Trade Unions and Politics

They say that the Universe is fractal.  It means that the parts forming it are miniaturised versions of the whole that they form.  This makes drawing inferences for larger systems possible by watching  smaller sub-systems.  Though, there must be a limit at which this recursion breaks down; the extreme example being going down to a single point.  

Now, what is happening in the economic and political spheres at the country level may be difficult to observe in its totality because of its sheer size that can't fit into our frame of observation as also a lack of complete data and soft information.  But one can always draw inferences by observing smaller structures within the industry or organization one works in.

Recently a friend and colleague posted in FB about how the trade unions in banking industry have systematically cheated their members and benefitted at their cost.  When I expressed surprise in a comment at the fact that these unions continue to represent bank employees despite a majority of members despising them, another friend made important observations.  He said that the unions are able to retain their stranglehold by vigorously defending errant members facing disciplinary actions, and by siding with the management when it comes to demanding extra efforts for the organization (even though the benefits from it may not flow to them or may disproportionately benefit the top.)

Now take a look at the political sphere.  In our system of first-past-the-poll, and not proportionate representation, any ruling party is, almost as a rule, despised by more people than liked.  A 30% vote share may be more than adequate to ensure complete and even overwhelming majority, and a swing of a few percentage points to lose it.  So how does a party, in power on the basis of such minority support, strengthen its hold?  First by defending or protecting errant members (read criminals) of the society, and second by exhorting the populace in the name of patriotism and nationalism for greater, even slave like, efforts and sacrifices, the benefits of which hardly ever trickle down to them and are mostly reaped by the crony capitalists who always cosy up to the party in power!

Do you agree that the world indeed is fractal?

Musings On The Current Farmers' Agitation

Many columnists are writing in favour of the three Agriculture Acts that farmers are vehemently opposing.  They feel that these are steps in the right directions.  The Acts allow private players to purchase from the farmers so the competition can ensure better prices for the farmer.  These also remove ceilings on stocks of essential commodities, earlier put in place to discourage hoarding. These steps, in the opinion of the protagonists,  would eliminate wastages, ensure efficiency and get the farmer better remuneration for his produce in an open and competitive market not limited to their geographical location.

However, the farmers are apprehensive that there may not be enough competition amongst procurers, logistics providers, processors and marketers to ensure that the farmers get a good enough price.  Recent news about Adani Agri Logistics emerging as a measure player in most aspects of Agri Logistics adds fuel to their apprehensions.  Such apprehensions about lack of competition lie at the core of the present agitation and the farmers' demand for a guaranteed minimum price.

The corporate sector has always been wary of free competition and has tried to erect and enhance barriers.  When the economy started opening up in 1990s, a so called Bombay Club had come up to oppose it.  The government at that time didn't succumb totally to pressures and in about two decades time, everyone was upbeat about how Indian businesses were becoming world class and could confidently meet international competition.

However things seem to be headed for an U-turn now.  We are again afraid of competition as seen by India's refusal to join RCEP and reversion to 'Aatmnirbharata.'

It would seem that the aversion to competition is not limited merely to one's own sphere of enterprise but generally to new upstarts trying to break into their economic strata and enjoy privileges that come with it.  How else can we justify the fact that the few Indian unicorns that have come up have been able to do so only with the support of venture capital from abroad, including a neighbour country that is not so friendly?  That a financial system that has lost lakhs of crores to scamsters and bad debts, could not provide venture capital to budding entrepreneurs even to the tune of a few hundred crores?

All this seems to be the fallout of a system of crony capitalism that has evolved over the years through a nexus between businessmen and politicians.  This system has raised entry barriers in both the spheres, business as well as politics, and it works to the detriment of the public at large.  Public has become increasingly wise to the machinations of this closed group and is absolutely unwilling to take any proclamations by these two powerful groups at face value.

The difference between bonafide capitalism and crony capitalism is competition.  In the absence of competition, capitalism turns toxic. It is for this reason that competition is something that Governments are supposed to enforce.  But for governments to honestly do that it is important that role of money in elections be brought down to minimise politicians' dependence on business, and that is where the crux of the problem lies.

Congress too practised Crony Capitalism and it fell because it could not cover it up with a façade of nationalism.

And farmers are not willing to trust the markets being opened for them precisely because of a suspicion whether competition will truly be there or not. And hence the demand for a guaranteed minimum price.