From Charu

[Sanjeev Sabhlok <sabhlok@almaak.usc.edu>]

---------- Forwarded message ----------
From: Charudatt <charu@iced.com>
To: india_policy@cinenet.net
Subject: RE: Private property/ Governance: RE: Pre-debate Re: Nationalizat
	ion

>> Not so. Almost every country in the world has this thing called
>> taxation. Income tax, property tax, estate tax ... they're all a
>> transfer of personal property to the state.
>
Sanjeev wrote:
>Tax is paid to government in the same way that you pay Pepsico for a
>bottle of Pepsi: i.e., for services rendered. Paying taxes is as much
an
>obligation as a duty since you have received services in return.

This is only partially true.
I'd say you pay for services AND to redistribute wealth. Estate
tax is most obvious instance of the latter.
Not everyone pays the same taxes for the same services.
Property taxes levied by local cities are typically proportional
to the assessed value of your real estate assets rather than your
usage of roads, police, fire, or educational services.

>> Charu wrote:
>> IMO it should be the goal of any society to
>> strive for some level of economic equality or rather an absence
>> of huge economic disparity.

Sanjeev wrote:
>I only find the sensible thing is to eliminate poverty. Setting an
upper
>limit is fruitless and counterproductive. That is what the Preamble
>states, too.
>

I'm not suggesting an upper limit.
My point is that if everyone in society is to be equally
represented, since wealth translates to political power, it
makes sense to put in place a system that discourages huge
disparities in wealth as these translate into huge disparities
in political representation. It would also make sense to make it
harder to translate money into power, though I doubt it will ever
be possible to break the link entirely. In market-speak,
political power is yet another commodity whose price fluctuates
with supply and demand and a small group of players
can corner this "market".

Charu wrote:
>> I think this is a good jumping off point for us to debate what
sectors
>> the government should be in and which should be private. I would like
to
>> see us come up with a criterion for determining this. For example,
>> should healthcare be private or publicly funded- hospitals, clinics,
>> drug research and manufacture? What about prisons? How about the
>> military? Should military production be private or publicly owned?
What
>> about the military itself? Would the profit motive result in a more
>> efficient, effective and better trained military? Why? Or why not?
Some
>> mention has been made of airlines. What about private ownership of
>> railroads and surface roads?
>>
>> If we have a good criterion then we can resolve this debate much more
>> cleanly.

Sanjeev wrote:
>You are on the Governance task force: propose some criteria amongst
>yourselves and figure out. (if you fail to do so, of course I am always
>there as a backup to supply such things! Seriously, this is a MOST
>important point that you have raised, where ideology of any sort is not
>the issue, but effectiveness.

I was trying to get everyone thinking in a more general
framework, top-down. The bottom up discussion so far of stuff
like air lines has been valuable, but at some point we need to
generalize rather than create laundry lists.

The criteria I propose we examine are the following:

1. Period of Return or Short Term vs. Long Term Benefit or
Length of 'product' lifecycle.
It is hard to get private capital to into enterprises  that take
a long time to show returns or that do not produce tangible
monetary returns.

An example is education. We probably all agree that it benefits
society as a whole if ALL children receive at least a basic
education. The returns are long term, at least a generation, and
this is not the kind of return that shows up in quarterly
financial statements to shareholders. This makes education a
candidate sector for government to be involved. OK, I know there
are private schools that do run at a profit, but they do not
cater to the entire population, only those who can pay and I hope
we agree that we don't want to build a society where the
determinant of a young person's success is how rich their parents
are. Though, this does bring up the point of mixed sectors where
the government is one of many players thereby preventing
collusion or market cornering. Similar arguments apply to
healthcare and basic research.

I propose we consider government participation sectors that need
long term investment that is not available from private capital.

2. Single Supplier Situations or Natural Monopolies
Some situations are natural monopolies. An example water supply
and sewage services. [There may be present or future technologies
that make it possible and just as efficient for me and my
neighbor to have separate sewage service providers but I'm not
aware of them]. Local phone and cable services represent similar
cases.

I propose that such situations are candidates for public
ownership.

3. Power Critical Services
I'm having trouble coming up with a better label for this
class. What I mean is services like the police and
military. Because of the high level of accountability a civil
society demands from these institutions in return for letting
them wield power, and because we cannot tolerate their absence
for even the shortest period of time, their presence and control
cannot be left up to private market forces.

This is a preliminary list and could use some refinement. I look
forward to comments and criticism.

-Charu