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Home > Yearend > Columnists > Ashwin Mahesh

Think consumer, engage society

December 06, 2007

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It's always interesting to look back upon a period -- any period -- and assess its joys and sorrows. Our lives being guided by the Julian calendar, it is natural that we ask, at the end of each of its years, how the past 12 months have been. Typically, opinion-makers offer glimpses into political and economic developments, and the odd social one, to understand the past. That's a fair thing to do, I think, but let's do something slightly different -- we'll break things down into domains that broadly cover our lives, and look at the year through these.

Here are a few things that are getting worse, or not as good as they ought to be -- Agriculture, Child Welfare, Public Education, the Environment, Primary Health Care, Fiscal Discipline, Human Rights, Law-making, Poverty Alleviation, and Gender Issues. Don't take my word for it -- here's a small exercise that you can carry out yourself. Take any newspaper of your choice, and look through its coverage of these issues, and you'll find something uniform. Articles on these topics are invariably talking about struggle and despair, and to my reading, that means that these domains are not doing well.

Now here's another list of things, which if you read those same newspapers, would lead you to the opposite conclusion: Private industry, foreign education, High-tech medicine, Entrepreneurship, Tax Revenues, and Travel and Tourism. Invariably, coverage of these domains is positive, even breathless, and would lead one to believe that things are going quite well on these fronts.

The question is -- which list is bigger? That there are -- and have been -- two Indias, one for the haves and another for the have-nots, is well known. What is more robustly debated is whether one of these Indias is overcoming the other. There are those who argue that economic growth and its attendant benefits will eventually erase the India of deprivation, and others who are certain that the continuing inequalities will inevitably end in upheaval of one sort or another. Being of neither camp, I tend to believe that both of these are plausible, but that it's impossible to tell now whether one is more likely than the other.

But that's not the end of it. The two lists that I offered differed in one significant aspect -- the negatives represent a much larger slice of the nation than the positives. That is, while there are both pluses and minuses to be counted, the minuses appear far bigger than the pluses. Thus, any proportionate representation of the two lists would lead to the conclusion that current economic growth alone will not be sufficient to overcome the social and other deprivations that continue to mark so much of Indian life.

What will help make the India story more inclusive? It's difficult to say, but there is a battle going on in public space in which, if we make the right choices at the right times, things can tip favourably.

There are two major forces that compete for gain in the public arena in India today -- the politics of the old, and the business of the new. The 'India Shining' story is the arena of the latter, and the 'India trailing' story is the arena of the former. Various descriptions of Indian history have now conclusively established that the facade of socialism through many decades did nothing to actually uplift the working poor and the lower castes, so we can be sure that the politics of the old is not going to create a new India. The question at the heart of the current schism between haves and have-nots is whether the business-lensed approach of recent years is likely to fare any better, or whether -- like the politics that preceded it - it too will end up simply privileging a few.

The nice thing about this 'politics versus business' approach is that we voters get to play the umpire. Thanks to the rules of democracy, each of them must parade their model before the people, and it is only the affirmation of the people that determines which of these dominates in the long run. Therefore, if the people are clued in, they can select the winners they would rather have, and reject the rest.

There are two objectives in this exercise. In social battles, a good umpire must do two things -- he must reduce the cost of winning for the preferred candidate, and increase the cost of losing for the rejected candidate. If you do this a few times, then the only candidates for your attention will all be offering honest choices, and you can take the ones you want. We're familiar with this approach in the economic arena -- even the guy who makes a flaky washing machine has to invest in marketing and supply chains and financial schemes and all that, so his cost of losing as a result of the flaky machine is very high. So he has an incentive to make the machine better, simply because the other expenses would not be justified without this. We've got to bring this principle to bear in more social settings, and then good choices will begin to emerge.

This logic can be applied to politics too. Parties make mistakes all the time, and what keeps them from capturing power is the inability to round up the last few voters who are not their natural supporters. For most elections, the margins of victory in our first-past-the-post system are low. So, if you vote for a smaller political party, you can nudge the system a little bit, helping the better of the larger parties win, and increasing the cost of losing for the others. If your candidate is going to lose, he may as well be someone you like!

This opportunity to choose between political and business interests didn't exist until very recently. Politics and business operated more or less in collusion, and consumption was not a major driver of growth; as a result, the local populace was not invited to put its seal of approval on the conduct of either businesses or politicians. But now, things are a little different. In a consumption-led economy, businesses must find more than political patronage to survive (although there are still many industry where patronage is the only game), and politicians must constantly explain to the people why their consumer expectations should not be met by an ever-increasing array of products and services.

There's also one other thing that should make this tussle fascinating. Consumers of political and economic offerings are the only legitimate umpires in this contest. Politicians who rant and rave against business interests must be able to demonstrate that their alternate vision of the future still offer the opportunity for economic or social growth. This is why there is so much political resistance to organised retail -- once the door is open, the consumer economy will place high expectations on politicians too, not just the businesses that sell goods or services. Even Reliance [Get Quote] will be back in UP, and if not, then there will be other retailers operating happily while Reliance takes the stick.

Remember that in this tussle, it's not important to the people which business wins or loses - even telecom companies may one day lose ground to VoIP or free carriage services. But the key is that the consumer-driven economy will increasingly demand that politicians do not interfere with the choices made by consumers, as was the case during the first fifty years since Independence. Also remember that not all business that prevail will be good, clean ones, and another round of battle will become necessary to re-build the political machinery and reign in runaway business interest again. But we're some years away from that.

Which brings us to the question: what are some of the choices that we can make that will help the India story become more inclusive? Simple: think like a consumer, engage society. You can only buy one washing machine, or cast one vote, but the best in both cases emerges from a lot of people making such small choices. Once we understand that, we can be powerful umpires. Vote for clean politics without being afraid that your vote will be wasted, give a local NGO 20 bucks, compare prices, join a social network and share information. There's a lot you can do, really, to help make 2008 - and each year thereafter - will be better. What's most important is to understand that the sum of our little choices will make a more powerful statement of our aspirations than any big step we can take.

A small aside: Some of you are bound to be interested in engaging problems of society and economy in more ways, apart from making personal choices. This is certainly more do-able nowadays. There are many stories of entrepreneurship and innovation around the country in all sorts of fields, and increasingly people are drawn to such work for its combination of social and economic rewards. And some of these ideas are gaining traction, for a variety of reasons. I have myself had the privilege of doing this kind of work -- one reason I have more or less stopped writing since 2004 -- first with the Administrative Reforms Commission, and now with Mapunity. I'd be happy to hear from you, if you have particular ideas.

Happy 2008!

Earlier columns by Ashwin Mahesh

Ashwin Mahesh