A few days ago I had done a small note on Ayn Rand. She was a Economic Philosophy writer who found that US A had too much governmental interference. If you are a student of Economics you understand the word ‘rent’ in the correct sense. Rent seekers are those people who have been able to create an interest because of ‘vesting’. So vested interest creates rent.
Now the Athletic Federation of India wishes to withdraw support for 3 POPULAR EVENTS. Why does it want to withdraw support? BECAUSE PROCAM THE ORGANISER IS NOT PAYING ENOUGH RENT. The logic is simple – if you want my support, YOU have to pay me rent, or I will withdraw. Now is it a simple deal? Is it like market forces? If I do not wish to pay Rs. 500 for a cup of tea, I do not go to a 5* hotel.
NO with the AFI the deal is not so simple. AFI general secretary Lalit Bhanot has WARNED INDIAN ATHLETES against participating in the race. …if they do…they will be SUSPENDED. THEY will not be allowed to participate in the Common Wealth Games..”If the organisers earn more, they should give us more…says Bhanot”.
If you have read Atlas Shrugged (I urge, implore, beg, request, threaten….you to do so if you have not read this book) you see these people who are the rule makers who put creativity at a discount and rule following at a premium. There are many companies like this too.
Not long ago to launch an international fund, there was a rule..that the amc should be atleast 10 years old. To launch international operations the airline had to be 10 years old. NO achievement criteria, just age (oops).
Similar for a company to be in the Index the only criteria is ‘market capitalisation’ – which means when everybody is buying realty, DLF will be in the index. If everybody is buying IT, Satyam will be in the index. However a brilliantly managed chain of boutique hotels WILL NEVER BE in the index. All telecom companies will be in the index, if things were fine Reliance Power (without any installed capacity) would be in the index .
There is a vested interest bias. So the regulator says ‘Pension funds should invest only in the Index’ ….rent seekers all.
If you are a small runner let us all run the Mumbai marathon…damn the AFI.
And do you know how easy it is to manipulate the ‘regulators’? They can pass an order which says how much you can produce, at what price you can sell, to whom you can sell, and how it is unfair to sell to YOUR OWN CUSTOMERS at a lower price, how you should sell to a ‘poor competitor unmindful of the ‘poor competitor’ being the 3rd richest man?
Do not believe it? Read on…http://epaper.dnaindia.com/epapermain.aspx
if you find this article difficult to believe…welcome to the REAL world..and you thought the world was fair? L O L> ROFL > ROFL again and again…
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