Comments by Captain S. Pullat

on Breaking Free of Nehru

plus some other comments.

These have been re-organised by Sanjeev Sabhlok,

and preliminary responses are provided [in blue]

 

A) GENERAL ISSUES

Doing vs. ‘preaching’

I believe that getting things done (with a small element of error) is more important than doing research, writing on what needs to be done and telling others what/how it can be done etc...... (Personally, I think I am in the stage mentioned, after passing thru the other two)

Agreed that each one contributes his own way and writers & academics do so with what they are best with

In fact thats why the scoundrels, rascals & uncouth are able to hijack power.....through rabble rousing........ 

As suggested in my book, I prefer action, but after 3 failed attempts, I realise one of the key weaknesses in India is the shortage of people who believe in freedom. This book is intended to increase the number of people who understand freedom, and can form part of the Freedom Team which will do the next steps.

Nehru bashing

I am sometimes with the author Sanjeev Sabhlok on the problems but not on Nehru bashing  and  agree with him on may findings but how to get the job done eludes me.........

Nehru was an evolved product of his times........ we too are today......a product of circumstances........ 

What damage capitalism has done to many small countries...making them banana republics......is unbelievabale That we escaped under Nehru 

yes after 60 yrs (twice that of thirty it happens to be)we are beginning to look for alternatives.......... 

I am not a Nehru fan or follower........but an admirer of the path he chose, systems he put in place (which was hijacked by her daughter and her gang.......) etc... like running a joint family......... which has lead us to prosperity for the top 20-30%.............. on which we can further build......... on the scarifices made by few generations earlier......... thank god the founding fathers didnt chose a banana republic model like Philipines...Yes, we could have done better..much better.......but thats our own making......

Guess you wudn't have missed out some belated research and praise for Nehru's economic efforts in page 9 of today's Business Line 10dec 07 in a piece by S. Venkitaraman reviewing a work of Dr Pulapre Balakrishnan  The Visble Hand, Public policy & Economic growth in the Nehru era

In the preface I have clarified that this book is not about Nehru bashing but about identifying what parts of his though were incorrect and making necessary adjustments to India’s policies.

Order of human wants

Human nature is such that one will do anything to obtain necessities (roti, kapda, makan.) then we want pani, sadak, bijli.......then wine, women (more, I mean), wealth......... eventualy health, pension/peace and spiritualism...

In the model of freedom, people are always free to choose whatever it is they need at which ever point in their life, and trade as equals, fully protected by a system of justice and accountability. We do not need to worry about what a particular individual needs. Let that person choose what he or she needs for himself/ herself.

Fault finding won’t get support

the efforts will get more support if fault finding with exisring system/drawbacks is reduced and more emphasis is given to problem solving without any intent/maligning 

Chapters 4-6 of the book are clearly focused on problem solving; we do need to identify and analyse the problem before we can begin to solve it. Hence, chapters 1-3.

B) CAPITALISM NOT THE PANACEA

Freedom is good – no doubt about that

Freedom, I agree with; thats what set off French Revolution and everythinmg else that followed.. with Magna Carta foreboding a hint of things to come.... 

If anyone agrees with freedom then the recommendations in the book are all natural derivatives, and should be acceptable.

Role of government

Re: “Wealth thus flourishes when the govt does practicallly nothing other than ensuring justice” This appears to be Utopian. comment: all systems of govt (except perhaps benevolent kings of yore) have failed in ensuring justice right from Dictators, Autocrats and the British-US democracies: eg: WMD mislead war on Iraq: people have been taken for a ride) Govts are required to play a balancing role........ 

Unsatisfactory systems of justice are rooted in design problems. The better the design of the system, the greater the chance that justice will be administered. This won’t guarantee that justice will be delivered in all cases, merely increase it, asymptotically. Socialism which is based on injustice (plunder of the rich, state-sanctioned theft) cannot even aspire to such a situation.

Cause of corruption

For administartive efficiency, it is necessary that government employees are well looked after.

One reason for corruption spreading from top to bottom (not the other way) is the war fuelled inflation of the '70s, and that wages  never kept pace with living necessities.

Agreed. The fuller analysis is found in chapters 4 and 5.

Economics an imprecise science

Firstly -crossing fifty perhaps- I have realised that Economics like Religion is man made (not spiritualism -which is the essence of all religions) It is an imprecise -art or science- so woodoo or dismal science prefixes

for eg: in Shipping, we are on the crest of a 3year boom (China driven they say) despite Billion $ research firms serving the 0.5Trillion $ shipping/freighting sector, none of them forecast a bonanza round the bend in hindsight of course, there are all kinds of explanations, predictions  -including doomsdayers.. (trough will be steeper/deeper than crest)

US & the whole world is inside a bubble asset driven, highly overvalued & leveraged yes, the real estate (huousing starts has the best trickle down.......) but if we fail to serve the masses, it leaves a lot to be desired...

Come to think of it, the Capitalistic economics is relatively new.... the Limitied Co concepts... and its fundamentals are questionable....

borrowing from Peter to pay Paul (like in leveraged buyouts...Kirk Kerkorian to Laxmi Mittal) inflation covering the interest burden (through better asset valuation)

and one man's gain................another man's loss

As clarified, economists will be foolish to predict the future with certainty: they can look at trends and forecasts, but not use this information to allocate public resources except say, for infrastructure planning.

It is not true that one man’s gain is another man’s loss. Economics functions on the basis principle that both parties to a voluntary transaction gain (Edgeworth box; see chapter 2 for enunciation of this in detail). Second, there is no limit to wealth. It is potentially infinite, being entirely man made. Wealth keeps increasing each year, on average, in capitalist societies, so people can share that increased wealth based on their mutual bargains/ trades.

Korea not a good example

Korea might appear as a good example (it was built up by military dictators  Park....)

most of their chaebols have been indicted (so too in Japan)....Hyundai recently.......

Rajiv did try to understand Korea to replicate here..... To me Russia was a big succes story.......but at huge social expense...(people wont do it again)

S'pore is another good example.......but freedom loving Sporeans are all migrating

In chapter 2 I have clarified that no country is a model for the capitalism I advocate. There are numerous shortcomings in all. If India complies the all the requirements of freedom, it will do much better than all others.

Public sector divestment being done transparently

Must be a joke: all the disinvestments in India has been scams.. the closest cleanest ones were in UK..........not definitely in US -the mecca o capitalism... 

I agree. We have a corrupt socialist system. It can’t divest without corruption. We need the transparent, well-planned system of divestment suggested in chapter 6.

USA is not the mecca of capitalism. I think the mecca has yet to be created. I suggest India could become one.

Merits of USSR socialism/ demerits of current ‘capitalism in Russia’

I for one, believe that Russians indeed had reached the zenith

before their communist misadventures brought them down

(or rather Reagan outspent them on borrowed money to destabilise them)

If there is one Communism -Leninists/Marxists whatever- that can be showcased as succes of their ideology,

it was the USSR, and not China or elsewhere

I believe, after their 1917 upheaval, despite the set backs of the 2nd world war

(holding the fort against Hitler itself was a miracle) for a large country with very little population and frigid climate they did achieve commendably in most fields including science, medicine, armaments, space adventure etc......

Their failure was the collective sacrifice the society had to make (forcibly to large extent -Siberian labour camps..) and lack of its fruits to share within a generation or two in terms of consumer goods and comforts

Their leaders may have had retirement dachas, but nepotism and corruption were never of the Capitalistic or Socialistic (read Indian) levels. I recall having visited USSR ports & shopping centres, things were cheap and shoddy

Food was short, curd was available, so too bread and sausage...but nothing fancy......

The recent liberalisation has attracted mohecans and the mafia....

Where the comparison with India arises, is the turning point we are in now at the threshold of pure capitalism, sacrificing the socialistic gains we had built up over a generation or two after the War

Fundamentally and theoretically, the philosophies, logics, arguments, pros and cons of Capitalism, Communism, Socialism and their combinations/variations are compulsive...  but I hope with your experience and insight....from history.....you can highlight that is relevant for us to replicate at the current phase of sustainable developmental efforts....

This section was from your general comments/ email. I would urge you to look more closely at the dictates of freedom and not gloss over the terrible evils of USSR’s socialism. I think it will be a terrible mistake to continue harking to the USSR example. If you really believe in freedom, you must not shirk an analysis of the truth about USSR. Ruled by a murderer, Stalin, it was one of the most ruthless and un-free systems devised in the history of mankind.

Flaws with capitalism

Just to argue/debate against capitalism: It is not a cure all - a panacea  just another system that will have to be tuned/changed after 30yrs or so...the longevity given by author himself 

From Bretton Woods, IBRD, World Bank, ADB, Gold linkage & delinking, GATT, WTO, Trading blocks etc the world is still trying to find/adopt and adapt closest to the ideal system

Win-Win is a myth simply bcause one man's gain has to be another man's loss Yes devaluation, inflation, ex-rate changes etc all can cloud... The fall outs of half a miillennium old capitalism is unfathomed as yet The environment damage caused through consumerism promoted by capitalism is the worst yet

These matters require separate analysis. Please note that the Great Depression which led to this system in the end was caused by centralisation in banking. A full-fledged capitalism will have its ups and downs but centralisation will always exaggerate its ills. Governments generally encourage monopolies, including central banking. If the fixing of interest rates is left purely to market forces with multiple banks competing for money, such problems will be dramatically reduced.

Frauds in capitalism

The true capitalists can declare bankruptcy (ch XI in US), banks can collapse, see the bust and accounting frauds in US.. 

Yes, of course there are the good capitalists too..  

just to give an example of capitalist exploitation and wasteful resources: 

In the OUTLOOK of Dec 17th Gopalkrishna Gandhi opines on Fairness creams (page 32 left top) Suppose fingers can be pointed out at our women (mothers included), TATA (Emami...) and Garnier wonder if such issues are of kick of value.....in the greater common good/interest efforts(I do network with like minded under the focus of `for greater common good') 

Fraud is not part of free markets. Frauds can take place in religion, family, everywhere. A fraudster is a criminal and must not be mixed up with capitalism which is ethical. Systems of justice exist precisely because there are fraudsters in the world.

As far as fairness creams are concerned, I do not know the details of the case, but should fraud be identified (in their claims) then the companies must be hauled and their CEOs severely punished. Whether people should want to use such creams at all is a matter which capitalism doesn’t pass a judgement on.

For India capitalism is not good

As for India, US style capitalism, or for that matter -free trade for the sake of above poverty line -WTO/GATT or not- is no good.

Bihar and those like her poorest must be shouldered as poor country cousins if we are to make any progress;

their demands and fund allocations cannot be ignored in real politik of lalooism.

We must go back to the drawing board in developing villages and hinterlands at the expense of ignoring cities and suburbs which can afford to pay to solve their problems.

Wither 5 year plans? Let us get it dusted off and rewrite a 15-25 yr action plans.

In my concluding comments I have shown how capitalism will ensure that each person in remote India will be well educated and poverty banished in three years. Socialism won’t achieve that even after 10,000 years.

Property rights

The concept of property rights itself is questionable ask the red inidans and see the plight of displaced to build dams, factories, SEZs and what not.... (what the west (England & Spain..) did to conquer the Americas is unpardonable -not so much with India though)

The concept of liberty is very new even in the West. It definitely did not exist in its current form in capitalist theory in the 1600s when early Americans divested ‘red’ or Native Indians of North America of their lands. If today the Indian government doesn’t honour property rights (eg in SEZs) then that is a very serious problem. I have discussed such issues in chapter 3.

Laws can’t protect: they can be bought

Dont expect laws/jurisdiction and legal system to protect rights under capital system... yjey can be bought out they are mostly busy arguing themselves on trivial thimgs including Construction (language) whilst the politicians run away....(capital system survived so far with provision for social security but now with aged population, BPOs and reducing earners & population too, the system is finding it difficult to support the aged..who had worked hard after the war and supported/helped create the capitalist system....) 

If the system of justice doesn’t function (as in India) analysis will show why it doesn’t work. Chapter 6 of my book (some of that material in Online Notes now) will explain how justice can be made to work.

Solution suggested

Well, what we need is a holistic pragmatic amalgam of the best possible (unlike the kichdi of constitution)and citizens to stand up and act.......

I guess, ideally, a benevolent dictator is the only choice

Like Machiaveli's Prince.......plenty Indian examples... thats what the Kings were supposed to be.....and not like Prince Charles...

What are the lessons that we can learn from the Rise and fall of Russian ideology........

I believe, to bring back ..to veer to the left of centre, so to say........

success must filter down to the masses that toil, work and sweat

and not to the punters, investors, power brokers and politicians that exploit the system...

I explain clearly in my second book (which is currently a draft) why no one in the world is qualified to be a benevolent dictator). A good democracy (not like India’s current version of it) will provide sufficiently high quality people who, through debate and discussion will generally arrive at good solutions for a society.

I trust that the final (printed) book, when it is carefully understood, will clarify these comments in much further detail. Given time constraints, I can only do my best at this stage. Hopefully there will be an opportunity to discuss such issues further in the future.

In particular, I’d like to thank Captain Pullat for very kindly providing editorial comments on one of later drafts of the manuscript of the book.

Sanjeev

20 Jan 08