Came across this wonderful summarization of pre-1991 era (in India’s context), from one of Gurcharan Das’s articles :
“Dreaded days prior to 1991 when our government did believe that the way to make a poor person rich is by making the rich poor”
Gurcharan Das almost always impresses me.A lot of my thoughts are reflection of his.
11 comments:
I like this and agree. Now I am looking forward to reading a debate here :)
@IHM.
Ha!Always open for a debate..lol, although it is not my intension here.I loved the summarization, so precise and yet so accurate.It captures the essence of socialism.
of course after his hey days at proctor and gamble - he is writing how he peddled to get license for p & g. chemicals ( that emit a lot of fumes while producting it in india)
has he forgotten to write how much air pollution was p&g instrumental in ?
i am sure gurucharan knew so much more and he has censored his pen in not giving many more vital details.
there are many such phoren companies who are responsible for carbon emissions in india and is very harmful to the people in the town. as you know indian companies ( though they are american ) take the leverage of also safety issues.
in essentiallity, american companies make all their chemicals that are instrumetnal for high emissions in india.
and people like gurucharan are responsible for it. did he write that?
Chikki let us not disappoint IHM here by not debating. In unbridled capitalism the rich will always become richer as the rules are framed in such a way to help the capitalists. If it is a fast growing economy as in India and China along with the rich becoming richer poor can improve their situation a lot. But still the gap between the rich and the poor will continue to widen creating social tension. Democratic Governments try to decrease the social tensions by trying to implement welfare measures funded by taxes mainly paid by the rich. In most of Europe education and health are funded by Govt money which in turn is making rich poorer and poor rich and I support it India should also follow this policy so that the gap between rich and poor are not very wide. Only such a policy will prevent social tension and extremist movements like Maoists which threaten our democracy and Capitalism
@Charakan
I Obviously don't agree. Such subsidies to bridge the gap will not actually make poor rich,will it?Economic policies alone can change the fortunes of poor, specially if you are looking at eliminating poverty in long term.
As said before
Create wealth before getting anxious about distributing it.
I really have nothing much to add other than this.
will free access to quality health care and secondary level education make the poor rich? Yes then they can have a more level playing field with the rich and there is more chance of economic improvement due to better health and jobs. Tendency of wealth accumulating in few hands creats more social tension and thereby threatens the process of creating wealth as it happened to feudalism.More evenly distributed money power means more and more things are bought and there by boost industrial production.So distribution is also important for the process of creating wealth.
@Charakan,
You are basically explaining me 'Subsidies'.
Few points
Foremost : You are an idealist and not an economist just like Nehru was.
The statement posted here is not related to 'subsidies', and carries a larger significance and depth.
Lemme put it here again:
"Dreaded days prior to 1991 when our government did believe that the way to make a poor person rich is by making the rich poor"
Now, not letting an entrepreneur open an industry by excessive controls with the fear that he/she will become ultra rich doesn't help eradicate poverty , or does it? This is just an example of what happened before 1991 and what Das probably means.
Since you wanna talk about subsidies, lets deal with that too :
Subsidies have become a political tool and is being overused to an extent where it is argued that the people will actually be richer without it. How? Remember Maharashtra's free electricity drive?The money eroded from state coffers was so enormous which if utilized properly would have anyway resulted in more jobs and higher per capita.
What exactly do you want to distribute if you don't wanna produce anything considerable at first place?You can't ignore Bangalore and talk about distributing wealth to poorer parts in Karnataka. I mean, who do you think is producing Money that they want to distribute - Its Bangalore!!
Don't fall for this political game.No one probably cares for poor more than the rich do.Today Ambanis, Tatas , Murths are giving jobs to millions. Why would you want to stifle entrepreneurship in the name of 'equal distribution' ??
The piece of cake that you want to divide is so small right now that your 'poor' are anyway going to be worst affected. Lets put our efforts in building a larger piece of cake and then distributing it which will automatically solve all your social problems.I live in a country where engineers like us stay with cab drivers in the same building because all of us can afford it.Do you think this was a result of some politically motivated subsidy or purely a result of better economic policies?
Subsidies are important but please understand there is a limit to everything.India spends 14% of its GDP on subsidies, how much does it spend on health or education??
Even after all these subsidies this is no way you are making a poor rich. Its an eyewash. Give him opportunities in a way that he doesn't need these subsidies.
A poor person probably only understands the naive fact that Govt is subsidizing him and hence doing more than enough. No wonder subsidies have become merely a political tool, something which is prolonging our economic development.
Having said all this, I want to stress that don't quote me as someone who wants zero subsidy.
yes like you i am not an economist.
I talked abt access to health care and education and you never mentioned abt that.
Singapore Govt subsidize heavily in both Health and Education and spends 3 times more than India per person in the above 2 fields.[the money of course come from tax collection and that makes the rich poorer]
Indian Govt never ever spend such money on health and education.either in Nehru /Indira era or in reforms era. So in my opinion Singapore Govt makes the poor rich by subsidizing in areas where there is real need of subsidy while Indian Govt never did that.
Will answer other points later.
@Charakan
I am not an economist either, but I would like to be pragmatic.Subsidies did not make anyone 'rich' in last 60 years, nor will it in next 60.
Also, I certainly think that you are confused between making someone rich and helping him/her fend off starvation by giving subsidies. Subsidies per se won't make anyone rich, but will help poor survive which I never disagree with.
To make someone rich, you need to have long term economic policies and not just cheap grains.
Sorry Chikki if I am getting on ur nerves. My choice of words were not correct. What I meant was poor becoming richer and not rich. I did not mean food subsidy. I meant only free or very subsidized education and health care. That will certainly make the poor richer and sometimes gives a chance to become really rich. As it is paid from tax money it can reduce the savings or spendings of the rich though. What is your opinion abt heavily subsidized education and health care ?
@Charakan
Oh, you are not getting on my nerves, don't worry..!!
"What is your opinion abt heavily subsidized education and health care ?"
My opinion is very simple - Necessary subsidies for people who need it. It shouldn't be based on your caste. It should be based on your family's financial health.It shouldn't be over-subsidized such that it becomes self defeating. Also don't just subsidize, get your policies right to create 'opportunities'. More about it, if I get to ponder over it for like a long time.
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