From: narayana@psuvax1.cs.psu.edu (Kuram T Narayana)
Newsgroups: soc.culture.indian,soc.culture.usa,soc.culture.pakistan
Subject: Re: TRICKLE-DOWN: Let us thank the conservatives!
Date: 23 Nov 92 20:00:43 GMT
Organization: Penn State Computer Science

In article <1992Nov23.183140.5195@news2.cis.umn.edu> prabhak@giga.cs.umn.edu (Satya Prabhakar) writes:
>TRICKLE-DOWN: Let us thank the conservatives!
>
> 
   (stuff deleted....)

Cannot help writing on this thread!

>India, for example, lags behind not because its people are illiterate, 
>not because it has 800 million of them and not because it is somehow
>condemned to be congentially third-worldish. To establish a causal link 
>between any of these to its dismal state of affairs is to miss the whole 
>point. 
>
>The only factor that has caused all this distress we see in India today 
>is this: for nearly half a century the government thought it knew best.
>

Indian govt never thought that they knew the best. They thought that
people knew the least.

>The government, unflinching in its misplaced confidence in itself,
>assumed that if it were to control everything it surveys, it can achieve
>the global optimum and the maximum good for the most people. And some

This statement damns Nehruvianism. Frankly people at the top, during that
time had to assign priorities and invest in building local technologies.
One can blame the liberal intellectuals for this notion of selfsufficiency.
But these intellectuals were largely guided by their patriotism than 
by the power that control permit raj gave them. At that time, there was 
atleast on the surface a successful socialist state (USSR). People felt
that basing their model on a mixed economy will give a human face to
socialism in India. Even in retrospect, there is nothing to suggest 
that the liberal intellectuals are wrong. If you look to Europe also,
a similar trend prevailed. So it is only the fall of soviet union 
that has discredited the socialist systems.  Whether liberals were discredited
as a result is difficult to say! To some extent they are able to see
the traps of socialist development. However their fundamental premise that
one needs to build a selfsufficient economy remains still correct; this
nationalistic sentiment is reflected across the board in all spectrums of 
political thought, not necessarily liberal.

>of this was fueled by this principle: when you control, you have power
>and power is a nice thing to have. So, politicians tried and succeeded
>in holding on to power. And they did it by coddling the poor in the
>lap of government and spoon-feeding them. The poor kept them in power, not
>aware how they are wrecking themselves and their future immeasurably.

This is true! 

It is generally true that in democracy the poor keep the 
>They created a venomous web of licenses, quotas and permits and built
>mile-high protective walls. Fettered by this vexatious tax and license 
>policy, many potential entrepreneurs gave in. While politicians, armed
>with the power they vested in themselves, rampaged the country with
>gorgon flourish, the country limped along. Iron-clad regimentation
>was the price of bleak prosperity.
>

Licence permit raj is a result of limited resource mobilization that
could take place at that time, and also a result of restrictive trade
policy to protect developing local industry.

>Trickle-down will work for India and for many other countries. It has
>already started working for India under teh aegis of its new PM, Rao. 
>A prime example is civil aviation: just six months after the state monopoly
>was dimantled, close to 6 airlines are now flying, employing hundreds if 
>not thousands. 

They may also collapse like the Laker airways! Trickle down only works
if there is a substantial govt intervention to support the private
sector. Such support must be conditional on quality, competitiveness
of the delivered product.

>
>Trickle-down.  Sure if makes the rich richer, but it will give jobs to the 
>poor.  But the way to see it is that it is the payoff to the enterprising 
>for risking their wealth and creating prosperity.

No! it will not give jobs! It will give the mirage of jobs. It makes the
rich really rich; this is no mirage. It is pretty concrete.

>
>Trickle-down. Yo, it does your country good!
>

Trickle though you must; But water does not trickle up a hill. You should
take the water up the hill and then let it trickle down.

>(And let us thank conservatives for this valuable lesson.)
>
>Satya Prabhakar
>(Honeywell, Minneapolis)
>

...kt
>
>
>
Newsgroups: soc.culture.indian