For India, Ghost of Planned Economy are causing starvation

[Sakal Gharelu Ustad]

Once people understand and trust the competitive market and there is no muscle power to deter people from investing, most sectors would see fair competition without any regulation.

There are sectors where free markets can not work, but a large number of sectors are not understood well and unnecessarily regulated. For eg. Sugar-cane mill left to itself is usually local monopsony and can ill treat the farmers on prices because farmers do not have the option of selling cane to a far-off mill. But that is only half the story which most regulators would like to tell. The farmers still have the know-how of growing other crops and can always switch to other crops and this acts as a check against monopsonist. But most people like to act in paternalistic fashion and do not want to let people think for themselves.

There are very few industries where cartels can work without muscle power. If you increase transparency in government functioning and reduce muscle power, competition would ensure that everything else falls in place.

 

[ejazr]

Caretilisation like the case pmaitra points out is an outcome of unregulated Capitalism. Capitalism with no regulations and anti-trust checks and balances led to things like Imperialism and monopolies that are overall bad for the economy and society.

When we talk about free markets, that is Capitalism with checks and balances were the govt. only makes sure that there is no cartels being formed and no monopolies are being built. If a cartel is formed, then the markets are no longer free because now they are controlled by the a cartel of companies.