EQUITY IS MORALITY

We need to examine two scenarios here:

1.When equity is derived from morality (m --> e)
2.When morality is derived from equity (e --> m)

These will enunciate the relationship that equity (e) is equal to morality (m). (e <=> m)

SCENARIO 1:
AUSTERITY DRIVE, EQUITY AND MORALITY:

The politicians in India have always been regarded as being way above the aam aadmi. However, recently, what else is all the hype of the “austerity drive” about but for the establishment of equality among one and all – be it the netas or the aam aadmi? The netas need to understand and follow equity to establish equality. The austerity drive has been taken up by the netas with much ardour so that the aad aadmi can identify with them and also, of course, empathetic votes never hurt.

The source of this desire for equality - via the practise of equity - is none other than a intutive sense of morality that everyone has. Being very pragmatic and honest, we must admit that India is essentially a poor nation. A majority of the people live under the poverty line. It has become the norm in India that wealth – if possessed by anyone – should be kept hidden since it can offend the dignity of the masses. This is an instance of how equity is derived from morality.

However, in this case, the approach is skewed. Our morality stems from the fact that poverty should be eradicated. To achieve greater results, it should stem from a desire of wealth creation. Hence, equity should not be practiced by portraying the netas to be as “austere” as the masses living in poverty but by bringing those poor people up to the level of our netas.


SCENARIO 2:
HOSTILE TAKEOVERS

The law sometimes matters less than the judgment of the public. Even if a company follows the strict letter of the law, it will run into trouble if it violates the moral intuition of its customers, shareholders and employees. Saying "what I did was legal" is not always a good defense since the customers lose confidence in the integrity of the company.

For e.g., if a company X wants to takeover Company Y without its knowledge, then it bids for the shares of Y under the aliases Company A, B and so on. Then, it also bids for the shares of Y under its own name X in the open market. This way, the controlling authority of Y goes to X. This practice is called a hostile takeover. The people feel that the company X will go to any lengths to gobble up other companies solely for the sake of capital and hence, X will lose face in the business world.

In India, currently, there is no law against hostile takeovers. A hostile takeover is hence legal yet it leaves a very bad taste in the mouth and is considered as a bad business practice. Hence, moral standards dictate that even though the law doesn't send people to jail for this practice, it should be shunned so as to lend a moral meaning to equity established by the law. This is the situation where morality springs from equity.

Historically, India has witnessed only a handful of hostile takeover attempts. Foremost amongst these is the highly contentious and unsuccessful attempt by Swraj Paul to take over Escorts Industries. Thereafter, corporate India witnessed the only successful hostile takeover of Raasi Cements by Indian Cements in 1998. And more recently, Harish Bhasin (the stockbroker) led a series of bids to acquire DCM Shriram Industries Limited and his attempts earned him the dubious reputation of being the ‘corporate raider’.