It is, again, generally accepted that free markets must be arrived at quickly, and that phasing them in slowly and gradually will only delay the goal indefinitely. It is well known that the giant socialist bureaucracy will only seize upon such delay to obstruct the goal altogether. But there are further important reasons for speed. One, because the free market is an interconnected web or lattice-work; it is made of innumerable parts which intricately mesh together through a network of producers and entrepreneurs exchanging property titles, motivated by a search for profits and avoidance of losses, and calculating by means of a free price system.
Holding back, freeing only a few areas at a time, will only impose continuous distortions that will cripple the workings of the market and discredit it in the eyes of an already fearful and suspicious public. But there is also another vital point: the fact that you cannot plan markets applies also to planning for phasing them in. Much as they might delude themselves otherwise, governments and their economic advisers are not in a position of wise Olympians above the economic arena, carefully planning to install the market step by measured step, deciding what to do first, what second, etc. Economists and bureaucrats are no better at planning phase-ins than they are at dictating any other aspect of the market.
Go read this 1992 essay by Murray Rothbard. As I had said before, Indians have no love for liberty that comes from the gut. Those of us who enjoy the fruits of increased prosperity tend to overrate the process of “reform” while those of us who get a peek in from outside tend to overstate the causal link between their misery and “reform”. Reforms in India have always been in the form of handouts from the maai-baap sarkar. We never really demanded them in 1991, nor do we demand them now. There is no structural change in our outlook towards liberty or the role of government in civil society.
Corporate interest groups getting their way does little to liberate civil society, but more dangerously, it strengthens the cause of the already intellectually bankrupt left. Utilitarians may rejoice at the partial opening of markets, but I am not yet holding my breath for liberty.
Filed under: Indian Politics, Liberty, Special Interests | 1 Comment
Yep, socialism sucks. It creates inefficiencies. But, lets see how good “free markets” are. Can free markets assign the right price of using a product, including it’s environmental cost ? Is oil priced today to account for extraction/refining costs , or does it include the price of global warming down the road ? Is paper priced today to accout for cost of cutting a forest + manufacturing paper or does it include the enormous cost of species loss due to deforestation. Do the metal prices of today account for mining + manufacturing of metal , or does it include the massive ecological harm done during mining ? Do the food prices of today account for industrial manufacturing of food using pesticides/fertilizers made from cheap energy or does it include the cost of massive pollution of our soils because of pesticide usage ?
The fact is free market is good at short term liquidation of natural capital (oil, forests, precious top soil etc) which built up on the earth for millions of years. All that is liquidated in couple of centuries and we boast of economic wellbeing and success of free markets. How will the market assing price for global warming effects that may occur 50 years from now ? How will the market assign price to species loss ? How will the market assign price to loss of billions of tonnes of top soil every year ? Next time you meet a free market libertarian, ask him how they’ll get the price of goods to incorporate the environmental costs.
http://www.earth-policy.org/Books/PB2/PB2ch1_ss6.htm
Regards,
Madhav