Privatisation - The argument continues

Vatsan, having seen some of my views on capitalism and privatisation, has sent me a mail quite a while back, which I saw only recently. I have sent him a reply which I have added below:

From Vatsan

Hi Sridhar,

I feel your views on disinvestment and privatisation are based on a superficial understanding of the issue, I also was an ardent fan of disinvestment, why should the government be bothered with production, etc. But some reading and pondering on the issue changed my perspective, and now i am against disinvestment. Think about it and your views may change. You arelooking just at one side of the pcture - better service, but there are more variables involved.

Regards
Vatsan


From me

Hi Vatasan

I'm not looking at disinvestment with blinkers. I do understand the perils of it. I'm an ardent supporter of disinvestment, privatisation and capitalism because I strongly feel that they are most appropriate solution to most of our problems. There are however a few caveats:

1) I'm not an economist but I look at the issue from the sociological point of view

2) Capitalism is not an answer to all our questions but other models answer lesser questions

If I have to compare the countries which implemented capitalism succeeded and failed with countries which adopted socialism and other models (communism) and succeeded and failed the ratio itself will speak for itself. For example, the critics of capitalism quote only Argentina and a few other South American countries as failures. But count the number of countries which have succeeded. I ask the question differently: Show me one -just one- country which adopted socialism or communism or public-sector model and succeeded. We have none.

And I have a lot more to say on this issue. If you still feel its superficial, I have to admit that my knowledge on this is really poor. I'm not an economist.

But my conviction isn't. I have spent my first twenty years in socialist India which probably you haven't. I have waited hours in front of a milk booth and returned home with empty vessel. I have seen my dad paying Rs. 3000, a huge sum at that time as an advance and waiting for four years for a telephone connection. I have seen the same telephone connection going out of order every four to five months. I have waited like a begger in front of telecom office to get my connection restored. I have seen my uncle booking Ambassador six months before with full payment and still could not decide on the colour. I have seen 'Sorry for the interruption' every second day on my Doordharshan. I have seen the bank manager, after making my dad wait for 2 hours and rejecting a loan application because my dad could not provide 'adequate' collateral security.

If this is the plight of the situation for a reasonably affordable urban Indian, I refuse to understand that life was any different for a rural citizen. I reckon it must have been far worse.

Capitalism is like democracy. It may not answer all our questions. But unfortunately, it's the best we have.