Seriously clueless

India, private equity and more ...

Thursday, December 22, 2005

MSM

Like all bloggers, its only a matter of time before I write about the MSM! In this case, I'd like to complement the MSM. Personally, I think the two recent sting operations are fantastic. First, the expose on questions-for-cash in parliament. The second one highlighted corruption in the local area development funds allocated to each member of parliament. Such operations not only help apprehend corrupt individuals, but make others think twice before going down this path.

I am a firm believer in the power of a free market. I see this as an indirect effect of free-market-competition in reducing corruption. Liberalize media. Lots of competition. Each channel is forced to innovate. Adopts technology (spycams) and new ideas (sting ops). Gains viewership and ad revenues. Laughs all the way to the stock market. I havent done the math, but would guess that sting ops yield better returns than buying expensive cricket or movie rights. Nothing like making money, with reduced corruption as a side-effect.

Notice that I havent mentioned anything on morals, good-evil, values, ethics and the like. Like everyone else, I cherish all of these, but realize that on their own, these have done zilch in reducing corruption on a large scale. My problem with corruption as much economic as it is moral. Corruption ranks very high on my list of factors hindering India's development. I see this as a tax, that's literally charged as a % of GDP by various government functionaries, eating into funds allocated for infrastructure, rural development, health, education, you-name-it. Even an incremental reduction in this tax will directly add several percentage points to GDP.

I realize that markets are imperfect. We'll always have market failures and distortions. In my own home state, the leading TV channels are owned by political parties. Similar to pathogens, politicians are quick to develop immunity and workarounds against any medicine. They'll get smarter at outwitting spycams. Thanks to the free market, the media will match politicians stride-for-stride, in coming up with better ways of generating scoops. Bribe-takers will have to be more alert than before. The heightened threat of exposure will make people hesitate. I am not naive enough to think that a few spycams will eliminate bribes. However, on the margin, we'll see a decline in corruption. The additional 5% freed up for its intended purpose can make a significant difference.

There are the usual arguments on ethics and privacy, against such sting operations. While these are valid in their own right, I couldnt care less if the outcome benefits efficiency and development!

14 Comments:

At 11:12 AM, Anonymous Anonymous said...

I agree. However, it is critical these criminals get some stern punishments. The problem is, if the government allows these criminals to go free, the public might stop caring for such operations. And if the public stops caring, you could expect such sting operations to get very little viewership.

 
At 12:57 PM, Blogger Tagad_Tale said...

Interesting post.

Can you comment about how politics in India has influenced life within the VC/PE industry?

 
At 2:09 PM, Blogger Natti said...

Yes, hopefully we see a reduction in the corruption levels. Interesting to note your mention of news channels being owned by the political parties in your state. It is very funny when you get completely contrasting information about the same news item. I started noticing this stark difference in reporting after one of the politicians was arrested early in the morning. Since then, I have been completely amused by the newscasts here More entertainment than information.

 
At 4:24 PM, Anonymous Karthik said...

No doubt free markets are the way to go, but just look at the way the standard of the media has declined over the past few years. You don't have to go far, just pick up the latest copy of India's leading english daily to see what I mean. The focus is more on "eye-catching" hot (pun unintended) news items, rather than the more significant activities that might actually affect our daily life. I guess free markets in this case would work when the participants realize their responsibility, profit maximization alone cannot be an end in itself. Media should realize its responsibility towards society.

 
At 11:34 AM, Blogger vishwamurthy said...

I agree with your view on corrupted politians, also think that the media should follow the case fully till the culprits get the punishment.

 
At 6:54 PM, Blogger Roshan said...

Very nice post Anand. I think soon we will see a set of reporters who establish a brand for themselves (fearless, willing to take on corruption) and these guys should be able to deliver such stories consistently.

 
At 11:08 AM, Anonymous Anonymous said...

Playing devil's advocate I have a counter view. How much does a politician earn in India? How much do civil servants earn in India? How much does a person who is a engineer in one of the defence establishment earn in India?
It is inevitable that people try to aspire for more money, more power. After all that is the basis of free market or capitalism. Taking bribes is one of the ways to earn more money - after all the end justifies the means. Most people who cry foul of people accepting bribes pay bribes when they want to get something done.

 
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