As bad news oozes even from newspapers dedicated to making readers feel good—as growth falls, jobs vanish, stock markets tank, the rupee plunges, investors flee, gold prices rise, the deficit soars—all that the country gets from the man at the very top is silence: thundering, deafening, ear-exploding, mind-splitting silence.
The prime minister’s twitter handler assures us that Manmohan Singh has actually made 1,300 speeches since taking office in 2004, but was anyone listening? Is anyone convinced? On the other hand, the PM is on his way to the United States soon and China after that.
Why, asks Malvika Singh in The Telegraph, Calcutta:
“Prime Minister Manmohan Singh, as the leader of India, should be visiting every state capital of this ailing country, reaching out to the people, explaining the overwhelming crisis and creating a future to look forward to, instead of only travelling to international capitals, particularly in a hugely disturbed year.
“As the head of the Union, he has ignored the country he rules and has not at all been active in this subcontinent.
“He is seen nowhere in India.
“He addresses no one in India.
“He has become much like a roving ambassador of India in Western capitals.
“There have been many trips overseas and the result has been abysmal, both in matters of foreign policy and international investment. With the exception of a ‘strong relationship’ with the United States of America, the relationship with the rest of the world has been polite and non-committal. And we all know well that the release of a bailout by the International Monetary Fund does not need a prime minister to travel to the US. His representatives can tie up the deal.”
Cartoon: courtesy Keshav/ The Hindu
Read the full article: Back into the mire
churumuri 
> What Manmohan Singh should really be doing?
1. He should admit he is an imposter, the actual Manmohan Singh died in early 2000s.
2. He should then resign.
3. Then he can write a book, the Manmohan Singh ‘I knew’!
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What Manmohan Singh should be doing – quit, dissolve parliament, get lost and save us from this hell
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You dont need pay in Indian Rupee to watch these– It is free.
1) http://www.glasbergen.com/wp-content/gallery/financial-cartoons/toon_50.gif
2) http://0.tqn.com/d/politicalhumor/1/0/h/v/1/recession_levee.jpg
(That wall is built using credit cards. In case of Manmohan Singh and India, I guess we will refer to blocks of gold to build a wall to keep those tsunami waves away..)
3) http://www.teluguone.com/tonecmsuserfiles/Manmohan%20Singh%20Jokes1.jpg
Thanks God, govt has decided not to increase the diesel price for the time being. It is much appreciated, govt is not putting additional burden on the Aam Admi now: That is the leading news appeared in Times of India today Read here:
“NEW DELHI: No plans of diesel, LPG price hike now, says oil minister M Veerappa Moily. Diesel prices will be hiked by 40-50 paise per litre every month till losses on the nation’s most used fuel are completely wiped out, Moily said today. Instead of Rupee falling from 43 rupees to 68 Rupees in 2 years, government is considering the option to let the Rupee fall 40-50 paise per hour against the Dollar, for the next 1 year. Once it reaches the historic figure of Rs.5000 against one US Dollar, cabinet subcommittee will meet to take stock of the situation and decide on the burial of the 5000 years old civilization or monitor the country till it is completely wiped out, Moily said today. For the second fortnight of August, the under recoveries on kerosene and LPG stood at Rs 33.54 per litre and Rs 412 per cylinder respectively.”
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One must admire the intent of UPA chairperson to pass pro-poor legislations like LAND ACQUISITION BILL which gives strength to the poor farmers to fight the blackmailing tactics of croony capitalists.
More than the food security bill, it is the land acquisition bill which will benefit the country.
Each passing day, SONIA GANDHI is proving a worthy inheritor of the Indira Gandhi legacy.
UPA -2 has mismanaged India more than governing it, but offlate, FOOD SECURITY BILL and LAND ACQUISITION BILL has given hope to the common Indian that government cares for him.
GRAM PANCHAYAT getting rights to veto a project which would destroy their existence is a great move, coming at a time when MNC mining giants wanted to dig and mine Indian forests like no tomorrow.
SONIA GANDHI has given ” development with a human touch ” a new lease of life. I appreciate it.
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I have not read about the details of these bills. (will I ever read?) But I fully endorse what Dr. Ramesh says. Why do you think people of USA still talk about Johnson? (even now a small fry like me, sitting in the remote corner of India is talking about Johnson ). I am sure, people of India would talk about Jairam Ramesh for the next one century for the MNREGA, Land acquisition bill and food security bill. Jairam Ramesh is the architect of all these bills.
Let us not forget. This is a “small version” of the Acts passed in USA decades ago. USA was dead against Socialist policies when these bills were implemented there. These bills are more in line with Amaryasen views. These are shining examples of “Welfare Capitalism”. I request our respected readers to search for “welfare capitalism” before commenting that these are Socialist policies. (at lease it will save you from huge embarrassment)
Yes, Rahul Gandhi is an incompetent added with a little sugar and more blunders, garnished with sasive, Jeera and faux pas, deep fried in failure, with a flavour of directionless and odour of misjudgments. Yet he has one good quality– He is not egoistic and arrogant considering the opponents. He is willing to learn and a team-player. Hence his curry is not toxic. No food poisoning.That is a great quality. Great people like Jairam Ramesh can flock with him, but not with criminal minded psychopaths.
Sonia Gandhi is an average person, I some times feel she has undergone a brain transplantation before coming to India. I guess Rajiv Gandhi might have insisted to accept the brain of a koopamandooka, so that she will become right match to him. But her best quality is to know and acknowledge her own negative — She knows that she doesnt have the knowledge of Indian politics, she needs the help of an expert team (not limited to write her speeches).
Ahmed Patel, GulamNabi Azad, Dig Vijay Singh, Veerappa Moily , Vayalar Ravi, Abhishek Singhvi. Apart from these, she has a big team of scholars and leading experts of the world to consult on matters. And these consultation is an ongoing process.
When Montek Singh advises Manmohan for economic policies, it is Jairam Ramesh, who is more down to earth, who advices her on economic policy matters. Two directions.
She earlier was assisted by seasoned and suave statesman Pranab Mukherjee to sort out differences. Her biggest failure is she doesnt/didnt consult people like ManiShankar Iyer, Keshava Rao, Late MA John when they still with congress)
But the family is one of the most corrupt in the world. One of her worst qualities is her insecurity feeling. She chose Manmohan Singh (who would be absolutely loyal to her) compared to Pranab. Had Pranab chosen to PM post, in the earlier stage instead of this “national waste” Manmohan Singh, India would have been much better now. She keeps AK Antony around, exactly for the same reason. AK Antony is honest but a good for nothing fellow. Ambika Soni is a “waste” but not having the quality of Antony.
IN short, she is assisted by a collective leadership. Though Sonia is self-centered and lack the ability to judge what is appropriate, ultimately she goes with the wise decisions taken by her experts. Some of her big failures are the failures of her team. In that sense, she has emerged as a leader of the leaders. That is a great quality. A leader or a Top Manager should preferably be a good executive, but that can be excused, if he/she can manage other performing executives.
Hence, the credit of these bills goes to Sonia and Rahul too. But at the same time, the future generations would remember the role of Jairam Ramesh. We also needs to know that, it was the Left Parties who were fighting for the implementation of such bills in India. It was the left parties who brought these issues as the agenda of collective political discussions in India and campaigned for these.
There was a long tussle between Chidambaram and Left parties in the UPA-1 . Chidambaram even tried to blackmail the left saying, he should be allowed to implement certain pro-liberalization steps if he can find funds for the Rural employment guarantee scheme. And it was the left leaning group within the Left who fought for the Land Acquisition bill. We need to note that, the Right wing leaders like Budhadeb were trying to undermine such political campaigns by employing goons to acquire land for Infosys in Kolkatta. (One resident got killed in the clashes. This was after Nandigram incident, when CPI(M) central leadership gave strict instruction to Budhadeb to wait until a Land Acquisition policy is ready.). More importantly, Naxalites and violent struggles agaisnt land acquisition through out India have played an important role in the implementation of this law. Many from urban middle-class may not like this. But the future generation will be forced to acknowledge the role played by Naxalites. (let me clarify that I never sympathise with Naxalites simply because they are just agents of Corporates. See Wikileaks for more evidence).
Interestingly, Devegowda said a few days earlier that Karnataka Congress Govt is not a congress Govt but led by old Janata Parivar. He is right. It was the Old Janata parivar who campaigned for these policies. Siddaramaiah himself was an old RajyaRaita Sangha leader. Sidda Ramaiah’s policies are directly opposite to that of SM Krishna. As I said elsewhere, Congress is still surviving in Karnataka because of Devaraj urs, who was just a “corrupted shisya” of Gopala Gowda.
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http://xa.yimg.com/kq/groups/80034860/805386236/name/The_Modern_Vikram_Betal_story.doc
Check this out! Apt story.
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dr ramesh must be smoking a special kind of beedi not available to us.ramesh should know that gurgaon is now being called “Jamaai Ka”,,Go figure it out..FSB is a crooked bill,will lead to more swindle.Don’t start farting when rice hits Rs100 per kilo
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What this country needs is rule of law and justice.Especially some of the holy cows in cong(i) get caught and sent to tihar, then the rest of the pickpockets masquerading in other parties especially regional ones can be easily brought to book.MMS is a zombie,, no use blaming him.Let us kickout the current regime.That alone will revive economy.
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@dr ramesh – Saar now that JDS has bitten the dust and is on the verge of disintegrating, have you decided to switch to Congressparty? Congrats!! Kowtowing to Madam, kowtowing to Gowda – all the same!! Wish you the best in your new endeavour!
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Best schemes in karnataka governence came when janata parivar was ruling,
Bus pass, panchayat reforms, irrigation, education reforms, Kannada culture …..
Deve gowda is the best opposition leader Indian parliamentary system has ever seen, an able prime minister, a master politician. I still believe karnataka needs a strong JD S.
JD S IS UNDERVALUED NOW, IT WILL FIND ITS RIGHT VALUE IN FUTURE.
Sonia Gandhi is a fighter, she saw bad times in politics, never gave up, never lost her conviction, when entire world gave her no chance in2004, virtually dismissed her, she surprised every one by winning.
Today after 10 years, anti incumbency is catching up, she has given indain poor a hope.
SHE MAY NOT BE AN INDIAN BY BIRTH, BUT HER PERSPECTIVE OF INDIA IS FAR MORE JUDICIOUS AND ACCURATE. IT IS HELPING UPA.
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Prosperity for the majority will not come by allowing Marwaris to meddle in the markets without any regulations, by removing taxes for IT companies and professional or removing subsides for agriculture. Government intervention, policy and execution is the most important thing.
Anyone talking about ‘free markets’, ‘remove subsidies’ blah blah and blindly opposing MNREGA and FSB blah blah, should look at the NEW DEAL and the impact it had on the United States in the 1930s. The effect of the New Deal can be felt to this day and was one of the main cause of the middle and lower class prosperity of the United States to this day.
And read Shemej’s posts above.
What example do the opposers have of an economy which grew due to government doing nothing?
From wikipedia:
The “First New Deal” (1933–34) dealt with diverse groups, from banking and railroads to industry and farming, all of which demanded help for economic survival. The Federal Emergency Relief Administration, for instance, provided $500 million for relief operations by states and cities, while the short-lived CWA (Civil Works Administration) gave localities money to operate make-work projects in 1933-34.[3]
The “Second New Deal” in 1935–38 included the Wagner Act to promote labor unions, the Works Progress Administration (WPA) relief program (which made the federal government by far the largest single employer in the nation),[4] the Social Security Act, and new programs to aid tenant farmers and migrant workers. The final major items of New Deal legislation were the creation of the United States Housing Authority and Farm Security Administration, both in 1937, and the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers.[5]”
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Shemej Says@11.42am – Cong(i) party is dead,, after this election,,it will get solid blows,,the leadership is knee deep in corruption,,tihar dwelling is not far away for some.Unless Modi does a vajpayee deal with jamaai by letting them off the hook,their goose will be cooked,,with that the party as it stands today will be buried once for all.A new force will emerge out of that party minus the “jamaai” and that will be a good for the country.So 2 national parties one BJP( even BJP will undergo changes throwing out dead wood especially rootless leaders in delhi and even our own state) and the other a new force ( whatever be its name),no holy cows,,no protection from 24/7 news channelss/english newspapers,,no leeches drinking India’s blood sitting in all important govt. institutions including education paying obeisance to “Jamaai”,, a level playing field for all.This will be a new dawn and I see a silver lining for our country with the new generation emerging taking India forward.Our founding father Gandhiji knew of the danger continuing congress party after independence.The Congress name stands for Gandhiji and his team of high valued/highly knowledgeable individuals but then nehru for all this limitations usurped that great idea of “congress” and has tarnished the unique identity by encouraging his jamaai.One bad apple is enough to rotten the entire basket.Now this name of “Congress” should retire from Indian politics.”Congress” is a great idea not only bringing us independence by uniting the entire country but also addressed some of the important social evils especially inequality and untouchability.This unique identity should never be tarnished.
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‘X’ Guy no one is opposing the FSB Bill as you seem to think! It is the cynical timing and the way it was introduced. Good intentions alone cannot solve India’s problems.
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DB, Well there are certain ‘free market’ commentors who think the FSB or MNREGA are bad pieces of legislation. Or at least that is the impression that I got, maybe I was wrong.
As to the cynical timing, sure that is how politics works. Better cynical timing than not doing anything or introducing some short sighted law which does long term damage.
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“New Deal … was one of the main cause of the middle and lower class prosperity of the United States to this day.”
For God’s sake, let us understand the importance of state intervention for boosting the business further. It seems people like harkol (such a matured thinking person he is!) thinks food-security bill, MahatmaGandhi_employment scheme etc are just govt doing charity using public fund. This is complete misconception.
Let us not think of big economic theories. Please just go and ask the shop-keepers when they get business. Most of their business happens immediately after people get salary in offices. Initial weeks of a month. Again just watch where the business happens? Exactl, where people have money.
We should understand that we are in a global village. This means where ever large number of people have money in their hand, business will happen there (provided some effort made by govt). Let us assume that India’s most poor 20 crore people are given a lot of money by government. What do you think will happen? Part of this money will be used for buying ಹೆಂಡ. People often complain that Govt is giving the money to these “useless people” to drink. Here is the problem. Why should we worry about what they do with their money? Let us look it from an economics point of view. These people who gets money is going to finish the entire money within the first two weeks for sure. What does that mean. The entire money is coming back to the market. it circulates, by further boosting the activities in the locality.
Are they going to become lazy. Yes they will for a few days. More importantly they may refuse to do the work for meager wages. This may create some problem for labour oriented works where profit margin is low. Say for example, there could be some shortage for agricultural activity in the remote rural areas. But what people forget is, agriculture sector in India is facing acute shortage of labour not because of MGREGA scheme, but because of the large scale migration of rural workers to urban areas looking for construction jobs.
How many of the 20 or 35 crore people who gets any such govt benefit keep even a single paise in their pocket? No one. Not a single person will keep that money. Instead, they are going to spend it. That will spur a lot of economic activity in the system. Shop keepers will get more money, more tailors will get more job, more consumption of food item.More travel, more health checkup, more watching of movies, more buying of tea and more feeding of cows and goats, more repair of houses. The only one problem is more spending on mobile phone sms chatting and more gambling…
Now let us examine what will happen if they are not given the govt support. Instead given subsidy to industry.
More than one lakh houses and apartments in Bangalore are vacant. No one really wants to stay there. These “intelligent” techno-coolies thought they can invest in apartments and make money. Who is going to stay there? 30 lakhs worth apartments means you pay 25000 EMI for (20 years repayment). And you can expect to get a rent of 12000 maximum per month (much below, actually, as high end apartment rates are too high). For just 5000 Rupees, you can get a non-furnished one BHK house in RT nagar, if it is slightly old house., but decent locality like Anand Nagar.
This means no one is going to get back the investment during the first 10 years and the expectation is, they get good profit after 10 years. This is possible, only if the existing Bangalore continues to develop for the next 20 years. But as Bangalore doesnt have large number of manufacturing industry, the whole of Bangalore’s development is depended on the IT boom. Even if the IT Boom continues to happen, that will happen only in the north of the present Devanahalli Airport (as land is relatively cheaper, and more available from Devahahalli to Doddaballapur stretch. This means, there wont much demand for most of these apartments built in the coming 15 years. Considering that the life of a concrete building is 30 years and can be considered okay for 50 years maximum and there will be a lot of repair and maintenance work for these building after 10 to 15 years. The maintenance cost will be relatively higher during those years. This means the entire construction boom and apartment boom in Bangalore is just unproductive. They are all dead investments. (Remember, most Real Estate project now come in disguise as IT projects. They have an IT components and a real estate component).This is what happened when you give higher salary to executives. (I am not arguing against you paying them. But just feel sad how people lost their hard earned money.). Another big spending is to Vijay Mallya, and how he wasted those money is known to all of us. In addition to that, he has looted the public sector Banks with active support from SM Krishna, Sharad Pawar, Sonia Gandhi, Praful Patel, Manmohan Singh and others.
Next, let us look at the ill-effects of the tax exceptions given to Corporates. A lot of money was utilized to acquire the foreign companies. One group company gave loan to another group company etc. That money is going out of this system. It may inspire growth elsewhere, it may generate jobs in England not in our system.With the subsidy you gave to Infosys, they expanded in China and Chinese communist party is getting good name for industrial growth ! (when these chinese communists are sheer looters)
In short, when you give some money to large number of people in a sate or province, business will come in search of that money. You have to understand that, when migrant workers suddenly started earning higher wages (from new destinations) they started spending huge share of it for the education of their children and for housing. Hence there is a new generation of skilled labour created replacing their parents’ generation of unskilled labour. This is giving competitve edge to our economy when attracting sophisticated new industries. One of the major problems the industries face is the non-availability of skilled labour. You read any number of studies about what is the main expenditure of the (migrant) labour class people, it is children’s education and housing.
What does that mean? This means, compared to Bangladesh or Philippines the chances of India attracting sophisticated industries is more, simply because India will have more educated (that implies more skilled) labourers available in the future.
This is exactly why South India is more developed compared to BIMARU states.(South Indian states implemented more social security schemes) In Punjab there was green revolution and more distribution of money happened earlier. And that is rich. In Haryana, again there was more agriculture activities and now there is industry (Gurgaon). By nature, agriculture is a labour oriented economic activity. That means agriculture help to distribute more during the production process itself. Though West Bengal can be compared to a BIMARU State, compared to the entire Eastern Province, the purchasing power and life standard of the Rural Bengal had improved significantly during Communist rule. The reason– agriculture. West bengal replaced Punjab as the top producer of Agriculture output in India during Communist rule. Look at the statistics, Bengal had a surge in industrial activity during the final years of Communist led rule (again it is not communism, but Capitalism by communist led coalition). Reason – land distribution and state intervention.
In short, where ever the distribution happens, it further boosting the business activity. Remember, for a global market, there is no division between India, china, vietnam or Taiwan. The finance capital will go to where ever they can find some money. (of course, only if the Govt intervenes and help to create infrastructure. ) But remember, There is a fall in the real wages of workers both in the advanced Western Capitalist Nations as well as in the poor third world countries. This is because the costs are going up. But we need to note that the actual productivity of the workers are improving through out the world. That means, if India never give money to its poor, the productivity of the labour force in India will not improve. but it will improve every where else in the world. If you have pass marks in Business sense, tell me where will the business go? a) Where labourers have higher productivity or b) where labourers have lower productivity? (considering the labour cost is same in both system). Next question Where do you think the labour is more productive? a) where labour class lives in utter poverty?or b) people have some money in pocket?
The fundamental rule about business is–You cant sell anything if you dont have buyers. If you create more buyers, business will come in search of your country. If you need to create more buyers, you need to distribute wealth.
Here is an insightful article by Prabhat Patnaik explaining various issues we discussed. Including the State intervention–
http://www.networkideas.org/news/jan2012/news06_Nature.htm
But there is an other side of the issue. If the Govt spends a lot of money and if that doesnt reach the poor, that will bring disaster. That is exactly happening in India. No law can stop this. People should be politicized. You take any politicized society, corruption is less. When I and you discuss in Churumuri, the corruption comes down. Corruption and political awareness are opposite words.
Thanks AnonymousGuy for discussing about “New Deal here”. I hope media persons in our state will understand these things and arguably, that will create an awareness among masses. Funniest thing is, many Americanized guys in Bangalore do not even now these facts. America became a super-power precisely because of these measures, after the second worldwar, when the whole of Europe powers collapsed.
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Shemej:
Your basic point is, “if we distribute money to people, they will spend money on buying things, and it will circulate in the economy and we will benefit”.
I have not heard more flawed and dangerous logic than this. This is why I mentioned that you were pseudo-socialist in disguise.
When I was a little kid I used to wonder why the government did not simply give money to poor people so that poverty vanishes. Today I realize that I was just an innocent kid then. But pseudo-socialists are yet to grow up. They still don’t understand. What does one do with pseudo-socialists?
I agree with your other points regarding corporate exemption and real estate in Bangalore though.
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“When I was a little kid I used to wonder..”
— So, you are suggesting that you have grown up now? When did that happen? Just before posting the last comment or immediately after that?
(Kindly dont get annoyed. Thanks for understanding.)
“Your basic point is, “if we distribute money to people, they will spend money on buying things, and it will circulate in the economy and we will benefit”.”
— This is what YOU have understood, BUT NOT WHAT I SAID. Still you believe you have grown up..Okay, 6th standard or 7th standard now?
“I agree with your other points regarding corporate exemption and real estate in Bangalore though.”
— And you dont see the connection of this and the earlier part of the write up. My dear friend, they are two sides of a phenomenon.
I have discussed here —
https://churumuri.wordpress.com/2013/07/22/everybody-loves-a-nice-random-number-like-37/
That India cannot expect to sell any product or services to USA or developed western countries for long.
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When 20% of the population of a country of more than 100 crore can not participate in any productive activity that system will collapse.
India should either sell its products to the domestic market. Or to a foreign market. Which foreign market wants India’s products?
Other countries like China, Singapore etc are not interested in India’s products and services– in a volume that matches that of India-USA trade, or China-USA trade. If India’s only strategy is to provide cheaper labour, we cant compete with other nations for long. That is why India should improve the skill set of our workforce.
In order to improve the skill set of Indians, we cant send all our children forcefully to IITs and IIMs tomorrow. What sense it makes, when we talk about refining the skill-set of Indians when nearly 50% of them are not even literate.
We can only progress in a step by step way.
First eradicate absolute poverty. Do you know why India has largest number of cattle but “Despite being the world’s largest milk producer, India’s productivity per animal is very low, at 987 kg per lactation, compared with the global average of 2 038 kg per lactation.” — Source http://www.fao.org
Karnataka Milk Co-operative societies are trying its best by distributing good breed of calf to farmers. Do you know what many farmers from impoverished areas do? Sell these cows to rich farmers and continue to bring up “naatti cows”… Why? It needs more investment to bring up hybrid/better breed cows. Most poor farmers in Karnataka have an average 40000 to 1 lakh rupees debt (I am not citing any govt sources or statistics. This is what I observed when met people in rural areas — different districts of Karnataka including Mandya, Raichur,Bellari, chamaraja Nagar, Belgaum (didnt go there), Gulbarga, Bidar etc. As they are consistently pestered by loan-sharks, they cant wait an year to produce more milk and repay the loans. The easy solution is to buy Naatti cows and ask one of their children to take these cows for grazing to the forest-land or fields. By following this traditional method, you dont spend much money for buying cattle-feeds, not much spending for animal care, treatment etc. Most poor families in Karnataka insist their children to take cattle for grazing to open fields.
This nation incur losses in two ways. The children do not attend schools, precious resources are wasted. Remember a good hybrid cow would give at least 15 liters of milk where as a naati cow may gives upto 2 liters of milk a day. The whole spending by govt aimed at increasing productivity, by providing veterinary services, artificial insemination facilities, better feed and farmer education — all are wasted.
This is a concomitant effect of absolute poverty. Plus many of these people become Naxalites and corrupt Govts like that of Raman Singh take it as an opportunity to swindle public money. They keep naxalite problem and such socio-political-economic problems active for two centuries and allot more fund to private army and contractors.
What happens if absolute poverty is removed? (in this case –) There is a better chance of these children attending schools and becoming responsible citizens and skilled workers and earn more wages and spend more money to the market, thus incite more demand and fuel more growth. Secondly, the farmer may continue to grow a hybrid/better breed cow and produce 15 liters of milk per day instead of 2 liters.
But do I argue that, if the govt simply distribute money to poor people, that will stimulate growth? No. I dont say that.
Please understand that you are not giving 1 lakh rupees each to every govt employee here. We are talking about a population whose montly expenditure is still less than 1000 rupees.
What I suggest is, compared to the govt giving incentives (subsidies) to the Corporate, the subsidy given to the poor people is always productive. Please read Prabhat Patnaik’s article in my earlier comment.
And about the “accusation that I am a “pseudo-socialist”
I am a Socialist. More importantly I consider myself a Marxist sympathizer. Yes, my knowledge about Marxism and Socialist theory is very limited. But obviously, as Marxists we all belong to a more civilized class. Does anyone has any doubt about that? : )
Let me clarify that the official Marxists may not agree that we are Marxists and that is their opinion. Secondly, I consider all our friends here (and in the society) all belong to respected, more civilized class. But Marxists belong to a more civilized class. Any complaint? Then I am willing to apologize … : )
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Vinay, Deep suspicion of socialists and communists is something we all share. From the comments, it is clear most of us here clearly remember the time when license raj and government control was the order of the day.
But I think terming Shemej a pseudo-socialist is unfair. If you haven’t already, please read up about the New Deal and what it did to America. That is not to say that it is the correct or only way of dealing with things.
Also you may want to look at the actual levels of subsidies, government control and spending that are in place in the US, Japan, Europe or China. Data and papers on it are freely available on the internet. Simple example, compare education and government spending – you may know that public education in schools in the US free, paid for by the government. Any American rich or poor is guaranteed an education at government cost. And this is not the eyewash education provided by public schools in India. In many districts public education competes with private education in terms of the quality of education provided. Of course there are many arguments in the US itself against this system, problems in certain school districts etc. Government spending is not always seen as the only way. Similarly look at government spending and intervention in the agriculture, power, defense, telecommunications, transportation, space etc. sectors.
If you looked at strong European economies like Germany, you will notice the breadth of government control is even greater.
Another thing which helps a total ignorant like me in these matters is reading the blogs of real economists – one example is Robert Reich who served in the Clinton administration. You could term him a pseudo-socialist, but look at the arguments together with the data provided.
If we take our personal experiences as the only input, it is easy to miss the woods for the trees.
You may want to study the FSB and MNREGA a little more, what long term effects they may have before you condemn them as mere socialist policy and call Shemej or Dr. Ramesh pseudo-socialists.
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Shemej,
I think, another example of the positive effect of state intervention and policies, is what happened with agriculture in India and Pakistan.
In Pakistan, the feudal landlords maintained control and did not allow government intervention, land re-distribution and the like. It was quite different in India, especially in South Indian states.
While the effect on agricultural output itself was not that different, the social, economic and political effects are clear.
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Anonymous Guy:
The aim of land-reforms in India was laudable (as are so many other ‘rights’ based bills.
The trouble isn’t the exalted objective. The trouble invariably is motive and execution. The motive is by far vote-banks, and execution in invariably tardy.
For example, when Land-reform bill was implemented, they setup tribunals to decide whom to give the land to. Tribunals being packed with politicians of ruling party, with an agenda to create vote-banks, didn’t care if the claim of tenancy was legitimate or not. They gave the land to anyone who claimed they were tenents. After 30 years, we still have huge disputes in courts, because a lot of folks would just file an ‘declaration’ stating they were the tenent of a land, tribunal would agree with them!
Imagine, someone being able to file a ‘declaration’ on your property claiming it to be his tenancy, even though you never let it out!
Same has been the case in many other legislations. THe most recent FSB is an ideal that every nation should aspire to. But, every nation should also aspire to have as many folks to earn their own bread instead of govt. feeding them. Thus it is absurd for a govt. to feed 70% of its population. At best it should be the poorest, who will otherwise go hungry. In India, that percentage is between 1-2%, and people who are mal-nourished is about 20%.
Executional flaws mar almost every legislation, making them dens of corruption. Thus, the ideal thing to do is to reform administration, make radical improvement in accountability, then roll out such welfare schemes to target the deserving.
Oh, coming back to feudality – India has as much a feudal setup as Pakistan! Almost 80% of India’s ruling establishments are feudal. We are full of ‘appa-makkala party’ or ‘family establishments’ like Gandhis.
All that the govt. has done is to take away land from old Zamindars, and re-acquire those properties to create new zamindars. Largest land holders in this country today, are its new politicians.
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I dont know why this prejudice against Socialism. I agree when people are suspicious about the virtue of socialism, they are actually against some of the “negative sides” of the so called socialist development model what they have mistaken as “socialist model”
Say for example, many people like some of my family members (including myself ?) who are born in Hindu families, have a deep prejudice against Muslims. If you really communicate with them and ask why they have these prejudice against Muslims, you will get really funny answers. Many Hindu believers do not realize that today’s Hinduism is just an Islamized version of Hinduism. http://www.ramakrishnavivekananda.info/gospel/introduction/brahmo_samaj.htm As some of the 19t century Hindu Reformers were proficient in Arabic and Persian, they studied Qur-An, Islam and Christian religious texts and adopted good aspects from all these. If the 21st century Hindus consider themselves as civilized, that is only because today’s Hinduism is Islamized version of old Vedic Hinduism. http://www.edurite.com/blog/raja-ram-mohan-roy-%E2%80%93-greatest-social-reformer-in-the-history-of-india/2028/#
Democracy is also a foreign concept. The initial opposition agaisnt Democracy was that it is not suitable to India. Now section of scholars are arguing some crude form of Demoracy existed everywhere. But we all know that primitive Democracy existed in Tribal system can not be compared with modern Democracy. India got the concept of “Modern demoracy” – with its complex institutions and set of laws — from the west. In fact, even today, our political parties are not influenced by Democratic principles, but by feudal ideology. A good example is the “High command” of Congress. Another example is how political parties like Janata Dal “authorize” one leader to take all decisions. (this is the influence of feudal culture. “hero worshiping” within democratic politial set up is a legacy of centuries old feudalism.)
Socialism or Communism can not be rejected only because it is a foreign concept. The very Hinduism is a foreign concept. There are convincing evidences to show that Vedic Hindus migrated to present day Harappan land (areas near Afghanistan to Kashmir and Punjab) and later to Ganga valley. http://go.hrw.com/ndNSAPI.nd/gohrw_rls1/pKeywordResults?ST9%20India%20Migration .
Though John Maynard Keynes didnt influence FranklinRoosewelt implementing “New Deal”, Keynes theories definitely gave greater clarity and ideological base for Roosewelt Administration’s democratic experiments of 1930s. And later economic policies of USA were influenced by Keynes untill the time of Raegan. We can easily argue that Keynes himself was influenced by Marx. In fact modern Marxists alleges that Keynes copied some aspects from Marx, and Capitalists are now using Keynes theory (which is inspired by aspects of Marxism) to fight agaisnt Marxism and to delay the revolution. You talk with 10 Marxists scholars, they all will laugh at “Neo-liberalism”. They all will admit, they are not worried about Reagan’s ideology in modern world, but they are actually threatened by “Welfare Capitalism” and Keynes’ theory. No Capitalist Scholar in the whole world can now justify Reaganomics and Neo-liberalism, but most opposition at theorotical arena is now coming from “students of Keynes” or those who reform and further enhance Keynes’ principles.
Interestingly, “Marx felt himself to be the true heir, and the destroyer as well, of bourgeois economy” (that is capitalist principles). Why? simply because Marx has started from where Adam Smith and others wrote and studied.
In short we can not put all these into different compartments when we talk about a “school of thoughts”. They are all influenced by each other. But when we talk about an Economic system, we look for the main emphasis. Witin a Capitalist system, there are aspects of Socialist policies. And within a socialist policy, they utilize Capitalist principles. But if a particular system is really helping to accumulate wealth and control in the hands of a few corporate, then it is not acceptable. That system can never be called Socialist system. Essentially, Nehruvian model helped the Corporates of India to accumulate wealth from the masses. But here and there they implemented some models inspired by socialist principles.
When some of us blame “old socialist model” of India, we are actually blaming a certain administrative/government system which used “socialism” to justify many of its corrupt practises. They have never implemented / never tried to implement Socialism in India. When some of us blame Communism as failed ideology, we are actually referring the failure of an administrative/political system which took the brand name “communism”. Soviet Union collapsed when they tried to use the brand name “communism” to systematically concentrate power in the hands of party bureaucrats.
I shared your criticism against the failed model of “hierarchical -Vedic Hinduism”. I share your criticism against the failed model of “license raj – Corporate Capitalism” which is oftern referred to as Nehruvian Model. I share your cirticism against the Soviet experiments, which seized democratic rights of people.
But there are subjective and objective aspects of these models. You take the subjective parts and reject the objective parts. (But that should not be a justification for compromising with injustice. I never argue you bring back Nehruvian model. I never argue you revive Soviet union. I completely reject China’s communism. I completely reject Budhadeb’s Bengal Communism. But I am definitely inspired by some of the brave democratic experiments.
When you try to understand the developments over many decades, the Principles of Demoracy, Principles of Socialism etc have helped the human race to grow by leaps and bounds. We human race can never abandon the core vision of democracy or Socialism. Capitalism,(more so Corporate Capitalism) is anti-human, anti-civilization. In that sense, I am sure, a few centuries later, people will acknowledge that Socialism is a more sophisticated, more civilized way of life. This is like our generation now recognize Democracy is a more civilized and more sophisticated way of life compared to Maharajas (even the most benevolent ones) ruling their prajas.
That doesnt mean every one who support a socialist ideology is a socialist. Every one who support Marxist vision is not a Marxist political worker. I first read about Socialism when I read Jayapraksh Narain’s “Why socialism?” from Library when PUC student. That was a small book. I guess it is out of print now. Please read, it is so simple to apprehend.
AG, interesting – I will try to search online and read about Pakistani experiments.
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Anonymous Guy:
I completely agree with you that a certain level of government investment is required and essential. You are right, all nations have a certain level of govt. investment such as your example of public schools in the US.
My point was that the thought process of “giving money to the poor” so that “consumption increases”, and businesses come over to cater to the needs of these poor people (who now have money), is flawed.
Government spending is essential in all modern economies. Apart from the obvious sectors such as police, army, judicial system, civil services, etc., we do need government in other sectors of the economy too, and I am not disputing that. We cannot have a wholly “capitalist” setup where everything from toilets to rockets are made only by private enterprise.
All these “isms” that we speak about – socialism, Marxism, etc. – these are terms which don’t have a fixed definition and everyone uses these terms to suit their convenience. In India, most people who call themselves “socialists” are proponents of the licence raj. I am sure there are exceptions as in everything, but in the Indian context, socialism and pseudo-socialism are associated with pre-liberalization licence raj ideology. You know, that crap we hear some people talk about the “good old days”.
The question is, what should the government spend on, how, and how much? The issue is that our UPA chaps are trying to legislate their way out of every issue. We have a PDS system which is totally dysfunctional and leaky. It takes hard work to actually build things like revamping the existing PDS, providing proper storage and ensuring no wastage of foodgrain, maybe IT-enabling the entire PDS system nationwide for zero wastage and 100% tracking – these things require time and effort. I am pretty sure this FSB will be a monumental disaster due to leakage and misuse and massive corruption. Can you imagine the mind-boggling bureaucracy and scale of corruption – how are they going to implement this successfully? Even a simple bridge across a river costing a few crores is not implemented properly – there are delays, corruption, etc. We are talking about lakhs of crores here, in one of the largest nations on the planet.
You know what – if you look at it, FSB is just “nationalization of agriculture”. The government is a monopoly buyer here. Tell me this: if the market gets price is Rs 20/kg of rice, and you can get 35 kg of rice per family per month at Rs 3, who will not buy from the PDS and sell to the market? Let us not even discuss all the “fiscal deficit” and “bad economics” and “stock market going down” etc. – let us leave that to the economists. But tell me this – does India have a “starvation” problem? Or does it have a problem of inadequate nutrition – malnutrition? Do we have those famines of the 1940s and 60s now with mass starvation and deaths due to non-availability of food? Do we have many starvation deaths in India? Or is the problem, availability of sufficient nutritious food – fruits, vegetables, eggs, protein?
All of us want Indians to be prosperous and healthy. But is something like FSB the way to do it? This is just legislating your way out of sticky issues. Who will revamp and repair the PDS? How will it be implemented? How will it be effective? It will ruin the economy along with all that jazz about “market sentiment” and “fiscal deficit” and “investors confidence”, and will hardly provide any tangible benefit.
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Shemej:
In short, you don’t support socialism as we have seen it practiced so far (China, USSR, Nehruvian), but you support socialism as you feel it ought to be practiced, in a form which has never been implemented till date anywhere (so no one really knows how the “real socialism” will be implemented practically).
Sounds legit.
This is reminiscent of the Sharia Mullahs who advocate Sharia law from the Quran. When they are asked about the defects in states that are following sharia, such as Saudi Arabia, their response is, “that is not true Islam and true Sharia. True Islam has not been implemented in any country till date”.
Very convenient. Thank you, we will measure socialism and communism by its impact and effect in societies which claim to have implemented it. The USSR, Mao’s China, Nehruvian India, etc. Any future attempts to implement your “socialism” will draw upon these examples.
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And Shemej:
No one on this page claimed that they were rejecting socialism because it is a “foreign concept”. I am not sure where you got that from.
And the concept of “Hinduism being a foreign concept”, “aryan tribes migrating into IVC”, etc. is highly debatable, so let us not go there for now.
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Real estate prices are seeing a correction in metros. Now, there will be a slowdown in construction, and the thousands of labourers who depend on construction to sustain themselves will find the going tough.
Instead of spending lakhs of crores on an unviable FSB, if they had provided a stimulus to the economy by injecting massive funds into infrastructure – roads, highways, ports, airports, new rail lines, metros – it would have kept our labour occupied and created thousands of jobs.
You know, with one year FSB cost, it is possible to build a metro in 10 Indian tier-2 cities like Hubli, Vijaywada, Surat, Kanpur, etc. There is a clear clash of pseudo-socialist poverty-perpetuating ideas here, versus job and growth-driven economics for long term prosperity.
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In my attempt to over-simplify the debate about “subsidising the poor Vs Subsidising the Corporates” (1st Sept- 12:50 am) I have given room for counter-arguments. Though, my arguments in general was right, the way some of the examples were presented, were not helping to convey the idea, I guess.
In that sense,– though, I requested not to be annoyed—, I think it was rude to make comments about growing up etc at my later response (1st Sept- 4:56 pm). I withdraw it (do I act like a polititian?) and I am sorry. But again, I didnt intend to hurt Vinay. I was a little ‘perturbed’ as Vinay put the sentence within Quote: “if we distribute money to people, they will spend money on buying things, and it will circulate in the economy and we will benefit”. I have never said this anywhere. It is like putting words into my mouth taking a few words from here and a few from there, out of context.
“wastage of foodgrain, maybe IT-enabling the entire PDS system nationwide for zero wastage and 100% tracking ”
Vinay, corruption is indeed a concern. But again considering the benefits, (we have no alternative but to) Govt has to take brave steps forward. I think many of the middle-class people like us refuse to acknowledge— politics has an important role to play. corruption is less, in politicized society.
There is an important concept about “Social capital” by the world Bank (economists). That is why the Worldbank and International Capitalizm is now building “Social capital” everywhere in the world. But the funniest thing is they want to de-politicize the societies and build “social capital” (in simple words they build these “stree sanghas” — women’s self help groups etc, fund NGOs). There is a book by John Harriss (Depoliticizing Development) discussing how important it is to have politicized societies. If you dont have politically aware and active societies, you will have corruption and the societies will suffer. It is the Corporates which is funding NGOs to depoliticize society. Hence Corporate, World Bank and ruling class is responsible for corruption, even if the Corporate themselves are not corrupt.
In India, the main reason for corruption in society is Corporates.
IT enabling or computerisation can not stop corruption or leakage. It will only help to shift the corruption from lower rungs to higher ends. It is easy to fight corruption at lower level, if there is a politicized society and beneficiary groups. But it is very difficult to fight corruption at top level. Secondly, no one can implement “Adhaar” in India. No govt can force the citizens to take adhar to get gas connection. Govt can keep giving warning to take adhaar. Thats all. Taking Aadhaar is not constitutionally mandatory. But giving the benefit of social security scheme to all eligible citizens is a constitutional mandatory for the govt or implementing agency/ service provider. If Govt gives subsidy, then govt will be forced to give every one irrespective of some one has Aadhaar or not. You can not force people to take Aadhaar. If you do, that is the violation of fundamental rights. If a consumder who doesnt have the Aadhaar, demand for the benefit of the subsidy, then agencies can only request other forms of ID cards etc.
I agree 60% of the beneficiaries will take Aadhaar out of panic. But 100% of beneficiaries can never take Aadhaar. This means Govt will have two different process of supplying subsidized food. One– using Adhaar and refunding through bank. Second, the traditional method. This will continue for another two decades and finally some govt with some good sense will come and declare, that Adhaar is not necessary. Cancel it.
Aaddhaar is to collect the data of Indians to pass on to intelligence agencies. that is prmarily to track terrorists. That is why USA is more interested in it. For Corporates, (reliance), they want to cut down the subsidy expenditure and maximize profit.That is why they have deliberately scaled down the production of Gas at Krishna Godavari basin
If India has to progress, people should be politically aware and active. We may not like it. But this is true. All progress happened to Karnataka when old socialists were conducting militant struggle. A society needs such churning process, which will throw out good leaders with commitment to society. What we get now is those who fail in business, then enter politics and build the business with the support of Govt machinery and political support
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Vinay, I get what you are saying, but you really need to look beyond your personal experiences at data before opposing something FSB. Personal experience is prone to so many biases, real data might surprise you.
You imply that famines of the 40s and 60s and starvation was reduced due to nutritious food being made available due to ‘denationalization of agriculture’.
– The larger problems of famine was alleviated by the green revolution and to lesser extent by laws like anti-hoarding (to counter a very free market in action). On a side note, initial anti-hoarding and profiteering laws were introduced by the British themselves who had recognized the havoc wreaked by this ancient problem.
– The green revolution would not have happened without active government intervention and support. This happened well before the reforms in the late 60s and early 70s.
– Indian agriculture was never nationalized. True some states implemented things like land reforms in greater measures than the others, for example Karnataka for various reasons (impact of socialist Gopal Gowda and his sisyas etc.). While it is not clear if this had a positive impact overall, there is anecdotal evidence that Karnataka did not do any worse than say a northern state which did not go so far in land reforms.
– Subsidies have been part and parcel of Indian agriculture since Independence. But they are far smaller than a country like United States, where the farming lobby wields far greater power when it comes to getting subsidies and passing protectionist laws. Draw your own conclusions here. You can search the net to look at the extent of subsidies in developed nations which have an agricultural sector.
– Conversely Indian agriculture was never ‘de-nationalized’. So the eggs and vegetables you see did not come from some extra privatization of agriculture. That is just progress in agricultural techniques, fertilizers, pesticides etc.. And yes, the subsidies provided by government still play the biggest part in bringing us this nutritious food.
– Regarding starvation, hunger and malnutrition in India; things have gotten worse after liberalization.
“It also places India amongst the three countries where the GHI between 1996 and 2011 went up from 22.9 to 23.7, while 78 out of the 81 developing countries studied, including Pakistan, Nepal, Bangladesh, Vietnam, Kenya, Nigeria, Myanmar, Uganda, Zimbabwe and Malawi, succeeded in improving hunger condition”
Click to access ghi11.pdf
So while people around us many have more nutritious food, know that we can extrapolate this ‘feeling’ for a country of 1 billion. With such numbers relying on personal experience leads to selective bias from the very start.
Regarding Shemej’s use of ‘isms’, good that you are skeptic about it. But to get deeper understanding of things, we do need to get into the weeds of theory, and the ‘isms’ are a good starting point. That is what economists do for us.
Funny thing, if I take my personal experiences about land reforms etc., I would be writing the same thing that you did, perhaps more vehemently :)
Long hari-kathe… Anyway wanted to just say we cant the positive impact that a simple law like FSB could have provided the execution is not botched up.
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I agree with Vinay here. While all the theorizing of Shemej and AG is good to read and easy to understand, they don’t clearly explain why similar policies that have been practiced by the Congress government for 60+ years have totally failed to eradicate poverty. So much so, that 67% of the population is now deemed to be in need of cheap food.
As far as I know, FSB is not a totally new concept. It is just a reworking of many state level schemes. NTR provided Rs 2/- rice in 1983 in AP. And it has been in effect in AP for 30 years now ( with marginal increase in price, and then roll-back to Rs 2/-). So has it decreased AP’s poverty? AP doesn’t need FSB now? AP sees the highest farmer suicides in the country.
The problem is implementation, plain and simple. Just making laws is not going to help. Problems cannot be solved by the same kind of thinking that created them in the first place. Large, monumental legislations cooked up in the corridors of Delhi is not going to help. It has to be left to the states or probably further to the district administrations/Gram panchayats to tackle these problems. If there is a food scarcity problem in some states/districts a specific targetted project will help better than grandiose plans thought up in the parliament.
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Dr. Ramesh, the land acquisition will make land so costly and so long to acquire, that none of the industrialists would be interested to do so.
As you are a dentist, try out this thought experiment. All the dentist in your city, agree that you will charge six times of what you are currently charging for all services. Also simply increase the waiting time for treatment. What do you think will happen? Do you think all the dentists will suddenly become six times richer? OR, people will just stop visiting dentists till the pain totally unbearable? The second is more likely to happen, rendering dentists poorer than before.
Similarly, industries will simply stop buying land in India, and move their manufacturing to Korea or Thailand or China. That is simple economics.
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Shemej:
>I dont know why this prejudice against Socialism.
Socialism is a failed ideology – because as a rule it is practised in extreme.
In other words, the human greed (which stems from survival instinct) makes the altruism needed for Socialism impossible. So, what the practitioners of socialism do is to become ‘more loyal than king’ to the ideology of socialism, to hide their own greedy deeds. Happened in each and every socialist/communist country.
What capitalism does is – It allows the greed to be played out in open, controlled by regulations. Thus is ‘manages’ a deep rooted human behaviour – instead of denying it all together. But, if taken to extreme even capitalism, can be harmful (i.e. only capital is god means a guy without capital is as good as dead). So far, the man kind has evolved better way of managing the extreme of capitalism, as versus extremes of socialism.
This is why Socialism hasn’t worked anywhere in the world.
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Anonymous Guy:
You are speaking of the benefits and precedents of government intervention in the economy. As I already said, I agree that a certain degree of government control is essential in the economy, and we cannot have a setup where everything from rockets to toilets are built by private enterprise.
But as I said, the question is, what should the government spend on, how, and how much?
I’ve already given my arguments and reasons for opposing the FSB in my earlier post, so I won’t repeat it. As far as nutritious food is concerned – you are listing historical reasons for India being self-sufficient in food today. My point is, we don’t have a situation where 67% of the population is starving, and need rice and coarse grains. The problem is malnutrition in many places in India, not starvation.
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One point– I think it is completely misconceived to say, “India doesnt have absolute poverty now.” I can only request my good friends to tour villages in India, especially Dalit, adivasi, and fishermen villages of India. I dont want to elaborate further, but focus on other issues.
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See, one problem is, there is an obvious reluctance to put some effort and try to understand a complex principle, ideology, politics or economic system. Some of us think it is too painful an exercise to even attempt to anyalize and understand. Hence the strategy here is to “brand” it as something inferiour, and attribute all “negatives” to it, and then reject it.
It is understandable if some one disagrees with any aspect of Socialism. But declaring that — we dont want to try to understand, as we have never seen it being successfully implemented it. Hence it is a “failed concept” , reject it. This is the same mind-set which glorifies “stock markets, Infosys, software, MNCs, Real Estate boom, America” etc when it is showing some “upward movement/buoyancy” and the moment when it shows some corrections/downward fall, declare that, “it is doomed to failure”. This approach may be suitable for scoring points in a popular debate. But it can not take any nation forward– if all our policy makers follow this approach.
The basic problem here is the misconception about “Socialism” , “wealth”, “money”, “progress” etc.
Harkol seems to think Socialism is a set of pre-determined principles or something practised somewhere in the past. With a lot of respect, let me ask: “Where did you get this information?”. In short, some of us conclude “this is what is socialism” and give a completely absurd interpretation to it first, then reject “our own absurd idea”. The problem is, Socialism is not what we believe.
Another example is comparing “Islamic” ideology with “socialist” principles. This is too childish.
Islam is a religion, based on “a holy (written down) text” and precedents and their interpretations (hadiths). The principles, way of life etc are pre-determined. I can not argue and change it. But I can (along with millions of others in this society) argue with valid points and change the concept of Socialism. It is not a pre-determined set of rules, but what we all collectively evolve. But there are some guiding principles. Socialism is not an idealistic vision of taking rich people’s money and giving to poor. Even the communism is not a vision to help poor people. Except in India, no communist party in the world, its leaders lead a simple austere life. Unfortunately or fortunately Indian communists were all Gandhiji’s admirers, hence many of them lead a very frugal life. But communist all over the world (many of them, if not all) lived lavishly. They were all rich. Communism is not talking about rich and poor. It talks about two classes. A working class member can be a rich person (more so in an advanced industrialized system). But communism always think of using that ideology to change the world for better. Hence it is an ideology to uplift the poor. But it never discusses a contradiction between “the poor” and “the rich”. But it analyse how the inherent “contradiction between opposing classes” take this society forward. Socialists may be talking about giving support to the poor. But socialism as a political vision never thinks that you take money and give to poor and that is the solution to all problem. (Communist leaders try to stay away from Business, not because business is bad, but because, they dont want to be influenced by the business interests. But this not alwasy the case)
Socialism, very much consider the “greed of human being”. Socialism understand that, human being will always be guided by greed and self-interest. But socialism does not consider that, if thousand or a million people have some good intention to eradicate the poverty, the poverty will vanish. No wishful thinking can change the world. No good ideology can change the world. Socialism is a science trying to analyse the complex rules of social changes and try to take more scientific and more right steps from time to time. No socialist can take “the right step”. We are all humans. We make mistakes. Hence we can not completely apprehend the rules of progress. We dont know the solutions for sure. But we can try to understand more and more. The more we study the better clarity we have. it is like any other science. Why human body gets cancer? Why planets go round the sun. When you study more and understand more you can use these insight to avoid some mistakes in the future. You can never avoid all mistakes.
Jaipal Reddy once said: “We correct a mistake not to repeat it, but to make new mistakes.”
Socialists only tries to study the past, study today’s society and try to suggest some steps. But there are some core principles… If you prove these core principles wrong, then throw it. But no one has proved these core principles are wrong till today. In fact, the world is more discussing about Keynesian theory, Marxism and Socialism after the financial melt down of 2008. That doesnt mean we are now going to copy and paste Keyns, Marx and Lohia.
Now, compare that with the concept of “Democracy”– Which book you follow? There could be 10,000 books defining what is “Democracy”. But ultimately “Democracy” is an ever evolving concept. No one can dictate what it is.
The model or path of Democracy that India follows is different from what the rest of the world follows. But can we reject all definitions of “Democracy”, that is written or explained by the rest of the world?
When we try our democratic experiments, we are not following any Holy Text. We learn from trial and error and we build our own New Experiments of building Democracy. It is an altogether new Voyage. Exploring new worlds. Every day we learn from our failures and aberrations and furhter ameliorate it.
Why do you think Anna Hazare fought for JanLokpal? Loknayak Jayaprakash tried for such law decades back. Janata Govts tried to build such a law, failed. Why do you think we allowed different personal laws for different religious community? Why do you think there is a debate for a uniform civil code? Why do you think Babasaheb argued for a reservation policy in India? (which books you can find these? They are all new brave experiments) The role played by “activist judiciary”– can you ever point out these models in any other text book. When Justic VR Krishna Iyer and Bhagavati interpreted: the role of the judiciary is to ensure the justice is done. When the Legislature and the Executive fail in their responsibility or try to avoid it, the judiciary step forward and take the activist role. Krishna Iyer interpreted the poor landless bonded labourers can not even approach the Judiciary to seek justice. Hence Judiciary reach out to them. Where can we see this model earlier? By Activist judiciary, we gave new dimension to Democracy. I think it was Nijalingappa who asked in Constitutional assembly: “if a state govt fail to protect a section from the violence by other section, isnt it appropriate for the Central Govt to step in and intervene? Can Central Govt use article 356 and dissolve the state govt to protect its citizens?” Ambedkar replied: “No. unless and until the state govt deliberately act against the very constitution of India, Central Govt should keep quite. it is for the peopel of that state to learn from these bitter experiences, correct its leadership in the next election.” Later, Justices Sawant led constitution bench in its landmark SR Bommai case, explained this principle (1994). 3 years later President KR Narayan refused to dissolve a BJP led govt though, politically Narayanan was opposed to BJP. Tell me which book about democracy you read this?
Democracy or Socialism are ever evolving social concepts, they can not be compared to a pre-written set of rules or religious sricptures.
The core principle of Parliament Democracy is, only a Govt which has the confidence of the Parliament can rule India (that is why it is called “vote of confidence”.). But when no single party enjoys the confidence of the people, two or more parties sit together and try to figure out the “common elements in the programmes” in their manifesto. They form a new action plan based on “commonly agreed programmes and principles of constituent parties” and call it a “common minimum programme”. Even the BJP was ready to shelve some of their dear programmes to form coalitions. And we are now in a Coalition era. I remember people ridiculing the “coalition dramas” when DeveGowda Govt was formed. At national level, we never had such experiments earlier (except Left front state govts). We had opportunistic alliances, but no coalition based on commonly agreed principles and programmes. But that is a new experiment in Democratic Political Progress in India.
Hence, Democracy, Socialism, Communism etc is not a set of rigid rules and principles. We the people of India try to use light of available principles, emerging concepts and try to evolve our own “democracy” our own “Socialism” and our own “communism”. If Marx comes back now, I will tell him: “Get lost! I dont want to obey your opinion.” This is because, Marxism says: “every cook must learn to govern the state” or in other words, it is the collective process. No one look upon Leaders or theoretician as the ultimate authority of wisdom.
The rule of progress is that, the world always progress from a relatively simple state of affairs to more complex system.
However, when we are too reluctant or lack confidence to apprehend the complexities of this world and the developments, we tend to look for some old models and we tend to look for powerful leaders who can guide us. This is dangerous. We dont have any certain path ahead. We dont have any “all powerful leader” to guide us. We can not imitate what was there in the past. Simply because, the past is an entirely changed entity. Our timid mind may try to find out some remote similarity between incidents and instances of past and the present. But they are deceptive. We can not go back to Gandhian era. We can not go back to Nehruvian era. We can not go back to Soviet experiments. We can not look upon Jayaparakash Narayan. We can not even get guided by Narasimha Rao or UPA_I. Today’s problems demand more audacious, more comprehensive, more scientific, more rational, more accurate, more fruitful solutions.
A medical doctor can some times give a same medicine to hundred patients. But no social scientist can give the same medicines twice. Even today morning’s medicine wont be effective by today evening. If I suggest a solution to the depreciation of Rupee and if the USA attacks Syria tomorrow, my suggestion may become completely meaningless in tomorrow’s situations.
Many of our good friends are still becoming inspired by Manmohan singh of 1991 or Vajpayee of 1999. When we talk about Socialist model or state intervention etc, we are not advocating to copy and paste what was done a few decades ago. We are only talking about some fundamental principles. Which are more fruitful than some of the present day hypes.
What are those principles? Let us discuss them….
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Goldstar, Think of it this way: if we didnt have policies like FSB combined with progress made by things like the green revolution, a much larger percentage of our population would be malnourished. We wouldnt have had reforms, IT, vibrant stock markets – we would instead have had disease, revolts and breakup of the nation.
Eradication of poverty in a place like India with its history and population is just a goal which moves further as you get close to it.
Congress or its policies are not great. Of course things could have been much better, but boss this is India, you cannot fly with the eagles when you run with the chickens.
What we are talking about here is whether the FSB is a good piece of legislation or not. In terms of implementation, it is relatively simple to implement unlike many complex laws we have, and that is what makes it a good law.
I haven’t heard a good argument or data otherwise, besides personal anecdotes on availability of good food and jobs for the people you are personally acquainted with in the past few years. I am all ears.
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Ok to further this discussion since we dont have too much data on why FSB and MNREGA are bad, here is a couple of questions for commentors opposed to these laws:
Let us say we dont allow things like FSB or MNREGA. Let us take it a little further, we cut all agriculture subsidies, dont ‘distribute money to the poor’ etc.
Could you think of what this would achieve? What would be the economic, political and social impact of being a total libertarian in a place like India and removing most government.
I am not asking this to further anything I have in mind, am curious to know what you think.
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Goldstar,
Industrialists will stay put in India, yes they will feel the pinch a little more because of the cut in their profits. No where else in growing economies they would be pampered more.
Food inflation is on the rise because of unscientific, illogical policy of granting agricultural land for industrial purposes. Its plain simple.
According to experts, daily 2000 farmers are shunning agriculture due to the wrong policies of govt. Few years down the line, we would be importing food related products more than petroleum related products. This would be disastrous. LAND ACQUISITION ACT atleast gives agriculture a chance.
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Anonymous Guy:
We cannot, and should not, be a “total libertarian state” – that will spell doom for India. In the scenario you describe, there will be total chaos and anarchy.
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Dr. Ramesh:
Utterly simplistic and naive reasoning. It is a wonderful thing if 2000 farmers are shunning agriculture every day. I wish the number increases to 5000.
Anonymous Guy has spoken about land reforms that took place in India. They were necessary at the time, and helped correct many social evils. As of today, do you know what the situation is? The agriculture sector in India is heavily overstaffed, and for the amount of GDP that comprises the agri sector, the number of people it employs is humungous, leading to a very poor per-capita figure in the agri-sector.
The fact is, we just do not need so many people in agriculture as there are today. This sector has huge disguised unemployment. And due to small land holdings and lack of mechanization in such small land holdings, agri sector is the worst performing among most similar nations.
India’s crop yields are dismally low compared to developed nations. The number of people required in the agri sector is around 1/10th of the workforce that it currently employs. With the resultant consolidation of land holdings and increased mechanization as seen in developed nations, our yields will in fact increase.
To summarize, taking people out of the agri sector will actually increase our crop yields, and not the other way round. The country needs to take out hundreds of millions of people out of agriculture and shift them into either services or industry, preferably the latter.
As landholdings consolidate and mechanization takes place, we will see increased crop yields, and the labour force:GDP ratio of agriculture sector will be more sensible, rather than the 56:18 it is now!!
Every developed nation embarked on mass industrialization and urbanization. And as long as we remain a predominantly agricultural rural nation, social evils like caste etc. will remain. It is only a shift to egalitarian urbanism that will change Indian society.
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Let me talk about an altogether different issue.
United States has a total external debt of US Dollar 16,737,246,099,998 as of this year.
Perhaps USA will never be able to clear these debts any time in history.
But, interestingly, USA is not worried. From the time of Ronald Reagan, USA has only one miraculous strategy —
Dont manufacture anything. Dont try to export anything. Just print a lot of US Dollars and simply sit idle.
Even now, when ever USA govt wants money, they just print any volume of currency Notes and sit idle. They dont even need to keep equivalent Gold as reserve.
If India wants some money, can India ask Reserve Bank to print a lot of Indian Rupee Notes? We all know that a currency note is just a currency note. Just a piece of paper. (it is a contract paper. Promising people, “I will give you the equivalent value, to anyone who hold this agreement paper”). If India keeps printing currency notes, that currency will collapse and India will have only high inflation and financial crisis.
But why USA is (in relative terms) not interested in actual creation of wealth? Why it can simply print currency notes?
If we assume their minimum wage is USD 6.5 per hour, roughly it is approx. 60,000 rupees per month
This means,if USA workers manufacture a Travel Bag and sell to international market, and Indian manufacture the same Travel Bag, Indian Bag would be 10 times cheaper. (same quality. If the other costs are same, as USA labour charge is higher.)
Why should USA manufacture a Travel bag which is 10 times costlier than an Indian or Chinese Bag? It is better, USA import such a bag from outside to its country. If USA import a cheaper item from another third world country, USA is actually saving resources and its people can actually enjoy the same quality products and services at lower price. But if India print currency notes and wait, no one would sell products at a cheaper rates to India.
Similarly, it is inevitable for all other countries will sell their products and services to USA, at a lower rate compared to the cost of production in USA. This is because US Dollar is the only approved currency to trade oil in International market. If any country in the world do not sell any product or service to USA,then it wont have US Dollar reserve in their hand. If they dont have US Dollars with them, they cant buy pertoleum products. Without petroleum products, you cant have fuel, plastic, fertilizers, LPG etc in the country. That means the country would go back to dark era without any modern industry or business.
This is why countries all over the world keep selling products and services to USA and hold huge stock of USA Dollars with them. As of today, any country decides its strength of economy in terms of the USA Dollar reserve they have. In short, USA Dollar has emerged as a reserve currency of the world. Every one needs USA Dollar. When USA Dollar is the most demanded commodity in the world a nation can just print it and sit idle. They will survive.
This is an advantageous position for USA. They need not worry about doing any actual production. By reducing interest rates, USA is encouraging its citizens to buy products and services in credit and lead a comfortable life. That is why United States total debt is USD 16,737,246,099,998 today. They wont repay it. No one will ask them to repay. They print currency notes and live happily, infinitely.
As USA is not very keen to export products and services to other countries (if they export, they actually lose wealth), they prefer to import cheaper products from elsewhere, and there is a huge gap in export-import balancesheet. The USA is now in huge debt to the world. Their citizens are in debt. Yet, they dont need to worry, simply because their currency is the reserve currency of the world.
In fact, immediately after the Second World war, when the European countries were pauperized, according to the Bretton Woods agreement, USA dollar was used as an international exchane currency. USA uses its military hegemony to threaten other nations to accept USA Dollar as approved currency for Oil Trade. (When Saddam Hussein first demanded to use Euro as Oil Trade Currency, they attacked Iraq and Killed saddam)
But nations like India or China can not just print currency notes. We actually needs to store a share of the value as Gold in our Reserve banks or we need to build Foreign Reserve in our Banks. If not, the Indian Currency will crash. We Indians actually needs to work hard and produce real wealth.
This poses another interesting question — What is the real wealth? Is it currency notes printed by Reserve bank? Or is it something else.
When human hard work is applied on nature (or natural resources) the wealth is created. In some cases, we mine the natural resources or produce food grain through agricultural activity. Only when labour is applied on nature, the wealth is produced.
In some cases, a technology may eliminate a lot of labour in production process, but years of research and development works is necessary to produce a new technology. Hence, even if there is no direct employment of large number of workers, indirect employment of labour is necessary. hence Wealth = skilled labour + Nautral resources.
But the market value of a product is not actually determined by the real value involved. Some times a certain product may be in much demand, some times due to scarcity, the rates may artificially goes up.
However, finance capital goes to destinations where it can easily and quickly multiply its profits. Reap the benefits and run out of the system. In most of these cases, the real wealth is not created. If the market price of a business share is going up in a very short term stock exchange trade, but if the company fail to produce wealth for many decades, will that be good for any Nation?
Satyam Computers was actually bribing the Auditing agencies and artificially inflated the profit margin of the company. As a result, the share prices of Satyam shot up. A lot of activity in the market. Many individual investors may have made profit by investing/ buying and selling Satyam shares.
But did this whole process help this great Nation to increase its wealth even by one paise? If the stock indices goes up and falls down, is it relevant for a nation? Unless and until India create actual wealth, can we survive as a healthy economy for a long time.
One problem with the Globalized economy is, in many cases, the actual wealth is not created. There is much chaos in the market. We in India, are also trying to imitate USA and trying to chase speculative bubbles.
There are several forms of this finance capital speculation. But if we are talking about the progress of India as a robust economy, then what really matters is how much real wealth India produces and not what is the stock exchange index on a given day. This is not USA, India doesnt have hegemony in International market. Our currency is not used for oil trade. Our currency is not the international reserve currency.
If we all agree with the above points, it is easy to understand why India needs its citizen having more money at hand.
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Toddy shops will thrive, and wife and children will sleep hungry!
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Let me give a few examples of how there is no “real wealth” is created in the neo-liberal world, but the whole excerise is “mulitplying the profit (with what is already in the hand) without participating in any production /service process”.
I have already pointed out (previous comment, 4th Sept) any model of business which does not actually create wealth will not help India and its majority, that is, 80 crore plus population. But it will help the Corporate interest of Global North countries.
Example 1-
There is a little less than US$1000 billion petro Dollar revenue which is piled up in the hands of OPEC nations. Out of this Kuwait has approx. 36 Billion of petro Dollar revenue in 2005. UAE has 39 billion. Kuwait has a total population of 28 lakh people. Out of that only 14 lakhs are Kuwaitis. UAE which is a group of nations, has 78lakh population. Karnataka has 6.1 crore population. This means the whole of Kuwait, which is just in the size of a District of Karnataka has this much revenue piled up. These nations are more feudal or pre-feudal in nature. They dont have much advanced technologies. They dont have a vast domestic market. They dont have huge capital incentive advanced industries. What do you think is happening to this “money” piled up in their hand.
This money is earned in US Dollars (remember, US Dollar is the approved currency of world OilTrade.). This money is coming back to USA, both in Govt Bonds and in real estate business. The Oil Barons of OPEC countries are not interested in investing for a 20 years or 200 years project. Instead, they invest in speculative capital and they want their profit in short span. This almost infinite source of money was creating huge speculative boom in the USA market. This is essentially called “Petro Dollar Recycling”
USA print and circulate USA Dollars. Some other countries work hard to create wealth, manufacture products and export to USA to earn USA Dollars. These countries spend this money to buy Petroleum products. When they have huge stockpile of money, which they can not invest practically anywhere, this money goes back to USA Banking system and real estate speculative market. Create boom. When they invest 10 dollars they reap 100 Dollars and they come out. Please read more about “Petro Dollar recycling”
Part of this Petro Dollar is coming to India and invest in India’s stock market. They are not interested to wait for a 20 years business and manufacture anything. They are only interested in “Quick growth” with
“higher GDP growth rate” (which indirectly means, they want to gamble and make quick return. They are not ready to wait. Next time, when you hear about “quick growth” and “higher GDP growth Rate”, we can understand they are not actually talking about any “Real Wealth creation, by investing in any long term business- neither a manufacturign, nor a service business”. But they are gambling in Stock market casinos. By nature of this investment, this money can not generate any wealth in India, it can not participate in any actual business activity, it can not have a long term interest, it can not create real wealth in India. It is short term speculative investment in Stock Market Casinos. Or gambling for quick profit.
A significant investment happened in India after the globalization (post 1991) is this speculative, highly volatile short term investment, especially by Foreign Institutional investments (FII)s.
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Example 2:
“The concessions, upon deeper examination, show that they are acting as avenues of tax havens for
big corporates and multinational giants. There are presently 578 formal SEZ approvals granted since
notification of the SEZ act in 2006, and of these, 325 have been notified. As on March 31, 2009, Rs 98,498 crore had been invested in the new, generation SEZs. It is estimated that the tax breaks awarded to SEZs will cost the government more than £150 billion. It is estimated by the
finance ministry that the revenue loss on account of SEZs could be over $25 billion for 2007,10,
which would be nearly 4,5 per cent of total tax revenues of the government”
“Nevertheless, there is a huge difference in private investment in the SEZ vis,à,vis
the exports generated. While both total exports and exports from SEZs have been increasing over the years, it is clear from the graph that SEZ exports still form a very small percentage of the total exports. The contribution has risen from 3.6 per cent in 1996,97 to 4.4 per cent in 2001,02, to 6 per cent in 2006,07, and finally to 10 per cent of total exports in 2007,08.”
“Only 10.16 per cent of the total exports is being contributed by SEZs,which receive as many
favourable concessions as possible, while the rest 90 per cent is contributed by units
managing without the concessions.”
“Total direct employment created in all the SEZs in India stands at approximately 387,439 persons,
as at the end of March 2009. Of this, approximately two lakh are employed in seven government SEZs”
“The number of people likely to be displaced by the already notified SEZs is approximately 1.14
million, which is 18 times higher than the number of people officially claimed to have got
direct employment in the notified zones ”
Source: http://works.bepress.com
One simple question is this– SEZ are obviously not helping to create jobs in India. These companies are only trying to take advantage of Real Estate accumulation and real estate boom and interested only in Tax concessions, and investment favours offered by Govts. These are actually Countries within a country. Most of the rules applicable in India are not applicable within these Underworld Money multiplying – crony capitalist dens
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Example 3:
“Hawala is a traditional money,laundering system. It is widely used as an alternat
ive or parallel remittance system. It operates outside of, or parallel to, normal banking and financial channels. That there are close to 4,000 hawala operators in India – 20 per cent of who work their businesses out of Delhi and Mumbai – is testimony to the fact that the system works and is thriving. The real action is in foreign hawala, where black money is sent abroad, laundered and brought back as foreign investment. About 75 per cent of the black money in India now goes abroad through hawala channels. It is a staggering $300 billion”
“The India,Mauritius Double Taxation avoidance agreemen ( DTAA ) came into effect in December 1983. In 1994, in the wake of liberalisation and in an effort to make India an attractive destination for investments, the Central Board of Direct Taxes issued a circular that literally exempted Mauritian investments in India from capital gains tax and withholding taxes, and opened up the floodgates of tax,free financial flows from Mauritius by taking full advantage of legal loopholes in the India,Mauritius treaty A lot of the money Indians sent abroad in the 1970s and 1980s is now coming back to India, in a kind of ‘reverse hawala’ flow. Investigating agencies say illicit money is coming back into the country from every possible pore. A favoured route is the dummy software company. Since software has no material value, fraudsters are shipping out cartons of empty floppies to ‘foreign clients’ and showing export ‘earnings’ in millions of dollars.”
Source: http://works.bepress.com
Please explain to me, how this is going to help to create Real Wealth in India. It is infact, hurting the economy. When there is an expectation of a boom in the market, this hawala money is coming to Software Business and other business, looking for easy and quick profit, and also to regularize the black money. And this is adding to the Inflation of this system. The major reason why govt and Reserve bank is tightening the banking financing is, because Govt wants to control Inflation. Inflation is the number one villain which is preventing the Development opportunity of this country. And this hawala investment model is one of the main villain for the high inflation India is witnessing. When they avoid tax, India is already losing. And when they return back to economy, it further put burden on the people by creating inflation. In short, it is a double punishment for the people of India. More importantly, this hawala investment is not interested in any real business. Hence, it is giving unhealthy, competion to the real, good business. Many small and midsized businessmen loses their entire investment because of the competition given by hawala investment.
It is creating a parallel economy in India. It is assisting Terrorism and all anti national activities, directly or indirectly.
Tell me how this is helping India’s real progress?
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Shemej:
While your posts are full of information, I am not sure whom you are addressing here with the posts about US dollar being reserve currency, hawala, etc. All this is known. What is the relevance of these points to the issue we were discussing?
It appears that you are concerned about creating “real wealth in India”. Good, I share the same aim. So, what is the way to create this real wealth?
Encourage manufacturing industry in India, moving people out of rural agriculture into urban-oriented industry and services, build massive infrastructure like roads, highways, canals, ports, rails, metros, etc.
Is the above outlined method the way forward, or creating legislation to provide 1 rupee foodgrain to 70% of the population so that the masses can sell the grain in the black market? Should we create infrastructure and jobs, or try to legislate our way out of all problems? I will not be surprised if the UPA comes up with a “Right to 8% growth” tomorrow.
Anonymous Guy, please note: as I have maintained all along, I am not blindly against government intervention. I do not think a totally libertarian state is viable anywhere in the world. The whole question is, what should the government spend on, and how much? If you re-read my posts you will realize that I am against FSB in particular, and not against government playing a role in the economy in general.
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Every day, Bangalore Software professionals’ neighbourhood kids look at their company websites. But their own kids look at the Ebay.com. Why?
Neighbours’ kids look if new vacancies are listed online.
Their own children want to find out if their parents’ comopanies are listed for sale online.
(Okay, this is applicable to most companies, not just software companies.)
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I am going to call shemej as ControlCControlV !
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“Encourage manufacturing industry in India, moving people out of rural agriculture into urban-oriented industry and services, build massive infrastructure like roads, highways, canals, ports, rails, metros, etc.”
You are right except on one thing. “moving people out of rural agriculture into urban-oriented” This is a flawed vision. And this vision is destroying India now.
We need Industrialization, no doubt. However the all inclusive business model is not to “move people out of agriculture to urban areas” . This is the method of Old Capitalism and Neo Liberalism, which want to evict masses from their habitats and villages and accumulate Resources, Land, water, clean air, minerals, enviorment, their culture,language, life style and what not… Accumulation is the way of neo-liberalism.
If you change that phrase slightly, you can get this sentence – Create infrastructure in the remote rural areas. This society should move towards a situation where there is no major urban-rural divide. People are the owners of this land, its resources, its air, its culture etc. Without destroying these habitats, it is possible to implement industrialization.
“Every one is emphasizing on other points — “Encourage manufacturing industry in India, ………., build massive infrastructure like roads, highways, canals, ports, rails, …., etc.”
Now the question is who will build it.
That is exactly what I have discussed above.
Finance Capital is not interested to do this. They are interested only in accumulation. If possible, please study the economy. Which direction the wealth is flowing–
It is an established fact that the wealth is flowing from Global South to Global North (from third world countries, which are located more int he southern hemisphere of earth to northern countries most of them are rich nations.
Secondly, the wealth flowing from Rural areas to urban areas.
Thirdly the wealth is moving from working class to Corporates.
I have discussed in detail, why Global finance capital can not build what you are suggesting to build.
Even the Capitalist economists like Keynes underlined this.
This is more true now. The bulk of the money/wealth is now stored in the hands of 5000 plus conglomerates in the world. They have Trillions of Dollars of Surplus with them. They cant practically do anything with that much money. if they invest in manufacturing industry, they will lose it.
Take a simple example. Why dont people invest in post office savings account? Or why people dont invest in Insurance Companies when they have too much money in hand (other than to get tax savings)? This is because, when there is more than 12 to 15 percent of inflation in the country, if you deposit a few lakh rupees and after 5 years, when you take back that money with interest, you can not buy same items, commodities, services, land or house that you can buy now. Because the bank interests are lower than the inflation rate.
When ordinary people are not ready to invest in Banks and Insurance for a realtively low interest, how can you expect the Finance Capital to bet on it?
The manufacturing industry, all over the world is not giving high profit margin. This is more true when you dont have consumers with high purchasing power.
Dont compare Infosys and IT companies. They were not selling anything to Indians. Their consumers are Worlds’ largest industries, which sell Nuclear Reactors etc. Most of the Big companies, which are into Manufacturing industry are now moving to Defence Manufacturing. Even those who are investing in othe manufacturing industry are insisting to get a Real Estate component to be given to them. Otherwise, it is a loss to them (they dont have losses, but relative terms).
If we all try for next 200 years, no Corporate is going to build infrastructure without getting huge return. And that is unaffordable to the people of India. This is why Tata insisted to allot 1000 acres of land to them. (when even the biggest Automobile manufacturing units in India doesnt have more than 500 – 600 acres of land.
Vinay, I am only requesting one thing. Please dont read each paragraph separately. Please connect all these posting and see the obvious logic. Just visualize your ideas into the last details.
If you just repeat what the Corporate media says “invest in infrastructure, IT BT, Multinationsl companies, PPP models etc” (you dont say , just giving example), you will never understand why they are viable or not viable. Just imagine, if you are the Economic minister, and if you really want the people of India to get benefited, how are you going to implement it.
For every 1 lakh rupees Nano Car Tata produced, the Indian public is paying 60000 rupees subsidy to TATA. Why should we do this?
If there is no high return, Foreign Institutional Investors are not going to come and invest in that business. Just think — which industry in India is actually manufacturing and adding wealth to this Nation? (You have to think, you are not giving any undue concessions. For Infosys exporting Software, why should I give my money to them? My point is, let them make money, I dont have any objection. Just find out how much crores of rupees of subsidy is given to these companies.
Every company in India want to export to USA or Western market. Why?
Because, the local market is not developed. Except banking Software etc, how many software applications Infosys developed for Indian consumers, indian companies? Why?
Everybody wants Dollars. But that is not sustainable. What we need is a well developed local market. When Indian consumers have more purchasing power, they will be able to support big industries in India.
Except Big Metros like Mumbai, Bangalore, Chennai, Hyderabad, New Delhi, Kolkatta, and few other towns, and excpet Kerala, Haryana and Punjab rural areas, the local market is not well developed in India. In other words except the top rung 20% people dont have purchasing power in India. Indian companies can become worlds biggest companies, and compete with American Companies when all Indians are able to purchase from them. Right now, most companies in India are into small scale sales and services.
This is why everyone is trying to sell (export) to western countries.
I have given the example of kerala earlier. The purchasing power of rural Kerala is higher than that of Indian (almost double) average. That is why even though the Govts do not give big subisidies to Corporates, some companies make relatively better profit there. But outside Kerala, Indian companies can sell only in big metros.
Dont take my suggestions. But tell me 20 points that can strengthen local economy and give more purchasing power to local people, so that Indian companies can sell more to Indians. This will prevent the flow of money from India to west. That is when India can start progressing.
2 points which will help India develop local economy are
1) Land Reforms in a comprehensive way. Then form collective farming groups so that you can use mechanized, modern farming
2) Invest heavily in Research and Development. When Indian companies have more patents on latest Technologies, India can effectively compete with Western companies. As of today, Inida has the technology to manufacture cricket bats. That is good, but that is not enough.
Please see the connections between all what I type.
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“Encourage manufacturing industry in India, moving people out of rural agriculture into urban-oriented industry and services, build massive infrastructure like roads, highways, canals, ports, rails, metros, etc.”
where do you bring the energy for all these! if the consumption level of natural resources is greater than of its regeneration, then this consumption is unsustainable.Historically, all the high consumption societies collapsed because of the depletion of natural resources. When natural resources are depleted, the accumulated technology and human capital, which are really means to utilize natural resources, lose their value as well. capitalism is unable to explain the dynamics of change in human history. capitalist argue that today’s capital investment will always benefit future for accumulated human capital can substitute natural-capital , including knowledge capital, is geared toward the current level of energy consumption and other natural conditions. If these conditions change, the assets could become liability. For example, highways can facilitate rapid movements of goods in an era of cheap fuels. However, if cheap energy supplies exhaust in the future, highways, which take vast amount of land, cannot be reverted to agriculture land easily!. So today’s investment could harm future’s sustainable economic environment.
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On 98% of occasions, whenever i copy and paste, I have given within “quotation marks” and given sources. But in some cases, I am not sure, if I have the right to give the actual source completely. (they could be private documents, not sure. In the above example, the actual pages were under proof reading. I dont know if they do proof reading online, and while that happening, the search engines took snapshots.
I am stating known facts, and I am giving an angle/ view point.
Just see all my posts from the beginning. I have followed this rule of giving quotes and sources. (some times I forget where i read certain things earlier, then I search online and give similar articles to support my claims.
This is a learning process, by getting inputs and criticisms, I can correct myself and take a more right, more scientific line.
I request all my friends to do one thing– Please try to give supporting points to give strength to your comments from next time onwards. Believe me, when you argue based on “wishful thinking” and “prejudiced opinions”, then you cant get supporting facts. A good friend in Churumuri once described my comments as “dishing out utter drivel” with these supporting points I am proving what I say is not completely baseless.
At the same time, I am not happy to give lengthy quotes like this. I am sorry, I am not an economist to give points from my own books or from my own memory. I am an ordinary layman. But a layman who can use rational thinking.
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Shemej:
I am surprised that you do not see the obvious disconnect and contradiction in your own post.
In the beginning you say that people should not be moved out of agriculture into industry – you call it a “flawed vision”. And at the end you say that you want mechanization and modern farming on larger plots of land.
What will you do with the excess labour after you implement your mechanization and modern farming? They cannot be left to starve or killed, no? And the primary question here is, how will you achieve your “collectivization” and mechanization? When I hear the word “collectivization”, my antenna goes up. It sounds suspiciously like Stalinist and Maoist communism – “farm collectivization”. This “collectivization” was the most notorious aspect of communism and totally destroyed their society. I hope this is not what you have in mind.
Yes, we need “collectivization” of land and modern farming to increase our crop yield. How do you get it done? You will make that happen only when there is industry, which provides hundreds of millions of agricultural labourers employment options. It will then lead to consolidation of landholdings in rural areas as those who remain in farming will end up with larger tracts of land, and implement modern mechanized methods of farming.
And make no mistake – agriculture in India is heavily overstaffed. Agriculture just cannot provide employment for 800 million people. This dependency on rural agriculture as a means of employing people is the primary reason that India remains a poor country. There is not enough money in agriculture, and practically, there just cannot be enough money ever, to support those numbers, because food prices cannot increase – that would be a disaster in itself. Agriculture should ideally support only around 150 million people. When this golden number is achieved we will have optimum landholdings, mechanization, great yields, and a prosperous agriculture sector.
The remaining people need to move to industry or services. There is no other option. You practically show me where else and how you will accommodate the remaining 700 million people. You cannot, because there is no other way.
You ask me who will build infrastructure? When private parties find it viable to build and operate infrastructure, let them. In other cases, it is the job of the government to build infra. This is my whole point. With one year FSB cost, it is possible to build a 10 km metro in 10 tier-2 cities in India, and even this is a conservative estimate. Instead of this piece of shit called FSB, which will lead to nothing except leakage and black marketeers, investment in infra and thereby enabling industry would have done wonders for the nation. This FSB will turn out to be India’s biggest mistake, thanks to the bloody fake Gandhis.
And to wind up, I will repeat what I told Dr. Ramesh: “Every developed nation embarked on mass industrialization and urbanization. And as long as we remain a predominantly agricultural rural nation, social evils like caste etc. will remain. It is only a shift to egalitarian urbanism that will change Indian society”.
Yes, urbanism is more egalitarian, and free of the social evils, which our villages are a den of. Every country in the world urbanized as it developed, and India will be no exception. Your arguments make no economic sense, neither will they allow India to progress socially.
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Dear Shemej,
Your amazing prescription to help ..”India develop local economy” is laughable!
1. Collective farming is not the issue! Indian farmers even the subsistence farmers use modern farming methods (if they can afford it they will use tractors; rich farmers use mechanized methods any way). What is lacking is comprehensive grain storage and vegetable and fruit storage facilities. Since we don’t have them you have farmers routinely dumping tomatoes on roads when the market prices crash and we let millions of tons of grains to rot!
2. R& D is good but that can be pursued on a parallel track. Again you are dismissive about Indian Research claiming …”India has the technology to manufacture cricket bats. That is good, but that is not enough…” This shows how ignorant you are and please don’t bore other posters with your essays on “Prescriptions to Economic Ills of India”
I still say you are a cut’n paste artist! Thank you.
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It is very amusing to read the arguments put forth by supporters of crony capitalism. As Mr Shemej told these cronies only knows“accumulation “of wealth” in turn creating more disorder in rural and ecological environment. Somebody here please tell me what is the physical foundation of modern economy in simple way. Are its foundation only lies on market equilibrium/ general equilibrium and supply -demand phenomena? What is meant by Capital? Is it really a paper currency or indeed has any “real value” in it?
I am little confused with variety kinds of economics coming here. So I will stick to my favorite one, physics. There is a branch of economics which is offshoot of physics called Thermo-Economics. Here Capital flow= Energy flow.
Laws of thermodynamics ->1. Quantitative behavior of energy-Energy neither be created nor destroyed. 2. Qualitative behavior of energy- system in closed or isolated state, its entropy (disorderliness of energy) never decreases.
What kind of systems are human being, animal, family, organization, institution, society, country and even universe? Are they isolated? Most experiments say universe is tending towards maximum entropy. Iron getting rusted, food spoiling, aging etc. then why human being, species, some organization/ institutions like crony capitalist ones feels less entropy(disorderliness)?!! (google -negantropy)
Answer is simple-Erwin Schrödinger famous physicist cum biologist in his book “what is life” has mentioned- “human being feeds on surrounding environment for “negative entropy” thereby obtain Orderliness in turn creating more “Disorder” in the environment! So “entropy never decrease” still holds good!!!
Yes for every “Orderliness” there is equal disorderliness! Newton’s third law holds good here. This is the main principle behind “evolution theory” –both in biological and non biological system-organization, or social, community etc.
The more you play with Energy source the more exergy destroyed (degradation of energy) which is equal to increase in entropy (disorderliness).
Until you people doesn’t learn to moderate your greed, this universe will only speed up more in its increasing entropy. That’s what happening now.
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Emptymind:
If we are worried about energy, we might as well go back to the jungle, kill animals and eat them. That is perfectly “sustainable”.
We have a population of 1.3 billion, whom we need to bring into the middle class. It is the most selfish and hypocritical thing for people like you and me to say that we must keep the poor as they are because it is not “sustainable” in terms of energy. In effect that is what you are arguing. Will you be prepared to give up your middle-class lifestyle and live with the tribals of Chattisgarh or the North-East? No, you want electricity, cars, a good house, entertainment facilities – but you feel that the 800 million people who aspire for the same cannot be given those, because you feel there is no energy for them. You are telling me that you have a monopoly on energy consumption.
Coming to the practical answer to your question: there is no energy problem. The problems are purely economic. A combination of high fuel prices and massive traffic problems will drive city dwellers to mass transit like the metro. The metro network will continue expanding, and will be introduced in more and more cities. Simultaneously, electric technology will improve, and electric cars like the Mahindra E20 will improve in range and utility, and will become more affordable. As fuel prices increase further, it will result in a massive move towards electric cars.
Simultaneously, high fuel prices will make it viable and profitable to conduct oil exploration in hitherto unviable regions such as deep-sea, frozen wastelands, etc. With the advent of shale oil, the day of “peak oil” is anyway postponed by decades, if not a full century.
Simultaneously, coal liquefaction will provide even more oil. I foresee most of the coal going towards liquefaction, around 5 decades from now. We will see more and more electricity being generated in nuke plants. Thorium is the star on the horizon, more so in the case of India. We will see almost 80% of electricity needs coming from nuclear sources.
Needless to say, renewables like Solar will get a massive fillip in the coming years, and companies will conduct more research and the technology will improve. The same goes for wind, geothermal, tidal and other unconventional energy sources.
Hydrogen powered vehicles, with the hydrogen produced by nuclear electricity, will also have a massive market in the future. Market forces will propel investment and innovation in this technology.
Like the example of Brazil, we will see more flex-fuel vehicles and many 100% Ethanol vehicles. Ethanol and Biodiesel will see a massive upsurge – you know that we already mix 5% Ethanol in all our petrol in India. This number will increase in tandem with the internal combustion technology required to burn higher and higher percentages of Ethanol and smaller percentages of fossil fuel.
I can go on for 5 more pages, but I will stop here. Please don’t give me these “energy arguments” to prevent development and keep the poor as poor as they are. There is no energy problem. We already have enough alternatives to keep going for another 500 years, but in the present-day, fossil fuels are the most cost-efficient and easy option – that is why fossil fuels remain the most popular. This has begun to change, and will change drastically in the coming decade. It will follow the laws of economics, demand and supply. Repeat: there is no energy problem. Just focus on development and the economy, there is no energy problem, there will be no energy problem.
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Emptymind:
I don’t know whom you are referring to when you speak of “supporters of crony capitalism”. I am never in favour of Ambani-Congress type of crony capitalism, as I have mentioned several times.
Your philosophical crap is good for lazy Sunday afternoons, it has very little value in practical terms. I am a practical person and I need practical solutions, answers which have tangible value. I don’t want some disjointed airy dreamy talk about entropy and disorderliness and orderliness.
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And Emptymind:
Before advising others to “moderate their greed” (another philosophical BS), I would recommend that you follow your own advise about not disturbing the ecological balance, and go back to living in the jungles and eating animals in complete harmony with nature. You don’t need all the luxuries such as electricity, fuel, communication, entertainment, and so on.
The world is tired of this kind of preaching – seriously.
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sorry for any hurt you feel for the word “crony capitalist” Its not directly meant to you. please come up with physical foundation of your economics before calling other disjoint here.
You can even claim to extract energy from Mars when all energy on this planet is degraded by over consumption. The problem in mainstream economics is that it always assumes infinitesimal continual supply of energy and natural capital for maintaining balance in supply-demand phenomena. It emphasizes more on “competitiveness” of participants in market system than the surrounding ecosystem. For you thats only efficiency. I have strong prudence that this concept would have been borrowed from Newtonian mechanics or even statistical mechanics to some extent. Newtonian mechanics are time reversible. You can assume degraded energy (increase in entropy) can be reverting back without doing external work! Newtonian mechanics assumes no violation (even it does only in extreme circumstances) of common expectations of causation and determinism. But in reality most process in thermodynamics, general relativity, quantum mechanics, quantum cosmology violates reversible process (google arrow of time). All This is because of “law of entropy”.
Coming to farmers forceful evacuation from his occupation.
“competitiveness of market equilibrium” is not the only factors in deciding optimization of economic activity. economic activity is trade off between two factors which are opposites in meaning but we need to balance them.
1. Competitiveness with “large fixed assets” in “stable environment”
2. Flexibility with “small fixed assets” in “volatile environment”.
“Environment factor” here is relative in nature. It covers both external aspects and mental aspects of the participants. The same environment which is stable to one participant may be volatile to other participant.
Let A1, A2,.. An be the participants in system -1. B1, B2..Bn in system -2.
-It is appropriate to tell all members in system-1 to show enough “competitiveness” in work to reap maximum profit. Here no doubt that competitiveness factor should dominate.
-it is also appropriate to tell all members in system-2 to show enough “flexibility” in work to have better adaptation in extreme situation. Here flexibility should dominate.
-But, when the same “competitiveness” factor dominates in system-2 which is unstable and volatile!, you will see more corruption and chaos, agitation, in the system.
-same way, when the flexibility factors dominate in system 1, it leads to drowsiness, unproductive.
Thats why elephant with large fixed asset(in size) is king in its stable environment(forest) suffers massive disorder in volatile environment (towns) searching for its huge negentropy source!
i will iterate here i am not against the developmental activity. but it should by done with high regulation governed by physical laws. laws of economic should obey Physical laws for its own good. its not like to avoid one extreme we went to another extreme.!
The problem with Corporate is that never learn to live in flexibility in volatile condition, dictates the poor farmers to show competitiveness with them (they don’t care whether farmers are in stable or volatile condition with every prejudiced thoughts about them) and find ways to feeds upon negentropy( farmers land, water recourses) for balancing its continuous dissipation of energy! Let them learn to live in extreme condition which is good for its own health. we should tame wild elephant here :)
Only local factors and the participants in it should determine the disintegration of farming in respective cultivating land. No other external economic bullies or even state should interfere in the rights of farmers.
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This is how it is
food security bill
Food for the people
Security for the congress
Bill for the tax payer
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.correction
No other external economic bullies or even state should not interfere in the rights of farmers.
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and Vinay. I am not interested in advising you. If you have billion dollar, you are free to expend it in what ever way you like. I don’t have rights to question it. But creating ideas based on your own defected economic theories( with vested interest) for expansion of corporate wealth by forceful expulsion of poor is untenable.
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Vinay,
Excellent counter arguments.
Doomsday scenario predictors like EmptyMind need to read this:
http://www.singularity2050.com/2008/03/rebuttal-to-a-f.html
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Emptymind:
I don’t really comprehend your post. The issue is that I am talking in hard practical terms while you are providing esoteric analogies.
The facts plainly stated are quite simply: you claimed that my development/economic model was nonviable because of energy constraints. I responded with examples and concrete and tangible points to show that we do not have an energy problem, even with current technology. You need to rebut my arguments and convince me that my points were incorrect. I don’t think you can do that, because my points are perfectly valid.
I am not even talking about future yet-to-be-discovered technology or “extracting energy from Mars”, as you put it. I have not talked about cold fusion and mysterious new energy sources. I am talking about current technology. I have explained that even with technology which we currently have, we have enough energy for hundreds of years.
I don’t believe in doomsday predictions because commonsense thinking tells me that doomsday predictions are nonsense, as I have explained in my previous post.
I recommend you read Goldstar’s link. I found the comments in that link spot-on too:
“I have often suspected a strong tribal component to the doomsayer’s view. “My tribe is not ruling…the wrong people are making money…clearly we are on the brink of some disaster.””
“I agree that most people at the oil drum site are professional pessimists. Either they make money from doomsday predictions, or they get their jollies that way.
Peak oil catastrophe, global warming catastrophe, overpopulation catastrophe, Y2K catastrophe, nuclear winter catastrophe, . . . , . . . ,
It’s a sure sign of decadent people with nothing important to do, to spend so much idle time master-baiting on catastrophe fantasies.
“
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Goldstar.
Sir, I would be the most happiest person if there is no doom day for you . Seems you have not comprehended thermodynamics laws. it puts limitation in even on efficiency. please go through its 0th, and 3rd law also. There is no 100 percent efficient system in whatever product/technology you take. Also it doesn’t restricted only on charcoal, coal, batteries, petroleum products. From my understanding thermodynamics principle pervades all phenomena where heat is involved. food what we eat, the digestive system which process those food, the mind we think and even communication system you use, obeys entropy law!. Think why there is degradation of values(another kind of energy!) in our society -;)
I wonder whether our most of our IT coolies in this blog know this- Claude Shannon father of “information theory” borrowed concepts from thermodynamics to his “information theory”.
the entropy law limits the channel utilization by creating trade off between “bandwidth efficiency of the channel” and “energy efficiency of the the channel”. we need to optimize the two for better overall efficiency.
same way the same entropy creates trade off between “growth rate” and “energy utilization” in economic spear. in other words entropy limits the growth rate.
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EmptyMind,
Your example of two systems and “Only local factors and ….” will work only if the number of participants in the system are stable i.e. the population remains same, and does not increase.
For e.g. villages may have been self-sustaining in the olden days. But when the population of the village increases (due to better health and longetivity of life, not due to migration), the production of the village will not suffice. The employment opportunities of the youth will not be there. And thats when, either you have to usurp lands from the neighbouring village (that is also facing the same issue) or go for different type of employment for farmers.
This is where your example of the systems breakdown.
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correction.
//the entropy law limits the channel utilization by creating trade off between “bandwidth efficiency of the channel” and “energy efficiency of the the channel”. we need to optimize the two for better overall efficiency.//
what i meant was trade off between bandwidth of the channel and power(or energy) content of the signal.
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Emptymind,
“Think why there is degradation of values(another kind of energy!) in our society -;) “.
Another of those woolly headed “good-old-days” kind of statement without validity. Which values are degraded ? Slavery? Untouchability ? Human rights? Women’s rights?
Do you know that the period we are enjoying now is the MOST peaceful in the entire history of humans?
Please give practical examples. Don’t talk about Thermodynamic laws. We all know that. Please talk about economics, which is comprehensible for us lesser mortals.
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please go through this forum for better insight.
http://phys.org/news176365278.html
also this one:-
Click to access entropy.in.economics.pdf
and this one:
Click to access book.pdf
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