Image: Courtesy Zoho
On the significance of ‘Swadeshi’ (make in India) in a recent Zoho initiative called Swadeshi Sankalp
Under this initiative, we launched tools and programmes for the education and government sectors of India to help them tide over the pandemic. Zoho’s current priority is to survive and serve.
India is at peace today because of our social institutions and families. I’ll give an example from my current location. There are many poor widows in this village and they are able to have a reasonably dignified life because they’re surrounded by friends and family. Not only that, their extended families are taking care of them. This is the local social solidarity that we can never lose, which in the West is largely lost, particularly in America’s atomised society. Such a person [a widow] in America would be all alone, she would have to face life’s miseries all by herself.
I would also like to say that global warming is real. All of this that we are currently facing, this pandemic is a wakeup call. It’s time to go backwards—back to smaller towns and villages, live closer to the roots, both human and our natural roots.On whether tech founders like him should play a bigger role in governance and policy formulation
Informally, when government officials ask, I give my inputs on policy, but this is different from lobbying. That is one of the reasons I actually try to maintain some distance [from politics]. In the US, the lobbyists are writing the laws because Congress has now become a joke; lobbying is linked to legislation. But, at the same time, there’s definitely expertise that we can draw upon and we should do this. I think people with longer-term ideas should enter politics. I never considered politics to be dirty because the alternative to politics is war. If we don’t have politics then we will have war, one of the two. However distasteful you find politics, it beats the alternative. That’s all I’ll say.On his proximity to the Rashtriya Swayamsevak Sangh (RSS) [Vembu attended an RSS event in February]
The RSS is doing a lot of good things on ground. I have seen hundreds of volunteers who are going around and distributing food during this time and it is not visible to everyone. And I’m not going to forbid this group just because some people will take offense on Twitter. I’m definitely not going to give authority to anyone to enforce where I should be. They have liberty to do what they want so even I’m at liberty to speak [what and where I] want.... that’s my attitude and that’s freedom (laughs).On being ‘a techno-optimist but economic-pessimist’
If we say this whole thing [crisis] is because of the virus than we are completely not learning the lesson. The reality is there is an organic link from the dotcom bust to the global financial crisis [GFC] to the present economic crisis. These are separate but are also the same phenomenon, distributed in time. And the root of this is the way the monetary system and the financial system is set up. This is exactly the same process with India, the cortex is severely dollar indebted.
The US Federal Reserve has lost control of its own monetary policy. When the US prints money, they would like it to go to Baltimore, Chicago or Michigan, but in reality, it is escaping into the global financial system. It’s not really serving the Americans at all. The dollar printed is not actually achieving much in the US, other than make the inequalities worse.
I have lived in America for 30 years and seen shocking kinds of things. I mean, you will see homeless people in San Jose, the heart of Silicon Valley. In one of the richest countries in the world, almost 60,000 people killed themselves with overdoses, how could this happen? This is all related—the Federal Reserve policy, homelessness in San Francisco and dying of overdose. The academics are completely wrong and their academic ideas are wrong. They worship false ideologies and that is why we are here.On imbalances in trade and its consequences
My critique of the current system is that we are buying things on installment and debt. Most communities, cities, towns, and districts are not capable enough to produce all the things they need. Therefore, that trade is asymmetrical or imbalanced; either they go into debt or they have a very lopsided or old colonial economics paradigm, where they sell raw material and buy all the finished goods, which is intrinsically bad and that is how India got colonised. Exporting raw materials and importing manufactured goods is a bad economic structure to get into for any region or country. You need to have a balance to be economically strong. That means you’ve to build the capabilities; this is the first principle, and for that you ought to move the capability jobs to these places.
From the perspective of citizens, it has multiple economic advantages: The cost of living drops dramatically and now that they have disposable income, they could invest in a different way. For example, they could invest in a local venture that creates jobs locally. And the second is of course environmental. I’m completely without AC in my house here because it is not required, village atmosphere is automatically cooler. My energy consumption has dropped dramatically after moving here. So this is my impact on the planet. Then comes real estate. I actually have done an economic analysis to show that most of the economic productivity added in Bengaluru or Mumbai is captured by the real estate industry. Meaning the real estate prices go up at multiples of GDP. Real estate could be 100x or 500x. What used to be land worth ₹1 lakh becomes a ₹50 crore land.
Henry George was a popular American economist in the 19th century, but somehow the world forgot Henry George but remember Karl Marx. I am a little bit of a Georgist in this area. Henry George had some very good ideas. So, I have studied Georgism and there is a lot of merit in his argument [George reckoned that wealth from land value belonged to the public, and he proposed a ‘land-value’ tax to reduce inequality]. Particularly he had this idea that land actually plays a very special role because of its scarcity. The fact that you fill it up, the price explodes and that is a major issue he identified over 100 years ago.On the fallout of Covid-19 on cities and migration
A lot of migrant labour will leave the big cities. When I was a kid, Chennai had about 3 million people now it has over 10 million people. So, that is why we need more balance. I think this virus in a way is forcing us to do things we may have wanted to do anyway. I mean, as a global civilisation, this virus has lowered our energy footprint, simplified life; all of these were, anyway, probably called for and this virus is kind of forcing us in a way in that direction [laughs]. If you believe in God, God sent as a signal here through the virus.On the criticality of leadership in Covid-19 times
It is absolutely vital because during these times people look for some signs of reassurance that the ones who are leading know what they’re doing. Actually that’s not a given, unfortunately, in some places. Do they know what they’re doing? Are they really up on it?
These are truly scary times where no one knows what is ahead in many ways, economically or socially. But still leadership has to project a certain beginning of calmness and reassurance. And what I tried doing in the company is to communicate openly and say these are the challenges. I also say we will work on them together and steadily. I’ll give you an example: During this pandemic, we have a situation where some of us have 100 percent of our income but there are a lot who have zero or no personal income. This is quite an arbitrary situation, there’s no rhyme or reason. It’s not like anybody deserved it [either situation]. So that is why I recommended this in our company—adopt a person who lost all their income and help them. Many of my employees are actually doing it. I suggested, go to your neighborhood, you’ll find somebody who lost all their income, so find a way to help them.
Government should actually implement a policy where a certain group of people should be asked to volunteer and give 50 percent of their income, which can be distributed to the people who have lost everything. This will bring social solidarity in a very deep way. I think that these are the kind of things leadership could do. Also I feel India has relatively handled the situation better than most countries; given our size and density, I actually expected much worse. I hope that we shall pass this virus phase without any massive damage.On the decision to move to Tenkasi and life there since
At the time of the GFC of 2008, we had a fragile and non-resilient system. Resilience calls for starting from the foundation, which also means going back to our roots, smaller towns and rural areas. That was the decision I made 12 years ago, to buy land in Tenkasi, and we acted it on it.
I come from a family who were farmers, so personally I like to do farming. I slowly got to know the village around here. Part of the reason of me doing agriculture is also that people here need jobs. The only line of work they know [is agriculture] and if that doesn’t exist then they all will decide to migrate. In surrounding villages people have moved to Bengaluru or Mumbai. I always thought that people migrating from villages to cities is not a good idea. The only way they could make anything of themselves is to move to Mumbai and Chennai and that’s not a great way to be.On his notion of capital
Capital is something that protects you from adversity; that is why you save up capital. We have lost a lot of things in this whole idea that capital is equal to its financial valuation. On the internet, the world’s tail-wag-the-dog obsession has become the valuation itself, not the underlying capital, which is intrinsically not measurable, but you can see it, it’s like beauty. You know it when you see it. I am a capitalist, and I don’t care about net worth. And I want to build capital and the capital includes know-how, capability, formal knowledge, advanced knowledge, physics, astronomy, culture...all of that is a form of capital.
I’ll give you a thought experiment. Let’s create a very poor Indian village for thousand people. And we do an exchange where these thousand people live in a Japanese village of equal size and the Japanese villagers are moved to the Indian village of that same size... nothing else happens. What happens after five to 10 years? Indian village would have taken on from Japanese characteristics....you will find better infrastructure, better roads. And in fact, we can stop all financial flows, meaning the Japanese villagers are supposed to come without bringing any money, only with their brains. And likewise for the whole Indian village.
In such a case, the Japanese did bring capital, even though materially they brought nothing. Countries that were razed to the ground were pulled up again by capital. And that is the capital we need to seek and that is the capital we need to build. It is not just personal, individual and corporate. It is social. It is institutional, our justice system, our newspapers, or news media, these are all capital of society, our ability to analyze trends, all of this is capital.
So capital has a much broader notion, but it all goes poof when you chase valuation.
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(This story appears in the 19 June, 2020 issue of Forbes India. To visit our Archives, click here.)