Macro mess

"Most of the problems which need to be tackled now have been caused by governments, not banks, in the last 30 months. They have responded mindlessly to populist outrage and misperception about what fundamentally caused the crisis as opposed to what triggered it."

Essay won for C Rajagopalachari Essay Competition 2011

Here is concluding para of an essay that won the “C Rajagopalachari Essay Competition 2011” The beautiful and lucidly explained essay is by Neeraj Kumar Singh.

Neeraj says:

• “If one could travel through time to mark the times and places when men have been prosperous, those points would be coincident with greater economic, political and personal freedom. The economic progress that India has seen in the last 20 years is a result of increased freedom. Through this essay I have tried to bring forth the areas where our freedoms are still restricted by the state. If these un-freedoms are removed, India can achieve its true potential and simultaneously move towards being a freer society.  The project of liberty has never been carried to its conclusion anywhere and India is no exception. The road remains only half-built.  The bottom-line is that the road to liberty needs to be built soon enough. I sincerely hope that this project is not contracted out to the government.” 

The full essay is available here (PDF).

“To Hayek there was no such thing as ‘the economy”

John Phelan writes:

• July 26^th saw one of the most eagerly anticipated economic events of recent years. At the London School of Economics (former employer of Friedrich von Hayek), Professor George Selgin and Dr. Jamie Whyte for the Hayekians and Professor Lord Skidelsky and Duncan Weldon for the Keynesians gathered in front of a packed lecture hall to debate Keynes vs. Hayek. Two other lecture halls were required for the overspill. The debate will be broadcast on BBC Radio Four on August 3^rd.

• In front of a boisterous crowd, Hayek won fairly easily. Skidelsky’s haughty style contrasted with Selgin’s bullishness and the perennial Keynesian failure to look at the origins of the bust won over nobody in an admittedly partisan crowd. But even an hour of discussion left a few things hanging.

Fiction of central bank

From The Economist on Milton Friedman (His centenary birthday is on coming Saturday 31^st July):

"…central banking is an essentially illegitimate criminal enterprise freer rein. When a significant portion of a political movement's activists believe that the whole point of central banking is "systematic robbery", and that inflation is the means by which this robbery takes place, widespread, reflexive opposition to inflation is not surprising." 

Seven wasted years

The below paras is from Mr Ramachandra Guha's latest article published in  the Financial Times on July 19:

• Many, perhaps all, of these reports have been read by Manmohan Singh, India’s scholarly prime minister; indeed, several were commissioned by him. Which is why the inaction on their recommendations is so disheartening. When Mr Singh became prime minister seven years ago, his appointment was widely welcomed. He was seen as incorruptible, and with the added advantage of a lifetime of public service. Tragically, in terms of concrete institutional reform these have been seven wasted years.

• To single out an honest and intelligent man when corruption and criminality flourish may seem unfair. But W.B. Yeats was right: it is when the best lack intensity and conviction that we must fear for ourselves and our future. Mr Singh has been content to let things ride. He has not asserted himself against corrupt cabinet colleagues, nor has he promoted greater efficiency in public administration. Whatever the cause – personal diffidence or a dependence, in political terms, on Sonia Gandhi, his party president – this inactivity has greatly damaged his credibility, not to say India itself.

Unleash it further India’s economic reforms

Paul Johnson has great article wherein he says:

• India. Having clung to democratic institutions and the rule of law, India offers a better role model, albeit a corrupt and confusing one. After gaining independence in 1947, India also missed an entire generation of growth. Gandhi and his followers wanted a primitive handcraft society. Nehru and his family dynasty practiced a form of socialism invented by Harold Laski at the London School of Economics in the dismal 1930s. Not until these twin formulae for perpetual poverty were shaken off during the last quarter of the 20th century did India begin to unleash its people's natural energies and thrive accordingly. Since then much has been achieved.

On Corruption and interventionism

Image: Vidyanand kamat
Here is my latest article “B.R. Shenoy's Forgotten Voice of Dissent” (with my friend Vipin) published in the Forbes India.

“Mr PM, at least in my clinic please open your mouth"

“Whether the new rulers were from the Congress party or the BJP, they were more concerned with giving credit to their party members than recording the truth. At times it appeared like anti-Sikh communal prejudice. Perish the thought.”

Gandhi, the Liberal

Here (PDF, see page 15-18) is my latest piece published in the July issue of Pragati: The Indian National Interest Review or you can also see here.

One Big Change

According to Prof Rana Mitter: 

"So in many areas today, as in the past, party membership has been made the key to advancement. The difference is that in the past, progress in the CPC was tied to one's status as a worker or peasant. Now, it is the rising technological entrepreneur and financial executive who may reach a certain level of success, only to be told that it would be "helpful" to join the party. The one thing that almost never motivates any application to join is a belief in socialism, ideology, or that historical relic known as Maoism. Membership of the party has become almost entirely utilitarian. As long as the economy remains strong, this may be enough to prolong the party's grip on power."

  

Turn that coin OUT

Sudheendra Kulkarni has very nicely explained the abolition of 25 or 50 paisa coins specifically a logical “.. thought on what the death of ‘paisa’ means for the social, cultural and psychological history of India?”.

I remember a news item of 2004 or 2005 when I was student of social science at Indore University. The RBI had announced the abolition of 50 paisa coins from circulation. I felt how stupid, to do this, when the economy is still developing from the bottom, I mean when the country has huge population with less and lesser per capita income how come the bigger denominator would help poor people? Just think of a case, a labourer who earns Rs.100 per day and he spends on various basics needs like food, etc. How much money he might have left in his packet or for that matter how much money he or she will give it to his children who are largely 

dependent on tiny shops for their tiny items. I am talking about rural area. This is terribly.

So the mess is everywhere not only in central bank in India but also from school education to university education.

In a lecture yesterday Prof Yash Pal said in New Delhi that our university system is in complete chaos and also in terrible and spoiling the beautiful young minds. Though, he realizes these things very late, he could have done it something when he was in power as Chairman of University Grants Commission that look after the higher education system in the country in terms of funding etc. He did not do anything. Of course, he ensured how to get attracted by media etc, etc. He never visited single university independently to understand what is going on with the university or college or students etc. when he is going to die, he talks about the reality of the education system! Of course, we may get some understanding from his utterances but then what is the point? When he along with others have already sent a crooks of team to kill the education purpose!!

“Now, communists are being hunted, killed, offices raided”

These are the words from Communist Party of India (Marxist) leader A B Bardhan. 

Some excerpts from his interview with Indian Express:

• Besides, she alone will not run the government. There are other forces who have been behind pulling down the Left—CII, ASSOCHAM, FICCI, etc. They will put in all their expertise. And the Government of India will bail her out every time. Funds that they never gave to the Left, they will give her. Therefore, I don’t think she is in for a short spell.

• Now, communists are being hunted, killed, offices raided. Even INTUC in Bengal has asked her to stop trying to take over the trade unions by force and intimidation. All that will have to stop.

•  They sent us a questionnaire which was an insult to the political parties, asking us to answer ‘yes’ or ‘no’. Should the prime minister be under the Lokpal Bill? Yes or no, tick mark. Should political parties be treated like that?

• And I agree that the base support to the Left parties has been eroded to a great extent for various reasons including the fact that divisive politics in our country is very strong—communal, caste etc. These are factors we have to fight. We are continuously fighting against the current, and we have failed. But I don’t think it’s an ideological failure. The general mass of Left-oriented supporters has not reduced. Organisationally, we have failed.

We need more to happen these things!! 

Lose your job and beg at my feat!

Learn how to destroy the jobs created by people themselves through Central Government schemes like NREGA which is fully funded by tax payer’s money.

My Ambedkar article in the ANU’s South Asia Masala!!

On 1^st of July, a slightly different version of my Ambedkar article was published in the Blog (South Asia Masala) maintained by The Australian National University. There were some reasons due to which I did not posted here. It is done now!! Here is the article which talks about Ambedkar’s views on English language, urbanization, whether free market is good for dalit or not etc.

C V Raman, the classical liberal

Arvind Kumar  and Arun Narendhranath writes in the DNA:

• Sir CV Raman, who argued, “We must largely build upon the intelligence, energy and enterprise of individuals, which can only be forthcoming if they can hope to reap the results of their personal efforts. I do not think state enterprise as such is likely to be very  successful in Indian conditions.” When he visited the United States, he attributed the prosperity and efficiency of the country to the system of “free and unfettered private enterprise”.

India's Great, Forgotten Free-Market Economist

As India celebrates, the twenty years of economic reforms what we all need to do is simply to remember the IMMORTAL words of Professor BR Shenoy!! who alone voice gave many policy suggestions through his writings, lectures etc for more than three decades.

It is sad that no one remembers him!

The title of this post is my latest article published by The Ludwig Von Mises Institute in its Mises Daily.

PS: The earlier draft of this article was rejected by none other than Professor Shenoy's own daughter Sudha Shenoy on some other ground!!!!

Postscript: I sincerely thank my friend M.Saravanan for his critical as well as constructive comments and suggestions on the earlier draft.

The State is not antidote, it itself is big problem

Here is what P V says:

“For eight hundred years, from the time of the Magna Carta, legislators have fought for outright powers to decide how much to tax and in what way it should be collected and how that money should be spent. That authority is now sacrosanct and nobody questions it — except when it goes against the Constitution. Unfortunately, legislators decide what the Constitution should be. Hence, that check too is limited.”

Bhalla after Nitish Kumar!!

A political match that looks fixed