Business to the Buddha

Tag: Socialism

  • Data as a narrative

    I listen to even the data driven opinions with a pinch of salt now. I did it unwillingly and learnt it one can present data to please bosses even if the findings are unfavorable. It happened with a client of ours. They’d invested about 8 Cr rupee in their Above The Line (ATL) marketing. We used to do offer data analytics solution to them. So, we were told measure the impact. We found out, there was almost no impact – statistically, even if you take p-values and seasonality and market condition etc etc. The 8 Cr had gone in drain. However, we’d to help our manager at client’s office “look smart”. We’d to make a presentation that look and feel sound, statistically such that the branding efforts have had a positive impact. We somehow did it, against my wish. I quit the organization soon after, due to various reasons.

    Actually we had conveniently changed the goalpost for the client. Our clients objective of the ATL was generating investments, however the presentation of the data was done completely for branding. All the communication for the ATL was regarding “invest with us”. The presentation was not about the impact of that in terms of call to action “investment” as such. Human being are smart, we create our own narrative from what we see, hear and observe.

    You-see-what-you-want-to-see

    So, one must take data and findings with open eyes and willingness and honesty to question. I’ve been favoring capitalism over socialism (or some sort of communism), the data suggests that capitalism is somewhat better than socialism. We have many examples – South America going through the upheaval North America is better off, USSR broke down, India moved to more open economy after 1993. Mass production or mass anything is great for economy of scale and businesses. I happened to stumble upon the episode of “Last week tonight” by John Oliver on Amazon or warehouses. John Oliver presents concepts interestingly. He adds humor with numbers and in 20 minutes drive home his point and makes you accept the conclusion.

    After watching this episode of Last week tonight, I thought of writing on this. However, as I said, I have started taking data with pinch of salt. I asked myself, are these the only few stories about work condition at Amazon? Why other such stories not coming out? Should one get to see other perspective instead of believing only one side? I came across similar thought published in NYT, so I made up my mind to type it down. My opinion still stays – the quantum can be more or less, presentation may make the statistic look appalling.

    The NYT article touches what John Oliver is talking about in his show – work conditions at Amazon. In fact Amazon is forcing competitors to match its standards, which affects lives of employees. I wonder if we really need that toilet paper at lightening fast speed, as John Oliver talked about in his show. Are we sure we want such competitive and capitalistic world? I wish no. Mass production results in unwelcome competition and possible corrupt practices example – using fertilizers for farm produce affecting the soil quality or destroying work life balance of employees for quality of service that may not be the demand of customer.

    I’d not envisioned capitalism of this kind to win over socialism – where there is no trickling down as expected by economists however not happening on ground as recently economists found out. If we do not improve our capitalist approach to be more inclusive we will surely pay a huge price of inequality – as Prof Joseph Stiglitz had pointed out in his book by same name.

    We need a world that is more balanced, the competition of capitalism can eat into mental peace of individual. Socialism as we know it, tries to make everyone equally poor that bad too, we need balance – the middle path. Few months back when I visited a village, I saw how Modi govt’s socialistic approach of govt worked. I see promise in such approach where there is a balance – in Govt trying to balance socialistic giving and encouraging competitiveness. Though currently, according to data the economy of India is not doing that great. Also some time back GDP calculation method was changed. Should we trust data that can be manipulated to suit narrative? Before trusting anything, should not we ask questions on validity of data and representative-ness of the same?

    Image source – https://www.skepticink.com/

  • Entrepreneurship and interdependent co-arising

    Over time, I have been analyzing socialism and capitalism from the lense of spiritual professional. Mostly, people think combination of words “spiritual” and “professional” sound as an oxymoron. No it is not. A spiritual person can be more thoughtful, it is not necessary that a spiritual approach only suits in Himalayas. On a lighter note – I do not intend to state that I am thoughtful. My looking at socialism and capitalism has also come from practically looking at people be it Aarti Amma or Shaku bai.

    • Business-to-the-Buddha

    Well, slowly I have made a centrist approach, though leaning right. At least capitalism gives everyone an opportunity to become rich, understand the futility of being ultra rich and become a philanthropist. We can argue till cows come home about the eyewash of this philanthropy in many cases. There are many of these new gen millionaires in India, they are doing their bit of philanthropy in a different manner. They are helping other startups with funding or advice.

    In last more than a decade, India probably has seen many young, competitive, hungry for more and problem solver millionaire. The list is long from Bansals of Flipkart, Ritesh Agarwal of Oyo, Vijay Sharma of PayTm, Byju Raveendran of Byju’s to others. The best part is, the list is very long. This kind of opportunity was less likely in India before 1990’s. This new entrepreneurial energy and problem solving for Indian and global context lets me lean to the right.

    If we take examples of Sarla or Kishore, there is surely a better way of making everyone work towards becoming self dependent. This opportunity is better offered by capitalism – as much good as you can make good for yourself and society you can be better off and in return you are helping the society too. In a way capitalism gives you an opportunity to be more practical in implementing interdependent co-arising. If you are solving a pressing problem you will get buyers, you make buyers life easy, they will pay you.

    Now, I see entrepreneurship also from an spiritual perspective. I believe that there will be someway and someone who will help Aarti Amma and Shaku Bai to grow beyond their limited means. Though when I look at socialism and capitalism I still emphasis, socialistic approach is needed in some cases such as healthcare, education and food safety. Here too a Public Private Partnership is fine. At one time or the other interdependent co-arising will work for Aarti Amma and Shaku Bai too with some entrepreneur helping them and make a financially viable business solution.

  • Socialism the right way

    Recently I wrote on why socialism fails? The article may sound a complete no-no to socialism. I believe any concept is inherently not flawed. The flaw is mostly in the execution – be it capitalism, socialism or any other “-ism. So, what can possibly be socialism the right way? I am sure many would know Venezuela going through hyperinflation and complete chaos – that is one gift that socialism may give you.

    In economics many of the rules are written in some assumption or concept like – “everything else being constant…” the concept will work like this or like that. For an example – demand curve or supply curve. These curves are belied by the prices in some cases such as – price of oil or price of diamond.

    Similar is the case of assumption in the underlying concept of socialism. The assumption is – no one will try to game the system. If I take the same example of Sarla or Kishore of the previous blog any Sarla or Kishore with average intelligence will stop working or will try to get a certificate that proves (s)he is the bottom 20% of Indian population to get the benefits of NYAY scheme announced by the Congress Party in its election manifesto.

    In India, Amitabh Bachchan got a certificate of being a farmer long back. So, it is not difficult for people to get a certificate to the race to the bottom. Though, off late Mr Bachchan has paid off loans of many farmers in UP. The way a farmer’s certificate was easy to obtain for Mr Bachchan it is easy to get a BPL certificate too. What the scheme Nyay is most likely trying to do is – make youth and many Indians lazy or to game the system. This is how Socialism fails.

    There is another example of similar scheme running in India – MGNREGA. I have heard of cases where there is immense corruption in this scheme. People are getting part of the allocated fund per person just for signing a document (rest goes to the chain of officials). Thus, the unskilled people for whom it was an employment guarantee, get money for free. If one wants to get the same work done by someone, the wages asked are higher. It results in increase in inflation.

    With schemes like MGNREGA or Nyay, does not the leaders of the political parties implying that they do not have any idea for – 1. how to create more jobs (run the economy) and 2. how to increase skill level of the citizens so that citizen can do something for themselves rather than depending on others. It looks like these politicians have not heard the idiom – “Teach a man to fish and you feed him for life”. By the way, MGNREGA was started by one of the most renowned economists of the world!

    If I recall 2009 farm loan waiver of Manmohan Government – again a Congress government – more socialistic in its letter and spirit that did not augur well to our economy. The impact of that according to Bank of America Merrill Lynch the farm loan waiver will cost 2% to the GDP of India by 2019. At times educated economists try to fix a problem at the wrong place. Possibly the Modi Government GDP numbers could have been 2% higher!

    No doubt the basic principles of the right to food, shelter, water, education, and healthcare is considered given in today’s capitalistic economies and countries – example Obama care in the USA or Ayushman Bharat Health Scheme in India. There is a universal education program running in India Education for all (Sarva Shiksha Abhiyan). When I started looking at quick implementations of government’s schemes such as Pradhan Mantri Awas Yojana I feel current Indian Prime Minister Narendra Modi is more socialistic than the Socialists / Marxists in India. In fact, recently I went to a village (about 500 KM from Mumbai), and I first hand saw – took some photos too shown here – the scheme being used by the villagers effectively.

    However, good the intentions to keep everyone at an equal level, humans do not seem to have found a way for equality. Possibly in the ant world, socialism is practically depicted to a better extent. Why USSR failed and communism of China is not worth appreciating, why Venezuela failed? Because there is no incentive to work or there is no ownership (common ownership) involved. Further, the move from capitalism to socialism follows communism as a midway stop. Communism gives power to the few, who – like any other human being – would not want to relinquish their power? The result – communism does not seem to end ever.

    Socialism (to some extent any -ism) can only work if we create a different scale for all of us – human beings. A different scale for success, survival, and growth. Many times greed and wish to control – people, things and systems – makes way and thus the Marx intermediary (read communism) from capitalism to socialism remains never-ending. Why can not we have a good execution, social good, and profit together? We can have it, provided we look at some new scale to measure ourselves.

    If any form of socialism needs to survive it has to be a middle path – a mix of different approach to economics, policy making and system. A system where we reward work, we provide essentials at appropriate cost or subsidy or for free and let people benefit from their work. At the same time, all the world political, social, economic and cultural systems must include teaching spiritual practices, trust and fairness – example is concepts of Jainism – Ahinsa (non-violence), Asteya (non stealing), Aparigraha (non-attachment) and concepts of Buddhism – meditation, interdependent co-arising. These concepts are essentially from different philosophy of Hinduism.

  • Why socialism fails? NYAY

    Our maid – Sarala – works at about 4 homes. She works close to 6 hours a day. With this hard work she earns more than INR 15,000 per month. There are laborers who work at construction sites and as daily wage electrician or carpenter – Kishore – in our area. Assume laborer earns INR 250 per day that comes out to be more than INR 6,000 per month. I am giving these numbers for Mumbai’s unskilled workers. So, I did some back of the envelop calculations. Here are some questions that make us believe Why socialism fails?

    Now let’s review a probable scheme NYAY announced few days back. NYAY is promised by Congress party (erstwhile Congress (Indira)). In this scheme they intend to offer 6,000 per month to the bottom 20% poorest people of India.

    Many of the people identified in the beginning, will fall in that category. Why? Because there is no way you can define bottom 20% poorest people. The reason is none of the above are in tax bracket. There is no way you can define their being “poor”. You may argue that there is a Below Poverty Line (BPL) cards. Many of the Indians know that our systems are such that this card – like a Bangladeshi illegal immigrant can get an Aadhar – is easy to get. If you do not remember any such card being made, read here. At the same time, if without such verification a scheme is run – you would get to see a misuse like this. Both the points are seemingly contradictory, however this is how manipulation happens with Government schemes. Most of the money allocated goes to the corrupt party’s politician’s pockets.

    population-estimate-India-2017
    GDP-estimate-India-2017

    This corruption is just one part of the story. Let’s dig a bit on how it can impact country’s economy. Now, since Sarala and Kishore are immigrants from different parts of India either they can get the benefits in their respective villages or the worst migrate back to the village – because they can get 6,000 for free per month. A village may not be as expensive so survival can be easy there. If they get the benefits staying here the NYAY scheme becomes UNNYAY (injustice) in itself. If they migration and so possibly many others. The shortages of unskilled labor in cities certainly will result in expensive labor. This expensive labor will translate in expensive stuff – be it real estate (the industry is in a tight spot anyway) or a house maids.

    Assuming some numbers and bringing others numbers, I did some back of the envelop calculations, references are attached herewith. Click on the images to enlarge.

    NYAY-GDP-impact-calculation-Summary-base-2017
    USD-INR-Exchange-rate-2017

    The worst is yet to come – one of the Congress’s think tanks Sam Pitroda says we will have to increase tax on income to manage in this expensive scheme. The outlay of NYAY can be as much as 22% of GDP. The numbers are calculated based on population estimates of 2017 and GDP estimates of 2017. Please check screenshots. This scheme would most likely cross defense budget of India. Effectively, it will reduce savings of middle class due to tax burden and higher inflation.

    I will leave you with few questions on this scheme – why would Sarala or Kishore want to up skill him/herself and ADD to the economy if such free money is available to him/her? Would not there be a competition to show oneself poorer than the poorest to get this free money? Should not job creation and up skilling be the priority of government rather than splurging tax money? Just imagine if up skilling program gets such fund (3.8 trillion or 3.8 lakh crores INR) how much skilled labor we can create? How successful is MGNREGA? If it really was, we must have had pukka roads across country by now. If a report writes positively about the scheme – can it possibly be PAID for?

    And the last question to you – if you were Sarala or Kishore what would you prefer – free money or a dignified earning, up skilling and job opportunity? If your answer is former – read individually smart collectively dumb.

    Note: numbers of 2017 are taken as those were readily available on Google Search

  • Economics concepts and equality







    I was thinking about this strange experiment. What is we conclude end of day today that, everyone is given a new currency DMV (Digital Monetary Value) 2000. Any currency anyone has in his /her account is NULL except DMV 2000 after end of day today. Any other assets whatsoever are also NULL.

    maxresdefaultThis will bring everyone on the same economic level.Socialists want that, right? Next day onwards everyone has to work in DMV equivalents only. What would happen? Would we see equal socio-economic status of the world in say 20 years? Because everyone started off afresh with same amount of currency? Would the world be same as it is today (without DMV), after 20 years? The inequality will creep-in. Socialism seems to miss something in that sense of the world? The inequality in the world is not only because of the madness human-beings are involved with, but also because of the way soft things are build. The lobbying would continue, even after the DMV, and citizen’s representatives will make laws to favor few. Education will also make an impact the inequality generated. Relationships will play another role in creating the difference. Result? We would end up with the same The Price of Inequality.

    Capitalists will disagree to the starting point of the experiment itself. However, if capitalists understand the basic flaw of socialists approach they can understand last three sentences of the previous paragraph.

    I noticed on the net that If there is any religion that could cope with modern scientific needs it would be Buddhism. [Tweet “Albert Einstein said – If there is any religion that could cope with modern scientific needs it would be #Buddhism”] Though my opinion is – one must not even accept everything in Buddhism also as  panacea. I would suggest two point if not anything else of Buddhism – 1. compassion & knowing interdependent co-arising and 2. meditation.

    The problem is the way we think, we need to change the way we think (what we think we become) [Tweet “what we think we become”]. Here is an example – Asian shares climb after dismal U.S. jobs report. This is the situation when one side of the world is in trouble the other half enjoys and makes profit. Are we going to understand the true meaning of equality? Forget meditation for some time, are we going to learn – interdependent co-arising?

    Image source – http://i.ytimg.com/vi/hdr6vSYZXGo/maxresdefault.jpg

  • The Price of Inequality







    I have read Dr Joseph Stiglitz. He is a Nobel prize awarded economist. The book I read first was Globalization and its discontents and recently I started reading The price of Inequality.

    I realized that Dr Stiglitz may not be the so called capitalist economist, he is capitalist but with a touch of a Just and relatively Equal society. So, when I started reading “The price of Inequality” I started wondering what kind of wealth difference exist in the US. Since, I have never been to the US so the picture of the USA I have always created is – no poverty, everyone having enough and more to not only survive but also a lavish life, a home with front garden, a car parking (of course too), wonderful interiors of the home etc. This picture is largely because of the Movies we watch – on a lighter note Hollywood is responsible for that ;).

    Well, while reading the book, I came across a video on Facebook (watch below).

    [youtube=http://www.youtube.com/watch?v=QPKKQnijnsM]

    Though, some may argue this video is shared for more socialistic reform e.g. healthcare reform, but that is not the point of contention for me. Watch Margin Call to understand the point of view of the bosses of the investment banks – well to sum up “They do not care! Everything will be fine in sometime.”

    My perspective is not a fight on any economic approach e.g. socialism Vs Capitalism, I favor inclusive growth and I believe for achieving that we need to follow a middle path wherein a mixed approach be used.

    Read my previous blogs related to the book – Globalization and its discontents

    Blogs here

  • Inclusive growth







    We’ve seen that socialism had it’s problem, capitalism is no less culprit. I’ve been thinking about both together and have written about it. Regularly I asked this questions of how to two of my MBA professors – Prof Harkant Mankad and Prof Arun Ramanathan. Prof Ramanathan suggested me to read functioning of Nordic countries – heavy tax but less social security. Once I shared this logic –

    Socialism & CapitalismIf we look at both simultaneously we see some good and some not so good practices. Socialism had social benefit at center but execution sucked. On the other hand capitalism has profit at center and execution is better, and also capitalism largely never considered social good as one of the concerns.

    The very bird-eye-view (yes MBAs use this kind of jargon) solution could be – What is we bring social benefit and profit together at center and use execution efficiencies of capitalism around? The profit does not necessarily become – extracting whatever available consumer surplus is there with consumer. Take an example of social entrepreneurship, that is one good approach. Here, I do not intend to say every business should be like that. Also, yesterday I tweeted and updated on LinkedIn – If you want to be social entrepreneur, remember funder of social enterprise has impact in mind+heart & investing in head, so impact weighs higher! those kind of initiative can help in inclusive growth.

    I see that PPP – Public Private Partnership – can also be great boon for inclusive growth. However, greed has created more problem in the Indian context than giving us Inclusive Growth.

    Take an example of MNREGA, it has been failing, benefits are not reaching where they should. How can political parties be kept away from execution? Politicians asking for bribe in such cases is nothing but extortion. How about giving the executioner tax benefits to get involved in it and ask for accountability? Audit Done periodically by people (an independent body monitoring). The people affected and benefited can vote for continuation or stopping that company from involvement. So this can be kind of election on performance of NREGA.

    What I think is – people want a respectable life and not bread thrown at them condescendingly. Inclusive growth is possible when we think more like a combination of socialistic -capitalistic society.

    This way we’d be capitalist but in a socialist manner where besides profit, social uplifting would be a core of philosophy and growth.