Sad but true article over @ TCS (TCS ROCKS!) about the latest instance of economic idiocy coming out of India – TCS: Tech Central Station – Wheels of Fortune?
It is rare to find a single story that illustrates, in exquisite detail, all of the varied pro- and counter- arguments for free trade as opposed to managed or protected trade. I am therefore grateful to Peter Foster who filed this piece in the Daily Telegraph from New Delhi. In a nutshell, the Indian Railways Minister, a Mr Prasad, has refused permission to import railroad wheels into India, preferring to establish a factory in his home state of Bihar to make India self-sufficient in their production.
Outsourcing & IT might make the headlines but when it comes to the nitty-gritty improvement of per-capita GNP, lifestyles, health, and so on, it’s the boring stuff like logistics that make all the difference.
The cost of not allowing imported train wheels? Well, one of the many costs is quantified –
Analysts predict that it will be many years before India can produce enough wheels to meet demand. The shortage has left 20,000 carriages awaiting wheels, and a similar number of old ones requiring replacements.”
This makes my blood boil on so many levels. Idiots.
Laloo Yadav’s the Indian … umm … well, there’s no non-Indian equivalent really. He’s always up to some seriously annoying shit !!
it’s bihar.
like assuming sicily reflects bad on italy.
The factory’s in Bihar but the policy is nationwide?
Vinod, I’m not so sure why your so angry? Is it simply becaus there are stupid people in India or just that this one particular person is stupid? Or is it more of an existential economic angst?
I started looking TCS and stories, and I landed at the “about us” page. Couriously I saw this, Tech Central Station is published by DCI Group, L.L.C. Hmmm, plug into google you get this. Gave me a good laugh….I thought there was something odd looking from the front page of TCS.
Sluggo –
the anger –> cuz one boneheaded move like this screws the population of india overall & counters the positive efforts of practically thousands of IIT’ers working on outsourcing projects. The problem with econ idiocy is that it affects so many people in so many ways both direct, but more often indirect. Curtail GNP growth and rather literally, more people die. India needs all the GNP it can generate.
TCS –> the link about the publishers is interesting (in a Michael Moore conspiratorial web-of-connections sort of way). Whatever the cse, TCS is opinionated, for sure, but the content & the writers it brings in are top notch….
Sluggo:
Anybody who reads TCS regularly knows that it comes from a right-wing, libertarian perspective. That it’s linked to some political outfit is immaterial. The quality of the contents are just too good to matter.
Who in their right mind thinks being completely self-sufficient is a good idea? Right. Lets see, today instead of going to buy things in a store, I’ll quickly grow my own vegetables, cook them (in pots I made my self with clay I dug up in my back yard)and cook them on a stove I built myself and …..Ok. You know where I am going with this.
I think Vinod is angry because the poor economic policies of Indian leaders is the main reason India is still so poor. It ought to make anyone angry.
Well, it’s important for non-commodity, single source, and nationally strategic goods.
This particular politician, Laloo Prasad Yadav, is notorious. He’s probably a spoils appointee, I doubt he has railroad experience.
But the general question: why do you suppose India has poor leaders? Surely they didn’t spring out of thin air. Surely not consistently bad leadership over 57 years of independence.
But the general question: why do you suppose India has poor leaders? Surely they didn’t spring out of thin air. Surely not consistently bad leadership over 57 years of independence.
surely you aren’t suggesting chinese autocracy? 🙂 don’t know, the american public really has not faith in comparative advantage, the economic elites regulary foist it upon them ‘for their own good’ (wink).
It’s important for wheels for trains to be made in India? Huh? I’m sorry, that just does not make sense. Build some decent roads and no one will care about wheels for trains anyway.
And no, I don’t think all Indian leaders are awful. That was a mistatement on my part. But there have been enough silly moves by enough of the political class that it makes you breathless with wonder. I guess if you get votes by promising to protect this industry or that industry, it’s hard to think about getting votes any other way. I should know. I grew up in Iowa and how many billions do we throw away to ‘protect’ farmers? Yuck.
This is pretty common in india. There is corruption in most offices in india, u cannot complete any official government related work without bribing someone. If u refuse to give a bribe them they will make you wait for months and if u bribe them you can get the job done in a day.
The same is the case when you apply for government jobs. You can pay and get a degree in medicine or engineering in some states in india. Sorry state of affairs, politicians give their relatives contracts to build roads, railways etc., or give the contracts to people who bribe them, so no wonder they dont want to import wheels though they know they do not have the technology to build efficient wheels. They will allot crores of rupees on starting factories to make wheels and no wheels will ever be made and they will put that money in their pockets , go to jail for a couple of months if they are caught and have courtcases run for decades on this which would never come to any settlement. The system has so many loupholes, so common man in india cannot do anything about it. This is pretty common in india, most politicians in india become rich at the end of their tenure. Specially in bihar its worse. From what I heard students write exams copying from textbooks and no investigator can stop them from doing it ( my dad was stabbed by a student in andhra pradesh when I was five years old because he stopped copying in his colleges, thank God he survived.. so u risk ur life basically if u want to fight the system) and you dont need to buy a ticket to travel in bihar trains if you have right connections. Bihar chief minister Laloo prasad yadav was in jail and CBI filed a case against him for not accounting for 1000 crores of money in a fodder scam. He went to jail and had his wife rule bihar, his wife I read did not even pass fourth grade school curriculum. what is more surprising is in india even leaders sent to jail on corruption charges like laloo, jayalalitha are re-elected time and again. Thats really surprising for me , indian electorate psyche is just confusing, I just cannot figure out why they vote for people who are corrupt, unless they are stealing ballot boxes and winning elections. India is the largest democratic country in the world and has a 57 yr old history but that doesnot mean the system is efficient. Having lived in india most of my life, its just too hard to get things done in india, no wonder foreign investors think twice before investing in india despite liberilization . India would have been way ahead if there was no corruption. And India as a country survives despite the mediocracy in ideals/ ideologies/ policies/technologies. Hopefully manmohan singh would do a good job and cure india of this sickness.
Bihar is a mess, has been a mess, and will continue to be one in the forseeable future.
I find it interesting that having reaped the benefits of opening up the economy since the early 1990s, people still think that forcing home grown industries supported by the Government with whatever money (subsidies, land, investment, etc.) would actually work.
In India, some States get it and some just won’t. The Western and some of the Southern states are definitely on the upswing and proactive in terms of cutting red tape and bullshit economic strategies. Those states though also have a more eduated populace. Bihar has horrible litracy rates and is still inflicted with the Feudal ideas of caste warfare.
Prakruti: I’m glad your father was ok from the incident. I’ve heard several similar incidents all across India. Just a quick critque if you don’t mind. Please use paragraphs by spacing them, it becomes very difficult to read a block of ideas when not spaced out visually.
Isn’t it a miracle that India is even a country right now? I mean, it seems that there are wider cultural differences within India than without. The differences in appearance, ethnicity, language, and culture seem to go far beyond any commonality of being Indian.
It seems like with so little to tie the country together on a federal level, it seems that guaranteed corruption on a local level is the only thing that ties the entire country together.
My uncle was very heavily involved in the politics of Bihar in the 1970s and I know that the corruption is endemic. Recently, the local power structure has been upended as low-caste peoples have banded together to use their numbers to overturn centuries of near feudal-slavery to Rajput and Thankur families. Yet after having risen to power, they are not interested in destroying the system because it is their turn to loot it. It’s bad, but it’s better than the “communal violence” that we saw in the 70s. I cannot overstate Laloo’s popularity with the low-caste people of Bihar. They feel like he is one of them and would stick with him over anyone.
Incidentally, I’ve always thought “communal violence” is a much more effective euphemism for genocide than “ethnic cleansing.” Ethnic cleansing sounds suspicious, but communal violence almost sounds like a civic duty!
Vinod:
True, but it’s not like it hasn’t happened in the past, or in other countries; even the US. Getting upset is fine, but unless you can gain some influence there it’s kinda moot…
Vinod
Niraj
I can’t vouch for the content because this is first time I’ve been too it, however, I don’t think it’s entirely immaterial. And you can see this from a variety of sides. Personally I think most of the so called “pundits” on tv and the oped pages are whores. Take a look at John Stossel on 20minutes, he was good reporter/researcher until he got greedy. At which point a majority of his reports were geared toward right-wing/conservative philosophies. Again, I don’t think this is wrong, but what was wrong was that he wasn’t upfront to the audience about where he got he is information, and how he skewed reports to favor those results. Many people dislike Michael Moore, but at least he’s upfront with his information and where he’s coming from. Similarly, most of the media outlets (print, tv, radio) are owned by seven large corporation, one being Rupert Murdoch’s. I don’t need to be an expert, but as a born skeptic, and watching, reading, and researching bears the fact that ‘Fox News’ is heavily slanted. Not that any of the other News channels are any better, especially when the rely on Drudge for breaking news. So I have become cynical and jaundiced over the past few years, and so TCS may have great information, but I take it with a grain of salt when I see who publishes it;
MD
Md, many nations don’t even the natural resources to produce or manufacture many goods, and such are dependent on other nations who may sometimes extort high prices for these imports. For Expample, North America has only 3% of the Oil in the world, and we are extremely dependent on other nations. Remember the 70’s embargo? This driven US administration to construct economic and polictical policies that we are both paying and benefiting from; So, yes, there pros and cons to self-sufficiency, but’s it’s not simplistic as you make it out to be;
I agree Bihar is a mess, and rrr states what I felt for a while in that “miracle that India is even a country right now”. But I think this has more to do with spirit, like the earthquake in Gujurat — people were rebuilding their lives within three weeks. Whereas Turkey in a similar situation still couldn’t get it together after three months.
shrug
“But I think this has more to do with spirit, like the earthquake in Gujurat — people were rebuilding their lives within three weeks. Whereas Turkey in a similar situation still couldn’t get it together after three months.”
Unfortunately even the tragedy of an earthquake did not deter the corrupt folks from dipping their hands in. Plenty of cases where foreign aid workers were simply dismayed at how certian folks in the ‘supply and logistics’ of humanitarian aid within the Indian Government took their chance to horde: Blankets, medical supplies, and price gouge among other things.
Like you said, there are pros and cons. The earthquake gave India the idea of raising American National Guard type units in control of the states to aid in such disasters. However, as Indian politics goes, the process has essentially bogged down.
Hey blank–
could you at least sign in as “blank” rather than ” “? As is, I can’t click on your entries in the comma list, which makes it really annoying. I’ve basically stopped reading anything you’ve written b/c the transaction costs are too high …
That should be “comment” list rather than “comma” list above. A brain-o, apologies.
I found the default Comma amusing.
Regardless, “Blank” it is. Your transaction cost will be economically feasible now. My apologies for making your Sepiamutiny experience difficult.
How fatalistic – no wonder India is so screwed.
Seriously though, the reason so many people expend so much energy blogging is to affect the world somehow – even indirectly. Hopefully my anger will resonate somewhere and perhaps via some long chain, eventually reach a few minds in India….
heh – I just started reading a book by Stossel about his career in the Media. Basically, he got ~20 emmy awards as long as he was towing the traditional media soft-socialist line (e.g. corporate expose’s, demands for govt action, etc.). Since he started towing a libertarian line (exposing govt failures… advocating self responsibility, etc.), his take has been zero.
Telling the truth cost him within his profession.
But, it sounds like for you, anyone outside of the “soft socialist” conventional wisdom is a “whore”
Vinod
Nope, not fatalistic – realistic. India has survived in one form or another for over 5000 years, so I’m sure that it can make it for a few more. Plus pontificating on your blog isn’t going to make much of a difference unless a majority of indians not only have access to it, can read english, organize themselves, and put their agenda into effect via email, more blogs, or other media methods. Plus much like me (and maybe you) we are all worried more about our individual lives, and it is more so over in India then in the US. Do I discount your efforts? No. Blog away.
One option of course is if you have a lot of money, say like Richard Mellon Scaife(and others), is to use those millions to create lots think tanks that would then study and publish huge number of atircles that would influence social, economic, and political policies according to their agendas. It may take a few decades, but it can be done. I know that a lot fundies have been doing that in India for the past decade already.
Yeah, it cost him his integrity. And wtf, does soft-socialist line mean anyway? You mean it’s wrong expose corporations that commit fraud? Or that it’s wrong expose problems with government and then have the government try to fix it? Besides he say’s it himself, ‘I got a little older,’ John answered. ‘Liked the idea of making real money. So started looking at things a little differently.’ Plus he’s not as poor as he makes himself out to be…‘Stossel was willing to give well-paid speeches to corporate groups and avoid ABC conflict-of-interest restrictions by having his speaking fee donated to this “charity” which seems aimed mostly at increasing Stossel’s ratings. ‘. And I didn’t choose Stossel because he’s libertarian, conservative or leans right. But in your rush to label me you missed what I said:
But Vinod, I agree with you, India has to change many of it’s economic policies. What’s the best way? who knows 8p
sluggo –
India has a LONG way to go – we both agree. BUT, to quote a horribly cliche phrase – a journey of a thousand miles begins with a single step. Noone goes anywhere tossing their arms up and saying “it’s hopeless.” That’s all the cover lameness like “railroad wheel-gate” need to happen.
Perhaps one day, Sepia Mutiny will reach a billion Indians. Until then, I’m hopeful that the indirect effects (rather than the direct ones) will contribute some how.
As for Stossel, we’re going way off topic. For now, lemme just say that I can easily point you at other interviews (for ex. here and here). My point is something different, for you Stossel was an agent of Truth and Light in the first half of his career when all he was doing was corporate bashing. And afterwards, Darkness. BUT, you’re making a strong, implicit judgement call that what he was doing earlier was the Correct thing – a call that many others dispute.
When Stossel in his Emmy-award winning days was exposing corp abuses (whatever they were), don’t you think that was a skewed perspective?