This is a true account of the state of things in my native place. The Municipal corporation there has constructed a central shopping place and it leases out shops for long duration (100 years or so) for a very nominal rent (about 1% or so of true 'economic' rent). The original allotment happened a few years (maybe a few decades) back and the way the system works now is like this: A person who already has a shop there and wants to close down has to return the shop back to the municipal corporation or find some other person who wants to do business in that shop and get the lease transferred to him. Now, there is no transfer fee charged by the municipal corporation, the rent remains the same and the original owner is not 'supposed' to charge any transfer fee either.
Now, the right to occupy that shop for a few more decades for a very notional rent is a very valuable asset that existing shopkeepers have. They are supposed to transfer that right/asset free of cost. Hello... are we living in utopia?
Now transactions between existing and prospective shopkeepers do take place regularly. It is anybody's guess as to whether they actually happen as they are intended or there is money involved. I know for sure that money is involved. I don't think it takes too much intelligence to imagine that money is involved. And why should it not? Existing shopkeepers own a valuable right and they have every right to profit from it. I don't blame the shop keepers at all. They are acting 'rationally' in demanding a price for transferring their asset. All we are doing through well intentioned regulations is encourage corruption. People respond to incentives and if incentives are strong enough they will cheat, deceive or whatever...
Now, if the municipal corporation needs to stop this black money transactions, it has two simple options.
Firstly, it can start charging 'economic' rent for the shops, this will automatically reduce the transfer price of the asset.
Secondly, it can legally allow the transfer for monetary consideration. this will bring the under the table dealings out in the open and the state can collect taxes on the capital gains that accrue to transferor shopkeepers.
Either way, the state ends up gaining more money and there is no change to how business is conducted anyhow. So why not do it?
Two reasons again. Firstly, vested interests. The clerk, the officer in the municipal corporation who approve of the transfer have a power and given their knowledge of money involved, it allows them to earn a commission.
Secondly, this denial. Our political leaders suffer from this socialism ideals wherein they simply deny that 'market' would work in a certain way irrespective of rules against it if there are sufficiently strong incentives (Gambling is illegal, but we have gambling of more than billions of dollars on cricket alone).
Don't fight markets. Regulate them and allow them to prosper. The solutions generated in a market environment are more likely to be optimal than solutions reached in parliament or legislatures (I am a die hard free marketeer, you see!).
That's it for now...
Thursday, June 21, 2007
Sunday, May 06, 2007
It's the PATH that matters not the LEVEL
What a miserable time to restart this blog.
I am very miserable these days. Haven't quite felt so miserable in quite a few years and I am wondering why.
Analyzing my situation carefully, if I had presented to myself my current situation (at least the broad contours of it) say six months back - i wouldn't have been delighted but wouldn't have been surprised. In fact I would have said this is exactly how I expect things to pan out and would have taken the situation on balance. If so, why am I so very miserable?
The answer lies in the path things take to reach their current level. It does not matter where things are, what matters more is how things got there. When as in my case, you get very close to realising something very important and you get pulled down at the last moment you get miserable - notwithstanding the fact that six months back you did not really expect to achieve that goal. That is not important. What is important is that you were taken up and up by the situation and then brought down. It is that emotional roller coaster that you've had makes one (and that has made me) miserable.
To completely change field, I have often wondered why were investors so miserable when markets crashed May-June last year or late February-early March this year. If the market came down from 14000 to 10000 - so what? The market is still up more than 3 times from its low a few years back - i would have thought if you were told in say June 05 that the market would be at 10000 in June 06, most people would have gladly taken that - in fact put more money in. Then why do you hear stories of 'blood on the street' etc. Again, its the path that matters.
So how do I get out of the misery I find myself in? Simple, by making my heart focus on the level and stop thinking about the path. Sounds simple ain't it? Yeah it does sound simple, I have been at it for the past few hours and it sounds like any other theory!
As they say, in theory there is no difference between theory and practice, in practice - that's a whole different ball game!
That's it for now and it's good to be back!
I am very miserable these days. Haven't quite felt so miserable in quite a few years and I am wondering why.
Analyzing my situation carefully, if I had presented to myself my current situation (at least the broad contours of it) say six months back - i wouldn't have been delighted but wouldn't have been surprised. In fact I would have said this is exactly how I expect things to pan out and would have taken the situation on balance. If so, why am I so very miserable?
The answer lies in the path things take to reach their current level. It does not matter where things are, what matters more is how things got there. When as in my case, you get very close to realising something very important and you get pulled down at the last moment you get miserable - notwithstanding the fact that six months back you did not really expect to achieve that goal. That is not important. What is important is that you were taken up and up by the situation and then brought down. It is that emotional roller coaster that you've had makes one (and that has made me) miserable.
To completely change field, I have often wondered why were investors so miserable when markets crashed May-June last year or late February-early March this year. If the market came down from 14000 to 10000 - so what? The market is still up more than 3 times from its low a few years back - i would have thought if you were told in say June 05 that the market would be at 10000 in June 06, most people would have gladly taken that - in fact put more money in. Then why do you hear stories of 'blood on the street' etc. Again, its the path that matters.
So how do I get out of the misery I find myself in? Simple, by making my heart focus on the level and stop thinking about the path. Sounds simple ain't it? Yeah it does sound simple, I have been at it for the past few hours and it sounds like any other theory!
As they say, in theory there is no difference between theory and practice, in practice - that's a whole different ball game!
That's it for now and it's good to be back!
Tuesday, November 07, 2006
Lifting the veil
The almost global debate on whether Muslim women should wear their customary veil is another example of us confusing between what we think people ought to be doing and what people have a right of doing. It also illustrates lack of cultural sensitivity.
The reason the western world is so much up in arms against such explicit display of one's religion is because their religion does not have any such requirements. That being the case, they just cannot fathom things like Muslim women wearing the veil or Sikhs wearing the turban and growing beard. I am pretty confident that if christainity had any such explicit requirements, the western world would have been far more sensitive on these matters.
I do not think that wearing a veil is something any women ought to be doing. Hiding one's face to me is a sign of cowardice. At the very least it is reflective of socio-cultural conditions a few decades back (at the minimum). But that is my opinion and that is about it.
I also think that women have the right to decide what attire they ought to be wearing. They have a right to decide whether they want to expose their face or hands in front of others - its their personal decision and they have a RIGHT to make that decision. If they do decide to wear the veil, its not something I appreciate or like or support, but I certainly support their right to make that decision.
Now again, this right to wear or not wear the veil cannot be absolute. If the demands of work or things like security demand it, then one cannot be allowed to hide under the garb of religion. So one cannot possibly be allowed to teach to small children wearing a veil - it just does not make sense for example.
In the same light I firmly feel that in India we ought to have a uniform civil code. We ought to have a basic common framework governing individuals. It cannot be left to subjective interpretations by religious scholors of ancient scriptures. Nor should we have different sets of rules governing different individuals depending on their relious beliefs. There ought to be one single law applicable to Indians and within that legal framework, individuals are free to practise their religion.
That's it for now...
The reason the western world is so much up in arms against such explicit display of one's religion is because their religion does not have any such requirements. That being the case, they just cannot fathom things like Muslim women wearing the veil or Sikhs wearing the turban and growing beard. I am pretty confident that if christainity had any such explicit requirements, the western world would have been far more sensitive on these matters.
I do not think that wearing a veil is something any women ought to be doing. Hiding one's face to me is a sign of cowardice. At the very least it is reflective of socio-cultural conditions a few decades back (at the minimum). But that is my opinion and that is about it.
I also think that women have the right to decide what attire they ought to be wearing. They have a right to decide whether they want to expose their face or hands in front of others - its their personal decision and they have a RIGHT to make that decision. If they do decide to wear the veil, its not something I appreciate or like or support, but I certainly support their right to make that decision.
Now again, this right to wear or not wear the veil cannot be absolute. If the demands of work or things like security demand it, then one cannot be allowed to hide under the garb of religion. So one cannot possibly be allowed to teach to small children wearing a veil - it just does not make sense for example.
In the same light I firmly feel that in India we ought to have a uniform civil code. We ought to have a basic common framework governing individuals. It cannot be left to subjective interpretations by religious scholors of ancient scriptures. Nor should we have different sets of rules governing different individuals depending on their relious beliefs. There ought to be one single law applicable to Indians and within that legal framework, individuals are free to practise their religion.
That's it for now...
Subscribe to:
Posts (Atom)
Posts
