Stiglitz for state role in market

Patna, Jan. 14: Nobel prize-winning economist Joseph Stiglitz today suggested that the government should always keep "general people's interest" in mind while formulating policies for helping industry acquire land and advocated state role in "regulating the market".

The Nobel laureate's remarks would have come as music to the ears of chief minister Nitish Kumar, who wants landowners to have a stake in industry if their land is being acquired.

Though the government was silent on the economist's views, a senior IAS officer said: "The government's approach is quite in conformity with what Stiglitz has stated."

Stiglitz, on a tour of Bihar, patted the state for ushering in change. "Bihar has demonstrated that change is possible, that the possibilities of growth are enormous, that the state can be an important instrument for promoting growth," he said while delivering the Asian Development Research Institute (Adri) foundation lecture ' "Redefining Capitalism".

He squarely blamed the "mis-governance" in capitalism that has acquired the name of "market economy" and the government's failure to "regulate it" for the global financial crisis. "The global financial crisis served to remind us that the markets on their own are neither necessarily efficient nor stable. Yet, the long history of failure of communism and attempts at state dominated growth have also failed," he said, clarifying that the implication was that there has to be a balance between the state's role and market.

Driving his point home in a clear and succinct manner, free of clich�s and jargons, Stiglitz said: "There has been no success where governments have not played an important role. And also, there is no success where markets have not played an important role. What is needed is the right balance in the role of the government and the same of the market."

Stiglitz also sang in tune with the chief minister who was presiding over the function on foreign direct investment (FDI) in retail. He cautioned against FDI in India. "What are the foreign funds bringing into this country? In retail, there is already a wealth of entrepreneurial talent in India. There are assertions that bringing of foreign retail will improve the supply chain and enhance the welfare of farmers and consumers. But some of these foreign retail firms, including Wal-Mart, are noted for their poor labour relation, workers' exploitation, discrimination and bribery," he said.

Stiglitz made it clear that the free market does not amount to monopoly of some rich and powerful people. Capitalism or business economy is not also something static. "Capitalism needs to be continually redefined. Scandinavian capitalism differs from American style capitalism, which in turn differs from the model of capitalism that has evolved within Germany. What is right balance will differ from time to time and from place to place on socio-economic, political and historical context," he said.

He said there should be a need to take note of the important role that other players ' civil society, co-operatives and NGOs ' should play. He enumerated a variety of "key roles" that the government could play. "The most important role for the government to play is to ensure basic functioning of society, law and order, enforcement of property rights and contracts. Another role is restraining the markets from doing what they should not."

In this context, Stiglitz specifically mentioned how "the failure of the US government to play that role was central to the financial crisis. The government needs to make market function like market". "The government must not focus just on efficiency but on fairness and social justice," he said.

Summing up his deliberations, Stiglitz said: "The successful development requires improving institutions at all three levels ' improving markets, re-inventing government, creating an active civil society and achieving harmonious relationship between the three."

Heritage site promise

Economist Joseph Stiglitz today assured chief minister Nitish Kumar of trying his level best to include Nalanda ' the ancient seat of learning ' in the list of world heritage sites.

"It was an amazing experience to see the world's most ancient university. I will certainly do what I can to ensure Nalanda is declared a world heritage site," he said, after Nitish requested him to help Nalanda get the coveted status.

Matches

MORE TOP STORIES TODAY

Kallis, Narine star in Knight Riders’ crushing win

Kallis, Narine star in Knight Riders’ crushing win

An all-round display saw Knight Riders thump Mumbai Indians by 41 runs in the IPL-7 opener. More »

Pietersen to miss Delhi's first game

Pietersen to miss Delhi's first game

The former England batsman will have to lead the franchise as he is out of the match against Bangalore with a finger injury. More »

Srinivasan named in fixing report: SC

Srinivasan named in fixing report: SC

The court emphasised that the tainted administrator can no longer work for the BCCI. More »

'Yak' Kallis still on top of his game

'Yak' Kallis still on top of his game

The 38-year-old South African veteran turned it on for Kolkata Knight RIders in the opening match of IPL-7. More »

'If you do the wrong thing it will be found out'

'If you do the wrong thing it will be found out'

'Everyone knows what is right and what is wrong and if you do the wrong thing it will be found out' More »

Why I'm not looking forward to the IPL

Why I'm not looking forward to the IPL

Welcome to another season of a league that many watch but few trust. More »

Johnson may quit T20s for Tests

Johnson may quit T20s for Tests

Australia's Mitchell Johnson may quit limited-overs cricket to prolong his test career with an eye on the 2015 Ashes series in England, the fast bowler… More »

There's a lot going on: Fleming

There's a lot going on: Fleming

He experienced anxious moments in the lead-up to the tournament as the courts decided on whether to suspend the franchise, he said, but stressed that the… More »

Latif couldn’t work with tainted players

Latif couldn’t work with tainted players

Former Pakistan cricket captain Rashid Latif said Tuesday he turned down the job of national chief selector because he could not work with ex-players tainted… More »

Big runs expected, with bat and ball

Big runs expected, with bat and ball

Royal Challengers Bangalore: Their main concern, once again, is the fast bowling More »

We are not over-confident: Bailey

We are not over-confident: Bailey

Indian Premier League — George Bailey-led Kings XI Punjab will face Chennai Super Kings on Friday. More »

Taxing issue — BCCI hits roadblock

Taxing issue — BCCI hits roadblock

MoU between BCCI & its units to avoid double taxation delayed after a few decline to share details. More »

Black Caps pick rookie duo for West Indies

Black Caps pick rookie duo for West Indies

New Zealand selectors included two new caps in a 15-man Test squad named Tuesday to tour the West Indies, with injury-hit spinner Dan Vettori's future… More »

The stage is set for IPL-7 to start

The stage is set for IPL-7 to start

The Preview — Defending champions Mumbai Indians take on Kolkata Knight Riders More »

Srinivasan appeals to court to allow BCCI comeback

Srinivasan appeals to court to allow BCCI comeback

He was aggrieved by the allegations against him during the hearing. More »

India: cricket's Brazil

India: cricket's Brazil

They are tough to beat with a big talent base exposed to good facilities. (CYCSPL) More »

Delhi Daredevils say no to gifts

Delhi Daredevils say no to gifts

Franchises are doing their bit to refurbish the image of the tainted league. More »

Klinger on his exit from South Australia

Klinger on his exit from South Australia

Michael Klinger has revealed he felt compelled to leave South Australia after being told he would be only a fringe part of the Redbacks' plans for next season, and disputed the suggestion that he left… More »

India-Pakistan Test series likely in 2015

India-Pakistan Test series likely in 2015

The revival of Indo-Pak Test ties could take place in UAE. More »

Kohli hopes to end RCB trophy drought

Kohli hopes to end RCB trophy drought

'This time around we will hope to go few more steps ahead and actually get that trophy' More »

Gavaskar can help IPL regain glory

Gavaskar can help IPL regain glory

Apart from the foreign players a lot of behind-the-scene activity has taken place in selecting the Indian domestic players. More »

Tendulkar, Ganguly to promote soccer

Tendulkar, Ganguly to promote soccer

Leading Spanish club Atletico Madrid and former cricketers Sachin Tendulkar and Sourav Ganguly are among the owners of eight franchises of a new Indian… More »

This isn’t my first trip to India: Neesham

This isn’t my first trip to India: Neesham

Kiwi all-rounder wants to utilise the India leg to explore the country’s tourist attractions. More »

Ishant wanted to quit ODIs

Ishant wanted to quit ODIs

Says his mother made him change his mind. More »