reflections on free market- book review

8/14/2019 Reflections on Free Market- Book Review

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Reflections On Free Market: Economy, Capital Markets,

Banking, Forex Markets And Governance

by G. R. K. Murty

The book in general deals with a wide variety of issues,

challenges, and opportunities that have confronted mankind for the

last few years. The articles offer a sustained and scholarly analysis of

significant developments of the day in the country and abroad over

the last few years.

Section one of the book consisting of 30 articles, discusses the

specialized contexts of the modern economy with reference to

globalisation. In the very first article, Growth: The Other Side, the


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author says that with the advent of globalisation, India is

experiencing a boom in the service industry, mainly through the

deployment of human capital, which in turn has made India emerge

as a hub for Business Process Outsourcing (BPO) and Knowledge

Process Outsourcing (KPO). Turning to the vexed issue of

reservations, Murty contends that the current increase of

reservations in IITs and IIMs, in the backdrop of globalisation, would

surely undermine the national interests of the country. However, he

asserts that it is time companies walked beyond resentingreservations and exhibited a sense of social responsibility by

undertaking various skills development activities for people in areas

around their workplaces and made them employable. It is not

reservations that the Government should aim at, but develop

human capital in partnership with corporates. Furthermore, the

author comes up with certain remedies that will reduce the gap

between the haves and the have-nots. He suggests the creation

of community vocational centres that can retrain those who will or

are likely to lose jobs, and make them reemployable. Murty also

covers a variety of issues and topics ranging from an obituary of the

renowned economist Professor John Kenneth Galbraith to foreigndirect investment and the condition of life insurance corporations,

etc.


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The theme of Section Two of the book is Capital Markets and it

comprises 15 articles. In the very first article Sense and Sensex,

the author observes that the stock markets are changing every day.

He warns the prospective investors to be ever ready to change their

investment plans with agility. He argues that volatility would haunt

the Indian market so long as it is in the growth phase. While

discussing the Indian aviation industry, the author claims that it has

at last come of age, through the opening up of Indian skies for

private carriers. While discussing the role of culture in the Indianmarket, the author, in a separate article, pointed out that Its not

the economics that matters in making a country investment-worthy

but its very fabric of culturevalues, ethics, and morals(p. 160).

The author further says that in a globalised market no one can

afford to ignore the fact that money moves in and out of markets

with an exclusive concentration on profit and nothing else.

Investors do not hesitate from shifting their savings from one locale

to another to earn more profit. Murty seeks to reconceptualise

economics from a growth orientation to that of stewardship.

The Third Section of the book dealt with the various features ofBanking. The article, Recent Rise in Undesirable Consumerism:

Credit to Credit Cards is particularly contemporary and worth

reading. He says that a new philosophy of life has emerged since the


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launching of economic reforms by India in 1991 and believes this

trend may become dangerous sometimes. Murty warns that living

today on tomorrows likely earnings is as suicidal as playing with a

tiger, which is giving shape to a new theory of consumer choice.

But, at the same time, the credit card culture is blind to the

essentially relational aspects of human life. In another article the

author opines that in todays globalised economy, the current ways

of doing business in the country are not good enough to stay

competitive in tomorrows market. Therefore, the organisationshave to invent new ways of competing. He has thus tried to

establish the importance of synergy theory, which states that

when two banks combine they should be able to produce a greater

effect together than what the two could do independently. But, the

author also cautions that if the mergers are not successful this may

end up with the proverbial farcical result! The underlying theme of

the different articles of this section is that wealth sometimes has a

negative utility beyond a middle point. At the same time it is obvious

from the authors discussion that there are ample world recourses

to secure the three basic rights for all.

Murty with his characteristic aplomb claims that it is not only human

beings that have character but also the corporates. It matters most

in corporates because they thrive on the capital of many (p. 226).


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Section Four deals with the Forex Markets, especially convertibility

of currency. He discusses the impact of Asian Crisis of late 1990s in

the Southeast Asian nations. He surmises that a platform for the

free flow of capital should be developed, especially on the fiscal and

monetary fronts before opening up for free flow of capital across

borders. In a very interesting article, Who is Great: God or the

Economist? the author pointed out that history testifies to thefact that prior to the world wars, growth in world economy was

abysmally low, since it remained essentially provincial. The cross-

border flow of goods was minimal and the capital investments were

mostly within sovereign boundaries. Obviously, this resulted in

orderliness in the management of money. But, this inflicted silent

suffering on those who were not endowed with natural

resources? (pp.252-253). Murty asserts that it is time for the

Government to take bold initiatives for improving infrastructure and

thereby give a boost to economic growth which in turn can

generate more employment and arrest ills of poverty to a tolerable

level of a civilised society. Are we not entitled to leverage on thecurrent strengths of the economy?(p.261) only time could reveal

the extent of our success.


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In the Final Section the articles converge on the theme of

Governance. In this section at least two articles analysed the recent

Indo-US nuclear deal. The author shows how national interests are

integral to good governance and humorously concludes: In todays

context national interest is the only guiding post and everything

else becomes secondary to it and the sooner we practice it, the

better it would be. God alone save us, if we do not know what is in

our interest!(p.305).

The book offers a practical agenda for beginning the fundamental

reorientation of the new global order. The book evolves in the form

of commentaries analysing everything under the sunfrom

governance to public affairs, from banking to the economy, from

capital markets to the forex markets, and from insurance to the

latest US-India nuclear deal. The range and sweep of topics and

issues covered is extensive indeed. As B. Ramesh Babu puts it in his

Foreword to the book: In this age of specialisation (i.e., to know

more and more about less and less till you know everything about

nothing!) and knowledge revolution to find such generalists, as GRK

Murty is rather refreshing(p.11). Undoubtedly, the author ispushing for the welfare of the teeming millions of our countrymen

and pleading for common sense in public affairs on a wide variety of

issues, challenges and opportunities that threatened the nation


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over the last few years. The book is thus a valuable addition to the

accumulating literature on the study of Economics, Management,

International Relations as well as History. However, understanding

this book is not every ones cup of tea. The language is lucid, the

sentences are meticulously framed, and every word Murty used has

its own metaphorical meaning. The ultimate essence of the book is

that in the age of globalisation, it is important to recognise,

understand and discuss Indian culture and cultural differences. This

canvas is very wide and his brief sketches elucidate almost everysubject on earth. Even the titles of the article are very well chosen.

The book in general recognises the importance of understanding

contemporary India against the global backdrop. Globalisation in

the 21st century is a compelling process and no nation, including

India can negate. But, the developing nations must adopt to the

process in their own positive ways: One thing that is certain in a

globalised economy is that we need to be doubly right in picking up

the sounds of flapping wings and be instantaneous in our policy

responses to those global sounds (changes); else we may risk being

left far behind in the race. The book conveys two broad ideas. First,

a sense of balanced civic nationalism, which is bereft of ethnic orcommunal overtones. Second, a sense of rationality that warns the

nation with characteristic panache bordering on pun.


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Reviewing this kind of book is a Herculean task since the range of

themes addressed is so very wide and varied; and not directly linked

with one another. However, the Management Schools, at the same

time the financial institutions and universities will find this book

worth reading. Students and teachers alike are recommended to

read this book to get an idea about the current economic scenario

of the country. The scope of the book is contemporary and its

language trendy. The cover of the book is well designed and every

care has been taken to avoid errors and omissions, as it is evidentfrom a careful reading of the book. Students of literature will also

like to adopt this book as a rapid reader for its lucid prose!

Dr. Tridib Chakraborti,Head and Professor,

Department of International Relations,Jadavpur University, Kolkata.

E-mail: [email protected]

reflections on free market- book review

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