The Economist has an article titled Glitzkrieg, where the blurb reads: "Respectability is for sale. Here is a buyer's guide."
As I read it, I thought: A lot of these tricks are used within India by some businessmen rocketing up to respectability! But there are a few unique dimensions of this racket in India. E.g. big hoardings on the street in Bombay; Gaddafi doesn't do that in London.
But it's interesting to think of three shades of gray:
As I read it, I thought: A lot of these tricks are used within India by some businessmen rocketing up to respectability! But there are a few unique dimensions of this racket in India. E.g. big hoardings on the street in Bombay; Gaddafi doesn't do that in London.
But it's interesting to think of three shades of gray:
- Goods with objective attributes: An ogre can make a commodity like steel, and the customer does not care. The quality of the steel is objectively visible in the steel.
- Goods where reputation helps: A second tier of products & services are those where there are some intangible attributes.
- Goods where reputation is essential: In finance, regulators require producers of certain products & services to be fit and proper. Here, it's a matter of life and death. A wannabe has to buy the reputation, to be considered fit and proper, else he will be thrown out of that business.
So an ogre who makes steel can choose to spend money on buying a private jet or he can choose to spend money on buying a reputation: that's just a matter of taste. But as you go into the 2nd and 3rd categories, the purchase of reputation increasingly becomes a cost of business.
On these issues, you might like to see: Section 8.1, The intrinsic value of regulation for IFS production, in the Percy Mistry report; and Ethics and entry barriers.
excellent post. thanks for sharing!
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