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Re: Protectionism



On Sat, 16 May 1998, [PS: John: your computer is completely conked out:
gives dates a week older than the actual one!] Rozario wrote:

> No Indian
> industries, should  be protected. There should be no policy specifically
> protecting an industry. This is a negative approach. There should instead
> be policies allowing Indian industries to flourish within the international
> environment. However, an orderly sequence of deregulation should be
> executed over an appropriate period of time. 

I think Sequencing of reform is an issue of great concern. I had studied
this for a while along with a friend who teaches in IIM Bangalore (now in
IIM Indore), and wrote a little note which is at: 

	http://www-rcf.usc.edu/~sabhlok/Termpap/termpap.html

under item No.7 (Sequencing ...). If interested, pl. take a look at it:
useful as a starting point.

However, evidence in the past two years, coming in from the Polish
experiment is confirming that the 'big bang' strategy has worked much
better by forcing competitive behavior on the people at one go (I can give
references to those interested).

If we have to go for liberalization, we have to do it rather drastically,
and that is why I wanted to know what an 'ideal' party should do in its
first 30 days.  Else, we can keep "hanging on to liberalization" like we
have been doing for the last 15 years, and nothing much will come out of
it. The stranglehold of the public sector is almost complete in India
today, and privatization has been only cosmetic. 

The exact method of privatization used in Poland is also of great
interest - by using vouchers or some such thing (I forget at the moment).
Will revert to this topic in due course: for the Policy Framework, where
one has to go into much greater level of detail.

> Let's not
> think of competition simply as "Indian company vs Foreign company". We
> should equally think of it as "Indian company vs Indian company". This is
> exactly what is happening in the most advanced economy, the US economy.
> American companies face just as great (or sometimes even greater) a
> competition from other American companies in the same field as they do from
> foreign companies. 

Very well said. I think you write **very well**. If you can spare your
valuable time, and believe that your contributions will count, somewhere,
in some way, in this vast ocean that is India, then please try to do the
following:

a) Please organize your thoughts a bit more tightly (though I should
perhaps not be the one saying this!). Also, try to cut down your
paragraphs into smaller ones so that it is easier for a reader to skim
through. 

b) Please try to see if you can write brief notes/papers supporting each
and every policy that is so far on the Manifesto. These can be linked up
with the web page (as the data/ bibliographies are being linked together).
Then people who wish to go into further details of the manifesto can
explore these papers (2 or 3 pages, each). 

c) Next, please see if you could help by writing some flyers - simple
one-page handouts - very very brief, which contain the gist of some points
that people in the field can use to discuss with the workers and students
who assemble in tea shops across India. We need to convert these flyers,
once "approved," into all languages in due course and place these in PDF
format for easier downloading across the world. 

This request is not only made to John. It holds for all active (and
non-active) subscribers who wish to not only contribute to this minor
debate (within the e-mail networks) but to help start a major debate on
the ground. 

We need to start preparing for the major debates, since (a) we don't know
everything that is to be known, (b) we have much to learn, (c) we have
much to teach, and (d) people in the field have even lesser time than we
have on this list. 

People in the tea shops have very short attention spans, and need at most
five points to discuss on a particular day. We must try to address their
main concerns first: corruption, economic growth, inequality, job
security, etc., and show them that these things cannot be attained within
the current dispensation. All in one page each. We must also have a method
to get feedback from the ground.

> And all this because of "self interest" which
> Sitaramayya is unhappy about.  

John, though I have perhaps pulled this line out of context, I have a
suggestion to make:  Let us try to avoid generalizing about people's
opinions. The opinions that we all hold are rather complex, and their true
nature comes out after much discussion. For example, I quote Sitaramayya's
recent comments: 

"A free for all capitalism will take us back to the Neanderthal era. A big
government to regulate everything about human beings will take us to
Stalin's era. What we need is a mix of desirable things to prevent social
Darwinism of Capitalism on one hand and snuffing of individual initiatives
by Socialism on the other."

Clearly Sitaramayya recognizes the serious problems with socialism
snuffing out individual initiative. He is also completely against trying
to regulate everything (which leads to Stalinism, as he clearly points
out). He wants us to try to make a "mix of desirable things" - which is
what we are trying to do and have been working on in the Manifesto. 

The current "consensus" is in favor of "minimally regulated capitalism." 
None of us have - so far - advocated blind capitalism, or unrestricted
growth of monopolies, or even foreign capital. I guess there are not too
many differences between most discussants when we go a little below the
surface. I am sure that Sitaramayya does not believe that nationalization
is a solution, since that clearly curbs individual initiative. And so on.

The temporary difference I had with Mr. Sitaramayya was on the question of
'public' vs. 'voluntary' service and the motives behind each of these
activities. That was resolved satisfactorily, I believe.

Let us therefore try to understand each other much better and try to stop
even the slightest hint that might lead to any antagonism. At this stage
it appears to me that we all essentially seem to believe in a similar set
of concepts, relating to individual freedom, initiative and competition,
and that the differences between most of us are very minor. If anyone has
a major objection to (a) the Preamble and (b) the Manifesto, so far built,
then please object! I love objections! (Objection, Your Honor!! Hamein yeh
dheek nahein lagta!)  

> We must promote the spirit of voluntarism by 1.
> explicitly stating it in the manifesto, 2. promoting its awareness publicly
> 3. supporting increasing numbers of civil institutions that promote
> voluntarism in many fields.

I have placed these excellent points in the Agenda page under National
Reconciliation. If you have more specific thoughts on this, please
consider drafting a Policy framework for National Reconcialiation. 

Thanks,

Sanjeev