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Re: Enron India Problem

Please help make the Manifesto better, or accept it, and propagate it!
I would call myself a libertarian and respect the sanctity of a contract
more than a majority of the people. But here there has arisen a serious
discrepancy. The MSEB is not a private company answerable to its
shareholders. Its not even a public comapny answerable to citizens. the
bureaucrats who signed the letter have nothing to lose  when they signed
it. Will you call this fair ? What the government should have offered
DPC is merely what it offers other businesses - the safety of their
property, fairness in legal cases and the right to sell to anyone who is
willing to buy. When you sign a majorly loaded contract like the one
signed here - offering protection against so many factors, you create
what is known as a moral hazard. the producer loses his incentive to cut
costs and give power at lower rates.
What should have been done is to legalise inter-grid power trading
(yeah, it is illegal in india) and privatise the distribution. then
anyone who wants to setup a power plant should be allowed to, taking
into acount only environmental pollution factors.

why just dabhol, even in claifornia- the rulers, ignorant of the most
basic economic principles, tried to create a quasi-market situation and
FAILED desperately. California is facing black-outs now.

anyway, that drifts away from the mian theme of this posting which is to
say - voluntarily, is a term best used when the property dealt with is
one's own. And in the case of MSEB, it is a tragedy of the bureaucracy.
(kind of tragedy of the commons )

------------- Original Message --------------
Padmanabha Rao <kvprao@igidr.ac.in> wrote:
From:Padmanabha Rao <kvprao@igidr.ac.in>
Date:Sat, 24 Mar 2001 00:46:28 -0800 (PST)
Subject:Re: Enron India Problem

I think one gets a backbone by displaying responsibility. MSEB SIGNED a
CONTRACT, voluntarily. Enron did not force it to enter the contract
against its wishes. If MSEB thinks it was a mistake it has only itself
blame, not Enron. Why do we miss such simple truths ? If I break a
contract, and rely on my power to destroy to contain it, then I am being

violent. Period. And violence is not in the least a rational act.
violence is good, not proactive violence. Did Enron break the contract ?

Then certainly destroy it.



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