Krishval Musings

Monday, 30 March 2015

Harsh Truths about Laissez-faire (Free Trade).

Business Philosophy of the WASPs 

WASPs expand as “White Anglo Saxon Protestants”, neither a religious nor an ethnic group but a business culture of the Western Europe that encourages innovation, exploration and passion for achievement and growth. They prefer a strong capitalism with least interference from the government. Armed by two ideologies, democracy and Laissez-Faire (‘let do and let pass’ meaning deregulated free trade), world economy has been under their direction for the last 400 years. It is empowerment of the corporate sector to run the economy. Anglo Saxon governments, generally well organized, provide political and military support to their businesses under any circumstance - and at all levels - to secure their interest and domination in world commerce/industry/trade.  The USA stands as an extreme example of pure Laissez-faire.  
The strong belief in Anglo-Saxon economies is to create and keep increasing shareholder/owner’s value. The survival and success of the CEOs depend only upon their ability to maximise it. In recent years financial experts capable of   manipulating figures and play in speculative deals are preferred as CEOs.
Economic approach in the rest of the world is more after equality than wealth. Stake holders (employees, creditors, customers, government and public) are respected as partners in progress and not viewed as an unavoidable burden. It l has a social quality and social nets so that workers are not being reduced to cost factors. Anglo Saxons strongly believe that liberalised economies welcoming foreign capital and skilled labour produce greater overall prosperity, while the others counter argues that regulated economy will produce lesser inequality and lesser poverty at the lowest margins.  

WASP philosophy strongly advocates self reliance and initiative. During the great economic depression in 1929, the Anglo Saxon pundits advised that Government charity, especially robbing people of initiative, would be a great error.  President Herbert Hoover warned that American people should not look for help from the Federal Treasury even during national crisis as it might become a practice in future. When there was vociferation that 600 families control and enjoy the wealth of America, he said “confiscation of wealth may satisfy the vengeful in us and may soothe a retaliatory spirit. But it is the path of national suicide. Objectives of planned economy should not be made to depend upon popular decision.  Planners must control the people and be vested with full authority.”  Many government regulations introduced under the New Deal progamme to revive the economy after the depression was removed when normalcy returned.

 It supports national businesses against foreign competition and restrictions but will be unmerciful if they run into trouble.  Bank failures in the USA are very common and the FDIC’s statistics reveal 3560 bank failures since 1934.  Many prominent multinationals of yester years ( Pan-Am, Chrysler, Chase Manhattan Bank) had disappeared or have lost their identity. Both share and stake holders are expected to manage their risk and protect them from failures as there will be minimal government interference.
“They should pay for their irrational exuberance”, cried the conservatives who opposed the US government efforts to bail out  the scandalous big fish like Citicorp, AIG, Goldman Sachs and a few others  during the 2008 financial  crisis. The US Congress approved a rescue package of 700 billion dollars as a temporary cure for the crisis because of its contagion impacts, but made it clear that it will not set a precedent for a government bailout in future.  A few corporations who availed of the rescue funding have already repaid part amount.

The US government operates like a business house.  Extreme steps such as shutting down the functions of the Government like an industrial lock out are common.  President Obama shut down the Federal government for 16 days in Oct/2013 when the Congress refused to provide extra funds to run the government.  Eight government shutdowns were recorded in the last 40 years. Detroit city was declared bankrupt in 2014 due to lack of funds. These actions will never take place anywhere in the rest of the world.  Hire and fire policy is widely practiced with no exception even to top ranking CEOs.  Unceremonious sacking of Vikram Pundit, CEO of CitiGroup who rescued it from bankruptcy is the recent example. 

Will this philosophy which religiously follows the Darwin’s theory of “Survival of the fittest” fly in India?  
The hangover of government control and support is still strong among the public.   This philosophy will be disliked by politicians as it will put a stopper into their personal and party kitty. A decade ago, India was under heavy pressure from the West to liberalise its banking sector.  Nobel laureate Joseph Stiglitz complimented India for resisting pressure to deregulate.  She was able to maintain her economic balance during the global turmoil in 2008, thanks to the stubbornness of the then RBI Governor Dr.Y.V. Reddy.  Hasty deregulations by aping the USA will only complicate the system and make corruption totally untenable as our law enforcement machinery is weak.

“Inclusive growth”, the recent Mantra adored y India, is diametrically opposite to Laissez –faire.  Many sops under this programme are aimed to capture vote banks. The word ‘inclusive’ has a complex meaning and dimension in India, not just confined to economic backwardness.   Inclusive Growth may temporarily reduce inequality but will add more to the prevailing lethargy and will be counterproductive in the long run.  India is still confused about a suitable economic model. Many of her policies have become ineffective due to cutting a middle path to satisfy everyone. India is a typical middle path monger.  


Anglo Saxons will gun down a limping horse but Indians will not. 
Although successful and admired, pure laissez-faire is a misfit for a soft and developing country like India where stakeholders prevail over shareholders. It can have only an information value in economics text books. India needs fair trade not the Anglo Saxon style of free trade.

Dr. Krishnan Arunachalam

Ref: The Great Depression by Don Nardo

(Published in Mylopore Club Magazine Mar/2015)

Monday, 2 March 2015



“Over the next few decades, as we tried to reach education to the lowest common denominator, we constantly lowered standards so that the weakest could catch up. As a result the average intellectual capacity of our nation today is determined not by our brightest, but by our dumbest.”  (Ghazala Wahab
India enjoyed an enviable reputation in the international theatre due to her very rich culture and heritage derived from high level of education.   Bharath produced many scholars, philosophers and scientists whose research works were stepping stones for the entire world.
Education which brought fame and respect to India all these centuries is being spoiled by short sighted approaches and deliberate dilution of standards. Indian education which was in the hands of highly dedicated and erudite scholars supported by philanthropists who respected  education is now being managed by  selfish and rapacious politicians, movie magnates and fake holy men.   Education which was revered and respected is now reduced to a business where students are looked upon as customers.
There is a big clamour about the declining standard of our education and the below 30% employability of the graduates/post graduates.  The unscrupulous mass education programme has precipitated several malpractices   like   bribery , paper chasing, fake  certificates/degrees, showering of  high marks , appointment of less qualified tutors, mark sheet manipulations, name changing , copying in exams, impersonation of candidates,  tampering question papers, plagiarism,  cut &paste practice in research papers, making qualification insignificant  to price tags  for admission to professional courses and for recruitment of  teaching staff  and many more.   Majority of the students who have little interest and seriousness in learning but ambitious to get a degree are being pushed to pursue higher education. 
Lowering the standards to help the undeserving to get through is a dangerous trend that is swamping the educational system which will have a serious negative impact on the growth of the nation.    
Lesson from Ramayana
Private universities boast about their modern building, A/C classrooms, high style furnishing, restaurants, large play area, cultural activities and foreign tours etc. but are silent about the quality of faculty and standards of curriculum.  They try to sell not only low quality education but also false dreams to the innocent and ignorant boys and girls.  All universities circle around marks, grades and placements.
King Dasaratha got his four sons after a long wait.  He brought them up like jewels.    He was a very learned person who had a complete sense of value on education.  He could have easily built a mansion for the Guru Vasishta and asked him to give tuition to the princes for their education.  Instead, he sent them to Gurukulam where the boys had to stay at the Guru’s hut, sleep on the floor, fetch him water, clean his house, wash his clothes, do all services   and try to learn as much as possible. They learned the disciplined way and   realized the value of education.
                                              Sri Rama in Gurukulam

Education has to be earned. It is neither a product that can be bought over the counter nor a gift or compliment.  Mahatha Shramena, Mahatha Shradhaya cha” - We earn education with lot of efforts and dedication.
Removing all the bars like ethnicity, caste, religion, gender and financial capacity should be in place so that equal opportunity is given to all; but the standard bar should be elevated in post graduate and research studies to maintain high quality.  Higher education should be only for those who have the interest and ability to pursue it.
Guru Dhronacharya in Mahabharatha made it clear that he will teach and guide only the Kshatriyas (Royal family) in the art of warfare. Secular social scientists criticized it as arrogance of casteism.  His approach had no caste discrimination; it was pure rational thinking.  Kshatriyas have the natural inclination and seriousness to learn because it is required for them to run the government and protect their citizens.   Dhronocharya wanted only such students having the commitment and concentration to learn.
Ekaliva was an exception and not an example. Similarly a Sheppard called Kalidasa who became a great poet by the grace of Goddess Saraswathi was also an exception.
Dedicated teachers are vexed with the influx of unfit and disinterested students.   The system is further roiled as the teachers are made scapegoats for their poor performance.   The teacher/student relationship has become meaningless without mutual respect and trust. 
The low employability is not only due to rote education system but also the dilution of its standards.
Prof. Arun Kumar of JNU, Delhi wrote “Many Indian intellectuals tend to be “derived intellectuals” recycling knowledge from the West. Government’s ‘Make in India’ programme depends on strong R&D capability which in turn requires a dynamic system of higher education.”(The Hindu Jan/8/2015)      
Scholars including the President of India have been blathering about the poor quality of education.  No action will be taken because dilution has become a populist game to influence vote banks.  The deterioration is also due to depriving the deserved   from pursuing higher education due to socio-political pressure. Over pampering the weak at the cost of the qualified will backfire on the quality of the future teaching staff.
Indian education is becoming a factory where the students are manufactured rather than developed and groomed.  An army of mediocre graduates /post graduates rolled out of diluted education system are now available for the progress of India. Indian intellects are already puzzled to find the prestigious IITs and IIMs rank after 200 in the list of top universities in the world; netting them into the dilution process will push them further down in the list.   Education, the powerful weapon of India, is getting blunted; a bold corrective action is required sooner than later.
The procedure of Ramayana and Mahbharatha may not be suitable now, but they had the right approach for quality education. 

Dr. Krishnan Arunachalam

( Published in The Mylapore Club Magazine February/2015)