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| Sunday, 8 August 2004 |
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| News Business Features Editorial
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Taken to the brink by 'Engine of Growth' Wendell W. Solomons The idea 'engine of growth' arose in centuries past to describe the role of education. But, during the last twenty years, media usage has made 'engine of progress' and 'engine of growth' words descriptive of the private sector. From 1977 this second meaning was specifically used for a changed economic policy in Sri Lanka. * * * A group of 140 Indian businessmen arrived recently in Sri Lanka on a sight-seeing visit. For beauty of scenery, the Indians found their organiser's choice apt. However, in their chance encounters with local business they found their counterparts complacent and laid-back. What they encountered were the results of 27 years of Sri Lanka's use of the policy "the private sector is the engine of growth." Famed financier George Soros tackles the issue in the following way (in the "New Republic" journal, visible on the Net): "...Firmly held ethical, professional, and social principles serve as an anchor, keeping financial markets stable... But when people pursue financial success without regard for other considerations, they become willing participants in initially self-reinforcing but eventually self-defeating processes." "Market fundamentalism became dominant around 1980, when Ronald Reagan was elected president in the United States and shortly after Margaret Thatcher was chosen as prime minister in the United Kingdom... Market fundamentalism is a false and dangerous ideology...by equating private interests with the public interest, market fundamentalism endows the pursuit of self-interest with a moral quality." * * * Human civilisation becomes possible when "We" and "I" are in a compatible relationship. The theorist who led us in the direction of obliterating "We" is Alice Rosenbaum (assumed name Ayn Rand). Her collaborator Milton Friedman later translated her offering into language that economists use. Here are two short two extracts from her book "Anthem" (1938) reflecting the anti-social witch's brew she offers: "The word 'We' is as lime poured over men, which sets and hardens to stone, and crushes all beneath it, and that which is white and that which is black are lost equally in the grey of it." "I am done with the monster of 'We,' the word of serfdom, of plunder, of misery, falsehood and shame." Coming back to where we are, in company letters you will come across phrases such as "We are glad to inform you ..." Alice Rosenbaum's credo breaks down the "We" of the real-life corporate entity. Here is an example that will not sound unfamiliar to a reader in Sri Lanka: The head of a local ad firm was meeting a personal friend during the weekend. His friend heads a major paint producing company. He told his friend with a shrug, "When I am invited to visit a firm in Colombo to discuss an ad campaign, the marketing manager often suggests, when closing the deal, that the ad campaign would happen faster if I placed money in his drawer." He continued, "Now - if my firm makes it a habit of offering kickbacks, sooner or later that would bring out an opportunist streak in my staff. That streak would repel creative talent in my firm. What should I do to get orders for advertising and keep the firm running?" The dilemma is that since "private sector" is a general or catch-all term, it also covers sole-proprietorships and wheeler-dealers. So the very idea of annulling the "We" leads to personal acquisition by a get-rich-quick don from within - whether it be a corporate body in business or public sector, a religious body or a community association. If opportunism is glorified, the example of one individual helping himself to company property soon leads to imitation. George Soros calls it "self-defeating" because company progress stalls. Through infighting in the company for spoils, amity suffers and therefore productivity. As a business executive once said, "We spend the day bad-mouthing each other." Finally, a long established company has the choice of - (1) Sinking under its overheads; (2) Enhancing its window dressing by overcharging customers or engineering tax-trimming; (3) Creating its own banking window to produce the cash to meet the costs of expensive overheads. (Officially, you are only required to have as little as Rs 20/- of every Rs 100/- you issue). George Soros concludes the discussion in his article, "It is unrealistic to expect that all market participants will suddenly undergo such an ethical conversion. But public opinion and public discourse - as we saw in the '90s - can have a dramatic impact on individual behaviour. Americans must relearn the difference between a collection of individuals each pursuing his or her self-interest and a society of people guided by the public interest. How well Americans relearn that difference may well determine whether this country and the world return to economic stability and prosperity in the months and years to come." Sri Lanka is hardly in a less perilous position and needs rapid, careful attention. Author invites response at: [email protected] |
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