You can, if you wish, paint Bhopal as an example of rapacious profit-seeking corporations putting profits above human lives. You can argue that thatzwhy we need strong regulations. But your argument will run into the problem that Bhopal occurred in 1984, in the India of the license-permit-quota raj.  Not all the permissions that Union Carbide had to seek, not all the inspectors they were forced to bribe, could prevent the disaster from occurring. Once it did occur, the paternalistic State, instead of looking out for its children, sold them out.

So, if the failure of the free market makes the case for regulations, does the failure of regulation make the case for loosening them? Well, that’s not what usually happens.  We’re more likely to hear that Bhopal makes the case for strengthening the regulatory framework.  We don’t need deregulation. We need stronger, more effective regulations, the argument goes.  If we don’t have strong regulations, what is to prevent corporations from creating a Bhopal every other day in pursuit of profits?

Well, strict liability and the tort system, for one. If we could sue the pants off any company that dares to impose harm on third parties, we would see fewer industrial disasters.  If we junk half our regulations and use the resources freed up to modernize our courts so that they deliver verdicts in months rather than decades, we will be much, much better off than we are. Shruti notes in her piece that the Indian government actively worked to minimize the compensation victims could claim from Union Carbide. This phenomenon is familiar, and has a name – regulatory capture.

Hyderabad

Why did we need a free and fair trial for Kasab? Because…

What is common to Sanskrit, Brahmin, Sion and Matunga?

The answer is that they are all Indian words written in English that would have been correctly pronounced if they were pronounced the way a native English speaker would  pronounce them, but mispronounced because of  the way Indians pronounce English.

In “Sanskrit” and “Brahmin”, the “i” is supposed to be pronounced the way it is in “Sir” and the pronunciation would have been correct. Instead, we Indians pronounce them as “Sanskreet” and “Brahmeen”  thinking that we are anglicizing them.

“Sion” comes from the Marathi word “Sheev”, which means border.  (Sion is the northern border of Bombay city. Beyond it is suburban Bombay.)  It is supposed to be pronounced “Seeon”. But everyone pronounces it “Saayan”.

If  you were to pronounce the “u” in “Matunga” like the “u” in “but”, you’d be close to the original name of the suburb, which is “Mathanga”, so called apparently because an elephant stable used to be housed there. But everyone calls it “Matoonga”.

Incidentally, the last two examples tell us something about the original inhabitants of Bombay, viz. how few actually exist. They also tell us a lot about the state of Hindi and Marathi scripts in Bombay till recently.

Of course, saying that they  won’t penalize delivery boys for bad performance is not the same thing as saying that they won’t reward them for good performance. The two aren’t the same, because of the endowment effect. Then again, you shouldn’t reward them every time they do an on-time delivery, because it will effectively amount to the same thing. You need to reward them for aggregate performance.

Something to do with their pronunciations.

Also, most Indians aim to live their lives. We aren’t particularly interested in being a country-sized museum of anthropology for you guys to visit for extended periods when you get bored of your suburban life.

The typical arguments are made by the right too. If the economy is going good “see, the deregulation has brought about unprecedented wealth. How can you propose more regulation?”

When the economy goes bad, we get the answer “see, the crisis is brought about due to regulation in the housing mortgage market. How can you propose more regulation?”

Yes, the libertarian right makes this argument, but there is a consistency in it. We believe that most regulations do harm, and that a lightly regulated economy works best.

If the socialist left made the counter-argument, that too would be internally consistent. If you really wanted to regulate the economy all the way to the Soviet Union, you could justifiably claim that both the US and India are variants of the same system. But in my post, I wasn’t arguing with the socialist left – I don’t need to, as history has already answered them.

My argument is with those who say that “we need a free market with some regulations, but that doesn’t mean that we should be socialist”. If you hold that belief, I would expect you to believe that there is some point at which additional regulations do more harm than good, so you’d support some regulations and oppose others. But what I notice is that for supporters of regulation, the right amount of regulation is always “A little more than we have now”.

Also wields the knife

When things go wrong in the US, we get the answer: “See what happened to the US because they followed a free market system? How can you propose that we junk our regulations? We need more.”

This bias ensures that we will always follow suit when the US moves left, never when it moves to the right.