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BUSINESS, GOVERNMENT, AND SOCIETY


MID-TERM EXAMINATION, 2007
Professor Rajeev Gowda
INSTRUCTIONS
This is a closed book exam. Answer any 5 out of the following 6 Questions completelyincluding
all sub-parts (a to e), worth 4 points each. Write brief, carefully argued answers. Your opinion is OK,
as long as it is well reasoned. Throughout, draw on and refer to insights gained in the BGS class. Time
yourself carefully. You have 1 hour to read the question paper. Then 3 hours to answer. Have fun!

QUESTION 1
Turn savvy: Slimmer PSUs show the way
Economic Times, 22 Jul, 2007, 0011 hrs IST, Ashish Agrawal & Harsimran Singh, TNN
NEW DELHI: The age of the stodgy Indian PSU is over. Even as the economic reforms have
played out in India, the public sector has seen an image makeover like never before. Throw the
age-old pictures of rickety PSUs mired in losses out of the window. Thanks to liberalisation, they
too have become more savvy and profit motivated.
A pre and post liberalisation survey by SundayET shows that Indias largest companies of 1991
IOC, SAIL, SBI, HPCL, BHEL and BPCL are now producing 10 times more revenues with
same, and in some cases, almost half the number of employees. Incidentally, the top 10
companies of the country during the pre-liberalisation period were all PSUs.
A look at 32 top listed companies of 1991 shows that their productivity level in terms of profit
(net profit/number of employees) has improved almost 14.5 times. The latest available figures
(March 2006) show an increase of profit per employee from 0.40 lakh in FY92 to Rs 5.9 lakh in
FY06 for the 32 listed PSUs. The aggregate revenue per employee figure for 32 listed companies
increased by 8.5 times during the 16 year period.
Take the countrys biggest bank SBI for example. It has seen its profit go up 25 times with 89%
of the 1991 workforce, resulting in productivity improvement of 28 times. For equipment major
BHEL, though the workforce has come down to 59%, the maximum reduction, its profit has gone
up by 11.2 times.
Almost all the PSUs have trimmed their workforce since then. There are some, which have added
people as well such as Oriental Bank, Corporation Bank, BPCL and NALCO. However, their
productivity improvement is still close to the average figures.
A look at two major sectors banking and oil, where PSUs have a strong presence, shows that 6
oil PSUs have improved productivity by 10.6 times in terms of sales, and 15.3 times in terms of
profit during the period.
On the other hand, their performance stands out as profit productivity has gone up by as much as
29 times, against sales improvement of only 4.9 times. Syndicate Banks profits grew a
whopping 120 times during the period with only 67% of the 1991 workforce.

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a. In class, we learned that there are things called Non-Market Failures, i.e., systematic
ways in which non-market or government institutions fail to achieve efficiency. Then how
come the Indian PSUs discussed above are not exhibiting non-market failure?
Profit bottomline
Operate in a competitive market
Technological advances
Reduced workforce and thereby increase efficiency
Less bureaucratic controls
Performance can be measured from the point of view of the shareholder
Threats of being privatized.
MARK DISTRIBUTION Any of the 2 points get 2 mark each 2X 2 = 4
b. What are Adam Smiths views on the role of government in business? What exceptions
does he justify? To this, what would Keynes add as a critical role for government?
Non-interference of Government in the market place
Public goods
National defence
During depression and macro-economic failures, the government should step in and jumpstart the
economy
MARK DISTRIBUTION 1 + 2( 1 mark each) + 1 = 4
c. What are the key features of public goods? How do these prevent the private sector from
providing public goods? How can we explain Indian roads being built by the private sector?
Features of a public good:
Non-exclusive: once it has been produced, you cannot exclude anyone from consuming it

Non-rival: one persons consumption of this good does not take away from another
persons consumption of the same good.
If you cannot exclude you cannot create a market. This feature of the public good provision rules
prevents private sector participation.
The toll roads built by the private sector have limited access which violates the non-exclusive
feature of the public good.
MARK DISTRIBUTION 2 + 1 + 1 = 4

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d. If government is to help promote business, one way is to improve the functioning of the
judicial system. According to Ex-Chief Justice of the Supreme Court, Rajendra Babu, what
specific changes in the judicial arena would help Indian business?
1.
2.
3.

Increasing the number of judges


Limiting the right to appeal
Setting up of specialized courts
They tend to subject-matter specific and follow streamlined rules of procedure to
speed up hearings and increase accessibility.

Reduce uncertainty for Investors


Protect intellectual property
Secure property rights against administrative expropriation
Dysfunctional judicial system discourages savings and promotes capital
flight
Enhance efficiency
High risks & large transaction costs can distort economic decision-making
MARK DISTIBUTION - Any 2 points get 2 mark each 2 X 2 = 4
e. From your own experience or knowledge, give an example of how the government of
India has tried to promote social capital. Also, government intervention can actually harm
social capital. How? Illustrate with an example.
Tax deductions to welfare associations / trusts / NGOs
Government support to initiatives such as the Bhagidhari system.
Trade unions are consulted during budgets
Resident Welfare Associations , Co-operative societies
Permitting citizens to come together and celebrate all religions
Through promotion of citizens associations
Andhra government - Janmabhoomi
Marathons
Representation and respecting all religions in constitution
Government intervention can actually harm social capital when Formation of exclusive in-groups: E.g., racist, caste exclusion, glass ceilings.
SC for one group at expense of the other; Rationales for superiority/inferiority: E.g.,
Fascism, Rwanda Hutu-Tutsi.
Other: Unforseen consequences of SC rent-seeking, corruption.
Govt intervention may hamper individual/citizen initiative

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QUESTION 2
Coalitions vs the two-party system
B. S. Raghavan, The Hindu BusinessLine, June 13, 2007
The President, Mr A. P. J. Abdul Kalam, added piquancy to the observance by Parliament of the
150th Anniversary of the first war of Independence (1857), which might otherwise have passed
off as a ceremonial occasion with set-piece talks by the assembled dignitaries, by his call for
"rapidly" evolving "a stable, two party system", without assuming that multi-party coalitions "as a
regular form of government" have become the norm.
Mr Kalam is not alone in his scepticism about coalitions: He is in the good company of many
eminent Western political scientists who had no hesitation in dismissing coalitions as a sound
basis for stable government. A former Prime Minister of Britain, James Callaghan, condemned
coalitions picturesquely thus: "A coalition is like a mule; it has no pride of ancestry, and no hope
of posterity"!
For all that, Mr Kalam's is a cry in the wilderness. Contrary to the mystique surrounding the twoparty system, it is more an exception than the rule. There had so far been only two democracies
the UK and the US where it could be taken for granted. Elsewhere and especially in
Europe, multiparty governments are a common phenomenon.
a. What does Duvergers Law have to say about what features affect the kind of party
system and number of parties in a country? What are the factors that really matter?
Duvergers Law:
Single Member Plurality based electoral systems tend to produce two parties
Proportionate Representation systems tend to produce more than two parties.

Factors
Diverse cleavages across states (divides based on language, culture, region,
religion, etc.)
Ethnic and minority concerns
MARK DISTRIBUTION 2 + 2 = 4

Duvergers Law
A First-Past-The-Post system will tend to lead to a Two Party outcome (India)
Proportional Representation will tend toward a Multi-Party outcome (EU)
Mechanical Effect
Parties getting above a certain %age of votes tend to get overrepresented in terms of
seats
Psychological Effect
Citizens will not vote for their first preference overall; they will vote for their first
preference among parties that have a realistic chance of winning

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b. Why does Duvergers Law not work in India? Or does it? Explain.

Duvergers Law does not fail overall, with some minor exceptions, for instance at the
Centre where there is a multi-party coalition.
APPLICATION OF DUVERGER LAW IN INDIA
Level of analysis matters; Duverger alive and well
Most states are bipolar (except UP, Karnataka)
Diverse cleavages across states (divides based on language, culture, region, religion,
etc.)
National parties that want to win power in Delhi have therefore often to ally with
regional parties in coalitions
Coalitions with regional parties lead to decline of national coalition partner (e.g., Cong
in TN; BJP in AP)
Regions & regional parties more powerful
Diversity in state politics not fragmentational, reflects ability of system to allow
diverse people to articulate diverse agendas

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This example is for parts c, d. & e. There are 3 candidates for Vice PresidentNajma Heptulla,
Rasheed Masood, and Hamid Ansari (labeled N, R, and H). The electorate consists of 542 Lok
Sabha MPs and 250 Rajya Sabha MPs. This time the government wants to change the electoral
rule used to elect the Vice President. Prime Minister Manmohan Singh has called you in to
suggest alternative rules and to show him who would win under each rule. Because he needs to
explain this to the duller members of his cabinet, you must show your workinghow you arrived
at your conclusions. Dr. Singh also shares with you confidential intelligence reports that show
that 395 MPs prefer H to R to N; 205 MPs prefer N to R to H; 172 MPs prefer R to H to N.
c. What is a Condorcet Winner? Who is the Condorcet Winner in the above situation?
Condorcet winner is the one who is preferred to all other alternatives on a one to one basis.
Boxing Champion. Winner in a head to head competition.

MARK DISTRIBUTION 2 + 2 = 4

d. Who would be the winner if a Borda Count were used instead?


H: 395(3) + 205(1) + 172(2) = 1734
R: 395(2) + 205(2) + 172(3) = 1716
N: 395(1) + 205(3) + 172(1) = 1182
H is the Borda Winner
MARK DISTRIBUTION 4 marks
e. Who would be the winner under plurality? What is the difference between plurality and
majority winner? Who would win in a Runoff?
H is the plurality winner.
Plurality winner is the one who gets the maximum number of votes. Majority winner is the who
gets 50% + 1 votes.
No Run-off as there is already a majority winner.
MARK DISTRIBUTION 1 + 2 + 1 = 4

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QUESTION 3
US companies cut junk food ads on kids' shows
by Virginie Montet, Sat Jul 21, 2007, 3:18 AM ET Agence France Presse
Eleven big US producers of chocolates, fries, sodas and sugary cereals pledged to cut back advertising
aimed a kids to help fight child obesity. To head off being forced off the air by law, major corporations
like McDonald's, Coca-Cola, Mars and Kellogg said this week they will pare back advertisements
during television programming where the audiences are over half children under 12 years old. Candy
maker Cadbury Adams said it would stop running ads for its super-sweet bubble gums beginning
March 2008. Soft drink and fast-food conglomerate Pepsico said it would limit its under-12-directed
pitches to its sports-rehydration drink Gatorade and its low-fat Baked Cheetos snacks. The initiative
was promoted by the US Federal Trade Commission and the Council of Better Business Bureaus
(BBB), a self-regulating business group, as sentiment against junk food in the United States rises and
Americans' waistlines bulge. The others in the group include Campbell Soup Company, General Mills,
Hershey Foods, Kraft Foods and Unilever.
Studies show a steep increase in overweight children, with 20 percent measuring as obese, three times
the level of 40 years ago. Critics of the fatty and sugary foods link the problem to publicity. Children
get hit with some 3,000 advertisements a day from television, the Internet, magazines and even on
school buses, said one recent study by US pediatricians.
On children-targeted TV programming, one third of advertising time is given to spots pushing sweets,
one third to breakfast cereals -- which are often highly sweetened -- and nine percent to fast foods.
The ads are important for businesses: children have considerable influence in buying the snacks and
cereals worth some 500 billion dollars a year.
Under the BBB initiative the companies are setting their own collective standard for what is and is not
allowed in advertisements, focusing on the nutritional content of the foods advertised and what is
"better for you.". "It's a great step forward for companies to be tying advertising decisions to nutrition
standards for advertising to children," said Elaine Kolish, director of the BBB initiative. "For example,
these commitments effectively limit participating companies' advertising of snack foods and other
food products to those that meet new or existing better-for-you nutrition criteria, and limit the
advertising of cereals to those with 12 or fewer grams of sugar per serving," Kolish said. "We want to
be part of the solution, and we want to help families make good choices," said Chris Shea, senior vice
president of General Mills, one of the country's largest breakfast-cereal makers.
But consumers' organizations said they were not impressed by the self-imposed guidelines of the
group. "Each company set its own standards. What I expect will happen is that companies will
reformulate products to meet these standards," predicted Susan Linn, cofounder of the Boston-based
Campaign for a Commercial Free Childhood. She said, for example, that they might cut a 13 grams of
sugar product to 12 grams just to be able to advertise them. "This is going to be very difficult to
monitor," she told AFP.
Lin also said that companies will likely continue to pitch their less-healthful brands on hit shows like
"American Idol," which have a significantly large, while less than 50 percent, under-12 audience.
London-based Consumers International meanwhile said the company-by-company approach "can only
lead to confusion for parents." The group asked why the companies were not applying the measures to
advertising outside the United States. "These half measures by multinational companies only serve to
reinforce the need for mandatory action on an international level," the group said.

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a. How might Milton Friedman have reacted to the companies voluntary actions? Explain.
The business of business is business. Profit maximization with in the rules of the game. Since
the company is not breaking any rule there is no need for voluntary action.
OR
Voluntary action may be good from a business point of view since there is a risk of ban against
the companies.
MARK DISTRIBUTION 4 marks
b. Suggest two different ways in which government regulators could address this problem.

Ban the products

Setting standards for the quality of the product

Imposing high tax on companies which are producing foods that cause obesity.
Making it mandatory for producers to give warning regarding the ill-effects
Reduce the cost of airing ads for healthy foods
Regulating ads / selective advertising
Tax benefits and subsidies for companies producing healthy food.
MARK DISTRIBUTION Any 2 points get 2 marks each
c. Obesity can be considered to be an Externality. Explain what is an externality and why it
is a market failure using your own illustration of one positive and one negative externality.

Externalities: When the actions of a firm or individual have an impact (positive or


negative) on someone else, and do not take into account those impacts, then we have an
externality.
Actions with positive externalities will be underproduced by the market and those with
negative externalities will be overproduced by the market.
Positive Externality Primary education
Negative Externality Pollution
MARK DISTRIBUTION - 1 + 1 + 1 + 1 = 4

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d. Briefly summarize Ronald Coases suggestion for how externality problems can be
resolved. What key conditions need to be met for his solution to work?
Coase Theorem states that as long as property rights are allocated correctly, no government
intervention is needed to get efficient resolution of such externalities
Transaction cost should be Zero.
MARK DISTRIBUTION 2 + 2 = 4
e. If you were to go to the Supreme Courts in India to confront companies that market
products that cause obesity, what argument can you try and use to succeed in your quest?
Explain how you draw inspiration from environmentalists who have successfully filed
public interest litigations.
The Right to life argument

Caption: I want you to turn off your computer, get off your butt and lose some of that bandwidth.

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QUESTION 4
From Garrett Hardin: The Tragedy of the Commons, Science, 162 (1968):1243-1248
We may well call it "the tragedy of the commons," using the word "tragedy" as the philosopher
Whitehead used it: "The essence of dramatic tragedy is not unhappiness. It resides in the
solemnity of the remorseless working of things."
The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be
expected that each herdsman will try to keep as many cattle as possible on the commons. Such an
arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and
disease keep the numbers of both man and beast well below the carrying capacity of the land.
Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of
social stability becomes a reality. At this point, the inherent logic of the commons remorselessly
generates tragedy.
As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or
less consciously, he asks, "What is the utility to me of adding one more animal to my herd?"
a. What would be the outcome of the above situation? How does the tragedy arise?
Each individual seeks to maximize his own interest which is greater than the loss(overgrazing)
that impacts all. Overgrazing leads to the collapse of the commons.
MARK DISTRIBUTION 4 marks
b. Which Social Contract political philosophers views match those of Hardin above? How?
What solution does that philosopher propose to overcome that problem/challenge?

Hobbes.
The life of mankind in the state of nature is characterized by conflict and life is nasty,
brutish and short.
To get out of this predicament, people come together to elect a king (i.e., a strong central
authority or government) who can punish non-cooperation. This helps people move to a
better, more optimal societal outcome.
MARK DISTRIBUTION 1 + 1 + 2 = 4

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c. How is this situation similar to the Logic of Collective Action proposed by Mancur Olson?
What solution does Olson propose to overcome collective action problems?
Collective action leads to benefits that have a public good nature. Therefore leads to free riding
(example of organizing local neighborhood watch). Free riding can be overcome in small groups
because of monitoring ability. These small groups proliferate and take bigger share of economic
pie compared to general interest (e.g., tax breaks for special interests; no national taxpayers
union to protest against this)
Large groups are difficult to organize Individuals in large groups are anonymous
In a large group, one person's contribution is unlikely to be important
No enforcement mechanism against non-cooperators
Ways to overcome problems of Collective action:
Positive Selective Incentives
Provide informational benefits like a members-only newsletter or magazine
Provide selective material incentives like special services (discounted travel)
Provide solidaristic benefits like group meetings and networks
Provide purposive benefits to make members think their purpose is important
Negative Selective Incentives
Threats of Violence or Noncooperation
Social Selective Incentives
Boycotts (possible even among countries)
MARK DISTRIBUTION 2 + 2 = 4
d. Membership is increasing in organizations like Greenpeace. Yet Putnam argues that
Social Capital is declining in the US? What is causing the decline? Why is Greenpeace
membership not an indicator of increasing Social Capital?
Causes for decline of Social Capital
Movement of women into the workforce
Mobility and migration
Demographic transformations and effect of features like supermarkets, Internet shopping
Technological transformation of leisure
Greenpeace not an indicator of Social Capital because one can become a member with only a
financial contribution. It does not involve active participation and interaction of any kind.
MARK DISTRIBUTION 2 + 2 = 4

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e. What, according to Ashutosh Varshney, explains why similar Indian cities have different
levels of communal violence? What are the two types of interactions between communities
and which is more important for preventing communal violence?
The intensity and frequency of communal violence (cv) will correlate to whether there are
functioning, strong inter-communal (etnic-socio-econ-relig) interactions and networks. Intercommunal engagement can be of two types: quotidian or associational.
An e.g., of a quotidian interaction is a community where shopkeepers of both communities share
their time on a daily basis. More formal is associational engagement wherein members from
differing communities organize to develop civic networks that bridge difference and facilitate
communication. Members of these organizations were notable in having gained trust and
authenticity among the larger population in general, thereby acting as a calming effect when
violence broke out.
Long-term gains can be won with associational civic structures.
One set has communal violence; other does not. Why?
Ahmedabad vs Surat; Hyderabad vs Lucknow

Key are Intercommunal Interactions & Networks


Intercommunal Interaction:
Quotidian or everyday interaction, e.g., shops
Associational interaction, e.g., civic networks

Associational Interaction Key to Defusing Tension


Communally integrated civic groups counter rumors/riots
Can be politically constructed: Gandhi, Congress big tent
MARK DISTRIBUTION 2 + 1 + 1 = 4

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QUESTION 5
Media bosses admit pro-war bias in coverage of Iraq
By Patrick Martin

www.wsws.org

2 May 2003

Two leading media bosses have admitted what has been increasingly evident throughout the monthlong war in Iraq: the American broadcast media systematically distorted the news of the war and
functioned as an electronic arm of the Pentagon and the Bush administration.
In separate speeches April 24 in London and San Francisco, BBC Director General Greg Dyke and
Ted Turner, founder of CNN, discussed the performance of the media during the war.
Both sought to lay the blame for the super-patriotic tone of the war coverage largely on the media
empire of billionaire Rupert Murdoch, whose News Corp. owns Fox News, the biggest US cable news
network, as well as Britains Sky News and nearly 200 daily newspapers worldwide. While there is no
doubt that Murdoch was the most strident of the voices for war, the BBC, CNN and the rest of the
broadcast and print media followed suit.
Dyke spoke at a conference at the University of London, singling out US television and radio
coverage of the war, not the British media, especially Fox and Clear Channel Communications, the
largest US radio group. I was shocked while in the United States by how unquestioning the broadcast
news media was during this war, Dyke said. If Iraq proved anything, it was that the BBC cannot
afford to mix patriotism and journalism. This is happening in the United States and if it continues, will
undermine the credibility of the US electronic news media.
He pointed to the open espousal of right-wing politics on Fox News, as well as the organization of
pro-war rallies by talk-radio hosts working for Clear Channel Communications. (While Clear Channel
encouraged its DJs to engage in political activity, the US media as a whole barred employees from
participating in antiwar rallies and one major newspaper, the San Francisco Chronicle, fired a tech
columnist who joined a march against the war. [See San Francisco newspaper fires antiwar
reporter]).
Dyke admitted that the conduct of the American television networks was detrimental to the health of
our democracy, adding that the trend has been noticeable particularly since September 11, when
many US networks wrapped themselves in the American flag and swapped impartiality for
patriotism.
Turners comments were characteristically more blunt. Speaking to the Commonwealth Club in San
Francisco, a leading business forum, he described Rupert Murdoch as a warmonger who had
promoted the war. Turner, himself a billionaire and the largest shareholder in the worlds largest
media company, AOL Time Warner, said the American media was far too concentrated: Theres really
five companies that control 90 percent of what we read, see and hear. Its not healthy.
The record of the BBC and CNN
Despite the qualms of Dyke and Turner about the degrading of journalism into government
propaganda, their own networks performed as lamentably as Murdochs, even if their flag-waving
support for the war was at a slightly lower volume.

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While the BBC occasionally broadcast reports of the war that were at odds with the official story
emanating from US CentCom, the Pentagon and 10 Downing Street, it was the worst among major
broadcast outlets in covering the antiwar movement, according to a study by the German newspaper
Frankfurter Allgemeine Zeitung.
The newspaper reviewed war coverage in five countries and found that the BBC provided the lowest
proportion of coverage to dissenting views, 2 percent, even lower than the 7 percent of coverage
provided by the US-based ABC network. So hostile was the networks attitude to the massive antiwar
protests that British demonstrators regularly denounced it, along with Murdochs tabloid Sun, for its
coverage.
According to a report in the Guardian newspaper, the BBC cautioned senior management, in a memo
dated February 6, the week before the biggest protests, to be careful about broadcasting antiwar
actions.
As for CNN, it sought unsuccessfully to close its ratings gap with Fox News by aping the chauvinist
coverage of the Murdoch-owned cable network. CNN anchormen and embedded reporters regularly
referred to US troops as heroes and liberators, and joined with the rest of the American media in
downplaying reports of Iraqi casualties, civilian and military.
CNN chief Eason Jordan, in an appearance on his own networks program on the media, Reliable
Sources, defended his use of military experts who had criticized US tactics and strategy during the
initial stages of the invasion. The Pentagon had vetted all these retired generals in advance, he
revealed.
I went to the Pentagon myself several times before the war started and met with important people
there and said, for instance, at CNN, Here are the generals were thinking of retaining to advise us on
the air and off about the war. And we got a big thumbs-up on all of them. That was important.
In other words, CNN made sure that any comments about the progress or difficulties in the war would
be within the bounds set by the US military. Needless to say, there were no expert commentators
brought on board from the antiwar movement.
Censorship from NBC
The kowtowing to American imperialism continues unabated in the postwar period. A case in point is
the reaction of NBC to the speech made by one of its own news correspondents, Ashleigh Banfield, at
Kansas State University April 24. Banfield blasted the US media coverage of the war for presenting a
grand and glorious picture which covering up the real impact of US bombs, missiles and shelling.
These were horrors that were completely left out of this war, she said.
It wasnt journalism, Banfield said, adding that the coverage would encourage Americans to support
future wars, because it looked to them like a courageous and terrific endeavor. You did not see where
those bullets landed. You didnt see what happened when the mortars landed. A puff of smoke is not
what a mortar looks like when it explodes, believe me.
Banfield criticized MSNBC for hiring right-wing talk-show host Michael Savage, in an attempt to
copy the Fox News formula of appealing to the most backward far-right audience. Savage recently
denounced Banfield for her reports on the state of public opinion in the Arab countries, including the
mass popular hostility to Israel and support for Palestinian suicide bombers.

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The NBC correspondent also noted that the cable TV networks have recently shifted their coverage
from conditions within postwar Iraq to sensational criminal cases in the United States, such as the Laci
Peterson murder. Her network was about to close its bureau in Kabul, Afghanistan, she said.
NBC and MSNBC officials rejected Banfields criticism as soon as it was made public, and within
three days had extracted from her a statement of retraction. An NBC spokeswoman announced
Monday that NBC President Neil Shapiro had spoken with Banfield, and that both agreed that she
didnt intend to demean the work of her colleagues, and she will choose her words more carefully in
the future.
But MSNBC general manager Erik Sorenson essentially confirmed Banfields charge that the network
deliberately suppressed footage of Iraqi civilian and military casualties. We were reluctant to run
graphic images of any casualties, civilian or military, he told one press interviewer. Antiwar activists
have complained to MSNBC, Youve made war seem like fun. You cleaned it up. We saw and
experienced a lot of the power and horror of these weapons. I didnt need to see the body literally
chopped in half.
Such images, however, have been widely broadcast, not only in the Arab media, but throughout the
world outside the United States, bringing the horrors of the American devastation of Iraq to a global
audience.

a. What are the key features of Herman & Chomskys Propaganda Model of the Media?
1. Size, ownership & profit orientation of the mass media

2. The Advertising License to do business


3. Sourcing Mass-media News
4. Flak & the Enforcers
5. Anticommunism as a control mechanism
b. Illustrate how the Propaganda Model is valid, drawing on 4 examples from the article.

The Pentagon had vetted all these retired generals in advance, he revealed.
media empire of billionaire Rupert Murdoch, whose News Corp. owns Fox News, the biggest US
cable news network, as well as Britains Sky News and nearly 200 daily newspapers worldwide

Theres really five companies that control 90 percent of what we read, see and hear. Its
not healthy.
As for CNN, it sought unsuccessfully to close its ratings gap with Fox News by aping the chauvinist
coverage of the Murdoch-owned cable network.
The newspaper reviewed war coverage in five countries and found that the BBC provided the lowest
proportion of coverage to dissenting views, 2 percent, even lower than the 7 percent of coverage
provided by the US-based ABC network.
(While Clear Channel encouraged its DJs to engage in political activity, the US media as a whole
barred employees from participating in antiwar rallies and one major newspaper, the San Francisco

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Chronicle, fired a tech columnist who joined a march against the war. [See San Francisco newspaper
fires antiwar reporter]).
particularly since September 11, when many US networks wrapped themselves in the American flag
and swapped impartiality for patriotism.
Rupert Murdoch as a warmonger who had promoted the war.
MARK DISTRIBUTION Any 4 examples get 1 mark each

c. Why is sensationalism in media coverage rational? Then what aspect of US media


coverage of the war is therefore surprising?
Sensationalism in media coverage Increases readership / viewership and TRPs.
But coverage of the war by the US media was almost one-sided, heavily controlled by the
military, based on perceptions that were vetted by authorities. Objectivity replaced by
patriotism.
MARK DISTRIBUTION 2 + 2 = 4
d. Give your own example of Ideological Bias in news media coverage in India.
Anti Reservation
Godhra riots
TV channels explicitly associated with political parties JAYA TV

MARK DISTRIBUTION 4 marks


e. How does media coverage affect peoples Judgmental Biases? Illustrate with one example.
Availability more vivid and memorable even though they were covered for sensationalism

Representativeness
Anchoring and Adjustment
Confirmation bias
Hindsight and the curse of knowledge
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QUESTION 6
Dr. Haneef and Firdous: The breaking down of Stereotypes
By Girish Nikam

http://www.indiasreport.com/node/523

However liberal and progressive one is as a person, all of us at some time or the other are guilty of
indulging in stereotyping. But one stereotype in the last decade and a half and more so in the last
couple of years, which is difficult to forget, because of the constant reiteration, is about the Muslims.
In India we have been hearing this about them ever since the formation of Pakistan that they are more
loyal to that country then India, despite any number of examples to the contrary.
The more recent stereotype about Muslims is that they are all terrorists or sympathizers of the
terrorists. Soon after the three Bangalore boys were arrested in England and Australia, a young
journalist friend remarked, we can never believe them, sir, even the most educated among them.
There was almost an air of triumph and also an I told you so in his voice. He was waiting to be oneup on me, having been a student of mine, and being rapped for jumping to conclusions and creating
and believing in communal stereotypes, in the last three years that I have known him.
These last few weeks, ever since Bangalore Boys were detained, another event has been in the news,
which only strengthened the stereotype. The sentencing of the 1993 Mumbai serial blasts accused.
Except for a few hindus among the more than 120 found guilty, all of them are muslims, and it only
added to the beliefs like the one held by the young man quoted above. The Memons and their
accomplices, as well as the Bangalore Boys were all seen as part of this Islamic conspiracy against
India, and therefore no muslim is worth trusting, was the belief.
The Australian authorities right down from the Prime Minister to the Public Prosecutor only added
fuel to this fire, by leaking out information about Dr.Haneef which put him also under the same
category as the Memons and the Ahmed brothersSabeel and Kafeel. Has anyone noticed that even
as the Australian authorities were leaking like a sieve, the British authorities have been far more
circumspect, and there is hardly any information about the progress of the investigation against the
Ahmed brothers, except about the Glasgow bomber, Kafeels battle with life, which continues to hang
by a thread. Though Kafeels role in the bombing and the conspiracy is more or less clear, that of his
brother, Dr.Sabeel, is not so obvious as yet, and therefore the British authorities are holding their cards
close to their chest.
But that has not stopped a section of people in this country to continue believing the worst. So much
so, even the leader of the Opposition L.K.Advani found it appropriate to attack the Prime Minister
Dr.Manmohan Singh for having uttered some words of sympathy and empathy towards Haneefs
family, after having been moved by their plight. The underlying message of Advani was even the
innocent members of (only a) suspects family are not worth sympathy, and any such words virtually
amounts to supporting terrorism!
In these circumstances the honourable release of Dr.Haneef by the Australian court and the admission
of their mistake by the authorities, assumes huge significance. Here was a family (of Dr.Haneef)
which had seen bad days when he was growing up, having lost his father while still in pre-university,
and later see him grow up as a responsible student, graduating in medicine and becoming the patriarch
of the family. And to suddenly be told that this responsible young patriarch was a secret terrorist was
obviously shattering.
What however stood out in this 25-day trauma not just for the family, but for the entire secular-minded
citizens of this country, was the way in which his young wife, Firdous, stood up to it. Going through
her postnatal phase, she displayed extra-ordinary courage and confidence about her husbands

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innocence, and the determination to fight it out. It was the firm and steady confidence that she exuded,
which put a doubt in the minds of the stereotypists, if one may coin a word.
What was more important was that Firdous continued to be attired in her traditional Muslim dress with
the chunni overhead, and to all eyes she was a traditional Muslim, the kind the stereotypists
intrinsically disbelieve. But her fluency in both English and Hindi, betrayed the modern education that
she had the benefit of, not the madarasa education which is supposed to spawn terrorist mindsets. So
here was a young Muslim woman not hesitant to be attired conventionally but with a modern mindset,
and firm convictions about her and her husband being good Indians.
In a long long time, one wonders whether there has been another Muslim couple that has managed to
strike such a firm blow against the stereotyping of Muslims. In fact Dr.Haneef himself has
complimented his wifes courage by showing patience and amazing self-control, obviously bolstered
by his self-belief that he was innocent. All of it has paid off, and he returned to his home, head held
high, though staring at an uncertain future. But what he and his wife have showed to the country and
those who tend to bracket all Muslims together is that communal stereotyping has no place, especially
in a country like ours.
Of course when it comes to his wealthier cousins still under detention in England, the same cannot be
said. It only goes to prove that even within a family there can be different kinds of people, swayed
differently by same religious influences, and so to jump to the conclusion that all those belonging to
one religion are alike is not only unfair but also disastrous for us a nation.
So if we finally heave a sigh of relief at the sentencing of the perpetrators of the ghastly 1993 Mumbai
blasts, we also need to celebrate the release of Dr.Haneef and his innocence.
As far as the young journalist is concerned, he is yet to surface and argue his case. But one last
thought. Whatever may have been the goof up by the Australian authorities and the trauma that they
subjected Dr.Haneef to for over three weeks, they went on to admit their mistake openly. Can we
expect such candour from the Indian authorities when they commit such blunders?

a. Drawing on judgmental biases, explain how stereotyping of Muslims as terrorists arises.


Availability more vivid and memorable even though they were covered for sensationalism

Representativeness
Confirmation bias

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b. Give two examples of your own of the types of narrative stories used in general/public
discussions to support the accusation that Indian Muslims are less loyal to India?

c. Give one example that uses Equity and one example that uses Numbers to illustrate how
Muslims are regarded as being pampered by Indian secularists.
Lack of uniform secular code
Haj subsidies

d. How can Prospect Theorys insights into Risk Seeking behavior explain suicide bombers
actions? Remember its what they believe to be true that matters.

Prospect Theorys insights into Risk Seeking behavior Risk-averse in the domain of
gains and risk-seeking in the domain of losses.
Al-Qaeda frames a situation which suggests that they are in the domain of losses which leads to
risk-seeking behaviour
The suicide bombers feel that they are in the domain of losses since they believe that their
religion is under threat which leads to such risk-seeking behaviour.

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e. Explain how John Rawls derives his theory of Justice as Fairness. How can it be used to
justify special treatment for disadvantaged minorities?
Veil of ignorance argument
The truly disadvantaged should have a chance to come out of the situation.
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