Demystifying what the Master said about wealth creation

The Master said…

'Giving is the essence of wealth creation…..'

You gain wealth from creating Value for others, Lending out your assets, or through the Goodwill you have earned as a result of having contributed positively to people's lives or to the society. Essentially through giving.

Of course there are other ways of making money like benefiting from other peoples follies and stealing and taking advantage of other peoples miseries but those fall in the realm of immoral and unethical (the demonic ways). I presume we don’t want to concern ourselves with these.

'Worry about where the money is going rather than where it is going to come from….'

Warren Buffet one of the richest man in the world says that his most important task is 'capital allocation'. Where he has put (given) the money has made all the difference in converting a approx 100,000$ borrowed from friends and family into billions (incidentally he has pledged nearly all his wealth estimated at over 40billion $ to charity).

'Widen your sources of income instead of worrying about your expense…..'

In his book Managing for Results, Peter Drucker says- "..There is a need to concentrate scares resource on the greatest opportunities and results...". Reducing expenses contributes to wealth creation to the extent that expenses are reduced to make resources available for the most attractive possibilities (or opportunities for wealth creation).

'Where the money goes is important…..'

Money must act as a seed to grow wealth. Frivolous expense is like seeds falling on sterile ground. That does not build value or assets or good will. And therefore terminates the process of wealth creation.

And the Master said....

'If you want more money to flow to you, broaden the flow of money from you….'

The more the money flows out from you the more goodwill, value and assets that you create, which in turn becomes the source of wealth creation for you.

So you thought your fixed deposit was about saving? Not quiet. Essentially you are giving the money out to someone else (the bank) who gives it out to someone else (the borrower) and that's how the money grows. Not by keeping it with you but by giving it out. Incidentally the longer you give out your money the more it grows. It might even be that the more often you give it out the more it makes for you. Ask any money lender.

Then he said...

'Live in with the feeling of abundance…..'

Because all the riches in the world will not take the poverty out of a man who thinks he needs some more. That's exactly what a beggar thinks of all day.

What's good about the election results

With more than 50% of the people favouring the Congress or the BJP, the vote certainly is in favour of the national parties.

BJP as an opposition has the fire power in the parliament - with Advani, MM Joshi, Jaswant Singh, Sushma Swaraj, Yashwant Sinha, Shanawaz Hussain, Sidhhu et. al. It certainly missed this in the last Lok Sabha, with Advani almost single handedly leading the charge (with Vajpayee in absence due to ill health).

National Parties will get stronger. BJP will reform and Congress will build-up on its gains

Oppurtunitic politics has failed.

Approximately half i.e. 266 MPs below the age of 50 so young people and New Ideas will come to the fore.

60% of the sitting MPs have lost their elections. Most of them deserved to.

With a clear majority, the govenement has no room for excuses

It's a positive vote for good governenace. Mostly the performing CMs who have been able to deliver irrespective of the party they belonged to.

BJP was never going to get this kind of numbers (given the limitations of its geographical reach). So would have been subjected to blackmail by the allies. The current configuration is likely to be more stable.

Many of the outrightly criminal candidates have lost.

Congress now has to itself clear up the financial mess it has created for the government.

Keeping truthful company

To come to know that nothing is good, nothing is bad, is a turning point; it is a conversion. You start looking in; the outside reality loses meaning. The social reality is a fiction, a beautiful drama; you can participate in it, but then you don't take it seriously. It is just a role to be played; play it as beautifully, as efficiently, as possible. But don't take it seriously, it has nothing of the ultimate in it.

The ultimate is the inner; the indivisible soul knows it. And, to come to that soul, this is a good turning-point.

-Osho


Allow me an interpretation - 

What Osho is telling us is to reject dogmas and theoritical understanding of the world.

This is a very scientific approach because unless we look at things as they are no scientific progress is possible. E.g for years doctors held on to the belief that ulcers were heriditary that no bacteria could grow in the highly acidic environment of the stomach. It was only when what was considered right till then was rejected that the ulcer causing bacteria was discovered and a new (very effective cure) for ulcers was found.

Our minds are clouded by dogmas and truths half understood. This really is the result of our social existence. Where all kinds of half baked ideas and understandings are thrown at us daily. That's why it is so important that we keep good (truthful) company. That's why being with the Guru and in the company of the Buddha is so important. 

Technology and aspiration

For years it was difficult for me to see things differently. That our existence and preservation of life on earth and our aspirations were in direct and fatal conflict was a sad conclusion I had arrived at.

 

I deeply and desperately desired to do something to save our planet. I reasoned that if we had to save life on earth we had to rein in our aspirations. And though I studied engineering and technology, for most of my years in college, I came to dislike it. I saw it as product of our 'evil' aspirations and as something that was at the heart of the self-destruction that we were inflicting on ourselves. All around were signs of how the use of technology was slowly destroying our forests, land, rivers and seas and polluting the air we breathe.

 

But something was wrong with this picture. Because when I looked around I also saw that so much that was good about life flowed from aspiration. Indeed aspiration was life. And that life depended on aspiration to move forward on its path of evolution.

 

Then it occurred to me one day - technology was not bad in and by itself. It was the inadequacy of the refinement and application of technology that was responsible for the rapid destruction of our environment.  And that a very large part of the solution to reconciling our aspirations with self preservation may lie in technology itself.

 

Amongst other things, our company's objective is to discover applications of technology and how it can be improved to build a future that is more sustainable. One in which our aspirations and existence are not on a collision course.

 

Our current engagement with Messaging and Collaboration technology is one such attempt at providing a faster, cheaper, lesser damaging and in many cases better alternative to travel and transportation. We also see technologies for collaboration (and knowledge management) as a way to tap into the collective intelligence of the human race to find durable answers to the conflict between our existence and aspirations.

 

I hope we can make significant contribution towards this.

Creating high technology companies in India

I think that the primary problem with creating a high technology/software product company in India is the lack of the eco-system (in the form of an organised distribution, suppliers, skilled staff, critical mass of high tech product companies, VCs, etc.). It is, I think, the single biggest reason why the VCs have a perception of high risk associated with the success of an enterprise of this kind here. It makes success at every point in a ventures life (creation, growth and exit) more challenging and negatively impacts the net outcome. The task becomes even more difficult if the company is focused on the (considerably smaller) domestic market.

All other things being equal - Lets assume that there are five factors related to the ecosystem that a start-up must get right in order to succeed. Let’s also assume, that the difference in the probability of success in each in Silicon Valley is a little more than in India due to a better developed ecosystem there. For the sake of calculations let's assume this probability of success in each of these factors is 80% in silicon Valley and 65% in India. The net outcome is a much higher chance of failure for a company in India than in Silicon Valley.

Chances of finding suppliers to deliver as per the plan

-80% in Silicon Valley; 65% in India

Chance of succeeding in getting the product developed on target on time

- 80% in Silicon Valley; 65% in India

Chance of succeeding in setting up a distribution system 

- 80% in Silicon Valley; 65% in India

Chance of reaching a critical mass of customers before money runs out 

- 80% in Silicon Valley; 65% in India

Chance of finding the next round of funding to sustain momentum  

- 80% in Silicon Valley; 65% in India

The combined probability of success owing to these factors is Silicon Valley would be 32%

Whereas the combined probability of success in India due to these factors would be only 11%

Secondly every kind of product has a different cycle times over which it matures. The fault with most VCs entering the Indian market lies with the small and standard cycle time that they set for all their investments and exit.

While this might be fine in mature eco-systems like the Silicon Valley (where exits are easier) this time needs to be a stretched (and even adjusted, as per the product categories, target markets etc.) here in India to account for the extra time needed to take action to compensate for the lack of a developed ecosystem.

The fault with the entrepreneur lies in benchmarking themselves against the present day entrepreneurs of Silicon Valley, instead of benchmarking themselves against the early entrepreneurs that appeared at the genesis of the Silicon Valley. The content of our work is probably closer to what they had to do.  Entrepreneurs in India must allow for (indeed give themselves) time to build this ecosystem (of distribution, suppliers, skilled workforce etc.). 

Entrepreneurs must invest in building this ecosystem and even enjoy the process of doing so. After all most of us are not in it for bread alone. We enjoy the process of creating something new, overcoming the challenges and dream of leaving behind a worthy legacy.

The VCs will follow. As happened in Silicon Valley.

Critical work & trust

You need to first build trust to be given critical and challenging work.

Any good team, manager, leader or customer will give crucial and important work to those whom they can trust.

People who are trusted naturally get the most challenging and interesting work.

Trust cannot be built over a few short weeks or months. Trust is established by the demonstration of consistent, diligent and honest work done over several years.

Powershift to the internet

The use of internet is perhaps the one of the distinguishing features of these elections. Especially with the media (particularly the television) having lost quite a bit of credibility, the internet offers a more open medium, allowing the content on display to be commented on, responded to and contested by the consumers (unlike the traditional media). Helping shape opinions in a more open and truthful way.

LK Advani's website is an interesting experiment in collaboration over the internet. The significance of this exercise goes beyond the 2009 elections. It is about educating the people, learning from the people and carrying out an informed debate. It is about people’s participation in shaping the destiny of the nation. It is about bringing out the truth.

I wish the BJP had started this initiative even earlier. I wish that the Congress and the Communist respond to this initiative with vigor.

The impact that television had on politics in the country in the 90s would be the impact that the internet will have in the 2010's. There is going to be a powershift from the television to the internet. And for the better.

Individual & isolated successes cannot substitute for Collective failures

Sometime ago, someone from our office had forwarded me a mail about things that we Indians can take pride in. The mail mentions things like -
An Indian - Vinod Khosla founded Sun Microsystems, Vinod Dham (an Indian) was the creator of the Pentium chip and so on.
It goes on to enumerate how many Indians work at the top organisations like Microsoft, NASA etc. and talks a little bit of our glorious historical past.

While these are indeed things to be proud of, there are two things that disturb me about it

1. It celebrates mostly individual achievements. 
2. It celebrates mostly the past glory of this country.

Sadly most Indians commit themselves to achieving only individual excellence and are focused on their own welfare. As a rule most Indians do not dedicate or even participate in activities that would benefit the larger community. That's why we do not have a Harvard, a Microsoft, a Standford or a NASA in this country. That's why our homes are clean and our streets are dirty. That's why a few of us live first world lives while hundreds of millions of Indians lead a life of desperation and deprivation.

I am not an India basher. I love India and its people more than I can state in words. My concern is that we are substituting our current failures with past greatness and substituting the failures of the community with individual successes.

Work can be tough

Any work no matter how interesting sooner or later involves a lot of drudgery. Work cannot be exiting all the time. And it definitely cannot be entertaining. Work can be very frustrating at times. Especially when you are attempting to do something BIG. But when you involve yourself meaningfully in work, it can bring in a deep sense of satisfaction and even a feeling of exhilaration at having achieved what you thought impossible when you first began.

Engage and contribute

Engage and contribute to the company's purpose. It doesn’t matter, where you want to go next. What matters is that - Right now you get your livelyhood from this company so you must do a honest day's work. Right now, by making this company better you are contributing to the society, nation and the world. Right now you have an opportunity to engage and learn more. Right now you have an opportunity to make things better for your customer. Right now you have the opportunity to rise above your problems. Right now you have an opportunity to stop complaining and take action to remedy whatever you think is undesirable around you.

Work better-Earn better-Spend better

I think we need to replace the Work-Earn-Spend culture with Work better-Earn better-Spend better culture. Let me explain-

Work Better - Knowing what should be done and what should be left alone is all important in determining your efficacy and efficiency at work.

Earn Better - Money is not the only thing we can hope to earn in life. Growth in our understanding & capability (of not just what is on the outside but also on our inside) is the more important earning we should aspire to as part of our work.

Spend Better- Acqusitive spending (and unbridled consumption) only adds dead weight. Making life burdensome. Spending with a purpose to make our own life and that around us more liberated is the better way.

Going beyond just planting a tree once in a long while

I think we need to go beyond just planting a tree once in a long while. The urgency to take action demands that we widen the scope of our action. 

Here are two ideas. 

One of the ways, we can contribute towards the environement is by reducing our 'carbon foot print' as an individual, family and/or business. For example one of the things I have resolved to do as part of reducing my own carbon foot print, is to not change my 10 year old car. My cousin (a car enthusiast) says, it's still good for another 200,000kms. I'd be doing this besides using my feet, the bicyle and my motorcycle more often. May be I should also eat a little less.

A second one would be to adpot a 'green spot', ensuring that this place remains clean and green. My personal preference would be to adopt the Law college hill (Tekddi) and University of Pune Campus as my 'green spots'. Over the years I have returned again and again to this place with my family and friends and it has always been a pleasure. These places have a wide variety of trees (and I have often spotted many different types of birds there). These places are wonderful getaways within the city and are beautiful anytime of the year. I especially love the mornings there, and the evenings during early monsoon. I'm be happy picking up the litter, planting trees and taking care of them...whatever it takes to preserve and nuture the place.

Government as the masters versus enterprise of the people

Here is the basic difference between the Congress and the BJP. The Congress continues to perpetuate a Mai Baap Raaj. This approach is based on the perspective that people are poor and helpless and we (the government and enlightened politicians) must help them. The BJPs view on the other hand is, that we as a people only need to realise our greatness. This view incidentally is not based on western capitalistic ideal but on the ideals that is part of our vedantic philosophy that talks about the divinity waiting to be realised in every individual. 

The BJP must articulate this position better. - Are we helpless people that need to live by the grace of our political masters and the crumbs that they throw at us or are we the masters of our own destiny? The question to be asked is that - can only the governments do the task of building the nation or is this nation to be built by its people? Clearly the answer is the latter because despite all the government failures this nation continues to move ahead. Now we are not arguing for no government or less government. And we are certainly not arguing for crony capitalism (like that practiced by Congress and a few of its allies). What we are arguing for, is a government that does enough to make its people succeed in realising their true potential.

What government no matter how big or wise can build a nation all by itself?

This difference must become more pronounced, articulated and encapsulated in the messages and programs of the BJP. It must take a position counter to intellectual arrogance, crony capitalism and corruption. And against government being the masters and commanders, towards collaborative effort, empowerment of the individual and collective enterprise and dharmic (principled) governance.

It is only then can we live up to the vedantic ideals of realising the divinity in the souls of all individuals. There true potential. 

Only then can India take a leadership position in the 21st century. And we seek this leadership position not out of our ambition to be seen as better than others but out of our sense of responsibility to lead the world for the better.

Perhaps the biggest achievement of the rule of BJP under Vajpayeeji was going from a state of extreme despondency to one of self confidence. My hope is that the BJP can deliver on Advaniji vision of not just restoring  our lost self confidence but also on moving us forward to a position of global leadership.

Why we need a vision lead alternative

Mahatma Gandhi saw the need of a vision for the nation, the need to change the hearts and the minds of people, as more important than political freedom. He also saw the centrality of the vision in bringing about this change. To the extent that we (Indians) followed that vision we have been successful. And failed to the extent we compromised with it. 

If Pakistan is a failed state today, it is only because it was an alternative without a vision. 

So it is with some satisfaction that I note L.K. Advani's good efforts in leading with an alternative vision.

Financial innovations v/s real world innovations

Money represents a quantity of something physical (real) say gold. By printing more currency against the same physical quantity, the relationship is redefined and there is loss of value (in relation to this physical reality).

When something like a mortgage instrument is created, what we do is create money in another form i.e. money that is backed by future earnings. Physical reality remaining the same, by creating this money, the value of money degrades. 

When such mortgage is available against even dubious future earnings, the value degrades further. Everything becomes more expensive. Simply because the supply of money has increased. 

Interestingly the additional money made by the business in the process is not passed on to the workers down the line quickly enough (it really is a trickle) for reasons of greed or prudent management (to account for the replacement cost given that everything is becoming more expensive). The result is that the borrower now buys stuff using depreciated money and pays a charge (interest) on this money. 

Given that there is more money to be made per transaction the entrepreneur has no time for such distracting tasks like productivity improvement or innovation. He'd rather focus on the maximizing the number of transactions and bargaining an even better price per transaction. So the costs keep rising. The situation is further precipitated by the fact that inefficient and wasteful methods continue to perpetuate on an even larger scale putting a higher demand on the resources (both natural and man made) driving the prices even higher.

All this time ever larger quantities of money is moving into fewer hands while only a small trickle flows downstream. 

Eventually this creates many a distortions in the economy. The most critical being the one between the real income of the people and the rising cost of living leading to distress abandonment of assets and possessions that no longer can be supported on a narrowing purchasing power.

Financial innovations such as these fail to provide the 'intended' benefits to the consumers. On the other hand innovations and productivity improvements (especially those that provide breakthrough gains) are a more definite way to spread the benefits to consumers (evenly across the society). 

Innovation and productivity improvement increase the supply of goods and services and therefore increase the value of the money making it a faster way to spread prosperity than the 'trickle down effect' of capitalism.

The point is fewer and fewer people want to undertake the 'stupid' work of building an enterprise, improving productivity or indulge in innovating things. Even entrepreneurs these day think more in terms of trading their ideas and businesses for cash that they can then use to make more cash. Hopefully the current crisis will set the balance right between real world innovations and financial innovations.

The future of capitalism lies in the real market place and not in the money markets.

Restructuring of the world economy

I think that the capacity of the current economic structure to grow has almost run out. Let's say you have a certain capacity to run. Utilising that capacity at the lower levels is easy. As you move towards the higher end of utilising that capacity, the effort (mental determination) required is greater and greater. But beyond the limit of that capacity no amount of effort (mental determination) can do it. Towards the fag end of the capacity of the current structure of the economy to produce, we've seen an unprecedented use of capital (and financial innovation) to drive growth. And then came the collapse, where no amount of financial innovation could drive the growth anymore because the productive capacity of the economic structure had been almost exhausted.

The world economy will probably settle down at a lower level. Current world economics will have to undergo restructuring to Build new and additional productive capacity. Much like the runner who failed to reach his objective, must go back and work at building a new level of capacity. 

How much growth the next cycle will produce, would depend on how deep this restructuring is.

So the question is - what is the possible direction the economy will take? I get the idea as I pick my tooth brush up this morning. I'll be discarding this tooth brush in a matter of few days. It already seems like I have used it beyond its effective life span. But then I will be discarding the the whole tooth brush when it's only the bristles that need to be replaced. The rest of the tooth brush (the handle etc.) is actually just as it was when I first bought it some weeks ago. The point is a lot of the 'things' that we buy and use today were designed at a time when the constraint on resources was not a factor requiring much consideration. These 'things' have become misfits in today's world. 

Many a successful innovations since the start of the industrial revolution (and even before) need now to be replaced. Indeed the success of the Industrial revolution itself might have hastened the need to discard them. Improved purchasing power (due to cheaper manufacturing and financial innovation), spreading prosperity (due to expanding trade) and population growth (on the back of better health care) have ensured a continuous growth in the demand for these innovations. But then these innovations were never designed with the impact of very large scale usage in mind. Take for example the personal Automobiles, designed for user convenience & improved quality of life, the falling costs and rising purchasing capacity have resulted in such wide spread use of this mode of transport that it now is negatively impacting the quality of life (not just of the bystanders but the owners themselves). 

Having stretched material supply to exhaution, we now need new innovations that are resource efficient, sustainable, and renewable. The economics of scale itself might be on its way out. So also the life styles of the 20th century.

Triumph of the bigger ideas

Triumph of bigger ideas...

...as it happened during the Parliament Debate on the Nuclear Deal.

Somnath Chaterjee's defiance of the whip of the party that got him the speaker’s chair; Omar Aubdullah's sharp criticism of the nuclear deal being tagged as anti-muslim alongside an expression of deep regret, for having sided with the NDA during Gujrat riots; 

Rahul Gandhi’s acceptance of Vajpayee’s contribution towards the nuclear deal; 

Shanawaz Husain's scathing attack on the government for non-performance and over simplification of the solution for the energy crisis; 

Alignment of rival Kasmiri parties (NC and PDP) on the same side of the nuclear divided; 

BJP acknowledging the need for the nuclear deal but opposing the government’s high handedness; 

Akali Dal’s neutral stand on the deal but a vote against the government; 

BJP's readiness to support it's rival Congress for reforms (both economic and social ); 

and so on, may at one level seem chaotic and cynical behavior - of MPs falling for bribes in cash and kind. And of self serving political interests driving the regrouping of political parties.

At another, it is a triumph of the bigger ideas over politics, personal egos and groupism.

The Indian constitution triumphed over party diktat; 

The government stood rightly exposed for cobbling up a majority by fair and foul means; 

The opposition to the nuclear deal in the name of Muslim interest stood rightly rubbished; 

The need to break away from the isolation of India on nuclear technology stood rightly supported; 

The by and large dysfunctional (or at best mediocre performance) of the government stood rightly condemned.

Expect more such episodes of fights over ideas. Watch individuals and groups switch sides. Watch the bigger ideas win.

Growth and Greed

A little while ago an editorial in the Times of India written by Jug Suriya titled - Growth and Greed started me thinking...

Prosperity that comes from the growth of good things, is not accompanied by fear of losing it, is not accompanied by a feeling of emptiness of something missing in ones life, is not accompanied by sickness originating from stress and frustration, is not accompanied by discontent and disillusionment, is not accompanied by desperation.

So then what are these good things we should strive to grow? The answer is capability, quality, productivity & capacity (as measured by the production not of more quantity but of quality), improvements and so on.

And what is bad prosperity? It is the prosperity that follows - growth driven by greed, growth built on waste, growth resulting from consuming more than required, growth built on envy and comparative competition, growth built on having rather than creating, growth built on taking rather than giving, growth build on wanting more for accomplishing less and less.

If fact such growth is not growth but wealth going around from one point to another and in the process eroding the sum total wealth. E.g. if a man acquires a larger house but loses his health in the process of working for it, he is on the whole poorer. If in building more assets of production (machinery) we pollute our rivers and dirty our cities, we have become poorer not richer.

A picture caught my eye in the news paper a few days ago – Two men were standing with a sign that read - 'Starving Billionaire'. This was a picture from Zimbabwe, where the local currency has almost completely lost it value. That's really what the paper money is worth - it cannot buy you even a loaf of bread, if, the value system around it have collapsed.

Governance Infrastucture

India is moving from a nation of low activity and a slow moving one to one of hyper activity (from Taamsik to Raajas state as my friend Koushik would put it.)

Governments have been talking about building Physical and Social infrastructure for long with chequered success at doing it. Much still needs to be put in place. But physical & social infrastructure will only enable the flow of these energies. Even act as a multipliers.

What we need is management infrastructure or as L.K. Advani would put it a 'Governance' infrastructure.

Without it, these newly released energies are likely to collide violently or dissipate or worse still, get blocked leading to a dangerous growth in frustration.

What is required is an intense focus on managing the growing activities of our economic and social life. Mind you I'm not talking about containing or controlling them, I am talking about channelising them, giving them directions.

As much as we need good ideas to lead these energies, we need equally good action to be able to do this. So what is this management infrastructure (or governance infrastucture)? Management infrastructure as I see it would be the Vision, Policies, Methods, Human Resource, Regulatory Framework, Governing bodies, Leadership etc. of our cities, towns, airports, ports, roads, public utilities, religious places, educational institutes, judiciary, the police and so on.

Such a management infrastructure can help us direct the unleashing energies into the making of a better India and a better world.

One of the ways to weigh an advice (to our ruling masters) on bettering things is to see if we as citizens can act on it. I see this as such an idea. The RTI (Right to Information) Act e.g. gives us the power to be quasi-Auditors and quasi-Board members of the government run institutions we care for. Asking for information and advocating improvements can improve the goverenances of these institutions. Or easier would be to start with getting involved in the management of - our societies, our children’s schools, our teams at work etc. Easier still to start by managing one’s own self better.

Fortunately all this is already being done by many people in our country and across the world. We need to quickly become part of this tribe.

I wish the media is less cynical, less intent on manufacturing political controversies, less inclined to merchandising misery and more active in seeking the truth behind the miserable management of our institutions and exploring possible solutions.

I support Advani's idea of Governance being the central plank to judge performance of governments. It is great to see Advani et. al. spend more time building & articulating their idea of governance. It is heartening to see him lead more by an alternate vision around the idea of good governance, than by slamming the incumbent government on the mat for its every fault. 

Unusual remedies for the current economic crisis

Rather than discuss more on the problems of the current economic crisis and what caused it, I have attempted here to explore some solutions. These might not be the only alternatives. But the current crisis may just force the movement in such a direction of change. What was once a wise choice might now become the only choice in many instances.

Not Consumption but Capacity Creation----------------------
Unfortunately, the economist are mostly thinking in terms of consumption i.e. by bailing out financial institutions and kick starting credit flow, they reason, people will be back in the markets buying things as before and all would be fine soon. A slightly longer term thinking revolve around creating a more integrated financial system in the market so as to enable a more transparent and faster flow of money across the world markets. These measures they argue would restore confidence in the financial markets and bring back the global economy onto the growth path. 

One thing that is not given enough attention is that unprecedented levels of consumption had stretched the material supply beyond sustainability. That's why all commodities and assets were at an absurdly high level before the world economy crashed. One wonders if the government released inflation figures truly reflected the stress on peoples income as a result. That this stress was sought to be compensated by access to cheap and easy credit only compounded the problem. 

Increasing money supply by way of increasing credit supply is only a demand side intervention that does not address the real issue of a supply side constraints. In a country like India for example with nearly 400 million working age people, if the salaries rise rapidly (especially for only a few segments like professional services, financial services and IT), it is more so because there is lack of supply of trained people, which in turn is a result of the lack of capacity of our education system. So what we need is not more credit supply to these businesses that are rapidly eroding their profitability, but a greater supply of trained manpower.

What is true about the Indian education system is also true about the manufacturing world wide. For example manufacturing must discover more efficient uses of material (maybe using Nano technologies), substitutions for material use (using software) and new designs that are more efficient, durable, reusable and sustainable. Or else high commodity prices will threaten its very existence.

Not Repair Work but Restructuring---------------------
Over the last many decades humans have become too accustomed to quick fix solutions and that is why the debate doesn't go beyond, interest rate cuts and bailout packages. These are all lazy approaches. 

An economy driven by consumption (more) itself is the problem. The financial crisis is just a symptom. And while we must realise that there are material limits to consumption that can only be stretched through improving material efficiency and reuse in things we make, the more important things is to realise that there are limits to our consumption imposed by time and attention. And that we just wouldn't have enough time or attention to consume all that we can buy with our money.

It won't be enough if this restructuring only goes to the extent of reworking the use of things material. Perhaps we need to move from where the society values owning and enjoyment of the goods that the world has to offer, towards pursuit of learning, creating, leisure, contemplation and common good. Only then can we hope to spread material benefits more widely. The true long term solution therefore lies in building new capabilities and in redesigning the values on which our society is based.

There has to be compression of a lot of activities that are doing no good to our life and to life on earth. So also there is much work to be done. The economy can go on for years around regenerating our forests and bringing back to life our rivers and lakes, bringing up children to each realise there special talents, building bridges amongst communities, nursing the world back to health, making our planet safer, inventing new ways to use material more optimally, in learning better ways to live together.

If only we are willing to expand our vision.

Not More but Excellence-----------------------
A life time spend in pursuit of excellence is far richer than one that is spent on keeping up with the Jonneses, where every time you catch-up with one there is another one to catch-up with. It is time we realise that we have to wake-up and move forward on our journey to take life forward, in pursuit of individual and collective excellence - measured, not in terms of our possessions but in terms of our capacities and capabilities, measured by the quality of our action and thinking and not the quantity of our acquisitions. 

We need to move to a future in which parents pride themselves on the goodness of the deeds of their children and the contribution they make to the society than on the size of the multinational businesses their children work for or the salaries they get.

Not Systemic Problems but Greed(is the problem)---------------------------- 
I was watching a discussion on the BBC on the current financial crisis where the audience was quizzing board members and executives of very large financial institutions accusing them of being lax and self serving in the discharge of their duties as board members and executives. Unfortunately the panelists defended themselves by citing it as a systemic failure of the financial markets arising out of inherent complexities, one in which they were helpless and of which they were clueless. The truth is that while financial systems around the world are in need of a restructuring (because of the sheer size they have assumed), it really is greed, irresponsibility, lack of vision and plain stupidity that have got the better of these capitalists.

Not China but Independent Thinking----------------------- 
The failure of American financial institutions doesnt automatically qualify the Chinese model. The current regime in China is demonic. Their aggressive pursuit of economic success is doing little good to the world. I believe we (Indians and the world at large) have very little to learn from them. What is needed is independent thinking rather than getting caught up in the illusions(Maya) that is spun by the world's financial institutions or the Chinese government.

Not Financial Markets but Culture--------------------
Not rejuvenation of financial markets but a cultural renaissance is required. Clearly the lifestyle of the west cannot be lived by all on the planet without threatening our very existence. The breakdown of the financial system is only one in the series of warning that follows the phenomena of global warming, terrorism etc. hinting at the possibility of much worse to come if we don't change our ways. I believe that changes by way of redefining of lifestyles can contribute the most to correcting this imbalance. One in which, nourishment of the soul is more sought than the pleasure of the senses.  

For a person living in the Dark Ages, nothing must have seemed wrong till the 'rebirth' of classical values. Perhaps the world is about to see such a change. We will in all probability look back in time from a future standpoint and wonder how we allowed ourselves to be carried so far out in our material pursuit. I imagine a new economy that is built around a dynamic culture not a decaying one. Here is where India can take leadership position. Not for the sake of leadership but leadership with the purpose to recreate the world for the better.

Not Individualism but Community living---------------------------
The high ideals of liberty and individual freedom have been flogged to dead end where it has manifested itself in greater and greater separation amongst individuals. The communities themselves decaying for lack of dynamism have been easy targets for anything that promised freedom from it. So individualism became fashionable and then a marketable commodity driving consumerism to ever higher levels. 

Communism has failed. Consumerism is failing too. Perhaps the answer lies somewhere in between where voluntary Communities drive the economy forward, creating shared resources for the common good. 

Voluntary communities are coming together to pursue common good while at the same time allowing individual freedom. When Tarun Bharat Sangh works to re-hydrate hundreds of villages in Rajasthan through voluntary community service you are seeing investment in collective generative capacity. When citizens in Europe volunteer to bring in cycles to create cleaner cities, what you are witnessing is purposeful community action. When people at SSY get together to build an Ashram for learning and meditation, you are witnessing Community Economics. When people at AOL resolve to plant millions of trees you are seeing community action in pursuit of a common good. Perhaps the best example of community living is India itself which sustains a large population using much less resource - much of which is owed to the existence of various different communities that act as support systems for the individual. There is economics involved in all this.
This change is not going to come in a hurry there are too many people hopeless stuck in the current systems. And it is not going to be easy to bring about the new order without working out many many conflicting interests and ideas. But that the change in happening in this direction is clearly visible.

Though, it might be a while before these communities that exist as islands today proliferate more rapidly to cover most of the landscape of our societies.

Not Financial Freedom but Freedom from Fear-----------------------
Much of the western and westernised world, suffer from the desire to be free from having to work for a living, hoping to put enough money away into a retirement fund that gives then a guaranteed return so they don't have to work any more. They call it financial freedom. The financial crash has highlighted the limits of this idea. It is time we recognise that - Wealth without Work is only an illusion. Many years ago a Mahatama (Gandhi) had warned us of the seven things that can destroy us - Wealth Without Work, Pleasure Without Conscience, Knowledge Without Character, Commerce (Business) Without Morality (Ethics), Science Without Humanity; Religion Without Sacrifice; Politics Without Principle - we must urgently pay heed to it if we are to truly free ourselves.

Not Economits but Leaders------------- 
Perhaps leaders like Obama (or perhaps like Nitish Kumar et. al.) and not economists can make a difference. What the world needs now is clear thinking and honest leadership to lead the change the world needs. That kind of leadership is needed not just at the head of governments but at all levels of all human enterprises. Perhaps the time for the Economists to define the course of the economy has reached its end (at least for the moment).

Not Politicians but Teachers------------
Only a teacher, a seer can show the way. Only a sadguru can build in us the capacity to change. Only a sadguru can instill in us the correct purpose. For, it is the Guru who symbolises the living, dynamic knowledge of a society. In fact any one who speaks of this knowledge is a Guru. Only a Guru (or the chosen one) can tell us that we are caught in yesterdays decaying ideas. 

Perhaps the ideas on which our economy and society rests has been overused. Maybe it has outlived its use. Maybe in our pursuit of growth we have gone too far away from the seed, from the universal principals, from the truths and therefore we suffer. Who else other than a Guru can bring us back to the center.

With much gratitude to all my teachers and Gurus