S.

GurumurthyLifeAfterMarxand Market
(SpeciallecturebyS.Gurumurthyon"LifeafterMarxandMarkets"atbooklaunchfunction M.R.Venkatesh's"GlobalImbalancesandtheImpendingDollarCrisis",publishedbyInstituteof EconomicEducation.DateUnknown.Thefollowingtexthasbeenpreparedlisteningtoyoutube videoatfollowinglink:https://www.youtube.com/watch?v=eNtlHmJZgO8. PleasebeknowthatIhavemademaximumefforttotypeexactlywhatSriGurumurthyhad spoken.But,asithappens,therewillbesomeerrors.So,ifanyerrorschangethemeaningof whatSriGurumurthyhadactuallyintendedtoconvey,itisentirelymymistake.Butallthecredits goestoSriGurumurthyonly,asyouknowalready:). Inmyview,thisisoneofthoserarelectureswhichwillchangethefutureofIndia,ifgivena properattention.Ifyouhearitkeenlyandunderstandwhatheconveys,withacriticalmind,alot ofPARADIGMshiftwilloccurinyourviewofIndia.Youwillfindtheinadequacyofavailable guidelinestounderstandIndianwayoflivinganddoingbusiness.Ifonetakeshisinputsinto seriousresearchandifanypoliticianinpowermakesproperpoliciesbasedontheresearched data,perhapsrulingIndiawillbecomemoreclearerandeasier.Ifacademiciansandteachers followtheguidelinesSriGurumurthyprovidesandpreparetheirbooks,thenthestudentsofIndia canhavearealeducationwhichisdirectlyapplicabletotheeverydaylifeofIndia. Mymotivebehindmakingtextofthisspeechispartlyduetomydefectivemindwhichcouldnot remembertheessencebehindeachsentenceofthisspeech.WhateverIgraspatonesentence alwaysoverlaidbyanothersentence.Ithoughtofreadingthisspeechafterlisteningitsoasto graspandthinkleisurelyandkeenlyabouteachsentence,relationsbetweeneachofthe sentencesandideasbehindthesesentences..Andhencethetextformofthisspeechinfrontof you.Ihopethistextformwillgiveyouchancetogothroughthespeechthoroughlyanddiscuss pros&consofit.ThankyouNaveenReddy.K)

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So,inthepresentsituationthetopichasbeensuggestedtome,itisnotmychoice,wasLIFE AFTERMARXANDMARKET. Itrhymeswellbutitisdifficulttospeakonit.Yousee,ifyoulookback,tillthedaycommunism collapsednooneknewitwascollapsing.Infactvolumeshavebeenwritten,maybesometen thousandbookshavebeenwrittenonthissubjectastowhycommunismcollapsed.Howaworld standingontwopolesbecameunipolar,onepolejustdisappeared.AndinfactmyfriendArun ShourieoncetoldmeandhewasanempathizerofcommunismwhenIusedtohave discussionswithhimatonepointintime.Heusedtotellme,Guru,Ithadallthepotentialitiesof collapse,butIneverthoughtitwouldcollapse.Iaskedhim,Howdidyouthinkitwouldnot collapsewhenyousawthepotentialityforcollapseandIaskedhim,Whatisthepotentialyou sawinit.Hesaid,YoulookattheBerlinwall.TheBerlinwallisbuilttoseethatnobodyfrom theeastcrossestothewest.Anditwasnotbuiltbythewest.Itwasbuiltbytheeasttokeep theirownpopulationintheirowncountry.Thisshowedthepotentialitythatitwaswaitingto collapse.Andthehistoryofcommunismisnotonlyanenlighteninghistory,asaphilosophyitis notonlyaveryexcitingphilosophy,ithadahugehistorybehindit.......intellectual history,philosophichistory,politicalhistory,culturalhistory,economichistory,religioushistory.... butallpeculiartoonlyEuropeandChristendom.Ithadnoexperienceoftheoutsideworld.Why communismcouldneverunderstandtheworldis......ithasseentheworldonlythroughtheglass ofchristendom.Marxsfriendsandenemies,histeachersandadversarieswerefoundonlyin Christendom.Infact,therearethreedateswhichareveryimportanttounderstandMarxism. OneisHegelwhowassomekindofaDronacharyaforMarx.FromHegel,Marxtookthe philosophical,analyticalmodelforhiscommunistthesis.Marxhimselfwasalmosta contemporary.BecauseHegellivedbetween1770and1831andMarxlivedfrom1818and 1883.ButHegelwasthemanwhoinessence,wecansaywithsomekindofclaritytoday,he wastheonewhoconfusedtheentireEurope.Andhisinterpretationproducedtheistaswellas atheist.So,youcanunderstandhowconfusinghewastointerpret.Hisphilosophywascapable ofinterpretationonlyintheworldlysense,itwascapableofinterpretationcompletelyinthe otherworldlysense.So,hisfollowersorhisstudentsgotdividedintotwogroups.Therewasa leftgroupandtherewasarightgroup.EvenbeforeCommunismcameintobeing,leftgroupand righthaddeveloped.SoMarxwasaproductofthatclubwhichwastheleftthinkingclubatthat time.So,muchbeforeMarx,leftistthoughthadcomeintobeingandwhatistheoriginofthis thought?Youmaybesurprisedtoknow.......withoutaphilosophy,withoutathought,withouta leader,withoutaneconomicalmodel............intheyear1534acommunistrevolutiontookplace intheworldinthecityofMunsterinwestphaliainGermany.Manyofyoumayhavebeenaware ormaynothavebeenaware,Iamnotsure,aboutanabaptist.Theanabaptist...youknowinthe entirecourseofEuropeanhistory,therewasonethoughtthatwasdrivingthewhole intellectual,academic,political,philosophic,religiousthinkinginthewest.Andthisthinkingwas drivingtheworld,youwillnotbelieve,tillaboutthemiddleoflastcentury.Anditisdrivingthe worldeventodayinthemindofmany....i.etheendoftheworldisimminent.Andwhentheend oftheworldoccurs,beforethatchristwillcomebackandrulethisworld.Andwehavetoprepare theworldforthereturnofchrist.Andthisonesingleobsessivethoughthasdriventhehistoryof entireEurope.So......theAnabaptistwhoweretheprotestantChristians........veryrigid,very

frigid,verycommitted,absolutelyreligious,verysimple.......theydecidedthattheysawalotof wrongthingsgoingoninChristianity.......theChristianswerenotdiscipline,theywerenot religious,theywerenotfollowingthetraditions.....thatiswhyChristisnotreturning.Andsothey decidedtoseizepowerandtheyseizedpowerin1534believingthatthereturnofchristis imminentbutitisnotoccurringonlybecause......wearenotgood,wearenotgoodenoughto callhimbackreceivinghimback.AndtheyseizedpowerandburntallbooksotherthanBible, enforcedcommunalcommonownershipofpropertyincludingwomenandpolygamy,because theyfeelanythingaboutwhichyoufeelpossessivedelaysthereturnofChrist.Youneedaworld inwhichthereisnopossessiveinstinctatall.....everythingshouldbecommon,everything shouldbeavailabletoeverybody.Nothingshouldbespecialtoanyoneincludinghiswife.And oneyeartheyruled.Andtheyruledinthismanner.Thereareanynumberofauthoritiestoshow thatallthatthecommunistphilosophy,communiststructure,communistorganizationderived wasverylargelyintherevolutionarypartofcommunismfromAnabaptistwhopredated communismatleastbythreecenturiesandmore.Soyoucanunderstandthatthetensionsand turmoilswhichwereletlooseintheEuropeanhistorywhichtheysay,infactIwaslookingatthe.. browsingthroughtheinternetaboutthekindofdeathsthathadtakenplaceinthelasttwo millenia,morethanhundredcrorepeoplehadbeenkilledandaverylargenumberofdeathsis why99%ofthekillingshastakenplacebecauseoftheideas,ideologiesandphilosophieswhich areemanatedandgotintopowerandpositionandinfluencefromEurope.Soitwasasocietyof suchunbearabletension,innerpainthatproducethisphilosophy.Anddon'tthinkitproducedonly thatphilosophy.Thatphilosophywasareactiontoanotherphilosophy.Andthatwasthe capitalism.Thatishowthisideologicalevolutiontakenplacesimultaneously...oneasthe reactiontotheother...andmyfriendProfessorVaradarajanusedtosaythatCommunismand Capitalismarenotoppositesbuttwosidesofthesamecoin.Infact,thishetoldmetwentyyears backwhenIwasbecomingtresspasserinEconomics.Ibeganunderstandingthesubstanceof whathewassayingbyanalyzingwhatistheunderlyingphilosophyofboth.Theunderlying philosophyofCommunismandcapitalismwasoneandthesame.Bothlookattheworldonlyas amaterialphenomena.Andbothrejectedtheideaofgodanddivinity.Andbothconcludedthat humanbeingsarejustabundleofwantsanddesires.Andtheonlyquestionishowtofulfillit. Capitalismwouldsay,infactsomebodyputitsobeautifully....IthinkNoamChomsky,hesaid thatatthattimetheChernobilblasttookplaceinRussia.Chomskysaidtheonlydifference betweenCapitalismandCommunismis.....CommunismwillhaveChernobilatanycost, capitalismwillhaveitonlyifitleadstoProfit.thatsallthedifference.Ifthereisprofitthereis Capitalism.Evenifthereisnoprofitthereiscommunism.Thatsthedifference.Otherwisein theirassessmentsofhumanbeings,theirhistory,theirphilosophy,theirinterrelationship,their sensitivitesandsensibilities....thereisabsolutelynodifferencebetweenthetwo.Theonlything iscapitalismknewhowtolivewithdifferencesandallowpeoplewhodie....whohavedifferent viewstodieapeacefuldeath.Itisagaschamber.Butcommunismwillkillthem.Thatsthe difference.Nowonehascollapsed.Andthereisnodoubtithascollapsedthough....yousee nothingcollapsescompletely.YougoandseealltheBabyloniancivilizations..therearestill structuresstanding.SoCPMwillbethere,CPIwillbethere..thatdoesnotmeanthestructure survive.Sothecollapsehastakenplace,eventheydonotgoingtosaythattheworldisgoingto riseupacommunistpower,theproletarianunity..allthisisgone,eventhekindofcapitalism

theyopposedisnotthere.ThecapitalismoftodayhasnothingtodowiththecapitalismAdam SmithprobablyconceivedorwhichMarxopposed.Becausetherehasbeensuchatectonic changeswhichhavetakenplaceinthecharacterandreachandpowerofcapitalismwhichhas arousedthemostbasicelement,baseelementintheman.Thatswhyitisdifficulttosaythe samecapitalismaswayithasretainedsuchanamountofasuricspiritinthesociety..thatithas takensuchdeeproots..todayitisdifficulttosayitissamekindofcommunismwhichKarlMarx wasopposingorsamekindofcapitalismmanyeconomistshaveconceived.Sothemoment communismhascollapsed198990therewaseuphoriainthewest.Becausetheydintknow whyitiscollapsed.Buttheywanttoappropriatethevictoryforthecollapse.Sopeoplebegan writingbooks.Andthebookswerewrittennotastoacknowledgeortotakecreditforoneofthe forceswhichhadwonagainsttheother.Itwasonaveryhighphilosophicground.Andagain Hegelwasbroughtintoit.Hegelsaidthemostperfectsocietyisonewherehumanbeingsfeel thatthereisnofurtherneedforsearchforperfection.Andthatisthehighestandthemostideal stateofasociety.So,FrancisFukuyamaoneofthemostacknowledgedintellectualsofour timeswroteabook,EndofhistorylostmanandclaimedthatinHegeliansense.....theperfect societyisathandonlyiftheworldisstrugglingtomoveforwardandtherewillbecompeting forces,therewillbepeopletoquarrel,therewillbefightsandconflicts.isitthereisnotgoingto beanysuchsituationandthewholeworldwillbefreeofconflictsinfacthewenttotheextentof sayingthehistorydepartmentsmayhavetobecloseddownbecausetherewillbenohistoryof conflictatall.Andyoumaybesurprisedtoknowthisbecamethebibleforglobalizationthatthe entireworldwillhereafterlivewithoutanykindoftrouble,anykindofmutualbickering,quarrel... wehavereachedanidealstate.Andwhatisanidealstate.Andhedefinedtheidealstateto meanthatthetraditionsofliberaldemocracywhichthewesthadbuilthasfinallywonagainstthe restanditisfortheresttofollowthewestasthebest.Thisisthesimpletheoremheexpounded. Andallofustherestoftheworldwillhavetocondemnourselvesontheexperienceofone fifteenthoftheworldandsaythatwehavelivedabadlife...hereafteryoursisthebestwewill acceptandthereisnoalternativetoit.Thiswasthearrogancewithwhichtheideologyfor globalizationwasexpoundedintheEndofHistoryLostmenbyFrancisFukuyamo.WTO, differentglobalregimes,washingtonconsensus..........MRVStracedalotofitinhisbook.And thesouloftheworldbecomesthehightowerofcapitalism...thatisAmerica.WhateverAmerica saidordidwasfitenoughtobefollowedbytherestoftheworldandthiswastheextentwhich thepowerofmoderncapitalismrose.Democracy,moderncapitalism,marketeconomics...they areallthreedimensionsofthesamephenomenonthatisbasedonindividualism....individualism thathasgonetotheextentofcompletelydestroyingfamilies,communities.....andyouknow whatishappeninginthewesttoday..allthathighphilosophyofindividualismwhichhasbeen assiduouslybuiltasanalternativestructureforworldtoreston,.....thathascompletely destroyedthefamilylife.Noonewaswillingtolookintoitbecausewhattherestwassayingwas right,doingwasrightandwehavetodosomethinglikewiseinordertosurviveintheworld.This iswhatwasbeingconstantlyfedtotherestoftheworld.Withtheresult....noonewaswillingto criticallyexaminethatthewestiscollapsingfasterthancommunismwasseentodo.Yes, Communismwasseentobeindifficultiesinthe80s.InfacttherewasadebateinAmerica WhenRonaldReaganwasthepresident.TherewasadebateinAmericaastowhetherAmerica shouldgototheaidofRussiaandsay,seecommunismcannotsurvivewithoutourhelp.This

wouldbeabenevolentapproach....atthesametimewecanproveourpointthatwearethe victors.Becauseifthefellowwhohasbeenfightingwithus,hecametouswithbeggingbowlwe putsomemoneyandthatisanacknowledgementenough.Butruthlessattheyareandrightly so,becausetheyarebothareruthlessandwecanexpectonetobecompassionate.Theysaid nothingdoing,Letthemcollapse,letthemdie,dieatourfeet.Thiswasthedebatethatwasgoing oninAmerica.Youknowwhatwasthemechanismtheydevisedforthis..ifyouarealreadyin difficultiesandifyouarecompetingwithmeandyoucantcompetewithme,youdonthavethe financialpowertocompetewithme,Iwillmakeyouspendmoreandsotheyconceivedtheidea ofstarwars.Theydidnotspendonerupeeonstarwars.Buttheysaidwewillcommitonetrillion dollarsforstarwars.Onetrilliondollar!!!........wherewillRussiago?SoRussiahastomountits owncountertostarwars.Andtheresult?WhattheRussianscouldnotdotheyattemptedtodo andacollapsewhichwouldhavetakenplacethreedecadesfromnow,tookplacewithina decade.Soyoucanunderstandhowglobalpowerstargeteachotherbecausebothare acquisitivepower,strongpowers,ruthlesspowersandthefundamentaldifferencebetweenthe twois....onesaystherehastobeindividualismbutcollectivisedunderthestatewherethestate willdisappearandultimatelyallindividualswilllivehappilylikeourKritaYuga.Communism beganwithKaliyugaandtriedtoendupinKritaYuga...astatelesssocietywhereeverybodyis happy,nopolicemenareneeded,noprimeministerisneeded.Theworlddoesntneeda government.Thisisextentwhichthetheoreticalexpositionsofcommunismtooktheworldto andmaketheworldbelieve.Butweknewfromourexperiencethatwehavemovedawayfrom Krutayugaintokaliyugaandyouhavetounderstandthatthisworldisatoughworld.sowemade ourpeoplepractical.Ifourpeopleareindifficulties,theyknowtheyhavetobeindifficulties,they havetotacklethesedifficulties.ButcommunismdidthereverseYouneednottobein difficulty....seetheworldweareprojectingtoyou.Seetheconsequenceofit.Theamountof deathanddestructionthisideologycausedbyblindingtheworldtobelieveit,thatitistakingthem toautopiaonthisearth.Withthatchapteroverandvictorsclaimingwehavewon.Whatisthe victorythatwasclaimed?Thevictorywasthattheliberaldemocracyandmarketcapitalismhave wonthewaragainstautocracyandeconomicdictatorship...politicalautocracyandeconomic dictatorshiphavebeendefeatedbyliberaldemocracyandmarketcapitalism.Thisisthemost importantpartofglobalization.Thatisthetheoreticalandphilosophicalbasisofglobalization whichwearealltalking,ourmediaistalking,oureconomistsaretalking,ourfinanceministeris talkingoranyfinanceministeristalking.....withoutunderstandingwhatisbeingtalked.Whenwe aretalkingaboutcapitalizmwearenottalkingaboutforeigninvestment.Whenwearetalking aboutglobalizationwearenottalkingaboutexportsorforeigntrade.Wearetalkingabout somethingfarmoreseriousandprofound.andunlessyouunderstandthecriticalityofthe situationyouwillnotabletoappreciatetheriskanddangersinherentinthisargument.Andwhen theysaidthatitisendofhistoryandrestoftheworldwillhavetofollowthewest,theentireworld waslookingatAmericaasthefinaldestinationanditwasthebeginninganditwastheinitiator anditwasthedecideranditwastheconcluderofanymeeting.Andalmosteverynationwhich wasnotinthemarketcapitalistorientationhadlostitsconfidence,includingIndia.Therewasa timewhereIusedtomovewithtopindustrialfamiliesinthiscountry,Iusedtotalkaboutwhat theywerefeelingintenselyandthefinanceministryofficialsofthegovernmentofIndiausedto advisethefamilies..largefamilies,largeindustrialgroups...itisbetterforyoutosellyour

manufacturingunitstodayotherwiseyouwillhavetosellitasscraptomorrow.Itismuchbetter yousellthemandbecometraderswhichisourprimeavocationthreehundredyearsback.....we weregreattraders,letusgointotrading,letamericansdothemanufacturing.Thiswasbeing talkedinthesouthblockandnorthblock.Soyoucanunderstandthedepthstowhichour confidenceoranycountrysconfidencehadfalleninthosedays.Wirelessinternet communication,Americaneconomicgoingat8%andeverybodywantingtogotoAmerica..not onlyinIndia,inRussia,inGermany,inFrance,inChina.Thiswastheworldunfolding.Was Fukuyamaright?hasitbecamethefinalvictoryofthewestovertherest?Everythingturnedon oneday.Thatwas9thofSeptember,2001,whentheIslamicterroristshit....notanyotherthing buttheworldtradecentrewhichwasthesymbolofcapitalism.Theyneverkneweconomics. Theydon'tunderstandwhatiscapitalismorcommunism.TheyonlyunderstandIslamand Quran,nothingelse.Whatisitthatmadethemtarget?Whatisthesymbolofcapitalism?model ofcapitalism?Theydinttargetaneconomicideology.Theydinttargetamaterialisticphilosophy. theytargetedtheuniversalismofthewest.TheWesternideawasalwaystoinfluencethe powers,includingthetallestpowerintheworld.....thatthereissomethinginIndiawhichwehave missedout.Andwealsomissedoutbecausewewereonlycarboncopyingtheirideasandtheir textbooks,theirlanguage,theiridiomandtheirwayoflookingatIndia...andwhateverwasbadin theireyeinIndiawasalsobadinoureyes.Ifthisistheassessmentonwhichwewerejudging India.So,youhavetoconcedetotheforeigners,foreignscholars,foreignphilosophers,foreign historians,foreigneconomists,foreignpoliticians...hastowhytheyhavemissedoutIndia?How didtheymissoutIndia?SeewhencapitalismwasontheriseandwhentheWesternnationshad completelyovertakentheasiannations..asiannationsmeans...youmustatthatpointjudgeonly IndiaandChina..mostpopulousnations,greatpowers,greatcivilizationsandwehavethe softwaretoruntheworld.Hadthesenationshasfallenapart?Fallingdown...inthescaleofthe world.AndsoMaxWeber,hewrotethatyouknowthemoderncapitalismwhichisdevelopingis aproductofChristianity,protestantchristianethic....HinduismandBuddhismwhichbelievein Karmaandrebirthwillbedestroyedinthatcapitalistmodeofeconomy...theyhavenowayof evencopyingit...Youdon'thaveeventheDNAwhichwillenableyoucopy,thismodelcant survive,youdon'tevensurvive..thiswashisconclusionintheyear1920.AndIdon'tmindsome weberinGermanywritingabookandconcludingwhichisnoteventranslatedintoEnglishtill sometime1954,ithink.Butitbecamethebibleforourownsocialreformers,ourown economists,ourowndevelopmentalthinkers,ourownpoliticians,ourownmedia,ourown intellectuals.ThatthebeliefinkarmaandrebirthandcastesystemofIndiahasdoneIndiainand unlessIndiadisownsallthese..thatisunlessIndiadisownsitself.....thereisnowayIndiacould developandmatchandbecomesomethingworthcallingitselfintheworld.Thiswasthe economictheorythatwasbeenbombardedintheIndianeducationalinstitutions,media..dayin anddayout.TheproblemofIndiaisnottheeconomy,theproblemofIndiaisthesocietyofIndia. Theproblemoftheindiaisthecultureofindia,problemofindiaisthetraditionofindia...the problemofindiaisIndia.ThiswashowIndiawasbeenconvincedandbyourownpeople.Ifthe westjoin,itsstrategicforthem..maybeevenrealforthem,itisintheirinterest.Butfor50years thisnationsconfidencewasdestroyedbyourownleadership,ourownpeople,ourown intellectuals,ourowneconomists,ourownpolicymakers.Thatwesurvivedthroughallthisand forwhatreasonnowwearebeingacceptedintheworldandseennotonlyasarisingeconomic

powerbutalsoasapoliticalpower,aculturalpower,asoftpower...callanyidiominthe languageofthewest...youarebeingseenasapositivemanifestationofthat.Andtheworldis beggingtoseeIndiabecauseIndiasriseismakingthemfeel.Andunlessthereissomething veryinnate,somethingveryintrinsic,somethingwhichismatchingwiththesoulofIndiainits veryexterior,Indiahasnotbeenraising.Andvolumesarebeingwrittenaboutourraisetoday.I wouldpersonallytracethisraisetooneevent.Likeonenoneconomicevent,transeconomic eventwhichhadnothingtodowiththeprinciplesofeconomicsorglobalizationordollaror anything,itcompletelydestroyedtheconfidenceofAmerica....namelythe9/11attackon America,thereisonenoneconomiceventwhichcompletelytransformedtheconfidencelevels ofIndiaandthatisthePokhranatomicblast.YoutracetheriseofIndia,thezerodatewillbe that.TheworldhasdecidedtodestroyIndiaonthatday.TheworldhasdecidedtodestroyIndia andonthattherewasabsolutelynodoubt,thefinanceministryofficialswerelividatthat decision.Infactthefinancesecretaryinthosedaysdecidedtoresign.Heisnowtheplanning commissionvicechairman.Hesaid,ThisgovernmenthasdestroyedIndia.Everycountry worththenamepouncedonIndia,evenanimpotentJapanwhichdoesnthavearifleevento shootus.Theyarespending60billiondollarsasmilitaryexpense,theydon'thaveasingle soldier.BecausetheypaythatchequetoAmericaforthemtoprotectthem,soyoucan understandthestateofthatcountryasapower..youmayhaveaeleventrilliondollarsbank savingsbutdoesntmeananythingunlessyouhaveanarmy,unlessyouhavepower...unless youhavepowerinthesenseinwhichtheroguesonthestreetwillbeafraidofyou.So,whole worldpouncedonIndia.ThewholeworldwaslookinghowthiscrisisIndiawilltackle.Thisis wherethewholeworldbegantohaveadifferentfeelofIndia.ThenonresidentIndianswho alwaysusedtoabuseIndia..infactoneadvertisementexpert,shewroteanarticleineconomic times..TaraSinha..intheyear2000or2001ifIrememberright....whereshesaid,Asaglobal executive,Ialwaysusedtotravelthroughouttheworldbutbeingapersonbroughtupinvery traditionalsurroundingsIneverusetogotohotels,Ialwaysusetostayinthehousesofmy friends....andthewaytheyusetoabusethiscountry...itisarottencountry,itisadirtycountry,it isacorruptcountry,seethetraffic...twentymillionsIndiansabusingIndiadayinandday out....andyour500IFSofficerstotalkgoodaboutIndiaiftheywantto,soyoucanunderstandthe imbalanceabouthowmuchopinionhasbeengeneratedagainstthiscountryandhowahelpless governmentwhichonlyteachesIFSofficershowtotakedrinkswiththewesterncountries,they cantbetheculturalambassadorstodefendIndia..acountryandacivilization,aculture,a traditioncompletelyundefendedintheworld.Thegovernmentissuedanappealtothe nonresidents,All,weareintrouble.Pleasehelpus.Theywantedfivebilliondollars.Atthat timeourforeignexchangereservewascomfortable.Butanyrunontheforeignexchange reserve...becausewedontknowwhatthewestcoulddo.Theycoulddoanythingtocreatea collapse..theydidinRussia,theydiditinYugoslavia,theydiditineasterneconomies...they coulddoitinIndiaandtheywouldhavedoneitifIndiacouldhavegonetoconvertibility,they wouldhavefinishedIndiawiththatatomicblast.IfIndiahadtakenadecisiononconvertibilityand thengoneforatomicblast...wewouldhavebeenfinishedasacountry.Wehadapolicysafe guardofnonconvertibilityofthecurrencyandsotheycoulddoadamn...theycouldnotdo anything...theycouldonlybringmoney..theycouldnottakeitout.Andwhenwewantedfive billiondollars....thenonresidentIndiansgaveus6.2billiondollarswhennoonewouldthinkof

investingevenonedollarinIndiaatthattime.Youknowthewestwatchesallofthis.Noone wouldhaveputonedollarinIndianeconomyatthattime,thecountryriskwassohigh.Nobody wantedtoinvestonedollar.Theyinvestedsunk6.2billiondollars,thatmeanseachmusthave thoughtletmymoneygo,butmypridehasbeenarousedtoday.Thiswastheturningpoint. Andnowwearelookingatthemarketeconomy.Lifeaftermarket.Mostpeoplecannot understandhowmarketfunctionsinIndia.98%ofIndianbusinessesarefamilyowned.Weread itsomewherebutwedon'tconnectittoanyotherthing.TodayIwasaddressingaseminaron corporategovernance.Howfoolishweareasasociety?someintelligentcommunitylikethe charteredaccountantcommunity.whatisitdiscussingabout?....whatiscorporate governance...thesearesupposedtobeamongstthemostintelligentpeopleinthecountry.. leavemeoutofthis...becausesomeofthebestmindsenterthecharteredaccountant profession....evennowtheydoitbecauseitistheonlyplacewherewecangowithout reservation.Sowhentheywentin....becamesuchacceptablyintelligentpeople...whatis corporategovernance?Idinthaveanopportunitytoreadit..Ididsomeresearchsometwoor threehoursyesterdayandfound...thereasonwhythisideaofcorporategovernancegenerated itselfinwesterncountriesparticularlyinAmericaandUK...nootherwesterncountry....isthatthe Americancompanieshavenoowner,becauseallthesharesinthecompanyareownedby investmentinstitutions..thereisnobodycalledapromoter..thereisnoTata..exceptFord,there isnootherownerandsotheyfindthattheshareholdersarenotrepresentedatall.ItistheCEO whoisthetopman.Andhecandoanything.andhecolludeswiththefewinvestment institutions,defraudsthecompanyandthereisnoanswertoit.Anewsituationhasdeveloped, whereyouhavehuge500billiondollarcompanywhichhasnoowner.Theysaidsomeprinciples ofgovernanceisneededtosupplytheomissionorsupplythevacuumthathasbeencausedby thedisappearanceoftheowner.Andsothecorporategovernance....thestructurewas conceivedinthelastfewyears.Itisnotthatithashappened20yearsback.Wearenow discussingit.Wearenowwantingtobringitin.Butherewehaveapromoter,wehaveaowner. Heretheproblemistheconflictofinterestbetweentheownersandothers.Butnothingofthat kindisbeingdiscussed.Wearealsodiscussingaboutcorporategovernanceinthesamesense inwhichAmericaisdiscussing...asifwedonthaveowners.Thisistheextenttowhichour brainshasbeenmortgagedcompletely.SmallexampleIamgivingyou.Andthisistheworkofa community.Thisistheworkoflawyers,thisistheworkofmedia,thisistheworkofchartered accountants,thisistheworkofbureaucrats..theseareallsupposedtobegreatthinkers, intelligentpeople..butseetheextenttowhichwehavebecome,wehaveseizedtobethinkers forourselves.....wedon'tevenknowaboutourselves.....wedon'tevenholdamirrorbefore ourselvestoseewhetherwhatkindofhumanbeingsweare....whatkindofananimalwe are...wedon'tevenunderstand.Somuchofselfforgetfulnesshascomeintothesystem,inthe thinking,inthestructures,intheapproachestoothers...thatahugedifferencewasmadeforthe firsttimeandtodayIndiaisbeingseen..andwhatistheimpactofIndiasriseparticularlytothe conceptofmarket?ThemarketinthewestandthemarketinIndiahavenothingtodowitheach other.Evenfamiliesaremarketthere.Familyobligationsareoutsourced.Awomancan outsourcetheburdenofgettingachildtoanotherwomantoday.Spermsarebeingsold.Bought. Nobodyknowswhichchildrenisborntowhom.Gayrights,gaymarriagesaregoingon.Andthe

marketthathasdevelopedisbasedontheseprinciples.Asonhastocompetewiththefather,a motherhastocompetewiththedaughter..thereisnothinglikeafatherbeingrespectedbythe sonorateacherbeingrespectedbythe....ateacherhastocompetetowintherespectofthe child.youknowhowdifficultitis.Wehavebeenstudents.Canateacherwintherespectby competingwiththestudent?Competitionhastakenrootsinsuchseverefashion everywhere.TodaytheAmericangovernmentis..whytheentirewesternsystemisbearingthe burdenoftransferenceoftheresponsibilitiesfromalltheintermediaryinstitutionslikethefamily, thecommunityandalltheseinformalinstitutionswhichgovern,whichinawaysustainandwhat professorVaradarajancalledastheinstitutionsofDharma,theysustainthesocietyandthe entireresponsibilitywhichismanagedbythesedharmicinstitutionsaretheideaofdharma... havebeentransferredtothestateinAmericathroughthemarket.Infacttherewasadialoguein whichonceIsaid,Indiaisperhapsthemostprivatizedeconomyintheworld.Becausethe largestpublicburdenofthepeopleinthewestcountriesinthewest,namelythesocial securityburdenhasbeennationalizedinwesterncountriesanditisprivatizedinIndia,thanksto theprinciplesoftheDharma.Responsibilityoftakingcareoftheparents,thebrothers,the sisters,theunemployedsons,daughters,extendedfamilies..imaginetheseresponsibilitiesare tofalluponthegovernment?CanthegovernmentinIndiarunforoneday?...notspeakingabout thefinancialburdenithastoface.TheentirerevenueofthegovernmentofIndiawillnotbe sufficienttokeepthesepeoplesfreeofhungerbytwosquaremealsaday.So,themarkethere isaverydifferentmarket.ItisnotbasedonIndividualism.Andsowhenwearetalkingabout marketafterMarx..whataftermarketandMarx?...whatisthemarketwearetalkingabout?Itis notthemarketinthewesternsenseoftheterm.Itisoursundhai.InfactifIrememberonce.. whenIwasdiscussioninthecentreforpolicystudies..theytoldme...ithinkitisin MursheedabadwheretheSundhaiwasmeetingandtherewerenotmanytrees.Andsothe Britishauthorities....atthattimetheeastIndiacompanyauthoritiescameandplantedpeepal treethere..peepaltreeplants.Sothesundhaipeoplewhousedtoassemblethere,theybegan assemblinginanotherplace.Theysaid..whyareyounotassembling?wehaveplantedthe treesonlyforyoupeople.andyouareleavingeventhelittleshadeavailablehereandgoingand doingyourtransactionssomewhereelse.Sir,ourtraditioniswecanttellliesinfrontofthe peepaltree.Nocivilizationcanunderstandthistoday.Ihadmade...someofmyfriends assisting..Ihadmadeveryextensiveresearchofthecommunitysysteminindiaandjust revealingonethingandwhichweshallseethedifferencebetweenthemarkethereandmarket therecommunicated...withthatIwillclosewhichmarketwillwin.Marketwillwin..butwhich marketwillwin?Therearetwocommunities...strongcommunitiesinCoimbatore.AndIwas talkingtoaveryleadingindustrialistbelongingtoonecommunity.Iaskedhim.....Isawhis balancesheet...Youhavenearlythousandcroresofsurpluscashinyourbalancesheet..why don'tyoubuy..therearemanycompaniesareavailablehere..whydon'tyoubuythose companies?...Vannaanga,nammasamudaayatthukullaanaavasyimaamanasthaapa vandharunga.Sarisirungacommunitycompanyvangavenda...adutthacommunitycompany vaanglaame?Illasirrendusamudaayatthukullaanaavasyamaathagaraaraondrurusir.Can youseetheinfluenceofthesocietyonthemarket?Inothercountriesthemarketforceswill destroythesecommunities.Theyhavedestroyed.Herethecommunityrestraintisdisciplining themarketforces.Noregulatorymechanismcanprovideforthis,onlythesocietywhichcando

it.TheroleofthesocietyinsustainingtheIndianeconomy..hasanyonestudiedtheIndian system?Ialwaysusedtorepeat..IhavetoldinuniversityofLosAngeles,totheIITofMadras,to theIIMofBangaloreandIhavetoldthistohundredaudiences.ForsevenlakhsvillagesinIndia wehaveonly12,404policestations.Youseethedepthofthesocialdisciplineinthiscountry?. Andyoutrivialisethiscountryasaviolentcountry,asarottencountry.Noothercountrycanlive withsuchminimalistpoliceforce.Wedon'tneedpolice.Whatisthereason?Thereasoniswhat thisladywhospokehereastheinvitedentrepreneurtospeak.Howwhenherchildwasreading, withoutknowinghissubjectsshewasjustsittingbyhissidetoseethatheissupported psychologically.YoucantfindonemotherinAmericalikethat.Youcantfindoneindustrialistlike thewhom..infactIforgottotellyouIspoketoanotherleadingindustrialistbelongingtoanother community,theothercommunityandhegavemethesameanswer.Thisisnotwhat educationalinstitutionsinIndiateaches.Sothemarketthatwillsurviveisthemarketthatwas alwayswiththehumanbeingsfromthetimethehumanbeingbegantalkingabouteconomics. Butnotthebarbaricmarketthatthewestistryingtohackthroughtheworld.Thatmarkethasto bedestroyed.Evenifitisnot,itcontainsseedsofdestruction.Idontwanttogointothefinancial implicationswhichMRVSbroughtoutsobeautifullyinhisbook.Anyonewhoreadshisbookwill cometotheconclusionthatevenifthewholeworldwantsandpraystotheonlygodwhichthey wantustobelievein,thissystemwillnotbesustainable.Acountrywhichsaysyouborrow moneyandspend..don'tworryaboutwhetheryoureturnthemoneybackornot,ifthatcountryis goingtoleadanddecidepoliciesandsayhowothercountriesshouldbehave,youcan understand..forthetenth,eleventhyearinsuccessionAmericaisonlyborrowingmoneyand theirtotalborrowingsisoverseventrilliondollarstoday.Sothecrisisisreal.Crisisformarketis real.Thecrisisforthewesternmarketisrealbutthepeepaltreemarketwillcontinuetoexist. Thankyouverymuch.