respected sumit bhai saab...
although i do have a different opinion about ur thoughts frm rest f the jatlanders... as u r different frm all... bt at the same time i say tht i think ur views are nt goin to sirvive tday .. they may come in force after some hundred of years.... bt nyways....
I am not different than anyone of you. I just think out of the box.
u commented on the monopoly of the government.... nd u say its not right.... here i want to throw some light on some facts of this fiscal year only in which this CONGRESS GOVT. under the sharp minded people f chidambaram n sharad pavar, took the decision of taking monopoly out f the hands f F.CI. i.e. Food Corporation of India .... now wt happened was tht every private person(company or aadhti) was allowed by the govt to buy the wheat frm the farmers directly and most f the farmers sold thier output to the private hands only because they gave them higher price than the govt. fixed price... nd wt the fact is tht the difference in the price at which private hands bought the wheat nd the govt fixed price was mere rs 2 or 3 ... now for this much money the poor farmer sold the grains to the private men bt farmer still remained poor... bt due to this lost in monopoly policy of FCI , FCI lost the capacity to maintain the prices of the commodities related to the basic needs of common man..... as they never had enough of the produce to maintain the price level of the product....
The reason Soviet Union failed was just what you mentioned above.
In the former Soviet Union there were millions of acres of very firtile land. There were warehouses filled with fertilizers. And there was very advanced agricultural machinery rusting on the farms.
Why?
Because the communist government was enforcing imaginary prices that it pulled out of the thin air.
When this happens, resources are not valued efficiently. Becuase the market price of the resources is not known.
I will explain this with a simple example. Suppose you have 4 chickens. One for you. One for your friend. One for your servant. And the 4th one for your neighbor. Now, lets suppose you had to give away one chicken. Which one would you give away?
The rational answer would be the 4th chicken, becuase you value it the least.
If you had to give away another chicken, the rational answer would be to give away your servant's chicken. And so on.
This is how commodities are valued in the market. But, in a socialist economy with govenrment enforced prices, the correct values of commodities is never known, because instead of consumers determining the price by the means of demand and supply, the government enforces prices pulled out of the thin air.
Artificial prices lead to shortage. Who knows whether we are paying over the efficient price or under the efficient price for the Wheat flour that we buy from the local store?
Every year people in India die of starvation while there are godowns full of grain. Why?
So the government must stop determining the price for any comodity. Let the market forces of demand and supply determine the prices. Those prices are the most efficient for both the farmer and the consumer. If the the farmer is not hapy selling grains at the equilibrium price, he can move on to his next chicken, or in other words, the next most favored use of his land. He doesnt have to produce grain and grain only.
i think in cases like this there is strict need of monopoly of govt in the market..... u jus cant let them (pvt persons) to come into it....
the products like petrol, dieseal need to b looked after by the govt only..... the subsidies provided on the dieseal rates by the govt. can never b provided by ny type of rule except govt.
Everytime I look at the oil prices in India, I get a headache. even with all the subsidies, the prices are nearly double of whot most people in unregulated economies like US and Canada.
Dont you think that the subsidies should have kept the oil prices much lower than what other people pay.
Subsidies artificially lower the price. This creates a shortage of commodities. This further leads to escalation of prices. Inspite of all the subsidies, the consumer ends up paying more than what consumers pay in unregulated economies where the oil price is the equilibrium price.
there r hundreds of examples like this ... nd we jus have to try to look into the good wt the govt system is doin instead of alws criticising it on same issues..
thanks
For every example that you think that government does any good, I think the complete opposite for it. Government does not have a magic wand that it can wave around and make nice things happen.
It is centuries old secret that the best pricing is the one done by the means of demand and supply that determine equilibrium price. This is the price that consumers and sellers accept as the price due to which each side is best off.
What do you think will happen if the government set an artificial price of grain at Rs. 1000 per kilogram. Dont think that it is imaginary. Ths price is as imaginary as the price it set before breaking the FCI monopoly.
What will happen is that people will switch to other alternatives and stop eating grains.
What will happen if the government set the price of grain at 1 Paise per kilogram. The farmer wont produce any grain inless he can still milk some profit at this price.
This will lead to widespread famine.
Are you trying to understand the extremes that government pricing can do.
However, market pricing sets the price that is acceptable by both the buyers and sellers. It does not cause the consumers to stop eating grains. And it also does not cause the farmers to stay back home during enxt season.
I am sure that if the farmers are not happy selling the grains at market price, they will switch to something else.
This thread is not about markets. It is about Ch. Chautala.
So in a way my post is indirectly on the correct thread.
More than 60 years of home rule havent improved the plight of our farmers. We produce immense amounts of agricultural produce. Yet, the farmer is still where he used to be in 1947. Infact I heard better stories of the old days. How each family in the village used to be much better off with all the doodh-ghee.
The reason is that politicians have promised artificial prices year after year. And that has actuallymade things even worse for the farmer.
It doesnt take a Politician to improve the economy. It takes the unregulated forces of demand and supply to imprive the economy.
.... ibb diyoo koisa iska jubab deta ho tey....
... ibb aap taai key main kimmey keh saku sun... na jama nahi... 