The End of Innocence

[Image by Gerd Altmann under Creative Commons]

The main thing about money, Bud, is that it makes you do things you don't want to do ~ Lou Mannheim in the Hollywood classic Wall Street

It was early 2008—a few months before the world tried to come to an end. The Global Financial Crisis would hit us in September that year. I was sitting across a bunch of young, bright-eyed NRI kids from the UK. They had left their cushy jobs in London and wanted to launch a mobile gaming venture in India. OnMobile had just listed and was running amok on the bourses. The market was red hot for mobile start-ups—Altruist, Comviva, 197 (PayTM’s original business), all of them were the next big things. Caller-tunes and value added services (VAS) had become money-spinners overnight. 

Fresh-faced and full of optimism, they went on about how mobile gaming in India would be the next big thing after Google. The energy was infectious. I asked them how much money do they intend to raise. “Rs 20 crore,” they said without as much as blinking an eyelid.

It was a lot of money in those days. I asked them to show me how they planned to deploy it. They pulled their spreadsheets out. 

My eyes latched to an expense of Rs 5 crore under “Miscellaneous”. What was that all about? “What do you mean by parking such a huge amount under miscellaneous?” I asked them. 

They looked at each other—and then at me. “Sir, this is money kept aside for the under-the-table amounts we need to pay VAS teams at some of the Cellular operators. We figured at the circle-level (telecom players run profit and loss statements circle-wise) they have made a rate card for running promotions and charge us under-the-table for every game downloaded. If we don’t pay it, we’ll never be successful. It is standard industry practice.”

I declined to invest. The conversation though stayed in my head.

Every week we hear of stories of fraud at some corporate. And mind you, those are stories that come out in the open. We really don’t know how many frauds go unnoticed or get shoved under the carpet because it looks silly for a company to be scammed by its employees.

A few weeks ago we read a compelling account of fraud at Foodpanda. In the recent past, we’ve heard of misdemeanors from Reebok to Ranbaxy. A study by Assocham in association with Grant Thornton concluded 71 percent of companies surveyed expected cases of corporate fraud to increase in the next five years. “Bribery, corruption and regulatory noncompliance are the top frauds that respondents have experienced in the past two years,” it said. 

Global corporates are not far behind. What happened at Volkswagen was not negligence or oversight. It was deliberate deception—not by one man, but perhaps ordered in the boardroom by a leadership that instructed a team to write software to hoodwink the pollution testing system.

When I think of it, there isn’t anything here that ought to surprise us. Greed inevitably lurks in places where people have discretion or arbitrary power. It started with food when primitive man snatched it from another for survival. The advent of money just made it easier. No one ever said, “Enough, I don’t want to make my next million.”

Every society has tried to fight this addiction. Every religion condemns it. From Red Riding Hood to the Mahabharata we’ve seen the greedy one lose. The moral of all these stories is that retribution follows greed.

In India, we are no strangers to greed. We don’t need international rankings to know how corrupt we are as a nation.

When I think of it, greed happens at four levels.

The first kind of greed is witnessed among politicians and high-ranking government officials. Across the world, they are among the most corrupt. You can almost forgive them because this behaviour is a pre-requisite for the job. After all, how can the world’s armies move if defense contractors stopped their machinations?

The second kind of greed exists in the form of corruption at the corporate level where greed becomes a game between competitors. Who can get ahead with which licence first? We see unholy alliances between Indian conglomerates and politicians. We saw it in the financial scams of Harshad Mehta and Ketan Parekh. We see it in the financial engineering by folks who snare investors into their chit funds. Most of these people have money to last generations. But it is a drug. These people are greedy because they get a thrill out of winning. They were not brought up to be criminals. Their cleverness drove them to it. 

The third kind of greed is that of the policeman, the court clerk and the government servant. This is where India starts becoming a case study for the world. Their greed cannot be condoned. But we can attempt to understand it.

They are witnesses to life pass them by in the post-liberalization era. Private sector incomes and lifestyles have transformed and these people are left behind. They watch as others go by in BMWs and Audis and buy apartments that run into the crores. Sure, they have the security a government job provides. But they don’t have the income to maintain the lifestyle they see around them. It is inevitable then they rationalize it is okay to take a cut.

The fourth kind of greed now emerging is that of the well-paid, well-educated, Indian manager with roots in the middle class. They’ve worked their way to the top and it isn’t difficult to spot those paid by the crores every year. Theirs is not greed of want—it is greed born of desire.

Until it came to this pass, they worshipped Saraswati, the goddess of learning. They believed if they did the right things, Laxmi, the goddess of wealth would shower their blessings on them. They were the ones who prayed before every auspicious occasion. They believed in doing things the old fashioned way. Work hard, and the rewards will follow.

But their coming into wealth on the back of fancy salaries seems to have unhinged them. They dream of a bigger house, a bigger car, a bigger everything that compels them to take shortcuts and compromise on integrity. To understand the import of that, allow me to point to a report published in The Times of India on how income inequality has doubled over the last 20 years.  “The top 10 percent of wage earners now make 12 times more than the bottom 10 percent, up from a ratio of six in the 1990s,” it says.

If more perspective is needed, do look up this interesting thread on Quora around what is your salary at age 24 in India.

Is that the driving force behind shorter tenures at work? Does that explain the desire to quit for a marginally higher salary?

A great example to look at to understand this new kind of greed: the conversations Rajat Gupta had, which were eventually used as evidence in the insider-trading case for which he got convicted. That desire to get a board position and earn a few extra million dollars was as clear as daylight. The evidence was secondary. The greed was apparent. Rajat Gupta is the poster child of the middle class dream—a story of rising from hard circumstances, individual grit and impeccable ethics. But then it comes to naught for a few million dollars.

For the life of me I haven’t figured why couldn’t he understand money is only a marker of what you create and achieve. Money is meant to be the outcome of a good job. It was to be but an accessory to success. But the means have become an end in itself.

Scientists researching the theme have consistently observed becoming rich could make you greedier. Chances are the better off you are, the more unethical you are likely to be. They found the richer you are, higher the chances you will break traffic lights, threaten pedestrians, lie on your job interview and generally cheat at a game. Somehow apathy follows wealth, which follows greed. 

Or is it nothing more than peer pressure? The desire to shop the best, vacation the hardest, send your kids to the most expensive schools and universities. Are we being compelled by social media that pummels our feed with the best one percent of other people’s lives and makes us believe our own is insipid? Does that dictate our aspirations and actions? Do we need a reminder that we are not what we own, and are not defined by our bank balance?

And no one knows when this disease strikes a working professional. I don’t think their spouses and families know when these people choose to forsake their reputation for money. When do they take that first, fatal irreversible step?

Our moral compass was to point towards True North. But that needle now wavers. It points towards more.