What Kind of Capitalism Should India Have?
Though the term ‘compassionate capitalism’ has been a part of public discourse outside India for some years now, the current spotlight on it in India is largely due to N.R. Narayana Murthy, the co-founder of Infosys. His most recent reference to it was occasioned by the hike in former CEO Vishal Sikka’s salary, which made it 935 times the median pay at Infosys last fiscal; the extraordinary severance compensation paid to Rajiv Bansal, former Infosys CFO, on his exit from the company and a pay hike of 35% to COO Pravin Rao. Describing his philosophy of compassionate capitalism, Murthy said it was capitalism in mind and socialism at heart, a creed which looks at fairness and at ensuring that everyone is better off. In FY16, at least 27 directors earned at least 100 times more than an average employee, whereas under a saner capitalism the ratio between highest compensation in the firm and the median salary should ideally be 50-60.
Compassionate capitalism as a term became a part of public discourse globally largely after the economic crisis of 2008 and Thomas Piketty’s seminal publication, Capital in the Twenty-First Century, which highlighted the growing disparity between the haves and the have nots of this world, and movements like Occupy Wall Street. Picketty confirmed that though capitalism is central to the innovation and entrepreneurial risk-taking needed for economic growth, inequality does not naturally or automatically decline under capitalism and that capitalist growth leads to greater inequality because of the higher rate of return on capital compared with the low overall growth rate of the economy, or to put it another way, income from investments rises faster than wages. Several economists like William Easterly, professor of economics at New York University and senior fellow at the Brookings Institution, have argued in favour of traditional capitalism because it helps the poor; others believe that insisting on greater equality will distract businesses from their primary goal of making profits. In the UK, 10% of profits were returned to shareholders in 1970; this figure is now 70%. In India, the figure is lower but is growing rapidly, and for many corporations it is now higher than 50%.
Since a majority of shareholders are among the richest in society, the benefit goes largely to the rich, increasing inequality. According to recent research by Forbes and the International Monetary Fund, the wealth of 101 Indian billionaires equals 13% of country’s GDP. Every dollar of profit given to the shareholders of corporations is a dollar that could have been spent paying producers or workers more, paying more tax, or investing in infrastructure or innovation. A laissez faire capitalism which embodies an ‘I am alright Jack, and the devil take the hindmost’ attitude will no longer do. Apart from communism, reform advocacy has ranged from welfare capitalism to Gandhi’s theories of decentralised production by small individual owner producers, along with trusteeship of the wealthy; corporate and individual philanthropy; mandatory corporate social responsibility contributions from companies, to variations of compassionate capitalism such as ‘inclusive capitalism’, the ‘humane capitalism’ of Muhammad Yunus and the ‘creative capitalism’ of Bill Gates.
Compassionate capitalism must also emphasise conscious reciprocity, a concept which implies that the giver gets as much as the receiver.
God is good to bring us on a journey that includes friends that become like family along the way. In our quest to bring hope and help to America’s Gold Star families, there have been a few individuals that have also brought their businesses along for the ride. We met Chris Gannon because the Rebacks love fried chicken. At the time, Chris was managing a local PDQ franchise that his family owned. His family is of Outback Steakhouse, Carraba’s, Bonefish Grill, and PDQ fame.
Chris is one of the first people I called when I had this crazy idea of intersecting civilians and Gold Star families, and he jumped in with both feet. Chris and Tim Gannon have given us food for nearly every event, opened their homes, brought other corporations on board, and been more than just a promoter of Believe With methey have swung hammers and given of their talent, their time and effort as well. They have been eager to give back to America’s Gold Star families knowing that their success is because of the sacrifices of those who serve in our military. Chris leaves it on his mantle year round as a reminder that there are families all across this nation that have given their sons and daughters for our every freedom and opportunity. His understanding of serving and giving has been shaped by intersecting with our Gold Star familiesand our capacity to give back to those who have paid for our freedoms with their loved ones has been multiplied because of families like the Gannons.
So if you love our Gold Star families, then feel good about giving your hard earned money to restauranteurs like the Gannons. Have a bloomin’ onion and know that every time you do, you’re helping us give back to those who have given us their ALL. Consider Sharing to Support Gold Star Families.