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9th Anniversary: Free Tote & Mug

State capitalism is a negation of democracy. Laissez-faire is dead as a dodo: AD Shroff

A concept of mixed economy alone provides the necessary balance of power between the State and free enterprise, AD Shroff wrote in 1956.

With the announcement of the Socialist pattern of Society as our goal, the raising of the tempo of planning and the inevitable concentration of economic power in the hands of the State, the question of the relation between Free Enterprise and Democracy has assumed great significance. Some time back, the Prime Minister at a press conference in Calcutta expressed the view that the idea of equating democracy with private enterprise was not justified. He is further reported to have observed that in the last analysis democracy and unrestricted private enterprise were incompatible.

As against this view, there is a large section of opinion in the country, which believes that the present trend towards State Capitalism, under the ostensible plea of a Welfare State, threatens as much to enslave man to the State as a totalitarian State. It is maintained by them that democracy is a political concomitant of Free Enterprise, and with every step towards a diminution of Free Enterprise, democracy is hastening towards its end. It is not a mere accident or coincidence of history that democracy has grown and flourished along with the system of free enterprise. Issues are unfortunately confused by the dogma of Marxism, identifying ends with means. The heresy of yesterday has become the orthodoxy of today. It is, therefore, essential to examine the question of Free Enterprise and Democracy afresh in their proper perspective.

It should be clear to any student of economic history that Free Enterprise in our country and elsewhere is not advocated today in terms of the outmoded doctrine of laissez faire. To talk, therefore, in terms of unbridled private enterprise at the present time is to confound the issues and lose sight of the necessary historical background and perspective. The laissez faire is dead as dodo. It is a singular triumph of the dynamic urge of democratic ideals to have developed a new awareness of social justice and equality. The sphere of the activities of the State has widened considerably.

In the economic field, the State wields today enormous power and is able to regulate, and even control, processes from the supply of raw materials to the quantum of production. With the apparatus of Import-Export regulations, it considerably affects both the internal and the external trade of the nation. By means of the powerful instrument of taxation, it adopts suitable monetary and fiscal measures, so as either to curtail distributed profits and/or limit dividends. The vast amount of Labour legislation regulates the relations between the employers........

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