Published January 22-February 8, 2021
When Leaders Fail Us
For many of us who believe that India needs a new direction on both the political and economic fronts, the most important question that needs to be discussed is about how this change can be brought about. Political power is a prerequisite for economic transformation. Our leaders across political parties are ignorant of the differences between policies that perpetuate poverty and those that put people on the path to prosperity. They have consistently taken us in the wrong direction. A successful new national political party is hard to create – the last one has been the BJP and it was launched 40 years ago. So what is the solution? Is there a solution? Or are we doomed to suffer through another generation of middling growth and lost opportunities?
I have been thinking about those questions for the past few years. I had hoped in 2014 that the BJP would free Indians from the past decades of economic controls. Instead what we got and are still getting has been a throwback to many of the failed policies from the 1960s and 1970s. Instead of dismantling India’s anti-prosperity machine, knowingly or unknowingly, what India’s leaders are doing is continuing to feed the system that has prevented Indians from becoming rich. Repeated and deep interventions in the economy, a disregard for markets, trade, disrespect for property rights, high taxes, wealth redistribution without incentivising wealth creation, a return to licence-permit-quota-raj, a tax on exports by the imposition tariffs on imports, a mighty state that has crossed the line to cronyism, institutions that have been conquered and subjugated, increasingly insidious restrictions on individual freedom – all of these hurt Indians who would otherwise create a better lives for themselves and their family. [See my previous essay: Nations, Leaders and their Decisions.]
The hope of 2014 has given way to an economic status quo as we repeat the failed mistakes of our past and make new ones. An intellectual elite that has mentally (and in some cases physically) seceded, a middle class too embroiled in the daily struggles of life, a subservient and ignorant media are all combining to crush aspirations that tomorrow will be significantly better than today. A small number of entrepreneurs with foreign capital willing to bet everything are India’s last heroes – fighting against a system that does not understand wealth creation and prosperity. They build businesses and better lives for many – and yet run the risk of a bureaucrat’s regulations killing enterprises with the stroke of a pen. (Witness the recently announced regulations for cab aggregators.) No private transaction between two consenting individuals is shielded from the eye of the rulers, themselves descendants of the British colonists who extracted and exploited a helpless population.
In this New India what can we the people do? Give up hope for a better tomorrow and go into their cocoons? Forget the dreams of an India that could match China’s rise and lift hundreds of million out of poverty? Continue with the sometimes-up-sometimes-down life and entertain ourselves in the artificial reality created by WhatsApp forwards and OTT web series looking into a small screen and away from the sad reality around? Is there anything we can do? [See my previous essay: The Revolution India Needs.]
My answer: Yes, but only if enough of us leave aside all the differences that divide us, pledge to come together as one, and use the power of our united vote to bring about political change for a better economic future. The answer lies not in another politician but the aggregate power of the people – the United Voters of India.
We know that the politicians cynically divide the country along religion, caste, and linguistic lines. This fractures the population into very small groups and allows the political parties to win seats with only a small minority of votes in their favor.
To counter this, we have to create an artificial vote bank of people who have the capacity to think long-term, desire economic and personal freedoms (not just political freedom), and are willing to work together to bring about change for the public good. Urban educated people will form the core constituency of this vote bank. We call this association of voters the “United Voters of India” or UVI. It’s motto: Good governance through participation.
It is likely that a significant percentage of India’s urban educated population are motivated people who have the capacity to understand what good policies are, know the importance of electing capable policymakers, and whose interests are aligned with the broader long-term national interest of India.
It is possible that the around 175 urban parliamentary constituencies of India have an aggregate of 30 million or so people who are really interested in good governance. If they can be consolidated into a “vote bank” and persuaded to vote en bloc, it is possible that they can swing elections and be a force to contend with.
… UVI…is a vote bank of urban educated voters. We need this vote bank to counter the baleful effects of other existing vote banks that are based on demographic characteristics such as caste and religion. Like other vote banks, UVI aggregates the preferences of a group of people and thereby it amplifies the demand of the group.
In the case of UVI, the demand is better governance. This demand aggregation will therefore force political parties and politicians to supply good governance. For example, if UVI is a sufficiently large vote bank, then it will improve the quality of our elected officials since UVI demands competent and honest politicians.
…You can think of it as a cooperative. Coops gain bargaining power by aggregating their demand. This is also similar to labor unions in which individuals achieve bargaining power by being part of a larger body.
Votebanks or voting blocs are not uncommon in India – political parties know this and exploit them for electoral success. There has never been a voting bloc for prosperity. This is what UVI must become. 60 crore non-aligned and non-voters, two-thirds of India’s electors, is the target group for the creation of UVI. They are not loyal to any of the existing political parties. If a significant chunk of the non-aligned and non-voters (NANVs) can be persuaded to come together to form a loose coalition in the form of UVI, political change and economic betterment is possible. UVI is the spark that can fire the Indian Revolution.
The idea of votebanks is not new in Indian politics. From Wikipedia:
Votebank, in the political discourse of India, is a term referring to a loyal bloc of voters from a single community, who consistently back a certain candidate or political formation in democratic elections. Such behavior is often the result of an expectation (real or imagined) of benefits from the political formations, often at the cost of other communities. Votebank politics is the practice of creating and maintaining votebanks through divisive policies. As it encourages voting on the basis of self-interest of certain groups, often against their better judgement, it is considered harmful to the principles of representative democracy.
The term was first used by noted Indian sociologist, M. N. Srinivas (who also coined the terms Sanskritisation and dominant caste), in his 1955 paper entitled The Social System of a Mysore Village. He used it in the context of political influence exerted by a patron over a client. Later, the expression was used by F. G. Bailey, a professor of anthropology at the University of California, San Diego, in his 1959 book Politics and Social Change, to refer to the electoral influence of the caste leader. This is the usage that has since become popular.
Some of the first identified votebanks were along caste lines. Others based on other community characteristics, such as religion and language, have also occurred. Votebanks are generally considered undesirable in electoral politics.
Another term used is “voting bloc”. From Wikipedia: “A voting bloc is a group of voters that are strongly motivated by a specific common concern or group of concerns to the point that such specific concerns tend to dominate their voting patterns, causing them to vote together in elections. For example, Beliefnet identifies 12 main religious blocs in American politics, such as the “Religious Right”, whose concerns are dominated by religious and sociocultural issues; and Jews, who are identified as a “strong Democratic group” with liberal views on economics and social issues. The result is that each of these groups votes en bloc in elections.”
Whatever we call it (I prefer voting bloc), two things are clear in the Indian context. First, politicians know and leverage the idea of voting blocs in election campaigns. Second, voting blocs have been seen to be along caste, community and linguistic lines. There has never a voting bloc organised on economic issues and prosperity.
To better understand how votebanks (voting blocs) have been a central feature in Indian politics, here is a brief summary of columns from the past few years.
Syed Ali Mujtaba in Himal SouthAsian (May 2004): “Vote bank politics has come to become an Indian reality and democracy in India has come to be the fine art of balancing different vote banks with very little exception. Some political parties may openly denounce the politics of cultivating vote banks but overtly or covertly they practice it in their own constituencies, for political survival and advancement… It has been said that democratic processes would put an end to India’s unique divisions, which were wilfully exploited by the colonial masters to perpetuate their rule. It was reasoned that periodic elections would gradually diminish the divisions based on caste, creed and religion. However, in the process of empowering the masses, democracy has sharpened the diversity by transforming them into vote banks and important ‘variables’ in the political process… There is no end in sight to the phenomena of vote bank politics in India. As new groups come forward to demand space in politics, the creation of new vote banks is an accelerating process. There is emerging consciousness among various marginalised groups to get united in the course of political mobilisation.”
Niranjan Rajadhyaksha in Mint (Oct 2012): “Middle-class voters are generally less prone to tactical voting. One often hears about how entire blocks of votes based on caste or religion shift depending on the promises made by parties. One rarely sees similar analyses of middle-class votes. One reason could be that votes in this category are more stable, and hence part of the core support base of various political parties. The flip side is that such voters are taken for granted. Political parties have a great incentive to attract votes at the margins…Election contests can be quite close in India, with narrow victory margins. A consolidated group of urban voters who choose en masse based on strategic considerations could be one way out for citizens who currently either choose not to vote or prefer to back a certain loser. There are undoubtedly serious moral issues with such an approach, most importantly because strategic voting is insincere and cuts the roots of representational democracy and its ability to reflect social preferences.” Niranjan also references Atanu Dey’s UVI idea.
M K Raghavendra in Deccan Herald (December 2018): “Before speculating on what a ‘vote bank’ actually is, we may take stock of what is already known: a) money plays a big part in elections and the incidence of political corruption can be traced to it; b) a large proportion of the electorate votes on the basis of jati or the religious groups to which they are affiliated; c) national/state elections are won on the basis of small swings of 3-4%, which could add up over the years depending on the long-term fortunes of a political party; d) the educated voter is apathetic and does not determine the outcome of the elections; e) the poor come into their own at election time, when they vote en masse… Parties do not deal directly with the individual voter but through intermediaries belonging to this or that block, with the trust of its members. This intermediary is known to the members through tasks undertaken on their behalf — like getting civic problems attended to — and s/he is trusted by parties to deliver block votes. Together, voting groups linked through intermediaries to political parties constitute voting networks.”
Martand Jha in Hindu Business Line (March 2019): “There is a big positive side to it as well. It increases both the individual and collective bargaining power of the people vis-à-vis those in power. Democracy is a daily exercise, involving numerous bargaining processes between citizens and the political class…Therefore, when a particular group aligned on the basis of caste, sect, religion, or language is recognised by one or more political party, the chances of their demands and aspirations getting fulfilled are much higher than that of a group or community that is not recognised as a vote bank… Once a group or community starts feeling that it can be recognised as a vote bank, their collective strength increases manifold. All political parties, therefore, keep appeasing these groups as they can’t afford to lose their votes during elections…Given its potential for cynical misuse, vote-bank politics should be seen as an instrument to be deployed by citizens, and not by the political class.” Martand discusses votebanks of persons with disabilities and women.
Whatever we call it (I prefer voting bloc), two things are clear in the Indian context. First, politicians know and leverage voting blocs in election campaigns. Second, voting blocs have been along caste, community and linguistic lines. There has never been a voting bloc organised on economic prosperity and wealth creation.
Bihar Election Numbers
A person’s vote is not cast in stone until the button is pressed on the EVM. In fact, many voters do not have entrenched beliefs on who they will support. A decision on whom to vote is made on the day of voting or just a few days before. A Prashnam survey showed the following:
- 45% vote for the same party regardless
- 40% decided on the day of polling, or 1 or 2 days before polling
- 8% had made up their mind even before elections were announced
- 7% voted based on manifesto promises
Turnout in the Bihar election was less than 60%. Putting this in perspective, out of 100 eligible voters in Bihar, 60 voted. Of these 60, 45% (27) can be considered as the core base of the political parties.
Another interesting facet of the Bihar election was that the two main coalitions got just 75% of the vote, as can be seen from the IndiaVotes data. These two coalitions won 97% of the seats (235 of 243 seats). In effect, 25% (of 60% who voted; 15 out of 100 eligible voters) of the voters wasted their vote by voting for candidates or parties that had no hope for winning.
To simplify, here is the composition of the Bihar electorate on a base of 100:
- 27: committed core base across political parties
- 18: floaters
- 15: wasters
- 40: non-voters
So, a majority (73) of 100 eligible voters in Bihar are in the NANV (non-aligned and non-voters) bucket. The story is not very different for other states and elections.
The challenge lies in crafting a message to persuade the NANV segment that their individual vote, while useless on its own, can become a force for positive change if combined with others like them.
This may seem like mission impossible. How does one identify the NANVs? How does one reach them? Why will they agree to join UVI? In an electorate in which politicians shower many goodies for votes, why will anyone agree to vote for ‘free’? UVI may sound like a good idea on paper, but can it really work? All good questions. And all have answers. I will argue that UVI is an idea whose time has come. What India needs is not a new political party, but 10% of voters agreeing to unite into a voting bloc dedicated to the principles that create prosperity.
Let us start by considering the numbers that can make UVI work. Consider a constituency with 100 eligible voters. About 65 of them vote. The winner typically gets about 30 votes, the runner-up will get about 20-25, and the rest of the 10-15 goes to the smaller parties or Independent candidates. Of the winner’s 30 voters, about 20 form the core while the other 10 come from the floaters who make up their mind very late on who to vote for.
In other words, a committed core of 20 which creates the perception of victory can attract another 10 to create a winning coalition that can rule the entire 100. Crafting this ‘selectorate’ is what smart politicians know and do in India’s first-past-the-post system.
They play that game, and so should we. Let us understand the ‘we’. Out of the 100 voters, about a third constitute the core of various existing political parties. Another third are non-aligned – they comprise floaters and wasters. Floaters are those who will swing towards the party likely to win, while wasters are those who will vote for one of the smaller parties or independents who have no hope of winning. The last third comprises the non-voters – those who are whatever reason do not vote.
UVI can operate at three levels. If it can garner the support of 10 of the 67 NANVs (non-aligned and non-voters), it can in effect swing the election. With a support base of 20, it can get to a runner-up position. And if it can get to 30, it stands a very good chance of winning. (Remember that the core base of the winning candidate is just 20.)
What we are saying is this:
- If UVI can persuade 1 in 10 to join it, this bloc can make someone win or lose. Demands made by UVI can put pressure on existing political parties and create competition between them.
- If UVI can get to 2 in 10, it could put up its own candidate who could probably end up as the runner-up, depending on the level of fragmentation of vote
- If UVI can get to 3 in 10, it can put up its own candidate who will have a very strong likelihood of emerging victorious
Let us start with the lowest number: 1 in 10. That’s the tipping point for UVI to succeed. Because most victory margins in elections tend to be in the 5-10% range, this 10% voting bloc can tilt the scale in many seats and perhaps the entire election. Think of this as the “marginal revolution” in Indian electoral politics.
A Single Vote
Logically speaking, voting in an election is an exercise in futility. A single vote makes no difference to the eventual outcome of a contest for a Lok Sabha seat. Here’s why. If a contest is decided by, say, five voters then each of the five votes matter enormously because if two voters vote one way and the two others vote the other way, then the fifth person’s vote decides the outcome. However in a contest that has nearly 2 million voters (a typical Lok Sabha constituency), no person’s vote will ever be the decisive vote.
Here is an explanation from Robert Wiblin (in the US context, but applicable to any election):
We can start small. Imagine that you’re on a small committee making a decision. The odds that you’ll change the outcome of a vote like that — assuming 2 options and 4 other voters, each 50% likely to vote for either option — is about 19%. We could confirm that empirically if we liked.
We can then work upwards to the size of national elections: with 8 voters it’s 14%, with 16 voters it’s about 10%, with 32 voters about 7%, and so on. In fact, the likelihood you’ll change the outcome ends up being roughly proportional to one over the square root of the number of voters.
Statisticians who specialise in politics add real polling data to the mix, and compare it to actual election results to figure out how accurately polling predicts how people will vote. This gives them a ‘probability distribution’ for the likelihood that each elector will choose to vote for each candidate.
With all of this information in hand, we can go ahead and model tens of billions of elections to estimate how often the entire result will be changed by a single vote.
The famous statistician Andrew Gelman of Columbia University has done just this for US presidential elections, which are broken down into states, and has published several papers outlining the results.
He found that if you’re in a ‘safe state’ like California, the odds of your vote changing the outcome of a presidential election really is effectively zero (the model spits out 1 in 100 trillion, but it’s very hard to assign meaningful probabilities to something so unlikely). Something similar would be true for voters in ‘very safe seats’ in the UK or Australia.
So, a single person’s vote makes no difference in the outcome of the election. But what if a collective of voters came together and publicly said prior to an election, “We will all vote and vote as one”? If their number exceeds the typical winning margin, they can be the swing vote that determines the outcome of the election. Politicians and their parties have to listen to them if they are to retain (or gain) power. As the phrase goes, “Boond boond se banta sagar.”
Rules, Not Rulers
As we have seen, vote banks are what are very well known to politicians – and leveraged opportunistically by them by pandering during election campaigns. One can also think of them as “special interest groups.” In India, vote banks have largely been based on identity (caste, community or language). A principles-based vote bank would be something different – and could be a potential game changer. This vote bank needs to be based on a single agenda – good rules are needed to change the system, rather than depending on good rulers.
What changed in India in 1947 was just the skin colour of the rulers, not the rules. What India got was only Swaraj (self-government), but not Swatantrata (freedom). And it is only freedom – personal and economic freedom – that can bring prosperity to India. That freedom works is apparent both from the success of Indians outside India in countries like America (different rules), and from industries in India where entrepreneurs can operate with freedom (airlines, telecom, IT services, private banks). Where the government has skewed the rules in its favour, the outcomes have been bad — education, health, agriculture, criminal justice, public sector banks.
All Indian political parties are for increasing government intervention and varying degrees of socialism. None are for increasing individual and economic freedom, free markets and rule of law – which are the building blocks for prosperity and wealth creation. Bad rules create interfering governments which constrain citizens and lead to bad outcomes. Conversely, good rules constrain those in power and maximise freedom for citizens and create good outcomes. Therefore, rules that constrain behaviour prevent people in authority to engage in opportunistic behaviour. That means we have to design better set of rules that do not require “better people” to be in power.
In the words of Milton Friedman, “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or if they try, they will shortly be out of office.”
This is where collective action via a voting bloc comes in.
The Power of 10%
A principles-based vote bank could now give the right incentives for a politician to make seemingly bold decisions. So far, the worry for a politician in India is that the ones who didn’t like the decision would vote against, while the others would stay at home – thus resulting in possible electoral defeat. But what if an electorally significant group (say, 10% of the electorate) came together, made their support visible prior to the election, and encouraged the politicians to go through with the right decisions – promising to vote, and vote as one?!
This united voting bloc could thus persuade and reward the politicians electorally for doing the hard task of changing rules so that India was put on an irreversible path to prosperity. (Conversely, it could also punish politicians for not doing the right thing.) Actions have to be taken prior to an election – since promises made could easily be forgotten after an election.
Good rules – built on the principles of classical liberalism of a limited but strong government – can only happen via collective action. A new group of voters has to be created from among the two-thirds of those eligible to vote but disconnected from the political system – the NANVs (non-aligned and non-voters). This group, if it voted and voted as one, could work as a swing vote and a pressure group with an ability to determine the eventual electoral winner.
Today even the most sincere, honest and well-meaning leader can do little in India – because the rules are so bad and complex. That is why we have no option but to write new ones. Amending old ones or finding bypasses around the bad rules will not cut it. You cannot take a bullock cart and make it into a jet engine through piecemeal changes. Politicians perhaps intuitively know this but are scared to act because they think elections will be lost, and there are no prizes for brave losers in politics. So, the vote bank could embolden the right-minded politicians to come forth, speak up and do the right things. It could also give citizens who wanted to see a better and richer India a way to effect positive change.
These two ideas – that India needs new rules (based on a new set of principles) with personal and economic freedom for Indians at their core, and a united vote bank of about 10% of voters that could determine the fate of politicians electorally – can become the building blocks of UVI. For all those who think they are alone in wanting a better India and their voice does not matter, UVI can become the route to actually making a difference and impacting electoral outcomes, and creating a better future for themselves and all Indians.
Making It Happen
Political parties are election machines. Even as they indulge in theatrics inside and outside of the legislative bodies, they have a grassroots cadre (voluntary and paid) which comes to life during election time. A good and successful party separates politics and elections. Win every seat is the mantra. To make that happen, they need to focus on two tracks: keep the core enthused and create the ‘hawa’ to swing the non-aligned voters. The base needs to be glued to the floaters to create a sticky selectorate.
Taking on existing political parties is non-trivial. Recreating the organisational system they have built over decades is not easy. If disruption needs to be done, digital is the only alternative. UVI needs to work like a new-generation startup that is taking on the heavyweight incumbents in politics. This mindset can offer ideas on how to make UVI a success.
Firstly, UVI is not competing for the committed voters of existing political parties. That is the red ocean and what all the political parties do with their high decibel and divisive campaigns. UVI needs to focus on the blue ocean – the largely uncontested market of the non-aligned and non-voters, who constitute two-thirds of all eligible voters.
Secondly, UVI cannot replicate the offline presence of the incumbent political parties. It has to go all-digital. Most of India now has a mobile phone, and there is a smartphone with at least one family member. Just like Amazon and its ilk have built all-digital platforms to penetrate the competitive world of retail, UVI needs to build a digital platform to reach out to the blue ocean of NANVs.
Thirdly, UVI must not succumb to the temptation of creating a new political party. Parties have their own distinct dynamics – a few at the top of a political party seek to control the election symbol and everyone else. (In fact, a good election reform would be to get rid of the arcane election symbol – that was needed in the India of two generations ago when illiteracy was very high. It is time to now start putting the names of political parties or the candidate affiliation next to their names on the EVM. A further election reform needed is to replace the EVM itself (as I have written earlier.) UVI’s focus must be to support candidates and parties who get reforms done – or vote against those who don’t. Do it in a couple of elections, and all parties will get the message.
Fourthly, UVI must have a unifying agenda. This must be around the principles of prosperity – a list of 8-10 ideas that work to attract those frustrated about the lack of choice in what the current set of political parties have to offer. This is the white space UVI must target – India has never had a united voting bloc for principles.
To summarise: UVI should become a digital non-party platform targeting the blue ocean of NANVs with an agenda crafted around principles for prosperity and wealth creation to attract at least 1 out of every 10 Indians. This is how citizens can seed the political revolution India needs to engineer the economic transformation that creates a Nayi Disha for the next generation.
Ghar Lao Lakshmi
The final question to address is: what can be foundational principles that can attract voters to UVI? Atanu Dey has written about “Pretty Good Principles” in his book, “Transforming India.” The key ideas are based on limited government, individual rights and the relationship between the individual and government. These are good starting points. I had also outlined a set of prosperity principles and starting solutions in the Nayi Disha manifesto. What is common to both (and to nations that have created wealth for their people) is the idea of economic freedom.
Here is a preamble I wrote recently – capturing the current state of affairs and the change that we need to work towards.
I am an Indian. I want to bring home Lakshmi.
I am a farmer. I want to bring home Lakshmi.
I am a trader. I want the freedom to buy and sell, so I can bring home Lakshmi
I am a student. I want free entry in education, so I can bring home Lakshmi.
I am unemployed. I want a job, so I can bring home Lakshmi.
I am a mother. I want Dhan Vapasi for my family, so we get Lakshmi at home.
I am a salaried worker. I want lower taxes, so I can bring home Lakshmi.
I am a manufacturer. I want freedom from licences and permits, so I can bring home Lakshmi.
I live in a village. I want to move to a city, so I can bring home Lakshmi.
I live in a city. I want good infrastructure, so I can bring home Lakshmi.
I am an entrepreneur. I want rule of law, so I can bring home Lakshmi.
I am an exporter. I want an end to import tariffs, so I can bring home Lakshmi.
I am an unborn Indian. I want to grow up in a home with Lakshmi.
I want a new India.
I want an India in which Lakshmi resides in every Indian home.
I will not be divided by my caste or religion. I am an Indian first.
I am tired of divide and rule. I am tired of being exploited. I am tired of British Raj 2.0.
I want a government of Indians who will let me bring Lakshmi home.
I will vote out those who have let me down.
I will vote out those who have not let me bring Lakshmi home.
I will vote and vote as one to bring Lakshmi home. For myself and every Indian.
If you and I unite, we can bring Lakshmi home for every Indian family.
We can bring Lakshmi home. Not in a generation, but with the next election.
If you and I unite, we can make India great.
We are United Voters of India.
Will you join me?
The time has come to move from Ram to Lakshmi. While Ram will reside in a temple faraway for most Indians, Lakshmi (wealth) needs to be brought into the homes of each and every Indian. Every political party has connived to deny Lakshmi entry into our homes. This is the central theme UVI must build on – Ghar Lao Lakshmi (Bring Home Lakshmi). This is the challenge and opportunity for India’s voters to, in Swami Vivekananda’s words, “arise, awake, and stop not till the goal is reached.”
Postscript: Many as One
The past week has been a tumultuous one in India’s capital as protesting farmers upped the ante with their actions on Republic Day. Riding tractors, they drove into Delhi and clashed with the police at multiple places. The peace was broken and positions will undoubtedly harden on all sides going forward. Even as all this was happening, there was a different sort of organised and coordinated action taking place in the US financial markets. A large group of individual traders rode up prices of a few stocks (primarily GameStop) and roiled the world of some of the large hedge funds who had shorted these stocks. As individual farmers went up against the might of the state in India, digitally savvy retail traders took on the biggies of Wall Street. The common theme was of individuals organising themselves and coordinating their actions.
Going back a few weeks to early January, digital platforms were also used by US protestors to coordinate the storming of the Capitol. A mob came together and acted as one in a horrifying attack on the seat of US power. This would have been unthinkable just a few years ago. Social media platforms and messaging apps are the instruments the masses use to unite and act in ways that were impossible earlier. The collective becomes greater than the sum of the individuals.
The underlying theme in all these cases has been digitally coordinated action by individuals to take on the powerful. Farmers have used WhatsApp while the retail traders used the Reddit platform. The Capital protestors used a wide variety of platforms. All were largely leaderless (though one could argue that Donald Trump egged on the Capital mob from the White House). The story of GameStop is especially interesting because it illustrates how digital technology has changed the game and levelled the playing field for the weaker players. Whatever be the eventual outcomes of the farmers’ protests and the GameStop matter, there is much to learn for us on how to make United Voters of India (UVI) a success.
I had written earlier: “Taking on existing political parties is non-trivial. Recreating the organisational system they have built over decades is not easy. If disruption needs to be done, digital is the only alternative. UVI needs to work like a new-generation startup that is taking on the heavyweight incumbents in politics… UVI should become a digital non-party platform targeting the blue ocean of non-aligned and non-voters (NANVs) with an agenda crafted around principles for prosperity and wealth creation to attract at least 1 out of every 10 Indians. This is how citizens can seed the political revolution India needs to engineer the economic transformation that creates a Nayi Disha for the next generation.“
If the two-thirds of India’s eligible voters that constitute the NANVs can organise themselves and act in unison, it will be possible to bring about political change in India – not just determine the winners and losers, but actually be the winners. The key change is to use coordinated action within the existing rules of the game to bring about the desired change. It is not a change in the rules but in the strategy that the players evolve that change the outcome of the game.
Let’s begin by looking at what happened in the US in its financial markets – it is a fascinating study because it is end-to-end digital. We will then consider what could be done in India to make the Indian Revolution a reality.
As I was thinking about the coordinated actions of many, I remembered reading about swarms many years ago – the idea of distributed, collective intelligence. It was this 2001 article from Harvard Business Review that had interested me in swarms. An excerpt: “Consider termites. Individually, they have meager intelligence. And they work with no supervision. Yet collectively they build mounds that are engineering marvels, able to maintain ambient temperature and comfortable levels of oxygen and carbon dioxide even as the nest grows. Indeed, for social insects teamwork is largely self-organized, coordinated primarily through the interactions of individual colony members. Together they can solve difficult problems (like choosing the shortest route to a food source from myriad possible pathways) even though each interaction might be very simple (one ant merely following the trail left by another). The collective behavior that emerges from a group of social insects has been dubbed “swarm intelligence.””
In other words, ‘spontaneous order’ or ‘emergent order’.
More from Wikipedia: “Swarm intelligence (SI) is the collective behaviour of decentralized, self-organized systems, natural or artificial. The concept is employed in work on artificial intelligence. The expression was introduced by Gerardo Beni and Jing Wang in 1989, in the context of cellular robotic systems. SI systems consist typically of a population of simple agents … interacting locally with one another and with their environment. The inspiration often comes from nature, especially biological systems. The agents follow very simple rules, and although there is no centralized control structure dictating how individual agents should behave, local, and to a certain degree random, interactions between such agents lead to the emergence of “intelligent” global behaviour, unknown to the individual agents.”
Another example that is instructive is John Conway’s Game of Life. The rules are simple. Order emerges but the outcome of the playing of the game is hard to predict. The outcome is not determined by any subset of the players of the game but from the interactions of all of the players.
The HBR article summarised the key attributes of swarms: “flexibility (the colony can adapt to a changing environment), robustness (even when one or more individuals fail, the group can still perform its tasks), and self-organization (activities are neither centrally controlled nor locally supervised).”
In politics, the recent examples of the Tea Party in the US and Occupy Wall Street movements come to mind – largely leaderless swarms of people coordinating action to achieve a specific purpose. Digital tools have amplified the power of individuals to come together. Hierarchies of WhatsApp and Signal groups, Twitter accounts, Facebook messages, online bulletin boards like Reddit can now supercharge message distribution and engagement to reduce latency between ideas and actions.
There is one important difference between the behaviour of termites and swarms, and on the other hand that of the farmers’ and Wall Street groups’ actions. The former don’t have a defined specific purpose or goal; the latter have a goal that clearly motivates them to act.
It all came together in recent weeks with the stock of GameStop – where a swarm of individual traders attacked the hedge funds who were shorting the stock. Irrespective of what happens in the long run, the early score, as The Economist put it, is “Retail punters 1, short sellers 0.”
Bullish retail traders were ginned up when the market makers who sold them their bets were forced to hedge against rising prices by buying shares. Short-sellers were also forced to buy shares after incurring losses worth several billion dollars. The wall-to-wall coverage of the stock has prompted yet more investors to pile in. GameStop was the single most traded stock in America on January 26th; volumes matched that in the five biggest tech giants combined (see chart). The share price more than doubled the next day. The masses are coming for other heavily shorted stocks too. Share prices for AMC, a chain of cinemas, and Nokia and Blackberry, which once made popular mobile phones, have also spiked.
Jumpy professional investors will now have to keep one eye on the mob.
This past week has been a banner one for Reddit’s island of misfit investors.
WallStreetBets exploded into the mainstream, moving from the front page of Reddit to the front page of the New York Times and nearly every other major news site. The subreddit’s short-squeeze of GameStop helped shoot up the price of the video game retailer’s stock a mind-boggling 1,700% from the beginning of January to Wednesday (before it fell again Thursday), captivating the minds and wallets of investors — both casual and institutional — and financial regulators.
But while millions are now discovering WallStreetBets for the first time, it has been building momentum throughout the pandemic. One can trace its epic rise to a perfect storm of favorable conditions: the exponential growth of the app Robinhood and its no-fee options trading, the extreme volatility Covid-19 brought to the markets, the stimulus checks mailed to millions of Americans, the lack of televised sports for much of the year, and the unwanted free time stuck at home the pandemic has forced on many people.
Describing itself as if “4chan found a Bloomberg terminal,” the forum’s giddy nihilism, inscrutable language and memes fueled a war on a perceived corrupted mainstream.
And it’s led WallStreetBets’ evolution into an unprecedented force of retail-investing financial radicalism, offering the allure of get-rich-quick gains to a rapidly expanding audience of millions.
Here is the stub from a Daily Mail article: “How minnows sank the Wall Street sharks: It’s the most astonishing financial story for years – the army of small investors who took sweet revenge on cynical hedge fund millionaires.”
Aswath Damodaran, comparing the events to the storming of the Bastille, wrote about the broader trends at play:
A loss of faith in experts (economic, scientific, financial, government): During the 20th century, advances in education, and increasing specialization created expert classes in almost every aspect of human activity, from science to government to finance/economics. For the most part, we assumed that their superior knowledge and experience equipped them to take the right actions, and with our limited access to information, we often were kept in the dark, when they were wrong. That pact has been shattered by a combination of arrogance on the part of experts and catastrophic policy failures, with the 2008 banking crisis acting as a wake up call. In the years since, we have seen this loss of faith play out in economics, politics and even health, with expert opinion being cast aside, ignored or ridiculed.
An unquestioning worship of crowd wisdom, combined with an empowering of crowds: In conjunction, we have also seen the rise of big data and the elevation of “crowd” judgments over expert opinions, and it shows up in our life choices. We pick the restaurants we eat at, based on Yelp reviews, the movies we watch on Rotten Tomatoes and the items we buy on customer reviews. Social media has made it easier to get crowd input (online), and precipitate crowd actions.
A conversion of disagreements in every arena into the personal and the political: While we can continue to debate the reasons, it remains inarguable that public discourse has coarsened, with the almost every debate, no matter in what realm, becoming personal and political.
Some of the themes were echoed in an essay by Raghu SJ (Anticipating the Unintended) discussing “four trends now deeply embedded in our culture and politics seem to have marked their arrival in the markets with this story”:
Radically Networked Societies (RNS) meet Capital Markets: Nitin Pai and Pranay define a radically networked society as a web of hyper-connected individuals, possessing an identity (imagined or real), and motivated by a common immediate cause. The emergence of RNS aided by cellphones, cheap data connectivity and social media platforms is a phenomenon for the hierarchical state to contend. The immediate cause that motivates an RNS could be irrational but before the state or the established institutions can even put their shoes on, the RNS might have gone around the world twice with their message
Knocking the experts off their pedestal: The experts are all sold out. They have an agenda and they won’t tell you the truth. That’s the message that’s mainstream now in politics and culture. This is what drives the anti-vaxxers, climate science deniers, trade protectionists and other conspiracy theories going around. Now add the Wall Street experts to this list.
The crowd is right: What are people like you buying, watching, eating or wearing? So many people can’t be wrong. If I can watch and enjoy something based on what others are watching, I can buy a stock the same way. Zero brokerage platforms like Robinhood and Public have built their business models around this. Gamify the stock markets. Make it addictive. The millennials seeking thrill sitting at home during the pandemic have a new destination.
It is personal: Hyper-personalisation, the market of one, call it by any name. You are now invested deeply in your belief and your platform. It is your identity. The echo chamber you inhabit keeps reinforcing this belief.
Reading all this got me thinking: how can India’s forgotten and ignored masses swarm together, organise and co-ordinate their actions using a digital platform, and take on and bring down the political parties to make possible the political change that is needed for the economic transformation that will bring Lakshmi into the home of every Indian?
India’s Ruling Elite
India’s political and governing elite have prevented Indians from becoming prosperous. Ananth Nageswaran wrote recently in Mint: “Over the decades, Indian bureaucracy—Union, states and local—has honed its skills in tying the rest of the country down in non-productive endeavours into a fine art that very few countries can match. The operating principle in view is that the government does not trust citizens to do the right thing, forcing citizens to reciprocate that faith with their own creativity. Some give up. Some emigrate. Some co-opt the system. Many struggle throughout their lives to deal with the government machinery. It does not end even after their sojourn on earth ends. India’s regulatory, compliance and inspection frameworks are similar to an auto-immune disease that makes the human body’s defence system turn on the body instead of protecting it.”
The India taking shape in front of our eyes is one in which the very institutions that should safeguard the rights of the people are doing exactly the opposite. Pratap Bhanu Mehta wrote recently:
The language of order, and the pieties of the flag in which it is wrapped by the state and the media, is not about order at all. The language of order is partisan to the hilt. It is weaponised to crush dissent. It is used to empower repression. It is used to desecrate the spirit of constitutional values. But it gives even the supposedly most liberal amongst us the perfect pretext to rally behind the government once again. It gives a pretext to appease our consciences that we can ignore the systematic repression of civil liberties, the runaway crony capitalism, and the frightening communalism of the state, the criminalising of dissent, the desecration of federalism and the collapse of institutions. It allows us to ignore the fact that the most influential and powerful sections of society from legal professionals to academics and media, from owners of capital to bureaucracy, have connived in creating the conditions of disorder, by closing off legitimate channels of democratic deliberation, and actively supporting authoritarianism and communalism.
As I have written previously, India’s leaders and their decisions over the decades have doomed the people. Like the British, India’s leaders continue to divide and rule to craft their selectorate to stay in power. The courts, police and media become puppets of those in power. For people to co-ordinate their action was very difficult – so far. What GameStop and other protest movements in an eventful January are now demonstrating is that it can be done. What is needed is a platform like UVI to enable a coordinated collective to come together to break the centralised control a few politicians at the top have over an entire nation. The game is the same, the rules are the same; it’s time for a different strategy.
India’s political parties are examples of extreme centralisation. The members of the national and regional parties practice absolute obedience to a single leader (or in some cases, a family). Every important decision flows from the top. The masses who vote for these parties have no say in even choosing their own candidate. As such, power gets sucked from the people to the party HQ and the isolated, supreme leadership.
Creating yet another centralised system is not the solution to taking on the established political parties. Disruption happens when a new way of doing things is created. Faster mainframes did not transform computing, the desktop PC did. Today, we have more computing power in our smartphones than the most powerful of computers 50 years ago. And there are billions of such devices, not a handful.
India’s political parties and their leaders will not bring about change. If anything, they will concentrate even more power in their hands and centralise decision-making to greater levels. We are seeing this play out with every government in India. Centralisation increases with every election. The previous leader’s playbook becomes the starting point for the next. No change can be expected from such a system.
What is needed is the opposite of a centralised system. Once upon a time, the internet was catalogued by Yahoo’s editors. Yahoo did not lose out to a better editorial team; it lost out to a search engine which leveraged the information embedded in links in pages created by millions of people. Google’s decentralised decisions by algorithms won over the centralised directories of the early Internet.
A centralised system is one in which a central controller exercises control over the lower-level components of the system directly or through the use of a power hierarchy (such as instructing a middle level component to instruct a lower level component). The complex behaviour exhibited by this system is thus the result of the central controller’s “control” over lower level components in the system, including the active supervision of the lower level components.
A decentralised system, on the other hand, is one in which complex behaviour emerges through the work of lower level components operating on local information, not the instructions of any commanding influence. This form of control is known as distributed control, or control in which each component of the system is equally responsible for contributing to the global, complex behaviour by acting on local information in the appropriate manner.
Indian politics needs a decentralised system as its next innovation. Power needs to flow back to the people and be distributed through the chain with the lowest possible unit making it relevant. Decentralised systems + Swarm intelligence + self-organising + co-ordination + digital. This is the magic and promise of UVI which can change India’s politics and our futures.
To bring about change, UVI will need to make the leap from attracting between 10% to 30% of the voters. As we have seen, the NANVs (Non Aligned and Non Voters) make up about two-thirds of the Indian electorate. So, around half of them will need to come together and vote as one to bring about real change in India’s political landscape. To coordinate the actions of such large numbers is impossible even for political parties. This is where the ideas of swarm intelligence, self-organising systems and emergence come into play. Rather than trying to build a top-down system which can be immobilised by targeting the leaders, what is needed is a bottom-up decentralised system – coordinated via digital tools.
The organising unit for UVI has to begin at the booth level. A polling booth consists of about 1000 voters – about 250 families. A UVI cell will be needed in every booth with a single objective: can the cell attract a third of the voters (families) who agree to vote and vote as one on election day? Little of no action is needed in the physical world except the act of voting. Everything else can be done digitally – right from signing up members to running primaries to campaigning. A UVI member with a smartphone is the granular unit from which the larger swarm can be constructed. India’s future – our children’s future – is truly in our hands.
Today, there are many who feel helpless – disillusioned with the existing political parties and not finding alternatives among the available options. This is the ideal scenario for a new startup – but the solution is not creating a new political party which over time becomes just like the established entities. What is needed is a new approach to politics. Robinhood and Reddit brought in a new class of investors to the US markets. UVI and its digital platform need to do a similar transformation in India – attract those who are not passionate about politics but have a desire for change. The answer lies in each constituency selecting its candidate via primaries – thus laying the foundation for a Swatantra Lok Sabha.
With a growing number of economic policies taking India back to the dark days of 1960s and 1970s, India needs a “Ghar Lao Lakshmi” movement. A digital platform like UVI can help the silent and disenchanted majority come together to coordinate their actions to overturn the power structure in India that has made serfs of its citizens. Street protests are fine but what’s needed is electoral power. Votes of the selectorate keep the incumbent parties in power. It is time for the independents to rise to complete the unfinished freedom movement of 1857 and 1947 so that when we look back a decade later, we can say, “Ghar Aayi Lakshmi.”