atcheruti

Posts Tagged ‘financial crisis’

Reasons To Abandon Capitalism

In Uncategorized on October 23, 2008 at 3:13 pm

It is not surprising to watch Sitaram Yechuri trot out the old tired strawman method of making a point.  In this method, you take something that is not representative of an idea, treat it as it it is and then proceed with a demolition job.  In the case of Mr. Yechuri, he takes Wall Street and The Economist as representatives of Capitalism and then proceeds to say that Capitalism has failed.

This is false because Wall Street and The Economist are not representatives of Capitalism.  They are the products of a mixed economy in which freedom exists side-by-side government controls and regulation.

And this is just one of the mistakes that Mr. Yechuri makes, for even granting his premise that “Capitalism” has flaws, it should be remembered that Communism, the ideology he espouses has been a complete failure.  China and India have been able to make progress only by freeing their markets to some degree.  The Soviet Union, the posterboy of Communism, is only a memory printed on old maps.

What then is better, the system that lead the Soviet Union to extinction or the system of free markets which even if it undergoes problems is capable of rising to live another day?

For more on the nature of Capitalism and the financial crisis please read the blogs of Aristotle the Geek and Applying Philosophy To Life.  You might find your time to be well spent.

Bailing Thin Air (India)

In The Bad on October 19, 2008 at 2:46 pm

The Government of India has announced that it might help Air India with Rs. 2,500 crores in “soft” loans.  The argument given by the Government is that as the owner it has the right to transfer the money.  This argument is false for a number of reasons:

Government as owner is a very different proposition than a private owner.  Private owners have three major sources of funding – borrowing from banks and other private individuals, selling equity on the market and selling assets.  The government has a fourth source – taxation.

This is where the problem arises because governments collect taxes on the basis of providing the rule of law and protection of individual rights to their citizens.  It is patently immoral for a government to use money raised on this basis to help companies that is owns.

It is also unfair to other private companies that they should have to make the money which the government then taxes and distributes to the state owned companies.

Next, the claimed ownership of Air India must itself be question.  Air India was started as a private organization which was later appropriated by the government.  As such, the government acted like a thief and any claimed ownership is only that of the de facto possession that a thief has.  It is an immoral and corrupt ownership with the aviation minister as the current receiver of stolen property.

The bottonline is that India is run by mendacious thieves who steal the money the people of India work hard to create and spend it on incompetent, loss making companies owned by the government.