Savitri Era of those who adore, Om Sri Aurobindo and The Mother.

Wednesday, November 26, 2008

The two great means of communication are language and money

‘Economic revolutions are always monetary’
from The Memory Bank by keith
Mauss, Polanyi and the breakdown of the neoliberal world economy
Anthropology in the financial crisis

Everybody knows that we are living through a hinge moment in world history, the financial crisis of 2008. The collapse of the credit boom has already had dramatic social consequences: the default and nationalization of banks, dramatic losses of personal savings and mortgage foreclosures on a massive scale...

The rise and fall of national capitalism
In order to understand the potential of our moment in history, we need to reflect on competing visions of the development of capitalism in the twentieth century and before. There is no more fruitful place to begin such reflection than Karl Polanyi’s masterpiece, The Great Transformation, published in 1944 and largely gestated in England during the 1930s. It opens with a highly selective account of the making of world society in the nineteenth century, a society that Polanyi not unreasonably considered to be lying in ruins as he wrote. Money was a central feature of all four pillars of this civilization. Polanyi identified the interest that had sustained a century of peace in Europe with what he insisted on calling haute finance...

The conditions Polanyi described for the decades leading up to the First World War have been closely replicated in the last quarter-century. As the smoke rises from the rubble of neoliberalism’s demise, we should revisit the story of national capitalism’s rise and fall; and Polanyi’s account of that earlier cycle has lost none of its fascination for us.

Money, much as Durkheim argued for religion, is the principal means for us all to bridge the gap between everyday personal experience and a society whose wider reaches are impersonal. Money is often portrayed as a lifeless object separated from persons, whereas it is a creation of human beings, imbued with the collective spirit of the living and the dead. Money, as a token of society, must be impersonal in order to connect individuals to the universe of relations to which they belong. But people make everything personal, including their relations with society. This two-sided relationship is universal, but its incidence is highly variable. Money in capitalist societies stands for alienation, detachment, impersonal society, the outside; its origins lie beyond our control (the market). Relations marked by the absence of money are the model of personal integration and free association, of what we take to be familiar, the inside (home). This institutional dualism, forcing individuals to divide themselves between production outside and consumption at home every day, asks too much of us. People want to integrate division, to make some meaningful connection between their own subjectivity and society as an object. It helps that money, as well as being the means of separating public and domestic life, was always the main bridge between the two. That is why money must be central to any attempt to humanize society. It is both the principal source of our vulnerability in society and the main practical symbol allowing each of us to make an impersonal world meaningful...

We also need ways of reaching the parts of the macro-economy that we don’t know, if we wish to avert the ruin they could bring down on us all. Perhaps this was what Simmel had in mind when he said that money is the concrete symbol of our human potential to make universal society.

The two great means of communication are language and money. Anthropologists have paid much attention to the first, which divides us more than it brings us together, but not to money whose potential for universal communication is more reliable, in addition to its well-advertised ability to symbolize and even generate differences between us. We cannot afford to neglect money’s potential for universal connection, choosing rather to demonize it as the source of our vulnerability to those who have a lot more of it. It is high time for us to return to a more inclusive philosophical tradition of anthropology, building on Kant’s example, but also on the neo-Kantianism of Durkheim, Mauss and Simmel in the early twentieth century . I have been driven to this conclusion by studying money as the most tangible manifestation of the new human universal that is our shared occupation of the planet.

Mauss and Polanyi
Do anthropologists have something to say about all this? It would help if we could bring the distributive consequences of finance down to a concrete level. Our readers might then be able to engage with money not as a superhuman force with devastating effects, but as the outcome of ideas and institutions that can and should be changed by human action. Kula objects have magical power for those who exchange them, but anthropologists have shown their social logic and instrumentality. We have always invented concepts to describe and explain social processes quite different from those familiar at home. The current crisis presents us with a compelling reason to do so again, this time in a global context. When others may be losing their heads, there are rich precedents in the anthropological literature for where to start.

We can do no better than to renew our engagement with the writings of Marcel Mauss and Karl Polanyi. The ideas of these foundational writers in economic anthropology have been sliced and diced – like mortgage debt – to serve different purposes over the years, but their perspectives on political economy can help us to make sense of the current situation and to recommend a path forward beyond market fundamentalism. Mauss’s reflections on money and exchange in The Gift have often been misunderstood. Probably his essay’s title and later academic discourse have obscured his concern there to use unconventional money forms to illuminate some potentially dangerous aspects of money forms based on capitalist corporations and the welfare state. Mauss was a cooperative socialist in the British tradition of the Rochdale Pioneers, Keir Hardie and the Webbs. He was a tremendous Anglophile and spent the war on the front line as a translator for British and Australian troops. He also kept a close eye on the cooperative movement in Switzerland and Germany. He lost part of his inheritance financing a cooperative bakery in Paris. But his metier was as a political journalist. His political writings were published together in 1997 and they run to 700 pages, about two-thirds of them written in 1920-25, the period when he wrote The Gift. He was anti-capitalist, but not anti-market. He was pleased that his uncle’s idea of an organic division of labour was extended to international economy after the war. He also tried his hand at financial journalism, notably in the context of the exchange rate crisis of 1922 when he wrote that “Economic revolutions are always monetary”, a pregnant comment whose implications I would like to apply to our present circumstances.

In analyzing practices such as the kula ring or potlatch, Mauss pointed to how monetary means were a crucial constituent of the social order. The social distinctions allocating rights to engage in different exchange institutions organized the monetary media and were organized by them in turn. Malinowski showed that not everyone had the right to engage in the kula ring; and this had particular implications for social rules and hierarchies. The imagined ‘force’ of the monetary ‘objects’ also defined the multiple but limited possibilities of the participants. If the ‘gift’ implied disinterest, it was in fact a site of sometimes violent power struggles. These helped to define, reproduce or transform the social order and even the boundaries of particular groups. Mauss observed, on the basis of these reflections, that in contemporary capitalism the wealthy classes acted increasingly as if they did not belong to a social order that made redistributive obligation a condition of their hierarchical privilege. Their amnesia when it came to the ‘gift’ was not just a function of power, but of an accumulation of power that considered itself to be socially unbounded. As a result, heightened strife put the social order itself at risk.

Although Polanyi’s analysis of how markets became disembedded from the rest of society, in The great transformation and after, is often thought of as a general critique of market relations, like Mauss he considered markets and money to be fundamental elements of any social order. He too contended that the classes who benefited from markets, particularly high finance in the decades before the First World War, neglected the interests of the rest of the population, with devastating consequences for society. The distribution of resources, according to him, should not be left to the search for profit in market relations, but needed also to acknowledge solidarity between all members of society. Like Mauss, Polanyi was concerned with the ideas that defined money, the rules of its use and the social distinctions that made its circulation possible and legitimate. Above all, he identified the historical dialectic or ‘double movement’ whereby the drive of capitalists to escape from social constraints met the countervailing power of classes and institutions (such as those adhering to the welfare state) acting in society’s self-defense. Polanyi analyzed the specific effects of shifts in the distribution of resources, showing how this was the object of violent power struggles culminating in untold human misery and the protracted death of a civilization. Anthropologists following him would thus explore how the social struggles over money are understood by the participants, and with what consequences for distribution itself. This would offer a critique of the pretense that economics is not social or political; beyond that, it would constitute a research programme.

The two authors could be said to be complementary. Mauss reminds us that monetary relations may be understood by analysing how the objects of exchange and the social roles of the participants are defined. This process is not restricted to the political utopias of liberalism. As much as the kula was a particular way to understand political economy in the Western Pacific, the ‘rationality’ of homo economicus is just another version of this, not simply a human universal to be accepted without reflection. Polanyi drew attention to how economic institutions organize and are in turn organized by a plurality of distribution mechanisms that, in the modern world, affect the lives of millions of people who participate in them, without being granted any measure of control. This led him to highlight the inequality created by these institutions, as they swing between the poles of market and state, of society’s external and internal relations. In the current crisis, the immediate reaction is to turn to a variety of government institutions with Keynesian redistribution in mind, flipping the coin from tails to heads as it were, instead of insisting that states and the markets have to work together in less one-sided ways than before. To this end, Polanyi’s call for a return to social solidarity, drawing especially on the voluntary reciprocity of associations, reminds us that people in general must be mobilized to contribute their energies to the renewal of society. It is not enough to rely on impersonal states and markets.

Polanyi and Mauss made sure that their more abstract understandings of political economy were grounded in the everyday lives of concrete people, thereby lending to field research the power of general ideas. I have already noted a significant stream of recent research on aspects of capitalism, but anthropologists have largely left the global effects of an unequal distribution of money, the class conflict between rich and poor everywhere, to other branches of the academic division of labour, especially to economists of whatever political persuasion. There are rich precedents for the anthropological study of distribution in particular contexts, but we still tend to privilege the rural inhabitants of the former colonial empires and settle for cultural representations of isolated social fragments.

The missing link between the everyday and the world at large can be found in the work of Polanyi and Mauss. An unblinking focus on distribution at every level from the global to the local reveals how the social consequences of political economy and the way it is understood by those who make it are one and the same social process. The current crisis renders this insight particularly visible, since it challenges contemporary financial ideas, while its tangible distributive effects are felt and feared throughout the world. We are clearly witnessing a power struggle of potentially awesome consequences. Each new political response to the latest economic calamity evokes the spectre of the Great Depression and its bloody aftermath. The mask of neo-liberal ideology has been ripped from the politics of world economy.

Money in the making of world society
What light do Mauss and Polanyi throw on the part played by markets and money in the making of world society? Mauss held that the attempt to create a free market for private contracts is utopian and just as unrealizable as its antithesis, a collective based solely on altruism. Human institutions everywhere are founded on the unity of individual and society, freedom and obligation, self-interest and concern for others. The pure types of selfish and generous economic action obscure the complex interplay between our individuality and belonging in subtle ways to others. He was highly critical of the Bolsheviks’ destruction of confidence in the expanded sense of sociability that sustained the market economy. In his view, markets and money were human universals whose principal function was the extension of society beyond the local sphere, even if they did not always take the impersonal form we are familiar with. This was why, in a long footnote to The Gift, he disputed Malinowski’s assertion that kula valuables could not be considered to be money. Mauss advocated an ‘economic movement from below’, in the form of syndicalism, co-operation and mutual insurance. The true significance for him of finding elements of the archaic gift in contemporary capitalism was to refute the revolutionary eschatology of both right and left. Most of the possibilities for a human economy already co-exist in our world; so the task is to build new combinations with a different emphasis, not to repudiate a caricature of the market in the name of a radical alternative. Here Mauss follows Hegel — rather than Aristotle or Marx — in seeking the integration of institutional possibilities that have been variously dominant in history rather than representing them as mutually exclusive historical stages.

Mauss was interested in how we make society where it didn’t exist before. Hence we offer gifts on first dates or on diplomatic missions to foreign powers. How do we push the limits of society outwards? For him money and markets were intrinsic to this process. Hence giving personalized valuables could be considered to be an exchange of money objects if we operate with a broader definition than one based on impersonal currencies and focus rather on the function of their transfer, the extension of society beyond the local level. This helps to explain his claim that “economic revolutions are always monetary”, meaning that they push us into unknown reaches of society and require new money forms and practices to bridge the gap. The combination of neoliberal globalization and the digital revolution has led to a rapid expansion of money, markets and telecommunications, all reinforcing each other in a process that has extended society beyond its national form, making it much more unequal and unstable in the process.

All economic possibilities coexist now, including those that have been variously dominant in history. Our task is to build economic solidarity through new institutional combinations and with a new emphasis. This is a concept that animates much progressive intervention in Brazil and France, as well as a new collection produced by the US Social Forum. It means combining the equal reciprocity of freely self-organized groups with the redistributive powers of the state. It is, however, no longer obvious, as it was for Mauss, Polanyi and Keynes, where the public levers of democratic power are to be located, since the global explosion of money, markets and telecommunications over the last three decades has severely exposed the limitations of national frameworks of economic management. We are clearly witnessing the start of another long swing in the balance between state and market. Before long, a genuine revival of Keynesian redistributive politics seems to be inevitable. But the imbalances of the money system are now global, as the financial rescue operation recently performed on failing American banks by the ‘sovereign funds’ of some Asian and Middle Eastern governments shows. Society is already taking the form of large regional trading blocs like the EU, NAFTA, ASEAN and Mercosul; and the Bretton Woods institutions (World Bank, IMF, WTO) promote no interest beyond that of western capital. The strength of any push to reform global institutions will depend on the severity of the current economic crisis. A return to the national solutions of the 1930s is bound to fail.

Conclusions: Polanyi’s prophecy then and now
So what are the lessons to be drawn from comparing our situation with the one Polanyi depicted before? He explained the world crisis then as the outcome of a previous round of what many today would call “globalization”. There are substantial parallels between the last three decades and a similar period before 1914. In both cases, market forces were unleashed within national societies, leading to rapid capital accumulation and an intensification of economic inequality. Finance capital led the internationalization of economic relations and people migrated in large numbers all over the world. Money seemed to be the dominant social force in human affairs; and this could be attributed to its greater freedom of movement as the boundaries of society were extended outwards, then by colonial empire, now by the digital revolution and transnational corporations. The main difference is that the late nineteenth century saw the centralization of politics and production in a bureaucratic revolution, while a century later these same bureaucracies were being dismantled by neoliberal globalization. Moreover, the immediate winner of ‘the second thirty years war’ (1914-1945) was a strengthened national capitalism whose synthesis of state and market was hardly anticipated by Polanyi.

It is odd that Polanyi appears sometimes to reduce the structures of national capitalism to an apolitical ’self-regulating market’. For his analysis of money, markets and the liberal state was intensely political, as was his preference for social planning over the market. His war-time polemic, reproducing something of his opponents’ abstractions, was more a critique of liberal economics than a realistic account of actually existing capitalism. This would explain the lingering confusion over whether he thought a ‘disembedded’ market was possible or just a figment of liberal ideology, ‘market fundamentalism’. Similarly, one could argue either that neoliberalism did effectively disembed the market economy or that its claim to have done so was a mystification of the fact that markets were still embedded in largely invisible political processes. In either case, the postwar turn to ‘embedded liberalism’ (Harvey) or social democracy — what I have called the apogee of national capitalism — is only weakly illuminated by The Great Transformation.

I have made much here of Mauss’s idea that the principal function of money and markets is to extend society beyond its present limits. Thus Malinowski’s ethnography of the kula ring could be taken as a metaphor for the world economy of his day, with island economies that were not self-sufficient being drawn into trade with each other by means of personalized exchange of valuables between local leaders. These canoe expeditions were dangerous and magical because their crews were temporarily outside the realm of normal society. This always happens when society’s frontiers are pushed rapidly outwards, as they have time and time again in the last two centuries and long before that. The period of ‘neoliberal financialization’ could be compared with previous episodes in the history of global capitalism, such as the dash to build continental railroads, the gold strikes in California, Alaska and South Africa or the wild rubber boom of the mid- to late nineteenth century. There are many analogous episodes to be found in the mercantilist economies that emerged during the period 1500-1800, notoriously the ‘South Sea bubble’ and the ‘Tulips craze’. Similarly, the last three decades saw a rapid extension of society’s frontiers after the postwar convergence of state and market in national capitalism reached its limit in the 1970s. The quick wealth and cowboy entrepreneurship we have just witnessed was made possible by the absence of regulation in a period of global economic expansion. The end of the bubble marks an opportunity to consider how world markets might now be organized in the general interest.

It is easy enough to harp on the irrational excess and sheer inequality of the neoliberal era — the heedless speculation, corporate skullduggery, outrageous looting of public assets, not-so-creative destruction of nature and society. But there are lasting institutional effects, just as there were to previous booms which generated transport and communication systems; a mildly inflationary gold standard; new industrial uses for rubber; stock markets and colonial empires. I have suggested here that the extension of society to a more inclusive level has positive features; and, before we demonize money and markets, we should try to turn them to institutional ends that benefit us all. The world economy is more integrated than it was even two decades ago; we need new principles of political association with which to put in place more effective regulatory frameworks. Fragmentation would be a disaster. Clearly the political questions facing humanity today concern distributive justice. The long period of Western dominance of the world economy is coming to an end. New actors on the world stage will have their say about who gets what. An escalation of war and general fractiousness is quite likely. Under these circumstances, a focus on the socially redemptive qualities of money and markets might be quite salutary. In this constructive sense, I depart from Polanyi’s conclusions; but I fear that his time as a prophet is yet to come.

Friday, November 21, 2008

The softly-totalitarian control neoliberalism exerts by means of political correctness

larvalsubjects Says: November 19, 2008 at 10:15 pm My position is thus as follows.

All things being equal, when face with a choice between a system that benefits only a select few while generating poverty, lack of freedom, suffering, exploitation, and war for the rest, versus social formations that allow many to organize and create better working conditions for themselves, a better standard of living, more services, more freedom, more control over one’s existence, etc., the second choice is a no brainer.

The second choice is in my self-interest, while the first choice is not. Unless I harbor a fantasy like Joe the Plumber, believing that somehow I will someday be among the chosen few, it makes sense for me to work with others in order to have a greater share of control over my labor conditions. That said, I fully agree that we must study and seek to understand why certain types of collective assemblages led to certain horrible outcomes. I do not share the thesis that all collective assemblages necessarily lead to horrific outcomes.

parodycenter Says: November 19, 2008 at 10:37 pm
I put serious question marks on the idea that what is collapsing right now is neoliberalism-as-capitalism, because I feel that neoliberalism deploys strategies learned in the self-managing phase of socialism, for example, the softly-totalitarian control it exerts by means of political correctness (the laws against smoking, the "embrace” of minority groups, and the ethos of equality being preached in companies even as the salary gap increases, et cetera).

I argue it is precisely this socialist facade which allowed neoliberalism to take on, and believing as I fully do that Yugoslavia was a social engineering project from the very start, know that this was the theoretical and practical testing ground for what we are experiencing today. Even the credit crunch as the bursting of a virtual bubble resembles very much the disintegration of the self-managing economic system.

larvalsubjects Says: November 19, 2008 at 11:17 pm
Dejan, I don’t at all disagree. Neoliberal practices has formed an extremely strong network system that defends itself in a variety of ways. My thesis is rather modest. It is not that neoliberalism has been undermined or is facing its imminent implosion, but that due to recent failures that are the direct result of these policies and economic strategies, new possibilities have become available at the level of the plane of expression, collective assemblages of enunciation, or discourse that at least allow the premises of this sort of economic system to be questioned (cf. my post “Of Games and Rendering Alternatives Available” on November 17th).

Prior to the last few years (in the States), I do not think these alternatives were publicly available outside of the academy or marginalized leftist anti-globalization activists. What is surprising is that they are now becoming topics of discussion among establishment media and politicians. This minimal opening opens the possibility of forming more effective collective assemblages that might begin to enact new types of economic practices, legislation, states, etc. Nothing is guaranteed, but things are a bit brighter in the sense that 45 degree fahrenheit day is a promising sign during an ice age.

Not all individual putsuits of self interest necessarily and unintentionally benefit society

Adam Smith on Natural Liberty from Adam Smith's Lost Legacy by Gavin Kennedy
Sauvik Chakraverti writes, 19 November, in Antidote, (‘libertarian opinion from Indyeah)’: "Adam Smith... And Marathi Politics’ HERE

Many readers of Wealth Of Nations, however, mistakenly confuse the precepts of Natural Liberty – philosophically an element of moral philosophy – with those associated with laissez-faire economics. Smith was careful to distinguish the jurisprudential roots of Natural Liberty which was applicable in all societies, independently of their subsistence basis of their economies, from the political economy of commercial societies. Cointrary to myth, he did not advocate laissez-faire economics though he was familiar with the Physiocratic terminology of some of its members (he met and discoursed with them in Paris and elsewhere, and in correspondence and the exchange of manuscripts but he never used the words laissez-faire in anything he wrote).

Tellingly, he made many references to either curbs on the behaviours of ‘merchants and manufacturers’ and to interventions that he considered necessary by governments to curb the freedoms of some of the same people, of whom he was suspicious of their tendency to act against the interests of consumers. There are over 50 instances of him mentioning the less than beneficial actions of self-interested individuals in Books I, II and III of Wealth Of Nations.

On such set of commercial entrepreneurs that he wrote extensively about were the bankers of Scotland and the rest of the UK at the time. After a long discourse in Book II, chapter 2, on banking operations and some of managers and customers' dangerous failings on occasion, he drew a line between Natural Liberty and total commercial freedom:

“To restrain private people, it may be said, from receiving in payment the promissory notes of a banker, for any sum whether great or small, when they themselves are willing to receive them, or to restrain a banker from issuing such notes, when all his neighbours are willing to accept of them, is a manifest violation of that natural liberty which it is the proper business of law not to infringe, but to support. Such regulations may, no doubt, be considered as in some respects a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments, of the most free as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty exactly of the same kind with the regulations of the banking trade which are here proposed.” [WN II.ii.95: p 324]

I think this is clear enough. It separates ‘freedom’ as a legal concept and as a practical policy by a qualifying restraint where a person’s freedom has deleterious consequences on the public good. Clearly, not all individual putsuits of self interest necessarily and unintentionally benefit society; hence mythical theories of the invisible hand imposed on Adam Smith by 20th-21st century economists are a manifest violation of Adam Smith’s intellectual integrity and a gross abuse of his legacy. In short, a violation of his Natural Liberty rights. My thanks to Sauvik Chakraverti for creating this opportunity to comment on this important distinction.

Tuesday, November 18, 2008

Free market is finally only the reflection of human nature, itself hardly perfectible

LRB 14 November 2008 Slavoj Žižek Use Your Illusions

The French neoliberal economist Guy Sorman admits that the market is full of irrational behaviour, but is quick to add that ‘it would be preposterous to use behavioral economics to justify restoring excessive state regulations. After all, the state is no more rational than the individual, and its actions can have enormously destructive consequences.’ He goes on:
An essential task of democratic governments and opinion makers when confronting economic cycles and political pressure is to secure and protect the system that has served humanity so well, and not to change it for the worse on the pretext of its imperfection. Still, this lesson is doubtless one of the hardest to translate into language that public opinion will accept. The best of all possible economic systems is indeed imperfect. Whatever the truths uncovered by economic science, the free market is finally only the reflection of human nature, itself hardly perfectible.

Rarely was the function of ideology described in clearer terms: to defend the existing system against any serious critique, legitimising it as a direct expression of human nature.
It is unlikely that the financial meltdown of 2008 will function as a blessing in disguise, the awakening from a dream, the sobering reminder that we live in the reality of global capitalism. It all depends on how it will be symbolised, on what ideological interpretation or story will impose itself and determine the general perception of the crisis. When the normal run of things is traumatically interrupted, the field is open for a ‘discursive’ ideological competition. In Germany in the late 1920s, Hitler won the competition to determine which narrative would explain the reasons for the crisis of the Weimar Republic and the way out of it; in France in 1940 Maréchal Pétain’s narrative won in the contest to find the reasons for the French defeat. Consequently, to put it in old-fashioned Marxist terms, the main task of the ruling ideology in the present crisis is to impose a narrative that will not put the blame for the meltdown on the global capitalist system as such, but on its deviations – lax regulation, the corruption of big financial institutions etc.

Against this tendency, one should insist on the key question: which ‘flaw’ of the system as such opens up the possibility for such crises and collapses? The first thing to bear in mind here is that the origin of the crisis is a ‘benevolent’ one: after the dotcom bubble burst in 2001, the decision reached across party lines was to facilitate real estate investments in order to keep the economy going and prevent recession – today’s meltdown is the price for the US having avoided a recession seven years ago.
The danger is thus that the predominant narrative of the meltdown won’t be the one that awakes us from a dream, but the one that will enable us to continue to dream. And it is here that we should start to worry: not only about the economic consequences of the meltdown, but about the obvious temptation to reinvigorate the ‘war on terror’ and US interventionism in order to keep the economy running. Nothing was decided with Obama’s victory, but it widens our freedom and thereby the scope of our decisions. No matter what happens, it will remain a sign of hope in our otherwise dark times, a sign that the last word does not belong to realistic cynics, from the left or the right. Slavoj Žižek is a dialectical-materialist philosopher and psychoanalyst. He also co-directs the International Centre for Humanities at Birkbeck College. The Parallax View appeared last year. elsewhere

Monday, November 17, 2008

Boundless capacity for self-delusion, and the ecstatic fetish for Great Leaders

Libido for Power from Cafe Hayek by Don Boudreaux

Challenging the myth that society would be improved if governed by "intellectuals," Thomas Sowell -- writing in today's Washington Times -- says that "It would be no feat to fill a big book with all the things on which intellectuals were grossly mistaken, just in the 20th century."

Such a book has already been filled. Paul Hollander's "Political Pilgrims" documents the gullibility, the boundless capacity for self-delusion, and the ecstatic fetish for Great Leaders displayed throughout the 20th century by large numbers of American and European intellectuals. These Smart People cheered the Soviet Union, applauded Mao, drooled over Castro, celebrated the Sandinistas - all the while dismissing those persons suspicious of centralized power as "anti-intellectual."

Of course, consistently these "anti-intellectuals" were proven right as the heroes of the "intellectuals" were revealed to be blood-thirsty bastards. Is there reason to suppose that the "intellectuals'" still-raging libido for Great Leaders and Big Plans is today any more rational than it was during the tragic episodes documented by Hollander?

Of Games and Rendering Alternatives Available from Larval Subjects

My suggestion here isn’t that Obama is a socialist or that he will depart from neoliberal economic policies (I’m skeptical). Rather, what I find interesting is that news shows, editorials, and various pundits are suddenly raising questions of whether unfettered capitalism is the best possible system. What we increasingly here today is a popular space in which capitalism is being contested or questioned, and a halting groping towards other possibilities. It is only when the game itself becomes an object of critique, when it comes to be seen as contingent or something that could be otherwise, that it becomes possible to overturn that game.

Wednesday, November 12, 2008

Murthy feels in the end it is always about ethics and personal values

India best placed to fight global eco mess: Narayana Murthy
Published on Tue, Nov 11, 2008, Updated at Wed, Nov 12, 2008 Source : CNBC-TV18 Moneycontrol » News » MARKET OUTLOOK
Speaking to Vallabh Bhanshali of ENAM Securities at the ENAM 2020 conference, NR Narayana Murthy, Chairman and Chief Mentor of Infosys, said if greed overtakes leaders, it is inevitable to avoid disasters because in the end systems are much more powerful than individuals.

Murthy feels in the end it is always about ethics and personal values. "That is why it is very important for every society to create checks and balances. That is why it is very important for every society not to create incentives for people to become greedier. That is why it is very important for all of us in the corporate world to create incentives for long-term performance rather than short-term performance."

"I believe that India is better placed than any of the leading economies of the world to recover from the mess that the world economy has got into because of a very simple reason. We are primarily a domestic economy focused nation. Our fundamentals are good. Our productivity is improving." Here is a verbatim transcript of the exclusive interview of NR Narayana Murthy on CNBC-TV18. Also watch the accompanying video.

Q: Wall Street is probably a collection of the best minds in the world and yet in recent times they seem to have created one disaster after other. The current one probably the biggest of the world they had seen in recent times. You wrote or you spoke at one forum and what I consider is one of the most seminal pieces of intellectualisation that I have come across. When you talked about Eastern values and Western values and you have been an admirer of the governance in the West in general. Could you please tell us what has failed and what has not?

A: It doesn’t matter how bright a person is. How smart a person is. If they don’t understand the risk emanating from what they are doing, if they are not suitably regulated and if greed overtakes them it is inevitable that one sees disasters because in the end systems are much more powerful than individuals.

Having said that I must say that I am very impressed with the alacrity that the US has reacted and taken steps, that Europe has done and I am also very happy about how our Finance Minister P Chidambaram and the Governor of Reserve Bank of India, Subbarao, have quickly taken action. I am also very happy, frankly, with how KV Kamath and Chanda Kochhar handled what could have become a very serious situation. Also let us remember one thing––when one operates at the huge scale and the pace at which the Wall Street is operating unless he has good real time control systems and have eyes on the gauge all the time it could lead to disaster.

It is almost like the control centre of the rocket. That’s why they have real time control. They monitor it second by second. In some sense the complexity of what is happening in the Wall Street has become somewhat of a real time necessitated system requirement.

Q: There is this obvious attempt to explain what happened in America and maybe in some of the other Western countries. You did mention that if greed overtakes the best of institutions would fail. But do you subscribe to the general theory that it’s becoming popular that it was greed that overtook ethics because for long years the institution of ethics was probably not nurtured, or even if ignored, and it was not just a question of failing of some regulation?

A: In the end it is always about ethics and all about personal values. That is why it is very important for every society to create checks and balances. That is why it is very important for every society not to create incentives for people to become greedier. That is why it is very important for all of us in the corporate world to create incentives for long-term performance rather than short-term performance. When you create systems that focus on short-term performance, when you create a system that reveres money rather than decency, honesty and respect, when you make it a fashion for youngsters to revel in the power of their wealth, it is inevitable.For example, a month ago, I was on a flight from Frankfurt. I saw two young men in their late or mid-20s who were travelling by the first class, and I was slightly surprised. I had gone to attend a board meeting and it was a huge bank, and they pay. That is fine. But these were 25 or 26-year old people and they were travelling first class. What does it mean? It means we have created a value system that says you are a success if you travel by first class, you are a success if you own a flashy car, you are a success if you own a big house, etc. That is why, in fact, I suggested at Davos a few years ago that we need to create a system where we can rank world corporate leaders based on their respectability. Today, we have the most powerful leaders, the best managed companies, companies by market capitalisation and all of that. But we have to move towards a regime which will rank corporate leaders based on their respectability and everybody must say that I want to become the most respected leader in the world.

Q: All the large economies of the world, US, Europe, Japan seem to be in greater economic distress than the emerging markets. India and China are mentioned most often as possibly helping the world out. Do you think we have (specifically India than China) what it takes to don this mantle of world leaders?

A: I am conservative in these matters. It’s too early to think of countries like India and China taking the mantle of world leadership, though at the G-20 meeting they will discuss a new financial architecture with a greater role for countries like India, China, etc. on November 15 or 16.It’s too early for a simple reason that the US has had the experience of going through such times in the past. The US, Europe – particularly UK, have had robust growth for about a decade or so. Japan has demonstrated its resilience by coming out of a long recession. Japan has had the ability to manage the mess in the financial system, particularly in the banking sector. That is one aspect. The most important thing is that US, Europe and Japan have been the engines of innovation. As long as the engines of innovation are alive, and they attract the best talent, the leadership will continue to be with them.Secondly, China has done a good job with USD 3.7 trillion of GDP and perhaps USD 8-9 trillion on a Purchasing Power Parity (PPP) basis, India with probably USD 1.2 trillion and perhaps USD 2.6-3 trillion on a PPP basis has done reasonably well. Both the countries have grown pretty well.However, even if we grew at say 8% this year, we will be adding about USD 100 billion. China at 8% will add USD 300 billion. If the President-Elect Obama were to bring in all the changes that he would want next year not this year – next year if US were to grow at 1-1.5% your looking at anywhere between USD 120-180 billion dollars of addition. But the important thing is that our growth comes primarily from the domestic market. In other words, we do not impact the global trade. We do not impact the global financial system as significantly as US, China, Japan and UK would do. In that sense, while I am a great admirer of all the good things that India has done, while I bask in the glory of all that has happened in the last decade, I would like to say that it is too early to think of India assuming the mantel of leadership in the global financial and global economy.

Q: There is large number of optimism in the country and they have two arguments. We started on the path of economic reforms in 1991 and we have sustained them by and large. We survived the Asian crisis. We went through 9/11 and we became a nuclear power in the last few years. If we can manage this financial crisis rather well, the world will look at us with a new respect. This is one thing which is being put forth. The second argument is that this country was one of the most prosperous and respected countries of the world for 100 years and very different from the models that we are talking about currently based on hard infrastructure etc. This was done on the basis of its spiritual thought that it was able to influence two-third of the population of the world without as Chinese Ambassador said firing a single arrow or a bullet – it was able to conquer large countries and this was based on what is called the soft infrastructure of its family values, social orders and the system of sacrifice. Do you think there is leadership potential to position this correctly as an opportunity and rally the imagination of the country even if the path to leadership – in leadership in itself doesn’t mean anything because I am sure it will come with a lot of responsibilities for example America obtained its leadership by playing a very decisive role in the World War II and therefore earned the respect of the world. So it will come with this but just for the benefit of these several optimists – do you see this is quite misplaced and as you talked about innovation and discipline – they being a lot more important?

A: Again I am a believer in the adage – performance leads to recognition, recognition leads to respect and respect leads to power. We are at this stage when we are focusing on performance and we have received some recognition. There is no doubt at all and we have also received some respect because we have insulated ourselves from what happened during the Asian financial crisis, currency crisis. We have insulated a little bit from what has happened in the global financial crisis now. The country is growing well, but I don’t know if we have reached a stage when what we do in India impacts what happens in the US.

Yes in our IT sector - software sector no doubt about that but unlike India, what happens in China in some way impacts the US economy, the European economy, the Japanese economy much more. For this very simple reason – all of us have seen, you go to any supermarket in the US, almost 70-80% of things there are all manufactured in China. That is the reason why I don’t want to make the statement that we have the power to influence the global market.

What we are doing is we are becoming better. We are making the lives of our middle class better. We are enhancing our foreign exchange reserves. We have enhanced our GDP growth rate. This year I was told year-to-date our agriculture has grown by 7%. All of these are excellent things, and we have to keep doing more of it.But whether this has given us the power to influence the globe, whether it has given us the wherewithal to assume the mantle of leadership in the global economy is something we will have to discuss and debate.

Q: You mentioned about the response of the IT industry. That is very interesting and opportune. Just as the IT industry saw the Y2K difficulty and then 9/11 as opportunities to showcase the capability of the Indian IT sector and grow quite seriously after that. Do you see such opportunities today?

A: It is too early to say. I do believe that any economic difficulty in a market will necessitate greater need for innovation, will necessitate greater competitiveness through better value for money.
So, I do believe that there is much greater opportunity for Indian companies, particularly, in the software sector as we move forward, once the dust settles down, and corporations get up and start running.
The second area where we perhaps would see opportunities would be in the new financial architecture that will come into place, in the new regulatory system that perhaps may be put in place, because the world has pumped in something like USD 4 trillion, if we include all the countries. When one puts in USD 4 trillion, obviously, one want to make sure that corporations don’t falter again, and don’t commit the same mistake again.
So, in that sense I do see opportunities for the Indian software industry. But it is somewhat early for us to make any predictions.

Q: You have been on the Prime Minister’s Advisory Council and several other Councils where you have looked at the prospects of several other industries. Do you see any such opportunity for other industry outside IT?

A: I would say that contract research, clinical trials, is one sector where I believe there is great opportunity for India because there is a tremendous need to bring the cost of healthcare down in the US. There is a tremendous need amongst the pharmaceutical companies to bring the total cost of releasing a new drug into the market. I believe that India is in a unique position because of its huge population and competency in biochemistry, medicine, etc. I believe that this industry has tremendous opportunity. But this requires that we work well amongst the government, the corporate leaders and the academicians just as my industry, the IT and software industry worked exceedingly well in the 90s, and work as a wonderful team to create tremendous growth in our industry. We need that to happen. If it happens, I think we will definitely see opportunities.

Secondly, we have done reasonably good in certain specialised manufacturing. For example, forging is a good area where India has done pretty well. I think we have to learn from the lessons of Bharat Forge and other companies and perhaps scale up because the world needs more of it than what we are able to produce.

First of all, most of it is being used in India. We can become the forging factory for the world. I think there are a few areas that are complementary to China. I think that is the direction for us to go.

Q: At Infosys you did several pioneering things such as developing the global delivery model, listing the company at Nasdaq, making a huge investment in training much before people could see the need for it and most importantly you went about exploiting challenges whether it was 9/11 a year in which you were the only company to meet guidance or whether it was Y2K or the chancing shape of IT when BPO (Business Process Outsourcing) became a very large business and you charted your own course in this. So there was something about your method will you like to share something about those thoughts?

A: Infosys has brought pretty smart people together. Infosys has given opportunity for youngsters to come out with new ideas. Infosys has created a platform where meritocracy has prevailed. Infosys has put premium on innovation; we have created incentives for people who are innovative. Infosys has been an enlightened democracy where the hierarchy of ideas prevails over hierarchy of men and women. Infosys has built-up a mindset where everybody makes short-term sacrifices because they see long-term benefit in that. Infosys has laser focus on customers; Infosys brings customers into its premises, into our software engineering and technology lab, so that we can serve our customers better. Infosys is a place where there is tremendous energy and enthusiasm because of the leadership. I think those were the needs of the day.

Q: Do you see that as the formula for exploiting the opportunities which may not be very obvious at this point of time but definitely lurk in all crises?

A: There is only one ingredient for innovation and that is the power of the human mind. As long as a company is able to attract, enable, empower and retain the best of the brightest, it will have a play. As long as the leadership of companies ensure that the physically and mentally tired mind that leaves office at whatever 7:00 pm - 8:00 pm or 9:00 pm comes back mentally and physically reenergised and enthusiastic to add significant value to the customer next morning, the job is done.
That’s why at Infosys we say at 9:00 am when every one of our people is working the marketcap maybe whatever it is, 15-16 in these tough days, but at 6:15 or 7:00 pm when the last of us has gone or maybe 9:00 pm when the last of us has gone home the marketcap is zero. I think that is the fundamental instrument that every corporation must believe in. That’s the power of the mind; the power of the happy, enthusiastic, energetic, satisfied, aspirational mind. The moment you create that rest is all simple.

Q: One of the opportunities in current times is acquiring low price assets or good assets at attractive prices. Infosys despite having made a statement that we want to make acquisitions has been very careful and today it is looking very glorious having done that. At the same time we know that Indian companies became acquisitive rather late in the season and some of the stock prices have been beaten down by the market alleging that these acquisitions were not very attractive. The flip side for Infosys has been that it has been from periodically developing a large reserve of cash and of course you have distributed it couple of times to the shareholders – it is not that you have been very found of cash for the sake of it. And I want to ask you a related question – you emphasized being ethical, being strictly legal all the time and the third dimension of governance which you have practiced is one of prudence that whether it is dividing your business by markets by customers, by service offering etc, - you have driven this with a great fervor. I must say that we don’t come across this prudence aspect very often. One way to describe the current crisis really is that prudence was given a go by in a big way in the world – whether it was leverage of the banks, whether it was the Reliance of the markets. I have linked the two questions and if you would share your experience and views.

A: There are two fundamental characteristics of Infosys. One; we are an engineering company. Two; we are a company founded by middleclass people. I will link the two. Being an engineering company, we discuss and debate, collect data, analyse, argue and then come to some conclusion. As we are middleclass people that founded the company – we don’t go by flats, we don’t go buy fashion and we don’t want to look good in a party just because we have spent a billion dollars to acquire a company.
When you combine these two powerful attributes, you end up being conservative. There is no doubt at all. Infosys is conservative, but there is a method in this conservative behaviour. We have clearly laid out rules for operation. We said our people will have to collect money because at the end of the day the real happiness is cash in the bank. We say profit is an opinion – the real happiness is cash in the bank. We created incentives for our sales and customer facing people which would ensure that they collect money.

Secondly, we hired pretty smart sales people in the industry and that’s why you will notice that we have anywhere from 500-600 basis point of higher operating margin than any of our competitors because we tell them that if the customer thinks that USD 100 is the price – your smartness is to sell it for USD 105 and give the customer USD 110 worth of value. Don’t cheat him, but sell it at USD 105 and provide value of USD 110. That is what we have focused on a lot.

Thirdly, there is tremendous cost consciousness in the company. We are not judged by how opulent our rooms are – we are not judged by whether we travel in this class or that class. So right from the beginning we focused on that. When you focus on middleclass values, when you focus on analytics – it is easy to have a lot of cash in the bank.

Q: You sit on the boards of some of the biggest companies in the world and also some of the most respected universities. Would you like to share the companies and individuals who inspire you as role models?

A: I make an attempt to learn from everybody. I learnt to focus on growth in topline and bottomline and sustain earnings growth from Bill Gates. I learnt to focus on quality from Idei San who used to head Sony. I learnt to focus on human resources from leaders of Hewlett Packard. I learnt so much from my own colleagues.
I learnt from Dean Bob Joseph of Stanford, the importance of being agile. Even in an environment like a university, Stanford revamped their curriculum, made it much more international. They brought in new ideas to encourage critical thinking. I learnt great ideas from Michael Treschow and Patrick Cescau of Unilever on how to sell consumer products.I learnt how to maintain your sense of balance when you run a large bank like HSBC from Stephen Green. So, I have learnt so much from many people.

Q: We started by talking about the depression of 1930, there is much to get depressed about today and not seeing a reference point in the past. As we started saying that it is about depth of your reflection and the purity of your process that you are able to deal with this crisis. I can tell you that there is much dismay and discomfort both amongst corporates and the youth, the youth particularly about whom you are always very hopeful and enthusiastic. Would you like to share as we depart a few thoughts for each of them – corporates and the youth?

A: I have always said that a good leader simplifies business. It doesn’t matter what business he or she runs. So, I would suggest that we use simple business rules, not complex or compound ones. The good thing about simple business rules is that it is easy to understand, easy to practice, easy to communicate, and you cannot cheat anybody with simple business rules. And you can enthuse every one of your colleagues with simple business rules because there is transparency, there is fairness, and there is accountability. As far as the youth of this country is concerned, I would say that for the first time in the last 300 years, this country has received recognition in the global markets, and received certain respect. This is the time for us to work hard, this is the time for us to work smart and consolidate on the gains. Indians are generally not known to have the killer instinct or not known to run the last mile. Yesterday was a wonderful exception when the Indian cricketers beat the Australians. But that is a rare one. We have to make it a habit. We have to make it a habit of what Dhoni and others did yesterday. That is make sure that all the good things that they have achieved in the last 10 years becomes a habit. To do that, you need continued discipline, hard work, smartness, integrity and putting the interest of the country above your own personal interest. There are lots of things that are not good that we read in the papers every day. I don’t want to comment on them, we have all seen this morning’s paper. But let those shameful incidents not be the beacons for our youngsters. So, that is what I would say.

Q: For all these good qualities we need a reference point. Where do you see Indian growth over the next three-four years?

A: I believe that India is better placed than any of the leading economies of the world to recover from the mess that the world economy has got into because of a very simple reason. We are primarily a domestic economy focused nation. Our fundamentals are good. Our productivity is improving. Yes, we had a huge stock market fall, but that was because we are all linked in some sense - we have 25% of market capitalization held by foreign institutional investors and when they see uncertainties in their countries they dramatically want to pullout as much as possible from foreign countries. I do think that things will get back to normalcy, get back to buoyancy quicker in India than in most of the countries – that’s what I feel.

Q: Would you like to put a growth number? This is a number crazy group.

A: I think people up there are much smarter than I am, and much more capable than I am in coming out with an estimate. So, I don’t want to hazard a guess because at the end of the day we have experts. We have a Finance Minister who is a fantastic person, we have an RBI Governor who is another highly knowledgeable person, we have lots of economists and we have people like you. You people should come out and give wisdom to rest of us who are in the trenches. You people have a 50,000 feet view of our economy.

Q: Infosys has shown Indian corporates the way to good governance and how good governance leads to goodness for everyone. When do you think that good people like you would lead the country to good governance?

A: I do think there are wonderful people. I have tremendous respect for Dr. Manmohan Singh, and tremendous respect for his colleagues. But we have to work a little bit more at enhancing the quality of leadership at the state level. There is no doubt at all.

That does not require people like me to participate in the governance at either the national or the state level because we have our work cut out. We have to make our corporations; we have to make areas in which we are interested. Right now I am interested in higher education; I am interested in making a difference to the poorest of the poor and so on. I think if we can put in more hard work, if we can show a little bit of smartness in what we are doing, the country will be better off. So, I think the current leaders will continue on all sides of the aisle, whether it is the Congress or the NDA or the UPA. It doesn’t matter who is going to be in power. But I think there are pretty good people on both sides of the aisle.

Tuesday, November 11, 2008

Boudreaux is perhaps the staunchest advocate of free trade on the scene today

Don’t Blame Globalization Written by Phil Murray Monday, 10 November 2008
In Globalization (Greenwood Press, $44), Donald J. Boudreaux, chairman of the economics department at George Mason University, intends to help us understand worldwide free trade. Copyright 2008 American Institute for Economic Research

The author begins by documenting the many benefits of globalization. Chief of these, he writes, is that people who live in more open economies have higher standards of living than people who live in less open economies. But Boudreaux also shows that people around the world who earn higher incomes have higher life expectancies, achieve higher levels of education, enjoy more leisure, drink cleaner water, and breathe cleaner air.
The author also refutes the claim that economic growth increases income inequalities. He cites a study that concludes that poor people in countries with a high average level of income tend to have higher incomes than poor people in countries with a low average income. Put simply, life as a poor American is better than life as a poor Cuban. “Today, ordinary citizens of modern open economies enjoy nearly as much access as do the world’s wealthiest persons to the most basic, most essential goods and services,” he writes.
Free trade remains unpopular, however. American autoworkers, for instance, correctly reason that competition from foreign auto producers may cost them their jobs. Boudreaux emphasizes that “foreigners sell only to buy.”

If Americans buy cars from Japan, the Japanese may use the dollars to buy lumber from America. Or, if the Japanese buy coffee from Brazil, Brazilians may use the dollars to buy American software. The implication is that jobs lost in import-competing industries will be offset by the jobs gained in the exporting industries.
Although the author acknowledges the misfortune of laid-off workers, he rejects the notion that trade is the source of their misfortune. To him trade has the same impact on markets that technological progress and entrepreneurial innovation does: It offers consumers a better way to get what they want.
Boudreaux also strives to correct the view that a trade deficit is an “unfavorable” balance of trade. The deficit, he writes, results from the fact that foreigners buy American assets as well as goods and services. In addition to stocks and real estate, these assets include the debt incurred when U.S. corporations or governments issue bonds. Boudreaux contends that borrowing to finance government expenditures is unwise, but maintains that foreign lending does not encourage it. He also points outs that foreign lending reduces the interest rates U.S. taxpayers have to pay on U.S. bonds.
Boudreaux is perhaps the staunchest advocate of free trade on the scene today. Globalization makes a compelling case for free trade and allays many of the concerns of ordinary people. He has set a high bar for any protectionist to write an equally effective rebuttal. Home About Research Summer Fellowship Support Us Archive Bookstore Contact Us EJW News

Shameless Bragging and Self-Promotion (by Don Boudreaux)
from Cafe Hayek by Don Boudreaux
I thank Phil Murray for this very nice review of my book Globalization.

Saturday, November 08, 2008

Bipin Chandra Pal contemplated an association of free nations. Current trends towards globalisation affirm Pal’s belief

Forerunner of secular nationalism
By Subrata Mukherjee The Statesman - Kolkata, Saturday, 8 November 2008

The partition of Bengal in 1905 and the incapacity of the moderates to extract substantive concessions from the British helped in the consolidation of extremism. Bipin Chandra Pal, an integral part of the trio ~ Lal, Bal Pal ~ created the first major mass popular upsurge against the British Raj before the advent of Mahatma Gandhi. He was the second most important leader, after Aurobindo Ghosh, of extremist politics in Bengal. He was a radical both in his public as well as his private life. He started off as a believer in the Empire and subsequently became its militant opponent.

As a student he was a Brahmo and had to leave home for marrying a widow. He was not sectarian and looked upon Krishna as the soul of India. He had to discontinue with his education for lack of finances. He was a man of indomitable courage and conviction. This trait led him to disagree with Gandhiji during the non-cooperation movement of 1921. As a consequence, he had to spend the rest of his life in oblivion. He died in 1932 in abject poverty.

Pal believed that the basis of a successful and enduring political action is political philosophy and like the Italian Marxist Antonio Gramsci, endorsed a philosophy of praxis, thus making him an activist theoretician. After beginning his career as a teacher, Pal made his debut in politics at the Madras session of the Indian National Congress in 1887. Before taking to full time politics in 1901, he toured England and the USA to study comparative religion. He started a journal New India with a purpose of creating social awareness.

The partition of Bengal in 1905 became a catalyst, for until then, he was a moderate believing in the innate sense of British justice. With the Bengal partition New India became a political journal making a passionate plea for India’s independence. Pal joined Aurobindo and advocated boycott and Swadeshi as the very basis of independence struggle. It was Pal who introduced the phrase “passive resistance” to imply action that was opposite to aggression. This meant breaking the existing law by establishing a parallel administrative structure with the intent purpose of paralysing the official administration. Boycott, National Education, Swadeshi and self-government were the important ingredients of his notion of passive resistance. By 1905, Pal became the undisputed leader of the extremists in Bengal and in 1906 he started a daily Vande Mataram. With similar objectives of Jugantar founded in 1901 by Aurobindo’s brother Barindra Kumar Ghose, Pal established the Anushilan Samiti as a school to teach physical culture to Bengal’s youth.

As a Congressman, his major aim was to democratise and broaden the base of the party. He was aware of the limitations of the early Congress with its membership mainly confined to the urban-based successful lawyers. he was equally critical of the terrorists for he regarded them as cowards in general. He also observed that terrorism led to an increase in repression by the government resulting in the general breakdown of the national movement. In 1906, Pal and Aurobindo proposed Tilak’s name for the post of the Congress Presidency. The Tilak-Pal alliance not only generated considerable alarm among the British but also the Congress leadership. This assessment led him to quit Vande Mataram, which he rejoined after the arrest of Aurobindo in 1908. Though he was opposed to terrorism he refused to be a witness against Aurobindo in the latter’s trial for his writings against the Raj.

Pal’s major emphasis in this extremist phase was the attainment of Swaraj by open and lawful methods. His efforts were to emphasise self-help and self-organisation. Distancing himself completely from any terrorist activity, he remarked that bombs and assassinations did not have any place in the programme and that “both our instinct and our wisdom equally rebel against these outlandish methods of political warfare”. In the wake of the disarray of the extremists after the Surat Congress in 1907 mainly because of governmental repression and Tilak’s arrest, Pal was forced to go abroad. The revolutionaries in Europe expected the support of Pal but he continued to oppose their activities as he did in India.

During his stay in England there was a sea change in his outlook for he totally moved away from his extremist phase. Instead of total independence, he contemplated an association of free nations as a federal ideal. Pal returned to India in 1911 and participated in the home rule movement led by Tilak and Annie Besant. In 1918 along with Tilak he participated in the International Home Rule Conference in England.

The next phase in Pal revealed his severe criticism of Gandhiji’s philosophy and practice of non-violent non- cooperation. He considered Gandhian programmes as based on magic rather than logic. He also opposed the Khilafat and cautioned against the ill effects of pan Islamism. Pal suffered a defeat when his amendment was rejected at the special session of the Congress in Kolkata in September 1920 and when Gandhiji emerged as the undisputed leader of the Congress and secured overwhelming support for his resolution for launching the non-cooperation movement.

Pal contended that the action plan for non-cooperation be deferred and the time gained could be used for sending a delegation to England to meet the British Prime Minister to make a last-ditch effort to gain self-government by negotiation and dialogue. Pal, who never learnt the art of compromise, became “totally isolated and alienated from the mainstream of the national movement”.

Pal made a major contribution in the realm of political theory. He recognised the absence of modern vocabulary in Indian political thought and conceded that words like politics, patriotism, nation and independence were western in origin. Hindu thought was theological in nature and the social system was deformed by the caste system. Unlike the West where the spirit of patriotism was the link between the individual and the state, in India this link was provided by religion. But Pal was careful to note that no religion was entirely based on renunciation as their major sustenance came from satisfying people’s interests and needs. It is this later urge that led to the establishment of a modern nation.

Even in India this was true as evident from the unity of Hindu and Muslim landlords in protecting their common interests towards the end of the Mughal Empire and the Sepoy Mutiny of 1857. As such the stability of a nation is best preserved when all sections of the people find fulfilment of their desires. In the context of India, Pal pleaded for a composite patriotism which would bridge the gap between the two major communities. Towards this end he insisted on the need to organise an “Akbar festival” along with a “Shivaji festival”.

Pal was no blind worshipper of the West. He characterised the American and European democracies as cruel and thought that the future Indian democracy would be far better than these for it would be based on equality. He felt that imperialism contributed more to unification of humanity than any other association or organisation. This did not mean that he endorsed its cruelties and exploitative mechanisms. What he pleaded for was transcendence to a larger and broader entity other than a nation. The sociability in human beings would eventually push towards a common bond among nations and the current trends towards globalisation affirm Pal’s belief. Like Gandhiji, he advocated labour intensive rather than capital intensive technology as far as India was concerned for that would mitigate the problem of unemployment.

Like Jefferson he believed in the idea of self-sufficiency and the freedom of the village-based artisans who could combine their art with agriculture. In 1917, Pal in association with Das and Motilal Ghose unseated the Moderates in the Bengal Provincial Congress. In the same year, Pal was one of the few Indian leaders who supported the Bolshevik Revolution explaining the cause of the revolution to the lack of democratic institutions in Czarist Russia. Pal has to be remembered for his courage, convictions and selfless devotion to the cause of India’s independence and development. In remaining steadfast with his belief in secularism he did not even mind near oblivion from the national scene and in spite of being in dire financial need he showed his courage of conviction. (The writer is Professor, Department of Political Science, University of Delhi)

Friday, November 07, 2008

I'm happy to know that such an attempt at utopia still exists > World > Asia/Pacific
India Tourism Forces 'Universal Township' to Ponder Crowd Control
Tourists in Auroville pose in front of the Matrimandir, a meditation center. Lately, residents of the small community have wondered whether it is becoming too popular for its own good. By Emily Wax Washington Post Foreign Service Friday, November 7, 2008; Page A12

AUROVILLE, India -- Standing amid his shop's hodgepodge of saffron Hindu goddess T-shirts and jasmine incense sticks, Krishna Romali said he had moved to the outskirts of this "universal township" in southern India after hearing that business was even better here than at the infamous party beaches of Goa.
But after several months of selling toe rings and crystal necklaces, Romali admitted, he isn't really sure what Auroville is.
"There's some sort of meditation dome here. The foreigners really like it," said Romali, 20. "We just know Auroville is great for sales. We need the money."
Auroville, located about 100 miles south of Chennai, was founded in 1968 as an "experiment in human unity," where residents from around the world would live and work together along a tree-lined stretch of winding, red earth footpaths.
Today, the community of more than 1,700 has a solar-powered kitchen, a giant, golden-domed meditation center known as the Matrimandir, and residents from 35 nations. There is no corporate ownership. But there are frequent community meetings. Many residents work at home-grown publishing houses or organic cashew farms. They produce their own pottery, cotton clothes and beaded jewelry. Think Takoma Park times 100, only in India.
But lately, some residents have been wondering if Auroville is becoming too popular for its own good. Some fear their community, with its "laughter yoga" and vegetarian cookery classes, will turn into a "second Goa," as a front-page article in the monthly newsmagazine Auroville Today recently put it.
"We are increasingly attracting a different kind of visitor, one more interested in attending cheap workshops or simply 'chilling out,' " the article noted.
In its 40th year, Auroville has to pull off a balancing act: It must reconcile its original charter of "belonging to nobody in particular and belonging to humanity as a whole" with the less idealistic goal of controlling the number of visitors.

Other utopian destinations on the hippie trail across India have failed to get it right. Some have become overly commercialized or have simply shut down. The famous ashram in the foothills of the Himalayas where the Beatles once meditated, for example, is now just a shuttered relic of 1960s counterculture.

Working the front desk at the Auroville visitor center on a busy day recently, Thulasi, who goes by one name, said the increase in tourists represents a challenge. Thousands of Indian families and foreigners show up every month, she said, and the numbers are climbing.
"We could spend all our time giving tours. We don't want the Matrimandir to become like a Hindu temple, with thousands of visitors every day or even hour," said Thulasi, who is originally from Sri Lanka. "Yet at the same time, we want to be inclusive, not exclusive. We have to somehow evolve. It's a real discussion."
The community is mulling plans to change the way visitors spend time at Auroville, including requiring a 10-day minimum stay and tightening the rules for admission to the various yoga and meditation workshops. Another idea is to ask long-term visitors to commit to volunteering in the community.
There is already a fairly complicated procedure for visiting the interior of the Matrimandir. From the outside, it looks like an enormous golden golf ball or an object from a science fiction movie. Inside, it's completely white, with beams of light focused on a giant crystal orb. Visitors are required to watch an informational video and then must request permission to meditate for an hour up to two days later.

There is also a firm set of procedures for moving to Auroville. Those who want to live here are called newcomers and spend two years learning the ways of the community before a committee interviews them.
The population of the township is approximately 43 percent Indian but also includes French, British and a recent influx of Russians, who say they are drawn to the Eastern philosophies and to yoga, which were once banned in parts of their homeland.
Some see hypocrisy in Auroville, since Indian domestic workers do most of the cooking and heavy cleaning while the Europeans live in comfort. Neighborhoods have names such as "Aspiration" and "Transformation," and residences range from shacks to solar-equipped eco-mansions.
The idea for Auroville came from a spiritual leader known as the Mother who died in 1973 -- Mirra Alfassa, a French woman who was an accomplished painter and musician, as well as a self-proclaimed psychic.

UNESCO, the U.N. cultural agency, has endorsed the township as a place that strives to foster unity and has helped its neighbors by employing often desperately poor local families. Auroville was considered a particularly good neighbor during the December 2005 tsunami, when it offered several rehabilitation programs across Tamil Nadu state. Residents have also planted hundreds of trees on what was once barren land.

"I like the spirit of the place, and it's still very much here," said John Harper, a Canadian who attended a meeting about Auroville in California in 1974 and decided to come.
On a recent day, hundreds of visitors had gathered to simply gaze at the meditation dome. A group of young Indian men wanted to be photographed with European women. Couples unfurled picnic blankets and snacked on lentils and flatbread packed in tiffins, or Indian lunchboxes. Europeans did yoga poses, listened to their iPods and snapped photos with camera phones.
"Despite any controversies, it's still a lovely place to take a break. I'm happy to know that such an attempt at utopia still exists," said Tony Mathew, 24, who works in the oil industry and drove 80 miles with his family to be here. "This is the type of place that has made India famous. So of course we want to see it."

Auroville is not meant for tourists, nor is the Ma... Auroville offers a new definition of self, society... Why should Auroville Foundation and its numerous s... Our fight is against Puducherry or Auroville becom... One third of the Auroville population comes from t... BBC broadcast a lie on Auroville to millions of pe...

Thursday, November 06, 2008

Gitanjali Devi has mentioned that the book is blasphemous and makes several defamatory remarks

The Hindustan Times November 6th 2008
Soumyajit Patnaik Bhubaneswar - November 5th

The Scheduled publication of Sri Aurobindo's biography by Penguin India this month has run into trouble with the Orissa High Court on Tuesday asking the Publisher to obtain a no-objection certificate from the Union Information and Broadcasting Ministry and Home Ministry.

The Lives of Sri Aurobindo is penned by American writer Peter Heehs and has already been published by Columbia University Press in May 2008. In India, it is scheduled for release this month.

The court, acting on a petition asked the I and B Ministry to inquire into allegations that the book makes defamatory remarks about Sri Aurobindo, one of India's revered philosophers and freedom fighters, who died in 1950.

Gitanjali Devi, in her plea, has mentioned that the book is blasphemous and makes several defamatory remarks on the life and character of the philosopher. Her counsel Mr. Milan Kanungo told HT

"The court has directed the I and B Ministry to make a thorough inquiry into the contents of the book and ascertain whether it contains any defamatory comments about Sri Aurobindo. The report would be submitted to the court by December 15, which has been fixed as the next day of hearing."

Heehs, one of the founders of the Sri Aurobindo Ashram Archives did not respond to an e-mail query from HT. 1:03 PM 9:24 AM 8:57 AM 7:18 AM 1:13 PM 1:28 PM 4:29 PM

Tuesday, November 04, 2008

Jean-Baptiste Say's "Law of Markets" was a pillar of classical liberalism

Mint : Mon, Nov 3 2008. What pumps up the economy
An understanding of Jean-Baptiste Say’s Law of Markets is essential in these turbulent times
Sauvik Chakraverti

To theoretical economists, the current turmoil in global financial markets is a battle between Keynesians and Austrians. Yet, I would prefer to go back in time to an older insight. This is Jean-Baptiste Say’s “Law of Markets”, which dates back to the early 19th century, long before either Keynes or any Austrian appeared on the scene. J-B Say was known as the Adam Smith of France. An understanding of his important law is essential in these turbulent times.

In a nutshell, Say’s law holds that the sale of X gives rise to the demand for all non-X...I have taken a small liberty by representing the law as “the sale of X gives rise to the demand for all non-X”. The actual law goes deeper. What it really says is that “the production of X gives rise to the demand for all non-X”...

In the early 19th century, gold was the only money everyone knew, and the International Gold Standard was what all political economists called money. The greatest tragedy that Keynesianism has wreaked upon the world is that it has caused a total loss of understanding of how markets actually work, an understanding at least 200 years old.

Furthermore, the Keynesians exaggerated the role of the state. Classical liberals stood for “limited government”: a constitution that limited the government’s powers; and a parliament that limited its revenue. Thanks to the Keynesians we now have omnipotent government. No government is “limited” if it has unlimited powers to “create money”. Parliaments become meaningless then. Democracy becomes “pork-barrel politics”. Economic totalitarianism, and the consequent inflationism, are the twin evils Keynesians have bequeathed to the modern world. This is the long run Keynes laughed about. Sauvik Chakraverti is an author and award-winning journalist. He blogs at . Comments are welcome at The "Law of Markets"... Applied from ANTIDOTE