Note to recruiters

Note to recruiters: We are quite aware that recruiters, interviewers, VCs and other professionals generally perform a Google Search before they interview someone, take a pitch from someone, et cetera. Please keep in mind that not everything put on the Internet must align directly to one's future career and/or one's future product portfolio. Sometimes, people do put things on the Internet just because. Just because. It may be out of their personal interests, which may have nothing to do with their professional interests. Or it may be for some other reason. Recruiters seem to have this wrong-headed notion that if somebody is not signalling their interests in a certain area online, then that means that they are not interested in that area at all. It is worth pointing out that economics pretty much underlies the areas of marketing, strategy, operations and finance. And this blog is about economics. With metta, let us. by all means, be reflective about this whole business of business. Also, see our post on "The Multi-faceted Identity Problem".

Tuesday, March 26, 2013

Is the Presidential System a better system for India?

Speaking of Shashi Tharoor: it has been a major thoughtpoint of Shashi Tharoor's over the past couple of years that India would be better off with a Presidential System. Would a Presidential System be better for India? My short answer is : No. More on that below, but just to clarify : this is what I was talking about when I said that "I don't believe much of the other stuff [Tharoor] has written as well" in my previous post. 

A sampling of his opinion on this matter : 
“I believe that the Presidential system would be far better in our country than the Parliamentary system because of the nature of our polity and the fact that we have so many political parties, coalition governments have the say in the last couple of decades,” Tharoor said. He also said, “Parliamentary system sadly privileges a situation where checks and balances outweigh the possibility of decisive action and instead of electing someone to get something done and then holding him/her accountable at the next elections, we are essentially forced to elect someone who spends a large portion of their time try ing to stay in power rather than exercising their power in terms of effective governance.” 
Vivek Dehejia in the New York Times argued against this proposal raising four major points against the idea.
(1) The best government is the one you can get rid of most easily. (2) Voting patterns are not independent of the electoral system, and you may get something you didn’t wish for.  (3) Lack of decisiveness in government is not always, or even usually, socially undesirable. (4) Because of its complexity and importance, great prudence should be exercised in introducing sweeping constitutional reforms.
Points #3 and #4 are arguably the most weighty ones, the one with the most bearing on the matter at hand. The economy of India is doing quite well now that the government is out of the way in the growth sectors and there is no reason to bring it back in. Further to these points, here are three other reasons why the Presidential System is not a good one for India.

(1) Monolithic political organizations: Indian political parties are quite monolithic. Power is concentrated among a few. This is true of not only the Congress(I) but also of the BJP and the Janata Dal.
(1a) The Congress(I) does not even have elections for the post of President of Congress(I).This is a tremendously undemocratic system. While there are some advantages to a Presidential system, the danger to the political system itself from abuse of  power is tremendous. The danger is that India will face the same sorts of issues related to abuses of power that countries like Pakistan and Afghanistan have faced.
(2) Corruption would worsen: Corruption is rife in Indian politics. By accumulating power with a single person, there will likely be much more corruption.
(3) Lack of support for free markets: It is unclear that the President of India would be pro-free market. This ultimately is the killer argument. If nothing else, the most important thing for India right now is that its policy of liberalization continue.
It has been pretty clear to me that what India lacks is not the Presidential System as such but rather a coalescing of political opinions around ideological rather than religion- and caste- based grounds. If there was an organization of political parties along ideological grounds, and if free enterprise would be allowed to flourish, the problems faced by India in terms of lack of active decision making would get resolved quite naturally. With a political system organized along ideological ground, people would be able to choose which candidate to vote for based on that person's political beliefs. This means that there would be better accountability since candidates can be held responsible much more easily if they professed their political beliefs on particular issues pertaining to the polity rather than claiming that they would defer to the "senior leadership" on specific matters. By the by, I am surprised that Shashi Tharoor has not responded (AFAIK) to the issues raised by Vivek Dehejia (I had raised some of the above issues on my List as well). Surely, he (or his sons) must have come across this critique in the New York Times. My suspicion is that he does not, in fact, have a good response to the issues raised and that his is not a quantitatively well founded argument in terms of the social science. I believe that if there were a political party in India that was committed to free markets, then it would have been able to demonstrate the power of free enterprise for developing states such as Gujarat and Maharashtra by having liberalized various sectors of the economy, notably, the technology sector and by cutting unnecessary costs. They would be able to provide the proof of the pudding, as it were, by way of positive outcomes. Indeed, one of the major questions today is how committed the government is to further liberalization in the retail sector (prices would drop for the average consumer, gains from trade would result, et cetera, et cetera), and this question has not been adequately dealt with in a timely fashion by the Manmohan Singh government. This is a hugely important reform that would unleash the power of the market in lowering prices for the average person (and this also includes the very poor, by the way) and thereby would enable them to afford a better standard of living.

What looks like a failure of decisive action from the government is really the inability of the political parties to truly free the invisible hand.

Update (Mar 26, Mar 27): Updated the post a bit. From Wikipedia's article on India's Congress(I) :
The All India Congress Committee (AICC) is formed of delegates sent from the PCCs around the country. The delegates elect various Congress committees, including the Congress Working Committee, which consists of senior party leaders and office bearers, and takes all important executive and political decisions.
Whether you agree with the free market argument or not may not even matter all that much here. What's more important is that the structure of the political organizations in India is quite undemocratic. We have a AICC which actually consists of 'senior' party leaders. This leads to a bit of a chicken-and-egg problem for those who want to run for office. How do you become a 'senior' party leader? By already having a political machine, of course. This is one of the main reasons that political machines are virtually handed down from generation to generation. This is the problem that Shashi Tharoor should be talking about but isn't.

It is time, I think, for us to talk about real democracy.