Saturday, February 04, 2012

Humanity is digging its own hole.

Humanity (through government, public and private sectors) is making wrong developmental choices on behalf of living beings by only using financial value-add as a measure to compare between alterative ends. Such choices theoretically ought to get made based on the maximum longer term financial and non-financial value-add to the maximum number of living beings(through long term impact on living beings, their surroundings and their relationships).

Unfortunately these decisions get made more on the basis of short term tangible impact of the choice on the (sometimes sub-group of) local people, their relationships and their surroundings.

The foolish criteria of "cost of financial capital", which is used to guide investment decision making is hopelessly inadequate due to its miserable short termism and subvertibility. This measure focused only hides the selfishness in the intangible (non-financial at decision time, but strategic and financially relevant in the long term) impacts of investment decisions on living beings.

The capitalism of Adam Smith, which posits that self-interest constitutes a method of social organisation, around the current means of investment for production and the subsequent distribution of the needs of humanity is a bit flawed. Till all humans correctly understand their enlightened self-interest, Adam Smith's capitalism is vulnerable to subservsion by empire-building ignorant humans and groups of humans, who do not understand how their ignorance causes their own misery and that of the rest of humanity.

Potential solution

Trusting unenlightened humans or groups of human (without adequate education and training and sensitivity) with making choices for the best interests of humanity is dangerous. Putting too much trust in systems and procedures to guard against the risk is not the solution. Unless financial cost of capital is supplemented by adequate social and environmental cost benefit criteria at all levels of decision making, humanity is systematically digging its own hole by making seemingly good choices, which if reflected adequately may be poor choices.

There is a need to raise the purity of intentions, skill of implementing

intentions and knowledge of how actions compare in purity and skill at all

points of time.

IPR, Slavery, Emerging Value Chains

I think that way humanity defines and manages the institution of property is part of the problem and hence part of the solution.

If humans were to correctly define, separate and manage the personal from the non-personal, then many problems would go away.

The thought, speech, actions of humans impact the non-personal and the personal. The impact on the personal is change in mental and physical habits. The impact on the non-personal depends on the overall impact of all actions of individuals on humanity and environment. The impact on humanity manifests in social habits, economic habits and political habits, while the impact on environment manifests in weather and climate change.

The right way of defining personal as separate from non-personal is ensure that the group decision processes ensuer that each personal choice has the possibility of influencing the final non-personal outcome fairly. If the social, economic, political institutions through which humanity or its sub-groups make multi-level pipelined decisions resulting in the final outcome are not compliant with the values of equality, fraternity, liberty and justice, then the outcomes may be more favorable to fixed sub-groups than others. This constitutes structural barriers to the simultaneous freedom of all humans and must be dismantled. Affirmative actions to compensate for past structural unfairness, also becomes easy to understand and justify this way as needed to dismantle the structural barriers.

On an average, when the "number of levels" and "time length of pipeline" increases, structural barriers for viewpoints of subgroups of humans to propagate in pipeline creep in quickly. Whenever such a situation arises, the right way to solve the problem is to first see it clearly by seeing data for ALL the levels simultaneously to detect the location of the problem clearly. Once the problem is clearly seen, it is easy to solve by removing the barriers to smooth flow.

Based on the above and based on my own experience, I am certain that humanity is digging a hole. The creativity of hungry and naked people can be bought cheap and sold dear using IPR as a tool of exploitation. The situation whereby cheap Indian labor is overworked in poor working conditions on notional T&M basis, where the intermediaries keep telling them that their IPR is useless and worthless to force cheap sale of IPR and/or free value-add to T&M services (by "some silly offshore back-office native kid" desperate to make a mark and rise in local "hierarchies") is no different from the slavery described by Eric Williams (in Capitalism and Slavery).

But coming from poor, hungry and powerless dalit India, having been through this whole chain and having seen it all, I now see new chains being setup, which will enable the creative labor of dalit India to reach western markets without passing through non-dalit intermediaries, whose value chains too have no place for dalits, under some silly reason which they shout hoarsely, calling as merit.

Exposing Manuvadi Fraud Logic Against Reservations

My position on reservations for MBC (the lower-castes among OBCs) is similar to my position on dalits. Reservations are meant to address long term problems of dalits and MBCs because long term solutions alone are possible to these problems. Short term solutions are neither cost-effective, nor stable solutions to their large scale and scope structural problems. So just because a particular politician tried to make short term political capital by scheduling the announcement close to elections in 3 states, that
does not change this fact and does not raise any doubt in the minds of dalits and OBCs. Nevertheless it does seem correct to criticise the timing of the announcements.

An industry which has merely sat on its haunches on for so long without doing anything for dalits and MBCs will do nothing for them, unless there is a financial incentive to do and/or a financial dis-ncentive to not do. The owners/manager of private sector firms cannot be relied on at all in this regard, because they use the support of the state seek to prevent implementation of the goals of our state. If they do not yield to voluntary/mandatory affirmative actions, dalits and MBCs may need to force nationalisation of such manuvadi firms, through putting political pressure applied through elections.

India needs to take a stand. Growth without social justice increases social injustice against those kept away from the growth. This cruelty must stop immediately.

It is utter nonsense to say that foreign capital/firms will move away due to reservations. The truth is that if Indian industry is able to leverage the cheap human capital of 300 million dalits, the business case of Indias outsourcing revolution and general sustainable competitiveness can only improve. Far from reducing quality, voluntary affirmative actions without compromise on quality will further increase the perception that India provided best value by providing excellent quality at cheapest prices for a much much longer time. India should not allow entrepreneurs to make profits while destroying longer term profitability.

On the contrary if India does not harness the creative capabilities of dalits through supporting affirmative actions, not only will the cheap human capital advantage fueling Indias competitive advantage sputter and die, Indian industry would have lost the first real opportunity since Independence to REALLY solve the problems of economic and social inequalities without having to take from peter to pay paul in REAL ECONOMIC terms. The reason for this will be that the wealth re-distributed to dalits will be come more from the economic growth, than from the prior wealth of non-dalits.

The essential problem seems to lie with the poor quality of decision making by manuvadi financiers who are in control of India along with entrepreneurs, who are trying to merely make quick bucks at stock markets, but destroying long term value in the process. Clearly manuvadi Idiots who run Indias
financial institutions need to read the Mckinsey article which explains all this clearly. They are stealing from the nations future to line their pockets in the present.

Impleenting reservations for dalits properly is the only way to prevent frittering away of Indias sustainable competitive advantage in the Global economy. The dalits who become productive economic agents through education, employment, enteprise will save the money to invest in the development of
dalits. If dalits are not made productive through reservations in this way, non-dalits will need to continue to fund the investments to enable dalits to escape their enforce low-value-adding economic lives into more productive value-adding-creating lives.

India needs reservations.

We need to dump the manuvadis into the Arabian Sea, Indian Ocean and Bay of Bengal as appropriate and get on with implementing reservations fully. After all democracy values representativeness higher than efficiency in the functioning of its instititions for obvious economic reasons, elaborated above. And markets and related freedom of choice will ensure that the minimum standards remain high in all these institutions.

I just don't understand what the hoopla is about

Of course you will notice that I have left the argument about improving our civic and social values as a nation totally. The economic argument of sustainable development of Indias competitive advantages itself is enough to expose the manuvadi fraud logic against reservations.

Give Dalit Merit A Chance

The inappropriate allocations by the allocative forces in the Indian economy (planning commission, government executives, private sector management, private sector fund managers) are sure to be less profitable uses of Indian (and foreign money) given the evidence described in following link.

The reason such inappropriate allocations happen is because those in allocative roles of funds to competing uses are either not aware of or do not care about or even worse are incapable of making allocations which will be win-win for different communities, society and the environment.

The spurious "merit" of the idiots who have been allocating Indian and foreign capital to its multifarious uses in India need to be exposed as merely being a selfish cover for a 50 year conspiracy to earn unfairly high returns for the capital owned/controlled by non-dalits.

The non-dalit oligopoly which controls the allocations of Indian capital to its uses in government, public and private sector needs to be dismantled. A body truely representing the interests of the WHOLE of Indian needs to replace them.

Down with "merit", up with "dalit". Let "the elite" win.

The incompetent people who have ruled India for 50 years with only marginal change in the situation of dalits should not be allowed to rule India by merely claiming to be meritorious, when their merit just does not show.

Give true dalit merit a chance

Should there be reservations in tertiary education?

India has democracy and markets. This means that state is not merely
responsible for primary and secondary education, which the constitution
explicitly exhorts it to, but also for “equality of opportunity” in tertiary
education, employment and enterprise and generally in social life.
Presumably those who keep repeating the above argument imply that markets
can be trusted (without state intervention) to provide “equality of
opportunity”. But data shows that this is not the case. One wonders then,
what is the basis of the argument at all? Markets are embedded in societies
and merely perpetuate the omnipresent casteism exactly because of the nature
of distribution of capital and the prejudices/ignorance/entry-barriers of
capital. Else how can the human capital of 300 million dalits stay
under-priced in the global labor market over such a long horizon? If state
does not fulfil its above responsibility of providing equality of
opportunity, presumably elections are the way that the polity uses to
enforce its will on the state. Since too little dalits are able to use the
facilities provided in tertiary education, employment, enterprise et al,
presumably the remaining dalits should vote against these reservations and
in favour of the primary and secondary education. But this is not happening.
The dalit vote is not divided on this matter. Please correct me if I am
wrong. The reason for this is simple. The facilities for tertiary education,
employment, enterprise are like a window of opportunity from which dalits
expect a lot. They know that Indian society is hypocritical and will not
politically support the large scale radical reform in educational system,
enabling politicians keep giving multiple excuses while making token noises
and doing nothing in practice. But the community hopes that the
beneficiaries of the facilities of education, employment and enterprise will
expand the window further and further (not by expanding reservations, but by
feeding-back investment into dalit development), till the wall containing
the window itself crashes and all dalits can get out of the prison of
hand-to-mouth existence that they have been locked into for generations.

I have no conclusive argument to offer on the tenability of reservations
policy for OBCs, but I am firmly of the belief that the case for
reservations for dalits remains water-tight. The clear visibility and
measurability of reservations enables them to be a better measure of state
activity than the fuzzy “large scale and large scope focus” on primary and
secondary education – a project whose cost and viability lies undefined and
whose execution requires much larger effort than anyone has cared to
describe. Even the much shouted and touted project of building a ring of
highways is better defined than this much-much more mega project, no details
of which are available. But such token speak suffices for those whose kith
and kin do not suffer. The rest of us prefer the tangible security of
measurable and visible devices like reservations.

Finally reams of media arguments mean nothing in front of democratic opinion
in theory and in practice. Social values represented by media are hostage to
the elites in all societies. In democracy there-fore their social value
positions deserve no higher priority than the social values expressed by
democratic opinion. So in summary…I just don’t get what is the hoopla is
exactly about when you ask whether this is the kind of India we want. Let us
ask the polity what kind of civic society we want. People are not idiots in
the long run. Your fears are unfounded. Stop taking those outside the media
and those whose opinions are explicitly ignored by public media as idiots.
We have a democracy here. What is happening is just that the masks are all
coming off. Trust democracy and hold tight as India starts accelerating
towards actually becoming a democracy.

Dalits and Development

Eric Williams book (Capitalism and slavery) describes how low productivity levels are associated with slavery.

Labor productivity figures in Indian manufacturing are chronically lower than many other countries. Could the chronically low labor productivity of Indian labor be related to the caste-system because like slavery it restricts upward social mobility and hence the marginal utility of incremental labor units? In this context, will it be correct and/or accurate to use the difference between productivity of Indian labor and average productivity of non-Indian labor to the cost-drag caused by the caste system on the Indian economy?

In Eric Williams book, he also says that as technology changes the productivity figures and hence social pattern of production, social values and hence laws/policy-regimes change.

With liberalisation, privatisation and globalisation, Indian manufacturing has grown its labor productivity using technology and needs less labor units to create the same level of output. The social pattern of production changed in both the manufacturing and services sectors to favor labor with a higher level of skills.

Due to the prior inequitous ownership of property and hand-to-mouth existences preventing surplus tradeable/investible value from labor, dalit castes have traditionally not been able to educate/skill themselves for higher skilled employment and/or fund productive enterprises as much as non-dalits were able to. The caste system created structural barriers for dalits to enter educational institutions, enter gainful employment and start productive enterprises and prevented the development of dalits in education, employment and enterprise. In fact the caste system prevent protection of even the human rights of dalits. Development remained a distant dream.

With LPG, the Indian economy has seen a lot of growth. But this growth has not trickled down to dalits due to the structural barriers mentioned above, which prevent dalits from increasing the surplus value from their labor units and trading/investing this surplus value to improve their skills, get gainful employment, create productive enterprises and eventually improve their quality of life, health and property.

On the contrary, LPG has increased the level of skills required to compete and reduced the number of labor units required thereby driving down the value of the cumulative labor units of dalits to abysmal levels. In the absence of a social security system to fund the lives of dalits who have been made redundant and/or the non-implementation of minimum wage regulations for those who have to accept lower wages due to increased competition for the reduced labor units, the conditions of dalits are worsening even while the Indian economy is growing.

Yet over the last 50 years, due to reservations a small group of dalitshas managed to improve their skills, get gainful employment and has setup productive enterprises. Due to the emergence of this category, the cumulative surplus value of the dalit labor and dalit capital has begun rising. Many of these dalits are directly and indirectly contributing to the growth of the surplus value of the labor of similar other dalits by investing in their development by launching schools, launching enterprises and employing dalits. Since the number of such dalits is very low, it is neccessary to retain the reservation policy which helps in growing the number of such people. In addition to this enabling these dalits to improve the surplus value of their labor and capital through high-end-education and training and through encouraging them differentially to launch productive enterprises focused on speeding up the process of dalit development (schools, colleges, placement agencies, dealerships, sales agencies, D2D product/services like marriage bureaus, investment bureaus, co-operatives, banks, etc) with state support in financing and preferential procurement will go a long way in leveraging the investments made by India in creating a pool of well educated and well trained dalits through the reservations policy.

This approach is justifiable because non-dalit entrepreneurs are less equipped to understand the credit risks, the product/service preferences and the cultural uniqueness of dalit customers and more important may not invest their profits in the development of dalits. So dalit entrepreneurs should be protected from non-dalit entrepreneurs who enjoy advantages in terms of capital, experience social networks in operating such business and may use these to displace dalit entrepreneurs. The nature of protection can be like the protection given by India to the Bombay club entrepreneurs against foreign entrepreneurs. This protection can be reviewed and dismantled later.

This seems to be the only comprehensive way of developing dalits without needing massive outlay of money at one shot. It is time to adapt the policy-regime to facilitate development of dalits in this way in the changed social pattern of production, which provides higher return to knowledge/skill than to manual/mechanical labor or to capital