Tuesday, 27 September 2011

Labour's still wedded to the license state


The bizarre polity that is modern India was - under its then perennial Congress Party rule - described as the 'license raj":

This is when India got its License Raj, the bureaucratic control over the economy. Not only did the Indian Government require businesses get bureaucratic approval for expanding productive capacity, businesses had to have bureaucratic approval for laying off workers and for shutting down. When a business was losing money the Government would prevent them from shutting down and to keep the business going would provide assistance and subsidies. When a business was hopeless an owner might take away, illegally, all the equipment that could be moved and disappear themselves. In such cases the Government would try to keep the business functioning by means of subsidies to the employees. One can imagine how chaotic and unproductive a business would be under such conditions. 

Every economic act, every profession, every industry acts solely on the basis of licenses granted by government. Not only was this corrupt but it crippled the Indian economy for a generation.

This lesson in failure - with India falling ever further behind places like South Korea, Thailand, Indonesia and, latterly, China - is still ignored by social democrats. Ignored by those who see the purpose of the state as the direction of individual actions to a greater good - or rather to the preferences and interests of the political class.

Such a man is Ivan Lewis MP, the Labour culture shadow - Mr Lewis wishes to license journalists:

Lewis will suggest that newspapers should introduce a system whereby journalists could be struck off a register for malpractice.

Not only is this illiberal - but then we expect that from Labour politicians - it is stupid and enforceable only by arbitrary power. It would represent the first step towards the social democrat establishment controlling the output of the press, a big stride towards the hounding of journalists for the grave sin of criticising Labour politicians. And it is wrong.


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