Posted by: John Elliott | May 15, 2007

Dynasties Rule, ok?

India is a country of dynasties. They dominate politics at all levels. They are present in many top companies, and they even pervade Bollywood – and they are constantly in the news.

Within the past few days, Rahul Gandhi, heir apparent to the leadership of the powerful Nehru-Gandhi dynasty that runs the Congress Party, has suffered a serious personal setback in Uttar Pradesh (UP) assembly elections where Congress did badly.

A bitter dynastic row among politicians in the southern state of Tamil Nadu has led to the sudden resignation of Dyanidhi Maran, the country’s able communications minister.

Arguments in Bajaj, one of the best known business families, are leading to a split that is now being finalized by Rahul Bajaj, the family head. And only last month the media was swamped by the wedding of Abhishek Bachchan – film star son of one of India’s most famous stars – to Aishwarya Rai, a female film star.

The ups and downs of dynasties are not just the stuff of gossip and news headlines. They are so pervasive that they affect how India and business are run, and by whom – much more so than say in America, despite the presence there of political and business families like the Kennedys, Bushes, Fords and Rupert Murdoch.

Whether this is a good thing for India is highly questionable. Certainly political dynasties provide continuity and recognizable names and faces for the uneducated to support. Sometimes successful leaders emerge. Sonia Gandhi, current head of the Congress, has saved her party from political disaster and possible splits, and brought it back to power at the head of the current coalition government. But, more often, family members enter politics to protect (often illicitly) wealth accumulated by their fathers and other relations and to sustain the gravy train.

In companies, strong leaders also sometimes emerge. Ratan Tata has successfully built up Tata, one of the country’s two largest groups. Both Kumar Mangalam Birla and his late father, Aditya Birla, have done similarly with their businesses, and there are also successes in the younger generations of families such as Bajaj, Mahindra and Thapar.

But there are many failures as well – as has been demonstrated by the gradual decline of several other parts of the Birla family’s empire, which was once a dominant force. The business fortunes of other old families have also faded since the early 1990s when economic liberalization made them compete or decline.

Life in dynasties is never simple – human greed and ambition make sure of that. Maran had done a good job running the government’s telecommunications ministry but has become caught up in jealousies over dynastic political succession. He got the government job because Muthuvel Karunanidhi, Tamil Nadu chief minister and his grand uncle, nominated him following the death four years ago of his father, Murasoli Maran, who was industry minister.

But last week a Maran-owned tv station published an opinion survey suggesting that Karunanidhi’s younger son was ahead of an elder brother in political succession stakes. Infuriated, the elder brother organized a violent attack on the tv station’s offices, where three people were killed. These events deepened a family rift and Karunanidhi, whose DMK party is part of the Congress-led coalition government, forced Maran to resign.

The Bajaj story basically it comes down to what happens in many business families after two or three generations, when younger family members want to enjoy and run their own slices of the wealth.

Sometimes such splits are managed relatively quietly and well. The Birlas have been gradually separating their massive empire since the early 1980s with little publicity, but the Ambani-controlled Reliance group split in a very public second generation row two years ago. Now Rahul Bajaj is trying to resolve his sons’ and cousins’ ambitions without too much public rancor.

So yes, dynasties do rule, and it sometimes is ok. But they are often protected from some of the impact of market forces, both political and business, so are unduly resistant to change. They block the emergence of new leaders in political parties, and they demotivate top executives who have little chance of reaching the top.

It is for example inconceivable that anyone but a Birla (with one exception, now in the courts) or a Bajaj would head those families’ empires. The only notable exception is Ratan Tata who is believed to be considering whether it would be best if a non-family member succeeds him in a few years’ time.

It is also inconceivable that the Congress Party will for years to come have any leader other than a member of the Nehru-Gandhi dynasty, which has been in charge for most of the past 60 years. And Rahul Gandhi, Sonia Gandhi’s 36 year old son, will not lose his heir-apparent status because of his party’s drubbing in the UP elections, even though he led and dominated the Congress campaign.

Such dynastic longevity is of course good for the families involved, and for those who cluster sycophantly around them. But dynasties stymie development and, when they are as pervasive as they are in India, their impact overall is more negative than positive.


Responses

  1. In my view dynastic rule politics is more dangerous than in any other field. The market place always kicks out the non performer, people reject almost 70 percent of the movies. But, politics is something different, where in elections only half of the population are participating. For the Congress Party, the Nehru family is inevitable. Only non-Nehru family Congress PMs have delivered the results. Even economic liberalization was started by P.V. Narasimha Rao’s goverment. Ex-PM Deve Gowda played a cunning game in Karnataka (southern Indian State) to make his son Kumaraswamy the CM of the state. Kumaraswamy, who drove his father’s car for ten years, is now the CM. Rabri Devi (wife of Lalu Prasad Yadav) who know only cooking, ruled Bihar. What kind of DEMOCRACY do we have? Wwho voted for Kumaraswamy or Rabri Devi? Who is going to tame these people? The tragedy is,there is no one to tame like in business or Bollywood.

  2. John,

    The observation is very notable and I could not agree more with you. I agree Dynasties are not necessarily bad and they are pervasive feature in every society around the globe. Though I believe Dynasties are similar to species. The old Darwin rule still holds true. That’s the reason we be disintegration of so many of them. I like your article more for the observation and unbiased analysis. I would ask people to read more into the analysis and not derive tones (many times emotional) out of the article. There are both sides to Dynasties. More important is to accept it and try to use it for the benefit of many.

  3. Nice take on one aspect John. But you forgot to round it up together in the end to give the final, big, correct picture.

    Yes, India does have Dynasties. Though Congress is the only notable one left – and as you said yourself, they do get a flavour of things once in a while. But look at the business domain. The dynasties like Bajaj, Birla, Tata etc you quoted are sound, sensible, professional folks now – not just silly sons of the owners. They understand business, and strategically steer their empires well towards greater wealth. I would be worried if they were correspondent courses graduates, but most of them fortunately are MBAs and CAs with a solid grounding. So as long as things are professional, it’s cool.

    And then there are several non-dynasties as well that are shining bright – the likes of Infosys, ICICI, HDFC, Air Deccan, DMRC, ITC, NIIT…

  4. Interesting observation by John Elliott.

    But no other country ever had to contend with over a billion population, 30 different official languages (8000 odd dialects) a coalition government and yet an economy growing at around 8%.

    The point is, what worked in the US and Western Europe, is not necessarily the best. There may yet be more options, and well opinion is only restricted by ones own experience.

  5. True, indeed! In a country like India which has, in the past, witnessed the dynasties rule and has more uneducated/little educated public, this is nothing new and far more understandable as it is. Even the well educated men rely more on brand names – whether it is politics or business. Indian minds need to change their thought process if we want to be the largest economy in the world.

  6. History is replete with accounts and attainments of leaders and their personal qualities.Indeed the dictum that dynasties have positive impact , rather than negative, in a cultural set up such as India still stands allure.

    What is more important is to understand the cultural set up of India.Dynasty plays an an important role from marriage to death.And what is wrong in that? Even UK has a form of dynastic rule, THE QUEEN be at the helm of affairs. However the metamorphosis take place over the period of time,making dynastic leaders as ornamental leaders, while the systems in place, executes the duties, responsibilities and progress that is needed.

  7. i think that perhaps you should also add the Ambani dynasty to your article – esp considering the bitter split between the brothers of the group their father built.

  8. it is unfortunate that the indian society was in the clutches of a few dominant groups (castes) for nearly three thousand years.Even after independence the same is continueing in a different form i.e.political inheritance,even when the successor is unfit to be a leader.
    apchaudary ap india

  9. hi john

    i am not a die hard indian who can not
    take a critisim but your analysis
    of dynasty/inheritance in american
    societies as well
    look at CLINTON/ BUSH FAMILY 2 MEMBER
    OF THE FAMILY IS BECOMING PRESIDENT
    AS WELL AS LARGE CORPORATES LIKE FORD
    MANAGED BY FORD JUNIOR.
    THERE ARE MANY MORE LIKE THIS IF THIS
    CAN HAPPEN IN COUNTRY LIKE USA WHO HAS
    A DEMOCRATIC HISTORY OF ATLEAST 6 TO 7
    TIMES HIGHER THAN INDIA

    HAVE A DIFFERENT LOOK AGAIN

  10. Yes John, its kind of surprising that
    the US is not alone in this matter, I guess. I was reading Nicolas Kristoff’s piece on how were Hillary
    elected 2 families would have controlled the WH for 25+ years. Need
    I mention the Ford who became CEO, or
    for that matter Motorola or Don Trump,
    or the Kennedy Family(and Arnie).
    Or Jerry Brown.
    Association seems to help in Democracy.
    But Dynastic rule while a natural when
    ownership passes from a majority holder
    to child, should not be possible
    elsewhere. Communism has done well
    on this front, but Mrs Mao did rule
    the roost for a period.

  11. John Elliott is spot on!

    Dynasties exist everywhere. However, in India, it is so pervasive that it stifles and saps the creativity and energy of those on the “outside”.

    Enlightened public officials and institutions should try their very best to build an American-style meritocracy. Only a meritocracy can ensure continued progress in any society.

  12. You make it sound as if India is like Indonesia, where most of the country’s wealth was once controlled by Suharto’s family. The only major political dynasty is the Gandhis, and Sonia Gandhi became politically active only reluctantly, to save the fractious Congress party from self-destructing. In business, yes the names you describe have been business houses for generations just like the Fords and Bancrofts. However, just like America’s Microsoft and Bill Gates, the richest (Azim Premji) and biggest (Reliance) are but a generation old.

    By the way, what do you call the current (and possibly future) string of US presidents? Another point is that while there is a board of directors that decides who rises to power in most US corporations, we all have seen how dishonest that system can be.

  13. It is unfortunate for India but true – inheritance in all forms should be banned to infuse new and fresh blood in all realms of society!


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: