COLUMNS

The fallen idols of Americana

It is time to rethink our notions about American business icons, says
Saurabh Sharma

There’s a telling joke on the Internet about Arthur Andersen. It says that to qualify as a consultant at Arthur Andersen, one has to possess the necessary degrees and knowledge, membership of the right clubs, articles in journals and magazines and so on.

But to clinch the job one needs the right attitude. What is this right attitude? Is it the ability to spot emerging market segments or interpersonal skills?

None of the above. The correct attitude is to ask the client,”These are the facts. Now, what do you want the report to be?”

The indictment of Arthur Anderson by the US Congress and the speed with which about 50 major companies have severed relations with the consultancy confirm an emerging truth. After the collapse of Enron and the weaknesses it revealed in the much-acclaimed Generally Accepted Accounting Practices (GAAP), many of America’s icons are flawed.

Let us study Americana over the past month or so. It has many interesting lessons. We can rest some images and ideas about America and also set ourselves an agenda to ensure that flawed American icons do not go unchallenged. The hegemony of these flawed icons over our thoughts and agendas needs to be arrested.

At the annual general meeting of Berkshire Hathaway this year, Buffett returned to a favourite theme — the shabby ethics of many businesses in the United States, encapsulated by the tech bubble and the fall of Enron.

“Charlie and I are disgusted by the situation, so common in the last few years, in which shareholders have suffered billions in losses while the CEOs, promoters, and other higher-ups who fathered these disasters have walked away with extraordinary wealth,” he said.

Is this particular aspect of American management highlighted in the news here in India? “Many of these people were urging investors to buy shares while concurrently dumping their own, sometimes using methods that hid their actions. To their shame, these business leaders view shareholders as patsies, not partners,” Buffett added.

This when India has its hallowed foreign institutional investors lecturing us on the flaws in Indian management. Of course, Buffett himself takes the rough with the smooth along with other shareholders — his stake in Berkshire is worth about $ 34 billion, which he says is 99 per cent of his net worth.

The other lesser-known event relates to the discovery that the hero of corporate America, Jack Welch of GE fame, had a mistress. His wife, after his retirement, is now suing for divorce.

If a respected Indian name had done the same thing, the news would have been all over the Indian business press. But Jack Welch’s libido has gone unnoticed here. From the early nineties, the Indian press has turned very aggressive but Welch has not been questioned. Incidentally, the accounting norms of GE are also under intense scrutiny.

Finally, it is ironic that so soon after the US (along with the EU) persuaded the rest of the world to launch a new round of trade liberalisation negotiations at the World Trade Organisation, it has chosen to impose additional tariffs of between 8 and 30 per cent on steel imports — a decision explicitly aimed at protecting the domestic steel industry.

Did this item make the headlines? Did it invite a series of commentaries, panel discussions, spotlight interviews? Was the American ambassador interviewed and interrogated on this apparent contradiction in what the United States preaches versus what it practices? Was there a detailed feature on the loss per capita to India and in our competitive edge?

There is plenty more evidence that highlights the egregious conduct by US corporations, their media and their politicians. What is glaringly obvious also is that we have been unable to convert this data and mould public opinion such that Frank Wisner of Enron fame and the ex-ambassador of India, would be called a dalal.

Can an Indian ambassador to the US get away with these kind of activities? This emissary of Enron used his privilege of being a former ambassador to India to raise the bogey of poor FDI inflow if the rogue Enron project was not sanctioned. And he got away with it.

This failure to mould public opinion and formulate a coherent and “pro-India” view vis-a-vis foreigners is costing the country dear. We deal with a set of mercenaries giving them respect and credibility which is unworthy of their stature.

The business deals concluded with these set of individuals or governments are a direct loss to the nation. The loss per capita is huge and rising. For closing the Enron deal in India, Enron executives earned bonuses of, hold your breath, $ 50 million (another power plant can be set up with that kind of money). And it is paid for by poor Indians at the rate of Rs 7 per unit of electricity.

The other damage that this does is that it stunts the growth of domestic icons. It dwarfs their credibility and their stature. Thus, Rahul Bajaj’s demands for a strong and vibrant India and Indian industrialists are laughed at as being a hangover of a licence raj desi industrialist (with time he has proven everyone wrong, but that is another story).

Rahul Bajaj was and is a patriot with an impeccable family lineage on the patriotism count. Yet, the foreign icon was allowed to dominate our thoughts and resulted in a thumbs down for him and other Indians like him who are our foremost bastions of economic independence.

Neither Wisner, Clinton, Merill Lynch nor Andersen had to suffer the kind of beating his image took in India. The Bombay Club was derogatory but the Boston Club is perceived as sacrosanct. Something is fundamentally wrong.

The media of any country is a watchdog of society. At stake here is a very high loss per capita to the country. How about loss of esteem per capita? What about economic independence per capita? Has anyone measured this? Or thought of it? The mercenaries have arrived and once again subjugated our thought process.

It is like the East India Company days again, replete with Jaichands. It has to end. When we trash our own icons and worship false foreign icons, we have lost our capacity to reason. When will our new wave freedom press arise again? Where are the voices against neo-colonialism? When will neo-colonialism feature boldly in each and every editorial and each and every first page of newspapers?

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