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Business, Government and Society - their interaction and relations between them.
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BUSINESS, GOVERNMENT & STUDIES –
HANDOUT SUMMARIES
On 1 August 2009
Contributors: Saurabh Verma Amartya Singh Sadanand Subray Kamat Ashis Nayak Jagadeesh R Om Prakash H Mayank Rohit Jaiswal
Bhawna Jain Alok Jain Humbad Abhishek Nirmal D Dineshkumar Shikha Rawat Rangineni Srikanth Hemant Agarwal Ravi M V
R Umesh Ram Sevak Sandeep S Nair A V Naga Chaitanya Chayan Mukhopadhyay Anuprakash Kapil Makhija Rajeev Kumar
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 2 of 50
Contents Introduction ................................................................................................................................. 4
Overview ..................................................................................................................................... 4
A New Era for Business.............................................................................................................. 4
How to Manage government and Influence Politics .................................................................... 5
The Corporation ........................................................................................................................... 6
The Social Responsibility of Business is to Increase its Profits....................................................... 6
The Corporation’s Rise to Dominance ........................................................................................ 7
The Biggest Contract ............................................................................................................... 10
Merck Case A.......................................................................................................................... 12
Role of Government ................................................................................................................... 12
The Public Sector in a Mixed Economy ..................................................................................... 12
Excerpts from Capitalism and Freedom .................................................................................... 14
Parkinson’s Law ...................................................................................................................... 15
Regulation.................................................................................................................................. 16
The End .................................................................................................................................. 16
The Looting of America’s Coffers.............................................................................................. 18
Unintended Consequences ...................................................................................................... 18
CUTS ...................................................................................................................................... 19
Interest Groups .......................................................................................................................... 21
The Logic ................................................................................................................................ 21
Sharing the Spoils; group equity, development and democracy ................................................. 22
Social Movements in Crisis ...................................................................................................... 24
Social Capital .............................................................................................................................. 27
The Prosperous Community .................................................................................................... 27
The Market and the Polis......................................................................................................... 29
Introduction in ethnic conflicts and civic life ............................................................................. 31
Media ........................................................................................................................................ 32
News Media & Nonmarket Issues ............................................................................................ 32
A Propaganda Model............................................................................................................... 38
Media and Governance ........................................................................................................... 41
Caste matters in the Indian media............................................................................................ 43
Sense Making by the Public ......................................................................................................... 44
Equity, Symbols, Numbers, Rights ............................................................................................ 44
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 3 of 50
Environment .............................................................................................................................. 47
Environmentalism: Ideology, Action, and Movements ............................................................... 47
The Truth about the Environment ............................................................................................ 47
A Global Marshall Plan ............................................................................................................ 47
Green and Competitive: Ending the Stalemate.......................................................................... 48
Business Strategies for Climate Change .................................................................................... 48
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 4 of 50
Introduction This document is a compilation of the BGS Summaries painstakingly put together by a handful of
students of the PGP 2009-2011 Section E. Hope this is enlightening to one and all.
Overview
A New Era for Business
Scott C. Beardsley, Sheila Bonini, Lenny Mendonca and Jerry Oppenheim “A New Era for Business”
Stanford Social Innovation Review, Summer 2007
Saurabh Verma (0911343)
The article is consultants from McKinsey who talk about how the future of companies is intricately
tied to the socio-political issues of the times. These days, the issues are far more in number - and
social lobbyists far too strong – for companies to ignore them. The solution is to adopt a strategic
long-term approach, and engage with NGO’s, Govt. etc. for two reasons:
These issues can affect their reputations if the companies are seen as culpable
Companies may capitalize on the issues as business opportunities
Companies have a social contract (Hobbes, Locke, and Rousseau) as a set of laws, regulations and
obligations that guide corporate behaviour. These vary from industry to industry, region to region.
It can be formal, like regulations/ laws (what Enron faced),
Or informal, like labour standards, healthy food (related to obesity etc.), environment
These are complex – eg. A bank is expected not to lend to companies that are harmful to nation, but
also grant equal access to all.
The 5 R’s:
Risk: Predict and handle new risks that result from changing societal expectations. (If you react late
to an issue, it might hurt your reputation. Eg: ‘green’, ‘climate change etc.)
Renewal: Approach societal expectations as opportunities for growth (new products, processes,
markets). (Eg: Hybrid cars)
Regulation: Shape policy agendas to reflect society’s and company’s interests.
Relationship: Identify stakeholders to build relationships. (NGO, Govt.)
Reputation: Foster public trust, not just with PR, but with action. (One wrong step can cause great
harm. Promote consumer concerns, and demonstrate your progress on them)
How to tackle these issues:
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 5 of 50
Prioritize Issues: (Public concern and effect on company)
Collaborate: with NGO’s, Govt., or other companies. (May also choose to capture early bird
advantage and not collaborate with competitors, in some situations)
Communicate clearly: Show people you’re making a trade-off between profit and common good
Lead from the top: CEO should set example
Become an agent for change: Indulge in debates, speak to diverse people
How to Manage government and Influence Politics Rishikesha T. Krishnan “How to Manage Government and Influence Politics” Sensex, April-June 2009
Amartya Singh(0911291)
The article basically talks about the association between the government and the corporate
India.
The article starts with the liberalisation in 1991. Initially the Industry has raised its
opposition to the deregulation process. Later, they realised the benefits of exploiting new
opportunities, which clearly outweighed the benefits of a previously protectionist regime.
The author gives several example as to how various policies by government have helped the
business enterprises:-
1. India’s power projects, post 1991, benefitted companies more than public.
2. During Deregulation in telecom sector, licensing conditions had to be completely changed
to rescue the telecom conditions who had given over-optimistic bids
3. Land acquisition for companies in India still requires political support(Eg – Sterlite over
POSCO in Orissa)
4. Lack of clear regulatory authority by TRAI, CERC, IRDA.
5. Legal system not as fast as China. Late resolving of cases. In some cases, Indian firms have
had vested interests in delaying court decisions
6. Lack of competition regulation in India
Importance of Politics
The only constraint before the politician-business-bureaucrat nexus is the democratic
electoral compulsions. The closures of Dabhol power project, pulling back SEZ formation in
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 6 of 50
West Bengal in face of oppositions and maintenance of power tariffs for small domestic
consumers are some examples.
Another issue of interest for politics and business people is the availability of skilled
manpower. Industry bodies have been involved in development of skilled manpower. E.g –
Infosys. CII has setup a center of excellence for development.
While many business people have entered politics of late, there have not been many
business men taking up stands to fight on contentious issues. The exceptions include Ratan
Tata against violence in Nandigram and Anu Aga against Gujarat riots
Politicians owning institutes of higher education has also been controversial.
In Perfect Balance
Indian government has lobbied hard abroad for the rights of the Indian businessmen. E.g –
in acquisition of Arcelor Mittal by LNM and lobbying against protectionism by Obama
government for the betterment of the outsourcing companies. The government has not
taken proper care of labour rights vis-a-vis companies
The article concludes by saying that an understanding has been reached between the
current UPA government and the business industry. Equilibrium has been reached which will
perhaps be disturbed if say BSP comes to power at the center.
The Corporation
The Social Responsibility of Business is to Increase its Profits
Milton Friedman “The Social Responsibility of Business is to Increase its Profits”, New York Times
Magazine, September 13, 1970.
Ashis Nayak(0911296)
Writer Friedman doesn’t buy to the concept of businessmen speaking eloquently about
“businesses have social responsibility”
According to him (a) Business or corporation having social responsibility is a vague
statement with corporation being an artificial person/entity; but it’s the corporate
executives who have the social responsibilities.
(b) Again the corporate executives are the persons who are appointed by the owners or the
stockholders of the firm to run their business; His first responsibility is to adhere to the
stockholders’ interest;
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 7 of 50
(c) When these corporate executives exhibit social responsibilities, they do with their own
money, let it be to the community or to the church they go to; but again, it is their personal
social responsibility not the corporation’s.
(d) The executives perform social responsibilities when they use the company’s profit or the
money for some social acts like using costlier techniques (which is consuming company’s
profit) to reduce the pollution generated by the firm and likewise; in these cases he is using
someone else’ money for the social cause. But in this case there is every chance of him
being fired. So, it is a very improbable case.
(e) In certain cases the companies act on Social corporate responsibilities (CSR) but they are
stunts performed to reduce their tax. They use the money they would have given to
government as tax for SCR.
All in all the only CSR for corporations is to use its resources and engage in activities
designed to gain profit so long it remains within the rules and regulations of the game
without deception or fraud.
The Corporation’s Rise to Dominance Joel Bakan “The Corporation’s Rise to Dominance” [Chapter 1 from Joel Bakan The Corporation: The
Pathological Pursuit of Profit and Power, Free Press, 2004]
Jagadeesh R (0911313)
Note: This article is not the author’s opinion, but merely a roster of events tracking the history of
emergence of corporations through major events arranged in their chronological orde r.
The corporations have managed to rise from relative obscurity to become the world’s largest
economic institutions, their remarkable growth is analysed below:
From late 16th Century to the Bubble Act:
The corporation first emerged in the late sixteenth century with the basic idea of separating
ownership from management. This was a departure from the prevalent form of business then,
Partnerships, where the owners ran the business.
Sceptics argued that this was a recipe for corruption and scandal, stemming from the fact
that other people’s money was being poured into the company run by managers. This was indeed
what happened between 1690 and 1720, when many bogus companies were floated in London’s
Exchange Alley which flourished on speculation, only to collapse soon after.
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 8 of 50
After the collapse of South Sea Company, taking down many people with it, the Bubble Act
(1720) was passed by the British Parliament, which outlawed the creation of corporate bodies.
From 1712 to the repeal of Bubble Act:
In 1712, the steam-driven machine unwittingly started the Industrial revolution, leading to
the development of large-scale industries such as textiles, mining, breweries and distilleries. These
industries required more capital investment, thus leading to an explosion in the number of
corporations in the US. England, not to be left behind, repealed its Bubble Act in 1825.
From early 19th century to the Limited Liability Act:
With the invention of the steam locomotive, railways became the engines of growth of the
corporation. Since railways were mammoth undertakings requiring huge capital investments, they
soon became heavily reliant on the corporate form of financing. This led to a national market for
company securities, with numerous people investing in it.
Despite its popularity, the stock market still had one major barrier, which kept the middle -
class out of the process. Unlimited liability – which meant, irrespective of the amount invested,
every shareholder was personally liable to pay the debts incurred by the company without a limit.
Supporters for limited liability mushroomed, selling the idea to be an antidote to class
conflict by co-opting workers into the capitalist system. They predicted that once the limited liability
was brought into force, the common man would become a shareholder. There were some detractors
of the idea too who believed it would undermine personal moral responsibility.
Nevertheless, limited liability was incorporated into the law in 1856 in England, followed by
the US. By the early years of the 20th century, numerous publicly traded corporations dotted the
economic landscape.
Early 20th century to the Great Depression:
The era of corporate capitalism began with many provinces relaxing restrictions on
corporations, especially regarding mergers and acquisitions, this lead to the consolidation of many
individually owned enterprises into a few huge corporations.
Corporations assumed the role of a ‘person’, complete with rights to ‘due process of law’
and ‘equal protection of the law.’ The voices of the stockholders died out in large corporations. With
their size, their powers grew, making them unpopular among the general public who viewed them as
soulless leviathans.
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 9 of 50
Sensing their vulnerability to public discontent and organised dissent from growing labour
movements, huge corporations like AT&T and GM launched advertising campaigns aimed at
humanising and softening their image. Especially after the great depression, to reverse the adverse
public opinion, the corporations initiated Corporate Social Responsibility.
From the New Deal to Neoliberalism:
Post depression, Franklin D. Roosevelt created the New Deal, which among other things
curbed the powers and freedom of the corporations. This stifled the unbridled growth of the
corporations.
Then, the advent of technology and convergence of ideology and law in the 1970s led to
economic globalisation. This together with the crisis created by the surging oil prices led the
governments to embrace neoliberalism. Thatcher and Reagan who came to power in late 70s were
active proponents of neoliberalism, whose core policies were deregulation and privatisation.
The era of WTO:
Technology grew rapidly and aided in the rapid advent of globalisation. Corporations were
no longer limited to a particular country and now scoured the earth for cheap labour and
rich markets. Thus corporations now leveraged their independence to dictate terms to
governments. States started deregulating and slashing taxes with little regard to social
welfare, to attract investments.
With the creation of WTO (1993), all regulatory measures weakened. It became a powerful,
corporate-influenced overseer of government’s mandate. The states who became members came
under pressure from WTO to change or repeal laws designed to protect public interest, which
hindered trade. Governments lost their abilities to protect their citizens from corporate
exploitations.
The curse of power:
In the present day, though the corporations have arguably become more powerful than
governments, it is their very power, which makes them vulnerable. Corporations today attract
mistrust, fear and demands of accountability as in the past. And they, like their predecessors, are
trying to humanise their image through branding exercises.
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 10 of 50
Corporate social and environmental responsibility is offered today as an answer to the
growing public concerns. Beyond just being a marketing strategy, CSR lends legitimacy and presents
corporations as responsible and accountable rulers of the society.
The Biggest Contract Ian Davis “The Biggest Contract” The Economist May 26, 2005
Om Prakash H (0911322)
This article tries to shed light on the long-running debate about the role of the business in society.
Ppl on one side argue that the “business of business is business”. Social issues are not of prime
concern to the corporate management. Their sole purpose is to create shareholder value.
On the other side, we have the corporate social responsibility(CSR).
But both fail to notice the significance of social issues to business’s success, and the contribution of
business to society.
Now we talk about the problem with the business of business is business attitude.
This attitude blinds the corporate management to 2 important realities:
Social issues are not so much tangential to the business as fundamental to it. Companies
that ignore public sentiment make themselves targets for public attack. But these social
pressures can also act as indicators for company's profitability: by adhering to the
regulations and public-policy environment, for example.
If companies treat social issues as distractions or unjustified vehicles of attack on
business, they are making a big mistake, because, these public sentiments can have a
major impact on the company’s strategic future. Most stock market value in American
and European markets depend on expectations of company’s cash flow beyond the next
3 years. In food & restaurant industry, the general concern on obesity has led to a
stronger control on the marketing of unhealthy foods; public and planning resistance to
establishment of new stores of big retailers, etc.
As can be seen, these social issues can eat away billions of dollars of shareholder value, if unnoticed.
Usually, managers focus excessively on short term performance of the business, and tend to forget
the long term opportunities and issues, of which, society is vital, and so is the customer trust and
growth prospects.
So, large companies need to articulate the business’s social contribution and define its ultimate
purpose in a way that has more subtlety than “the business of business is business”.
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 11 of 50
Another interesting aspect is that, business can profit by spotting and supplying unmet social needs
and consumer preferences. Ex: in the era of fast foods, providing healthier meals, in the polluting
energy industry, the creation of cleaner fuels.
But CSR is not the best answer to ensuring that the companies are bound to the social welfare. CSR
is very defensively perceived and disconnected from the corporate strategy. The main reasons could
be the anti-corporate campaigns and anti-globalization protests during the 1990s. This prompted the
companies to draw CSR as a means to avoid the NGO and damages on reputation.
Big companies bring with them, productivity gains, innovation & research, large scale investments,
and above all, global economic welfare. Companies which undertake stakeholder dialogues with the
NGOs will be much aware of the potential social issues and would have already incorporated in the
corporate strategy. Even then, the company usually takes up CSR initiatives by adding a new policy
here and there, just for the sake of it. They tend to operate at a distance from the strategic decision -
making within the company, and exist for rebutting criticism.
In view of these, a new approach for business needs to be created. Three main points stand out in
this regard:
1. Business needs to make sure that social issues and forces are discussed at the highest level
as a part of overall strategic planning, by the way of introducing explicit processes.
2. The need for realization of the fact that business and society have an implicit contract. Even
though it has been successfully portrayed as a bargain thru which only business benefits, the
need to highlight the fact that the society has very much benefited from the business is high.
At the same time, business should acknowledge that it is subject to rules and
constraints.Company should also actively manage this “contract” by the means of
transparent reporting, developing and deploying voluntary standards of behavi or. Ex: GE’s
announcement of extending its spending on eco-friendly technologies.
3. The need to shape debates on social issues much more consciously. This means that the
companies should more actively be involved in external debates and in media about the
social issues that shape the business context; to describe business’s ultimate purpose as the
efficient provision of goods and services that society wants.
The point is that, profits should be seen as a signal from society that the company is succeeding in its
mission of providing something ppl want, and in a very efficient manner.
Rousseau’s social contract helped to seed the idea among political leaders that
they must serve the public good; in similar lines, the CEOs should take the
opportunity to restate and reinforce their own social contracts in order to help
secure the invested billions of their shareholders, in the long term.
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 12 of 50
Merck Case A
Mayank (0911319)
Merck case is classical situation of Friedman’s B3 Vs Social responsibility. In the coastal
region of some African countries, people used to suffer with a incurable disease known as
River blindness. Merck has invested initial money in the research for drug formulation for
the disease. They have come up with a version which is effective on animals.
However, Merck is facing couple of issues before going ahead with the drug:
The cost of drug is really high for the poor.
There is still no guarantee that the drug will be successful for Human beings without
side effects and research investment will pay off.
There is threat of drug sales in black market.
There is no proper distribution channel.
There is no organization which has come forward to deal with Merck in addressing of
this issue.
The dilemma lies with Merck is that its main objective is to serve patients, so in this case,
should Merck with go for further investment in drug formulation despite knowing of less
profitability???
Role of Government
The Public Sector in a Mixed Economy
Joseph Stiglitz “The Public Sector in a Mixed Economy” [Chapter 1 in Joseph E. Stiglitz The Economics
of the Public Sector (3rd edition), W.W. Norton, 1999
Rohit Jaiswal (0911339)
There is a role of govt In lots of things from hospital to roads to travel.
Economists always differ on the role of govt. To what extent and in which areas should govt. play an
imp role?
Key concepts:
1. Mercantilists believe that govt. should promote trade and industry. Some countries had benefited from the active role of the government. On the other hand there were others where active government had caused a negative impact by squandering on wars or unsuccessful ventures
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 13 of 50
2. Adam Smith asked for very limited role of govt. Invisible hand: put forth by Adam smith- suggested that competition among individuals for pursuing their personal interest (profits), will indirectly serve public interest too. Adam smith was of the opinion that there was no need to rely on the govt. People in the
process of doing their own good will do the benefit for the society.
Competition will lead to the prod of all goods at minimum cost Competition leads to
efficiency and provides spur to innovation
3. Laissez Faire – Govt should leave the private sector on its own and should not attempt to regulate the private sector.
4. Keynes - He felt that govt should try to create employment and remove economic disparity.
5. Four major reasons for systematic failure of Govt
a) Limited Information – Govt has limited information required to do what it would like to do. For eg. Govt. might like to give some privilege to those who are disabled but with the limited info Govt. has it fails to differentiate b/w those who are really disabled and those who are pretending to do so.
b) Limited control over private market responses – Govt has limited control over the consequences of its decision.
c) Limited control over bureaucracy – Govt has limited control over those people who will be executing/implementing its policies.
d) Limitation imposed by political process – Political interests come in picture when govt make decision. This raises additional difficulties.
Public sector economists are concerned with 4 fundamental questions of choice concerning the use
of limited resources
1) What is to be produced? What kind of public goods to be produced 2) How should it be produced? Whether to produce privately or publicly? Whether to use
more labor or capital intensive technique. 3) For whom is to be produced? Who is the target consumer of public goods/services? 4) How are decisions made? How to make collective decisions? What policies to adopt to reach
to a decision affecting whole group?
Four general stages of analysis to the above fundamental questions
1. Knowing what activities the public sector engages in and how are they organized? – Describing what the govt does.
2. Understanding and anticipating the consequences of the Govt activities 3. Evaluating alternate policies 4. Interpreting the political process. 5.
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 14 of 50
Positive Economics – It looks at the scope of govt activity and the consequences of it.
Normal Economics – It tries to evaluate the alternative policies that might be pursued.
Richard Musgrave thought of govt as having three economic branches
1. Stabilization – To ensure that economy remained at full employment with stable prices 2. Allocation – How to allocate money to diff resources – education, military, how to impose
tax. 3. Distribution – How the goods that were produced by the society were distributed among the
members.
Excerpts from Capitalism and Freedom Milton Friedman Excerpts from Capitalism and Freedom (2d Ed.) University of Chicago Press, 1982.
Bhawna Jain (0911301)
The article talks about competitive capitalism – the organization of the bulk of economic activity
through private enterprise operating in a free market – as a system of economic and political
freedom.
As opposed to President Kennedy’s views “ Ask not what your country can do for you – ask what you
can do for your country”, Friedman says that to the free man will ask “what I and my compatriots
can do through government to help us discharge our individual responsibilities, achieve our goals
and purposes and above all to protect our freedom?”
To a free man, the country is the collection of individuals who compose it, not something over and
above them.
One of the greatest threats to freedom is the concentration of power in political hands. He asks how
can we benefit from the promise of government while avoiding the threat to freedom? The solution
:
1. The scope of the government must be limited. Its major function must be only to protect our freedom, to preserve law and order, to en force private contracts and to foster competitive markets. In both economic and other activities, we must ensure that private sector is a check on the powers of government sector.
2. The government power must be dispersed and decentralized. By centralization and standardization, government actually replaces progress by stagnation, creativity by mediocre performance
The role of the government cannot be spelled out once and for all since each day brings new
problems and new circumstances. Its also why we need to reexamine the role of government from
time to time.
He goes on to criticize how the meaning of the term liberalism has changed from the late eighteenth
century to the twentieth century. In the 18th century liberalism supported laissez faire and
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 15 of 50
emphasized freedom as the ultimate goal and the individual as the ultimate entity in society.
However in the 20th century, in the name of welfare and equality, liberalism has started favoring
centralized government and the revival of the very policies of state intervention against which
classical liberalism fought!
Parkinson’s Law Northcote Parkinson C “Parkinson’s Law” This article first appeared in The Economist, November
1955.
Parkinson’s Law is based on observations and can be stated as work expands so as to fill the time
available for its completion e.g. An elderly lady of leisure can spend an entire day in writing and
dispatching a postcard while it requires a mere 3 minutes effort from a busy man. Law is mainly
concerned about public administration work or paper work. According to Parkinson the number of
the officials and the quantity of work to be done is not related to each other at all. The rise/growth
in the total no. of employees is governed by Parkinson’s Law and this law is based upon an analysis
of factors by which the growth is controlled.
Before statistical proofs, the two motive forces that underlie the Parkinson’s Law are
Factor I. The Law of Multiplication of Subordinates: An official wants to multiply subordinates, not
rivals.
To explain this, author gives an example of a civil servant A who finds himself overworked. For this
real or imaginary overwork, there may be three possible remedies: (i) He may resign or (ii) He may
ask to share the work with a colleague B or (iii) He may demand the assistance of two subordinates C
and D. By resignation he would lose his pension rights. By having B at the same level, he will feel
more competition for promotion. So A would prefer to have two junior C and D below him. Here he
has not chosen C alone because in that case C would be sharing the work with him and assume
almost the equal status which has been refused in the first instance to B. So to facilitate A’s own
promotion he would like to have two subordinated rather than one. So this chain grows further in
the same way. C and D will have the two juniors each namely E, F, G and H and hence the situation
will facilitate X’s promotion.
Factor II. The Law of Multiplication of Work: Officials make work for each other.
Continuing with the previous example, now seven people are doing what one did before. For these
seven make so much work for each other that all are fully occupied and A is also working harder
than ever. Now an incoming document comes to all of them in turn before giving it to A. But A is
busier now because he is also handling seven people below him. He is the one to decide for their
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 16 of 50
promotion, vacation, transfer and sickness leave related issues. But A is conscientious man; so
besides these many problems created by his colleagues for themselves and for him, he is not going
to shirk his duty. He reads each document coming before him for approval, undoes unnecessary
changes done by other officials and finally produces the same reply he would have written if officials
C to H had never been born. So here far more people have taken far longer to produce the same
result.
Statistical Proofs:
To prove statistically author has taken two examples, one is British Navy and other is of Colonial
office estimates. In both the example, statistically finds that the in normal scenario rate of increase
in staff is around 5.5 to 6.5 percent per year irrespective of increase in the work load.
Parkinson’s Law in Mathematical form: In any public administrative department not actually at war a
staff increase may be expected to follow this formula:
X = (2km + p) / n
Where k is the number of staff seeking promotion through the appointment of subordinates; p is the
difference between the ages of appointment and retirement; m is the number of man hours devoted
to answering minutes within the department; and n is the number of effective units being
administered then X will be the number of new staff required every year.
Regulation
The End Michael Lewis, “The End,” Conde Nast: Portfolio, December 2008. Available at:
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-
Streets-Boom
D DineshKumar (0911305)
This article does not have any concept being conveyed. It’s more of an narration about the
events which had let to this sub-prime crisis of last year. Its just talks about the subprime
lending, creation of complex securities like CDOs, negligence of the rating agencies, etc., as
events leading to this financial crisis.
Article published in Dec 2008 – Author Michael Lewis ( and ex- Wall street Investment
Bank employee who had written the famous book “Liar Poker” in which he has criticized
the practices been followed in the finance companies)
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 17 of 50
The author through the characters (Eisman, Daniel & Mossels) of certain financial analyst,
tries to analyze what went wrong during the past decade which had resulted in this financial
crisis.
The following events were cited and criticized by the author
Prediction of housing bubble early in 2004:
There’s a simple measure of sanity in housing prices: the ratio of median home price to
income. Historically, it runs around 3 to 1; by late 2004, it had risen nationally to 4 to 1. But
the problem wasn’t just that it was 4 to 1. In Los Angeles, it was 10 to 1, and in Miami, 8.5 to
1. And then you coupled that with the buyers. They weren’t real buyers. They were
speculators
In 2000, there had been $130 billion in subprime mortgage lending, with $55 billion of that
repackaged as mortgage bonds. But in 2005, there was $625 billion in subprime mortgage
loans, $507 billion of which found its way into mortgage bonds
By the spring of 2005, FrontPoint was fairly convinced that something was very screwed up
not merely in a handful of companies but in the financial underpinnings of the entire U.S.
mortgage market.
Subprime Lending:
Lots of firms were lending money to people who shouldn’t have been borrowing it.
Lenders were making loans to people who, based on their credit ratings, were less
creditworthy than 71 percent of the population
Original & Ideal structure of Mortgage bond :
. The loans went into a trust that was designed to pay off its investors not all at once but
according to their rankings. The investors in the top tranche, rated AAA, received the first
payment from the trust and, because their investment was the least risky, received the
lowest interest rate on their money. The investors who held the trusts’ BBB tranche got the
last payments—and bore the brunt of the first defaults. Because they were taking the most
risk, they received the highest return
Modified structure of these bonds – resulting in crisis
The big Wall Street firms had just made it possible to short even the tiniest and most
obscure subprime-mortgage-backed bond by creating, in effect, a market of side bets.
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Instead of shorting the actual BBB bond, you could now enter into an agreement for a
credit-default swap with Deutsche Bank or Goldman Sachs.
Conversion of BBB rated loans to AAA:
Wall Street investment banks took huge piles of loans that in and of themselves might be
rated BBB, threw them into a trust, carved the trust into tranches, and wound up with 60
percent of the new total being rated AAA.
Formation of CDO’s & the rationale :
The first tower is made of the original subprime loans that had been piled together. At the
top of this tower is the AAA tranche, just below it the AA tranche, and so on down to the
riskiest, the BBB tranche—the bonds Eisman had shorted. But Wall Street had used these
BBB tranches—the worst of the worst—to build yet another tower of bonds: a “particularly
egregious” C.D.O. The reason they did this was that the rating agencies, presented with the
pile of bonds backed by dubious loans, would pronounce most of them AAA. These bonds
could then be sold to investors—pension funds, insurance companies—who were allowed
to invest only in highly rated securities.
The Looting of America’s Coffers David Leonhardt, “The Looting of America’s Coffers,” New York Times, March 11, 2009
Shikha Rawat (0911344)
The looting of America’s Coffers
The article talks about the financial crises and gives a specific term to the actions of the financial
giants – ‘looting’. The government has to bail out the banks and financial institutions to prevent
large scale crises (spiralling out of control). This creates a moral hazard. The financial institutions
play with the money and take risks, if the risk works out, they earn huge profits but if it doesn’t they
don’t have to bear the loss. Hence they have an incentive to loot which was what happened in the
Texas crises of 1980s and the more recent subprime loan crises. Stricter government regulation
including steps to clearly define the path towards nationalization of financial institutions, regulation
of payment of bonuses and other high salaries (they should not be paid out of profits which are
actually taxpayer money siphoned off in advance through looting), etc.
Unintended Consequences
Rob Norton, Unintended Consequences. Available at:
http://www.econlib.org/library/Enc/UnintendedConsequences.html
Rangineni Srikanth (0911336)
The law of unintended consequences states that actions of people and of government always have
effects that are unanticipated or unintended.
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One example is the case of the Exxon Valdez oil spill in 1989. Afterward, many coastal states enacted
laws placing unlimited LIABILITY on tanker operators. As a result, the Royal Dutch/Shell group, one of
the world’s biggest oil companies, began hiring independent ships to deliver oil to the United States
instead of using its own forty-six-tanker fleet. Oil specialists fretted that other reputable shippers
would flee as well rather than face such unquantifiable risk, leaving the field to fly-by-night tanker
operators with leaky ships and iffy INSURANCE. Thus, the probability of spills probably increased and
the likelihood of collecting damages probably decreased as a consequence of the new laws.
Economists and other social scientists have heeded its power for centuries and it is considered one
of the building blocks of economics. American sociologist Robert K. Merton identified five sources of
unanticipated consequences.
They are
1. “Ignorance”
2. “Error”
3. “Imperious immediacy of interest” : If someone wants the intended consequence of an action so much that he purposefully chooses to ignore any unintended ef fects. For example, The Food and Drug Administration creates enormously destructive unintended consequences with its regulation of pharmaceutical drugs. By requiring that drugs be not only safe but efficacious for a particular use, as it has done since 1962, the FDA has slowed down by years the introduction of each drug. An unintended consequence is that many people die or suffer who would have been able to live or thrive.
4. “Basic values” As per Merton, ethic of hard work and asceticism paradoxically leads to its own decline through the accumulation of wealth and possessions.
5. “Self-defeating prediction” This happens when the public prediction of a social development proves false precisely because the prediction changes the course of history. For example, the warnings earlier in this century that population growth would lead to mass starvation helped spur scientific breakthroughs in agricultural productivity that have since made it unlikely that the gloomy prophecy will come true.
CUTS
CUTS Centre for Competition, Investment and Economic Regulation, Status of Competition and
Regulation in India, 2007.
Hemant Agarwal (0911311)
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A competition policy and a regulatory regime have become very important in India since the
reformed in 1991. Post 1991, Competition laws didn’t achieve the fairness and efficiency they
were aimed at.
In most sectors, protection of public interest objectives rests with the law
Regulatory regimes have been set up for “natural monopolies” (telecom, electricity) and
network industries (where production patterns of one producer are linked to that of others,
e.g. cement, steel)
CCI: Competition Commission of India
Government wants to play the role of a facilitator and allow for more competition. But many
govt policies are not in line with market principles:
a) Operation of anti-dumping measures, inverted duty structure, etc
b) Discrimination in favour of the public sector
c) Intervention in pricing of several commodities like coal
d) Rules and regulation like the Essential Commodities Act
e) States making laws to favour local players
1. Competition Act, 2002 (amended in 2007)
a) CA 07 handles cartels better
b) Protects IPR (intellectual property rights) better
2. Sectoral Dimensions:
a) Local Regulation Required: Problems need to be handled in a more distributed scale
b) Telecommunication: need to be delinked from changing governments, has been partial
towards particular business houses
c) Electricity: politicians need to accept electricity can go to private hands, regulator has
been grossly ineffective
d) Healthcare: fee structure need to be monitored to prevent exploitation of patients, very
little competition on local level
3. Way Forward:
a) Political elite has to realize importance of competition
b) A broad-based national competition policy is required rather sector based policies
c) Predictability is needed in regulatory framework to attract investment
d) Competition rules should be enforced
e) Better pays and a restructuring in the regulatory bodies, presently made up of retired
judges and bureaucrats, needed
f) There is very little expertise in the country, capacity building needed to implement the
changes.
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Interest Groups
The Logic
Mancur Olson “The Logic” [Chapter 3 in The Rise & Decline of Nations: Economic Growth, Stagflation,
Social Rigidities, Yale University Press, 1982] pages 17-29.
Olson, Mancur (1965) The Logic of Collective Action. Cambridge: Harvard University Press.
chapters 1-4, and 6. Author DV IV
Mancur Olson “The Logic of Collective
Action” Collective action (group
organization to gain collective goods) Size of group Use of selective incentives Asymmetry of incentives/benefits (“privileged groups”) Summary: Olson gives a “logic of collective action” that describes how organization/collective action comes about in relation to the size and type of groups. Unlike individuals or small groups, large, “latent” groups will face collective action problems because freeriding is easy and collective goods are non-excludable. Thus, organization will not occur without individual, selective incentives. Using the labor union as an example for his logic, Olson shows how compulsory membership and/or coercion is necessary for large groups to overcome the collective action problem. He also applies his logic to explain the failure of Marxist theories of class conflict and illustrates how large press ure groups are capable of collective action because they provide other functions. Main Points
� The purpose of organization is to achieve common interest � Collective good is public good � non-excludable in a large group
� Exclusive and inclusive groups: market vs non-market situations. According to this division, the exclusivity of a group depends on its goals, not its makeup. Less bargaining or
strategic interaction in inclusive groups because one person’s holdout does not affect others much.
� A Taxonomy of Groups 1. Two types of non-market groups that correspond to “oligopoly” in market situations A. “Privileged” Group: small group in which benefits are unequally distributed, so “privileged” members have an incentive to bear the costs of organization. B. “Intermediate” Group: group in which no member has incentive large enough to insure organization, but the size of the group is large enough so that one person’s default is unnoticeable. Interest is shared. 2. Non-market group that corresponds to atomistic competition A. “Latent” Groups: refers to groups which are so large that one member’s default is unnoticeable – has no effect on group. Because free-riding is easy and collective goods non-
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excludable, these groups require separate and selective incentives to stimulate individuals
to act in a group-oriented way. Barely even shared interest. � large groups are different from small groups in terms of collective action
� The Labor Union and Economic Freedom 1. Large, latent union groups succeeded in action because of compulsory
membership/support and coercive picket lines (as a form of coercion against economic incentives to defect)
2. The union is analogous to the state, public goods can only be provided through compulsion
3. Economic freedom: government provision of public, collective goods limits individuals’ economic freedom, while government-owned socialistic enterprises producing noncollective
goods do not (paradox: socialism actually limits an individual’s economic freedom less!) � Marxist Theory of Class Conflict: Failure is explained through Olson’s logic. If individuals
are rational then class conflict should be less prominent because of organization/collective action problem.
� By-product and Special Interest Theories 1. By-product theory of large pressure groups: large pressure group lobbying is by-product of organizations that are organized for some other purpose. 2. Business/Special interests: “privileged groups” hence high levels of organization Questions A. What is “common interest”? Is it interest for the whole but can exclude interest of some indvls, or is it interest of all indvls and hence aggregated interest of whole? B. How does Olson explain existence of group leaders? Are these solely those whose private incentives are larger than the rest? Can these private incentives be intangible? (psychological)
Sharing the Spoils; group equity, development and democracy Pranab Bardhan “Sharing the Spoils; group equity, development and democracy” [From Atul Kohli
(ed.) The Success of India’s Democracy, Cambridge University Press, 2001]
Kapil Makhija (0911314)
Part I
India is a hierarchical society and heterogeneous in composition. This results in greater drive
for equity. As a result there is a frenzy for job reservations and caste quotas in India. But,
since the structure is multi-layered, they may be crying about indignities from upper strata,
but forget their behaviour towards the lower strata. For example, Jats in UP would worry
about equity with upper castes, but forget their oppression of Chamars.
Part II
The pluralistic culture of society has resulted in each group asking for greater share of the
pie (sharing the spoils).
Large part of public resources spent on implicit and explicit subsidies. All these subsidies,
together with upwards revision of salary scale, and other factor results in huge fiscal deficit.
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According to a document submitted to Ministry of Finance in May 1997, budget-based
subsidies of the central and state governments taken together amounted to Rs. 1.4 tril lion,
which is 14.4 percent of GDP.
States are unable to pay back the financial assistance provided by centre. Farmers get
benefits in terms of fertiliser subsidies, small industries get protection against competition,
all increasing the fiscal deficit.
Interest groups ensure that reforms cannot take place in the Indian system. Little has been
achieved in breaking the grip of the network of subsidies catering to dominant interest
groups.
Part III
Political parties favour quotas and reservations, resulting in more protectionism and less
efficiency, all in the name of intergroup equity. They don’t realize that reservations once
adopted are difficult to reverse. More stress should be on equality of opportunity instead of
equality of outcome i.e. provide more training programs and preferential loans and
scholarships.
Public investment allocation in favour of uneconomical plants and unsustainable projects in
backward areas has been supported in the name of regional equity.
Part IV
Bureaucrats are transferred very regularly owing to their caste, especially on appointment of
a lower caste chief minister, people of his/her caste are promoted, and those belonging to
upper caste transferred.
Politicians for many years used to direct managers of public financial institutions to relax
their strict criteria in giving out loans to their favoured clients.
o Inefficiency in public jobs is because politically powerful lowest grade employees
have complete job security.
Criminals join politics to ensure that they can neutralize the police. Any enquiry against the
leaders is publicized as discrimination against their particular caste.
Part V
No accountability in government institutions. Serious problem of absenteeism of salaried
teachers in village public schools and doctors in rural public health clinics. The doctors and
teachers are not answerable to the villagers, since the system is not sufficiently
decentralized.
Overhead costs of organizing resistance groups, hence poor are less organized at local level
than at national level, where they can pool their organizing capacities.
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Decentralization can give rise to greater voice for poor, and hence greater accountability at
local level.
Social Movements in Crisis
Rajeshwari Deshpande “Social Movements in Crisis?” [From Rajendra Vora and Suhas Palshikar (eds.)
Indian Democracy: Meanings and Practices, Sage Publications, 2004]
The reading tries to develop a sympathetic critique of the role of social movements in India. It offers
tentative analyses of the contemporary crisis and discusses how the situational constraints and
internal dynamics contributed to the present crisis. The major points in the reading are:-
Post Independence, social movements have been on a decline and have played a peripheral role in Indian politics.
Review of social movements post independence: o Trade Union movement
Working class politics dates back to colonial period – industrial workers agitating against unjest woring conditions First Indian factories Act implemented by british in 1881 Communist led Kisan Sabha’s in rural areas Communist mobilised urban insutrial working class Remained engulfed in economism. Unable to stand up to the expectations of leading a revolution on behalf of the poor. Remained a movement of a small section of the society.
o State as a mediator Just after independence, the economic model that India accepted helped in
stabilization of labour market in organized sector and Facilitated the growth of the trade union.
Economic development heavily relied on growth of industrial sector. Policies resulted in increased jobs and bigger working class The state was interested in regulating industrial relations in order to patronize the
emerging capitalist relations, benefitting the bourgeois Government implemented welfarist labour laws to protect working class Trade unions fought over economic issues Unable to develop independent agenda for workers Officially remained committed to labour welfare, however sided with employers in
all major industrial disputes. All the political parties established their own unions. Industrial development in India happened at an uneven pace
First 2 five year plans emphasised on industrial growth – Organised sector workers pushed for aspirational demands which were unheard by state and employer
1974 railway workers’ strike, 1982 Mumbai strike, Emergency marked the period of industrial recession and decline of trade union movement.
Agitation against the MNC’s by white collar service secotr in 1980’s As a result of changing economic plans, role of state as a mediator changed and i t
no more favoured the working class. o Challenges of Informalization
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Liberalization geared up the process of informalization and casualization of the Indian workforce.
Major of workers in informal sector. Most of the urban informal sector workers forced to be unemployed Resulted in scattered workplaces and temporary employment. Left could not associate itself with informal sector workers. Unable to expand the
dimension of class politics to issues like caste, gender and communal questions. Reasons for failure.
o Agrarian Movements Struggle led by left were on a decline. Only naxalites are working among poor
peasants and tribal’s. Agrarian sections highly stratified. Most of the struggles led by rich and middle
sections. Land reforms programmes – legitimised role of state as intermediary in reforming
the existing land relationships. Lot of reforms, but partial implementation did not benefited the marginal and the
small farmers much. Green revolution, further helped in consolidation of this group.
Left couldn’t focus on poor peasants and landless labourers o The Naxalite movement
Expresses unrest that emerged in the county during 1970. Political programme includes abortion of landlordism, redistribution of land
through peasant committee, wage increase, distribution of governmental land, and control of forest resources and political mobilization of the peasants, dalits and tribals.
Common problems – Choice of politics of violence (alienated them from large section of society and made them an easy target of state)
Could not deal with caste questions. Success among tribals based on assumption of homogeneity of tribal society which
is not true in many situations and hence limited success. Could not wade through the more complicated – relations of exploitation in
mainstream civil society o Farmer’s movement: A new phase
Rich and well to do farmers dominated the agrarian politics. Main demands – Higher subsidies for agricultural sector, remunerative prices,
lowering of taxes and debt relief to the farmers. Due to populist appeal, the movement could attract poor peasants Upper agricultural strata major beneficiary. Never emphasized on redistribution of land, increase in wages. Only consistent demand - remunerative prices Initially neutral in political stance but gradual became more political. Possibility of increased participation of the lower social sections in democratic
practices o Anti caste politics – Dalit Movements
Initially led by RPI (Republican party of India) which faced continuous splits at organizational level since its inception.
Engaged in politics over symbolic issues Dalit organization mainly active over issues of effective implementation of
reservations and related educational matters. Reservation centered politics of the movement limited its potential and reach.
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In 1988, formation of dalit federation – main demands: effective implementation of reservation policy and prevention of atrocities against dalits. Unable to go to the root of the problem.
o Emergence of OBCs Legal category developed by state, recognized later as a political and ideological
category. Increased the participation of lower castes in politics Inadequate for anti-caste movements Permits the state to mould it for political purposes. Ex: recent inclusion of Jats Electoral politics mainly benefited the upper caste amongst OBCs.
o Women’s movement – Three Currents Very limited in scope inspite of its strong ideological intervention. 2nd most important movement post independence Taken shape in 3 levels post 1975
Environmental issues (chipko movement), agrarian struggles in Maharashtra, Bihar, etc.
Work of women organizations affiliated to political parties, notably left political party.
Autonomous organizations working on women’s issues. Emerged as mainstream women’s issue.
Limited in scope due to:
Initial concentration on issues of sexual harassment and violence, but was limited to urban centres. Ignored rural women, lower caste, manual labourers, and self employed.
To relate to rural India, started working in areas like health and education. 2 consequences:
o State had a possibility of influencing and co-opting by pumping resources
o NGOs o Non political character
Inadequate understanding of women’s situation. Misses the caste and class dimension of gender inequality No women constituency and hence apolitical. No political party has the political will to support women’s cause – Women’s Bill Reservation as a tokenist gesture.
o Voluntary Sector Owed origin to Jayaprakash Narain’s call for “total revolution” and students’
movement. Flexible and open in nature Loose organizational network of the people.
o Middle class activism Worked among agricultural labourers, tribal’s, women and small villages over
issues of wages, health, education, etc. at local level. Beginning of process of disjunction between political parties and social movement. Failure of state to intervene on behalf of dispossessed. State was condemned and delegitimized.
o Grassroot Movements Micro struggles. Became inevitable because of failure of macro level institutes. Led
to the glorification of grass root movement as the only solution. Work failed to pose a challenge at the political level. Could not develop links with
mainstream politics.
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Could not intervene effectively with civil society as they operated at local level. Most of them transformed into NGOs. Could not further the radical agenda of the
social movement. o National Alliance of people’s movement (NAPM)
Alliance of many voluntary organizations. Share their opposition to the process of globalization. A network of such responses will help change the overall political system.
Crisis of Social movement o Micro struggle has occupied the mobilization politics arena in last 2 decades. o Other social movements are on a decline. o Who are the people?
Resorted to the category ‘people’ to buildup dissent against estab lished political system
Fail to address caste class injustices – in their bid to address subtle experiences of injustice
Shifting Support Bases o Issues
Lack of cooperation and coordination among movements Overlapping characteristics of movements State and political parties – co-opting without representing
Problems o Construction of people problematic at many levels. Imagines local communities as
autonomous, homogenized entities, which they are not. o Shifting support base o Disjunction from politics. o State and civil society relation
Movement might side with the global capitalist forces. Movements have to take help from state in dealing with civil society injustices.
Social Capital
The Prosperous Community
Robert Putnam “The Prosperous Community,” The American Prospect, Vol. 4, No. 13, March 21,
1993.
Ravi M V (0911337)
General summary of the passage is ‘Everyone would benefit if everyone cooperate with each other,
In the absence of coordination and mutual commitment but everyone defects apologetically but
rationally confirming each other’s depressed expectations’
Analogous with the human capital that enhances individual productivity, social capital refers to
social networks that facilitate coordination and cooperation. These social networks could be
newspaper readership, soccer clubs, literary circles etc. These networks value solidarity, civic
participation and integrity. These groups allow the democracy to flourish.
Italian experiment verify the above statement, in regions where the social bodies were active the
government proves remarkably successful, where as in areas where the engagement is social an d
cultural associations is meagre, the government failed miserably.
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Also the active social groups seem to be a precondition for economic development. How does the
social capital support good government and economic progress? The social groups foster the feeling
of reciprocity, i.e. ‘You do for me, I will do for u’. A society that relies on reciprocity is better than
distrustful society. In addition these bodies facilitate coordinate and communications among the
members.
Social capital is a resource whose supply increases rather than decreases through use and becomes
depleted if not used.
Social networks foster trust, lower transaction costs and speed information and innovation. China’s
extraordinary growth depends on the personnel connections to channelize savings and investment.
Job searching is more efficient when they are embedded in social networks. Networks among the
workers and entrepreneurs fuel ultra modern industries. Social capital approach can help us
formulate new strategies for development.
In the modern society lack of connections among its members can also have negative effects. Most
poor Americans experience social and economic isolation which leads to j oblessness, inadequate
education and poor health.
That is two identical youths, the one unfortunate enough to live in a neighbourhood whose social
capital has eroded is more likely to end up hooked booked or dead. Thus the social capital you can
draw on helps to define who you are and thus to determine your fate.
Research suggests that life chances of today’s generation depend on the social capital resources of
their ethnic group.
Investments in physical capital, financial capital, human capital and social capital are complementary
and not substitutes. Investments in jobs and education will be more effective if they are coupled
with the reinvention of community associations. Social capital is a prerequisite and as well as a
consequence of effective public policy.
The importance of social capital is not limited to minority groups. Take public education, the private
schools success depends on the involvement of parents and other communities in the process.
Our political parties once connected to the community have not alienated from the grassroots. If we
have to reform our democracy we should promote the social capital i.e. allowing space for religious
organizations, choral societies. .
Negative effects of social capital: Networks that serve some groups may obstruct others. Even with
active social networks we need to worry about how community distributes the benefits. Before
promoting the social capital, we need to weigh the costs as well as benefits.
The social capital approach uncovers the new ways of combining private social infrastructure with
public policies that work and in turn revitalize the stocks of social capital.
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The Market and the Polis Deborah Stone. “The Market and the Polis” from Policy Paradox WW Norton, NY, 1997.
R Umesh(0911324)
Definitions
Polis, a Greek word for city- state conjures up an entity small enough to have very simple forms of
organization, yet large enough to embody the elements of politics- hence a fitting name for the
essential political society.
A Market can be defined as a social system in which individuals pursue their own welfare by
exchanging things with others whenever trades are mutually beneficial. Participants in the market
are in competition with each other for scarce resources; each person tries to acquire things at th e
least possible cost, and to convert raw materials into more valuable things that can be sold at the
highest possible price.
Basic features of the market model
In the market model, individuals act only to maximize their own self - interest. Self- interest is not the
same as selfish- they might include, for example, the well-being of family and friends. The
competitive drive to maximize one’s own welfare stimulates people to be very resourceful, creative,
clever and productive, and ultimately raises the level of economic well-being of the society as a
whole.
Comparison between the Market and Polis Systems
1. Community- Markets start with individuals and assume no goals, preferences or intentions
other than those held by the individuals. A model of the polis assumes both collective will
and collective effort. A model of the polis must include a distinction between political
community( a group of people who live under the same political rules and structure of
governance and share status as citizens) and cultural community( group of people who
share a culture and draw their identities from a common language, history and traditions)
Membership in the community defines social, economic as well as political rights. Example
of insurance. In polis money is pooled by the members but in market insurance is just a
financial product one buys from another seller.
2. Public Interest- In a polis, there is public interest. Public interest could be individual interests
held in common, things everyone wants for themselves or individual goals for the
community. They could also mean goals on which there is a consensus. Public interest is
usually perceived as things which are good for the community as a community. The concept
of public interest is to the Polis what self- interest is to the market. Public interest in a
market society is the net result of all individuals pursuing their self-interest. While public
interest in markets are filled in as an afterthought with side effects of other activities, it is
well planned, forethought and made with conscious effort in a Polis Model.
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3. Commons Problem- Situations where self-interest and public interest work against each
other are known as Commons Problems. There are 2 types of commons problems-
a. Actions with private benefits entail social cost- discharging industrial wastes into a lake
b. Social benefits necessitate private sacrifices-maintaining a school system requires
individual tax payments.
In markets common problems are exceptions, in polis common problems are everything.
4. Influence- The gap between self-interest and public interest is bridged in the Polis by
influence, cooperation and loyalty. Influence is inherent in communities. People are neither
freewheeling nor freethinking. Our ideas about what we want and what choices we make
are shaped by our education, persuasion and general processes of socialization. Influence
sometimes becomes coercive. Bandwagon effect. Central elements of politics.
5. Cooperation- In the Polis, cooperation is as important as competition. This is true be cause
politics involves seeking allies and organizing cooperation in order to compete with
opponents. Cooperation is also essential to power. It is often a more effective form of
subordination than coercion. In the ideal market, there is nothing but pure competition,
which means no cooperation among either buyers or sellers.
6. Loyalty- In the ideal market, a buyer will switch suppliers in response to a price or quality
change rather than stick with the previous supplier. In politics relationships involve gif ts,
favors, support and future obligations. Political alliances bind people over time. In the
market, people are buyers or sellers. In politics, they are friends or enemies.
7. Groups- In the polis model, groups are important in 3 ways-
a. People belong to institutions and organizations even when they are not formal
members. Their opinions are shaped by organizations, and they depend on them to
represent their interests
b. Policy making is not only about solving public problems, but about how groups are
formed, split and re-formed to achieve public purposes
c. Groups are important because decisions of the polis are collective. When officials have
“sole authority” they are influenced by opinion and pressure.
8. Information- In an ideal market, information is accurate, complete and available to everyone
at no cost. In the polis, information is interpretive, incomplete and strategically withheld.
Because politics is driven by how people interpret information, much political activity is an
effort to control interpretations. Information is never fully and equally available to all
participants in politics. Crucial information is very often deliberately kept secret.
9. Passion-In the market, economic resources are governed by the laws of matter. Resources
are finite, scarce and consumed upon use. In a polis, passion feeds on itself. Like passion,
political resources are often enlarged or enhanced through use, rather than diminished.
Political skills and authority grow with use. In the polis, the whole is greater than the sum of
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its parts. Another law of passion is that things can mean (and therefore be) more than one
thing at once.
10. Power- Power is a phenomenon of communities. Its purpose is always to subordinate
individual self-interest to other interests. It operates through influence, cooperation and
loyalty. It is based on the strategic control of information. It obeys the laws of passion rather
than the laws of matter.
Any model of society must specify its sources of energy, the force that drives the change. In the
market model, change is driven by exchange, which in turn is motivated by the individual quest to
improve one’s own welfare. In the polis, change occurs through the interaction of mutually defining
ideas and alliances. Ideas are the stuff of politics. People fight about ide as, fight for them and fight
against them. Interaction between ideas and alliances is ever-changing and never-ending.
Go through page 33 of the reading. There is a table which summarizes all the basic difference
between market and polis.
Introduction in ethnic conflicts and civic life Ashutosh Varshney “Introduction” [In Ethnic Conflict & Civic Life]
Ram Sevak (0911335)
In this section, the author talks about the link between the structure of civil society and
ethnic/communal violence. Inter-communal networks can be of two types: associational forms such
as reading clubs, sports clubs etc and quotidian (everyday) form. Civil society is a non-political but
non-state forms of organization. As Horowitz argues, all conflicts based on ascriptive group identities
such as race religion, tribe etc can be grouped under ethnic conflict. Contrast this with the narrowly
used sense of “race” when discussing ethnic conflict.
Ethnic conflict can have an economic base but it is not its defining feature . Ranked ethnic systems
(ethic systems with a hierarchy such as caste) can merge ethnicity and economic class but unranked
ethnic systems cannot (e.g. inter-racial relation in the US). So it is imperative to study ethnic peace
to understand ethnic conflict. If we analyze Hindu-Muslim violence in India from 1950-1995, it is
largely an urban phenomena and that too concentrated within specific region in a city. The pre-
existing local networks of civic engagement between the two communities act as the single most
proximate cause for conflict. That’s why associational forms of engagement act as a bulwark of
peace than everyday engagement. As regards the absence of riots in Indian villages although they
don’t have an associational form of engagement, the author argues that size reduces the
effectiveness of everyday interaction and associations are only critical when village like intimacy in
public life is not possible within conflicting groups. Thus a multiethnic society with few
interconnections across ethnic boundaries is very vulnerable to ethnic violence.
Politicians behavior depends on the settings of the institutions i.e. constitution of the country,
power sharing agreements and structure of civic life in a conflict zone . Such institutional linkages
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between politicians and the public were formed in India during Gandhian struggle for uniting Indians
in 1920s. So genesis of some of these conflicts can be traced back to Independence struggle
underlying historicity of ethnic strife in India.
Media
News Media & Nonmarket Issues
David Baron “News Media & Nonmarket Issues”, Business and its Environment, 3rd edition, Prentice
Hall, 2000.
Sandeep Nair(0911341)
Introduction
The news media plays an important role in society by providing information to the public about
matters affecting people’s lives and the society they live in. It also plays an important part by
identifying non market issues and stimulating actions which affects their progress. Many companies
dread media coverage of their non market issues. The essential role the news med ia plays in a
democracy is accompanied by responsibility to provide the information in an accurate and an
unbiased manner so that individuals can formulate their own conclusions.
The role of the News Media in Non market Issues
Media coverage can
Alert the public, activists, interest groups and government officeholders to the non market
issues.
Raise concerns about the policies and practices of firms
Provide information about the likely effects
Reduce costs of non market action
Facilitate a non market strategy by conveying information generated by an interest group.
Represent certain interests and principles consistent with the news media’s perception of its
role in society
Message and their interpretation
Because of the importance of the news media, firms and their managers must anticipate which
issues will attract media coverage and how the media will treat them.
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Coverage and treatment provide inputs to which the reader and the viewers are exposed and on
which the interest groups, politicians, firms and others condition their perceptions and actions.
Those actions can themselves be newsworthy, attracting further coverage and giving the issue a life
of its own.
The messages provided by the news media are interpreted in a variety of ways depending the
individuals’ prior information, beliefs and preferences. Their impact can be systematic and
important.
The message received by those in the non market environment can give rise to market and non
market actions that shape the environment of business and affect the progress of issues through
their life cycles.
A Theory of News Media Coverage and Treatment
Treatment can take several forms
A straightforward presentation
An interpretation of facts and events
An exploration of potential significance
Advocacy of a course of action
Intrinsic Audience Interest
Predicting which issues the media will cover requires determining which issues are of intrinsic
interest to the readers and viewers. Similarly, to predict the treatment of an issue requires
determining what holds the attention of the audience. The principal predictions of the audience
theory are
1. Coverage increases with the increase in audience interest
2. treatment will be chosen to appeal to and retain an audience
Societal Significance
This reflects the news media’s perception of the significance of an issue to society as a whole. It
reflects the media’s role in protecting democracy by providing the information the citizens need. It
emphasizes issues which are important to the social fabric and the tension in that fabric. The news
media has a special role in a democracy and is assigned or has assumed the duty of serving the
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people’s right to know. The greater the perceived societal significance, the more likely the treatment
will be characterized by advocacy.
Refer to Figure 3-2 in the book.
Extending the theory
The newsworthiness of issues extends the intrinsic audience interest and perceived societal
significance dimensions. The more people to whom the issue matters and the more it matters to
them, the more newsworthy is the story.
It is also more newsworthy if
- it has a degree of immediacy or urgency
- it has a human interest dimension which the audience can identify with
- it involves a celebrity
- it contains controversy or conflict
In contrast, stories about ideas are often difficult to write about, especially in the visual media.
The audience
The issues audience also affects its treatment. Many non market issues, such as the opening of a
foreign market are primarily of interest to those who want business information.
When an audience is the broader public, news organizations beyond the business media will be
attracted and journalists may be less knowledgeable about the issue.
The cost of coverage
News coverage is also a function of the costs of obtaining information and producing a story. Media
is more likely to use stories from journalists already onsite as the marginal cost is lesser.
Both the costs of obtaining information and budget pressures on most media organizations have
forced them to rely increasingly on low cost sources of information such as interest groups,
government etc. rather than developing the information first hand.
Nature of the news media
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In the United States, news organizations are owned by for profit companies, so profit is a primary
objective. News organizations are in a highly competitive industry. They compete not only against
other companies in the same medium, but also across media. Competition has increased with the
rise of the internet.
The profession
Media decisions are shaped in part by the people who chose careers in journalism. Journalists are
often perceived to be more liberal and activist than the public in general. A widely shared
perspective among journalists is that they are serving the public.
As a profession, journalism is governed by standards enforced by the news media organizations and
professional organizations. These require that a story be
- Accurate – verify facts and ensure that the situation is portrayed correctly.
- Balance – both sides are represented
- Fairness – participants have an opportunity to present their views.
Journalists seek professional attainment and reward. A necessary condition is that a journalist’s work
should be published or should have an impact.
Does the news media treat issues selectively?
The media may not cover all issues under the same criteria. Most issues are treated under controls
and editorial standards. On some issues like pollution etc, the media adopts an advocacy approach.
Bias and Accuracy
Business criticism is due to a variety of reasons.
1. Few companies like their activities scrutinized
2. Critics of the company get an opportunity in the interests of balance
3. Media caters to anti business sentiments
4. Interviews edited to make the best, but not complete.
5. Always results in oversimplification, which may not be correct.
Business interactions with the news media
The need for information
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Many business issues are newsworthy, and frequently only the business has the information that can
serve as the basis for a story. This provides firms with an opportunity to bui ld a relationship with the
news organizations in which they provide the information needed in exchange for stories which will
be fair and balanced.
Media Strategies
Six elements of effective media strategy
- The unusual is usual
- Emphasize the consistency of business and public interest
- Remember your audience
- Communicate through the press
- The medium is the message
- Establish credibility not friendship
Response and Vacuums
On many issues, business prefers that no story appear. One strategy is not to comment to the media.
But this can be risky when the story is going to appear anyway.
Relationships with the Media
Many firms develop relationships with the news media based on mutual respect and honest and
forthright exchange. This is easier in the business press than in the general media.
Media Interviews
Because of the importance of the media in the development of non market issues, managers are
frequently interviewed by the media and called on to speak to the public. Media training is
customary in many firms, and a communications consulting industry has developed. Many firms
provide guidelines for dealing with journalists.
Anticipating issues
When a non market issue can be anticipated, the theory of the news media can be used to assess
whether the issue is likely to be covered, and if so, the type of treatment it is likely to receive.
Normal interactions are with the business media and these can be predicted. However when the
general media comes into the picture on issues of societal significance, the issue becomes m ore
complex.
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When it can be anticipated, the firm has the opportunity to prepare. Preparation includes gathering
relevant information about the issue and its context. Preparation also includes assessing the
messages and the likely responses to them.
Unanticipated events
Because events such as environmental accidents can occur, firms should have a routine to follow in
case of the breaking story. For serious matters the firms should have a crisis management plan. If
the issue is to be confidential, be prepared for leaks later.
- Gather information as much as possible.
- Develop a strategy
- Implement it and speak in a single voice
Recourse in disputes with the media
Private recourse
The subjects of news coverage at times perceive stories to be incomplete, inaccurate or unfair.
Actions taken can range from
- Writing to the editor to correct inaccuracies
- Initiating legal action
- Economic measures
Media organizations take actions to discipline their correspondents, editors and managers who
violate ethics. They can be suspended, reassigned or fired.
Recourse to the Law
Libel – Statements which are either written or broadcast
Slander – statements which are spoken
A degree of privilege is provided to the media by the first amendment, which extends protection,
but does not provide an absolute defense. For E.g. New York Times V/s Sullivan (1964)
The rationale for the standard enunciated in Sullivan is that although individuals retain rights to
privacy, they lose a degree of privateness when they participate in “public” activities .
A relatively untested aspect of the law pertains to information on the internet. Such postings can be
widely disseminated and could form the basis of a defamation lawsuit.
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Political Recourse
New bills have been passed which are called the “veggie -libel” laws. They do not allow disparaging
comments against certain vegetables.
Other Laws
Certain companies have adopted a new approach. They filed lawsuits challenging the means by
which the news media obtained a story.
A Propaganda Model Edward S. Herman & Noam Chomsky “A Propaganda Model” [from Edward Herman & Noam
Chomsky Manufacturing Consent: The Political Economy of the Mass Media]
AV Naga Chaitanya (0911286)
Introduction
The authors claim that a systematic propaganda is at work in the United States. Busi ness, media and
the government are the main players in their proposed propaganda model. It is difficult to spot this
propaganda system at work since it is operated by private media houses in an environment where
formal censorship is absent. Also, the media purportedly disguises the propaganda by periodically
attacking and exposing business and government malfeasance and by portraying themselves as
spokesmen for free speech and general community interest.
The authors identify five essential ingredients in the propaganda model. They call these ingredients
as ‘filters’ that regulate the flow of information to the public. They claim that media’s claim to
objectivity is only valid within the constraints placed by these filters.
Filter 1: Size, Ownership and Profit Orientation of the Mass Media
Radical and working class press that emerged in Great Britain in the early 19th century has been
gradually snuffed out by
1. Libel laws and prosecutions enacted by the legislature of the time
2. Rise in investment required to operate the newspaper business (due to improvements in
technology)
Hence the first filter is size. You need to big money to enter the media business. The huge monetary
interests of ownership act as a filter on the information disseminated by the media. There are 24 big
media houses in the United States which act as the top tier of the media. Smaller media houses
depend on this upper tier for content and news. These 24 companies are owned by quiet wealthy
people. There are also patterns of cross ownership (Banks, institutional investors and corporations –
ex. GE – have huge stakes in media houses). Cross ownership has been fuelled by rules limiting
media concentration and control by non-media companies.
Another structural relationship of importance is the media companies’ dependence on and ties with
government. The radio –TV companies all require government licenses and franchises and are thus
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potentially subject to government control or harassment. This technical dependency has been used
as a club to discipline media. Media houses are also dependent on Government for general policy
support (favourable tax laws etc.).
Filter 2: The Advertising License to do Business
The main source of funds for the print media is not sales. In fact the selling price of newspapers are
more often than not less than their manufacturing and distribution costs. Media houses manage to
under price their news papers through advertising. The television and radio media are completely
funded by advertisers.
Hence for media houses sell their audience/readers to advertisers. Hence media houses are
interested in attracting audience; not just any audience but audience with buying power. Also,
advertisers are in a position to influence television programming. In fact television networks have
special departments to solicit potential advertisers and to explain how their programs serve the
advertiser’s needs. Large corporate advertisers on television will rarely sponsor programs that
engage in serious criticisms of corporate activities, such as environmental degradation, working of
the military-industrial complex etc. Hence we see a dearth of serious programming and television
and an increase in trivial and lightly entertaining programs.
Filter 3: Sourcing Mass-Media News
The media need a steady, reliable flow of the raw material of news. They cannot to have reporters
and cameras at all places at all times. Economics dictates that they concentrate on sources of
information. The white house, the Pentagon, and the State Dept. are some of these sources. He nce
media is implicitly dependent upon the govt. bodies for its news.
Corporations and trade groups are also regular and credible purveyors of stories deemed to be
credible by their status and prestige. Observe that news that does not emanate from ‘credib le’
sources will require extra work in to establish its veracity.
To consolidate their preeminent position as sources, government and business-news promoters go
to great pains to make things easy for news organizations (think advance copies of speeches, photo-
op sessions etc.). In effect the large bureaucracies of the powerful subsidize the mass media, and
gain special access by their contribution to reducing the media’s costs of acquiring the raw materials
of producing news. The media may feel obligated to carry extremely dubious stories and mute
criticism in order not to offend their sources and disturb a close relationship. It is very difficult to call
the authorities on which they depend as liars.
Filter 4: Flak and the enforcers
Flak refers to negative responses to a media statement or program. It may take the form of letters,
telegrams, phone calls, petitions, lawsuits etc. Positions have to be defended within the organization
and without, sometimes before legislatures and possibly even in courts. Adve rtisers may withdraw
patronage. Television advertising is mainly of consumer goods that are readily subject to organized
boycott.
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The ability to produce flak and especially flak that is costly and threatening is related to power. The
Media Institute, the Center for Media and Public Affairs and Accuracy in Media may be regarded as
institutions organized for the specific purpose of producing flak. These institutions more often than
not are funded by corporate-wealthy patrons.
Although the flak machines steadily attack the mass media, the media treat them well. They receive
respectful attention, and their propagandistic role and links to a larger corporate program are rarely
mentioned or analyzed. The producers of flak on the other hand add to one another’s strength and
reinforce the command of political authority in its news-management activities.
Filter 5: Anticommunism as a control mechanism
Communism as the ultimate evil has always been the specter haunting property owners, as it
threatens the very root of their class position and superior status. The Soviet, Chinese and Cuban
revolutions were traumas to Western elites. Anticommunism helps mobilize the populace against an
enemy, and because the concept is fuzzy it can be used against anybody advocating polici es that
threaten property interests or support accommodation with Communist states and radicalism. It
serves as a political control mechanism.
The anti-Communist control mechanism reaches through the system to exercise a profound
influence on the mass media. In normal times as well as in periods of Red scares, issues tend to be
framed in terms of a dichotomized world of Communist and anti -Communist power, with gains and
losses allocated to contesting sides, and rooting for ‘our side’ considered an entirely legitimate news
practice. The ideology and religion of anticommunism is a potent filter.
Conclusion
The five filters narrow the range of news that passes throught the gates, and even more sharply limit
what can become ‘big news,’ subject to sustained news campaigns. By definition, news from primary
establishment sources meets one major filter requirement and is readily accommodated by the mass
media.
Conversely, propaganda campaigns will not be mobilized where victimization, even though massive,
sustained, and dramatic, fails to meet the test of utility to elite interests. Thus, while the focus on
Cambodia in the Pol Pot era (and thereafter) was exceedingly serviceable, as Cambodia had fallen to
the Communists and useful lessons could be drawn by attention to their victims, the numerous
victims of the U.S. bombing before the Communist takeover were scrupulously ignored by the U.S.
elite press.
In sum, a propaganda approach to media coverage suggests a systematic and highly political
dichotomization in news coverage based on serviceability to important domestic power interests.
This should be observable in dichotomized choices of story and in the volume and quality of
coverage... such dichotomization in the mass media is massive and systematic: not only are choices
for publicity and suppression comprehensible in terms of system advantage, but the modes of
handling favored and inconvenient materials (placement, tone, context, fullness of treatment) differ
in ways that serve political ends.
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Media and Governance Mukul Sharma “Media and Governance” Seminar [From www.india-seminar.com]
Rajeev Kumar (0911333)
Role of Media in Governance: Democracy implies participative governance, and it is the
media that informs people about various problems of society, which makes those wielding
power on their behalf answerable to them.
The actions of the government and the state, and the efforts of competing parties and
interests to exercise political power should be underpinned and legitimized by critical
scrutiny and informed debate facilitated by the institutions of the media. Media can shape
power and participation in society in negative ways, by obscuring the motives and interests
behind political decisions, or in positive ways, by promoting the involvement of people in
those decisions. In this respect the media and governance equation becomes important.
Indian Media: There are at least three major media traditions in modern India – that of a
diverse, pluralistic and relatively independent press; of the manipulated-misused, state-
controlled radio and television; and that of many autonomous, small media outfits of
various subaltern groups and their organizations.
With television expanding its base among the masses and aided by economic liberalization,
particularly from the 1990s, the onslaught from the skies, in the form of international
satellite-distributed television, radically transformed the country’s broadcasting
environment.
Globalization has further had a profound effect on India’s media, particularly the growth of
Internet and on-line media. While e-mail still accounts for the majority of Internet usage in
India, Internet is fast becoming a means for political communication as well. Many Indian
newspapers have gone on-line. The Indian Army web-site gives its version of events in
Jammu and Kashmir. The Bharatiya Janata Party (BJP) set up India’s first party website
during the 1998 elections.
Current State of affairs: State control over television and radio, the role of multinationals
and big corporate houses and bourgeois monopoly over print media has meant that media
has often remained inaccessible to the vast majority of the poor and the marginalized.
Overwhelming commercial interests and monopolies of a few affluent individuals and
business houses are not good for democracy. The media, under monopoly conditions, does
not provide a wide range of interpretive frameworks that are important for the well being of
democracies.
It cannot be denied that both media and governance in India suffer from serious problems,
which at times even feed into each other. Suspension of civil liberties, excessive
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militarization, communal assertions, and homogenizing tendencies has too often spelled
doom for Indian democracy. In this context it is imperative that media becomes more
sensitive on issues of democratic governance, people’s struggles against social injustice and
inequality and so on. Its commitment towards democratic norms and values in its own
governance system, structure and function is a must.
Role of the society: The role of people’s organizations, social movements, voluntary
organizations and other civil society formations in monitoring the functioning of media and
making it more people centred is important especially in light of the fact that autonomous
organizations within media like those of journalists and workers, have not only become
weak but they also severely lack in their ability to raise critical issues pertaining to media
governance and its functioning.
Positive Role of the Media: The news media plays a decisive role in establishing a discursive
space, one framed by the state and economic domains on either side, for public
deliberations over social issues. The formative influence of the news on popular attitudes is
accentuated by conceiving of the news audience as citizens engaged in public dialogue.
If we want to define various developments in the particular context of governance, and
governance that means something for a majority of the poor, the struggling people, then we
must first realize that the media, in all its varied forms, has opened up the potential for new
forms of participation. People are discovering ways to think about themselves and to
participate in governance that would have perhaps been unthinkable a generation before.
Their access to information and accessibility of information has both increased.
Thus the dalits, women and other marginalized sections of the society are also using the
media to make their voices heard, to make democracy somewhat more real. It is also
amazing that in spite of variations and complexities of opinions, by and large the overall
thrust of news-gathering and dissemination is to propagate and promote democracy. Media
in India depends on the central impulses and aspirations of democratic governance.
Relatively Independent: India has not had an unreported famine since independence, and
the media, especially newspapers, and opposition political parties have played an important
role in this. China on the other hand, went through a more-or-less unreported famine during
the Great Leap Forward of 1959-61. This experience highlights the truth that in the Indian
context, there exists a relatively independent and plural space I n the media that can
perform valuable democratic functions and take on progressive roles.
Need of the Hour: Over the years the corporate sector has developed its own press and
channels. The political parties have their own newspapers. The governments in this country
have also promoted their own medium of mass communication. But the voluntary
organizations, groups engaged in movements, associations of the oppressed castes and the
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citizens engaged in promoting alternative politics which have grown manifold in the post-
independence era in terms of its sheer number and the area of operation, have not been
able to develop their own press or television channels with a mass reach and sound
credentials. It may be noted that different civil society formations have developed and are
running their own medium of communications, like small magazines or newsletters. But
these do not have an impact on a macro level and have not been able to develop a
professional form. The challenge to develop a reliable TV channel, a TV programme, a radio
programme or at least a magazine is before all those who are engaged in various ways to
promote and support alternative movements, alternative social groups and alternative
models of development.
While it is true that a truly ‘public’ media is essential for a live democracy, media is only one
of many institutions and practices of democratic life. No single institution can by itself bear
the burden of furnishing democracy. Indeed, such centralization would be profoundly anti
democratic. For a people’s democracy, people’s participation, panchayats, local governance,
schools, civil liberties, forms of work life, freedom of faith and worship may be placed above
the media. Civil society needs a variegated array of institutions and necessities – sanitation,
electricity, water, neighbourhoods, libraries, rule of law and above all a basic level of
security and welfare. An informative and critical media is a necessary condition for
democracy but not a sufficient one. Democracy can exist only when interwoven with the
human and material condition of life.
Caste matters in the Indian media Siddharth Varadarajan “Caste matters in the Indian media”, The Hindu, 3 June 2006. Available at:
http://www.thehindu.com/2006/06/03/stories/2006060301841000.htm
Kapil Makhija (0911314)
Politics about caste plagues media as much, if not more, as it does the society. The article
elaborates this with inhumanly treatment meted out to SC students in UCMS (University
College of Medical Sciences).
The media gave a lot of coverage to anti-reservation protests, but hardly any voice to pro-
reservation protests. Whatever coverage has been about reservations, it has always been
projected in the negative light, as a compromise of meritocracy.
One instance of this bias is when a section of doctors sought to protest against higher fees
imposed on poor patients, they were warned of dire consequences. Under a High court
order, AIIMS premises cannot be used for protests, but anti -reservation protests were
supported by one and all openly on the same premises.
Not a single accredited Dalit journalist in Delhi. Number of accredited OBC journalists in
Delhi less than 10. No tribal journalists in Chhatisgarh.
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Better caste representation in media would ensure equal coverage of different sections of
society, instead of having a bias towards pro-forward caste news coverage. It would help
broad-base the journalism and make it more authentic and professional.
Media houses should think about starting internships and training programs for Dalit, Tribal,
Muslims, and OBC students.
Sense Making by the Public
Equity, Symbols, Numbers, Rights
Deborah Stone. “Equity, Symbols, Numbers, Rights” from Policy Paradox WW Norton, NY, 1997.
Introduction: The author analyses the importance of Symbolic Representation in the definition of
Policy Problems.
She is of the view that all Policy Problems are defined with words; therefore the manner in which
these words are used symbolically to represent an idea can determine how the policy problem is
conveyed to the public. This strategy does not necessarily imply conspiracy or manipulation; by
conveying right and wrong, good and bad it becomes a fundamental instrument in the struggle over
pubic policy.
Symbols:
Anything that stands for something else;
Meaning depends on how people interpret, use or respond to it: hence collectively created
How are Symbols political devices?
A good symbolic device works to capture the imagination, shapes our perceptions and suspends
scepticism (at least temporarily)
Therefore, they are means of influence and control.
Four Aspects of Symbolic Representation:
Narrative Stories
Synecdoche Metaphors
Ambiguity
I .Narrative Stories
Narratives use many literary and rhetorical devices to lead the public to a course of action
Have heroes and villains, problems and solutions, tensions and resolutions.
Provide explanations of how the world works
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They are of two types:
Stories of Decline :There is dramatic tension drawn from the assumption (stated or implicit) that in the beginning things were good, then it got bad, now it’s a intolerable; usually ends with a prediction of crisis and a proposal on how to avert it. Foster anxiety and despair Eg.Poverty rates are rising, environmental quality is worse etc.
Stories of decline have two variations:
Story of stymied progress: in the beginning things were terrible, then got better thanks to someone, but now someone else is interfering therefore, terrible again. eg.In 1970s & 1980s the American Medical Association, while fighting Govt.cost
containment efforts reminded the public of days of plague, tuberculosis etc and
warned that govt interference would undo all the progress.
Story of progress-is –only –an- illusion: Eg.Child abuse is not on the rise, it only appears to have increased because there is
more public awareness, legislation etc. Hence Progress/Improvement is only an
illusion.
Story of Control : Moves the public from the realm of fate to the realm of control ,alleges that what was believed to have been random or natural can be changed through a human agency, that there is a choice, thus invoking the support of the public; Offer Hope
Has two variations:
Conspiracy Story: Shows that things were in our control, only few knew it and concealed it from the rest.eg.Ralph Nader’s crusade against auto makers to improve the safety of the cars, proved that accidents could be controllable
Blame the victim story: Locates control in the people who suffer the problem. Eg. Workers suffer from occupational injuries because they refuse to wear
protective gear
II Synecdoche
A synecdoche is a figure of speech where a part is used to represent the whole.
A small part of the policy problem is used to represent the whole ;politicians or interest groups
choose one outlandish incident to represent the universe of cases.
For Eg.Wisconsin,Divorce reform law : Presumed there should be equal division of property upon
divorce because the woman had spent years as a housewife and mother and would therefore not
receive any economic assets in settlement .This “ diplaced homemaker “ perspective that dominated
public thinking did not account for a)women who were home makers and income earners , and
b)women who had brought home substantial assets to the marriage,
and would therefore be entitled to more than the equal share of the assets.
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III Metaphor
A likeness is asserted between one kind of policy problem and another, pervasive in policy language.
eg. We live on spaceship earth- subtly implies a fragile co-existence.
Common metaphors in politics include :
Living Organisms: E.g. Communities/Neighbourhoods have a “life of their own”. Often used in the
context of resisting change, upsetting a natural balance etc
Natural laws: Laws that govern the social world, divide society into rulers and the ruled etc
Robert Michaels : Iron Law of Oligarchy : All organisations inevitably evolve towards the
concentration of power among a few leaders.
George Stigler :Law of Public Income Redistribution : Any attempt to redistribute toward the
poor ultimately takes the money away from them and redistributes it in the middle classes
Albert Hirschman:Futility Thesis : Impossibility of human control
Charles Murray : Law of Unintended Rewards: Helping people who have
problems(illness,poverty)actually rewards them for being in that condition and creates an
incentive to stay that way.
Other metaphors used: machines, tools, containers, disease and war.
IV.Ambiguity
The ability of statements, events and experiences to have more than one meaning. Ambiguity is the
“glue “of politics, enables coalition and compromise. It allows people to agree on laws and policies
because they can read different meanings into the words, allows policy makers to placate both sides
in a conflict
Eg.The phrase” Defending the country’s interests” has different connotation for the country’s
judiciary, legislature and the citizens. However invoking this phrase is a good way of getting
everyone to agree on a policy.
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Environment
Environmentalism: Ideology, Action, and Movements
Harper “Environmentalism: Ideology, Action, and Movements”
The Truth about the Environment Bjorn Lomborg “The Truth about the Environment” The Economist, August 2, 2001.
Chayan Mukhopadhyay (0911302)
The truth about the environment-the economist
Environmentalists say:-
1. Natural resources running out
2. Population ever growing and less to eat
3. Species becoming extinct; forests disappearing
4. Air and water getting more polluted
Facts:
1. Only 0.7% of species expected to disappear in the next 50 yrs
2. Acc to UN, agricultural production in the developing world has increased by 52% per person
since 1961
3. Malthus said population growth will be exponential and many it will bring more land into
cultivation. He was wrong.
As people grow healthier and richer, they have smaller families; growth rate now less than in
1960s
4. Threat of biodiversity loss exaggerated; species are more resilient than expected. E.g 99%
forests destroyed in Puerto Rico, but only 7 of 60 species of birds became extinct
5. Air pollution diminishes as society becomes rich enough to concentrate on the environment.
e.g London:- air pollution today-cleaner than it has ever been since 1585
reasons for people thinking the problems to be more serious than they are:
1. Environmentalists have the nature of lobbying just like other groups
2. Media
3. Poor individual perception
What it means for us:- not to get distracted by the fear of largely imaginary
environmental problems which may lead to diverting energy from dealing with more
serious ones.
A Global Marshall Plan Al Gore “A Global Marshall Plan” Earth in the Balance
Abhishek Humbad (0911312)
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 48 of 50
- Environmental crisis is a global problem
- Need to collectively fight
- Participation required across all countries,
- In order to counter this threat we need collaboration never before seen in history
- Something similar but smaller which happened in history is the Marshall Plan or the
European Recovery Program post World War-2
- We need a Global Marshall plan to counter this environmental crisis based on
- Concepts of democracy, free markets and global civilization are globally accepted and
followed, same must be applied to the environmental crisis
- Global Marshall plan must be an inclusive system with equal weightage and involvement of
Africa and Latin America
- New plan will require the wealthy nations to allocate money for transferring
environmentally helpful technologies to Third World
- Need for international agreements amongst countries to take up action
- All countries must share the burden
- Crisis can be solved by attaining 5 strategic goals
o Stabilizing world population
o Development of environmentally appropriate technologies in energy, transportation
etc.
o Accounting mechanisms for environmental and ecological impact
o International agreements for cap on emissions
o Educating world citizens on the scale and urgency of the environmental crisis
Green and Competitive: Ending the Stalemate
M.E. Porter and Claas van der Linde “Green and Competitive: Ending the Stalemate” Harvard
Business Review, September-October 1995.
Business Strategies for Climate Change Enkvist, Naucler and Oppenheim “Business Strategies for Climate Change” McKinsey Quarterly, 2008,
No. 2.
Sunil Kumar (0911348)
The shift to a low-carbon economy is already under way and that business must get ready for it,
especially in the energy, transport and heavy industry. To meet the goal of reducing global
greenhouse gas emissions, economic growth must be decoupled from emission growth.
Three related developments provide the starting point for the analysis of a low -carbon landscape
and for any strategic response:
1) Optimizing current assets and products
There will be efforts to optimize the carbon efficiency of existing assets and products:
infrastructure (buildings, power stations), supply chains and finished good (automobiles,
TVs, PCs). This optimization will involve measures to improve energy efficiency, as well as a
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 49 of 50
shift to less carbon-intensive sources of power such as solar, wind, nuclear and geothermal.
Corporate leaders should consider the following ways to benefit from the shift:
a) Reduce costs through carbon-efficient operations
Many companies in most sectors have profitable opportunities to save money by cutting
energy consumption and greenhouse emissions. Reducing emissions will be particularly
profitable when companies can receive carbon credits, which can be sold in the EU’s
Emission Trading Scheme, for the reduction. A simple starting point for any company is
to improve its internal energy efficiency and to use less carbon-intensive fuels.
Reconfiguring production can be an effective lever in heavy industry. One example is to
reuse heat from manufacturing processes to generate electricity or to heat later stages
of production. Similarly, financial companies can save energy and cut costs by
reconfiguring data centers-removing redundant applications and installing new servers
to improve heating efficiency. Switching of lights and machines when not in use could
also help. Another way is to design products like computers and cars that are made from
more carbon-efficient raw materials and consume less energy and emit lower levels of
greenhouse gases in operation.
b) Reposition the portfolio
Companies in energy and heavy industry can also reap strategic advantages by
repositioning their asset portfolios. They could sell plants likely to be less competitive if
carbon regulation is introduced or reinforced. And they could buy assets that will benefit
from public-policy actions. And they could shift the mix of their investments toward less
carbon-intensive plants and technologies.
c) Capture profit in carbon-trading markets
The EU Emission Trading Scheme and similar regulatory mechanisms that could be
established elsewhere are ideal for banks and other capital traders that understand
what drives carbon prices and how these markets could develop. Though the total value
of the emission rights is about $40 billion a year, only a fraction of that is traded now but
it is a growing fraction.
2) Building new low-carbon businesses
There will be major moves to develop radically more effective low-carbon solutions for new
infrastructure. Emissions can usually be reduced at lower cost by building new houses,
factories or cars than by retrofitting existing assets. The need to decouple emissions from
economic growth will reinvent industries. In forestry and bioenergy, for example, a major
new value chain seems likely to appear around the large-scale supply of biomass to power
plants. Power plants and property owners could form new alliances to generate distributed
power.
3) Shaping the regulatory landscape
For many industries, huge value is at stake in the regulatory arena. The precise design of
emission-trading schemes can have a great bearing on profits. Mandates and subsidies will
be decisive for the commercial viability of solar power and many other emerging green
technologies. Companies need to work closely with regulators to ensure, for instance, that
the rules don’t unintentionally shift production away from relatively carbon efficient plants
in regions with high carbon costs to higher-emitting plants in geographies with lighter
regulation. There are several ways companies can influence the regulatory environment:
a) Assess the value at stake and develop a stance to regulation
Handout Summary Business, Government and Society
PGP 2009-2011 Section E Page 50 of 50
The regulatory interests of companies within an industry vary considerably, depending
on issues such as the carbon intensity of their assets and products, their technological
capabilities, their market shares indifferent segments and they geographies where they
operate. Figuring out what position to take in each area of regulation-and integrating
these different stances into a coherent and credible argument- are prerequisites for
successful regulatory management.
b) Leverage the advantages of incumbent or attacker position
Incumbents have an opportunity to build strong positions by amassing emission permits
as carbon markets develop. Attackers, by contrast, typically have the benefit of a newer,
lower-carbon asset base.
c) Engage regulator at many levels
Businesses have a lot to gain from participating in a sophisticated process of
engagement, using partnerships and alliances to support their arguments, and
influencing policy makers both through direct dialogue and through efforts to shape
public opinion. To succeed, most companies will need to strengthen the regulatory
organization and raise the discussion to the level of senior management.