Book Review- Transforming Capitalism by Arun Maira

Transforming Capitalism by Arun maira, review by Dr. Anand Philip[dropcap style=”3″]T[/dropcap]he last decade has seen a rise in philanthropic businesses and big businesses investing in the society. The worldwide depression brought on by the wall street, stricter laws about environment, and the rise of laws about corporate social responsibility have contributed to this. There is also a growing awareness among businesses large and small that screwing over people and the environment is bad business in the long run.
Arun Maira, in his book Transforming capitalism, improving the world for everyone, makes the case that

  1. Capitalism, if practiced laissez-fair, is harmful for everyone involved.
  2. Businesses can and should do the right thing from a moral point of view when dealing with people and
  3. People/businesses with a lot of money should see themselves as custodians or stewards of their money and resources and so should help people with it.

Arun Maira is a journalist, for a large part of his life he was a business manager. Over the past decade, he has written in most of India’s top business magazines, as well as in the magazine Civil society about the various ways in which businesses can, do and should help people beyond the narrow confines of material profit. This book is a collection of these articles. This is probably why, though the book is divided into four sections, a clear progression or continuity cannot be felt in the writings.
This is not a progressive apologetic, this is not a case for marrying socialism with capitalism either, this is a cross section, through the writings of someone who has been in the field long enough to know what he is talking about.

What I like about this book the most is that instead of preaching or a prescriptive style of writing Maira exhorts. he points to what is happening, suggests gently and with authority that instead of formulas both sides have, what is needed, foremost is dialogue open, honest and constant dialogue. this behavior is quiet uncommon in columnists these days who are eager to preach, eager to repeat over and over how their ideas are the best and why the world will go to the dogs if they don’t follow their brilliance.

It would be foolish to think that leaders of environment killing or people-hurting businesses don’t realize that what they are doing hurts people, but a fundamental belief, a one in the free market ( and some healthy greed) keeps them and everyone down the chain chained to their course. They believe that the free market, which enables everyone to take part equally in wealth creation and ultimately in the pursuit of ones happiness without the state directing what one ought and ought not to do is the best way to eradicate poverty. And lets face it,free market creates wealth. Anyone who has lived through pre and post liberalization India can attest to this.

But what apologists of capitalism often forget to preach is that when it comes to creating wealth for the ultra poor, the trickle down effect is often like eating leftovers from a rich mans table. with our new humanist understanding of human rights, I don’t think it is acceptable anymore to knowingly let people suffer based on one’s belief in the market. The non-profit groups or the civil society who typically are the champions of the poor operate under a completely different set of beliefs. To many of them the idea of making profit for the sake of profit is abhorrent. And practically all of them believe that human beings cannot be trusted to do the right thing in an unregulated system. Their idea of regulation of course is not peer regulation but strict almost socialist regulation. What Mr. Maira does very well is explain why both sides of this divide need to have a sustained conversation that helps us achieve the goals of alleviating poverty,social justice etc.

To me this is probably not a book written for the CEOs of Fortune 500 companies. This is also not a book for someone who has been following the social business/enterprise sector for the last few years. This is the book for the MBA student or the new manager, for the young Indian who wants to enter the markets but still stay good.

A recent survey showed that the worlds highest number of social businesses or socially minded businesses of the last few years have started in India. This is a clear sign that a lot of young people in this country are interested in doing good and Mr. Maria’s book can serve as a good starting point showing that it can be done.

The only worrying thing is Mr. Maira’s adoption of Gandhian ideas about wealth and businesses.

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The Parable of dead bodies: Looking at the Food Security Bill

The Parable

Anand Philip on the parable of dead bodies and the food security act
By Great Beyond

When the villagers of Utopia woke up that morning, they found that the current had washed up a dozen or so dead bodies on their river bank. The people quickly got to action, as was normal for Utopians. Frogmen helped by the fire department dragged the bodies ashore, the mayor decided they would be cremated outside the city, the Doctor examined them and concluded that they died of nothing contagious and the priest performed their last rites.

Unfortunately, it was not to be a one time event. The next morning, and then the morning after that and in the mornings after that morning, the barrage of bodies continued. While the frogmen and priests and other workers pitched to get the bodies out and disposed, the city council gathered to ponder upon the matters.

After much philosophizing about what the dead bodies stood for, who they were, whose fault it was and which department should handle them, it was unanimously agreed that the poor souls deserved dignity. The council wrote to the king, known for his big heart, consulted his circle of elders and granted them a nearby wasteland to create a crematorium for the dead, and a fat purse for funding.

Soon it was noticed that picking up bodies in the morning was creating traffic jams and so the mayor decided to launch a technologically advanced boat patrol that would scour the river as it entered their territory and pick up the bodies as they arrived.

The boat workers then started settling near the river, as it was easier for them to go home that way, and with the increased traffic of the boats, the river port could no longer be used for fishing and other usual purposes. The mayor therefore sanctioned that building of a new port, a bit upstream from where the bodies were being found.

As time went by, new problems would arise but Utopians fixed them all as they had done so far. For his astute handling of the situation, and creation of hundreds of new jobs as boats men, crematorium workers, traffic wardens, and what not, the mayor was re elected. For the hard work, solidarity and greatness of heart of the people of Utopia, their King granted them the status of a City and they lived happily ever after.

Problem: Hunger and Malnutrition

India, hunger, free food, malnutrition
by juicyrai

Depending on which source fits you best, anywhere from 28%1 to 80%2 of Indians live in poverty. The real figures are vigorously debated, and the National Advisory Council [NAC] has taken a value of 836 million- 77% of the Indian population as living with food insecurity- a figure they use interchangeably with the number of poor. These numbers fly in the face of common sense and other reliable studies but it clear that a large segment of the population- between 373 and 50% suffers from chronic malnutrition4. And a smaller – around 5% suffers from day-to-day hunger.

Deaths from acute malnutrition are declining rapidly as are the cases of acutely malnourished children. It is possible today for a medical student in a government hospital to pass out without ever seeing a single case of acute severe malnutrition. But chronic malnutrition remains a serious issue and the contributing factors are recurrent disease, chronic poverty5, lack of nutrients in food, lack of access to protein/vitamin rich sources, and peri-natal conditions like maternal nutrition, birth weight and breastfeeding and weaning practices.

Root causes:

  • Poverty
  • Lack of sanitation, access to clean water,
  • Bad farming practices and lack of agricultural reforms,
  • Corruption,
  • Persistence of historic marginalization.
  • Unemployment and wage exploitation in the unorganized labor sector.
  • Unexplained nutritional factors

What has been done:

  • — Integrated Child Development Service (ICDS).
  • — Kishori Shakti Yojna
  • — Nutrition Programme for Adoloscent Girls.
  • — Rajiv Gandhi Scheme for Empowerment of Adolescent Girls
  • — Mid-day Meal programme for schools
  • — Sarva Shiksha Abhiyan
  • — National Rural Health Mission
  • — National Urban Health Mission
  • — Rashtriya Krishi Vikas Yojna
  • — National Food Security Mission
  • — National Horticultural Mission
  • — Rajiv Gandhi Drinking Water Mission
  • — Total Sanitation Campaign
  • — Swarna Jayanthi Gram Rozgar Yojna
  • — Mahatma Gandhi National Rural Employment Guarantee Programme
  • — Targeted Public Distribution System
  • — Antyodaya Anna Yojna
  • — Annapoorna 6

[Note: This impressive list of interventions is a partial list only, there are other state specific and lapsed programs that are not included.]

Of these programs, the ones that have had the most money and effort put into them are those that have some form of subsidized distribution of food, medicines, or un-sustainable job creation.

Study after study has shown that at best the areas that need these the most, have a success rate of under 50% and at worst, almost no benefit has reached the intended targets7. Not just that, there is pilfering and hoarding, reselling to commercial markets and BPL cards and lists miss 50% of deserving an often include those APL.

What does this bill do?

  • Increase spending on food grain
  • increase allocation of Grain per family
  • Adds on bureaucratic processes with no accountability in the form of redress forums
  • Tries to make PDS leak proof, but retains structure and form almost entirely and allocates little for infrastructure.

The key fact being is none of this actually increases food security- only feeds those in hunger, if the food reaches them. These are inherently stop-gap measures, but with the lack of permanent solutions, this leaky PDS pot has persisted 60 years into independence.

Moreover,

  1. There are no bills in the parliament at present‭ ‬ address to resolve the root issues,‭ neither is the NAC doing anything at infrastructure or system level to address the root issues.
  2. The bill Ignores studies that show that the caloric intake of the poorest in India has reduced in-spite of increase in income. It 8equates hunger with poverty and malnutrition, though nowhere does it actually mention malnutrition. ‬The problem might not lie in access to food at all,‭ ‬but in quality of food,‭ ‬work levels,‭ ‬and other factors. which are not addressed at all.9
  3. Disregards the further strain it is going to place on farmers, who are already getting poor returns for their investments. 10

Surprisingly, some of the people who have shown these problems with the bill are on the NAC and are considered very influential.

The NAC, which is pushing the bill, seems to believe that if you pour water into a bucket with no bottom, as long as you keep pouring, you are doing the right thing.

Pouring money into a bucket with a hole
by Coltera

Back to the Parable.

‎Something struck you as odd didn’t it? Why did no one try find out where the dead bodies were coming from? Why did they not try stop the flow of the cadavers altogether? What use is it mopping up the blood if you do nothing to stop the bleeding?

This obvious logic has surprisingly eluded much of our policy makers and politicians, who continue to fish bodies out from the river, and make enemies of those who can help stop the killing.

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Foot Notes

1Planning commission press release for poverty estimates 2005
5Chronic Poverty in India: Incidence, Causes and Policies AASHA KAPUR MEHTA World Development Vol. 31, No. 3, pp. 491–511, 2003
8Food and Nutrition in India: Facts and Interpretations” (EPW, 14. February 2009), Angus Deaton and Jean Dreze