McMedia
& Market Jihad
By
P. Sainath
01 June, 2004
The Hindu
So
maybe it's safe now to speak about the market without its leaping off
a cliff, screaming. (Or maybe not quite. By close on Monday, share prices
recovered nearly half the losses they logged soon after opening.)
The hysteria around
the May 17 `meltdown' was more scary. The Times of India front page
recalled 9/11. It splashed the figure 2340000000000 across the page,
just beneath its masthead. A strap shrieked that 2.34 lakh crore of
"investor wealth" had been "wiped out." The loss
of this paper wealth was declared in eight column headlines as "Ground
Zero." The accompanying graphic mimicked the attack on the WTC
in New York. An image of the stock exchange building in Dalal Street
exploding in flames. And, yes, the hijacked aircraft ploughing into
it had the Communist hammer and sickle on its tail.)
Within two days,
the Sensex showed what The Times now called "instant recovery."
A response to the `good news.' No Sonia Gandhi. As the extent of the
irrational behaviour sank in, there was a sheepish plea to the markets
to behave. This time the paper warned: "That markets should play
such a role, by design or default, in the formation of government bodes
ill both for our democracy and the future of free enterprise."
(They're still at it, though. Friday's Sensex wrote us an editorial
on the Common Minimum Programme of the United Progressive Alliance.)
Actually, some in
the financial world were slightly more balanced than the media. Through
the chaos, they stressed that there were several reasons, external and
internal, behind the `meltdown.' Other markets too, had been affected.
Hot money had a role. But complexity confuses a media that needs a simple
plot. A villain, a hero and a happy ending. In the Left, Manmohan Singh
and a partial bounce-back, it found two and a half of these three.
Dr. Singh seems
a reluctant hero. Take his gentlemanly defence of the villains: "I
believe the members of the Left Front are just as patriotic as anybody
else... "
Unless I got it
wrong, this is new. Will patriotism now be measured by your allegiance
to the markets? Maybe its time for a new anthem as well. (The Abba hit
from the `70s, for choice: "Money, Money, Money. Think it's funny.
It's a rich man's world.")
Here's a useful
exercise: Check out the newspapers for three days after the polls. And
for three days after the `meltdown.' Compare the coverage and, importantly,
the passion. You'll know which mandate the media see as more important.
That of the masses or the one from the market.
In three days, the
big media gave the `suffering' in the stock market more space than they
had to thousands of farmers' suicides in the past few years. Never mind
that two-thirds of our people depend on agriculture. Or that just 1.15
per cent of India's 180 million households invest in stocks.
Some economists
point to the puffed up role ascribed to the market. As Prof. Jayati
Ghosh writes: "In the Indian stock market... a few large investors
such as the financial institutions, big corporates and foreign institutional
investors dominate. Only a small proportion of the stocks are available
for trading. All the gains and losses are simply on paper and do not
imply any erosion of the country's real wealth... It has been clear
for some time now that the markets are very poor pointers to real economic
performance."
Behind the stock
market is the larger notion of `The Market,' a much wider political
concept. And the conflict between that and democracy is very real.
The Wall Street
Journal knows this. "Democracy is perverse," it whined about
the poll results on May 19. "Although it is natural for the U.S.
to suggest that all countries should embrace democracy, the lesson from
India is that Western countries cannot be dogmatic about elections."
"As India's
election will testify, democracy is not always supportive of coherent
economic policy and prosperity." (Read: the voters are too dumb
to know what's good for them.) On countries not yet at India's level,
the Journal has some advice. The West "should be more hesitant
about promoting political competition... " For alas, that "could
destroy the leadership" that pursues vital economic change.
Maybe the Journal
worries about post-June Baghdad? An elected government that might grumble
when Dick Cheney's cabal plunders Iraq's oil? The Journal's dilemma
is a classic one. Market fundamentalism versus mass democracy.
It's a dilemma that
has our own market jihadis seeking martyrdom. They go a step ahead of
the Journal. With them, it's death to the infidels. "In 2004,"
writes a leading editor, "no government that the markets see as
hostile can survive." The rhetoric of the rabble "has to be
tempered to provide for the sensitivities of Dalal Street."
"The markets
have spoken," declared another top Indian newspaper. But God is
a bit edgy. "The markets are jittery," explained one business
editor on television. "We need to soothe their nerves." (Hush
now, the markets are asleep. Don't start off something by speaking aloud).
So, did 400 million
citizens and voters queue in blistering heat of 40-plus to soothe the
fretful nerves of the market? Some of us thought they were asserting
their sovereignty. To demand the reforms they really needed. And to
pass judgment on the market-driven reforms governments have followed.
So what happens when poll verdict clashes with market edict?
The Wall Street
Journal's answer: Don't waste time on the electorate. "The lesson
of the past week is that if India truly wants to become an economic
power it has to pay heed to the global voters known as investors, in
addition to its own voters at home." We can listen to our people,
says the Journal (gee, thanks guys) so long as they vote the way the
investors want them to.
Surely, this is
a regression? For years, the WSJ and others have argued that not only
are markets intrinsic to democracy, they are democracy.
There is no miracle
The Market cannot perform. Market forces, as Swaminathan Aiyer argued
long ago, are great for the environment. Time magazine's Charles Krauthammer
sees the market as the lifeline for `previously starving Third World
peasants.'
Hunger is a function
of anti-market systems. Want more jobs? Free the market. The crisis
in agriculture is best dealt with by not dealing with it at all. Leave
it to the market. Given its all-knowing wisdom, maybe the `The Market'
ought to go out and seek a popular mandate.
One result of the
`meltdown' was the return of the small investor to media limelight.
It's hard for people to weep over some nasty Croesus losing a couple
of million. The Little Guy jerks the tears better. In the United States,
this little guy is the mythical small farmer. In his name, tens of billions
of dollars are doled out each year by Congress to huge agribusiness
corporations. Not to the Little Guy.
No citizen wants
to make Rockefeller richer than he is. But if you get the public heart
to bleed for the small farmer, you get the public purse to bleed for
giant farm corporations. In India's corporate media, the Little Guy
is the Small Investor.
Small investors
are to markets at crunch time what the giant shoals of sardines are
to the sea at lunchtime. A floating restaurant. Marauding sharks and
dolphins corral the sardines into tight herds from which they can eat
them in their millions. But the seas of the Indian stock market, though
turbulent, are shallow. The shoals have been stagnant for a decade.
When that other,
real small investor suffered due to an interest rate crash, many in
the media applauded. When retired people saw their lifetime's savings
crumble. When those with fixed deposits in banks or with NSC certificates
took a beating, there were few teary pictures in the media.
There is, though,
yet another kind of small guy who can get hurt. The volatility now structured
into the market can, at some point, affect the real economy. Then it
would hit, as Prof. C. P. Chandrashekhar writes, poor people. Even though
"they do not participate in, or often are not even conscious of
the workings of financial markets."
Meanwhile, the media
assured us all these years that the Indian Left is irrelevant. Unless
it can learn from China. (China's CEO is our CEO?) Yet, the same pundits
tell us that a couple of sentences from the irrelevant Left was enough
to trigger "Bloody Monday." There you are. Revealed
the secret of how to make the markets dance up and down in a frenzy.
Maybe the markets
will settle down as they realise that even if they dance the Swan Lake
on one toe, the BJP isn't coming back. Not just now anyway.
Market-worship is
not novel. But the insane primacy it now gets is relatively new. Among
other things, it reflects the ever-growing corporate links of the media.
Links that spur them to mislead the public for their own profit.
"Markets are
all about sentiment and confidence," gushed one TV anchor. "We
must give them the confidence that governments will listen, that their
interests will be honoured."
Voters, too have
sentiments. Often very anti-market ones. They too wish to have confidence
that governments will honour their interests. Whose interests do we
give priority to? Voters? Or `The Market'? The corporate media have
given their response to that question. The new Government still has
time to find its answer.