Thursday 30 October 2008

Who's melting?

Will we say that a fall in book prices is an educational meltdown or a reduction in medicine prices is a medical meltdown? Surely, publishers and pharmaceutical companies lose money unless demand picks up at the lower price. Surely, the two effects do not always happen simultaneously. Yet we see the larger picture. We want ever more people to have medical care and education. 

Why then is a fall in share or real estate prices as a meltdown? Don’t we want more people to have homes or own shares in companies and be able to grow money? It may well be argued that those who stayed out of share markets because they thought share prices were too high will not come in once prices fall. 

It can be similarly argued that a poor person will be wary of medicine’s effectiveness once he can afford it. Does he actually feel so? There may be stray cases, but, in general, we see only good in being able to afford better health and education. 

Yet on purely economic terms, it isn’t so straightforward. When everyone is a MA, doctorate becomes the new MA. When everyone can work till 70, 20-year-olds find it harder to land jobs or negotiate salaries. By that logic, educated people should not want lower book prices and each layer of society, ranked in terms of access to medical care, should want medicines it can afford to be out of reach of the layers that come next. 

Of course, it’s more complex, because productivity increases, quality of life improves and the rest of it. Can’t similar good things happen with the stock market, at least over the proverbial ‘long run’?  Why can other meltdowns be confined to industries, but market meltdowns not stay confined to a class?

Jobless Muslims

On the 27th, the Times of India published an article titled ‘More Muslims studying, but can't find jobs’. Said it, “...does better education lead to better jobs? The NSSO reports reveal a mixed picture. Between 1993-94 and 2004-05 the proportion of employed who had studied beyond secondary level increased much more for Hindus than for Muslims. In rural areas, the increase was about 6% for Hindus, but only by about 3% for Muslims among men, and around 3% for women from both communities. In urban areas, among men, the increase was about 7% for Hindus compared to 5% for Muslims while among women it was 8% for Hindus and 6% for Muslims.

This is starkly reflected in unemployment rates, especially among educated persons. 

In rural areas, while 7% of Hindu graduates were unemployed, among Muslims this was more than double at 15%. In urban areas too the unemployment rate among Muslim graduates was double that of Hindus. 

This means that despite more and more persons getting educated, they are not finding jobs at the same rate — a share of the educated are remaining out of the workforce. It also indicates discrimination — your religion can make all the difference in getting a job, even if you have the same educational qualification. This is starkly reflected in the shares of educated among those employed. 

In rural areas, among men, 19% of employed Hindus had completed secondary or higher levels of education, while among Muslims only about 10% had studied to that level. In the urban areas, 48% of employed Hindus but only 26% of Muslims had secondary or higher levels of education.” 

The article was expectedly followed by more than thirty comments. By and large, the Hindus were criminally communal while the Muslims lamented. Only two offered explanations that disagrred with the discrimination theory. 

All focused on the difference in employment levels among the graduates, which is to be expected because most commentators are probably graduates themselves. (I doubt if the Hindus are educated in any other sense of the word.)

One gentleman said that Muslims were, in general, bad students. Another looked at the data from a different angle. He said the figures can reframed as saying 93% and 85% of Hindu and Muslim graduates, respectively are out of work. Put this way, the difference does not seem so horrifying.

I suppose the first had a well-founded point; the second didn’t. In a survey like the NSSO you expect little margin of error. Showing figures in your own way is to self-deceptive.

Some more things can be considered. 
1. What subjects did the two communities study? Obviously, not all subjects have equal demand.  
2. How long have the candidates been looking for jobs? If the number of educated among Muslims has increased rapidly recently, is it not possible that the average Hindu unemployed has been looking for a job longer than the average Muslim unemployed have? How do the chances of landing a job change with the length of job search? 

3. Is it possible that self-employed people reported themselves as unemployed? It is illogical to attribute an 8% difference to misrepresentation, inadvertent or deliberate. Yet history tells us that states have been boundaries have been redrawn, at least partially, based on misreporting. When Haryana was carved out of Punjab, it was alleged that many Punjabi Hindus reported their first language as Hindi so that they may have a Hindu state, separate from the largely Sikh west Punjab. 

4. How are the unemployed spread geographically? This one can lead to a chicken & egg problem.

If we explore these questions, will be denying discrimination? I don’t think so. I think we will just be separating the real from the reported. Let me recall the incident that makes me say so.

Many moons ago, I saw a TV programme where writer and lyricist Javed Aktar gave out a series of statistics to show that Muslims were grossly underrepresented in government jobs. Some months after that I came across a book on Kashmir, whose author I forget. Anyway, this fellow contended that Muslims were overrepresented in government jobs in Jammu & Kashmir! He argued that the key figure was not ‘population’ but ‘qualified population’. Once you looked at the latter, you realised that in J&K, especially the Valley, at every level, the Muslims’ share of government jobs was considerably larger than their share of the eligible population.  

Now, both gentlemen had axes to grind. Nonetheless, the latter’s point of view was more credible since it went deeper. That is not to say that bigotry against Muslims does not exist, or that we should provide fuel to Hindu bigots. It is to plead for some thinking.

For put yourself in the shoes of a young Muslim college student. The deck is most probably stacked against you in every way. Then, you read this headline: ‘Unemployed among Muslim graduates twice that among Hindus’. The related article insists that negative bias is the only reason for this disparity. What motivation will remain in you? Why will you want to ‘act Hindu’ any more?

Friday 24 October 2008

Bad language

The other night I was watching a Muslim gentleman being interviewed on TV. Quite typically he said that Muslims were being called terrorists and traitors while their contributions to the country are being forgotten; and that all political parties had cheated the Muslims giving them nothing in return to their votes. He added that the time had come for Muslims to unite in a separate party.

The interview triggered a question: Who is calling Muslims these vile names? 

I cannot deny that there is raving and ranting about ‘all terrorists being Muslims though all Muslims being terrorists’ and ‘the government is being soft on terror only because of Muslim votes’. Yet most of the discussion in media seems to be against such rubbish, not for it. 

Perhaps we’d all be better off if there was no discussion at all, because the more widespread and enduring damage of terror is psychological division. Ignoring the issue partially removes the terrorists’ – or their controllers’ – raison d'ĂȘtre. 

At the least, can’t the Muslim intellectual concede that most people, at least when appearing in media, speak against smearing them? Isn’t he too paying far more attention to a minority (the Muslim-baiters) than it needs? Will the protestors (against smear) continue if unacknowledged? 

Also, when we say that a particular community rebelled, do we, generally, mean a mass movement or do we mean that a few rebels came out of that community, though the vast majority of its members did nothing? Surely, we mean the latter. 

And this is not very unfair considering that the silent majority reap the benefits of rebellion if there are any; and if there are none, do nothing to disassociate themselves from the rebels, either because they don’t want to be branded collaborationists, or because they have better things to do than prove their innocence in ‘crimes’ they didn’t commit.  

Nonetheless, the layman in the majority community does want to hear more from the minority mouthpiece than justification for rebellion. He wants them to at bring a few home truths to the rebels. “Don’t kill, because we suffer the repercussions. Ask yourself what you have done to help yourself before blaming others. Don’t just say your government representation in jobs is disproportionately smaller than your share of the population: Ask why it is worse in the private sector, where, supposedly, merit rules. When you’re about it, look beyond raw population figures and count the number of candidates with minimum qualifications that you put up. Does the picture look so bad when you do that?” 

From the majority community needs to hear these for credibility’s sake. Or we go back to the logic of the Round Table Conferences: Since the Indians cannot sort matters out between themselves, we need to be there to keep them from each other’s throats.  

Finally, when a leader continuously complains about how his community is being marginalised and maligned, what is the solution he suggests? Is he for separation or integration? If he wants out, what is in it for him? Will he create another Pakistan or Israel? 

That is not to suggest that there was any lack of justification for either nation. However, it is to suggest that those about to be rescued should ask why the rescuer is so bothered, more so because he repeatedly insists that he has no personal axe to grind. Or they may find themselves trading one tyranny for another. Not that the new tyrant thinks he’s one; he believes he’s the only person who can keep chaos at bay.

Wednesday 8 October 2008

Buddhu and Buddha

This morning’s Times of India has a longish interview of Ratan Tata. Essentially, the old man is relived that "There is a bad M and a good M and we have made the transition." 

Very well. But certain excerpts are telling: 
TOI: What made you go to West Bengal in the first place? Buddhadeb Bhattacharjee? 
Tata: Did you say Mamata? (Laughs) Yes, it was Mr Buddhadeb Bhattacharjee. I have known him literally from the day he took over as chief minister from Jyoti Basu. We were at that time with the Haldia Petrochemicals Complex and because we had a problem, not with the state government, but with Purnendu Sen, we withdrew. At that time, I met Mr Bhattacharjee and was extremely impressed with his sincerity. And that sincerity has been there throughout. He told me that I should not withdraw and I told him we must but we would come back with a bigger investment to West Bengal because I believe he was doing the right thing. Then one day when we were inaugurating the cancer hospital in Kolkata he said why don't you bring your automotive project to West Bengal. I told him the incentives you have will not match with what other states are offering. And both he and Nirupam Sen (industry minister) set themselves the task of meeting what was needed. 

To be honest, he first offered us land at Kharagpur. But then that was far from Kolkata. I told him that if we wanted the project to be showcased to the world as a world-class enterprise, we should have it at a location where we could bring in our best people, give them the best schools, best colleges etc. In deference to my wish, he showed several plots out of which we found Singur most suitable. 

Unfortunately, what followed was something unexpected while we had something wonderful going. It would have brought investments to a part of a country which has been neglected. It was a forerunner of future investments in that part of the country.
 

In other words, he held a gun to Buddababu’s head. 

TOI: What is the loss to the Nano project because of time overrun? 
Tata: First of all, all the equipment will come good. So there is no loss on equipment. One may ask what have you left behind and how much of it is totally wasted. You can retrieve a fair amount of the fixed assets that you may have and relocate it. It is our view that in terms of the current year we will not have to reflect any appreciable loss in our books. We have also not discussed with the state government what we would do with the land because its still leased to us. The state government wants us to look at other projects, which we have agreed to do. We just said that we will do it if the environment is conducive, otherwise we will not. So it's not that we have walked out of West Bengal and left a crater or a barren piece of land behind.
 

Oh, but all along we were told that the slightest alteration in the configuration of the plant will make the project unviable. Now it’s being shifted across the subcontinent with minimal loss!

And some questions are not being asked at all. The Tatas were and are being given land virtually for free. The state governments are ready to bloody their hands and noses for the Nano’s sake. So what is Tata’s exit penalty? I mean, if you and I are in a deal, and I’m doing the dirty work, what do I get if you don’t, or can’t, do the good work? 

Second, we were told that this deal will generate jobs. Jobs for whom? If nearness to Kolkata was a criterion simply because the city gave better facilities to the employees at the plant, does it not mean that they were not looking at signing up hundreds of unlettered, underfed villagers. 

And why was all that followed the MoU so unexpected? Did Tata think that our most sincere Buddababu had dictatorial powers over Bengal, even if it was a benevolent dictatorship? Was one man’s word good enough to take a decision that big that it could make or break a state’s industrialisation? Is corporate social responsibility about charities or is it first about due diligence in running a business? 

TOI: From Bengal to Gujarat, it's the same country and two very different stories. What lessons do you draw as a senior business leader? 
Tata: I don't know how much problem that we faced was really that of the famers. I would just say that political opposition and political aspiration should always be subordinated to the better welfare of the country or the state. I don't know who would be the losers. You have talked about ourselves being one of the losers in the sense of losses owing to time overruns. But I wonder what we have left behind. I am sure West Bengal can attract other investments and will attract other investments and we will be as supportive as we can in attracting new investments. But what about the people who had aspirations for jobs? The people who have made this issue of land-for-land — will they prosper? Has anything been done to increase their yeilds, their income levels? Many of them are below subsistence levels — they say so themselves. On the one hand, they talk of drinking their money away or not having money, and on the other hand, they talk of having their land back. I mean are we doing anything to improve their lot? These are the questions that come to my mind. So, political opposition should hold the country first and not themselves. That's all I am saying. 


Wonderful! Politicians shouldn’t interfere in economics… or religion, or education, or sports, or culture. What is the politician supposed to interfere in? The politician is probably very happy to be everyone’s favourite scapegoat as long as he can enjoy his ill-gotten millions. But can we afford to do without politics? Who takes the decisions for the state, for us? 

Or are we switching to anarchy (as in the political term, not mayhem)? Does that work? Or will we need a state in cold storage to bail us out when everything crashes? Even Lord George of Bagdad is having a tough time rescuing Wall St. What happens when Main Street gets all dug up too?

By the by, why didn’t anyone bother about what form compensation will take? I mean, doctors don’t just push medicine done patients’ throats, do they? Why didn’t good corporate citizen Ratan Tata think a bit about the starving millions he was rescuing with his factory, instead of asking his minion Buddababu to give them cake since they didn’t have bread? 

Marx toiled in vain. Mr Tata and his ilk will bury capitalism without Das Kapital

Monday 6 October 2008

What matters is when

I just finished reading The Last Durbar by Shashi Joshi. This book portrays Mountbatten as the selfless umpire-cum-manager who guided the two infant domains and their infantile leaders through their darkest hour, insisting on certain minutes of protocol only because they were vital for prestige, which, in the absence of real administration, was the only leash on demonic rage.

In his India After Gandhi Guha complains that Mountbatten spent his entire life after his viceroyalty making sure a picture just like the one described above should emerge. This may not be wholly true, because he make it to the top of the British navy as well, though it was, perhaps, by then no longer a force to reckon with.  

Let us, for a moment, assume that the interpretation in The Last Durbar and similar books, like the pedestrian, popular Freedom at Midnight, is basically right. It begs a question.

Nehru, Jinnah, Patel and the rest were moderates. They were very far from revolutionaries, by any definition of the word, though they did fight for and, in the end, bring about momentous change. (For now, we discount the smart alecks’ attitude that all change in Asia, however large, is either evolutionary or a result of Western benevolence.) Why did they then behave ‘irresponsibly’? 

They may be some merit in the hypothesis that the politician’s and the historian’s (or umpire’s) time horizons, which force them to look from very different perspectives. 

Let’s look at a different area. A business professor may be all for long-term investments, in bets that, in spite of every possible precaution and calculation, leave plenty to chance. The businessman may realise that the future of his company in, say, a decade, lies in the bets he places now. But his shareholders will not always take the same view. Their needs and wants are likely to be immediate. 

In anciant times, when the stock market was coming into being, the time horizons were probably not so different. Technology was probably more predictable. If you didn’t commission a boiler this year, because shareholders were not for it, you could commission it the next, when the shareholders were more agreeing, and still carry on ‘as usual’. Therefore, the structure worked. 

It may not work so well today. That’s why some writers complain bitterly about the tyranny of the share market.

There may be parallels with politics here. Policymakers and lawmakers may well recognise the need for long-term thinking and the risks involved. But can their hands are tied by electoral politics, which would rather have Robin Hoods robbing the future for the present than philosophers starving the present for the future. 

In short, we are to blame for the bestiality of our leaders. We should decide our priorities and invite them to lead us accordingly.  

Why extreme

I just finished reading The Last Durbar by Shashi Joshi. This book portrays Mountbatten as the selfless umpire-cum-manager who guided the two infant domains and their infantile leaders through their darkest hour, insisting on certain minutes of protocol only because they were vital for prestige, which, in the absence of real administration, was the only leash on demonic rage.

In his India After Gandhi Guha complains that Mountbatten spent his entire life after his viceroyalty making sure a picture just like the one described above should emerge. This may not be wholly true, because he make it to the top of the British navy as well, though it was, perhaps, by then no longer a force to reckon with.  

Let us, for a moment, assume that the interpretation in The Last Durbar and similar books, like the pedestrian, popular Freedom at Midnight, is basically right. It begs a question.

Nehru, Jinnah, Patel and the rest were moderates. They were very far from revolutionaries, by any definition of the word, though they did fight for and, in the end, bring about momentous change. (For now, we discount the smart alecks’ attitude that all change in Asia, however large, is either evolutionary or a result of Western benevolence.) Why did they then behave ‘irresponsibly’?   

They may be some merit in the hypothesis that the politician’s and the historian’s (or umpire’s) time horizons, which force them to look from very different perspectives. 

Let’s look at a different area. A business professor may be all for long-term investments, in bets that, in spite of every possible precaution and calculation, leave plenty to chance. The businessman may realise that the future of his company in, say, a decade, lies in the bets he places now. But his shareholders will not always take the same view. Their needs and wants are likely to be immediate. 

In olden times, when the stock market was coming into being, the time horizons were probably not so different. Technology was probably more predictable. If you didn’t commission a boiler this year, because shareholders were not for it, you could commission it the next, when the shareholders were more agreeing, and still carry on ‘as usual’. Therefore, the structure worked. 

It may not work so well today. That’s why some writers complain bitterly about the tyranny of the share market.

There may be parallels with politics here. Policymakers and lawmakers may well recognise the need for long-term thinking and the risks involved. But can their hands are tied by electoral politics, which would rather have Robin Hoods robbing the future for the present than philosophers starving the present for the future. 

In short, we are to blame for the bestiality of our leaders. We should decide our priorities and invite them to lead us accordingly.