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Admin + Fairness

Administrative Note:

Week's Agenda: Social Conditions

  Minimum Wage
  Rules regarding Safety of Personnel at work to be made clear
  Introduction of Social Security Net
  Introduction of identity card
  Removal of Age discrimination at work
  Creating conditions so that reservations will no longer be necessary

SS :
> Let me assure you that people in BIMARU states did not reproduce more
> rapidly out of the great urge to get more seats in the Parliament. 
> are the poorest states of India and they had more babies for causes 
> we have already explored. I assure you that our suffering in India 
> NOT become lesser if we freeze the seats the way they are. My
> recommendation: let the basic Rule of association be obeyed and let 
> person get one vote and an EQUAL representation.

Arvind :

whatever rule you want to pass should be done AFTER creating the
conditions for it. Otherwise it will be disastrous. If the government
one fine day decides that reservation is not fair and scrapped it
overnight, the consequences will be terrible. 

SS :

Arvind :
what have you proved? you've stated some obvious facts which cannot
be implemented in india due to many reasons.



I agree with Arvind that whatever rules are passed should be done
after creating the conditions for it and as to why they can not be 
implemented in presend-day India.

I have taken this a step further in my last posting : Do we have to 
by Rules framed by another generation who even though they may have
had the best interests of the nation at heart, failed to see Farther 
the conflicts that could arise as a result of the rules then framed ? 
would be like saying that all the rules of good conduct and prosperity
have been laid down since the days of Ramayana (the Kingdom of
Sri Rama was a prosperous one, I suppose) and Mahabharatha and
therefore fresh thinking including the Insistence on Free markets and
Market-supremacy is Unnecessary which is contrary to the Present
line of thought.

For that matter, I think, this defence of Free markets is coming rather
late in the day as even Michael Camdessus of IMF is getting roughed
up for IMF's free market ideas and consensus is turning to "managed"
flow of capital.

The reason behind this is a bit obvious - the function of economists is 
to Observe social conditions and devise guidelines for equitable 
distribution of the Economic-cake. They are usually "good-hearted" 
fellow who seek to "right the world" in the light of their own 
"experience". No body can fault them for practising the type of rigorous 
precision that goes into the thinking of a "scientific mind". A very 
good example of this was presented by Alan Greenspan a while back when 
he pronounced Bombastically that it was "too late in the day to turn the 
clock back" while commenting on statements by Dr. Mahathir on 
currency-values as perceived by Markets. Well, Mr. Greenspan may know 
his economic theory well but in this instance was certainly looking more 
to the Invisible Hand that had within its control the turning on and off 
of the tap of his own personal money-supply - Go against the president 
and get Sacked. Who would like that after almost completing his "term" 
before retirement and risk a big reduction in pension ? But he did not 
take into consideration that Trains, including Economic-trains, do crash 
and when the Malaysian economic train was in danger of "crashing", Dr. 
Mathathir rightly, "stopped" the train and "Re-started" the clock Where 
he thought it would do most good to His country. National economy can 
not be held hostage to International concerns which is another name for 
International Cheating.

A recent example, a few days old, is the rescue on the International 
capital market of LTCM (a big Hedge Fund) to the tune of 3.7 billion 
dollars. There are two Noble Prize winning economists and an ex-Fed 
governor on the board of LTCM ( all americans,  which just goes to show 
that market-savvy is not the preserve of american-economists). This 
hedge fund had an open position on the market of $200 billion, in total, 
then reduced to $ 100 billion. Can you imaging what damage this can do 
to international capital flows ? These leveraged funds destablize world 
markets by distorting"supply and demand' by creating artificial 
scenarios that mislead the market participants.

Last  year LTCM paid out a dividend of $1.7 billion dollars to its share 
holders. Do such people deserve to be bailed out ? But the International 
community had to do it since the fall out of not doing so would have 
carried greater risk to the world economy.

There are other examples from past including the then biggest trader of 
bonds, Solomon Brothers being successfully taken to court for "rigging 
bond bids". They were finally heavily penalised and barred from 
bond-trading for certain time, if my memory serves me right.

If this is the Morality of market where even the market leaders stoop 
down commit such shenanigans, don't you think markets can not be left 
alone to do as they like ?

Just a couple of lines about why the commodity-producing nations have 
remained poor. Here also the market distorting factor of buyers being 
fewer (developed countries ) and suppliers being many comes into play. 
Besides this the "Productivity" of Land has not yet reached the marginal 
level where shortage would begin to be felt by the market as a result of 
a few producers seeking to limit their production to hold up the price 
line. De Beers has successfully upheld the price of diamonds in world 
market by withdrawing the excess supply and nullifying the above-stated 
principle. But producers of coffee, sugar, tin and other metals and 
commodities that form the economic backbone of many countries can not do 
this because their coffers are emply unlike the overflowing coffers of 
De Beers.

For these and many other reasons, it is Most important to follow market 
- measures that are compatible with the economic development of an 
individual country. What suits america doesn't have to be suitable for 

To bring this to a Scary end - let us not follow Bill Clinton into His 
methods of doing things economically and personnaly. Half the economic 
troubles in the world are the results of his push for globalization of 
trade and use of IMF-aid as a policy-instrument. George Bush started it 
all when he said, "Japan is too expensive for us to do business there" 
and let loose his economic-hounds to eviscerate Japanese economy. This 
policy was expanded greatly under Clinton and to day the country that  
is the biggest creditor to the world and holds 60% of American Treasury 
certificates is
"DOWNGRADED" by Moody's for its soveriegn debts. Some Joke that. This is 
the Japan that "wanted" to help start an Asia Fund last year to 
kick-start the revival of Asian troubled economies. But, mainly, 
American pressure prevented them from doing that as the Asia Fund would 
have Reduced the Clout of IMF which is Nothing more than a means of 
Recycling the rich world's financial reserves into "interest-earning 
investments". And so by the way is EXIM bank which guarantees the "home 
exporters" from default by private foreign parties AFTER getting 
guarantee of payment from the Importer's home-Govt. If you are under the 
impression that these banks set up shop in your country to help YOU, 
then YOU ARE TOO GOODY GOODY AT HEART or bedazzled by Economic theory. 
Notice how your neibghour's infant child radiantly smiles back at you 
when you "make eyes" at him - he will flash the same radiant smile at a 
kid-snatcher too. Let us grow up and cross this stage of flashing  
smiles at every western idea and learn  more about how international 
business operates.

Are you sure the market forces are working ?

Sorry to sound so Cassandra-like, don't like to criticize too much but 
you are devising policies for the future India and that concerns me 

This is not Personal in that it seeks only to serve as a good-hearted 
(Alas ! Economics) warning to some of our  more ardent team-members.

With Regards to all.

Vinay Chandekar.

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