Vivek Kaul
Talking about contradictions, here is an interesting one.
The Times of India edition dated March 18,2013, had a huge advertisement featuring Arindam Chaudhuri, the pony tailed bossman at IIPM(Indian Institute of Planning and Management) and his father Malay Chaudhuri. The advertisement congratulated Chaudhuri senior for having turned seventy five and had the vision to launch IIPM forty years back.
This advertisement came four days after Arindam Chaudhuri wrote a column titled Are you still a moron advertising in newspapers? The column ended with the rather prophetic line “However, yes, your business may not be able to cater to the next generation unless you realise that you are a moron to be still advertising in newspapers!”
Why Chaudhuri chose to contradict himself is something only he can explain. But his column does offer reasons for why IIPM seems to gradually moving its advertising budget away from newspapers, the front page advertisement in The Times of India notwithstanding.
As Chaudhuri writes “It all started changing around 2009 to 2011! As everyone knows, we were one of the country’s biggest ad-spenders till 2012! But interestingly, our returns from newspaper advertising started dropping sharply from 2009-2010. The first year, the admission applications we received from students due to our newspaper advertisements dropped to 40% of the levels we had in 2008-09. The next year, the same was 25% compared to 2008-09 levels. And finally in 2011-12, our applications from advertisements were, hold your breath, just 5% compared to 2008-2009! So basically, in three years, our returns from newspaper advertising came down by a mind numbing 95%!”
While this might also be a result of the falling reputation of IIPM, given the negative coverage its constantly got in the media over the last few years, but Chaudhuri does make an important point here.
IIPM’s target audience would be people in their early 20s, living in cities and who come from reasonably rich families (given the high fees that IIPM charges). There is enough anecdotal evidence to suggest that people belonging to this demographic group consume news largely online by logging onto the internet through their computers and now their mobile phones. Or as Chaudhuri aptly puts it “if you wanted to target the youth, or actually anyone born after 1980 for certain! None of them is reading newspapers anymore! So how will this segment see your ads in the first place and how will they pick up your application form? Yes, that’s the hard fact!”
Various readership surveys have shown over the years that print readership in India has remained stagnant. In comparison people logging onto the internet is growing at a very fast pace, albeit on a lower base. It would be safe to say that a large number of advertisers are interested in this lower base which typically comprises of youth coming from reasonably well to do families living in cities. In short these are the people who have the money to spend (either their own or that belonging to their parents).
So the moral of the story is that Arindam Chaudhuri is making an important point though he has chosen to contradict it himself.
What Chaudhuri’s column does not answer is why is newspaper readership stagnating? When it comes to the city bred youth at some level its a matter of what we can call the Levis syndrome. The jeans brand Levis over the years came to be associated as something that their parents wore, in the mind of the American youth. The same stands true for newspapers as well. Reading newspapers is not cool at least among the youth.
The newspapers in India have tried to tackle this through what they feel is younger and funkier design. The looks are getting trendier and there is more sex and entertainment in the newspaper. But this hasn’t worked beyond a point. As Chaudhuri puts it “naked bodies and titillation are far more easily available and in greater variety on the internet.” And all said and done a newspaper has its limits on this front. The internet doesn’t.
An extension of filling the newspaper with sex and entertainment has been the conclusion that most readers are not looking for serious content in a newspaper. This is what we can call The Times of India syndrome. Since, this kind of positioning has worked for India’s most profitable newspaper, newspapers (across different languages) have been looking to do the same thing. But what works for The Times of India doesn’t necessarily work for others as well.
As marketing guru Al Ries told me in an interview “Everyone assumes the No. 1 brand must be doing the right thing because it’s the market leader. Therefore, we should do exactly the same thing, but better. That seldom works.” There are newspapers which have lost hundreds of crore trying to bring out a better Times of India than The Times of India.
They forget a very basic point. If I as a reader want to read The Times of India, I will read The Times of India, and not a clone. More newspapers (at least the top English and the top Hindi newspapers) have been trying to bring out different versions of The Times of India, though their managers, editors and promoters will never admit to the same. This has stagnated readership at one level as the standard of content has fallen dramatically. There is inherently better content available on the web in India, if you know where to look.
Another reason for worry for most newspapers is that their business model is not working. In the late 1980s a copy of the Delhi edition of The Indian Express (with air surcharge) used to cost around Rs 3.50 in Ranchi, where this writer grew up. Now nearly 25 years laterThe Indian Express costs Rs 4.50 in Delhi and Rs 4 in Mumbai. Most other English newspapers cost around Rs 3-5 i.e. if you buy them off a news stand. The price point of a newspaper hasn’t really taken inflation into account at all.
If you are annual subscriber the cost can be very very low. In Mumbai newspapers have been known to offer an yearly subscription for as low as Rs 99. This basically meant that the daily newspaper was priced at 27 paisa (Rs 99/365 days). No wonder people bought newspapers so that they could accumulate good raddi and then sell it.
The idea behind this business model was to lock in a subscriber for a year by giving away the newspaper almost for free, and then go to the advertiser and tell him, we have so many readers, why don’t you advertise with us.
This has meant that most newspapers are now totally dependent on advertisers to make money. This business model worked during the period between 2002 and 2008, when companies were falling over one another to advertise. It doesn’t work at all in a low growth scenario, where everyone is looking to cut costs. Also with the advertiser getting top billing any negative stories that hurt a prospective advertiser are a strict no no. This makes more newspapers concentrate on the feel good and have a pro business attitude. In short, most newspapers dish out more of the same. There is not enough differentiation for a wide variety of taste that people have.
The other thing this business model does is, it limits readership beyond a point. The newspaper cannot expand because its not viable unless extra advertising comes in. Newspapers are a rare business in which selling an extra number of units can increase losses instead of profits. This is because the reader doesn’t pay for the newspaper. If newspapers in India have to survive, they have to figure out some way of getting out of the subscription based business models that they have got themselves into and can’t seem to come out.
These were points that go against a newspaper, but what about the internet? Newspapers are a very limited medium of communication. You only read what the promoter(and not the editor) of the newspaper wants you to read. In case of the internet people can create their own content. Hence, there can (and is) a tremendous diversity of opinion which one can never get in a newspaper. Also space is not a problem on the internet. It is in a newspaper. Thus, internet can have more diversity of opinion and thus appeal to more people than a newspaper can.
Also as the world gets inherently more complicated, the limited space in a newspaper tends to make things overtly simplistic rather than just simple. On the internet things can be explained and arguments and counter arguments can be made in detail. For anyone who is looking to understand the way the world works around him, the internet is an inherently better medium.
On the internet news can be consumed almost instantly. A reader need not wait for the next day’s newspaper to be updated on what is happening in the world around him. Even analysis on the internet is up and ready, before it comes out in a newspaper, the next day. Also, the internet is now accessible almost anywhere and one doesn’t have to go looking for it, like one has for a newspaper that one does not subscribe to.
Internet is a very low cost medium. A newspaper is a very high cost operation which involves buying land to set up a printing press and cutting trees to make newsprint on which the paper is printed.
So there are many good things going for news on the internet. The trouble though is that almost no one has till date figured out how to make money on the internet through news. Internet as a medium tends to be associated with “free”. Hence, digital subscriptions have not worked almost anywhere. Also people tend to ignore advertisements on the internet. A part of this equation is falling into space through Google Ads. Now only if websites could figure out the other half, newspapers would be dead sooner rather than later.
The article originally appeared on www.firstpost.com on March 19,2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
The Times of India
Why Rahul Gandhi doesn't really mean what he says
Vivek Kaul
In an interview to the Tehekla magazine in September 2005, Rahul Gandhi, now the Vice President of the Congress party, is said to have remarked that “I could have been prime minister at the age of twenty-five if I wanted to.”
The statement created an uproar. The Congress party immediately jumped to the defence of its princling. Abhishek Manu Singhvi, the then Congress spokesperson, specifically mentioned that Rahul had not said ‘I could have been prime minister at the age of twenty-five if I wanted to’.
Tehakla initially stood by its story but backed down later. “This seems to be a clear case of misunderstanding. Mr Gandhi thought he was having a casual chat whereas our reporter took it to be a proper interview,” the weekly said in a statement.(The ‘edited’ casual chat can still be read on Tehelka’s website).
On another occasion Gandhi remarked “Please do not take it as any kind of arrogance, but having seen enough prime ministers in the family…it is not such a big deal. In fact, I often wonder why should you need a post to serve the nation.” (Source: Decoding Rahul Gandhi, Aarthi Ramachandran).
Gandhi’s obsession on clarifying that he is not in the race, seems to have continued. “Asking me whether you want to be prime minister is a wrong question,” he recently told journalists. In fact he even went onto add that he did not want to get married because marriage leads to children and a lust for power. “I feel we should all be detached from power. Only then we can contribute to the society better. You people ask me about my marriage plans. Sometimes, I think, if I marry and have children, I would want my children to take my position,” he said.
The spin doctors of the Congress party have been working overtime to portray this statement of their princling as a great sacrifice. But being married has got no link with running political fiefdoms and lusting for power. As Swaminathan Anklesaria Aiyar writes in a recent column in The Times of India “Mayawati and Jayalalithaa are both unmarried and without kids, and they run fiefdoms no less feudal than the Congress. Absence of children has never meant decentralisation.” This argument also works for Mamata Banerjee in West Bengal, Naveen Patnaik in Orissa and Narendra Modi in Gujarat, who also run political fiefdoms despite having no children. So the lust for power or politicians running political fiefdoms, has got nothing to do with being married or not.
Also the question is that what can Rahul Gandhi get done as a Prime Minister that he cannot get done being outside the government (assuming that the Congress led UPA continues to be in power)? As Tavleen Singh writes in a recent column in The Indian Express “Rahul already has more power than almost any politician in India other than his mother. So why should he want something he already has?”
Other than wanting to be detached from power, Rahul Gandhi also wants to empower middle-level leaders. “Today, I see how MPs feel without power and it is the same story in all the parties, be it the Congress or the BJP. I want to empower the 720-odd MPs in Parliament. I want to give voice to the middle tier, empower the middle-level leaders,” he said.
While he can’t do anything about the BJP, what is he doing about the Congress? Not much seems to be the answer. The upper ranks of the Congress party seem to be filled with sons/daughters of Congress leaders. In fact, Rahul’s boys, a term I use for the relatively younger leaders in the Congress party supposed to be close to the princling, are all sons of Congress leaders. As Aiyar writes “After talking for years about promoting youth in politics, you have indeed promoted many newcomers to important ministerial positions. They are young by Indian standards, but many have greying hair. The list in New Delhi includes Jyotiraditya Scindia, Sachin Pilot, Milind Deora and Jitin Prasad.”
Nothing seems to have been done about the Congress tradition of the so called “high command” appointing the Chief Minister, in case the party happens to win a state election or even otherwise. This trend was most recently visible in Uttarakhand where the majority of the MLAs wanted Harish Rawat as the Chief Minister, but had to make do with the high command’s choice of Vijay Bahaguna ( who interestingly is the son of the late H N Bahuguna, who was with the Congress party for most of his life). The high command also appointed Prithiviraj Chavan (whose father and mother were both Congress MPs), a political lightweight who was not a member of the state assembly, as the Chief Minister of Maharashtra when they wanted to replace the scam tainted Ashok Chavan (son of SB Chavan, another Congress leader).
The points made above are not exactly rocket science. And I am sure Rahul Gandhi understands them as well as the others. As Tavleen Singh writes in The Indian Express “Rahul Gandhi knows this as well as anyone else in politics, and if he wants to change things, then this is terrific. But why does he not get on with it? Why does he not begin by ensuring that next time the Congress party wins elections in some state, the high command is not given the task of choosing the chief minister? Why does he not ensure that next time a parliamentary constituency reports a vacancy, it does not get handed down to an heir?”
Singh in her column writes that as a responsible political pundit she has been mulling over what Rahul Gandhi said, and she remains “puzzled” and “mystified” by it.
This writer believes that there is an answer to what Singh refers to as a mystery and a puzzle. Allow me to explain. The writer Ramachandra Guha told me in an interview late last year that “I think this dynasty (Gandhi) is now on its last legs. Its charisma is fading with every generation.”
This is something that Shekhar Gupta also pointed out in The Indian Express “Ask any Congress leader who contests elections (unlike its star cast of chronic Rajya Sabhaists) and they will admit to you, albeit in whispers and fearfully glancing left and right, that the days when the Gandhi family could win them their seats are over. In the elections, now, it is every man for himself.”
This has been proven in Uttar Pradesh elections and the Bihar elections before that where the Congress party was routed. Rahul Gandhi was closely involved with both the elections. Given this the ability of Rahul Gandhi or for that matter his mother Sonia, to get in the votes for the party, is very limited. They are not in the same league as Jawahar Lal Nehru, Indira Gandhi or even Rajiv Gandhi, before them. Gupta explains it best when he writes “their ability to win seats beyond the Amethi-Rae Bareli enclave has diminished to insignificance.”
It would be foolish to believe that Rahul or Sonia do not understand this. Hence, they need the Scindias and the Deoras and the Pilots and the Prasads, of the world to continue winning elections. The smaller princlings within the party who can continue bringing in the votes from all across the country. The Congress party may be a shadow of what it was in the past, but it continues to remain India’s largest party. And for it to hold onto what it has, it needs to continue with the feudal structure that totally encapsulates it, with the Gandhis at the top.
In fact when the party has tried to get rid of its feudal structure it has had disastrous results. Take the case of Andhra Pradesh. After the death of Y S Rajasekhara Reddy, his son Jagan Mohan, wanted to become the Chief Minister. And that was not allowed. Jagan Mohan left to form his own party and is expected to widely damage the electoral prospects of the Congress party in a state which sends 42 members to the Lok Sabha.
On the flip side, even though the Gandhis are no longer the vote winners they once were, they are still very important to the idea of Congress. As Gupta put it in his column “I asked a senior (and always elected) Congress leader, then why was the Gandhi family still so important and had total sway over the party. He said, surely they cannot help anybody win elections, but they keep the party together. Their word is law and the party needs that discipline. Illustration: the moment Sonia or Rahul says something, everybody nods and falls in line. If Narasimha Rao or Sitaram Kesri said something, everybody broke out in rebellion and rashes.” So even though the Gandhis may not bring in the votes, they do help keep the Congress flock together.
Given this is in nobody’s interest, neither the Congress party, nor Rahul Gandhi (or for that matter his mother Sonia) to disturb the status quo. The Congress needs the Gandhis to survive as a party, and the Gandhis need the seats in the Parliament and the state assemblies to continue to be relevant.
In October 2008, while addressing girl students at a resort near Jim Corbett National Park, Rahul Gandhi referred to “politics” as a closed system in India. “If I had not come from my family, I wouldn’t be here. You can enter the system either through family or friends or money. Without family, friends or money, you cannot enter the system. My father was in politics. My grandmother and great grandfather were in politics. So, it was easy for me to enter politics. This is a problem. I am a symptom of this problem. I want to change it.”
More such statements will be made in the days to come. Meanwhile, the symptom and the problem will continue to co-exist.
The article originally appeared on www.firstpost.com on March 12, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
Why Samsung is the new Nokia
Vivek Kaul
I grew up reading The Indian Express. But a few years back my parents started subscribing to The Times of India after my mother complained once too often that “Express main masala nahi hai!”
The fall of The Indian Express along with The Statesman which used to be two very good newspapers (Express still is. And I haven’t read Statesman in a while, though at a point of time it was regarded the best English newspaper in Asia) are nowhere in the reckoning now, as far as the number of readers is concerned.
What happened? To some extent the papers remained stuck to their past glory and did not see the rise of the new Indian middle class, which along with hardcore news also wanted a dash of masala every morning. They wanted to know how the Congress party was screwing up the country but they also wanted to know whether Amitabh and Rekha smiled when their eyes met at a film industry party.
The Times of India was the only newspaper which caught on to this trend (or should we say created it), raked in the moolah and got way ahead of almost all its competitors in the race.
So what is the point of I am trying to make? Incumbents who are firmly entrenched in their businesses more often than not fail to see the rise of a new category. The most recent example of the same is Nokia, which after being the top mobile phone brand in the world for a period of nearly 14 years has lost out to Samsung.
And the reason for this is very simple. Nokia did not see the smart phone. There are loads of other examples of existing companies that did not see the rise of a new category.
Sony invented the walkman but allowed Apple to walkway with the MP3 player market. RCA which was big radio manufacturer had earlier allowed Sony to walkaway with the pocket radio market. Southwest Airlines created an entirely new low cost airline market which gradually spread to all other parts of the world. Incumbents like Panam, Delta, Singapore Airlines and British Airways did not spot this opportunity.
In India Hindustan Lever Ltd did not spot the low cost detergent market, Nirma did that. Amabassador and Premier Padmini which were the only two car companies in India did not see the rise of the small car market which Maruti Suzuki captured. More recently Maruti did not spot the growing demand for diesel cars and continued to be primarily a company which manufactured petrol cars. It lost out in the process.
Bharti Beetel, revolutionised the landline phone market in India with the introduction of push button phones. But it got into the mobile phone market very late. And this was a huge business opportunity missed given that Bharti Airtel became the largest mobile phone company in India and could have easily bundled Beetel mobile phones along with Airtel mobile phone connections. An entire first generation of Indian mobile phone users could have ended up using Beetel mobile phones. Kodak a company which invented digital photography went bankrupt recently. And BBC, the most respected news organisation in the world did not see the rise of the concept of 24 hour news and left it to CNN to capture that market.
As marketing consultants Al and Laura Ries,write in War In the Boardroom, “The biggest mistake of logical management types is their failure to see the rise of a new category. They seem to believe that categories are firmly fixed and a new one seldom arises.”
And why is that? The answer lies in the fact that incumbent companies are too cued into what they are doing at that point of time. A brilliant example is Kodak. How could a company which invented digital photography go bankrupt because of it? Mark Johnson explains this phenomenon in Seizing the White Space – Business Model Innovation for Growth and Renewal. As he writes “In 1975, Kodak engineer, Steve Sasson invented the first camera, which captured low-resolution black-and-white images and transferred them to a TV. Perhaps fatally, he dubbed it “filmless photography” when he demonstrated the device for various leaders at the company.”
Sasson was asked to keep quiet about his invention. This was because Kodak was the biggest producer of photo films at that point of time. And any invention that did not use photo films would have hit the core business of the company. So Kodak ignored the segment. By the time it realised the importance of the segment other companies like Canon had already jumped in and become big players. Also by then brand Canon had come to be associated very strongly with the digital camera whereas Kodak continued to be associated with the old photo film.
The same would have stood true for Beetel in India. They would have been making good money on selling landline phones and wouldn’t have seen any sense in entering the nascent mobile phone market in India where calls were priced at Rs 16 per minute. And by the time the market took off brands like Nokia would have been firmly entrenched. Amabssador and Premier Padmini fell victim to the same thing.
Another excellent example of this is Xerox. “Just think of Xerox’s Palo Alto Research Center, which famously owned the technologies that helped catapult Apple (the graphical user interface, the mouse), Adobe (post script graphical technology) and 3Com (Ethernet technology) to success,” writes Johnson.
But Xerox executives were busy selling the photocopier. They did not have time for these small tinkerings that seemed to have been happening in their company labs. The photocopiers brought in all the money and their attention was firmly focussed on them.
Sony is a really interesting example in this trend. Sony had created the Walkman and the entire market of listening to music anywhere and everywhere. But they somehow failed to latch onto the MP3 player market which was captured by the likes of Apple iPod. An MP3 player was just an extension of the Walkman.
Other than being an electronics company Sony had also morphed into a music company owning the rights to the music of some of the biggest pop and rockstars. Hence Sony supporting MP3 technology would mean one of the biggest music companies in the world supporting the free copying and distribution of music because that was what MP3 was all about.
And with this logic which might have seemed perfectly fine at that point of time Sony lost out to Apple in the MP3 space. Also, over the years music became free anyway.
Getting back to where we started, Nokia made the same mistake. It did not see the rise of the smart phone category as other players like Samsung and Apple did. And the reason was simple. Even though smart phones have been around for a while only now have they really taken over the market because they are robust enough. Hence, as long as the basic phones of Nokia were selling well, as they were till a couple of years back, it had no real interest in thinking about the smart phone market.
By the time the company caught on with the launch of Lumia other international players like Samsung and Apple already had a major presence in the market. In India the smart phone space has loads of local players like Micromax battling for the market as well.
And so Nokia lost the race!
The interesting thing is that Samsung will also will lose the race when the next evolution in the mobile phone space happens. It will be too focused on the smart phone.
The article originally appeared on www.firstpost.com on December 20, 2012
(Vivek Kaul is a writer. He can be reached at [email protected])
Ads everywhere: Do we want a society where everything’s for sale?
Vivek Kaul
Innovation is a weird word. It means different things to different people. For people working in the marketing department of a newspaper it sometimes means an advertisement which makes it difficult for the readers to read the newspaper.
It could mean a sidebar before the front page which makes holding the newspaper difficult. Or it could mean a newspaper smelling in a particular way on a particular day. It could also mean an advertisement as the front page of the newspaper, something that can really get the regular reader irritated.
And at times it could mean an advertisement being splashed across different stories that appear on the front page of the newspaper. Most editions of The Times of India, for example,have one such advertisement of Britannia Good Day biscuits.
When money becomes the be all and end all of all decisions in life market values tend to crowd out non market values.
The advertisement comes with a tagline har ghante ek tola sona khanke. Five gold biscuits with Good Day printed in their middle are spread through the front page of the newspaper.
One such Britannia gold biscuit in the Mumbai edition of the newspaper appears bang in the middle of a story about a twin murder, where a father strangled his two kids and tried to kill himself.
Surely, the marketing department that places the ads would not have known that a gruesome story would be wrapping the biscuits. Nor could the advertiser have known that his ad may appear at an inappropriate place.
The issue does not relate just to print advertising. Ads placed on internet sites – including possibly this publication – may sometimes send the reading public that money can buy everything. This is how mishaps occur. Also are brands as big as Britannia is okay with advertising themselves in such a way? Bang in the middle of the story of a father strangulating his kids and then trying to kill himself. Is this the association that they want to build for themselves? Or has it all become about hit and run where you can just put an advertisement one day and forget about it the next day?
The question is can money buy everything now? This clearly seems to be the issue in this case.
I recently spoke to Michael Sandel, the foremost political philosopher of our times, who is a professor at Harvard University. A part of this interview appeared in the Daily News and Analysis. Sandel has most recently written What Money Can’t Buy: The Moral Limits of Markets.
As Sandel put it, “The last three decades have been a period of market triumphalism…We have drifted from having a market economy to becoming a market society. And the difference is this. A market economy is a valuable and effective tool for organising productie activity. And market economy has brought prosperity and affluence to countries around the world. A market society is different. A market society is a place where almost everything is up for sale. It’s a way of life in which society uses markets to allocate health, education, public safety, national security, environmental protection, recreation, procreation, and other social goods.”
The Britannia gold biscuit advertisement is a part of this larger phenomenon. Even a story of a father killing his two daughters and then trying to kill himself is – inadvertently – up for sale. As long as some money can be made, nothing else really matters.
And this is a phenomenon visible at other places as well, even temples. You don’t want to stand in the long queue at the Siddhivinayak temple in Mumbai; you can just pay a few hundred rupees extra and beat the queue. Other temples across the country allow you specialdarshan if you can pay a little extra. Religion and god have been turned into a perfect business model which never goes out of fashion. Ask those who paid Rs 2,000 to get darshan of Nirmal Baba.
Sandel gave me an interesting example of Pope Benedict XVI on his first visit to the United States. “When Pope Benedict XVI made his first visit to the United States, free tickets were distributed through local parishes. But the demand for tickets far exceeded the supply of seats. And soon a market for those tickets started to develop and one ticket sold online for more than $200. Church officials condemned this on the grounds that you cannot pay to celebrate a sacrament. Turning what are essentially sacred goods into what are essentially instruments of profits values them in the wrong way.”
This phenomenon has even been visible everywhere from war to even medicines. “In Iraq and Afghanistan there were more paid military private contractors on the ground than US military troops. We never had a public debate whether we wanted to outsource war to private companies,” said Sandel. “Or consider the aggressive marketing of prescription drugs by pharmaceutical companies in rich countries. The funny thing is if you have ever seen the television commercials that accompany the evening news in the United States, you might come around to believing that the greatest health crisis in the world is not malaria or river blindness or sleeping sickness, but erectile dysfunction,” he added.
When money becomes the be-all and end-all of all decisions in life, market values tend to crowd out non-market values. Let me explain this through an example narrated to me by Sandel. “Some years ago in Switzerland they were trying to decide where to locate a nuclear waste site….There was a small town that seemed to be the likely place for the nuclear place site. The residents of the town were asked to, in a survey carried out by economists…if they would vote to accept a nuclear waste site in their community, if the Swiss Parliament decided to build it there. Around 51 percent, or a little over half of the respondents, said they would accept it.”
The economists then asked a second question. “They asked the residents of the community that suppose the parliament proposed building the nuclear waste facility in their community and at the same time offered to compensate them with an annual monetary payment, would they still favour it? You might sense that the number would have gone up to 80 or 90 percent but in fact the opposite happened. The support went down and not up. Adding the financial inducement to the offer reduced the rate of acceptance to 25 percent from the earlier 51 percent. Even when the economists upped the monetary incentive further the decision of the people did not change. The residents stood firm even when they were offered yearly cash payments of $8,700, which was more than the median monthly income of the area.”
So what is the moral of the story? “This is an illustration in which a cash payment can crowd out a non market value. When the people were asked to make a sacrifice for a common good without paying them the majority said yes out of a sense of civic responsibility. But when they were asked to change their mind (with money) many of them said we didn’t want to be bribed. The offer of money changed the character of the offer.”
A similar thing could be happening with the sale of advertising space in newspapers to the highest bidder. If Goliath sets a trend, the Davids are more than likely to follow.
And in this case it isn’t really a good trend. Do you want newspaper readers reading the story of a father killing his daughters and feeling disturbed by it or do you want them looking at the Britannia Gold biscuit ad which appears bang in the middle of the story and thinking maybe even I can win them? Do we want to build a society that is sensitive to what is happening around it? Or do we want to build a society which thinks of winning gold biscuits all the time?
As Sandel put it, “Most people would agree that there is a difference between prostitution, which is paid sex, and non-instrumental and non-monetised sexual intimacy… So do we want a society where everything is up for sale? Or are there certain moral and civic goods that markets do not honour and money cannot buy?”
And that is something worth thinking about.
The article originally appeared on November 23, 2012 on www.firstpost.com
Vivek Kaul is a writer. He can be reached at [email protected]. He has worked for the Times Group in the past.