Re: Reputation as a major check on malpractices

[Kush Khatri <free_voice@yahoo.com>]

Thanks Sanjeev for your answers.  I wish I was in Hawaii!   I was
deliberately provoking my dear friends in BDP.  But they all displayed
tremendous amount of maturity by not taking my bait.  I also know you
like me do not worship anyone.  I knew that--just was seeking
reaffirmation.

OK regarding individuals and institutions:  I agree that it is
individuals that make the institutions. But I do not agree with your
analysis that all that counts is the individual (People do not live
and breath as collectives, or as teams).  Believe it or not sometime
you have to breath and think as a team.  In fact, that underscores why
Indians succeed as individuals but fail as a collective (country,
team, organization, corporation)  Little wonder India being one of the
most populous nation has no OLYMPIC TEAM.  Even socialist countries
recognized the power of teamwork and the collective pride that
everyone aspires for.  Therefore, they were able to build powerful
sports institutions even without the incentive of big money.  
Yes, Alan Greenspan is a terrific individual.  But people listen to
him not because he is a good individual but he also heads a unique
INSTITUTION.  

What we are trying to do here in formulating this ideal paper
(manifesto) is team work.  As individuals we are contributing but at
the same time other individuals on this project are enhancing my
contribution by their strengths and insights.   My contribution is
nothing unless it is agreed to, appreciated and incorporated by others.

Regarding the inspections of food facilities etc.  That authority is
with the state governments and as delegated to the local
jurisdictions.  The Washington Post either every Saturday or Sunday
prints the name of food establishments closed for non-compliance.  The
Federal Government already has the authority over all  interstate
commerce and movements of commercial goods. You are probably right
that the Federal government may not pass an edict closing down unsafe
food production facilities but they can exercise their authority by 

Sanjeev Sabhlok <sabhlok@almaak.usc.edu> wrote:
>
> Dear Kush,
> 
> Glad you are back! I thought you had gone to Hawaii or something and
> forgotten to come back! 
> 
> About your point/s. Please let us understand each other clearly on two
> things.
> 
> a) This is not BDP or any other group. This is everyone of us as
> individuals.
> 
> b) People do not live and breath as collectives, or as teams, but as
> individuals. You are currently thinking things from your own mind, not
> because your mind is linked up biologically with any other "team." So,
> clearly, in my personal experience, the individual is superemely
> important. 
> 
> c) I am not worshipping Alan or any other Greenspan or Bluespan. To
me he
> is simply one animal (primate) that has some ideas of interest to
me, and
> which I can learn from. I do not worship human beings, dead or
alive.  But
> I do listen to ideas that might make sense. That he is almost solely
> responsible for the decisions of the Fed is clear from the past
records of
> the Fed. The Chairman has almost unilaterally guided Fed Policy in
the USA
> since ages. That is why the world listens much more carefully to
Alan the
> Greenspan than to Bill the Clinton.
> 
> d) No one is disputing the fact that markets are not perfect, even
in the
> USA. But remember, in the USA, it is the industry that regulates
quality,
> including the meat industry. The fact that people in US Government are
> asking for laws which will empower them to take the decision to
close down
> a firm on grounds of lack of hygiene does not mean that this power
exists
> with them today. That is a debate that is in process. I would be
grateful
> if you could summarize the actual laws which operate in this area in
the
> USA today, since I do believe, from my casual reading of this subject,
> that the US government does not have the powers that you seem to be
> talking about.
> 
> e) Corruption is the key issue that is being tackled, but not by (i) 
> crying about corruption, (ii) being burnt out and feeling hopeless
about
> it. It is being tackled in every line and every word of the
manifesto, by
> trying to build institutions and systems - and professionalism. If you
> find any line in the Manifesto/ Agenda so far that tries to violate
this
> and tries to encourage corruption, please point it out and let us
debate! 
> 
> And welcome back from your hibernation, once again!
> 
> Sanjeev
> 
> PS: I would really appreciate if you could not only give the actual
facts
> as asked for in Para d above, but also draft a single para on "quality
> control" that can go into the Manifesto/agenda. I'm sure you can do
it!
> 
>
***************************************************************************
> 
> On Tue, 2 Jun 1998, Kush Khatri wrote:
> 
> > Hello People:  I guess just when you were happy that I have faded
out,
> > here I am back!!  After reading with interest your postings for
three
> > weeks, I can confidently report that things are cloudier on this
list
> > and people are still going round and round in circles!
> > 
> > Those of you who have experince working with the GOI (government of
> > India) are so badly "burnt" that you cannot envision ever a time in
> > the distant future when government in India will be corruption free
> > and will do what it was meant to do in the first place.
> > Sanjeev, please accept my thanks for what you have done on and for
> > this disucussion.  
> > However, I was perturbed by two things in your write up.   First, 
> > Alan Greenspan has not single-handedly done anything so spectacular
> > that you are worshipping him just as people worship ministers in
> > India.  I pointed out in my earlier posts that it is time that we
> > start seeing the importance of INSTITUTIONS in a democracy.  Looks
> > like that you are still more focused on the INDIVIDUAL.  It is
> > institutions such as the Federal Reserve that make the individual
look
> > good,  even the best in the field.  However, without the backing of
> > the INSTITUION the individual is useless.   I have no doubt Alan
> > Greenspan will whole heartedly agree with me.    However, that does
> > not mean that Alan Greenspan is not a "hero" of some sort.  Yes,
> > individual talent and leadership matters.  Mr. Greenspan is doing a
> > great job.  But so is his "TEAM" of analysts and other governors and
> > board members. 
> > 
> > The central point raised in your post that reputation is a check on
> > business malpractice is true -- but, once again, let us put that
into
> > proper context.  Most of the time this will only apply to businesses
> > who have made a name for themselves in the eye of the consumer. In
> > India also you can trust reputed companies.  For example, while
buying
> > a cold drink, I am far better off buying Thumbsup or Fanta rather
than
> > a drink bottled by a "local" bottler. But not all businesses deal
> > directly with the cosumer. That is why despite what Mr. Greenspan
> > says, public is demanding MORE meat inspectors in the USA.  Why? 
> > Because many meat packers work in the backwaters and supply meat to
> > large buyers.  Yes, they have everything to lose if meat is
> > contaminated -- but THAT DOES NOT GUARANTEE THE SAFETY OF MEAT. 
> > Neither can more inspectors.  However, it does minimize the risk,
> > provided the inspectors are doing what they are supposed to.
> > In short, as we have already talked about that government always
has a
> > crucial role in development as it does in public safety and public
> > health.  ONCE AGAIN THE PROBLEM IS NOT WITH INSPECTORS but with the
> > system.
> > It is no use creating more inspectors in a system where they can be
> > bought by businesses or misuse there positions.  THAT IS WHAT I
MEANT
> > THAT WE ARE STILL GOING AROUND IN CIRCLES.  At the beginning of this
> > debate I had pointed out that CORRUPTION IS NUMBER ONE PROBLEM IN
> > INDIA.   The BDP group on this list wants to avoid tackling this
> > problem.  Instead, they keep going off on tangents.
> > I had pointed out that corruption exists because basic democractic
> > norms about individual and governmental authority are ignored or
> > flouted  (please see my earlier postings).
> > Second, corruption exists becuase the "system" allows both parties
> > (bribe giver and bribe taker) to hide assets.  The bribe giver gets
> > away because there are no internal audit prinicples that are being
> > adhered too.
> > The bribe taker gets away because the system allows him to HIDE
> > ILLEGALY ACQUIRED ASSETS.(something which is impossible in the US,
for
> > example)
> > 
> > I HAD ALSO POINTED OUT THAT THE 0NLY WAY YOU CAN CHANGE THIS
SYSTEM OF
> > PROTECTION IS THROUGH TECHNOLOGY AND PROFESSIONLISM.   Technology
> > means introduction of fool proof method of records, change of
> > ownership in assests, and transactions related to these assests.  
> > Because most systems are manual (bank records for example) the bribe
> > taker can easily hide his/her identity and transact business with
> > impunity.  Without technology you cannot have systems such as
national
> > id numbers for businesses as well as individuals (as was proposed on
> > this list).
> > But for some reason the power of technology and professionalism (I
> > think I have defined that before) you will have a continuance of the
> > status quo.   Do not expect business to perform as long as there is
> > corruption all around.
> > 
> > More later,
> > 
> > Kush Khatri
> > 
> > 
> > Sanjeev Sabhlok <sabhlok@almaak.usc.edu> wrote:
> > >
> > > Since we were discussing the role of government in monitoring,
> > regulating
> > > and standardizing, I wanted to mention a few counter-points,
before we
> > > rush headlong into making another "inspector raj." The small but
> > > intelligent government concept gets even more force in such a
case. 
> > > 
> > > Ask Alan Greenspan, a person I know that all of you respect, for
> > having
> > > provided the USA with the lowest unemployment in 30 years, and
very
> > low
> > > inflation, coupled with enormous economic growth.
> > > 
> > > a) Please read Alan Greenspan's article in the Objectivist
Newsletter,
> > > Aug. 1963 (also reprinted in Ayn Rand's "Capitalism, an Unknown
> > ideal")
> > > which is entitled, "The Assault on Integrity." It speaks clearly
of
> > the
> > > role of reputation and good will in keeping unscrupulous
practices in
> > > check. Economists have today realized the immense importance of
this
> > > aspect in the economy and the latest literature on game theory
studies
> > > these things in intricate detail. Basically, the point being
made is
> > that
> > > if markets are allowed to operate properly, and transparently,
then
> > > problems such as mixing kerosene oil with petrol, mixing sand with
> > cement,
> > > mixing water with milk, mixing useless powder with fertilizers,
> > etc., will
> > > automatically come down drastically.
> > > 
> > > Today, because of virtually 90% of the government functionaries
> > (taken as
> > > a whole) and virtually 100% of our Ministers are busy dabbling
with
> > money
> > > below the table, grabbing "rents"  left, right and center,
therefore
> > every
> > > businessman cheats given the slightest opportunity, since he/
she is
> > in
> > > strong collusion with the "authorities."  Reputation has lost its
> > meaning
> > > because the officials are corrupt, and even the courts are often
> > corrupt. 
> > > Therefore it is easy to get out of the system, and the
businessman can
> > > make good money out of selling sand as cement, and giving part
of the
> > > "cut" to "authorities" around him. He is assured of no one being
> > able to
> > > "touch" him. I can assure you that even God Himself cannot keep
the
> > > unscrupulous in jail for long in India: these guys have angelic
wings
> > > which enable them to slither out of jail in a short while. 
> > > 
> > > On the other hand, take the case of a fully capitalist system (pl.
> > read
> > > the definition on the web page, in case of a doubt about what this
> > word
> > > means), if a businessman knew that nobody in the government would
> > protect
> > > him (if we had a small, well paid, and intelligent government),
and
> > that
> > > he had to compete with other businessmen for survival, then pure
merit
> > > would once again start to count, and the businessman would be
forced
> > to
> > > stop cheating since his reputation would be ruined if he cheated,
> 
=== message truncated ===



_________________________________________________________
DO YOU YAHOO!?
Get your free @yahoo.com address at http://mail.yahoo.com