Why did ex Socialist countries embrace the harshest form of Capitalism?

 

Thought Provoking Conversations

 

Voters can be convinced China is defeated, but how do you convince jobless they’re earning?

Yogendra Yadav in The Print

It must have been hard for Nirmala Sitharaman. With all her sharp mind, sharper tongue and sharpest sense of political opportunity, it wouldn’t have been easy to manage the Narendra Modi government’s budget for 2022-23.

After all, she happens to be the finance minister of an economy fast approaching 5 trillion dollars GDP while the income of 80 per cent of the families to whom she was presenting the budget, has been declining for two years now. Most of them have had to dip into their savings or take out loans, just to survive. Unemployment is at its peak, triggering job riots in Uttar Pradesh and Bihar the week before.

Small-scale businesspersons — her party BJP’s traditional supporters — are in a bad shape, unable to recover from the triple whammy of demonetisation, GST, and lockdown. Besides, this budget was to be the moment of glory for the much-touted “doubling of farmers’ income” promise, which now seems only a few light years away, beyond the newly discovered ‘Amrit Kaal’. 

Managing the art of hiding in plain sight

The finance minister also had the unenviable challenge of hiding a little elephant. The-elephant-that-must-not-be-named. As practically everyone’s income and wealth were suffering a decline, a prodigious child of Bharat Mata managed to defy all odds — the economic meltdown as well as the pandemic-induced lockdown — and emerge as glorious as Sitharaman made all of us feel in her budget speech. But why not? As the pandemic struck, this little elephant’s empire was worth Rs 66,000 crore. By the time the finance minister was presenting her budget, the same empire had grown to a little more than Rs 6.75 lakh crore. Another jewel in Bharat Mata’s crown is that the combined wealth of India’s top 100 billionaire families was one and a half times the size of the budget she was planning to present.

Then there were some minor money matters to be sorted. This was a little tricky, but nothing that could not be managed by a fine budget speech. Even before the pandemic had struck, the Modi government had been spending a few more trillions than it could earn. The Reserve Bank of India (RBI) had already been ‘robbed’ by the government, leaving little space to dip into. The finance minister even tried hard to sell the country’s property, but that also seems to not have earned much. And of course, taxing the rich was ruled out. The only option was to borrow further. But the interest payment on previous borrowings was already one-fifth of the entire expenditure.

As if all this was not enough, Sitharaman was placed in a country with “too much democracy” and “free” media . Perceptions have to be managed. People have to be managed. Orders have to be followed.

We must thank God for Economics and English. They make for such a lovely couple. Their charm obviates the bother of having to explain what goes on in the business of economy to those whose life it affects. Thankfully, though most of them consumed the information in one of the Indian languages, neither the budget nor the commentaries were thought through in those languages. English creates knowledge about the economy. Other languages disseminate this wisdom. English takes your attention away from the wretched everyday world of the ordinary people; they make a guest appearance in their costumes, just as ‘emerging economies’ do at Davos. The jargon of economics puts a gloss on the most painful and humiliating experience. 

Be grateful, for you have support of lackeys

Nirmala Sitharaman must be grateful to the media. Ever since the Union Budget became a television spectacle, the more content is generated about the economy, the less we understand it. A small club of businessmen, all in awe or need or fear of the government, represent the economy. An even  smaller club of English-speaking economists, mostly sarkari and darbari, or representing a business interest, represent knowledge about the economy. Thank God we have never heard of conflict of interest. And a set of anchors, ignorant or compromised or both, act as interlocutors. It makes for a perfect setting for a theatre of power.

No one makes much of a mismatch between the text of the budget speech and the numbers in the budget document, between past promises and present performance, between claims and truth. Remember the time when the Economic Survey numbers contradicted the data presented in the budget the very next day? Or the spontaneous manner in which the finance minister made up pandemic relief package figures on a daily basis? Or her imperious silence on the doubling of farmers’ income this year?

This is the theatre of power where everyone else feels awkward on the finance minister’s behalf, bending over backwards to find assumptions, theories and rationale underlying a series of disconnected assertions. If all of this is not enough to fill air time, the finance minister’s speech has a lot more — drones for farmers, old schemes renamed, old promises reinvented, acronyms – all that stuff which passes for news.

Democracies always have some trouble-makers. Like ours has the irreverent Ravish Kumar, the acerbic Rathin Roy or the predictable Jayati Ghosh. Thank God, there are enough trustworthy voices in the media to sideline such outliers. A few phone calls in the afternoon can tweak the agenda for evening panel discussion. And not to forget the ideologues who would remind you that creating jobs is not the job of the government, who can be trusted to rubbish the idea of taxing the super-rich.

Well, the media can be managed and more than half the job is done, but then comes the problem of political management. Now it certainly does seem to be ‘too much democracy’. There are voters to be persuaded and elections to be won. Here, Sitharaman needs something more than good English and bad Economics. TV channels can help you convince a voter that India has battered Chinese forces in Ladakh, but how do you convince an unemployed person that she is earning wages? How do you convince a farmer that their income has doubled? For that, you might have missed, we have a sharp political strategy and an even sharper electoral machine.

Uttar Pradesh is a case in point. The finance minister would certainly have had to announce something major for farmers or the unemployed youth, but thankfully that is not what this election is about. This election is about ‘Mr Jinnah’, the temples in Ayodhya and Varanasi and the “gunda raj” during the Samajwadi Party’s regime. Simple recipe: keep the Hindu-Muslim pot boiling, use money-media-muscle to stitch a careful caste coalition and let your good English take care of the bad economics. And if matters go out of hand, you can always throw in some additional ration and cash transfers.

Ain’t that tough? Like every TV expert, I must bow my head to Nirmala Sitharaman for managing a very difficult task. Final score? 8 out of 10, I guess.

India Supreme Court on Reservations in Promotions

 

The paradox that leads professionals into temptation

 Andrew Hill in The FT

Before her first ward-round as a medical student, Sunita Sah watched as the consultant leading the group stuffed his pockets with branded pens and notepads from a hospital cart piled with drug company freebies. 

Noting her astonishment, he remarked, “these are the only perks of the job”, and continued to stock up. “I couldn’t help but think: ‘What’s the end-effect of this?’” Sah told me. 

She found part of the answer to that question when she moved from medicine into management consulting and started analysing how every interaction between healthcare companies and doctors had an impact on their prescribing habits. 

Now a professor at Cornell University and an honorary fellow at Cambridge’s Judge Business School, Sah has filled in more gaps with a new study that sheds light on the dark side of professionalism and how to avoid it. 

Her findings are stark and surprising. The greater a manager’s sense of professionalism, the more likely he or she is to accept a gift or bribe. Worse, high-minded professionals may be more susceptible to unconscious bias towards gift-givers, precisely because they are convinced they think they know how to ignore their blandishments. 

“I NEVER turn down something for free that I know isn’t going to kill me!” retorted one manager in response to Sah’s survey. “A free lunch from someone? Go for it! If the guy is fool enough to think his free lunch/dinner/use of cabin, etc, is going to influence me, he doesn’t know me at all! People don’t influence me beyond what I, and I alone, allow!” 

In the study for the Academy of Management Perspectives, Sah equates this “professionalism paradox” to the Dunning-Kruger effect, according to which poor performers lack even the ability to recognise their own hopelessness. 

Sah’s study is based on surveys of managers, but some of the pernicious real-world effects of her paradox are clear. In the extreme case of the opioid epidemic, books such as Empire of Pain and Dopesick (now also a television series) have chronicled the way respected physicians were dragged into the overprescription of painkillers after receiving free gifts and conference invitations from manufacturer Purdue Pharma. 

Yet their ability to self-regulate against conflicts of interest is still many professionals’ first line of defence when watchdogs and legislators start threatening to curb their autonomy with new rules. 

One problem is that we are all professionals now. The term used to be almost the exclusive domain of lawyers, doctors, teachers, accountants, and others who had laboriously acquired specialist knowledge, shown integrity, and deserved an elevated status. Now the same status is loosely claimed by everyone from salespeople to, yes, journalists. The currency has been debased. 

In law, behaving professionally and ethically is “part of your training, it’s part of your identity, it’s what makes you tick — which isn’t necessarily true elsewhere”, David Morley, former senior partner at Allen & Overy, says. But the head of a professional services firm adds that professionalism “can’t be an excuse or a cover story” for a lack of underlying principles. 

These senior leaders are describing the difference between what Sah calls “deep” and “shallow” professionalism. 

Deep professionals should recognise the risk of undue influence and avoid exposing themselves to it in the first place. Her parallel is Odysseus plugging his ears with wax to avoid falling for the sirens’ song, or, more prosaically, managers who decline all gifts, rather than relying on a corporate threshold to protect them. It is “easier for individuals to rationalise and morally disengage the acceptance of [small] gifts”, Sah writes, or even to stop noticing them altogether. 

Deep professionals should embrace continued ethical training, to help embed principles, and embrace an understanding that they may be prone to bribes and influence-seeking. They should also continue to practise their values, just as a concert pianist goes on rehearsing scales. 

Professionalism “isn’t an individual characteristic, or a feeling”, says Sah. Instead, she would like to redefine it as “repeated behavioural practices that demonstrate a deep understanding of the concept”, backed by appropriate rules and codes. In that form, anyone can aspire to deep professionalism. 

“The law as a profession doesn’t give you some status or standing: you have to earn that,” the senior partner of another law firm told me. “We shy away from [the attitude] ‘It’s OK, we’re professionals’.” In fact, professionals who catch themselves saying or thinking anything similar should be on their guard. They may be in the ethical shallows and about to run aground.  

Njan Prakashan in Punjab

 

The Left has Failed; Capitalism morphs into Techno-Feudalism