Sunday, November 17, 2013

Adam Smith, Forbes, Kejriwal, AAP

A news item [1] was critical of the fact that 11 of the 70 candidates of the Aam Aadmi Party (AAP), as declared by the candidates themselves, are worth more than Rs. 1 crore with “R.K. Puram candidate Shazia Ilmi” sitting atop a pile of Rs. 30 crores. The list includes AAP head honcho, the great Arvind Kejriwal (on the margins to be sure, only Rs. 92 lakhs). Given all the data, we can do a detailed analysis, find the mean, median, standard deviation etc., locate individuals at 3 sigma and more, but that is not the exercise I wish to take here.

My interest here is in something Kejriwal said: “”Whoever owns a house in Delhi is a crorepati.” This was in defense of his candidates, at least the unlucky 11.

That statement sent me scurrying to Adam Smith’s An inquiry into the nature and causes of the wealth of nation, of which I am a little more than 1/3 way through. I read, “The stock that is laid out in a house, if it is to be the dwelling house of the proprietor, cease from that moment to serve in the function of a capital, or to any revenue to its owner.” OK, maybe Adam Smith did not know what our finance wizards are capable of, CDOs, securitization of mortgages etc. We will take what he said, in the 18th century, with a pinch of salt.

But, that cannot be the full story. The magazine Forbes must know the newest trick in the universe of finance. When it estimates the wealth of the super richest, it does not reckon the primary residence of the person. To make it simple, Mukesh Ambani’s Altamont Road residence, the ugly skyscraper Atilia (If I spelled it right) does not count. Likewise, the Kensington residence of Lakshmi Mittal, before he sold it, as reported.

Now, I haven’t the faintest how the Election Commission of India reckons the primary residence of the candidates. Does it listen to either or both Adam Smith and Forbes? But, if we take Kejriwal’s word for it, the primary residence counts, in which case his claim is patently untrue, unless the type of residence and its locality is clarified. Owners of Janta and at least some SFS flats, possibly the real aam aadmis, must be surprised to hear what Kejriwal said. And, less said the better about those who have a house in Gurgaon!

On top of this, he has started down the slippery slope of comparing himself and AAP with the other politicos: “We are nowhere. [The talk should be of billionaires].” Then, we are left to wonder whether the comparison will extend to corruption too (“The talk should be of lakhs of crores of rupees, not merely thousands of crores”).

And then, to what else?

Where is the exit ramp for AAP along this slippery slope?

Raghuram Ekambaram

1.    Many crorepatis in Aam Aadmi Party, Mohammed Ali, The Hindu, November 17, 2013  


Aditi said...

I sincerely wish that AAP loses severely.Not because I am rooting for the established parties, but the AAP manifesto for Delhi election that I got as a handbill with the morning newspaper got my goat. The manifesto does not display any awareness of power and responsibilities in India's Federal structure and promises to deliver on items that a State Assembly has absolutely no control on.Besides, it promises free water to all citizens of Delhi and allotment of free flats in-situ to slum dwellers.

About every houseowner being a crorepati in Delhi,if the word 'notional'is added to crorepati , I suppose the statement will be largely correct, as I find from the going market value of 2 bedroom DDA flats, the aam aadmi kind of accommodation.

P.S. If you don't mind my saying this, I find reading white letters on black background very strenuous, wondering if you would consider changing the blogpage appearance for reader benefit?

mandakolathur said...

Aditi, to address your difficulty in reading, my immediate response. I will change it pronto. That was just a fancy that overtook me. My apologies.

I do not think I would have waited for the manifesto to take the decision you took. This was true from day one.

Yes, "notional" would have done the trick, but how many who follow AAP know the meaning of the word?

Thanks for adding to the post, as always.