This is in response to the article “In pursuit of structural reforms” (Op-Ed page, Dec. 18). Free market capitalists suffer from a fascination for historical myopia and always seem to bemoan the lack of a ‘true free market’, despite the historical evidence being deeply against their thesis. However, unlike science, where experiments have the final say, economists have a funny way of disregarding experiments when they don’t agree with their ideas. Structural reforms are not new; first, they were tried in Chile under the military dictatorship of Pinochet. Markets were given free reign and government basically was there to manage the military. The writer would have us believe that untold riches would befall such an enlightened country; however, the Chilean economy took a deep nosedive, unemployment soared and, finally, surprise surprise, it was only solved after the country nationalised its industries.
The same things happened in Thatcher’s Britain where she devastated communities, especially of poor workers in steel plants and miners, sold off national assets such as the railways. The result, widespread societal collapse, British rail is beyond repair and it led to severe austerity that, according to research, has killed thousands of people.
In the 1990s, after the collapse of the U.S.S.R., structural reforms were applied in the breakaway republics and the new Russia as well. The result, rise of massive oligarchs, widespread corruption, decline in quality of life and a lowering of wages in Western European countries because they could now get the E astern European labour for cheap. In the U.S., this has led to destruction of American company town, decline in life expectancy and, most spectacularly, the 2008 economic collapse.
The results of structural reforms have been stark in India as well — skyrocketing income inequality, agrarian distress, corporate corruption and the general destruction of public services as well as the selling off of the productive and profitable public sector industries. Structural reforms is nothing short of gutting a public state and leaving everything to strict market discipline. They have failed to deliver any reasonable prosperity anywhere, except for a small coterie of elites.
The path to ‘free market utopia’ is strewn with broken societies, unemployment, despair and deaths.
S. Bhushan,
Jaipur
