The real financial debate

Since the "start" of the financial crisis in 2008 (I use quotes because the crisis had been growing for perhaps a few years prior to that, and how does one define the start for something that is not a single discrete event?), the debate that has occupied the airwaves and newsprint, and bandied about by the general public, is that of capitalism vs socialism. Specifically, the bailing out of the banks and other private institutions that were running amok, taking on risks that even the most reckless individual would shy away from, by governments and public institutions (thereby converting the private losses of a few into the public debt of millions). Capitalism has obviously been severely dented as a result of the crisis, and the recovery has been exceedingly slow, with threats of a double dip recession worrying investors and pundits alike.

But don't let capitalism's loss fool you into thinking that socialism is somehow going to make a comeback across the developed world. Socialism is an equally flawed system and, in its extreme form of communism, can be regarded as even more dangerous than capitalism. Some amount of socialism will always be retained even in the most capitalistic of economies (the rallying cry for small government does not mean "no" government!) as there are some economic activities that are just not effectively managed by the private sector.

The real debate, however, is not so much about the ownership of assets, or the fact that capitalism tends to be regarded as for-profit while socialism is usually deemed to run at a loss. The hidden menace that we don't pay much attention to is the vicious circle of mass production and the mass consumption that is engenders. Mass production is THE defining characteristic of the industrial age, with its focus on economies of scale, automation across industries, and the resulting workforce reduction. The inventors of the steam engine were rightly impressed by the ability of their invention to reduce human toil in the fields and mines - society back then was in need of such an step change. But they could scarcely have imagined the radical transformation of society that the past two hundred and fifty years has brought about.

While mass production has been around for a while, its coupling with mass consumption occurred only after the second world war, when the population of the US and, to a lesser extent, the UK, having been deprived of all but the bare necessities during the war years, were suddenly able to buy all kinds of "consumer goods" to make their lives comfortable beyond belief. Thus, the age of the consumer was born and has been the primary export of the West to the developing world ever since (while one might argue that infrastructure leads the way, there is no denying that the ultimate aim is to convert the world into a giant shopping center for the largest corporations to sell their wares).

So why is this a bad thing, you say? After all, mass production has allowed so many people to improve their standard of living by making products more affordable for them to buy. While that is true, the unfettered continuation of mass production is likely to soon reach a critical point in a world where resource limitations will be harder to mitigate as in the past. This is because while production and consumption are linked i.e. they drive each other, the coupling is extremely loose, so that one can use raw materials and energy and produce vast quantities of some new product, only to have the consumption not match it. In the natural world, any kind of "wastage" is easily handled through recycling back into the various ecosystems. But in the man made world, wastage cannot be recouped as easily.

Furthermore, by touting the virtues of economies of scale, the producer is driven to make the largest amount of product possible irrespective of whether there is sufficient consumption - only because the unit cost is the lowest. And the consumer, seeing the amount of product available (the overflowing shelves in large supermarkets in contrast with the limited quantity available in a corner shop) is driven to consume more through absurd pricing that penalizes lower consumption. We've all seen the 2 for 3$ deals, when buying one item would cost $ 2.50. No matter how little value you have for two, you are driven to make that purchase.

What does mass production then make the manufacturer do? Lower costs naturally - recovering the cost of selling products so cheaply can only happen if the input cost is lowered. And this is where workforce reductions come in. Ironically, companies are out there selling their products to the same people who no longer have a job that pays them money to buy those products (the reverse of Henry Ford's visionary step of paying his workers double the prevailing wage so that they would buy his cars!). One would expect this to be a self regulating system, and that a company would soon run out of consumers and have to reverse its trend. While a few have done it, the vast labour pool in the East, and the economics that make a machine a better option over a human will take a long time to overcome.

Futurists always tend to project a society living in harmony with nature - only making things that it needs, as efficiently as possible, harnessing energy and materials as per its requirements. This is not too different from an Amish society or a tribe living in a forest. Perhaps this picture is painted because the alternate of business as usual production and consumption is so ingrained in the reality that the diametric opposite is what people gravitate towards. Till we get such a society though, the production-consumption nexus will continue to rule our lives.

Up the learning curve

I am a highly educated person - and consider myself extremely lucky to be able to say that. Considering the average level of learning of my fellow countrymen, I would perhaps be in the 99th percentile in terms of academic achievement. I attended a good private school (not an elite one, mind you, but one that stressed good all round development), the finest technical institution in the land (and possibly the world) and went on to get a PhD in another fine university. Along the way, I had the support of teachers, relatives, friends and - of course - my parents.

My parents, for their time, were also well educated - my father got a bachelor's degree before he embarked on a long and successful career with the Indian Railways, while my mother actually went one step further and got a Masters in Economics. For the 1960s, this was almost revolutionary, as the typical Indian woman would have been married perhaps at 18 and have two children by the time she was 22. It was clearly a subject that she loved, as evidenced by the fact that, after raising her kids, she took up a teaching career in her mid 40s that lasted for another twenty years!

But that's where the story ends.

Neither of my grandfathers had stellar academic records - which doesn't mean they were not learned and wise (as Mark Twain once remarked "I never let schooling interfere with my education") - they simply did not have the opportunity, or perhaps chose not, to get fancy degrees, or venture to foreign lands in pursuit of knowledge.

And neither of my grandmothers came close to finishing school, having got married off in their teens. And while their husbands were reasonably fluent in English, having served the British Raj, my grandmas were both more comfortable in either Hindi or Tamil (in fact, I learnt all my Tamil from just listening to my maternal grandparents speak - although I can barely converse in the tongue!)

Shocking, you say. And yet this is the story of virtually every middle or upper middle class Indian today who is the CEO of a major company, a top university professor, a well respected scientist - in fact, pick just about any walk of life, and you can trace that individual's line back to an illiterate or semi-literate grandparent. This is not any different from the West, mind you - the rags to riches stories of entrepreneurs from the US to Australia routinely turns up people from humble backgrounds, with the absence of a ribbon wrapped scroll being a common denominator.

Which makes the debate around reservation for people from economically weaker sections (EWS) of society in private schools in India all the more challenging - and necessary. The attitude of the "middle class" parents, who have openly objected to their precious children being put in close proximity to those from "less desirable" backgrounds, is nothing short of hypocrisy, if one considers that they are perhaps no more than one generation removed from the same state. To deny someone the right to enjoy what you have been fortunate enough to get yourself is borderline criminal - and when what is being denied has the ability to free one's mind and lead a person out of poverty and to a life of dignity, then it is even less defensible.

I agree that providing reservation for EWS students is far from being a long term solution to the problem of educating millions of Indians - even if government schools were all operating at full strength and of the highest quality, there would likely still not be enough room for everyone who needed to go to school. And even if there were enough places available, the number of avenues to earn a livelihood at the end of the road would severely limit the progress to college and beyond.

But that is good enough, I argue - with a population of over a billion people, 70% of whom are engaged in agriculture, there is little point in aiming to graduate a million engineers a year, or a million newspaper reporters. Unless there is a catastrophic reduction in the population, to the point where widespread mechanization of agriculture is the only solution to feeding the population, the average Indian will still be engaged in farming. The difference is that if he or she is educated, they will lead far better lives and be less exploited than those who rely on a thumbprint to carry them through life.

The parents of "modern" kids argue that the EWS children will somehow corrupt their wards, and be a negative influence on them because of their manners, hygiene and poor English skills. I have to a stifle a laugh when I hear that, because if there is any corrupting to be done, it will likely be the other way round! The EWS kids will be entering an environment that is alien to them and, as a minority group within the school, they are unlikely to exert much influence over their richer cousins. Manners and hygiene can be taught - and schools that are successfully integrating EWS children are putting in the effort to provide education beyond just the classroom.

Which brings me to the last "gripe" - English (or lack thereof). It is only when you realize that Thomas Macaulay died in 1859 that the true impact of his "master plan" becomes evident. By bringing in English as a replacement for education in Indian languages and creating a "class" of Indians who would be more comfortable using the tongue of Empire and not their own, he has left Indian society in this no man's land where neither are we satisfied with conducting our lives within the confines of our mother tongue, nor are we able to fully embrace English as the single language that all Indians should speak.

To that extent, what Macaulay did was even more destructive than the French and Spanish conquerors in Africa and Latin America respectively, where they wiped out the native tongue and replaced it with their own. There are occasional reports of a language in the remote interior of some country which has but a handful of speakers left, and a few laments are made about the evil spectre of colonialism that was responsible, but ask a Colombian or Chadian whether he would go back to speaking the language of his ancestors and he would likely look at you as though you were crazy.

I have always maintained that one of the fundamental weaknesses of India when compared with our neighbor China is the lack of a common language. China also has some diversity in that regard (the western sector including Tibet clearly is less comfortable with Mandarin). But the sheer number of varied tongues in India, and the role that English plays in uniting - and dividing - us is perhaps unique in the world. No other country has to resort to using what is ultimately a "foreign" language to communicate with one another - and you will never find a German, Frenchman, Swede, Japanese, Arab or Russian who looks down upon his fellow countryman because of his inability to speak the global language.

Which is why the argument of Indian parents to keep their children away from those who would "confuse" them by speaking is strange tongues cannot be fathomed. It is as though, having crossed the "divide" and attained a modicum of fluency in English, they are now choosing to raise the drawbridge and keep the latecomers outside the fortress that protects their right to a good future. A strong nation can never be built when one section of society is able to discriminate against another on the basis of possessing knowledge that was till recently unknown to them as well. If the same argument had been used in the time of my grandparents, I would perhaps not have been so proudly flaunting my academic achievements, but rather standing on a street corner in Gurgaon, staring mutely at smartly dressed office goers who were all conversing in gibberish, while laughing at my native dress.

Lay offs can be deadly

Just saw the film "Fired" starring Rahul Bose, a directorial debut by Sajit Warrier, who has outdone M Night Shyamalan's masterpiece "Sixth Sense". The entire film is set in a two hour period , inside a corporate office, with only Rahul Bose and his imagination/hallucinations as cast. In that regards it is reminiscent of the Hitchcock classic "The Rope" where the entire film was set in a single room (of course, with the added bonus that it was shot in a single take!) Warrier has used sound (whispers, eerie background music) and light (shadows, steam, strobes) to create an experience that had me on the edge of my seat at 3 in the afternoon (I would probably have declined to watch it at night)

The storyline has Bose as a successful desi corporate fast tracker who has just fired a boat load of people in the London office of an Indian company, and established himself in the CEO position (the only weak point of the story - what would he do as CEO with no staff?) Anyway, the fun starts as he is wrapping up his day and getting ready to go home - things start to "happen" in the office, he starts seeing and hearing things, most spooky of which are some "encounters" with a former colleague with whom he was having an affair. Sitting in his plush chair, surrounded by his iMac and fancy gadgets, Bose's mind, fueled by alcohol and some pills, leads him down a path of increasing insanity, where he can no longer tell what is real and what is imaginary. The presence of a CCTV makes the audience aware of the reality - there is nothing there, he is holding a knife and activating a fire extinguisher to fight off a figment of his imagination. While the imagery is quite clever, the real effect comes from watching Bose alternate from panic to relief to terror. Filming this must have been interesting, I wonder whether there were some points in time where he actually began to believe the plot of the story.

Psychological thrillers have always been difficult to pull off - it is far easier to show blood and gore, aliens and vampires evoke a visceral reaction that has been exploited quite well in cinema of recent times. But the subtle hint, the whole "twilight zone" type plot where one has to stretch one's belief in reality, is the most powerful of all. One can only imagine what is must really be like to succumb to "mind games". I'm not going to be staying late in the office anytime soon!

Money can't buy me....

What is it with the recent upsurge in the number of billionaire businessmen who seem to be going out of their way to plummet to the depths of the oceans for what clearly appears to be no monetary benefit - just their name in the papers (as if they don't get enough of that already) and the bragging rights that go with it? First it was James Cameron who, after filmng the Titanic underwater, decided that he was going to the bottom of the Marianas trench, 7 odd miles underwater, to capture some more deep sea experiences. Then along comes Jeff Bezos, who hit upon the idea of hunting for the rocket boosters from the Apollo 11 mission off the coast of Florida, which he now claims to have found. Balloon ascents, Everest expeditions, walking across the Sahara - if there is a challenge to be undertaken, you can bet that a person loaded with money will soon be there to try his hand.

While the rich have always had the ability to buy their way into any endeavor, it is only in modern times that they have chosen to undertake such risks. In medieval times, the rich did everything possible to stay alive, given how easily one could contract a grave illness and die. With the advent of modern medicines, however, and the increase in life expectancy,the option to earn one's riches and still have time to enjoy life after that is all of a sudden very possible. Not being content to merely start new businesses and float them on the stock market to become billionaires overnight, the quest is now on for the unique adventure, the discovery of a lifetime - anything with which to rub your fellow business tycoon's nose in the dust.

On the other hand, there are the Bill Gates' and Premjis of the world, who are openly donating their wealth to societal problems. Not that their aims are any less selfish - Gates gesture is being seen as the benchmark for all other aristocrats to aspire to. The difference is that there is a benefit to someone else - while the Cameron effort is hardly likely to produce any tangible impact, other than a "feel good" factor.