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EDITORIALS

ISI-Taliban terror nexus
Pakistan’s jihad factory in full cry
T
he recent New York Times report on the Pakistani ISI’s continued support to the Taliban in Afghanistan reinforces what various US government officials, including the Director National Intelligence and the Chairman Joint Chiefs of Staff Committee (and also US-based think-tanks), have been saying for the past few months – that Pakistan’s jihad factory is flourishing and showing no signs of abating.

New worries for Congress
A pressure group within the UPA
The coming together of three constituents of the UPA — Lalu Yadav’s RJD, Ram Vilas Paswan’s LJP and Mulayam Singh Yadav’s Samajwadi Party — makes it clear that as a pressure group they are angling to strike a hard bargain with the Congress after the elections to the Lok Sabha. In both Bihar and U.P. which are the battleground of these parties, they would be arrayed against not only the BJP but also the Congress which has been their ally in the UPA.



EARLIER STORIES

Realignment in Tamil Nadu
March 27, 2009
The daily bread
March 26, 2009
Third alternative?
March 25, 2009
Prosecute Varun Gandhi
March 24, 2009
Iran as the US master-key
March 23, 2009
Buy the best for armed forces
March 22, 2009
Jail for Telgi
March 21, 2009
Threat to security
March 20, 2009
Punish Varun
March 19, 2009
Marxist manifesto
March 18, 2009
Restoration of Chief Justice
March 17, 2009

When homes are not safe
Law and society must fight incest
Just as the nation was grappling with the ghastly tale of a father in Mumbai involved in the rape of his daughter, a repeat incident in Amritsar proves that the Mumbai case was not just an isolated incident. In a shocking similarity, a 21-year-old Amritsar girl has accused her father, a political leader, of raping her for the past six years. Both incidents have evoked outrage and condemnation.

ARTICLE

When will they ever learn?
Wooing voters with divisive policies is worrying
by B.G. Verghese
V
arun Gandhi’s best qualification currently appears to be that he has managed to obtain anticipatory bail. What an inglorious certificate to carry. His Pilibhit election speeches have been aired and there is no escaping the meaning of what he intended to convey. To plead that the tapes were doctored to add sentences he did not utter because they were not immediately aired and his voice sounded gruff rather than soft strains credulity.

MIDDLE

We may not pass this way again
by Trilochan Singh Trewn
M
Y wife and I were in the vicinity of Venice in the Adriatic sea for five weeks. We decided to visit the outskirts of Munich where Miraben, once an inmate of Sabarmati Ashram and devoted disciple of Gandhiji, lived and whom I had met twice before in New Delhi.

OPED

Red Dragon rising
China adopts ‘military strategy of active defence’
by Gurmeet Kanwal and Monika Chansoria
I
n keeping with its past practice, China released its sixth White Paper on National Defence in January 2009. Though it is an improvement on previously published White Papers in terms of transparency, there still is considerable opacity in revealing key defence policies and China’s strategic outlook and its annual defence expenditure.

‘Honour killings’ in Turkey
by Ramita Navai
W
hen Elif’s father told her she had to kill herself in order to spare him from a prison sentence for her murder, she considered it long and hard. “I loved my father so much, I was ready to commit suicide for him even though I hadn’t done anything wrong,” the 18-year-old said. “But I just couldn’t go through with it. I love life too much.”

Spending money is like a drug
by Steve Connor
M
oney works like a drug on the human brain – and even just the thought of earning a higher salary gives us a physical buzz, a study has found. Scientists have discovered that thinking about cash stimulates the reward centres involved in pleasure and the higher the salary – even if it is just imagined – the greater the pleasure generated in the brain.


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EDITORIALS

ISI-Taliban terror nexus
Pakistan’s jihad factory in full cry

The recent New York Times report on the Pakistani ISI’s continued support to the Taliban in Afghanistan reinforces what various US government officials, including the Director National Intelligence and the Chairman Joint Chiefs of Staff Committee (and also US-based think-tanks), have been saying for the past few months – that Pakistan’s jihad factory is flourishing and showing no signs of abating. The notorious ISI is brazenly aiding the Taliban’s campaign in southern Afghanistan providing it, as US intelligence agencies have discovered, with weapons, finance, strategic planning and even recruits. This also partly explains why the US government’s ‘Global War on Terror’ in Afghanistan is making little headway even as Washington prepares to dispatch a further 17,000 soldiers taking their troop total to 65,000. Till last count, the US has lost 671 soldiers in this strife-torn country along with a further 449 belonging to the allied forces.

But this is not all. The ISI is also continuing to patronise terrorist groups such as the Lashkar-e-Taiba (LeT) and the Jaish-e-Mohammed, which have specifically been targeting India. The 26/11 Mumbai attack and more recently the fierce encounter between the LeT and the Army in Kashmir are evidence of just how actively this terrorist group is enjoying the ISI’s patronage. A well known US Intelligence think tank, considered to be a shadow for the CIA, has predicted more 26/11-type attacks in India while Indian intelligence agencies have warned that eminent politicians and the electoral process itself may be the next major target for these terror groups.

Yet, all this evidence and more has not sufficiently convinced the US government that Pakistan runs the world’s most dangerous terror network. Pakistan’s Army and ISI remain the power centre in a country that has become dysfunctional and strident in its practice of terrorism as a continuation of politics by other means. If anything, it in fact seems to be paying off. Reports suggest that over the next decade the US is expected to lavish around $30 to $35 billion in aid to Pakistan, which it regards as its frontline state. This includes about $15 billion as part of the Af-Pak policy of the Obama Administration, which has begun pressurising India to resume the dialogue process with Pakistan that was suspended after the 26/11 Mumbai attacks. All this poses a serious challenge to the Indian defence, security and intelligence establishment which will need to remain ever vigilant.

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New worries for Congress
A pressure group within the UPA

The coming together of three constituents of the UPA — Lalu Yadav’s RJD, Ram Vilas Paswan’s LJP and Mulayam Singh Yadav’s Samajwadi Party — makes it clear that as a pressure group they are angling to strike a hard bargain with the Congress after the elections to the Lok Sabha. In both Bihar and U.P. which are the battleground of these parties, they would be arrayed against not only the BJP but also the Congress which has been their ally in the UPA. Although their so-called ‘alliance’ spans 134 seats in Bihar, U.P. and Uttarakhand, the RJD and the LJP have no presence in U.P. while SP is virtually absent in Bihar. Consequently, they would not be treading on each other’s corns. What this alliance signifies, however, is that their position vis-à-vis the Congress has hardened after the failure of their seat-sharing talks with that party’s bosses.

For the Congress, the alliance is a setback but not one of which it need be unduly alarmed. It only re-affirms that the Congress can no longer depend on crutches to win seats in U.P. and Bihar. Only time will tell whether that would be a blessing in disguise for a party that has been marginalized in the two most populous states while it rode piggy back on its allies over the last few elections. But the Congress party has little to lose considering that it has dipped seemingly to its lowest ebb.

The changing stance of its erstwhile allies is, however, a psychological setback for the Congress which could earlier boast of a strong grouping behind it. The blow in the north has come at a time when the PMK has deserted the Congress and the fledgling party of Vijay Kanth in Tamil Nadu has decided not to forge an alliance with it. Cumulatively, all this spells trouble for the Congress in an election in which the single largest party could have a clear advantage in forming a workable coalition.

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When homes are not safe
Law and society must fight incest

Just as the nation was grappling with the ghastly tale of a father in Mumbai involved in the rape of his daughter, a repeat incident in Amritsar proves that the Mumbai case was not just an isolated incident. In a shocking similarity, a 21-year-old Amritsar girl has accused her father, a political leader, of raping her for the past six years. Both incidents have evoked outrage and condemnation. Incest might be taboo but the social evil has been destroying young lives with alarming regularity. In fact incest is a common form of child abuse. A report from RAHI, a Delhi-based NGO working with child sexual abuse victims, suggests that nearly three-quarters of upper and middle class Indian women are abused by a family member.

Incest lends credence to studies that have reiterated that women face maximum abuse and violence at home. Random surveys on incest have pointed fingers at an uncle, cousin, father or brother. The number of calls made to child help lines pertaining to child sex abuse indicates that incest is a gory social reality, albeit grossly under-reported. Incest is often brushed under the carpet for fear of shame and social ostracism. The courage with which these girls have spoken against the perpetrators of heinous crime is a cue that other victims can take.

In fact there is an urgent need to break the silence over this abominable evil that seeks and finds both refuge and sustenance in India’s close-knit family system. Stringent and separate law over the issue, fast courts and deterrent punishment can prevent home from turning into an address for torture and suffering. NGOs can ensure that the victims, who among many traumas also suffer from guilt, can start life afresh. Society too must realise that the accused and not the victim ought to be the target of its disdain and approbation. It is about time India, where millions of girls have gone missing due to rampant female foeticide, treats its daughters with love and respect.

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Thought for the Day

A politician is a man who understands government, and it takes a politician to run a government. A statesman is a politician who’s been dead 10 or 15 years. — Harry S. Truman

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ARTICLE

When will they ever learn?
Wooing voters with divisive policies is worrying
by B.G. Verghese

Varun Gandhi’s best qualification currently appears to be that he has managed to obtain anticipatory bail. What an inglorious certificate to carry. His Pilibhit election speeches have been aired and there is no escaping the meaning of what he intended to convey. To plead that the tapes were doctored to add sentences he did not utter because they were not immediately aired and his voice sounded gruff rather than soft strains credulity. In any event, the Election Commission has rightly held that it is not for it to disprove his charge but for him to adduce convincing proof in support of his contention.

Speakers at the hustings rarely speak softly. More often than not, they rant in tone and content. But apart from finding little reason to believe that the tape was tampered with, Varun himself justified much of what he said and sought to contexualise it in the background of a series of rape cases in the constituency that were soon disproved.

The BJP tried to run with the hare and hunt with the hounds, formally dissociating the party from what was attributed to him in view of his denial. Yet it endorsed him as the party candidate for the Pilibhit seat. The Shiv Sena openly applauded Varun’s hate speech as a frank espousal of the Hindutva cause while more than one report has suggested that not all Parivar cadres are displeased by his remarks which obviously echo their own sentiments.

It is certainly cause for worry that policies and programmes presented as exercises in electoral persuasion and future governance should be so vicious and divisive. What the outcome of the charges levelled against Varun Gandhi will be, remains to be seen and both L.K. Advani and Mohanrao Bhagwat, the new chief of the RSS, should introspect on what they stand for and where they are headed, pious disavowals notwithstanding.

None of these negative trends is unique. The BSP’s list of Lok Sabha candidates from UP includes five persons facing murder charges and two nominees allegedly involved in other crimes. Five wives have been given tickets. In announcing this list, Mayawati has appealed to the UP electorate to return the BSP in sufficient numbers so that she can be Prime Minister though her “manifesto”, thus far revealed, is vacuous. Other partiers have also dredged dirt to pick up candidates.

At least two Hindu right extremists who have been in the news, of late, for all the wrong reasons, are seeking court permission to contest the elections. Whatever the law, it is morally wrong to release such under-trials on bail to contest elections and, if they perchance win, to claim thereafter that they have been exonerated by the “people’s court” and now stand above the law in their new avatar.

It is in this context heartening to see bright new and younger candidates entering the lists, some of them with proven records and achievements. Sashi Tharoor (Congress, Thiruvananthapuram) and Mallika Sarabhai (Independent, Gandhinagar) are two among them. Win or lose, their presence will add some leavening to the campaign and compel the electorate and their opponents — Advani in Gandhinagar — to take note of the issues they raise.

The other focus of excitement is the new alignments being forged between parties and coalitions. Even as the BJD has walked out of the NDA, Lalu’s RJD and Paswan’s LJP, both UPA partners, have tied up a seat-sharing arrangement that has left the Congress out in the cold. An angry Congress has decided to contest all Bihar seats in response to this calculated snub. Speculation is rife, as elsewhere, about the fallout; but what must be remembered is that candidatures, party alliances and friendly contests will continue to be fought over until the last date of withdrawal in each phase in a game of blinkmanship. The tussle may be a little keener this time but the pattern is familiar.

The other issue being debated is the merits and sanctity of pre-poll versus post-poll alliances and whether joint manifestos or common minimum programmes will issue and when. These are all matters of tactics and much will depend on the results in terms of party numbers and personalities. The fall of certain champions could engender a tendency among the rank and file to become footloose as larger parties and formations seek to garner additional support. Hence, much of the current debate amounts to little more than posturing and should not be taken too seriously. Contrary arguments will be cleverly justified after the polls.

That there will be hard post-poll bargaining among and within the major parties and formations goes without saying. But this is not uncommon elsewhere, as in Europe and Israel. There is no reason to baulk at this and assume that chaos will ensue. At worst, a government will be formed as unlikely partners get together to prevent a vacuum with every expectation that subsequent upheavals could lead to fresh elections.

Fresh elections are not to be feared as they will serve to sift the grain from the chaff. It will be for the President and Governors to maintain cool heads and, if necessary, to summon the House and by floor tests determine which party or combination enjoys the confidence of members. It is giving undue time for and, indeed, inviting horse trading by seeing parades and letters of “majority” support is what must be avoided. These are bad practices.

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MIDDLE

We may not pass this way again
by Trilochan Singh Trewn

MY wife and I were in the vicinity of Venice in the Adriatic sea for five weeks. We decided to visit the outskirts of Munich where Miraben, once an inmate of Sabarmati Ashram and devoted disciple of Gandhiji, lived and whom I had met twice before in New Delhi.

Before joining Gandhiji she was Miss Mediliena Slade, daughter of a British admiral. She had made headlines in India. After Gandhiji’s demise, she suddenly decided to leave India and settle down near Munich.

We arrived at Miraben’s residence uninvited and unannounced. It had a small garden with a long wooded driveway. The Government of India, through the Indian ambassador in Germany, had sent her items like shawls, etc as a token of regard for her service to India.

Miraben received us warmly. She lived a simple life with two inmates who appeared to be her relations. It was a nostalgic meeting. She received us warmly in her sitting room.

Novice as we were about reasons of her abrupt decision to leave India, we decided to ask her about it after she served us shamrock tea and Scottish short bread. We eulogised her enormous and unforgettable services to India. Then we hesitantly queried about precise causes of her decision to leave India after carrying out laudable social work for decades.

Miraben smiled graciously and started relating her version of history. On her mantlepiece we could see a large photograph of her with Gandhiji and another one showing a frontal view of Sabarmati Ashram. There were only two black and white portraits of Mozart and Beethoven and no other furniture except a modest sofaset, four chairs with a dining table.

Miraben very lucidly explained to us that years ago she had left her home for India solely due to her dedication towards Gandhiji and his patriotism, truthfulness, transparency in life, humanism, simplicity, love for nature and approach towards happenings around. To fight for India’s freedom or to be a social leader were not the reasons which attracted her to India. This had been a misconception amongst senior political leaders. Therefore they expected her to stay back in India after Gandhiji’s demise.

Although she had not revealed to others before leaving India, her entire life was mainly devoted around two main items — dedication towards Gandhiji and love for western music, particularly of Mozart and Beethoven, from her very childhood. She had never lost touch with her love for music even when she was in Gandhiji’s ashram. It was for precisely these reasons that she decided to settle down near the home of Mozart and Beethoven and not return to England.

We were immensely surprised. Before departing she allowed us to have a look around her residence. As we entered her bedroom a large framed piece on a side table greeted us. It read “I will pass through this world once. Any good thing that I can do or any kindness that I can show to any human being, let me do it now. I shall not pass this way again.”

Sometime later after receiving a Rashtrapati award, Miraben passed away!

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OPED

Red Dragon rising
China adopts ‘military strategy of active defence’
by Gurmeet Kanwal and Monika Chansoria

In keeping with its past practice, China released its sixth White Paper on National Defence in January 2009. Though it is an improvement on previously published White Papers in terms of transparency, there still is considerable opacity in revealing key defence policies and China’s strategic outlook and its annual defence expenditure.

Beijing had estimated its defence expenditure for 2008 at about US $61 billion. This was much lower that the estimate made by the Stockholm International Peace Research Institute. According to SIPRI, China is likely to spend a staggering $140 billion on the People’s Liberation Army (PLA), its navy and air force this year.

The Chinese leadership believes that “China’s security situation has improved steadily,” although China is still confronted with “long-term, complicated and diverse security threats and challenges.”

The White Paper cautions the Chinese people that China is facing “the superiority of the developed countries in economy, science and technology as well as military affairs… and faces strategic manoeuvers and containment from the outside.”

Although, China continues to reiterate that its defence policy is purely defensive in nature, the White Paper reveals that it is working towards implementing a “military strategy of active defence.”

While formulating its military strategy of active defence for the 21st century, China is focussing on four crucial components: emphasising the prevention and deterrence of crises and wars; building hi-tech military capabilities to win local wars in conditions of ‘informationisation’; enhancing the ability to counter various security threats; and, improving its military mobilisation and logistics mechanism.

The latest White Paper selectively provides previously unreleased information. It indicates that the Chinese armed forces are training for integrated joint operations on future battlefields. The army is working towards high mobility and three-dimensional assault.

The navy is acquiring integrated sea-air capabilities for offshore defensive operations. The air force is developing integrated air-land capabilities for both offensive and defensive operations. It has also opted for capital intensive air-to-air refuelling capabilities and strategic airlift for power projection.

The second artillery force, the Chinese equivalent of a nuclear command, has acquired potent surface-to-surface missile systems for both nuclear and conventional missile strikes. Approximately, 1,000 short-range ballistic and cruise missiles are known to be deployed opposite Taiwan. These are mobile systems, which can be easily re-deployed in Tibet and other theatres.

China is also training its armed forces for military operations other than war including UN peace-keeping and peace-support operations, anti-piracy missions, environmental disasters and societal unrest.

These efforts provide evidence of China’s gradual move towards employing its armed forces as an instrument of statecraft, to achieve major national security objectives and to show the Chinese flag as well as mark China’s presence around the world.

Laying added emphasis on the navy the White Paper states, “in line with the off-shore defence strategy, the navy takes informationisation as the orientation and strategic priority of its modernisation drive…” Increasingly, larger numbers of Chinese naval vessels are plying in the Indian Ocean.

China is developing deep sea port for Pakistan at Gwadar. This port and others such ports in Myanmar (Sittwe) and Sri Lanka (Hambantota) may be used for berthing facilities or upgraded to bases for the navy in future.

Significantly, the new Chinese naval base at Sanya on Hainan Island could house a large fleet of surface warships and also serve as an underwater naval base for submarines.

The completion of the Sanya base will allow China to extend it influence in the South China Sea and provide it with greater access to the Straits of Malacca. Eventually, the navy will be able to operate and sustain itself in the northern Indian Ocean region by about 2015.

A conspicuous omission in the White Paper is the failure to comment on China’s anti-satellite (ASAT) test of January 2007 - an aggressive demonstration of its technological prowess. The White Paper underlines that Beijing’s threat 
perception in the Taiwan Strait has been “greatly reduced.”

However, it notes explicitly that China’s military capabilities will continue to grow even as the Taiwan issue thaws, confirming that the evolving Chinese national security strategy will look beyond Taiwan. Notably, the Chinese concepts of warfare and capability upgradation go well beyond meeting challenges such as Taiwan and Tibet.

As China prepares for its 60th anniversary as a Republic in October 2009, the armed forces appear to be receiving enhanced political guidance regarding their responsibilities and missions.

The PLA’s modernisation drive is intended to contribute militarily to enhancing China’s comprehensive national power. It is also expected to ensure that China can fight and hold its own against a Western coalition with armed forces property trained and equipped.

China’s growing power and influence in Asia poses a strategic challenge to India. The Chinese armed forces are well ahead of their Indian counterparts in many areas of defence modernisation and the gap is slowly becoming unbridgeable.

China’s defence budget is growing annually between 16 and 18 per cent while India’s defence budget is now less than 2.0 per cent of India’s GDP.

There is a real risk that 15 to 20 years from now China may attempt to force a military solution to the territorial dispute with India after settling the Taiwan issue.

In case the present trend of inadequate allocations for defence modernisation, bureaucratic red tape and indecision continues, India may be forced to accept an unequal settlement due to its military weakness.

An analyst must listen to what a nation’s leaders say, but s/he must also carefully watch the body language. While China’s leaders make a song and dance about China’s peaceful rise and its adherence to the principles of peaceful co-existence, their body language says, “Get out of the way.”

The writers are with the Centre for Land Warfare Studies, New Delhi.

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‘Honour killings’ in Turkey
by Ramita Navai

When Elif’s father told her she had to kill herself in order to spare him from a prison sentence for her murder, she considered it long and hard. “I loved my father so much, I was ready to commit suicide for him even though I hadn’t done anything wrong,” the 18-year-old said. “But I just couldn’t go through with it. I love life too much.”

All Elif had done was simply to decline the offer of an arranged marriage with an older man, telling her parents she wanted to continue her education. That act of disobedience was seen as bringing dishonour on her whole family – a crime punishable by death.

“I managed to escape. When I was at school, a few girls I knew were killed by their families in the name of honour – one of them for simply receiving a text message from a boy,” Elif said.

So-called “honour killings” in Turkey have reached record levels. According to government figures, there are more than 200 a year – half of all the murders committed in the country.

Now, in a sinister twist, comes the emergence of “honour suicides”. The growing phenomenon has been linked to reforms to Turkey’s penal code in 2005. That introduced mandatory life sentences for honour killers, whereas in the past, killers could receive a reduced sentence claiming provocation. Soon after the law was passed, the numbers of female suicides started to rocket.

Elif has spent the past eight months on the run, living in hiding and in fear. Her uncles and other relatives are looking to hunt her down, for dishonour is seen as a stain that can only be cleansed by death. One of the women’s shelters where Elif has stayed has been raided by armed family members.

Elif is from Batman, a grey, bleak town in the south-east of Turkey nicknamed “Suicide City”. Three quarters of all suicides here are committed by women – nearly everywhere else in the world, men are three times more likely to kill themselves.

“I think most of these suicide cases are forced. There are just too many of them, it’s too suspicious. But they’re almost impossible to investigate,” said Mustafa Peker, Batman’s chief prosecutor.

Wearing tight clothes or talking to a man who is not a relative is sometimes all it takes to blacken the family name. Mr Peker said women who are told to kill themselves are usually given one of three options – a noose, a gun or rat poison. They are then locked in a room until the job is done.

A woman’s fate is usually decided during a “family council”, when the extended family meets to discuss breaches of honour. In these meetings, it is agreed how the victim must be killed.

If it is not to be a forced suicide, a killer is chosen. The youngest member of the family is often ordered to kill, in the belief they will be treated more leniently if caught.

Mehmet was 17 when he was handed a gun and told he would have to kill his stepmother and her lover. “I didn’t want to do it. I was so young and so scared,” he said. Mehmet ran away, but his family tracked him down and warned him his own life would be in danger if he refused to kill.

He shot dead his stepmother’s lover, but his stepmother survived the attack. He was given a two-and-a-half- year prison sentence.

“There were many other ‘honour killers’ in prison and we were treated with respect, even by the prison guards,” Mehmet said.

Most honour killings happen in the Kurdish region, a barren land ravaged by years of war and oppression. Rural communities here are ruled under a strict feudal, patriarchal system.

But as Kurds have fled the fighting between separatist rebels and Turkey’s government, the crime is spreading across the country into its cities and towns. According to a recent government report, there is now one honour killing a week in Istanbul.

“Families who move here are suddenly faced with modern, secular Turkey,” said Vildan Yirmibesoglu, the head of Istanbul’s department of human rights. “This clash of cultures is making the situation worse as the pressure on women to behave conservatively has become more acute. And of course there are more temptations.”

Ms Yirmibesoglu believes that the entrenched belief in the notion of honour – at all levels of society – is impeding any progress. “Honour killings aren’t always properly investigated because some policemen and prosecutors share the same views as the honour killers,” she said. “For things to change, the police, prosecutors and even judges need to be educated on gender equality.”

— By arrangement with The Independent

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Spending money is like a drug
by Steve Connor

Money works like a drug on the human brain – and even just the thought of earning a higher salary gives us a physical buzz, a study has found.

Scientists have discovered that thinking about cash stimulates the reward centres involved in pleasure and the higher the salary – even if it is just imagined – the greater the pleasure generated in the brain.

This may be no great surprise, but the most intriguing aspect of the research is that the findings hold true even if what we want to buy costs more, for example in times of high inflation, and our actual spending power drops.

The results of the study suggest that the human brain is innately susceptible to the illusion of wealth that money can bring. This is known in economics as “money illusion” – when people get fixated on the nominal value of money, rather than on its actual purchasing power. Some economists have proposed that people behave irrationally when it comes to wages by being happier with higher salary increases in times of high inflation than they are with lower salary rises in times of low inflation.

It has now emerged that more money really does seem to generate the feelings of reward in the brain that are also involved in irrational or addictive behaviour, even if the purchasing power of higher salaries is reduced by high inflation.

A study by Professor Armin Falk, of the University of Bonn, has found scientific support for the theory of money illusion being embedded in the human mind by examining the brain activity of 18 volunteers who took part in a series of tests involving different salary payments and prices.

The volunteers were asked to earn their “salaries” by performing a series of mental tasks on a computer. The salary rates were at two levels, with the higher level being 50 per cent greater than the lower level.

They could then spend this money on a selection of goods listed in two types of catalogue. Each catalogue was identical except that one was 50 per cent cheaper than the other.

In practice, the volunteers had the same purchasing power, irrespective of which salary they earned. But the brain scans show that the reward centres in their brains were far more active when stimulated by the idea of the higher salary.

“Intuitively, money illusion implies that an increase in income is valued positively, even when prices go up by the same amount, leaving real purchasing power unchanged,” Professor Falk said.

“Economists have traditionally been sceptical about the notion of money illusion, but recent behavioural evidence has challenged this view,” added Professor Falk, whose study is published in the journal Proceedings of the National Academy of Sciences.

For instance, studies have shown that people report being happier when they receive a 5 per cent increase in their salaries at a time of 4 per cent inflation, compared to a 2 per cent increase in salary at a time of low inflation.

But a limitation on these previous studies is that they rely on questionnaires rather than brain scans, which has led other economists to suggest alternative, more rational explanations. The present study sidesteps this potential flaw in the research by looking directly at the reward centres of the brain that are directly involved in making decisions, Professor Falk explained.

The scientists measured higher blood flows in regions of the brain known to be involved in the experiencing of rewards, such as the ventromedial prefrontal cortex, which lies directly behind the eyes in the front part of the brain.

“This result means that reward activation generally increases with income, but was significantly higher in situations where nominal incomes and prices were both 50 per cent higher, which supports the hypothesis that activity in the ventromedial prefrontal cortex is subject to money illusion,” Professor Falk said.

— By arrangement with The Independent

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