India

Export of Free Speech can be India’s soft power

As the recent permanent ban imposed on President Trump’s social media demonstrates, Free Speech is under threat even in the home of the First Amendment. France’s craven response to the recent decapitation of a middle-school teacher who was murdered for using the Charlie Hebdo cartoons as a teaching aid underscores that Europe is moving away from enlightenment values. It is telling that in both examples of assault on free speech, the victims found more support in India than in their own countries. This suggests an opportunity for India. We can be the beacon for free speech in the rest of the world.

On the other hand, the recent example of Munawar Faruqui illustrates the dangers of untrammeled free speech for Indians. While we need to champion free speech across the world, there is obviously a need to balance this advocacy with India’s own policy priorities, including, but not limited to, preventing insult to our gods, maintaining peace between communities, stamping out criticism of our leaders and clamping down hard on contempt of court.

Fortunately, there is a tried and tested solution to this conundrum. This has been effectively employed in the economic sphere to balance the need to earn foreign exchange and the imperative of keeping Indians poor and dependent on government handouts. We could deploy the same solution here, in the form of SEZs, or Special Expression Zones. These SEZs can be used to host infrastructure for free speech exiles from other countries – for example, the social network Parler, currently subject to a brutal clampdown in the United States, can find a home here. The only condition should be that Indian passport holders should not be allowed to use these services, obviously as the policy priority is to export free speech. The regulation setting up these zones should provide for international arbitration to settle any disputes that arise, keeping them out of reach of capricious Indian courts to the extent possible.

I think there is great potential in this idea. Global export of Free Speech can be India’s Soft Power. We can be the Vishvaguru for the world. People around the world will look up to us and see us as a shining light and an example for the rest of the world to follow. This is apart from the economic opportunity that this obviously represents. I hope Prime Minister Modi takes this idea seriously, especially given that it already has a catchy acronym and has the potential to be a significant component of our post-COVID strategy in 2021.

A Congress version of Modi will not succeed

Regular leadership transitions are necessary, but even necessary transitions weaken the entity that is being led, as contenders to the gaddi duke it out and governance takes a pause amidst the uncertainty. The transition can be made shorter and smoother by having a well defined and legitimate process.

There are many different ways to decide on the succession – it could be dynastic or democratic. You could have an appointive process where the incumbent or a board makes the choice. You could do a search for the next reincarnation of the bodhisatva, or you could have an elephant with a garland choose the next king. To succeed, the process requires legitimacy. It is a necessary but not a sufficient condition for success.

What is legitimacy? In the words of Thomas Schelling, it is a focal point. In those of Lord Varys, “power resides where men believes it resides”.

If I win a legitimate democratic election, I know that my opponent will not mount a rebellion against me, so I will have no need to conduct a purge and eliminate my opponents. My opponent knows that I know that he will not mount a rebellion, and therefore, I will not attempt a purge, and therefore, he feels safe enough to not mount a rebellion. I also know that once the election is over, norm assures me that barring exceptional circumstances, I am safe from a challenge till the next election, and therefore I do not need to be in a combative posture continually. I can reach out and shake hands with my opponent and strike up a working relationship with him.

The dynastic method of succession also successfully serves as a focal point. It narrows the field of contenders to the throne to a small number within the family. (If you adopt a rule like primogeniture, the field is down to one) While it is disappointing for someone outside the dynasty that he will never gain the top position, the disappointment is somewhat mitigated by the knowledge that others around him are in the same position and he doesn’t have to engage in constant power struggle. Because the dynastic position is for life, the lucky sperm can focus less on power struggles and more on governing, at least till his offspring grow up.

I don’t want to overstate the case for the dynastic system. Historically, most dynasties did not survive for long. They were overthrown by others who established their own dynasties. And the dictum of legitimacy being a necessary but not sufficient condition of success applies particularly with the dynastic system.

Many people are calling for either the democratization of the Indian National Congress or a Modi-style rebellion against Rahul Gandhi, but the problem remains the same with either scenario. The democratic process does not have legitimacy in the current Congress. The dynastic system does. Legitimacy takes a long time to be established. The power struggle that is required to unseat the Gandhis will finish the INC much before legitimacy can be established.

The BJP does not have a legitimate process for succession either. Modi took over a party whose aging leadership was overdue for retirement. There was no formal leadership challenge, no election or any kind of competitive process. Everyone kind of just decided that he was the right man for the job and the entire party reoriented around him. Modi’s task was made easier by his overwhelming popularity within the party. It also helped that the party has organizational and ideological coherence that ensured that it would stay intact even if there were a power struggle.

The Congress does not have any of these advantages. Its organizational coherence is uneven at best, and it has no ideology to motivate it. A BJP leader or worker does not have a future outside the party, as Keshubhai Patel, Uma Bharti and Kalyan Singh learnt. For a congressman, the INC is one of the many career options. There is no reason the party will stay together during the period of inevitable uncertainty when a leadership struggle happens.

To make this concrete, we can try to imagine a Congress version of Narendra Modi – a challenger to the leadership. Obviously, such a person is unlikely to exist in the current national “leadership” of the INC, because popular leaders have been systematically eliminated from there. So imagine an ambitious and talented leader at the state level, either within the Congress or outside it. He wants to carve out a career path for himself that will take him to the Premiership of India by adopting any strategy that will work. In any plausible scenario, is staying in (or joining) the Congress, deposing and taking over its leadership the dominant strategy? I claim that the answer is no. I would argue that in almost every case, breaking up the state level party to form a new entity and trying the coalition route, or trying to form a new national party that attracts the disaffected leaders of the Congress and other parties dominates in terms of cost-benefit analysis over the strategy of working within the party.

The one exception I can think of is a strategy that does not directly challenge the legitimacy of the dynastic system. This is the method by which the Peshwai was established, the method by which ambitious and competent ministers have risen to be the power behind the throne when the throne is occupied by weak kings, or indeed the method that resulted in constitutional monarchies in many countries of Europe. But for such a strategy to work, this ambitious minister will have to insinuate himself into the good books of a man who has absolutely no discrimination and whose natural instincts are to trust charlatans like Praveen Chakravarty, fight off political machinations and intrigue by a jealous inner circle whose attacks on him will only increase the more successful he gets and somehow also concentrate on his core job of strengthening the party and helping it win elections. Perhaps in some particular combination of circumstances the stars might align and the right person adopting such a strategy may be the right choice, but no, this is not something one can reasonably hope for as a way to form an alternative to the BJP.

Thoughts on the GST

Much reporting on the GST is about how tax rates have changed after the rollout. You may have read that a good or service was taxed at, say15% earlier, but will be at 18% now. I suspect that these reports are comparing on the basis of sales tax and VAT in the case of goods and service tax in the case of services. Such reporting displays a lack of understanding of the fact that GST replaces many other taxes, as also of the value added nature of the tax.

Suppose that you run a shop. You have been buying a widget that incurred excise at 10%. The cost to the manufacturer, ex tax, was Rs50. With tax, you bought it for 55 rupees. Your value addition and profit came to Rs45; with a 15% sales tax on Rs 100, the widget retailed for Rs115. The tax incidence on the widget was 20/95, or 21%.

Now, the GST at 18% has been introduced, replacing all other taxes. In a perfect world that adjusts to the GST immediately, you would receive an invoice for the widget from your supplier showing a price of Rs50 and the GST of Rs9 as separate line items. This GST would not figure in your pricing decisions because you would claim it as input tax credit. Your value addition and profit would still be 45 rupees, so your widget would be priced at Rs95 pre-tax. With a GST of 18%, your widget would be priced at Rs112.1. In other words, in our perfect world, it is perfectly possible that replacing sales tax of 15% with a GST of 18% results in a reduction in price.

The real world differs from the perfect world in several crucial ways.

First, the widget in question is imaginary and I have made up the tax rates. I have only a dim understanding of what taxes used to apply at what stage, and I have no idea what the tax rates were on different products. The government has claimed that the tax rates were aimed at achieving revenue neutrality. If they are right and if they have done a perfect job of being revenue neutral on every product and service, retail prices should not change at all. Of course, it is unrealistic to expect that kind of perfection. It will take significant analysis to figure out how good or bad a job they have done on this count, and whether they have erred on the side of higher or lower revenues. But the point to note is that revenue neutrality can only be achieved if the GST is higher than or equal to the current sales or service tax.

Second, the example assumes that the shop will instantly respond to a fall in input prices with a reduction in price. In reality, it’s just as likely to keep its listed price the same and slap the 18% on top of it, and try to pocket the profits as long as market forces let it.

Third, even if the shop does want to adjust prices in response to the GST, it is unlikely to have full visibility into prices along the entire supply chain. The example of the widget was a deliberately simplified one. The more realistic scenario is a complex supply chain with multiple stages involved in the conversion of raw materials to finished goods. Each participant in the supply chain faced a certain set of taxes earlier and is faced with GST and input tax credits now. Getting all the costs worked out and the prices renegotiated is going to take time.

Fourth, one of the avowed aims of the GST rollout is increased tax compliance. While that is a good thing, if it succeeds in achieving this goal, it means that taxes that weren’t being paid earlier are now being paid. If that happens, it means an increase in prices.

In other words, any claim you read about how the GST is going to increase or reduce prices should be taken with a pinch of salt. Unless there is evidence that those who are making the claim have done rigorous studies taking into consideration the above factors, they are probably just pulling numbers out of their ass.

A partial exception to this principle of scepticism can probably be made for services. Unlike goods, there is no supply chain to deal with, so it’s more likely that replacing a 15% service tax with GST at 18% results in a straightforward increase in price. Of course, a hairdresser’s shop does deal with raw material like shampoos and hair dyes, while for a financial services firm, the tax credit on office stationery and on ISP payments will probably not compensate for the higher GST rate.

The point of all this is that calculating the impact of the GST on prices even in the short to medium run is difficult. In the long run, the GST is supposed to bring about a whole bunch of structural changes in the economy, like speedier transport of goods, economies of scale in warehousing, more rational decision-making on the question of where to locate factories, etc. All of these should contribute to economic growth and should also have a positive impact on inflation. Calculating that impact is a different story.

Shyam Narayan Chouksey – the Movie

Shyam Narayan Chouksey is a great man who deserves to have a movie made about his life. More Indians need to know about this public spirited citizen.

Back in 2002, Mr Chouksey was watching Kabhi Khushi Kabhi Gham at a theatre. The movie has a couple of scenes involving the protagonist’s son learning to sing and then singing the National Anthem. Mr Chouksey, a simple, but patriotic man, knew what one must do when one hears the Anthem. He stood up to pay his respect. Unfortunately, his actions blocked the view of others in the theatre, who, lacking a similar conception of patriotism, remained seated. They objected to his standing up while he objected to their continued sitting. The dispute did not find a resolution then, but it instilled in Mr Chouksey a determination to teach his nation the right way to pay respect to its Anthem.

Mr Chouksey took his campaign against the disrespect to the National Anthem to other movie theatres and then to the High Court of Madhya Pradesh, where a bench comprising of Justices Dipak Misra and A Shrivastava sided with Mr Chouksey, and ordered deletion of the scene containing the National Anthem from Kabhi Khushi Kabhi Gham.

Unfortunately, a year later, Mr Chouksey suffered a setback. In 2004, a bench of the Supreme Court ruled that standing up for the National Anthem is not mandatory, especially if the playing of the National Anthem were to occur during the movie, as part of the story. Expecting moviegoers to stand at attention in the middle of the movie would cause disorder and confusion, rather than add to the dignity of the Anthem, the Court ruled.

Undeterred, Mr Chouksey began a long battle to get the Supreme Court to determine the proper way of paying respect to the National Anthem. Finally, on 30 November 2016, a bench of the Supreme Court comprising of Justices Dipak Misra (now a judge of the Supreme Court) and Amitava Roy ruled for him. The proper way to pay respect to the National Anthem, they found, is to play it at the end of every movie with the doors shut so that moviegoers cannot escape. While the Anthem is being played, the National Flag should be displayed and everyone should stand up to pay respect. It is unlawful to play the Anthem in any setting that involves commercial expropriation or entertainment, and the full version of the Anthem must be played.

Mr Chouksey’s 14-year long struggle has finally borne fruit. Indians now have clear guidelines regarding how to pay appropriate respect to the National Anthem. More of us need to know his inspiring story of struggle against the apathy and scorn of his fellow citizens. A movie needs to be made about his life, and I suggest that Karan Johar should make it, to atone for Kabhi Khushi Kabhi Gham.

Once the biopic is made, Mr Chouksey will move the Supreme Court to pray that Mr Johar be held in contempt, because the movie will have to depict examples of what Mr Chouksey was fighting against – fragments of the National Anthem, people disrespecting and mocking the Anthem, showing of which is illegal under the current Supreme Court regime. Plus, the movie will be a commercial venture and make an attempt, whether successful or otherwise, to entertain the public. By banning a biopic made in his honour, Shyam Narayan Chouksey can perform the greatest service possible for his motherland.

Black Money and Chaos

The chaos created by demonetization is not because of a failure in implementation. It could not have been avoided by calibrating ATMs on time. It is a function of how much of India’s black money is held in cash.
To understand this, consider a thought experiment. Suppose that there was no cash black money in India, and yet the government, for some vague reason, announced demonetization. Would there have been a similar level of chaos?
Or consider another thought experiment. Suppose that the government announced demonetization, but also announced that the 500 and 1000 rupee notes could be exchanged at the bank without limit, no questions asked. Would a similar panic have spread through the economy?
My answer to both questions is no, and it would stay no even if you told me that in both thought experiments, the government was as unprepared with the task of ATM calibration as in the real world. That is because in both those situations, shops would continue to take the demonetized notes even though it would be illegal to take them.
In the real world, shops are refusing to take those notes, not because it would be against the law (we aren’t a very law-abiding society), but because of the difficulty of converting them to legal tender. This difficulty is because of the existence and quantum of cash black money (thought experiment 1) and the difficulty of laundering it (thought experiment 2).
Because of these two factors, the demonetized notes are trading at a discount. Because of this discount, there is a huge impact on the economy. Remember that the black economy is also a part of the economy, and a hit on the black economy is necessarily an attack on the economy, and the people affected aren’t necessarily, or even primarily the holders of black money.
Another way to say the same thing is to note that the discount on the demonetized notes affects everyone, not just those who hold unaccounted money. It affects daily wage labourers, it affects the supply chain for food, everything.
My initial reaction to demonetization was that it was a mildly positive move, but ultimately more of a PR stunt rather than one that would have a large impact one way or the other. That is because my thinking ran on the lines of ” Who keeps their black money in cash?” I thought was that people mostly maintained only their working capital in cash, and as a great believer in the efficacy of markets, I thought that money laundering channels would quickly take care of the black money that was in cash. The net result would be a PR victory for Modi, a one-time shock to the cash economy and a net cash transfer to the poor, as it would be the poor whose Jan dhan accounts would be used to launder all the black money.
From the chaos that is occurring, it appears that I was wrong about how much black money is stored in cash. Of course, I don’t have a baseline level of how much chaos was expected to compare the current level with. But the point is that if you believed that a lot of black money is stored in cash (as against circulated as working capital and laundered before storage) you should have expected a much higher level of chaos.
A full model of how much chaos to expect from the demonetization would consider:
  1. How much black money is in cash
  2. Efficiency of the laundering channels that will develop (The more efficient the channel, the quicker the economy will recover)
  3. How much of the remonetized cash will be sucked back into storing black money
  4. How’s quickly the Banking system can be remonetized with the new notes.
It looks like Modi has a similar mental model of demonetization. The government has flipped and flopped multiple times, but it has been consistent in one thing, which is that it had imposed ever tighter restrictions on changing money over the counter.
This makes no sense if you believe that the folks changing old 500 notes are the unbanked poor, but makes complete sense if you believe that it’s a channel to launder demonetized notes into remonetized ones AND if you believe that those notes will go back to black money storage. The problem though is that anything that hurts black money storage (#3) will also hurt the circulation of black money (#2) and this puts pressure on #4 even more.
I don’t know if this experiment will succeed. As I write this, it is the end of November and the ATMs around me are empty. If people are unable to withdraw money when they get their salaries in the first week of December, I expect hell to break loose.
But what this experiment has taught us is not, as one article put it, how much India runs on cash, but how much of India’s unaccounted money is stored in cash.

WWWIG-1 Envious and Righteous Anger

It has been famously observed that getting Americans to fight a class war is an extremely difficult, bordering on the impossible. This has been ascribed to the fact that almost all Americans, regardless of their material circumstances, place themselves among the middle-class. While this is no doubt true, I believe that a more precise explanation can be found in the difference between two feelings that I label envious anger  and righteous anger respectively, and what Americans feel the two varieties of anger over.

An American, when he encounters a rich person, does feel anger, but this anger is tinged with envy – that is, he wishes that he, instead of the other guy, was rich. A businessman who has been bested at the game by his competitor does feel anger, but a large part of this anger is directed inwards – he gets angry at himself for not playing the game well. The anger that you feel when you lose a fair game is different from the anger you feel when you believe that the other guy has broken the rules, or when you believe that the rules have been rigged in favour of the opponent. That is the point at which you feel righteous anger, and when you do, you do not wish to replace the object of your anger. You consider the other person to be a lesser human being because he is violating fundamental norms.

Now, two caveats must be put in place here. First, human beings are complex beings. It is not always possible to clearly distinguish the two forms of anger. A person who has lost a fair fight may try to whip up righteous anger by alleging wrongdoing. Second, the two forms of anger are as much social and cultural phenomena as they are human emotions. The two kinds of anger exist in every human being and in every society, but just what we feel angry over is socially and culturally determined.

And this brings us to India. Let’s start with a commonplace observation about Indians – that we are loath to stand in queues. In queue-loving western societies, people stand in queues even when there is no obvious queue to stand in and even when there is no one to enforce the norm that one must wait one’s turn. When these norms are violated, people react with righteous anger.

In India, queues rarely happen unless there is external enforcement, and even then people continually find ways to get to the head of the queue. Others in the queue may object to those who cut to the front of the line, but these objections are laced with envious anger rather than righteous anger. They are reacting to the queue-cutting in the same way that a businessman reacts to a competitor’s moves. It is important to show some anger, because if they don’t, their objections won’t be effective, but there is also no point getting into a righteous rage about it, because in slightly different circumstances, they would have done the same thing.

As must be obvious, queue-cutting is only a particular instance of a general attitude towards rule-breaking. And rule-breaking, in turn is associated with a desire for status. Indian attitude towards people of high social status is very similar to American attitude towards wealth.

Beyond a point, Americans will not tolerate soak-the-rich policies, because deep down, they believe that the rich deserve their wealth. More importantly, they empathize with the rich, and hope that they or their children can be rich one day.

Indians, likewise, believe that a state of status inequality is the right way to order society. This does not mean that they believe that the social hierarchy is rigid and unchanging for all time. In particular, this does not mean that Indians accept their place low down in the hierarchy any more than the fact that poor Americans accept wealth inequality as a given means that they accept their low income. Indians accept hierarchy as a given, and they want to improve their place in the hierarchy. Because it is only natural that rules do not apply to those high up in the hierarchy, the best way to assert your high status is to break the rules yourself. As everyone wants to move up the hierarchy in India, everyone breaks rules when he can, and uses rules to put down others when he can.

Every so often, Indians get into some sort of outrage over the treatment of one of their high-status people at foreign airports or some such. These high-status people have to pay lip service to the fact that we are ostensibly a democracy that has nominally adopted equality before the law, so they come up with explanations for why they deserve special treatment. The usual tack to take is to claim that they are not demanding special treatment, but that they are only feeling the pain of the common people: “If this is the treatment we get, imagine what a common person will go through” is the usual justification.

The other, closely related line of attack is to argue that not providing special treatment to the individual high-status person is actually an attack on the entire identity group the person represents. The surprising thing is not that the high-status person makes these arguments. The interesting thing is that Indians actually agree with their leaders who make these arguments, but only when the leader’s identity groups match their own. So when a Shahrukh Khan or an A P J Abdul Kalam gets frisked at a foreign airport, Indians’ identity as Indians takes over, and they treat the frisking as an insult to all Indians. Within India, when a Mayawati is given special treatment, Dalits stand behind her, while everyone else pretends to be outraged at the special treatment.

These arguments over special treatment do not represent a fundamental fight for equality. They just happen to be status competition by other means.  Competition for status happens not only between individuals, but also between identity groups – caste, religion, language, nationality, etc. The excesses of our leaders, the instances of rule-breaking and self-aggrandisement, are actually public goods that they are providing to their followers. Indians do feel genuine pride when leaders they identify with indulge in the same status seeking rule breaking behaviours as their competing group’s leaders.

So, this is the first in my seven-post series on WWWIG – What’s Wrong With India’s Governance. What I have just described is the first and most basic reason for why India’s governance has been difficult to fix. In five subsequent posts, I will speak of five more reasons and in the last post, I will sum up. The next posts will be titled:

WWWIG-2: India’s Model of Democracy
WWWIG-3: The Jagirdari System
WWWIG-4: Downward vs. Upward Accountability
WWWIG-5: The Legal Irrelevance Theorem
WWWIG-6: The Eternal Adolescence of India’s Mind
WWWIG-7: Summing Up

Now, for some necessary disclaimers.

Obviously, many of these blanket statements I’ve made in this posts and will make in subsequent posts are generalizations. Generalizations do not have to be true in every single instance, but they have to be valid enough to support the point I am making. Not every Indian has the attitude I described, but enough do to have an impact on Governance.

Yes, much of what I am describing is changing, and hopefully much will have changed for the better in 10 years. What I am describing is the baseline from which to measure change. Also, how much of the change is real? How much of the current anti-corruption struggle represents a genuine cultural change and how much of it is simply power-struggle played out by the same fundamental rules? How do we know the difference?

Do not point to me instances where members of the American upper class act as if they are above the law, or instances where they actually get away with such behaviour. I am aware of them. They do not invalidate my argument. My argument is that American society as a whole is not comfortable with letting them get away with such behaviour. Likewise, do not point me to data that proves that American income and wealth mobility is not as much as the average American believes it to be. For purposes of cultural attitudes, what matters is the beliefs, not what actually happens.

The Gatekeepers to India

It is said that our country is divided into an India and a Bharat. I hate this terminology because it is unnecessarily pejorative towards “Bharat”, but let’s go with it for now.  These two nations are often identified with Urban and Rural India respectively, but sometimes the borders are not so clearly geographical. Some people say that the border is in fact between the rich and the poor. I believe that there are in fact two nations, but the line of separation is different from what is commonly assumed.  On one side is India, a nation that exists in spite of government hindrance.  On the other side is Bharat,  a country that would not have existed in its current state without the overbearing presence of government.

Guarding the frontier between the two countries are the Gatekeepers. They are a loose coalition of politicians, government offiicials, NGOs and other activists, caste and community leaders, local strongmen, industrialists, and the like. The Gatekeepers may have access to the levers of government, the capability for violence, or both, to achieve their end.  The Gatekeepers guard both countries against each other. To the Indians, they say that they are protecting them against the hordes from Bharat. To the Bharatiyas, they say that they are preventing the evil Indians from encroaching on their domain, and ensuring that the wealth created in India is equitably distributed.

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A Rant About Poverty Numbers

The good Pragmatic Desi asked me to write about the release of the latest poverty numbers from NSSO. I do want to write a follow up post to my Pragati article. But the bad news is that I have accumulated a lot of heavy reading material in preparation for that follow up post which I need to read. The good news is that a long weekend is coming up, and I hope to get the reading and the post out by then.

But in the mean time, here is a rant.

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The Moral of the Corruption Tale

Gaurav argues that the only discernible  moral from my tale of corruption is that Indians are corrupt.  Well, that is a good enough summary, but I need to fill out an entire blog post, so here I spell out the lessons I drew from that incident.
The most striking aspect of the tale, to me, was this: B, who was undoubtedly a well-meaning man, saw nothing wrong in misusing the CBI to achieve what he considered were morally justifiable ends. But if misusing public resources to achieve private aims is what is considered corruption, how were B’s actions any less corrupt than A’s?

There is a tendency in India to think of incorruptibility as a personal quality roughly equivalent to “lack of avarice”.  We believe that corruption is caused by a hankering after material wealth, and consequently, the tendency is to hold the saintly man, preferably with no family to lead him astray, as the model from which good governance will flow.   Sometime back, I read a story on how Nitish Kumar was transforming Bihar. I do not remember the source now, nor the exact words, but there was a line on how honest a man Nitish was. Apparently, industrialists who went to him with bags of money (presumably as donations to the party fund) found that Nitish did not even look at or touch the money when they tried to hand it over, but asked them to keep it in one corner.  Now, without detracting from Nitish’s achievement in making Bihar governable, which is indeed a considerable one, Nitish’s own personal “cleanness” makes no difference to the fact that the wads of notes that industrialists contribute to his party funds distort policy-making, just as B’s own personal honesty made no difference to the fact that his actions ensured that a person who ought to be arrested and in jail was out of it because it served the cause of a private dispute.

This tendency to think of corruption in terms of personal characteristics is a consequence of the saintly idiom in Indian politics. Gandhiji contributed significantly in establishing this, but he was by no means responsible for originating it. This mode of thinking has had many deleterious consequences on our polity.  One of them, which has thankfully reduced in severity, is an Indian inability to distinguish between a dishonest man and a person who, having made his money honestly, enjoys the good things in life.  This inability was fueled by, and in turn contributed to, the antipathy towards free-market policies.  Whether it is liberalization that changed this attitude or generational change, this particular attitude’s trend is downwards. Other consequences, however, remain. We tend to search for the incorruptible person to run our systems, and our fantasies of a perfect society display a disturbing willingness to hand over dictatorial powers to such a person.

The second aspect of the story to note was the reaction of the association’s members. The membership was split in its support between A and B, but there was no dispute over facts. None of A’s supporters thought him to be an honest man. Indeed, it never occurred to them that there was anything wrong with looting from the public purse.  What tipped the views of his supporters in A’s favour was the fact that A did a good job at the association – and yes, they knew that he took a cut there too.
For that matter, A’s opponents weren’t particularly concerned about the public money either. It was his avarice and his behaviour at the association that they were concerned with (Of course, as we have noted, B, the supposedly honest man, wasn’t that concerned about A’s corruption)
This is an important point, and unless we address it, we are not going to get rid of corruption. For us, the government’s money is “out there”, something external to us. It exists to be looted. The job of our representatives is not to be incorruptible and govern impartially.  It is to be corrupt in our favour.  We are strongly opposed to corruption when indulged in by our opponents, because they are denying our side the opportunity to do the same thing.

That brings me to the Jan Lok Pal idea, which is essentially a fantasy that we can get rid of corruption without addressing the systemic problems that cause it. I will write about it in a subsequent post.

(Update: Aadisht pointed out that I mixed up A and B in the last few paragraphs. Fixed that.)

A Little Tale of Corruption

This story played itself out back when I was a teenager.  The two protagonists, let’s call them A and B, were locked in a dispute. The dispute was about how the affairs of a particular association ought to be run. Now, it is somewhat important to mention that the association in question was a caste-based association, and the specific caste in question is Brahminism. However, I feel some regret having to mention this, because this fact will prejudice the minds of many of my readers. I, therefore, ask them to try and ignore the caste-based nature of the association and treat it like any other voluntary association of citizens. The import of the story and the morals to draw from it will not change significantly.

With this caveat in order, let us return to the story of A and B. Now, as it happened, both A and B were government employees. A was known to be extremely corrupt. Not a file passed through his desk without a bribe having to be paid to him. His extra-income showed up, not in his lifestyle, but in the assets that he was known to possess. He had no flashy taste in clothes and he had no unbrahminical “bad habits”. His wife, a genuinely good woman, wore much less jewellery than the ordinary middle-class woman at weddings. However, it was well-known that he had accumulated a lot of money. He had used it to buy up houses and stock up enough in his benaami bank accounts to last his descendants seven generations.

 

B, on the other hand, was known to be an honest man. He had never taken a bribe in his life, and his family’s lifestyle reflected this as well. For long, they lived in the same Central Government Quarters that his employer provided, and while his family did eventually achieve its ambition of buying  a modest house, at the time of the story, they had been unable to achieve it. B was widely reputed to be uninterested in wealth – and rumour has it that he was also uninterested in family life, believing himself to be cut out for higher pursuits, one of which was the association that is the subject of our story.

 

Let us now turn our attention to the subject of the dispute between the two men. We will not get too much into detail, but suffice it to say that the rights and wrongs of the dispute were exactly what one would expect from the character sketches of the two men we have drawn above. A had monopolized the affairs of the association, and it was widely thought that he took a cut from the association’s budget. To be fair to him, however, it was also widely thought that the association was in fact being run well, and its members regularly reelected him. B was proposing a change in the association’s by-laws that would bring in more transparency and bring in some degree of fresh blood in the association’s managing committee.

 

The dispute between the two men got personal, as these things frequently do. Apparently A struck the first blow – the details of which I do not remember. In response, B retaliated by calling in his contacts – he had many – and getting the CBI to open an investigation of A’s affairs. (“CBI” was the term used in the conversations I listened in on. It might have been some other investigative wing.)  The CBI carried out a series of raids on A’s property.

 

The response to the raids among the association’s members – and here I think it is relevant to point out that almost all of them were middle-class, educated Brahmins – was mixed. Some thought that A had got his comeuppance. Many others felt that B had gone too far in involving the police in an internal dispute.

 

In any case, these raids shook up A and made him ready to open talks with B for a possible compromise. After  extensive discussions, a “compromise” was reached, which can better be described as a surrender. A agreed to the rule change that B wanted – and B used his contacts to call off the CBI raids and hush up the investigation.

 

I will end this story here.  There are of course many lessons to draw from this, and if  I start off on them, the size of this post will double, so I will leave those for a subsequent post. But I must mention that this story tells us almost everything we need to know about the Indian’s attitude towards corruption, and the Indian’s conception of honesty.  Of course, we will get a Jan Lok Pal  who will fix everything.