Adam Smith, the father of capitalism said “Labor was the first price, the original purchase – money that was paid for all things”. And Karl Marx, father of communism said “Capital is dead labor, which, vampire-like, lives only by sucking living labor, and lives the more, the more labor it sucks.”
In terms of labor they seem to be somewhat in agreement, but not in terms of capital. But Indian politicians do not agree or disagree on anything. It depends upon who has done it. If their party has done it, that’s what India needs, but if other party does it –its blasphemy.
Capitalism is free markets and competition, a place where private entrepreneurs run most of the things. Communism is a controlled environment with government controlling most of the things. In terms of salaries, Smith would argue for more private enterprise, so that workers can choose where they want to work and at the salary of their choice. Whereas Marx would argue for a minimum wage and increments happen through wage boards. It is not my personal bias but communism did not really work out, and if it did (in China) – it did with little help from Capitalism (China opening its markets in 1999).
But what do we follow in India? As per the preamble of Constitution of India we are a “Socialist Secular Democratic Republic”. Ok, so we are socialist. No confusion on that, license raj is known for decades – which did not help the economy. Back in 80s, it was so difficult to get a scooter or even cement. But after the economy was opened by Manmohan Singh in early 90’s, which Subramanian Swamy of BJP claims as his idea (which he asked Manmohan Singh to prepare for, and his government did not last) – we worked out towards better, with some help from Capitalism.
Back to the present, is subsidy good or bad? What has contributed to budget deficit and trade deficit? The budget deficit and trade deficit, and decline of our currency are really alarming. Ask any neutral economist – he will call Indian economy a failure in last 5 years. That shows the terrible job done by Manmohan Singh and Montek Singh.
But was all of this done by Congress and BJP opposed it? How is Arvind Kejriwal’s Aam Aadmi Party (AAP) different from all this?
First let’s study the AAP’s move to give free water and electricity in Delhi. Swamy claims that AAP has a hidden leftist and communist agenda – all the BJP and Congress leaders shout the same, and recently Farooq Abdullah has said “Giving free electricity is like giving free cocaine”. BJP and Congress leaders also claim that subsidy is bad, it hurts the economy, it brings in deficit – and an open economy (backing free and competing private enterprise) is good. Ok, so that means, BJP and Congress are for Capitalism – very good.
Now the great leader of Jana Sangh, Shayam Prasad Mukherjee (and considered to be the father of BJP) was himself a Capitalist, and he was not in favor of special status to Jammu and Kashmir under article 370. That is consistent, since article 370 is a form of communism (and discrimination), by allowing special rights to own property and business, that is against free markets and competition (Capitalism). Good move. He planned to agitate in Kashmir against this; by conducting a hunger strike over there (Kejriwal and Hazare are not the only ones). He was arrested and put in prison, in a bad health condition – and later died under mysterious circumstances. There were claims of conspiracy theory (by Mukherjee’s mother and former Prime Minister Atal Bihari Vajpayee in 2004) that Sheikh Abdullah and Jawaharlal Nehru were somehow responsible for his death. Sheikh Abdullah was the father of Farooq Abdullah (the inventor of electricity = cocaine theory) and grandfather of the present Jammu and Kashmir chief minister Omar Abdullah.
All the three generations of Abdullah’s are in favor of article 370 and special rights for Kashmiri people. Is that not against Capitalism, not allowing any outsider to buy land and do business, is that not against free enterprise. But when Wal-Mart wants to do this, that is a disaster – when they do it, it’s completely essential. Is article 370 not a subsidy, or equivalent to cocaine, just like what Farooq Abdullah claims – but electricity is cocaine since Arvind Kejriwal did it?
Now let’s move our attention to Congress, who called Kejriwal’s move a populist move, and this subsidy is going to hurt the economy. Absolutely right! But then what is Sanjay Nirupam going on hunger strike for – cheaper electricity? Was that not blasphemous when AAP did it? What is the view of the Congress – is subsidy bad? Here is what they have done – free salaries – Mahatma Gandhi NREGA scheme, free food – food security bill, double price of land – land security bill, free education and tens of other bills splurging subsidies. All this adds up to over Rs 1.5 lakh crore of subsidies and contributing to a Rs 5.5 lakh crore of fiscal deficit (5% of GDP 2012-13). And Mani Shanker Iyer said on a debate “Oh you Capitalists, you do not understand real and poor India”, and later he finds the poor, tea-vendor background of Modi obnoxious.
And was BJP opposing all this? No, they were voting in favor of all these bills. Swamy does not find all these leftist and communist – he is totally ok with this. But if the Left parties or AAP does it, that is really bad – subsidy is bad – communism is bad. What has BJP done – approve MGNREGA, approve food security bill, approve land security bill and tens of other subsidies.
And finally Kejriwal, who is more worried about the statistical distribution of voters than anything else. He just wants to impress upon poor and lower middle class – who have the maximum population in the country. He is against FDI in retail, he is all for subsidies – he is more worried about the auto owners than the public who sits in the autos – since auto drivers give him free advertising. But when he goes to speak at a CII conference – he gives comfort to business owners. He is against the rich and big industrialists – he may be right in case of few – but how about crediting some people who became rich since they worked harder than others. He is not helping the Capitalism cause in India for sure.
So will the real Capitalist please stand up, and put one of those fingers of each hand up? Since we will not be able to find the real Capitalist – at least we got real slim shady: