Delusions
Published by Yazad Jal February 13th, 2004 in Libertarian, GovernanceDigdug made this comment on Ravi’s driving license post.
For me “we” own the roads(opposed to your view of the government owning the roads) and the government only administers them on “our” behalf.
I wonder how “we” as citizens own the roads. The only analogy that comes close is that of a shareholder in a company. Just as an equity shareholder is part owner of a company (regardless of how small a part), I’ll assume digdug means a citizen is part owner of the roads (and other property held “in trust” by the government).
Looks like a good match. But, on further analysis, a shareholder has far more powers than a citizen regarding the property in part ownership. Can we as citizens vote to get changes made in roads like better resurfacing? Not really — unless you consider the rather indirect way of electing an MP / MLA who may get the work done. Can we as shareholders vote to make changes in the company? Yes. And unlike the citizens we can do it directly. Without dislodging the current “administrators”. Shareholders can pass resolutions against the wishes of the management without asking for the management’s removal. The political equivalent is a referendum process, which does not exist in India.
What do you mean by “ownership” digdug? If I own something, I should be able to make changes to it. If I am part of a group that owns something, then we should have a simple mechanism to reflect changes. Voting out governments is a rather messy way of getting small changes done.
Would beg to differ here.
“Can we as shareholders vote to make changes in the company?”. The answer is as affirmative as it would be to the question “Can we as voters vote to make changes in the country/ constituency?” but if you say that can an individual shareholder make significant changes, the answer is as resounding a no as it would be to the corresponding question. (assuming 1/n as the vote power of both ‘n’ stakeholders and voters for now, i.e. each shareholder has one vote). Each is equally powerful or otherwise in a similar situation. If you are talking of punitive action, then it is a different matter.but that cannot be a conclusive test of ownership.
Of course, this is assuming the analogy of a joint stock company. But the process of political representation is a very different creature built for a different purpose than a JSC. Probably, its mission is to maximize ’social profit/good’ rather than monetary profit.
As for the statement “If I own something, I should be able to make changes to it”, you can make changes equal to your share. This is where another difference kicks in between the JSC and the Political system(I discard my earlier assumption to align with reality): Each person has no. of votes equal to the number of shares in the former, while in the latter, it is equal to one vote, irrespective of the population.And that is why I believe, the analogy is incorrect.
The answer is as affirmative as it would be to the question “Can we as voters vote to make changes in the country/ constituency?”
List the changes please. The only one I can think of is changing the elected representative. Let me take the small example of a municipal constituency which elects a corporator to the municipal corporation. In Bombay there are around 20 - 25,000 voters in such constituencies (227 corporators total). Now suppose 15,000 of my fellow citizens wish to make certain changes to the roads in our constituency with money taken from the municipal taxes we pay. Can we have a vote for that (i.e. a referendum)? I’m prepared to accept defeat if the vote goes against what I want. The problem lies in the fact that we cannot do anything.
Let’s assume that we would like to vote for a “social good” — doesn’t change what I’m saying.
If you don’t want to use this analogy, can you tell me in what way do “we” as citizens “own” the roads? I am helpless in getting any changes made — even with the support of a *majority* of citizens of my area.
yazad, wasn’t it gratifying to label an opinion that’s unlike your own delusional?. I don’t like participating in discussions that degenerate into name calling…Make it civil and I’ll post what I mean.
Digdug, the opinion is delusional. I’m not saying you are. So there was no name calling.
And please, lots of opinions on the blog are unlike mine. Including those of guest bloggers at times!
I said: “..an opinion that’s unlike your own delusional?”. I don’t think I implied anywhere that you called me that. Ok..here I go again: I don’t participate in discussions where my opinion is not respected and is called names.
I don’t think all opinions deserve respect. I have explained why I think that specific opinion is delusional. Please feel free to rebut my arguments. Or keep silent. The choice is yours.
Well, there are mechanisms that exist. The IAS, the IPS etc. are all constituted for this function, i.e. carrying out day to day administrative and other functions. If you take the BMC, you have the water works department (for example) that looks into water supply related issues. The Ward Officers etc. are not elected by the people. They are employees of the BMC. Now, if you want to construct a new road, it may require a Committee that could comprise elected representatives, but that is a part of the checks and balances of the system.
Thus, the citizen, in her capacity as a citizen, and not a voter, can affect changes, in theory. The politicians come in when the theory gets perverted.
Can citizens vote to sack non-performing employees of the BMC? Shareholders can vote to sack non performing directors.
Let me reply by asking you another question :Can shareholders sack the non-performing middle management of the company? Let me also take the liberty of answering it : No (legally). As I said in my first comment, a voter is at least as powerful as a shareholder.Let me reiterate: we are talking of mechanisms that respond to the demands of the ‘owners’ without overhauling the whole system and I believe that they exist in our democratic set-up. In theory.
Nandan, but a shareholder can sell the share of the company, to someone who does not mind the middle managment, can’t he? In that sense he has a real exit option. A voter living in Mumbai has to be subject to the writ of the BMC, irrespective of whether he likes its policies, supports them or is against them.
The next possible counter-argument is that he has a right to shift out of the BMC area. But that brings in the issue of who really owns the property, the voter or the BMC? In law I think the voter owns the property, and if he does not pay his tax dues, the BMC can forclose on it in leiu. But the voter has no such recourse if the BMC does not deliver the services it promises, does he?
Hi Gautam,
“but a shareholder can sell the share of the company, to someone who does not mind the middle managment, can’t he? ”
But then again, is that not the giving up of ownership…the final, extreme step? It does not seem very different to me from the extreme step of removing the BoD or removing politicians out of power. The ‘owner’ decides to devolve ownership or remove the managers. The whole issue of contention was whether a mechanism exists wherein the owner can affect changes without taking any such extreme step, such as compromising ownership or removing the mgmt. And I am still not convinced otherwise.
This has been an interesting debate and before Yazad gets really bored seeing my name on the comments section of his blog, I think I should go easy with my comments. :-) . If you are like me and wish to say some more things in this matter, I’d appreciate that you do it on my blog rather take up space on Yazad’s, if he agrees, of course.
Nandan, I am not in the least bit bored. Please continue to comment here.
You are right however that this requires a fresh post. Maybe Gautam or I will find the time…
Hi Nandan, from what I know of Yazad, he never tires with discussions, the more controversial the better. Infact he is reveling in these discussions, so there is no reason why we cannot continue to talk here.
The ease with which an exit could be secured, is part of the power that a shareholder has over the management. If shareholders do not like managment policy they can exit the company, creating an expected future value which is lower than the present value of the share, which may induce others to exit the company as well, and so on, creating a negative effect on the remaining shareholders including the management presumably which will see a depreciation of its assets. Unless management is absolutely sure about their moves they will have a strong incentive to change them.
In the case of the BMC, however the shareholders or voters have no such power of exit, and thus cannot use it to enforce their wishes. The management has a far smaller stake in delivering services than in extracting as much money in terms of bribes and kickbacks as they can, and securing their power bases (usually a minority in their constituencies). Even if the next election yields a change of gaurd the same story is usually repeated.
So even if it is not exercised the mere existence of the right to exit is a strong power in the hands of the shareholder or voter.