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Showing posts from April, 2007

Capitalism, Efficiency and Equity

Capitalism, Efficiency and Equity Ganga Prasad G. Rao http://myprofile.cos.com/gangar Prasad Rao? Criticizing Capitalism? It must be the end of Time! Well, may be, but even in the US, the bastion of capitalism, economists, environmentalists and social thinkers have begun to question the Capitalism as the 'panacea for all ills' (See “Is Capitalism courting long-term disaster?”). True, capitalism embodies some of our most cherished values: competition and free markets (though, not exactly), incentives, innovation, and excellence; yet, one cannot wish away its fundamental problems as has been revealed over time. First, by trading the entire future of firms on the stock market, one of its primary institutions, capitalism encourages profit bubbles and short-trading that sucks away all future rents leaving behind, on one hand, a large group of long-term investors waiting decades for the growth that must materialize for them to realize profits and, on the other, managers who must find...

Public Distribution System – Not (a) Fair (Price)!

Ganga Prasad Rao http://myprofile.cos.com/gangar When young, there was a 'pata nahi kis ration ka (khana) khaya' joke – a reference to how certain boys were much healthier than others (sometimes without the appetite to show for it). Those were the days when the public distribution system (PDS) served a useful purpose of providing essentials to citizens (during war time), and guarded them from hoarding and exorbitant prices. For those of us who are 'fresh', the PDS is a government sponsored network of 'fair price shops' that are fed from Central warehouses by a fleet of contracted trucks and backed by a Ministry, bureaucrats, officials and accountants, who keep track of the meticulous task of feeding subsidized essential household items to millions across the country. Last time I checked, they sold grains, flour, sugar, kerosene and perhaps cooking oil. Citizens merely need to apply for a 'green card', and stand in line, sometimes for a few hours (good pl...