Tuesday, June 30, 2009

End licence raj in education

The Yashpal Committee is too socialist.

Is Behavioral Economics Doomed?

Is Behavioral Economics Doomed? The ordinary versus the extraordinary

Monetarism Defiant

To be terribly disruptive school education

It’s not a new if somebody proposes a model for Indian school education. In that line Mr Subir Gokarn saysThe goals and strategy of the primary education system must be defined in terms more fundamental than passing a board exam. What attributes do we want our kids to enter adult life with? I would submit that there are four “core” and two “elective” attributes. The former should be imparted to every student, implying that they constitute the focus of the first few years of primary education, with a largely common curriculum. Two of these attributes are behavioural, which I would label “values” — ethics, appropriate conduct in a social context, respect for law and institutions — and “teamwork” — individual responsibility and accountability within the framework of collective effort and outcomes. The other two are the more conventional literacy and numeracy, each with an appropriate component of IT.”

Biology is similar to Economics

Krugman gave a talk at the European Association for Evolutionary Political Economy in 1996. Some interesting analyses were drawn in this talk mainly the difference between economics and biology.

But for learning basic economics in comprehensive he says:

Economics is “Interactions among intelligent, self-interested individuals.

  • “Economics is about what individuals do: not classes, not "correlations of forces", but individual actors. This is not to deny the relevance of higher levels of analysis, but they must be grounded in individual behavior. Methodological individualism is of the essence.
  • The individuals are self-interested. There is nothing in economics that inherently prevents us from allowing people to derive satisfaction from others' consumption, but the predictive power of economic theory comes from the presumption that normally people care about themselves.
  • The individuals are intelligent: obvious opportunities for gain are not neglected. Hundred-dollar bills do not lie unattended in the street for very long.
  • We are concerned with the interaction of such individuals: Most interesting economic theory, from supply and demand on, is about "invisible hand" processes in which the collective outcome is not what individuals intended.

I believe many the libertarians will agree with me at least in the above lines.

Mises wrote in his masterpiece Human Action that “It is a mistake to set up physics as a model and pattern for economic research. But those committed to this fallacy should have learned one thing at least: that no physicist ever believed that the clarification of some of the assumptions and conditions of physical theorems is outside the scope of physical research. The main question that economics is bound to answer is what the relation of its statements is to the reality of human action whose mental grasp is the objective of economic studies.”(p.6)

Mises also argued that “The discovery of a regularity in the sequence and interdependence of market phenomena went beyond the limits of the traditional system of learning. It conveyed knowledge which could be regarded neither as logic, mathematics, psychology, physics, nor biology.

But Krugman argues “…….economics and evolutionary theory are surprisingly similar. It is often asserted that economic theory draws its inspiration from physics

Further Krugman says:

  • You will discover that our whole style of thinking, of building up aggregative stories from individual decisions, is not at all the way they think.
  • Nature can often find surprising pathways to places you would have thought unreachable by small steps."

Monday, June 29, 2009

Fallacies in Prof. Yashpal Committee on Higher Education

There are many but I am taking only two in this post that is one is on ‘higher education and caste’ and another one is on ‘social justice’. The Yashapl report argues:

  • “higher education was increasingly perceived as a means to overcome caste and class hierarchy, patriarchy and other cultural prejudices and also a source of new knowledge and skills, a space for creativity and innovations. Higher education, therefore, was and continues to be considered a national responsibility and the state has to make necessary provisions to realize its potentials.” (p.11)

When The State is an empty stump in creating of knowledge how it going to create is a not a question for winning Nobel Prize? But ponder how The State lives without the knowledge which actually with million of people.

  • “An under-regulated system encourages exploitation, contributions to disorder and erosion of social justice.” (p.51)

It is totally nonsense, just see how the under regulated Telephone connections, electricity meters, cars, scooters,” sector have performed in the past.

Even the word ‘social justice’ has no meaning at all. See here for more on F A Hayek ideas.

Thomas Crombi Schelling on Economics is not like engineering

In an interview to The Business Line Prof Schelling says:

Where do you see the future of economics as a subject?

I think what they are calling behavioural economics is, on the whole, pretty good stuff. I am a great believer in theory but we have to recognise the limitations of markets, competition and so on.

There can be huge departures from what is defined as rationality. So much depends on what people believe will happen. Economics is not like engineering.

Ricardo's difficult idea

The 2008 Nobel Prize winning economist Paul Krugman wrote an article title “Ricardo's difficult idea. Though, he tends to lie on today’s public policy analysis. But I find something worth to note in his 1996 article.

The purpose of taking note of his article is as simple to adopt a way to learn economics in a different way.

Some excerpts from that article. He advised to:

  • Take ignorance seriously:
  • Adopt the stance of rebel:
  • Don't take simple things for granted:

We need to plant lots of seeds………

Sam Pitroda says “there is enough buzz over the $10 laptop. Let me tell you, there is no such thing as a $10 laptop today. Anybody who talks about a $10 laptop is ignorant. It’s not easy to develop technology and, with due respect, India has not yet developed any good products..., one can argue.”

Western ideas, Indian ends

Liberal economist Sauvik Chakraverti has great article in today's Mint.

One pondered how he narrates a simple idea into in a broader understanding. For me his writings are nothing but a marvelous path to realize how ignorant Indian economists are even in today. And they keep on teaching all those old dogmas which has already damaged Indian society more than one could imagine.

Friday, June 26, 2009

under the law there was “no remedy”


Unquestionably, the people hurt most by trade barriers are the citizens of countries where such policies exist.

Professor Dr. Donald J. Boudreaux on Free Trade and Prosperity:

“Free trade gives consumers the opportunity to buy goods and services from the best producers in the world. If shirts could be best produced domestically, then free trade would help to keep those producers profitably in business. Alternatively, if shirts could be best produced abroad, domestic consumers would only have ready access to those shirts through trade. Thus, free trade would encourage inefficient domestic shirt makers to use their talents for the maximum benefit of consumers by switching out of shirt-making and into other productive activities. By directing resources around the world into those tasks that each resource does best, free trade arranges the world’s resources so that they produce the greatest possible output while giving consumers maximum access to this output.

Thursday, June 25, 2009

Committee to Advise on Renovation and Rejuvenation of Higher Education

The Rao’s debacle!

Prof Arvind Panagariya writes “To make the announcement credible, he should appoint Dr Govinda Rao, arguably India's foremost public finance expert, as the 'GST Czar' for a two-year term with the sole mandate to ensure that at the end of his term India has a well-functioning GST in place.

School vouchers, please Govt monopoly is crime against children

Doing this for thousands of years

Prof Bibek Debroy is little nerves on the beast called government’s action on religion. He asks:

  • Is this what a 21st century India is about? There is a difference between personal practices and public policy. There is a narrower question of whether governments should propagate obscurantism. But there is a broader question about whether public policy should at all be based on religion. Is that the right interpretation of secularism? How can a government order religious organisations to undertake prayers or even supervise prayers that are being held? The reason is purse-strings, since such religious institutions receive endowments from government.
  • Why should there be an Endowments Minister and Ministry? Tirumala Tirupati Devasthanams (TTD) was established in 1932 and at that time, a colonial government may have wanted oversight. Regulation for something like TTD is fine, but does one need the AP Charitable and Hindu Religious Institutions and Endowments Act of 1987, or the ones that preceded it? Does one need the Board of Trustees of TTD to be packed with IAS officers and MLAs? Does one need the government to dabble in religion? That's a terrible idea. Since the government messes up most things, it will also mess up religion. Let's keep religion in the private domain.

 The reasons are below:

  • In Madhya Pradesh, "Som Yajnas" have been performed in Ujjain. As far as one can make out, the Som Yajna in Ujjain was performed by Sholapur's Veda Vijnana Ashrama, a private entity. The government requested the private entity to come to Ujjain and perform the yajna.
  • Though the Chief Minister Shivraj Singh Chouhan, participated in prayers, no financial transaction in terms of payment seems to have been made to Veda Vijnana Ashrama. By most indicators, Andhra is ahead of Madhya Pradesh and therefore, it is understandable that Andhra CM should do better. Not content with appealing to Hindus, Muslims and Christians to offer special prayers for rain, Y S Rajasekhara Reddy has gone a step further. All temples, mosques and churches in Andhra have been ordered to conduct special prayers. The Endowments Minister, G Venkat Reddy, will personally supervise the prayers being held, as per the orders.” 

Wednesday, June 24, 2009

In Search of a Monetary Constitution

"Buchanan said, teaching people to think about aggregate economics in terms of the measurements by which the economy today is understood – national product, income, rates of growth and so on. But no comparable advance has occurred since."

Chacha Milton Friedman

"Make politics an avocation, not a vocation."

Dr Tom G. Palmer links the importance of limited government to a sustainable democracy at Liberty Institute’s Julian L. Simon Memorial Lecture

It is interesting to read Palmer lecture on “Enduring Democracy and Limited Government: An unbreakable partnership.” However, the word "sustainable" is stucking somewhere or other way when he uses democracy.

People want a free-market economy

Niranjan Rajadhyaksha has a very good piece in today’s mint. The following are some of forgotten facts in development economics in India. 

  • “The poor are either ignored or patronized, crushed or pitied. Few seem to believe that these people are capable of helping themselves if they are given the right opportunities. It reminds me of the critique of development economics by Peter Thomas Bauer where people were treated as “lifeless bricks to be moved around by some master builder”. That attitude has not changed. 
  • Bauer himself was a great believer in direct observation. His studies on the rise of cash crops in countries such as Malaysia and Ghana involved a lot of field work. He showed that farmers in these countries were quite able to take the long view and plant cash crops that took years before they yielded any revenues; they responded to price signals; they had an instinctive understanding of risk. 
  • The poor show surprising sophistication when dealing with finances. “…we came to understand that money management is, for the poor, a fundamental and well understood part of everyday life,” the four authors say in the introduction.

The voluntary sector does credible work

A person writes in today’s ET that "Government has its own trust dilemma and resorts to red tape as an insurance policy, knowing fully well that this is not a medicine which cures.

And to be precise, as I agree with Kaushik Das who says the “wealth generation or development is not a state subject; rather, it is clearly a market subject. Put simply, development requires private saving, private investment and entrepreneurs working under the forces of free market competition—not under the umbrella of a big welfare state.” 

But it is stupid to argue that the “Education is an area of market failure, besides providing education especially school education is among the core duties of the state,”

Yashpal panel lays out road to reform

There is news which says that “There are no great universities in the world that do not simultaneously conduct world-class programmes in science, astronomy, management, languages, comparative literature, philosophy, psychology, information technology, law, political science, economics, agriculture and many other emerging disciplines. All the disciplines breed value into each other.” This is the model that the Yashpal Committee would like the new universities to follow."

Sibal toys with idea of school vouchers

Sibal toys with idea of school vouchers, but doubts remain

Tuesday, June 23, 2009

Mortgage in one lesson

Friend, Shruti Rajagopalan has interesting article tracks the present US financial crisis and shows the true picture of The State which is helpless and do nothing to solve but create the layers of crisis to prolong. She writes “are these “toxic asset prices” a good thing? Nobel Prize-winning economist F.A. Hayek would certainly think so. According to Hayek, the “most significant fact about this (price) system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action… Therefore, in abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned.” The price of the pearls is more than just what is on the sticker. Prices give away millions of small bundles of information to millions of individuals. If these prices are manipulated, or fixed by the government, they will distort the knowledge given by the prices.

Monday, June 22, 2009

Sauvik Chakraverti, The Editor, The Economic Times!

After reading Mr.Khushwant Singh's great article in the Hindustan Times published on last Saturday I immediately thought of Sauvik particularly for the following lines: he says “I think that once you have paid the full price for an article, it is unfair to make you pay more when you bring it home.” 

Imagine if Sauvik as an Editor of The Economic Times, I think that the Indian community will be sharpened their understanding of economics and the daily editorial will be a gun shoot for officials in government and the socialist propagators. 

In fact some years ago I met Asma Jehangir in a conference at Kashmir and all that is different story. 

For record I am posting the full article below: 

Stamp out the fundamentalists, gently by Khushwant Singh, June 19, 2009 

Whenever I read of a bomb blast somewhere in Pakistan — which is every other day — I think of Asma Jehangir. I hope she is safe in her home with her family in Lahore. She is prone to be wherever there is trouble. She defies the government, cocks a snook at religious bigots and propagates friendlier relations with India. She has become an icon of Indo-Pak brotherhood. She is in and out of India in connection with her work. When she has time to spare, she drops in on me. I welcome her visits. I get the latest news of what is going on in Pakistan at first hand. 

Asma was in Delhi recently for heart surgery. Before returning to Lahore, she breezed in to see me. I was overjoyed. I started off with the stock question: “What is going on in Pakistan

“What do you want to know ?” 

“Why do Muslims the world over, including Pakistan, suffer from a feeling of hurt and discrimination?” 

She explained in detail: the decline of Muslim power, of the cultural and scientific supremacy it once had, and looking for scapegoats as excuse. 

“Why the recent eruption of bigotry and its medieval penal codes — burqa, flogging girls, cutting off limbs, beheading, etc? Why don’t educated Pakistanis slam the door on their faces?” 

“They do. There is a rising tide of resentment against the attempted Talibanising. We have had enough of them. You’ll see the results soon enough.” 

“Stamp them out without killing them,” I said. “We in India have done so. Our fundoos count for very little today. They have been thrown into the dustbin of history.” 

Asma Jehangir smiled and said, “Well done! We’ll do the same. Inshallah!” 

Out of custom 

My heart goes out to Sheetal Mafatlal who has been arrested by Mumbai customs for trying to smuggle in gold and jewellery worth several lakhs without paying customs duty on them. I am on her side as I too have tried to do so in the past because I think that once you have paid the full price for an article, it is unfair to make you pay more when you bring it home. 

Her fate reminded me of a few encounters I had with customs officials. 

The first was when I was in college in England. Once, on my way back to London by boat, I bought a camera at Port Said. It was an expensive German camera newly out in the market. The shopkeeper who sold it to me gave me a receipt giving half its real price, so that I would not have much to shell out to British customs. At Southampton, where I disembarked and my luggage was examined, I showed my new purchase and the receipt. The custom official took the camera out of its leather case and showed me its market price printed on it, in Deutsch mark. It was double the price on the receipt. Very shamefacedly, I paid the duty demanded. I began to hate my camera. I couldn’t get a single good photograph out of it. Years later, I gave it away to my son. He got many excellent shots out of the same camera. 

Most of my foreign travel in later years was by air. I taught myself a few tricks. While in Bombay I had the logo of The Illustrated Weekly of India, of which I was the editor, reproduced on my suitcases. Customs officials were impressed and did not ask me too many questions. In Delhi I did the same with the logo of The Hindustan Times boldly displayed on my luggage. I was rarely asked to open my only suitcase. I walked through the green channel ‘nothing to declare’ with my head held high. I never felt guilty of cheating the customs. 

Since customs officers got X-rays which show all there is in your baggage, it has become difficult to sneak in taxable items without paying tax on them. Sheetal Mafatlal should have known this before she catwalked through the green channel. 

When you really know you have nothing to declare and a customs official refuses to believe anything you say, you can strike an indignant tone of righteousness. This happened to me when my wife and I were returning from a conference in Colombo. We had bought nothing as there was nothing worth buying. However, a cheeky young lass of Madras customs, new to her job, went through all we had and found nothing taxable. Her eyes fell on the gold Rolex watch I was wearing. She asked me to show it to her. I did so and told her it had belonged to my late father and was given to me by my mother when he died many years ago. And that I had been going in and out of foreign countries without anyone asking questions about it. “Why have you not put it in your passport?” she demanded. “Don’t be silly,” I roared, “Why the hell should it be on my passport?” She promptly reported my behaviour to her senior officer. He came fuming and asked me if I had used the word silly for her. I continued to roar, “You ask silly questions, you are silly. I am not paying duty on a 20-year old wrist watch. Do what you like.” 

My tone carried the day. Or perhaps the label on my case, “Editor, The Hindustan Times.” He apologised and let me go. 

File it, forget it 

This is a true story of an ingenious politician who was head of a government company which was to buy 40 buses for its transport fleet. After getting his palm duly greased, he asked his procurement-in-charge to put up a note recommending that the buses be bought from a particular firm. The note was duly put up. The politician wrote ‘approved’ below the note and signed. Meanwhile, another firm had got wind of the deal, so they approached the politician with a better kick-back offer. 

The politician recalled the file and added ‘Not’ in front of ‘Approved’. The original supplier then landed up and offered the politician a further cut. The politician calmly recalled the file a second time and added an ‘e’ after ‘Not’, so that now it read ‘Note Approved’. 

(Contributed by Rajeshwari Singh, New Delhi)

Thursday, June 18, 2009

The 25 percent of India's population with the highest IQ!

Harvey Mackay on Commencement—the beginning of life changes 

  • China will soon become the #1 English-speaking-country in the world.
  • 300 million people play basketball in China—the same number of people who live in the United States. I was amazed to initially learn this fact when I attended the Olympic Games in China last summer.
  • The 25 percent of India's population with the highest IQ is greater than the total population of the United States. Translation: India has more honors kids than America has kids.
  • We are living in times of exponential change. There are 31 billion searches on Google every month. In 2006, this number was less than a billion.
  • For students starting a four-year technical degree, half of what they learn in their first year of study will be outdated by their third year of study.

Public policy and the ability of private sector

Nouriel Roubini on BRIC and typically down grade India’s growth rate for 2009. In Forbes article he writes “Capital inflows and the IT boom played a large role in driving job creation, investment and asset bubbles in recent years. India's high dependence on foreign capital and IT exports increased its vulnerability to the global crisis. As a result, GDP growth in 2009 might fall to around 5% from the buoyant 8%-9% of recent years.” 

lose-lose option-Imagining India - Transportation Sector

For British India, infrastructure meant building roads and rail that focused on colonial requirements, rather than responses to popular demand.

Property rights is inevitable but Mr Hernando de Soto is not in our President mind

Shirish Patel has a good piece in today’s Indian Express in which he writes about the recent remarks by President of India in the Parliament. She said: 

“to states that are willing to assign property rights to people living in slum areas...to create a slum free India in five years.”  

Further Mr Patel writes: 

“Hernando de Soto, the distinguished Peruvian economist, in his book The Mystery of Capital asks why capitalism is a success in the West and a failure everywhere else. He concludes that it first happened because of the almost inadvertent creation of property rights, properly documented and enforceable. Originally designed to settle disputes, these recorded property rights have then provided the collateral needed to raise capital, and thus underpinned the entire process of funding innovation and entrepreneurship. In other words, capital comes to life because of enforceable property rights. The greater the number of people who have marketable, enforceable property rights, the bigger will be the pool of potential business talent and enterprise. The eventual result should be a stronger economy. Perhaps it is the poor who can make our country rich (and help themselves in the process).

So the proposal to assign property rights to those living is slums is entirely laudable. It gives the poor the same access to legal property transfers as are already enjoyed by the rich. And if they have the freedom to offer property as collateral it has the potential of opening up for the poor opportunities for access to capital as are already available to the rich. Now for the caveats.”

Wednesday, June 17, 2009

Markets are unsympathetic and unforgiving

It doesn’t mean The State or government is sympathetic and forgiving when you don’t pay your tax. 

This country is full of crooks and bad babus in all kinds of regulatory system which attempts maximum to help people die.  Recently I met a person whose job is a rescuing snakes and snakes bights. He told me no modern medicines are available in India if anyone gets snakes bights that have higher venom. More importantly he shared one of his experiences with Doctors in government Hospital and government officials. He said even for a fever one should not go to government hospitals. Of course it’s true but the poor people don’t have any other option because since independence our bureaucratic ruined all other option to give good healthcare to our people. 

Ramesh Ramanathan has worst experience with a person who had bad experience with government hospitals. I friend of mine told me a similar experience with his father critical operation in the government hospitals. 

Similarly, the ruining is happing in the retail sector in the country just see for example: 

A guy writes

  • "A Parliamentary Standing Committee on Commerce has actually recommended a blanket ban not only on FDI in organised retail, but also on domestic corporate heavyweights entering the sector. Already, several large domestic companies are into organised retail covering food, textiles, electronics, furniture and household items. 
  • ….it would be unfair to throw small retail among wolves, as it were, because markets are unsympathetic and unforgiving.
  • On the other hand, looking at the economic situation in the country (with over 200 million below the poverty line and many hundreds of millions barely managing to make ends meet) there is absolutely no urgency to open up FDI in retail.
  • The country can do without it for some time. But it is important that the process of capacity building among unorganised retail commences soon.
  • Another issue is regulation. A strong regulatory oversight may help bring some discipline.

Live Free or Die

A veteran libertarian economist Dr.Walter E. Williams arguesWe forget that once we have government-sponsored health care, it can be used to justify almost any restraint on liberty. That's the justification behind helmet and seatbelt laws. Britain is well along the road toward totally controlling health care. Steyn says, "Under Britain's National Health Service, for example, smokers in Manchester have been denied treatment for heart disease, and the obese in Suffolk are refused hip and knee replacements. Patricia Hewitt, the British Health Secretary, says that it's appropriate to decline treatment on the basis of 'lifestyle choices.'" Steyn adds, "Smokers and the obese may look at their gay neighbor having unprotected sex with multiple partners, and wonder why his 'lifestyle choices' get a pass while theirs don't. But that's the point: Tyranny is always whimsical."

Focus must on such spending, not on tax cuts

Hardly any libertarian disputes, the Indian with what Mr Aiyar saysMukherjee….. must step up spending on infrastructure, especially rural infrastructure, which will combat the recession while strengthening the foundation for future growth.” 

But I am sure almost everyone will disagree with what Mr Aiyar says Mukherjeefocus must on such spending, not on tax cuts.” 

Tuesday, June 16, 2009

Rudrapatnam Shamashastry and Mr Kutila

“…..a broad humanities culture does not come from the market. It comes internally, when scholars no longer believe that the purpose of education is to distinguish the truly valuable from the merely fashionable, the purely instrumental from the genuinely elevating thought.

Bangla-accented English

Prof Yashpal and Ms. HECR!

The below lines taken from a interview by Professor Yashpal on India’s Higher Education. 

“…………….teachers are not courier agents.  

 So you don’t believe in dual degrees? 

What is a dual degree? Today, textbooks should be banned. The MIT (Massachusetts Institute of Technology) is open access, has its text books and notes on the net. So does that mean that you will get a degree from the MIT if you reproduce it? 

 So you don’t support the foreign universities Bill? 

There is no wisdom to be got from outside the country. Whatever is there, is on the net. Setting up a university is not buying office space and furnishing it. There is more to it, something that comes from the teacher-student interface. That can be imparted by imported teachers. The foreign university Bill is only about signing agreements between babus in India and abroad. It has little to do with education. Why did world-renowned radio astronomer Prof Govind Swarup start teaching here?

Saturday, June 13, 2009

What is the difference between rocket science and social science?

A Indian Civil servant writes

“It is the presumption that the science of economics is somehow subject to some universal, natural laws which is the issue.  

Economists, after all, were the awesome rocket scientists of the social sciences, complete with calculus, regressions, complex equations and econometric models.

 ……..the discipline of economics from the jaws of rocket scientists and mathematicians and handing it back to macro-economists, economic historians and political-economists. Social scientists need to reclaim the dismal science and spruce it up."

Fallacies in First Past The Post election system

S. Srinivasan writes:

Belgium was the first country to introduce proportional representation in 1899 for national legislative elections to its lower chamber.

Today, besides Belgium, Australia, Austria, Cyprus, Denmark, Finland, Germany, Greece, Iceland, Ireland, Malta, Monaco, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden and Switzerland adopt one of the many models of proportional representation.

Single transferable vote, choice voting or the Hare-Clark System are systems that asks the voters to rank candidates on the ballot. Voters’ choice is based on ranking the candidates rather than on choosing a party, so voters can choose between candidates from the same party or vote for candidates from different parties.

The single non-transferable vote system enables the voter to cast a single vote for one candidate in a multi-member constituency. In a four-seat constituency, among the candidates contesting, the four receiving the largest number of votes individually would win the seats.

The Party List System is currently adopted by many democracies in Western Europe. This model has two variants. Each party nominates a list of candidates equivalent to the number of seats to be filled from a constituency.

In the ‘Closed List System’, the party fixes the order in which the candidates are listed and elected and the voter casts one vote for the party list as a whole. Thus, if a party wins enough votes to be awarded three seats, the first three candidates listed on the ballot are automatically elected. On the other hand ‘Open List’ allows voters to choose the candidate they like. Votes are cast for candidates and not for parties.

The most popular model adopted and considered fit for adoption by many countries is the German model known as the Mixed Member System, that includes members elected both from single-member constituencies and from party lists. In many cases, half the seats are filled from single-member constituencies and the other half from the party lists. Voters cast two votes; one for the local candidate of their choice and one for the party of their choice.”

Friday, June 12, 2009

Global Recession and Liberalism

A talk by Dr Parth J. Shah  on “Global Recession: Chances and Challenges of Liberalism”,

Bravo Ruskin Bond Sahib

“When the great socialist government of Uttarakhand has destroyed Dehra Dun, Ruskin Bond’s town will still be there.

Frum on Mark Levin's "Liberty and Tyranny"

All the private medical, dental, engineering and management institutions are not profit oriented!

Manoj Pant has article in today’s ET with some facts about higher education and FDI in India but entirely his ideas are not new, in fact how can any one expect anew idea from Marxist stricken university like JNU? 

  • “……all the private medical, dental, engineering and management institutions are not profit oriented! 
  • FDI in higher education will squeeze state institutions. This is probably the main concern. That public sector institutions hampered by state controls would not be able to compete with the foreign institutions. There is no “level playing field”. But the counter argument is compelling: if state-run banks could be subject to competition from private foreign banks why not state-run educational institutions? As in the case of state-owned banks (who also have a social commitment) is it not possible that state institutions would also improve their services with competition?  
  • FDI would bring in competition. This is easily the strongest argument in favour of FDI. Today state-run higher education can accommodate only about 10% of eligible students. Even with the ambitious plans to have new central universities this figure would only go up to about 15%. As recent media exposes show, private institutions are fleecing students via both regular and capitation fees. 
  • Many unscrupulous state institutions have aided this process via what are called “deemed (doomed?) universities” or “affiliated institutes”. As a consequence, the better students are looking for foreign pastures while the wealthier ones obtain dubious degrees. What is even worse, the dubious institutes (many linked with domestic schools) are tying up with even more dubious foreign institutes in granting “foreign” degrees. 
  • That is really the problem. With insufficient domestic capacity, private institutions are having a field day. In fact, the principal opposition to FDI in higher education would really come from this private sector. As is well known, most of the private education providers have links to business and/or are owned by politicians. So who will push through legislation allowing competition? Which politician would kill the goose which lays the golden egg? 
  • It is impossible that, in the near future, the state will generate sufficient capacity to raise the gross enrolment ratio in higher education to 30-35% as in most comparable developing countries. In fact, spreading the state control too wide might well result in decline in quality of existing state institutions. Historically, R&D normally emanates from universities and the Indian state can ill afford to allow things to slide here. But why bat for the private sector?

When the rupee crumbled

“Her cabinet had endorsed devaluation earlier in the evening, with Manubhai Shah alone dissenting. Only at the eleventh hour did it strike the prime minister that she must also consult the powerful Congress president, K. Kamaraj. According to R. Venkataraman, then a member of the Planning Commission and later President, who was acting as interpreter because Kamaraj spoke only Tamil, the Congress president “hit the ceiling” and told her that she was “courting disaster”. Kamaraj also muttered to RV: “A big man’s daughter, a small man’s mistake”. However, it was too late to change the process already set into motion.

Thursday, June 11, 2009

Street is no mood to listen like you think!

Yes, says Philip Delves Broughton:

“Time after time, and scandal after scandal, it seems that a school that graduates just 900 students a year finds itself in the thick of it. Yet there is remarkably little contrition. ....You can draw up a list of the greatest entrepreneurs of recent history, from Larry Page and Sergey Brin of Google and Bill Gates of Microsoft, to Michael Dell, Richard Branson, Lakshmi Mittal — and there’s not an MBA between them. 

Yet the MBA industry continues to grow, and business schools provide vital income to academic institutions: 500,000 people around the world now graduate each year with an MBA, 150,000 of those in the United States, creating their own management class within global business. Given the present chaos, shouldn’t we be asking if businesseducation
 is not just a waste of time, but actually damaging to our economic health?” 

But T T Ram Mohan of IIMA seriously  think:

"But much of the talk about B-schools creating ‘ethical leaders’ can be dangerous nonsense. "

The Age of Milton Friedman

Wednesday, June 10, 2009

Fallacy is the State of Economists mind

Since the mega event of major financial crisis in US followed by UK, economists and analysts around the world did (and continues even now) all kind of noises about the reasons for collapse and the magic of economic recovery. 

There are three groups of economists/analysts at least in my view. One group argues based on the people who warned in the pre crisis which said the central bank was dead sleep, in the sense that they failed to see their actions in terms of trend in interest rate, credit flows, risk involved in 100% loan etc, the second group which is the post crisis accident group which argues by blaming the notion of capitalism, wait, this group neither understand the central banks regulations in the past and what they did and did not do and finally the third group which is part of first group. This group accepts the central bank failure along with government and absurdly proposes to print more money or increase deficit financing like anything to recover the economy.

As for as the Indian economy which I continue to observe and it is natural to ask how Indian economy pushed into slowdown and what is the evident to say Indian economy is severely affected by the US financial crisis? 

There is another group which is mixed of all argues that the world and Indian economy is in economic crisis which is stupid. Further this group does not understand difference between economic and financial crisis and the results is absurdly comparing the current crisis with 1930s. More importantly by ignoring the facts of Milton Friedman and F A Hayek who best explained what cased the 1930s depression. 

Indian economists/analysts are no different from rest of the world. I mean how the hay of noise mounted by economists and analysts with out figuring out the reality. 

Precisely a few people said what Mr Jha said which I think right in an article published in today’s ET. 

What went wrong in the Indian economy and how unnecessarily we are in slowdown is best explained by economist Prem Shankar Jha: 

  • “But in 2008 the economy had already slowed down sharply because of the increase in interest rates that the Reserve Bank had engineered in 2007. So a more pertinent comparison is with 2007. In January to March 2007 industry grew at 12% a year. This dropped to 7% in the same quarter of 2008. It has fallen to minus 0.9% this year. The last 12 months’ decline has not therefore been caused by the global economic recession alone.  
  • The reason is that the slowdown did not begin in October last year but in 2007 when the RBI mounted its battle against the phantom of inflation by savagely reducing the supply of available credit in the market. It had had all the time it needed to spread from the consumer durables into the capital goods industries. 
  • The most unequivocal sign that the deceleration is continuing to deepen is the sharp drop in the volume of new lending by the commercial banks. Net bank credit has actually fallen by Rs 37,000 crore in the six weeks between April 10, and May 22. While seasonal factors are partly responsible for this, the main cause is a drastic slowdown in the growth of bank lending that has been evident since November. As a result, In the previous full year (May 23, 2008 to May 22, 2009) credit extended by the commercial banks expanded by only 15.7% against 25.3% in the corresponding period of 2006-7”. 

Indeed the whole article is worth to read.

Moribund free marketers in the TOI

A socialist commentator writes in the TOI that “The rich in India are among the world's most under-taxed. Since the 1930s to the Thatcher-Reagan era, the western capitalist countries had a top tax rate of 60 to 80 per cent and a direct tax-GDP ratio of 35 to 55 per cent. India's ratio, under 10 per cent, cannot fund public services. These changes will be resisted tooth and nail. But if the Congress recognises the roots of its own success, and Rahul Gandhi takes his social sector commitments seriously, the government must forge ahead with the New Deal.” 

Tuesday, June 9, 2009

Our BEd programs are a complete joke

Our BEd programs are a complete joke

Reading the history means reading somebody’s mind

Yes, re-reading the “machinery of government” or The State is worth like anything says economist Bibek Debroy in the Indian Express. He quotes something which is terribly practical for a century if the India choose to go like in the past.

Let’s go to the quote:

From a report on Reorganisation of the Machinery of Government and the author was N. Gopalaswami Ayyangar, 1949.

  • “There is need for carrying out organisational changes in the existing set-up of the machinery of government. This is so because there is insufficient coordination in the framing of policies and plans and inadequate speed and efficiency in their execution... It is necessary to bring about such changes in machinery and procedure as would render the process of expenditure sanction more intelligent, well-informed and speedy, and thereby remove the sense of frustration which afflicts, at any rate, several ministries and departments at present; and, at the same time, to tighten up the process of budget control of expenditure, and to promote economy-consciousness and sense of financial responsibility throughout all administrative departments. These are the effective safeguards against extravagance.”

From A.D. Gorwala’s Report on Public Administration1951:

  • “This feeling is intensified by a fairly general belief in the lack of integrity of many of those in high position... No government, least of all the Government of India, at the present juncture, can afford to proceed on the basis that it is better to attempt many things than to achieve a few. If it does so attempt, it must dissipate its energies and resources to little purpose. The basic things are food, clothing and shelter... It does seem that today, after providing for the legitimate requirements of external and internal security, the most important task of Government is that which falls within the economic sphere... There are undoubtedly many other activities in which a modern government has to take part and these cannot altogether be ignored, but the effort and expenditure... on these must obviously not be such as to prejudice the fundamental task, for, if this fails, everything else must also fail.”

From Dr Manmohan Singh speech at Conference of Chief Ministers and Chief Justices September 18, 2004:

  • “The institutions of governance fashioned by our founding fathers of our Republic have served us well over the last five decades. However, it is fair to state that many of the institutions have been of late showing signs of stress and today, the efficiency and effectiveness of many of these institutions are being questioned. There is growing dissatisfaction regarding the functioning of the executive and the legislature and their ability to deliver effective governance to meet the needs and challenges of our times.” 

Father of the cell phone

Father of the cell phone

A broken school system

A broken school system

Without Nath everything is hunky dory

Without Nath everything is hunky dory

Saturday, June 6, 2009

Digital socialism

The New Socialism: Global Collectivist Society Is Coming Online

Adiga: India's stagnant, corrupt socialist economy......

From Adiga interesting interview:

Q: What were some of the challenges or advantages of writing two books at the same time?

A: Between the Assassinations and The White Tiger were conceived as two books that would tell one story. It was always my plan to create two narratives about India, set on either side of the landmark year of 1991, when the stagnant, corrupt socialist economy was opened up to capitalism and globalization. These forces created the "new India" – of rapid economic growth and massive inequality – which is the India of The White Tiger.

Between the Assassinations tells the story of the final years of the old India. In that sense, the two books complemented one another quite well. In fact, The White Tiger grew out of a couple of the stories in Between the Assassinations. There are echoes of The White Tiger in Between the Assassinations. At least one vignette in Between the Assassinations – which was first published inThe New Yorker as "The Elephant" – features a poor man tempted by violence and crime, but then takes a very different turn from The White Tiger.

Q: What appeals to you about the seven-day time frame as a structural device?

A: Since the two books were written at the same time, and they are mirror images of each other, it follows that the structure of the stories is also somehow similar.

Q: What is significant about the time between the Gandhi assassinations?

A: The assassination of Prime Minister Indira Gandhi in 1984 traumatized India, but it also opened up the possibility that the economically stagnant and corrupt India that she had created could be reformed and modernized. But after a promising start, the man who replaced her as prime minister – her son, Rajiv – failed to change India, and his years in power were years of frustrated hope and failed dreams.

Q: How is the India of that time different from the more contemporary India of The White Tiger?

A: It was only after Rajiv's death that the old India was finally swept away. The years between the assassinations are the last years of the old regime. They are a time of dashed hopes and of crisis; yet the men and women who endured these years did so by learning the virtues of perseverance, resignation and compassion – virtues that have become less conspicuous in the new India of The White Tiger. In that sense, Between the Assassinations is not a prelude to The White Tiger but presents an alternative vision of India – and poses a challenge to The White Tiger.

Q: Please share an anecdote about something that happened to you as a consequence of winning the Booker.

A: In the Mumbai airport a few weeks ago, a woman recognized me from my photograph and said, "Your book has changed the way I see my servants." This wouldn't have happened if not for the Booker. It was one of the rare moments in the past few months when I've been glad that I won.

Are Indian people better off under free markets?

Friday, June 5, 2009

UPA II’s tokenism by a woman as President and as Speaker

JD (U) chief Sharad Yadav said Parliamen

"We may not have the numbers but I will consume poison and die here but not allow the passage of the Women's Reservation Bill”………. "Congress party has been resorting to tokenism by appointing a woman as President and as Speaker," 

There is no such thing as “human rights”

Paul L Poirot argues very interestingly that “A man without property rights-without the right to the product of his own labor- is not a free man…..the real distinction is not between property rights and human rights, but between equality of protection from governmental compulsion on the one hand and demands for the exercise of such compulsion for the benefit of favored groups on the other”.


Professor Jagdish Bhagwati's on Chacha Manmohan Singh

Professor Jagdish Bhagwati's first take on the new Indian Government

June 05, 2009, 3:36 AM

I was asked to respond to questions about the Prime Minister and India's policies after the elections, by a well-known foreign journalist writing a story on this subject. Below are the complete questions and my answers which the journalist will quote from.

Q1. What, in your understanding, is Prime Minister Manmohan Singh's understanding of so-called "inclusive growth?"

Ans: He has always understood that the economic reforms which he started implementing wholeheartedly when he was Finance Minister would be the most important single change that would accelerate growth and finally reduce poverty, as indeed they have. This is "inclusive growth" indeed. This growth has directly pulled people out of poverty; it has also generated revenues without which little can be spent on bringing benefits such as health and education to the poor and the marginalized. The Prime Minister has always been explicit on these matters, criticising the critics of the reforms that fail to understanfd that, without growth and the accompanying growth of revenues, the "inclusive growth" that we planned for since the 1950s cannot be delivered.

Q2. Throughout his first term, Manmohan Singh was often criticized as weak, accused of being a puppet of Sonia Gandhi, and denigrated for caving in to the demands of the Left. Another Newsweek writer even blasted him for "missing his moment." In hindsight, it looks more like he was biding his time. Is he a natural compromiser, or was he simply a more savvy politician
than people gave him credit for?

ANS. The PM has had a strong partnership with Mrs. Sonia Gandhi who is the effective politician who has managed to turn the Congress Party back into a viable political party. But this "team" was shackled by having to work with rejectionist communist allies. Now that they are unshackled, we can expect that the PM will intensify the reforms which were largely on hold. Interestingly, Rahul Gandhi has also been emphasizing growth; and the post-1991 experience only underlines the fact that intensified economic reforms are the principal answer to our challenges.

Q3. One of the most interesting developments in the recent election was when Manmohan Singh began to respond directly to the charges leveled at him by LK Advani and others that he was a weak PM. What did you make of Singh's tough talk? Was that out of character?

ANS. In my long-standing experience with him since our days in Cambridge together fifty years ago, the PM has always displayed quiet strength of convictions and character, not the Oxbridge flamoyance. He is polite but no patsy. When Mr. Advani's criticisms got out of bounds, the PM responded firmly but without rancour.

Q4. There's a popular perception (though I'm not sure on what it is founded) that Manmohan Singh is a free marketeer, and Sonia Gandhi is the socialist /populist part of the equation. What's your assessment of Singh's opinion on issues like globalization, deregulation and the "religion of free trade?"

ANS. This contrast is only true in the sense that Mrs. Gandhi has to> cement and lead the Congress Party with its diverse elements and she has had to manage the alliance with anti-reformers like the communists, whereas the PM has to lead on policies. The PM, and indeed Mrs. Gandhi and Rahul Gandhi, are fully aware of how India has finally begun to have what Jawaharlal Nehru called our "tryst with destiny", only thanks to the reforms that included surmounting the fear of globalization and of freer trade; and that this has finally enabled us also to deliver on Mahtama Gandhi's vision of an India without poverty. They are unlikely to reverse course and return to the bankrupt policies of the pre-reform past to which the populists and ultra-leftists cling with impassioned nostalgia.

Thursday, June 4, 2009

Out of many, one

From Obama's speech to Muslims in CairoIt was innovation in Muslim communities that developed the order of algebra; our magnetic compass and tools of navigation; our mastery of pens and printing; our understanding of how disease spreads and how it can be healed. Islamic culture has given us majestic arches and soaring spires; timeless poetry and cherished music; elegant calligraphy and places of peaceful contemplation. And throughout history, Islam has demonstrated through words and deeds the possibilities of religious tolerance and racial equality.” 

Indian babus most inefficient in Asia

From todays ET edtioral "In a damning judgement on the babus, the Political and Economic Risk Consultancy (PERC), which released the survey report on Wednesday, said "India's suffocating bureaucracy was ranked the least efficient” and that working with the country's civil servants was a "slow and painful" process. 

"They are a power centre in their own right at both the national and state levels, and are extremely resistant to reform that affects them or the way they go about their duties," PERC concluded. "

Government is not part of the problem, it is the problem

Yes, T C A had believed actually other way around, thanks to his honest education.

“The Government is not part of the problem, it is the problem. Its brain is scintillatingly alive, but neck downwards it is completely paralysed, excepting for corruption,” says T. C. A. SRINIVASA-RAGHAVAN.