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Indian Economy--a different view.

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Humanity in search of a new narrative
Arun Maira, The Mint
Published on June 5, 2017
Economics must be redesigned to produce a better society,
rather than society being redesigned to produce a larger economy

The peace that followed “the end of history” in 1989 (according to Francis Fukuyama) with the victory of democracy and capitalism over authoritarianism and communism has ended. Geopolitics is back on the global stage. Globalisation is in retreat.

Within the victors of the Cold War—the US, Britain and the rest of Europe—the people are rising against the establishments that have ruled them. History has returned. There is war between a liberal order on one side and authoritarianism and populism on the other. As in Leo Tolstoy’s War And Peace, a narrative composed of many stories, many stories are inter-woven into this global narrative of rising tensions.
There is the story about the bottom-line struggling for attention from the top-line.

The story of gross domestic product (GDP) is about the progress of the top-line. It corresponds to reports of the top-line revenue of a company, whereas accounts of corporate profits and human well-being are stories about the progress of the bottom-line.
In the last 20 years, too much attention has been given to GDP—checked every quarter and in decimal points, to track the progress of countries, whereas creation of more jobs and livelihoods, and improvement of general well-being did not receive the same attention.At the end of the day, the bottom-line is what matters to shareholders and citizens. And just as chief executive officers are fired by shareholders if they do not produce profits (even if the revenue is rising), leaders of nations with high GDP growth, such as India, are coming under pressure to create livelihoods and to improve citizens’ well-being.

There is another story— a story of nations seeking “greatness” and respect in the world— competing with the story of economic growth. Authoritarian leaders obtain passionate support from citizens when they tantalize them with visions of their nation’s historical glory and its future greatness, even if their policies will damage their countries’ economies. Indeed, this emotional passion is what troubles rational economists, who find themselves on the back-foot when defending free trade and the balancing of national budgets.The rational economist’s narrative of competition and efficiency as necessary shapers of a healthy economy is being confronted by a counter-narrative of equity, cooperation, and solidarity as the forces that shape good societies.

In the economists’ story, freedom for capital, and flexibility for employers and investors, are the principal protagonists. In the other story, freedom for humans, and fairness for workers, are the heroes.
A deeper conflict is the war between two ideologies: the ideology of capitalism and the ideology of democracy. Capitalism runs on the principle of property rights. Democracy runs on the principle of human rights.

In governance by capitalist principles, one dollar equals one vote. Therefore, in the governance of capitalist institutions, such as joint stock companies, voting rights must be proportional to how much the voters own. On the other hand, in democracies, all human beings have equal votes, whether they own a billion dollars or none.

An old story of the people versus the establishment in the king’s court, which appears in many revolutions in human affairs, has returned, with mistrust increasing for both governments and big businesses.More troubling for citizens is the collusion between big businesses and their governments. In the US, Bernie Sanders and Donald Trump, both outsiders to the establishment, rode up on an anti-establishment wave. An anti-establishment movement has risen in Europe too. It also helped the Leave side win the Brexit referendum.The people are rising against experts. Brexiteer Michael Grove declared, “People in the country have had enough of experts.”

Narendra Modi said, “Hard work is more powerful than Harvard,” to counter the economists who had demonised his demonetisation of high-value currency notes. Whereas, economists framed demonetisation as a story about the condition of the economy, Modi framed it as a story about the condition of society— of an uncaring and greedy rich class and suffering people.
Underlying these competing stories is a chasm between the prevalent paradigm of economics and the reality of human society.

Economists say that free trade, globalisation, freedom for movement of capital, and protection of investor rights will lift global growth again. They are concerned about the stagnant top-line. Surely, a bigger pie must benefit everyone, they say. Whereas, the bottom-line reality is that people are experiencing a widening gap between the incomes and wealth of people at the very top and the rest.The people in the middle and at the bottom are not getting enough of the pie.

Automation technologies are advancing. They will produce more returns for their owners and fewer opportunities for human workers. Ultimately technology always benefits everyone, people are told. It is the further churning of their livelihoods in the meantime that they fear.
The ultimate purposes of economic development and technological progress must be to create a better world for human beings.

Economics must be redesigned to produce a better society rather than society being redesigned to produce a larger economy.Capital must serve people; rather than people serving capital. People want governance systems they can trust.

Capitalist and democratic institutions must evolve to serve the people better. The inherent tensions amongst them must be resolved too.
A new narrative of progress that is fair and inclusive must be written. It must be created collaboratively by many stakeholders. Experts must listen more to the people and less to themselves.

Hard facts and soft hearts must talk to each other.
The ability to listen to others, and especially to those who have different views of the world—to “people not like us”— is critical for shaping a narrative of inclusion in human progress and peace. The other competing narrative, on stage already, is violence within and between countries.
Arun Maira served in the erstwhile Planning Commission.
 
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Most socialist economists of erstwhile Planning Commission come out with sob stories being out of tune with new realities of a capitalist order . The old rhetoric of

shedding tears for the poor and the middle class in the name of democracy and equality has not many takers except those belonging to those classes.

Fair and inclusive probably means freebies for middle classes and the poor or more subsidies.It also means supporting an order where half the population lives on govt

doles and not working for a living.
 
Article is well written..Why can't capitalism & democracy coexist...Capitalism brings the money to be productively used..Democracy brings in fairness in dealings with people..The brain & heart have to co-exist too...In case of a bickering, there are avenues available for resolving the disputes...
 
Most socialist economists of erstwhile Planning Commission come out with sob stories being out of tune with new realities of a capitalist order . The old rhetoric of shedding tears for the poor and the middle class in the name of democracy and equality has not many takers except those belonging to those classes.

Fair and inclusive probably means freebies for middle classes and the poor or more subsidies.It also means supporting an order where half the population lives on govt doles and not working for a living.

The society has a common denominator. It is not as if the rich have been sent into this world by God to appropriate every comfort at the cost of the rest of the population. And history since ancient times tell us that these rich have also come from the same society only. Their circumstances and their equipments were different and they came up. So they can not simply ignore the less fortunate fellow beings.

Dhirubhai Ambani was born the son of a primary School Head Master in a place called Chorwad in the Porbhandar tehsil of Gujarat and at a very young age went to Aden to work. He "rose up" in the ranks and became a tally clerk in a shipping company. Then he saved furiously and with his savings came to Mumbai and started selling synthetic fibre yarns in the bylanes of Mumbai's bazaar. Then he decided to produce these fibres and also fabrics in India and founded Reliance Enterprises. the rest of the story is history now.

It is not as if the Dhirubhai was born with a silver spoon.

The labour class and the middle class (Dhirubhai belonged to both these classes when he was struggling as a young man) work for their survival. Those who are well equiped come up. It is just luck and circumstances. When they demand institutionalised help from Government they are not asking for the moon as the capitalists would like to make it out and as the free enterprise intellectuals of this forum would like us to believe. They ask only for enabling circumstances to be created by the Government so that they too can live and struggle with dignity.

Planning commission did the right thing. Their 5 year plans were excellant well thought out strategies to develop the country by appropriate allocation of resources as they accumulate. And India built its enviable infrastructure because of these plans. It is a different story that the rich manipulated to make most of the public enterprises sick and dormant. For example, the large percentage of NPAs carried by the State owned banks is the contribution of the so called rich capitalists who used to set up an industry with bank loans, make it sick by diverting capital and borrowed funds, avail sick unit refinanceing at concessional interest rates and with the money thus saved buy or set up new units to make their siblings chairman of such new unit. And they want today the Government to recapitalise the banks with people's money so that they can continue with their games.

Indian economic history is one of how the greedy, crafty and cunning rich class exploits the nations resources, cheats the Government, and finally puts the blame on the poor.

Krish44's post is an example of the last part of the preceding sentence. LOL.
 
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Indian economic history is one of how the greedy, crafty and cunning rich class exploits the nations resources, cheats the Government, and finally puts the blame on the poor.

Krish44's post is an example of the last part of the preceding sentence. LOL.


My up vote to you Sir



oped1-kFbH--621x414@LiveMint.jpg



[FONT=&quot]An old story of the people versus the establishment in the king’s court, which appears in many revolutions in human affairs, has returned, with mistrust increasing for both governments and big businesses. Photo: Reuters

Source: [/FONT]
http://www.livemint.com/Opinion/3NplsdFE1mJuBJjtvznTzO/Humanity-in-search-of-a-new-narrative.html
 
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Lol.

Vaagmiji,I am a product of the socialist order.

When disparities between rich and poor are very high, and resources are meagre one can think of apportioning them in a more fair way.

But in early nineties we took the decision to open out and dismantle the controls to release the animal energies in the economy.

From a hindu rate of growth of 4% throughout, we got into a growth spiral.of 8-9 %.

While it is conceded that disparities increased between the rich and the poor, it took govt out of various unimportant sectors leaving the private sector to grow without

hurdles.

Our private sector turned india around and made it a booming economy.

Our middle class lifestyles improved with all discretionary consumer durables becoming easily available at competitive prices and our middle class lifestyles also became better with

goods and services available at competitive prices.

Lifestyles of the poor and the marginalised definitely have improved due to increased social sector spending and making education ,health care accessible at low costs.

It could be still better . For that poor need to have motivation to work which is killed by making everything free or highly subsidised.Reservations of various types have

lead to a more equal society.

It is fashionable to bash up the productive industrialists and those who are creators of wealth. Only if wealth is created , it can be shared.There is no sense in

distributing poverty.lol

We are brahmins. We are the privileged class. We walk into any job in govt or private based on education and playing the brahmin card and connections.{ in places like

delhi , this is quite common.].

Top MNCs hire the forward castes as many forwards are entrenched there and would give a helping hand to others belonging to our community.

Why blame the marwari , baniya or gujarathi industrialists alone?

If tax rates are unreasonable, there is a tendency to avoid or evade by all.-irrespective of the class they belong to.

Fixed salary earners pay their taxes as it is cut at source.

All find tax sections under which they can get tax concessions.

This blame game is equally practised by all.

No sense in singling out any section.
 
We are brahmins. We are the privileged class. We walk into any job in govt or private based on education and playing the brahmin card and connections.{ in places like

delhi , this is quite common.].

Top MNCs hire the forward castes as many forwards are entrenched there and would give a helping hand to others belonging to our community.

Krishji,

I have been in North for last 27 years..I have never seen any Brahmin even from North India getting jobs using the Brahmin tag in the private sector..May be the Brahmin tag gets them a job of cook or guard..Period!!
 
In the bygone years, you had to be an Iyengar to get ahead in a private firm in Chennai.
It might have changed now. In Marwari or Sindhi firms it would be a definite advantage to belong to that community.
Parsi's were definitely favored in Parsi firms.

Then again not many Brahmins own businesses that hire.
 
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Neither communism nor capitalism is the ideal economic system.
One stifles innovation the other leads to excessive greed and inequality.
Controlled socialism also failed in India.
We are still looking for an ideal economic system.
 
Lol.

We are brahmins. We are the privileged class. We walk into any job in govt or private based on education and playing the brahmin card and connections.{ in places like

delhi , this is quite common.].

.

This situation may be true at Delhi but not definitely in Tamil Nadu

One cannot generalize Brahmins as privileged class and tend to walk into any job in Govt or private....

There are prominent lawyers at Chennai and there are leading Chartered Accounts also

There were Brahmins doing successful business in most of the fields

And one need not be an Iyengar only to get a job with either TVS Group of companies or Hindu

There are also other companies like Simpson, Amalgamations, India Piston, TAFE Group

And there are WS Insulators, Sankar Cement, etc

There are lot of other Industries and Catering Establishments, owned by Brahmins, not to speak about IT Companies owned by them now.

With the quota system followed by the Dravidian parties in Tamil Nadu over the past sixty years, Brahmins were excluded in getting Medial seats, Engg. seats in Good Educational Institutions (except a most powerful) and are completely out of contention in State Government jobs.

 
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On one hand we crib about Brahmins not getting jobs and on the other hand, we are proud of Brahmins owning businesses. Where is the disconnect?
 
Krishji,

I have been in North for last 27 years..I have never seen any Brahmin even from North India getting jobs using the Brahmin tag in the private sector..May be the Brahmin tag gets them a job of cook or guard..Period!!
Throughout fifties and sixties,Tamil brahmins got into IAS and allied services in very large numbers.

Their children got admitted to top engineering and medical colleges since there was no reservation policy and parents many times on phone calls could get admissions.

Jobs in private was got on brahmin or college connections of parents.

I am from north.

You have to have the right connections . Thats all.

This is nothing peculiar to brahmins. All communities take care of their kith and kin.

But one thing. A small percent thrive on connections. The majority follows the normal route based on marks ,interview and merit.
 
But one thing. A small percent thrive on connections. The majority follows the normal route based on marks ,interview and merit.

Out of 1000 new employees may be 2 or 3 come through some recommendation..Even these people, if they are not meeting the organizations' requirements are shown the door in 6 months...This is my experience in private sector (IT)
 
Out of 1000 new employees may be 2 or 3 come through some recommendation..Even these people, if they are not meeting the organizations' requirements are shown the door in 6 months...This is my experience in private sector (IT)
It is not that those who come thru recommendations are incapable.

When too many similarly qualified are trying for a limited number of positions,an extra push at entry level helps. Later on they normally come up on own merit.

These days every professional is on sites like Linked in , where more than qualifications it is the connection of the professional circles that helps job change.

Social skills and contacts in addition to professional competence matter in finding better jobs.
 
Returning to the subject of the thread, the way indian economy works is interesting.

Industrialists use liberally bank money mostly to set up their business.Banks lend money getting a nudge from political class.When one PSU bank lends. Other PSU banks follow the

bank and also lend to the same entity thinking it is safe. So far a NPA, it is always three banks or more who have lent.The promoter hardly brings in anything much

and manages papers to show he has brought in seed capital thru various methods. Big corporates have multiple companies and presence abroad to show capital inflow.

Similarly, every year small farmers agitate for loan waiver.The rich farmer with large holding with money borrowed from banks gain when it is written off.Small

farmers unless they have got money from banks do not get anything much. They mostly borrow from local money lenders or micro finance companies who have tough

recovery procedures.It is the small farmer who commits suicide.
 
The way Indian economy functions is interesting.

The wealthy industrialists live om bank money.Rich Farmers like to depend on write off of bank loans, free power and fighting for more MSP.Workers in organised sector

look for pay revisions and higher DA to compensate for price rise.Govt types live with subsidised housing , almost free medical care.Private types look for perks-

company leased house, Cars given to them almost free after three years of their own use. Educated Jobless live on govt doles and freebies.

I keep wondering who works and earns salaries which they spend .

I do not know who are the persons who are not covered by any of these classes.

They must be doing something drastically wrong that they are starving for a living.

They must be belonging to some unorganised class which cannot fight fight for its rights.

Yet There are a few who die of starvation. Perhaps they lack the capability to identify with some class which can bargain to get them something to live on.These are the ones who need empowerment.

They might be adivasis ,tribals,belonging to remote areas not part of the main stream.

I went all over south in last three weeks.

In all places I went I found people well clothed, fed and who could find a place[at least pavements or huts] to live.

Not anyone dying of starvation etc.

India has become more affluent.One can see the change in cities and rural areas.

Thats why I take sob stories on poverty with a pinch of salt.

There is money for people who want to make it if they are prepared to work hard if not intelligently.

We did not have these oppurtunities when we were young.
 
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