06-09-2004, 02:34 AM
these "pro-poor" decisions can have the reverse effect that is sometimes not easily seen. For e.g. using home-spun linnen, is good for the people who make it, but bad for the people who make non-home-spun-linen. So, what have you essentially done? you have done the following --
you have replaced the jobs of the machine operator by hnadloom guys. let us say you have replaced 1 job by 10. sounds good right? wrong...
This implies that the cost of home-spun linen will be much more then the factory made one. So, the railway will pay more for the linen. The only way this can be done is by --
a) taking money away from the expansion of the railways
b) increasing the ticket price
c) increasing the railway budget deficit.
So, which do you think is more likely in laloo raj? You are right it is c)
Is that pro-poor? well you have to take the money out of the hands of the public and spend it somewhere else. The only thing that has happened is transfer of money from the effieent hands of public to the rotting and inefficient beauracracy, and then to the handloom weavers.
You might argue, that you have created new jobs, so all that is ok. But, that is a fallacy, because you overlooked the jobs lost due to --
a) less machine weaved clothes being produced
b) If the ticket prices are increased, then jobs are lost because whoever travels on trains will have that much less money to spend
c) If expansion of railway is not done, then the jobs are lost.
c) If deficit is increased, then common man has less money to spend, as govt. snatches away that money , and jobs are lost again. Also, the cost of industries to get money from the market increases, as the govt. will crowd them out due to deficits. And, jobs are loa once again.
So, yes visible jobs are created for handloom weavers, but many times more of the invisible jobs are lost due to increased inefficieny. When will these idiots like Laloo learn that jobs cannot be created by transfer of money, but only by increasing efficiency. But, then that requires an IQ level in at least double digits, and is too much to expect from these morons.
you have replaced the jobs of the machine operator by hnadloom guys. let us say you have replaced 1 job by 10. sounds good right? wrong...
This implies that the cost of home-spun linen will be much more then the factory made one. So, the railway will pay more for the linen. The only way this can be done is by --
a) taking money away from the expansion of the railways
b) increasing the ticket price
c) increasing the railway budget deficit.
So, which do you think is more likely in laloo raj? You are right it is c)
Is that pro-poor? well you have to take the money out of the hands of the public and spend it somewhere else. The only thing that has happened is transfer of money from the effieent hands of public to the rotting and inefficient beauracracy, and then to the handloom weavers.
You might argue, that you have created new jobs, so all that is ok. But, that is a fallacy, because you overlooked the jobs lost due to --
a) less machine weaved clothes being produced
b) If the ticket prices are increased, then jobs are lost because whoever travels on trains will have that much less money to spend
c) If expansion of railway is not done, then the jobs are lost.
c) If deficit is increased, then common man has less money to spend, as govt. snatches away that money , and jobs are lost again. Also, the cost of industries to get money from the market increases, as the govt. will crowd them out due to deficits. And, jobs are loa once again.
So, yes visible jobs are created for handloom weavers, but many times more of the invisible jobs are lost due to increased inefficieny. When will these idiots like Laloo learn that jobs cannot be created by transfer of money, but only by increasing efficiency. But, then that requires an IQ level in at least double digits, and is too much to expect from these morons.