Thursday, January 26, 2012

SOPA, PIPA, Kapil Sibal and Ad Hominem

In recent times, we have seen a huge furore against policing on the internet, both in India and globally. In the US, SOPA and PIPA have been positioned as instruments of state control (even Wikipedia went on a 24-hour black out against this); while in India everyone and their dog has cried foul against Mr Sibal.

Now, neither Mr. Sibal not the US Congress are saints. But we need to see what they are saying instead of attacking a framework just because it has been presented by them.

The US wants to expand the current copyright framework and clamp down on online piracy aggressively. I cannot see how this is against freedom of expression.

The whole issue boils down to the issue of "user-generated content". Over the past 18 months, we have seen many forums that host content contributed by the user - Blogs with comments, facebook, youtube, etc. This has been a magnificent addition because this has democratized creativity, so to say. One does not need to have a grand distribution system to launch a video/album. You put something together, get it up on youtube and it will take off if it is good. On good websites, the comments section has increased the value of the article to the reader immensely. They have taken this urge in people to express and converted this into a wonderful positive externality. So, user-generated content has generally been a huge positive.

However, the provision of this platform has lent itself to two forms of abuse - copyright violation and hate commentary. Anyone who feels compelled to do so can upload highlights of a football match or streaming video of a concert. Thanks to technology the costs of doing this is very low. And most people do this in order to increase traffic to their blog/channel. This is not user-generated content - this is called IP theft.

Facebook, youtube and co have found a wonderful way to help ordinary people find a platform for expression. What they have also found is an equally wonderful way to monetize this. Even if they were not monetizing this, they should be held responsible for content that gets aired. I cannot imagine a legal framework where some movies cannot be aired but can be showcased on youtube,

The cloak of anonymity gives many cowards the "courage" to air their thoughts. This is why the internet is more hateful, shameless and edgier than real life. Facebook, youtube should provide all details to help nail the offenders. They cannot simply shrug their shoulders and hide behind freedom of expression.

Freedom of expression has established limits in almost every country. In India, one cannot incite religious hatred in the name of FOE. Even in the far more liberal Euro-land, holocaust denial is a crime. In almost all countries, freedom of expression does not include the right to air content created by someone else. That is Intellectual Property Right violation. The internet need not adhere to stricter standards than the real world. But, it most definitely should adhere to the basic tenets agreed upon in each country.

If it is considered illegal to say random stuff about religion in India, it must be considered illegal to post it on facebook on Indian accounts. And if facebook cannot take responsibility for this, I do not know who else can. Facebook, youtube, etc should be asked to monitor content aggressively. And a government agency should be given the powers and liberty to impose hefty fines if some violation sits on the website for more than, say, 6 hours. I would go to the extent of saying FB and youtube should be able to share their overall dope for the government agency to continuously screen the content with some sophisticated software. If any user can come up with a screenshot of offensive content, they should be able to send it to some government agency. If FB/youtube do not agree to this, said websites should be asked to take a hike.

Just because the odds of Kapil Sibal saying something sensible are very low, we should not take it that everything he spouts is incorrect. In fact, his reasons for wanting to monitor the web could be spurious, but the point still remains. Hiding under the garb of "user-generated content" is a lot of copyright violation and hate-speech. The sooner we face up to this reality and handle this the better.

Sunday, January 22, 2012

India's inverted risk pyramid and FDI in retail

90% + graduates from India's IIMs take up jobs with the corporate world. 95% of entrepreneurs (most working in the so-called unorganized sector) are guys who would definitely not be among the top 10% of India's wealth (who will collectively hold 90% + of India's wealth)

Vijay Mallya runs a so-called risky business where his personal fortune is perfectly hedged. Apparently for every Re 1 that Kingfisher loses, assorted creditors and banks lose Rs. 14. Your vegetable vendor borrows Rs. 1000 at the beginning of the week, buys vegetables & fruits, makes Rs. 1600 -ish through the week, repays Rs. 1100 and then keeps Rs. 500 for himself (If everything works out).

In a rational world, we would see well-off people taking more risk and the less well-off settling for steady-income jobs. In India, the setting is the exact opposite. The well-off fall in two categories - 1) ones that are happy with a steady role and see enormous wealth-accumulation opportunity in that and 2) ones those find themselves in a position to take healthy risk with other people's money.

The poorer ones, on the other hand, are forced to take risk on an everyday basis. They take every kind of risk - business risk, financial risk, life risk (have you seen how our buses/trains overflow), health risk, etc. etc. The organized sector shuns these because they lack polish and good communication skills, they do not have inherited wealth and make a choice to run their own vegetable shop rather than being someone's office boy. Many take the route to Dubai or East Asia. (very risky options).

Now, what has this got to do with FDI in retail? Everything. Forget the big shops, forget the consumer benefits, forget how the big western guys can scr*w the happiness of dear Reliance retail. Expansion of organized retail can de-risk India's working class. And it is worth pursuing for that reason alone. A week's effort from a vegetable vendor can be erased if one small scooter runs into his tricycle by mistake. If you have seen the utter look of horror on the face of a vendor when they see looming clouds on the horizon, you can get a sense of what I am getting at here. What is 2 hours of pain for most of the salaried-class is a debt-crisis for the vegetable vendor. Especially, when you keep in mind how tough it is to maintain vegetables and fruits fresh during rains.

A lot of chatter has been seen on how Mom and pop stores can get squeezed out by giant discount stores. This is irrelevant. Lets face it, our mom and pop stores are not great entrepreneur stories anyway. Lot of these stores are being run because the people who are running them could not get "other" jobs. If these people could get employed at a big store, stay in AC store rooms for 10 hours, get paid a salary, get 15 days off a year and get trained on consumer-handling, it is going to be great for them. They no longer need to worry about their mini-store getting flooded when rain crosses 12 cms level in Chennai. For the love of god, someone should be selling the idea of this de-risking. Instead of saying this is Satan by another name.

Quite inevitably, India being India, either the Ambanis or Ruias or Mallyas will get into some JV with some global player and make tons of money for just existing. But for all this, if retail chains come through and convert India's hapless unorganized sector into salaried class, it is worth pursuing.

India's poor are exposed to way too many risks than they care about. If trickle down can make their life more steady, even if not richer, that alone is worth pursuing. India's poverty cannot be eradicated in 10 years. If we can create a setting where the next generation has hope, that is something to shoot for. Reduce risk, give people good salaries and bend over backwards to convince them that this is the better option for them. Instead of doing all this, we are protesting against organized retail.