Sitaram Yechury on Crony Capitalism

Arun Ramachandran G December 26, 2010

Sitaram Yechury, Politburo Member, CPI(M). Photo: Wikipedia


The term crony refers to a long standing friend – in that sense, crony capitalism means a capitalist system, by and for, such long-standing friends. Going by this definition, it is no surprise that people from various spheres have started to describe capitalism practised in India as Crony Capitalism. In the past few months, we have seen several scams hitting the front page - 2G spectrum, Common Wealth Games, Illegal mining scam, Petrol bunk licenses, Adarsh housing, to name a few. It is in this context that Sitaram Yechury, Politburo member of the CPI(M), delivered a lecture on "Crony Capitalism, Management of Democracy" at IIM Calcutta on December 17, 2010 as a part of the Institute Lecture series.

Yechury touched upon several recent scams like the 2G and Common Wealth Games. He points out that signs of corruption were visible right in the beginning. For instance, companies that had nothing to do with telecommunication were allotted 2G licenses, only for them to turn around and offload their shares to multinational corporations often at 9-12 times the money they paid for the spectrum. In the case of Common Wealth Games, the renovation cost for Jawahar Lal Nehru stadium in Delhi alone turned out to be 12 times the cost of building a brand new stadium in Nagpur.

In his remarks, he noted that even within a system like Capitalism that seeks to maximize profits, the Capitalist state has to come in to set up rules and regulations and work out methodologies to set up a level playing field. Given the very nature of capitalism, these rules and regulations are always bent and taken to the limits of rupture, so that profits can be maximized. In crony capitalism, there exists a nexus between government, capitalists, sections of bureaucracy and media – this sort of nexus determines the nature of economic activity or who gets to do what in the system. Continuing on his analysis of the widespread corruption in the system, he went on to say that not only does Crony Capitalism loot the resources of the country, it also imposes a collateral damage on the various spheres like environment, agriculture and livelihood. He cited several startling statistics – for instance, in the Karnataka-Orissa-Andhra belt alone, 1.6 lakh hectares of forest land has been diverted for illegal mining. Illegal iron ore mining in took up 77 million tonnes of water in 2005 – which would have been more than enough to meet the daily needs of 30 lakh families. Not only does it loot the resources of the country, it also distorts the very concept of democracy with election victories being “purchased” through unaccounted and illegitimate campaign financing.

Referring to the importance of management as a discipline he pointed out that the future of our country is a very big management exercise. On the one side, we have 1.1 billion people out of whom, 77% are unable to have three square meals a day. On the other side, we have a specific amount of food grains and potential for agricultural produce. How we distribute this to the people so that all of us can lead a comfortable life - this is a management problem. Management is no longer a multi disciplinary approach, it has transcended to become a trans-disciplinary approach. He concluded his lecture by urging the students to come forward and address this significant management problem to create a better India.

After the lecture, Mr. Yechury answered questions from the audience on several issues like how the CPI(M) handles cases of crony capitalism involving its own cadres and trends in corruption post liberalization. His observation in response to a question on the capitalism followed in China was particularly interesting. In a candid yet clear response, he commented that it is difficult to say whether China is following a market oriented socialism – with market as the dominant player in economic decision making - or a socialist market economy, with planning as the dominant player using market indicators. In response to another question, he remarked that committing a mistake is not a mistake, but not realizing that you have committed a mistake and thus repeating it, is a mistake.

Yechury's talk not only highlighted the critical challenges posed by crony capitalism to democracy in India, he also outlined the imperative for future managers and young professionals to utilize their skills and education for the greater common good.

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The Moral problems and the family values should be adresed ....

The suffering and shining India and its Widening gap is the Historical problem. How we can tackle it? The constitutional Change through the mass movement and reinstating the Moral Values to the society is needed.

The capitalism has changed our moral family values .According to Marx (from manifesto page No 71)" Our bourgeois ,not content with having the wives and daughters of their proletarians at their disposal.....

Bourgeois marriage is in reality a system of wives in common....................................For the rest, it is self-evident that the abolition of the present system of production must bring with the abolition of the community of women springing from that system ,ie,of prostitution both public and private"

At the outset these "Quot" from Manifesto may not have any relevance.

But alarming growth of our population since independence and the declining the moral values are directly proportional to the scientific growth. I think along with the concept of the socialistic and thereby the communistic movement we should address this ethical values for the future India,where the spirituality is to be blended with Marxism especially the VIVEKANANDA'S movement.

The capitalized society since 1991 have been destructing the ancient cultural bondage of families.The unscientific destruction of the Joint family also creating poverty and insecurity in this society.How we can put forward the old tradition into reality. It should be addressed by the new managers......

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The Moral problems and the family values should be adresed ....

The suffering and shining India and its Widening gap is the Historical problem. How we can tackle it? The constitutional Change through the mass movement and reinstating the Moral Values to the society is needed.

The capitalism has changed our moral family values .According to Marx (from manifesto page No 71)" Our bourgeois ,not content with having the wives and daughters of their proletarians at their disposal.....

Bourgeois marriage is in reality a system of wives in common....................................For the rest, it is self-evident that the abolition of the present system of production must bring with the abolition of the community of women springing from that system ,ie,of prostitution both public and private"

At the outset these "Quot" from Manifesto may not have any relevance.

But alarming growth of our population since independence and the declining the moral values are directly proportional to the scientific growth. I think along with the concept of the socialistic and thereby the communistic movement we should address this ethical values for the future India,where the spirituality is to be blended with Marxism especially the VIVEKANANDA'S movement.

The capitalized society since 1991 have been destructing the ancient cultural bondage of families.The unscientific destruction of the Joint family also creating poverty and insecurity in this society.How we can put forward the old tradition into reality. It should be addressed by the new managers......

Arun, Nice to know that

Arun,

Nice to know that Yechury was in Joka.

Management is also reductionist as a discipline. So young professionals and management graduates need to be modest and cautious while seeking "managerial solutions". Realizing what is a "managerial problem" within the context and what is not, requires us to transcend disciplines ( including multi-s / trans-s) and root ourselves in history and social processes. Or else we might become "Monteks', Kalams' and Narayanamurthys' of management"! Hope Yechury's speech was not taken in isolation by the audience.

BK