On Speed-Breakers & Role of Government – Guest Post by Narendra
Dear All: It is my pleasure to publish this thought-provoking guest post by fellow FTI colleague, Narendra Sethia that does a wonderful job of explaining the guiding principle(s) behind state control of activities and enterprise (one of the important distinctions between “socialism” and “capitalism”). Pl read on (emphasis added):
*** by Narendra Sethia ***
I think most activities where government control is needed can be defined on the basis of the principle of freedom outlined in Sanjeev’s book – BFN. If there is any grey area, the bias should always be for a free run until proved detrimental to society.
We often come across this situation in India. If any accident takes place at an intersection connecting smaller road to a main road, there is a tendency to put a set of speed-breakers on the main road, thus increasing fuel cost to a much larger number of people using the main road. This ‘Speed-Breaker’ mentality is so much prevalent in India that we can find parallels in almost in every walk of life. As much possible, speed-breakers must be avoided, but If there is potential danger to life, speed-breakers must only be put on smaller roads to limit the restriction to a small number of people using that road.  Role of government is like a speed-breaker.  Lesser used the better.  If it must be used, restrict it to a smaller affected area only.
It could be too simplistic but if some experts can create an index that can indicate 3 different parameters for any activity that takes place, it can at least create a transparent environment for government’s decision making. These parameters are:
- Effect of an activity on individual’s freedom
- Effect of the activity on human health
- Spread of effect of such activity
Each of these parameters can be measured on defined scales based upon agreed limits supported by good examples. Government can then have a role in various forms in the following order depending upon the index score (along the following range):
- No Interference
- Empowering public with information with the encouragement to act for protection from the activities affecting their freedom or health.
- Localized warning signs /information cautioning public of the potential harm.
- Imposing costs on activities
- Defining standards to carry out certain activities
- Banning activities in public places
- Banning activities even in private places
- Declaring activities as major crime.
*** End ***
What do you think? Makes sense? or too simplistic? or too complicated? or something else? Comments and thoughts welcome, as always…
Image courtesy: Wikipedia
I think this is an excellent short-hand summary of the philosophy of classical liberalism. Well done, Narendra. We need these kinds of simple messages to be created and widely disseminated.
This is not only defensible because it respects everyone’s freedoms, but it also yields the highest national prosperity – and preservation of the environment.
There are very few things that a government should do, and these it should do well.
Regards
Sanjeev
While the overall point regarding government’s role is good, the “small road-main road-car” analogy is just terrible and not apt at all.
First of all, the paradigm used in the analogy of road-car is faulty. A road is used not only by cars but also by buses (public transport), bicycles and pedestrians. Too often, roads are designed by ignoring the latter two (or three), which results in accidents and complications. If the paradigm were that roads are shared and not just the exclusive domain of the cars – especially on roads in cities – then many accidents can be avoided.
Take any European city and you will find bike lanes and plenty of space for pedestrians (sidewalks) as well as priority to bikes and pedestrians in (walk) signals. Traffic-calming techniques are quite common in urban planning today when designing and constructing new roads as well as modifying already-constructed roads.
And not just in Europe, but cities in South America have successfully used this concept in re-designing cities. Example of transformation of Bogotá in Colombia (and Enrique Peñalosa http://en.wikipedia.org/wiki/Enrique_Pe%C3%B1alosa) is quite well-known, along with other cities like Cartagena and another in Brazil (Curitiba).
The car-centric model when it comes to urban planning is becoming increasingly obsolete, and I’d suggest that the Classical Liberals at least use an apt and current model in their analogy when making a point – otherwise that point will be lost and Liberals risk being rendered obsolete in their ideas.
Here’s a quote from the former mayor of Curitiba, which Liberals would likely agree with:
“Credit cards give us goods quickly, the fax machine gives us the message quickly – the only thing left in our Stone Age is central governments.” — Jaime Lerner, former mayor of Curitiba
And here’s a link to the positive changes brought about in Curitiba (by rejecting the car-centric model), juxtaposed with Farnborough in England – it’s well-worth a read.
http://www.heureka.clara.net/gaia/curitiba.htm
Hello,
I cannot whole heartedly agree with the article published on the role of the government.
I believe it branches out from the theory that the government is not capable of providing “things” which capitalism can.
I cannot claim to have read all classical, neo-classical, modern or even some more contemporary theories which try to justify one system over the other, but I’ll try to present my case and wait for the more learned to revert.
I believe that the government in any society has a extremely important role to play especially where all members of its society do not have the same wealth/privileges enjoyed by a select few.
I have often read that no/minimal interference is the best way for a government to function because it allows its society to flourish in the way each sees best and can better their own individual lives, also creating a trickle down effect which helps people around them.
What I don’t ever understand is what do people think the government is made up of? The government is made of people who believe that they can run the society more effectively. Why don’t the people who run the government want to believe that they can maximise the resources which society provides them to utilise for the benefit of the entire society?
Why does the word/organisation “government” never equate itself with maximising wealth creation and returns?
Why do we always think of the “government” to always try to restrict freedom/wealth of an individual when they are run by ordinary people, the same people who advocate capitalism as well?
Many of us believe that “we” individually are capable of doing many more things than the current environment around us lets us and hence we favour capitalism as it gives us a chance to “rise above” our present into a better tomorrow.
The government finds it very hard to be able to balance the needs of every section of the society because the demands made on it often politically are at distinct odds with the general population needs.
This is just a case of wrong priorities and bad governance, something which we all hope will not exist. Every evil which we imagine rests within the government can/will/does rest within privately run organisations as well.
Why do we approve governments who try to attract private capital for investing in their state instead of wondering why doesn’t the government do it by itself. Surely, if we believe that the government is well run, which a large part of the society reading Satyamev Jayate wants to see, why don’t we want to government to become a investor by itself. Its shareholders are then the society itself.
A hybrid of capitalism and cooperative society.
At a much deeper level, we have to be prepared to answer the question, who is more important, the individual or the society be it for wealth generation or freedom of expression.
I think it is “we” who act either in our own interests or in the interest of society. Its the same doer, with the same action.
Regards,
S
Dear Kaffir
Example of Speed-breaker has been used as a metaphor to display the excessiveness of government’s role. Another such example can be a book or movie that has some contents that affects the sensitivity of a small section of society. Barring a few exceptions, governments always resort to banning such books or movies. Net result – freedom of majority of people gets compromised.
This post is about defining the role of government in various activities and not about urban infrastructure.
Regards.
Narendra Sethia
This is a good demonstration on the role of government. I think the role of government cannot be uniform in all activities.
In some cases, there is no some of any control. For example airline industry. Because 1. The industry is mature. 2. It will keep on attracting service providers as long as the there is possibility of normal profit. 3. Entry is easy in the industry.4.govt has to ensure the Pilot training and certification as private players may not be interested to invest in training in initial stage. 5. Govt should pull its hands from all direct activities and should only play the role of facilitator.
There are some other activities where government’s intervention is more important. For example, rural transport industry. The industry is not lucrative. Less competition results into higher fares. Higher fare will adversely affect the benefits of the formers. Govt should run its buses in the non profit routes or ease the licensing policy in these areas. Should cap the fare and encourage competition. Increase awareness about maximum fare that could be charged by private operators. Cease the permit if players are profiteering.
The same is happening in Madhya Pradesh. Private operators are charging fares at their will. Govt has capped the fare and asked the bus owners to paste a fare list in the bus. Most of the bus owners are not putting the list in the bus. Even if some buses have list pasted, poor awareness and lack of leaders let the bus operators profiteer. Although the case in MP is of poor governance.
A very good article to explain the degree of government intervention in functioning of an economy.