Wednesday, August 08, 2007

Too much of laisseze faire

Having read the comments of several champions of the market economics and laissez faire, i have come to grow a little weary and wary of their arguments. Government is bad at this and worse at that and leave to the markets, individuals, entrepreneurial initiatives and so on. I am not a fan of interventionist government. However, i do not think the answer is in saying that let there be nothing instead! Of course several sections of the economy would like to be left alone today - to their wishes and fears and greed. I do not care if stock market tanks. Though if interest rates are going to go up because the mad rush of capital in my country has led the RBI to tighten money supply, and that in turn increases my home loan EMI, i am bound to be justifiably worried. Who wants this capital? Is it creating the value it was expected to? Or is it yet another ploy of the proponents of laisseze faire to blind me with arguments of market efficiency being in the best interests of all in the end?
I do not know the answer. All i am saying is that we need to stop saying "leave the markets alone and the market forces will take care of everything". They will take care of a minority of established interests and probably few lucky ones new to the system. Apart from that it seems like a novel system to perpetrate the existing inequality under a new guise. If we have overcome the shackles of state dominated socialism with so much effort, it is not for letting the aristocracy of the capitalists to take charge instead in the name of efficiency. As participants in the economy, the masses need to understand that the ideologies are just that. Finally, everyone is going to be driven by self interest and unlike what the market proponents claim, it does NOT result in a socially optimal solution. The only chance we have is to transcend the ideological boundaries of being in the capitalist camp or communist camp and really take on the basic question of maximum happiness for maximum number of people. The ideology should then evolve from that and not the other way round.

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