What is wrong with India’s kind of capitalism?

Capitalism is always contrasted with socialism. Yet both have great similarities. Not in terms of what the two ideas advocate, but in the sense that both are the product of philosophical ideas of how humanity should be working, living and owning. It is debatable which of the philosophical ideas is more logical and more practical for good life. The answer to this question lies in understanding the point of the philosophers and administrators.

The difference between a philosopher and an administrator is that a philosopher thinks with a free mind without the constraint of being responsible to rule a sea of its subjects in most challenging ways. Philosopher writes based on the free will and provides lots of examples and reasoning for why his concept is right and perhaps why others may be wrong. It is the part of the philosophical writing and research. Criticism is most welcome to such free thinking and there is no final word in philosophy. As ideas, most philosophers will convince you the basis and logic of their concepts of human life and controls of the subjects in a society, and it is up to the administrator, if he is able to fully or partially adapt to the idea successfully to rule its people in his region or nation. Therefore what happens is that an administrator needs to adapt to a particular philosophy most suitable to ground realities of the cultures and life style of its citizens.

What US did by adopting the idea of free capitalism was to use the philosophy to benefit from the advantages while avoiding the pitfalls as mentioned in the original philosophy of democracy and free market economy. It was achieved not in decades but over centuries of experimentation with the philosophical idea of capitalism, modifying the idea to suit to the practical realities of ruling a peculiar set of population with specific demography as prevalent in that part of the world. USSR on the other hand, perhaps could not really experiment with the idea of socialism innovatively enough to suit the requirement of an administrator and tried to dream the philosopher’s way, leaving no space for administrative modifications required in a purely philosophical idea. Finally the idea failed in that part of the world, leaving the remnants of the idea to People’s Republic of China, which wowed to preserve the philosophy of socialism and experimented with it to suit the administrative requirement of its own realities, like what US did with their original philosophical idea of free capitalism. In case of China the timing of such experimentation came out to be perfect and today, China could prove the efficacy of its own kind of capitalism which is result of experimentation of its own kind of socialism too.

On the other hand India just decided to experiment with the capitalism in its most basic form, 60 years back, after Britishers were out of the country. It was like reinventing the wheel again. Many countries like South Korea, Malaysia and others just copied the capitalist practices of long practiced US capitalism supported by its own kind of democracy. While India came out to be the largest democracy of the world, it did not choose to copy the administrator’s form of capitalism long practiced in US and Europe. India tried to build upon the basic philosophical idea, but had been sluggish to learn and experiment with the same to suit its ground realities, a mistake similar to what was done by socialists in Russia. The result is that India today faces major challenges in reaping the benefits of democracy, which in its present and recent past form is at best flawed if not junk.

The biggest problem with the Indian capitalism is that, it is not supported with an administrator’s kind of democracy, at best adopting a philosopher’s kind of democracy and more as a formality and on paper rather than being as a mission to achieve results and in its true spirit. Away from so called Meritocracy as invented by Singapore and later adopted by China. That is where the real contrast comes among Chinese Capitalism and the resulting current situation of Indian capitalism.

On the other hand, difference between US capitalism and Indian capitalism can be best seen from the point of view of the resolve of US to make sure that every American is provided equal educational opportunities supported by a dynamic and sound school infrastructure at the state cost and available to both poor and rich entrants (born in random households / parents perhaps by the will of so called GOD) in this world but as US citizens. The idea ensures the true fruits are reaped of the idea of democracy and free capitalism, lest only children’s of rich families will be able to show their inborn strengths to take the country’s capitalism to new heights. The same is not true for India, where only rich families are able to provide right opportunities to their children, while poor kids never see the light of even basic middle-income life. Lack of basic school infrastructure defies even the very idea of free capitalism in its administrative form rather than philosophical terms. It is interesting to note that lack of schooling to the poor kids of India’s population which forms a majority results into a lot of inborn talent being wasted and not put for the national growth because of unequal opportunities available to poorly born kids in poor households/parents of India.

In other words without the right riders and enablers, the idea of democracy is farce for a country like India. It was more so when it was born 60 years back if not today. A literacy rate of around 74% way below world average ensures a lot more talent not being put for national growth leave aside a thought of meritocracy irrespective of family background of new entrant of this world as Indian citizens. China do not have such a situation albeit different route taken with respect to its political idea. Therefore the most debated concern related to ‘China’s future political stability’ may be a mere figment of imagination of certain philosophers, not too happy with the administrator’s experimentation with the basic idea of Chinese socialism.

In all, India needs a major rethink of its own kind of capitalism which needs to be supported by a real workable democracy which is result oriented like that of US, and which makes popular but real sense and considers checks and balances of the original philosophical idea of democracy in a form which gives prosperity and economic growth. Otherwise India needs to junk its 60 years old idea and perhaps restart afresh, after all the race can not start with different starting points, to be fair to the real winner.

INCOTERMS 2010 revision is more practical

INCOTERMS 2010 which contain 11 delivery terms comprising of 7 ‘multimodal’ or ‘place to place’ terms and 4 ‘port to port’ terms are now much more easy to understand and applied more practically to today’s international logistics practices. A seller or the buyer is not really interested to know what happens at the sea port or at the airport and the different terminal formalities which are taken care by the multimodal transport operator (MTO) or C & F agent. Therefore it makes more sense to refer to delivery terms in the export contract as place to place delivery terms either at the sellers place or close to buyer’s place unless the cargo is loose cargo being shipped and handled by any of the 2 parties at the ports.

This is what was discussed and concluded at the one day I.T.S – MDP held on 10.08.13 at Hotel Jaypee Siddharth, New Delhi. The topics covered at the MDP were – INCOTERMS 2010 and Letter of Credit. The MDP was attended by executives from several MNCs.

One day I.T.S - MDP
One day I.T.S – MDP