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Responses to [ISTT] News Digest No. 877 Number 2

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  • Francis Lobo
    Hi Everyone, Supratim has misquoted what me. I have said is that there is no evidence that privatization ensures better performance than other forms of
    Message 1 of 2 , Oct 12, 2005
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      Hi Everyone,

      Supratim has misquoted what me. I have said is that there is no evidence that privatization ensures better performance than other forms of organization. Against the overwhelming evidence I have given of the developments in the Industrial & Post Industrial Eras, the growth of super powers like U.S.S.R., U.S.A., Japan, Germany, China, which would not have been possible without massive state intervention, he has changed the idiom of discourse & now talks about PRIVATE CAPITAL V/s PUBLIC CAPITAL.

      Capital is a dead commodity. It gains life through Management of this resource. Management is not an abstract subject; Ownership is. Theoretically, because I own some shares in Reliance, I am an owner of Reliance, but does it mean anything? Ownership is Notional, Management is REAL.

      Management is a Technology & as I have said, Technology & Organization have been the drivers in the modern age. Management like engineering & medicine can be taught & learnt. That is why there are 900 or institutions in this country offering post graduate qualifications in management. It has a distinct vocabulary & body of knowledge. Like Electricity its results & outcome do not depend on who applies it provided she follows the rules of application correctly.

      If public sector organizations are being sold to generate funds, that is one thing. If they are being hived off because some private individual can run them better, the assumption needs to be challenged.

      If a company can become profitable merely by changing the form of capital employed, then just trade all public sector shares on the stock exchange & you get private capital injected into the organization. If private companies can make money by running airports why cannot the public sector?

      The examples are given of U.S.S.R. Remember it achieved super power status in a remarkably short time. The fact that the Roman or the British Empires do not exist any more does not change the history that they were forces to reckon with in their time.

      FRANCIS LOBO


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    • Peeyush Bajpai
      A short injection to this lovely debate: Response to Mr.Lobo Capital may be dead but ownership of that capital is not dead. Management of my capital (private)
      Message 2 of 2 , Oct 12, 2005
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        A short injection to this lovely debate: Response to Mr.Lobo

        Capital may be dead but ownership of that capital is not dead. Management
        of my capital (private) is to use all my learning so as to maximize my
        returns. Management of our capital (public with the notional ownership for
        me) may not have me putting all my learning to maximize the returns. A point
        highlighted by you in the post: Public capital has no real ownership but
        simply notional ownership like the shares of Reliance.

        > If public sector organizations are being sold to generate funds, that is
        one thing. If they are being hived off because some private individual can
        run them better, the assumption needs to be challenged.

        The assumption is based on the human tendency that if it is mine I will work
        my ass off and use "Management" to ensure I get the returns. If I am not
        its owner then I may not use the "Management" to maximize the returns.



        ----- Original Message -----
        From: "Francis Lobo" <fllobo@...>
        To: "India Strategy Think Tank" <indiastrategy-thinktank@...>
        Sent: Wednesday, October 12, 2005 12:51 PM
        Subject: Responses to [ISTT] News Digest No. 877 Number 2


        > Hi Everyone,
        >
        > Supratim has misquoted what me. I have said is that there is no evidence
        that privatization ensures better performance than other forms of
        organization. Against the overwhelming evidence I have given of the
        developments in the Industrial & Post Industrial Eras, the growth of super
        powers like U.S.S.R., U.S.A., Japan, Germany, China, which would not have
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