Taking for granted

One can get into taking for granted when things go well. Taking India, for example, it pays to remember the quagmire of the License Raj. The nation was in dire straits in 1991 after decades of centralized mismanagement. It had come to the brink of defaulting on its obligations. The central government had to use the nation’s gold bullion as collateral in return for a loan from the IMF. Under the able leadership of P. V. Narasimha Rao, India was able to adhere to the terms of the IMF and liberalize the economy in return for getting bailed out. In doing so, Narasimha Rao was saving the civilization from economic collapse. Today, India is seeing a return to some level of prosperity, although it is by no means out of the woods yet.

A much worse scenario was seen in other countries like Romania. As part of a government mandate, women were required to have as many children as possible. Given the overall poverty, children ended up getting abandoned and orphanages overflowed. Many lives were lost because of centralized mismanagement.

What decentralization and the great benefits property rights brings to societies cannot be underestimated. Central planning and central management bring no accountability and any mistakes made affect vast numbers of people. On the other hand, economies that are antifragile are managed locally. Any mistakes made only affect locals and such mistakes are corrected because it is much easier to enforce accountability.