Greed Begets Capitalism Begets Scams, Corruption

22 December, 2009 at 17:37 Leave a comment

Some selected quotes from, “Scams that Launched a 1,000 Suits” by educator and commentator, Paranjoy Guha Thakurtha and, “Of Money, Greed and Risk-loving CEOs” by economist, Jayati Ghosh both of whom put the year-end focus on scams that rocked both India and the world, er, USA. While many people believe, (or are led to believe by the capitalist media which also have major stakes in the system) that capitalism is somehow more open, accountable and democratic that has led to an appreciation of the qualities that capitalist functioning is based on: individualism and the competitive spirit have something else coming in this post. It is a false illusion because capitalism as a system in based on greed, on the harnessing of individual self-interest to the common good. 2 words – human nature – which should be all-encompassing on how corporate games are played – dirty and fatally.

In 1776, Adam Smith’s famous and still widely quoted passage in the “Wealth of Nations” noted that ‘It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to self-love, and never talk to them of our own necessities but of their advantages. More recently, the more famous quotation was probably that of Gordon Gekko, the fictional hero of the 1987 film “Wall Street”, ‘Greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind’. The proof is out there for all to see – well, to someone looking. A series of corporate scandals and failures rocked the US economy in 2001 and 2002 – from Enron and WorldCom to Adelphi and even one of the “Big Five” accounting firms, Arthur Andersen. It turned out that much of the much-hyped growth and profits were clearly illusory, based on fraud and data manipulation, or simply put, lies. Two points that emerged then are still relevant today. First, such scams are not new nor unexpected; in fact they are part of capitalism’s normal functioning. Only most naive interpretations of the history of capitalism would leave out the crucial role played by fraud, deceit and open crime in the accumulation of capital and its subsequent use. While many of the financial malpractices continued for several years, they were exposed only when economic slowdown and the stock market bear trend fed into each other. Yet another (policy created) bubble in the US — this time directed to the housing market and financial proliferation — once again diverted attention and brought back the glory days for risk-loving CEOs of large companies, especially financial firms. The period 2002 to 2007 thus became, in the US and globally, a repeat of the earlier 1990s process on an even larger scale. It was the same dance, to just a slightly different tune, and joined by many more economic agents all over the world. Greed and boundless market optimism were back in fashion again. And the current crisis is not over yet. The major imbalances that were at the heart of the crisis still persist: the imbalance between finance and the real economy; the global macroeconomic imbalances; and ecological imbalance resulting from the pattern of growth. This cycle will repeat for eternity.

When Deccan Chronicle asked me to draw up a list of the 10 biggest scams of the past decade, I didn’t realise there were so many over the last two years alone. I gave up counting. A group of bleeding-heart do-gooders by the name of ‘Transparency International’ ranked India at the 85th position out of 179 countries in its annual “corruption perceptions index” in 2008. In fact, India’s score improved dramatically from 2.7 (out of 10) in 2002 to 3.4 in 2008. Does it mean that corruption has become better or that India is more transparent in its corruption today than before? Everybody accepts it as a way of life. Of capitalism and bureaucracy taking its charted path. We draw distinctions between the more corrupt and the less corrupt, the corrupt-but-efficient and the corrupt-and-inefficient – “that fellow accepts bribes but still refuses to do his job”. We are a nicely nuanced lot. But as a majority is so poor, none of this actually affects them. They have their own fish to fry (this is figurative because there aren’t enough fish to feed all the ugly masses). Scams therefore, escape our scrutiny for the same reason. Harshad Mehta, former employee of the New India Assurance Company who became a notorious stockbroker by presiding over a financial scandal involving Rs 4,000 crores. Byrraju Ramalinga Raju, who headed Satyam Computer Services confessed that he cooked the books of account of his flagship firm to the tune of Rs 8,000 crores. Ketan Parekh is a pale shadow of his former cocky self and few remember C.R. Bhansali’s claim to infamy. The IPO scam involving India Bulls and stock-broking firm Karvy is a distant development. And, have you recently heard anything about Abdul Karim Telgi who started life as a fruit and vegetable seller before he decided to bribe his way into the Nashik security printing press and forged wads of stamp paper? Madhu Koda started off as a labourer in a mine and a window-grill fitter before a small-time flunky in the BJP to a big-time beneficiary of the vagaries of coalition politics. He reportedly almost bought up a couple of uranium mines in South Africa before celebrations abruptly ended. But Koda’s shenanigans faded into insignificance before the occurrence of the “biggest” scam in independent India, namely, allotment of electro-magnetic spectrum to a clutch of mobile operator telephone companies at prices that were at least one-seventh their true market value. What was the loss to the nation? Only Rs 50,000 crores! This is India, after all, the world’s greatest democracy, where sibling rivalry can paralyse the working of the government. Imagine a tycoon splurging on front-page advertisements in dozens of newspapers to tell the world how the Union ministry of petroleum and natural gas was depriving the exchequer of huge amounts by favouring a fraternal company by agreeing to pay a higher price for natural gas taken out of the bed of the ocean in the Bay of Bengal. More than 250 aircraft and helicopters valued at not less than Rs 16,000 crores that were imported into the country between May 2007 and July 2008 by more than 70 companies controlled by some of the country’s most prominent industrialists after evading customs duty worth Rs 4,000 crores. Noteworthy that most of these private aircrafts were used not merely by corporate honchos, family members and business associates but also by “politician friends” during their election campaigns.

All said and done, capitalism works because it is first and foremost a monopoly – only because of a failure (and propagandic annihilation) of other systems to catch on, rather than any strict opposition or fair-play – because our pathetic little brains and genome vessels cannot think beyond self-preservation. During the cold war, the East looked in jealousy at West for the goods they have in their supermarkets. But now, the East which still suffers from poverty inspite of capitalism, looks in despair and hopelessness at the West for the debt-ridden luxury consumption that is the driver of growth more than industry. After all, we are animals who like cuckoos value trinkets like some yellow metal (read, gold) and pressurized rock (read, diamond) in high regard than that of the life of a fellow human and would be willing to commit unspeakable actions to the pursuit of stuff – white solids or black liquids or green paper or blue powder – that has absolutely no real tangible value if one really spends enough time to think and ponder about this madness.
This is getting boring, isn’t it? If one were to start chronicling the stories of human greed, it would take a million lifetimes. The MD of Alcatel-Lucent India, Vivek Mohan spoke, “It is high time for India to move on from ‘Copy the West’ phenomenon and develop innovative, India-specific stuff. I strongly believe that India is home to the best entrepreneurial talent and Indians have innovation in their DNA”. It is so very true. We are innovators in corruption and scams today after successfully imitating the West at a scale that boggles the mind. It is in our blood to be apathetic and suffer. Connection between capitalist greed and scams and the nexus between business and evil politics is neither new nor unique. What’s a few billions among friends, eh? Let’s talk about the weather instead. Oh wait, there is a scam brewing here too. Of railroad engineers, Pachauri and failed Presidential candidates, Gore who could be the first carbon billionaires if not already, which would be even cooler – paradoxically – to cash-in on the haze of mitigating/combating global warming.

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Entry filed under: Citizen-Journalism, Climate, Economy, Energy, India, Life-Theories, Politics, Poverty, Research, WebXP.

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