Tom Friedman's column on Tata's small car...

http://www.iht.com/articles/2007/11/04/opinion/edfried.php?WT.mc_id=newsalert

The Emasculation of Mr.Singh

It was amusing to watch the volte face done by the PM Mr.Manmohan Singh at the HT Leadership summit a few days ago. This volte face has shattered the facade of Mr.Manmohan Singh as one of the select few politicians who have an iota of integrity about them. In trying to save his government the blushes, Mr.Singh has shown himself to be no different from any other politician. Given the stature of the PM and the importance he attached to the deal, people atleast expected him to stand up and call the bluff of the Left. Alas power can do strange things to even the best amongst us.

In the ruckus over the nuclear deal, I see a sinister plan by the Left to position itself as the alternative to the Congress and the BJP. Though the Left doesn't have a significant base in India other than in Kerala and West Bengal, it has hogged the national limelight now as a result of the ineffective leadership of the BJP. The Left is cleverly using this opportunity to increase people's awareness of its policies while keeping the government in limbo. In my opinion, the threats of the Left are just canards being played out to the media. The Left is enjoying its role and will not want to bring this government down at any cost. Who knows what the elections might hold for them?

To conclude, I think the Congress will lose whatever groundswell of support it has currently if it goes on without doing much to improve the levels of governance. It is now for the Congress to decide if it is willing to be in a worse situation much later.

Are we going ballistic over the nuclear deal?

It was fascinating to see the high drama being enacted over the N-deal in India. What was baffling to me and surely to most Indians was the stage at which reservations were being expressed over the deal. After the agreement was signed in July 2005, there was a period of 2 years during which the Indian government was negotiating ostensibly in national interest with the US to arrive at a fairer agreement. This is what happens when we give some parties especially the Left in India the opportunity to shape policy without being accountable whatsoever for any of the hardships involved with its implementation.

When you sit across the table with seasoned negotiators such as the ones the US has, its very hard to get any traction on most issues. When compared to other negotiations such as the Doha round of trade talks, the US has been far more conciliatory in granting India what it wanted on many aspects of the N-deal. Any international agreement has some trade offs built in to it. Otherwise the two negotiating parties would have never been able to face their respective domestic constituencies without accusations of a sell off to the other. What is striking is the unpragmatic stance adopted by both the left and the BJP in this matter to dogmatically insist on a deal that is blatantly India sided.

Coming to the points of opposition the Left has over the deal, India's loss of strategic sovereignty on its nuclear programme shouldn't be a big deal for the Left considering its opposition to nuclear weapons of any kind. Its hard to understand the Left's U turn on this issue as they have been consistently critical of the US for triggering a global arms race. It remains a totally different issue that both Russia and China have also been doing the same and have been long standing influences on Left policy in India. Coming to the next point of opposition that the Left has to the deal, India's strategic alignment with the US makes much more sense than the alignment India had with Russia. Maybe the Left wants us to forge a completely unrealistic alliance with China-a country that build roads connecting it to Mt.Everest and Pakistan without taking Indian sentiments into consideration. Russia is today a dangerous country in terms of the direction it can go in and India needs to be careful about dealing with forces in the country today. In a situation where even Pakistan is experiencing domestic trouble, India needs strong allies to help it in the event of a war like situation.

India's image in the world community as a progressive nation embracing the winds of global change are at test today with this deal. What India does today will influence the image of India in the west far more than in the past. Its time for India to stand up and be counted amongst the leading nations of the world. Lets not throw it all away at this juncture.

United Nations Talk by Jiddu Krishnamurti on Peace in Our time

Probably since the beginning of man, human beings have had no peace at all. And there have been a great many oganizations, including this organization, to bring about peace in the world, pacem in terris. But there has been no peace. For various obvious reasons: nationalism, which is glorified tribalism, various opposing religions, divisions of classes, races and so on. There have been divisions on the earth from the beginning of time: the family, the community, bigger community, the nation, and so on. And also from what one observes, religion has been one of the causes of wars. One sees the Israelis and the Arabs, the Hindus and the Muslims, the Americans and the Russians, ideas against ideas, ideologies opposing ideologies, the communist ideology and the so-called democratic ideologies. Why is it, after all these millenia upon millenia, why is it that human beings throughout the world don't live in peace? Why is it our society in which we live, whether it is the American society, the European, or Indian, or Japanese, that society has not given us peace either. That society, the culture, the tradition, is created by all human beings. We have created this society. We are responsible for this society, which is corrupt, immoral, violent, divisive, cruel and so on. We have created this, this society in which we live. We are the society.

Please the speaker is not a communist in the orthodox sense of that word. We are what we have made of the society. So we are society. That is a fact, not an exotic or stupid, irrational thought. We are society. Each one of us have made this terrible confusing, contradictory, brutal society. And until human beings, each one of us, radically transforms himself we will have perpetual wars, there will be no peace on earth. Religions have talked about it endlessly. The popes, the priests, local parish clergyman, have talked about peace. This Institution, with all its power, with its position, with its international grasp, this Institution has not brought about peace either. Forgive me for saying this, if you don't mind. And will institutions, foundations, will they ever bring peace on earth? Or it doesn't lie in that field at all - organisations or institutions, propaganda and all the rest of it? Or do we realize, each one of us, I am asking this most respectfully, do we realize that we are responsible for this? Not intellectually, or verbally, or just accepting a theory, but we are responsible for this horror that is going on in the world; every form of violence, terrorism, wars, we are responsible for it. War is not in Beirut, it is in our hearts and minds. This has been said so often, one is rather bored by all that. And we human beings seem to be incapable of living peacefully in our relationship with each other, living peacefully without any dogmatism, ideals, concepts. Because beliefs, faith, conclusions, ideals, have separated man. And man apparently has not been able to live without any of those bondages. Man is conditioned, human beings right throughout the world are conditioned. Their brains have been moulded according to a particular tradition, various forms of superstitions called religion. And is it possible for human beings wherever they live to be free of their conditioning? The conditioning as an American, as a European, Hindu and so on, is it possible for us, who are so advanced in technology, is it possible for us to radically, fundamentally, bring about psychological change? This is really a very, very serious question. This is what the biologists, bio-technologists are trying to do - trying to bring about a radical change in the very brain cells themselves so that human beings can live peacefully, not everlastingly fight each other.

So facing all this, not abstractly, as a human being, what is he to do actually? Form another group? Another religion? Another Institution? Or as a human being become aware of his conditioning? Be concerned with his conditioning and free the brain from that conditioning? Otherwise we are going to have perpetual wars, there will be no peace on earth in spite of all the religions, in spite of every institution. It must begin with us, not without somebody else out there. So is it possible to bring about a deep mutation in the very brain cells themselves? Why are human beings so conditioned - Germans, French, Russians, Italians, British, Americans, Hindus and so on, why? Is it because we want security, both external and inward? Is there such security inwardly, psychologically to be safe? Is there such security? Or psychological security is an illusion? We can go into all this in detail but our time is very, very limited.

So is there psychological security, either in the family, in a group, in a community, in a nation and internationalism and all that business? Is there any kind of security inwardly? And that is, if we are not sure about that, certain, clear, we try to seek security outwardly, externally, through nations, through religious oganizations, through some ideologies. So it is very important, it seems to one, that we should talk over together now and discover for ourselves if there is an inner security - security in our relationships with each other, however intimate it may be, between man and woman, security in community and so on. Is there security in our relationship with each other, man and woman, wife and husband? If there is security why is there such contention between man and woman, wife and husband, such conflict in their relationship, each one pursuing his own ambitions, his own fulfilments, his own desires and so on. Is it not important to find out for ourselves if there is such security in relationship. If there is such security in this then that security is the beginning of peace. If there is no security in our relationship with each other that is the beginning of conflict, war.

So we ought to really seriously enquire into this question. That is, become aware, conscious, of our relationship with each other because to go very far we must begin very near. And the nearest is man and woman, wife and husband. In that relationship there is conflict as there is now, then that conflict is spread, ultimately war. We have never given thought to this, that as our house is burning, which is society is burning, declining, degenerating, are we all so degenerating? To slide, slip down, implies our whole life is a routine, our whole life is a series of battles, struggles, conflicts. If we don't alter there, how can you bring about peace on earth. It seems to logical, so rational, sane, but we don't do that. So could we, as human beings, not as Americans and all the rest of that business, could we as human beings become aware, pay attention to our intimate relationship because unless the psychological world is quiet, sane, peaceful, that psychological state will always overcome every kind of organization, whether it be communist organization, totalitarian, or so-called democratic organization. The psyche is far more important than the external legislation, governments and so on. I wonder if one realizes all this? Do we, sitting here, peacefully, so-called peacefully, realize our responsibility as human beings? The wars that are going on in the world is our war, because our consciousness - if I can go into all this much more deeply - our human consciousness, which is made up of biological reactions, fears, hurts, pleasure, beliefs, dogmas, rituals and endless suffering, that is the content of our consciousness. If you observe this closely it is a fact that every human being throughout the world shares this, every human being suffers, every human being has fear, pleasure, sense of loneliness, despair, anxiety, confusion, every human being, whether they live in the Far East, or here, or in Russia, or in other places. We have been brought up, educated to consider ourselves as individuals. Is that so? Is that a fact? Because we share the consciousness of humanity, because we all suffer, we all go through great agonies, boredom, every form of uncertainty. You may have great talents, great capacities, but behind those capacities lies the ordinary, daily consciousness of all humanity. So each one is humanity, not separate individuals. I know you will not accept this because you have been conditioned from the beginning by religions, by society, by culture, that each one is separate individuals, separate soul. And therefore he must seek his own salvation, his own expression, his own fulfilment. And this so-called separate individuality is creating havoc in the world, which does not mean that we all become the same automatic, turned out in the same mould. On the contrary, freedom is the highest form of existence. It is the greatest art, to live freely. But we are not free. One thinks one is free to do what one likes, specially in this country, each individual thinks he is supreme to do what he wants. His own fulfilment, the expression of his own desires and so on. But if we examine closely and seriously, we share the consciousness of the entire humanity. Because this is a fact. Individuality may be an illusion. And to that illusion we are committed. But when you travel around and observe very closely, every human being, whether he has great position, great deal of money, status, power, he is like the rest of the world psychologically, he goes through great pain, desperate loneliness and all the rest of the psychological world of uncertainty, confusion. And we are the rest of humanity. We are not Africans and Europeans and all that nonsense. We are humanity. Unless we realize that one major fact in our life, we are the rest of humanity, black, white, purple or whatever colour they be, psychologically we are one. Unless human beings deeply realize that we are going to have wars, we are going to be eternally in conflict, as we are now. And no organization in the world is going to change that fact. We have had religions all over, various types of religions, Catholic and Protestant, and the division in Protestantism. There have been religions of various types in Asia. All invented by thought. And thought has made man separate because thought is the result of experience, knowledge, memory and so thought is always limited. It is never complete, it can never be complete because it is based on knowledge and knowledge is always finite, limited. It can expand, it can change but it is still within the field of knowledge. And knowledge is always limited. And we try to change the world through our knowledge. And this experiment to change the world through knowledge has never succeeded.

So what is a human being to do, if you are serious, concerned, with the world, with your own life? What is a human being to do? Form innumerable oganizations, with their bosses and their secretaries and so on? Or each one of us is responsible because we have created this society, we are responsible for every kind of war. So is it possible, not merely intellectually, but actually, in our daily life, radically to change, bring about a deep mutation? Unless we are capable of doing that we are going to have perpetual wars. No organization in the world has prevented any wars. For the last historical process there have been practically wars every year for the last five, six thousand years, all over the world. And man has been responsible for these wars. You may not have a war in America, in this part of the world, but you have wars in other parts of the world because we are divided, as Americans and Russians, and English and French and all the rest of it, not only nationally but religiously, Christians, Buddhists, Hindus. So there is this constant division, both outwardly and inwardly, it is bringing about great conflict. We are one human being, not separate. We don't seem to realize that. You suffer, you go through great anxieties, uncertainties, so does every other human being in the world. And we haven't been able to solve that basic issue, whether we can live with ourselves peacefully. Peace doesn't begin on the other side of the world, whether we live peacefully, without conflict.

And I think this is a very important question which we must put to ourselves: why is it that human beings who have lived on this earth perhaps fifty thousand years, we have done extraordinary things technologically, we have done practically nothing in our relationship with each other? We are perpetually in conflict with each other, man and woman, and this conflict is extended into war. So we are asking a most fundamental question: why do human beings who have lived on this earth for so many millenia, who have done extraordinary things technologically, who have brought about good health for people, we have done the most incredible things externally, but inwardly we are savages. Forgive me for using that word. We are fighting each other, even in our most intimate relationships. So how can one have external peace in the world, pacem in terris, if one is not peaceful in oneself? We never answer that question, we are always trying to bring changes in the outer, but we never ask of ourselves why we live this way, perpetually in conflict. It is fairly obvious when you ask that question seriously, not casually, we never spend a day trying to find out why we live this way, building a vast network of escapes from this basic fact. And we are still going on. We never seem to realize that unless each one of us fundamentally changes radically there will be no peace on earth as long as you are an American, Russian, different ideologies, different concepts, different gods, and so on, we will never have peace on this earth.

So it behoves us, and each one of us, to find out why we live this way. And whether it is possible radically to change our whole psyche. If there is not a revolution there, mere outward revolutions have very little meaning. We have had communist revolution, French revolution, other forms of revolution throughout the world and we remain what we are, self-centred, cruel and all the rest of it.

I have finished sirs.

Indians in a state of denial about terrorism....

Recent events that have shown albeit inconclusively the links of Indian educated doctors to a botched attempt to blow up public sites in the UK have thrown Indians all over the world into a state of denial. The response of the intellectual elite in all the countries has been to state that these are the actions of a fringe group in Islam rather than the views held by the majority. I would like to explore in some depth if our attempts to add such a spin to events is facile.

It has become the standard response of Indians as well as others in the world to react to such incidents with the same nonchalance as any other. Whether it is Hindus desecrating mosques or Muslims joining the Global Jihad, our response has been that it is the fanatical few that are bringing disrepute to the overwhelming majority. Is this really true or do we want to stay in this state of suspended disbelief for ever? None of these events would have happened in a vigilant and aware civil society.

To brush these things under the carpet by saying that these are exceptions rather than the rule brings us to a more fundamental question? Why is it that these exceptions are not caught by the civil society or the law enforcing agencies early enough in India? Is it because we will be accused of prejudice if we act fairly? Is it because our views on religion transcend the views that we hold about our country? These seem to be some of the arguments that educated Muslims seem to be putting forward to justify these actions. I cannot still understand why Muslims in India should feel a deep sense of injustice towards what is happening in Chechnya? If they interpret this as a massacre of Muslims then what should be said about the nerve gassing of Shias and Kurds by Saddam-a Muslim himself? Are we so naive that we believe this so called theory of a global conspiracy against a community?

The only solution to prevent such problems from occurring in the future is to encourage a tolerant and aware yet vigilant civil society. None of these events could have happened without atleast a few of us in the know. Unless we stand up and confront these deep seated prejudices, we will only be saying the same thing for ever. Let us change so that we can prevent a repeat of the bombings that took place in Mumbai?

The irrelevance of the Left in today's policy debate

Two recent events exposed the stark reality of the irrelevance of the Left in shaping today's policy agenda in India. The first was the protests of the left to the docking of the USS Nimitz at Chennai. The incongruity of the event and the protests of the Left demonising the docking of the ship as India's abject surrender to the US is worth a dekko. The fact that US and India are embarking on a fresh chapter in their relationship speaks volumes of the new found maturity of the nations. However the Left still seems to be caught in a time warp and doesnt want India to get too close to the US. If not the US, does the Left want India to join forces with China or an irrelevant Russia? Chinese foreign policy has always been to keep India guessing and any talk of friendship is sheer optimism. The Left parties project the Indian dependence on the West as a sign of our weakness rather than as a sign of India's strength. A majority of the Indians have no qualms with our friendship with the US and aspire to the way of life there. Why does the Left still behave hypocritically when even China has adopted capitalism as the engine for its growth?

The second event that was not very publicised was the interview with Buddhadeb Bhattacharya on IBN. The West Bengal CM clearly said that he disagreed with the views of the Leftist economists on developmental policies. Such a pragamtic articulation by one of India's best CMs should jolt the Left out of its slumber and force them to re-think their policies. But the Left still seems to believe that what is good for Bengal is not good for the rest of India. It remains to be seen whether the Indian public will finally wake up and force the dinosaurs of the Left into extinction forever.

Is the Tiger on the verge of extinction?

One of India's finest species of mammals may soon be on the road to extinction unless we act immediately. According to recent estimates by the World Wide Fund for nature, the tiger population has dropped significantly from its levels in 1995. While at the turn of the 20th century, the tiger population was estimated to be 100000 creatures, the latest figure could be anywhere between 1500-3000. What is more alarming is the drastic fall that has occurred in the last 10 years. Years of official apathy have led this magnificent creature to wage a heroic struggle for its survival.

There are many reasons for the sad state of affairs today. The encroachment of the tiger's habitat due to the pressures of an evergrowing population demanding amenities for itself has been one of the primary reasons for the disappearance of the tiger. In addition large scale poaching especially in states like Madhya Pradesh have led to a significant decline in the population of tigers. The demand for tiger skins is well known throughout the world. However what is not very well known is the increasing appetite of the Chinese population for drugs that include the bones of the tiger amongst other ingredients. This demand is fuelling a large cross border illegal trade in tiger parts. What is perplexing is the attitude of the Chinese government if recent news reports are to be believed. A Chinese official has said that the ban on tiger trade in China may be lifted as early as this year. This is despite the recommendation by the WWF against lifting such a ban.

Drastic measures are called for in this moment of crisis. A nationwide educational campaign on tiger habitats will help tribals appreciate the importance of preserving the tiger for the ecological balance of the country. In addition special areas need to be reserved for the tiger where humans may not transgress. The government must take stringent measures against poachers even if that means deploying a special task force for the time being. In addition, the government must step up diplomatic pressure on the Chinese to prevent them from lifting the ban. Only time will tell whether we will be able to do something soon enough to protect the tiger from being seen in photos and videos only in the future. Will the government take a strong position atleast on this issue?

United Petty Alliance and the Presidential election

The UPA has proved itself to be as petty as the opposition it claims to be communal. The pettiness of the election for the highest albeit ceremonial post in India has turned out to be the biggest farce of the past few days. The UPA decided on Pratibha Patil's name as a fait accompli after the Left opposed every single candidate the Congress could think of. Since when have the people given the Left the job of deciding what is in the best interests of the nation? When we vote as the people of India, we believe in the principles India stands for and every candidate that is elected is no different when compared to any other. It is an insult to the collective intelligence of this country when the Left starts deciding who is secular and who is not. We the people are intelligent enough to discriminate between the two poles without having the Left guide us all the time.

Coming to the process of the election of the President, it was shameful to hear Mr.Dasmunshi, Mr.Pawar and Laloo telling India's eminent nuclear scientist and arguably one of its most popular presidents that his time was over. Retirement it seemed was also not going to be a matter of his choice. Many people have already written about the tokenism that was shown by the UPA when they announced Pratibha Patil as the symbol of women's empowerment in India. But what went unnoticed in all this din was Laloo celebrating womenhood when her name was announced. The people of this country remember distinctly the role of the RJD and the SP in scuttling the Women's reservation Bill in Parliament and don't need to be told about the emancipation of women by Laloo.

I have tried to understand the reason why the Congress was opposed to Mr.Abdul Kalam by watching the debates where their leaders participated. But I must confess that it was not at all clear to me why they were unwilling to consider his name again other than cite precedents. Don't they understand that what they have done has created a precedent that will be emulated by any party following them? In the interests of the nation, it is Ok to dump the Left.

Excessive profits and Pseudo-communism?

The events of the last month where the Prime Minister made a speech using Keynesian values as the basis for the cap on excessive profits of companies should make all of us as Indians in the next century reflect on the arguments presented by Mr.Manmohan Singh. As a counterpoint to the PM's statement I reproduce below Milton Friedman's famous article on the social responsibility of businesses.

The Social Responsibility of Business is to Increase its Profits

by Milton Friedman

The New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company.

When I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free en­terprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing em­ployment, eliminating discrimination, avoid­ing pollution and whatever else may be the catchwords of the contemporary crop of re­formers. In fact they are–or would be if they or anyone else took them seriously–preach­ing pure and unadulterated socialism. Busi­nessmen who talk this way are unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades.

The discussions of the "social responsibili­ties of business" are notable for their analytical looseness and lack of rigor. What does it mean to say that "business" has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but "business" as a whole cannot be said to have responsibilities, even in this vague sense. The first step toward clarity in examining the doctrine of the social responsibility of business is to ask precisely what it implies for whom.

Presumably, the individuals who are to be responsible are businessmen, which means in­dividual proprietors or corporate executives. Most of the discussion of social responsibility is directed at corporations, so in what follows I shall mostly neglect the individual proprietors and speak of corporate executives.

In a free-enterprise, private-property sys­tem, a corporate executive is an employee of the owners of the business. He has direct re­sponsibility to his employers. That responsi­bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con­forming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose–for exam­ple, a hospital or a school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services.

In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them.

Needless to say, this does not mean that it is easy to judge how well he is performing his task. But at least the criterion of performance is straightforward, and the persons among whom a voluntary contractual arrangement exists are clearly defined.

Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he rec­ognizes or assumes voluntarily–to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He ma}. feel impelled by these responsibilities to de­vote part of his income to causes he regards as worthy, to refuse to work for particular corpo­rations, even to leave his job, for example, to join his country's armed forces. Ifwe wish, we may refer to some of these responsibilities as "social responsibilities." But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are "social responsibili­ties," they are the social responsibilities of in­dividuals, not of business.

What does it mean to say that the corpo­rate executive has a "social responsibility" in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price in crease would be in the best interests of the corporation. Or that he is to make expendi­tures on reducing pollution beyond the amount that is in the best interests of the cor­poration or that is required by law in order to contribute to the social objective of improving the environment. Or that, at the expense of corporate profits, he is to hire "hardcore" un­employed instead of better qualified available workmen to contribute to the social objective of reducing poverty.

In each of these cases, the corporate exec­utive would be spending someone else's money for a general social interest. Insofar as his actions in accord with his "social responsi­bility" reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money.

The stockholders or the customers or the employees could separately spend their own money on the particular action if they wished to do so. The executive is exercising a distinct "social responsibility," rather than serving as an agent of the stockholders or the customers or the employees, only if he spends the money in a different way than they would have spent it.

But if he does this, he is in effect imposing taxes, on the one hand, and deciding how the tax proceeds shall be spent, on the other.

This process raises political questions on two levels: principle and consequences. On the level of political principle, the imposition of taxes and the expenditure of tax proceeds are gov­ernmental functions. We have established elab­orate constitutional, parliamentary and judicial provisions to control these functions, to assure that taxes are imposed so far as possible in ac­cordance with the preferences and desires of the public–after all, "taxation without repre­sentation" was one of the battle cries of the American Revolution. We have a system of checks and balances to separate the legisla­tive function of imposing taxes and enacting expenditures from the executive function of collecting taxes and administering expendi­ture programs and from the judicial function of mediating disputes and interpreting the law.

Here the businessman–self-selected or appointed directly or indirectly by stockhold­ers–is to be simultaneously legislator, execu­tive and, jurist. He is to decide whom to tax by how much and for what purpose, and he is to spend the proceeds–all this guided only by general exhortations from on high to restrain inflation, improve the environment, fight poverty and so on and on.

The whole justification for permitting the corporate executive to be selected by the stockholders is that the executive is an agent serving the interests of his principal. This jus­tification disappears when the corporate ex­ecutive imposes taxes and spends the pro­ceeds for "social" purposes. He becomes in effect a public employee, a civil servant, even though he remains in name an employee of a private enterprise. On grounds of political principle, it is intolerable that such civil ser­vants–insofar as their actions in the name of social responsibility are real and not just win­dow-dressing–should be selected as they are now. If they are to be civil servants, then they must be elected through a political process. If they are to impose taxes and make expendi­tures to foster "social" objectives, then politi­cal machinery must be set up to make the as­sessment of taxes and to determine through a political process the objectives to be served.

This is the basic reason why the doctrine of "social responsibility" involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce re­sources to alternative uses.

On the grounds of consequences, can the corporate executive in fact discharge his al­leged "social responsibilities?" On the other hand, suppose he could get away with spending the stockholders' or customers' or employees' money. How is he to know how to spend it? He is told that he must contribute to fighting inflation. How is he to know what ac­tion of his will contribute to that end? He is presumably an expert in running his company–in producing a product or selling it or financing it. But nothing about his selection makes him an expert on inflation. Will his hold­ ing down the price of his product reduce infla­tionary pressure? Or, by leaving more spending power in the hands of his customers, simply divert it elsewhere? Or, by forcing him to produce less because of the lower price, will it simply contribute to shortages? Even if he could an­swer these questions, how much cost is he justi­fied in imposing on his stockholders, customers and employees for this social purpose? What is his appropriate share and what is the appropri­ate share of others?

And, whether he wants to or not, can he get away with spending his stockholders', cus­tomers' or employees' money? Will not the stockholders fire him? (Either the present ones or those who take over when his actions in the name of social responsibility have re­duced the corporation's profits and the price of its stock.) His customers and his employees can desert him for other producers and em­ployers less scrupulous in exercising their so­cial responsibilities.

This facet of "social responsibility" doc­ trine is brought into sharp relief when the doctrine is used to justify wage restraint by trade unions. The conflict of interest is naked and clear when union officials are asked to subordinate the interest of their members to some more general purpose. If the union offi­cials try to enforce wage restraint, the consequence is likely to be wildcat strikes, rank­-and-file revolts and the emergence of strong competitors for their jobs. We thus have the ironic phenomenon that union leaders–at least in the U.S.–have objected to Govern­ment interference with the market far more consistently and courageously than have business leaders.

The difficulty of exercising "social responsibility" illustrates, of course, the great virtue of private competitive enterprise–it forces people to be responsible for their own actions and makes it difficult for them to "exploit" other people for either selfish or unselfish purposes. They can do good–but only at their own expense.

Many a reader who has followed the argu­ment this far may be tempted to remonstrate that it is all well and good to speak of Government's having the responsibility to im­pose taxes and determine expenditures for such "social" purposes as controlling pollu­tion or training the hard-core unemployed, but that the problems are too urgent to wait on the slow course of political processes, that the exercise of social responsibility by busi­nessmen is a quicker and surer way to solve pressing current problems.

Aside from the question of fact–I share Adam Smith's skepticism about the benefits that can be expected from "those who affected to trade for the public good"–this argument must be rejected on grounds of principle. What it amounts to is an assertion that those who favor the taxes and expenditures in question have failed to persuade a majority of their fellow citizens to be of like mind and that they are seeking to attain by undemocratic procedures what they cannot attain by democratic proce­dures. In a free society, it is hard for "evil" people to do "evil," especially since one man's good is another's evil.

I have, for simplicity, concentrated on the special case of the corporate executive, ex­cept only for the brief digression on trade unions. But precisely the same argument ap­plies to the newer phenomenon of calling upon stockholders to require corporations to exercise social responsibility (the recent G.M crusade for example). In most of these cases, what is in effect involved is some stockholders trying to get other stockholders (or customers or employees) to contribute against their will to "social" causes favored by the activists. In­sofar as they succeed, they are again imposing taxes and spending the proceeds.

The situation of the individual proprietor is somewhat different. If he acts to reduce the returns of his enterprise in order to exercise his "social responsibility," he is spending his own money, not someone else's. If he wishes to spend his money on such purposes, that is his right, and I cannot see that there is any ob­jection to his doing so. In the process, he, too, may impose costs on employees and cus­tomers. However, because he is far less likely than a large corporation or union to have mo­nopolistic power, any such side effects will tend to be minor.

Of course, in practice the doctrine of social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.

To illustrate, it may well be in the long run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government. That may make it easier to attract desirable employees, it may reduce the wage bill or lessen losses from pilferage and sabotage or have other worthwhile effects. Or it may be that, given the laws about the deductibility of corporate charitable contributions, the stockholders can contribute more to chari­ties they favor by having the corporation make the gift than by doing it themselves, since they can in that way contribute an amount that would otherwise have been paid as corporate taxes.

In each of these–and many similar–cases, there is a strong temptation to rationalize these actions as an exercise of "social responsibility." In the present climate of opinion, with its wide spread aversion to "capitalism," "profits," the "soulless corporation" and so on, this is one way for a corporation to generate goodwill as a by-product of expenditures that are entirely justified in its own self-interest.

It would be inconsistent of me to call on corporate executives to refrain from this hyp­ocritical window-dressing because it harms the foundations of a free society. That would be to call on them to exercise a "social re­sponsibility"! If our institutions, and the atti­tudes of the public make it in their self-inter­est to cloak their actions in this way, I cannot summon much indignation to denounce them. At the same time, I can express admiration for those individual proprietors or owners of closely held corporations or stockholders of more broadly held corporations who disdain such tactics as approaching fraud.

Whether blameworthy or not, the use of the cloak of social responsibility, and the nonsense spoken in its name by influential and presti­gious businessmen, does clearly harm the foun­dations of a free society. I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely farsighted and clearheaded in matters that are internal to their businesses. They are incredibly shortsighted and muddle­headed in matters that are outside their businesses but affect the possible survival of busi­ness in general. This shortsightedness is strikingly exemplified in the calls from many businessmen for wage and price guidelines or controls or income policies. There is nothing that could do more in a brief period to destroy a market system and replace it by a centrally con­trolled system than effective governmental con­trol of prices and wages.

The shortsightedness is also exemplified in speeches by businessmen on social respon­sibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal impulse.

The political principle that underlies the market mechanism is unanimity. In an ideal free market resting on private property, no individual can coerce any other, all coopera­tion is voluntary, all parties to such coopera­tion benefit or they need not participate. There are no values, no "social" responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form.

The political principle that underlies the political mechanism is conformity. The indi­vidual must serve a more general social inter­est–whether that be determined by a church or a dictator or a majority. The individual may have a vote and say in what is to be done, but if he is overruled, he must conform. It is appropriate for some to require others to contribute to a general social purpose whether they wish to or not.

Unfortunately, unanimity is not always feasi­ble. There are some respects in which conformity appears unavoidable, so I do not see how one can avoid the use of the political mecha­nism altogether.

But the doctrine of "social responsibility" taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a "fundamentally subversive doctrine" in a free society, and have said that in such a society, "there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

The UP elections-a psephologist's nightmare

People closely following the UP elections on the mainstream English media must be wondering why they got it horribly wrong despite their claims of large sample sizes and the like. Even the major national parties like the BJP and the Congress were at a loss for words when asked about the reasons for Mayawati's landslide win. A better understanding of the concept of critical mass helps explain the reasons for the failure of the national parties in UP.

Critical mass as a phenomenon starts to work when people base their decisions on the opinions or views of the others around them. Critical mass is often a winner takes all scenario and therefore both parties and companies need to understand what they need to do in order to achieve a point of critical mass beyond which there is a decisive movement in their favour-often a point described as an unstable equilibrium. In order to build up the momentum to achieve a critical mass, parties need to have a large proportion of die hard supporters which helps them turn other people into trying the product or policy. The BJP which once had the upper castes as their die hard supporters sadly seems to have lost the game this time with the BSP making inroads. The Congress has never had a die hard support base since their loss in 1989. This made it extremely difficult for both these parties to reach critical mass as they had to convert a larger number of undecided voters. The BSP and the SP however had their captive Dalit and Yadav votebanks that helped them reach critical mass easily.

The second important feature of the critical mass game is the extent of hate voters you have in the population. These are voters who are unwilling to try your party irrespective of your formulation. The BJP lost the game here as well with their Anti-Muslim rhetoric. Though the Congress didn't have too many hate voters, they were simply not seen as a viable alternative to the SP with the result being the BSP gaining. Both the Congress and the BJP need to introspect to see what they can do to change the rules of the game in their favour. The BJP can try a Centre-right approach for a start surely instead of clinging on to Hindutva.

The Presidential election

I am not sure how many people are following the Presidential election in India right now but it soon seems to be turning into a huge farce. To put things into perspective, the whole issue snowballed out of proportion when Mr.APJ Abdul Kalam was being touted in the media as the favourite choice of most of the people in India. People also felt that they needed an apolitical person if he wasn't re-elected. However the behaviour of the politicians in India needs serious introspection on our part.

First the Left parties were opposed to him on reasons that they could not articulate very well. This is despite the fact that he is a figure respected by many in the World and is admired almost everywhere he goes. He is a scholar on the Gita and is a Muslim by birth. Surely this must have been enough for the so called secular alliance to re-nominate him as the President. However the Left has shown that they are no better than others they claim to despise when protecting their vested interests(read Somnath Chatterjee). Surely a divisive figure such as Somnath who doesn't enjoy the support of the BJP shouldn't be foisted upon the country as a President if the Left believes that the President should be one who unites the country.

But Congress showed yesterday that they could stoop to much lower levels than the Left when they proposed Pranab Mukherjee, Sushil Kumar Shinde(Who?) and Karan Singh as candidates for the presidency. If you look at these candidates, does anyone in India think these honourable gentlemen have the stature to be the President of India? The next name that the Left will throw out is Jyoti Basu- a nonagenarian non-entity. This Presidential election was a chance for all the major parties to prove that they respected the wishes of the Indian people. Alas the Congress and the Left have shown that they are not holier than the BJP when it comes to petty politics.

UPA's non-performance under Manmohan Singh

The events of the past few months must have been distressing to a lot of Indians especially the way the UPA government has handled the issues of price rise and OBC reservations. I was recently watching an interview with Mr.A.B.Bardhan- CPI's general secretary who said that it was time for the Left to reconsider their support to the UPA government. Its been 3 years since the UPA came to power on the plank of doing something for the Aam Aadmi. The Left's discomfort is understandable considering the fact that they have a constituency to defend especially with the General elections in 2 years time. This is the right time for them to start the process and expect the process to end sometime later next year.

What is however appalling is the way UPA is still running the government without doing anything in the last few months. If the Aam Aadmi is not too happy with the increase in prices and the UPA allies are also not exactly ecstatic about its performance, Isn't it time for the PM to resign? Or does it mean that he wants to go on like this forever? What is especially troubling is his inability to influence even a spent force like Arjun Singh from shooting off his mouth on issues that require serious debate. India will do better to have its PM on the list of Time's most influential persons rather than the President of his party.