Interesting. I did not expect a radical subjectivist to take such a paternalistic position towards what economic activities are useful or not useful.
I am not going to be too quick to judge. But I find it insufficient argument that innovation to work around regulations and taxes is bad innovation. Banks may lose several hundreds of millions of dollars if they don’t work around certain taxes and regulations properly, and they end up saving a lot of their client’s money by hiring a financial services advisor who can help them out with that stuff. How is THAT not useful?
Disclosure: I myself used to regard corporate lawyers as socially useless, because many of them only get jobs because of contradictory and needlessly complex regulations. But then I realized that corporate lawyers who are paid $1 million end up saving a business several hundreds of millions of dollars because they ensure there is a legal safety net to every major business transaction.
Is it any coincidence that the most developed industrial countries have the most lawyers? You don’t ever get to fool a major corporation or cheat it when it has an army of lawyers. You also don’t get to push arbitrary mandates on a business, when their own lawyers can point out that one regulation contradicts another. Here in India, however, even the biggest businesses are cheated by fly-by-night operators, and big businessmen have been dragged to the courts with little to defend themselves from incomprehensible charges. That’s what caused Aditya Birla to shift all his factories abroad.
Well, you have to remember that a lot of the mortgage derivatives were a product of government – i.e. the bundles created by GSEs like Fannie and Freddie. At least, that’s what I understand from my limited research on the subject.
I have no idea how those two things are even related…let alone what that has to do with how industrially developed a country is. Are you making the argument that a country is more developed because it has more lawyers?
When was the last time you ran a business in the United States?
Good that you asked, John James, because my parents incorporated their small online retail store in the US as well in order to rent some warehouses there, and they faced fewer legal hurdles than they ever have in India.
Well if they faced “zero” hurdles, they were lucky. And I can provide plenty of evidence to support that. (Not to mention they were simply filing incorporation papers for an online store? And renting some warehouse space? Let’s talk when they try to open a restaurant or a small brokerage firm…or at least something that takes up space other than storage).
But the point is your statement was “You also don’t get to push arbitrary mandates on a business, when their own lawyers can point out that one regulation contradicts another.” And my point is you’re right…when a business is large enough and has its own army of lawyers (and lobbyists) arbitrary mandates aren’t forced on them. They are generally the ones helping to author the madates that get forced on others.
And to say that someone faced less hurdles to doing anything business related outside of India versus in it, is like saying they were much more successful at breathing when they were out of water versus in it.
And the question still remains: Are you making the argument that a country is more developed (at least in part) because it has more lawyers?