Re: [Capitalism vs. Socialism in India?]

[Srinath S <srinaths@usa.net>]

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vamsi@siliconcorp.com wrote:

I have never intended to ignore "other" factors at all by highlighting
capitalist
vs. socialist models in the Indian context.

>>>>>

My contention is that it is these "other" factors that are so massively
influential that capitalism vs socialism is too small a model to be pertinent
enough. India is on a road towards liberalization, and it is unlikely that it
will ever go back to socialism. But then, that does not mean that it will
automatically reach a free market configuration. Often, there is a little
difference that can decide whether a given system will enter into a free
market configuration or will collapse into anarchy. (I believe, this is
determined by whether the dynamics are demand driven or not.)


>>>>>>>
In fact, I claim that Capitalism/free-market system vs Socialism will dictate
the
outcome of the Indian democracy in the coming years.  That is, if Indian
Democracy
is fully sanctioned by the people and the majority would choose to retain
democratic institutions within the country then India must have a free-market
system.
>>>>>>>>

I disagree here. It is not capitalism vs socialism that would decide India's
fate in the coming years. The decision towards capitalism has already been
taken. What will decide India's future IMO, is whether the liberalization can
be made to be demand driven.

Capitalism and free market are two different things. Capitalism is just the
rule of capital where anyone with capital has more opportunities than anyone
who does not have capital. The dynamics here are capital driven. But a free
market is one where there is an equal opportunity for any legitimate actor to
generate capital and have his/her/its demands met. It's dynamics are demand
driven.

In India, presently dynamics are capital driven. Local demands are orders of
magnitude less lucratuve than foreign demands. And this creates skewed
dynamics that is not demand driven. For example, for all the hoopla made about
IT and the big millionaries that IT has made, India's internet population is
not even 2 million -- about 0.2% of the population. But a look at billboards
in any major city would have one believe that the whole city is wired
together.

It is simply that IT brings quick money (from outside) which has no
correspondence to value that has been added inside India. The government
should recognize economic holes resulting from such dynamics and formulate
policies accordingly. And this, IMO is neither a capitalism nor a socialism
problem. In fact, I would contend that such a problem had never been an issue
in the known economic past, since connectivity and monetary transactions at a
global level has never taken place in this scale before.

>>>>>>>>>>
I put forth the suggestion that a democracy cannot be sustained under a
socialist
system.  In other words, the power structure of a socialist system is such
that it
will invariably result in a totalitarian system!!
<<<<<<<<<<

It is a well known and well studied fact! But my argument is that it is not in
correspondence with ground realities in India today. We should be careful not
to indulge in solution-probleming. My argument is that the problems in India
do not amean themselves to this framework and we had better model it soon.

>>>>>>>>>
Hence, I conclude that mapping India into a Capitalist/free-market system vs.
Socialist System is quiet important - Indian Democracy may well depend on
it!!
<<<<<<<<<

Well, I am mapping it to a capitalist vs free market and not a capitalist/free
market vs socialist. Even in the height of socialism, India was nowhere near
to the socialist systems that existed in Eastern Europe or Soviet Union. India
has far too much diversity and a far weaker centre to enforce such a strong
regime of controls. But India has been suffering from, and continues to suffer
from suppression based on might in many forms -- be it religion, caste,
language or social norms. My contention is that capitalism vs socialism throws
light on too little of India's system, for it to be considered a useful
candidate.

Best,
Srinath


Ideas for India: Building the future -- together
http://www.ideasforindia.net/

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