We always knew that the RBI Governor Raghuram Rajan was a confused man. His higher education in the US pulls him to free markets. And his school education in India and general milieu in India where he grew up pulls him to Socialism. His policy schizophrenia has best come out in a speech he gave at DD Kosambi Ideas Festival in Goa on 20-02-2015. In fact the Socialist side of his personality is what must have led to his appointment as RBI Governor in the first place. He makes the most dangerous assertion: that is if the voters believe that the rich are crooked, they should vote for the punitive taxes and tough regulations ! So according to him a mob can decide a citizens integrity and vote what Rights he cam have !
“According to Rajan, ‘free markets’ can be considered as a fourth pillar in addition to those suggested by political scientist Francis Fukuyama — a strong government, rule of law and democratic accountability — for liberal market democracies. The bedrock on which all four pillars stand is a broadly equitable distribution of economic capabilities among the citizenry, he said.
While free markets and democracy create a level playing field, there is a key difference. “Democracy treats individuals equally, with every adult getting one vote. The free enterprise system, by contrast, empowers consumers based on how much income they get and property they own,” Rajan explained.
Rajan said the median voter rationally agrees to protect the property of the rich and to tax them moderately when they are seen as efficient managers, creators of jobs and prosperity that all benefit from. However, if the rich are seen as idle or crooked — as having simply inherited or, worse, gained their wealth nefariously — the voter should be willing to vote for tough regulations and punitive taxes on them.” (from the news report.)
Read the whole report here.