director made way but the minister continued.

Now we have come to a position that Air India is all but dead, groaning under a massive debt burden and huge losses. Air India has thus ceased to be a player and foreign airlines have captured the Indian skies. This is not the end of the story: with the actions of the Indian ministers resulting in establishment of aviation hubs in Dubai and Abu Dhabi, Indian airport operators are unhappy and rightly so. GVK and GMR, which operate airports in Mumbai and Delhi respectively, wonder why the airports in the two cities cannot be built as hubs. After all the entire Indian traffic that is going to the west through the middle-east can easily be sent to the final destinations through Mumbai or Delhi, if hubs are developed there. This is especially because the long-haul Dreamliner planes are now being inducted into the fleet of Air India. These planes can fly nonstop to any part of the globe. In this way they are a threat to the concept of mid way hubs.

For those who may not be aware, Praful Patel, who represents the Nationalist Congress Party (NCP), comes from a beedi-manufacturing family. After his father died, Patel a product of Campion School and Sydenham College in Mumbai, took over the business and expanded it. The Mumbai schooling made him savvy, running the business from a young age made him street smart. He is popularly known as the beedi king of India.The family company, Ceejay group, rolls over 60 million beedi sticks a year. The beedi leaves are grown in central India, and Patel’s constituency in Bhandara-Gondia although in Maharashtra is not far from Chhattisgarh. Praful Patel’s father also doubled up as a politician and the son followed in his footsteps becoming an MP for the first time in 1991. The UPA government being a coalition government, Patel’s actions were tolerated for a long time. But in the end he was removed and pushed to the heavy industry ministry as full-fledged cabinet minister. All the while in the civil aviation ministry Patel, now 56, was a minister of state but with independent charge.

Seventy-four-year-old Jat leader Ajit Singh is the son of former Prime Minister Charan Singh. A product of IIT Kharagpur, Ajit worked in IBM in the US for 17 years before returning to India and jumping into politics. His Indian National Lok Dal (INLD) – with 5 MPs – became part of the UPA in 2011 and shortly thereafter he was made civil aviation minister.

This privatisation of the Royal Mail would be a national disaster

The Royal Mail must remain in British ownership and remodelled like Germany's Deutsche Post

• 
• • Will Hutton
  • The Observer, Sunday 14 July 2013

A great British institution: the Royal Mail. Photograph: Tim Graham/Getty Images

Britain is 159th in the world league table that ranks investment as a share of GDP. This is not new. Owners of British companies have long been permitted a feckless lack of responsibility. Smart countries, from the US to Germany, make sure that they insulate their companies as far as they can from the myopia and short-term greed of stock markets. Instead, the British approach to ownership exposes our companies to stock market thinking: shrivelling investment, cutting back on innovation, minimising training and hoarding cash to please their irresponsible, transactional owners.

It is a national disaster that another great British organisation, the Royal Mail, is to be cast into this maelstrom. (As I explain later, a more imaginative "protected" private model could work.) The directors of the Royal Mail will be under the same relentless hammer as those in every other British plc. They will put up prices as much as the regulator will allow, cut into universal provision and relentlessly contract out as much of the delivery to the lowest paid, least protected workers; none of this will be enough to satisfy their owners.

Eventually, the directors, vastly enriched with share options, incentive plans and 200% bonuses, will run up the white flag. Within a decade, the Royal Mail will be sold overseas, probably to another state-owned postal service, if not to a private equity fund based in a tax haven. Who knows? It could even be the Chinese communist party that ends up owning this great British institution.

You don't need to be a great seer to predict this future. It is exactly what has happened with our privatised water and energy companies. Economists will say the mail service is more efficient, rather as they discussed the way financial deregulation promoted banking efficiency up to the financial crash of 2008 without ever anticipating the costs of the crash that overwhelmed those gains. By one yardstick, this "efficiency" is guaranteed: the Royal Mail's 150,000 workforce will shrink.

But economists' definition of efficiency is pathetically narrow. It will take no account of the lost tax revenues when the Royal Mail is owned offshore, nor the cost of the state guarantees that will be necessary to support crucial investment. (See the demands from the privatised Thames Water and BT are seeking for their investment in, respectively, the super sewer and national broadband.) Neither will it measure the social impact of a diminished, expensive and fractured postal service, part of the glue that holds the country together, nor the need for state support if some unexpected event threatens. In short, any efficiency gains from privatisation have to be qualified by large costs, some of which only become obvious over decades.

Thus, although all the big six energy companies are more efficient in the sense they produce more power, with fewer employees, than they did a generation ago, any calculus of gains and losses must include the price guarantees the government offers to secure the investment Britain needs in renewable energy and nuclear. Centrica, withdrawing from its partnership with EDF Energy over building nuclear power stations, acknowledged its shareholders wanted higher returns over a shorter period than any deal the government might offer.

If energy provision in Britain were only to be delivered by British privately owned plcs pleasing their tourist stock market owners, they would all build gas-fired power stations, an energy mono-culture that would make the country reliant on one energy source. It would also be environmentally disastrous. The state cannot stand back.

We know all this, but somehow there is a political and cultural incapacity to face the reality. State ownership is seen as cumbersome, socialist, bureaucratic and hidebound. Private ownership is seen as none of those things and little mention is made of the acute depredations wreaked in the private sector. Try getting Ukip to promise that it would oppose the Royal Mail being owned by a Cayman Islands private equity fund, an Arab sovereign wealth fund or some plutocrat. There is silence. Ownership does not matter.

The Department for Business website talks loftily of ensuring that the Royal Mail has the necessary access to investment through privatisation, "untying its hands", as business minister Michael Fallon puts it. But this is the same Department for Business that was so concerned that privately owned plcs were short-termist and anti-investment that it commissioned John Kay to investigate. Even if his report shrank from any meaningful action, it at least dramatised the problem.

The model of privately owned postal companies competing in a regulated market is not a priori wrong: it seems to work in Germany with the privatised Deutsche Post. It is just that British private ownership structures maximise every adverse possibility and outcome. We are about to experience a boom in parcel deliveries as online shopping explodes. Universal parcel delivery is going to become an indispensable utility. Any government that consigns this crucial service to British-style private ownership – for a mere £3bn with 10% of shares given free to workers as a blatant bribe – is as short-termist as the stock market.

Instead, with ownership configured more imaginatively, the Royal Mail could become a de facto trust, a British postal and logistics group ready to exploit the coming boom. A creative government would transform it into a private trust with its own supervisory board on top of the management board, modelled along the lines of Deutsche Post that pro-privatisers like to cite but without ever doing any homework on the detail. For this model would be charged with ensuring managers protect and improve Britain's universal postal and parcel service, as well as seeking other commercial opportunities. The board would have public interest directors along with directors elected by the workers, enfranchised by the collective ownership of, say, a quarter of the shares in an employee ownership scheme. External investors could thus only buy into an organisation whose constitution, purpose and ownership were permanently shaped to deliver public good.

No such template has been floated. It is an opportunity Labour should seize as the embodiment of responsible capitalism. If Ed Miliband and Chuka Umunna were suitably adept, they could even create a parliamentary majority, with dissident Lib Dems and Tories, for it. Apart from ideologues, no one thinks privatisation as it has been practised works and everyone knows that in a decade the Royal Mail will probably be foreign owned. On this, the Communications Workers union and the Labour party are right. But supporting the status quo is insufficient to win the argument. What they need is an alternative prospectus. There is nothing to lose and everything to gain.