How much Free Market can you take?

by Manshu on February 18, 2009

in Opinion

When I was giving job interviews during my MBA – one incident changed my whole outlook on – Free Markets. Most MBA schools have a few “Placement Days” in which companies are invited to interview and recruit students. Normally this lasts for three or four days. The whole process is loosely described as “Placement Process” or just “Placement”.

The first day is called – Day Zero and during my Day Zero, we didn’t have any Placement Rules. Students were allowed to sit in as many interviews as they liked and there was no limit on the number of job offers they could accept.

As a result, at the end of Day o, we had several people who had multiple job offers; while many others had no job offers at all. At the end of Day 1 – the situation worsened. It seemed that a large number of people were getting no job offers at all, while a few had multiple offers.

Since a student can’t do more than one job at a time, this was turning out to be a disaster. If things were allowed to continue in the same fashion, we would have had a lot of recruiters who may have had – five accepted jobs, but no one would have turned up at work. And at the same time we would have students who had up to five job offers while others didn’t even have one.

The Free Market would have ruined us.

That was when our Placement Coordinators intervened and did a fine job of regulating the market. They made a few simple rules that were easy to execute and proved effective.

They mandated that every student will have to select his “Dream Company”. If he didn’t have a job offer, he could apply to as many companies as he liked, but once he had a job offer, he could only apply to his Dream Company.

If he got accepted to his Dream Company, then he would be automatically out of the Placement Process. That meant that each student could waste a maximum of one single job.

It also meant that the competition for those people who didn’t have a job reduced and they were also able to secure a job.

For me, the Placement Experience was the defining moment of my education. I have never seen such selfishness, greed, double speak in my life, as I did in those days.

People were wasting jobs in order to boost their egos and serve their vanity.

That also changed the way I looked at Free Markets.

Free Markets are great, but, how much Free Market can you really take? There needs to be regulation and there needs to be supervision.

There also need to be decisions based on facts and needs of the hour; rather than principles and ideologies. I feel a lot of the current – Bank Nationalization debate is based on ideology and not the need of the hour.

Nationalization of insolvent banks seem to strike a certain disgust in people. When in fact such a thing has been happening through the FDIC for years now.  It is also something that other countries have been able to do successfully and so if you are against this – On Principle, then probably you need to rethink reality.

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