Gujarat Shining - An Alternative Opinion

Jean Dreze in The Hindu 11 April 2014

Why does Gujarat have indifferent social indicators, in spite of having enjoyed runaway economic growth and relatively high standards of governance?

Gujarat’s development achievements are moderate, largely predate Narendra Modi, and have as much to do with public action as with economic growth.

As the nation heads for the polling booths in the numbing hot winds of April, objective facts and rational enquiry are taking a holiday and the public relations industry is taking over.

Narendra Modi’s personality, for one, has been repackaged for mass approval. From an authoritarian character, steeped in the reactionary creed of the Rashtriya Swayamsevak Sangh (RSS) and probably complicit in the Gujarat massacre of 2002, he has become an almost avuncular figure — a good shepherd who is expected to lead the country out of the morass of corruption, inflation and unemployment. How he is supposed to accomplish this is left to our imagination — substance is not part of the promos. The Bharatiya Janata Party (BJP), too, is being reinvented as the party of clean governance, overlooking the fact that there is little to distinguish it from the Congress as far as corruption is concerned.

Spruced up image

Similarly, Gujarat’s image has been spruced up for the occasion. Many voters are likely to go the polling booths under the impression that Gujarat resembles Japan, and that letting Mr. Modi take charge is a chance for the whole of India to follow suit.

Some of Mr. Modi’s admirers in the economics profession have readily supplied an explanation for Gujarat’s dazzling development performance: private enterprise and economic growth. This interpretation is popular in the business media. Indeed, it fits very well with the corporate sector’s own view that the primary role of the state is to promote business interests.

However, as more sober scholars (Raghuram Rajan, Ashok Kotwal, Maitreesh Ghatak, among other eminent economists) have shown, Gujarat’s development achievements are actually far from dazzling. Yes, the State has grown fast in the last twenty years. And anyone who travels around Gujarat is bound to notice the good roads, mushrooming factories, and regular power supply. But what about people’s living conditions? Whether we look at poverty, nutrition, education, health or related indicators, the dominant pattern is one of indifferent outcomes. Gujarat is doing a little better than the all-India average in many respects, but there is nothing there that justifies it being called a “model.” Anyone who doubts this can download the latest National Family Health Survey report, or the Raghuram Rajan Committee report, and verify the facts.

To this, the votaries of the Gujarat model respond that the right thing to look at is not the level of Gujarat’s social indicators, but how they have improved over time. Gujarat’s progress, they claim, has been faster than that of other States, especially under Mr. Modi. Alas, this claim too has been debunked. Indeed, Gujarat was doing quite well in comparison with other States in the 1980s. Since then, its relative position has remained much the same, and even deteriorated in some respects.

An illustration may help. The infant mortality rate in Gujarat is not very different from the all-India average: 38 and 42 deaths per 1,000 live births, respectively. Nor is it the case that Gujarat is progressing faster than India in this respect; the gap (in favour of Gujarat) was a little larger twenty years ago — in both absolute and proportionate terms. For other indicators, the picture looks a little more or a little less favourable to Gujarat depending on the focus. Overall, no clear pattern of outstanding progress emerges from available data.

In short, Gujarat’s development record is not bad in comparative terms, but it is nothing like that of say Tamil Nadu or Himachal Pradesh, let alone Kerala. But there is another issue. Are Gujarat’s achievements really based on private enterprise and economic growth? This is only one part of the story.

When I visited Gujarat in the 1980s, I was quite impressed with many of the State’s social services and public facilities, certainly in comparison with the large north Indian states. For instance, Gujarat already had mid-day meals in primary schools at that time — decades later than Tamil Nadu, but decades earlier than the rest of India. It had a functional Public Distribution System — again not as effective as in Tamil Nadu, but much better than in north India. Gujarat also had the best system of drought relief works in the country, and, with Maharashtra, pioneered many of the provisions that were later included in the National Rural Employment Guarantee Act. Gujarat’s achievements today build as much on its ability to put in place functional public services as on private enterprise and growth.

Misleading model

To sum up, the “Gujarat model” story, recently embellished for the elections, is misleading in at least three ways. First, it exaggerates Gujarat’s development achievements. Second, it fails to recognise that many of these achievements have little to do with Narendra Modi. Third, it casually attributes these achievements to private enterprise and economic growth. All this is without going into murkier aspects of Gujarat’s experience, such as environmental destruction or state repression.

At the end of the day, Gujarat poses an interesting puzzle: why does it have indifferent social indicators, in spite of having enjoyed runaway economic growth for so long, as well as relatively high standards of governance? Perhaps this has something to do with economic and social inequality (including highly unequal gender relations), or with the outdated nature of some of India’s social statistics, or with a slackening of Gujarat’s earlier commitment to effective public services. Resolving this puzzle would be a far more useful application of mind than cheap propaganda for NaMo.

Jean Dreze in The Hindu on 11 May 2014

If Gujarat is a model, then the real toppers in development indicators, like Kerala and Tamil Nadu, must be supermodels

In an earlier article published on this page (“The Gujarat Muddle,” April 11, 2014), I pointed out that Gujarat’s development achievements were hardly “model” class. This is pretty firm ground: the same point has been made by a long list of eminent economists. Yet confusion persists, so I decided to take another look at the data, just in case I had been carried away.

Summary indexes

This time I looked at a bunch of summary indexes based on multiple development indicators. One advantage of summary indexes is that they make it harder to “cheat” by focussing selectively on particular indicators that happen to suit one’s purpose. The Human Development Index (HDI) is a good starting point. The latest HDI computations for Indian states, presented by Reetika Khera and myself in Economic and Political Weekly, place Gujarat in the 9th position among 20 major States — very close to the middle of the ranking. In the same paper, we also looked at a summary index of child well-being, nicknamed Achievements of Babies and Children (ABC), which is based on four indicators related to child nutrition, survival, education and immunisation respectively. In the ABC ranking, too, Gujarat occupies the 9th position among 20 major States.

Another useful summary index is the Multidimensional Poverty Index (MPI). Briefly, the idea is that poverty manifests itself in different kinds of deprivation — lack of food, shelter, sanitation, schooling, health care, and so on. Starting with a list of basic deprivations, a household is considered “poor” if it has more than a given proportion (say one third) of these deprivations. There is some inevitable arbitrariness in the specification of basic deprivations, but nevertheless, the MPI is a very useful supplement to other poverty indicators. In the latest MPI ranking of Indian States, by Sabina Alkire and her colleagues at Oxford University, Gujarat comes 9th (again) among 20 major Indian States.

A new entrant in this family of summary statistics is the Composite Development Index devised by the Raghuram Rajan Committee. This index has ten components related to per capita consumption, household amenities, health, education, urbanisation, connectivity, financial inclusion, and so on, based on the latest available data. Looking at the list of component indicators, an unsuspecting reader of the mainstream media might expect Gujarat to emerge pretty close to the top of the State ranking. Alas, not. Here again, Gujarat scores 9th among 20 major States!

There is something almost uncanny about this pattern, since the summary indexes are based on very different indicators. And it’s not that I am selectively focussing on particular rankings where Gujarat happens to rank 9th out of 20. I have reported all the recent summary indexes I know of. If you don’t like them, we can always fall back on the Planning Commission’s standard poverty estimates based on per capita expenditure. But then Gujarat slips from the 9th to the 10th position among 20 major States, according to the latest estimates for 2011-12.

The Raghuram Rajan Committee also devised another interesting index: the Performance Index, which captures the progress that States are making over time in terms of the Composite Development Index. This is an important indicator, because some proponents of the Gujarat model argue that what we should look at is not the level of Gujarat’s development indicators, but how they change over time. And that is precisely what this index does. Further, it focusses on performance in the decade of the 2000s, when Gujarat was supposed to be at its best. Surely, Gujarat will fare well this time? On the contrary, it slips from 9th to 12th in the ranking of 20 major States.

In short, whichever way we look at it, Gujarat looks less like a model State than a “middle State” — far from the bottom in inter-State rankings, but far from the top too. If there is a Gujarat model, then there must also be a Haryana model and perhaps a Karnataka model. Incidentally, Maharashtra does better than Gujarat on all the summary indexes mentioned earlier. Why, then, is Gujarat held as a model and not Maharashtra? Your guess is as good as mine.

If Gujarat is a model, then the real toppers, like Kerala and Tamil Nadu, must be supermodels. Indeed, not only do Kerala and Tamil Nadu routinely come at — or near — the top in rankings of summary development indexes, they also surpass other States in terms of the speed of improvement. For instance, Kerala and Tamil Nadu do better than any other major State in terms of both level and change of the Composite Development Index. Of course, if you believe the touching story whereby Kerala’s achievements are actually based on the Gujarat model, then we are back to square one.

Why this image?

An interesting question arises: how did Gujarat acquire an inflated image? No doubt, this optical illusion partly reflects Narendra Modi’s outstanding ability to confuse the public (with a little help from his admirers in the economics profession). But perhaps it also has something to do with the fact that our perception of India is over-influenced by the large north Indian States — the former “BIMARU” States, which have dismal infrastructure, awful public services, and abysmal social indicators. Gujarat certainly shines in comparison — but so do many other States.

Mind you, the “G spot” (9th out of 20) may be auspicious. The number nine, according to Wikipedia, “is revered in Hinduism and considered a complete, perfected [sic] and divine number.” The Chinese, for their part, associate the number nine with the dragon, “a symbol of magic and power,” which also “symbolises the Emperor.” If the numerologists got this right, NaMo is well placed.

Pfizer's bid for AstraZeneca shows that big pharma is as rotten as the banks

Global pharmaceutical companies are dodging the risks by loading R&D costs on to taxpayers

• Mariana Mazzucato
• The Observer, Sunday 11 May 2014

Every one of Pfizer’s patented drugs benefited from decades of taxpayer funds. Photograph: Canadian Press/Rex

Countries around the world are seeking long-run, innovation-led growth in the "real economy". This is born of a wish to move away from speculative growth led by short-term financial markets. For this reason, industrial policy is back on the agenda after years of being a near blasphemy.

The life-sciences industry is top of the list, for both Barack Obama and David Cameron, of "real" industries to nurture through such policy. But this month they have been reminded of an uncomfortable truth: big pharma is just as sick as the banks. And, like speculative finance, it is hurting taxpayers in the process.

Pfizer wants to buy AstroZeneca, a British firm, to cuts its high overheads and especially to pay the lower UK tax rate (20%) – the cheap way the UK attracts "capital"– rather than the 40% US tax rate. This is nothing new as Google and Apple have been shifting profits around the world to avoid tax. Even within the US, Apple moved one of its subsidiaries to Reno, Nevada to avoid paying higher tax in Cupertino, California. Let's call it a race to the bottom.

What makes this dynamic particularly problematic for the taxpayer is that the knowledge behind Apple and Pfizer products – the key to their long-run profits – has been virtually bankrolled by that same taxpayer. As I discuss in my book The Entrepreneurial State: Debunking Private vs Public Sector Myths, every technology behind the iPhone was publicly funded (internet, GPS, touch-screen, Siri) and every one of Pfizer's patented drugs benefited from decades of taxpayer funds through the US National Institutes of Health, which in 2012 alone spent £32bn (£19bn).

Indeed, Pfizer's recent shift of one of its largest R&D laboratories from Sandwich in Kent to Boston was not due to the lower taxes or regulation in Boston but to be closer to this pot of gold. Coming back to the UK only to suck more blood out of the system should warn the government of the kind of image it wants to present of itself. Is it happy to be played front and back?

And what is happening to big pharma's research and development? In the name of "open innovation" – the admission that most of their knowledge comes from small biotech and large public labs – big pharma have been closing down their own R&D (reducing total numbers of researchers), as well as moving the remaining ones to be close to those labs.

Big pharma is no longer in the innovation business, using its own resources to fund the high-risk ideas, most of which will fail. It has become more risk-averse and prefers to focus on the D of R&D and please shareholders. Mergers and acquisition strategies reduce expensive overheads and costs (of which research infrastructure is the highest).

Things become even clearer when we look at the numbers behind one of their biggest expenditures: share buybacks. These are geared to boost stock prices, stock options and executive pay. Indeed it is this type of dynamic that has been driving the extreme inequality described by Thomas Piketty. The calculations of Professor William Lazonick suggest that in 2011, along with $6.2bn paid in dividends, Pfizer repurchased $9bn in stock, equivalent to 90% of its net income and 99% of its R&D expenditures.

While the justification for such buybacks is often that there are no "opportunities for investment", the increased public funds in pharma research shows who is funding the opportunities and who is free-riding. Though in the end both lose since without an engaged private partner, innovation suffers.

To make matters worse, these "innovative" companies advising governments on their "life-sciences" strategies are constantly seeking handouts through R&D tax credits, or more recently through the UK  Patent Box tax scheme introduced in 2013 (as well as in the Netherlands, Belgium and Spain, and soon in the US), with a 10% tax for income earned on patented drugs.

Patents are already monopolies with 17 years' protection. There is no reason to increase profits even more during that time. Especially as what drives the research that leads to patents is not the "cost" of the research, but the opportunities that are perceived—historically driven by large amounts of risk-loving public funds.

Experts from the Institute for Fiscal Studies have argued that this policy will diminish government revenue by about £2bn a year, and have no effect on business investment in research – which was meant to be the point. Indeed, private investment tends to follow well-funded public investments, that are of course undermined by the constant bashing away at the ability of government to collect tax revenue. This not an innovation strategy but a City-like speculation strategy.

The parallel goes even further: just like the banks, big pharma socialises the risk, but privatises rewards. The few drugs that are coming out would not have emerged without taxpayer-funded research. Yet the taxpayer then pays twice: first for the research then for the high prices, justified by the supposedly high risk that big pharma is taking on. This is almost surreal: what risk? And what about taxpayer risk?

Rather than empty words on a life-sciences strategy, what is needed is for policymakers to become more confident in their negotiations with business. The 1980 Bayh-Dole act that allowed publicly funded research to be patented says that government should have a say on the prices of the drugs. The fact government has never exercised this right shows who has the upper hand.

But things can change. Innovation policy should be linked to corporate governance – why should companies that spend more on share buybacks than R&D benefit from public research funds? Then "intelligent" R&D tax credits could be created, linked not to the income generated from R&D but the research labour hired to conduct it (as introduced in the Netherlands).

Government could also retain a golden share of the intellectual property rights (patents) which public research produces, and/or make sure that the prices of the new drugs reflect how the taxpayer paid for the most high-risk research. And, finally, given the high dependence of the industry on publicly -funded R&D, do not allow acquisitions that undermine the underlying research base the companies themselves should commit to - and for which they constantly request handouts.

In short, we need to start fostering a more symbiotic innovation eco-system. It's time to put an end to the current, increasingly parasitic one. We could start by realising that government does have power to actively shape and create markets, and not just fix broken ones.

University economics teaching isn't an education: it's a £9,000 lobotomy

Economics took a battering after the financial crisis, but faculties are refusing to teach alternative views. It's as if there's only one way to run an economy

• 
• • Aditya Chakrabortty
  • The Guardian, Friday 9 May 2014

The Post-Crash Economics Society at Manchester University has arranged an evening class on bubbles, panics and crashes. Photograph: Jon Super for the Guardian

"I don't care who writes a nation's laws – or crafts its treatises – if I can write its economics textbooks," said Paul Samuelson. The Nobel prizewinner grasped that what was true of gadgets was also true for economies: he who produces the instruction manual defines how the object will be used, and to what ends.

Samuelson's axiom held good until the collapse of Lehman Brothers, which triggered both an economic crisis and a crisis in economics. In the six years since, the reputations of those high priests of capitalism, academic economists, have taken a battering.

The Queen herself asked why hardly any of them saw the crash coming, while the Bank of England's Andy Haldane has noted how it rendered his colleagues' enchantingly neat models as good as useless: "The economy in crisis behaved more like slime descending a warehouse wall than Newton's pendulum." And this week, economics students from Kolkata to Manchester have gone on the warpath demanding radical changes in what they're taught.

In a manifesto signed by 42 university economics associations from 19 countries, the students decry a "dramatic narrowing of the curriculum" that presents the economy "in a vacuum". The result is that the generation next in line to run our economy, from Whitehall departments or corporate corner-offices, discuss policy without touching on "broader social impacts and moral implications of economic decisions".

The problem is summed up by one of the manifesto's coordinators, Faheem Rokadiya, at the University of Glasgow: "Whenever I sit an economics exam, I have to turn myself into a robot." But he and his fellow reformers aren't seeking to skimp on algebra, or calling for a bonfire of the works of the Chicago school. They simply object to the notion that there is one true way to do economics, especially after that apparently scientific method has been found so badly wanting.

In their battle to open up economics, Rokadiya et al have one hell of a fight on their hands, for the same reason that it has proved so hard to democratise so many aspects of the post-crash order: the forces of conservatism are just too powerful. To see how fiercely the academics fight back, take a look at the University of Manchester.

Since last autumn, members of the university's Post-Crash Economics Society have been campaigning for reform of their narrow syllabus. They've put on their own lectures from non-mainstream, heterodox economists, even organising evening classes on bubbles, panics and crashes. You might think academics would be delighted to see such undergraduate engagement, or that economists would be swift to respond to the market.

Not a bit of it. Manchester's economics faculty recently announced that it wouldn't renew the contract of the temporary lecturer of the bubbles course, and that students who wanted to learn about the crash would have to go to the business school.

The most significant economics event of our lifetime isn't being taught in any depth at one of the largest economics faculties in the country. So what exactly is a Russell Group university teaching our future economists? Last month the Post-Crash members published a report on the deficiencies of the teaching they receive. It is thorough and thoughtful, and reports: "Tutorials consist of copying problem sets off the board rather than discussing economic ideas, and 18 out of 48 modules have 50% or more marks given by multiple choice." Students point out that they are trained to digest economic theory and regurgitate it in exams, but never to question the assumptions that underpin it. This isn't an education: it's a nine-grand lobotomy.

The Manchester example is part of a much broader trend in which non-mainstream economists have been evicted from economics faculties and now hole up in geography departments or business schools. "Intellectual talibanisation" is how one renowned economist describes it in private. This isn't just bad for academia: the logical extension of the argument that you can only study economics in one way is that you can only run the economy in one way.

Mainstream economics still has debates, but they tend to be technical in nature. The Nobel prizewinner Paul Krugman has pointed to the recent work of Thomas Piketty as proof that mainstream economics is plenty wide-ranging enough. Yet when Piketty visited the Guardian last week, he complained that economists generate "sophisticated models with very little or no empirical basis … there's a lot of ideology and self-interest".

Like so many other parts of the post-crash order, mainstream economists are liberal in theory but can be authoritarian in practice. The reason for that is brilliantly summed up by that non-economist Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."

42 phrases a lexophile would love

By Ajay Desouza

1. I wondered why the baseball was getting bigger. Then it hit me.

2. Police were called to a day care, where a three-year-old was resisting a rest.

3. Did you hear about the guy whose whole left side was cut off? He’s all right now.

4. The roundest knight at King Arthur’s round table was Sir Cumference.

5. To write with a broken pencil is pointless.

6. When fish are in schools they sometimes take debate.

7. The short fortune teller who escaped from prison was a small medium at large.

8. A thief who stole a calendar… got twelve months.

9. A thief fell and broke his leg in wet cement. He became a hardened criminal.

10. Thieves who steal corn from a garden could be charged with stalking.

11. When the smog lifts in Los Angeles , U. C. L. A.

12. The math professor went crazy with the blackboard. He did a number on it.

13. The professor discovered that his theory of earthquakes was on shaky ground.

14. The dead batteries were given out free of charge.

15. If you take a laptop computer for a run you could jog your memory.

16. A dentist and a manicurist fought tooth and nail.

17. A bicycle can’t stand alone; it is two tired.

18. A will is a dead giveaway.

19. Time flies like an arrow; fruit flies like a banana.

20. A backward poet writes inverse.

21. In a democracy it’s your vote that counts; in feudalism, it’s your Count that votes.

22. A chicken crossing the road: poultry in motion.

23. If you don’t pay your exorcist you can get repossessed.

24. With her marriage she got a new name and a dress.

25. Show me a piano falling down a mine shaft and I’ll show you A-flat miner.

26. When a clock is hungry it goes back four seconds.

27. The guy who fell onto an upholstery machine was fully recovered.

28. A grenade fell onto a kitchen floor in France and resulted in Linoleum Blownapart.

29. You are stuck with your debt if you can’t budge it.

30. Local Area Network in Australia : The LAN down under.

31. He broke into song because he couldn’t find the key.

32. A calendar’s days are numbered.

33. A boiled egg is hard to beat.

34. He had a photographic memory which was never developed.

35. A plateau is a high form of flattery.

36. Those who get too big for their britches will be exposed in the end.

37. When you’ve seen one shopping center you’ve seen a mall.

38. If you jump off a Paris bridge, you are in Seine.

39. Bakers trade bread recipes on a knead to know basis.

40. Santa’s helpers are subordinate clauses.

41. Acupuncture: a jab well done.

42. A lot of money is tainted: ‘Taint yours, and ‘taint mine.

Why psychopaths are more successful

Andy McNab and Oxford psychology professor Kevin Dutton in The Telegraph reveal how acting like psychopaths could help us in work, life and love

Behaving like a psychopath could help you in your career and love life. It’s counterintuitive – who, after all, would hire Hannibal Lecter or want to date Norman Bates – but that’s the idea behind The Good Psychopath’s Guide to Success, part popular science book, part self-help guide fromAndy McNab and Oxford psychology professor Kevin Dutton.

“I wanted to debunk the myth that all psychopaths are bad,” says Dutton, who has explored this subject before. “I’d done research with the special forces, with surgeons, with top hedge fund managers and barristers. Almost all of them had psychopathic traits, but they’d harnessed them in ways to make them better at what they do.”

It was through this research that he met retired SAS sergeant and bestselling author McNab, who in tests exhibited many of these psychopathic traits, including ruthlessness, fearlessness, impulsivity, reduced empathy, developed self-confidence and lack of remorse.

“There’s no one thing that makes a psychopath,” Dutton explains. “You want to think of those traits being like the dials on a studio mixing desk, that you can turn up and down in different situations – if they’re all turned up to maximum, then you’re a dysfunctional psychopath. 

As one dysfunctional psychopath – who was serving a life sentence for multiple murders – put it to Dutton: “It’s not that we’re bad, it’s that we’ve got too much of a good thing.”

How, then, can you act more like a psychopath in your everyday life?

IN BUSINESS

Focus

“If I’m in a hostage situation I’d rather have a psychopath coming through the door than anyone else because I know he’s going to be completely focussed on the job in hand,” says McNab.

The ability psychopaths have to turn down their empathy and block out other concerns make them the best operators in high-pressure environments, he says. “If I was on trial, I’d want a psychopath [to represent me] too. I want someone who’d be able to rip people apart in the witness box, go back to their family and not think anything more about it, because it’s just a job for them.”

Fearlessness

The lack of fear which characterises psychopaths could also help people in the work place, says Dutton, who asks of the book’s readers: “What would I do in this situation if I wasn’t afraid?” (It matches, almost word for word, a sign which greets visitors to Facebook’s California HQ, “What Would You Do If You Weren't Afraid?” though Dutton insists this is coincidental.)

“If it’s asking for a raise or picking up the phone to call someone you wouldn’t otherwise, functioning psychopaths have a natural advantage in that they can turn this fear down.”

Lack of empathy

But it’s important, McNab says, not to turn down the ‘empathy dial’ completely when doing business. “You don’t want to be a Gordon Gekko character, screwing people over all the time. They get hurt once but you get hurt forever because they’ll never trust you again. That’s the difference between a good and a bad psychopath: knowing when to turn that up and when to kill it.”

IN RELATIONSHIPS

Fearlessness

One dysfunctional psychopath Dutton worked with used to have a competition when out with his friends: not to see who could get the most phone numbers from women but see who could get the most rejections. “It’s something anyone could learn from,” Dutton says.

“Once you get used to being rejected it doesn’t hurt, you realise it doesn’t matter. Then your confidence gets up and you start approaching everyone – you’re coming across as less confident, less worried and your hit rate starts going up. It’s a great example of how you can turn this fear down if you work on it.”

Ruthlessness

“A lot of the problems in relationships come from the fact that people stick in them when they’d be better off out,” says McNab, who had been married five times – though has been with his current wife for 14 years. “You have to know when to cut loose.”

Self-confidence

Psychopaths never mind striking out on their own – and this is a good example to follow, Dutton says, if you start feeling constrained by your friends. “Your friends might be smoking and drinking all the time while you’ve decided to get fit. You have to be prepared to stand apart sometimes. It doesn’t mean ditching them, it’s just healthy to be your own person once in a while.”

When it comes to self-confidence, as with all the psychopathic traits the pair explore, the most important thing is to be able to strike a balance. To anyone worrying that the book will create a wave of unfeeling monsters, Dutton says: “We are absolutely not aiming to turn people into psychopaths.

“It’s for people who have those mixing dials turned down too low and need to get them up.”

Uefa and Michel Platini are missing the real targets with their £50 million fine for Manchester City

Paul Hayward in The Telegraph

When Abu Dhabi’s rulers first decided to build a bonfire of hundreds of millions of pounds at Manchester City they would have laughed at the idea that blowing money was a crime punishable by Uefa sanctions. Imagine that: a sport where they throw a £50 million penalty at you for excessive generosity.

Strictly, Financial Fair Play (FFP) is an anti-subsidy initiative by a game that prostrates itself to foreign billionaires and then ticks them off for investing too much. It defiles the World Cup by awarding it to Qatar, then disapproves of Qatari spending at Paris St-Germain.

It says little about rampant ticket price inflation, the huge sums extracted by agents or grotesque individual player salaries. Whichever way you turn it, Uefa’s clumsy lunge at “fairness” has ended up being about two gulf states who jumped into football as an act of future-proofing because their oil was running out.

No torch is being held here for sovereign wealth. But the distortion of the London house market by foreign speculators, for example, is a far more serious issue than City paying Sergio Agüero’s wages via a so-called sweetheart deal with Etihad Airways.

Uefa-ologists might have spotted that president Michel Platini enjoys a cosy relationship with Qatar, who chose Paris as their investment outlet, and that it might have been somewhat awkward for Europe’s governing body to punish PSG without also directing their disapproval at City. 

The clubs hit hardest by these arbitrary actions are those who had to spend heavily to raise underperforming clubs into the elite. City and PSG both fit this profile.

It was no surprise, then, to find Roman Abramovich broadly supportive of the FFP principle. Chelsea’s owner had already torched the kind of cash City and PSG have burned in the last three years. By endorsing the move to have such extravagance cast as a crime, Abramovich was simply blocking the way to new tycoons and therefore protecting his competitive advantage.

From Sheikh Mansour of Abu Dhabi’s viewpoint, a £50 million fine doubtless leaves a kind of moral stain. It implies financial doping, or even cheating, with its suggestion that the £35 million-a-year Etihad deal was really a polite way to cook the books.

As with PSG and the Qatari tourist board (£167 million), Uefa clearly believe that the deal was inflated to allow one part of an oil-rich state to subsidise another. And they might be right.

Yet the people who struck those deals are unlikely to appreciate being singled out in an industry that is synonymous with creative accounting. If in doubt, consider the mess Barcelona got themselves into over Neymar.

Nobody wants an unregulated free for all, or illegality, or the crushing of the poor by the rich. But Uefa’s punishment of City takes no account of the direction in which the club is heading or the socially constructive investment in the Etihad Campus in a deprived part of Manchester. Shiekh Mansour and his entourage are not philanthropists, but nor does their spending fit the template of outright decadence.

So far all that expenditure has bought them one Premier League title and not much headway in Europe. There is no wholesale buying of trophies because the Premier League is too competitive to allow it. This season City have had to fight Liverpool and Chelsea for the championship. The seductive allure of FFP is that helps the poorer against the richer. All it might do in this case is to make Abu Dhabi resent being stigmatised and cause them to question Uefa’s motives. You can see the speech bubble now: “They take our money and then fine us for giving it to them?”

A much greater problem, certainly in England, is clubs being ram-raided by speculators who seek to suck money out, not put it in. Portsmouthand Birmingham City are just two examples of clubs that have been treated like lumps of meat on an “investment” menu.

Many of us would like to see regulation attack that issue before the Uefa bureaucracy drives through arbitrary penalties against a club (City) who are putting money in, rather than taking it out, however vulgar it might sometimes seem.

Where is the £50 million fine for the Glazers for servicing their debts from Manchester United’s revenues? On this evidence, FFP is mere grandstanding.

ECB and Pietersen - Inside the Turtle Tank

by Tregaskis in The Full toss • May 5, 2014

I know, I know. We’ve done the KP thing to death now. But we simply had to publish this very insightful article by Tregaskis. It takes a broad perspective and frames events somewhat differently to the norm. If only more mainstream cricket journalists had taken a similar approach ….

I recall attending a conference a few years back when the guest speaker opened with an old joke – “Asked how many people worked in his organisation, a CEO replied “about half of them.” The conference was about motivation and engagement in the workplace, and Paul Downton’s interventions on the subject during the unveiling of Peter Moores as the England cricket head coach struck me as something that deserved a second look.

Downton said there were no specific issues surrounding Pietersen’s sacking – “I arrived in Sydney on 31 December and it was clear from Andy Flower that there were two issues we were facing. He [Flower] was uncertain about his future – and what were we going to do about Kevin? … I watched every ball of [the fifth Test in] Sydney, and I have never seen anyone so disengaged from what was going on. What you need from a senior player is backing and support and everybody working together, but we had got to a stage where that was no longer the case.”

With a mounting cast of injured, retired and disaffected players, Downton’s demand for the backing and support of Pietersen raised a rather awkward question – what kind of backing and support does the ECB gives its players? In balancing the pursuit of financial gain and the well-being of its players, where is the ECB positioned – Primark sweatshop or John Lewis Partnership. How does its record on connectivity stack up?

It is a truth universally acknowledged that an organisation lacking effective leadership will experience an endless stream of crises, problems and dropped balls. An analogy is sometimes made to turtle farmers, who buy the baby reptiles and put them in small tanks. The turtles stop growing in response to the limited living space. All the potential for growth is stunted. It is the same in command-and-control hierarchies like the ECB, especially ones headed by a Hippo, where the Highest Paid Person’s Opinion overrides creative input in favour of gut feeling, pride and prejudice.

Enlightened organizations understand that if they are to retain talent and optimise performance, they need to engage with their workforce. Leadership is not about demanding connectivity but creating an environment in which employees can thrive. The best organisations do not see their employees simply as interchangeable cogs in a mechanism for delivering a product or service. They see them as the most important assets of the business; the best may even be a million-dollar asset.

General Norman Schwarzkopf, of Gulf War fame, knew a thing or two about leadership. He said: “I have seen competent leaders who stood in front of a platoon and all they saw was a platoon. But great leaders stand in front of a platoon and see it as 44 individuals, each of whom has aspirations, each of whom wants to live, each of whom wants to do good.”

Russell Jackson, in the Guardian the other day, describes the job done by Darren Lehmann in transforming a dud and dysfunctional Australian team by “creating the environment in which this collection of players could thrive as individuals, take pleasure in each other’s performance and quickly turn themselves into such a dominant outfit.”

There are countless measures for assessing whether a business is engaging with its employees. For instance, does management show it values its employees? Is an employee’s input shown to be important? Do employees feel free to voice their ideas and opinions? Are leaders as quick to praise an accomplishment as they are to criticize a failing? Is the employee’s position secure? So how does the ECB measure up as an enlightened employer?

The list of recent players feeling badly treated by ECB management includes Nick Compton, Michael Carberry, Monty Panesar, Jonny Bairstow, Steven Finn and Kevin Pietersen. I don’t suppose Ashley Giles is feeling particularly well valued at the moment. That is the spine of a pretty decent-looking England test team. As Mike Selvey might have said in a parallel universe, with this many disaffected players around, something must be wrong with the way they are treated.

Kevin Pietersen is a high-profile victim of the ECB command-and-control regime. His is a complex case study because he is both the most successful England batter of his generation and also one of its most neurotically demanding. Pietersen is hard wired to seek achievement and perfection alongside recognition and affection. These are personal and emotional goals that drive most professional cricketers, but in Pietersen’s case they are magnified exponentially because of his brilliance and particular psychological needs.

Disengagement is a recognised coping mechanism displayed by people suffering anxiety through, say, feeling unsafe, unloved, and undervalued. Steven Pye in his Guardian blog on the 1981 Ashes series observed that the concept of Botham being on trial was not helped when he was made test captain on a match-by-match basis only. It was, wrote Pye, far from ideal and unlikely to improve Botham’s ailing form with that amount of tension hanging over him.

Botham was a beast every bit as big as Pietersen, yet he crumbled under the pressure, till rescued by the man-management skills of Mike Brearley. Downton should know – he played in the first 1981 test! Pietersen has been on trial for half his international career; how safe can he have felt? He had to keep his head down. If he had looked up he would have been stabbed in the eye by the sword of Damocles poised perpetually and perilously above him.

Type “Pietersen, unloved” into Google and endless headlines come up like this from the Telegraph in 2010 – “Unloved Cricketer Kevin Pietersen blah blah” and this from the Mail in 2014 – “Gifted but Unloved KP Never Belonged.” Being Kevin Pietersen can’t have been easy in a press environment that targeted him with years of personal antipathy. His wealth, flamboyance and outward self-belief marked him not as a talented and successful individual but as unclubable. He was a marked man whose failures were always embraced with more joy than his successes.

The Pietersen charge sheet lists three principal felonies. First, his removal of Moores (#1) as head coach; secondly, text-gate; thirdly, his disengagement during the Sydney test. On each of these occasions, it can be argued that Pietersen was simply exhibiting recognised behaviour patterns commonly seen in victims of stress-ridden, high-anxiety, alienating environments.

Going back five years or so, it was clear that Moores (#1) did not possess the competence to bridge the gap between county and international cricket. He was unable to connect with senior professionals and failed to progress the team in terms of meaningful results. Michael Vaughan has described how Peter Moores operated first time around – “The team is starting to get irritated by the new management regime – being told what to do and treated like school kids. Peter loves talking and having the last word.”

Vaughan gives as an example an occasion when the team was asked to write down “100 things” that would improve the team. This tripe comes from the same coaching-by-numbers manual employed by Mickey Arthur, the Aussie head coach to be forever remembered as the architect of homework-gate. By all accounts, the headmasterish Andy Flower was more Alcock than Powlett-Jones, more Chief Superintendent Bright than Endeavour Morse. His prescriptive, micro-managing style offered little room for players to voice ideas or opinions of their own, and extended little forgiveness to those that did. The turtle tank was a small, growth-retarding environment under both Moores (#1) and Flower.

This was never just a Pietersen-Moores conflict. Vaughan, Strauss and Collingwood all doubted Moores and his methods. Pietersen, in circumstances not dissimilar to the dressing-room meeting some five years later, was invited to present his strategy for improving England’s performances and in a showdown with Giles Clarke made it clear that his vision for improvement did not include Moores. Pietersen may or may not have given a him-or-me ultimatum but the conflict was leaked to the press. Dennis Amiss, vice-chairman of the ECB, confirmed that Pietersen was not responsible for the leak, though the leak pretty much ensured the matter could not be resolved behind closed doors. It could only have come from within the ECB.

Pietersen’s position was not unexpected or unreasonable. That is why Moores was sacked. Moores’s incompetency was not Pietersen’s fault. Pietersen resigned before he was sacked himself, but his departure flowed not from inappropriate behaviour towards Moores (#1), but because the ECB felt uncomfortable with investing this captain with so much power. Fast-forward five years and the ECB’s decision-making is now built around supporting the captain regardless of his faultlines. Cook is arguably the worst but most powerful captain in a generation. It is hard to see any consistency in the ECB’s ethical baseline.

Pietersen’s tactical mistake was seeking to have Flowers removed as batting coach at the same time. He did so, presumably, because Moores  (#1) and Flowers were close and shared a common coaching philosophy. In those terms, it made sense for the ECB to let both coaches go and appoint someone with a completely different approach to player motivation. The appointment of Flower as head coach will, for Pietersen, have been a hammer blow and the worse of all possible scenarios.

A series defeat to India in winter 2008 triggered the tumultuous double sacking. Over the next three and a half years, Pietersen must have incubated a deep and growing distrust of the ECB. His unfair dismissal as captain, the embarrassing return to the ranks, the devious leak, the regular fines over innocuous Tweets. He was poorly treated, undervalued and picked on for meaningless misdemeanours. Flower’s appointment as head coach will have done nothing to quell Pietersen’s neurotic tendencies and by all accounts the two men made do with a distant relationship that was awkward and good-times dependent.

Flower comes across as a manager long on memory and short on forgiveness, and Pietersen would have been justified in thinking that revenge when it came would be a rasgoola over a vindaloo. While Pietersen’s ashes were not exactly released into the Ganges, January 2009 marked the moment when the ECB first set Pietersen adrift. Even so, Andrew Strauss confessed that he admired how graciously Pietersen behaved, in impossible circumstances, towards management, the players and to Strauss himself as the new captain. Pietersen continued to make an MVP contribution to England’s elevation to No 1 test team in the world.

This was the context in which the hokey-cokey central contract discussions were taking place, with Pietersen wanting to play in the IPL, his natural milieu, and the ECB telling him his contract said no. So Pietersen decided to retire from ODIs, to concentrate on tests and T20, but the ECB again said no. It was an inflexible no, a prescriptive no, a no with knobs on. Every other player in the world of Pietersen’s considerable calibre was playing in the IPL. A cricketer has a short career and needs to make the most of his earning power. The international stars of world cricket apart, it was hardly fair that players like Napier, Mascarenhas, Shah and Bopara could earn big bucks in India while exponentially better players on central contracts could not.

There were tectonic forces at play here, between a command-and-control behemoth and the evolution of the cricketing market. Suddenly, natural selection had become an indefinable concept. It may play out badly again this season if Morgan fails to make the test team after “choosing” to showcase his skills in a damp and cold English April instead of the warmth of a dollar-rich six weeks in India.

Meanwhile, in the dressing room, Pietersen caught wind of a parody Twitter account called KP Genius set up by a wag, who turned out to be a mate of Stuart Broad. The tweets set out to ridicule Pietersen and his perceived ego and hubris. There were a number of followers in the team and Pietersen believed that the tweets were being fed by leaks from the England camp. At a time when Pietersen felt that he was being straitjacketed by the ECB negotiators, the KP Genius shenanigans must have removed any refuge he thought he had in the dressing room. The press largely laughed this off as a light-hearted jape that pricked the thin skin of the resident diva.

Andrew Strauss tells us that Pietersen’s in-out-shake-it-all-about negotiations meant he had major bridge building to do with his teammates, without ever explaining why. This was a hostile environment in which Pietersen was required to go about his work. He was being alienated inside and outside the dressing room, with unsympathetic noises off from the press. Yet while Strauss’s man-management skills were in sleep mode, and the ECB were micro-managing his life, Pietersen went about his day job scoring 149 in the second test against South Africa in one of his most audacious knocks ever.

With cricket known as the divorce sport, it did not need Pamela Stephenson Connolly to point out that a high performing talent alienated in his work environment may well seek friendship and approbation elsewhere. It was, after all, a loveless marriage. Pietersen chose de Villiers and Steyn, both IPL teammates, as his tit-bits on the side. Pietersen got it wrong. It was inappropriate, insensitive and dumb. He should have exercised more self-discipline. But this was to ask him to rise above the provocation and disconnecting tendencies of the ECB and the dressing room.

His actions were professionally unforgivable but emotionally understandable. This was an employee, treated badly by management, having a big moan around the water cooler. There has never been a proper debate about the proportionality of the ECB’s response to Pietersen’s texts. Like the 50 misdemeanours, they have never been published, so they could be something or nothing. At a guess, barely three people in the world knew the content, but there was a great deal of spinning against Pietersen. Sub-editors crafted headlines and journalists pursued a narrative based on threadbare facts that fed an agenda.

Fast-forward two years and the ECB continues to spin a miserable line of empty cares and empty fables. Andrew Strauss has accepted that he does not think Pietersen tipped the wink on the skipper’s batting frailties. Pietersen was a victim of another leak, and once again this prevented the matter being handled behind closed doors. The press seized on the matter with rather less hilarity than it did the KP Genius affair. Strauss was hurt, distraught, let down. Not emotions permitted to Pietersen.

What followed was the most pernicious phase in the ECB’s dismantling of Kevin Pietersen’s career. Text-gate was spun to a frenzy. Pietersen had to publicly mea hisculpa before a schadenfreude press, self-flagellate before Matins, prostrate himself before a system that wanted to bring him down a peg or four. This was not a seamless rejoining with the team in the way Shane Watson and Mitchell Johnson took up their natural place in the Australian team after homework-gate. This was an ugly re-integration with Frankenstein stitching. It was a pejorative “re-integration” tattooed on the miscreant’s forehead in indelible glow-in-the-dark ink. This was three strikes and you are out. This was Flower’s cold-hearted revenge.

From this point, Pietersen’s locker was redesigned to feature a naughty step. It appears disproportionate and a further mismanagement of a key asset. It would have been easier and more financially beneficial for Pietersen to have thrown in the towel and exchanged his flannels for the blue pajamas of the Dehli Daredevils he knew. Yet he swallowed his enormous pride and stayed. He wanted to play for England and had his eye on the 2015 Ashes and reaching 10,000 runs.

It would have been better for the ECB to sack Pietersen and make a clean break. Its half-hearted decision to re-integrate him under probation-like terms simply widened an existing schism and reinforced the detached status of its star batter. So far removed was Pietersen from the heartbeat of the team, he would have needed a 50-foot stethoscope to detect its pulse.

Over the course of the winter, as a buoyant Australia dismantled England like Chittagong ship breakers, the hidden fractures and stress points in the England cricketing vessel were brutally exposed. Faultlines in management and leadership were revealed as success fell away, and these led to the two key incidents that finally did for Pietersen.

First up was the infamous team meeting held at the tail end of the Melbourne test. The team had lost the first four tests with no strategy for arresting a slide into 2006-like ignominy. The most common understanding is that captain Cook and vice-captain Prior called the meeting in an attempt to wrest responsibility for the team away from a suffocating management and back to the players. Flower, Gooch and Saker were out of this loop. The agenda must have written itself – how does the team salvage some pride from the wreckage? The terms of reference were written in the blood of brothers – what was said in the dressing room stayed in the dressing room.

Only it didn’t. The loop turned out to be a Möbius strip with Flower not informed and totally informed both at the same time. In a reprise of events in 2009, Pietersen was asked for his input and gave it. Never shy, given a platform to express his views, these were likely brutal, on the nail and lacking in diplomacy.

I doubt his thoughts on Flower had changed that much over five years, any more than Flower’s thoughts had adjusted to Pietersen’s non-conformity and hubris. Hell, the team was in crisis, he was a senior professional and he was asked. I wonder how much pent-up frustration and resentment spilled out during the few minutes that he held the conch?

It turned out that the sanctity of the dressing room was as semi-permeable as the current confidentiality agreement. Someone betrayed Pietersen to Flower, who seemed more concerned with Pietersen for his unreconstructed views than with Cook for holding a secret meeting. Clearly the captain and vice-captain thought the team was disconnected from management in some critical degree. Pietersen did not call the meeting. He had no power to enforce his views. His was one of maybe two dozen opinions. If he carried the meeting, then he had a point. If he didn’t, then what was the problem? According to Tremlett, he was just honest.

When the ECB’s Orwellian Ministry of Truth justifies Pietersen’s exclusion on the grounds of trust, those outside its totalitarian regime might just marvel at how may times Pietersen has been leaked against, ridiculed, betrayed, humiliated and alienated over the past half dozen years by those in a leadership role. His tormentors have been aided by a compliant, embedded press, including a cabal of former low-to-mid ranking test bowlers, drunk on their proximity to power and privilege. These have lickspittled and polished the ECB’s tampered narrative and undermined the character of the South-African-born Pietersen, as they prefer to call him.

The second incident was probably fairly innocuous but for being unhappily adjacent to the first. Two days before the final test, Cook decided that the best strategy in the face of Ashes annihilation was to concentrate on fitness levels. Pietersen argued that the time would be better spent focused on sharpening skills in the nets. Cook was so on the wrong side of the argument that it barely deserves analysis. A day of bleep tests and squat thrusts would do diddly squat for fitness levels in a test match just 48 hours away, but it definitely risked player fatigue and stiffness. It was no more a fix than singing a happy song when your parachute fails to open. It might take your mind off the problem for a while, but it would not stop you hurtling towards oblivion. I doubt Pietersen was any more impressed that his attempts to manage a dodgy knee were being compromised by Cook’s desperate embrace of his mentor’s obsessive work ethic.

It has been reported that Flower observed the exchange and called Pietersen into his study and admonished him for questioning the captain and for the views he expressed in the players’ meeting. Whether or not Flower used the occasion specifically to call time on Pietersen’s future in the team, Pietersen must have known that the gossamer thread that held the sword of Damocles precariously at bay was about to be cut. Flower crushed Pietersen’s hopes of clinging to the wreckage by indicting him with a third strike.  In these circumstances, it would have required ninja turtle fortitude to avoid an overwhelming emotional disassociation from the dementors who had sucked all happiness from him.

So when Pietersen walked to the crease for the second time during the fifth and final test in Sydney he must have known that short of scoring a match-winning 300, nothing would prevent his walk back to the pavilion from being the last time he would wear an England shirt. Caught Bailey bowled Harris for three was not a career-rescuing performance.

Whistling a happy tune in the dressing room, far from being an expression of disinterest, was a classic way of coping with the stress and anxiety brought about by the situation. This was not just the shoulder-dropping, hip-holding, foot-staring, head-shaking, confidence-sapping, mind-scrambling dejection suffered by the rest of the team following the humiliation of an Ashes whitewash. For Pietersen, this was also the apotheosis of five years of ECB alienation – the end of his international career and the destruction of his legacy.

If the watching Paul Downton had never seen anyone so disengaged from what was going on, he should have been watching with a wider angled lens. Neither can he have been paying much attention when he played with Geoff Boycott. Nor can he have been in receptive mood as his captain, Mike Brearley, quietly went about his work as one of the great sports leaders of his generation. Imagine Alastair Cook trying to lead a team featuring Boycott and Botham!

The bubble in which England cricketers are confined is characterised by few of the markers that identify an enlightened and connecting working environment. There are other rather different markers at play. The relentless playing schedule leading to inevitable homesickness, burnout and career-ending injuries. Players taking to the field carrying niggles and half-healed strains, kept together with cortisone injections and vinegar and brown paper. 

A work environment in which Jonathan Trott felt compelled to keep mum and carry on while the team doctor allowed the batter’s mental state to unravel before his eyes.

The philosophy of consistent selection, so successful during England’s upward trajectory, transitioned to a more random pick-and-drop policy, leaving in-and-out players confused, under-confident, undervalued and fearful of failure. It could be argued that over the winter, the entire team underwent a mental disintegration, but in spite of having a psychologist among the backroom staff, this was missed or most likely ignored. The word coming out of Lord’s is that Paul Downton intends downgrading the role of Mark Bawden, the team psychologist, which seems a backward step in terms of modern sports welfare.

There is a fascinating piece by Dylan Cleaver in the New Zealand Herald back in October 2013, so a few months before Jonathan Trott’s breakdown, exploring why cricket is widely known as the divorce (sometimes suicide) sport. Quoting Mike Brearley, he observes that cricket is an “uniquely dangerous environment … there are unique pressures associated with the sport that lead, not necessarily to suicidal thoughts and depression, but towards situations that require a reservoir of mental wellness to cope.”

There are big themes at play in the Pietersen story – loyalty and betrayal, truth and deception, justice and punishment, money and personal development, with a dramatis personae to match. But on the ECB’s central charge against Pietersen of disconnection and untrustworthiness, there is a compelling case for saying physician, heal thyself. In a sport where management should have a heightened responsibility to engage with its employees and look after their well-being, the ECB has shown itself to be inward looking, self-serving and ridden with sinecure appointments and insincere platitudes. It is more connected to its financial interests than the interests of its players. Over the past four months it has exhibited an arrogant disregard for large swathes of its fan base, dismissing lay supporters as outside cricket. Like Kevin Pietersen and others, we have all been disconnected.

With casualties in the aftermath of the worst tour in cricketing history confined to a couple of blokes who had least responsibility for it, and the ECB reinforcing its inbred cosiness in the shuffling of its management team, the appointment of Moores (#2) suggests there is little prospect of the turtles getting a bigger tank any time soon. In April 2007, Mike Brearley said the appointment of Moores (#1) smacked of favouritism. I’m afraid the 2014 appointment of Moores (#2) and retention of Cook smacks of turtle-ism.