So let’s see, pompous, armchair critic makes a statement about the One Lakh Car, and then can’t take the criticism. Aww poor baby. Then proceeds to write an article which basically puts down his commenters and tries to put Free Market economics above all of us laypeople. It’s not that you said something stupid, Mr. Dey, it is, us the laypeople who didn’t read our nobel-prize-winning economics textbooks properly. Oh wait, but you don’t blame us for being dumb, it’s just that the authors of those textbooks didn’t dumb their stuff down enough for us peasants. I mean, you, the supreme being, have the most expert grasp of economics, what with your Ph.D and all, but the CEO of the Tata Group, heck, what the hell does he know. He’s just a money-grubbing capitalist acting out of his own self-interest. The Invisible Hand seems to be jerking off at the moment….I mean, do you really think these CEOs do arithmetic? Surely you jest! They just wander around buying foreign companies because daddy left them with a lot of money.
No no, you know what’s best for the economy, like the countless central planners before you. You and Nehru both. Could it be, that producing a cheap car might be more for export? Could producing a cheap car automatically lead to some conclusion that it’s impossible and therefore alternative engines might need to be tried out to get a cheap car? In fact, could the whole idea just flop horribly?
Do any of these choices lie outside the realm of Free Market Economics? Free Market Economics, REGARDLESS of the conditions surrounding them, produce the best outcome. ‘Market Forces’ are ALWAYS at play. That’s because ‘Market Forces’ is another name for Human Nature. Don’t get a stable electricity supply? The market provides you with generators. Doordarshan stinks as a TV channel? Some dude starting getting signals from the sky and tossed a wire into your home. Your water supply is full of crap? Coca-Cola will sell you clean drinking water. That is the market. It is always at work. It’s job is to ‘Allocate Scarce Resources’. And it does this well. The price of oil is very high? Well then, let’s try and make cars cheaper. Or let’s use public transport.
Is using public transport, and making cheaper cars mutually exclusive? Could producing a car at a ridiculously low price also lead you to produce a bus at a low price, just like your Tata Ace Truck, so that you give people cheap public transport? Could some other innovation spring from this? Are we God-gifted seers? Could my project fail miserably when people realize that the cheap cars are deathmobiles and turn into tin sheets on being greeted by Buses? Could the fact that most of the buses and trcuks on the roads of India that kill people are made by same company force that company to make safer buses and trucks?
Could, in fact, ‘the Market’ decide whether this idea is good or bad, externalities included or not?
Free Markets do not prevent people from coming up with stupid ideas. But definitely prevents them from implementing them. Mr. Dey, your Ph.D is useless, and it is ironic that you blame others for not having explained Economics clearly enough to the rest of us. You’re doing a really bad job of it yourself.