Bailouts harm free markets
Manish Sabharwal is right on the ball in today’s Mint: “By demanding fiscal relief, do managers realize or care about the damage they do to the legitimacy of markets when voters and politicians see private profits and socialized losses?… Big bailout
By Parth Shah
Manish Sabharwal is right on the ball in today’s Mint: “By demanding fiscal relief, do managers realize or care about the damage they do to the legitimacy of markets when voters and politicians see private profits and socialized losses?…
Big bailouts not only undermine the credibility of markets but few things corrode business efficiency more than the realization that it is more profitable to win the favour of politicians than the favour of customers.
Herbert Spencer the British philosopher said the ultimate result of shielding man from the effects of his folly is to people the world with fools. Bailouts such as GM are on the wrong side of history; the UK government spent $16 billion on British Leyland before they gave up.”
About Parth Shah
Parth J Shah is founder president of Centre for Civil Society, a think tank that promotes choice and accountability across public and private sectors. He is co-founder and Director of Indian School of Public Policy. Parth’s research and advocacy work focuses on the themes of economic freedom, choice and competition in education, property rights approach to the environment and new public governance. He recently edited Liberalism in India.