Crony Capitalism and the freedom from society

2

30/09/2014 by Siddiqui Fayesal

I came across an old editorial from The Free Press Journal a few days back while I was rummaging in my box o’ vague things. It was a cut out of an article by Dr. Bharat Jhunjhunwala telling us how Crony Capitalism was an impediment for our economy.

Dr. Jhunjhunwala’s captain obvious contention was based on the absence of clear demarcations between politics and capitalism. He insisted that the reason for compassionate capitalism mutating into crony capitalism was the absence of self check that could be put in place by a rigorous and righteous form of government that would keep each other, the businessmen and the politicos, in check. One toe out of line and a hollering brings to attention the wrongdoing etc etc etc.

Though I completely agree with the idea that crony capitalism can be solved, it does bring to my head the other problems associated with capitalism itself. There was a point of time when I was under the impression that capitalism is all bad; that has changed after a few years of reading and analyzing. It’s like saying that Democracy has its share of problems. But we can’t deny that it’s the best we’ve got. So, coming to the crony part of the capitalism, I was reminded of another article I read in the newspaper not very long ago. It was written by the chairman emeritus of Infosys, N. R Narayana Murty.

Now, there are many who have problems with this simple man. There are those that make faces and cat call his intentions and study into simple organizational reformations saying that if he had so much problems with ‘living it up’ he shouldn’t have gotten rich in the first place.

To those people I say, STFU.

Murthy’s opinion on simple living might seem as a curriculum on theology or sociology but definitely not a standalone discussion that takes place in the boardrooms of business organizations. His piece spoke quite nonchalantly about corporate packages that CEOs take home. There are varied opinions which support the phenomenon of multimillion pay packets to the upper management while the lower management is, at times, not only a percent of that pay. Murthy’s opinion is based on three things; fairness, accountability and transparency.

Murthy has always stood up for minimizations of the corporate salary and has also come up with the ratio within which it should be calculated. He says that the difference in salary between the lowest level professionals and the highest paid managers in a corporate house should be between 20% and 25%. This solves the problem of disparity at the lowest level. It solves the issue of distribution of wealth at the base at which it is created.

800 million people in India live on less than 100 INR a day. That’s less than 2 American dollars today and by no means whatsoever an ostentatious and obscene display of wealth by the rich can be justified. Of course, altruism and charity are personal choices but the rich who get rich via the society do have an obligation towards the very same society! I’m not even asking for an austere lifestyle; not even expecting, nor trying to parley with the rich, that their wealth is not their own.

Coincidentally, I happened to flip the cut out of Murthy’s address over and I find a small snippet of Tim Cook, the CEO of Apple, taking a huge cut on paper at the end of 2012. A drop from $378 million to $4 million??? I knew there was a catch.

I later realised that I hadn’t quite understood what ‘on paper’ meant actually. It was not a cut after all. Just a jiggling and re-stacking of calculations and variables and, voila, you have a ‘cut’ despite his base salary being increased by 50% and getting a 200% bonus.

Time Life, dated June 11th, 2011 had a spread quoting many such industrialists and business men. While some maintained, like Adi Godrej and Anu Aga that the rich have a duty towards their not so lucky brothers and countrymen there were some who played the ‘freedom’ card.  Most callous in her approach was Image Consultant, Chhaya Momaya who went on record asking why one couldn’t be allowed to enjoy the wealth one has created through hard work and enterprise? The editorial was not an answer seeking exercise. It was only an article in a paper not really known for its seriousness of news distribution but it does beg the question about the fine line between enjoying ones wealth and obscenely displaying your wealth in a society where more than half the population has difficulties of making 2 squares a day.

While this article was spurred by the garish and vulgar display of inappropriateness by Mukesh Ambani’s 27 storey apartment in Mumbai, Antilla, it was a question just begging to be answered when the rich are getting richer and the poor are having a lesser of a roof over their heads. Antilla is an ugly structure from where Mukesh Ambani can see acres and acres of slums around the city while he sits in his glassed façade smoking whatever he smokes. From getting ‘favours’ from the Income Tax department to killing the fabric of fair and decent capitalism, the Ambanis have done it all.

For those, and there are plenty in number, who keep saying that charity is a personal choice and that it cannot be forced upon anyone I’d say that I agree with you. But then, I’d ask, since when did doing good need a stamp of approval? The Tata’s are the oldest industrialists in our country and have been known for their culture and strict policies. I have personally seen the amount of charity that their corporate structure fuels. Their trusts have been known to reach the furthest corners of the country and set up workshops and schools. It’s not only a myth that Tatas have their head in the right place.

It was Ratan Tata who mentioned that the Ambani residence was an example of rich Indians lack of empathy for the poor.

While the debate over the rightful usage of wealth is never ending, the process of CSR has taken roots with a little more seriousness in corporate India. Compliances have become heavier with the very recently amended Act making it mandatory for corporate houses to spend 2.5 percent of their wealth towards social causes.

If only a more emphatic approach is taken towards a serious intentioned process by the rich of this country there’s no saying where we would be in the next 10 years to come. If politicians actually took pride in their ‘job’ and went about doing their duty; if the rich actually believed in the theory of trusteeship propounded by Gandhi; if only the common man didn’t have to stand in queues for 13 hours for getting his kid into a school; if only sanitation and healthcare was cheaper and freely available to the poor.

India is a country of contradictions. Onions get pricier and mobile phones get cheaper. I like technology making new groundbreaking inventions that the cab driver and I can afford the same phone.

I only wish it was true with the food I ate and the clothes I wore and the opportunities I had.

Siddiqui F.
(21.09.2014)

2 thoughts on “Crony Capitalism and the freedom from society

  1. Aditya says:

    Very well written. Good work!

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