It's A Sick Society That Sees Frugality As A Threat, But Not Social Inequality

When I was in my late teens and early twenties, I was a lot more left-leaning than I am now. This was true even when I was at the capitalist bastion of B-school.

I could not bring myself to take a single elective in Marketing because I believed it was an evil profession. My classmates tried to assure me that Marketing only performed the benign function of determining people's needs and ensuring that they were met. I was convinced it was all about determining people's insecurities and exploiting them to create demand, which could then be satisfied by producing goods and services at the highest price the newly-created market would bear. I also detested the definition of "market" as including only those who could afford to pay.

Wants or needs? And can everyone afford what they want?
("The Toy Shop Window" by Timoleon Marie Lobrichon)

I often dreamt of a world where people would go to a shop and see plainly-packaged products labelled simply "soap", "toothpaste", etc. My observations were deemed amusing. My B-school classmates went on, almost without exception, to become captains of industry. I too followed, just at a more modest level in the corporate hierarchy. We all benefited from the existing world order.

Today, we're hearing it reported, entirely without irony, that the world is in danger of going into a deep recession because people are only buying essentials!

If that isn't an indictment of our society, I don't know what is. It's a bad thing when people only buy what they need? This is as jaw-dropping as banks classifying people who pay off their credit card outstandings in time as "bad customers" (true story).

We've been selling ourselves the narrative that growth at all costs is necessary for prosperity, and so staying out of recession is in itself a virtue. We've completely ignored increasing inequality as long as growth has continued in terms of aggregate numbers.

Now, elites hopefully understand that inequality threatens them too. The fact that Boris Johnson, who is as elite as they come, could find himself close to death, has no doubt shocked the entire cohort at the top of the pyramid. (At a human level, I'm glad he's out of danger now, but maybe it was a good thing someone from the elite did go through a scare in a high-profile manner.)

When we rebuild society after this pandemic (and there will be pandemics in future too, so going back to the way things were is not an option), we should pursue growth in a more equal fashion. Do what the profession of Marketing professes to do - determine the needs of *all* people (and satisfy them), not just the wants of those who can afford to pay for things. Better yet, ensure that everyone *can* afford to pay for the things they need. Then we can still have a multi-trillion dollar world economy, but not one that produces non-essentials for anyone who can afford to pay, but essentials for everyone.

If you don't like the word Socialism, let's call it something else. Rebranding is a capitalist skill, after all.

India Has No Excuse

I was shocked to read recently that China's GDP is 5 times that of India's. Five times! Not 20% more, not 50% more. Five times more!

How? How did a country with roughly equal population, and that was at roughly the same level as recently as the 1980s, end up doing not just slightly better, but so much better?

Why couldn't India achieve something comparable? If India's GDP could have been just three times what it is, can you imagine how many hundreds of millions of people could have been lifted out of poverty and into the middle classes? When you look at it that way, you have to conclude that a crime of incalculable proportions has been perpetrated on the Indian people.

I often hear Indians claim that India is poor because it was looted by its British colonialists for two hundred years. But the example of China shows that up as a mere excuse. The British left India two generations ago. Since then, if we compare India and China as two independent countries in charge of their own destinies, the British are nowhere in the picture. If China could progress so much in the same time, what's India's excuse?

Besides, being looted is hardly an excuse when one looks at countries like Japan and Germany, which were both utterly devastated and left in ruins after the Second World War ended in 1945, with a significant portion of their able-bodied men killed or turned into invalids. Yet in less than twenty years, both countries had not just restored their industrial strength but had also established themselves as manufacturers of quality. Being knocked down is no excuse for staying down.

There are those who will blame Nehru (who died way back in 1963) or the socialist policies of the Congress party. These excuses might be valid in a dictatorship. In a democracy, where people have a right to judge the performance of their government and to regularly reward and punish political parties based on their assessment, where does the buck stop?

I can only conclude that Indians' expectations have been too low for too long, and that they have suddenly woken up and realised that the rest of the world has passed them by. The one comparable country in terms of civilisational past, size of population and parity two generations ago, is now five times their country's size.

The blame lies with the expectations, attitudes and will to action on the part of Indian citizens.

A Label for the Rest of Us

Every revolution needs a handy slogan, whether it's "No Taxation Without Representation" or "Liberté, Egalité, Fraternité". The latest revolution, born of the economic crisis hitting the world, seems to be centred around the notion of "99%" to distinguish the rest of us from the "1%" to describe our oppressors. Now that we have our slogan, the 1% had better start shaking in their boots. The revolution is on.

The slogan of the Occupy Wall Street protesters was "We are the 99%". Now the respected Nobel Prize-winning economist Joseph Stiglitz has further fuelled the collective ire in a hard-hitting article by identifying "the 1%" as the cause of all of America's troubles.

This in a country so scared of socialism that a presidential candidate got into trouble for wanting to "spread the wealth around". One could argue that the irrational fear of socialism is what has landed Americans in this mess where 99% of the population is worse off than before, and 1% is far better off. I think it's the misunderstanding of the term "free market". It isn't about laissez-faire, it's about keeping markets truly competitive. I don't believe it was capitalism that has brought the US and the rest of the world to this pass. I think it's crony capitalism as perfectly described in Stiglitz's article, which is a horse of a different colour.

Somewhere, the ghosts of both Karl Marx and Adam Smith are laughing.