CAC class has always triggered lot of emotions in me. Todays class was the most puzzling one. In the entire class, I was thinking about the points and questions raised by Prof. Raju. How many of us will be ready to pay more for the commodity only for the sake of distributive justice? Do not we feel cheated when we pay more for the commodity that is available at lower cost at some other place? And the most fundamental of all, how are we helping a poor milkman by paying Rs50 per litre of milk when the market price is Rs.20 per litre. Are not we directly telling him that “ poor chap, I pity you?”
I do not completely disagree with the theory of distributive justice taught by the professor. My only point of concern is his expectations from consumers to pay more for the productions of poor people. I would be interesting in knowing why the price of that commodity is low. Taking his example forward-“ why is milk sold at Rs.25 per litre while coldrinks at Rs.40?” Economics will simply say “ a theory of supply and demand” and take the back seat. I think there is something dipper in the story. Were it only supply-demand, what if all milk producers join and decide to sell milk at higher price? Will that drive the price of milk upward? I am not very sure about the potential of collective action here. Because they need money badly, they will always be tempted more to break the cartel.
I go back to my fundamental question’” Are we expecting that if we pay more to one milkman, he will ask for more from his other customers and thus a loop will be created which will finally culminate in to higher price of milk?” If we are thinking on those lines, I think we are expecting too much. What all you have to say my dear friends?
Please help me in getting out from this dilemma.
Waiting for your reply
Ravi kumar Dhanuka
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7 comments:
dear ravi, there were many issues which you tried to talk about. i would like to write something about pitying a person and paying more for his product.i base my thoughts on what i have learnt about the cooperatives in my field work. cooperative is just an other form of business. when emotions, pity, sympathy come to play, the sustainability of the cooperative is at stake.
but what prof. raju tried to tell(or what i understood) was that the material supplied by a producer had a definite price fixed by the market, but the share of that market price which was going back to the producer was very little. when the middle men are removed from the chain, the share of the price which goes to the producer increases and this happens without any increase in the price..
but when prof. raju talked of market which created all the disturbances, the concept of pricing, demand and supply would have no meaning...
again,going back and thinking about a market less society is tough...
ravi, the main point that i understood from todays class is that we shud b altruistic...
one thing was botherin me all the time in the class...but i dint have the guts to ask it...let me take the example of dairy...actually, whoz the producer there?? isnt it the cow...so y r v only talkin bout the milkman....so, wil the milkman provide a gaurantee tat he wil pass on the benefit of more money given by us to the cow?? like a better cowshed with fans etc...nd wil the cow in turn be ready to pass on the benefits to whomsoever it is using...the pre-requisite to altruism is tat the lowermost functionary in the chain shud be ready to accept the altruistic principles...whether this can b done is the real challenge...
my real concern with todays class was tat v stop our logic bout altruism at the level of human beings(or wherever we want it to stop)...v are never willing to extend it further...if v want 2 b altruistic, the altruistic principles shud b applied at the atom (or nuclei or even smaller) level...
i'm not purposefully tryin 2 b weird..its jus tat i want 2 speak my mind out atleast in a blog...if tat results in me being called a nerd, so be it...
jo here raises the eternal debate of charity vs self interest in a very valid way. now why not think of it this way- that it would be in the interest of the milk man to take better care of the cow if he is dependant on her for his livelihood. similarly, why should the milk man not get better returns for his milk if his milk is giving us higher utility and value. but the problem right now is that the milk is not giving us the value. i mean, coke is giving us higher value right now, but in terms of an aspiration and 'coolness'image. so, if the milkman decides to add some 'softer' values to it (like amul is trying to do) or processes it to create some product which is more in demand, like it is being done, he starts to command higher value. what i mean to say is that we, as customers, are not going to pay him more because that is the right thing , but because the product deserves it. so, for the milkman to have more benefit, he should himself be responsible for it.
dear ravi and joseph,
when we talk about altruism and economics in terms of distributive justice, we all are trying to justify a system from which we benefit. when we talk about the market and its validity in our lives, we always try and favor the market as a tool which would bring justice to everyone. for us, tampering with the market is like tampering with the eternal truth which would just lead to worst policies.
but, is it so always? why are we all such big advocates of the market when we know that it is skewed? the answer lies in the fact that we all benefit from it. our judgements in this regard are biased to protect our interests which are linked to market.
when the same market forced 1000 airline crew out of their jobs, they could not stop criticising the market in the national media. the glossy high flying air-hostesses with the flag of communist party of india. oh!! it was a sight to see and smelt of utter selfishness of we people who adopt and banish market owing to our benefits!!
so when prof. raju talks that we should give more to the milkman, he says that not as a charity or pity, but because he has been denied his due owing to the market! if u dont give him his due for long, he will take up other means to take them , the manifestations of which we see in naxal affected districts!!
so when we talk about distributive justice, it means a "justice", not a help!!
does that help u in resolving ur dilemma?
nice thoughts, aman...
but i differ with you completely on the role of markets...
let me first make an admission..i'm a great fan of marx..but i disagree with his notion (and yours) that markets are inherently for the exploitation of the underprivileged...yes, there are imperfections in the system. nd to tide over these imperfections, we need rational regulations...
but, to say tat 1000 airline crew are out of their jobs bcos of market is just over the top. in the first place, we have an airline and in turm employment in the airline bcos ther is a consumer "market" ready to avail the service of airlines. this in turn means tat the employees received the job in the first place bcos of markets...
i have never believed tat the world is a fair or just place by itself..if u want a fair world, the onus is on u to construct one...the imperfections in man (like greed) will certainly reflect in the markets he has created...but jus bcos man is imperfect, shud v commit genocide...no, we shud try to tide over our blemishes..similarly, we need to always fine tune our markets...but to say tat markets is "the problem" is like sayin tat problems in this world can be solved only by removing homo sapiens from the face of this earth...
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