Price Vs Quality: A conundrum on inclusive growth

A few weeks back – I had an argument with my close friend.  We were discussing the merits and de-merits of social welfare, and we are discussing the perils or advantages of giving away free TV by Government.

He was arguing FOR such social measures to bring up equality, etc.  He was pretty romantic in saying that it is better to have inclusive growth, otherwise social unrest will result – like in case of Katradhu Thamizh or Maoists, etc.

Just 2 weeks later, his tax deduction report came about, and his employers denied him some deductions that he claimed, and his tax was increasing by 3-4000 dollars.  He was all complaints and he was very upset.

I was very surprised – wouldn’t he think that that is a small contribution to the “inclusive growth”?  Wouldn’t he indirectly fund 4 more poor families to get TV at their home?  Shouldn’t he be happy that he was required to pay a trifle more tax?

Then it dawned on me – it was a revelation – He was talking about “other people” to be funding the “inclusive growth” not him, no, no, no.  He was not rich enough.  Others were richer, and they should be paying.  Oh, that explains it!

All the people who are talking of these words – behave very differently when it comes to their own money and taxes, and NONE seem to be willingly giving away taxes for these programs.

It is some other “rich people” who should pay – I am not rich!

Believe me – he belongs in any economic study to the top 2% of Indian wealthy.  But, according to him, only the top 0.5% should pay.  I am sure people who belong to the top 5% think that only the top 2% should pay, and so on.  Irrespective of where you belong, you want people richer than you to pay taxes, and not you!

Wow!  What a concept, this “inclusive growth hypocites” have.

I believe that inclusive growth should come from education.  I believe that inclusive growth should come from voluntary contributions.  I feel immensely thankful for the society for where I am.  I want to give it back.  I have taken some voluntary “giving back” as part of that.  And, I feel “giving back” will be with my time, and not necessarily money.  And, I will decide what and when and to whom I want to give back.  It is my choice – someone does not have a right in compelling me to give back.  That is all there is to it.  I have no questions about giving back – I have all questions about the compulsion vs volition.

Price Vs Quality: A few quick clarifications

Azagu made a twist in my argument and changed topic about inclusive growth, and made it sound like having expensive restaurants and movie halls are opposed to “inclusive growth”.

A huge no here – I am a HUGE proponent of inclusive growth.  But, I certainly believe that inclusive growth comes by better production, which does not come by restrictions, and worse still – price control.  My article ends with a note on cellular phones, and I was wondering how cellular phones became so inclusive in spite of price control, and that is what we need to think about.  Nobody will deny that cellular phones in India has seen “inclusive” growth.

In another note, I am not a fool to think that higher prices mean better quality.  All I am saying is – subsidies usually mean poorer quality.  The opposite is not true, and I do not mean that at all.  So, compelling someone to offer subsidies or a low price – definitely motivates poorer quality.  Lower price is better coming because of competition – and definitely not by compulsion.  That is the point.

Price vs quality!

I have been wondering why there is a dearth of organized multiplexes in Chennai, while Bangalore, Mumbai, Delhi, Pune seem to have them in plenty.  My questions were answered in 2 doses.  My rotary friend Abirami Ramanathan opened what he calls as a 7-star theater in Chennai.  But, ticket charge?  Rs. 90.  Why?  There is a limit to what maximum ticket price can be.  Price control – where all can that be?  Education is price controlled, transport is price controlled, petrol is price controlled, we are controlling prices of literally everything.

The second answer came to me yesterday, when I had 2 hours of time before taking a train from Bangalore to Chennai. I watched an utterly-unwatchable-for-anyone-other-than-die-hard-fans-of-the-genre-movie:  Predators.  Ticket price?  Rs. 160.  They say they charge more for weekends, and release weeks.  No wonder, the theatre was all polish and shiny.  The cost of a small pop-corn was Rs. 70, and I was happily buying it.  Of course, if you cannot afford it, you have options elsewhere, and that niche will be served by someone else for sure.  But, why restrict when some people are ready to pay, and there is a profitable business model with low volume high-price?

What is the result of price control?  We get great quality at cheap prices?  A HUGE no!  We get mediocre quality at medium prices in Chennai for movie tickets.

Same reflects in terms of low quality for cheap price in terms of bus & rail transport in Chennai.  We want to pay Re. 0.5 or Re. 1 per Km, but want the frequency to increase (read it as capital cost), drivers to behave (HR & training costs), seats to be better (capital and maintenance costs), and more space in the bus (Lower occupancy rate).  It is such a conundrum.  Can it be done?  Yes!  But, it can be done only through competition, not through monopoly and price control.

We have always price-controlled cell-phones.  But, there, it has worked wonders and cell phones in India is a success story.  We need to learn from there – but, IMHO, price control was not the reason for success, it probably worked “in spite of” price control.  I will think further on this and write.

why is week day called a week day?

Sashank’s latest joke: weekday is called a weekday because we come home from office very ‘weak’. Sent from my Nokia phone

Ahmedabad trip

I am in Ahmedabad today. Hot hot hot, but a great city. From flight, during landing, the look of ths city is so beautiful with organized houses and nice roads. People are also so enterprising and welcoming. Nice!

Capitalism vs Communism

I have a new colleague by name Manoharan in Aspiration Energy, who claims to be a “communist”.  I announce myself to be “fiscally conservative and socially liberal”.  We keep having conversations about communism vs capitalism, and my (obviously uninformed) ideas on communism is getting shattered.

He vociferously supports Jayalalitha’s decision about Government employees when she was in power.  I thought that was so right wing.  So, isn’t communism the left wing?  It is confusing for me.  I have asked him to bring Marx books, which I intend to read.

As long as the system does not do “work as per capacity, and get as per needs” as described by Ayn Rand, I am fine with whatever “ism” that is.  I agree with Rand that “get as per needs” is inherently unfair.  Who is to determine what is a “need” and what is a “want”?  Example:  Is owning a TV a need or a fundamental right, that has to be satisfied through public funds by the Government?  That is where “get as per the needs” fails.

Eating is a fundamental right, probably.  But, eating a bowl of cooked ration rice or eating in “The Taj” are manifestations of the same eating.  Which one can be called the fundamental right?  How can we define it?  The best is to get people to “earn” their rights.  Earning, in my mind, makes it equitable.  Once earned, the individual has the right to distribute to whatever social causes, instead of someone plucking it away to distribute it.

In any case, this triggers my curiosity and the need to read a lot more.   I will!

More integrated blogging

Hopefully I will blog more using this email to blog service! I keep thinking of writing something but with my 2G connection on mobile it has been painful. Now, this may work. Lets see.

—– Original message —–
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What is in a name?

“A rose called by any other name is a rose”!  We all know that.  (Corollary:  Bhoo, called by any other name is as bad as “Bhoo”.)

But, names make a difference, we all know that.  Some people even claim that the names contribute to character, and some even go to the extent of making future predictions based on names.

My name has been such a special one.  I am frequently “BOO”ed in my MBA class.  My name takes numerous forms in the mouths of people. 

One funny incident takes a prime place in all the incidents involving my name. 

I was calling my friend, Kumaresh.  His friendly receptionist took the phone.  She promptly informed me that Kumaresh was not around.  So, I asked her to keep a message for him.  I did not know that there was trouble brewing!  Here is how it went:

Bhoo:  Tell him that Bhoo called up.

She: Who called up?

Bhoo:  Bhoo called up.

She: Who called up?

…………….

It went on for a few times, and I spelt my 4 letter name to her with a lot of difficulties.  At last, I was satisfied that my message was taken.

I happened to visit Kumaresh the next day in his office, and this guy – treating me like a show-piece, calls a few of his colleagues around his table, and introduces me – “This is my friend, Bhoo.”  People walked around me with sheepish smiles!  I was totally confused on what the heck was happening.

After a while of this “being a museum piece” experience, Kumaresh showed me the yellow post-it slip left by his receptionise about my message the previous day.  It read “OOO called up” with a triple “O”.  What say I!

The Partial Ramanuja (or any other God!)

Last year, we visited to Niagara falls along with my dad!  It was approaching fall season.  My dad was taking an overnight (red-eye) flight from SFO, while I was driving from New Jersey.  The previous day morning, the weather report said the chances of rains to be 50%.  The probability gradually rose during the day, and towards the evening, when we began our journeys, the probability was predicted as 90%.

We were about to drop the plan altogether.  My dad came up and said:  “I trust in Ramanuja , he will save my day.  We will not drop the program, let’s go!”.

When we landed in Niagara falls the next day, we were thrilled to see a clear day!  It was sunny to the extent that we even saw rainbows on Niagara.  My dad kept repeating that Ramanuja saved his day, and enjoyed the trip to its fullest.

Now, this got us into an argument (what is new!).  If Ramanuja has God-like qualities, how can he be partial to the people who have faith?  This question I have for people who preach about any God.  If God needs to be God, He needs to protect people irrespective of their leanings.  If he protects people who have faith on him at the cost of others who do not believe in him – doesn’t he become an egoistic man?  Is it Godly to be partial to those who believe in you?  Is it Godly to even go to the extent of “punishing” people who do not have faith on you?

I often get mailers that claim that if I forward to 10 people I will get great wealth or fame or something, and if I do not, I will get punished!  My God!  How can this be right?  How can any “God” do that?  If someone does that, doesn’t it disqualify them as God or Godly?  Isn’t it a “scum”worthy human trait to expect people to believe in and praise one’s self?

This is just one among the several questions I have on “praying”.  As always, I am NO exception to pray sometimes.  But, back-to-back, I cannot help but think that, if there is this huge “GOD”, HE must know what I need.   He must be knowing what should be done with my life.  Then, how can we pray him, or praise him and get something of it?

*(Ramanuja is one of the God’s messengers, believed by a sect of Vaishnavites in India.)

Who am I?

I am a huge believer of “universality” and “humanity”.  The recent news about Thackerey vs Tendulkar is so disturbing for me.  In a world that is rapidly becoming global, in a country that is rapidly becoming an icon, here is someone who is looking for “regional divide”, leave alone digital divide.

Why do we have so much urge to identify ourselves with something or the other?  We want to call ourselves an Indian, an American, a businessman, a socialist, a capitalist, a brahmin, a hindu, a muslim, what not!  When people ask me if I am a brahmin, my usual response is, “No, I am a human!”.  Why is it that none are ready to identify themselves as “HUMAN”?  Isn’t it above all else?

I am even fine with identifying one’s self with “chosen” or “accomplished” stuff.  As an example, I can choose to be a socialist, choose to be a businessman;  I can accomplish becoming a nobel laureate, or a minister or a businessman.  Identifying one’s self with that is at least acceptable.

But, what is difficult for me to accept is the claim to “fame” by being born in a community, or a surrounding or a city.  By birth – is a very difficult thing to digest.  It is probably a difference between a rich person by self-earning and rich-person by inheritance.  But, when someone feels proud for things that he / she is neither born in, nor contributed for – it feels really sad.  Is there such a huge identity crisis in this world?

I am NOT claiming to be an exception to this rule of “self identification” or even pride of remote association.  I may sometimes identify myself to one of the “isms”.  But, the question remains – how can I identify myself as a Maharashtrian as opposed to being a human?

For that matter, while Tendulkar is certainly taking a higher plane by claiming to be an “Indian”, that is still a subset of being “human”.  At the end of the day, we should all bow to “human” excellence.

My friends says something profound on this.  Human beings do not need to excel.  Just being born, and being able to live itself is a MIRACLE of huge proportions.  So, we should respect all human beings, just for being there!