Will the Real Adam Smith Stand Up, Please!!

Sometime in the last century, Adam Smith was hijacked, gagged, and new words were forced into his mouth!

The hijacking of the 300-year old dead Scotish economist happened, when in 1948, I believe (or so I read somewhere), he got misquoted in Paul Samuelson's Textbook of Economics. That perhaps, was the first time the theory of "invisible hand" of the free-market got articulated. The so-called "quote" from Adam Smith's An Inquiry into the Nature And Causes of the Wealth of Nations (1776), reads:

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

Every individual endeavours to employ his capital so that its produce may be of the greatest value. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own security, only his own gain. And he is in this led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than he really intends to promote it."

This (mis)quotation from Adam Smith, which has been so often repeated (by politicians, media, adademics, policy-planners) that it has become an underlying - a dogma/ ideology - of our present flavour-of-the-day global economic system. It helps justifying the unregulated "free-market" ideology, globalisation, the doctrine of "self-interest"/limitless-greed, and the irrelevance of state/government in promoting public good.

The only problem is that this is not exactly what Adam Smith had ever said!!!

What Did Adam Smith Say?
The Book IV/Chapter 2/Para 10/Line 2 of Wealth of Nations gives the full quote:

"As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it."
http://www.adamsmith.org/smith/won-b4-c2.htm

It is, indeed, perhaps more than a coincidence that the popular version of Smith's (mis)quote, completely misses out his views about the individual employing his capital "in the support of domestic industry" or preferring "the support of domestic to that of foreign industry."...

According to the full quotation, Adam Smith was actually saying that investment in domestic industry and its produce - i.e., localisation not globalisation - promotes the "public good"... He was, actually, promoting a sort of economic nationalism!!!

What Else Did Adam Smith Say?

There are many other things that Adam Smith wrote, which are also never mentioned or highlighted. Some of his other observations, that are carefully never mentioned:

On "State vs. Business" Issue: Lesser of the Two Evils!

"The capricious ambition of kings and ministers has not, during the present and the preceding century, been more fatal to the repose of Europe than the impertinent jealousy of merchants and manufacturers... the mean rapacity, the monopolizing spirit of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind..."
http://www.adamsmith.org/smith/won-b4-c3-pt-2.htm

On Industry/Trade Associations/Forums

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary."
http://www.adamsmith.org/smith/won-b1-c10-pt-2.htm

On Nature of Sustainable Nature of Wealth:

"The unstable and perishable nature of stock and credit, however, render them unfit to be trusted to as the principal funds of that sure, steady, and permanent revenue which can alone give security and dignity to government. The government of no great nation that was advanced beyond the shepherd state seems ever to have derived the greater part of its public revenue from such sources"
http://www.adamsmith.org/smith/won-b5-c2-pt-1.htm

On Corporation & Corporate Governance

"The pretence that corporations are necessary for the better government of the trade is without any foundation. The real and effectual discipline which is exercised over a workman is not that of his corporation, but that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence. An exclusive corporation necessarily weakens the force of this discipline."
http://www.adamsmith.org/smith/won-b1-c10-pt-2.htm

On "Export-Led" Economies

"According to the natural course of things, therefore, the greater part of the capital of every growing society is, first, directed to agriculture, afterwards to manufactures, and last of all to foreign commerce... Some of their lands must have been cultivated before any considerable towns could be established, and some sort of coarse industry of the manufacturing kind must have been carried on in those towns, before they could well think of employing themselves in foreign commerce. "
http://www.adamsmith.org/smith/won-b3-c1.htm

On Bilateral Trade Agreements

"WHEN a nation binds itself by treaty either to permit the entry of certain goods from one foreign country which it prohibits from all others, or to exempt the goods of one country from duties to which it subjects those of all others, the country, or at least the merchants and manufacturers of the country, whose commerce is so favoured, must necessarily derive great advantage from the treaty.... Such treaties, however, though they may be advantageous to the merchants and manufacturers of the favoured, are necessarily disadvantageous to those of the favouring country."
http://www.adamsmith.org/smith/won-b4-c6.htm

etc. etc.

To be sure, Adam Smith was not against free-market. However, his definition of "free-market" was quite different (in many ways, opposite) than what is attibuted to him nowadays.

A couple of years back, I had made a posting on this blog entitled: Capitalism contradicts Free Market!!! I am reproducing it again:

We normally use the term capitalism and free-market in the same breath -- in fact, often interchangeably.

If one really thinks about it, the "Free Market Capitalism" (or "Capitalistic Free Market") is a contradiction in terms. Capitalism is based on an economic doctrine which concentrates the power to a few., while Free Market is based on assumption of equal distribution of power across markets.

Also Adam Smith's Free Market Theory was based on some assumptions:

(1) player are not large enough to influence the market dynamics
(2) there are no "information assymetries" (or trade secrets)
(3) trade across nations/ regions is balanced
(4) sellers are also producers, etc.

Clearly, none of these holds in the present day real world: World's largest 200 corporations earn sales revenues which are greater than the combined GDPs of 48LDCs; IPR regime blocks free flow of information; trade barriers and subsidies by richer nations do not allow balanced trade across regions, and sellers are often out-sourcers... etc.

So one can either support capitalism or support free market!!!

Setting the Terms of Debate - Part II (Volcker Report)

This is the promised continuation of the last post, which ended with the statement:

For that matter, the Volcker Report itself is a good example of "setting the terms of debate".

...Set-up to investigate the corruption in the UN-sanctioned Oil-For-Food program, Paul Volcker's agenda clearely (and cleverly) skirted any investigation in the historical background of the Oil-For-Food Program (and the illegal, criminal activities that led to the necessity of having such a program)

...so here is a brief reminder of the historical background:

1. In August 1990, UN Security Council, led/convinced by the US, imposed trade santions against Iraq, as a punishment for its invasion of Kuwait.

2. Why did Iraq invaded Kuwait? Iraq suspected and blamed Kuwait of "slant" mining into Iraqi territory... As this story points out, apparently, it was "set up" to create a justification for US to invade...
See:
Was Gulf War A Setup For Iraq?

3. To build up support for military action against Iraq, in October 1990, "Nurse Nayirah", an alleged refugee from Iraq, told the US Congress how she had witnessed Iraqi soldiers dumping Kuwaiti infants out of their incubators "on[to] the cold floor to die," and then leaving with the machines.

This testimony was organised by the PR company, Hill & Knowlton, who were hired by the exiled Kuwaiti government, to create support for the US counterstike. The company also got the tearful performance filmed and circulated it to more than 300 news-channels...

The 15-year old "Nurse Nayirah" later turned out to be the daughter of Kuwaiti ambassador to the US, and two maternity nurses in that ward later said that they had never seen Nayirah there and that the baby-dumping had never happened).

But by that time, the US Congress had already approved the invasion of Iraq (leading to Gulf War I)...

...Hill & Knowlton got paid US $14 million by the US government for its help in promoting the Gulf War.
See:
Nurse Nayirah (Wikipedia)
Lies, Damn Lies and War (Daily Mirror)

4. During the Gulf War of 1991, US forces intentionally - and in contravention to Article 54 of Geneva Convention - bombed Iraq's civilian infrastructure (the Iraqi electrical grids that powered its 1,410 water-treatment plants). This was a calculated move. To quote the scenario predicted in one of US Defense Intelligence Agency document (Jan 1991, titled "Iraq Water Treatment Vulnerabilities"):

"SUBJECT: Effects of Bombing on Disease Occurrence in Baghdad
Food- and waterborne diseases have the greatest potential for outbreaks in the civilian and military population over the next 30 to 60 days.... Increased incidence of diseases will be attributable to degradation of normal preventive medicine, waste disposal, water purification/distribution, electricity, and decreased ability to control disease outbreaks. Any urban are in Iraq that has received infrastructure damage will have similar problems."
See:
How the US Deliberately Destroyed Iraq's Water

5.Not surprising that by mid-90s, the Iraqi population was devastated.

Iraq was dependent on its oil exports for its food imports. Combined with the use of later UN sanctions - embargo on export of Iraqi oil, which reduced its legal foreign trade by 90% - to prevent Iraq from getting the equipment and chemicals necessary for water purification (and food), this was a perfect recipe for an UN-mandated genocide:

The World Health Organization (WHO) observed in March 1996 that, due to the sanctions, there was a six-fold increase in the mortality rate for children under five and the majority of the country's population was on a semi-starvation diet.

UNICEF reported in October 1996, that about 4,500 children under the age of 5 were dying every month in Iraq due to hunger or disease.

UN figures showed that by 1995-96, more than 1.7 million Iraqi civilians had died as a result of the sanctions. ...etc.
See:
Bleeding The Gulf
UNICEF Says Thousands of Iraqi Children Are Dying

6. In May 1996, Madeleine Albright, the then US ambassador to the UN (and later made the US Secretary of State), when asked about the death of half a million Iraqi children due to sanctions, made the (in)famous statement: "I think that is a very hard choice, but the price, we think, the price is worth it."
See:
Iraqi Sanctions: Were They Worth It?

7. After a major public outcry, the Oil-for-Food program was established in 1996 through a UN resolution... after much resistance by Saddam Hussain.

Reasons for the reluctance/resistance were many:

The price fixed for sale of oil was much below the global market price.

Proceeds from such oil sales were banked in New York. 34% of that was disbursed to outside parties with claims on Iraq, e.g., the Kuwaitis, UN, etc. Another 13% went to meet the needs of the Kurdish autonomous area in the north.

The rub was that US could anytime deny the import of any equipment - which it did, e.g., when it allowed the purchase a sewage treatment plant, but blocked Iraq from buying the generator necessary to run it!!! ...etc.

8. Meanwhile, the US-UK coalition enforced "no-fly" zones over north and south Iraq (they were illegal, since not mandated by UN... Surprisingly, they were also not objected-to by UN either!), and kept on bombing Iraq for 12 years... The so-called "international community" - an oft-used term these days - sat on the fence and watched a nation being decimated...
See:
Iraq Was Being Bombed During 12 Years of Sanctions
Squeezed to death

9. Since then, we all know that US re-invaded Iraq on the pretext of the alleged WMDs (Weapons-that-Mysteriously-Disappeared...

...etc. etc.

Predictably, Paul Volcker's report on Oil-for-Food program does not go into this histry of deceptions/ crimes/ payoffs, etc...

It starts with the innocent premise that the Oil-for-Food program was "legal" (thus, justifying the sequence of actions that led to - and followed - it as "legal")....

After all, if Genocide is taken as legally sanctioned by the "rule of law"... Then any action - for whatever reasons - that violates the intention to kill becomes "illegal"...

This is setting the term of debate!!!

Setting the Terms of Debate - Part I

An old adage of public deception - to paraphrase Thomas Pynchon - is:

"If you get them to ask wrong questions, you will never have to give the right answers."

This is a good description of what is often termed as "setting the terms of debate" - he who sets the ground rule, is bound to win.

A good example of this phenomenon is the response of Indian main-stream media and politicians to the Volcker Report. The report mentioned 129 Indian companies and one politician (Natwar Singh) as the "non-contractual beneficiary" of the kickbacks.

Predictably, there are numerous questions raised in the parliament, cover-page articles, first-page headlines, etc., about Natwar Singh's role (or its refutal).

Surprisingly (or perhaps not really so), there is hardly any coverage, questions or comments about the alleged role of the Indian companies mentioned in the report (that include some big names like Reliance Industries, Tata international, India Oil, Godrej Boyce, Kirloskar Brothers, Alembic Chemicals, Ajanta Pharma, State Trading Corp, etc.).

And that is how, the terms of "public debate" are set...

... for that matter, the Volcker Report itself is a good example of "setting the terms of debate".... (so wait for Part II of this posting)...

Organisations as Phrog Farms

I had read this article, by Jerry Harvey, when it was published in Organizational Dynamics journal, I think, in 1977. Recently, I discovered it once again (as a chapter in his book Abilene Paradox and Other Meditations on Management)...

...It is a depressingly insightful and hilariously zany look at the contemporary organisations - that sadly remains as much relevant now, as it was then.

Some excerpts:

All organizations have two essential purposes. One is to produce widgets, glops, and fillips. The other is to turn people into phrogs. In many organizations, the latter purpose takes precedence over the former. For example, in many organizations, it is more important to follow the chain of command than to behave sensibly.

Phrog is spelled with a ph because phrogs don't like to be known as frogs, and they try to hide their phroginess from themselves and others by transparent means... For one who has been a person, it's a great come down to be a phrog.

Phrogs tend to live a solitary life in the swamp, or as one phrog said, "It's a lonely life on the lily pad." Phrogs compete with one another for insects, vie for the right to head the flicking order of the swamp, and are ultimately evaluated for what they do in their own mud flats.... Most phrogs spend more time flicking flies in the fog than draining the swamp. It seems that their behavior is circular. If they were to spend time draining the swamp, there would be no flies to flick - and no phrogs. For that reason, it's very important to phrogs to maintain the swamp as it is rather than to drain it.

In phrog farms, bullphrogs generally get to be phresident. In other words, the better a phrog can tolerate the loneliness of his lily pad,
- the more facile he becomes in flicking flies,
- the more skillful he becomes at appropriating others' lily pads, and
- the more adroit he becomes at maintaining the swamp,
the more likely he is to become phresident.

Bullphrogs are greatly revered in the swamp. In fact, other phrogs assume that bullphrogs have magical powers because of their unusual abilities to turn people into phrogs... The magic exercised by bullphrogs comes from humans' belief in it. The tyranny of bullphrogs stems not from the reality of bullphrogs' power, but from the human belief of the myth of "bullphrog power." Belief in bullphrog power prevents humans from having to take responsibility for the fog and mud and moss that make up the atmosphere of the swamp.

Bullphrogs - particularly phresidents - frequently feel very trapped in the swamp. Many of them are destroyed by it. They feel trapped because they are trapped...

...Management improvement programs generally consist of phrog kissing, which is magical, harmless, and platonic. Any activity designed to facilitate phrog kissing is cosmetic organizational development an example of ODD behavior - that is, organizational development, by deception - or organizational improvement as practiced by phrogs. Activities such as phrog style assessment, phrog chorus-building, and inter-lily-pad conflict resolution, in the absence of swamp drainage and area reclamation, are examples of phrog kissing by ODD managers...

...Occasionally, during meetings of Phrognarians, a phrog pharts in the fog. When that happens, the phrog loses some of his or her phroginess and, therefore, represents a great threat to the balance of the swamp. Phrog pharts are seldom sanctioned by Phrognarians. They are too real. They put holes in the fog and ultimately threaten the atmosphere of magic required to maintain the swamp...

...The job of most swamp managers is to maintain and enhance the swamp, not to drain it... The purpose of swamp consultants - in the eyes of swamp managers - is to help the swamp operate effectively, not to drain it.... Most management improvement literature is designed to facilitate swamp management, not area reclamation. Most managers are phrog farmers, and most management consultants and phrogfessors of marsh management are phrog farmers' helpers. The relationship is symbiotic.

Most phrog farmers and their helpers are aware that they are mired in the swamp... May God have mercy on their souls...

God does have mercy on their souls. Otherwise, God would be the greatest phrog farmer of them all.

Amen!!!

India's Most Privatised and "Invisible" Workforce

One may have used the term "Working Poor" to describe them, but, to my knowledge, this term is not much in currency in India. Instead, they are termed as part of "unorganised or informal workforce"...or more often than not, they remain nameless, faceless part of the country.

So who are they?

Of course, the "rural poor" are part of this category. But even if one lives in an Indian city/town - big or small - and moves out of the neat and clean commercial and residential area (only from which one would be able to access this blog/mail)... and one decides to notice ...well, they are actually all around!!!

- On the sidewalks which are occupied by vendors and hawkers of vegetables, fruit, meat, fish, snack-foods and a myriad of non-perishable items ranging from locks and keys, soaps and detergents, clothing, vessels to books...

- On the sidewalks and street corners, as the owners of those numerous stalls and kiosks selling various things and services... as the road-side cobblers, barbers, tailors, book-binders, cycle mechanics... as the garbage collectors, rag-pickers... construction workers...

- On the road, one would also notice them as head-loaders, cart-pullers, camel/bullock/horse-cart drivers ferrying goods/passengers to other places... and of course, the rickshaw and auto rickshaw drivers... the truck drivers...

- Down the narrow crowded lanes, they work in/ own small workshops that repair bicycles and motorcycles, recycle scrap metal, make furniture and metal parts, tan leather and stitch shoes, weave, dye, and print cloth, polish diamonds and other gems, make and embroider garments, sort and sell cloth, paper, and metal waste... and more.

- Many of them remain "invisible" and produce and sell from their homes/shanties (mostly women) as garment makers, embroiderers, incense stick rollers, bidi-rollers, paper bag makers, kite makers, hair band makers, pickle and papad-makers, and others.

- Back in one's home, they work as maids, domestic servants, chauffeurs, gardners... the person who comes to wash the car, to deliver newspaper, milk...

Irrespective of their trade, however, they share a few things in common:

they work without a secure contract,

they have no or minimal worker/employment benefits, and

they have no access to social, or even legal, security.

... And they comprise of 93% of India's 370mn strong economically active workforce.

Even in the urban centers of India (Delhi, Mumbai, Bangalore, Chennai, etc.) - which cluster most of the employment opportunities - this "unorganised workforce" accounts for about 60-67% of total employment.

...As a collective entity they are quite productive as well. These "India's most privatised citizens" contribute to:

60% of Net Domestic Product

68% of income

60% of savings

31% of agricultural exports

41% of manufactured exports

They perform one other very "useful" function in the society, which is least acknowledged:
They subsidise life-styles of their "more organised" fellow citizens!!!

One of the hopes/dreams (/fantasy/delusion/hallucination?) of the middle-class Indians is that, with the liberalisation of economy, the wealth will "trickle down", and these boats will also rise with the tide...

Somehow, this has not happened (in fact, it has not happened anywhere in the world either). In fact, if anything, - though there are more formal enterprises in India than 15 years back - the proportion of the "unorganised" in the workforce has risen from 89% in 1989 to 93% today .

...and their numbers will perhaps keep on rising... as India's formal enterprises increasingly become "leaner" and more "competitive", increase their "labour/manpower productivity", and achieve the "least-cost producer" status, etc.,....

After all, where else do all those down-sized/right-sized people disappear and become "invisible"??!!!

War is Still a (Profitable) Racket

A sort of continuation of the last posting...

Major General Smedley Darlington Butler served the US Army for more than three decades, and was the recipient of two Congressional Medals of Honor.

Perhaps better known now for his book War is a Racket, in which he described how war - any war - is but a tool in the hands of business tomake money...

The full text of book can be accessed at:
http://www.ratical.org/ratville/CAH/warisaracket.html
[Highly recommended - a must read!!]

The following is the excerpt from a speech delivered in 1933 by him, that gives the gist of his experience as a warrior: http://www.twf.org/News/Y2001/0911-Racket.html

War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses. . . .

There isn't a trick in the racketeering bag that the military gang is blind to. It has its "finger men" to point out enemies, its "muscle men" to destroy enemies, its "brain men" to plan war preparations, and a "Big Boss" Super-Nationalistic-Capitalism.

It may seem odd for me, a military man to adopt such a comparison. Truthfulness compels me to. I spent thirty- three years and four months in active military service as a member of this country's most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.

I suspected I was just part of a racket at the time. Now I am sure of it. Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service.

I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912 (where have I heard that name before?). I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.

During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents...

Apparently, not much has really changed in the world since then. Here are some news items and reports:

Rebuilding Iraq Proves to Be A Gold Mine for Middlemen (Wall Street Journal, 16 June 2003)

The Privatisation of War (The Guardian, December 10, 2003)

Advocates of War Now Profit From Iraq's Reconstruction (Los Angeles Times, 14 July 2004)

The Price of Freedom in Iraq and Power in Washington by Ceara Donnelley and William D. Hartung, August 2003 (gives a detailed account of profits have zoomed up for companies such as Boeing, Bechtel, Lockheed Martin, Raytheon, Halliburton, DynCorp, etc.)

A Band of Brothers: The Rebuilding of Iraq [pdf format]

List of Articles on War Profiteering from CorpWatch

WarProfiteers.com

...On War, State and Deception

More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.
(~Woody Allen)

After each war there is a little less democracy to save.
(~Brooks Atkinson)

They have always taught and trained you to believe it to be your patriotic duty to go to war and to have yourselves slaughtered at their command. But in all the history of the world you, the people, have never had a voice in declaring war, and strange as it certainly appears, no war by any nation in any age has ever been declared by the people.
(~Eugene V. Debs, 1918)

It is not the function of our Government to keep the citizen from falling into error; it is the function of the citizen to keep the Government from falling into error.
(~Robert Houghwout Jackson, Chief Judge, War-Crimes Tribunal, Nuremberg, 1945)

Death has a tendency to encourage a depressing view of war.
(~Donald Rumsfeld)

How many does it take to metamorphose wickedness into righteousness? One man must not kill. If he does it is murder. But a state or nation may kill as many as they please, and it is not murder.... Only get enough people to agree to it, and the butchery of myriads of human beings is perfectly innocent. But how many does it take?
(~Adin Ballou, 1845)

All murderers are punished unless they kill in large numbers and to the sound of trumpets.
(~Voltaire)

God and Country are an unbeatable team; they break all records for oppression and bloodshed.
(~Luis Bunuel)

War is a racket. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.
(~General Smedley Butler)

In all history there is no war which was not hatched by the governments, the governments alone, independent of the interests of the people...
(~Leo Tolstoy)

The people can always be brought to the bidding of the leaders...tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger.
(~Herman Goering)

Our government has kept us in a perpetual state of fear - kept us in a continuous stampede of patriotic fervor - with the cry of grave national emergency.
(~General Douglas MacArthur)

If they can get you asking the wrong questions, they don't have to worry about answers.
(~Thomas Pynchon)

I guess every generation is doomed to fight its war...suffer the loss of the same old illusions, and learn the same old lessons on its own.
(~Phillip Caputo)

It is in war that the State really comes into its own: swelling in power, in number, in pride, in absolute dominion over the economy and the society.
(~Murray Rothbard)

What is absurd and monstrous about war is that men who have no personal quarrel should be trained to murder one another in cold blood.
(~Aldous Huxley)

Almost all war making states borrow extensively, raise taxes, and seize the means of combat- including men--from reluctant citizens...
(~Charles Tilly)

All warfare is based on deception.
(~Sun Tzu)

I just want you to know that, when we talk about war, we're really talking about peace.
(~George W. Bush)

We have guided missiles and misguided men.
(~Martin Luther King, Jr.)

Civilization began the first time an angry person cast a word instead of a rock.
(~Sigmund Freud)

Peter Drucker's "Seventh Learning"

Peter Drucker - that Grand Old Man of management - died today.

Needless to say, he will be remembered as the Management Guru, a prolific thinker and writer, and a person, who often anticipated the future...

Besides his management writings, for me, one of his best pieces was an article "My Life as a Knowledge Worker" (published in Inc magazine, February 01, 1997). This was one of those few of his writing that had nothing to do with management... in which he had narrated seven of his learning experiences over his lifetime.

... And among them, the most enlightening one was the "Seventh Learning" which he gained from Joseph Schumpeter,, one of the greates economist of last century...

one of my favourites, I am reproducing it below:

THE SEVENTH EXPERIENCE
Taught by Schumpeter

One more experience, and then I am through with the story of my personal development. At Christmas 1949, when I had just begun to teach management at New York University, my father, then 73 years old, came to visit us from California. Right after New Year's, on January 3, 1950, he and I went to visit an old friend of his, the famous economist Joseph Schumpeter. My father had already retired, but Schumpeter, then 66 and world famous, was still teaching at Harvard and was very active as the president of the American Economic Association.

In 1902 my father was a very young civil servant in the Austrian Ministry of Finance, but he also did some teaching in economics at the university. Thus he had come to know Schumpeter, who was then, at age 19, the most brilliant of the young students. Two more-different people are hard to imagine: Schumpeter was flamboyant, arrogant, abrasive, and vain; my father was quiet, the soul of courtesy, and modest to the point of being self-effacing. Still, the two became fast friends and remained fast friends.

By 1949 Schumpeter had become a very different person. In his last year of teaching at Harvard, he was at the peak of his fame. The two old men had a wonderful time together, reminiscing about the old days. Suddenly, my father asked with a chuckle, "Joseph, do you still talk about what you want to be remembered for?" Schumpeter broke out in loud laughter. For Schumpeter was notorious for having said, when he was 30 or so and had published the first two of his great economics books, that what he really wanted to be remembered for was having been "Europe's greatest lover of beautiful women and Europe's greatest horseman--and perhaps also the world's greatest economist." Schumpeter said, "Yes, this question is still important to me, but I now answer it differently. I want to be remembered as having been the teacher who converted half a dozen brilliant students into first-rate economists."

He must have seen an amazed look on my father's face, because he continued, "You know, Adolph, I have now reached the age where I know that being remembered for books and theories is not enough. One does not make a difference unless it is a difference in the lives of people." One reason my father had gone to see Schumpeter was that it was known that the economist was very sick and would not live long. Schumpeter died five days after we visited him.

I have never forgotten that conversation. I learned from it three things: First, one has to ask oneself what one wants to be remembered for. Second, that should change. It should change both with one's own maturity and with changes in the world. Finally, one thing worth being remembered for is the difference one makes in the lives of people.

I am telling this long story for a simple reason. All the people I know who have managed to remain effective during a long life have learned pretty much the same things I learned. That applies to effective business executives and to scholars, to top-ranking military people and to first-rate physicians, to teachers and to artists. Whenever I work with a person, I try to find out to what the individual attributes his or her success. I am invariably told stories that are remarkably like mine.

*****

.... thanks, Peter Drucker, for sharing this insight!

The Untold/Forgotten History of the Internet

Whether the Internet is a "medium" or a "terrain" has long been a query for me (with a bias towards the latter... It is an entirely new terrain much to be explored)

Some years back, I had building a database about the "untold/ forgotten story of internet" (and had forgotten it, myself) - and discovered it in one of the files today...

These are tit-bits from the history, before the corporate takeover of the internet, beginning 1993 - prior to which "hackers" were the good guys, and "nerds" represented the dark forces of commerce... (see later in this posting)

When the internet began, there was something (still is!) magical/ unknown/ exciting about this new terrain (and apparently, those who expanded and enlarged it were driven by a drive, that's long long forgotten)... Something to discover, to expand, to enhance the human potential/consciousness/imagination...

So, here are some interesting tit-bits about the magical/mythical roots of Internet (as a terrain) - specially, since one rarely talks about these - nowadays. They also highlight the basic characteristics - often not appreciated by most who use it - of this terrain/medium called Internet:

Marshall McLuhan - the guy who is equated with "Medium is the Message" - wrote in 1968: "Civilization is entirely the product of phonetic literacy and as it dissolves with the electronic revolution, we discover a tribal, integral awareness that manifests in a complete shift in our sensory awareness... (electronic society is) a resonating world akin to the old tribal echo chamber where magic will live again."

Mark Pesce, the inventor of VRML (Virtual Reality Modeling Language) was a drop out from MIT, which he found to be a "profoundly dehumanising place" (but then, "if you get thrown out of MIT, that's your first step in your career as a programmer.") In an interview in 1994, he said: "Both cyberspace and magical space are purely manifestation in imagination. Both spaces are constructed by your thoughts and beliefs. Korzybski says that the map is not the territory. Well, in magic, the map is the territory. And the same is true in cyberspace. There's nothing in that space you didn't bring in."

In 1989, T M Luhrmann published a survey study on pagan culture in modern society (Persuasions of the Witch's Craft), in which he found that a disproportionately large percentage of those who practiced paganism (in its various forms) were techies from IT field. Based on his interviews, he concluded: "both magic and computer science involve creating a world defined by chosen rules, and playing within their limits."

The term "Cyberspace" originate from a book by William Gibson, Neuromancer, published in 1986. Gibson described cyberspace as "consensual hallucination". For Gibson, cyberspace was "the point at which media (flow) together and surround us. It's the ultimate extension of the exclusion of daily life. With cyberspace as I describe it you can literally wrap yourself in media and not have to see what's really going on around you."

JRR Tolkein (Lord of the ring) was a cult figure among the counterculture techies of the 60s and 70s. The first comptergame, Dungeons and Dragons, was developed by two students in 1973, the year Tolkein died. Many of imageries and personalities were directly influenced by Tolkein's character, and obviously the plot was similar to Lord of the Rings

Do these partly explain why magic continues to live with logic in the digital age? and why Harry Potter, Sabrina the Teenage Witch, Buffy the Vampire Slayer, Stephen King, heavy metal, Hollywood macho and horror, Doom, etc. continue to fascinate? and why tyranny of reality fails to overpower the lores of virtual reality?...

Behind this magical nature of the internet was also the basic DNA of internet... the activism, the original spirit of "digital culture" (based on the norm of sharing and collaboration) - till it got usurped by the "digital economy" (based on the rule of private property rights and competition)...

Not many people remember now, that when Paul Baran, back in 1962 designed ARPAnet - the predecessor of Internet - the framework was to create a system for "distributed communication" which had no central control (which is what Internet is - and as recently as 1996 Singapore, Germany and China tried to control use of Internet, without much success).

Not many people know/remember, either, that long back being a "Hacker" was the way to be. In 1984, Steven Levy had described the "Hacker Ethic" in his book "Hackers, Heros of the Computer Revolution" (full transcript here):

Access to computers should be unlimited and total.

Always yield to the Hands-on Imperative!

All information should be free.

Mistrust authority — promote decentralization.

Hackers should be judged by their hacking, not bogus criteria such as degrees, age, race or position.

You can create art and beauty on a computer.

Computers can change your life for the better.

Some examples of this "activism":

Ted Nelson , who invented "Hypertext" also wrote a book/manifesto titled "Computer Lib" in 1974?

the first invention of Steve Job and Wozneik - founders of Apple - was the "blue box" which you could use to make long distance calls at local rates

many members of Ken Kesey's "Merry Pranksters" (the guys who used to organise acid-trip festivals in the 60s) were actually techies - such as Stewart Brand (who actully coined the term "personal computer" in an article published in The Esquire in 1972)

Jim Warren - a pioneer in microcomputing and the recepient of Electronic Frontier Foundation Pioneer Award - perhaps summarised the digital age the best:

"It had its genetic coding in the '60s ... Anti-establishment, antiwar, pro-freedom, anti-discipline attitudes."

The Real "Miracle" of Chinese FDI Figures

In a one of the earlier postings, I had pointed out that the difference between the Chinese and Indian FDI figures is just a matter of how they are calculated.

This news item, quoting the UNCTAD report shows more such contradictions

China fudged FDI nos: Unctad

"China claims FDI of $5.42 bn from US in 2002 while US says $924 mn, a variation of 83%.

Adding a new twist to the debate over China's awesome FDI figures, a recent Unctad report has said the numbers claimed by the country are far in excess of those reported by investors.

China claims that it got FDI worth $5.42 billion from the US in 2002. But the US says it has invested a meagre $924 million during the period, Unctad's World Investment Report 2005, says.

The discrepancy is visible in case of other investors as well. China says Hong Kong invested $17.86 billion in 2002. But Hong Kong says the amount is $15.93 billion. Again, Chinese data show that Japan pumped in $4.19 billion during the year, while Japan claims it invested $2.60 billion a discrepancy of 38 per cent.

Interestingly, an OECD report titled China: Progress and Policy review points out that FDI flow into China from OECD countries during 1995-2000 was $39.3 billion, while the Chinese commerce ministry shows $77 billion.

The OECD report states, "MOFCOM (ministry of commerce of the People's Republic of China) FDI statistics are not based on the internationally recognised standards that are generally applied by OECD countries. Consequently, the differences in the statistics compiled by OECD countries on their investment in China and the statistics published by MOFCOM on OECD members investment in China show serious inconsistencies between these sources."

Citing the instance of China from 2000-2002 with respect to France, Germany, Hong Kong (China), Japan, the US and the UK, the Unctad report points out that bilateral discrepancies between FDI flows reported by home and host countries can be quite large."

etc. etc.

Meanwhile, our main-stream media, industrialists, speakers at various seminars organised by CII/Assochem/Ficci/Nascom, etc, big-time consultants (including Mckinsey), B-school profs, policy makers, etc., keep getting tied into knots to find out/prescribe "How India Should Catch-Up with the Chinese FDI "Magic".

Being "Not Poor" in India: What Does it Mean?

First the Good News:
Yesterday, Montek Singh Ahluwalia, the Dy Chairman of Planning Commission, told the audience of Sardar Patel Memorial Lecture (organised by All India Radio) that at the present rate of growth (8%), India could well become the world's 3rd largest economic power by 2020.

Even better news was that by 2020 India will be able to eradicate poverty completely. He cited figures as to how the population "living" (to use a term, in the absense of a more apprpriate one) below poverty line has been decreasing - from 56% in 1973-74 to 39% (1987-88) to 37% (1993-94) to as low as 26% in 1999-2000... At the present rate of 1.6%/annum reduction in poor population, it will just take another 15 years to achieve this feat!!!
[one can almost imagine the thunderous applause at these pronouncements... After all he is an economist - not a politician who are given to rhetorics - and is quoting facts and figures]

...as if to vindicate his claim, earlier this month, the Sensex had broken through the 8000 magical number, and FDIs grew by 25% last year, and Indian exports are growing rapidly!!!

...and now the Slightly Not-So-Good News Analysis:

How does India define its poor? How do we calculate the "poverty line"?

To go back in the history, the first official announcement of poverty-line was made in 1978, during Morarji Desai's government. The calculation for poverty line was - and remains - simple: how much nutrition would a person need to stay alive?

According to Govt of India, a person requires 2,400 calories in rural areas, and 2,100 calories in the urban area. The money needed to buy grains worth that much calories is the Poverty Line.

In the 1970s, it used to be Rs 61.80/person/month for rural areas and Rs 71.30 for urban areas. Adjusting to inflation, now it has gone up to Rs 328 in rural areas and Rs 454 in urban areas (Congratulations!!, if you earn more than Rs 500/month in India, you are not among the poverty stricken masses!)

Notwithstanding the fact that (1) a healthy nourishment also includes protein, vitamins, minerals, etc., which are not factored in to calculate the poverty line, and (2) according to the the National Institute of Nutrition (part of Indian Council of Medical Research), Indians require more calories to survive (2,900 calories in rural, and 2,400 calories in urban India), there is something perplexing - and perverted - about this definition!

Essentially, it defines someone as "not poor" who is not starving to death!!!...

...that is: even if

I do not have a shelter to live in,

I own no assets, e.g., land, house, etc.

I maybe shivering to death,

I have no access to sanitation, have no job, no access to minimum education or health facilties...
But as long as I am not dying of hunger, I am "not poor"!!!

An article by the Center for Policy Alternatives, New Delhi, makes some revealing calculations to correct this anamoly.

Imagine, the bare minimum needs of a "not poor" person: S/he lives in a family of five person (husband-wife, three children of 5, 10, and 15 age). Minimum nutrition. A small house (two rooms of 10'x10'). A bulb and fan in the rooms. A running tap in kitchen and bathroom. Clothes. Primary education for kids in the government-run subsidized schools. Basic healthcare.

If one defines "poor" as someone not having this bare minimum, then the Indian "poverty line" needs to be set at Rs 1580/month/person!!... Or around Rs 7,900/month for a family of 5.

And given the recent National Sample Survey data (i.e., 93% of Rural India spends less than Rs 950/person, and 83% of Urban India spends less than Rs 1500/person), apparently, more than 90% of Indians do not meet the above minimum definition of "not poor" - and are poor!!!

But then, these are the inhabitants of the Invisible India...

Sources:
India Could Become Third Largest Economy
Tripping over the Poverty Line
Living in Two India(s)

How do you identify/ cultivate Indian Talent? - Philanthropy or Competition?

At a time, when the urban/elite/educated/globalised/free-market "intelligentia" of India is going over-board about the virtues of privatised, competitive opportunities (that will hopefully/supposedly bring out the best of talents in the country), this article by Dr RA Mashelkar is a fresh breath.

Dr RA Mashelkar (Director General, Council of Scientific & Industrial Research & President, Indian National Science Academy), and the person who turned around CSIR to make it become the No.1 Global Innovator, ahead of Samsung (read: Samsung finds its match in CSIR)

This article written by him (Indian Express, September 22, 2005) vindicates that perhaps a supportive (subsidized/philanthropic?) social fabric of a society contributes more to identify, develop and leverage on the talent in a society (at least in Indian society), than an unthinking allegience to privatised, do-it-to-yourself social structure.

India’s future is in IT, but not in IT as in Information Technology, but in IT as in Indian Talent. Giving every opportunity possible to Indian talent to reach its real potential would truly empower India.

What happens to Indian talent today? Fifty per cent Indian children go to school. Thirty per cent of them reach up to 10th standard. Forty per cent of them pass. Thus, six per cent of our children go past the 10th standard. This is only a tip of the iceberg, of which only a very small part shines. A huge part of the iceberg remains submerged and dark. To me, India will be truly empowered when we let the entire iceberg shine by lifting it.

I too belonged to that submerged part of the iceberg. I was born in a very poor family. My father died when I was six. My illiterate mother did menial work to bring me up. I went barefoot till I was twelve. I studied under streetlights. Yet I was empowered again and again.

I studied in a free municipal school. Access to free education through public funding was the first empowerment in my life.

On finishing primary school, I sought admission in a secondary school. I required 21 rupees as admission fee. My mother did not have the money. A lady, who herself was a housemaid in Mumbai, gave her savings to us. One ‘have not’ sharing with another ‘have not’ was a powerful lesson of empowerment early in my life.

I stood 11th amongst 1,35,000 students in the state in the Maharashtra State Board exam in 1960. I was about to leave the school, since my mother could not afford my college education. Sir Dorabji Tata Trust gave me a scholarship of 60 rupees per month until my graduation. Thus, my next empowerment came through the philanthropy of an industrial house.

My school teachers empowered me. Principal Bhave taught me physics in the school. One day, he took us out in the sun to show how to find the focal length of a convex lens. When the sun rays were focused on the paper, it got burnt. He turned to me and said, ‘‘Mashelkar, if you focus your energies, you can achieve anything in life.’’

That gave me an inspiration to become a scientist. It gave me the philosophy of life; focus and you can achieve anything. Empowering India to me, therefore, means growing millions of Bhaves, who will inspire young Indian kids.

I was teaching and researching in England in the early Seventies. Indira Gandhi was the Prime Minister. The news of Nobel Laureate Khorana not getting a job in India had done rounds. She asked the then Director General of CSIR, Dr Nayudamma, to go abroad, pick up the brightest and the best and offer them jobs on the spot.

Nayudamma came to London in 1974. He met me, among others. He offered me a position at NCL in Pune. There was no application, no formal interview, no bureaucratic hurdles. I came back to India, thanks to a science leader, who was trusted and empowered by a Prime Minister.

India cannot be truly empowered until the best of its talent stays in India and contributes. Why does talent leave India? An Italian Nobel Laureate, Riardo Giacconi, who settled in the US said, ‘‘A scientist is like a painter. Michelangelo became a great artist, because he had been given a wall to paint. My wall was given to me by the United States.’’ To empower scientists, it is necessary give them a wall to paint.

This year, I became only the eighth scientist from India to be elected to the US National Academy of Science since 1863. After the Nobel prize, this is one of the highest honours. Every scientist aspires for it. The honour came to me this year because a visionary CSIR leadership had empowered a young Mashelkar by giving him his wall to paint thirty years ago.

My lessons from my life are simple. A society, that gives an opportunity for education to everyone, that has inspiring teachers, that has philanthropic industrialists, that has visionary leaders in all walks of life and that gives the talent every opportunity to reach its real potential—becomes truly empowered.

Gandhi, Grass-Root Democracy and Blogosphere

Gandhi once wrote: "Whatever you do will become insignificant, but it is very important to do it."

... Therefore this posting,

...since it will add to a growing number of voices about the IIPM vs. Rashmi Bansal/Gaurav Sabnis issue, that has helped bringing the Indian blogger community together in just about 48-72 hours.

If you are aware of the facts, skip the first part... Otherwise, here is the unfolding of events:

1. A few months back, JAM magazine, a print magazine brought out by Rashmi Bansal, carried an article questioning the claims made by the full-page ads of Indian Institute of Planning & Management (IIPM).

2. Gaurav Sabnis, an IIML graduate working with IBM, linked the Jammag's article to his blog posting on IIPM. His posting starts with a hilarious sentence: "IIPM is to Management Education, what Parnab Mukherjee is to quizzing."

3. Two months later - and a week back - Gaurav received a "legal notice" from the "IIPM legal cell" threatening a lawsuit for Rs 125crores (!!!). It is a must-read, hilarious and purile notice and contains some gems of threats like:

- "Warning: This email has been judicially notarized and has been tagged to validate receipt and response" and
- "We are also providing your details to respective national and regional police authorities for undertaking and implementing immediate arrest warrants against you. We are also providing your details to various corporations within India and abroad to inform them about the judicial, legal and police action against you; thus ensuring that your details are well documented."

4. Gaurav posted the notice on his blog, and it started circulating on the net (I got it in my mailbox on the 7th). This was the beginning of an Indian redo of the Jonah Paretti vs. Nike case

5. Rashmi Bansal posted the happenings, including a clarification on a comment about JAMmag made on Gaurav's blog posting

6. Suddenly IIPM "discovered" that there are something called blogs, and overnight many IIPM blogs came up - all eulogising the greatness of the institute. Which would have been OK, except that their "owners" also started posting insulting (actually, downright vulgar) comments on Rashmi's blog.

7. Apparently, Jammag was also sent a "legal notice", and its office was visited by IIPM "faculty"...

8. on 10th, Gaurav Sabnis resigned from his job with IBM, since IIPM had apparently threatened to "burn IBM laptops" in front of IBM office, and his super-super boss had rung him up to enquire what this is all about. No, IBM did not fire him... But this is classic tactics for making a seat hot for somone.

9. In any case, all this mobilised the bloggers, and is gaining shape of a major milestone in the blogging community in India. In a way, it has brought them together around a common issue - blogging itself.

10. Today, it also got coverage in Hindustan Times ("Freedom under Siege") and in Mumbai Mirror (Story on IIPM (It Snowballed into High Drama)

11. "IIPM" has become the most searched term on Technorati - the blog search engine - even above "web 2.0", "earthquake", "Paul Krugman" or "bird-flu" (For all one knows, IIPM may convert this into their full page ad: "IIPM ranked by the Global Blog Search Engine, Technorati, as No. 1... above all the IIMs" :0)


So Why is this cyber-event so important?

I don’t think this is just about a replay of themes of David-vs-Goliath, an-individual-against-the-establishment, etc.

It is also not just a matter about cyber-harrassment of Gaurav, Rashmi and some other bloggers - or for that matter, even about IIPM and its dubious claims.

It is also also more than just the vindication of a basic truth about blogs that Steve Hayden of O&M had once mentioned (and as was confirmed by the "IIPM Blogs": "If you fudge or lie on a blog, you are biting the karmic weenie. The negative reaction will be so great that, whatever your intention was, it will be overwhelmed and crushed like a bug. You're fighting with very powerful forces because it's real people's opinions."

It is important because, this is about freedom of expression; it is about someone trying to invade, capture and suppress the grass-root democratic nature of blogosphere

...for those not in the know, blogosphere is the fastest growing medium of grass-root individual expression - 80,000 blogs get created every day, there are about 19mn blogs, and are doubling every five months. That is the reason why blogosphere is the "commons" whose conversations become a threat to the establishment.

This is not the first time, such a thing has happened.

- Earlier this year, Times of India forced journalist Pradyumn Maheshwari to close his blog, http://mediaah.blogspot.com/, through a similar (and perhaps more real) threat.

- Countries and governments have been banning blogs and imprisoning bloggers, check: http://committeetoprotectbloggers.blogspot.com/

- Electronic Frontier Foundation (EFF) had to compile a Legal Guide for Bloggers. Check: http://www.eff.org/bloggers/

In India, perhaps, IIPM's threat of lawsuit, will not hold in court. According to Pavan Duggal, a Supreme Court advocate specialising in cyber laws, "Blogs are not specifically covered in the IT Act of India. Secondly, every citizen has, except in certain extraordinary circumstances, the fundamental right to freedom of speech under the Constitution. This incident of a blogger being threatened with legal action clearly reflects the need for a clarification of the rights of a blogger."

But legal threat is only a peripheral issue. Even if the threat is legally ineffective, an organisation can always keep a lawsuit going,and make an individual bankrupt through what are called the SLAPP (""Strategic Lawsuits Against Public Participation") - "the corporate technique of suing people into silence and submission... SLAPP targets who fight back seldom lose in court yet are frequently devastated and depoliticized and discourage others from speaking out... SLAPP suits achieve their objectives by forcing defendants to spend huge amounts of time and money defending themselves in court."

Perhaps that is why it is important to rally around the issue, to take sides, to fight...

Gandhi also said: "First they ignore you, then they laugh at you, then they fight you, then you win."

-------------
UPDATES:

#1 (Oct 13, 2005): IIPM vs. Bloggers: The Other Concern

#2 (Oct 15, 2005): A couple of comments below, made by a visitor allegedly repesenting IIPM, illustrate why it is necessary to keep the "open space" of blogosphere free from "cyber-vandalism"

#3 (Oct 16, 2005): ... for that matter, even the comment by someone who logged on from either MTNL Delhi (IP: 59.178.1.33) or BSNL Delhi (IP: 210.212.194.4) [the two IPs logged on to this blog when the comment was posted] to post the comment, posing as "XL student"...

-----------

References:
DesiPandit
Directory of Indian Bloggers
Gaurav Sabnis' Blog Entry: The Fraud that IIPM Is
JAM mag article on IIPM
Garuav Sabnis' posting of IIPM's "Legal Notice"
Jonah Paretti vs. Nike case
Rashmi bansal's Blog: Lies, Damned Lies, and Fake Blogs
Hindustan Times ("Freedom under Siege")
Mumbai Mirror (Story on IIPM (It Snowballed into High Drama)
SLAPP (""Strategic Lawsuits Against Public Participation")

Living in Two India(s)

The Distance! 
I know both these places, because I teach in one and often walk through the other. This schizophrenic experience has also made me realize what an insurmountable gulf a mere ½ km can be …


Foundations of Prosperity 
One way I can make sense out of this is to visualize that we live in two India(s) – these two realities coexist side-by-side in a surrealistic blend:

This posting is an attempt to understand these two India(s). One may say that this is a sort of anthropological exploration of two continents/ paradigms/ realities – which co-exist, and yet do not (perhaps) understand the other side

The Visible India:

The Visible India is visible because it is the proverbial tip-of-the-iceberg. It is also the convenient constituency of media, and therefore plays an influential part of metropolitan debates and conversation, and in forming perceptions about India.

Only about 15% of India’s 190mn households have an annual household income of more than Rs 2.5 lacs (Rs 0.2.5mn). Assuming 5 persons / household, these approx. 150mn people (out of 1bn) are the solid citizens of Visible India. There must be another 100mn or so who also exist on the periphery of this demographic continent (or believe that they do)

Citizens of the Visible India share two common features:

1. irrespective of their income-levels, they like to describe themselves as the “middle-class”. They also believe that the “middle class” is a synonym for the “common man” or the representative citizen of India.
2. they see consumption as an inalienable right, and like to describe themselves as “consumers” or “customers”… In the Visible India, there is no such term like a Middle-Class Producer.

The consumption of the Visible India contributes substantially to India’s GDP. For instance, during 2004, its inhabitants downloaded ring-tone worth Rs. 400 crores (Rs. 4bn) on their mobile/cell phones, and they contributed an estimated Rs. 1500 crores (i.e., Rs.15bn) to GDP during Valentine Day, and so on…

The Visible India likes numbers, and believes in their magical quality in capturing the reality. Numbers like “GDP”, “FDI”, “Global Competitiveness Index”, “Profits”, “Market Share”, etc. are important to them; their personal self-esteem goes up and down with these numbers.

One of the magical numbers, for instance, which its inhabitants like is “Sensex” – it is seen as an indicator of the health of Indian economy/business. Its “magical” quality lies in the fact that it is based on the behaviour of about 35-40mn investor population (about 0.4% of India’s total population), as they buy and sell the “dead stocks” of a handful (30-50) of India’s companies.

The inhabitants of the Visible India also like words such as “privatization”, “globalizations”, “competitiveness”, etc., which they see as signs of progress and development.

Correspondingly, by and large, they feel that nation-states and government have (or should have) less role to play in “economic” development. The also feel that nations are economies and not societies.

Quite a few of those living in the Visible India – hopefully, not all – are also skeptical about “democracy” in India. Some, in fact, also feel that “we have too much democracy” and prefer not to participate in it.

Nevertheless, they do expect an elected government to provide them with “world-class infrastructure”, take care of the “consumers’ interests”, reduce taxes, abolish regulations, etc…. all in the same breath!!! – more often than not, they also succeed!!!

Citizen of the Visible India like to live on debts – credit cards, consumer finance schemes, loans, etc. – the higher the debt, the greater one’s “credit worthiness”.

Lastly – actually, not lastly – one can go on elaborating - , the Visible India holds a premium on the “brands” that one buys, the “address” one lives in, the “life-style” on leads, the “CV-value” of one’s activities, etc.
Etc. etc……

The Invisible India:

The Invisible India is invisible because it is so ubiquitous and pervasive - it gets merged in the background of the hectic lives of those who live on the other side of reality. It remains a taken-for-granted, nondescript, an apparently needless distraction, except for those who live in it.

About 92-93% of India’s active workforce lives in this reality… Actually, they live in slums, shanties, and villages.

The economists say that they belong to the “informal”/ “unorganized”/ “marginal” sector… which actually is funny, since this “informal” sector accounts for around 2/3rd of the workforce even in all metropolitan cities (Delhi, Mumbai, Chennai, etc.)… but then most economists live in the Visible India…

These denizens of the Invisible India follow diverse professions – hawkers, vendors, roadside tailors, mechanics, contract labours, construction and agricultural workers, domestic workers, weavers, potters, papad-rollers, handcart pullers, laundry workers, etc.

…and account for 60% of India’s GDP!

In a way, they are India’s truly self-employed privatized citizens – no government support, no income or social security, no access to formal credits, no insurance…

Most of the workers in India’s 3.2mn SMEs – that accounts for India’s 40% of manufacturing sector and 36% of exports – are also a part of the Invisible India (in 2003, when the India’s pharma company, Ranbaxy Ltd. registered $960 in its overseas sales, Dharavi – Asia’s largest slum in India’s financial capital, Mumbai – exported goods worth an estimated between $690 and $1.84bn).

The Invisible India also accounts for the bottom 10% of India’s population which owns 1% of country’s assets (as compared to the top 10% in the Visible India who own 48%).

Of the India’s 0.7mn villages, around 67% have a population of less than 1000 – mostly with no roads, no electricity, no amenities of sorts, etc.… They are also a part of the Invisible India.

It is somewhat ironic - The Invisible India is also a low cost, cheap supply of labour and services, and subsidizes the “life-style” costs of the Visible India… in terms of a maid-servant, a dhobi, a guy who delivers milk/newspaper… etc.

...Just a thought which keeps recurring in my mind:
Are we a Schzoid Nation?

Cont... Whither B-School Rankings!

This is just a continuation of the previous post on the futility of relying on B-School Rankings...

Since then, one more publication has come out with rankings... and so here is a scorecard as of now.



would these really help an MBA aspirant help making an educated choice?

...or maybe, we seriously need a "B-School Ranking Regulatory Authority of India" :0)

Invade!... but at least change "the script"!!!

Perhaps, they should seriously think about changing the script justifying the invasion of a sovereign country.

Back in Oct 2002, the CIA's National Intelligence Council page had stated:

"Iraq has largely rebuilt missile and biological weapons facilities damaged during Operation Desert Fox and has expanded its chemical and biological infrastructure under the cover of civilian production."

3 years later, today,a US States Dept spokesman said:

"We have no doubt that if Iran continues on the path that it has chosen to follow for these past years, pursuing nuclear weapons under the cover of a civilian nuclear program, that they would be reported, and should be reported, to the Security Council..."

Just google "Under the cover of civilian nuclear program", and the stale - and noble -justification for "preemptive war" loses its novelty - and ethical - value

...and in case, if wants to shrug this away as a semantic coincidence, here is another curious repeat of history (Some earlier posts - e.g., "The New "Axis of Evil" - or emerging Geo-Political "Continental Shift"", "The Collapse of Dollar Economy?", etc. - had touched upon this):

A news-report earlier this month - Will the Iranian Oil Bourse Threten the Dollar? - states:

"Tehran reconfirmed that it plans to create a euro-based exchange in oil — to compete with the London and New York dollar-denominated oil exchanges, both American-owned.... The proposed March 2006 launch of the Iranian oil bourse (iob), if successful, would give the euro a foothold in the international oil trade, solidifying its status as an alternative oil transaction currency. This, in turn, could be a catalyst for a major currency flight from the dollar to the euro—and a disaster for America."

Rings a bell?

well... back since 2000, Iraq had also started selling oil in Euro !!!

...thus setting the stage for Gulf War-II

Sources:
1. US Brushes off lack of support for action on Iran
2. CIA 2002: Iraq’s Continuing Program for Weapons of Mass Destruction
3. Google: Under the cover of civilian nuclear program
4. "The New "Axis of Evil" - or emerging Geo-Political "Continental Shift""
5. "The Collapse of Dollar Economy?"
6. Will the Iranian Oil Bourse Threten the Dollar?
7. CNN.com: U.N. to let Iraq sell oil for euros, not dollars
8. Gulf War II: Saving the US$ against Euro

"B-School Surveys" Misguide....Period!!!

The B-School Ranking Season is here... and confusion galore!!!

If B-Schools claim that they teach the students how to make wise decisions amidst ambiguity and uncertainty, then the learning process certainly starts for the wannbe MBAs when they consider the numerous published B-School Rankings to chose where to apply.

So far in this season, only 3 publications have published their unique - and mutually contradictory - rankings.

However, last year 6-7 publications had ranked the B-Schools on their self-selcted criteria... so one can safely anticipate that more rankings will be getting published in the coming months... In fact, given the craze of media to rank everything, anything goes - more rankings, more critereia, more clarifications in small prints... and more confusion...

... I mean, there is no law which says that, say, Femina, Chandamama, or Janasatta - or for that matter, Banta Singh Santa Singh Foundation for Whatever- cannot rank B-schools, is there?.

What has made the process of ranking slightly tough for the publications this year is the decision by all IIMs not to participate in the ranking (I guess, the same for FMS Delhi, but am not sure)... and XLRI, Jamshedpur is participating on a selective basis.

But, the 3 rankings - by Business World, Outlook and AIMA-Business Standard - published so far are worth looking at:


A. Business Today (June 19, 2005)

A couple of years back, BT had decided that since verifying the information given by the B-Schools is virtually impossible, it is more convenient to evaluate the B-Schools as "Brands". This year too, the ranking is based on "Brand Loyalty + Price Premium", etc.

...er ...pardon this extremely stupid question: when you select a B-school to study in, is it really like buying a soap?)

Their 2-stage methodology is interesting:

Stage 1: How do you shortlist the 30 B-schools to be ranked?
Just ask

101 MBA aspirants (out of more than 100,000 who sat for CAT, and more than 50,000 who appeared for XAT), and

75 recruiters (sample: "a mix of managers from companies with revenue less than Rs 500 crore and more than 500 crore" - so precise!!!)

Stage 2: And how do you arrive at the magical rankings?
Interview another 108 current MBAs, 88 young executives and 77 functional heads

Total Sample for survey: 449
(they ranked almost 1000 B-schools in the country!!!)

But Presto! - here are the rankings:

1. IIM, Ahmedabad
2. IIM, Bangalore
3. FMS, Delhi
4. IIM, Calcutta
5. XLRI, Jamshedpur
6. IIM, Lucknow
7. IIFT, Delhi
8. Symbiosis, Pune
9. JBIMS, Mumbai
10. NMIMS, Mumbai

... Which may look OK at a first glance, till you look at the details in the pages that follow. Some startling revelations from this study:

IIM, Bangalore does not feature in the Top-10 list of Recruiters' Choice.

A recruiter would rather go to KJ Somaiya or to Symbiosis or to IIFT (nothing against these institutions - they are good in their own ways) than to IIM Calcutta

An MBA aspirant, given a choice between ITM Ghaziabad and IIM, Calcutta, is likely to join the former

For that matter, an MBA aspirant is likely to select ITM Ghaziabad or Alliance or Amity over XLRI Jamshedpur (which does not even feature in the Top-10 of the Wannabe MBA's choice.

Needless to say, such findings would shake one's faith in reality as one knows it!!


B. Outlook (September 15th, 2005)

This one looked like a more comprehensive and rigorous ranking - what with 6-7 well-defined parameters. Pretty honest also, since the magazine mentions that out of the invitations it sent to 950 B-Schools, only 234 responded. To clarify to the wannabe MBAs, as to why there were so many B-schools who refused to participate in the survey, page 62 clarifies:

"The were all wrong: they didn't have a clue about how B-School rankings are done; many, who sat in their cosy, air-conditioned offices, were criticising it only because their particular institutes had been ranked low in some surveys; then there were those who were shell-shocked by their institute's ranking and opted out of most of surveys."

Notable among these B-Schools, who
(1) had no "clue about how B-School rankings are done", and
(2) "were shell-shocked by their institute's ranking"
were the IIMs, XLRI (and I guess, FMS, Delhi), who refused to participate in the ranking survey

Nevertheless, for some myterious reasons (or not so mysterious either - I mean, how do you justify the validity of your objective B-School Rankings, if they don't feature the IIMs in the top-10), the magazine did rank IIM A/B/C... Based on "secondary data"...

So here goes... Have your pick:

1. IIM, Ahmedabad*
2. IIM, Bangalore*
3. IIM, Calcutta*
4. MDI, Gurgaon
5. SP Jain Instt, Mumbai
6. IIFT, New Delhi
7. NMIMS, Mumbai
8. XIM, Bhubneshwar
9. ICFAI, Hyderabad
10. IMI, Delhi
(* did not participate in the survey - ranking based on "secondary data")

Ok, if MDI did not feature in the top-10 of the earlier BT survey, or if the FMS Delhi or XLRI Jamshedpur does not feature in this list... Well, your luck!... Take your pick!!!


C. AIMA-Business Standard (BS, September 15, 2005)

Ah.... Finally a "politically correct" survey!

This one does not "rank" but "grades" the B-Schools - and publishes them in "alphabetical" order (don't know how many people read the fine print that the following are the Top 10 A+ B-Schools, and are not ranked from 1-to-10

Bhavan's SP Jain Instt, Mumbai

DMS, IIT Delhi

IIFT, New Delhi

IMT, Ghaziabad

IRMA, Anand

MDI, Gurgaon

NITIE, Mumbai

University Business School, Chandigarh

XIM, Bhubaneswar

XLRI, Jamshedpur

OK, OK!!!... we will ignore the fact that "SP Jain Instt of...." is actually - and technically - "Bharti Vidya Bhavan's SP Jain Instt..."... . Frankly, I did not know this... and therefore will naturally lead the pack of A+s

Just a slight of hand (or pen), one will say... :)

Postscript: Since the issue/dynamics of "Why Rank/ Be Ranked/ Rely on Ranks" has alrady been covered in an earlier posting - The Maya of B-School Salary - I have skipped that...

Manufacturing War (1): Kosovo Bombing

When Hitler's Minister of propaganda, Dr Joseph Goebbels said: "Tell a lie hundreds of times - and it becomes a truth", he knew what he was talking about.

Mordern wars and media (more specifically, PR agencies) have grown together (after all, the PR industry was an born out of WW-I).

Here are excerpts from an interview with Mr. James Harff (director of Ruder & Finn Global Public Affairs) given to Mr. Jacques Merlino, associate director of French TV 2, in Paris in October 1993.

(Ruder & Finn is a public relations company, and was working for "the Republics of Croatia and Bosnia-Herzegovina, as well as for the opposition in Kosovo" during the early 90s...)

-------
Harff: For 18 months, we have been working for the Republics of Croatia and Bosnia-Herzegovina, as well as for the opposition in Kosovo. Throughout this period, we had many successes, giving us a formidable international image. We intend to make advantage of this and develop commercial agreements with these countries. Speed is vital, because items favourable to us must be settled in public opinion. The first statement countsThe retractions have no effect. .

Question: What are your methods of operation?

Harff: The essential tools in our work are a card file, a computer, and a fax. The card file contains a few hundred names of journalists, politicians, academicians, and representatives of humanitarian organizations. The computer goes through the card files according to correlated subjects, coming up with very effective targets.

The computer is tied into a fax. In this way, we can disseminate information in a few minutes to those we think will react (positively). Our job is to assure that the arguments for our side will be the first to be expressed.

Question: How often do you intervene?

Harff: Quantity is not important. You have to intervene at the right time with the right person... ...

Question: What achievement were you most proud of?

Harff: To have managed to put Jewish opinion on our side. This was a sensitive matter, as the dossier was dangerous looked from this angle. President Tidjman was very careless in his book "Wastelands of Historical Reality". Reading this writtings, one could accuse him of of anti-semitism.

In Bosnia, the situation was no better: President Izetbegovic strongly supported the creation of a fundamentalist Islamic state in his book "The Islamic Declaration". Besides, the Croatian and Bosnian past was marked by a real and cruel anti-semitism. Tens of thousands of Jews perished in Croatian camps. So there was every reason for intellectuals and Jewish organizations to be hostile towards the Croats and Bosnians. Our chalenge was to reverse this attitude. And we succeded masterfully.

At the beginning of August 1992, the New York Newsday came out with the affair of (Serb) concentration camps. We jumped at the opportunity immediately. We outwitted three big Jewish organizations... We suggested to them to publish an advertisement in the New York Times and to organize demonstrations outside the U.N.

This was a tremendous coup. When the Jewish organizations entered the game on the side of the (Muslim) Bosnians, we could promptly equate the Serbs with the Nazis in the public mind.

Nobody understood what was happening in Yugoslavia. The great majority of Americans were probably asking themselves in which African country Bosnia was situated. But, by a single move, we were able to present a simple story of good guys and bad guys, which would hereafter play itself.

We won by targeting Jewish audience. Almost immediately there was a clear change of language in the press, with the use of words with high emotional content, such as "ethnic cleansing", "concentration camps", etc. which evoked images of Nazi Germany and the gas chambers of Auschwitz. The emotional charge was so powerful that nobody could go against it.

Question: But when you did all of this, you had no proof that what you said was true. You only had the article in Newsday!

Harff: Our work is not to verify information. We are not equipped for that. Our work is to accelerate the circulation of information favorable to us, to aim at judiciously chosen targets. We did not confirm the existence of death camps in Bosnia, we just made it known that Newsday affirmed it... We are professionals. We had a job to do and we did it. We are not paid to be moral.
----------

As another article mentions:

"Public relations firms have also played a major role in misinforming the public by sending out a steady stream of press releases to the American and European media, as well as to the United Nations, with the primary purpose of painting the Serbs as barbarians. Ruder Finn, a major PR firm, sent out reports that Serbian men had raped 50,000 Muslim women. This highly publicized report led women around the world to condemn Yugoslavia, and the Serbs in particular. A subsequent investigation by the United Nations revealed that 800 rapes occurred, and that they had been committed by Serbs, Croatians and Bosnian Muslims alike. Again, the correction went unnoticed by the media.

In 1995, the city of Srebrenica, a terrorist base for Islamic forces in Bosnia, was attacked by Serbian troops. The media reported the massacre of 8000 Muslim men, and the Serbs were immediately accused of a campaign of genocide. Such accusations brought pressure to put Serbian leaders on trial, and a War Crimes Tribunal, controlled by NATO and held in the Hague, proceeded to do just that. Nevertheless, the bodies from the alleged Srebrenica massacre have never been found, leading one to ask, on what did the tribunal base its charges of genocide? Three weeks after the battle of Srebrenica, Croatian General Agim Ceku led a devastating artillery bombardment of the Krajina, a Serb-inhabited region of Croatia. Nearly 250,000 Serbs were ethnically cleansed from the Krajina in advance of the Croat onslaught. Since the US had covertly aided the Croats in what was called Operation Storm, the massive Serbian tragedy went virtually unreported in the North American media, in contrast to the media blitz covering Srebrenica."


... Of course, the Kosovo massacre/liberation/bombing (or whatever!) was neither the first - nor the last - in a recurring phenomenon of the violent 20th century. We still carry its legacy - and illusions - into this century...

Sources:
Western PR Wars
PR Firms Create an Appearance of "Genocide"
Media on Trial
Operation Storm

9/11 vs. Belgrade '99

Disaster's - specially the man-made ones - are always painful and sad spectacles, wherever and whenever they occur.

But some get converted into a "brand" (and their "brand value" is leveraged for many new forays and expansions). Others, unfortunately get forgotten - they fade away as mere cruel footprints on the shifting sands of history.

Nothing demostrates this phenomenon more accurately than these parallel picture of

9/11 (when the suicide bombers crashed their planes into WTC), and

Belgrade '99, when the NATO planes (headed by U.S. Air Force General Michael Short) bombed it to primitive ages (78 days, 10,000 sorties, 7000 tons of explosives (including depleted uranium bombs and cluster bombs), to destroy 50 bridges, 6 trunk roads, 5 civilian roads, 20 hospitals, 30 health centers, 190 educational institutions, 12 railway lines... Among numerous lives)

[try if you can distinguish the "terrorist attack" from the "collatoral damage"]


















Sources:
1. Emperor's Clothes - Death on a Very Small Planet
2. Damage to Civilian Infrastructure in Yugoslavia
3. Anatomy of Collateral Damage