Re: WTO and socialism

[Arvind Kumar <arvind.kumar@rocketmail.com>]

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Administrative Note:
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Week's Agenda: Political & administrative reforms
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---Vinay Chandekar <vinay@asiaaccess.net.th> wrote:
>
> 
> LET ME TELL YOU ONLY THIS  that the policies
> which you seek to decry TODAY were the exact
> policies FOLLOWED by US & Germany 150 years
> AGO who advanced protectionist arguement to safeguard
> their respective industries against the then far
advanced
> British industries.

We are talking of two different policies. Today the
situation has changed. We are not talking of mere
imports but of industries setting up their base in
India. Sure, there will also be imports but the
benefits of these new industries will outweigh the
disadvantages. The protectionist policies of 
yesteryears were to keep out foreign goods. We are
talking about companies in india but owned by 
citizens of another country. Such an arrangement 
is a win-win situation. They make their profits, we
make ours (through taxes, generation of employment,
getting latest technology, exposure to competition)
Let them make profits too. Let us not feel jealous of
them.

> 
> Till 1945s, US was a relatively poor country.
People used
> cheap linoleum flooring in houses (they have to use
to
> protect themselves from cold). See the GDP graph in
> Prof.Samuelson's Economics book and you will find
> that the Second World War, in which US was supplying
> all sorts of equipment to the warring nations, gave a
> tremendous boost to their economy. And once, you are
> made, then you are Made. It is like securing a huge
order
> or contract in which a trader makes a big big
profit and is
> then in a position to undertake modernisation,
expansion
> and fresh research.
> 
> Economic gains are made by innovation and invention
not
> by paper-shuffling. But once you make money, you
can afford
> to shuffle papers.

Exactly. Isn't that why we should open up to 
industries? The dangerous ones are going to be the
financial institutions which gamble big time but what
about the other industries which generate employment?

> 
> The arguement about Gold is not about what is of
value - it is
> about breaking a sovereign understanding.

Point taken. Let us not criticise the philosophy
of capitalism for the lapses of one country. To
believe that USA became rich thanks to breaking 
a soverign understanding is to fool oneself.
I am not saying USA is perfect but why blame an
economic theory for the faults of USA.

> Under gold-standard, the value of a nation's
currency has some
> reference-point : in floating rate exchange it
becomes gambler's
> chips.

This is not true. Floating rate represents the true
worth of any currency. Why artificially fix a rate?
How is the government going to maintain the rates?
By printing notes? When you print rupees, it ends
up in inflation and since you cannot print dollars,
you end up with massive debt. What is the use of
fixed rate? Periodically, you'll be forced to devalue
it just to make it closer to reality. Why not let it
happen continuously. At least it won't be cruel on
the people as it is when there is a sudden and steep 
increase in prices when the devaluation comes.
You can gamble on anything. You can gamble even on
democarcy. That is not the fault of democracy. you
can gamble on the price of onions. Why blame the poor 
onions for it?


> 
> Re. WTO : I think you will agree that the real aim
of this to open
> the world markets and as can be concluded from what
has been
> clarified above  is that weak economies can not
afford to open
> their markets but should behave like US & Germany
of 150 years
> ago.

This is not true. Letting in the financial companies
who speculate may be dangerous. In india, even that 
cannot be done. Without full convertibility and proper
derivatives market, the only speculation is on the
performance of industries. Such a speculation is
actually beneficial as it manifests in the form of
assessing the capabilities of various industries. It
is also in the interest of the banks who lend to see
to it that they lend it to people who actually 
contribute to growth of the country (by making profits
for themselves)

> 
> Suspicion of West : We are not suspicious. Just
read history. The
> only thing the Spanish did in when they found gold
and silver in
> American continent is to cart them back to their
homeland by
> ship-loads. What Warren Hastings did in India was
to snatch
> gold necklaces from the NECKS of Begum of Avadh.
> 
> I have personally heard from the mouth of a Belgian
(to day a
> upper middle class citizen) that in 1940s, there
used to be ONE
> loaf of bread as Christmas dinner for their whole
familyand that
> this guy with his brother used to looking for an
opportunity to
> steal a chicken from someone's coop to put it on
the table !
> 

Yes, they did it. That was past. They were barbaric.
Why hold grudges. That period is over. How far back
in history should we go to vilify someone? 50 years?
2000 years? Let us move forward, not harp on what 
happened. What happened was clearly wrong. We cannot
undo it. Let us move forward.

> Gold and silver represent money and nothing can be
accomplished
> without money. You have to pay for raw
materials.You have to pay
> labourers. You have to pay the army - Napoleon
said," An army
> walks on its stomach."
> 
> Talking in general terms and without going into the
theory of money,
> What can you do without money ? To think food and
water is enough
> is to ignore the possibility that tomorrow guns may
be required
> to fight off the enemies and arms and ammunition is
not for sale in
> exchange for rice and lentils.

Money = Effort. Money =/= Gold or Silver or Paper.
That is crystal clear to me. If we suffer from food
or water shortage, we are helpless. We do not. So why
aren't we putting in the effort to lead more 
comfortable lives?

> 
> I have said again and again and again that ISMs do
not concern
> me. What we want is Freedom from Hunger, Freedom from
> Oppression, Freedom from being dictated to, as has
happened
> for the last thousand years in India. For this to
come true, you

In other words, you want capitalism :-)

> have
> to be AWARE of the Tricks of the Game. The game is
a Con Game
> but to apprehend the card-sharp, you have to be
Powerful otherwise
> his backers and bouncers will beat the daylight out
of you
> economically
> and physically (think of Iraq). The Game is about
Money - it always
> has been.

It is about money. No doubt about it. It is not a con 
game. It is a game the rules of which have been agreed
upon beforehand. Such a game also incorporates in its
rules conditions which see to it that no one loses.
you seem to think that there is more gambling than 
productive activity. This is not true. Just look at
the revenue of Singapore. I do not have the numbers but
the first time I came across the figures, I was 
surprised to see how little of it came from the
finance sector. Manufacturing and useful services
helped singapore build reserves of 90 billion dollars.

> 
> So make money first and become Prosperous. To do
this adopt the
> policies that made yesterday's poor nations rich .
They restricted
> trade, they protected their industries, they
favoured their
> own-type.
> By removing all restrictions and liberalising the
economy
> prematurely,
> to the organized onslaught of the organized West,
you are exposing
> your economy to risks.

The question of Our and Their is thin when a foreign
company sets base in india. It has indian workers,
pays taxes in india, all its new innovations in india
benefit india, its exports benefit india and so on.
Let them take a little money they make back home too.
Why not?

> 
> It is true that we languish behind.  But what we
have achieved in 50
> years is REMARKABLE. We have made this progress
inspite of our
.
.
.
<SNIPPED>

> of learning. No my friend, I can not agree with you
that socialism
> or
> whatever ism we have followed has not served us well.

Whatever we have achieved is very little. Nothing 
remarkable about it. A country with 16% population 
hasn't contributed 16% in every field. 
The achievement which is usually touted by the Govt
is the green revolution. That was nothing great. 
Punjab got irrigated. No more than that. We did not
improve the acreage yield. According to the 1994-95
figures, india's yield per hectare in quintals for
wheat is 25.5, china's is 31.2, Ireland's is 74.5.
For rice india's is 19.2, china's is 55.1 and N.Korea's
is 75. 

> 
> Yes, we could have achieved more but the failure
has been due to
> two reasons : adoption of a certain policy that
while building up
> our

Completely agree with this view. There is a name for
the set of policies adopted - it is called socialism.

> industry, did not produce immediate gains - to say
that every policy
> decison MUST succeed is a little bit too much
especially as we were
> starting from scratch - and the moral-tone of our
people. The
> greatest
> impediment to our progress has been the failure in
IMPLEMENTATION.

This is not true. When you order companies that they
should make 30000 scooters per year or that they should
export only so much, it is a flaw in policy.

> 
> Our policies may not have been perfect but the
major cause of
> failure
> has been in the field of Implementation and NOT
THIS OR THAT
> POLITICAL SYSTEM.

I do not blame the political system but the economic 
system.
All that socialism has done is to indulge in 
propaganda. I still have a few Soviet era books on
various subjects with me. If you have any, please read
the last chapter. One science book for children says
that it was the power of socialism which made a 
Soviet the first person in space. A book on chess says
that the 'Great October Socialist Revolution of 1917'
created conditions for chess to reach unprecedented
heights in Soviet union.
The situation is not different in india. If you are a
socialist, you are pro poor. Otherwise, your aim in 
life is to see the limbs of poor people fall off 
before they die so that you get pleasure from their
sufferings. 
My point is that all economics is about the good of
the poeple. Leftists by propaganda have given a bad
name to capitalism by hijacking terms like 'welfare',
'intellectual' etc.

-Arvind 



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