Is Milton Friedman dead? Not quite. Individual social responsibility, not corporate social responsibility, must be the mantra
Gurcharan Das | Author, and former CEO, P&G India
The Times of India
Capitalism has been on the “defensive” since the 2007-08 global financial crisis, with people rejecting it due to deepening inequalities, writes Das. These fears recently pushed 180 CEOs in the US to put forward a new “statement of purpose”, that moved away from Nobel prize-winning economist Milton Friedman’s 1970 doctrine that the only “social responsibility” of business is to increase profits. The new statement focused on the bid to “balance the interests of shareholders with those of customers, employees, suppliers, communities and the environment”.
Das points out two problems with the statement. First, questions arise over how performance should be measured with so many vague goals, and who the company must be accountable to. Second, the statement may be “hollow” as profits matter to stakeholders, and value creation and competition are good for customers, employees and suppliers.
In India, the corporate social responsibility law eats into the profits of companies by 2 per cent, forcing them to spend on not-for-profit activities. But philanthropy should be an “individual social responsibility”, concludes Das.
Gautam Bhatia | New Delhi-based lawyer
Bhatia writes that amendments to the Unlawful Activities (Prevention) Act (UAPA) passed last month could be a “recipe for abuse”. The UAPA tribunal, meant for checks and balances, has given the government a lot of leeway. Its recent order upholding the government’s ban on the Jamaat-e-Islami, Jammu and Kashmir (“JeI, J&K”), illustrated this.
The government claimed that JeI was supporting extremism and had many FIRs against its members. The Jel responded with the claims that none of the accused had anything to do with the association. The judge, who received JeI’s membership register and other evidence in a sealed envelope, was still satisfied with the government’s claims. A five-year ban was put on an association with thousands of members based on this “secret evidence”. The tribunal referred to how the UAPA allowed departures from protocol in order to “serve larger goals”.
Bhatia concludes that this is not a jurisprudence that respects constitutional democracy or fundamental freedoms.
Pavan Duggal | Advocate, Supreme Court, and chairman, International Commission on Cybersecurity Law
Stressing the need for holding intermediaries accountable, Duggal writes that they assume the role of media companies while escaping the legal obligations that come with it.
Media companies are governed by “specific legal frameworks” that do not apply to intermediary service providers under the Indian Information Technology Act, 2000. But many intermediaries today are seeking refuge, writes Duggal, behind the precedent set in the Shreya Singhal v/s Union of India judgment in the Supreme Court — the order said that an intermediary will have to remove or disable access to any third party data only if there’s a direct order from a court or government agency.
Duggal highlights that fake news has become a huge concern in India but there is no law to curb this. Rules and regulations need to be put in place, and the Information Technology Act needs to clearly define the rights, duties and responsibilities of intermediaries, he adds.
Jaspreet Bindra | Author
Bindra highlights a recent debate between tech giants Elon Musk and Jack Ma on the impact artificial intelligence (AI) can have on humankind. While Ma was optimistic about the technology’s future, Musk raised doubts. In this context, Bindra asks if AI will be “a boon to humankind, or the harbinger of our destruction?”
Every new technology, be it computing, electricity or motor cars, “was supposed to destroy mankind as we knew it”, but humans always managed to use it for improvements in everyday life, writes Bindra. He cites the World Economic Forum to say that AI is likely to “displace 75 million jobs by 2022, but will also create 133 million new ones”.
He adds that naysayers differ, but he also leans a bit towards this camp. Bindra concludes by quoting Musk: “AI doesn’t have to be evil to destroy humanity—if AI has a goal and humanity just happens [to be] in the way, it will destroy humanity as a matter of course without even thinking about it, no hard feelings.”
V.S. Krishnan | Retired member, CBIC, and national leader, tax and economic policy group, EY
Krishnan comments on the government’s need to focus on improving the ease of paying taxes, comparing it with ease of doing business. He argues that this is likely to increase compliance.
Any tax system should have certain features like clearly defining disputes and keeping non-serious infringements out of the domain of disputes. There should also be “uniformity of practice in assessment” and “the system must ensure speedy adjudication of cases”, writes Krishnan.
He recommends that the distinction between “suppression” and “non-suppression” cases in the GST law should be done away with and there should be “one uniform period of three years to complete adjudications”. Krishnan also points out the need for an institutional mechanism where trade and industry grievances can be aired to officials.
K.R. Shyam Sundar | Professor, XLRI Jamshedpur
The Financial Express
Sundar takes a look at the Occupational Safety, Health and Working Conditions Code, 2019, writing that the code aims to combine 13 laws relating to factories, mines, dock workers and working journalists, among others.
The code has not dealt with the issues concerning occupational safety and health adequately, and even imaginatively. It leaves the “enumeration” of “maximum permissible threshold limits of exposure of chemical and toxic substances in manufacturing processes” to the state governments, writes Sundar.
On the positive side, though, the code requires employers to take prior consent from workers to do overtime, he notes. The code also requires all employers to issue an employment letter “but does not stipulate a remedy in case of non-compliance of it, save the general monetary penalties”.
Subbarao | Former RBI governor
The Indian Express
Subbarao labels the recent mega merger of PSU banks as a “needless distraction”. In the short-term, the administrative and logistical challenges of mergers will shift the focus away from non-performing assets, and the bank staff will also worry about its job and career prospects, he writes.
The long-term benefits of the merger are also not clear. There will be cost advantages because of economies of scale, but these merged entities can become too big to fail, he notes.
Subbarao also asks if India still needs PSU banks, writing that the financial sector is now “wide enough and deep enough to take care of financial intermediation without the government at the steering wheel”.