HyperActiveX's (Pre)Posterous Posts

A mini-blog for posts that are too long to be micro-blogged at http://twitter.com/hyperactivex and too short to be mainframed at http://hyperactivexs.blogspot.com

FDI in Retail vs. Reduce Reuse Recycle

Everybody and their aunt is now an expert on the Venn diagram of economics, foreign direct investment in India, and the Indian retail industry. In the wake of the recent controversy regarding the Government's proposed policy changes that will open up the retail sector in India to more foreign investment, there's been a bunch of op-eds and blog posts by self-styled pundits on why India "needs" FDI in retail. 

Yes, opening up of markets is always a good thing. Yes, a more efficient supply chain for consumer goods in India would be a good thing. And yes, professionalism in managing the workforce engaged in logistics and distribution, which remains an unorganized sector even today, would be a good thing. Surely, FDI in retail will positively impact the Indian scenario in all those areas. But does this mean we should blindly push our already fairly strong consumerist culture (and our typical middle-class hunger for more "things", arising from many years of scarcity) into overdrive? 

Take the issue of infrastructure, which some of our distinguished pundits just about recognize as a concern. The opening up of the automobile industry has given us a wide variety of cars to choose from (which is great) but did we spare a thought for road space or quality of roads or parking space or any other infrastructural prerequisites before we opened it out? Nope, we just plunged into it, probably thinking that growth in traffic would bring pressure on the concerned authorities to improve infrastructure. Clearly, that logic has not worked, and we don't seem to have learned this very important lesson.

We continue to struggle with strong urbanization trends, but we are clueless about how to handle the problems that come with them. Meanwhile, given the poverty in rural India, large scale migration to metros and larger cities continues to grow, resulting in more squatters and pavement dwellers, more shanty-towns and slums. Our cities and towns continue to be plagued by poor waste management and sanitation, not to mention pilferage and contamination. We are yet to integrate good practices of waste management into a culture which has gradually replaced civic sense with instant gratification and narrow self-interest. How are we going to cope with a dramatic increase in consumption levels, which FDI in retail is sure to bring about? I shudder to think how high a mountain that small but stubborn pile of garbage heaped outside my housing complex will grow into, after the "Big Boxes" of global retail arrive.

None of our erudite pundits makes even a passing mention of concerns related to sustainable development and responsible consumption. Which, according to me, should be our most important concerns. Not whether the local bania's business is threatened (which it may well be) or whether transnational giants will siphon profits out of India (which they certainly will). These are the same old arguments, tired and worn-out from repetition in the post-cold war socialism-versus-free-market debates. Many of our pundits, however, are still fighting those cliched battles of the old world.

The polemics of the new world are not going to be about leftism and rightism; they will be about how to deal with ecological imbalance and social disharmony, about how to plan for sustainable growth. In the mad frenzy for downloading -- to borrow Niall Ferguson's metaphor -- the 6 "killer apps" of the West (of which, incidentally, the culture of consumerism is killer app #5), we are rushing headlong towards irresponsible consumerism that has raised alarm bells in the West. India is lucky to be presented with an opportunity to circumvent the pitfalls of hyper-consumption, and lead other developing economies on the path to sustainability. But will India seize the moment? Or is this too much to ask for by way of a vision for India? Perhaps it is, I find myself compelled to say in spite of my generally optimistic disposition. 

Is it also too much to ask of Indian intelligentsia that the debate on FDI in retail be informed by sustainability considerations? Certainly not! 

Reform and Rectitude

There's usually a cloud of confusion hanging over any criticism of wrongdoing, as we are witnessing in the commentary on the many recent public protests in India, the US and elsewhere. Some of this confusion arises out of lack of clarity in what is being said, but even when that clarity is found, there are questions on who has the moral right to say it. Accusations of sanctimoniousness and hypocrisy are flung around indiscriminately, and everyone starts finding fault with everyone else. It is easy to see that a lot of this is politically motivated - the work of those with vested interests in the status-quo, for whom this confusion essentially forms the smokescreen of expedience. But what about the others, who get swept away by this political rhetoric of obfuscation? Why should they let themselves be distracted by such machinations?

Brainstorming events, such as the recent Goa Think Festival represent the few opportunities we get to promote healthy public discourse (a vital foundation for a vibrant democracy) on key issues impacting our present condition. But even those have come under criticism for "sleeping with the enemy" or being otherwise impure, just as leaders of India's fight against corruption have been pilloried for alleged misdemeanours in their past lives. We tend to take this business of "Let him who is without sin cast the first stone" a bit too seriously. We forget that none of us is without sin. We forget that it's not about casting stones. We forget that it is about systemic failures, and that any citizen has a right to demand reform to correct them. The point is, if we can't get everyone to the table, we can't have dialogue. And if we can't have dialogue, issues will remain deadlocked, and the status will remain quo, and history will repeat itself.

We need to remember a few simple and straightforward points, if we are to get this right and make some headway: 
(1) You don't have to be a saint to criticize wrongdoing - the first step to reform is to recognize what's going wrong and confront it, without being confrontational.
(2) The scope of alleged wrongdoing may extend beyond mere legalities and may even include charges that the justice system is rigged - it is easy to exonerate illegitimate behaviour on the grounds that is it not illegal.
(2) Protests are visceral reactions of a mass of people to unresolved issues, not necessarily about specific persons or corporations (who in some sense are considered "persons" in some parts of the world) though they may manifest that way.
(3) Even when they are about specific persons (or corporations) the focus should be on what they DID and not who they ARE - we must punish bad behaviour, not individuals, and we must punish it not as much for the sake of retribution as for the sake of restoration, rectification/ rehabilitation and prevention.
(4) In those exceptional cases where specific individuals (or corporations) appear intrinsically "evil" (assuming there is such a thing), we need to figure out a way to correct them - everyone has a right to another chance; a right to redeem themselves.

There's an old saying that goes - every saint has a past and every sinner a future. Let's remember that each of us has elements of both. It's "normal". It's what makes us human. Reform should be about fixing what's broken and straightening out what's crooked. Not a competition to qualify for entry through the Pearly Gates.

New Rules For Fools - Fairness and Equality

In all these criticisms of the Occupy protests, I see a common trend: critics pick words like "fairness" and "equality" and extrapolate absurd arguments from these words so as to make protesters' outcries look ridiculous. This type of specious argumentation is called "attacking a straw man". It is not as though such people don't understand what those words actually mean. They do. And you can tell that they do because they go to great lengths to misinterpret those words in every ludicrous way possible, carefully avoiding the most obvious, simple and straightforward representation. All just to obfuscate real issues and vitiate the spirit of public discourse by throwing around such red herrings as the suggestion that protesters' messages all boil down to the Marxist principle - "from each according to his ability to each according to his need". Do they, really?

Equal rights. Equal access to opportunity. Fair play. Rule of law. Equality of all citizens under the law. Justice for all. Not difficult concepts to understand, are they? Or maybe they are, for some of those critics. Maybe not all critics are attacking a straw man on purpose - maybe their very understanding of these concepts is nebulous. So here's a new rule that should clarify some of this.

Purpose of New Rule: This rule is meant as a guide for those who don't understand the meaning of fairness and equality, or why it is important for the health of capitalism to preserve and protect such ideals.

Description of New Rule: Think back to when you last took an exam (assuming, at the very least, that you went to school, if not college). Equality means all students answer the question paper under the same set of rules, within the same time period, under the same watchful eyes of the same invigilator. Fairness means that all students are given access to the same learning material and teachers, and in general, the same opportunities to prepare for their exams. Some students have a better grasp of the subject and/ or take the pains to be better prepared, and as a consequence, fare better than other students. That's fair. What would be unfair is if a select few were given an opportunity to be better prepared by "leaking" the questions to them ahead of the exam, or given opportunities to plagiarize, or given extra time to complete their answers. Not all students score the same marks. That's not what equality means! Nor does it mean that students who are less capable but "need" to do well in their exams should score higher marks. Assuming a "normal" distribution, some students will top the class, most will be somewhere in the middle while others will remain stragglers. As long as they used fair means to achieve their distinction, a merit-based outcome is not only an acceptable outcome but the inevitable outcome of a fair and just evaluation system. This is exactly how it works with capitalism. Given a normal distribution and a level playing field, some people will make more money than others. As long as they used fair means to make money, it is not only acceptable but inevitable that their abilities, ambition and industriousness merit their economic rewards. What is unacceptable is when a few people use unfair means to make disproportionately large sums of money. Unfair means such as gaming the system or bending the rules. Or even breaking the rules and leveraging powerful connections to get away with it. 

Protesters of the Occupy movement are not against meritocracy. On the contrary, that is exactly what they are asking for - the restoration of true meritocracy. They are decrying the perversion of meritocracy by the few, for the few. Criticism of these protests can only come from those who are so foolish that they just can't get this, or from those who are so guilty (of the perversion of meritocracy) that they just won't get this. Can't or won't, you know who you are.

Post Script, Oct 29

Having quoted Karl Marx in this post last night, and having come across this other quote from another Marx (Groucho) this morning, I think this says it best: "The secret of life is honesty and fair dealing. If you can fake that, you’ve got it made."

No More Missed Calls for Change

Two recent articles in popular news magazines caught my eye this weekend.

The Economist ran a story on climate change dealing with new evidence on global warming. Hopefully this should put to rest the furious debates triggered by the "climategate" scandal couple of years ago. In hindsight, that scandal was probably a good thing, inasmuch as it cleaned up the scientific research on the subject and served to keep climate change researchers honest. Scientists are, after all, human beings, and like all other specimens of our species, equally fallible and equally prone to fudging data to prove their hypotheses. They may not be as dishonest as an aspiring entrepreneur approaching a Venture Capitalist with a sexed-up business plan, but surely, they're prone to a little bit of disingenuousness here and there. But here's the fresh evidence now, from a squeaky clean team, led by a mild skeptic. Clearly, the "heat is on", to quote The Economist (and the first line from an old song).

The more interesting story was the one in the New Scientist a few days ago. It was about how a group of researchers had analyzed the complex network of relationships between over 43,000 transnational corporations (TNCs) and found that a relatively small number of them (mostly banks) wielded disproportionate power over the global economy. Here's an excerpt:

The work ... revealed a core of 1318 companies with interlocking ownerships. Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What's more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world's large blue chip and manufacturing firms - the "real" economy - representing a further 60 per cent of global revenues.

Occupy Wall Street (OWS) protesters would probably say "not surprising, we've known this all along", but now there's some hard evidence. While economists have already noted the increasingly widening gap in the distribution of income in America, and observers have already commented that "much of what investment bankers do is socially worthless", this is the first study that establishes the nexus of global dominance by TNCs including some big Wall Street players. 

Hopefully this should help establish a clearer perspective on the OWS protests, which have been criticized and supported for all the wrong reasons. And that clarity should help us look past the hype and hysteria, to recognize three simple truths at the heart of the pan-American Occupy protests: (a) It's all about fairness, and not really about equality (b) It's all about redefining capitalism, not about rejecting capitalism (and bringing in communism) (c) It's a "primal scream" of anguished masses, that doesn't require a structured manifesto to be judged morally valid. Dismissing the Occupy protests as a confused incoherent anti-establishment rant by a loose, louche lot of lazy leftist losers who blame the rich for their misery and who have no concrete solutions to offer, while convenient, would be a big mistake - one that may lead to worse consequences.

To any rational person with an open mind, the common thread that resonates in these two stories is the revelation that we are now at an important cusp of history - a point in time when we seriously need to rework our socioeconomic models to foster a kind of prosperity that will enable future generations to flourish. A global prosperity that will enhance rather than erode social and political harmony around the world, and that will maintain rather than destroy the planet's delicate ecological balance.

These are strong calls for change, backed by hard facts. We've been missing these calls in the past, under some pretext or other. But now it's high time the denial and the deception and the dithering stopped. Let's not keep missing these calls till it is too late to give our children a better future.

At times the pigeon, at times the statue

Thanks to Internet banking and the privilege of having a Relationship
Manager designated to me by my primary banker, I rarely need to visit
any brick-and-mortar bank branch. The other day was one such rare
occasion, when I needed to transact a certain kind of business that
could only be executed at a certain branch of a certain bank.

It took me a while to navigate to the desk of the customer service
officer to whom I was directed, and I got there only to find her seat
vacant. I looked around for a bit and everybody around seemed
extremely busy. At another desk nearby an important-looking officer
was going through a whole bunch of important-looking documents. She
didn't have any customers seated opposite her and I could tell that
she was aware of my presence, but she did her best to avoid
eye-contact. Lest I should bring her more work, I guess. Anyway, since
I was not in a tearing hurry I decided to hang around and look
helpless, hoping someone would notice. I was relieved when at last the
officer I was waiting for showed up. However, she scarcely registered
by presence, and instead immediately started talking to her colleagues
across her carrel partition. Yet another reminder that I have neither
a commanding presence nor a charming personality.

As I was waiting for her to turn her attention to me, I couldn't help
overhearing her complaining to her important-looking colleague (who
suddenly found time to listen to her), about the poor service she got
from her mobile provider's customer support staff. My patience was
rewarded when she finally turned to me, still in an unpleasant mood.
No smile, no warm friendly greeting, no "How can I help you?" -
instead, just a "Yes?" that barely managed to be polite. Before I
could complete my first sentence the telephone at her desk rang and
she answered it with a shudder of exasperation. By the time she was
done with that call and turned to me again, an apparently junior
colleague of hers came to her desk with some papers in her hand,
seeking advice on some other customer's transaction. Long story short,
it took me all of 30 minutes to complete my transaction, which
according to me should have taken not more than 5. Or maybe 10
minutes, at most.

As I was leaving I made a brief comment to her, with a smile - "When
we complain about poor service, as customers, it's a good idea to
introspect a bit about the quality of service we provide to our own
customers, when we act as service providers. After all, we all play
both those roles, don't we?" She was smart enough to get that, and
only then apologized. And even in that, showing herself to be an
efficient but helpless cog-in-the-wheel of a large, chaotic system. I
wanted to quote a line from Bob Dylan's song - "It may be the devil or
it may be the lord, but you're gonna have to serve somebody". But
somehow it didn't seem appropriate. For one thing I didn't think she'd
know who Bob Dylan was, and who knows, she might have even found the
quote egregious.

But for you, here's the song. Enjoy! And do remember this little
anecdote .. as much when you're the pigeon dumping on the statue, as
when you're the statue taking crap from the pigeon.

Reflection on Self-righteousness and Reflexivity

Every time I come across someone accusing someone else of being self-righteous I am reminded of Gödel Escher Bach and self-referential logic.

If you break it down to basics, this is how it goes:
1. It is wrong to be self-righteous (unstated premise, based on moral values)
2. You are self-righteous (observation)
3. You are therefore wrong (derived from #1 and #2)
4. I am not self-righteous (implicit in #2 -- since I am calling you out on this)
5. I am therefore right (derived from #1 and #4)
6. I am more righteous than you (inferred from #3 and #5) 

Who is being self-righteous now? (wink wink nudge nudge)

The accusation of hypocrisy, on the other hand, is free from reflexive contradiction. But I will let you reflect on that.

In any case, it pays to be a little circumspect when taking moral positions.

Snapshot of Civilization circa 2011

If an alien spaceship were to land on earth today and do a mashup of global news headlines, this is how it would look: 

Civil War in Libya, Civil Disturbances in Britain, Civil Unrest in Bahrain, Civil Uprising in Syria, Civil Society Protests in India, Civil Rights Agitation in Myanmar, Denial of Civil Liberties in Tibet, Civilian Casualties in Afghanistan ...

About time we put the 'civil' back in civilization!

Defining Excessive Greed

The New York Times carried an article the other day, whose headline "Billionaires’ Rise Aids India, and the Favor Is Returned" promised coverage of, say, the top 10 Indians in the Forbes list. However, the article focused on just one of them (save for passing references to a few others) and in doing so read like a PR job for Gautam Adani. By an uncanny coincidence, a day or two later, the Lokayukta of Karnataka submitted a report indicting Adani and others in what appears to be a massive scam relating to illegal mining in that state. More details emerged today suggesting that we have barely seen the tip of the proverbial iceberg up until now. No doubt, the future will bring us even more gory details. And no doubt all parties indicted are innocent till prosecuted in a court of law and found guilty.

That said, this episode reminded me of a conversation I had with a friend around the time the global financial crisis first revealed its enormity, about capitalism and excessive greed and such -- pretty common topic given the context. My friend's thesis, in short, was that capitalism is based on ambition and greed and that there is no such thing as excessive greed because it is impossible to calibrate that scale. So we just have to man-up and learn to deal with it. 

I had a different view. In my opinion, other than psychopaths, everybody has a sense of right and wrong. While this sense of right and wrong may be subjective and may vary from person to person based on culture, religion and various other factors, there exists a common objective notion of business ethics and civic propriety that we all understand. This comes from a secular morality that transcends religion and is based on the self-evident principles of sustainability. It forms the foundation for the legal and regulatory framework of nations. Many of these legal and regulatory frameworks suffer from any or all of the following maladies: they are obsolete/ full of inconsistencies due to constant patching with changes or new laws/ inhibit economic growth by constraining enterprise/ draconian and convoluted enough to promote corruption. The need for reforms in such cases is urgent and there is no disputing this fact -- as times change, we need to change with them. However, the argument that existing laws are not in the best interests of promoting economic growth should not become a ready refuge for the excessively greedy to bend or break rules. 

Which leads us to my proposed definition: excessive greed is when one's ambition overcomes one's values and principles. As long as greed remains within those boundaries, it remains a legitimate driving force to entrepreneurship and economic growth.

Yes, it is that simple. You know it, better than anyone else, when you're making excuses to circumvent your own value system. All you have to do is to look within. Unless, of course, you're a psychopath.

Crowdsourcing Governance Reform

I just came upon this article in PopSci proclaiming that "Iceland's Citizens Are Writing Its New Constitution Online" thanks to a friend who shared the link on Facebook.

Without getting into the whole issue all over again, of Anna Hazare's fast demanding active participation of civil society in drafting the Lok Pal Bill, I just want to make a point here in this post: in a democracy sovereignty ultimately lies with the People -- beyond the Constitution or Parliament. Iceland's bold experiment is testimony to this simple fact. And this point begs to be made, flying as it does in the face of criticism to the effect that citizens' active (and "official") participation in changing the law of the land: (a) is unconstitutional (b) subverts Parliamentary processes (c) undermines our democratic institutions.

Perhaps it is time to recognize that in today's day and age (relevant zeitgeist: increasing empowerment of common citizens) a purely representative democracy is unsustainable if it does not conflate at least some elements of participatory democracy. Some burning issues just cannot wait till the next elections, especially if the average citizen strongly feels that the establishment and its political processes have failed to deliver clean governance. Clearly, such is the case when it comes to the twin issues of graft and capital flight in the Indian context -- the Government in office has failed to check these chronic maladies over the years (even worse, its officials are suspected to be perpetrators of the same crimes themselves) and the main Opposition party has failed to correct that failure (even worse, is suspected to more or less equally guilty).

I sincerely hope our Indian think-tanks (who are wont to quote Dr. Ambedkar's quip about the "Grammar of Anarchy" at the drop of a hat these days) sit up and take note of the precedent set by Iceland, without bringing up feckless counter-arguments like: "Oh but you can't do that here because only the elite in India have access to the Internet" or "Oh but you can't do that here because the Indian public lacks maturity". We can definitely replicate Iceland's experiment in India (especially considering the urgency of the need to reform our antiquated and obsolete legal and regulatory framework). We have the technology, we have the intellectual capital (what the heck -- we export that stuff!) and we have the maturity too. We can do it, and we must do it. I just hope we will!

Post Script

Excerpt from an article by Vivek Dehejia in the Atlantic that I just came across, via @lpolgreen on twitter - 

There is one crucial missing link in India's otherwise thriving and robust democracy, the absence of which will complicate the country's political response to this economic problem: principled, motivated political parties. There is no party in Indian politics that could genuinely build a reform-oriented agenda crossing the country's left-right political divide. 

Rather, each of the major, viable parties is what political scientists call a brokerage party. As American commentator David Frum defined them, they are "a political entity without fixed principles or policies that exploits the power of the central state to bribe or bully incompatible constituencies to join together to share the spoils of government." No party such as this will be able to responsibly solve the problems of corruption and inequality.