Wednesday, July 05, 2006

Curse of seniority July 2, 2006

Two weeks ago I was invited to a glamorous event in Manhattan celebrating the launch of a special issue of the prestigious Foreign Affairs magazine titled The Rise of India to which I had also contributed. A knowledgeable and well heeled audience heard our moderator begin with Jim Rogers’ famous line that he wouldn’t invest in India because “it had the worst bureaucracy in the world”. An odd note to begin an event honouring India’s rise! It soon became apparent, however, that we must be celebrating the rise of a “private” India. A worrisome question hung over the whole evening--is India rising economically despite the state?

During our socialist days we worried about economic growth but we were proud of our world class judiciary, bureaucracy and the police. Now we are ashamed of these very institutions while we take growth for granted. The brightest human beings on the earth reside in India’s public services, but their fibre has been destroyed by the system’s inability to nurture the good and punish the bad. This is, in part, due to the insidious seniority system run by small and safe men. When a person is promoted regardless of performance he loses his will to excel. And so, what was once called the best civil service in the world has been “dumbed down”. In 1938, 81 civil servants ran the central government and a thousand ICS officers ruled undivided India of 300 million people far more efficiently because they had not succumbed to the disease of seniority.

It is also democracy’s fault. It creates the illusion that if we are equal in one respect we must be equal in every way. As citizens we are equal before the law with equal rights, but this sensible idea is subverted into a belief that if we are equal legally then we must be equal in other ways. Thus, we are shy to reward talented persons and punish non-performers. When institutions stop nurturing talent then one falls into a sick world of “rishwat and sifarish” where lakhs of cases remain pending in the courts, where drinking water doesn’t reach the poor, where electricity board engineers connive to steal power and universities promote unsuitable professors.

Great nations are built by talented persons. Anyone who has run an institution or a business knows the 80:20 rule—80 percent of the results are delivered by 20 percent of the people. Hence, smart managers reward the talented without de-motivating the rest. Talent is, of course, widely dispersed--it exists among dalits, brahmins and OBCs--and successful nations are able to spot and nurture it. Just as one wouldn’t select a World Cup football team based on reservations, so one must never bend the rules of entry into any institution. Doing so sends a wrong signal to the young, telling them, “chalta hai”. If the entry exam doesn’t evaluate talent properly then we should change the exam but not sacrifice the principle of merit.

Indian companies are becoming world class because they respect this principle. Veerappa Moily, who is now picking up the pieces after Arjun Singh, could similarly give birth to world class private universities in India if he got rid of the Licence Raj in education. What a wonderful way to expand seats! And if Manmohan Singh is serious about governance, he should attack the accursed principle of seniority. Great nations somehow manage to strike the right balance between the claims of talent and equity. Others are cursed to be mediocre.

A highway called India June 18, 2006

Homi Bhabha, the distinguished professor of English at Harvard, recently described India as a multi-lane highway. This is a happy metaphor, I think, because it captures nicely our diverse multilingual, multicultural, open society in which all are moving forward, albeit at different speeds. At the same forum Amartya Sen added that India had experienced huge gains from the economic reforms and everyone seemed to be rising. The only question is if those in the slow lane are gaining enough from the reforms. He went on to remind us about the English philosopher, David Hume’s astonishing thought--market expansion makes us aware of others’ lives and thus expands our ethical horizon.

Thanks to talented persons in the fast lane, India is now on the verge of becoming a world beater, even a champion, and this is happening after a thousand years. We ought to ensure now that those in the slow lane also get an equal start on the highway so that they too accelerate and change lanes at the right moment. Hence, I had proposed here a scholarship scheme on May 7th with a choice of any private or public school for all disadvantaged schoolchildren in India. This would promote equity without compromising merit, and it would do more for OBCs than reservations. It turns out that it will also cost exactly the same as the cabinet’s decision to recklessly expand capacity in higher education.

Arjun Singh’s proposal, however, seeks to artificially push persons from the slower to the faster lanes. This will cause accidents on the road and all the lanes will slow down. When high performers observe persons with lower marks stealing ahead by unfair means, they are bound to lose heart. Some of their competitive spirit will die. The notion of fair competition develops early in human beings. Studies by the Swiss psychologist, Jean Piaget, show that even three year olds get offended when one child gets a bigger piece of the cake. This is why every judgment by the American Supreme Court has opposed quotas even though it was sympathetic to affirmative action.

The cabinet’s compromise to rapidly expand seats will further diminish the already low standards in most colleges. India will not be able to compete in a world that has no place for mediocrity. Since 1991, we have tried to build a world class India by focusing on growth, believing that expansion was the best tonic for lifting the poor. Suddenly, in the past two years, we are no longer interested in growing India but only in dividing it. No wonder Arjun Singh appears in a web poll among the “villains who divided India” along with Jinnah, Godse, V.P. Singh and Narendra Modi. I am not one of Midnight’s children--I was born in the silence before the storm that overtook the lives of my family during the partition. I have a sickening premonition that we are facing another division of India. Arjun Singh might sleep well, but I wake up in the night with this terrible casteist nightmare.

At the same event in Delhi, Larry Summers, the former President of Harvard University, claimed that history will remember our age by the rise of China and India. The importance of this event to world history, he said, is equal to the Renaissance and the Industrial Revolution. If the cabinet proposal on reservations goes through then history will only remember the rise of China. India, it will record, was too busy cutting itself up.

A question of merit 4 June 2006

In the recent debate on reservations we have heard much talk about merit. Ever since the decision by the cabinet to extend reservations to the OBC, I have been deluged by anguished email whose common refrain goes like this: Just when things were going well for India, just when we were building a competitive nation based on merit, why did this tragedy have to fall on us?
These unhappy letters, I find, have been using “merit” as though it were a fixed and absolute thing. Amartya Sen, in a book, Meritocracy and Economic Inequality, edited by Kenneth Arrow and others, points out that merit is a dependent idea and its meaning depends on how a society defines a desirable act. An act of merit in one society may not be the same in another. When Arjuna pierced the target, he performed an act of merit and was suitably rewarded at Draupadi’s svayamvara in the Mahabharata. In our contemporary society Draupadi is more likely to choose a high performer on the CAT exam who gets into IIT. Any well-functioning society rewards talented persons whose actions further their idea of a good society.
In the private sector it is relatively easier to spot merit and reward it. If an individual’s actions consistently improve the company’s profit, she gets promoted and her fellow employees think it fair. Similarly, citizens of a nation prefer to reward those who promote the common good. The reservations debate has this silver lining--it is forcing us to think about our idea of the common good. For the philosopher John Rawls, a good action is related in some way to lifting the worst off in society. For Amartya Sen, it would lessen inequality, and hence he has consistently supported reservations for Dalits. The key point is that there is no natural order of “merit” that is independent of our value system.
Before getting agitated about reservations let us reexamine our notion of a good society. On the face of it, rewarding those who combine intelligence with effort and score in CAT exams doesn’t seem unfair. For these individuals are the ones that will go on to build competitive companies, which will create thousands of jobs and help our nation compete in the world. But Lani Guinier, the famous law professor at Harvard, questions if exams like CAT are the best selectors of talent. If she is correct, then we ought to re-look at our selection exams (including civil service exams) and ensure that they not only remove a bias against the low caste but are good predictors of future performance. Since we are becoming a service economy, our exams should also select those with a bias for serving others.
One of the great achievements of independent India is that we widely condemn discrimination of any kind. We even accept compensatory measures to lift Dalits. But we also believe that great nations are built by talent; hence, we don’t envy our software millionaires--they have risen through ability and hard work. This social contract of equity and excellence does not stretch, however, to extending reservations to the OBCs. Most of them are not the oppressed. Hence, we oppose and condemn this cabinet proposal. It discriminates against the talented and will lead to a decline in standards. Although Amartya Sen and John Rawls’ ideas may be seductive, we cannot forget the nightmare we have lived from 1950 to 1990 when we tried to socially engineer our society through such Utopian ideals.

A hot summer of envy 21 May, 2006

Ever since the state election results, there has been more than the usual talk about “soaking the greedy middle class” by the emboldened Left. As it is, this government has been obsessed with redistributing poverty, and has done too little to create prosperity, which will only come through genuine reforms. Meanwhile, Arjun Singh, smelling an opportunity to become a Left immortal, has trumped his OBC coalition partners and declared a caste war. It promises to be a long hot summer of envy.

S. Narayan, the former finance secretary and economic advisor to the PM, writes that the real motive behind Arjun Singh’s move to extend reservations is envy. Having failed to improve government institutions, our babus and netas now want to control private ones. It will give them the clout to “visit, examine, ask questions and be feted by” the elite. He has a point. There are 265 universities in India, almost all of them under government control. Only about 25 of these are any good. The rest seldom produce an employable graduate. If government would focus on improving the quality of the 240 bad institutions, it would do more for the millions of OBCs than to throw them a few crumbs in the IITs and IIMs. If we rapidly increased the supply of good institutions there would be no need for reservations. But this would mean doing hard work, and it’s a lot easier to redistribute poverty.

If greed is the vice of capitalism, envy is the flaw of socialism. “From each according to ability and to each according to his need” was the rallying cry of Marxism as it set out to create a classless, egalitarian society. Socialist societies, however, turned out to be the most envious in history. “The searing heartburn of envy causes a choking feeling in the throat, squeezes the eyes out of their sockets”, says a character in Y. Olesha’s 1929 novella set in the Soviet Union, where turning in your neighbour for his perceived advantage became a way of life. Envy is felt more strongly between near equals than those widely separated in fortune. It doesn’t make sense to envy the Queen of England, does it? Envy is different from jealousy--one is jealous about what one has, but envious about what others have. The philosopher, John Rawls wrote: “A person who envies another is prepared to make both persons worse off to reduce the gap between them”. Envy was a major factor behind the killing of Pramod Mahajan.

That wonderful character in the Mahabharata, Karna, struck a great blow against the caste system when he refused to switch sides. He stood up courageously to his mother. He told her that his “real” parents were his low caste family who had brought him up and not the royal one into which he had been born. Thus, he rejected society’s claim that status arises from birth. Although Karna was against the caste system, he was not envious. He was born with great talent, which was nurtured by private sector rishis rather than CPM’s unionised time-servers. He would have supported merit and vehemently opposed reservations. He would have embraced the affirmative action proposal I made in my last column, which would promote excellence and equity. Manmohan Singh, the economist, will quickly appreciate the lesson from Karna’s story--we must expand India’s talent pool without lowering standards. Thus, he would be wiser if he listens to Karna rather his envy inspired populist colleagues.