There is a message in my in-box today from the Transform India with Modi campaign team. I am not quite sure whether it is an initiative by the Government of India, or by the BJP or just another social networking site trying to add members rapidly. Whatever the case, the message is intriguing. It invites people like you and me to suggest ideas that would help make India a better, cleaner, business friendly place.
Such initiatives are incredibly hard to implement. Getting traction around the idea, both in the minds of the public and the bureaucracy. Then there needs to be alignment on priorities in the minds of the public, the bureaucracy and the enforcement mechanism.
Granting however, that change needs to start with us, the citizenry, I would like to refer your attention to the Broken Window Theory in criminology. Those of you who have read Tipping Point by Malcolm Gladwell will be familiar with this theory. In short, the theory suggests that curbing small crimes, like vandalism and ticket-less travel on the trains, can curb criminal intentions and solve larger problems later. Petty criminals who learn to get away with small crimes are emboldened to try bigger ones.
What are your ideas on the small crimes that need to be nipped in the bud? My first inclination is to go after traffic violations. In a country where spray-paint cans are expensive and vandalism of the scarred walls kind is fortunately not an epidemic, it is the youth on motorcycles who brag about getting to college without heed to traffic lights that need to be educated. Traffic violations are my first choice for another reason. We do not need to put in place a new mechanism to trap this culprits. We only need to make the punishment unaffordable. Rather than increasing the monetary penalty, it might be far more effective to impose the fine in terms of time. If the cop who stops a traffic offender is given instructions to simply hold the culprit there for a few hours before letting him go or charging him with a crime, the deterrent would be far higher.
Saturday, February 28, 2015
Friday, February 27, 2015
Side effects of a middle-class upbringing 1
In the post on keeping needs small, I mentioned the aversion to waste that our parents inculcate in us. A few days ago, I noticed a strange impetus that caused me to eat beyond the point where I was actually quite full. You see, there was a quantity of food left on my plate and, blame it on my now hard wired habits; I could not bring myself to leave that food uneaten. Somewhere in my subconscious, memories of my mother insisting that I finish everything on my plate were firing some neurons that caused my hands to move involuntarily to shovel the remaining food into my mouth.
It is obviously virtuous to take only as much on one's plate as one can finish. The habit once formed not only builds discipline, it builds a disdain for waste.
But this leads to quite a paradox. Food left on the plate would be a waste. But by pushing it through your alimentary canal, are we really not wasting it too? Not to mention the ill-effects on our health and well-being.
The discipline drilled into us makes us unable to make rational decisions in such situations. Even when we realize that we have made an error of judgment, we feel compelled to carry through with what is evidently a bad decision.
We might need to think about how we can teach our children the values of frugality and discipline and yet show them how and when to re-evaluate their decisions as events unfold. I suspect this is not going to be easy.
It is obviously virtuous to take only as much on one's plate as one can finish. The habit once formed not only builds discipline, it builds a disdain for waste.
But this leads to quite a paradox. Food left on the plate would be a waste. But by pushing it through your alimentary canal, are we really not wasting it too? Not to mention the ill-effects on our health and well-being.
The discipline drilled into us makes us unable to make rational decisions in such situations. Even when we realize that we have made an error of judgment, we feel compelled to carry through with what is evidently a bad decision.
We might need to think about how we can teach our children the values of frugality and discipline and yet show them how and when to re-evaluate their decisions as events unfold. I suspect this is not going to be easy.
Thursday, February 26, 2015
Travails of Entrepreneurship Part 1
I have been an entrepreneur for more than two decades now. And it has not always been smooth sailing. I have had a fair share of stumbling and bumbling along the way.
My first business idea was way back in 1987, when I was still in college. I was playing Donkey Kong on my Nintendo hand-held game unit, when I wondered why these units were not available in India. Because the Indian government back then was anti-imports, that's why. And the volumes that could be sold in India did not justify manufacturing them here. But what if I imported a small consignment, say 500 units and test the waters out? Well it turned out that there was no category under which I obtain an import license for these LCD games. It was possible, however to import components under an open general license (OGL) if I wished to assemble these units in India.
I borrowed some money from my dad, and traveled to Hong Kong with a friend to try and find someone who would be willing to sell me kits for these LCD games. We checked into a hotel near the Kai Tak airport; the hotels on Hong Kong island and in Tsim Sha Tsui were way too expensive; and started with the yellow pages. I called a few of smaller electronic toys manufacturers and set up appointments to meet with them across the next couple of days.
Not one was willing to sell kits unless I was willing to buy 10,000 kits or more. I tried arguing that we could look at higher volumes after we had tried the market out with 100 units. They saw the logic of that, but told me I would have to buy complete units if I only wanted a couple of hundred. This was turning out to be a bit of a problem.
On the fourth day, we took the MTR to the electronics market in Wan Chai to buy a set of watchmakers screwdrivers. Then we went back to one of the manufacturer and bought 200 game units. Across the next day, we sat in our hotel room and dis-assembled the units into kits. We placed all the LCD displays in one stack, all the Printed Circuit Boards in another stack and the plastic body components in a third. Then we packaged these three stacks into separate boxes and shipped them by air freight back to India.
We flew back to India, cleared the consignment through customs after paying the customs duty and then sat down to assemble the kits all over again.
We had started with 200, but we ended up with only about 180 sell-able units. Some of the LCD screens were damaged in transit and some of the units would not work after we had assembled them.
And, embarrassingly, we also had some parts lying around after we had finished assembly, that did not seem to go anywhere. Rap's law of inanimate reproduction states, "If you take something apart and put it back together enough times, eventually you will have two of them."
I did not make money on that first business idea, but I did learn Rap's Law first hand.
Wednesday, February 25, 2015
The human mind just loves problems
When I started out on my entrepreneurial journey right out of college, I had set ambitious goals for myself. Well, they had seemed ambitious at the time, but in some years, after I had achieved the monetary targets, the money looked insufficient. In his book 'Maverick', Ricardo Semler mentions what he calls the Leonardo Da Vinci Constant of Personal Wealth. He has hypothesized that once you have accumulated a certain quantum of wealth, you could comfortably live off the earnings off that amount - unless of course you had celebrity requirements like a $300,000 bash every month and a new Prada handbag every day. I re-calibrated the Da-Vinci Constant for life in India and set newer goals and set about them in earnest.
A business school education plus some years later, after the house and car and children's education is paid for, one would figure that one would be able to live peacefully. Work for the joy of work, not for the money. Not easy. The goal post moves itself again. I am beginning to wonder if the human mind needs problems to solve and if the world does not provide them, it learns to make up some on its own. The human mind is creative. If it cannot make wealth the reason for insecurity, it finds something else. Will my children turn out okay? Why is there so much pollution in my city? My favourite problem for the last few days? Too much noise on the streets and around my once quiet neighbourhood.
I have to go now, to figure out how much it will cost to install sound proof windows in my home.
A business school education plus some years later, after the house and car and children's education is paid for, one would figure that one would be able to live peacefully. Work for the joy of work, not for the money. Not easy. The goal post moves itself again. I am beginning to wonder if the human mind needs problems to solve and if the world does not provide them, it learns to make up some on its own. The human mind is creative. If it cannot make wealth the reason for insecurity, it finds something else. Will my children turn out okay? Why is there so much pollution in my city? My favourite problem for the last few days? Too much noise on the streets and around my once quiet neighbourhood.
I have to go now, to figure out how much it will cost to install sound proof windows in my home.
Tuesday, February 24, 2015
The power of keeping needs small
One of the things I have been blessed with is to be born into a middle class family in urban India. If there is one thing I have learned from my parents, it is to learn to take things as they come. My father has been a reasonably successful corporate executive, rising to VP of a large enterprise with a large company car and entitled to travel in the front of the aircraft. He has taken his family on holidays and treated me and my mother to experiences that living across the world can provide. But when he retired and we moved back to India in the late 80s, both my parents were equally happy with a Maruti 800 and traveling on Indian Railways. My parents do not smoke, do not drink and have never played golf at a country club. With no Havana cigars, no Dom Perignon and no club membership fees, their expenses for the month comprise largely of groceries, utilities, fuel, and taking the grandchildren out for a treat at a nice restaurant in Pune. During the times that I have lived outside India, add air-tickets for visiting us to the list, for they refused to let me pay for their air tickets. The secret to their happiness in the golden years of their lives, I have realized, is their ability to enjoy the good life when they had it and to welcome with equal happiness, the simpler life when they hung up their boots and moved back to Pune.
Those of us born into the Indian middle class with its sensibilities of frugality and abhorrence of flashy waste, perhaps do not realize the value of our simple lifestyles. Pu-La Deshpande, in his essay, Mumbaikar, Punekar and Nagpurkar poked fun at the limits of Puneri hedonism which culminates in no more than a good meal followed by a siesta. It is not very far off the mark. Our idea of a good time even today, with incomes far higher than our parents' generation, is an evening out with friends over a meal and perhaps a movie or a cricket match. Figure twenty dollars per person per event, or fifty dollars if you have bought tickets to watch the match live. It is this simplicity and frugality that the British failed to comprehend in Mahatma Gandhi and westerners yet fail to comprehend when playing hard-ball in negotiations.
I have a friend whose employer was trying to arm twist him into making concessions to standard operating procedure with a veiled threat of termination of employment. My friend, being the straight arrow that he is, did not catch the veiled threat until it was made more explicit, at which point, he said to his employer, "You have every right to tell me to leave, but I sense that you believe that I will not be able to survive without the salary you offer me. I don't think you understand how small my needs are."
Those of us born into the Indian middle class with its sensibilities of frugality and abhorrence of flashy waste, perhaps do not realize the value of our simple lifestyles. Pu-La Deshpande, in his essay, Mumbaikar, Punekar and Nagpurkar poked fun at the limits of Puneri hedonism which culminates in no more than a good meal followed by a siesta. It is not very far off the mark. Our idea of a good time even today, with incomes far higher than our parents' generation, is an evening out with friends over a meal and perhaps a movie or a cricket match. Figure twenty dollars per person per event, or fifty dollars if you have bought tickets to watch the match live. It is this simplicity and frugality that the British failed to comprehend in Mahatma Gandhi and westerners yet fail to comprehend when playing hard-ball in negotiations.
I have a friend whose employer was trying to arm twist him into making concessions to standard operating procedure with a veiled threat of termination of employment. My friend, being the straight arrow that he is, did not catch the veiled threat until it was made more explicit, at which point, he said to his employer, "You have every right to tell me to leave, but I sense that you believe that I will not be able to survive without the salary you offer me. I don't think you understand how small my needs are."
Monday, February 23, 2015
One smart engineer and one super salesman
I have met more than a few friends who have been distressed with the amount of BS that goes on in their (large) companies. There is real work to be done, but a number of people manage to subvert the primary goal to indulge in petty power-plays and turf wars.
I am sure, this question has bothered a number of us. How the hell do large companies survive with huge departments with large cost structures that seemingly achieve nothing? How do they go on to not just survive, but also grow across decades?
Those of you who have read the title of this post are well ahead of what I am going to say here. My hypothesis is that all these successful companies are propelled by a super-duo. One team of super engineers, to develop a product or service that the consumer really really wants and one super sales team, to sell it.
If the incremental value designed in by the team of super engineers were not so monumentally huge, the company would have the life span of the proverbial shooting star. Witness the large number of dot-coms whose glory days were a flash in the pan. Similarly, the best products or services are only as good as the revenue they can generate. Sony's Betamax video recording system of the eighties was universally acknowledged as superior to VHS, but was left behind by savvy marketing by JVC and Panasonic.
Smaller companies, without the marketing muscle to bring in mega sales to convert the value of their product to mega dollars, need for everyone in the company to pull their own weight just to survive. Perhaps that explains the large failure rate amongst smaller companies.
I am sure, this question has bothered a number of us. How the hell do large companies survive with huge departments with large cost structures that seemingly achieve nothing? How do they go on to not just survive, but also grow across decades?
Those of you who have read the title of this post are well ahead of what I am going to say here. My hypothesis is that all these successful companies are propelled by a super-duo. One team of super engineers, to develop a product or service that the consumer really really wants and one super sales team, to sell it.
If the incremental value designed in by the team of super engineers were not so monumentally huge, the company would have the life span of the proverbial shooting star. Witness the large number of dot-coms whose glory days were a flash in the pan. Similarly, the best products or services are only as good as the revenue they can generate. Sony's Betamax video recording system of the eighties was universally acknowledged as superior to VHS, but was left behind by savvy marketing by JVC and Panasonic.
Smaller companies, without the marketing muscle to bring in mega sales to convert the value of their product to mega dollars, need for everyone in the company to pull their own weight just to survive. Perhaps that explains the large failure rate amongst smaller companies.
Sunday, February 22, 2015
Chopping wood fetching water
I have been thinking some more about my friend who has been working on quant problems to train his mind to focus. Clearly quant works for him because he enjoys it, but it could well end up frustrating others. What does it take to teach one's mind to focus?
I was watching a show on the Discovery channel some time ago that provided the answer. That particular episode focussed on someone who lived off the grid in the tundra wilderness, and had to chop his own wood and fetch his own water. He spoke about how he was initially miserable when doing these chores, until he realized the source of his misery was all those random thoughts that his mind wandered into while he was working. A number of those rambling thoughts were just anxiety inducing ambiguities, not real problems that could be solved with concrete action. He found peace when he decided to concentrate on and learned to enjoy the job at hand. Chopping wood, fetching water.
I do not have the need to chop wood and fetch water, thankfully, but there was an activity that I used to find frustrating, but have now learned to enjoy. Some years ago I started to iron my own clothes, and hated it enough to cause me to wonder why I was putting myself through the ordeal. I would always rather be doing something else and ended up taking out my frustrations on my shirts and trousers.
After watching that show, I decided to give it a shot, concentrating on the ironing while I was ironing. I have gotten better at it too, and have been working on my speed. This might sound crazy, but it is now one of the activities that gives me my 'me-time'. Driving is another. And writing this blog has now become a third.
When I started out on the 1st of January this year, I was certain that it would be really, really difficult to go through an entire year with one post every day. Now, I am beginning to believe that I will manage, for writing a new post is one of the things I actually look forward to doing every new day.
I was watching a show on the Discovery channel some time ago that provided the answer. That particular episode focussed on someone who lived off the grid in the tundra wilderness, and had to chop his own wood and fetch his own water. He spoke about how he was initially miserable when doing these chores, until he realized the source of his misery was all those random thoughts that his mind wandered into while he was working. A number of those rambling thoughts were just anxiety inducing ambiguities, not real problems that could be solved with concrete action. He found peace when he decided to concentrate on and learned to enjoy the job at hand. Chopping wood, fetching water.
I do not have the need to chop wood and fetch water, thankfully, but there was an activity that I used to find frustrating, but have now learned to enjoy. Some years ago I started to iron my own clothes, and hated it enough to cause me to wonder why I was putting myself through the ordeal. I would always rather be doing something else and ended up taking out my frustrations on my shirts and trousers.
After watching that show, I decided to give it a shot, concentrating on the ironing while I was ironing. I have gotten better at it too, and have been working on my speed. This might sound crazy, but it is now one of the activities that gives me my 'me-time'. Driving is another. And writing this blog has now become a third.
When I started out on the 1st of January this year, I was certain that it would be really, really difficult to go through an entire year with one post every day. Now, I am beginning to believe that I will manage, for writing a new post is one of the things I actually look forward to doing every new day.
Saturday, February 21, 2015
Managing time in small blocks
So how do busy people find the time for all those things they manage to do? They have learned to use time in small blocks.
Ever since we were little, we have consistently improved our procrastination skills by training ourselves to wait for big chunks of time to schedule our activities. You know how that works. Let's say we had to study for a test scheduled for next week and figured we would need about 4 hours. Here's the thought process of a budding procrastinator, "Hmm. Let me see, when do I have a 4-hour slot open? Today looks difficult, I have to go here and then meet a friend at the mall, so by the time I get back, I will only have an hour before dinner. Tomorrow doesn't look good either. I have leave early for class and then I need to get that chore done. Only 2 hours left then. Saturday looks good. I will set the alarm for 6 am and get down work in earnest at 6:30. By 10:30 I should be done. No wait, I have the weekend badminton game at 9 am. Perhaps Sunday then." You get the picture. There is no 4-hour slot open.
Go getters think differently. They will use, the 20 minutes available now before they have to leave for wherever and then come back and use the 40 minutes before dinner and then get an hour's worth of reading done between dinner and bedtime.
The epitome of this disciplined behaviour was a classmate at B-School who is now a senior director at a top tier consulting company. He had little post-its on his study table with notations like "3:05 pm to 3:25 pm - Finish SMDA." At 10 pm he would politely usher us out of his room, "I am sorry guys, I need to read the case for tomorrow and get my 7 hours of beauty sleep."
That is the secret to his success.
Ever since we were little, we have consistently improved our procrastination skills by training ourselves to wait for big chunks of time to schedule our activities. You know how that works. Let's say we had to study for a test scheduled for next week and figured we would need about 4 hours. Here's the thought process of a budding procrastinator, "Hmm. Let me see, when do I have a 4-hour slot open? Today looks difficult, I have to go here and then meet a friend at the mall, so by the time I get back, I will only have an hour before dinner. Tomorrow doesn't look good either. I have leave early for class and then I need to get that chore done. Only 2 hours left then. Saturday looks good. I will set the alarm for 6 am and get down work in earnest at 6:30. By 10:30 I should be done. No wait, I have the weekend badminton game at 9 am. Perhaps Sunday then." You get the picture. There is no 4-hour slot open.
Go getters think differently. They will use, the 20 minutes available now before they have to leave for wherever and then come back and use the 40 minutes before dinner and then get an hour's worth of reading done between dinner and bedtime.
The epitome of this disciplined behaviour was a classmate at B-School who is now a senior director at a top tier consulting company. He had little post-its on his study table with notations like "3:05 pm to 3:25 pm - Finish SMDA." At 10 pm he would politely usher us out of his room, "I am sorry guys, I need to read the case for tomorrow and get my 7 hours of beauty sleep."
That is the secret to his success.
Friday, February 20, 2015
Only a busy person can find the time
My grandmother once said something that has stuck with me. Admittedly, she was being nice to me, for she was very fond of me. I had recently graduated from college and she had bought 2 tickets to a Shivkumar Sharma concert as a graduation gift. I had washed the car and driven over to pick her up when, in her Queen's English, she thanked me for making the time to go with her. I said it was my pleasure and that I would always have the time to go with her. And she said, "You are most kind. But I know that only a busy person can find the time."
I have realized over the years, the wisdom of her words. Trying to get a procrastinator to do something is about as difficult as trying to wake a person who is pretending to be asleep.
So how do busy people find the time for all those things they manage to do?
That is a post for tomorrow.
I have realized over the years, the wisdom of her words. Trying to get a procrastinator to do something is about as difficult as trying to wake a person who is pretending to be asleep.
So how do busy people find the time for all those things they manage to do?
That is a post for tomorrow.
Thursday, February 19, 2015
MBA disease
You have probably heard of Blackberry Disease, also known as Phantom Vibration Syndrome, that causes the false sensation and belief that your phone is vibrating when in fact it is not. It occurs when the boundaries between reality and imagination start to get blurred in the mind.
I was speaking with a dear friend this morning and he mentioned that he has been bothered by a somewhat related problem. It causes the equally false conviction that there is no right answer to any problem.
I suspect it afflicts MBAs more than others; professors at B Schools work rather hard in the first semester to try and get all those engineers in class to see that business situations are rife with ambiguity. Students start to take this rather literally and eventually learn to excuse themselves of the discipline to put in sufficient effort on a problem, and over time the mind starts to find it easier to wander, just considering multiple possible scenarios rather than focusing on solving the problem.
My friend has found an interesting solution to this Wandering Mind Syndrome. He has made it his habit to work on quant problems for about an hour every evening. Problems that can be solved, problems that have one right answer. He is teaching his mind to focus.
Methinks I am going to dig out my old Physics books this evening.
I was speaking with a dear friend this morning and he mentioned that he has been bothered by a somewhat related problem. It causes the equally false conviction that there is no right answer to any problem.
I suspect it afflicts MBAs more than others; professors at B Schools work rather hard in the first semester to try and get all those engineers in class to see that business situations are rife with ambiguity. Students start to take this rather literally and eventually learn to excuse themselves of the discipline to put in sufficient effort on a problem, and over time the mind starts to find it easier to wander, just considering multiple possible scenarios rather than focusing on solving the problem.
My friend has found an interesting solution to this Wandering Mind Syndrome. He has made it his habit to work on quant problems for about an hour every evening. Problems that can be solved, problems that have one right answer. He is teaching his mind to focus.
Methinks I am going to dig out my old Physics books this evening.
Wednesday, February 18, 2015
Honouring commitments - a simple algorithm
I have this quirk in my character that causes me to get inordinately upset when someone, myself included, is unable to honour a commitment. I have often wondered why someone would give their word lightly, and worse, appear to display no remorse, when the word was proven worthless.
Looking back at the times when I have not honoured my own word, I have come to realize that this lack of compliance is due to one or both of two things. Either we do not appreciate how important the matter is to the person we make the commitment to, i.e. we take the matter as trivial and to be taken care of eventually, OR we make the commitment just to get out of the discussion, knowing fully well in some corner of our hearts that we do not really intend to do this in the promised time frame.
I find myself running afoul of these two conditions when it comes to accepting responsibility for what I consider small chores. "Sure, I will buy this stuff on my way back from work." When I get home without the stuff, this is inevitably followed by, "All right. All right. What is the big deal? I will do it tomorrow." And so begins another evening of blissful married life.
After having had my ego bruised over this, I sat down figure out a way out of this mess. Here is my simple algorithm: before I make a commitment, I take a split second to ask myself whether I truly intend to honour my commitment within the promised time frame, or am I offering to do it on a best-effort basis. Once I have the answer, that is exactly what I will commit to. If I do not intend to do it, I will not say that I will.
It is quite simple really, when you think about it.
Looking back at the times when I have not honoured my own word, I have come to realize that this lack of compliance is due to one or both of two things. Either we do not appreciate how important the matter is to the person we make the commitment to, i.e. we take the matter as trivial and to be taken care of eventually, OR we make the commitment just to get out of the discussion, knowing fully well in some corner of our hearts that we do not really intend to do this in the promised time frame.
I find myself running afoul of these two conditions when it comes to accepting responsibility for what I consider small chores. "Sure, I will buy this stuff on my way back from work." When I get home without the stuff, this is inevitably followed by, "All right. All right. What is the big deal? I will do it tomorrow." And so begins another evening of blissful married life.
After having had my ego bruised over this, I sat down figure out a way out of this mess. Here is my simple algorithm: before I make a commitment, I take a split second to ask myself whether I truly intend to honour my commitment within the promised time frame, or am I offering to do it on a best-effort basis. Once I have the answer, that is exactly what I will commit to. If I do not intend to do it, I will not say that I will.
It is quite simple really, when you think about it.
Tuesday, February 17, 2015
Being miserable builds character - Part 2
I had a discussion with a friend about the Calvin strip - 'Being miserable builds character' and I believe I need to add this piece. In the interest of full disclosure, I need to state here that a large part of this post should be attributed to said friend who wishes to remain anonymous for reasons I do not quite understand.
Being miserable is not a sufficient condition for building character. Consistently being miserable about the same thing or class of things, may in fact indicate the opposite; a lack of character required to force a change in the things that are making one miserable, because making the change, like learning new skills, seems like too much trouble.
What does build character, is the misery one often goes through, in dealing with the unexpected or the unfamiliar while building the capability to deal with it the future. The misery of running a mile for the first time is an inescapable part of your journey to the pleasure and fulfillment of completing a marathon. This here-and-now misery of aching muscles is fundamentally different from the misery of living with a job or life that you need to change, but are not willing to, for fear of becoming temporarily more miserable.
Monday, February 16, 2015
What drives some people to work when others have to be driven to work
Timepass2007 makes an interesting point in her comment on the Being-miserable-builds-character post yesterday, that being miserable does not necessarily build character for everyone.
Ketan's comment on the post 'In defense of Capitalism' got me thinking about why some people seem to enjoy their work and others will shirk at the first opportunity available. We can think of people who truly seem to enjoy their work. Names that come to mind are Shivkumar Sharma or Sachin Tendulkar.
"Sure," I hear you say, "I would enjoy work too if it involved playing a sport or a musical instrument. What about people do office work for a living?"
Clearly, prototypical government employees are at one end of the spectrum. At the other end, there are those who look forward to Mondays. This becomes clear when you read about people like Akio Morita, or Jack Welch, or Joe Sutter. These guys really loved their work. What makes them tick?
Money can be one motivator, but surely, there is more to it. Joe Sutter mentions in his book that a number of patents on the design of the 707 carried his name and as per standard Boeing policy of the time he was paid $50 for signing over each of his patents to the company.
What is it then that separates these people who look forward to Mondays and the rest of the world. The masses who work Monday through Friday only to earn a living or so they can afford to pay for the stuff of weekends? And the really sad fact of life? A lot of them don't even do anything on the weekends.
Mohit has articulated this really well, "true joy comes only when one has bested the elements and the people to achieve something that one knows is right. In fact, I feel that that is the core of happiness at work too - high growth and difficult challenges."
Is this drive something that can be engineered in schools, Or are we to resign to the reality that driven, motivated people are born not made?
Ketan's comment on the post 'In defense of Capitalism' got me thinking about why some people seem to enjoy their work and others will shirk at the first opportunity available. We can think of people who truly seem to enjoy their work. Names that come to mind are Shivkumar Sharma or Sachin Tendulkar.
"Sure," I hear you say, "I would enjoy work too if it involved playing a sport or a musical instrument. What about people do office work for a living?"
Clearly, prototypical government employees are at one end of the spectrum. At the other end, there are those who look forward to Mondays. This becomes clear when you read about people like Akio Morita, or Jack Welch, or Joe Sutter. These guys really loved their work. What makes them tick?
Money can be one motivator, but surely, there is more to it. Joe Sutter mentions in his book that a number of patents on the design of the 707 carried his name and as per standard Boeing policy of the time he was paid $50 for signing over each of his patents to the company.
What is it then that separates these people who look forward to Mondays and the rest of the world. The masses who work Monday through Friday only to earn a living or so they can afford to pay for the stuff of weekends? And the really sad fact of life? A lot of them don't even do anything on the weekends.
Mohit has articulated this really well, "true joy comes only when one has bested the elements and the people to achieve something that one knows is right. In fact, I feel that that is the core of happiness at work too - high growth and difficult challenges."
Is this drive something that can be engineered in schools, Or are we to resign to the reality that driven, motivated people are born not made?
Sunday, February 15, 2015
Life coaches Bill Watterson and Scott Adams
One of my favourite Calvin and Hobbes comic strips is this one where Calvin, pretending to be his father, tells him to "Go do something you hate. Being miserable builds character."
I called up my dear friend Maarlee to share the joke. To my surprise, he smiled politely when I expected him to guffaw. I waited, perplexed, so he spoke. "Being miserable does build character," he said. It's not a joke then.
Thinking about this after the event, I found myself agreeing with Maarlee. If I look back at all the events in life that have made me the person I am, most of them were trying circumstances.
A large part of the respect accorded to people who have been through the rigour of the IITs and IIMs is perhaps a result of this truth. We tend to think of the people who make it to the IITs as intelligent. Think a little deeper though, and there might be more to it than intelligence. Most of them have had to give up all social life for the two years preceding their admit. If you have met any of them during that phase in life, you would have noticed how stressed out most of them seem to be.
One of the most trying times in my life was the first year at B-School. I was working between 16 and 18 hours a day and to compound matters, I was trying to compete with people who outclassed me so comprehensively as to make the effort seem hopeless.
The fact that top rung consulting companies and investment banks go hunting at these elite institutions might have more to do with the traits of tenacity, resolve and perseverance in the face of adversity than with intelligence.
Now, if you will excuse me, I am going to go watch the India Pakistan match to practice being stressed.
I called up my dear friend Maarlee to share the joke. To my surprise, he smiled politely when I expected him to guffaw. I waited, perplexed, so he spoke. "Being miserable does build character," he said. It's not a joke then.
Thinking about this after the event, I found myself agreeing with Maarlee. If I look back at all the events in life that have made me the person I am, most of them were trying circumstances.
A large part of the respect accorded to people who have been through the rigour of the IITs and IIMs is perhaps a result of this truth. We tend to think of the people who make it to the IITs as intelligent. Think a little deeper though, and there might be more to it than intelligence. Most of them have had to give up all social life for the two years preceding their admit. If you have met any of them during that phase in life, you would have noticed how stressed out most of them seem to be.
One of the most trying times in my life was the first year at B-School. I was working between 16 and 18 hours a day and to compound matters, I was trying to compete with people who outclassed me so comprehensively as to make the effort seem hopeless.
The fact that top rung consulting companies and investment banks go hunting at these elite institutions might have more to do with the traits of tenacity, resolve and perseverance in the face of adversity than with intelligence.
Now, if you will excuse me, I am going to go watch the India Pakistan match to practice being stressed.
Saturday, February 14, 2015
Of honour and shame - Part 3
I caught myself driving through a red traffic light yesterday. I had a very good reason you see, for I was in a terrible hurry, rushing to meet a family in bereavement. I was therefore entitled to skip the traffic light. I am sure everyone who skips a red light is in a hurry. Only their reasons for their haste are never as honourable as my own.
Epiphany for the day: The index of civilized behaviour for a society is how many of us consistently hold ourselves to the same standard that we hold others to. We get indignant about the way our politicians behave or about the impunity with which others skip the red light, or spit in public.
Do we exhibit the same level of indignation when we catch ourselves engaged in the same offense, or do we convince ourselves that we had a really really good reason?
Do we exhibit the same level of indignation when we catch ourselves engaged in the same offense, or do we convince ourselves that we had a really really good reason?
Friday, February 13, 2015
Geography is History Part 3
I have been thinking about this outsourcing business. I am a direct beneficiary of the globalization process for I run a business that does work in India for clients in the United States.
During the course of Webex meetings and conference calls and face-to-face interactions with people across the world, I have realized, first hand, that people from some countries seem averse to the idea of outsourcing. Europeans, for example, are generally not too thrilled with work that could be done at home, moving to another part of the world. While this causes a fair bit of consternation at work, I have to admit that I too, would not be thrilled about the prospect of outsourcing work from India to say Bangladesh or Nepal or Sri Lanka or England. I have found myself lamenting the fact that we in India seem to be buying too many products made in China, when we should be supporting our own manufacturers. So much so, in fact, that I make an active effort to look for alternatives if the product I wish to buy is made in China or made in England. In some areas, this is well nigh impossible. Try buying a computer or a pair of running shoes that is not made in China.
Which brings me to this question. How is it that Americans are so ready to outsource work even when unemployment is a problem at home? I know, I know, comparative advantage. But at a personal level, is the average American such a die-hard capitalist that s/he is willing to undergo hardship or see a friend undergo hardship for the esoteric benefit that society accrues through comparative advantage?
The United States is the largest economy in the world, and until recently, was the worlds biggest manufacturing powerhouse. They couldn't have gotten there by frittering away any advantages they have built over the last 2 centuries. Perhaps it takes just the kind of business maturity that the United States displays to be able to consistently maintain competitive advantage. They have figured out what they are good at, and they focus on doing that stuff. The US is exceptionally good at generating and nurturing new ideas and figuring out new ways of solving ever new problems. And they have moved on from trying to manufacture key-chains and shoes at home. They will invent and manufacture the first airplane, the first phone, the first photo-copier, the first computer, the first cellular phone, the list could go on. Their greatness lies in the fact that they are then willing to let others manufacture in the millions, copies of their inventions, while they move on to invent the first space telescope and the first Mars Rover and the first...
It speaks of a level of maturity as an economy that the US has attained, that allows them to move on. Perhaps, we in India, need to figure out what it is we are exceptionally good at and then concentrate on doing more of that stuff, while we start to import sweaters from Bangladesh.
I met an Australian many years ago, and I was telling him rather proudly that we make our own cars here in India. His response is still food for thought. "We have figured out that we are not very efficient at making cars," he said, "so we do other things and we import our cars."
During the course of Webex meetings and conference calls and face-to-face interactions with people across the world, I have realized, first hand, that people from some countries seem averse to the idea of outsourcing. Europeans, for example, are generally not too thrilled with work that could be done at home, moving to another part of the world. While this causes a fair bit of consternation at work, I have to admit that I too, would not be thrilled about the prospect of outsourcing work from India to say Bangladesh or Nepal or Sri Lanka or England. I have found myself lamenting the fact that we in India seem to be buying too many products made in China, when we should be supporting our own manufacturers. So much so, in fact, that I make an active effort to look for alternatives if the product I wish to buy is made in China or made in England. In some areas, this is well nigh impossible. Try buying a computer or a pair of running shoes that is not made in China.
Which brings me to this question. How is it that Americans are so ready to outsource work even when unemployment is a problem at home? I know, I know, comparative advantage. But at a personal level, is the average American such a die-hard capitalist that s/he is willing to undergo hardship or see a friend undergo hardship for the esoteric benefit that society accrues through comparative advantage?
The United States is the largest economy in the world, and until recently, was the worlds biggest manufacturing powerhouse. They couldn't have gotten there by frittering away any advantages they have built over the last 2 centuries. Perhaps it takes just the kind of business maturity that the United States displays to be able to consistently maintain competitive advantage. They have figured out what they are good at, and they focus on doing that stuff. The US is exceptionally good at generating and nurturing new ideas and figuring out new ways of solving ever new problems. And they have moved on from trying to manufacture key-chains and shoes at home. They will invent and manufacture the first airplane, the first phone, the first photo-copier, the first computer, the first cellular phone, the list could go on. Their greatness lies in the fact that they are then willing to let others manufacture in the millions, copies of their inventions, while they move on to invent the first space telescope and the first Mars Rover and the first...
It speaks of a level of maturity as an economy that the US has attained, that allows them to move on. Perhaps, we in India, need to figure out what it is we are exceptionally good at and then concentrate on doing more of that stuff, while we start to import sweaters from Bangladesh.
I met an Australian many years ago, and I was telling him rather proudly that we make our own cars here in India. His response is still food for thought. "We have figured out that we are not very efficient at making cars," he said, "so we do other things and we import our cars."
Thursday, February 12, 2015
Geography is History Part 2
Ever since the Wright Flyer took to the air in December 1903, distances have been shrinking. Air travel has now reduced to half a day, what used to take more than half a year not too long ago. Singapore Airlines flew until recently a non-stop flight from Singapore to Newark that made the journey in 18 hours. Look up the locations of Singapore (1N, 104E) and Newark (40N, 75W) and you will realize that they are located pretty much half-way across the world. According to the Man in Seat 61 a similar journey from the UK to Australia will take about 40 days by sea even today.
So distance is not what it used to be - but is that alone enough to claim that Geography is History? Maybe not, but put that together with another fact of life in the 21st century and we might find it hard to refute that claim.
This other life-changing fact is that work is now portable. We are all familiar with how it started. Work that was essentially done on computers, could be done on computers located anywhere as long as the little 1s and 0s could be carried over later to where the result of the work was required. In the earliest days of outsourcing, this probably meant carrying a hard disk drive over, but once computer networks spanned the globe, the work was not just portable but instantly teleportable.
Teleportation does not seem to be restricted to 1s and 0s anymore either. We now have teleportation of physical goods possible too - well in a way. According to this article, when an astronaut needed a wrench on the International Space Station, NASA emailed him one. I am sure that if I looked hard enough on the internet, some day very soon I will be able to find someone somewhere in the world who can manufacture a car and email it to me. That day is already here.
Geography is indeed history.
So distance is not what it used to be - but is that alone enough to claim that Geography is History? Maybe not, but put that together with another fact of life in the 21st century and we might find it hard to refute that claim.
This other life-changing fact is that work is now portable. We are all familiar with how it started. Work that was essentially done on computers, could be done on computers located anywhere as long as the little 1s and 0s could be carried over later to where the result of the work was required. In the earliest days of outsourcing, this probably meant carrying a hard disk drive over, but once computer networks spanned the globe, the work was not just portable but instantly teleportable.
Teleportation does not seem to be restricted to 1s and 0s anymore either. We now have teleportation of physical goods possible too - well in a way. According to this article, when an astronaut needed a wrench on the International Space Station, NASA emailed him one. I am sure that if I looked hard enough on the internet, some day very soon I will be able to find someone somewhere in the world who can manufacture a car and email it to me. That day is already here.
Geography is indeed history.
Wednesday, February 11, 2015
Geography is History
In November 1998, Iridium launched its vaunted satellite phone service with a full page advertisements in a number of newspapers across the world. The $60 million ad-campaign was based on the catch line, "Geography is History." At least Iridium got one of two things right.
Legend has it that the idea behind Iridium was conceived when the wife of Barry Bertiger, a Motorola executive, complained that she could not call the US from an island in the Caribbean. Motorola's can-do engineering prowess was soon brought to bear on this problem and they came up with a primary design involving 77 satellites, that could provide round-the-globe coverage. Even though the system was eventually launched with 66 satellites, they had already chosen the name Iridium. Besides, Dysprosium (66) does not roll off the tongue with quite the same elan.
In hindsight, Iridium's business plan was grossly optimistic. They had expected to garner 500,000 customers within a year of launch. but with handsets costing more than $2000 and talk-time billed at $5 per minute, they found themselves hard pressed to get even 10,000 customers to sign up. Two major issues contributed to the bankruptcy of Iridium in 1999. One, regular cellular phone service was getting cheaper by the minute, pun intended, and two, the Iridium solution required a direct line-of-sight between the handset and the satellite, meaning that it could not be used indoors or inside a vehicle. The only places where Iridium made sense was where regular cellular phone service was not available, like in the open ocean, or in the open desert. In the open ocean, shipping companies had a cheaper alternative in Inmarsat. And in the open desert, the Bedouins did not seem to care much for satellite telephony.
The part that Iridium did get right, is that today, Geography is indeed history. More tomorrow.
Legend has it that the idea behind Iridium was conceived when the wife of Barry Bertiger, a Motorola executive, complained that she could not call the US from an island in the Caribbean. Motorola's can-do engineering prowess was soon brought to bear on this problem and they came up with a primary design involving 77 satellites, that could provide round-the-globe coverage. Even though the system was eventually launched with 66 satellites, they had already chosen the name Iridium. Besides, Dysprosium (66) does not roll off the tongue with quite the same elan.
In hindsight, Iridium's business plan was grossly optimistic. They had expected to garner 500,000 customers within a year of launch. but with handsets costing more than $2000 and talk-time billed at $5 per minute, they found themselves hard pressed to get even 10,000 customers to sign up. Two major issues contributed to the bankruptcy of Iridium in 1999. One, regular cellular phone service was getting cheaper by the minute, pun intended, and two, the Iridium solution required a direct line-of-sight between the handset and the satellite, meaning that it could not be used indoors or inside a vehicle. The only places where Iridium made sense was where regular cellular phone service was not available, like in the open ocean, or in the open desert. In the open ocean, shipping companies had a cheaper alternative in Inmarsat. And in the open desert, the Bedouins did not seem to care much for satellite telephony.
The part that Iridium did get right, is that today, Geography is indeed history. More tomorrow.
Tuesday, February 10, 2015
GPS - Part 2
After reading yesterday's post, a friend asked why the handheld GPS device needs to get a distance from 4 satellites with known locations? Why won't three known points suffice?
Here is one way to think about this. Imagine a train traveling on a North-South railway line, say Mumbai's suburban local train. If I told you that the train is 4 km away from Andheri stations, that is not sufficient information to precisely locate the train for it could be either North or South of Andheri Station. But if I added another piece of information, that the train was also 10 km from Dadar, then you could locate the train at the point of intersection of these two distances. Alternately, I could tell you the train was 4 km South of Andheri - giving you again, two pieces of information, the distance and the direction. Long story short, to locate a point along one dimension, you need 2 pieces of information.
Lets try this in 2 dimensions. Let us say, you wanted to know the precise location of a certain village near Pune. If I told you the village was 50 km from Pune, it could be anywhere on the circumference of a circle with a radius of 50km centered on Pune. If we also added that it was 130 km from Mumbai, you are now better off, but these two circles could intersect each other at 2 points. If we add a third piece of information, that it is 1250 km from Delhi, then you have pinpointed the location.
Thus, the number of measurements needed is one more than the number of dimensions you wish to locate the object in. To get a location in 3 dimensions, i.e. on the surface of the earth, I explained patiently, we would need distances from 4 satellites.
My friend was not quite so naive. He was setting me up. After I had laboured through this explanation, he insisted that three satellites might suffice. His argument: the fourth measurement is known without reaching for a satellite. You know you are on the surface of a sphere with a radius of 6371 km.
"True," I said, in my best smart-ass tone, "Your solution would work if you were on the surface of the earth at mean sea level. But handheld GPS devices give you Latitude, Longitude and Altitude. And since the designers of the GPS system wanted the system to be usable by aircraft too, they figured you would need 4 pieces of information.
That leaves one question still open. If the satellites are buzzing about the earth in orbits along multiple planes, how do we know where the satellites are at any given point?
What say, Heisenberg?
Here is one way to think about this. Imagine a train traveling on a North-South railway line, say Mumbai's suburban local train. If I told you that the train is 4 km away from Andheri stations, that is not sufficient information to precisely locate the train for it could be either North or South of Andheri Station. But if I added another piece of information, that the train was also 10 km from Dadar, then you could locate the train at the point of intersection of these two distances. Alternately, I could tell you the train was 4 km South of Andheri - giving you again, two pieces of information, the distance and the direction. Long story short, to locate a point along one dimension, you need 2 pieces of information.
Lets try this in 2 dimensions. Let us say, you wanted to know the precise location of a certain village near Pune. If I told you the village was 50 km from Pune, it could be anywhere on the circumference of a circle with a radius of 50km centered on Pune. If we also added that it was 130 km from Mumbai, you are now better off, but these two circles could intersect each other at 2 points. If we add a third piece of information, that it is 1250 km from Delhi, then you have pinpointed the location.
Thus, the number of measurements needed is one more than the number of dimensions you wish to locate the object in. To get a location in 3 dimensions, i.e. on the surface of the earth, I explained patiently, we would need distances from 4 satellites.
My friend was not quite so naive. He was setting me up. After I had laboured through this explanation, he insisted that three satellites might suffice. His argument: the fourth measurement is known without reaching for a satellite. You know you are on the surface of a sphere with a radius of 6371 km.
"True," I said, in my best smart-ass tone, "Your solution would work if you were on the surface of the earth at mean sea level. But handheld GPS devices give you Latitude, Longitude and Altitude. And since the designers of the GPS system wanted the system to be usable by aircraft too, they figured you would need 4 pieces of information.
That leaves one question still open. If the satellites are buzzing about the earth in orbits along multiple planes, how do we know where the satellites are at any given point?
What say, Heisenberg?
Monday, February 9, 2015
GPS satellites are NOT in Geostationary orbit
I met one more person over the weekend who was sure that the Global Positioning System's 24 satellites were in Geostationary orbit. I have been especially surprised when this opinion is exhibited engineering students who have stated their favourite subject was satellite communications.
I have only an inkling as to why people might be labouring under this misconception. For a GPS device to figure out its own position, it needs to know its distance from at least 4 points whose location is known. The easiest way to find 4 satellites whose location can always be known would be to put them in Geostationary Orbits also known as Geosynchronous Equatorial Orbits (GEO). However, GEO is only possible if the satellite is placed in orbit exactly above the equator.
Geostationary orbits mean that the satellite is hovering above the same spot on the surface of the earth and moves around the planet once in 24 hours (23 hours 56 minutes 4.0916 seconds if you want to be precise). To an observer on the earth, the satellite will appear stationary.
Here is the problem with putting the 24 satellites in GEO. If we place 24 of them in GEO orbit, equally spaced, then only 6 will be visible from any point on the equator, the rest will be over the horizon. Moreover, and more problematic, they would all be in the same plane.
The GPS satellites are therefore in circular orbits with an orbital period of half a sidereal day, meaning they pass over the same spot on the face of the earth twice a day. If your handheld device can now get a distance from 4 satellites, it can figure out its own location in three dimensions.
But here's a puzzle for you. It would be easy to locate a satellite in a GEO. How does the GPS device know the location of the satellite it receives a signal from? To be fair, that is a trick question. The correct question to ask is this: how does the satellite know where it is before it can tell the GPS receiver its location?
I have only an inkling as to why people might be labouring under this misconception. For a GPS device to figure out its own position, it needs to know its distance from at least 4 points whose location is known. The easiest way to find 4 satellites whose location can always be known would be to put them in Geostationary Orbits also known as Geosynchronous Equatorial Orbits (GEO). However, GEO is only possible if the satellite is placed in orbit exactly above the equator.
Geostationary orbits mean that the satellite is hovering above the same spot on the surface of the earth and moves around the planet once in 24 hours (23 hours 56 minutes 4.0916 seconds if you want to be precise). To an observer on the earth, the satellite will appear stationary.
Here is the problem with putting the 24 satellites in GEO. If we place 24 of them in GEO orbit, equally spaced, then only 6 will be visible from any point on the equator, the rest will be over the horizon. Moreover, and more problematic, they would all be in the same plane.
The GPS satellites are therefore in circular orbits with an orbital period of half a sidereal day, meaning they pass over the same spot on the face of the earth twice a day. If your handheld device can now get a distance from 4 satellites, it can figure out its own location in three dimensions.
But here's a puzzle for you. It would be easy to locate a satellite in a GEO. How does the GPS device know the location of the satellite it receives a signal from? To be fair, that is a trick question. The correct question to ask is this: how does the satellite know where it is before it can tell the GPS receiver its location?
Sunday, February 8, 2015
The ordeal of buying a new car in India
In 2010, Volkswagen launched the Polo in India. It is a gorgeous
car and looked especially luscious in Red. I had such a crush on this car that
I put my booking deposit down even before I took a test drive.
Ding.
The car arrived into the showrooms and I went in to ask for a test drive. They did not have a test drive vehicle yet and they were unlikely to have one for a while. They were delivering every car they had because the demand was so high. I sat in the car, caressed the steering wheel and after getting high on the new car smell, made full payment for the Highline version with all options.
Ding.
I was supposed to get delivery in about 4 weeks. When I called to check, they said they were not getting any highline models because VW India had anticipated higher demand for the middle variant. They could deliver one of those if I was willing to take one.
Ding.
Then one day, the dealership called. My car had arrived. It would be registered the next day and I would be able to take delivery 2 days hence. I called them 2 days hence. There was a small problem they said. It would take another couple of days.
Ding.
Finally, the big day was here. I went over to collect the car. They handed over the keys and the person in charge of the delivery process started to tell me about the features of the car. "This is where you put in the key, this is the headlight switch, and this is the radio and CD player," he droned on, as I rolled my eyes. As he got to the audio system though, I noticed there was no pause button on the console and asked him how to pause the CD. He looked puzzled, trying hard to recollect this part of this training. Then he started to push every button on the console hoping for a miracle, hoping desperately that one of the buttons would be the pause button. Then he showed me that the CD stopped playing if I switched to the radio.
Ding.
I started the car. It shuddered and rumbled like a Diesel.
Ding. Ding.
Wait. “I hope you haven’t registered the wrong car. I had put my money down for a petrol engine car. If I had wanted a tractor, I would have bought I tractor,” I said. Before he disappeared to go check, I pulled out my booking receipt and showed him the part where it said PETROL. He walked around to the back of the car, read the decals, came back to the driver’s door, and said, “Sir, this is a petrol car.” I had just bought myself a petrol tractor.
Ding. Ding. Ding.
Every time I had heard those "Ding" sounds over the last two months I had looked around to see what the noise was. Only now did I realize, it was the alarm bell going off in my head.
This was not going to be the car I had lusted after. It started like a Diesel, it went like a diesel and it grumbled like a diesel. I am NOT a diesel person. Defeated, I took the car home and started using it for my daily commute. In a few days, rains lashed Pune and I was driving home through ankle-deep water. Ankle deep, mind you, not waist deep. The next morning, the car grumbled to life and sputtered a little but did not stall. I depressed the clutch pedal, slid the gear-shift into reverse and eased off the pedal. The car did not move. The engine struggled, then stalled. I tried again. Same result. The brakes had jammed.
I drove my trusty Honda City to the dealership and they were kind enough to agree to send a mechanic home with me. I took one look at the mechanic and his unbelievably dirty overalls and said I am sorry, but there is no way he is not going to sit in my car in those grease stained clothes. I had not guarded the new car smell in my 6 year old car to have it replaced with the aroma of warm grease. The manager took one look at the mechanic and agreed to send him with a service car. The mechanic arrived in the same dirty overalls and sat on my brand new Polo’s fabric upholstery in the same dirty overalls. He started the car, put it into reverse and it stalled. He then stuck it into first gear and raced the engine coaxing the car forward. The rear wheels dragged a black strip on the concrete floor. Then there was a bang and the brake was un-jammed. He stepped out and grinned triumphantly. “Problem solved, sir.” he said, “They all do that if you have driven through water.”
They all do that, do they? My humble Maruti did not do that. My Honda had never done that. My Mitsubishi has not even considered doing that. This must be the German engineering they sold me. And it is not just me. I have a friend who owns a German luxury automobile. Every rainy season, he has to take it to the dealership to have a certain windshield overflow channel cleaned, for otherwise the rain finds its way into the car to dribble onto his shoes while he is driving. He has surrendered to this reality. What still bothers him though is the length of the queue at the dealership to get this particular job done. But I digress.
Flash forward to December 2014. I bought another new car and my experience with the sales team’s knowledge about product features was no better than my experience detailed above. In the new car, I could not find the pause button for the CD player either. But there is a workaround, a feature even, if you care to look at it that way. In the new car, if you mute the CD player, it pauses the track. In the Polo, you had to switch to the radio to stop playing the CD. In this new car, you cannot switch off the radio; you can only switch the source to CD if you do not wish to listen to the radio.
But this is definitely a better car. And I am pretty sure this new car’s parking brake is not going to jam during the monsoon. Because this monsoon, I am going to use my reliable Japanese car. Am going to leave my new pride and joy where it belongs – safe and sound in my garage under it's Tyvek cover– until the sun comes out again.
Saturday, February 7, 2015
Three Degrees of Price Discrimination
Mohit mentioned in his comment yesterday that it is all about pricing. Takes me back to B-School where the economics Prof. explained the three degrees of price discrimination. Price discrimination is the process of charging different prices to different customers for the same goods, and getting away with it. Better still, if you can get your customers to thank you for charging them higher.
Price Discrimination is not a new concept. It happens at the subji-mandi all the time. I have vivid memories of the time when I was about 8 years old, I haggled the heck out of the vendor, getting him to drop the price of a watermelon to 12 rupees. I remember the smile on his face as I handed over the money. I thought he was admiring how this little kid was negotiating hard. I puffed up my chest nearly to the size of the watermelon, when I showed it off to my mother and asked, "How much do you think I paid for this?" I deflated rapidly at her guess, 10 rupees.
There's price discrimination for you. The vendor charged me the amount that I was willing to pay. This was not perfectly executed though, for I begrudged the seller for 'cheating' me of 2 rupees. How does a company engage in price discrimination and get away with it? That's where the savvy of the marketing blokes comes in.
Essentially, there are three different levels or degrees of price discrimination.
The third degree involves selling the same goods to different segments of customers at different prices, even though the cost of delivering that product or service is essentially the same. Consider the fact the electricity is sold at different rates to industrial customers, households and farmers.
The second degree is when there is a volume discount. Often however, the volume in question is not really large enough to enable savings due to economies of scale at the transaction level. When you buy a pack of ten pens at a stationery store, the unit price might be lower by about 10%. However, at the factory, the change in volume from 1 unit to 10 units has not really caused any change in economies of scale. So also at the fruit vendor, we ask for a drop in price if we are buying 24 oranges instead of the one.
First degree price discrimination is where things get really interesting. This is where the seller actively tries to extract the maximum price that each buyer is willing to pay. This happens all the time in the service industry. Airlines, after deregulation, charge different prices to different customers for the same service. Students willing to book 2 months ahead can fly from say Bangalore to Delhi paying Rs 2400. The businessman who buys the ticket a couple of days before the date of travel could end up paying as high as Rs 20,000. And yet, both of them are traveling the same route at the same time on the same aircraft, arriving at the same time and served the same crew. Crucially, both of them are likely happy with the transaction. If not, they were free to not buy at that price.
The really good marketing companies have learned to sell not just services but even products under first degree price discrimination, i.e. sell the same product to different customers at different prices purely on the basis of the customers willingness to pay . The key is to make the product appear sufficiently different to these different customers. In my post yesterday, I wrote about how the Skoda Octavia, the VW Jetta and the Audi A4 are essentially the same car under the skin. Yet different segments of customers are happily willing to pay vastly different prices, because the product appeals to them at that price.
So the next time you think you are making a statement by buying an Audi instead of a Volkswagen, or a Louis Philippe instead of a Peter England, remember, they love customers like you.
Price Discrimination is not a new concept. It happens at the subji-mandi all the time. I have vivid memories of the time when I was about 8 years old, I haggled the heck out of the vendor, getting him to drop the price of a watermelon to 12 rupees. I remember the smile on his face as I handed over the money. I thought he was admiring how this little kid was negotiating hard. I puffed up my chest nearly to the size of the watermelon, when I showed it off to my mother and asked, "How much do you think I paid for this?" I deflated rapidly at her guess, 10 rupees.
There's price discrimination for you. The vendor charged me the amount that I was willing to pay. This was not perfectly executed though, for I begrudged the seller for 'cheating' me of 2 rupees. How does a company engage in price discrimination and get away with it? That's where the savvy of the marketing blokes comes in.
Essentially, there are three different levels or degrees of price discrimination.
The third degree involves selling the same goods to different segments of customers at different prices, even though the cost of delivering that product or service is essentially the same. Consider the fact the electricity is sold at different rates to industrial customers, households and farmers.
The second degree is when there is a volume discount. Often however, the volume in question is not really large enough to enable savings due to economies of scale at the transaction level. When you buy a pack of ten pens at a stationery store, the unit price might be lower by about 10%. However, at the factory, the change in volume from 1 unit to 10 units has not really caused any change in economies of scale. So also at the fruit vendor, we ask for a drop in price if we are buying 24 oranges instead of the one.
First degree price discrimination is where things get really interesting. This is where the seller actively tries to extract the maximum price that each buyer is willing to pay. This happens all the time in the service industry. Airlines, after deregulation, charge different prices to different customers for the same service. Students willing to book 2 months ahead can fly from say Bangalore to Delhi paying Rs 2400. The businessman who buys the ticket a couple of days before the date of travel could end up paying as high as Rs 20,000. And yet, both of them are traveling the same route at the same time on the same aircraft, arriving at the same time and served the same crew. Crucially, both of them are likely happy with the transaction. If not, they were free to not buy at that price.
The really good marketing companies have learned to sell not just services but even products under first degree price discrimination, i.e. sell the same product to different customers at different prices purely on the basis of the customers willingness to pay . The key is to make the product appear sufficiently different to these different customers. In my post yesterday, I wrote about how the Skoda Octavia, the VW Jetta and the Audi A4 are essentially the same car under the skin. Yet different segments of customers are happily willing to pay vastly different prices, because the product appeals to them at that price.
So the next time you think you are making a statement by buying an Audi instead of a Volkswagen, or a Louis Philippe instead of a Peter England, remember, they love customers like you.
Friday, February 6, 2015
Auto Motives
Aravindhan Sundar suggested in his comment on yesterday's post that Boeing's approach might be easier in B2B businesses than in B2C ones. I think line extensions might be easier in B2C businesses. It must be relatively easy to package a detergent in a single-wash sized sachet, or in a 1kg pack to cover the household for a week or a month, in an industrial size 200 kg sack or army sized container loads. Ditto for flour, or biscuits, or most consumables. "But what about durable goods?" you might ask. Madura Garments, manufactures shirts and trousers for three very different market segments at three very different price points in various sizes. I have a strong suspicion that all three brands of apparel are made in the same factory on the same machines by the same labour, supervised by the same managers and sold in the same Planet Fashion stores. Automobile companies have also started to catch on. And this brings me nicely to my topic for today.
Consider the Skoda Octavia sold in India today. It is a mid sized car about 4660 mm long and 1800 mm wide with a 1.8 liter turbo-charged petrol engine or a 2.0 liter turbo-diesel engine developing between 148 and 184 bhp driving the front wheels. The Volkswagen Jetta also is a front wheel drive car with a 1.8 litre turbo petrol or 2.0 liter turbo-diesel engine developing between 148 and 184 bhp and happens to be near 4600 mm long and 1800 mm wide. The Audi A4 sold in India is again a front driver available with a 1.8 liter turbo petrol or 2.0 liter turbo-diesel developing between 148 and 184 bhp. The car is 4700 mm long and about 1800 mm wide. Incidentally, if you take the boot off these cars, you get the Skoda Fabia, VW Golf and the Audi A3 with lengths around 4000-4300 mm.
Under the skin, all these cars share the same suspension geometry based on the MQB platform, the same steering systems, very similar brakes and of course the same engines all made by the same group of companies. In Europe, the very same cars are sold with the same configurations, albeit with a wider range of engine and body choices, beginning with 1.2 liter and 1.4 liter turbo-petrol developing from 100 bhp on the Octavia and the Jetta and topping out with a 3.2 liter V6 turbo petrol on the A4.
It would be unfair if I did not also state here that there are some differences between the three cars. The interiors are designed to be 'value' (read budget) on the Skoda, boring on the Volkswagen and curiously dated on the Audi. Similarly the steering feel is aloof on the Skoda, devoid of any feeling on the Volkswagen Jetta and artificial on the Audi A4.
Clearly then, the Volkswagen group has segmented the market without segmenting the product line. The real clincher is the pricing difference across these models. The Volkswagen group sells the Skoda for about 14-18 Lakh Rupees, the Jetta between 16-20 Lakh rupees and prices the Audi A4 from 36 to 58 lakh rupees.
Audacious aren't we, Audi?
Consider the Skoda Octavia sold in India today. It is a mid sized car about 4660 mm long and 1800 mm wide with a 1.8 liter turbo-charged petrol engine or a 2.0 liter turbo-diesel engine developing between 148 and 184 bhp driving the front wheels. The Volkswagen Jetta also is a front wheel drive car with a 1.8 litre turbo petrol or 2.0 liter turbo-diesel engine developing between 148 and 184 bhp and happens to be near 4600 mm long and 1800 mm wide. The Audi A4 sold in India is again a front driver available with a 1.8 liter turbo petrol or 2.0 liter turbo-diesel developing between 148 and 184 bhp. The car is 4700 mm long and about 1800 mm wide. Incidentally, if you take the boot off these cars, you get the Skoda Fabia, VW Golf and the Audi A3 with lengths around 4000-4300 mm.
Under the skin, all these cars share the same suspension geometry based on the MQB platform, the same steering systems, very similar brakes and of course the same engines all made by the same group of companies. In Europe, the very same cars are sold with the same configurations, albeit with a wider range of engine and body choices, beginning with 1.2 liter and 1.4 liter turbo-petrol developing from 100 bhp on the Octavia and the Jetta and topping out with a 3.2 liter V6 turbo petrol on the A4.
It would be unfair if I did not also state here that there are some differences between the three cars. The interiors are designed to be 'value' (read budget) on the Skoda, boring on the Volkswagen and curiously dated on the Audi. Similarly the steering feel is aloof on the Skoda, devoid of any feeling on the Volkswagen Jetta and artificial on the Audi A4.
Clearly then, the Volkswagen group has segmented the market without segmenting the product line. The real clincher is the pricing difference across these models. The Volkswagen group sells the Skoda for about 14-18 Lakh Rupees, the Jetta between 16-20 Lakh rupees and prices the Audi A4 from 36 to 58 lakh rupees.
Audacious aren't we, Audi?
Thursday, February 5, 2015
Plane truth
I just found out that Boeing Commercial Aircraft division had mastered in the 1960s what took the automobile industry until the turn of the century to figure out; that you can save costs by developing multiple models on what is essentially the same platform underneath. Duh!
All of Boeing's family of narrow body jetliners are essentially modifications to one aircraft - the Boeing 707. The 707 was the aircraft that ushered in the Jet Age. It was not the first jet powered passenger aircraft, that title goes to the ill-fated De Havilland Comet which, being a post war British design, crashed more often than it flew. The Boeing 707 was the first safe jetliner that could carry 140 passengers with six across seating and leap the Atlantic in a single bound. Its four engines were thirsty though and it needed a hell of a long runway.
Some US airlines wanted a jetliner for domestic use on old airports with short runways that were originally designed for piston engined aircraft like the DC3. So Boeing made a shorter version of the 707 called the 720 that carried fewer passengers but could stop sooner. Other airlines wanted an aircraft with two engines for operational efficiency, so Boeing took the same fuselage, with its six abreast seating, unbolted two of the engines and made the 737. Airlines that wanted to fly short international routes over the sea asked for 3 engines, because FAA regulations mandated that twin engined aircraft could fly routes that were no more than 60 minutes away from an emergency diversionary airport. Three engined aircraft were not subject to this restrictive rule, and Boeing took the same fuselage with its six across seating, mounted three engines near the tail and made the 727.
As high-bypass-airflow jet engines evolved, becoming more powerful, more reliable and more fuel-efficient, Boeing realized there was demand for an aircraft to fill the gap left by the original gas-guzzling 707 on medium range international routes. So they made the 757, a twin engined aircraft, again, built around the same fuselage.
Each of these models was developed into further derivatives, adding length to carry more passengers as more powerful jet engines became available and market segments were identified and served. These derivatives are identified by the suffix after the original model name like -200 and -300. The 727 has two variants, the 727-200 and the 727-300. The 757 has five, the 757-200, the 757-300, the 757-200PF (with wide cargo doors to load Pallet-ized Freight) the 757-200SF (Super Freighter) and the 757-200M (Combi - part passenger, part cargo).
The 737 spawned what must be the most successful line extension of all time across any industry. Boeing started to run out of numbers on this one and had to resort to using alphabets too. The 737 family has grown from the original 737-100 to include the 737-200, 737-300, 737-400, 737-500, 737-600, 737-700, 737-800, 737-900, hold on, I am not done yet, the 737-700ER, 737-900ER, 737C (Convertible), the 737QC, (Quick Change) the 737 NG (Next Generation), the 737 MAX and the 737 BBJ - Boeing Business Jet.
Amazingly, Boeing has managed to segment the market without segmenting the product line, without being too obvious, unlike some automobile companies as we shall see tomorrow.
Nice going Boeing.
All of Boeing's family of narrow body jetliners are essentially modifications to one aircraft - the Boeing 707. The 707 was the aircraft that ushered in the Jet Age. It was not the first jet powered passenger aircraft, that title goes to the ill-fated De Havilland Comet which, being a post war British design, crashed more often than it flew. The Boeing 707 was the first safe jetliner that could carry 140 passengers with six across seating and leap the Atlantic in a single bound. Its four engines were thirsty though and it needed a hell of a long runway.
Some US airlines wanted a jetliner for domestic use on old airports with short runways that were originally designed for piston engined aircraft like the DC3. So Boeing made a shorter version of the 707 called the 720 that carried fewer passengers but could stop sooner. Other airlines wanted an aircraft with two engines for operational efficiency, so Boeing took the same fuselage, with its six abreast seating, unbolted two of the engines and made the 737. Airlines that wanted to fly short international routes over the sea asked for 3 engines, because FAA regulations mandated that twin engined aircraft could fly routes that were no more than 60 minutes away from an emergency diversionary airport. Three engined aircraft were not subject to this restrictive rule, and Boeing took the same fuselage with its six across seating, mounted three engines near the tail and made the 727.
As high-bypass-airflow jet engines evolved, becoming more powerful, more reliable and more fuel-efficient, Boeing realized there was demand for an aircraft to fill the gap left by the original gas-guzzling 707 on medium range international routes. So they made the 757, a twin engined aircraft, again, built around the same fuselage.
Each of these models was developed into further derivatives, adding length to carry more passengers as more powerful jet engines became available and market segments were identified and served. These derivatives are identified by the suffix after the original model name like -200 and -300. The 727 has two variants, the 727-200 and the 727-300. The 757 has five, the 757-200, the 757-300, the 757-200PF (with wide cargo doors to load Pallet-ized Freight) the 757-200SF (Super Freighter) and the 757-200M (Combi - part passenger, part cargo).
The 737 spawned what must be the most successful line extension of all time across any industry. Boeing started to run out of numbers on this one and had to resort to using alphabets too. The 737 family has grown from the original 737-100 to include the 737-200, 737-300, 737-400, 737-500, 737-600, 737-700, 737-800, 737-900, hold on, I am not done yet, the 737-700ER, 737-900ER, 737C (Convertible), the 737QC, (Quick Change) the 737 NG (Next Generation), the 737 MAX and the 737 BBJ - Boeing Business Jet.
Amazingly, Boeing has managed to segment the market without segmenting the product line, without being too obvious, unlike some automobile companies as we shall see tomorrow.
Nice going Boeing.
Wednesday, February 4, 2015
Why does the Boeing 747 have its characteristic hump?
I am currently reading an amazing book about the development process of the world's first wide body, twin aisle aircraft, Boeing's 747. The book titled '747' is written by Joe Sutter, the chief engineer in charge of the project. The Jumbo Jet is truly an amazing piece of engineering, even more so when you appreciate that the first one flew almost half a century ago in 1969 and the latest version the 747-8i is holding its own rather well, well into the 21st century. Well enough in fact, that premier airlines like Lufthansa are ordering new ones even today.
Here's a question I have always had about the jumbo jet. Why does it have the characteristic hump at the fore end of the fuselage? Why was it designed that way?
When Boeing started development of the 747 in 1965, the company did not have confirmed orders for their 350 passenger behemoth, only expression of interest from Pan-American airlines. Joe Sutter and his team realized that air cargo was going to be a huge market and their new aircraft would be big enough to carry standard truck sized cargo containers 8 feet wide by 8 feet tall and 20 feet long. In fact it could carry two of them side by side on its main deck. The problem was, they needed to figure out a way to get these into the aircraft, and the method that allowed the fastest loading and unloading was through the nose of the aircraft. They designed a loading door into the nose of the aircraft that hinged upwards. The engineers then had to move the flight deck, i.e. the cockpit, above the hinges and therefore above the main deck. The hump behind the cockpit was gently sloping for aerodynamic reasons. Over time, on succeeding generations of the 747, Boeing has been extending the upper deck aft to the point that on the 747-400, the Stretched Upper Deck can carry 40 passengers in Business Class configuration or 56 in Economy.
One of the most recognizable shapes in aviation owes its design to a team of engineers building in some insurance against the possibility of obtaining insufficient passenger jet orders. A good thing too, for the jumbo jet went on to become a runaway success in the air cargo world, so much so, that half of all air freigther cargo in the world is carried by 747s.
So now you know.
Here's a question I have always had about the jumbo jet. Why does it have the characteristic hump at the fore end of the fuselage? Why was it designed that way?
When Boeing started development of the 747 in 1965, the company did not have confirmed orders for their 350 passenger behemoth, only expression of interest from Pan-American airlines. Joe Sutter and his team realized that air cargo was going to be a huge market and their new aircraft would be big enough to carry standard truck sized cargo containers 8 feet wide by 8 feet tall and 20 feet long. In fact it could carry two of them side by side on its main deck. The problem was, they needed to figure out a way to get these into the aircraft, and the method that allowed the fastest loading and unloading was through the nose of the aircraft. They designed a loading door into the nose of the aircraft that hinged upwards. The engineers then had to move the flight deck, i.e. the cockpit, above the hinges and therefore above the main deck. The hump behind the cockpit was gently sloping for aerodynamic reasons. Over time, on succeeding generations of the 747, Boeing has been extending the upper deck aft to the point that on the 747-400, the Stretched Upper Deck can carry 40 passengers in Business Class configuration or 56 in Economy.
One of the most recognizable shapes in aviation owes its design to a team of engineers building in some insurance against the possibility of obtaining insufficient passenger jet orders. A good thing too, for the jumbo jet went on to become a runaway success in the air cargo world, so much so, that half of all air freigther cargo in the world is carried by 747s.
So now you know.
Tuesday, February 3, 2015
The flip side of Capitalism
I read an article yesterday on farmer suicide. Consider the plight of a farmer who changed from planting beet on his land to planting onion because the market price for onion had been going through the roof. Come the time to reap his crop and take it to market, the price for onion had dropped so far that it was not even worth the risk to try and take it to market. The transportation cost exceeded the amount he could have realized from the sale. Unlike some other crops, I hear one cannot leave onion unharvested, and you cannot dump it for mulch or fertilizer.
The first temptation is to set mechanisms such as floor price to protect the interest of the farmers. Step one away from Capitalism. Unfortunately, this does not really work to the benefit of the farmers. Middlemen and corrupt officials arm twist the farmer into signing for the support price while paying him short. Sugarcane factories in Maharashtra have recently been in the news for not paying farmers their dues for years. The sugarcane factories are under pressure too, for some are running at less than half capacity and unable to break even. The solution was to then institute a law that forced farmers to sell their sugarcane only to the sugar factories in their own sub-district. They were not allowed to cart their own produce to a market that offered a better price. Now we are two steps away from Capitalism. Follow this to its logical conclusion and pretty soon we have a full blown licence-raj where some wise babus in Delhi get to plan how many scooters should be produced in the country. We have seen how that worked out.
But back to the farmer, for this is where Capitalism falls short. The tenets of Capitalism dictate that if you do not produce what the customer wants at the price the customer is willing to pay, then the free hand of the market will reach out and slap you. But what did this farmer do wrong? He did try to produce what the customer wanted at a price that offered value to both himself and the customer, only to find the rug pulled out from under his feet after he had toiled for months.
Ditto for the newly retired people who put their life savings into a new home or invested in the stock market a little before 2008 only to see their support system destroyed and twenty years of remaining life staring them in the face. All while the BSDs at the investment banks took home their multimillion dollar bonuses.
Is more regulation is the answer? What am I saying? Contemplating more regulation is the top of that slippery slope that leads to a planned economy. Even with all its vices, Capitalism might be the best we have got.
And this is vexing, for the concept of survival-of-the-fittest evokes one emotion when you consider the winners, quite another when you contemplate the dying.
The first temptation is to set mechanisms such as floor price to protect the interest of the farmers. Step one away from Capitalism. Unfortunately, this does not really work to the benefit of the farmers. Middlemen and corrupt officials arm twist the farmer into signing for the support price while paying him short. Sugarcane factories in Maharashtra have recently been in the news for not paying farmers their dues for years. The sugarcane factories are under pressure too, for some are running at less than half capacity and unable to break even. The solution was to then institute a law that forced farmers to sell their sugarcane only to the sugar factories in their own sub-district. They were not allowed to cart their own produce to a market that offered a better price. Now we are two steps away from Capitalism. Follow this to its logical conclusion and pretty soon we have a full blown licence-raj where some wise babus in Delhi get to plan how many scooters should be produced in the country. We have seen how that worked out.
But back to the farmer, for this is where Capitalism falls short. The tenets of Capitalism dictate that if you do not produce what the customer wants at the price the customer is willing to pay, then the free hand of the market will reach out and slap you. But what did this farmer do wrong? He did try to produce what the customer wanted at a price that offered value to both himself and the customer, only to find the rug pulled out from under his feet after he had toiled for months.
Ditto for the newly retired people who put their life savings into a new home or invested in the stock market a little before 2008 only to see their support system destroyed and twenty years of remaining life staring them in the face. All while the BSDs at the investment banks took home their multimillion dollar bonuses.
Is more regulation is the answer? What am I saying? Contemplating more regulation is the top of that slippery slope that leads to a planned economy. Even with all its vices, Capitalism might be the best we have got.
And this is vexing, for the concept of survival-of-the-fittest evokes one emotion when you consider the winners, quite another when you contemplate the dying.
Monday, February 2, 2015
In defense of Capitalism
Mohit wrote a comment on my short post yesterday that I feel the need to respond to.
If one had to try and summarize the problem with Capitalism in one word, it would be 'exploitation'. Marxism was born out of this anguish, but as the world has figured out, the road to hell is paved with good intentions. The history of communism is a detailed account of the replacement of exploitation by the capitalists with exploitation by dictators and despots. Socialism was supposedly the golden mean - a democratic process for electing the government that would then manage the welfare state, presumably by taxing the rich to care for the poor. Save for a couple of Scandinavian countries, this approach has not really worked. The problem with socialism, can also be summarized in a word, and that word would be 'entitlement'. France, a poster child of the success of socialism in the seventies and eighties, is these days crippled by strikes at the SNCF with alarming regularity. The French are beginning to find even a 35 hour work week onerous. The number of people who live on the dole in a number of socialist-democratic countries across the world is worrisome, but nowhere near as worrisome as the number of people who actually aspire to live on the dole.
On the other hand, unbridled Greenspan-ian Capitalism produced the financial crisis of 2008 - a clear exploitation of the system by the few who didn't know what they were really doing, but knew that they could get away with it.
The devil and the deep blue sea then? Not quite. I would like to argue that the situation has changed sufficiently in the 21st century to favour choosing Capitalism over communism. Two factors are markedly different today as against in the early 20th century when Marxism took root.
One is the far higher literacy level among the populace, at least in the countries where the choice between Capitalism and communism is real. It is far more difficult to exploit a literate educated people than it is to exploit those whose thumb print can be forcibly affixed on a document. A signature forced under duress can be disavowed in the court of law, at least in places with a reasonable rule of law. The illiterate person is unaware of his rights within the law, let alone willing or able to fight for them.
The other factor is the loss of exclusivity over published material that used to be vested with the capitalists. Our maid has a smartphone and she is on facebook. She knows she has a say, and she is empowered to voice her opinion. Internet and social media are making it easier for her to learn that she has a right, an obligation even, to voice her opinion. For the first time in the history of mankind, vox populi is not muted, cannot be muted by external forces.
Capitalism today has to tread carefully to survive. In a dictatorship of the proletariat, you have to tread carefully to survive. Where would you rather be?
Capitalism is the deep blue sea. It is unpredictable and will throw the odd storm at you, but you are free to chart your own course. Communism, the devil, unfortunately has been unerring in its behaviour thus far.
If one had to try and summarize the problem with Capitalism in one word, it would be 'exploitation'. Marxism was born out of this anguish, but as the world has figured out, the road to hell is paved with good intentions. The history of communism is a detailed account of the replacement of exploitation by the capitalists with exploitation by dictators and despots. Socialism was supposedly the golden mean - a democratic process for electing the government that would then manage the welfare state, presumably by taxing the rich to care for the poor. Save for a couple of Scandinavian countries, this approach has not really worked. The problem with socialism, can also be summarized in a word, and that word would be 'entitlement'. France, a poster child of the success of socialism in the seventies and eighties, is these days crippled by strikes at the SNCF with alarming regularity. The French are beginning to find even a 35 hour work week onerous. The number of people who live on the dole in a number of socialist-democratic countries across the world is worrisome, but nowhere near as worrisome as the number of people who actually aspire to live on the dole.
On the other hand, unbridled Greenspan-ian Capitalism produced the financial crisis of 2008 - a clear exploitation of the system by the few who didn't know what they were really doing, but knew that they could get away with it.
The devil and the deep blue sea then? Not quite. I would like to argue that the situation has changed sufficiently in the 21st century to favour choosing Capitalism over communism. Two factors are markedly different today as against in the early 20th century when Marxism took root.
One is the far higher literacy level among the populace, at least in the countries where the choice between Capitalism and communism is real. It is far more difficult to exploit a literate educated people than it is to exploit those whose thumb print can be forcibly affixed on a document. A signature forced under duress can be disavowed in the court of law, at least in places with a reasonable rule of law. The illiterate person is unaware of his rights within the law, let alone willing or able to fight for them.
The other factor is the loss of exclusivity over published material that used to be vested with the capitalists. Our maid has a smartphone and she is on facebook. She knows she has a say, and she is empowered to voice her opinion. Internet and social media are making it easier for her to learn that she has a right, an obligation even, to voice her opinion. For the first time in the history of mankind, vox populi is not muted, cannot be muted by external forces.
Capitalism today has to tread carefully to survive. In a dictatorship of the proletariat, you have to tread carefully to survive. Where would you rather be?
Capitalism is the deep blue sea. It is unpredictable and will throw the odd storm at you, but you are free to chart your own course. Communism, the devil, unfortunately has been unerring in its behaviour thus far.
Sunday, February 1, 2015
Subscribe to:
Posts (Atom)