2 highlights
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There are many who defend Nehruâs investment in a massive and unproductive public sector on the grounds that the private sector wouldnât have done all those things. But then why on earth did he then go and introduce industrial licensing that effectively prevented the private sector from setting up the factories that were so urgently needed? The Amartya Sen fallacy of course. Once the public sector was set up, it needs to be protected from ruinous competition. Therefore, the private sector had to be constricted.
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Amartya Senâs logic ran somewhat like this: 1. We need government-run schools because private schools arenât up to the task 2. But government schools arenât doing a great job either, the reason is that competition from the private tuitions are taking resources away from them. 3. Hence we should ban private tuitions.