Sunday, November 27, 2011

Is ICAI really a partner in nation building or a conspiracy against the laity?

During the last 3yrs or so, ICAI has been spinning the message that it is a partner in national building. Noises have been made about helping in training(tax department officers, Government accounting), improving compliance(via audits/reviews), plugging tax loopholes(via prebudget memorandums) and generally ensuring proper flow of verified information. While all these sound good on paper, they are all win-win for ICAI since they come with the additional caveat of more professional assignments, carving out more exclusive niches, mandating tighter rules for SMEs. So is this a self serving stand, or does the improvement in public good offset the private gain?

Adam Smith had termed trade unions/associations as a conspiracy against the laity(''people') as he felt that no good could emerge from a trade meeting behind closed doors. And centuries later, the existence of cartels, industry lobbies and the trade union behaviour has proved him write,  in country after country. And this is true even for professional services associations like ICAI, where the information asymmetry and difficult to understand professional services, ensures  that scrutiny is not much. Few people understand the issues, and fewer bother to raise them in public forums. Hence, under the guise of ensuring better quality services, they get away with practices like severely restrictive entry norms in licensing, widely drafted professional service standards to reduce liability etc-all in a view to maximize the welfare of its members.

Now, if the services(audit, certifications..) were achieving their purpose, then one could be content that the larger public interest in served. But even in the mainstay(statutory financial audit and tax audits) work where decades of experience and well drafted standard exist, the end user satisfaction is on the downtrend. Few investors trust the audited accounts anymore, and even the taxman is resorting to mass online surveilance systems etc to detect cases of tax evasion. And contrary to the Hippocratic oath of not doing any harm, scam exposes have repeatedly revealed the active help and commission by omission of CAs who have been middlemen for bribes, helped launder money abroad, suggested sharp practices in tax, not been critical enough etc.And with LLPs fast gaining traction, the corporatization of the profession will be complete with the 20partner/firm limit being dropped.

So what is the way out? Let the profession not claim to have public interest as primacy, as the hard reality is that it IS becoming a business. Spin off the regulatory function to a independent regulator, and have ICAI as the first line Self Regulatory body. This post seems a rant but I just had to get it away from my system! And unless pro-bono work is done like the BCAS Charitable Institutions Accounts and Audit clinic, the claim of working in the public interest should be viewed with skeptism.

Friday, November 18, 2011

Justifying ebook 'piracy' in the Indian context

As a typical Indian of my generation, I have(in the past) used software and read ebooks without purchasing them. In some instances, they were not legally sold in India(or the Indian edition would be too delayed)-remember this was often in the pre-Amazon boom age. Or(more commonly), the purchase price would often exceed my monthly pocket money. Now, some readers may take umbrage with this and question that would I steal physical books/CDs from a store? If not, then why would I do that for digital goods?

Keeping aside the economics of it(digital goods have zero marginal cost, and therefore are not perceived as stolen 'goods' since the seller is not 'deprived' of anything. Ok, he could have realized the selling price, but the issue is whether that selling price is 'fair' or not ) and the morality(is this theft? Are we taking money from the pockets of the creators, retailers), it struck me that in this case, the David vs Goliath analogy was more apt. I(and doubtless many others) saw no shame in taking from a big anonymous entity out there(Microsoft, Harper Collins), even if we adored the creator(Bill Gates, JK Rowling etc).  And then, IPR awareness is still not that prevalent in India.

Another interesting explanation is that Indians are inherently uncomfortable with knowledge for profit. Since ages, the knowledge in books was freely available to all. While the Brahmin community did try to hoard it by forbidding the education of certain 'lower' communities, that was more out of a genuine belief in the caste system than an effort to profit from their knowledge. In the modern day era, it reflects in the fact that traditional knowledge is often shared without expectation of profit(as experienced by Prof Anil Gupta during his work with the National Innovation Foundation); non vocational accredited education is largely still not legally allowed to be for-profit; and IPR filings for designs/GIs are quite low. And Tagore's famous poem also mentions 'Where knowledge is free'. Now, it is quite likely he meant it in the intellectual freedom sense and not in the financial sense; but they are quite simillar anyway.

So in such a culture(where knowledge is freely shared) and legal environment(poor awareness), one can almost understand ebook 'piracy'. But what about those who are well versed with the legal situation, and who still do it? For them, an argument could be Two wrongs make a right. Basically that since the 'West' robbed the East of traditional knowledge(using it for pharma patents), clinical trials data and other things, this is one way to hit back because the publishers are mostly from the Anglo-Saxon world. Another argument could be that there is no opportunity loss(since they would not have purchased it anyways). Another could be that the prices are too high.

Now, all these arguments could be refuted under the English common law principle of sanctity and freedom of contract. And under the present legal context, one cannot invoke public interest to suggest that ebook 'piracy' is akin to free compulsary licensing of ebooks to those who cannot afford them.
But legal arguments often fall on deaf ears.

Therefore, an interesting way to spur on copyright respect and awareness, is to invoke the Indian concept of karma(like the Chinese principle of joss). Both these concepts would imply that do unto others as you would have done to yourself. Even the most fervent open source advocates would not accept working full time like how many authors do, and then giving away their output for free. But for this concept to be accepted, it is necessary to have a C2C platform between the author and reader. Platforms like Amazon self publishing already permit such a thing, and it would be interesting whether the social media burst(and resultant author-reader interaction) would result in lesser ebook piracy. After all, people hesitate to 'rip off' friends or people whom they know.