What could have been Discussed over Cups of Coffee ...
It all started on Shivam's blog.
Amit said he would prefer to discuss this over cups of coffee in the comment section of Shivam’s post (and if it is the finest, I hope he will sponsor it, if he is willing for Nescafe, I will shell out, whenever that happens).
It was such a good solution till Saket put it all over Desipundit. Well folks, if you are here you came via Desipundit, or else click on the photo on the right hand side of this page and it will take you there, I am bad at html and I hate making any more links than necessary. Now here I am typing my response when all I wanted you to read on my blog today was this.
(I edited the above para after getting a mail from Saket, but I do not know how to do it the way you guys do, by striking off what is written and adding something, so that both the previous and new version are visible. Let me add I am enjoying the debate from the beginning and more, so after it got featured on the Desipundit. Back to the original post.)
But I have very few things to say here.
One, read this, fraud is not only committed with taxpayer’s money (you will get an excellent collection of this kind of fraud on Amit’s blog) it is committed with company’s money too (employee’s career’s get at stake and shareholder’s money is not for gifting handbags) and in style. Read about Lord Black:
http://news.bbc.co.uk/2/hi/business/3617908.stm
Among the items listed as personal expenses claimed by Lord Black and his wife are the lease of a Gulfstream IV jet - at a cost of between $3m and $4m a year to the company between 2000 and 2003.
A further $3,500 went on silverware for the jet, while $90,000 was spent on refurbishing a Rolls Royce used for Lord Black's personal transportation.
According to the report, other luxuries picked up on the corporate expense account include:
- Handbags for Ms Amiel Black - $2,463
- Jogging clothing for Ms Amiel Black - $140
- Exercise equipment - $2,083
- A T Anthony Ltd leather briefcase - $2,057
- Stereo equipment for the Blacks New York apartment - $828
- Opera tickets for the Blacks - $2,785
- Summer drinks - $24,950
The case is under trial.
http://news.bbc.co.uk/2/hi/business/4533418.stm
And this is just one example, there are many others, but I leave it to yourself to find them. I picked this one because it is in news today. So Ravikiran, in reply to your question:
“Why do you think that a hopelessly flawed regulatory system will fix the problems in the hopelessly flawed market system?”
I would say both are flawed and if we give power without proper accountability to anyone, be it in government or corporate world ‘the human tendency’ as someone noted on your blog, comes into play. Also, since when did rule of law (which is implemented by the government) and free market become mutually exclusive?
I do not share your unbounded faith in free market but that by any streatch of imagination does not make me a supporter of license-quota Raj. Heck, I am just a humble NHB.
A side note: Half in jest and half in seriousness, I am thinking about putting a comment policy for my blog. If you let me comment on yours, you are welcome. If not please use the email; it is on my profile page. But I have not yet made up my mind. Gawker, for writing this post you are exempted from any comment policy I might make in future :)
PS. Ravikiran it is a bad idea to crack a private joke at a public blog. (I should update this, well, it is not too bad, all you get is a reply.)
Labels: blogging
posted by Mridula at 2:18 PM
23 Comments:
Hi,
I think the major distinction between misuse of Govt. money and misuse of company money (a la Lord Black), is that the people whose money Black stole had an option not to be associated with him. Hollingworth shareholders have the choice of not investing in the company, and I suspect many of them will want to take their money out now they know how it is spent. However, when it comes to the government, no such choice exists. We can't stop paying taxes because we're afraid of how the Railways Minister, for example, will spend the money.
Kunal, in a democratic setup we can change the government.
I did not intend to get into this debate, but I must say that I agree with Kunal here.
The point here is: I (or the investment company that I'm a part of) can unilaterally decide whether or not to invest in Black's company. The same is not the case in the case of the Government. I cannot unilaterally decide not to pay taxes, if I feel my money is being misappropriated. It is not optional.
If you look at it another way, investment in Black's company is voluntary (and not enforced). Investment in the Government is enforced.
Also, I cannot unilaterally change the government as easily I can decide not to invest in Black's company. It takes five years, and I don't necessarily get my way - I've got just one vote. It is a majority-buttresses-all thing.
Democracy is great, and I'm not arguing against democracy here. I'm attempting to demonstrate that the Government looting people is deadlier than corporations doing it. In the former case, the only thing I can do is mutely suffer while the government loots me and throws my money down the sewer (unproductive public-sector enterprise) or feeds off it (misappropriation of funds by Government functionaries, corruption, etc). With the private sector, I have a *choice*
It is also not just that you have a choice, but that the punishment is built-in to the system. Now that this person is known to be a cheat, nobody will invest in his businesses henceforth, investors will steer clear of him and so will other business partners - who wants to give money to a man who cheats? But when it comes to the government - what choice do you have? Can you decide not to pay taxes and not go to jail for that decision?
You're right, we can vote out corrupt governments, but what if the fraud is by a bureaucrat (which is sadly the case all too often). It is nect to impossible to bring them to book, and the vast majority of bureaucratic offenders go unpunished.
So we throw the government away and hand over the administration of the country to the private companies?
Unless we are willing to demand a clean government and better corporate practices, i.e. CII (and that is representative of industry, no one company) not sending suitcases to the government, no one is going to hand it to us on a platter.
Mridula, you might be interested in what Curious Gawker has to say. And, he is deadly serious!
Abi, thanks. He is serious indeed. And I agree with what he said.
http://kgptech.blogspot.com/2005/12/on-intellectual-masturbation-of-some_16.html
My thought on this issue. With a completely different prespective
When a government begins the privitization process, they must be very very careful that the changeover is not tainted by corruption. Look at Russia for example, they went "free market" but only a very few benefited, and so now we have these Russian billionaires buying up chateaus in France and lavishing diamonds on lovers while most of that country remains mired in deep poverty. Corporations can be very very corrupt and without proper gov't regulation there can be major trouble there.
Mridula: The Italians tried the "demand a clean government" approach in 1992, they called it the Mani Pulite or "Clean Hands" Revolution. A lot of corrupt politicians and officals were convicted in the mid 1990s. But then, public opinion changed, and one of the major accused in the scandal, Silvio Berlusconi, became PM of Italy. Now public opinion has turned against the judges and prosecutors who ran the Mani Pulite campaign, and Berlusconi has succeeded in changing the law to ensure that he is never brought to trial. Mass mobilization of public opinion got a few people in jail, sure, but it did not end Italy's endemic corruption problem.
Crystal: You are absolutely right when you say that the privatization proces should be free of corruption. However, I don't think Russia's current problems can be blamed on free markets alone. Firstly, the fact that Oligarchs control vast monopolies in Russia is a consequence of the fact that under the Soviet regime, monopolies were encouraged. So instead of having a Cement Industry, for example, the Sovs would have One Big Cement Factory. Obviously, when such a factory was privatised, the owner would have the Cement monopoly in Russia. Secondly, as the Soviet Union had been a Communist State for 70 years, and as the oficial currency was (in the early 90s) next to worthless, the only people who could afford to buy a newly privatised asset were the Russian Mafiya and the Black Marketeers. These people already had large sections of the ex-Sov bureaucracy on their payrolls, and proceeded to bleed Russia dry. This is why I feel the post-privatization problems of Russia cannot be generalised to all free market endeavour.
(Sorry for the long comment, btw)
Kunal, so give up and hand over to private corporations who always have consumer interest in mind?
Ah, and by the way in which country in this world we find a completely 'free market?' You understand imperfect markets like oligopoly and all? Like OPEC is an oligopoly, so is Walmart.
Mridula,
I'm not an economics expert. But whatever I've read and learnt about free markets, its a case where the consumers are in control. Not the corporations.
"Handing over to private corporations" is exaggerating.
And consumers being in control is a myth.
I really loved the way you stripped Amit Varma on Shivam's blog. Whenever that fellow encounters opposition, he falls back on Wikipedia and bullshit like Type M logical fallacies to defend himself.
He started the rejoinder by stating that 150 years ago women's empowerment was an utopia. Then when you matched him point by point, he started mellowing. Finally you delivered the knock out punch. Then he wanted to make a truce ...what a fucker! Wantes to meet over coffee etc.
i just hope that even though you have coffee with that fucker, you dont cowtow to him. Hold on steadfastly to your own viewpoints. Amit Varma was recently raped on the Indian Economy blog by a person called Kya Yaar tu Bhi- read the post "Tilling fields".
If this was a tennis match Mridula, you have beat Verma 6-0 6-0 6-0.
Hats off! :)))
Way to go with the Eco 101!
I saw your post elsewhere and followed you here. Why does your status as a woman imm. draw references from the women's equality claim??? MEN!!!
Shan't quibble about the paths you folk follow or trash, just a little aside...
Fair trade coffee is NOT an issue in India unlike the US of A where they import stuff from the origins giving coffee the status of the 2nd largest globally traded comm. So if you drink your coffee at Gurgaon malls, it is coffee grown in India with healthcare, education, housing water et al provided to the labour in terms of the Plantation Labour Act, which, btw your friends may like to decree(y) to death! And its only Nestle which may contain imported Vietnamese robustas which are obviously the cheapest and definitely not *fair* trade!
Drink to that!
What is women imm.?
Barista is sold in my Gurgaon Malls and this what they say about their buying of beans.
"We source the finest beans from around the world and also grow coffees on our estates in the regions of Coorg, Chickmagalur and Hassan. So what you get are only the best quality beans. While we get something to write about in this section."
http://www.barista.co.in/history_coffee.htm
I do not know how they source from around the world. So I thought as a second option I would go with the cheapest. Anyway my first offer still remains dhaba chai!
Artful Dodger, let us take insperation from Chetan, since you came from Shivam's blog you must have seen his logical and polite comment. Let us not get inspired by TTG and use language that is derogatory to anyone.
...women immediately...
Given that Tatas have opted out of barista in favour of F&H, its not the coffee *they* grow that they serve anymore. The amount they source of colombian and brazilian among others @ 100% import duty would a few beans for exotica no more.
And yes, in dilli, dhabas are the preferred option. Bangalore, of course, would be different!
"Given that Tatas have opted out of barista in favour of F&H, its not the coffee *they* grow that they serve anymore."
I told you what their website says, I even gave you a link. If you have a problem with that, write to Barista, not me. Another point, is the company misleading consumers from their website? Another example of how the markets work? I can't even trust on what a company says on their own website?
You evaded the point that I stressed quoting the Barista website and your earlier point about fair trade:
"We source the finest beans from around the world ..." I said I do not know if it is fair trade or not.
"And yes, in dilli, dhabas are the preferred option. Bangalore, of course, would be different!"
Yes, for me in Dilli dhabas are the prefered option, if you equate me with Dilli what more can I say?
And I agree, soon to be Bengaluru is a very nice place but you might also like to look at the seventh pic from top. It is a small road side shop in soon to be Bengaluru.
Madam,
I profusely aplogize for using profanity on your blog. Such a mistake would not be repeated. I really cannot thank you enough for pointing to Chetan's rejoinder. Suffice it so say that it changed me as a person.
I also left a comment on Chetan's blog.:)
Thanks again and I wish you a very happy christmas.
Artful Dodger, I read your and Chetan's interaction at Chetan's blog. Enjoyed it thoroughly. And where do you blog from?
A merry christmas to you too.
Borrowing from Chetan:
To all readers: Please refrain from making ad hominem attacks and statements in bad taste about anyone here. I let the one on Amit Varma by Artful Dodger slip through and am not moderating it because I had not warned about this earlier.
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