With regards to public transportation, I can give an example – Hyderabad. When Chandrababu Naidu was around he took active interest in and made possible commuter trains within Hyderabad for all the same reasons you mentioned in your 1 lakh car post. Although they pretty much go to all the major intersections and are clean, they run empty now. No one in Hyderabad uses them. The market has rejected the new public transportation. The buses are still full with people standing, sweating and with children suffocating and getting crashed during rush hours (I know what they are feeling). It’s one thing to travel in US or European public transportation whether on buses or trains. It’s another thing in India. Let the market place decide if they want 1 lakh car or take a suffocating bus to work or school. The choice is easy. There are more externalities then pollution and oil prices in jam packed Indian cities.

Pavan, yes – how to quantify joy, happiness, peace of mind etc. – that is the question, since two people will give you two different answers as to what gives them joy. And as I said, I was playing the devil’s advocate.

People select good stuff at a good price. It’s a natural and organic mechanism for figuring out what needs to be produced and how.
But isn’t there an implicit assumption in there that the customer has (or will have) all the information about the good available to him before he buys it (when we very well know that corporations obfuscate on purpose)? As an example, Ganesh statues made of plaster-of-paris and using toxic colors are causing a lot of pollution in Mumbai and Pune. So, there is a move to switch back to mud (traditional) or paper statues. Now, when a common man goes to buy a statue, he probably won’t have the information about the negative impact of statues available to him. Even if he does, if it doesn’t affect him directly, then he will take into consideration the impact on his wallet and go with p-o-p statue if it is cheaper. Yes, over the long term (5-8 years), the market will probably stop making p-o-p statues, but by then, there’ll be pollution costs to pay.

As a %age of the income it was a bigger chunk of money out of most of the hoshangabad residents
The residents economized as per there needs.
Given the nature of indian economy there is a huge untapped market, it will be interesting too see if they can deliver.
I personaly despise Tata,Birla,Ambani et all for the most part they arent innovators
with that said Its upto them to do what they decide is in their best interest.
I mean look at the silly movies being made in india one could argue that the a percentage of money spent there should be used into making public educational films.
Public infrastructure involves government being able to deliver on its plans.
Its too easy to start listing the failures of indian government in that sense.
Societies get the public infrastructure they want. Its the indian society that really didnt want it, if they did they would demand to see how the tax money is being collected(really interesting process in india) and being spent(no mystery there).

OT:
@Pavan: yes, economists are necessary (in fact very much necessary) but not sufficient to run this world.

-Mike

Wouldn’t the health/medical/pharmaceutical industry benefit from the sick people coming in for treatment (asthma, stress etc.)?

I think this is a basic misunderstanding on how economists think. Economics is a highly utilitarian discipline, it’s all about generating the greatest good for the greatest number of people. Unfortunately, economists tend to measure “good” in terms of money or GDP since more abstract concepts like “happiness” or “utility” aren’t easily quantifiable.
But we should never lose sight of the fact that what we’re trying to do is create as much utility for people as possible. So while some pollution may help an extractive industry or a pharmaceutical company, it also imposes severe costs on us. The quality of everyone’s life is materially diminished and the people who end up sick as a result of the pollution are all folks who might have done some good for society if only they weren’t wasting away in a hospital bed.

I always thought the reason free markets are so effective at distributing resources is the same reason a well organized republic is good at holding a country together.
It is, as Schumpeter would call it, the “perennial gale of creative destruction.”
In a free democratic society, when ideas become stale or ineffective, they will soon be voted out of office. So long as all players respect the rules of the game, we get stable and orderly transitions and changes of power without the messy backstabbing and wars of succession we would have had if we subscribed to some other political system.

Likewise with the distribution of goods and services. People select good stuff at a good price. It’s a natural and organic mechanism for figuring out what needs to be produced and how. As a result, the bad, shoddy made things fall by the wayside and the drive towards innovation and improvement elevates us to new heights. And we get to do all this without all the trouble of planning commissions and review boards, bribes, lines, and endless applications.

Like any machine, the more moving parts you have, the more difficult it is to maintain and the more prone it is to breaking down. When it comes to building an apparatus of state, you would want as few moving parts as possible.

More questions. Why should pollution etc. be a problem? Wouldn’t the health/medical/pharmaceutical industry benefit from the sick people coming in for treatment (asthma, stress etc.)?
How about the industry that builds roads? Surely it’s more business for them as they repair roads or construct new ones to accommodate increased number of cars.
How about increased jobs provided to workers as they build more cars? Mechanics as they will need to repair more cars? Increased sales for businesses that provide car accessories – trinkets, audio systems? And then we’re talking about the second-degree of separation industries that provide raw materials for all these industries directly linked to a car, and will benefit economically from more cars produced.

I actually think that a well-functioning and efficient public transport is the best way to take care of transport needs, but I’d like to play the devil’s advocate for a while.