V.R. Krishna Iyer, retired judge in the Supreme Court, in The Hindu:
“There should be a 10-year moratorium on any new foreign investment and any import of luxury items. No more should we have the bankrupting impact of foreign business. We must restrict the profit-grabbing car factories and the insatiably frantic buyers so as to sustain our economic self-reliance and solvency as a critically democratic mandate. Our neo-colonial financial globalism is a source of grave danger, great disaster and grim despair….
“India should abolish or minimise all avoidable expenditure, including the expensive perquisites of heads of state, ministers, judges and legislators. Alcoholism during festivals, celebrations and flashy functions should be banned. All five-star establishments, public and private, should be abolished. Fair but moderate prices for boarding and lodging should be fixed. Limits should be placed on feasts, rents and travel fares. Consumer extravagance and showy expenditure should be banned on a war footing.”
Read the full article: A bizarre nuclear deal pursuit
churumuri 
i.e. turn back the clock 30 years.
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Probably this fool is planning to take back india to dark ages again.He need to first visit west bengal and have alook there
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Sahukarru wants to add one more thing..
IT salary cap should be fixed at one anna per hour. And all IT graduates should work for 4 years in village or STPs.
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why two paras to convey a single sentence? ” communism is the way to go” would have just sufficed
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Bizarre suggestions from venerable justice.
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Good old Krishna Iyer…
Sense, reason and intellect never stopped you from insane judgments while in the Supreme Court… I see they don’t stop you from doing the same for everything else…
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looks like he saw some of his household bills before writing this
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“Sense, reason and intellect never stopped you from insane judgments while in the Supreme Court… I see they don’t stop you from doing the same for everything else…
”
Clap Clap Clap
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If we stop everything, what will people do? Sit idle? Who will feed them?
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The socialism itch is like STD infection, it never goes away, but keeps coming back and troubling VK Iyer every now and then.
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Hmm.. as it happenned i was reading this a few days ago…
subject: an early theory on editing films
In the two examples below. Vertov uses montage to make a political point. He edits together shots of women in beauty parlors with shots of women doing productive work (in a factory in the first pair of images, and as a film editor in the second pair). This montage supports Vertov’s political theme, calling for productive labor and an end to activities that the filmmakers considered to be frivolous.
http://faculty.cua.edu/johnsong/hitchcock/pages/montage.html
but screw all that. have fun
what i realized is even if vertov showed just her hands, even he could not hide the fact that there was somebody actually working on the makeup of that woman.
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What a nitwit.
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What can we expect from a Judge who was a minister in a Communist Government in Kerala before he became the judge!!??
Communists have a discredited ideology, and also have compromised their integrity in the name of ideological brotherhood. They have learnt nothing from the collapse of the soviet and eastern bloc and keep propounding their theory.
It all sounds very good on paper, however as Narayan Murthy said, the best way to abolish hunger is to make the Pie bigger rather than cut the pie smaller.
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Communal ism!!
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While products of murthy angadi economy quickly trash every thing which smells like communism I wonder if alls well with free economy and where it headed.I dont see why abolishing expensive expenditure and perquisites of heads of state, ministers, judges and legislators is problem.Isnt putting a check on auto companies a good thing ,while we already have maxed out every inch of road and moori available. What will happen to loans borrowed by consumers if economy goes phut? (most of them distributed by unwitting marketing folks of banks in street corners with hardly any credit checks)
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I am appalled by the derogatory remarks here. The problem with the middle class and those who live abroad is to see India in one-dimensional
view. Consider a country which has over 25% of its population below the
poverty line and where all family members work from 6 year old just to live at the poverty line. Our NRI friends wh advocate naked capitalism should visit their own less fortunate neighbourhoods to see how many percentage of them do not have medical insurance and are too scared
about sickness. I am not a communist/socialist/capitalist and a humanist who has been pained by the dire poverty situation in India in the 21st century neighbourhood of glassy IT establishments. Those who call Iyer a nitwit are themselves one.
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Alok said:
Good old Krishna Iyer…
No Alok ! Atleast there was golden thread among his insane judgments – that was his elegant language ! Alas with old age, even that has deserted him!
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Though I did not agree with the basic premise of Justice Krishna Iyer of communism solving India’s problems, I always enjoyed reading his articles for sheer style and his wordsmithy.
But this article has been a great disappointment. I feel he should stop writing articles like this and write about general things. He has absolutely no expertise in this subject. Can an English teacher be expected to write an article on nano technology and how it works? If he continues to write article of this kind, he would lose all his credibility.
Title of the article ” A Bizzare Nuclear Deal” and the contents of the article have nothing much in common. Like communist party, Krishan Iyer is interested in articulating his firm belief in communism. I wish he had written about what kind of car he is being taken around, how many of his relatives enjoy the fruits of capitalism in USA, what fuel his household is using for cooking (is it much dreaded LPG or “abundant” solar or geothermal or wind or wave energy?) etc to give greater credibility to his argument?
Yes our tryst with destiny is to help the poor. Did Nehru or his daughter Indira Gandhi following the socialistic policies solve the problem of poverty in India? History will show that it was a total failure.
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For those who have the vision to call Justice Iyer as the nitwit: Ihave seen and experienced the consumer craze that drive many families insane. But Justice Iyer should note that the glitzy days of India are coming to the end and the oil price and economic nearsightedness of politicians combined put an end to the boom, and middle class start looking around to see how those poor brethren live on a monthly salary equivalent to their 3 days’
restaurant bills.
Funny those Indians resident in America hurling ‘communism’ at any one
they like. The Fed literally nationalised a bank not long ago, not letting the bank to go under as Capitalism dictates. I have received offers of sale of nice houses in good locations from my friends who are sitting in these houses because their companies could not meet the energy bill hikes. The prices are slashed by 50%. Two of them are sick and have no medical insurance. One of them could climb up the career ladder as far an Indian could go in his company. He wants socialised medicine. I have seen the ugly face of capitalism in the Silicon Valley some 30 years ago.
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@Citizen of the World, when rich spend its the poor who benefit. So for instance, when there is a wedding ceremony just count the number of people get work – cooks, drivers, cleaners, decorators, flower sellers, sweepers, etc.
If the rich prefer to lock their money safely in bank accounts, who loses?
Just think, who works in 5 star hotels? Its the middle class. Won’t they become poor if the opportunities are reduced?
I can understand your concern for poor & povery. But I am afraid communism doesn’t solve this. Countries have understood this and have moved on.
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Narayan murthy said about making pie bigger!!! Hmm. interesting.
He may have been misquoted. What he meant was make Paisa bigger so that cheap paisas he is paying to his employees may look bigger.
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I want to visit him in his house to see how he lives. His address please!
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V.R. Krishna Iyer, as fine a judge as any that sat on the Supreme Court, cares not for casuistry as much as for principle, however outdated.
To each his own, especially to the retired.
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I think he is just suggesting to go littlt slow on consumerism.
I dont think it would be possible to ban investments but some regulations can be introduced. The governmnet should promote better public transportation schemes than allowing more cars to run on the already crowded streets that means some kind of limitations in production of cars. Most foreign companies are adding CO2 and will benefit eventually.
Bush and his stooges are insisting India and China should join the G8 countries in reducing CO2. That will impede India’s progress.
I have seen a Japanese female getting ‘Indian origin certificate’ as she has invested some good amount in a business firm. How can she be a Indian Origin person? Such things should be stopped.
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Vmanava
Socialism exists in many forms and shapes even in the USA. Guess who supported the bankrupting bank in America recently. The Fed dictated its revival just as the communists do not let go the bank to become bankrupt. Guess who supports the civil aviation construction in America – the Fed govt through research and dev contracts which is a subsidy. Ihere is nothing like unbriddled capitalism anywhere as Adam Smith wished. But what Justice Iyer is saying is different. Read what he has said.
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@Bevu Bella,
“Socialism exists in many forms and shapes even in the USA. Guess who supported the bankrupting bank in America recently. The Fed dictated its revival ..” LOL . This is fascism and not socialism. Taking money from the masses to save the big corporations.. :) America is socialist when it comes it to the richest 1% and uber capitalistic when it comes to the rest
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Government subsidies ( euphemism for aid), monopoly and government direction of various kinds including banning imports or taxing imports heavily are characteristics of socialism, the kind Justice Iyer advocates. Those who benefited from higher education in India or in hundreds of land-grant( state) universities in America are all beneficiary of government subsidies or socialism in one form . The Indian IT gurus who want to increase the size of the pie and who lecture about capitalism were all benefited from the socialistic attitude s of the government, be it buying lands cheap or getting help from govts for export etc..
I am unashamedly the beneficiary of Justice Iyer-kind of socialism when I undertook my higher studies in India and America, the latter in a state university. Indeed, one of my friends who is an academic in an Ivy league university in America says that his university’s endowments running into billions by munificent donors would have been impossible if these rich men and women the entrepreneurs did not get Fed and state govt subsidies in billions for their companies. Indeed, in two of the companies I was working a few years ago in America, the amount of so called government grants channelled as contracts , even before any product was conceived was so great that essentially the Fed and state govts owned those companies. Just look at how the Fed govt can restrict anything on the name of national security. Let us get real. Justice Iyer is not talking non-sense. If his suggestion is communism, I can show similar thinking right in our neck of the woods-in the USA.
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Comrades lets also use our Military to impose all these sanctions. I can add more to this list:
1. Ban all shopping malls. How many poor people visit shopping malls. Its only the middle class. Right
2. All provisions and commodities should be rationed to everyone. No more buying in excess and free market. Ration cards should fix the quantity of consumption per individual.
3. Comrade Iyer also has mentioned his intention to restrict foreign car companies. But we should go to the root of the problem and ban all cars. How many poor people in this country can afford to own cars. Smelt all cars and use the metal to produce Bicycles (Churumuri has also featured an Article on Bicycles. Strange coincidence?).
4. No five star hotels thats great. But we need to also think about the problem of private ownership of restraunts. We need to have government owned mess in every locality which can be accessible to our poor working proletariat. Also no more luxury items in our food. No sweets like Mysooru paku and dharwad peda. Also ban payasam especially Gasa Gase payasa in religious ceremonies (religions is surely the opium of the masses. so rightly said by our adi-guru Maharishi Marx). We can save a lot of Sugar in this process and we can import this Sugar to our bretheren in China, Cuba and Venezuala.
5. Get in the rent control act and slowly allow the government to take over private property. Our goal is make all houses similar and reflect the lowest common denominator of the society. We can start this process by turning whole cities into slums. After all the middle class bourgeiuose is just 15 % and the rest of our working class live in slums or slum like conditions. Our comrades in the politburo and the governing council can have the privelege of Bunglows and cars as they are the hope for the proletariat who have nothing to lose but their Mysore paks. Also our comrades are working for a greater good and can be allowed these luxuries.
6. Ban internet as this collaborative medium can disrupt the overall agenda of government. No more browsing and no google. Internet should be converted to our country’s intranet and the ideas of Karl Mars, Engels, Tortsky, belinsky should come up first in all the search engines.
7. Arrest Ambanis, Mittal, Tatas, NRN, Premji, Mahindra etc. Better still kill them and their families. These capitalits deserve only death. The senior management and executives of these companies can be spared their lives but they should be sent to siachen glacier for ten years to shove the snow.
But spare Vijay Mallaya of UB and use the UB distellieries to produce Vodka instead of Beer. Vodka is the nectar and life blood of the working class. Also ban all Ciggarettes with filters. Our comrades only smoke filter less ciggies like Scissors and Charminar. Comrade Iyer has hit the nail on the head for seeking the ban of alchohol in public and religious functions. Alchohol is to be used by our proletariat working class for relaxation after the hard days work only.
7. Ban all telivision channel except Doordarshan. Ban all movies except those movies which highlight the fight against class struggle. A citizen should not see more than five movies in a year.
Love live the revolution.
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ok let me play the favourite passtime of the bourgeois and try this over ambitious endeavor of capturing the essence of communism:
communism is the principle that all business, apart from the business of telling people how to lead their lives, is frivolous.
enantheeri?
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“communism is the principle that all business, apart from the business of telling people how to lead their lives, is frivolous”
Bush and his neocon friends had message from God Himself ( note that God is a man) to invade Iraq. My Texan and Carolina’s friends tell you how you should lead your life. They are not religious nutters, but noticeable CEOs of companies who get blessings direct from God himself! Last time Bush got elected by a surge of voters in Ohio ( many were highly educated engineers and doctors), who are very much interested to preach to you how you should lead your life. I see no difference between communists and this gang. I can give you more examples that in the land of freedom and opportunities, there is many who are in the business of telling people what they should do.
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@B. Shenoy
“Did Nehru or his daughter Indira Gandhi following the socialistic policies solve the problem of poverty in India?”
Well, it did solve some one’s higher education problem. But for Nehru, IITs would not have been established and those who criticise his socialism were beneficiaries of socialist education in IITs. Think of a student from Mysore after his PU course studying engineering in IIT Madras paying the full cost of education for 5/7 years? Nehru’s socialism achieved this. Think of this student graduating and leaving the country to work in USA and coming back with a healthy bank balance? Nehru’s socialism made this possible. I am not a socialist but I get irritated if those who reaped benefits from the socialist state turn back and preach capitalism and criticise the man who made their comfortable existence possible.
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Bevu Bella,
Actually, it was the aid of other countries that made IITs possible.
http://en.wikipedia.org/wiki/Indian_Institutes_of_Technology
==
Some IITs were established with financial assistance and technical expertise from UNESCO, Germany, the United States, and the Soviet Union.
==
And all the new colleges within those IITs have been funded by NRIs (Vinod Gupta, Kanwal Rekhi et al).
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Makes No sense at all. Price fixing and banning not the answer.
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And capitalism is the business of making some money by providing raw materials and subsidized labour to the only true capitalist country?
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Bevu Bella,
you are right about my IIT education, US, returning, bank balance etc. But what it has to do with my comment on socialism.
In fact I have been critical of what IITs have contributed to India’s development also.
If some gets benefits from capitalism will he or she loses right to crticise capitalaism? Well known Chomsky lives in the capitalist country and very critical of capitalism. There are thousands in the US are critical of capitalism. In your view I suppose they have lost the right to be critical.
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Justice Iyer is one of those types who are frozen in time. As a judge he was famous in letting our own desi amnesty PUCL doing a hatchet job on the nation with things secular. I might have got this one wrong however with regard to his tenure. On retirement Iyer started writing pamphlets for the Government of the day offering opinions. This is his latest creative effort:) Please enjoy!
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I am old enough to remember the establishment of the 5 IITs, and indeed I was an academic in one of them. The funding from abroad was for the equipment and training of people. Students were heavily subsidised. I also know about the ways some students sneaked in through the backdoor.
My argument is that without state socialism IITs would have floundered.
I worked in America long enough to know their simplistic view of Capitalism and how they paint other views. Some postings here reflect this simplistic view. About Chomsky. He is not only critical of capitalism but his utterances are bordering communism, should be in a communist country to realise what he has been saying. Justice Iyer alone is not forozen with time. Bush, Cheney and Rumsfeld hold views which are bordering Paganism. The fact that Federal funding is not forthcoming to molecular biologists who conduct the cellular research which use stem cells, some public and private schools do not believe in Darwinian evolution and teach kids the Biblical verson! That is frozen in time for me.
In my view, with such a large number of underclass, I wonder whether
Capitalism the way the Americans preach ( they do not practice – I can give examples based on my close experience in Federal Institutions) which is consumerism-oriented is the way forward for India.
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Just reminds about the fun of playing Capitalism. The sub-prime mortgages-those sold by very bright (?) young men and women ( from glitzy business schools) to vagrants of Harlem. My grandmother frozen in time would have asked a few more questions, and have seen the wickedness of doing this con activities. Having said this, our compatriot friend Dr Pandit of Citi has to go cap in hand to beg Bedouins of the Desert Kingdom. What institutions where Dr Pandit and his ‘smart MBA kids’ was carrying out was unadulerated Capitalism ( this con trick would shame the Palermo gentlmen in black suits and the street card shuffler who I used to see in my middle school days in Mysore), except that the chilly winds are freezing every country and even those who never heard of names like Citi and Wall Street. Let us watch when the sub-prime tsunami hits the friendly farmer in Ajjampur.
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@B. Shenoy
“There are thousands in the US are critical of capitalism. In your view I suppose they have lost the right to be critical”
Yes. You do not bite the hand that feeds you. These days, let these folks be careful, the ‘Patriot Act’ is lurking about. As some one said, Acts passed tend to stay on the statute bok for a long time.
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Bevu Bella,
Your last post doesn’t make sense. You a nazi or something?? :)
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MP
I think you should be a bit more smart to understand my last post.
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Bevu Bella – Harvard, Stanford, MIT, Princeton, Dartmouth, Cornell et al demonstrate that socialism is not necessary for higher education to flourish. These are some of the world’s best universities that have flourished in the world of commercialism/capitalism.
Agreed some of IIT students have returned to India with healthy bank balances but many many many more have stayed back in the US and helped the economy there… the capitalist/market economy
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Aditya,
Most IIT students who went to the places you mention didn’t pay beforehand for the education from their pockets. That is they didnt buy the services by paying an upfront fee. No market economy.
They had scholarships and research or teaching assistantships. So the institution or the state made funds available for these students to pay for their education. The money for this comes from government or private grants. GRANTS. It was done on the basis that subsidizing these people’s education in some ways and making it possible for them to go through with their research and education will benefit society on a whole later on. In many ways it is no different from the subsidized education they received at IIT.
If it was a pure market economy, very few IITians from India would have been able to pay for their education and then attend the universities you mentioned. Only the sons and daughters of the rich could attend these institutions. But then the institutions themselves wouldnt be so great anymore without their star students and researchers.
Bevu bella is making a good case without taking a black and white stand without supporting a particular buzzword be it communism, capitalism etc. That is something religious fanatics or political leaders would like us to do – just agree with what they do, provided they couch their actions with the right slogans or buzzwords – communist, capitalist, nazi, jihadi, cheddi etc.
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AG, Bevu Bella’s point seemed to be that higher education institutions such as IITs could only have come about in Nehruvian socialist environments. I was making the counterpoint that many American institutions esp. the Ivy Leagues have flourished in the mkt economy. The important distinction is that these institutions receive no government subsidy. They are funded by private endowments.
Your point about scholarships is valid but remember that in many cases, it is a fee for services rendered. e.g. teaching assistantships, research assistantships, so in other words a market economy.
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Aditya
I worked in one of the institutions you list, and know something about the
way they get their funds. Although , some or all them seem to work in a market economy and seem to flourish in a capitalist private education environment, the reality is different. For a start, the endowments they get from the companies and individuals indirectly originate from the subsidies and contracts these companies get from Federal government and which enable to set aside a slice of it as endowment. A company where I worked was heavily supported by the State and Federal overnment even before the product was conceived. Why, the CEO was able to convince the governments that the Japs will develop the product and flood it in America. The subsidy that the company got from the governments was used for R and D and this meant that a slice can legitimately be given to fund research at an university of their choice which would support researchers or used for endowing a chair or a lab. In effect, the State and Federal governments are paying for the chair or the lab . It is not market economy. You may well know the fee charged for undergraduate/graduate studies in the universities you list. This fee is not FULL COST of education and carries a level of subsidy by the state/Federal government.
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“Agreed some of IIT students have returned to India with healthy bank balances but many many many more have stayed back in the US and helped the economy there… the capitalist/market economy”..
Not all sections of US has market economy. That is a myth. Except a few companies, the rest are supported by tax payers through the State/Fed governments in ways one cannot imagine. The degree and modality of this support ofcourse matters. Even these realtively few employ engineers and scientists who have had subsidised education of one kind or another as I have alluded to earlier and/ or have links with research institutes/universities which are heavily supported by governments-State/ Federal.
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“Your point about scholarships is valid but remember that in many cases, it is a fee for services rendered. e.g. teaching assistantships, research assistantships, so in other words a market economy”.
Aditya-Sorry to disagree with you. The teaching /research assistantship are funded by grants and most of them funded by arms of Fed /State Governments ( NSF, NASA for example) channelled through universities. For example, I received research assistantship( long time ago) funded by TI memory chip division who in turn were supported by NASA and who in turn by the Fed government How was this research assistantship given to me? Not the market forces operating here! I was at the right time in the right place and knew the right professor! It was simply given to me. These teaching and research assistanships are held by professors who has a large say in who gets them. I can tell you market economy does not play a part here. These professors give it to students they say theyknow and trust (I did just that when I was a professor). The worst culprits are the private universities you mention. The example is me! If the research assistanship I got was open to my buddies in the university, there were smarter ones than me and would have got them. The issue here from my professor’s point of view was trust. He just gave it to me! No competition /market forces I am afraid!!!! I can give you current examples. But I do not want to drag people I know into this!!
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“Except a few companies, the rest are supported by tax payers through the State/Fed governments in ways one cannot imagine”
Please tell me you’re joking. It’s one thing to say that *some* companies are supported by state/fed government. I would agree with that. To say that except for a few companies, all other firms are government supported is simply incorrect. Would you like to back that up with data? Perhaps you can show me something that says > 90% enterprises in the US are supported by the government.
With re: to educational institutions, I agree they are beneficiaries of state and federal aid. But the ivy leagues and most private universities are funded *primarily* through private endowments.
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Aditya:
The acid test for market forces and market economy is that if a well known company with a brand product is up for sale, rival bids are considered, and the best candidate determined by the market wins. Try this in India. Very difficult to make it work as the central government would block such attempts. Try this in America, the Congress will surely block any such attempt. In socialist Britain Steel companies and Jaguar(won by Tatas) and Whyte and Mckay (won by Mallya) were allowed to go foreign hands as they were best bidders and market forces won. It is known that the Budweiser is on sale and a well known brewer from Europe is rumoured to have indicated a bid value. The sale will not go through as the Congress will block this purely commercial deal. They will never let a foreign owner to own a brand product outright as Tatas and Mallya have done.
Read the following which has appeared in Yahoo.com and this was simmering for a long time:
WASHINGTON (AFP) – US Defense Secretary Robert Gates said Wednesday the Pentagon will reopen a controversial 35-billion dollar contract to supply the air force with a new generation of air refueling aircraft.
Gates said rivals Northrop Grumman and Boeing would be asked to resubmit bids as part of a revised process aimed at addressing criticism of a contract awarded to Northrop Grumman earlier this year
The politically charged battle over the tanker pits the KC-45, a militarized version of Airbus’s 330, and the KC-767, a new version of the Boeing 767.
The choice of EADS raised protectionist hackles in Congress, with lawmakers citing security concerns and job losses to Europe at a time when the economy is struggling.
In otherwords, the Congress would block Northrop Grumman and EADS bids even if they are the best and it is done deal for Boeing. Curious how market forces operate in the Land of Capitalism. Practice what you preach!
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Yes, most research assistantships or teaching assistantships which Indian students from the IITs get are either directly or indirectly linked to a grant which emanated from government/state programs. It may be a department in a private institution which is carrying out the work, but eventually the most significant provider of grants are state agencies. Departments from public and private colleges vie for these grants. A system which works very well – but again not 100% market economy by any stretch of imagination. Just because an institution is private, it doesnt mean the research assistantship there came from private funds generated from profits made in the market. Even private endowments are just that – endowments i.e. donations. And most likely not taxed like a normal private fund would have been. If it was purely based on the market, the assistantships could be done away with and used for equipment etc. and the person paying more fees would get in. After all there is no one deciding exam like the JEE to get into a masters in the US. All in all a great system which works. Maybe not a system like the IITs, but no market economy either.
Another example would be the way the agricultural sector is protected in the US. Without support from the government, it is doubtful if the sector would have even survived from global competition. Maybe something good and provided by the government. But certainly an example of what bevu bella is saying.
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Aditya:
I have lived long enough and worked in many institutions and establishments to know how capitalism really works in America.
Surprisingly the big IT -related companies are as a result
of entrpreneurships. But most others have received Fed /State government subsidies one or another. You can get the data through
the Freedom of Information route. About endowments- I am
not sure how much closer you have seen them operating. I have and
even the blatantly private university has a chain of endowments which
leads to Fed/ State government. Even the tuition fee here which appears
substantial has a percentage of subsidy by the univesity which is traced
to endowment and which in turn to a company or companies which
received subsidies at one time or another.
Citizen of the World cites a few cases. I can give you a few more. Please don’t be fooled by the notion that private IVY League universities are supported by private endowments and market economy only. As I said I worked in one of them as a professor.
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AG,
You are spot on in regards to US Agriculture sector. Could I also add, others- aircraft, power, machine tools, oil, electronics including computer chips etc… Unlike in India and in European countries where governments
directly give aids (now the European Commission has banned this in Europe although some cuntries circumvent this),in America it is through’contracts’ which are often euphemisms for aids. The thing to look for is what the company delivered for the contract. Very often one would discover that not much was delivered considering the contract value. Interesting to look into where the rest of the funds went. If Mallya attempts to acquire Budweiser through open bidding, he will certainly fail. The Congress would stipulate that no foreigner could hold even a majority of shares in a company considered vital to the nation. But at the same time, Ford and GEs have forayed into Europe and every where else and argue market forces! Donald Trump wanted to buy hundreds of acres of land in Scotland to build a golf academy and he argued about market economy when the local government questioned it! This is impossible if say John Doe from Europe tries this in Atlanta. Rupert Murdoch has to become a US citizen ( albeit almost overnight!) when he wandered into large scale acquisitions, where as he has done this in England without being a British citizen. Market economy is good if market forces are ‘allowed to operate without restriction’ which means global competition in these days. Which also means Kirloskar acquiring the GE! Well, you have Congress to contend with. They will hide behind the Constitution and statutes!
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Another big industry which is protected by government and its policies and is thus a multi-billion dollar industry is health insurance. Due to this – even industries which provide services to health insurance are direct or indirect beneficiaries of the protected system. It isnt really a market system, but a system which is driven by the laws which have been setup to control the way things work in health insurance.
And like you said, as a counter point, a large part of the IT industry in the US is driven by free markets and hence a free will. Though here too there are companies which do IT for government/military contracts/health insurance etc.
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AG
Before closing my contribution to this thread, I quote the following:
“NEW YORK (CNNMoney.com) — The anxiety over Fannie Mae and Freddie Mac, crucial to a recovery of the battered housing market and the economy as a whole, took stocks on a wild ride Friday.
The New York Times reported Friday that senior Bush administration officials are considering a plan to have the government take over one or both of the companies if their problems worsen”.
In otherwords, it is good old socialism of nationalisation, the concept and practice of socialst countries have visited America the citadel of Capitalism! Bush, his cohorts and fellow travellers argue that this is an excepion and The economy will be serious trouble. this is precisely the arguments Justice Iyer would put forward. I would have thought that in Capitalism market forces reign supreme and market decides the fate of
any institution!! Well, I have closed my arguments!!
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I will concede the point re: academia. I’ve spent 4 years in American colleges but can’t claim to know the inner workings.
However saying that *most* enterprises in the US are *supported* by government is incorrect. Assuming that the Fortune 2000 is a reasonable proxy for private enterprise, most would imply >80% or ~1600 firms. “Supported by government” would be defined as these companies do not have a viable business model without government intervention. This is the model of Nehruvian socialism and Soviet Russia, not America today.
The examples you’ve provided are examples of the regulatory environment in the US and of course some companies (e.g. Lockheed, Boeing) benefit from it.
The notion of a “Market economy” is normative – an ideal state. Most economies fall somewhere in the middle. You make it sound like the US is a centrally-controlled economy. From my job as a consultant to the Fortune 2000, I can tell you it is most certainly not the case.
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Bevu Bella Sir!
Except Justice Iyer is 40 years late! The nuclear deal will clinch us some good technology and help us alleviate some of the energy problems. Even neglecting the deal for the moment, a good Central Government can do wonders in governance. With throwbacks like Arjun Singh, Mani Liar and other Socialist stalwarts, the fools at UPA completely forgot about the governance!
Now this clown OddVani could have let the UPA get the Nuclear Deal taking some credit for starting the process during Hajpayee’s regime but he is only a low-cunning Sindhi.
Thanks!
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Read the following. It is not a regulatory issue. The Federal Government is bailing out two firms which are going bust. A pure socialism, except that it is clothed in some other language. Large pockets of government subsidies do exist in here, in America. I agree with Bevu Bella on this. I have been a resident here for over 35 years, an accounting professional and know plenty of subsidised companies. The Feds will say that they are injecting liquidity in to these two companies, but that is Keynsian economics and not capitalism as preached by Friedman. When subsidies or aids or contracts whatever the terms used to justify the injection of funds to faltering companies, the arguments are bent and suckers like us swallow them hook, line and sinker.
“US TREASURY secretary Hank Paulson is working on plans to inject up to $15 billion (£7.5 billion) of capital into Fannie Mae and Freddie Mac to stem the crisis at America’s biggest mortgage firms.
The two companies lost almost half their market value last week as rumours of a government bail-out swept the stock markets, hammering share prices around the world.
Together, the two stockholder-owned, government-sponsored companies own or guarantee almost half of America’s $12 trillion home-loan market and are vital to the functioning of the housing market.”
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We could look at what Justice Iyer is saying as crude protectionism. I was chatting with a Republican Senator in my area a few months ago, and interesingly, he was arguing about keeping American industries American and buying American products , and was vigorous about keeping imports out. Which sounds good except that when you try to do it, you have to erect import barriers and protectionism is not far away. I commented that this is what socialists do, and he said for him it is commonsense! I do not support Justice Iyer, he might have been a mouth piece of the Socilaist government of the day, but so are many supreme court justices in USA who toe the lines of Republicanism particularly in the area of human fertility. Reagan downwards, the Republican presidents packed the supreme court with like-minded judges ( The president, for example Reagan appointed supreme court judges and the senate with Republican majority ratified the appointments. The majority of judges in the supreme court are still Republican/Conservative -minded). These judges together with Bush would not be interested in stem-cell research, where as Nancy Reagan is! She wants cure for Alzeimers, the disease Reagan suffered from. When things hit you closely, the philosophy goes out of the window, just like the case of two mortgage companies which are not allowed to go bust as capitalism dictates.
Uncle Sam has strange ways of explaining away, be it economics, politics, religion/moral or human issues!!
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Doddi Buddi,
I am a ‘manku thimma’ and cannot understand your argument. I guess you are resident in America and I am asking you why America shies away
from constructing more nuclear reactors to meet the energy needs in this day and age of expensive fossil fuel? Is it because of the Three-Mile Island episode. I would have thought that this mighty nation which has sent man to the moon would have learnt enough lessons from Three mile Island accident. I suggest you broach this subject to the wise and illuminated congressmen and senators there and you will find that they are
as much “throwbacks like Arjun Singh, Mani Liar and other Socialist stalwarts in India”. You see India does not have the monopoly of throwbacks, America have them in plenty. Try talking to the Harvard and
Yale educated congregation of Republicans and neocons about the choice capitalist countries provide and mention in the same breath ‘abortion is woman’s choice’, and see whether you get out in one piece.
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Free markets? I call BS!
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AG, You are so right. Fannie Mae and Freddie Mac are being nationalised, a pure Keynsian approach, except that the socialist ‘n’ word, ‘nationalisation’ is not used!! It is happening in the so called Land of Capitalism and Freemarket. Come and join me in monthly meetings of people with Congressmen and Senators in my area, and you will discover that the thinking of these elected representatives is no better than Justice Iyer! Now,after the tsunami of sub-prime, the talk is about job preservation and openly about support to companies failing, and the nice terms of ‘globalisation’ and ‘freemarkets’ are loathed in these meetings!!!
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DB, for your attention.
A further example of throwback, this time right back to biblical times!
Last year, my sister’ kid and my brother’s kid were discussing about science learning in schools. Sister’s son kid is 10 year old, studying in Bangalore, and brother’s kid is 9 year old, born and bred in Texas and was visiting his dad’s native land. Their conversation was very interesting. The Bangalore kid was talking about animals in sea and land and showed pictures of giant turtles in Galapagos Island that Darwin watched. The Texan kid was shocked about this direction ofn evolution and mubled about creation as well as science. We were flabbergasted. Here we had a kid from the land of thousand deities, worshippers of trees and cows talking about Darwin , and the kid from the land of space science and Nobel prize winners harping back to biblical messages mixed with science!
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AG, are you suggesting that the regulators let Fannie Mae and Freddie Mac fail so everyone can congratulate themselves on practicing “pure” free market economics while the economy comes crashing down. I believe this is called cutting of the nose to spite the face.
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I am not suggesting anything.
Just showing whoever says the US economy is a “market economy” and is pure “capitalism” a few things which would make them think.
In fact was just listening to the NPR – they made an interesting observation.
The democrats are saying the mess with these 2 behemoths is due to too little regulation with respect to these companies, while the republicans are saying that the mess is precisely due to too much government involvement!
In any case while we argue semantics, what happens in the real work will happen. As it always does :)
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“AG, are you suggesting that the regulators let Fannie Mae and Freddie Mac fail so everyone can congratulate themselves on practicing “pure” free market economics while the economy comes crashing down. I believe this is called cutting of the nose to spite the face”
Let us not mince words , it is good old ‘nationalisation’, not regulation as the Treasury gets involved. There is free market economics, period and it is always ‘unadulerated’ by subsidies or shares support by government. In a free market economy, companies rise or fall as dictated by market forces. Mine and I guess Bevu Bella’s arguments have been that US economy is not a free market economy and the Fannie and Freddie case exemplifies this. Let us not hear again about US being the citadel of free market economy. That is an illusion.
As I said before, I can give more examples where companies were/have been propped up against free market forces by Fed/state government subsidies.
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Its amazing to see that people believe here believe that the US gov’t rescue of Fannie, Freddie, Bear Stearns ( and more to come) is nationalism, socialism and what not.. The big corporations are all for socialism when they fail and for pure market capitalism when they are raking in the profits, but during anytime they are vehemently for pure capitalism when it comes to individuals. If they had allowed the market to take its own course, these would fail and it wud have thrown out all the junk from the system and rebooted the whole system, albeit with a lot of pain. Now it is business as usual and the CEOs get off scott free with their pockets full, while the lay man tries to hang on to his fast disappearing money.. And in next 5-8 years this whole cycle repeats
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“If they had allowed the market to take its own course, these would fail and it wud have thrown out all the junk from the system and rebooted the whole system, albeit with a lot of pain.”
= Just another conjecture.
Nothing amazing in what the people are believing. No one has a good answer right now – and the theory of markets taking their own course and correcting things is just one of the views.
Fannie Mae and Freddie Mac were founded on the American dream of owning a home and one of the main things which can be used to describe ‘the American way of life’. Fannie Mae in fact was founded in 1938 at the time words like socialism/capitalism were still in their infancy.
With the current wave of globalization (i.e. not just control of the world economy by the US), the US government might find it in their national interest to intervene with the market forces and correct the situation.
We can just wait and watch how things pan out.
From wikipedia about Fannie Mae:
“The Federal National Mortgage Association (FNMA) (NYSE: FNM), commonly known as Fannie Mae, is a government sponsored enterprise (GSE) of the United States federal government. It is a shareholder-owned corporation authorized to make loans and loan guarantees. Despite the fact that Fannie Mae is not explicitly backed or funded by the U.S. government, nor do the securities it issues benefit from any statutory government guarantee or protection, there are many people in the investment community who believe that Fannie Mae is a company that is too big to fail. [1] This belief was ultimately validated by the US government when Fannie Mae seemed in danger of financial collapse. Because of this, financial markets have often priced in an implicit government guarantee with respect to Fannie’s share price.”
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“Despite the fact that Fannie Mae is not explicitly backed or funded by the U.S. government, nor do the securities it issues benefit from any statutory government guarantee or protection, there are many people in the investment community who believe that Fannie Mae is a company that is too big to fail.”
Not just others but Fannie, Freddie etc themselves bought into this and were reckless in backing mortgage derivatives in search of quick returns. This is the root of the whole problem. If the US gov’t doesn’t intervene, someone (Warren Buffet has been talking along these lines) will buy them at dirt cheap price and throw out the risky investments (and along with it all the flimsy mortgage companies), with the end result being only worthy mortgages survive.
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Human,
US has over 100 plus reactors and they have some oil as well. India needs energy and with access to the latest nuclear technology (relatively speaking) we can reverse engineer some of these technologies to process thorium may be? Of course some throwbacks and retro retards will start saying they are better off with gober gas considering there is an abundance of BS coming out from our politicians and other useless types:)
Your kid from Texas will probably be able to think and cogitate better given some time. Also don’t forget there are plenty of interesting Bible bashers in TX who have their own sense of evolution rightly or wrongly broadcast in public space.
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DB,
You cleverly skirted my question. My argument was that India has no monoply of throwbacks (Like Mani iyer and his ilk) but US too can boast many and gave you an example near to your neck of the woods. The kid from TX illustrates the midset of renegades in the Land of Space Science who mix Biblical messages with science. These renegades are not mere astrologers or saffroned robed men one would find in India but well educated men and women in seats of power in East, West and MidWest expanse of the Land of opportunity. I can understand the hesitation in not recognising them , given Bush’s own beliefs and the security tentacles he spawned.
It is increasingly the practice of the US government, for ever the preacher of free markets (when it suits them) and to bail out the troubled companies citing globalisation glitches. After all, Keynsian economics so much detested in the so called Land of Capitalism is now the cure for the
sub-prime convulsions. What a turn around! Milton Friedman the ever foe of Keynes would turn, twist and rotate in his grave as more Keynsian practices find favour in Bush Administration.
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Manava,
Interesting reading about your brother’s kid from TX. I had not dissimilar experience with my own kid a few years ago. He was going to a private school specialsing in science teaching and I could barely afford the fee. His science teacher was asking kids not to forget the Biblical views when they learn science as she was saying both could co-exist! When confronted by me (a molecular biologist) in the school about her scientific messages, she mumbled something and took my phone number, onlt to call later to apologise. She said that her instructions were to teach science and Biblical mix and she had a family to support.
We all know that the hispanic population is increasing (as catholics they do not in general practice family planning and have large families) here in the US. As they slowly on the way to out number the Anglo Saxon whites, their practices and precepts take stronger roots. For example, a few of my senior collegues, second/third generation American hispanics, took days off to visit the Pope who was here and were full of praise of the Pontiff and his preachings. These were scientists who carry out cutting-edge research! It was noticeable that the Papal visit attracted so much attention this time, a sign of increasing voting power held by hispanics. Politicians from Bush downwards are forced to take good notice. Not surprising that my kid received such weird science lessons in this land of
poineering scientists! In a few years time, Spanish will replace English and Papal teachings will be avidly followed. This is not exaggeration.
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Human,
Some discrepancy in theory and practice is inevitable! Who would think that with our caste system and shit we have some of the finest advances in human thought in our religious literature (I mean Hinduism). Going by the same logic, US is only trying to do what works best for them! look closer home: are we socialists or capitalists or communists or a cocktail of all three?
Ajjampur,
There is some demonizing about Hispanics in the US. Catholics are into Papal worship big time! Some dualism is actually welcome in Science because that leaves the minds of kids more flexible.
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