Beer is freedom


I don’t consume alcohol. But this is fascinating video about failures of central planning aka socialism.

Venezuela is the world’s top oil rich country. Despite this the country is not just poor but pathetically poor. Venezuela’s malls are shut because they don’t have electricity anymore. You can not even buy a tissue paper and the only brewery in the country has shut down because it can not source the raw materials any more.

How come a resource rich country comes to such a situation ? The answer lies in central planning, the same model which has kept India poor.

Venezuela thought that it could pass laws that will ensure everyone is equally rich, where prices will be controlled and the government in its infinite wisdom could allocate all resources fairly among its people. Very much the same way some people do not want IPL in Mumbai while there is a drought in Latur.

The result was massive corruption, super inefficient allocation of rare resources and eventually a total collapse.

The lesson for India is that central planning does not work. Government controlling education, worse controlling only Hindu schools, capping fees, regulating coaching classes, AICTE’s terror etc only leads to massive inefficiency in Indian education. Indian education sector is pretty much like Venezuela. A wasteland where you cant get anything done and as a result 600,000 brilliant students flock to rest of the of the world for better education.

Same goes for agriculture and real estate. Indian farmer is poor despite having huge manpower, lots of free water and $$$$ in subsidies. Home prices in India are very high despite shittiest quality, almost non-existent private property rights and complete legal uncertainty.

All this because government claimed that “we need to do it fairly/poor must be protected” etc.

Free education or ceiling on fees also means scarcity of quality and ceiling on quality of education.

Subsidies to loss making agriculture means loss making agriculture increases driving people into poverty

Free water for agriculture means people don’t pay for the water they use and hence end up wasting more water.

Zoning laws and agricultural/non-agricultural conversion bans means land can not be used for the optimal purposes leading to scarcity and higher prices.

Beer is only an example.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s