Comments on: Missing Friedman, Missing Markets http://www.deeshaa.org/2009/05/29/missing-friedman-missing-markets/ Sun, 21 Mar 2010 05:54:07 +0000 http://wordpress.org/?v=2.9 hourly 1 By: plodder http://www.deeshaa.org/2009/05/29/missing-friedman-missing-markets/comment-page-1/#comment-142532 plodder Sun, 31 May 2009 20:22:42 +0000 http://www.deeshaa.org/?p=2436#comment-142532 Milton Friedman appears in Galbraith’s memoir ‘A Life in our Times’ in the Indian context. Apparently, PC Mahalonobis who was a member of the Planning Commission in the 1950’s requested the US government help for technocrats and economists to advise on the 2nd Five year plan. The US government (then the Eisenhower administration) suggested the name of Milton Friedman. On hearing this, Galbraith noted that ‘to ask Friedman to advise on economic planning was like asking the Holy Father to counsel on the operations of a birth control clinic’. At the risk of diverting the topic from Friedman to Galbraith, the latter had some interesting comments to make on the Indian public sector as he saw it during the 1950’s. Again quoting from his memoirs on the question of government owned enterprises - Galbraith, though not a free marketer on the scale of Friedman still believed that public sector management ‘must also be subject firmly to the test of earnings. This is because there was no other test – none that so comprehensively measures effectiveness in getting the most return at the least cost. Leadership should be undisturbed so long as it succeeds. When earnings fail, it should be changed and the new one left on its own to do better.’ On the Indian public sector, Galbraith said ‘In India these rules were not followed. The public enterprises were being seen as an extension of its government departments. Accordingly, the corporations sought decisions from the relevant civil servant or minister on a wide range of matters They were not subject to the harsh test of earnings; it was not clear how performance was measured’. This led him to coin the term ‘post office socialism’ to describe its Indian version. Milton Friedman appears in Galbraith’s memoir ‘A Life in our Times’ in the Indian context. Apparently, PC Mahalonobis who was a member of the Planning Commission in the 1950’s requested the US government help for technocrats and economists to advise on the 2nd Five year plan. The US government (then the Eisenhower administration) suggested the name of Milton Friedman. On hearing this, Galbraith noted that ‘to ask Friedman to advise on economic planning was like asking the Holy Father to counsel on the operations of a birth control clinic’.

At the risk of diverting the topic from Friedman to Galbraith, the latter had some interesting comments to make on the Indian public sector as he saw it during the 1950’s. Again quoting from his memoirs on the question of government owned enterprises – Galbraith, though not a free marketer on the scale of Friedman still believed that public sector management ‘must also be subject firmly to the test of earnings. This is because there was no other test – none that so comprehensively measures effectiveness in getting the most return at the least cost. Leadership should be undisturbed so long as it succeeds. When earnings fail, it should be changed and the new one left on its own to do better.’

On the Indian public sector, Galbraith said ‘In India these rules were not followed. The public enterprises were being seen as an extension of its government departments. Accordingly, the corporations sought decisions from the relevant civil servant or minister on a wide range of matters They were not subject to the harsh test of earnings; it was not clear how performance was measured’. This led him to coin the term ‘post office socialism’ to describe its Indian version.

]]> By: plodder http://www.deeshaa.org/2009/05/29/missing-friedman-missing-markets/comment-page-1/#comment-142531 plodder Sun, 31 May 2009 19:46:22 +0000 http://www.deeshaa.org/?p=2436#comment-142531 If you have 5 hours to spare and are interested in world economic history, may I suggest Milton Freedman’s fabulous ‘Free to Choose’ series on the 20th century world economy. This link (http://www.youtube.com/watch?v=d6vjrzUplWU) is the first volume of that series. Then there is that other opus from PBS called ‘Commanding Heights’ – another 6 hours on the same topic. Type ‘CH-1’ in the search box of www.video.google.com and you will be directed to the first episode of this series. ‘CH-2’ and ‘CH-3’ should give you the remaining episodes. If you have 5 hours to spare and are interested in world economic history, may I suggest Milton Freedman’s fabulous ‘Free to Choose’ series on the 20th century world economy. This link (http://www.youtube.com/watch?v=d6vjrzUplWU) is the first volume of that series. Then there is that other opus from PBS called ‘Commanding Heights’ – another 6 hours on the same topic. Type ‘CH-1’ in the search box of http://www.video.google.com and you will be directed to the first episode of this series. ‘CH-2’ and ‘CH-3’ should give you the remaining episodes.

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