Tuesday, August 31, 2010

Letters in spirits erode nothing but the ‘evil’

Recently I happen to read some of articles written by Jude Blanchette. The following are some of collection of letters written to various newspapers by Professor F A Hayek and Mises and Oskar Morgenstern. in the early decades of twentieth century.

From the "Austrian Economists as Denizens of the Popular Press"

  • In 1923, a 24 year old F.A. Hayek wrote a letter to the editor of The New York Times in which he detailed incipient inflationary forces in Germany that had already devalued the mark to 1/500 of its value. "It is a matter of common knowledge," the young Hayek wrote, "that Germany's middle classes, including the small merchant and manufacturer, have lost almost everything."

  • In a series of letters to the editor of The New York Times, for example, Mises outlined the socialistic nature of the Nazi regime. In a 1942 letter, he wrote that in Germany, "Market exchange and entrepreneurship are thus only a sham. The government, not the consumers' demands, direct production; the government, not the market, fixes every individual's income and expenditure. This is socialism with the outward appearance of capitalism ¾ all-round planning and total control of all economic activities by the government."

  • The need to overcome economic nationalism through trade and commerce, an important theme throughout the work of Mises, was the subject of a 1943 letter to The New York Times. In this letter, entitled, "Super-National Organization Held No Way to Peace," Mises writes that, "The building up of a lasting union of the peace-loving nations is not a technical problem of conventions, constitutions and bureaucratic organizations. Economic nationalism cannot be eradicated by measures of a purely institutional character. What is needed is a radical change in political mentalities and social and economic mentalities."

  • In a series of New York Times op-eds published in the 1950's, Oskar Morgenstern championed the capitalism of Hong Kong and noted the failings of the "third way" in Sweden. A 1954 piece entitled "Capitalist Oasis" details the remarkable progress made by the tiny island of Hong Kong, "a paragon of capitalist freedom."

  • What would be of particular interest to Austrians, and indeed was for Morgenstern, was the regulation of money, or lack thereof. "The money market is remarkable in that three private banks are still allowed to issue banknotes of their own, which constitute the local currency in circulation apart from government coins. There is no central bank, but whether because of this or in spite of this, the money system is very stable. Every currency can be transacted freely and there is no control over capital movements in and out."
  • In a remarkable four-part series appearing in the Wall Street Journal beginning December 12, 1949 and ending four days later, Mises condensed his critique of socialism and addressed it to the masses. The four op-eds were published under the titles "The Socialist Society," "The Socialist Planner," "Socialism's Unique Problem" and "Socialism in Disguise."

  • Hayek, for his part, took to the offensive in articulating the ideas of freedom. In a response to Professor Harold Laski, appearing in The New York Times, on the question of "Is the World going to the Left?" Hayek reiterates the need for individual thought and freedom in the face of totalitarian pressures.

  • "The century from 1848 to 1948 will probably come to be known as the century of Socialist delusion, a century during which, as a result of sheer intellectual error, so much good-will was canalized into efforts which very nearly succeeded in destroying the values the people most wanted to preserve."

  • In Socialism, Mises wrote that, "Only ideas can overcome ideas and it is only the ideas of Capitalism and of Liberalism that can overcome Socialism. Only by a battle of ideas can a decision be reached."

Also read:

  1. Education is the Effect, Not the Cause, of Affluence by Jude Blanchette
  2. Government Is Better than the Market at Producing Human Capital? by Jude Blanchette
  3. We Have Enough Globalization?by Jude Blanchette

It is not the question of “Spend vs Save” rather getting freedom to decide by their own than theft by The State!

A Civil Servant writes in today’s ET:

  • Received wisdom, in the form of economic theory, has relatively little to offer. There is the brilliant Keynes advocating deficit spending to boost sagging demand and depressed business expectations. But there is also the no less brilliant Nobel Laureate, Friedrich von Hayek pointing out that while the main deficiency during recessions is investment, the world’s troubles are because of imprudent borrowing and lending by public authorities, who mortgage budgets of the future and tend to drive up the rate of interest. According to Hayek, the right way to help revival is to abolish old habits of lavish expenditure, and abolish the restrictions on free trade and free movement of capital.

Questions at stroke:

  • What is the nature of the particular economy in respect of which prescriptions are being made? Is it an open economy or a closed economy? Is it a free-market economy or a planned economy, and if so to what extent? Is the nature of the economy likely to change with the answers to the basic question being debated, and how will that impact the fundamental impulse to progress, which has been the bedrock of progress in that economy? What is the current level and nature of unemployment in the economy? How will this be affected by the decision to spend or save?

  • A second set of questions pertains to the specific fiscal parameters of the particular economy. What has been the level and nature of past deficits and government and private debt, which determines the present scope for incurring deficits? What has been the level of past economic growth? Does this limit the prospects for future economic growth? What are the likely fiscal multipliers? If positive in overall terms, which are the specific sectors where they are highest? How will the impact of fiscal deficits be shared as between the domestic and external economy in a flat, and yet not quite flat world?

  • There is a similar set of questions with respect to the potential for monetary policy effectiveness . What is the level of interest rates? Of inflation? Other possibilities of quantitative easing? Are there ways of making credit move to deserving sectors, without leading to irresponsible lending, as seemed to have happened when crisis first struck?

Truly, the caveat lies here when this civil servant muses:

  • Keynes and Hayek, would then be not on different streets, nor would Wall Street and Main Street or Fleet Street for that matter! Truly a utopian vision, but one worth working towards.

Really, really…..

Monday, August 30, 2010

Uselessness of manufacturing or vice versa

Prof Jagdish Bhagwati on There is no proof that economic health depends on manufacturing”.

Spreading Hayek, Spurning Keynes

That is the title of article which profiles GMU Professor Peter J Boettke in the WSJ.

One thing I find horrible to see is the following lines:

  • In 1990, Mr. Boettke landed a job at New York University. "It was a dream come true," he says. Economics at NYU had legendary Austrian roots, but the school started to move toward a more standard mathematical approach, former colleagues say. Mr. Boettke was denied tenure in 1997, a blow to his personal ambitions.

  • The period also marked a low point for the Austrian field. Its philosophical approach looked old-fashioned amid the mathematical models dominating modern economics.

Friday, August 27, 2010

Hayek on democracy

“Egalitarianism is of course not a majority view but a product of the necessity under unlimited democracy to solicit the support even of the worst…. It is by the slogan that ‘it is not your fault’ that the demagoguery of unlimited democracy, assisted by a scientistic psychology, has come to the support of those who claim a share in the wealth of our society without submitting to the discipline to which it is due. It is not by conceding ‘a right to equal concern and respect’ to those who break the code that civilization is maintained…”

I have the book with me but not right now, will try to see what continue after the above paragraph.

(HT to cafehayek)

See here for more on the original post by DeLong.

Higher education =Profiting Myths

Anurag Behar observes:

  • “Even shallower is the notion that private “profit seeking” capital can somehow help in revitalizing higher education. Look at the commercial structure of US universities: the top 50 are either government-funded or have very significant philanthropic “endowments”. Even the top 10 “private universities” in the US, the Harvards, Yales and Stanfords, support 25-60% of their expenses through the returns on their endowment funds, besides other grants and contributions. These universities do not make “profits” in any sense of that word—and certainly not in the sense of providing returns to whoever has invested the capital. In simple terms, if the philanthropic endowments and other grants were not there, these universities would not exist.

Food is the Minister1

P. Sainath on definition of food security

Indian Socialism 2.0

Siddharth Singh writes:

  • “The traditional concept of socialism is based on state control of the means of production and intervention in pricing and production decisions in product markets. It was this version of socialism that so exercised economists such as Friedrich August Hayek, Ludwig von Mises and other critics of socialism. India never went down the Soviet road, and, as a result, avoided the worst excesses of that system. Instead of total state control, India had state-owned enterprises coupled with pervasive controls over various markets. Even this watered down version of socialism killed growth in India and led to a balance of payments crisis in 1991.

Genius for Compromise by Hayek

“Richard Ebeling has unearthed a very interesting column by Hayek from The Spectator in 1945. The context was as a response to some of the critics of The Road to Serfdom. As Richard noted in his email to us, this presages Hayek's discussion of principles and expediency in Law, Legislation, and Liberty. It is also very relevant to our own times. …...

Thanks to The Austrian Economists Blog.

Tuesday, August 24, 2010

Happiness or pleasures

I use to read regularly the weekly coverage of 'the third EYE' in the Indian Express. The last question is always asked about the 'happiness'. When the Senior Congress leader Mani Shankar Aiyer was interviewed he answered which is absolutly a fair answer than expected from a hardcore Marxist of himself than the CPI!

Unfortunately the link is not available.

Anyway what Benjamin Disraeli poem take us through:

“Happiness doesn’t occur by itself

You cause it to happen or not,

Yours is the choice to be unhappy in life

Or to be content with the life you’ve got.

How you relate to life’s events

Determines your joy and misery,

Whether your feelings are mean or kind

Your attitude to life is the key.

You can make up your mind to be happy

Life will be more rewarding if you do

For happiness is a state of mind

Developed and controlled by you.

Don’t wait to be happy until things are just right

Don’t let life’s little annoyances get in the way.

You can be as happy as you decide to be

And you can decide to be happy today.”

From Bureaucracy Today, August 2010, P.50

Monday, August 23, 2010

In nature there exists no democracy, nor equality

Mr.Natwar Singh’s mourning thoughts:

  • Even today, 36 per cent of men and 45 per cent of women cannot read or write. Yet, almost all of them know their Ramayan and Mahabharat well. A couplet from Tulsidas clinches an argument.
  • A striking linguistic feature of our national language Hindi is its undemocratic underpinning. Hindi-speakers address one set of people as aap, another group is demoted to tum, and finally there is the ubiquitous tu. No reform will change this linguistic Hindi uniqueness.
  • In nature there exists no democracy, nor equality. Who have suffered the most in the floods in China and Pakistan? The poor. Who have been at the fiery end in Russia? The poor. Against nature’s arbitrariness and fury, we human beings have no armour or shelter. Nature holds all the aces. What about Surya Dev (the Sun)? Surely He or It shines over every one. Yes, but its divine rays produce a Sahara, a Greenland and the ever-dark forests of the Amazon. The conclusion is inescapable, nature triumphs. This is not fatalism. This is reality. We are at the mercy of nature.

The mindset of a man

No, it is the morality of the man. Read this sad story of how a policeman runs Hindi university.


Really worthy to read this piece and see how many are actually out of our tiny mind!

Particularly: “…I am absolutely knocked down by news of Mansukhbhai Prajapati, that incredible school drop-out of Rajkot in Gujarat, who has won a National Award from the hands of the President, and been hailed as a ‘true scientist' by Abdul Kalam, for his low-cost MittiCool refrigerator made of clay which can store water, fruits and vegetables for eight days and milk for one day, not to mention his other patents — water-filter, non-stick tava and pressure cooker — all made of clay and available at a tiny fraction of the price of products of multi-nationals.”

Friday, August 20, 2010

How to evaluate your moral

Ananya Vajpey gives some clue how M K Gandhi had evaluated not in the name of nation freedom but as an individual first:

  • Talking about Gandhi in Kashmir (or in Maoist India) seems laughable. But Gandhi it was whom India listened to, when it fought hardest for its own decolonisation between 1920 and 1950. Throughout this time, the Mahatma tried to establish certain core ethical values for a new politics of swaraj. Among these were ideas that had a long history on the Indian subcontinent, such as ahimsa. We usually translate this as “non-violence”, but what Gandhi really meant was the moral courage necessary to relate to another person without the desire to harm him.

  • THIS moral courage is difficult to achieve between any two persons, but it is hardest, and most essential, that ahimsa prevail in the relationship between adversaries, so Gandhi believed. He got the lesson of ahimsa, oddly enough, not from Asoka the Mauryan emperor of the 3rd century BC, who became a pacifist after causing great carnage , nor from Jain doctrine, which enshrines ahimsa as a key practice, but from the Bhagavad Gita, in which Krishna teaches Arjuna how to put up a good fight, without compromising his basic sense of morality and decency.

  • But Gandhi also insisted on satya, the truth, enshrined in India’s national motto, satyameva jayate, “truth alone prevails” . In addition, he wanted India to recover its oldest tenets of ethical sovereignty : anukrosha, from the Ramayana , the capacity to feel another’s pain; aanrishamsya, from the Mahabharata, the elimination of cruelty from one’s conduct, which Yudhisthira recognised as the highest dharma, the norm-ofnorms , especially for a king. Gandhi sought not just political independence from British rule, but a truly liberating political culture, grounded in age-old ethical norms like non-violence , moral courage, non-cruelty , truthfulness and compassion. Without these values in place, he said, India would never be free, never have true swaraj.

IAS=Indian Azadi Service

In a recent Walk The Talk show Mr.Shekhar Gupta asked the new Chief Election Commissioner of India Mr S Y Quraishi:

N R Narayana Murthy is taking the lead in asking for the civil service to be reformed. Out of sheer frustration, he is even asking for the abolition of IAS. He says it has no accountability.

  • I beg to differ on that. You can abolish the IAS but you will have to substitute it with some other organisation. Can you guarantee that they will be different?

From AI:

  • The Government of India has released the findings of the first ever survey of the Indian Civil Services. The report titled "Civil Services Survey - A Report" surveyed officers from all 3 India Services (The Indian Administrative Service (IAS), Indian Police Service (IPS) and the Indian Forest Service (IFoS)) as well as officers of 7 Central Services. In total, the Survey covered 18432 officers belonging to the ten selected services. Out of the total questionnaires sent, 4808 officers responded to the survey which is 26% of the total universe.

  • The survey was conducted to assess the perceptions of civil servants on 11 major thematic areas including work environment, transfers, postings, integrity to harassment and discrimination. Read the full report online the pdf version of the report here.

Thursday, August 19, 2010

Urban apathy

According a Government of India’s Ministry of Urban Development:

  • Rating of 423 Class- I cities on various sanitation related parameters has been conducted under the National Urban Sanitation Policy (NUSP) during the period December, 2009 to March, 2010. The aim of the exercise was to assess the performance of the cities in the area of sanitation with respect to outputs, processes and outcomes including environmental and health outcomes. 189 cities were categorized as red cities scoring less than 34 marks out of 100 marks and 230 cities as black cities scoring 34-66 marks out of 100 marks. 4 cities were categorized as blue scoring 67-90 marks out of 100 marks. None of the cities were categorized as green. Cities in the red category are those that need immediate remedial action to address negative public health and environmental outcomes.

Land has become the embodiment of almost every significant fault line in Indian society

That is the strong wording from an eminent, may be a liberal social scientist Mr Pratap Bhanu Mehta, President of Centre for Policy Research.

Bring back private property rights:

  • The three areas which are the least liberalised and the least transparent are land, liquor and learning. It is no accident that the stamp of political patronage is most widespread in these areas. The revolt against land acquisition is as much a revolt against a corrupt state as anything else.

  • Land acquisition has also become a mechanism for exacerbating inequality in India in three ways. First, property rights were weakened in India to facilitate land reform. Ironically, weakened property rights, which were meant to help the poor, ended up dispossessing them even more.

Market process reduces inequality

Prof Ila has comprehensive review of a recent research paper in which she finds that:

  • A focused study of Dalits finds that the growth of the market economy has ushered in a reduction in caste and social inequality with an impact more fundamental and far reaching than the changes in average income or expenditure patterns. Dalit well being, when measured by personal consumption patterns, practices around social events, personal relationships across castes and expansion into non-traditional economic activities and occupations, shows rapid improvement in the market reform era in contrast to previous decades.

Moreover, there are number findings which are really fascinating to see at this juncture.

Central plan kills aspiration of individuals plan

Arun Maira on India’s “Plans that fulfil people's aspirations

F A Hayek wrote way back in 1945 that “The more the state ‘plans’ the more difficult planning becomes for the individual.”

Tuesday, August 17, 2010

Do political exercises connect with a moral evaluation?

The former Governor of West Bengal Mr. Gopalkrishna Gandhi has an interesting piece in which he eloquently expresses his views on “respect” and “belief. What struck me more in his speech is that, this line “political exercise that may or may not be connected with a moral evaluation”. Because “moral evaluation” is not just a cup of tea you may think? It has different connotations in ethics of once behaviour in both public and private life. Moreover, it is the “moral evaluation” which gets long life in the history of mankind. In fact even once own life time to remember their conduct of day today life.

Few excerpts:

  • Respect is either there or not there. You cannot have gradations of it, like Respect Vibhushan, Respect Bhushan, Respect Shri. Respect is Respect.

  • Respect does not come from reasoning. Respect comes instinctively from the thought. “Here is one I respect.”

  • Many holders of high office are elected to them. The process of election is now used skilfully by the electorate as a political exercise that may or may not be connected with a moral evaluation.

  • Several enter the fray because they command resources, not because they command respect. They command loyalty, they command obedience, they command admiration, they command fear. And because after commanding all these, they still want to command respect, they get their followers to try to commandeer it. But people, simple people, are able to perceive the intrinsic quiddity or thingness of a person almost by instinct, just as they are able to tell a good potato from one that has gone fungoid.

  • C. Rajagopalachari never contested or won an election in independent India, but public respect for him was strong, whether he was in office or out of it (which was most of the time). The same was true of his exact contemporary, ‘Periyar' E.V. Ramaswamy, whose ‘office' was none other than affectionate esteem. Stalwarts of our freedom struggle such as Nehru, Patel, Rajendra Prasad and Azad, and towering personalities like Netaji Subhash Chandra Bose and Babasaheb Ambedkar apart, post-Independence Chief Ministers such as Gopinath Bordoloi of Assam, Nabakrushna Chaudhuri of Orissa, T. Prakasam, K. Kamaraj, E.M.S. Namboodiripad, Gobind Ballabh Pant, C.N. Annadurai, and Jyoti Basu are among those whose incumbencies in elective office had little to do with the intrinsic respect they commanded across political divides and across the country. It is immaterial that Jayaprakash Narayan did not hold elective office. He held a respect which the spontaneous title — Loknayak — symbolised.

  • Nothing in creation is flawless, except perhaps forgiveness by the person entitled to forgive. (Forgiveness is different, we should note, from pardon). But the judiciary's mandate is not to distribute forgiveness, it is about determining culpability and where required, convicting and sentencing the culpable.
  • Nothing in creation is infallible, not even forgiveness. In the dispensing of justice in accordance with a differentiated code of defining and evaluating liability, this institution too can err.
  • Nothing in creation is constant or uniform, either. So the judiciary and constitutional bodies and commissions are a terraced palate, where fallibility is a fact as is dis-uniformity.

Very rightly:

  • Respect is often linked to admiration for skill. There is respect for a great musician, a dancer or sculptor, an actor or a sportsman because that person has honed a great skill to near-perfection. There is one unfortunate accompaniment to skill-based stature, however, that can rob it of its appeal. And that is the price tag that goes with high-calibre skill. Be it in sports — cricket in particular — or in music, or in the visual arts, the interplay of money with standards threatens respect for those persons endowed with skills and, in fact, with the place of skills in society.

Monday, August 16, 2010

Hope for decades to come

It was Jawaharlal Nehru who said:

  • A new star rises, the star of freedom in the East, a new hope comes into being, a vision long cherished materialises. May the star never set and that hope never be betrayed.

And then:

  • We rejoice in that freedom, even though clouds surround us, and many of our people are sorrow-stricken and difficult problems encompass us. But freedom brings responsibilities and burdens and we have to face them in the spirit of a free and disciplined people.

Further, what has been achieved then is not to hope down them but create new sins as below:

  • The future beckons to us. Whither do we go and what shall be our endeavour? To bring freedom and opportunity to the common man, to the peasants and workers of India. To fight and end poverty and ignorance and disease. To build up a prosperous, democratic and progressive nation, and to create social, economic and political institutions which will ensure justice and fullness of life to every man and woman.

Some says when you smile even in abject poverty it cost nothing and alas it has continued for so long by just hoping when the true individual economic freedom will arrive. So let’s hope the sons of east will one day turn to be centre of the world as a giant!

Retail corruption-The curtly killer of poor

In this world of globalised human settlement what is more matter is retail corruption than the wholesale corruption. But it does not mean that the wholesale corruption is not important. The retail corruption is more like instant killer among poorer section of the society. What they earn a little penny is theft under the big bang of bureaucratic administration which leaves them a rump of empty hands.

Mohit Satyanand lines his questions that “Every year, Income tax disputes run into tens of thousands of crores, defence contracts worth billions of dollars are awarded, and real estate transactions worth hundreds of thousands of crores need to be entered into the registers of our sub-registrars. Does any Indian adult really believe that any of these transactions are completed without 'facilitation fees' being paid?

I few years when I met him in one of the conference where he gave us a small game with chocolates through which he explained us how people allocate their resources when left themselves and how the State or Government allocate the resources through planning.

Our babus first tell us the resources are scare before they allocate them! So that they can have their share in it!

Why blame liberal polices?

Mr Desai has a nice piece on this issue: “Stop it soon and get back to the good old socialist ways.

Thursday, August 12, 2010

Absolute Khushwan and Omar, Ghalib and Tennyson

“You may or may not doubt the existence of God, you can’t doubt the certainty of death

Excerpts published from Khushwan's forthcoming book:

Omar Khayyam:

Into this Universe, and Why not knowing
Nor Whence, like Water willy-nilly flowing...”


“There was a Door to which I found no Key
There was a Veil through which I could not see
Some little Talk awhile of Me and Thee
There seemed—and then no more of Thee and Me.”

Asadullah Khan Ghalib:

Age travels at galloping pace; who knows where it will stop
We do not have the reins in our hands nor our feet in the stirrups.


“Sunset and evening star,
And one clear call for me
And may there be no moaning of the bar,
When I put out to sea...
Twilight and evening bell,
And after that the dark!
And may there be no sadness or farewell,
When I embark.”

I believe in the Jain philosophy that death ought to be celebrated. Earlier, whenever I was upset or low, I used to go to the cremation grounds. It has a cleansing effect, and worked like a therapy for me. In fact, I’d written my own epitaph years ago:

“Here lies one who spared neither man nor God
Waste not your tears on him, he was a sod
Writing nasty things he regarded as great fun
Thank the Lord he is dead, this son of a gun.”

Prof Jagdish Bhagwati on freedom, religion and the State

Prof Bhagwati writes:

  • And now President Obama is doing just what he should not do. Yes, deal with the states that have Muslim majorities and are often theocratic rather than secular: Intellectuals can shun those they deplore, but foreign policy must deal with what is there. Do we really want to promote foreign policy negotiations with nation states grouped around religion?

Also read: Professor Bhagwati criticizes Obama for not appealing to the tolerant tradition within Islam itself, especially in Andalusian Spain, noting that intolerance was in fact introduced by the Catholics instead.

Games of poor comes with patriotic

The equal and opposite effect

The State: paid news, food security

P. Sainath on Food security:

  • The food security legislation in the form that now seems likely weakens and dilutes the Directive Principles of State Policy of the Indian Constitution. Those are universal, not targeted. Sure, we have to move towards making them real. But we need at every stage to ask whether the steps we take strengthen or weaken the Directive Principles. These steps on food security weaken them. Also when we act in isolation in one sector like food, we undermine the vital others. What we could do with is a comprehensive universal programme that covers nutrition, work, health and education. At one time, for one nation.

Sunil Jain writes on paid news and the stupidity of The State

  • Despite the sub-committee report documenting all this, the PCI’s 13-page “detailed report” does not mention even one instance cited in the 71 pages of the sub-committee report which, it says, “may remain on record of the PCI as reference document”, nor does it annex the report — the actual report, though, is not on the PCI’s website (it can be accessed at http://www.scribd.com/doc/ 35436631/The-Buried-PCI-Report-on-Paid-News).

Wednesday, August 11, 2010

Students and the society

Sowell writes:

  • It is painful that people with lower incomes often have to pay higher prices, even though most people are not criminals, even in a high-crime neighborhood. But misconstruing the reasons is not going to help anybody, except race hustlers and politicians.

  • One of the many disservices done to young people by our schools and colleges is giving them the puffed up notion that they are in a position to pass sweeping judgments on a world that they have barely begun to experience. A standing ovation for childish remarks may produce "self-esteem" but promoting presumptuousness is unlikely to benefit either this student or society.

Tuesday, August 10, 2010

Unfolding money and inflation

Henry Ford, a driven entrepreneur, said, "If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability."

F A Hayek wrote: "When one studies the history of money, one cannot help wondering why people should have put up for so long with governments exercising an exclusive power over 2,000 years that was regularly used to exploit and defraud them".

Economist's unforgivable silence

It is extremely worth reading a piece by Mr. Cohen. It talks about a book review in The Economist. He concludes with the following para:

  • …the Economist's book reviews are unsigned, it's impossible to know -- and the Economist would not say -- who's at fault here. So the magazine itself is accountable not just for bad taste or unfathomable ignorance but for disregarding its own vow, published on its first page, "to take part in a severe contest between intelligence . . . and an unworthy timid ignorance obstructing our progress." During the week of July 15, it didn't just lose the contest -- it never even showed up for it.

Monday, August 9, 2010

Money mania

“The best advice about money is not to talk about it... […] it exists not by nature but by law. And it is in our power to change it and make it useless”-Aristotle,

Also read Why is the RBI blowing kisses at inflation?

Bits and piece of the I Day

Neither India nor the world is an orderly place

Nothing is quite perfect in this world and certainly not human beings

Das on dharma in twenty-first century

Economists have none of that-really!

J Bradford DeLong writes:

  • One of the dirty secrets of economics is that there is no such thing as ‘economic theory’ . There is simply no set of bedrock principles on which one can base calculations that illuminate realworld economic outcomes…..

  • Economists have none of that. The ‘economic principles’ underpinning their theories are a fraud — not fundamental truths but mere knobs that are twiddled and tuned so that the ‘right’ conclusions come out of the analysis.

“India has become the land of puzzling paradoxes”

That is what the 94 year old M F Husain says all about the India and asks “Why would little children pick up stones instead of pencils, pens and brushes, India has to ask itself. When they ask for freedom, it brings back memories of why I left. Just for one reason... Freedom and fear. At my age I cannot take too many risks. At their age, they too can't. But they have been forced to.”

Really puzzling, almost every day, month, year decade and you name it further.

Thursday, August 5, 2010

Karan’s Kani on population

Neither he is a jani (intelligence):

  • I will not go into the unhappy history of the population and family planning programme since I introduced the National Population Policy in Parliament in 1976. One of the great tragedies of the Emergency was the fact that the family planning programme got totally derailed. As a result of the debacle of 1977 the whole issue became politically radioactive, the name of the ministry itself was changed from “Family Planning” to “Family Welfare”, and “population” seems to have disappeared from the lexicon of political leaders across party lines. The word was not even mentioned in the last President’s Address, or by the prime minister when he replied to the debate. It is as if we have buried this factor so deep in our subconscious that we are unable to bring it out into the open and deal with it purposefully and effectively.
  • I was astounded some months ago when I mentioned this to a senior political leader and he replied that I should not bring this matter up as it would upset women’s organisations. In fact, it is women who have to bear the major brunt of unplanned population growth, including physically during childbirth where maternal and post-natal mortality is still unacceptably high — in rural areas particularly, where proper maternal facilities are few and far between. Indeed I would expect women’s organisations to be in the forefront of demanding a clear-cut population policy to ensure that contraceptive facilities become available to every woman in India and her reproductive rights safeguarded.
  • A theory that is fashionable in some academic circles is what is known as the “demographic dividend”. The argument is that with the population in the West declining, and India and China growing rapidly, one day through sheer demography we will dominate the world. I do not accept this; we are still producing children who are malnourished, ill-educated and, therefore, unable to really contribute towards building a strong and vibrant nation. Certainly our young people are our hope for the future, but unless we are able to ensure at least the minimum inputs necessary during pregnancy and early childhood for the full development of body and mind, we are doing them a great injustice. A vast army of unemployed and unemployable young people will hardly be an asset for the nation.

The apathy of paid news

The apathy of paid news and free politics free means free from control of any kind.

Satya and Rajan on Education and Inequality

Satya post in his blog:

Inequality and education

Raghuram Rajan suggests that inequality is the root cause of the financial crisis in America and the lack of educational opportunities is one of the reasons for the inequality.

  • Since the 1970s, wages for workers at the 90th percentile of the wage distribution in the US—such as office managers—have grown much faster than wages for the median worker (at the 50th percentile) such as factory workers and office assistants. A number of factors are responsible for the growth in the 90/50 differential.
  • Perhaps the most important is that technological progress in the US requires the labour force to have ever greater skills. A high school diploma was sufficient for office workers 40 years ago, whereas an undergraduate degree is barely sufficient today. But the education system has been unable to provide enough of the labour force with the necessary education. The reasons range from indifferent nutrition, socialization, and early-childhood learning to dysfunctional primary and secondary schools that leave too many Americans unprepared for college.

Rajan feels inequality is increasing in India too.

  • What I worry about India, however, is the problem of inequality. The rural areas, in many ways, are falling behind because they are not connected to the urban and coastal areas. Many of the ones that are backward do not have access to education, healthcare. It is very much a thing that the US has; so, in that sense, while 8-10% growth is fantastic, we also need to figure out how to expand opportunities for those being left behind.

One couldn't agree more on expanding educational opportunities as quickly as possible. There is no alternative to expanding the supply of affordable, quality schooling to ensure education for all children. The argument about the means (public vs private funding, non-profit vs for-profit etc..) to that end has been going on and on. If we don't begin to work towards the end soon enough, through what ever means, the demographic dividend will turn out to be a demographic disaster. Sadly, there doesn't seem to be any light at the end of the tunnel. At least, not yet. Maybe things have to get worse before they can get better.

Three interesting readings

First, what is the need for blogging? It means simply a lot to each one of us. It is new media for those who wanted to see their new world. Fellow libertarian Amit Verma of India Uncut has a nice piece on “The Big Deal About Blogging”. It is worth to read not as a blogger but a searcher of new world.

Secondly, a marvelous speech delivered at the Constituent Assembly in 1949 by Dr. B R. Ambedkar.

Third, Barun’s lucid update and way forward for A Time to have liberal political party in India.

Wednesday, August 4, 2010


The stimulus economist Robert J. Shiller writes:

  • So here’s a proposal: Why not use government policy to directly create jobs — labor-intensive service jobs in fields like education, public health and safety, urban infrastructure maintenance, youth programs, elder care, conservation, arts and letters, and scientific research?

First Report to People on Education and Employment


Politics of Money and Games

Allocate the public money on political agendas!

Basic needs and human beings

While basic needs arise for all human beings and are met by each one of us in various ways, fulfilling needs require stretch. Many of us oftentimes, therefore, lead our lives meeting basic needs but not meeting fulfilling needs.

Ayn Rand and Nehru

Gurcharan Das writes:

  • I quickly forgot Ayn Rand when I went to college and read serious philosophy. When her name came up in undergraduate conversations, I dismissed her as a writer of potboilers and propaganda. Like everyone around me in the mid-1960s, I passionately believed in Nehru's dream of a modern and just India. But as the years went by, I discovered that Nehru's economic path was taking us to a dead-end. Having set out to create socialism, he had created statism. Later when I was working as a manager I found myself caught in the thick jungle of Kafkaesque bureaucratic controls, a story that I have told in India Unbound.

Utter the word retail

Writes, Prof R Vaidyanathan

  • These are economic constructs imposed by the west on the rest and it is a form of terminological terrorism which is mouthed ad nauseam by our economists and policy planners without understanding the implications. The retail trade suffers from two major handicaps. One is the non-availability of credit at reasonable rates from institutions; the other is the bribe one has to pay to the government babus to leave him in peace.

Monday, August 2, 2010

Population cause prosperity

Bibek Debroy writes:

  • Here is the horror story according to Ghulam Nabi Azad. Between 2005 and 2010, China’s annual rate of population growth has been 0.6 per cent, against India’s 1.4 per cent. Around 2030, India will become the most populous country on earth — with a population of 1.6 billion by 2050. Gujarat and Haryana will reach replacement levels of fertility in 2012, Assam in 2019, Rajasthan and Bihar in 2021, Chhattisgarh in 2022, Madhya Pradesh in 2025 and Uttar Pradesh in 2027. I wonder if the health minister has read Paul Ehrlich’s The Population Bomb. If not, he should. And he should recommend it as mandatory reading for all MPs. In 1968, Ehrlich wrote: “India couldn’t possibly feed two hundred million more people by 1980.” And: “I have yet to meet anyone familiar with the situation who thinks that India will be self-sufficient in food by 1971.”

Yoginder K. Alagh on B R Shenoy

But the real outlier was B.R. Shenoy, who built a school in Ahmedabad, castigating those who never made money. His world was unfashionable as the country moved to the left, but he had a hardcore following.