Does India need to increase or decrease it's defense spending?

[deepakchoudhry]

You knw something sir, you do not know whats exploitation?

Exploitation is when people do not have a choice. They are forced to avail a given person's goods and services.

Markets avoid exploitation because bad behavior by a seller creates opportunity for other sellers to move in and provide good services.

I think that the vedic system was designed by the theologists to dominate our society and exploit the masses. I do not believe in god so I do not need brahmins. But, I am a human and need food and other services. So, I had rather have the vaishyas and the sudras than have more Brahmins. The whole concept of a vedic society was highly flawed. I am glad its gone. Each person must have the opportunity to give his or her best to the society irrespective of his or her background. Vedic system clearly avoids it.

By the way, if you are such a firm believer in the vedic system, then why are you a doctor. According to your own beliefs you should be in the fields right now, working on your crops.

We need armies for defence not for offence.

Human mind is not ready for the evolution you talk about. First we have to prepare human minds which will embrace humanity and common human values.

And once human mind has evolved then whatever humans do, it will be beneficial.

Artificial system will never work !!

If you believe in Science then Vedic Knowledge is a complete science, It teaches values and laws in harmony with natural laws.

 

[deepakchoudhry]

I guess I have read a little more Economics than most over here can comprehend. It is my bread and butter.

Thanks for giving a read.

Economics role in society is like blood in the body. It cannot be ignored.

But focussing just on Economics will not sort the problems of corruption, exploitation and degradation of Human values. One only has to look at the rich societies to understand this.

What we need a holistic approach to life and Economics can play a big a role in it.

So be prepared ...

 

[devdahiya]

Sumit bhai i know that you can not agree to any thing we say and that is possible in this world as we can afford to do that in any given situation.But i can agree with you in totality if that convinces you about what you have in your mind...[the pre-concieved] about this topic.I agree that no nation should have defence forces,no police,no roads,no canal system,no administrative set ups and no Government machinary because they all are financial liabilities on every nation.We should only have money and money making machines,inorder to have a set up where there is no expenditures but only money and money every where.Hope all powerful nations can heed this proposal.

 

[rraajjeevv]

Sumit Dahiya wrote -
'-----
The only reason I take time off to scribble on forums like these is to spread the word around.
-----'
It is nice to know that you go to great lengths to spread your point of view. But whatever you try to say has to be logical and reasonable.
Otherwise i can argue that since people die in road accidents let us ban cars and all vehicles on the road. People can walk and cycle around, which not only will contribute to the better well being of the people but also reduce pollution.
For your information, in UK everyday 10 people die due to road accidents, which is about 3600 a year. if we try to extrapolate the figure for India based on the same assumptions (i.e. 3500 for a population of 60 million), the figure for India will be about 60000.
This is a conservative figure and in India's case it will surely be more than that. Shall we then ban all vehicles?

 

[raj_rathee]

The only reason I take time off to scribble on forums like these is to spread the word around. I do not get pleasure out of being a pain in peoples' rear.

I have come to a conclusion that nothing can be done for a society that is so closed for new ideas. I think Indians deserve to be rammed in their rear day in and day out by our ruling elite.

Sumit, keep plugging away man!

Perhaps, some other forum or venue may be more receptive to what
you say. Clearly, Jatlanders are frustrating you with their inability
to comprehend. It is always a challenge to get people to see one's point
of view. A more sympathetic audience might also engage with
you in more meaningful debate and help you further refine your ideas.

Personally I find what you say very "cult"ish and rather naive. Also
you very quickly resort to high pitched retorts rather than backing
your arguments with persuasive explainations. But I guess
you'll get some of that practice during the course of your PhD.

I think people should go for the ideas they believe in. And you should too.
But if you fail to convince others of them, treat it as your failing, not theirs.
Taking yet another look to see if you can find better ways to get
across your ideas will only be helpful in finding the audience you seek.

 

[shobhitdeshwal]

I guess I have read a little more Economics than most over here can comprehend. It is my bread and butter.

Well Sumit,

This is a self explanatory statement about what do you want to hear from people here.... That since you have read more economics, so all of us shall give in to your words..... The point of discussion does not arise then!!!

I wonder did you really want a discussion on the issue??

The only reason I take time off to scribble on forums like these is to spread the word around. I do not get pleasure out of being a pain in peoples' rear.

You again.. I guess have take an assumption that you are a pain in people's REAR!! No.. i don;t think so.. you have invoked a very good thought process!!

I have come to a conclusion that nothing can be done for a society that is so closed for new ideas. I think Indians deserve to be rammed in their rear day in and day out by our ruling elite.

Again a disheartning statement from a man of knowledge!! The word is being spread.... Rome was not built in a day dude!! Halt!!

Very honestly, people will still not learn there lessons. Some tyrannical demagogue will set up a new system of government once the current one melts down. And people will again bend over for him to do what leaders like to do the most. And the circle will go on. I am not surprised that Indians have been enslaved by someone since the beginning of time. We have this mentality of being subservient towards our masters. The defense of government spending really does not surprise me.

I too am not in the favour of defence spendings!! My reply to the discussion follows:-

INDIA'S defence budgets have ranged between 14 to 15 per cent of the Central Government Expenditure (CGE) and 2.2 to 3 per cent of the Gross Domestic Product (GDP) in the last decade. In rupee terms, the budget estimates have risen from Rs. 35,620 crore in 1997-98 to Rs. 65,000 crore in 2002-03, an increase of 82.5 per cent in five years. In dollar terms, the increase has been over 60 per cent. Accounting for inflation, the increase in real terms has been over 7 per cent annually. Indian defence budgets do not include funding for pensions and para-military forces and expenditure on nuclear and space research. With these, the total spending would be 21 per cent of the CGE for 2002-03.

India is indeed spending a large chunk of the national pie on defence, and yet military analysts year after year complain of inadequacy of allotted funds to meet defence requirements. The dissatisfaction with defence allotments needs to be addressed. Are we getting the security we require? A co-relation between defence spending and the country’s defence requirements needs to be established to answer that question.

In 1996, Mr Jaswant Singh, India’s Finance Minister, in his book, “National Security: An Outline of Our Concerns”, wrote, “India’s defence expenditure has a fixity; it has an unvarying spending pattern.” After studying the defence expenditure trends for the period 1985-95, he made projections for 1995 to 2000 and concluded: “These monies are likely to be channelised into mission capabilities which are traditionally favoured, like armour and mechanisation by the Army, the blue water surface flotillas by the Navy and the strike aircraft fleet by the Air Force.” That remains the dominant motif even today.

India’s and Pakistan’s nuclear tests of 1998 altered the subcontinent’s strategic paradigm and the tactical basis of war for good. In 1999, the two fought a limited bloody conflict over Kargil in J&K. Sensing the transformed nature of war, in 2000, Mr Jasjit Singh in his book, “India’s Defence Spending — Assessing Future Needs”, wrote, “The significant point to note is that in the past, wars of the subcontinent were limited (in time, space, goals, etc) by choice. But nuclearisation has made wars limited as an imperative.” Still, we continue to arm for conventional warfare.

Bharat Karnad, while making out a case for a 400-plus thermonuclear warheads force for India, in his essay, “India’s Force Planning Imperative: The Thermonuclear Option (2002)”, acerbically comments that the cost for these at Rs. 89,920 crore over three decades should be viewed juxtaposed against Rs. 900,000 crore the country is likely to spend as per its traditional military expenditure pattern in just 20 years (2000-20), “on its armoured and mechanised forces to fight outmoded wars that are unlikely to be replayed.” Have the military registered the change?

Operation Parakram — the mobilisation and forward deployment of the Indian defence forces after 13/12 and return back a year later without engaging in combat — has brought home a lesson. If it were not a case of political or military nerves, it certainly wasn’t American pressure alone that prevented a conventional war. It has been commented that the services gained valuable experience in mobilisation, but surely that was not the aim of the exercise.

In the transformed paradigm what India will have to contend with is not a high-intensity conventional war but a covert or a limited low-to-medium-intensity war. There are several high-tech and astronomically costly weapon systems on order. Recently a deal has been inked with Russia to receive Admiral Gorshkov, a mothballed old aircraft carrier for free, the caveat being that India will have to pay an estimated $ 800 million (Rs. 3840 crore) for the refit of this old war horse and another $ 1 billion (Rs. 4800 crores) for MiG-29 K aircraft that it will carry. China does not have even one aircraft carrier in its naval fleet. 310 T-90 tanks are in the pipeline at a cost of some $ 450 million (Rs. 2160 crore).

There is another shibboleth that needs to be dealt with. In the military mind, modernisation is synonymous with mechanisation. Some years back the Army had imposed a unilateral cut of 50,000 in its manpower to generate funds for modernisation (sic). This cut was given a quiet burial after the 1999 Kargil war. The defence forces being deeply traditional are unlikely to yield ground on their demands for conventional war in the short term. Perhaps, the feeling is that a nuclear deterrent unless backed by a conventional deterrent will not yield results.

Modernisation is needed urgently but of a different kind taking the altered conditions into account. The defence forces will have to be convinced of the change in the nature of conflict resolution on the subcontinent, but that may take time. In the meanwhile, the Integrated Defence Staff (IDS) should be of assistance in carrying out a holistic across-the-services cost to benefit analysis and help in selective redeployment of funds for limited war. The Strategic Forces Command will have to be made operational at the earliest. Some creative budgeting is called for to achieve it.

There are two important aspects to defence expenditure - first, to plan and apportion expenditure judiciously and, second, to manage that expenditure adroitly. During the past few years there has been a lot of the criticism of the surrender of funds. The defence establishment was not able to absorb Rs. 4126 crore in 2000-01 and Rs. 5000 crore in 2001-02 because of antiquated and complicated procedures in the Ministry of Defence. It is important to utilise all the allotments but even more important is to prioritise the expenditure correctly keeping the changed strategic and tactical environment in view. To use an old management adage, emphasis must shift from “doing things right” to “doing the right things”. Otherwise we may not get adequate security for all the expenditure we make.

Coming back to the issue of defence allocations, the point of economic affordability is very relevant, though it can be argued that for military expenditure to be justified, there is no necessity to demonstrate that it has a positive impact on the economy. Further, security is a prime “public good” and “is an essential first charge on the nation’s resources”. At the same time, such arguments fly in the face of ground realities. It is grinding poverty, low literacy levels, poor health care standards, absence of worthwhile infrastructure, etc, that need heavy investment and tend to relegate the priority for defence requirements. Unfortunately very little of the funds deployed for development reach the target end. The filtration system of the Indian state absorbs a greater percentage of the developmental funds on the way to the target.

The long-term fiscal policy (LTFP) of the Government of India had set a target for defence as a percentage of the GDP for 1985-1990 from 3.5 to 3.8 per cent. The Standing Committee for Defence (1996-97) had recommended a fixed percentage of say, 4 per cent. It is evident that subsequently these figures were considered unaffordable and scaled down to an average of 2.3 per cent of the GDP for the period 1988-2001. The national security tripod of economic strength, internal stability and military capability are interdependent economic strength remaining the pivot. The affordability and adequacy gap has been the “central dilemma” of defence planners in this country. It has frequently led to low funding, resulting in starving defence and debilitating its military capabilities.

Finally, as a rule of thumb for sustainable defence expenditure, (given a stable base of say 3 per cent of the GDP) the rate of growth of the GDP must not fall below that of the defence expenditure. Hopefully, as the Indian economy picks up enough momentum, it should be able “to haul along” the military sector more rapidly. As defence allocations improve, modernisation, force restructuring and manpower adjustment will follow.


Cheers!!

Shobhit Deshwal.

 

[rraajjeevv]

Shobit Deswal wrote -
'My reply to the discussion follows:-'
Your reply is a complete cut and paste job from here
Defence expenditure versus military effectiveness
Kiran Krishan
INDIA'S defence budgets have ranged between 14 to 15 per cent of the Central Government Expenditure (CGE) and 2.2 to 3 per cent of the Gross Domestic Product (GDP) in the last decade.
------------------

That article uses very old figures as it was written in feb 2003. Things have moved on.

 

[shobhitdeshwal]

Well yes... The facts and figures are from the same article... And I did not say this is what i generated.. one has to pick the economic indicators from some where or the other...

I have solidarity with the views!!

Cheers!!

Shobhit Deshwal.

Shobit Deswal wrote -
'My reply to the discussion follows:-'
Your reply is a complete cut and paste job from here
Defence expenditure versus military effectiveness
Kiran Krishan
INDIA'S defence budgets have ranged between 14 to 15 per cent of the Central Government Expenditure (CGE) and 2.2 to 3 per cent of the Gross Domestic Product (GDP) in the last decade.
------------------

That article uses very old figures as it was written in feb 2003. Things have moved on.

 

[rraajjeevv]

Agreed.
But you could have higlighted the relevant sections instead of pasting the complete article without any reference.
Even I agree that India should cut its defence expenditure, but only when it is fully capable of defending itself against any external aggression. i do not want India to meddle in other countries affairs, but i also do not want other countries to meddle in India's internal affairs.
For that there is a long way to go.

Well yes... The facts and figures are from the same article... And I did not say this is what i generated.. one has to pick the economic indicators from some where or the other...

I have solidarity with the views!!

Cheers!!

Shobhit Deshwal.

 

[dahiyarules]

Sumit bhai i know that you can not agree to any thing we say and that is possible in this world as we can afford to do that in any given situation.But i can agree with you in totality if that convinces you about what you have in your mind...[the pre-concieved] about this topic.I agree that no nation should have defence forces,no police,no roads,no canal system,no administrative set ups and no Government machinary because they all are financial liabilities on every nation.We should only have money and money making machines,inorder to have a set up where there is no expenditures but only money and money every where.Hope all powerful nations can heed this proposal.

That was a total molestation of the whole idea. Ofcourse, we need security, canalas, roads etc. But, these services must be privately provided, and those who use them must pay their fair share.

You wont pay for the bus ticket for 10 other people in the bus. So why should you be forced to pay for 10 other people in other ways by the means of taxation?

No more redistribution of wealth. This will give everyone a fair opportunity to create their own wealth.

The wealthy cannot be wealthy if they do not have people of a certain economic stature in the society to do business with.

Do not forget that the wealth of a society is not determined by the gold or cash people hold. The wealth of a society is determined by its capacity to produce and consume a given level of goods and services.

That is why GDP is used as a true measure of a country's wealth. Even though the concept of GDP is slightly flawed, it gives fair estimate of the buying capacity of a society.

 

[pnauhwar21]

That was a total molestation of the whole idea. Ofcourse, we need security, canalas, roads etc. But, these services must be privately provided, and those who use them must pay their fair share.

Sumit,

Lets come down to the practicality of implementation of your ideas. You have talked about privatising everything from education, road building, military, etc. with no government at all. So, lets take military first..

How exactly will a privatised military work in your world? Will people have a choice to pay tax to support that military? What if out of total 1 billion people, only 2 lakh people want an army or actually pay for it if they have a choice. How will you support that army?

Lets say roads are built by private companies only if people pay. Thats obvious coz there would be no government so nothing can be forced upon people even if its for their own good. What if in my locality, only half of the people agree to pay for a new road, will the road be built by other half's money? Also, there will never be a road in the villages coz villagers will never be able to pay for a road to the private companies who will only work for their profits. So, how will the development happen in rural areas in your everything private society.

If you start informing about the ways of implementation of your idea, you will be able to convince people better rather than just simply boasting about the goodness of these revolutionary ideas. Hope you will take out time to share your thoughts on practical implementation now.

 

[dahiyarules]

Sumit,

Lets come down to the practicality of implementation of your ideas. You have talked about privatising everything from education, road building, military, etc. with no government at all. So, lets take military first..

How exactly will a privatised military work in your world? Will people have a choice to pay tax to support that military? What if out of total 1 billion people, only 2 lakh people want an army or actually pay for it if they have a choice. How will you support that army?

As far as military is concerned, I want the world to move towards the direction of total demilitarization. No country shall have a weapons development program. Weapons companies like Boeing and Northrop-Grumman will be closed down because there wont be a market for the products.

But, lets talk reality. You know and I know that it is never going to happen. Some rogue regime like North Korea is not going to stick to such regulations.

Right now, defense from big weapons (Atomic Bombs and ICBMs) is a monopoly held by the government. If you go through the link for the paper that I attached, you will see that there is so much wastage of funds even by private contractors like Boeing, because they do not operate in a free market scenario. They get any amount of money from the government as long as they deliver what the government wants.

If this monopoly is broken and private players are allowed to enter this market, trust me it is a huge market that many companies would be willing to invest in. But, presently private investment in national defense is not allowed by the government.

Private companies would do business more efficiently and will provide better services due to competition. We could have contracts like say for example for 5 years a company provides defense from Nuclear weapons. Just like people have insurance policies, they could have such services. In case the private defense company is unable to secure us from a nuclear attach, they will have to pay damages as mentioned in the contract. If you die in the attack, then the proceeds go to the person mentioned in your policy.

Just like insurance companies do not cover those who dont buy their policies, such companies wont be responsible for those hurt by such hostilities who did not pay for their services. So, such services could work just like insurance policies.

Would these services work? Heck yea they will! If the government wrapsup the military, whose going to protect me? There will be a demand for security. And that is the beauty of free-markets. Where there is demand, there is an opportunity. I will sign up for the best defense agency that my money can buy.

This whole concept is very fluid as of now. But, it could come to shape if the government let it be implemented. Dont forget the invisible hand concept by Adam Smith. The invisible hand is behind all the developed fairly capitalistic economies of the world.

If the invisible hand worked everywhere else at promoting the economic welfare of the people, why do you think it wont work with National Defense?

Now dont say that such Private Agencies would attack us and colonize us. Well, do not forget why colonialism failed. Colonists like Great Britain realized that they could benefit even more by having a free market system than by stealing the physical wealth of other countries. Trust me, if Britain had the will, we would still have a Union Jack on the Red Fort.

Such defense agencies face competition from other defense agencies. If one of the screws up, they will be out of business in no time and replaced by a more sincere and honest service provider.

Lets say roads are built by private companies only if people pay. Thats obvious coz there would be no government so nothing can be forced upon people even if its for their own good. What if in my locality, only half of the people agree to pay for a new road, will the road be built by other half's money? Also, there will never be a road in the villages coz villagers will never be able to pay for a road to the private companies who will only work for their profits. So, how will the development happen in rural areas in your everything private society.

Do you think there is a demand for good roads? I gues the answer is yes. So why wont people pay for better roads.

And, why wont a person pay for the road in his or her locality that he or she needs to use?

When you go to a grocery store and you want a loaf of bread. The only way you can have it is if you pay for it. Lets assume that you wont steal it. If you dont pay for it, you cant have it. What will you do? I guess you will pay for it, or you will sleep hungry for that night.

So why wont people pay for roads? Under the current system, a lot of people are not paying for the bread and having it too. Dont you think it is unfair?

We need a system where people pay for the goods and services and get a certain expected level of quality in exchange. A system where there is a recourse in case we do not get what we pay for.

There is a toll-road between Noida and Delhi (where I am from). You have to pay 10 rupees (thats what it was 5 yrs ago, dont know what it is now) to use it one way. Man, that is the best road you would ever get to use in Delhi. And guess what, people pay for it.

Initially people were cautious and would say: whose going to pay 10 bucks when they can taken an extra 15 minutes and use one of the two other alternative ways to get from Noida to Delhi. But they were all proven wrong.

From what I know, it is a highly successful venture. The invisible hand was at work again.

If people would pay the toll for the Noida-Delhi road, even when there are other free alternatives, why do you think people wont pay for such services elsewhere.

Especially, if there a road outside my house that I need to pay for to get to work, I will pay for it. And if there is a pot hole, I can stop paying for the road until they fix it. It could all be in a contract that specifies a certain quality of roads, otherwise the clients would be exempt from paying until the problems are fixed.

Once my land line was dead for three days. I called my telephone company and they fixed it. Guess what. I got a credit for the three days that I did not get the service even without me asking for it. Would MTNL give you credit for absence of service, when phones are dead for days at a length?

Ofcourse, there will be roads in villages. Dont people in villages need roads? Wherever there will be a demand for roads, there will be roads. They wont build a road to Mt. Everest, because there is no demand for it.

But, there was demand for space tourism. So, Sir Virgin Atlantic will be starting space flights in 2008. That is the power of free markets.

You have to think of the whole concept of free markets with an open mind. Just think of it this way. Free markets give the power to the consumer who can choose the best service for their money. And if the provider fails to meet the expectations, it will be punished by free markets by shifting its business to other providers who will provide better services for the money.

The government does not want you to imagine the possibilities of free markets. Because, if it looses its monopoly on services like roads and defense, then it will loose control. People do not join the government to serve the country. They join the government to gain power and control. Whether it is an IAS officer of an elected MP. It is all about power and control.

Free markets will take this power and control from corrupt despotic leaders and put it in your hands.

 

[rraajjeevv]

Sumit Dahiya wrote -
Right now, defense from big weapons (Atomic Bombs and ICBMs) is a monopoly held by the government.
That is because it requires a lot of investment in developing technologies that have not been proven. The higher the investment the lesser the number of companies who have the resources to invest in such ventures.
It is easy for mass produced items like bread, tv, etc where you can produce the same item anywhere once you have an assembly line in place. So whether you live in Kenya or USA, you will be able to invest in an assembly line. But where a product is developed/manufactured using project based approach , there are lot of complexities, e.g. you need to invest in equipments which most of the time will be sitting idle.

You are trying to implement economic theory in the product development process. There are a number of approaches to product development, it is not a one size fits all approach.

Free markets will take this power and control from corrupt despotic leaders and put it in your hands.
Okay I have a question for you. Do you agree to free market on the movement of people?
If yes then why not make the whole world a single country? We can then dismantle all the armed forces.

 

[dahiyarules]

Sumit Dahiya wrote -
Right now, defense from big weapons (Atomic Bombs and ICBMs) is a monopoly held by the government.
That is because it requires a lot of investment in developing technologies that have not been proven. The higher the investment the lesser the number of companies who have the resources to invest in such ventures.
It is easy for mass produced items like bread, tv, etc where you can produce the same item anywhere once you have an assembly line in place. So whether you live in Kenya or USA, you will be able to invest in an assembly line. But where a product is developed/manufactured using project based approach , there are lot of complexities, e.g. you need to invest in equipments which most of the time will be sitting idle.

You are trying to implement economic theory in the product development process. There are a number of approaches to product development, it is not a one size fits all approach.

You are wrong. The nuclear technology is held by several privately owned companies in the US, Canada, Europe and Australia.

What do you think this whole India-US nuclear deal is all about? It is about the sharing of Nuclear Fuel technology between private US corporations and similar entities in India for the purpose of production of energy.

But, the Nuclear technology can be applied for peaceful purposes only. These companies definitely know how to make nuclear bombs. They know nearly 95 percent of the process. But, they dont make nuclear bombs because the government will never allow them to do so. And even if they make Nuclear Bomsb secretly, it is next to impossible to sell the technology to rogue elements. Such transactions are too difficult to cover up.

you must not forget that the best space-launching services are privately owned. The best place to launch rockets into space is in French Guayana in South America because it is the closest to earths orbit for most of the year. The launch facilities there are mostly privately owned.

Another French-US private venture invested billions of dollars in developing a floating platform in the Pacific ocean to counter French Guayana's natural advatages. So, far it has been a highly successful ventures. These companies have a near 100 percent success rate of putting sattelites in space.

You cannot estimate the power of the invisible hand. If there is a demand, there is an opportunity. And, if there is no government control or monopoly, the invisible hand will definitely exploit the opportunity with utmost efficiency.

Free markets will take this power and control from corrupt despotic leaders and put it in your hands.
Okay I have a question for you. Do you agree to free market on the movement of people?
If yes then why not make the whole world a single country? We can then dismantle all the armed forces.

I definitely beleive in a border-less world. Initially people might move in droves to developed countries. But, there will be a balance later on as free markets create opportunity in other parts of the world. Eventually migration patterns will morph the opportunities that come up around the globe.

 

[pnauhwar21]

Sumit,

Can you confirm as per your theory Governments will be totally vanished or they will be still there. When you talk about privatisation, there are 2 things - privatising electricity, ammunition development, road networks, etc which is already happening and there are no issues there. Everybody agrees that Private companies function far better than the Government run organizations atleast in India.

But you have been saying that there should not be any government at all..Only private businesses which are approached by People as and when they need them. If this is what you believe in, let me pose you questions on your post.

You said that privatised armies will work just like insurance companies. To quote you 'In case the private defense company is unable to secure us from a nuclear attach, they will have to pay damages as mentioned in the contract. If you die in the attack, then the proceeds go to the person mentioned in your policy.' - Dear, this is called Insurance only and not a contract of a privatised army..this is in place even today. Who will pay the private cos. to fight with Pakistanis in Kashmir, who will pay them to fight on China border? I have nothing to do in Kashmir or North eastern states so I donot need to pay, right?

See your theory will work only if there are no governments at all in the whole world, there are no boundaries to fight for..people just do their work and approach other people as per the need and skillsets..You just can't talk about working of private companies when Countries are still there..border disputes are still there and all..

You gave an ex. of Noida Toll Bridge ..that contract was given by govt to a private company..whoever wants to use the toll bridge pays for it as you need to pay for any additional benefit..but that model can't be put in place for each road laying project in your locality. If there is no government at all, on what basis a private company will lay a road..if there is no govt to give a contract, how will 10 different companies make a claim for the project..do you think all people in a locality will keep on contacting the private cos. for creating roads? If a road has to be created near Noida Stadium, who will approach the private cos..? those who regularly use the stadium or what? Lets be really practical Sumit..

 

[rraajjeevv]

Sumit Dahiya wrote -
You are wrong. The nuclear technology is held by several privately owned companies in the US, Canada, Europe and Australia.
So what the hell was the Manhattan project?
The original investment was made by the government, once the technology stabilised private companies stepped in.

you must not forget that the best space-launching services are privately owned.
Here again the original investment and the hard work was done by the governments. The whole US and USSR rivalry gave a push to the development process.

For example, Indian satellite launches are cheaper than anywhere in the world. ISRO is a government owned organisation, only now has the government created a partially private entity called 'Antrix'.

You are not looking at the whole picture. In all the high end technology stuff, it is the government who spends money first. Once a concepts is proven to work, only then the private companies step in. A private company can copy the successful design and keep on improving on the original concept. They know that the concept is successful. private entities are after profits, they do not care about anything else. Of course you can argue things get balanced in the end, but what is the use of that when you have consumed all the resources.

i am not sure how much you know about product development process , but a common thum brule is that about 90% of the new products fail.

if you believe in borderless world then strive for that. Once there are not any borders, there would not be any wars. If there are not any wars there would not be a need for military.

Borderless world will also help free market. Free movement will lead to lower prices.

 

[rraajjeevv]

Sumit Dahiya wrote -
Another French-US private venture invested billions of dollars in developing a floating platform in ...

You are factually incorrect, it is not a private entity as you call it.
The original investment ws made by the French government.

Check your facts before writing anything.

From wikipedia
Centre Spatial Guyanais
The Centre Spatial Guyanais (English: Guiana Space Centre) is a French/European spaceport near Kourou in French Guiana.

The European Space Agency, the French space agency CNES as well as the commercial Arianespace company launch their satellites from Kourou.

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The spaceport was selected in 1964 to become the spaceport of France. When the European Space Agency (ESA) was founded in 1975, France offered to share Kourou with ESA.
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Fire safety is ensured by a detachment of the Paris Fire Brigade. Safety around the base is ensured by French Gendarmerie forces, assisted by the French Foreign Legion and other military forces.

European Space Agency
The European Space Agency (ESA), established in 1975, is an inter-governmental organization dedicated to the exploration of space, currently with 17 member states. Its headquarters are in Paris, France. ESA has a staff (excluding sub-contractors and national space agencies) of about 1,900 with an annual budget of about €3 billion in 2006.
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ESA's spaceport is the Centre Spatial Guyanais (Guyana Space Centre) in Kourou, French Guiana
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When you know that ESA is going to launch satellites from your spaceport any sane person can spend billions of dollars in the venture. And that is because the person knows that the spaceport is going to have a monopoly on launches from Europe.

 

[dahiyarules]

Sumit Dahiya wrote -
Another French-US private venture invested billions of dollars in developing a floating platform in ...

You are factually incorrect, it is not a private entity as you call it.
The original investment ws made by the French government.

Check your facts before writing anything.

From wikipedia
Centre Spatial Guyanais
The Centre Spatial Guyanais (English: Guiana Space Centre) is a French/European spaceport near Kourou in French Guiana.

The European Space Agency, the French space agency CNES as well as the commercial Arianespace company launch their satellites from Kourou.

--------------
The spaceport was selected in 1964 to become the spaceport of France. When the European Space Agency (ESA) was founded in 1975, France offered to share Kourou with ESA.
-----------------
Fire safety is ensured by a detachment of the Paris Fire Brigade. Safety around the base is ensured by French Gendarmerie forces, assisted by the French Foreign Legion and other military forces.

European Space Agency
The European Space Agency (ESA), established in 1975, is an inter-governmental organization dedicated to the exploration of space, currently with 17 member states. Its headquarters are in Paris, France. ESA has a staff (excluding sub-contractors and national space agencies) of about 1,900 with an annual budget of about €3 billion in 2006.
-----------
ESA's spaceport is the Centre Spatial Guyanais (Guyana Space Centre) in Kourou, French Guiana
----------


When you know that ESA is going to launch satellites from your spaceport any sane person can spend billions of dollars in the venture. And that is because the person knows that the spaceport is going to have a monopoly on launches from Europe.

Well, you are reading between my words. Ofcourse the ESA has big operations in French Guyana. But, I am talking about numerous other private entities that operate from French Guayana.

Space launch's is what that place specialises in.

Well, that wasnt the point of the discussion.

The point was that if there is an opportunity, it can be exploited efficiently by a private enterprise.

And you admit that people would be willing to throw in the cash to get such projects rolling.

Space exploaration isnt just all about NASA, ESA etc. It is being looked from a comerical perspective by god knows how many entreprenuers.

 

[rraajjeevv]

Sumit Dahiya wrote -
you are reading between my words.
Incorrect. You are not trying to understand what i am saying.

My argument relates mainly to areas such Nuclear Power, Defence, Space Technology etc where the investements can be humongous and the returns unpredictable. In such areas governments/philanthropists have to intervene. Here the returns may be visible only after 20-30 years of work, in which case it is not in the interests of private entities to invest in such ventures. of course the governments can assign part of the aowrk to be carried out by private companies (again if the project is of national interest, you have very few candidates to choose from), which is what happens quite often. But once a concept has proven to work even partially, one can then approach the private companies to mass produce the items.

What i am trying to say is that your theory of Free market and Free Enterprise works best when a prototype of a product has been produced. you can then easily plan for the future by forecasting demand for the product.

Space launch's is what that place specialises in.

Well, that wasnt the point of the discussion.

The point was that if there is an opportunity, it can be exploited efficiently by a private enterprise.

And you admit that people would be willing to throw in the cash to get such projects rolling.

Space exploaration isnt just all about NASA, ESA etc. It is being looked from a comerical perspective by god knows how many entreprenuers.

You are only partially correct on what you have written above. the private enterprises and sub contractors have come in only after the hard work done by the governments. In the case of French Guayana most of the initial spadework was done by the French and then other European countries stepped in. With monopoly on European satellite launches and with the main facility already in place , it was easy to persuade private companies to invest.

If one proposes certain theories, the theories should be backed up by reasonable arguments. You are trying to fit in a single concept of free market and invisible hand in every area of human activity, which I feel will not work always.

Heck I might come up with arguments and theories that Aishwarya Rai should marry me and no one else in the world. but I know (and Aishwarya knows) that it would not happen.

 

[dahiyarules]

My argument relates mainly to areas such Nuclear Power, Defense, Space Technology etc where the investments can be humongous and the returns unpredictable. In such areas governments/philanthropists have to intervene. Here the returns may be visible only after 20-30 years of work, in which case it is not in the interests of private entities to invest in such ventures. of course the governments can assign part of the aowrk to be carried out by private companies (again if the project is of national interest, you have very few candidates to choose from), which is what happens quite often. But once a concept has proven to work even partially, one can then approach the private companies to mass produce the items.

What i am trying to say is that your theory of Free market and Free Enterprise works best when a prototype of a product has been produced. you can then easily plan for the future by forecasting demand for the product.

We can play this game of "you are wrong" endlessly because you will just keep repeating the same points again and again.

There are several private initiatives, right as I am writing this, which require billions in investment, and need 20-30 years on an average to bring the final product to the market. And, even then there is no guarantee of success.

I can give you an endless list of examples. But, I will stick to the example of pharmaceuticals. The average time for a drug to be developed and brought to the market is over 20 years.

If you ever took a class in supply chain management, you will learn that the average time to bring a product or service to market could be over 5 years.

The market capitalization of the Fortune 500 companies alone is above the entire economies of the third world countries put together.

In the US, the entire US military is supplied by private manufactures and suppliers. Even though there is a lot of wastage by these manufacturers, they have produced the best defense systems man has ever imagined.

The Nuclear Power sector in the US is entirely supplied by private providers like GE.

Do not tell me that the private enterprises do not have the time and patience to invest in products and services.

What is the point of investing in something that guarantees negative returns? If there is a potential investment that comes with a guarantee that the returns will be zero, a private enterprise will never go ahead with it, because it has an obligation towards its investors. While, a government will not think twice of taking up such initiatives because they do not have an obligation towards th tax payers. When was the last time, the govenment got our permission for spending our money?

You are only partially correct on what you have written above. the private enterprises and sub contractors have come in only after the hard work done by the governments. In the case of French Guayana most of the initial spadework was done by the French and then other European countries stepped in. With monopoly on European satellite launches and with the main facility already in place , it was easy to persuade private companies to invest.

.
Look Buddy! you are under a very big misconception that governments convince private enterprises to invest.

The only thing that convinces a private enterprise to invest is potential profits. Of course, governments try to sweeten the deal. There are even a lot of behind the door dirty transactions that we don't know of. But, I do not support such kind of capitalism. It is what I call crony-capitalism.

Heck I might come up with arguments and theories that Aishwarya Rai should marry me and no one else in the world. but I know (and Aishwarya knows) that it would not happen.

Why are you so inconfident about Aishwarya. Heck! shes just one woman out of a few billion. And she realizes the fact. But, people like you put her on the clouds.

I think this discussion is loosing focus. You can email me at sd02@fsu.edu

Trust me you are not proving any intellect by repeating the same things over and over again. Now its getting lugubrious and redundant.