Line And Length
Ratan Tata, L M Thapar, Rahul Bajaj, Singhania, Assocham, Ficcii they are all grumbling away in their corners. Whats more, in their version of the Indian rope-trick, they have succeeded in equating their own personal interest with, first, the companies they preside over and, then, with national interest.
This raises liberal as well as communist hackles but there is no need for dismay and even less for strident criticism. After all, it is an age-old practice, the world over that when businessmen feel they are in trouble, they run to the sovereign for help. And it is again an age-old practice that the sovereign comes to their help.
Both practices are based on the You scratch my back, Ill scratch yours principle, though if you heard them talk, youd never think it was anything quite as basic as that.
So in the old days, they called the bailout dharma and thus imbued it with the notion of inescapable duty. In more recent times, it is called sovereign responsibility which amounts to the same thing.
The idea, however, is the same: political power must serve the interests of domestic capital first and only then of others, call them what you will people or consumers or communities or, following Tony Blair, stakeholders. This, too, is a worldwide phenomenon.
But globalisation of capital flows, consequent upon the gradual dismantling of post First World War capital controls, has added a new dimension to the problem. This is because capital now comes in two garbs, domestic and foreign.
So now, the world over, sovereigns have to choose between the following ranking of priorities:
Domestic capital
Foreign capital
The rest. Or
Domestic capital
The rest
Foreign capital
Note that in both rankings, the place of domestic capital remains unchanged thereby suggesting, rather cleverly, that the battle is really between the interests of the rest and foreign capital, while domestic capital looks on benignly with lofty innocence.
In post-colonial, democratic and nationalist societies, this idea has added appeal. But the US and Japan are no different. However, since they are the current initiators of globalisation, the choice between the domestic and foreign capital is not as stark for them as it is for India.
But I have different preference ordering to suggest. Given the record of both domestic capital and the government since 1947, I think the ordering, as far as manufacturing is concerned, should be as follows:
The rest
Domestic public capital
Foreign capital
Domestic private capital
Implicit in this ordering is the idea that public capital and foreign capital will serve the interests of the rest better than private capital which, in India, is yet to come out of the feudal age, witness their approach to things.
I also think that an alliance between public and foreign capital, rather than between private and foreign capital, will serve the interests of the rest better because the power of foreign capital can be countervailed effectively only by the sovereign power.
For proof, look at Maruti.