The intuition is spot on; the timing, right; the intervention, appropriate. Yet it doesn’t go far enough. The prime minister’s statement on the culture of ‘conspicuous consumption’, which defines the lifestyle India’s ‘new zamindars’, and the finance minister’s seeming disquiet at the astronomical salaries of senior executives should both, I believe, be seen as an invitation to public debate.
There are two Indias in the making. This is a cause of great concern. The new lifestyle of the corporate world may have something to do with it. This raises several questions: are the beneficiaries and victims both decided by processes and structures based upon ‘just desserts’? Is this a question to be decided only by economists and company managers or do moral theorists have a role? Are the incentive packages necessary to keep the economy on the growth trajectory or are they the result of skewed power relations and policy-making? Is this the only way?
The responses to the PM’s intervention has been along expected lines. Economic restructuring requires a package of policies that involve bitter medicines but only such a package will sustain high growth and only high growth will give us surplus for redistribution. ‘Conspicuous consumption’ and ‘astronomical salaries’ are only the indicators of this policy package and it is quixotic to expect otherwise. While there is strong economic data to support such thinking, to argue that it is the only way is to be less than empirically honest. One has only to look at the policy mix of nations such as Sweden or even Singapore to see the many combinations of equity with growth that are possible.
All policies, even the most technical, have at their very core a set of normative constraints. So ‘anything goes’ does not in fact go, but always gets constrained by some trumping principle. Moral principles, in the last instance, trump all policies, even ones made by the IMF. Only a foolish policy-maker would say he is value-free. The PM’s intervention on conspicuous consumption is about these trumping moral principles. He is right when he implies that the ‘new zamindars’ have begun to believe that whatever they earn is the reward for their hard work, ingenuity, risk-taking, and capability. The ‘new zamindars’ believe what they do with their wealth is their own business. The PM wishes, rightly, to challenge this belief.
