I know Mahul through CrazyEngineers (CE), and was in touch with him recently with regards to changing the link to my blog (was getting a fair amount of 404s!). During this time, I chanced upon one interesting post he had written on Inequality and Fairness.
In fact, to a certain degree, I agree with Ayn Rand’s theory of objectivism, and agree with the concept of the free market in principle. I am the firmest believer that people should not be given anything for free, because it acts as a deterrent to motivation to work hard, which, at the end of the day, is what creates value in a society. In principle, everyone should have an equal opportunity to succeed in a free market, and whatever product holds the greatest value should be the one to succeed.
Here’s an excerpt from the post, I (go on, read the rest of his post in the link I provided, then come back and read this counter post!).
In real life, there are no ideals. There are no whites and blacks … there are 50 shades of grey
People do not get equal opportunities, because those opportunities are the fruits of their predecessors. Mr. Anil Ambani is living in such an abode, because of the efforts of his father (who came from very humble beginnings). How he managed to get there is a different story … but lets not write-off those efforts which ensured that his children get better opportunities than the common man.
The beggar on the street is getting no opportunities not only because of his circumstances, but also because of his lineage.
In a real free market however, this is hardly the case. Because the humble 5 rupee lemon soda, though holds more value, is significantly less likely to succeed.
The humble 5 rupee lemon soda does not come with an international FDA approval. Pepsi, Coca-Cola and other pesticides do
Sometimes, it’s the overheads which have to be set off. It might be true that the concentrate costs INR 1 to produce, however if you add the advertising, marketing, inventory and distribution costs on top of it … not to mention the corporate salaries … then INR 10 does not seem that high. What’s more important that people are willing to purchase it at that price point.
As a service/commodity provider, I would always go for value based pricing! Which is what a true real free market would behave like. However, we are in no real free market … there is a regulatory body and the price is capped at the Maximum Retail Price (MRP).
Life is not fair, people are not equal.
Your efforts will pay dividends for your descendants … and other people will say that they are lucky and life is not fair :-).