Capitalism, and more specifically markets, is the best mechanism humans have invented to pool resources from where they are available and get them to where they are needed the most. This is true of capital. This is true of raw materials. This is also true of goods and services. This is , alas, not true of talent.
Talent is a blessing given by God to some of us. It would be vain to consider that talent is something we have earned. Yes, we may have nurtured it; yes we may have developed it; yes we may have worked extremely hard on it. But no; "we didn't build it" (with full apologies to the GOP). It was given to us.
And from those to whom much is given; much is expected too. You would expect that mankind would devise mechanisms whereby the world's best talent works on the most pressing problems facing it. But here, mankind's mechanism to channel resources seems to fail. For sure, there is a talent market that pools talent and sends them to who is ready to pay the highest value for it. But not necessarily to address the pressing problems humanity faces.
The best talent in the world does not work on eradicating, or at least minimising, poverty. It does not work on preventing wars from happening and preventing the countless from being decimated by war. It does not work on the great inequities around the world. It does not work on preventing the so many preventable deaths of children dying of diseases which are eminently treatable today. It does not work in the most complex management task of all - managing countries. It does not work in the challenge of leaving the world a better place for our children - without a crippling debt burden, without a deteriorating environment, without the hopelessness of a better world that seems to afflict the young today.
We all know, where the best talent in the world goes to. But why are markets so unable to channel talent to where it is needed the most ? For the benefit of all mankind. For future generations. For making the world a better place.
If markets fail to do this job, we have to invent another mechanism that will.
This lament is inspired by the speech made at Harvard in 2007, by William H Gates III. He is not a great speaker, but his thoughts and ideas are truly great. The title of this post is a quote from a letter written by his mother to Melinda Gates when they were married.
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13 comments:
Or teaching. Especially preschool and elementary. As I toured 5+ private schools in our area this past month, I only found 2 teachers that I liked. I'm really interested in opening a preschool if the compensation is even half of what I make right now. But alas, it's not.
Very thought provoking post. And sorry, I don't have any radical ideas to make this happen.
While I agree with your sentiments, Ramesh, and as much as I am way more suspicious of the market than you typically are, I believe that when we blame the "market failure" it provides us with a wonderful cover to not point fingers at the real problem--we, the people. After all, we are the ones who become the "market." A market failure is nothing but our failure.
We--here, of course, I mean more than you, Shachi, and me, and the global we--have remarkably skewed priorities. For instance, we are way willing to shell out money, even the money we don't have--think of India's poor here, for instance--in order to pay entertainers. Movie stars, and ball players, and entertainers of various sorts ....
The "market" that we criticize is nothing but an aggregation of our preferences. We can easily say no to carbonated sugary drinks or the gazillionth gadget. When we don't, well, Apple then sits on a mountain of cash, while there is very little money for research into malaria.
Now, I am as guilty as anybody else in this. But, the hassle is that we humans have tried so many other variations. And they all suck even more.
Finally, the reality is also that it is only a market-led economy that has helped us lift hundreds of millions out of poverty in merely three decades. Now, of course, the poverty numbers are starker when you leave out China's experience over the thirty years. But, counterfactually, one can imagine that poverty will be worse if China and India and others hadn't embraced the market at least to the extent they have.
Ok, will stop here ... ;)
@Shachi - Oh yes, the noblest of professions, teaching and nursing are also the worst paying. It says something about society's choices.
@sriram - In your usual crystal clear way, you have pointed out the core of the problem. Of course it is not the fault of the markets. It is the collective valuation of people. The thing I am not able to fathom is that usually markets place the highest value fairly efficiently. I am not able to figure out, why the collective we do not find value in solving some if the greatest problems in the world. I am starting to believe that self interest, which is at the core of capitalism and free markets, does not sit easily with the interest of the species as a whole.
more power to bloggers like you for writing such posts and creating awareness amongst people.
Hopefully we have people like Ramesh of janagraha(again your name, an Ny returned finance whiz who's brain child Janagraha is helping many organizations to help alleviate poverty and many more like him. But still considering our population, we need more such people for india and more numbers to swell to make our earth a better place to live.
The awareness should come from each individual and sustain as long as we live. Initially individually and then motivate collectively.
Glad to have blogrolled you. You write such meaningful posts which restores faith in humanity.
@Asha - Aww; you are always very kind.
Yes, Ramesh Ramanathan is a nice example. The best example is Bill Gates himself. The work he does now, is probably one of the noblest in the world.
@Ramesh - very topical and thought provoking, and you join some great minds in pondering these very important questions.
a) The real issue here is not the failure of the market but the use (or misuse) of the market to mediate in all aspects of a good society.
b) The unbridled pursuit of material wealth that crowds out all other achievement in most cases.
I read two very interesting books recently on these subjects (on which, if you will permit me, I will post a review for your readers if you will permit me at a later date)
- "How Much Is Enough" - Robert and Edward Skidelsky - who try to find answers to the second question. Robert Skidelsky is an economist and wrote a great biography of Keynes.
- "What Money Cant Buy" - Michael Sandel - on the first quer. Prof Sandel is a rock-star Professor at Harvard whose undergraduate course on 'Justice' is an annual liberal arts event.
Nowhere does Adam Smith say that leadership, values, ethics should not exist in a market economy. We all suffer from a debased leadership and elite. And a debased elite has the same effect on an economy as Gresham's Law on coinage - Bad Money Drives Good Money Out of Circulation.
Gotta go.
@Ravi - A learned comment as always - just what we would expect from you.
I have read neither book. I am still of the view that markets, warts and all, are the best mechanism for utilising of resources. Most other mechanisms, including government intervention, can be proved to be inferior. What is foxing me is that all of us collectively do not seem to place that high a value on the serious issues facing us collectively. Maybe its just a passing phase of civilisation. Maybe its hardwired into our genes to think of self and the short term. Maybe we are changing far too rapidly for evolution to keep up - remember evolution is used to dealing in centuries and thousands of years - not the next quarter. I don't know. I m just lamenting.
In current society especially in India success is measured in terms of wealth (in general) and this i think is a fundamental flaw. In order to transcend this a person would have to almost achieve a status akin to a saint and undergo great sacrifice to gain respect of the socienty. A talented person would probably have to forego his or her well paying occupation or profession to work on something which will help people. It would be difficult to do both in parallel (although some have probably been able to do it)..
But why should some one have to sacrifice a lot in order to do public good?? - here i think lies the failure of our system.
Many a times it is also about the family, if there was a good social security cover may be more people in India would have come forward to work for the benefit of society at large... One probably wouldn't work for the welfare of the public if your own family or children are at risk..
Therefore i think a key question is how do we ensure that people who work for the good of society in any field get what they deserve in terms of respect and security atleast if not in terms of wealth and money..
Exkalibur666
There is a subtle difference between what you want and what you need. Unfortunately marketing is all about converting a want into a need! The free market alone does not take the blame for this avarice in people. Can you compress all your needs into one suitcase is the ultimate test. (and don't tell me that the suitcase has to be about as big as a forty foot container!)
@Ramesh - you have awakened a topic that requires scholarly debate and deep thought. In my limited fashion some of my own musings.
Take the place of primary education in a country. I put it to you that though illiteracy is not a problem in England, there is a lot more care and attention given to all aspects of education in the UK. The Secretary of State for Education is a Cabinet member. Every aspect of teacher salaries, council school funding, national curricula, etc are debated and argued in Commons, in the Press and in local councils. I challenge you that this is not the same in India, except in the case of schools for the (relatively) wealthy members of the lower and upper middle classes in India. I mean who really gives a damn about the local Corporation school in the chattering classes, other than as desultory cocktail party conversations.
I put it to you that the relative importance of what you and I deem to be important is directly proportional to the wealth of the country. The kind of opportunity presented by the country helps channel the kind of resources. A primary school teacher in England makes 15,000 pounds per annum in England. Put on top of this a relatively free NHS, free schooling, an efficient and low-cost transport system, transparency in letting and buying apartments, no corruption at local government, relative abundance of food at affordable prices - the value of all of these to the teacher makes her salary worth twice as much. A nice career choice for a young woman who wants to make a difference. A primary school teacher in Tamil Nadu probably makes Rs 10,000 a month. He has job security but nothing else on top. No wonder all the guys who got 35% marks in my BCom class promptly became teachers. The job security got them dowries and a marriage. But that's about it.
The market of course does what it does best. It is blind and deaf, and should be indeed so.
The question is should India wait to become England until corporation schools start getting the same level of attention as Dhirubhai Ambani School? Obviously not.
Other than massive government intervention I do not see a choice. And of course, our governments are all run by third rate, incompetent, thieving nincompoops.
No easy answers. I guess each of us has to do the best that we can.
@Exkalibur - I don;t have a quarrel with money being a chief motivator, although its not very healthy for it to be the only motivator. My puzzlement is why the collective we do not value those who tackle the world's greatest problems more. For example, why would we not willingly pay a very high salary to those who are trying to eradicate malaria - or the peace keeping force in Congo ??
@kiwi - Yes the need and want conundrum always exists, but even if you have an imbalance, why should yo devalue, say, a teacher ?
@Ravi - You raise many many valid points and have covered education in some detail. But I am not even going there. An easier field to examine is public health; let us say child mortality. Some 6.9 million children under 5 die, mostly of preventable causes. The technology for preventing these deaths exists. Its an implementation and management problem. If we are willing to pay a million dollars salary to those employed to lick this problem, in five years this will be licked. Even if we distrusted the governments to do this, if you simply supported the Bill Gates foundation, this could probably be achieved. And yest, as a society, we place little value on this. Why ?
That is indeed a very different perspective... never thought of talent in this perspective.
A hard hitting post I must say.
@Prats - Thanks Prats
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