Published on 14th August, 2015, in the Economic Times.
There was once a gigantic 100-year-old tree in the middle of the great forest. When woodcutters came to chop it down, the tree said, ‘If you can be patient, wait for the spring to pass, so that my flowers can feed the bees and butterflies, and maybe for the summer to pass, so that my fruits can feed the bats and squirrels. When you do cut, cut me branch by branch, for there are birds who live on these branches, and monkeys too, and snakes. Make sure I do not fall where there are saplings germinating so that they do not die before they have a chance to live. Yes, take my wood, but with least problems to all those who depend on me.’ The woodcutters were impressed by the tree’s wisdom. They realized it was the Bodhisattva, the compassionate one, whose stories are compiled in the Jatakas.
Often regulators, as well as corporations, take seemingly small policy decisions that have huge impact on the market. The one taking the decision focuses on his job and his rules, without taking into consideration the vast network of dependencies that his ruling will impact. Their decision is like felling the great tree in the Jataka story, and when that tree falls a whole ecosystem is destroyed with it. In the world of business, it means the end of livelihoods for many, especially in a country like ours. And we are not talking simply of the directors here, we are also speaking of the doorman, the chai-wala, the driver, the housekeeping staff, who need those organizations to exist to earn their daily wage.
So seemingly ethical ban on a food item by a respected government agency has a huge consequence. And it is not just about the multinational company, which markets the product, or the millions of consumers who will be denied their favorite food. On the production side, raw materials will not be used. In a country where distribution of food is always a problem, the grains and cereals will not make it to the market. They will stay in warehouses and rot. On the logistics side, huge number of transporters will no longer be distributing that product. Retailers will not display the product. Distributors and wholesalers will have return stocks. Finished goods, that cannot be sold legally, will be sold illegally, or destroyed.
And then there will be financial repercussions. Payments will be stopped. Loans will be pulled back. Cash flow will be affected. Businesses will shut down as their cycle of payment will grind to a halt. Who will be affected most? The many at the bottom of the pyramid, not the few on the top. Everyone will be suffer, but the pain will be most intense with the least power and privilege.
And then there will be the social implications. The status associated with being a distributor of a popular brand is a matter of status. It is an indicator of success in trading communities. It guarantees credit worthiness, even marriage proposals. For the multi-national company, it becomes a huge brand setback, and an insult at international levels, as reputations are questioned. The stock market wonders negatively. Market capital is affected.
Policies are passed on religious and moral grounds without consideration to the eating habits of other communities, or the economic repercussions of such actions on the producers and distributors. Animal rights activists save animals from poor people who have no other choice but to exploit animals to earn a living. Environmental activists stop mining activities to save the ecosystem. Non-Governmental agencies are being shut down for being anti-national, without realizing that they also employ large number of people. Where will those people go to earn a wage? In the moral high-ground that comes from saving animals, ecosystems and the nation, there comes the moral price of depriving people, usually the poorest of the poor, from livelihoods. The rich simply shift focus elsewhere.
In a world where a lot of attention is being to macroeconomics and to ‘saving the world’, very little attention is being given to the microeconomics of ‘saving livelihoods’ or ‘creating livelihoods’. Every business, profit making or non-profit making, creates an ecosystem of vendors and partners and contract laborers. In a world that is becoming increasingly moralistic, we need to question the morality of stripping people of livelihoods. In a world where ethics is valued, we must ask questions if it is ethical to deny people a source of income. Yes, we want to save the consumer and the planet and the nation, but surely, we first want to make sure everyone has some food first.