RE: Minimum wages, competition and 200 years of success.

[Kush Khatri <free_voice@yahoo.com>]

I am glad that we have moved on from a very specific issue (settting
of minimum wages by government) to the larger questioin of "WHAT THE
ROLE OF GOVERNMENT SHOULD BE IN A DEMOCRATIC SOCIETY?"
On the later question we have more agreement than disagreement.  
Agreement: 
(1)  Government has a crucial leadership role in the development of a
society.
(2) Government should be a regulator, a refree and not a controller
and owner
(3) Without government being an honest refree, truly competitive
markets cannot grow or function
(4) a corrupt government has no incentive to create competitive markets
(5) To create good government we need a commitment and an investment
in technology, professionalism, and democratic institutions (effective
legislatures, law-enforcement, and modern accounting, auditing and
management systems)

The above is premised on the theory that we all are committed to
preserving democracy.  That is an extensive area which needs to be
discussed.  There is a lot of misunderstanding about the basics of
democracy and as we go on we will discuss that.

I think one area where we have some disagreement is the corruption
issue.  To me corruption is a number one problem, because it is not
only tyrannical (and therefore cuts the roots of democracy) but like
we said we can never have true competitive industry as long as there
is corruption ( I think we now agree that a corrupt government has no
incentive to creat a truly competitive economic environment.)

Sanjeev seem to be saying that corruption in India is because of
socialistic thinking.   I am saying that socialism is just a facade
for corruption,  In other words, corruption has nothing to do with any
ideology. Rather corruption has only one "ideology" which is personal
greed (sometimes necessity) and opportunity for corruption which an
unaccountable system provides.   In this regard, the corrupt who are
benefitting from an unaccountable system will oppose any suggestion
that even remotely threatens to change that system by bringing in
accountability.  Technology does precisely that.  Once a computerized
system of accounting is set, for example, it is difficult if not
impossible to fool such a system.   But manual systems depending on
babus/clerks (as Charudatt pointed out in a message) is susceptable to
theft and continuing manipulation.
Therefore, socialism has very little to do with the current climate of
bribery and corruption.  It is the system and this is what we should
address as a group.      Regards,

Kush Khatri, D.C.

P.S.  Sanjeev, it does not surprise me that you got a quick response
from the Social Security Administration.  A good government is a
responsive government and that is what I have been talking about.  Try
any other US agency/Dept. and I think you will get the same results.  
Professioinalism allows many good and talented people to enter
government without politics.  Professional government hiring here is
not done through just ONE EXAM and through ONE PUBLIC COMMISSION. 
Each U.S dept./agency has hiring authority.  Professional
qualifications are centrally defined and are the same as that of the
private sector.  

--Sanjeev Sabhlok  wrote:
>
> A little more on minimum wages, competition, and the role of govt.
> --------------------------------------------------------------------
> 
> This is in reponse to Kush's contribution:
> 
> 	History reveals how the monied or the
> > "industrialist" class have behaved ever since the industrial
> > revolution.  We will have plenty of opportunity to put forward very
> > many other instances, other than Mr. Ford paying higer wages to
> > produce his model T--examples abound of blatant exploitation,
inhuman
> > treatment and pure greed.
> 
> a) 	Before one can make the poor rich, one must have money. Money,
> 	unfortunately, can only be created by the production of goods
> 	and services. Workers are usually semi-literate, semi-skilled
> 	and even unskilled folk who cannot produce wealth on their own
> 	no matter what you give them. You and I (at least I) are workers.
> 	We cannot produce wealth no matter what. The process of
> 	production of wealth requires special guts and special kind
> 	of a brain. That of a entrepreneur and industrialist. 
> 
> 	Please do not rebel against industrialists. 
> 
> 	Your and mine existence in this country called USA 
> 	is being supported ONLY by the work of people like Edison,
> 	Ford, Bill Gates, and others. Cut out industry in this country
> 	and it becomes poor. The moment it becomes poor, people will
> 	start blaming all their ills to "brown" immigrants and others,	
> 	and all of us will get kicked out, back to the streets of India.
> 
> b)	If anyone can call an average US worker today
> 	as being "exploited" then he/she must consider the case
> 	of slaves (even India had them), feudal exploitation of virtually
> 	landless workers (and their families), and the killing of 
> 	millions of innocent workers in USSR, China, Vietnam, North
> 	Korea, and other places. The average US worker lives a much
> 	higher quality of life than our Cabinet Secretary in India,
> 	than our Supreme Court Chief Justice, and even comes close to
> 	the lifestyle of a clerk in the Delhi Development Authority.
> 
> c)	There is nothing in the world called a free lunch. Therefore 
> 	workers have to produce more than what they get paid for. That is 
> 	the fundamental law of business. The person who creates a plant
> 	or factory takes immense risk. He/ she borrows huge amounts of
> 	money, spends enormous time and effort bringing the raw materials
> 	together, then arranges to sell his goods, then gets his industry
> 	passed by all kinds of inspectors, then keeps his accounts,
> 	then pays the taxes, and then at the end of it he could 
> 	have the fate of Compaq, which sold $5 billion worth of goods
> 	in the last three months and made a profit of only $14 million.
> 	The businessman could often have done much better by simply
> 	putting his money in the bank and going to sleep. As I mentioned
> 	above, you and I (at least I) are mere ordinary workers. We don't
> 	have the guts to set up an industry. Then why do we criticize
> 	the industrialist? Please, please, first of all look around you.
> 	Almost all the wealth in the USA and in the West has been 
> 	created by industrialists. 
> 
> > Mr. Sabhlok I do not know where you come up with this competitive
> > market thing.  Yes, in theory there is such a thing as a competitive
> > market.  In practice, however, a competitive market cannot exist or
> > function optimally without the assistance of a neutral party which
in
> > most cases happens to be the government.  In other words, without
good
> > government, it is impossible to have a truly "competitive" market.
> > But Mr. Sabhlok's assertions seem to be based on the premise that
> > laisez faire is alive and thriving in America. The fact is that
laisez
> > faire failed miserably in the 1920s followed by the great
depression. 
> > "Free enterprise" in that sense is dead.
> > The lessons that Americans quickly learned were that economic
activity
> > left on its own fails to produce optimum competitive markets, the
one
> > Mr. Sabhlok keeps harping about.  
> 
> 	Please forgive me, but if you were to rank the following nations, 
> 	which ones would you call as being closest to free market economy
> 	and perfectly competitive economy?
> 
> 	   USSR China	N. Korea  S.Korea Singapore  USA Japan
> 	
> 	Which of these has succeed in showing outstanding results
> 	in the past 100 years? 
> 
> 	If you remember, in the "Preamble" to the Manifesto, I had
> 	stated clearly that pure capitalism is not perfect. I have 
> 	nowhere stated that you do not need to check monopoly power,
> 	or that oligopolies are an ideal solution to the growth problem.
> 
> 	I thought we were intersted in developing an ideal society
> 	and economy for India. Do we want a 1.7% per capita growth
> 	of income for 30 years since 1960, or do we want 7% growth
> 	that India should have achieved and can easily achieve?
> 
> 	We want to be like Japan, S.Korea, Singapore, USA, and even
> 	our arch-enemy, England. Not like our blood brother, USSR.
> 
> > To overlook the role of government in the success of America (which
> > Mr. Sabhlok lauds) is to overlook the reality of the market place
and
> > the real world.
> 
> 	If you would be more specific, we could talk. For example,
> 	village roads, highways, donation of property to private
> 	university efforts, and more. These are things called
> 	public goods. I have neither discussed these things here,
> 	nor do I deny the role of govt. in these things. I
> 	thought we were trying to artificially strangle the 
> 	concept of a market system by imposing minium wages. That's
> 	what I dispute, very seriously. 
> 
> 	I have much material on the justifiable role of govt. in 
> 	my book whose preliminary version is on the web. I do
> 	not want to bring in too many points from that here. But 
> 	I will definitely propose some points, now that you mention it.
> 
> 	 Socialism in India is
> > a facade and a fraud because as a controller the government fails to
> > create conditions for competition.  In fact, under the famous
> > licensing system, the Government of India (GOI) sold monopolies to
the
> > avaricious seths and lalas, who willingly bought into the system. 
For
> > the politicians and the bureaucrats selling of licenses provided a
> > means to hoard illegal wealth, and for the monopolists their
> > monopolies proved a goldmine.  The results for India, however, were
> > disastrous.  Indian businesses never had the incentive to improve
> > quality or productivity (worker wages and working conditions
therefore
> > could not improve).  When the Soviet Empire fell, the Indian
> > government, to save face and an impending bankruptcy, quickly
invented
> > another label called "liberalization". I have never been fooled by
the
> > sheningans of liberalization.  Deep down there is no change in the
> > culture and modus operandi of the GOI.  The politicians have run out
> > of monopolies, so now they have started selling whatever they can to
> > whoever they can, as long as they and the bureaucrats involved can
get
> > a cut in the deal.  Is this "liberalization?"  The control mentality
> > persists as does corruption.
> 
> 	Precisely my own thinking, and points, Kush. Why do we 
> 	seem to be disagreeing somewhere, then? 
> 
> 	You want competition? I want competition.
> 	You want to control monopoly? I want to control monopoly.
> 	You want good government? I want good government.
> 	You want real liberalization? I want real liberalization.
> 
> 	What is it you want, then, that I don't want? 
> 
> > A corrupt government has no desire to (1) produce a competitive
> > market, and (2) money that should go to improve the quality of life
> > for all, is pocketed by the few in the system.  That is why problems
> > of infrastructure, public health, education, environment persist
> > because government is simply not doing what it ought to.
> > Therefore, the premise that private effort alone can solve all
> > problems afflicting India is false.
> 
> 	Whoa!! What was that?
> 	You see the problems as arising from a corrupt government?
> 
> 	And so you want more government? 
> 
> 	Again, the points you raised, viz., infrastructure,
> 	public health, environment, etc., are the ones where
> 	I fully agree that govt. has a role. But I was only 
> 	rebelling against minimum wages, not against
> 	government itself!
> 
> 	The key point I have been making (and you seem to agree),
> 	is that corruption starts from socialistic
> 	policies, and that we can only cure it by minimizing
> 	(not eliminating) government. 
> 
> 	Minimizing government means transferring a lot of work	
> 	back to the people (also known in political jargon as 
> 	the private sector). Let the people set up their
> 	own universities (i.e., privatize education) like they
> 	did in the USA. The Ivy league is mostly private. All
> 	without government funds. The industry (including 
> 	defence industry) here is run by the people. Science is 
> 	supported by ... guess whom? Government!
> 
> 	So, we want to let government fund basic research (since
> 	industry will never do that), run primary and secondary
> 	education, and do things which it should. But return
> 	everything else (including the manufacture of clothes)
> 	back to the people. That is called providing good
> 	government, not imposing minimum wage laws (Am I persistent!).
> 
> > Can India have good government? Is it possible to reform a culture
of
> > bribery? Absolutely.  How can that be done will, hopefully, be
> > discussed as we go on.  
> 
> 	We don't have to worry about corruption.
> 	Indians are not genetically born with corrupt genes.
> 	
> 	Believe me, there are even IAS officers and others who
> 	are completely free of corruption (Ripley might not
> 	believe it, so bad is the image of IAS officers!). I offer
> 	you a case in point by "flaunting" my poverty to you.
> 
> 	But the fact remains that I have seen all around me, tons
> 	and tons of corruption. All arising from great power given
> 	over our people (economy) by our foolish legislators who	
> 	went and legislated on things they had no business to do,
> 	such as nationalizing our banks, textile industries, etc.,
> 
=== message truncated ===

_________________________________________________________
DO YOU YAHOO!?
Get your free @yahoo.com address at http://mail.yahoo.com