Sunday, February 21, 2010


Universal Law Publishing Co has published the Third Edition of M.V. Pylee's "Constitutional Amendments in India", in 2010, with full text of all Acts, Statement of Objects and Reasons and legislative history. The Constitution of India has so far witnessed Ninety-Four Amendments in its 60 years of operation.

Worldwide, the most significant constitutional reform we hear about is about having more open societies, where the citizens actively participate in governance. George Soros spoke elaborately about the need for open societies, and a transcript of his lecture is at The core problem is summarised by Soros in these words:

According to the modern concept of sovereignty, the natural resources of a country belong to the people of that country, but governments, which are supposed to be agents of the people, put their own interests ahead of the interests of the people whom they are supposed to represent and engage in all sorts of corrupt practices. On the opposite side, the managements of the international oil and mining companies represent the interests of the companies all too well. They used to go so far as to bribe governments in order to obtain concessions. Willing takers and givers of bribes are the root cause of the resource curse.

Once I became aware of the agency problem, I discovered it everywhere.

Communism failed because of the agency problem. Karl Marx's proposition-from everybody according to their ability and to everybody according to their needs-was a very attractive idea, but the communist rulers put their own interests ahead of the interests of the people.

The agency problem is also the bane of representative democracy: the elected representatives use their powers for their own interests to the detriment of the common interest.

The Internet, mobile phones and other electronic networks widely available today could make direct democracy possible. However, direct participation in policy and law making sans inter meddlers and representatives needs to be tried and tested, before it could be realised through constitutional changes.

The most veritable testing grounds for direct participation of people is readily available at most stock exchanges. It is no accident that the stock markets and legislative assemblies have advanced forward in parallel replacing older forms of trade and governance.

The Bombay Stock Exchange originated as "The Native Share & Stock Brokers' Association" in 1875, making it the oldest stock exchange in Asia, continuously existing for more than 135 years. It was established soon after the East India Company, was dissolved and liquidated in 1874 by passing of the East India Stock Dividend Redemption Act, after the Government of India Act, 1858 closed the company rule.

The Coimbatore Stock Exchange came up very recently. CSX developed in the light of floor based trading but after electronic terminals became common place after 2000, the floors collapsed. Terminal based trading changed the future for CSX. [Ref: etc.] The next big development in terminal based trading might be when the brokers feel the heat and terminate.

The future of grass root democracy is nascent in the air. The success of terminal based trading should encourage terminal based voting and law making. Constitutional history could be in the making again.