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Rakesh Kochhar

Executive coach & business consultant, CoachNme

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Is it good economics to provide subdized food grains or good politics?

Lets take the example of India. Can a country of 1.2 Billion people provide subsidzed / free foodgrains to nearly to 600 million persons near the poverty line in India. Food inflation is officially at 9.3% p.a while in reality its around 20%.p.a.
Then there are supply side constraints as agriculture growth rate over 10years average 2.7% p.a. only. Compare this to the population growth rate 1.4% p.a.Further India has recently been running large current account and fiscal deficits threatening its budget calculations.
Elections are going to be held in two years. The economy has decelerated to 6.5%p.a. growth rate from 10% p.a.over last 3 years.The rupee has fallen by over 20% against the dollar in last 2 months.The Sensex its at its lowest in last 2 years.
Other developing economies especially the PIGS are already being bailed out. Can India take this contrarian route?.
What about the fundamental rights of food and security for its citizens? Can this be overlooked because they don't have the buying power or employment opportunities to feed themselves?
Whose rights need to be protected? The economy or its Citizens? Is the proposed Food grain security bill a step in the right direction? Are there other alternatives?

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    Dec 25 2011: David:

    "So I would argue that what we call democratic socialism, is always, totalitarianism..."

    "A socialist society, is a society that believes it can vote it's way, into having more stuff."

    These are contradictory statements since the denotation of totalitarianism is having a central authoritarian government that represses it's people. I'm going to assume that what when we refer to socialism it is a government in which the people have the power, as you mentioned in your last post.

    Over the past 30 years corporate profits have soured while the middle class wages have stagnated. The people didn't want this. I agree that over consumption is a large problem in our society, but I don't think the people had that choice. From an economic perspective our country faces three main problems in: the Industrial sector(jobs), the financial sector (credit has frozen, housing market), and the daunting cost of medical cost.

    Right now I can think of two major turning point that have changed the past 40 years. First, we went off the gold standard despite resistance from the people, and two, corporations and our government started started to globalize. This generally happened with free trade agreements. The people had nothing to do with this, they were against it. This is class warfare.

    "I don't advocate for an economy run by the business sector, I advocate for an economy, where you pay others as you would have them pay you..."

    Are you talking about a free market? U.S has never had this. If there is no free market the above statement doesn't exist. Also the statement makes some sense if your a construction worker but if you are a single mom how much do you have them pay you?

    Should we start a new conversation (this one is timing out) or have you had enough?
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      Dec 26 2011: The statements are not contradictory... because of what you just explained... The people would never vote to enslave children in other countries... So they aren't given that choice. It's called a "free trade agreement" now. The United States has, had those in the past, but we rarely had them with totalitarian states, because the peopler are against them.

      Since we started doing that, and none of our politicians are running on that platform... Who's in charge? Certainly not the people. Neither of our choices represent our desires anymore. The last politician to argue for a change in this policy was Jimmy Carter... someone universally taught in schools as an incompetent politician "who just didn't understand what it took to get re elected".

      Why? Because he wanted to pay Chinese people better, and he wanted the countries that we buy oil from to give women the right to vote... All it took was 9 hostages and a media frenzy to destroy him. I am of course, probably one of the only self proclaimed capitalists, that will argue for Jimmy Carter, as one of the last decent human beings to run for office... but I'm proud of that stance, despite the fact that many would call it contradictory.

      Most people agree that Reagan was awesome... Reagan was the nail on our coffin... but it was because he loved trading with totalitarian states... Not because he was a capitalist.
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        Dec 26 2011: Yes I think I will start a new conversation once this one is finished.

        I agree with most of what you said until you started calling it socialism. I mean you say "Who's in charge? Certainly not the people." So why call it socialism.

        "The second a society believes it can vote its way into more stuff, and it's politicians don't correct them, it is both socialist, and totalitarian".

        To me it sounds like what you mean is that once the people have political power to change their economic position they will invariably choose to alter it's state into something that is not feasible for them. I would say the same but substitute the word people with a portion of the people, naturally the business sector (investors), thus creating disparity within the population and also provoking an ideology that does not consider holistic consequences of its action. And so consistently leading society in a position way beyond their means.

        Should one completely separate the government and it's economy. If so is that even possible. If not how much should the government intervene, subsidies and foreign policy.
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      Dec 26 2011: Feel free to respond if you're on tonight, if not start a new topic... Does trading with a totalitarian state, make you a totallitarian state?... Or The subtle art of keeping everything that's important to the people, "off the table", in a democratic state... Or whatever you fancy.

      I love talking about this stuff, because I have a very subtle and complex view on these topics, that is incredibly difficult for me to express clearly in a modern political climate. I think what I mean to say is "The second a society believes it can vote its way into more stuff, and it's politicians don't correct them, it is both socialist, and totalitarian".

      To be a democratically capitalist society, is to elect leaders that say "No, I'm not going to pay Chinese people five dollars a day... How bout we go back to making our violent criminals work? Why don't we print money to build solar farms, and take the hit as international inflation?"... And to remain a democratically capitalist society, we must revolt or rebel when leaders stop telling us the truth, vote in a patriot act, invade other nations in wars of agression... It's on us too. The people always go towards socialism and totalitarianism if you let them though. "Oh that a man's reach should exceed his grasp... For what is a heaven for?"

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