Are Indians system-blind?

(Updated below) Update II
This is going to be a long post.
Let me mention a few incidents:
1.In Vijay TV talk show Neeya Naana, they were discussing government staff behavior in the passport office. A lady said that the staff are very rude and abuse public all the time. The host Gopinath said that Indians accuse Indian government staff of rudness; but will stand in line silently if they are abroad. I have heard this before - that the same public who drive badly and are impatient in India, will behave well and be patient abroad.
Gopinath was implying that the public were to blame for this - that we have two standards of behavior.
But, if Indians behave well abroad and not so well in India, does it mean that something is wrong with Indians? Or does it mean that something is wrong with India?

2. In every campus interview students ask a standard question - why is your company not creating products for India? Why are you in IT services business? Why are you not serving India? This common complaint is asked in different ways by many people.
The assumption is that the way Indian companies behave has something to do with the NATURE of the business owners (they are not sufficiently patriotic).
It does not seem to occur to anyone that if companies all the time rush towards IT services, it must be because the commerce system is PUSHING them in that direction. That is, a set of tariff laws, calculations of profit margin and the way international capital is mobile, pushes IT companies in India to operate in a certain business model. It has nothing to do with the NATURE or personality of business owners.

3. A few days back, I was having a conversation with a friend of mine - he operates an electronic dealership. He mentioned that his staff keeps switching jobs; and that they expect a payscale in parallel with IT industry payscales. He thought this was because of the "attitude" of Indian labor. He said they were too arrogant and expected the moon.
I explained to him that if labor expected a suddenly increased payscale, it was because we have an IT industry that operates on very good margins and is on a boom cycle. Since this industry is in booming in the same city, It is easy for employees to learn software programming from some training centres and quickly double their salaries. That is, labor was being pushed towards IT because of the inflow of IT business to India. That meant that employers like my friend were facing the same pressure from the market.
That is, it was not the "attitude" of Indian employees that needs to be blamed - there is a perfect systematic reason for that "attitude".

In each of the above examples, and in many other scenarios, Indian opinion seems to tend towards blaming people and attitudes than the interacting systems that operate on people and cause certain behavior. It seems, as a whole, Indians are system-blind.

System Blindness and the Indian Psyche
Sudhir Kakar, in his landmark work, "The Inner World", linking anthropology and Indian psychology, says this:

Hindus share the belief that the legitimacy of social institutions lies in the dharma they incorporate rather than in utilitarian contractual agreements and obligations. ....
Moreover, it is generally believed that social conflict, oppression and unrest do not stem from the organization of social relations, but originate in the adharma (not dharma) of those in positions of power. Institutions in India are thus personalized to an extent inconceivable in the West; individuals who head them are believed to be the sole repository of the virtues and vices of the institutions. ....
Many are the poignant stories of simple farmers in the early days of British rule who responded to an act of injustice by government officials by spending their all in the vain hope of reaching the Queen and gaining her ear, at Windsor.
Any tendency towards social reform in India moves not to abolish hierarchical institutions or to reject the values on which they are based, but to remove or "change" the individuals in positions of authority in them. When an institution is not working, it is taken for granted that the power-wielders have veered from the path of dharma.

The quote talks about Hindu world view, but applies to Indians as a whole (because it is a cultural than a religious world view).
So, when faced with some social structure that is broken, or when faced with a certain group of individuals who behave a certain way, as Indians, our first tendency is to blame the individuals themselves than look for systematic reasons for such behavior.
This explains each one of the items I described above. It also explains why, when faced with a broken system like our incredibly bad driving in Indian roads, we look to blame the drivers themselves, rather than look for systematic reasons why people drive badly.

System-blindness in Driving
In the case of driving, we can see that the Regional Transport Offices (RTO) are not monitoring driving schools closely, nor are they applying very strict criteria for proof of learning from the public. We learn to drive mainly from an utility point of view and do not learn that driving has a social dimension. This fault squarely falls on the RTOs. Note that I am not saying that RTOs give licenses to wrong people - almost anyone can learn responsible driving, provided there is someone to teach them and there is time to learn.
The other side of this equation is the regulatory system - we do not have enough traffio police and the police available are overworked. They also tend towards corruption.
Instead what are the consequences of blaming the individuals who drive in our roads, and not looking at systemic reasons?

The Consequences of System-Blindness
Most of the time, blaming individuals means that we can never correct the situation - unless everyone in India becomes a saint, we cannot have a good society. Thus, right away, we have blocked an effort to correct the situation.
Secondly, blaming individuals all the time,means we OVEREMPHASIZE punishment for deviation from our laws - but not enough emphasis is placed on learning. As we saw in the above example, the learning angle of RTOs is entirely lost - we instead concentrate exclusively on regulation by Traffic police.
Thirdly, blaming individuals in the Indian context implies a kind of self-loathing. Most of us must be familiar with this - when you blame a politician (as I did in my post on Rahul Gandhi and the Mumbai Attacks), the instant response is that we have to blame ourselves (one of the comments says that).
I think we are all familiar with this pattern - when Ramalinga Raju was arrested, rediff published an "open letter" from some moron, (the article is here) - in which the guy compared Ramalinga Raju's crimes with people who were not swiping ID cards properly at Satyam. The article ended up saying we all have ourselves to blame.
After the current spate of attacks on Indians in Australia, Outlook has published a highly confused feature article saying "Aren't we racists too?".
The tendency is to spread blame around so generally that we cannot take any action to correct anything.
This "blame ourselves" cry usually comes because people do not differentiate actual crimes against the law from individual moral issues. But it also happens because people fail to realize the interlocking systems we live in and instead focus on individual behavior.

An Example of System Blindness - Indian Politics
One example of system blindness caused the exclusive focus on voting in last parliamentary elections.
There were heavy drives in the English media to go out and vote. Aamir Khan spoke about the importance of voting. When just 45% of Mumbai voted, there were castigations of the public.
What is the logic behind such focus on voting? The prevailing idea, as explained by the movie "Yuva" ("Aayutha Ezhuthu" in Tamil) is this: if we distinguish between good and bad politicians and elect only candidates based on "merit" then we can change the system.
I have a fundamental issue with this idea - it assumes that the current crop of politicians are bad. It thus blames our ills on a group of people's nature.
Most of our politcians are well educated - some of them are lawyers. Do we know if the constituencies of such ostensibly "good" candidates are well developed?
The answer is, of course, that there seems to be uniform ineffectiveness from our legislature, irrespective of the education or sincerity of the representatives.
Why is that?
Secondly, it is close to impossible to fight an entrenched political party's candidate. We think it is possible if everyone votes for the "good" candidate. But it is not easy to figure out a good candidate for anyone. This whole idea may have worked if we were in a community of a hundred people. It will not work in the current scenario.
So, let us take a step back and see what is wrong with the election system:
1. Political parties have zero inner party democracy and have managed to circumvent such democracy requirements. It should be upto political parties to figure out the good candidate - not just the general public.
2. The election process SHOULD FORCE public financing for campaigns - that is the only way to level the playing field so that entrenched parties do not dominate.

Both of the above are NOT going to be solved just by voting. It requires a campaign to change the system. Thus, it is neither the public's fault that we elect "bad" candidates not is it the politicians' fault that they are ineffective. We need to change certain aspects of the political system for any meaningful change.

Why are We System-Blind?
From the reason for Indian IT's focus on services to the emergence of South India as an IT destination to the collapse of Indian sports in the Olympics, everything can generally be explained by looking for systemic faults.
But in this article I seem to be blaming Indians in general for system-blindness - isn't that itself wrong?
There are certain reasons for our overlooking systemic faults. These are:
1. We are a conservative society, till now. One of the hallmarks of a conservative society is assigning blame to individuals for systemic issues. It is a way of looking at the world.
When the current credit crisis started in the United States, American conservatives explained the crisis by blaming it on black and Hispanic households, who could not repay housing loans. That is, they blamed the minorities for overreaching and being greedy.
On the other hand, liberals, who looked at the same crisis, explained it by tracing it from the credit default swap mechanism initiated back in 2000. They linked it to the complex derivative trading rules in Wall Street and even on the way compensation packages worked in the finance industry.
You see the difference? Conservatives blamed individual "attitudes" and liberals blamed ceratin features of the system.
In India, we, as a conservative society, blame individuals more than systems.

2. The second is the cultural reason that I quoted earlier in the article (from Sudhir Kakar). The way the concept of dharma works in Indian society, we are tuned to see individuals operating in dharmic or adharmic mode than systems that offer incentives or disincentives.

There are perfectly rational explanations for the reasons we focus on indviduals - but it is a weakness in our society.
One of the ways to change this focus will be through education. In the long run, if we guide our educational systems towards civic lessons and explain the interlocking economic and political systems that govern us,then we can expect future generations not to play the "blame ourselves" game.
Implementing the 30-year old recommendations of the Police Commission Report or Education Commission report; and cleaning up campaign financing will go longer to establish a sane society.

Update I
When I talk about a "system", I am talking about a set of procedures, laws and other mechanisms that offer incentives and disincentives for people to behave in certain ways. Such an idea of a system is used by economists all the time. The market is one such system. These incentives and disincentives need careful consideration and are not obvious all the time.
A few years back a law was introduced to make Rape punishable by death. Women's activists objected to this law. At first sight, it seems like they should support it because the law would act as a deterrent against rape and hopefully reduce it.
But there is a hidden effect of such a law - it means that a rapist is more likely to kill his victim for fear of exposure. This is the reason why women's groups objected to this law.
Almost all the time, we ARE operating under a set of interlocking systems. We are just blind to this process. I am NOT talking about creating a NEW system, or even a SINGLE system.
Many times what we require are policy tunings to get a desired behavior. Those policy tunings in the public sphere can be effective only if we understand what is being done.
The National Police Comission report was released 30 years back. It talks about separating the state police departments from under the state government (and thus, the ruling party). It talks about creating a separate governing body (like the US Department of Justice). One of the recommendations is that the governing body be a council involving a couple of Opposition party members and retired judges.
Such a tuning would have effectively prevented the abuses we see now from ruling parties. It is obvious, in Tamil Nadu, that Jayalalitha's dragging Karunanidhi from his home at midnight would never have happened if the police was under a separate governing body.
This is what I mean by a systemic knowledge. There is so much analysis done in television and the media during election time; it all focusses on personalities. If going out to vote is important, I think agitating for the implementation of the Police Commission report is more important and will change the system faster.

Update II
One of the main reasons to emphasize systems is that the alternative explanation - that Indian middle class is bad is just a cop-out. That just avoids argument. The explanation is also contrary to common sense - why should Indians behave well abroad and not in India? Further, why do we think that Indians are somehow uniquely corrupt?
It makes more sense that we behave the way we do and our politicians and businesses behave a certain way because that is the way incentives lie.