Tuesday, 31 August, 2010

Why does the universal become the peculiar in India?

An article in today’s FT (Search for a workable solution by Amy Kazmin) says, “Not every Indian company looks to the state to churn out the skilled manpower it requires. Larsen & Toubro, India’s largest engineering and contracting compnay, tries to bridge the skills gap with seven Construction Skills Training Institutes it runs across India… Yet L&T has struggled to find enough recruits, given the deep disdain for manual labour embedded in Hinduism’s hierarchical caste system. ‘It is not attractive because of the physical content of the job,’ says Mr Jayakumar. ‘There is a social aspect also; this will take time to change.’”

In a country where people carry human excreta for a living, why is Jayakumar feeding this rubbish and why is Kazmin swallowing it?

Anyway, I am yet to hear of any society that (as a whole) prefers manual labour to desk jobs. So why blame Hinduism for something universal?

And is there no chance that L&T’s curriculum or marketing is at fault?

Elsewhere, the article says, “In reality (…) corporate executives have quickly found that progress depends on the attitude of the training centre’s principals – most of whom are risk-averse career civil servants who still report to a sclerotic state bureaucracy.

Ms Gautam acknowledges that ‘there are teething problems’. At her training institute, for example, she has proposed letting hair and beauty students take commercial customers in their training salon, which would generate revenue to cover ongoing expenditure, such as hiring a technician to maintain the centre’s 100 computers. However, the idea has met with fierce resistance. ‘The principals are scared,’ she says. ‘For them, commerce is a very dirty word.’”

Kazmin obviously doesn’t think anything may be learnt by talking to any of those principles. For example, the principle in that particular school may have been reluctant to start commercial activities because that would mean competing with the very parlours that employ her students after they pass out. Or she may be plain lazy and not want any extra work.

Or she may believe, as other academics do, that places of learning should not get into commerce because there are potential conflicts of interest. There is nothing utopian in this. Many businesses would want the status quo and want academics to approve, if not praise, whatever they are doing; yet business as a whole benefits when research breaks the status quo, doesn’t it?

Anyway, why can’t the students simply be apprentices in regular parlours and pay more fees? Doesn’t that happen in many schools, including business schools? Why does the school have to be a shop?

My problem is not with this particular institute, of course, but with this type of one-sided reporting about the Third World, which by giving half or quarter of the picture only harms business. But somehow business likes it, or market forces should have brought in better journalism.

Sunday, 15 August, 2010

Broken families and rich individuals

In the video RSA Animate - Crises of Capitalism, David Harvey, a Marxist says that the present crisis has everything to do with fall in real income per family in the Western world; in this one, Crisis of Capitalism, The Critique,  someone debunks Harvey by pointing out that income per capita has increased and that the fall in income per family is simply because there are more families now, that is, if a population of 100 were split into 25 families of average size 4 (persons per family) 30 years ago, now that same population is divided into, say, 50 families of average size 2.

I have heard the same explanation from the Kublai Khan of capitalism, Jack Welch.

It looks too easy to be right.

First, where is the data? Let’s say fewer people are getting married in the West these days. Does that also mean that the size or nature of the family unit, on average, has changed drastically?

Second, if the income per family has dropped, why should one not worry about it? Doesn’t the amount a person spends, and saves, depend enormously on whether he or she is in a family?

Just take rent or mortgage. Suppose a family of four spends x by living under one roof (average spend per person = 0.25x); and a pair of divorced parents with the two children living with their mother spend 1.2x (father’s rent = 0.4x; mother and children’s rent = 0.8x; average spend per person = 0.3x, 20% more than the average for a 4-member family). Does that not make a significant difference?

Plus, the mother’s income may be less than her married counterpart’s because she has more on her plate (no-one to share her load with).

The father, on the other hand, may be spending more on conspicuous consumption than his married counterpart does.

In fact, both parents may be spending more on sex (wining, dining, gifting, grooming to entice mates, or straight cash) than they would have had they been in a family, where sex it is essentially a bonus (free gift?) of family life.

And while married parents (or parents who operate as a family in spite of not being married) may save to provide for the future, parents who do not operate as a family may, for financial and psychological reasons, save little.  

I mean, the word income has very different meaning when applied to a person than when it is applied to a company (where it means profit). So why don’t Western commentators take that into account?