Free markets -- How ideal are they ?

Free market economy by definition is an economy where the prices of goods and commodoties are defined by the forces of supply and demand with little or no intervention from the government. I came across and article that goes further to say the only role of government in a free market economy is to play the role of a watchdog , to make sure that the prices suppliers are charging are charging a "fair price". All through my college days and post graduation I had believed the supremecy of the Free market system. Having grown up in an India that opened it's economy almost immediately after my birth :) I was convinced that letting the businesses play their part without intervention is the best way of running a country.

I was watching Dr.Milton Friedman's video titled "Free to choose" on youtube , apparently he is considered the Einstein of economics and his video stood to his reputation. Taking the example of UK controlled Hongkong , Mr. Friedman clearly pointed out how industries operate in a free economy and how they change their strategies based on the changes in competition. An example is that of a Hongkong family which has been creating traditional bridal ware for nearly four generations and are now looking for a new product as demand for traditional ware is falling. The raising standards of living in Hongkong and the pain which illegal immigrants from China take , to cross the border kind of vindicated the Free Market principals.

However , nearly 27 years after Mr.Friedman's video things started happening that questioned the foundations of free market economy. American economy , the supposed champion of free market principals came crashing down. Goliaths like Goldman Sachs, AIG, GM, Fanny and Freddie crashed like a pack of cards and exposed the soft underbelly of the US. On the other hand , communist China started making good use of this opportunity and now the US owes nearly $500bn to the chinese. All this made me question the validity of these free market principles. How ideal are they ? Their role in making the US a global power is unquestionable , but then what led to the current crisis? Is the direction of the Obama adminstration more in tune with the socialist form of government ?.

Once while browsing through an article on Wal-Mart , I read that to kill competition Wal-Mart supplies a gallon of pickle at 1/4 of it's cost. While this is probably a free market principle, it's consequences are far reaching. The pickle manufacturer is being squeezed to reduce the cost so that wal-mart can make a profit and a brand that once commanded a premium price is now available dirt cheap. In addition to this, the consumer who is buying the product eats half of the product and throws away the other half as he doesnt really care (the law of diminishing marginal utility). Another example is that of an American woman , who flushes rice down the toilet as it makes her hate it and thus prevents her from eating rice and she does all this as she wants to stay thing. Reading that article at a time when Global prices of rice peaked and when Mr.Bush threw that ugly comment about Indians made me think. This is an abuse of Free Market principles. While free market economy increases the wealth of the individuals , the attitude of the individuals is what determines the economy's success. As the US tried to get more and more out of a cup that already reached it's maximum , while wasting precious resources (gas guzzling SUVs), no doubt the economy crashed. Thomas Friedman once wrote , stop giving the 16yr old kid keys to a car, instead give him a book and ask him to study.

So as I thought , read and analysed I felt while free market principles have their advantages , the country and it's people are to a larger extent responsible for the economy's stability. The recent economic crisis should serve as an example of what not to do in a free economy.

Khaled Hosseini

I thought of a few titles for this blog. Should I say A Thousand Splendid Suns ? or Should I say Kite Runner ? or Should I say a book review ?. However neither of these fit as the content I had in mind isn't a review of either of these two books but it was more about the author , his style and his mastery of blending various beautiful aspects of life with the not so glamorous ones. Hosseini has a unique style of narration that keeps the reader stuck to the book. Either it be the point where Amir knows about Hasan's death in Kite Runner or the point where Marriam sees her mother hanging by the tree , Hosseini starts with the action after the event and comes backwards. An intriguing style. This is a sample from A Thousan Splendid Suns.

"Morning brought no relief. The muezzin's call for namaz rang out, and the Mujahideen set down their guns, faced west, and prayed. Then the rugs were folded, the guns loaded, and the mountains fired on Kabul, and Kabul fired back at the mountains, as Laila and the rest of the city watched as helpless as old Santiago watching the shark take bites out of his prize fish."


Through his two books Hosseini presents the real Afghanistan to us. For a lot of people who think Afghanistan to be synonymous with terrorism , these two books offer a different perspective. Be it The Kite flying competitions of Kabul or the wonderful city of Herat or the culture of the pashtuns or the verses from ancient persian poets Hosseini shows us that there is much more to Afghanistan.

However, the most important feature of Hosseini's works is his mastery at describing how his central characters get haunted by one of their actions throught their life. Be it Amir not rescuing Hasan in Kite Runner or Mariam leaving her mother to find Jalil , only to return back and find her dead. These actions (or rather failures) of the protagonists keep coming back to disturb them through out the book. One final feather in his hat is the skill with which hosseini combines various human emotions in the backdrop of war. Education , Romance , love , sentiment and the pain of parting , all in the backdrop of a 40 year old conflict that wrecked the lives of thousands of Afghans is something that is bound to make you sympathize with the Afghans.

At the end , one cannot help but feel for the plight of Afghanistan and the havoc fundemantalism is creating in these parts of the world leading to the destructiong of some of the most beautiful cities and cultures of the world. Hope sense and sanity prevail and prevail very soon.

Getting into the groove

Had a relatively packed day yesterday. Went to Shishu Mandir early in the morning. It was a different experience. Asked the students to speak about themselves for a minute. Gave some guidelines on how to frame sentences and use basic grammar, followed this up with some songs and dance , played the tunes of "All iz well" . This work is excellent, challenging and exciting. Teaching is probably the best profession. To see someone remember lessons you taught them and apply them to become better is , well an awesome feeling.

Checked my toefl page and to my surprise the score was available. Didnt expect it till another 5 days. Scored a 114 (30-27-28-29) . I was always skeptical about the way i fared in the listening section . That lecture about some Egyptian scripts was damn confusing. I guess my speaking and writing sections really gave a boost. Guess it is a good score , considering the schools I am thinking of have an av of 110.

Had a 1.5hrs calls with my consultant for bschools. Roadmaps , teamwork , achievements, goals etc.. Kinda felt nice to explain to someone about my work. Hopefully , gods smile on me this year and I make it. Been researching schools and Duke , Ross, Kellog are certainly on the list. Not sure of my chances at these , but still they look to be good schools with a lot of opportunity for team activities. Need to browse others.

My fav Royal challengers Bangalore won again. Clinical performance. Sad to see Dada on the loosing side especially after batting well , but cricket is a game of uncertainities ... isnt it ?. Hope RCB gets to face KKR again in the Semis. This loyalty is getting to me. Kindaa difficult to take it when RCB looses :) . I wish DD gets thrashed today to spicen up the race to semis. MI look more or less like they have it. This bunch looks like it cant make many mistakes. All set for an exciting evening.

Now back to some more school research ......