Free Market: A Retrospective Through the Eyes of Bollywood

There is a trend of period movies in Bollywood this season! Directors and producers are lining up to recreate the magic of the golden age of the 70s and the 80s. From ‘The Dirty Picture’ to ‘Once upon a time in Mumbai’, it’s raining period movies all around. In keeping with this trend, you are about to be taken back in time to reminiscence how life was for the common man in these decades. You will also have a more substantial idea of how markets functioned and what it meant for the people of India, Bollywood ishtyle!

Many call it the golden age of India! The swinging 70s and the disco 80s are the names people use to romanticise the bygone era. This was a time when India had just come of age. It had been a few decades after our hard fought independence and the consequent partition and wars with China and Pakistan. The young generation of the country were raring to go. They wanted to leave an impression of the kind that we, the following generation, could take inspiration from and emulate. Artists had begun to make their names in the public domain. Cinema, both commercial and parallel, was booming. Writers and poets wrote of the hope of a new India that would announce its arrival thumpingly to the world. Scientists were found making breakthrough researches with hardly any infrastructure at their disposal. The country seemed locked and loaded to announce its arrival to the rest of the world.

Then something went terribly wrong! And India is till date found struggling to gain its foothold as a progressive nation.

What really happened? How did India slide down in this race to be the foremost nation in the world? Individual talent is proven beyond doubt. Perseverance too. Then what was it that resulted in India still struggling to be a superpower and not yet so? Well, the answer is simple. Along with talent and hard work and a great vision of a new India, we also had government control. It was omnipresent. The economy, the currency, businesses and our way of life was controlled!

The ‘Golden Age’ of Smuggling

Let’s take the story of ‘Once upon a time in Mumbai’ as a reference to give us a better understanding of how government control affected every little thing that we did. Nothing inspires us Indians better than Bollywood! The character of the protagonist is based on a yesteryear underworld don from Mumbai. This don was a ‘principled’ man. He did not deal in drugs or any other amoral things. He only smuggled gold and electronics items… it was illegal, he reasoned, but not amoral! But pray why was a don selling household items? Could we not just go down to the mall next door and buy a television with warranty? What was the need to buy electronic items from gangsters is the question the mind must be asking! Well this was the era of the ‘Licence Raj’! The reason given to us for this was that India was busy building infrastructure for a more prosperous and stable future. One needed scores of paperwork before being able to start any kind of business. Those who could afford to buy ‘luxury items’ like scooters and television sets would have to wait forever to get delivery. That’s because there were limited manufacturers and imports were restricted. So, those who wanted to come back from work and watch a little television with family and friends would have to turn to the smugglers! These items would cost the earth and would be sold without any warranty or after sales support. So, if your television set or VCR went out of order, it would be next to impossible to get it fixed and running again.

How Free Markets Shunted Out Smuggling in India

In contrast, today you can just step into any mall of your choice and buy a television set from a wide range of options and get warranty on it too. The contrast you see today is the result of the markets opening up in the 90s, thanks to the dynamic reforms and the modernisation plans. Once the markets opened up, there was more investment from foreign companies. More companies could set up shop here to trade their items. You can walk into a Sony or Samsung outlet and buy items with bills and warranty. There are many companies in the market vying to get your attention to buy the products and services. There is a healthy competition among them, which benefits the consumer. You are not dependent on people of questionable credentials for these basic needs anymore. Slowly, but swiftly, this phased out the once booming but shady business of electronic items in the grey market.

Imagine then the power that free markets bring. It is only in a free market that the consumer can be king. In a free market economy, prices are competitive, owing to more players in the industry. The companies are forced to offer better services and more and more money is pumped into R&D to come up with more ‘value for money’ products. This is good for any economy as one has a larger basket of goods for the same amount of money spent. As a direct result, the standard of living goes up. And since companies have to keep the prices of the products competitive, they try to broaden their profit margin by lowering the cost of production, which again leads to better allocation of resources, reducing wastages. Less wastage of resources leads to optimum utilisation of resources. That is the sign of a good economy. And hence the consumer in a free market gets precedence over everything else.

Sure, the naysayers will argue that whatever was done was to ensure the best for the nation in the name of ‘government control’. But then if that were true, why did the big businesses not boom? The once thriving jute industry of Bengal was practically rendered obsolete and, barring a few industrialists, most struggled to break even. The biggest challenge for India Inc, even today, is the lack of the very infrastructure that these strict controls sought to build. One trip to a government hospital or any other government building will give you a resounding idea of where we stand with infrastructure in this country. It is now that the real infrastructure for businesses is being built in India. And it is only because people have more say and freedom from government control.

So much sacrifice by our preceding generations went futile. One shudders to think the greatness they could have achieved had they not fallen for the hollow promises of the ‘Khadi’ clad ‘Babus’ and bureaucrats. Imagine if this lost generation had the means and the right resources at their disposal, where they could have taken this country. Is that not criminal? Even the gangster in the movie had better morals it seems!