Tuesday, July 6, 2010

Invisible Hayek’s Gangs among Indian economists!!

This is the first time I hear about economist Yoginder K. Alagh writing on Prof F A Hayek:

In today’s IE he writes:

  • As a country we seem to live in a state of nirvana. The discipline of strategic policies and planning was quietly given up almost two decades ago, so quietly that the logic of markets was never explained. Even as he brought in a Hayekian world with a vengeance, PM Narasimha Rao talked Nehru’s socialism right up to his defeat in 1996. His successor, understandably, did not want to be the bearer of bad news either.

  • we needed to explain to our people that we will now, subject to some restrictions and regulations, follow free markets and that means that prices at home and abroad will not only be costs, but will also play a role in allocating resources.

  • When people are hurt they will be angry, but it is the dharma of an economist, who’s not entering a popularity contest, to say that some prices have to rise for all of us to be better. I don’t believe in free markets for a strategic vision is the heart of policy in a poor country, but living in western India I know that some things markets do better than economists and babus and we must use them, where they work.

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