An interesting question posed over in India – which would you prefer, to have the economy subject to capitalist greed or bureaucratic sloth? More specifically, you would like the banking system to be subject to which?
This should be an easy question to answer of course. Who really would want to go through a crash like we did when that bankers’ greed gets the better of them and the system nearly falls over? Why, we lost as much as 7% of GDP! Better, surely, to have a system which doesn’t leave us subject to such shocks. And, as with India’s public sector banks, therefore have a system which simply doesn’t allow such things to happen.
We would also do well to remember that one of the primary reasons that India was cushioned from the 2007-08 global financial crisis was because, at that time, public sector banks commanded about 70.5 percent market share in the country. During a crisis fuelled by relentless greed, our public sector inefficiency proved to be a better alternative and saved the country from sinking.
The question to ask here is, when bankers advocate privatisation as the solution to our banking industry woes, have they forgotten their own excesses of merely a decade ago that jeopardised the very foundations of the system?
In the present context, it seems that as a society we must pick the lesser of the two evils, and decide whether our money is safer in the hands of a relatively underpaid and inefficient sarkari karamchari, or, if we’re better off placing our trust in an overpaid, greedy and most likely immoral banker.
Well, OK, since you put it that way, why not?
Ah, well, this is why not:
UK GDP per capita – 38,847
India GDP per capita – 1,852
That is, the capitalist greed and private sector banking system might indeed produce a 7% loss of GDP in a crisis. But India’s solution of bureaucratic sloth to the same problem hasn’t produced any GDP to lose.
We’ll take the greed please.