Above all, don’t lie to yourself. The man who lies to himself and believes in his own lies comes to a point where he cannot recognise the truth within him, or around him, and so loses all respect for himself and for others. And having no respect for anyone he ceases to love anyone. ~ Fyodor Dostoevsky, Russian novelist.

During the recent yearlong farmers’ agitation all of us learnt about the Swaminathan Committee recommendation of the ‘cost plus formulae’ for making agriculture remunerative. If Agriculture Universities and government establishments have the wherewithal to calculate the cost of agricultural production, why can’t we build capacity to calculate the fair cost of producing a film, staging a cricket series, manufacturing any product or providing any service? Factor in a cost plus component and you will end up with fair earnings for everyone. Right? But no, we must keep up the charade of market forces.

The overarching reality is that the prime movers of our modern economy, the corporate world, are the fountain head of all corruption. With their money they have subverted not just the political systems and bureaucracies of the world, they have taken over educational institutions, think tanks, NGOs, research bodies and the media, which together set out false narratives of right and wrong. It is their endowments and advertising clout which control all opinion making institutions.

Amassing material wealth at any cost, being blinded by consumerism and being happy in a make-believe world, firewalled by round the clock entertainment, is the essence of success for our aspirational classes. Try and say something different and you will be dubbed a ‘loser’, someone who is complaining because you didn’t make it. Let us get out of our comfortable cocoons for a while and find answers to why we have not seen any meaningful discoveries and inventions since 1970s.

Internet applications and Apps are not inventions, they are merely tools for scaling up of capacity and speed of processing. Why are children not attracted to study the sciences? Who is going to buy services if there are no goods produced and manufacturing activity is dis-incentivised? Why should a young boy or girl study engineering, medicine or other sciences if the system is going to pay many times more to a stock broker, financial manager, a lawyer or a computer code writer?

Society is losing out something big. Do you know which companies draw the best talent and offer the best salaries? It is the oil companies, pharma, fast foods, armaments, MNCs and finance. These are the same sectors which are responsible for ecological damage, destruction of bio-diversity, fatal addictions, malnutrition, organ damage, violent conflicts, and inhuman working conditions, suppression of wages, profiteering and destruction of industry. They also engage in the worst kind of economic subterfuge.

For example, we are expected to repose trust in the UN Framework Convention on Climate Change (UNFCCC) and the “1988 Global Compact”, when all such fora include fossil fuel companies. These companies own oil, gas and coal reserves valued at $27 trillion, 80 per cent of which will have to remain underground if climate laws are enforced. We keep trusting, and trusting more, because no one tells us the facts. Now can you blame our young for giving up the path of righteousness? So, is there no way out of this cesspool?

Let us accept the first fact. There is nothing wrong with private enterprise and, in fact, no country can grow without participation of private players. The only thing is control over all capital and natural resources must reside with the people. How can that be done? Four things which require to be done are: (i) All corporate accounting should be subjected to statutory audit by government bodies like the CAG, with further unhindered oversight by Parliament; (ii) Public funded corporates should not be treated as individual entities; (iii) Taxes have to be raised, both for individuals and for corporates ~ not for redistribution of wealth, but as ‘just compensation’ for all that is taken from society by the richest people; and (iv) No one can claim propriety over knowledge, which belongs to society. An incremental improvement cannot give the right to anyone to say he did it “all by himself”. Patents and IPR kill research and development.

On the first point, the argument is that all corporate accounts are subject to audit by reputed accounting companies. Some of the worst frauds in corporate history, however, have taken place with active connivance of the auditors. In the last twenty years alone, major frauds were detected in Enron, Halliburton, WorldCom, Merrill Lynch, Xerox, Wells Fargo, Lehman Brothers, Xerox, Merck & Co., Tyco, AIG, Barings Bank and of course our very own Satyam Computers. These companies were audited by well-known auditors like Price Waterhouse Cooper, Deloitte & Touche, KPMG, Ernst & Young and Arthur Andersen. Sure, the US has its Securities and Exchange Commission (SEC), the UK its Financial Services Authority (FSE) and the Financial Reporting Council (FRC) and we too have our own Securities and Exchange Board of India (SEBI). These bodies do exercise some oversight but are increasingly under pressure from governments committed to outdo each other on “ease of doing business” ratings, not to mention the aggressive lobbying through funding of political parties.

The second point is perhaps the bigger villain. Once the company is an individual independent entity it becomes the proverbial milch cow, to be used for easy profits without responsibility for the consequences of malfeasance. The promoters, directors and shareholders have to be fully and individually held to account for all decisions of their company. It should be enacted in law that if the company loses, the loss will be borne by the stake holders. Promoters cannot become fat while their company starves to death. Tax rates are ostensibly kept low to promote investment and ensure greater compliance.

Neither of these, in fact, happens. In the bargain the social indicators suffer and income disparity mounts. There is nothing like `trickle down’ of economic development in real life. Per capita GDP and similar indicators are the best tools to hide the reality of mounting inequality. Countries with the best social indicators like Denmark, France, Germany and the Nordic nations have the highest taxation rates of up 48 per cent, while the US has net taxes of almost half of that.

The poverty ratio in the US is now three times that in high tax countries and the collapse of their social security network is fairly well documented. There is far too much evidence to show that a country prospers only when the rich are made to pay progressively higher taxes. Again, how do we explain the everincreasing flight of capital and the growing migration of highnet worth individuals? India has lost the highest percentage of dollar-millionaires to migration in recent years.

Nearly 23,000 dollar-millionaires have left the country since 2014, with another 5,000 to 7,000 more leaving each year. The stratagem is to trade with foreign based companies through family held shell companies and book profits in tax havens, leaving losses in India. And once enough money has been siphoned out it is time to flee. I now ask, how have low taxes helped? Patents and IPR regimes are antithetical to laissez faire and a perfectly competitive capitalist regime. They promote monopolies and stifle creative application of knowledge. Those who can’t kill competition through monopolies do so through cronyism.

In India, we have seen that all those who became spectacularly rich after 1991 did so by acquiring public assets like land, minerals, bandwidth etc. allocated to them at ridiculously low prices. Public sector companies are sold off to the private sector ostensibly to make them profitable, ignoring the basic fact that the two sectors do their accounts in non-comparable manners. Strategic disinvestment is such a misleading term. The economic path we have adopted in the last 30 to 35 years seems to be the handiwork of a classic ‘economic hit man’.

No one in the corporate world will ever agree with these suggestions for cleaning up the morass, which will be equally and more vehemently resisted by their political frontmen. The elected leaders conveniently forget the interests of the masses who brought them to power and use misleading ‘buzz’ terminology to confuse the issues. While interest of the promoters, institutional investors and shareholders are pushed, no one looks after the interests of the sovereign owner of every bit of the nation’s wealth and natural resources ~ the common faceless constituent of ‘we the people’. So now that we know we are being conned, what can be done. The only thing is to resist being misled.

Don’t accept any promise at face value. Keep asking questions to get to the bottom of things. If the swanky malls are bereft of buyers, we must ask what their business model is. If grand projects are announced we must follow up on how the finances are raised and spent, alongside the actual execution of the promised projects. If strict regulation and oversight acts as a deterrent and Indians take their money out, we should let them go. In any case, they are intent on robbing the country. Their new nationalities make no difference. With free movement of capital in a digital world, their money will come back to India if we can set our economic model right. Hurt me with the truth but never comfort me with a lie.

(The writer is former Chairman, Union Public Service Commission)