Administration & Management

It's Art of Governance & Not Commerce Alone

Tag Archives: Democracy

One Percent versus Ninety Nine Percent: A Debate

INDIA DOESN’T NEED FDI IN RETAIL TO GROW — Joseph Stiglitz

Nobel Laureate of 2001 in Economic Joseph Stiglitz (who shared it with two more), presently Professor at University of Columbia, is  credited with starting the “1% versus 99%” debate. The Columbia University professor talks about his latest book, “The Price of Inequality”, in which he argues that economic inequality leads to instability

• The title of the book reflects a view that counters the right-wing argument that inequality may be a bad thing but to do anything about inequality is to kill the goose that lays golden eggs. Inequality is bad for economy, democracy and society. Much of the inequality in the US arises out of rent-seeking —monopoly, exploitive practices by banks and corporate exploitation of public resources. In the Indian context, you will call it corruption but we call it corruption American style, where you give away natural resources below market prices. India is doing it now but America has a long history of doing this.

There is a clear association between inequality and instability. People at the top don’t spend too much, they save a lot but people at the bottom spend everything. So you redistribute income from the bottom to the top and demand goes down. That makes an economy weak. That is what happened in the US. We would have had a weaker economy, but the Feds stepped in by creating a bubble that created more demand to offset the demand that was going down. Of course, creating a bubble was creating instability.

• Stiglitz confessed that both the IMF and the UN commission that I chaired came to the conclusion that inequality was one of the major causes for the crisis. It is not the direct, precipitating cause that bad lending was, but bad lending was a result of deregulation and the interest rates that were itself a result of inequality. If we don’t improve inequality and don’t do something else, it is going to be hard to get back to robust growth and prosperity. We are likely to have another housing bubble.

• He further opines, that in the presidential debates none of the candidates have mentioned the word ‘inequality’ as American politics is money-intensive and money-driven. Each of the candidates is expected to spend a billion dollars. When you spend so much, you have to go where the money is, and money in America is at the top. Therefore it is not a surprise that in the campaign you don’t hear a lot of discussion about inequality and the 1%. You don’t bite the hand that is feeding you in the middle of an election.

• He say that this debate may last or  may remain a phrase, he is not sure of, but it will be a part of America unless the problem of inequality gets addressed. It is just not that the top 1% get three to four times more that what they got in the 1980s, but the middle class today is worse off. When you have this degree of stagnation in the middle, there will be an expression through the political process.

• Stiglitz feels that GDP is not a real measure (or say per capita income) of development. he says that, I haven’t looked at India exactly, but it has strong implication for every country. In the case of China, if you take into account the environmental degradation and resource depletion, growth is much less than what it seems. You need that debate in India. Your GDP is going up, you have per capita highest number of billionaires but at the same time you have many people in poverty. So the GDP per capita doesn’t capture what is happening. In India, the progress in the middle and at the bottom has been less than what GDP in itself would like you to believe.

• When asked about the current issue in Indian Economy, that is FDI in retail, he puts it this way.  The advocates of FDI have probably put too much emphasis on it. India is in a different position than a small, developing country. You have a large pool of entrepreneurs. They are globally savvy, have access to global technology and they have a lot of wealth. So, if there were large returns to large-scale supermarkets, the domestic industry would have supplied it. Not having access to FDI is not an impediment in India. Wal-Mart is able to procure many goods at lower prices than others because of the huge buying power they have and will use that power to bring Chinese goods to India to displace Indian production. So the worry is not so much about the displacement of the small retail store but displacement further down the supply chain.

When an argument that ‘But big chains may create more jobs’; he told that  some of the profits of companies like Wal-Mart come from free riding on our society. They don’t provide healthcare benefits and assume that the spouses of the workers get healthcare benefits from their other employees or through some other mechanism. They might not be a good employer.

Always Yours — As Usual —- Saurabh Singh

Source: TOI

THE JASMINE REVOLUTION — Part – I

At times, few events, though not very often noticed, normally not even thought worth being covered by national media, but when the acts happen to be of SUPREME SACRIFICE or same order, change course of not alone history but geography too. The attempt is not to dub an act of self immolation as an act of bravery, and normally hundreds of cases of self immolation and attempts of self immolation get reported in media every year, besides lot many which even fail to find space in news media in nearly all the corners of the world which without fuelling in a minor change in governance.

The name “Mohamed Bouazizi” is not a famous or well known name even today, and thus indirectly gives an impression that history in due course of time may even forget to contain any record of this name for reference of future generations. The act of self immolation by this Tunisian Street Vendor to protest against the corruption is an apt example of helplessness being faced by common men, irrespective of him being a citizen, subject, at mercy of any dictator, fascist or Junta or probably any other form of Structure of Governance.

Strange are ways things are destined, much beyond human vision and imagination, it seems if  21st Century were a Century of Convergence of Scale for nearly every sphere of human related activities. A Century standing witness to Convergence of Communication Technology and Tools, Convergence of Economies of Nations, Convergence of Trade, Convergence of Financial Governance, and perhaps even Convergence of Revolutions against Governance Structures across various nations and probably the list continue…s, neither can it be covered in this deliberation nor will it be attempted.

Till a couple of months back, the individual of the day was busy in himself thinking that all the problems could happen and will happen with others only, aptly defined selfish by Adam Smith and the league, was thinking of governance all around the globe being cool, calm and pleasant except the places messed up by United States of America. Perhaps still the individuals will remain individuals and will rarely form a society or nation; as people aware of history know very well that even the phenomenon or concept of nation is a gift of as recent as nineteenth century.

Connecting back, it was morning of December 17, 2010 when Mohamed Bouazizi, a 26 years old street vendor of Tunisia immolated himself protesting against corruption, an event of the magnitude often not even noticed by world media, the Arab World has not remained the same as it was till hours before of this act on the same day. It has left whole geo-political area simmering and inhabitants rumbling.  It has initiated a chain reaction.

The chain reaction, that has already made twenty three years old rule of Zine El Abidine Ben Ali, (in power since 1987) now a chapter in history of Tunisia. It did not stop here itself. It perhaps turned a torchbearer for other nations of geopolitical area often called as Gulf (British call it as Middle East), or as the author calls it, the Middle West. It did not stop at Tunisia. The next link in chain turned out to be Egypt. In Egypt, the war hero of Egypt Israel War of 1973 that made Egypt a power centre in Middle West and one time air force officer Hosni Mubarak was shown door after his thirty year rule. To world it may look a silent transition made success by people of Egypt but sources say that at least 300 people lost their life and another 3000 suffered injuries. Reality about real causalities is not known due to initial crack down on media and still no real transition to any new form of governance taking place. It is probably still another Hosni Mubarak just individual may differ, as no real transition to any form of governance has taken place, but junta in control.

“The phenomenon being deliberated, as on date, has come to be known as SIDI BOUZID REVOLT in Arab World and as JASMINE REVOLUTION elsewhere.”

Similar turmoil, protests against governments in place, in numerous other nations of gulf is being seen and also the ruthlessness and lack of human emotions with which they are being suppressed and retaliated by various governments in place. It is the same story today in Algeria, Bahrain, Jordan, Libya and Yemen.

Always Yours — As Usual — Saurabh Singh

%d bloggers like this: