Tuesday, July 12, 2005

Innovation and free market economy in India

Indsight has an interesting post about how India, though chock-full of inventors and geniuses, is basically still stuck at square one with respect to actually being in the global forefront of technological innovation, since a number of these brainiacs reside in the farthest corners of rural India and do not obtain 1. the recognition they deserve and 2. the resources to succeed in bringing their products to fruition.

A few comments in the debate that arose from this post were against governmental involvement in any kind of endeavour to spotlight these innovators, because of corruption and inefficiency. I am guessing this point of view comes from a capitalist / free market view of India.

The basic premise of a purely capitalist nation state and a free market economy is that it allows a person with no money and no resources to start from scratch and move up the societal ladder on the back of his own hard work, intelligence and creativity. But, what most people forget is that this is only possible given everyone has an equal opportunity to do this. Maybe this model works in a cash-rich, well knit society like the western world, but when we talk about India, this model would not work so well for the following reasons, one, there is not much free cash floating around, hence individual people and / or privately funded enterprises are not willing to take risks with it, and secondly, the country is not that well knit, which means, people in remote areas have a lot less access to whatever limited cash and resources that exist. Equal opportunity, therefore, does not exist for every citizen. This is why the government needs to step in and without using the term "level the playing field" (since this implies you are lowering others' playing field and infuriates libertarians), should at least raise the playing field for people at the bottom of the economic and social strata. The government, with it’s potentially vast network and grassroots involvement can help these people who otherwise would have no chance of success. Sure, there’s corruption and inefficiency in any government endeavour, but for now this is the best bet India has. Maybe when everyone in India actually does have an equal opportunity and the myth of equal opportunity is a myth no more, it might be possible to eliminate government from the equation entirely. Till then, blindly going around beating the drum of capitalism is just plain wishful thinking.

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