PPP in the subject header stands for Public Private Partnerships. Gulzar has a terrific post on that, in the context of the privatisation of utilities and the railway network in the UK. A great summary.
He should link this to the post (another terrific one) on corporate ethics in India. What is the difference? May be, one is too sophisticated and one is not. But, does that matter to the outcomes?
He should also link this post to the NYT page link he had given in one of his ‘Weekend Reading Links’.
Now, let us get philosophical.
How do we solve this? If governments are captured, how do you expect the government to extricate itself out of it? It is now powerless. Ex-ante, it had. Now, it does not. It is captured.
The only way is to wait for change agents to come when a crisis presents itself. Over time, the change agents are captured too and we wait for newer change agents! It is an unending struggle between power and people.
Lot of permanent fodder for bloggers 🙂
Punarapi Jananam; Punarapi Maranam. Endless cycle.
(1) Differentiated banking – inefficient – one size – one umbrella – scale – exploitation – conflict of interest – opacity – management bandwidth – households hit – fat bonuses – trim banks – back to differentiated banking.
(2) Higher taxes cripple private incentives – lower taxes – system gamed – business concentration – capital income rises faster than labour income – raise taxes.
The lesson for policymakers and critics is that: solutions will keep coming back in cycles because contexts keep changing or keep going and coming around in circles.
So, there is no permanent pro-market; no permanent pro-government attitude; no permanent fixation on low taxes or high taxes. No permanent commitment to fiscal policy solutions or monetary policy solutions. No permanent commitment to re-distribution nor to economic growth.
That is a bit like Hinduism of yore. Everything goes. Contexts dictates the prescriptions just as occasions dictate the dress we choose from the wardrobe. Even Dharma was and is context-specific in Hinduism.
But, that is too demanding, even of intellectuals. A permanent state of abstraction or being unsettled is not easy to handle. Clear and ‘black or white’ demarcations appeal to our bounded rationality. We like things to be settled. ‘Happily ever after’ appeals to us for we do not like to revisit the stories and find that our heroes and heroines were back to a different set of griefs and challenges afterwards.
So, we are going to live with religions and philosophies and economic and social dogmas that claim to be universal, permanent, absolute and all-weather prescriptions.
Once this path is fixed, the powerful know how and when to game the system. The rest of us will be happy for smaller mercies, miracles and good luck. Those who can blog, can keep blogging!
What can break this cycle? Some loud thinking here:
Without a spiritual outlook and detachment on the part of the rulers – they minimise the risk and incidence of capture – the cycle of capture and release and capture will be endless.
Some change agents come with their own agendas. For example, is Trump draining the swamp? I doubt because he has just received a certificate from Lloyd Blankfein of Goldman Sachs. That says it all.
Now, if and when he finally goes, after one term or two terms or whenever, the old elites will be back in the saddle – the elites who gave us financial de-regulation, Public-Private Partnerships, etc.
But, amidst all this, some good have happened. Millions of Chinese workers and their families have had better lives than they would have. Few millions of Indian software workers and their families benefited from globalisation. The Philippines and Mexico workers have benefited.
So, amidst the capture, let us count the small blessings because ‘WE (the World Economy) are like this only’.