Tuesday, February 14, 2012

The Business of Politics- Capitalist View

Can we make political parties work like companies??

Very often we hear talks about politics in office and politics in business. I am curious as to how we can apply business sense to politics (governance to be precise). I have been seeing this battle between the civil society and the government. The whole idea of creating a lokpal which has complete authority and making it answerable to none, and hoping that this body will remain incorruptible and will act in public interest and not for personal gains, does not instill much confidence. I wont go into the details of this overly discussed topic, but frankly, i dont want to fight again after a few years for a Lok-lokpal ( an independent body to monitor lokpal ). We should keep in mind that most of today's problems are the results of yesterdays short sighted solutions.

Coming back to the topic, We dont see as many monitoring bodies in corporate sector, nor do we see such lengthy debates on the rules and regulations. But still we consumers keep on getting better services and products every other day. The life style of an avg Indian has improved drastically in last few years. This is not because of exceptional governance, but because of a very competitive and active corporate sector.

Can we take cues from the corporate sector and make our govt more efficient as well?? After all political parties can always be seen as companies with politicians as employees while the citizens of the country being customers. Like companies fighting for customers' money, the political parties fight for our votes.

I have always been a firm supporter of capitalism and believe that an open market place can solve most problems of modern times. So what do we have to do to make our govt more efficient?? The answer is the same as to what we do to make companies produce better products at cheaper rate. We make political parties compete for our votes. But we already have a system to do this. After all democracy means different parties competing for public approval to rule a nation. So we already have a market place. Then how do we make it 'open' or more competitive. We do this by being a more aware consumer. The moment our 'parties' realise that their customer responds sharply to any change in the quality of product, they will start giving us better product/services. 

Here I will have to discuss something called the 'elasticity'. If we respond very sharply to a corruption scam by voting out the ruling party in the next election, they we will be considered very elastic. Being elastic and being aware are the best ways to increase the sense of competition among political parties.

So the answer to the problem of corruption is not to create new rules. The answer is to respond sharply by using the power that we already have. By being an informed voter. This may sound cliche, but the truth is, Tata tea's jaago re campaign did more good to the country than Anna Hazare's fasts.  

14 comments:

  1. Some very valid points, I would be interested to know the ROI of politicians on their spend during elections.

    May be you can cover a post on how much a vote costs(officially + unofficially) and relate it to appreciation in assets of politicians in power, would be very interesting to note a trend there :)

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  2. Really..thats a great idea..but would involve a lot of research..no an easy task considering that unofficial expense dud form a major chunk...

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  3. Nukul,
    Interesting thought but I guess you have over simplified the issue here. Not that I am advocating the need for a Lokpal (which is redundant I believe) but 'public policies' as products and 'political parties' as companies don't exactly fit the analogy of an open market. While for any particular product you have competing companies, there are competing consumers for a particular policy say FDI in multi-brand retail. Here comes the vote-bank in the sense that not all votes are equal and every vote counts. Unlike in an open market where a section of people who don't have the purchasing power can't really affect the fate of the product as it is not the target audience, in governance if your target audience in small in number, the policy may still be ousted if it doesn't cater to the needs of the 'vote-bank'.
    A case in point is the recent roll back of passenger fare hike in Indian Railways. The fare hike made good business sense owing to the dearth of funds with IR but what went wrong? Vote-bank, coalition politics comes in. Who do you think will be out in the next election? Mamta Banerjee? Similarly there is the issue of decontrolling the price of diesel, reduction of subsidies, FDI, and many others. There are competing consumers of these policies and each has the right to vote.
    As far as corruption is concerned, it is true that only awareness can help solve the problem. But consumerism has made us all numb. We don't care beyond our little circle of daily lives.

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  5. Abhas..really well though of..and nicely put.!! good to see someone really thinking about the problem of governance. But like I said, the key is to be better customers and respond well...that means each one of us shows his/her support/displeasure by voting for or agaist a policy...if that is the case, the problem of vote banks becomes insignificant...If more people are in favor of price hike..then the favor obviously will be reflected in the elections..if not, it just means we went wrong in our calculations of what 'most' people want...The current scenario where some good policies are being voted out is because 'market' is not yet mature and hence imperfect.. if majority thinks that fare hike shud be rolled back..and shows that in next election..then be it..scholars are not to decide... after all governance is not just about greatest good..its about greatest good for the greatest number of people..

    There is one great point which comes out of your comment which I absolutely love...Unlike a normal market for product..in a "vote market"..even a non user can impact the policies..for example someone who never travels by train too has an equally counting vote as a person who travels daily... this further reduces the impact that vote banks can have..

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