Saturday, October 15, 2005

Socialism In Action

This story speaks to the inefficiencies in socialist economies - an analysis of the Delhi Jal Board, the water utility of India's capital city Delhi. Even my non-Indian readers will want to read this, especially the comparison between the performance of the utility companies in "booming" India and the forgotten Ivory Coast. This is the reality that you need to keep in mind the next time you think the government should take over an industry (think Democratic calls to have the Feds run refineries to compete with those 'evil capitalists' profiting from Hurricane Katrina). The reality is efficiency is the product of a need to survive. Think if you were guaranteed an 'A' in a course without having to study, how much time would you invest in the course?

Some notes before you read the link: 1 crore = 10 million, Rs 50 is just over a dollar, although I find a conversion of 8X works better in adjusting for purchasing parity (so someone making Rs 800,000 a year truly makes about $16,000, but lives like someone who would make $100,000)

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