The Economic Tunnel


And this is the joke.

There are three men on a train. One of them is an economist and one of them is a logician and one of them is a mathematician.  And they have just crossed the border into Scotland (I don’t know why they are going to Scotland)and they see a brown cow standing in a field from the window of the train (and the cow is standing parallel to the train).

And the economist says, ‘Look, the cows in Scotland are brown.’

And the logician says, ‘No.  There are cows in Scotland of which one, at least, is brown.’

And the mathematician says, ‘No.  There is at least one cow in Scotland, of which one side appears to be brown.’

And it is funny because economists are not real scientists, and logicians think more clearly, and mathematicians are best.

[From The Curious Incident of the Dog in the Night-time, Mark Haddon, 2003, a novel that won many awards like the Whitbread Book of the Year, the Guardian Children’s Fiction Prize, and the Booktrust Teenage Fiction Award]

Economists, politicians and traders go together, I know.  How much of the press goes with them was my problem. 

The Times of India goes with them, I’m sure.  It went all out to support the FDI in the retail business.  The very next day after His/Her Majesty’s Govt of India announced the FDI thing, the Times brought out innumerable arguments with a lot of highlighted coloured tables favouring the decision.  Their own Economic Times was more subtle and not at all colourful in defending the affair.  The pro-Left Hindu wrote an editorial labelling the affair a ‘Misplaced obsession.’  The editor of The Hindu further chose to invite economist C P Chandrasekhar to write an article about it on the edit page today, 30 Nov.

Chandrasekhar chose to obfuscate us – not with statistics, as economists usually do – with terms like oligoposony (situation of less buyers and more sellers) and oligopoly (less sellers and more buyers).  He concluded that the decision about FDI was a “rushed” one.  Given more time, Chandrasekhar would probably accept the FDI decision of the Indian govt.

Brinda Karat of the CPM was more explicit speaking to NDTV yesterday.  According to her, international retailers such as Walmart will exploit employees.  That doesn’t seem to be a very valid point against the FDI affair.  Aren’t employees all over the world accustomed to being exploited?  Is it any issue in the globalised world that the Indian employees will now be exploited by the white sahibs rather than by their brown counterparts?

The Times of India argued that while 40 million Indian retailers may suffer loss 122 million consumers stand to gain.

I remember reading in the Frontline more than two years ago that Reliance Fresh was giving a better deal to the farmers than the middlemen who used to buy the farm produce earlier.  The FDI retailers may bring more benefit to the farmers and other such local producers of goods in India.  Is that why many politicians are against it?  After all, the middlemen are the greatest supporters of politics.  And it is the middlemen who will lose the job when FDI is implemented. These middlemen are important to all political parties – left, right, or centre.  It is these middlemen who will organise political rallies whenever and wherever each party wants it!

So, should we advocate FDI in India?

I’m not sure.  My newspapers don’t give me a clear picture of what the whole affair is about.  As I understand, we – the ordinary people – have been overpowered by a system called capitalism which simply puts its faith by one thing only: profit.  And profit to them means economic profit – nothing else.  Your family may end up drinking rum in the nearest pub or injecting drug at the nearest hub because you have hoarded enough money to afford all that and much worse.  Your religion may end up killing innocent people merely because they belong to some other religion or caste, because your religion has enough funding from the economic system.  Your party will dither and slither as long as you want it to do so.  You want it.  You want it because such a situation brings you wealth: the only value left in your life. 

Ask Mayawati why she is proposing to cut up Uttar Pradesh into four states.  Is that retailing of power?

Ask BJP why it opposes the FDI affair?  Don’t expect any intelligent answer.  They buried their grey matter in the graves of history long ago.

Ask Jayalalithaa why she so vehemently opposes the reconstruction of the Mullaperiyar dam which imperils the lives of millions of people in Kerala while she also opposes the Kudankulam nuclear project in the name of saving people’s lives in Tamil Nadu. 

Is it all about economics? Or is it about power?

Let us listen to the economists; they bring us wealth + our politicians listen to them.  They say FDI will save our economy.  And economy will save us.

Because all the cows in Scotland are brown!




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6 Responses to The Economic Tunnel

  1. Sir, I do not agree with you on the front that the farmers would be getting a price in such a scheme because the ground reality is that the middlemen are not squeezed out as is the general understanding but in reality their number would increase. A newbattery of middlemen – quality controller, standardiser, certification agency,processor, packaging consultant etc – now operate under the same retail hub and would walk away with the poor farmer’s income. Moreover, due to the sheer size and buying power, big retail generally depresses producer prices.
    In England, Tescofor example paid 4 per cent less to producers. Low supermarket prices in Scotland forced the farmers to form a coalition called ‘Fair Deal Food’ to seek betterprice for their farm produce.
    It’s a complex issue far beyond the wits of a common man but one thing for sure is that under the banner of some economic revolution we cannot keep on justifying all ridiculous policies for which India is far from ready yet.

    • matheikal says:

      Thanks, Sid, for the extra info. I am not at all an expert on this issue. I wrote this more to understand it than to explain it. You have added more to my understanding.

  2. Raghuram Ekambaram says:

    I am with sid on this … it is just that now the middleman will not be cud (tobacco) chewing pot bellied mountain of a man but a designer suit wearing MBA graduate … (that is my dig at MBAs but not necesarily untrue!)

    If you see the turnover per worker for Walmart, it is in dozens of multiples (?!) of what it is for Indian stores of decent size. Walmart faced a class action suit on sex discrimintion and the case has been thrown out on issues of locus standi. The FDI issue has to be looked at in terms of transfer of power and wealth across society and not merely in terms of who gains and who loses (farmers, customers, retailers, middleman etc.)

    My 2 cents worth (not 2 paise worth because even 25 paise coin is illegal tender in India) and I am already into the post-FDI in multi-brand retail world.


    • matheikal says:

      Raghuram, just as you agree with sid I can only repeat my response to sid.
      You must have read in today’s Hindu a letter to the editor which said that Walmart employs 2.1 million people and gets a turnover of $400 billion. “The Indian retail sector, too, has a turnover of $400 billion, but employs 44 million people,” says that writer. That gives us a clue. Walmart is equal to the whole India in the retail business!

      In one way, Anna Hazare is right in saying that the Congress decision to implement this FDI thing is equal to inviting a new kind of colonisation.

      But, I add that I really don’t understand this whole bloddy business.

  3. Raghuram Ekambaram says:

    “If you see the turnover per worker for Walmart, it is in dozens of multiples (?!) of what it is for Indian stores of decent size.” – my statement. The letter in The Hindu had put just numbers on it.

    What I was agreeing with Sid was on that the middlemen will just change colors, and will not go extinct. This shibboleth is pure pulling wool over the eyes.


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