The Truth About Satyam

The capacity for ethical behavior is evidently not correlated with wealth. Too often I have observed poor taxicab drivers, upon being given a generous tip, attempt to return the excess amounts pointing out that perhaps I made a counting error. So it is no surprise to me to come across instances of extremely wealthy people behaving unethically and immorally merely to gain a little (relatively speaking) more wealth.

The evolving story about Satyam and its chairman Mr Ramalinga Raju is more interesting from a human interest point of view than merely from its commercial implications. Lots of very earnest analysis already occupies the minds of an army of commentators, editorial writers, bloggers and talking heads. Much of it is shock that Raju was so bold as to believe that he could get away with it. There is some puzzlement on why the auditors did not catch such a blatant cooking of books.

In all the handwringing, one detects more than a little schadenfreude, no doubt arising out of envy. After all, Raju had a meteoritic rise and watching him fall so fast cannot but give some secret joy to many. One of the chief joys of heaven (as conceived by the Christians) is watching the torture of the damned, as Tertullian conjectured.

I think I look at this whole sordid affair a bit more sympathetically than most others. I have the same capacity of behaving immorally and unethically, just like every human being. And while I admit that I have used that capacity at least a few times, I think the same is true of every one of us — present company not excepted. We are all flawed; the only difference is a matter of degree. The narrator in Oscar Wilde’s “The Ballad of the Reading Gaol” puts it thusly about the condemned murderer who was to hang:

So with curious eyes and sick surmise
          We watched him day by day,
        And wondered if each one of us
          Would end the self-same way,
        For none can tell to what red Hell
          His sightless soul may stray.

I think it is fear more than sanctimony or financial loss that motivates the anger against Mr Raju. Of course there will be sanctimonious posturing and most of it will come from precisely those who are greater criminals. The most unpalatable of this will come from the greedy politicians — and more specifically of the communist variety. They cannot let this golden opportunity of pointing out the evils of big private businesses go untapped.

The amounts that politicians routinely steal from the public dwarfs the amount that Mr Raju cooked his company’s books with. The politicians regularly get away with it. But Mr Raju will not get away. His actions have directly hurt his colleagues through the negative fallout on the whole IT industry. He will be made an example of because it must become clear to all that he is an exception and not the rule in corporate India.

Politicians get away with corruption primarily because of two reasons. First, the harm that they cause is diffuse. Even if the theft is $10 billion, it is just $10 per capita. The average voter has gotten used to theft and cannot afford to get worked up about it. Second, the corrupt politicians’ colleagues dare not get worked up because they are in precisely the same boat.

I feel for Mr Raju. He did create wealth by founding a company which had a significant impact on the economy. A lot has been lost as a result of his actions. They probably arose as a fatal combination of greed and poor judgement. To varying degrees we are all prone to the same human frailties. In his case, in keeping with his considerable accomplishments and his past successes, his failure is public. There but for the grace of my own modest position go I.

PS: I admit that the title of this post is not the most clever. Every Indian knows that “satyam” means truth. But I wonder whether the Raju family thought it was very clever to name their other concerns “Maytas” — ‘satyam’ spelt backwards. Does it not hint at falsehood, the opposite of truth?

Author: Atanu Dey

Economist. View all posts by Atanu Dey