Profit Motive instills efficiency

Friday, October 22, 2010

Capitalism provides more economic equality than Socialism

Just imagine the situation of two towns

Communist/Socialist village in West Bengal

The population is around 100,000 where the only occupation is farming.As in a typical
socialist economy the people are dependent upon the Govt for basically everything.The people in the best of weather will have work for not more than 90 days in a year(seasonal crops). and the chances of drought or floods is too high.God forbid, if that happens they are dependent on govt packages like drought or flood relief etc.Now this is not enough to make a living around the year.So they demand from the Govt for more relief.The Govt says we love/care for the poor and starts a new scheme called the National rural employment Guarantee Scheme which they say will provide employment throughout the year.The people in the village were hopeful they applied to this scheme and waited,waited,waited.... until finally they got a job to work in some handcraft industry or construction for about 30 to 40 days. They started putting pressure on the govt for more jobs to which the govt in their usual fashion announces another package which basically creates "fake" unproductive jobs just for the sake of calling them as employed which is nothing more than "doles" given to them.The people though happy to take such "fake" jobs as it gives them money to live but they have not realised that by taking these fake jobs they have also sealed their future into oblivion as there is simply no future for them.
A corporate house thought about starting a factory in this village,the people went up in arms as they feel that the "Men in suits" will always exploit the poor and they are not ready to sell the land which their ancestors have left them.The Corporate house was ready to pay them 5 times the market value but they refused saying that the amount will not be sufficient for them as they will lose the farm land and their only source of livelihood and does not have much confidence in doing other jobs than farming.So the project was cancelled.People now fearing that if they vote for any other party such doles or fake jobs will go away they continue their support for that party.The Govt is happy that their social image is intact with the poor farming class and doesnt care about the exploding public debt of the state economy.The farmers of this socialist state have unwittingly sealed their own fate of NO FUTURE FOR THEIR CHILDREN AND FAMILY by subscribing to this socialist economy and become a part of the low self esteem,unskilled labour force in India

Capitalist village in Gujarat
A vegetable vendor in the village was witness to the remarkable transformation his hometown has gone through .No one in his village have completed high school,he himself was illiterate.As they were fearing for a bad monsoon for their crops which was their only source of livelihood, a corporate house came to their village saying that want to set up a factory there.At first they were all fearful that their livelihood would be gone but once the corporate house said that they are ready to pay 5 times the market price they thought about it.THe village committee then decided that they will accept it. So the corporate house set up the factory there.The farmers who sold their land with the money they received invested it in a property and farm in a nearby town as it was cheaper there,and the excess money they invested in deposits in Banks.
Most of the farmers then became construction workers for the factory and received daily wages till the factory was completed.Once the production started many transport,ancillary industries sprang up around the factors.There was a huge demand for workers in these indutries.Skilled People from outside town came to reside in this village as it was near to the Factory in which they work and this lead to a 10 fold increase in property prices.Suddenly the farmers found that the property that they had invested using the compensation has increased 10 fold due to the housing boom.So they start renting out to earn more income to supplement their farm income.They have also found that since the village has now become more populated with salaried people of the factory,the demand for their vegetables have increased leading to higher prices(no middleman)so higher profit margins as well.Using the excess money they invest in more farmlands or other savings schemes of their choice.
The villagers have now realised that they have enough money to send their children to school in a nearby town and education for the first time has entered their family.
They are now sufficiently safeguarded against the vagaries of nature for their farms as they have adequate alternative employment opportunities.They have completely ignored the govt for their needs and decided to support the govt which is good for business. The entire village of 100,000 has now become a group of Indians who are highly hopeful about the future and feel like they can do any job whatever they want to do and is not dependent on farming alone.They become a confident vibrant family in India

This is just an illustration of a typical communist/socialist state and a Capitalist state,both started poor and illiterate but one clearly has developed into a vibrant state which has completely ignored the Govt for their needs,and feel confident to take care of themselves and their children.Whereas people in the communist village are always scared that the "doles" or the free packages which they receive will be taken away and spend most of their time in protesting and demanding from the Govt.
with no real job or a future for their children who in turn will grow to do the same.

This is the REALITY IN INDIA, doesnt 60 years of Socialism has taught us that how ineffective it is.Govt as an institution has always been inefficient India's public debt is exploding in tune with various relief schemes given out by the Govt.How many schemes are there in India for the poor,has any of them ever worked.Nothing will work.Unfortunately Capitalism is looked upon as a system for the "Rich" when in effect it is the only means to provide inclusive growth in an economy. Japan,Germany,Korea,China etc have all attained miraculous growth only due to the capitalist economic policies of the Govt.Socialism has only lead to inefficiencies and stunted growth with no improvements in social indicators whether they are education or health.

LETS STOP THE ANARCHY OF SOCIALISM IN INDIA

ECONOMIC FREEDOM IS MORE IMPORTANT THAN ANY FREEDOM

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