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A shift from economic control to economic Freedom

 

It is interesting to see how government’s role in socio-political and economic activities chages. It has moved from “Private” to “Government” and then again to “Private” sector. Long long ago, Greek philosopher Aristotle said that time and with it power never remains static. It keeps on changing.

Everything in this world moves in a cycle. How in modern world power and control over all activities -socio-economic and political-  moved on from “Private” to “Government” after the two world wars, from government to “Public” during early 1970’s and again to “Private” sector after the collapse of USSR as super power in 1990’s proves it.

Sixteenth century onwards started an era of European expansion, conquest, colonization and Empire-building. Many European States emerged as great imperial powers. Europe was the Centre point of all political activities during this period. Areas were named as Middle-east or Far-east etc depending on its distance from Europe. Nations were known as British India, Dutch East Indies, French Indo-China so on and so forth.

The principle of “Laissez faire” was the guiding principle of governance till 19th century. Governments were mainly in-charge of maintaining law and order and collecting revenue. During 19th century and beginning of 20th century, it led some nations through success after success in the economic field. USA became world’s largest economy. Australia achieved one of the highest per capita income rate.

World War-I was the turning point. French Revolution, Bolshevik Revolution, Industrial Revolution and Contemporary developments had a great impact in widening the scope of State activities. Poverty and misery, which were earlier accepted as the lot of masses, were no longer regarded as inevitable.

Millions of people started demanding, with persisting insistence, better standard of living, better housing, better education and better medical facilities. The masses started wishing that they themselves a better life and get benefited a much as possible, from the resources of their nation.

Some inherent weaknesses of capitalist system, the after-effects of war, the great economic depression of 1929 and mass awakening had turned the world opinion in favor of national governments to play the role of a guardian in order to protect its citizens from the shocks of every day life. It led some countries to turn into totalitarian regimes. The first one to opt for totalitarian regime was Soviet Russia. Italy became a fascist nation and Nazism grew in Germany.

After the World War-II, wave of “welfare state”, “principle of social-justice” and “socialism” swept the entire world. The main aim of initiating and nurturing this concept was to bring about betterment to the lots of weaker section of society by building up a rapidly expanding and technologically progressive economy. The need to emancipate the under-privileged from age-old discrimination/sufferings and to bring them into the mainstream of the nation was felt.

The desire of public to move forward quickly made governments of states powerful. All social, political and economic activities came directly under state control. It gave rise to the system of development administration based on “Planned economy”. 

Very soon the system gave rise to “Permit Raj”. If not handled properly, “Permit Raj” gives unbridled power to the governments. Very soon, “Permit Raj” became oppressive in almost all democratic countries – whether developed, developing or under-developing.  Excessive state control bred corruption everywhere.

Instead of creating a new integrated, classless egalitarian society, free of discrimination and inequality of race, sex, power, position or wealth, it gave to the public want, deprivation, corruption, fear and dissatisfaction, which raised doubts in the public mind allover the world about the efficacy of such a system.

Sometimes around 1970’s came in the forefront Public sector. The concept of mixed economy -making joint efforts for development by the government and private sector together-  gave rise to public sector units. 

Slowly but steadily, the system of mixed economy, combined with the socialism and capitalism, made the systems under-productive/unproductive, and non-competitive. All these practical problems suppressed the desired growth, the result being failure to deliver good results. The cumulative effect of all this was a stifled national economy. The whole atmosphere became suffocating once again for different societies.

It raised doubts allover the world about the reliability of such arrangements. Around 1990’s, yet another wave swept the world. Surprisingly, this time, it was led by capitalist ideology, which was supposed to have been defeated by now.

The shift from economic control to economic freedom took the shape of a larger global movement engulfing western democracies, former communist forces and almost all the developing nations.

 

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September 8, 2009 - Posted by | Social and political values and systems, Uncategorized |

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