Wednesday, February 27, 2008

Lessons from Chennai

Just an incident that I faced while in Chennai. After couple of days in Chennai I realized that auto drivers would ask for more money if I told them the amount and place in English. Slowly I started learning Tamil that allowed me to bargain with them and that did the trick.

The point I am trying to make is that I learnt Tamil because market forced me to do so. However, if the government had said that I have to pass exam X in Tamil before landing in Tamil Nadu or within 3 months I would have protested. Or worst, passed the exam using unscrupulous means.

And that is what governments need to realize. They can play the role of catalyst. They can offer incentives, benefits etc. to people if they adopt a certain line. But forcing people to adopt that approach often has the negative effect. And it wastes energy of governments in ensuring that people are following. And it people do not follow, it gives them the message that its OK not to follow. Everyone looses.

Governments need to remember that catalyst is defined as one that hastens (or slows) a reaction, without being consumed in the reaction. Being a catalyst preserved government and its energy for future uses. And it ensures that the reaction if doomed is not executed.

In terms of history, I think man created markets first, and governments later. There is info on first profession, but none of first government. And that is something that governments need to realize. They are powerful. But market is more powerful. For ages we lived under the socialistic era. Nothing was allowed to be imported without permission. Yet everything you wanted was available. Because market wanted it.

The problem with the government power is perhaps that it does thing artificially at times. For example take the development of Amethi. It prospers when Nehru’s are in power and then dithers. Because the progress is unnatural. This is not to say that governments should never intervene.

If you have fever you do take medicines. That's the power of government. If any area is actually lagging the governments should intervene. And yet that's its limitations too. You can't pop up pills daily. So governments after starting a job must be aware of there exit points. You can't live till eternity, even if you take medicines daily.

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