Book Reviews
Saving Democracy and Capitalism
Winston Churchill was right when he said that democracy is not a perfect system; but until we find a better one, it is the best we have. The pessimists in all countries, including USA and India (the largest democracies in the world), will keep complaining about the failure of the system. This is the easiest thing to do. Kotler, known as the father of modern marketing, prefers to be an optimist. He advocates that we keep trying to correct the system and make things better for everyone. For that, he goes back to his original training as an economist at the University of Chicago, under Nobel Laureate Milton Friedman, and then, at MIT, under Nobel Laureates Paul Samuelson and Robert Solow.
 
Kotler brings ‘marketing thinking’ to improve the working of capitalism and democracy. Therefore, in this book of only 200 pages, he does not just list the 14 problems/interlocked challenges, but also suggests how we could find solutions for them. Kotler looks at democracy as a product and then analyses the strengths and weaknesses, the competitive systems, why and in which areas it no longer satisfies the needs of the consumer (citizen) and then suggests how we can work towards making the product (democracy) a winner in the marketplace. 
 
Today, less than 60% of eligible voters vote in a presidential election (against a higher percentage in Belgium, Germany, etc).Over 96% of politicians are likely to stay in office. Since politicians desperately need money to run campaigns, many of them get money from the rich—for a price. The result: much of the legislation not only seeks to protect big fortunes but is designed to enlarge them. We have moved rapidly from being a democracy into an oligarchy or a plutocracy. And the weakening of democracy is reducing the capitalist system’s ability to produce benefits for the majority. Democracy is increasingly becoming an instrument to take care of the very rich—1% of the population.
 
Kotler lists 14 shortcomings in democracy such as low voter literacy, turnout and engagement; shortage of qualified visionary candidates; and two-party gridlock, etc. He analyses each of these and proffers solutions. It is a good start to save a system of governance, first initiated by Plato in The Republic—a government of the people, for the people, where only the ‘enlightened could vote or be elected’. This has been experimented in small communities (like in Vermont and New Hampshire in the US) where they met several times a year—and ran a government of - We the people, not We the Corporations! But this has changed everywhere else, because most democracies are ‘representative democracies’, not direct democracies. A very interesting comment on page 29 is: “In 2015, the League of Women Voters in USA cited three problems that are weakening democracy:  
  • Congressional districts are drawn and gerrymandered to benefit self-serving politicians;
  • Access to voting is limited and, sometimes, denied;
  • Dark money is infiltrating elections so voters do not even know who is bankrolling the political messages that we see and hear.”
Does this seem familiar, for India and many other democracies, younger than the US? Kotler suggest some solutions—or at least solutions that can be debated. One example is: Governments, at all levels, must become more businesslike and transparent. Periodically, they should tell us what they have accomplished with the tax money. Another example: reduce election campaign period. UK limits advertising campaigns to 30 days. All candidates would benefit by not needing as much money. 
 
There is much for the thinking Indian to learn from this book. Although Kotler mostly talks about the part failure of democracy in the US, much of what he says is applicable to India. India professes consumer protection, but the consumer courts have no staff—sometimes, not even any physical infrastructure. We want to look after the interests of the citizen but even minor legal cases can take 30 years to conclude because of the poor legal infrastructure. While Plato talked of an enlightened electorate, 60 years after independence, India still has a literacy level of less than 60%. And, yet, in August 2016, India is estimated to have the 7th highest number of richest people in the world. We may need to consciously target for improvement in per capita GDP, rather than total GDP. Just going after the latter can give a sense of complacency, when true change has not taken place at the ground level. 
 
This book is a must-read for all thinking Indians. If it can be buttressed with a reading of the earlier book on capitalism, so much the better. 
 

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A Sensitive Writer’s Concern with the Environment
To Amitav Ghosh, climate change is intensely personal and his own sudden experience of it has been so inexplicable that he hesitates to use it in his fictional writings, for fear of melodrama. Even now, while writing this work, he says, we are in enough self-denial and that The Great Derangement could only be written as non-fiction and may not have found acceptance as fiction.
His first personal experience was of an extreme weather event: a short, intensely devastating storm in which he could have been killed had he been in a slightly different place. It left him with a feeling of unreality. Although such an experience should have served him well as inspiration in his novels, the truth was too sensational for use in a modern novel with its need for realism. 
 

There is an increasing number of such, apparently stand-alone, events all over the world. There is a great reluctance to acknowledge that they are a direct result of our own activities and our extreme, sometimes misplaced, efforts to control our own environment. These efforts, he says, while providing a sense of control to humans for the first time in history, are, paradoxically, irreversibly changing the established processes on which we unconsciously depend for stability. Our environment is more uncontrollable than ever.
 
This book is an explanation of the collective sense of nonchalance with which people view climate change. It reflects how changes in fictional writing parallel people’s attitudes to real-life events and their need to control their own reality.
 
Ancient stories used uncertainty and melodrama to bring excitement. Classics, such as the Arabian Nights, used highly improbable events to tell stories which would capture the imagination. Non-human agencies, such as wild animals and extreme weather events, provide the unexpected and unpredictable twists and turns that fuel these melodramatic events. 
 
Non-human agents in novels are, often, based on ancient knowledge of real events. From Ghosh’s ancestral experience of life on the river banks, he tells the story of a forced migration due to changes in established patterns of a mighty river. His knowledge of the Sunderbans, a dense mangrove forest in Bengal, points to the intertwined fact and mythology of man-eating tigers: tragic and unpredictable events impacting nearly every family, which live on, in the tales of the region and in 19th century literature. The reference to the eyes of the tiger meeting the eyes of the human as it was about to attack, and the close bonding of the souls of attacker and attacked, tells of the inextricable nature of human life with its natural surroundings. 
 
In ancient times, he argues, man accepted that there were events and agencies beyond his control. He struggled to make sense of uncontrollable circumstances through story-telling of wildly improbable events, often founded on uncontrollable facts. The word ‘uncanny’ represents the meeting of unpredictable event and uncontrollable consequences. 
 
In the 19th and 20th centuries, however, humans began to assume greater control of their environment through rapidly escalating access to technology. Popular literature reflected changed attitudes by changing the acceptable form of the modern novel to reflect a highly controlled reality. For the first time, writings containing uncontrollable or less understood events were classified into genres such as fantasy, science fiction and Gothic novels. They were kept away from mainstream ‘serious’ literature.   
 
This change in literature reflected an important change in human consciousness and attitudes to our surroundings. Our own destructive behaviour contributes to more unpredictable events than ever before; this is illustrated in several different ways. Traditional settlements, away from the reach of powerful water bodies with unpredictable temperaments, have given way to settlements closer to the water’s edge in most major cities, assuming greater control of the forces of nature. Ghosh narrates examples of early miscalculations in building infrastructure in unsuitable locations such as a now-abandoned port in Bengal and recent extreme weather events in cities like New York and Mumbai. He also links the human aspiration to control Nature to the disastrous siting of the Fukushima nuclear plant in a vulnerable location. Such a location would have been barred by traditional knowledge of weather events such as tsunamis. 
 
These well-known examples indicate the tenacity of our need to assume control and inclination to see each such event as one-off. Ghosh reflects on the reluctance of human beings to acknowledge their own complicity in bringing about climate change events by escalating their attempts to control, while moving further on the path of danger. 
 
This leads directly to a change in our acknowledgement of the power of extra-human agencies to impact daily life. Melodrama in novels is complemented by the avoidance of melodrama in daily life and ‘extreme’ weather events are seen as something to be controlled or denied.
 
 
It is ironical, argues Ghosh, that the very control which humans are exerting over their environment, is leading us towards more uncontrollable extreme weather events and loss of communication with wild animals and forests. A greater need to exert control and denial of the out-of-control behaviour leads to a collective denial of climate change to the extent where even fictional writing blacks it out, in spite of increasing evidence of its reality and impact.
 
This is a very important book, bringing climate change into the writings of one of our most popular fiction authors. While acknowledging the impediments to integrating these concepts into his past fictional works, the author has indicated his wish to use it in his future fiction as a backdrop to the recent human experience of denied calamity and the continuing impact of non-human agencies. The settings of calamity in several locations of the world, especially India, provide ample backdrop for the stories of people impacted by these calamities. The Great Derangement indicates a change in Ghosh’s writings to include the reality of seemingly unreal events brought about by climate change. The present work is of immense value to bring the reality of climate change into the mainstream of human consciousness.

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COMMENTS

Laxmi Lobo

1 year ago

An excellent review. Thanks for the insights.

Quantitative Quest for Great Companies
Books that are able to describe successful businesses through a common theme or analytical framework are rare in India. This one (The Unusual Billionaires; Saurabh Mukherjea; Penguin Random House India, Rs499; 445 Pages) is an addition to that small collection. It uses the John Kay’s famous IBAS framework (Innovation, Brands/Reputation, Architecture, Strategic Assets) to explain the success stories of seven companies: Asian Paints, Astral Poly, Berger Paints, Marico, Page Industries, Axis Bank and HDFC Bank. Why these seven? Mukherjea, who is the CEO of institutional equities for broking firm Ambit Capital, and has studied under Kay, a professor of economics at the London School of Economics, has applied a quantitative process to select great companies. 
 
The process involved three steps. In step 1, Mukherjea and his team at Ambit created the basic set of companies to study. He limited himself to companies with at least Rs100 crore of market-cap. This surprisingly low barrier yielded a list of 1,500 companies. Step 2 was defining the time period. Great companies should be around for years. Here, Mukherjea chose a period of 10 years which is surprisingly short. Step 3 was defining superior financial performance as revenue growth of 10% and 15% return on capital employed (RoCE) for every year for the past 10 years. RoCE can’t be applied on financial firms and so, for them, Mukherjea used return on equity (RoE) of 15% and loan growth of 15% every year. Only eight companies have managed to fulfil both the growth and return criteria in each of the past 10 years, the eighth one being ITC (apart from the seven I mentioned earlier). 
 
Having identified these eight, Mukherjea has then told their stories. (Inexplicably, Mukherjea did not discuss ITC at all. Maybe, he did not get access to them.) What is behind the seven decades of continuous excellence of Asian Paints? How has Berger Paints done so well ever since the unassuming Dhingra brothers (now among the 50 richest Indians) bought the controlling shares in 1991? How has Marico, which still gets most of revenues from a commodity product (coconut oil), been such an outstanding performer? Mukherjea tells their stories. That apart, the book has sections on the IBAS framework, more detailed explanations of long-term portfolio called Coffee Can portfolio (a buy and forget approach) and a chapter on checklist for long-term investors. 

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COMMENTS

Rishabh Adukia

1 year ago

definitely seems interesting

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