Update: On March 23, 2012, Knowledge@Wharton published a rejoinder from Macro Viewpoints to the original article that we discussed in our article below. Our rejoinder at Knowledge@Wharton can be read at Real Drivers of Corruption in India and the Rest of the World.
We have written extensively about the level of corruption in Indian electocracy. We welcomed the recent anti-corruption drive by Gandhian Anna Hazare as India’s second battle of Independence. Recently, the Indian Supreme Court cancelled 122 telecom licenses that were granted in a “corrupt” auction. This auction represents, hopefully, the peak of the business-political nexus that drives corruption in India.
So we were pleased to hear that Wharton had published an article about business ethics in India. We expected to read analysis, to obtain insight from a school that markets its “Rigorous Scholarship” to 1.8 million subscribers of Knowlegde@Wharton. We assumed that an article published under the Knowledge@Wharton imprimatur and approved for by publication by Wharton Editors would be an example of intellectual rigor in practice.
We were disappointed in what we read. The article is not just trite or superficial. It seeks to manufacture a thesis under a self-proclaimed mantle of cultural and religious superiority. Below we present our case and leave it to the readers to decide between the merits of the Wharton Article and our criticism.
1. Business vs. Ethics: The India Tradeoff – the Wharton View
The basic premise of the Wharton article is that there are two sets of ethics, “Western Ethics” and Indian Ethics. The article sends the message that there is a structural, innate difference between these two sets of “ethics”. The article points to the case of Amar Singh, a well known Member of Parliament and power broker, to illustrate their case of the “uniquely Indian” practice of “finding a way to your cheese.”
The authors then make an intellectual and metaphysical jump to argue that the “innate difference” between Western & Indian ethics derives from Indian religious texts like Ramayan & MahaBharat and from Indian cultural contexts.
This central message allows the authors to bemoan the “neglect of Western ethical norms” in Indian business and question whether India is moving towards a more “Western” business ethics or whether it has already reached a static state.
As historical support for their case, the authors cite Kipling’s notorious statement, “Oh, East is East and West is West, and never the twain shall meet.” The authors use this citation to write about the stereotypes of the “unethical emerging East” and the “ethical emerged West”.
2. Our View
In contrast to its sweeping assertions, the Wharton article does not provide rigorous analysis or comparative evidence to justify their hypothesis of a structural, innate, unbridgeable difference between “Western” and “Indian” ethics. The article does not present any analytical chain linking their hypothesis to their conclusion. Instead, they simply state their thesis in a “we consider these truths to be self-evident” manner.
Our own view is that there are only differences of scale between today’s standards of business ethics in America and India. These differences of scale can be attributed to the different stages of development, institutionalization and capital generation in India and America. A better comparison could be made between American ethical practices prevalent about 100 years ago and Indian ethical practices today.
Secondly, we question the use of the all-encompassing term “western”. In fact, the American Bill of Rights and the American Constitution are the best evidence of the structural chasm between American ethical thought and European thought, practices and ethics. This leads us to wonder whether the term “western” ethics is really a code word for Christian ethics. This may be the reason the article makes gratuitously false references to “Hindu” texts like Ramayan and MahaBharat.
Below we share how we arrived at our views about the Wharton article.
3. Getting the Cheese – An Innately Structural Difference or a Difference in Scale?
The article cites the case of a well-known Indian politician helping a leading commodities player “fix policy, obtain clearance and resolve legal irregularities”. The article quotes the politician saying “no one can do things for you like I do.” This the article says is a uniquely Indian approach of “finding your way to your cheese.”
We are simple folk and we tend to think simply. To us, this practice seems similar to the uniquely American practice called Lobbying. Every major business, US or Multinational, including new entrants like Hedge Funds & Technology companies, and every Foreign Government is advised to engage lobbyist firms, otherwise known as Washington DC K Street cabal, if they want to influence the US Congress to fix policy, obtain legislative clearances and influence the political decision making. This week, Google, the ethical technology company that professes to “do good”, announced the hiring of Susan Molinari, a Republican politician, to head their Washington DC office.
Prominent, powerful US Congressmen and Senators routinely migrate to private industry where they use their congressional relationships, expertise and contacts to lobby their ex-colleagues. Last year, Senator Chris Dodd, the author of the Dodd-Frank legislation designed to root out unethical practices, moved over to become a richly compensated Chairman & CEO of the Motion Picture Association. In this new capacity, Senator Dodd tried to push through a legislation protecting the profits of the motion picture and content companies. Congressman Oxley, the author of the Sarbanes-Oxley bill, left the Congress years ago to become a richly compensated lobbyist, first for the Nasdaq and then for FINRA.
This is how the business-politics nexus works in America. How is this innately and structurally different from what Indian politicians practice? Yes, the American congressmen do not make as much money as lobbyists or facilitators as their Indian counterparts do. Yes, the American practice has developed a structure, a facade to cloak its nature under a legal and systematic form of finding a way to the cheese.
Would any article in Wharton link this “uniquely American” practice to American cultural context or to Christian texts like the Bible? Of course not. But Wharton, its editors and its authors, were quick to derive Indian business practices from their own perceptions of Indian cultural context and Indian religious texts.
4. The Wharton notion of “Western”
The Wharton article never uses the term “American”. Instead the article uses the all-encompassing term “Western ethics” without defining it. Today, the world is witness to the enormous differences between American ethics and European ethics. Virtually every European country suffers from massive corruption in its political-business nexus and from widespread evasion of taxes of all kinds.
America’s Founding Fathers understood old Europe very well. They wanted their new country
to be radically different from Europe. This is why the American Bill of Rights is structurally and fundamentally different from European thought, practices and “ethics”.
So where does the Wharton article derive the concept of “Western Ethics”? They could not derive it from any practices in today’s Greece, Italy, Spain, Portugal or France. The article does not list the common factors the authors see between “American ethics” and “European ethics”. This is why we think the authors use their term “western ethics” as a code word for Christian thought.
There is nothing wrong in using Christian theological or metaphysical approaches to discuss business ethics. We just think it needs to be done directly and in broad day light. Instead, the Wharton article does so using code words and verbal slight of hand. That, we think, is unethical both from an American and Indian point of view.
5. “Racist” Undertones in the Wharton Article
The authors quote Rudyard Kipling as if he were George Washington, Abraham Lincoln, Mahatma Gandhi or Martin Luther Ling. Look at the following quote of Kipling to get a sense of that man:
- (Rudyard Kipling) – It was the Bengali male’s “extraordinary effeminacy“,
as evinced by his diminutive physique, his flowing clothes, and his
worship of goddesses, that best illustrated why he, and by extension
India, had to be guided by the firm, benevolent hand of a supremely masculine race.
Kipling was not alone in his racial disgust of Hindus. Noted British author James Mill said:
- “the Hindu, like the eunuch, excels in the qualities of a slave,
What about Macaulay?
those arts which are the natural defence of the weak are more familiar
to this subtle race than to…the Jew of the dark ages,” Macaulay had written of the Bengali, who compressed into his diminutive form every loathsome aspect of the Hindu
Whether Kipling was a avowed racist is a question we leave for another discussion. But there is no doubt whatsoever that his “the east is east and West is West and never shall the twain meet” is a racist statement.
And the Wharton article refers to this racist claim as if it were a “self-evident truth”! And Wharton Editors allowed this to be published under the Wharton imprimatur!
The racist undertones of the Wharton article also extend to Indian businessmen. The authors begin their article with a seemingly plaintive cry of Ratan Tata, “If you choose not to participate in [corruption], you leave behind a fair amount of business.” In other words, Mr. Tata is portrayed as an unwilling and reluctant participant in “Indian ethics”, forced to do so at the expense of his conscience. In contrast, Babaj Hindusthan Sugar, a traditional “Indian” business is portrayed as a willing participant in the Indian way to the cheese.
For those who don’t know, Mr. Tata is a Parsi, a religious minority that used to be close to the British. In other words, Mr, Tata is unsullied by “Indian cultural contexts and ethical equilibriums” that the Wharton article detests. Therefore, according to the Wharton authors, Mr. Tata is to be pitied and quoted positively while Bajaj Hindusthan Sugar is to be negatively characterized as immersed in “Indian ethics”.
We ask readers to read the Wharton article carefully and then decide for themselves whether they agree with our claim of racial undertones in the Wharton article.
6. Wharton view of Indian Society vs. the facts
Look at the following paragraph in the Wharton article:
- Historically, Indian society has placed a great emphasis on loyalty to the collective, be it one’s caste, village or family. This drives a culture of favors, friendships and clanship that clashes with the Western concepts of conflict of interest and pure meritocracy.
We confess to be perplexed. Both “Clan” and “Caste” are Western words. The concept of Clan was widely prevalent in Scotland and Ireland. The English word Caste is derived from Portuguese Casta, a term for people bound by lineage. Europe is still bound by the notions of clans, and communities. This is why Greek labor, Italian labor is unwilling and incapable of migrating to German industrial provinces for work. In contrast, migration of labor and executives is routine and widespread in India.
The culture of ethnic favors and friendships is widely prevalent in Europe and in today’s New York City where jobs are routinely given to people of their community, by Irish-Americans to other Irish-Americans, by Italian-Americans to other Italian-Americans etc.
Look at today’s Europe and ask whether you see any signs of the “western” concept of “pure meritocracy”. An American Pepsi, an American Citibank can have Indian-American CEOs. Show us “Western European” companies that practice such meritocracy. Forget about Indians. A German company would find it extremely difficult to appoint a Greek or Spanish CEO.
We don’t know where the Wharton article gets its understanding of Indian society. Perhaps from the same impulses that lead them to quote Rudyard Kipling.
7. Wharton view of Indian Religious Texts
Look the following paragraphs from the Wharton article:
Furthermore, Indian literary history fully embraces the concept of
noble ends justifying dubious means. Three texts intrinsic to Indian
culture and philosophy help to explain the current business landscape:
the epics Ramayana and Mahabarata and the economic treatise Arthshastra.
In both the Ramayana and the Mahabharata, even gods
resort to deceit and trickery to accomplish their ends. In the latter,
Lord Krishna repeatedly devises “underhanded” methods to defeat the
opposing army — going so far as to encourage the protagonist, Arjuna,
to attack and kill an unarmed adversary.
These paragraphs show the utter ignorance of the Wharton authors and editors. And that is putting it mildly and charitably.
First, the concept of noble ends justifying dubious means:
- Consider the decision of President Truman to drop atom bombs on the innocent civilians of Hiroshima and Nagasaki. President Truman had to weigh the prospect of thousands of American casualties and the prospect of a long arduous war to defeat the Japanese army on Japanese land. So he chose, after deliberation, to cause the deaths of thousands of unarmed civilians to protect lives of American soldiers. American history supports this decision to this day. This decision has been supported by Christian thought in America as being valid under the Christian Just War doctrine. Has any Wharton article condemned President Truman for this decision? Has any Wharton article used American history and Christian doctrine of Just War to explain the lack of ethics in today’s American business landscape? We doubt it.
The concept of using deceit and trickery to accomplish their ends:
- Consider today’s American practice of drone attacks to kill suspected Afghan terrorists. These people are killed from the air and they are defenseless against the drones. Often, innocent civilians are killed along with the suspected terrorists. This is justified as “collateral damage” under American war doctrine which itself is derived from Christian thought. Has Wharton published any article that uses these tactics to explain lack of ethics in today’s American landscape.
These are but two examples. History is full of examples in which the doctrines of Just War have been used. Yet, no previous Wharton article has ever blamed Christianity or linked such Christian doctrines to today’s business ethics in predominantly Christian “West”.
The reality is the doctrines of Dharma-Yudh or Ethical War were first established in ancient Indian texts including the Ramayan and MahaBharat. The central even in the MahaBharat is the MahaBharat War in which an entire generation perished. This is often called the First World War because just about every country in the then known world participated and in which, according to the epic, about 3 million warriors died.
The MahaBharat covers the aspects of Dharma-Yudh or Ethical War in great detail with a multiplicity of metaphysical approaches. Some European scholars argue that many of the Christian doctrines borrowed heavily from Indian metaphysics of that era. That is not so hard to believe when you European and Indian languages are derived from the same Indo-European family and today’s European languages have borrowed a great deal from Samskrut.
None of this matters to the Wharton authors or the Wharton editors. And why should it when facts conflict with their manufactured thesis?
8. The Curious use of Goldman Sachs in the Wharton Article
Look at the following paragraph from the Wharton article:
- Goldman Sachs India admitted that growth to date has been slow, as the company’s priority has been to protect its reputation by dealing only with clients with the highest ethical standards.
We would like to ask whether there is a single country on earth in which Goldman chooses to deal with clients with less than highest ethical standards? We think not and the Wharton article does not say. Instead, the Wharton article seems to suggest, again without any evidence, that Goldman’s slow growth in India is due to the paucity of Indian clients with highest ethical standards.
This we think is defamation via tenuous word play.
We find it ironic that the Wharton article uses the same Investment Bank to defame Indian businesses that itself has been accused by American Regulators of unethical practices. As we recall, Goldman Sachs settled a case with the US Securities and Exchange Commission by paying a penalty $550 million dollars.
But the Wharton authors and editors seem oblivious to this irony. And why shouldn’t they be? After all, their mission was to manufacture a thesis that Indian Ethics is innately, structurally weaker than “western ethics” principally due to Indian religious and cultural contexts.
9. What does the Wharton article remind us of?
Rarely has a single company been so vilified as Goldman Sachs has been since 2009. Some argue the vilification is due to envy of Goldman’s huge profits. Some argue it is due to Goldman being a solitary winner in 2008 when all their peers lost huge amounts of money, a sort of a 21st century Salem witch hunt.
A few have wondered softly whether Goldman’s vilification is based on deep-seated anti-Jewish prejudice. We have read comments that suggest Goldman’s actions originate from a innate, structural difference between Christian ethics and Jewish ethics. These arguments were either expressed directly or suggested indirectly when the anti-Goldman hysteria was at its peak a couple of years ago.
The Wharton article on the innate difference between “Western” and Indian Ethics reminds us of the traditional anti-Jewish propaganda so prevalent in Europe, both today and in the past. This attitude was best portrayed by Shakespeare in the trial of Shylock in the Merchant of Venice. In his lecture to Shylock about the quality of mercy, the Judge suggests that mercy is solely a Christian virtue that a Jew cannot grasp without coercive persuasion and even then perhaps be unable to understand it because of his Jewish religion.
The authors of the Wharton article seem to be sending a similar message that the quality of ethics is a Western or Christian virtue that Indian business cannot grasp because of their Indian religious and cultural context or equilibrium.
Frankly, we find this message of the Wharton article utterly odious.
10. Our Conclusion
Based on our arguments and views above, we find the Wharton article to be false, manufactured, biased and defamatory at its core. We do not blame the authors because we cherish their freedom to express their opinions.
But we do find fault, serious fault with the editors of Knowledge@Wharton for publishing this article in its raw form. Besides being biased and defamatory, the article does not even meet the basic threshold of intellectual rigor.
We do no wish to be unfair to either the Wharton authors or Wharton editors. So we seek and welcome their responses to our views. We shall print them verbatim.
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