Greed is good!

�Greed is Good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed in all its forms, greed for life, for money, for love, knowledge, has marked the upward surge of mankind and greed will, you mark my words� save the malfunctioning corporation called the USA.�

Well , we have just seen what Greed has done to the malfunctioning corporation called USA. It�s nearly killed it.

From the robber barons to the sub-prime crisis, American Capitalism has lived through many cycles of greed. Amusement over greed often preceded revulsion with it. Business leaders first get glamorized and idolized. Then move on to getting demonized. Regulation moves on to deregulation and comes all the way back.

Where does this greed come from? Does it come from the share holders, who want more return on their capital? Does it come from the management, who want to get more bonuses? Or does it come from the employees, who want the fastest growth and be in the position of the former two, asap?

I think it starts way before that. It comes from the parents.

It comes, when the mom is dissatisfied with the amount of food her child eats, and wants him to eat more. It comes when the dad is unhappy because his kid started walking or talking too late. It comes when the parents are unhappy with the marks scored by their child in school. And it comes when the child does not get the things that we have dreamt of and considered worthy of for our child.

As a child I used to hear �santosh sabse bada dhan hai�. But never saw it practiced anywhere around me. Contentment was for the losers, not for the winners.

But that�s the disease our society is ailing from. Yes, it is important to desire, as dreams and the desire to achieve them is what keeps us alive. But there has to be an acceptable level of growth. Running too fast makes you fall, but there is always an option to run at speed that is sustainable for longer periods of time. Winning isn�t half as much fun as running together all the way and enjoying the company.

Our corporate world probably should set growth targets which are sustainable and acceptable. Slower than that and you may get bored. Faster, and you may fall.

The more we spend, the more we earn

For years we have been seeing the outrageous consumption behavious of the US consumer, who was forever spending money borrowed from the future and rarely saving anything. Wrong though it seemed, this is what kept the global economy on a growth chart.

Japan also benefitted from this consumption behaviour for a while when it started selling to the US. However, despite the period of prosperity that the country went through, the average Japanese continued to save instead of spending and soon the Japanese economy came to a standstill.

In recent years, India has also gone through a period of high growth by selling to the global consumer and we had just started seeing the same translating into growth in domestic consumption, with the average Indian going out and spending more. In the recent past, this led to a rapid growth in the Indian economy with almost all sectors benefitting. With those involved in the high growth export related sectors earning more, we saw more houses being bought, more money being spent in malls, more consumer goods purchases, more leisure travel, more investments and in general more of everything. The same had also started to have a trickle-down effect in the economy and individuals working in the related sectors also saw period of super-normal growth.

This cycle has just got disrupted. Layoffs and salary cuts have now started in the sectors that heralded the start of the India Growth story. While most of the developed economies will have to go through this recesssionary period till a new technology evolves and another bubble starts; we Indians have a choice.

Indians have traditionally been savers (thanks to the lack of a social security system and years of poverty). However, it's consumption that aids economic growth and not saving. To come out of this recession real fast, we need to ensure that we continue to spend and consume. The demographics of India, unlike the world, is extremely strong and as per estimates, we shall continue to be a young country at least till 2025. This essentially means that a larger proportion of our population would be economically productive, unlike some of our more developed counterparts and we would also have more individuals in the consumption stage of their life cycle.

This essentially means that India can continue to grow on the back of domestic consumption and reduce dependence over other nations. What we need to do is to not cut our spending too drastically and keep up the consumerism. The more we spend, the more we earn.