1. Name the former German intelligence employee who has been sentenced to eight years in jail for spying for the US and Russia?

Answer: Markus Reichel.

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MCQ-> Read the following passage carefully and answer the questions given below it. Certain words/phrases have been printed in bold tohelp you locate them while answering some of the questions. During the last few years, a lot of hype has been heaped on the BRICS (Brazil, Russia, India, China, and South Africa). With their large populations and rapid growth, these countries, so the argument goes, will soon become some of the largest economies in the world and, in the case of China, the largest of all by as early as 2020. But the BRICS, as well as many other emerging-market economieshave recently experienced a sharp economic slowdown. So, is the honeymoon over? Brazil’s GDP grew by only 1% last year, and may not grow by more than 2% this year, with its potential growth barely above 3%. Russia’s economy may grow by barely 2% this year, with potential growth also at around 3%, despite oil prices being around $100 a barrel. India had a couple of years of strong growth recently (11.2% in 2010 and 7.7% in 2011) but slowed to 4% in 2012. China’s economy grew by 10% a year for the last three decades, but slowed to 7.8% last year and risks a hard landing. And South Africa grew by only 2.5% last year and may not grow faster than 2% this year. Many other previously fast-growing emerging-market economies – for example, Turkey, Argentina, Poland, Hungary, and many in Central and Eastern Europe are experiencing a similar slowdown. So, what is ailing the BRICS and other emerging markets? First, most emerging-market economies were overheating in 2010-2011, with growth above potential and inflation rising and exceeding targets. Many of them thus tightened monetary policy in 2011, with consequences for growth in 2012 that have carried over into this year. Second, the idea that emerging-market economies could fully decouple from economic weakness in advanced economies was farfetched : recession in the eurozone, near-recession in the United Kingdom and Japan in 2011-2012, and slow economic growth in the United States were always likely to affect emerging market performance negatively – via trade, financial links, and investor confidence. For example, the ongoing euro zone downturn has hurt Turkey and emergingmarket economies in Central and Eastern Europe, owing to trade links. Third, most BRICS and a few other emerging markets have moved toward a variant of state capitalism. This implies a slowdown in reforms that increase the private sector’s productivity and economic share, together with a greater economic role for state-owned enterprises (and for state-owned banks in the allocation of credit and savings), as well as resource nationalism, trade protectionism, import substitution industrialization policies, and imposition of capital controls. This approach may have worked at earlier stages of development and when the global financial crisis caused private spending to fall; but it is now distorting economic activity and depressing potential growth. Indeed, China’s slowdown reflects an economic model that is, as former Premier Wen Jiabao put it, “unstable, unbalanced, uncoordinated, and unsustainable,” and that now is adversely affecting growth in emerging Asia and in commodity-exporting emerging markets from Asia to Latin America and Africa. The risk that China will experience a hard landing in the next two years may further hurt many emerging economies. Fourth, the commodity super-cycle that helped Brazil, Russia, South Africa, and many other commodity-exporting emerging markets may be over. Indeed, a boom would be difficult to sustain, given China’s slowdown, higher investment in energysaving technologies, less emphasis on capital-and resource-oriented growth models around the world, and the delayed increase in supply that high prices induced. The fifth, and most recent, factor is the US Federal Reserve’s signals that it might end its policy of quantitative easing earlier than expected, and its hints of an even tual exit from zero interest rates. both of which have caused turbulence in emerging economies’ financial markets. Even before the Fed’s signals, emergingmarket equities and commodities had underperformed this year, owing to China’s slowdown. Since then, emerging-market currencies and fixed-income securities (government and corporate bonds) have taken a hit. The era of cheap or zerointerest money that led to a wall of liquidity chasing high yields and assets equities, bonds, currencies, and commodities – in emerging markets is drawing to a close. Finally, while many emerging-market economies tend to run current-account surpluses, a growing number of them – including Turkey, South Africa, Brazil, and India – are running deficits. And these deficits are now being financed in riskier ways: more debt than equity; more short-term debt than longterm debt; more foreign-currency debt than local-currency debt; and more financing from fickle cross-border interbank flows. These countries share other weaknesses as well: excessive fiscal deficits, abovetarget inflation, and stability risk (reflected not only in the recent political turmoil in Brazil and Turkey, but also in South Africa’s labour strife and India’s political and electoral uncertainties). The need to finance the external deficit and to avoid excessive depreciation (and even higher inflation) calls for raising policy rates or keeping them on hold at high levels. But monetary tightening would weaken already-slow growth. Thus, emerging economies with large twin deficits and other macroeconomic fragilities may experience further downward pressure on their financial markets and growth rates. These factors explain why growth in most BRICS and many other emerging markets has slowed sharply. Some factors are cyclical, but others – state capitalism, the risk of a hard landing in China, the end of the commodity supercycle -are more structural. Thus, many emerging markets’ growth rates in the next decade may be lower than in the last – as may the outsize returns that investors realised from these economies’ financial assets (currencies, equities. bonds, and commodities). Of course, some of the better-managed emerging-market economies will continue to experitnce rapid growth and asset outperformance. But many of the BRICS, along with some other emerging economies, may hit a thick wall, with growth and financial markets taking a serious beating.Which of the following statement(s) is/are true as per the given information in the passage ? A. Brazil’s GDP grew by only 1% last year, and is expected to grow by approximately 2% this year. B. China’s economy grew by 10% a year for the last three decades but slowed to 7.8% last year. C. BRICS is a group of nations — Barzil, Russia, India China and South Africa....
MCQ-> The persistent patterns in the way nations fight reflect their cultural and historical traditions and deeply rooted attitudes that collectively make up their strategic culture. These patterns provide insights that go beyond what can be learnt just by comparing armaments and divisions. In the Vietnam War, the strategic tradition of the United States called for forcing the enemy to fight a massed battle in an open area, where superior American weapons would prevail. The United States was trying to re-fight World War II in the jungles of Southeast Asia, against an enemy with no intention of doing so. Some British military historians describe the Asian way of war as one of indirect attacks, avoiding frontal attacks meant to overpower an opponent. This traces back to Asian history and geography: the great distances and harsh terrain have often made it difficult to execute the sort of open-field clashes allowed by the flat terrain and relatively compact size of Europe. A very different strategic tradition arose in Asia. The bow and arrow were metaphors for an Eastern way of war. By its nature, the arrow is an indirect weapon. Fired from a distance of hundreds of yards, it does not necessitate immediate physical contact with the enemy. Thus, it can be fired from hidden positions. When fired from behind a ridge, the barrage seems to come out of nowhere, taking the enemy by surprise. The tradition of this kind of fighting is captured in the classical strategic writings of the East. The 2,000 years' worth of Chinese writings on war constitutes the most subtle writings on the subject in any language. Not until Clausewitz, did the West produce a strategic theorist to match the sophistication of Sun-tzu, whose Art of War was written 2,300 years earlier. In Sun-tzu and other Chinese writings, the highest achievement of arms is to defeat an adversary without fighting. He wrote: "To win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the supreme excellence." Actual combat is just one among many means towards the goal of subduing an adversary. War contains too many surprises to be a first resort. It can lead to ruinous losses, as has been seen time and again. It can have the unwanted effect of inspiring heroic efforts in an enemy, as the United States learned in Vietnam, and as the Japanese found out after Pearl Harbor. Aware of the uncertainties of a military campaign, Sun-tzu advocated war only after the most thorough preparations. Even then it should be quick and clean. Ideally, the army is just an instrument to deal the final blow to an enemy already weakened by isolation, poor morale, and disunity. Ever since Sun-tzu, the Chinese have been seen as masters of subtlety who take measured actions to manipulate an adversary without his knowledge. The dividing line between war and peace can be obscure. Low-level violence often is the backdrop to a larger strategic campaign. The unwitting victim, focused on the day-to-day events, never realizes what's happening to him until it's too late. History holds many examples. The Viet Cong lured French and U.S. infantry deep into the jungle, weakening their morale over several years. The mobile army of the United States was designed to fight on the plains of Europe, where it could quickly move unhindered from one spot to the next. The jungle did more than make quick movement impossible; broken down into smaller units and scattered in isolated bases, US forces were deprived of the feeling of support and protection that ordinarily comes from being part of a big army. The isolation of U.S. troops in Vietnam was not just a logistical detail, something that could be overcome by, for instance, bringing in reinforcements by helicopter. In a big army reinforcements are readily available. It was Napoleon who realized the extraordinary effects on morale that come from being part of a larger formation. Just the knowledge of it lowers the soldier's fear and increases his aggressiveness. In the jungle and on isolated bases, this feeling was removed. The thick vegetation slowed down the reinforcements and made it difficult to find stranded units. Soldiers felt they were on their own. More important, by altering the way the war was fought, the Viet Cong stripped the United States of its belief in the inevitability of victory, as it had done to the French before them. Morale was high when these armies first went to Vietnam. Only after many years of debilitating and demoralizing fighting did Hanoi launch its decisive attacks, at Dienbienphu in 1954 and against Saigon in 1975. It should be recalled that in the final push to victory the North Vietnamese abandoned their jungle guerrilla tactics completely, committing their entire army of twenty divisions to pushing the South Vietnamese into collapse. This final battle, with the enemy's army all in one place, was the one that the United States had desperately wanted to fight in 1965. When it did come out into the open in 1975, Washington had already withdrawn its forces and there was no possibility of re-intervention. The Japanese early in World War II used a modern form of the indirect attack, one that relied on stealth and surprise for its effect. At Pearl Harbor, in the Philippines, and in Southeast Asia, stealth and surprise were attained by sailing under radio silence so that the navy's movements could not be tracked. Moving troops aboard ships into Southeast Asia made it appear that the Japanese army was also "invisible." Attacks against Hawaii and Singapore seemed, to the American and British defenders, to come from nowhere. In Indonesia and the Philippines the Japanese attack was even faster than the German blitz against France in the West. The greatest military surprises in American history have all been in Asia. Surely there is something going on here beyond the purely technical difficulties of detecting enemy movements. Pearl Harbor, the Chinese intervention in Korea, and the Tet offensive in Vietnam all came out of a tradition of surprise and stealth. U.S. technical intelligence – the location of enemy units and their movements was greatly improved after each surprise, but with no noticeable improvement in the American ability to foresee or prepare what would happen next. There is a cultural divide here, not just a technical one. Even when it was possible to track an army with intelligence satellites, as when Iraq invaded Kuwait or when Syria and Egypt attacked Israel, surprise was achieved. The United States was stunned by Iraq's attack on Kuwait even though it had satellite pictures of Iraqi troops massing at the border. The exception that proves the point that cultural differences obscure the West's understanding of Asian behavior was the Soviet Union's 1979 invasion of Afghanistan. This was fully anticipated and understood in advance. There was no surprise because the United States understood Moscow's worldview and thinking. It could anticipate Soviet action almost as well as the Soviets themselves, because the Soviet Union was really a Western country. The difference between the Eastern and the Western way of war is striking. The West's great strategic writer, Clausewitz, linked war to politics, as did Sun-tzu. Both were opponents of militarism, of turning war over to the generals. But there all similarity ends. Clausewitz wrote that the way to achieve a larger political purpose is through destruction of the enemy's army. After observing Napoleon conquer Europe by smashing enemy armies to bits, Clausewitz made his famous remark in On War (1932) that combat is the continuation of politics by violent means. Morale and unity are important, but they should be harnessed for the ultimate battle. If the Eastern way of war is embodied by the stealthy archer, the metaphorical Western counterpart is the swordsman charging forward, seeking a decisive showdown, eager to administer the blow that will obliterate the enemy once and for all. In this view, war proceeds along a fixed course and occupies a finite extent of time, like a play in three acts with a beginning, a middle, and an end. The end, the final scene, decides the issue for good. When things don't work out quite this way, the Western military mind feels tremendous frustration. Sun-tzu's great disciples, Mao Zedong and Ho Chi Minh, are respected in Asia for their clever use of indirection and deception to achieve an advantage over stronger adversaries. But in the West their approach is seen as underhanded and devious. To the American strategic mind, the Viet Cong guerrilla did not fight fairly. He should have come out into the open and fought like a man, instead of hiding in the jungle and sneaking around like a cat in the night. According to the author, the main reason for the U.S. losing the Vietnam war was
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MCQ-> Read carefully the four passages that follow and answer the questions given at the end of each passage:PASSAGE I The most important task is revitalizing the institution of independent directors. The independent directors of a company should be faithful fiduciaries protecting, the long-term interests of shareholders while ensuring fairness to employees, investor, customer, regulators, the government of the land and society. Unfortunately, very often, directors are chosen based of friendship and, sadly, pliability. Today, unfortunately, in the majority of cases, independence is only true on paper.The need of the hour is to strengthen the independence of the board. We have to put in place stringent standards for the independence of directors. The board should adopt global standards for director-independence, and should disclose how each independent director meets these standards. It is desirable to have a comprehensive report showing the names of the company employees of fellow board members who are related to each director on the board. This report should accompany the annual report of all listed companies. Another important step is to regularly assess the board members for performance. The assessment should focus on issues like competence, preparation, participation and contribution. Ideally, this evaluation should be performed by a third party. Underperforming directors should be allowed to leave at the end of their term in a gentle manner so that they do not lose face. Rather than being the rubber stamp of a company’s management policies, the board should become a true active partner of the management. For this, independent directors should be trained in their in their in roles and responsibilities. Independent directors should be trained on the business model and risk model of the company, on the governance practices, and the responsibilities of various committees of the board of the company. The board members should interact frequently with executives to understand operational issues. As part of the board meeting agenda, the independent directors should have a meeting among themselves without the management being present. The independent board members should periodically review the performance of the company’s CEO, the internal directors and the senior management. This has to be based on clearly defined objective criteria, and these criteria should be known to the CEO and other executive directors well before the start of the evolution period. Moreover, there should be a clearly laid down procedure for communicating the board’s review to the CEO and his/her team of executive directors. Managerial remuneration should be based on such reviews. Additionally, senior management compensation should be determined by the board in a manner that is fair to all stakeholders. We have to look at three important criteria in deciding managerial remuneration-fairness accountability and transparency. Fairness of compensation is determined by how employees and investors react to the compensation of the CEO. Accountability is enhanced by splitting the total compensation into a small fixed component and a large variable component. In other words, the CEO, other executive directors and the senior management should rise or fall with the fortunes of the company. The variable component should be linked to achieving the long-term objectives of the firm. Senior management compensation should be reviewed by the compensation committee of the board consisting of only the independent directors. This should be approved by the shareholders. It is important that no member of the internal management has a say in the compensation of the CEO, the internal board members or the senior management. The SEBI regulations and the CII code of conduct have been very helpful in enhancing the level of accountability of independent directors. The independent directors should decide voluntarily how they want to contribute to the company. Their performance should decide voluntarily how they want to contribute to the company. Their performance should be appraised through a peer evaluation process. Ideally, the compensation committee should decide on the compensation of each independent director based on such a performance appraisal. Auditing is another major area that needs reforms for effective corporate governance. An audit is the Independent examination of financial transactions of any entity to provide assurance to shareholder and other stakeholders that the financial statements are free of material misstatement. Auditors are qualified professionals appointed by the shareholders to report on the reliability of financial statements prepared by the management. Financial markets look to the auditor’s report for an independent opinion on the financial and risk situation of a company. We have to separate such auditing form other services. For a truly independent opinion, the auditing firm should not provide services that are perceived to be materially in conflict with the role of the auditor. These include investigations, consulting advice, sub contraction of operational activities normally undertaken by the management, due diligence on potential acquisitions or investments, advice on deal structuring, designing/implementing IT systems, bookkeeping, valuations and executive recruitment. Any departure from this practice should be approved by the audit committee in advance. Further, information on any such exceptions must be disclosed in the company’s quarterly and annual reports. To ensure the integrity of the audit team, it is desirable to rotate auditor partners. The lead audit partner and the audit partner responsible for reviewing a company’s audit must be rotated at least once every three to five years. This eliminates the possibility of the lead auditor and the company management getting into the kind of close, cozy relationship that results in lower objectivity in audit opinions. Further, a registered auditor should not audit a chief accounting office was associated with the auditing firm. It is best that members of the audit teams are prohibited from taking up employment in the audited corporations for at least a year after they have stopped being members of the audit team.A competent audit committee is essential to effectively oversee the financial accounting and reporting process. Hence, each member of the audit committee must be ‘financially literate’, further, at least one member of the audit committee, preferably the chairman, should be a financial expert-a person who has an understanding of financial statements and accounting rules, and has experience in auditing. The audit committee should establish procedures for the treatment of complaints received through anonymous submission by employees and whistleblowers. These complaints may be regarding questionable accounting or auditing issues, any harassment to an employee or any unethical practice in the company. The whistleblowers must be protected. Any related-party transaction should require prior approval by the audit committee, the full board and the shareholders if it is material. Related parties are those that are able to control or exercise significant influence. These include; parent- subsidiary relationships; entities under common control; individuals who, through ownership, have significant influence over the enterprise and close members of their families; and dey management personnel.Accounting standards provide a framework for preparation and presentation of financial statements and assist auditors in forming an opinion on the financial statements. However, today, accounting standards are issued by bodies comprising primarily of accountants. Therefore, accounting standards do not always keep pace with changes in the business environment. Hence, the accounting standards-setting body should include members drawn from the industry, the profession and regulatory bodies. This body should be independently funded. Currently, an independent oversight of the accounting profession does not exist. Hence, an independent body should be constituted to oversee the functioning of auditors for Independence, the quality of audit and professional competence. This body should comprise a "majority of non- practicing accountants to ensure independent oversight. To avoid any bias, the chairman of this body should not have practiced as an accountant during the preceding five years. Auditors of all public companies must register with this body. It should enforce compliance with the laws by auditors and should mandate that auditors must maintain audit working papers for at least seven years.To ensure the materiality of information, the CEO and CFO of the company should certify annual and quarterly reports. They should certify that the information in the reports fairly presents the financial condition and results of operations of the company, and that all material facts have been disclosed. Further, CEOs and CFOs should certify that they have established internal controls to ensure that all information relating to the operations of the company is freely available to the auditors and the audit committee. They should also certify that they have evaluated the effectiveness of these controls within ninety days prior to the report. False certifications by the CEO and CFO should be subject to significant criminal penalties (fines and imprisonment, if willful and knowing). If a company is required to restate its reports due to material non-compliance with the laws, the CEO and CFO must face severe punishment including loss of job and forfeiting bonuses or equity-based compensation received during the twelve months following the filing.The problem with the independent directors has been that: I. Their selection has been based upon their compatibility with the company management II. There has been lack of proper training and development to improve their skill set III. Their independent views have often come in conflict with the views of company management. This has hindered the company’s decision-making process IV. Stringent standards for independent directors have been lacking...
MCQ-> Read the following passage carefully and answer the questions given at the end. When Ratan Tata moved the Supreme Court, claiming his right to privacy had been violated, he called Harish Salve. The choice was not surprising. The former solicitor general had been topping the legal charts ever since he scripted a surprising win for Mukesh Ambani against his brother Anil. That dispute set the gold standard for legal fees. On Mukesh’s side were Salve, Rohinton Nariman, and Abhishek Manu Singhvi. The younger brother had an equally formidable line-up led by Ram Jethmalani and Mukul Rohatgi.The dispute dated back three-and-a-half years to when Anil filed case against his brother for reneging on an agreement to supply 28 million cubic metres of gas per day from its Krishna-Godavari basin fields at a rate of $ 2.34 for 17 years. The average legal fee was Rs. 25 lakh for a full day's appearance, not to mention the overnight stays at Mumbai's five-star suites, business class travel, and on occasion, use of the private jet. Little wonder though that Salve agreed to take on Tata’s case pro bono. He could afford philanthropy with one of India’s wealthiest tycoons.The lawyers’ fees alone, at a conservative estimate, must have cost the Ambanis at least Rs. 15 crore each. Both the brothers had booked their legal teams in the same hotel, first the Oberoi and, after the 26/ ll Mumbai attacks, the Trident. lt’s not the essentials as much as the frills that raise eyebrows. The veteran Jethmalani is surprisingly the most modest in his fees since he does not charge rates according to the strength of the client's purse. But as the crises have multiplied, lawyers‘fees have exploded.The 50 court hearings in the Haldia Petrochemicals vs. the West Bengal Government cost the former a total of Rs. 25 crore in lawyer fees and the 20 hearings in the Bombay Mill Case, which dragged on for three years, cost the mill owners almost Rs. 10 crore. Large corporate firms, which engage star counsels on behalf of the client, also need to know their quirks. For instance, Salve will only accept the first brief. He will never be the second counsel in a case. Some lawyers prefer to be paid partly in cash but the best are content with cheques. Some expect the client not to blink while picking up a dinner tab of Rs. 1.75 lakh at a Chennai five star. A lawyer is known to carry his home linen and curtains with him while travelling on work. A firm may even have to pick up a hot Vertu phone of the moment or a Jaeger-LeCoutre watch of the hour to keep a lawyer in good humour.Some are even paid to not appear at all for the other side - Aryama Sundaram was retained by Anil Ambani in the gas feud but he did not fight the case. Or take Raytheon when it was fighting the Jindals. Raytheon had paid seven top lawyers a retainer fee of Rs. 2.5 lakh each just to ensure that the Jindals would not be able to make a proper case on a taxation issue. They miscalculated when a star lawyer fought the case at the last minute. “I don’t take negative retainers”, shrugs Rohatgi, former additional solicitor general. “A Lawyer’s job is to appear for any client that comes to him. lt’s not for the lawyers to judge if a client is good or bad but the court”. Indeed. He is, after all, the lawyer who argued so famously in court that B. Ramalinga Raju did not ‘fudge any account in the Satyam Case. All he did was “window dressing”.Some high profile cases have continued for years, providing a steady source of income, from the Scindia succession battle which dates to 1989, to the JetLite Sahara battle now in taxation arbitration to the BCCI which is currently in litigation with Lalit Modi, Rajasthan Royals and Kings XI Punjab.Think of the large law firms as the big Hollywood studios and the senior counsel as the superstar. There are a few familiar faces to be found in most of the big ticket cases, whether it is the Ambani gas case, Vodafone taxation or Bombay Mills case. Explains Salve, “There is a reason why we have more than one senior advocate on a case. When you're arguing, he’s reading the court. He picks up a point or a vibe that you may have missed.” Says Rajan Karanjawala, whose firm has prepared the briefs for cases ranging from the Tata's recent right to privacy case to Karisma Kapoor’s divorce, “The four jewels in the crown today are Salve, Rohatgi, Rohinton Nariman and Singhvi. They have replaced the old guard of Fali Nariman, Soli Sorabjee, Ashok Desai and K.K. Venugopal.” He adds, “The one person who defies the generational gap is Jethmalani who was India's leading criminal lawyer in the 1960s and is so today.”The demand for superstar lawyers has far outstripped the supply. So a one-man show by, say, Rohatgi can run up billings of Rs. 40 crore, the same as a mid-sized corporate law firm like Titus and Co that employs 28 juniors. The big law filik such as AZB or Amarchand & Mangaldas or Luthra & Luthra have to do all the groundwork for the counsel, from humouring the clerk to ensure the A-lister turns up on the hearing day to sourcing appropriate foreign judgments in emerging areas such as environmental and patent laws. “We are partners in this. There are so few lawyers and so many matters,” points out Diljeet Titus.As the trust between individuals has broken down, governments have questioned corporates and corporates are questioning each other, and an array of new issues has come up. The courts have become stronger. “The lawyer,” says Sundaram, with the flourish that has seen him pick up many Dhurandhares and Senakas at pricey art auctions, “has emerged as the modern day purohit.” Each purohit is head priest of a particular style. Says Karanjawala, “Harish is the closest example in today's bar to Fali Nariman; Rohinton has the best law library in his brain; Mukul is easily India's busiest lawyer while Manu Singhvi is the greatest multi-tasker.” Salve has managed a fine balancing act where he has represented Mulayam Singh Yadav and Mayawati, Parkash Singh Badal and Amarinder Singh, Lalit Modi and Subhash Chandra and even the Ambani brothers, of course in different cases. Jethmalani is the man to call for anyone in trouble. In judicial circles he is known as the first resort for the last resort. Even Jethmalani’s junior Satish Maneshinde, who came to Mumbai in I993 as a penniless law graduate from Karnataka, shot to fame (and wealth) after he got bail for Sanjay Dutt in 1996. Now he owns a plush office in Worli and has become a one-stop shop for celebrities in trouble.Which of the following is not true about Ram Jethmalani?
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MCQ-> I want to stress this personal helplessness we are all stricken with in the face of a system that has passed beyond our knowledge and control. To bring it nearer home, I propose that we switch off from the big things like empires and their wars to more familiar little things. Take pins for example! I do not know why it is that I so seldom use a pin when my wife cannot get on without boxes of them at hand; but it is so; and I will therefore take pins as being for some reason specially important to women.There was a time when pinmakers would buy the material; shape it; make the head and the point; ornament it; and take it to the market, and sell it and the making required skill in several operations. They not only knew how the thing was done from beginning to end, but could do it all by themselves. But they could not afford to sell you a paper of pins for the farthing. Pins cost so much that a woman's dress allowance was calling pin money.By the end of the 18th century Adam Smith boasted that it took 18 men to make a pin, each man doing a little bit of the job and passing the pin on to the next, and none of them being able to make a whole pin or to buy the materials or to sell it when it was made. The most you could say for them was that at least they had some idea of how it was made, though they could not make it. Now as this meant that they were clearly less capable and knowledgeable men than the old pin-makers, you may ask why Adam Smith boasted of it as a triumph of civilisation when its effect had so clearly a degrading effect. The reason was that by setting each man to do just one little bit of the work and nothing but that, over and over again, he became very quick at it. The men, it is said, could turn out nearly 5000 pins a day each; and thus pins became plentiful and cheap. The country was supposed to be richer because it had more pins, though it had turned capable men into mere machines doing their work without intelligence and being fed by the spare food of the capitalist just as an engine is fed with coals and oil. That was why the poet Goldsmith, who was a farsighted economist as well as a poet, complained that 'wealth accumulates, and men decay'.Nowadays Adam Smith's 18 men are as extinct as the diplodocus. The 18 flesh-and-blood men have been replaced by machines of steel which spout out pins by the hundred million. Even sticking them into pink papers is done by machinery. The result is that with the exception of a few people who design the machines, nobody knows how to make a pin or how a pin is made: that is to say, the modern worker in pin manufacture need not be one-tenth so intelligent, skilful and accomplished as the old pinmaker; and the only compensation we have for this deterioration is that pins are so cheap that a single pin has no expressible value at all. Even with a big profit stuck on to the cost-price you can buy dozens for a farthing; and pins are so recklessly thrown away and wasted that verses have to be written to persuade children (without success) that it is a sin to steal, if even it’s a pin.Many serious thinkers, like John Ruskin and William Morris, have been greatly troubled by this, just as Goldsmith was, and have asked whether we really believe that it is an advance in wealth to lose our skill and degrade our workers for the sake of being able to waste pins by the ton. We shall see later on, when we come to consider the Distribution of Leisure, that the cure for this is not to go back to the old free for higher work than pin-making or the like. But in the meantime the fact remains that the workers are now not able to make anything themselves even in little bits. They are ignorant and helpless, and cannot lift their finger to begin their day's work until it has all been arranged for them by their employer's who themselves do not understand the machines they buy, and simply pay other people to set them going by carrying out the machine maker's directions.The same is true for clothes. Earlier the whole work of making clothes, from the shearing of the sheep to the turning out of the finished and washed garment ready to put on, had to be done in the country by the men and women of the household, especially the women; so that to this day an unmarried woman is called a spinster. Nowadays nothing is left of all this but the sheep shearing; and even that, like the milking of cows, is being done by machinery, as the sewing is. Give a woman a sheep today and ask her to produce a woollen dress for you; and not only will she be quite unable to do it, but you are likely to find that she is not even aware of any connection between sheep and clothes. When she gets her clothes, which she does by buying them at the shop, she knows that there is a difference between wool and cotton and silk, between flannel and merino, perhaps even between stockinet and other wefts; but as to how they are made, or what they are made of, or how they came to be in the shop ready for her to buy, she knows hardly anything. And the shop assistant from whom she buys is no wiser. The people engaged in the making of them know even less; for many of them are too poor to have much choice of materials when they buy their own clothes.Thus the capitalist system has produced an almost universal ignorance of how things are made and done, whilst at the same time it has caused them to be made and done on a gigantic scale. We have to buy books and encyclopaedias to find out what it is we are doing all day; and as the books are written by people who are not doing it, and who get their information from other books, what they tell us is twenty to fifty years out of date knowledge and almost impractical today. And of course most of us are too tired of our work when we come home to want to read about it; what we need is cinema to take our minds off it and feel our imagination.It is a funny place, this word of capitalism, with its astonishing spread of education and enlightenment. There stand the thousands of property owners and the millions of wage workers, none of them able to make anything, none of them knowing what to do until somebody tells them, none of them having the least notion of how it is made that they find people paying them money, and things in the shops to buy with it. And when they travel they are surprised to find that savages and Esquimaux and villagers who have to make everything for themselves are more intelligent and resourceful! The wonder would be if they were anything else. We should die of idiocy through disuse of our mental faculties if we did not fill our heads with romantic nonsense out of illustrated newspapers and novels and plays and films. Such stuff keeps us alive, but it falsifies everything for us so absurdly that it leaves us more or less dangerous lunatics in the real world.Excuse my going on like this; but as I am a writer of books and plays myself, I know the folly and peril of it better than you do. And when I see that this moment of our utmost ignorance and helplessness, delusion and folly, has been stumbled on by the blind forces of capitalism as the moment for giving votes to everybody, so that the few wise women are hopelessly overruled by the thousands whose political minds, as far as they can be said to have any political minds at all, have been formed in the cinema, I realise that I had better stop writing plays for a while to discuss political and social realities in this book with those who are intelligent enough to listen to me.A suitable title to the passage would be
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