LIVE AND LET LIVE
Tit for Tat won Axelrod’s tournament not by beating other players but by eliciting behaviour from them that enabled them as well as Tit for Tat itself to do well. It was so successful in eliciting mutually rewarding behaviour (a la ‘live and let live’) that it amassed the highest overall number of points. In short, these experiments showed that when interacting with many different players, in non-zero-sum situations of the kind we have been discussing, one does not have to do better than others to do well for oneself. Letting others do as well as or even better than oneself is fine, as long as one is doing well enough for oneself. That is what is being gentlemanly all about. Consider this in the context of the comments we hear about how we Indians often compete not by performing better than others but by pulling others down.
CRABS IN THE BUCKET
We often equate ourselves with crabs in a bucket from where no crab would escape since any crab trying to get out of the bucket is sure to be pulled down by the others inside. This syndrome is nothing but a reflection of our dissatisfaction with others doing better than ourselves. So if we cannot do as well as them, we are perfectly happy if they will do as badly as us. Since it is easier to pull someone down than to pull oneself up, we usually choose the former. In effect, we want parity with our neighbour or our competitor, no matter how. In effect, in an iterative PD situation, we do not play the gentleman strategy. We play crabs in the bucket. Consider these recent examples of our policy making.
Foreign Direct Investment
Let us take our foreign direct investment policy. Just as the investment begins to come in as a consequence of a liberal policy, we begin to have some misgivings. There must be some unfathomable reason for those foreign investors to come flocking in. Could it be that, unwittingly, we have made the environment too good for them? Surely, if the environment is so good for them, it must be bad for us? With these thoughts nagging us, we soon announce a change in the policy. We would probably make some feeble gains, with a brownie point here and a political point there, resulting in a one-time payoff, but the decision would cost us enormously in terms of international credibility and sustainable future benefits.
Higher Institutions of Excellence
Or consider this. Few would seriously dispute that the Indian Institutes of Management (particularly Ahmedabad, Bangalore and Kolkata) are among the few Indian institutions of higher education that have done exceedingly well over the decades. They have built up international reputations. They have shown the ability to create potentially large corpuses. They have ensured that no deserving student has to forgo education in these institutions for lack of financial resources. They have done this by charging relatively high fees from those who can afford and subsidizing those who cannot. They have shown their ability to be free from government funding. Perhaps it would have been best for the government to allow these excellent institutions to continue their good work within a well-defined mandate, and expend its supervision and resources over institutions and areas that are crying out for reforms. Instead, what have some of the recent governments been doing? Working overtime to curtail these institutions from building reasonable-sized corpuses, preventing them from going global, denying them autonomy to decide on their fee structures, inhibiting them from bringing in foreign students or forcing their directors to seek permission of the human resources and development ministry for travelling abroad. If the rest of the government institutions cannot measure up to the standards of a few like the IIMs, they can always be brought on a par by pulling these centres of excellence down a few pegs.
Entry of Foreign Universities
The proposed bill to regulate foreign universities in India is yet another example. The bill ostensibly requires foreign universities coming to India to provide 49.5 per cent reservation (15 per cent for scheduled castes, 7.5 per cent for scheduled tribes and 27 per cent for other backward castes), not indulge in ‘profit-making’ and instead follow the fee structure suggested by the University Grants Commission. At the risk of oversimplifying, it would appear that, since our universities are unable to match the standards of the universities abroad, we are quite happy pulling them down to our level. At a time when we should be questioning reservations based on considerations other than merit, we are busy foisting the irrational, homegrown reservation policy not merely upon domestic institutions but also on foreign universities to bring about a lowest common denominator. While we ought to be looking at rationalizing our domestic fee structures for higher education, we are busy dragging the others down. Why would the foreign universities come to India on these terms, considering our very own IIM Ahmedabad pulled out of opening a Mumbai campus rather than acquiesce to the state government’s demand for a reservation policy for Maharashtrians? How can we ask for the participation of foreign universities when they have nothing in it for them? Where is the ‘live and let live’ policy here? Clearly, we are more worried about what they might get out of coming to India than what we might get out of it.
Rational Fools
Amartya Sen calls those taking such decisions, including the likes of our exporters, joint venture partners, et al., ‘rational fools’.2 It would appear that as a country we often act like the biggest ‘rational fools’ of them all. And why not? After all those who make the various structures, systems and units of the country are just ordinary fools like you and me.
IPD and TVS
We do have happier examples as well. This is a story retold by Suresh Krishna, chairman of Sundram Fasteners Limited of the TVS Group. His father, T.S. Krishna, the doyen of the TVS Group, narrated this story to him in the early 1960s.
In the mid-1940s’ economy, diesel engines were in extreme short supply in the country. Any trader who so much as held an import licence for a diesel engine could command a hefty premium on its import price in the domestic market. Most of the local traders in the then Madras Presidency did not miss out on this golden opportunity to realize that premium, and were able to realize Rs 4000 to Rs 5000 on a diesel engine as against its import price of Rs 1100. T.S. Krishna, however, continued to sell the engines at the standard mark-up of around 25 per cent. The local business community thought him naive, if not downright daft, for forgoing the opportunity to maximize what we would call today his ‘shareholder value’ (SHV). Having narrated this story, T.S. Krishna asked his son, ‘Son, of all those “SHV maximizing" [terminology in quotes mine] traders, do you recall even one? But the TVS Group remains a name to reckon with. Our customers remain loyal to us.’
The SHV maximizing businessmen who squeezed the war-torn economy for all it was worth by extortionist pricing showed non-cooperative behaviour (D behaviour) vis-à-vis their customers. While they amassed large one-time points by turning the pockets of their customers inside out, the customers in due course (remember the iterative PD) shifted their loyalties elsewhere, denying the former continuing points to be earned through mutual cooperation. That probably explains why those smart businessmen of the 1940s faded away without a name. T.S. Krishna, on the other hand, by continuing the normal pricing during the shortage period, had exhibited a basic cooperative behaviour (C behaviour), thus winning their loyalty and continued mutual cooperation.
In short, T.S. Krishna was a gentleman in the PD framework, who never defected first, giving little cause for his clients, shareholders and other stakeholders to defect either, and thus amassed a long string of reward points both in economic and in non-economic terms. Had Krishna argued, ‘Well everybody is doing it,’ like most of us argue, he too would have sold his engines at a higher mark-up and the TVS Group may not have been what it is today.
Clearly, on account of such cooperative behaviour, groups such as TVS and Tatas from the old economies and Infosys among the new ones have managed to retain the loyalties of their customers and shareholders over the years and it is this
behaviour that probably shapes corporate governance or business ethics. Probably, Krishna had never heard of such terms as corporate governance and social responsibility, but he did what a simple and decent man would do. And this made good business sense in the best traditions of iterative prisoner’s dilemma.
The Name-Change Companies
There were any number of companies in the 1990s that indulged in all kinds of ‘defection’ acts while making their public issues. They came to be known as ‘name change’ companies. Their defections ranged from opacity in sharing information with the investing public to deliberately misleading them, from gross overpricing of the issues to inserting an ‘infotech’ or just ‘tech’ into their names, and so on. These companies made their one-time big payoffs in temptation points, at the expense of the cooperating investors who were naive enough to invest in such companies. But these companies have hardly had the credibility to come back to the investing public for more capital, as the investors retaliated with their own ‘defection’ on such companies by starving them of any further capital. If these companies intended to be in existence for the long haul, well, they ceased to, thanks to their defective behaviour. But as scamsters out to fleece the naive over a one-time PD game, they did earn their temptation points. Unfortunately our weak legal system and poor enforcement machinery make it easy for one-time PD players to succeed.
WE HAVE HOPE YET
In all, being nice, simple, provokable, forgiving and unenvious—virtues learned from Tit for Tat—does help to go a long way. What Axelrod showed is that in an iterative PD situation, even if one is supremely selfish and sees nothing beyond maximizing satisfaction points for oneself, it pays to be nice, simple, provokable, forgiving, unenvious and the one who never defects first. We do not have to be cooperative, following values like ethics, fairness and integrity. Pure self-interest, as in the case of intense competition, will do nicely.
Another feature of prisoner’s dilemma is that it can never be resolved if you approach the problem from outside, that is, from the other’s viewpoint first. The problem offers a resolution only if you approach the problem from inside, that is, from your own self. As long as you begin your argument saying, ‘Whatever the other does, it is better for me to defect,’ you can never resolve the dilemma. The only way to resolve the dilemma is to ask, ‘What’s the right course of action that could be best for us both?’ In this sense, the resolution to PD is inward-looking and not outward-looking. If you look inwards, no matter how selfish you are, you will find the correct resolution to the dilemma. Needless to say, what holds true for you also holds true for the other. If both of you look inwards to arrive at the correct answer to the dilemma, you do arrive at it.
So it seems cooperation can emerge out of selfishness; it can emerge out of competition. At first glance, manipulative and exploitative behaviour might appear to get us ahead, but in the final analysis, being simple, nice, forgiving and self-righteously provokable gets us much further.
CHAPTER 6
Self-regulation, Fairness and Us
First they came for the Jews
and I did not speak out
because I was not a Jew.
Then they came for the Communists
and I did not speak out
because I was not a Communist.
Then they came for the trade unionists
and I did not speak out
because I was not a trade unionist.
Then they came for me
and there was no one left
to speak out for me.
—Rev. Martin Niemöller (1937)
PUBLIC HYGIENE AND US
What do you think is the biggest challenge confronting the country? Exploding population? Abject poverty? Pathetic basic education? Woeful primary health care? Scarcity of clean drinking water? Unhealthy pollution levels? Near absence of a justice delivery system? Runaway corruption? Pathetic infrastructure? Dangerously high criminalization of the polity? Depending on whom you ask, it could even be too high or too low real interest rates. Thank God, Veerappan is no longer a national problem. More visible and insidious than any of the above are our stinking toilets, which reflect not just the quality of our public hygiene and collective aesthetics but also our attitude towards sanitation. What makes us this way?
As nationals of the world’s largest democracy, we would like India to have a permanent seat on the Security Council of the United Nations. We would like India to be taken seriously by the world as a country of one billion. We would like foreign direct investors to throng in. We want India to be a major international tourist (including what we call health-tourism) and information technology destination. Yet, we see no inconsistency of these aspirations vis-à-vis keeping the country carpeted with garbage and filth. What is more, we see no irony in our posturing before the world as a representative of a morally superior culture. We see no ignominy in accepting the state of our towns and cities, perennially tottering on the verge of epidemics. Our tolerance towards using the streets as toilets goes to show that we see little shame in accepting that people can live without basic dignity.
In fact, at a national level, we do not even recognize our public hygiene habits or disorderliness as a problem. We read of the Singapore President, S.R. Nathan, exhorting his people to keep their toilets clean, as if they were not already the cleanest country in the world. Clean toilets were also the concern of a renowned management thinker, Frederick Herzberg, of the Herzberg’s Hygiene Factor fame. In India, nobody, either before or after Mahatma Gandhi, seems to have thought it seriously worthwhile to address the issue of our national sanitation.
Forget the dismal state of our public urinals, even the national carrier is occasionally known to suffer from toilet bowls brimming over mid-flight. Clearly, this has nothing to do with our poverty, or lack of resources or the economic status of the users. It is our defect–defect behaviour and utter lack of self-regulation.
We find examples of such behaviour wherever we look. Every day we see people sweeping the dust and garbage from their homes and shops on to the streets. We see entire housing colonies, hospitals and vegetable markets dumping their garbage into the next street. We see municipalities dumping their garbage on the outskirts of their cities. The garbage shoving goes on. Finally, what we are left with is not a garbage disposal system but a garbage redistribution system. As a consequence we must walk with our heads hanging down—not merely for the shameful condition of our streets, but also for fear of stepping into some inevitable muck. It is possible that you have done your bit and fought against filth, squalour and corruption. But it is equally probable that in time you have come to adopt an attitude a parent has towards an unruly child—you may be exasperated, or you may not be terribly proud of the child, but thanks to the parental bond, you cannot love the child any less.
MATCHING SENSE OF PUBLIC AESTHETICS
Our collective aesthetics is another case in point. Ghastly hoardings on ugly scaffoldings; untidy signboards on shops, roadsides and boundary walls; narrow, unplanned and perennially dug-up and potholed roads; dusty, unpaved roadsides full of squatters; roadside temples; free-roaming fauna; criss-crossing telephone and electric wires; unkempt shopping complexes; buildings with unmatched balconies and awnings, where no collective norms can ever be enforced; grubby trains and buses; undisciplined traffic . . .
Parallel roads and covered drainages, it would seem, went out of fashion with Mohanjo-Daro and Harappa civilizations. Today, we just erect buildings haphazardly and hope that in due course we will be able to carve out a road through the mess. We dump construction material on the sidewalks and even roads in the comfortable knowledge that either the authorities will not pull us up or that their ever-ready palms can always be greased. We release our sewage into our seas, rivers, lakes, streams and canals with impunity. We carve out ghastly sores on our hills and mountains in the name of mining rocks and earth. We let loose three-wheeled rattlers all around us, ca
using noise and air pollution. We smell human faeces and see bubonic rats on the tracks and curse the railway authorities, but never think of not using the toilets on the stationary train or not throwing that food waste on the tracks. Undoubtedly, our defect–defect behaviour lies at the root of our filth, corruption and chaos.
LACK OF SELF-REGULATION
Why is our sense of public hygiene and aesthetics so abysmal? In all the cases just mentioned, lack of self-regulation plays as much a part as lack of regulation. Unfortunately, self-regulation does not appear to be our strong suit.
For example, take our traffic. Why is it always in a shambles? The reasons are several. To begin with, we are a nation that regards traffic signals with contempt and will not voluntarily obey the signals until we are forced to. To make matters worse, we have very few traffic signals. Most smaller roads, even in big cities, often have no traffic lights. And, more often than not, the signals do not function properly, thus eroding public respect for them even further. As a consequence a red signal is hardly a cue to stop or a zebra crossing hardly a reminder to slow down for the pedestrian.
Even if there is an attempt at enforcing traffic rules, we disregard it except when the enforcement process is very physical. Ever noticed how, during peak hours, the Mumbai police use rope cordons to hold pedestrians at bay before the traffic lights clear? Or on occasion how constables have to stand in front of the lead vehicle to keep the entire rank of vehicles behind it at bay, till traffic from the other direction clears? Have you observed how frequently we do not stop our vehicles for even a minute to allow an ageing pedestrian or a child to cross the road? Left to ourselves, we are inconsiderate and uncaring.
Games Indians Play Page 7