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A relevant debate
I think that the socialism vs capitalism debate is a relevant one and will
retain relevance until there is at least one socialist left in India. One
has to ensure that the last socialist is convinced about the futility of
On Fri, 14 Aug 1998, N. Arvind Kumar wrote:
> At one time, I must
> confess, I thought that there was something in
> socialism. That was when I saw from close range
> speculators making millions of dollars and the
> richer traders making even more money than the
> ones with lesser money. What is worse, they gambled
> on commodities they never saw and made millions
> in minutes while the people who produced these
> commodities remained poor. Statements like "The rich
> become richer" and "Middlemen make all the money"
> seemed to hold water.
Thanks for pointing this out Arvind. The common impression about the
"failures" of capitalism is built on such 'experiences.'
In reality, what you are referring to is an EXCELLENT activity: the
completion of markets for trade of commodities in the future. That is one
reason why the price of breakfast cereal (I read this somewhere yesterday)
does not fluctuate from $0.50 per pound to $20 per pound over the course
of the year. The consumer and the farmer would be both completely ruined
if futures markets did not exist. The other side to some traders making
millions in a minute is other traders losing millions in a minute. There
are in fact very few life-long winners in this business of trading, which
seems to confirm - tentatively, the EMH, and that everyone can barely make
a decent living out of this exercise. How about you, Arvind? Are you a
millionnaire by now? Have you not lost a single trade?
The other major 'fluctuating' market is the stock market, where the
country's corporate wealth is being VALUED (through trading) on a daily
basis. Stop the stock markets and you will see wealth destroyed, as nobody
then knows how to value any firm, or its CEOs. The markets send a bunch of
critical 'signals' to investors, including bankers, lenders through the
continuous attempt to value the future expected output and sales of a each
The existence of mechanims to value other institutions and the future,
itself, is the key to capitalism. It is indeed impossible (and I do not
use this word lightly), to design an alternative system to the Price
system operating through competitive markets, to do this work.
That way capital is always gushing into areas of the highest possible
return: usually high technology. As soon as a particular technology
matures, capital flows out and gushes into other, newer technologies. No
single planner can do this by himself, and that is one reason why India's
socialism prefers to produce a 1950s Ambassador car model even today. The
socialist is a ossified fossil. And fossils only increase in entropy, and
decay, as India has decayed, visibly, today.
Evidence has consistently shown that (this, by the way, amounts to a
In capitalist societies, the rich have grown richer only if they were
really smart, while the poor have always grown richer, and many of the
poor have become enormously rich. Additionally, capitalist societies force
you to be honest else you face serious economic loss.
In socialist societies, the rich remain rich, while the poor become
poorer. In fact, the rulers become enormously rich. The ruling family of
Pakistan is said to have amassed more than two billion dollars (CNN news)
and India's ruling family is clearly very close. And finally, everyone is
forced to become corrupt and dishonest, or face serious economic
consequences (for continuing to be honest). Even my friend who paid
Rs.1000 to the dalal in Tis Hazaari has re-inforced the socialist
corruption that is found in India. None can escape. The system comes down
very heavily on you if you try honesty as a survival strategy. I told you
about my father's expereinces in USSR which he thought was the most
corrupt society in the world (just before it collapsed entirely). Try
North Korea, if you like, today.
Despite this VERY clear evidence - lying openly for everyone to see, the
funny thing is that there are so few 'capitalists' in India. It is as if
the whole of India has deliberately pulled a black hood over its eyes, and
has stopped thinking, analyzing, or debating. Data mean nothing, nor does
theory or experiment. All that you hear is a chant: if you are against
socialism, you must be against the "people."
If I were Mr. Gandhi, instead of calling my scheduled caste brothers, as
Harijans, I would have preferred to give them two cars each, a 3 bedroom
house, electricity, clean water, public parks, theme parks, good education
for their children, and so on, through promoting a highly capitalist
system in India. That is the minimum level of life you can expect in
capitalist societies if you work as a mere (sincere, hard-working)
janitor/ sweeper. Why doesn't someone tell our people that they can have
this, instead of the appalling squalor that they have today. In this
modern day, decades after Gandhi is dead and gone, if you go to Dhubri
town, you will find, at the entrance of the town, a "Sweepers Colony,"
which is like a swamp of filth, where dirty pigs and human (?) children
play together. This is the condition of our "janitors" after 50 years of
independence. I believe evidence is overwhelming in favor of a radical
change in India. The time has come to throw out this nonsense called
All this was totally un-necessary. All Gandhi had to do was to learn the
process of wealth-creation. Capitalism consistenly expands the cake. That
is why socialism must go! We want India's share of world trade to expand,
the share of world income to expand.
Today we are miserably trying to "alleviate" poverty in India. What is
that word: "alleviate" worth? It is a weak word, it reeks of
helplessless, as if poverty were an incurable disease that can only be
partially brought down in intensity.
Nonsense! There is no need to alleviate poverty. Let us CREATE (note this
word: it is an active, powerful word) wealth. It is proven to be possible
to do that, despite whatever mess we have landed ourselves into, 50 years
Wealth begins with the minds of men. Let us create situations for our best
brains to return to India, and for our excellent brains which are in India
to reach out to the sky.
Thanks for an excellent piece, Arvind!
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