Hayek Order

Visiting a village economy is like meeting Adam Smith!!

2012-01-28T17:44:00.000+05:30

I had a wonderful time visiting my village.

Some observations:

Private share Autos are competing with public transports in rural south India. Though, the price per km is high in private share autos but still people prefer private share autos because it saves their time, distance etc.

The village welfare schemes are highly misused for politicians private benefits.

The rapid development of information and communication technologies has limitation in terms of its positive impacts on village economy.

People in village economy are empowered.

Empowerment impact on local politics is something yet to happen.

Some interesting readings:

Reading the writing on the wall by K Satya and Parth Shah

Blinking links

2012-01-02T19:27:00.001+05:30

Interesting readings on Indian political economy:

The year of living angrily by Prof Ashutosh Varshney

Why not adjourn sine die and seek fresh mandate by Shankkar Aiyar

Reforms and the great divide by Yashwant Sinha

Par for the course by TC A Srinivasa Raghavan

Cracking the kerala myth by Prof Arvind Panagariya

Why one should give some credit to Dr Singh for telling the truths of socialist era of India? Read his address to the nation on the eve of New Year.

Thanks 2011!

2011-12-30T17:51:00.001+05:30

So, the year 2011 is coming to end. I thank you all for being part of this Blog. Your interest in this Blog encourages me a lot to do more. Of course, more justly. The purpose of this particular blog post is to recount and record my publications 2011 both online and printed versions.

For me, this year has not only opened a new window of opportunities but also helped me to communicate with others by writings less (un)known ideas from my readings on Indian liberalism. What I have done in the last 6 or 7 months is a piece of my vast readings. I know it sounds big. Given the vastness of the present day ignorance I have to say that.

First Visit to USA:

I had faced all kinds of problems while I was arranging the necessary things in order. Often I felt helpless and therefore I thought I should give up my try. But many friends and others like minded persons have encouraged me lot to try my level best. They all did not only constantly but quite honestly. I thank all of them.

After I returned from Mises Institute's Austrian Scholars Conference 2011, I got opportunities to write as well as to give lectures on my paper presented in the Conference. My paper was on "Was B R Ambedkar a free market economist?"

Talks and Lectures:

I am very much excited to share with you my talks/lectures. I have written my speeches for all the invited talks and lectures! Among them, the most enjoyed lecture was the one which I addressed 50 plus 2011 LAMP Fellows of PRS. It was one hour lunch on lecture. The following are the talks and lectures list of places I was invited to share the findings of my research on Ambedkar's free market economics:

1. On April 29, 2011 I gave a very brief talk at 'CCS Chintan' organised by The Centre for Civil Society, New Delhi.

2. On May 14, 2011 I gave one hour long lecture (Tamil) in Chennai, organised by The New Horizon Media.

3. On May 29, 2011 I gave brief talk at National Conference on "Shala- India’s National Interest: Towards Shared Visions" in Pune, organised by The Takshashila Institution

4. I addressed 50 plus 2011 Legislative Assistants to Members of Parliament (LAMP) Fellows, on “Some Aspects of Dalit Issues in India” on July 13, 2011, Constitution Club, organised by PRS Legislative Research, Centre for Policy Research, New Delhi

Popular Articles Publication:

The following articles were published in printed versions with large circulation:

1.Ambedkar, the forgotten free-market economist, Pragati: The Indian National Interest Review, April 14, 2011 (available online freely pdf)

2. The Untouchable Case for Indian Capitalism, The Wall Street Journal Asia, May 31, 2011 (available online freely here)

3.Gandhi, the Liberal, Pragati: The Indian National Interest Review, July 2011 (available online freely pdf)

4.Population in the 21^st Century-The Ultimate Resource, If Only They are Skilled, The India Economy Review-Great Indian Dream, IIPM Think Tank, August, 2011 (available online freely here)

5.B.R. Shenoy's Forgotten Voice of Dissent (co-authored), Forbes India Magazine, July 29, 2011 (available online freely here)

6. Growth Trends in Services Sector (co-authored), Yojana, Vol.55, September 2011 (Abstract available here)

The following articles were published in popular online run by classical liberal Institutions:

1. India’s Great Free Market Economist, The Ludwig Von Mises Institute, July 5, 2011 USA (available online freely here)

2. Twenty Years of Economic Reforms to the Free Market India (co-authored), published in French Journal, In Eco Veritas, August 31, 2011 (available online freely here)

3.20 years since India’s economic reforms (co-authored), November 28, 2011, The Cobden Centre, UK (available online freely here)

A token of gratitude:

In general, I wanted to thank in a big way to my friends of classical liberals for their continuous support: Vipin, Nitin Pai, Toby, Harsh Gupta, Raj Cherubal, Abheek, Ghanshyam, Anand, Parth, Chris, Sanjeev Sabhlok, Satya, Satyajit Dey and Dhanu.

Come 2012!

For 2012, I have already penned few equally interesting pieces for publication. Hope all goes well with the time to come and the same I will share with you all in due to time.

Thank you all,

Madan Mohan Malaviya and Prof B R Shenoy

2011-12-27T12:50:00.000+05:30

Today India celebrates 150th Birth Anniversary of great liberal Madan Mohan Malaviya (1861-1946). One of the great free market economists of 20th century India was Professor B R Shenoy (1905-1978).

As a student B R Shenoy had:

"actively participated in the freedom struggle and was jailed at Nagpur where he came under the close contact and immense influence of Pandit Madan Mohan Malaviya."

In his presidential address to the Lahore Congress, he said:

“If millions of people in this country are to be rescued from poverty, if new avenues for employment are to be opened and prosperity spread over the land, it is essential that an extensive system of technical and industrial education should be introduced in the country. The examples of other countries point out that to be road to prosperity.”

It is worth to quote his message on the founding of the Banaras Hindu University:

“India is not a country of the Hindus only. It is a country of the Muslims, the Christians and the Parsees too. The country can gain strength and develop itself only when the people of the different communities in India live in mutual goodwill and harmony. It is my earnest hope and prayer that this centre of life and light which is coming into existence, will produce students who will not only be intellectually equal to the best of their fellow students in other parts of the world, but will also live a noble life, love their country and be loyal to the Supreme ruler. "

See my earlier post here.

Lessons for Lokpal, from Karnataka Lokayukta

2011-12-27T09:59:00.000+05:30

The following are a excerpt from the article by Narayana A., Sudhir Krishnaswamy and Vikas Kumar (faculty at Azim Premji University, Bangalore):

…..between 1995 and 2011, Karnataka’s Lokayukta carried out only 357 suo motu raids against individual officials but received and responded to over 2,159 complaints against 2,681 officials (and 59 private persons). In other words, for every six cases investigated in response to citizen complaints, only one is initiated by the department suo motu.

Institutional leadership is seen to have a significant impact on the agency’s performance as more than 66 per cent of the raid cases were initiated between 2006 and 2011, when Justice Santosh Hegde was the Lokayukta.

A department-wise analysis of prosecution of corruption by the Karnataka Lokayukta reveals that more than 80 per cent of the trap cases are related to four essential functions of government: local government (24.06 per cent), administration (37.65 per cent), welfare (17.61 per cent) and regulation (2.54 per cent). The rest of the cases are divided between agriculture and irrigation (3.76 per cent) and economic activities (12.75 per cent). Analysis of raid cases reveals a similar departmental distribution.

In Karnataka, nearly half of the officials against whom Lokayukta has proceeded against are officials in the lower bureaucratic scale while about 10 per cent are senior officials. Only 0.8 per cent belong to the IAS, IPS, IFS and KAS cadres.

The core of the problem for the Karnataka Lokayukta is the criminal trial, over which it has little control. Over 95 per cent of the cases in which charge sheets have been filed are under trial. The cases under trial are, on an average, more than five years old. In any event, only 16 cases overall have resulted in convictions. This is a conviction rate of 20 per cent of completed cases and a small fraction of pending cases. This is much lower than the rate of convictions in criminal prosecutions in anti-corruption cases in India in recent years, which is between 34 and 40 per cent. Hence, the key problem at the core of a criminal conviction model for tackling corruption in India is the trial stage.

Media folly on B R Ambedkar, yet again!!

2011-12-26T18:15:00.000+05:30

In the print version of today's The Times of India, the newspaper has quoted two lines from the writings of B R Ambedkar on ethics and economics. It tells public only the half truth by saying he was "politician and jurist". What stops them saying "he was economist too"?

He had double degrees of Masters in Economics and double degrees in Doctorate in Economics.

Anyway the full quote is as below:

ETHICS AND ECONOMICS:

"History shows that where ethics and economics come in conflict, victory is always with economics. Vested interests have never been known to have willingly divested themselves unless there was sufficient force to compel them."

Read the below two compilations from his writings:

Interesting readings

2011-12-26T10:29:00.000+05:30

Make work choices

2011-12-24T13:27:00.000+05:30

On 21st of this month I was invited to participate in the third Annual School Choice National Conference organised by the Delhi based free market think thank: Centre for Civil Society headed by Dr Parth Shah.

Out of four sessions, the session on "Disruptive Innovation in Education" was not only great but also a classic. You might ask what made me to say its classic. The two speakers of this session was equally genius and great thinkers on children education.

The first three sessions were on learning outcomes of children studying in government schools vs private schools. None of the presenters said that the children studying in government schools scored higher in the learning outcomes. Similarly, there was hotbed debate on how teachers perform in government school vs private schools. But it was total blame on all kinds of teachers.

The interesting part.

Professor Sugata Mitra gave wonderful presentation on how children learn with computer you leave them "alone". It was great fun as well as learning. He explained plainly how we adult should try and understand the use of common senses of children if you leave them alone with an instruments or a thing. If you are not known to Prof Mitra's works. I recommend you should know. I read his piece on "Hole in the wall" some years ago. Also read this one.

The second speaker was Mr.Suneet Singh Tuli, CEO, Datawind. Though, Mr. Tuli's presentation was not that great as compared to Prof Mintra's but the power of speech he gave was no less than amazing and allows you to ponder over a while to get over on next lines!

Just one thought: Unlike other countries constitution Indian constitution has provision for parents to choose their choice of school to send their children. There are no mandatory option for parents to send their children to school.

‘Tiruchengodu CR' (C. Rajagopalachari)

2011-12-24T12:08:00.000+05:30

In times when politics has become brazenly self-serving and even ‘public service' unashamedly motivated, the life-work of such a one as Rajagopalachari seems almost incredible, a distant light beyond the miasma of politics. We do not see self-justification ‘torn off' from political intentions, nor human voices heard and heeded betimes.

Blinking links

2011-12-24T11:45:00.000+05:30

Dr.Surjit Bhalla on says perhaps rightly so "I think a liberal society, which I hope and want India to be, has absolutely no place for reservations of any kind." and "And reservations is not the right policy to enhance the well-being of the poor. Maybe after the noise has settled, Parliament will sponsor the creation of a new Constitution, one based on the principles of rights and justice, and not on the ad hoc principles of state intervention."

Shekhar Gupta explains Mera Neta -dalit, tribal, OBC, upper caste-Chor Hai



Dr. Shubhashis, Research Director,India development Foundation writes something interesting about Indian social science researchers dealing with data:

the other issue that was brought up was the difficulty of obtaining Indian data. Any researcher reading this will, I am sure, be able to recall many instances of this. In my own experience, I can think of at least two instances that stand out in my memory: (a) in one I could not get the type of access that a foreign researcher could; and (b) in the other, I got access from the foreign researcher at a time when the government organisation in charge of the data was refusing me access to it! In fact, what has helped research is the Right to Information Act and I know of many academics who have obtained data through this Act.

NREGA is money down the drain.

Buddies works!!!

2011-12-23T19:47:00.000+05:30

Impact of Innovation in Public Service Delivery (PDF) by M. Saravanan and K. Shreedhar

India'sstates can be laboratories for policy innovation and reform by Karthik Muralidharan (This piece is must read one!)

Prof Amartya Sen: conflicts in liberalisation

2011-12-23T18:40:00.000+05:30

On December 16th of this month, I had a great opportunity to listen to Prof Amartya Sen. This is the first time I got to see him closely and observe his actions in telling something about economics, politics and his friends like Dr Manmohan Singh. The session was chaired by Business Standard Chairman Mr T N Ninan.

The reader of this blog know that I came to know the fact that Prof Sen won 1998 Nobel Prize in Economics Science through my Tamil Language teacher.

Any way, Prof Sen delivered a lecture at Hotel Le Meridien, New Delhi and it was a part of 2011 Delhi Economics Conclave. Prof Sen's lecture was not on any specific topic. He briefly touched broadly on: (i) global financial crisis, (ii) the Euro crisis, (iii) implications on Indian economy and (iv) poor performance of social development indicators in India.

Prof Sen's understanding on 2008 financial crisis might be exceptional but given the ideological lean what he informed the hundred of industry member was not new at least in my view. So basically, he summarized by stating simply that the 2008 crisis erupted due to over confidence of banks (on lending, risks, etc), lack of rational confidence and inability of regulator. He also said that Adam Smith never used the word "capitalism" in his all works. According to Prof Sen Adam Smith only used the word "market" to analyse the players in the society.

On Bush and Obama: Prof Sen explained that Bush era saw the unrestrained capitalism, crisis of government and bailout to banks.

On Euro: Prof Sen said Euro is not worth having because there is no fiscal union in the political economy of EU. He also pointed out that the central problem of Euro crisis is epistemology and the crisis of government efficacy resulting from the fundamental like freedom and actions of key decision makers. He further went on to argue that the people who are reading the crisis in wrong side. He also talked about the 1943 EU movement of unity in Euro.

On Indian economy: Prof Sen's views are not new but some of his views expressed during this lecture is worth reading from the print media:

"We [India] need to maintain economic growth as growth generates public revenue and with public revenue we need to do things such as health care, immunisation, education...The government has to do a lot more,"
"I spent an hour with Manmohan Singh yesterday but I did not have any illusion that if I could convince him that everything will go fine, not because he is not a good Prime Minister, as I think he is, because that's not the way Indian democracy works".
"In a democracy, you have to carry the party, the coalition and the political system, including the opposition with you."
"I do not think that there is any conflict in liberalisation.... Each time you have to see if it is doing good for the people or not,"
"What we need is economic reforms, but reforms are not just about doing enough to addressed issues which are of great importance to those relatively prosper...Reforms are right but the formula that works for the only 20 per cent people of the country is not right,"

I must record here that Prof Sen rejected the way in which the Team Anna is trying to do with fighting corruption in India. I consider fasting for corruption is age old wrong doing. And I agree with him when he said that:

"What I had, in fact, said was that the judgement and penalty for corruption cannot be a matter for street justice, and must come through the democratic procedures that we cherish in India, including the courts and Parliament," he said in a communication.
"we do not not have to tie accused people to trees to deliver summary justice to meet the demand of most Indians to extend the process of democratic accountability in a more full-blooded way to corruption."

Make market forces work

2011-12-19T18:20:00.000+05:30

"The State could notmake India caste neutral. The State can’t force non-Dalits to dine with Dalits.This is where the market come in. They have played a great role — as thegreatest social leveler, the market has the power to bring Dalits and non-Daliton a common platform."

Madan Mohan Malaviya said “Mere industrial advancement cannot ensure happiness and prosperity to any people; nor can it raise them in the scale of nations... Formation of character is even more important for the well-being of the individual and of the community than cultivation of intellect. Hence the proposed university (BHU) has placed formation of character in youth as one of its principal objectives. It will seek not merely to turn out men as engineers, scientists, doctors, merchants, theologists, but also as men of high character, probity and honour... It will be a nursery of good citizens instead of only a mint for hallmarking a certain standard of knowledge,”

Blinking links

2011-12-17T12:08:00.001+05:30

Surjit S Bhalla argues ....At the outset, let me state that there are sufficient rumours about the possibility that the RBI is being dictated to by the Delhi combine of Manmohan Singh and his chief (and it appears, only,) economic adviser, C. Rangarajan.

Barun point how India missed yet again at Durban....."India has improved its carbon intensity by 32% in the past 15 years as it began to reform its economy and prepared to compete globally. Yet today, India’s carbon intensity is still seven times higher than Japan’s (Chart 2). This indicates there are still huge structural and policy challenges that are preventing India from adopting the best technologies and practices currently available in the world."

Can we have like this one (or more) for spreading liberals values in India?

"Godrej supports the contentious provision. “What the Companies Act envisages is that there is a recommendatory level of 2% of profit after tax for corporate social responsibility and in case you’re not able to spend that much, you must explain it in your annual report,” Godrej said on the sidelines of the second annual conference of the Dalit Chamber of Commerce and Industry. “I think that’s a fairly reasonable provision and I personally do support it.”

Surath Giri from Nepal argues.......quite interestingly that "Free market capitalism that rewards entrepreneurship, risk-taking and innovation, and at the same time provides easy universal access to economic activities to all citizens is a blessing. There are enough evidences that when allowed to work, the market has lifted more people out of the mud and misery of poverty than any government. And it has been true regardless of the culture, tradition, religion, economic base, and civilization of the society practicing it. The most prevalent myth about free market capitalism in Nepal is that in free market capitalism the economy is dominated by cartels and syndicates."

why liberals love "strangers"?

2011-12-15T11:52:00.000+05:30

May be you would like to read few pieces before you ponder on what may be yours.

Dig vs Sibal comic

2011-12-15T11:51:00.000+05:30

"THE undisputed king of comedy in Indian politics, Mr Digvijay Singh, is feeling threatened by the growing notoriety of Mr Kapil Sibal. Soon after Mr Sibal spoke about monitoring and moderating activity on social networking sites, there was widespread condemnation online. People cracked jokes. Many comic strips were made. TV debates happened about the stupidity of Mr Sibal’s statement and the impracticality of his suggestion."

SV Doraiswami and his book "Indian Finance, Currency And Banking"

2011-12-08T17:44:00.000+05:30

Here is a very interesting article which recounts the forgotten Indian economist S V Doraiswami and his important work in monetary theory. Doraiswami's principles are well formulated and strongly refuted the Lord Keynes theories in monetary theories.

B R Ambedkar also took the note of Doraiswami's contribution to Indian finance and banking.

My friend says "... the entire literature produced by the Keynesian economists is not worth a page of wisdom in Doraiswami’s book."

Of course, I read this very interesting book on Indian Finance, Currency and Banking by S V Doraiswami. This one was published in 1914 and 1915.

I strongly recommend the reading of full article which is here.

MP's can't dance SALA!!

2011-12-07T17:58:00.000+05:30

Excerpts from Barun Mitra's piece on disrupted democracy:

It is time to recognise that disruptions in Parliament are not just a reflection of the declining political acumen of our time. Enlightened political leadership may help, but will not be able to deal with the symptoms. The real root of this parliamentary disease is the Tenth Schedule of the Constitution, popularly known as the anti-defection law that was passed in 1986, with almost total unanimity across the political class and the intelligentsia.

This anti-defection law has empowered political parties at the cost of democratic debate, particularly within Parliament, since defying a party whip can lead to disqualification from the House. Since MPs can’t vote as per the merit of the debate, but must follow the party diktat, there is no reason for MPs to prepare for a debate. Consequently, many MPs don’t even bother to attend the House during important debates. And if MPs can’t debate meaningfully, then disruption becomes the main form of registering one’s opposition.

Let us stop bemoaning the loss of parliamentary discourse, look at the root of the present problem, and try to revive good parliamentary practices. Here are a few suggestions. First, restrict the party whip and invocation of anti-defection law to money bills and confidence votes. Second, a no-confidence vote must be accompanied by a confidence vote on an alternative leader of the House and government, so that each term of the Lok Sabha can run its full mandate of five years. Third, a mid-term poll can only be called if two-thirds of the members of the House supports the motion. Fourth, allow debate on all major issues, and extend sitting of the House where necessary to allow members to express their opinion. Fifth, allow members to vote on issues and legislations as per their conscience. Sixth, even if the government loses a vote on a specific issue, this need not reduce its capacity and legitimacy to function effectively. Finally, allow the government to pursue its policies, let the ruling side argue its case, and win back the support of a majority of MPs

Teachings of the great liberal from South India-Rajaji

2011-12-07T17:37:00.000+05:30

STRUGGLE by C. RAJAGOPALACHARI

“I have struggled for thirty years”

Said my friend,*–

“He was preparing for a Jubilee.

“But who that lives struggles not?”

I asked, and he agreed.

Life is a struggle all the time

One or another sort for every one;

From when the child is pushed

Head foremost into the cold world

Each breath is a struggle

And every thought is a struggle,

For struggle is the throb of life.

Envy not, for every soul

And every breathing body struggles.

And those who live in ease

They struggle too against hated ennui.

The fatigue you feel as the years grow

It is the gentle voice of nature

That you must round your stalks

And prepare to fall away.

Spring! And Summer! Then Autumn comes

And the leaves that served the mother tree

And shone in the splendour of active life

Softly they drop with rounded stalks;

And in golden yellow quietly smile

At the leafy vanities that are over.

Ah, men!

Our foolish loves

And our more foolish hates

They also find their dropping dates,

And sometimes suddenly the date arrives,

Yet always as an unfailing friend does Death

Ring down the curtain on our follies.

* Late Sri K. Ramakotiswara Rau, Founder-Editor, Triveni.–Editor

–Reprinted from the Silver Jubilee Number of Triveni, Jan. 1955

Retail polity

2011-12-07T17:29:00.000+05:30

In the on going debate on FDI in retail sector, even the so called liberals are grouped in different camp. If you glance through the following pieces you will get to know what I meant so called liberals. But the fact is that Walmart is not the only guy who is going to stay here for long, after all the king of competition is going to help us in improving our life style. These pieces in my view are must read, if at all you bother to get some concrete view about why we should or should not allow FDI in retail sector in India.

Market economy or market society by S.Gurumurthy

Exploring pros and cons of FDI in retail by Bibek Debroy

The party of no principle by Surjit S Bhalla

Teachings of the great liberal from South India-Rajaji

2011-12-06T16:17:00.000+05:30

WHY WE SHOULD LOVE INDIA? by C. RAJAGOPALACHARI

(This was published in the Swarajya on August 5, 1961)

"When one sees a great evil, one must fight it. Otherwise, there is no purpose in life … I have seen landslides of moral standards like mountainsides toppling down during an earthquake. I have seen callousness and greed replace all traditional sensibility and restraint, all ideas of Swadharma. My great age and varied experience have enabled me to see changes and contrasts, and the consequent distress is great.

This is an attempt to explain why I have broken away from valuable friendships and time-honoured camaraderie, which to many is still a mystery and is cause for distress and adverse comment. The sacrifice of comradeship and affection that I have made now, giving up that precious possession, and earning displeasure and dislike in the highest quarters – these are no less a sacrifice than what I made when I was forty, and full of potential for worldly advancement, gave up my practice at the bar grieved my aged father, withdrew my children from school and college, and went into the wilderness in 1920.

I have often thought of those days when a spirit of adventure and a passionate abhorrence of foreign rule helped one to undergo any sacrifice ...

But should we not defend freedom, should we not defend democracy, should we not defend Dharma? We must not allow India to be debased, mistaking mass selfishness for patriotism. We must love India and learn why we should love India. We must fight Statism, we must fight one-party rule, and we must stem the tide of greed and corruption. We must bring again into being a cadre of sternly honest officials to administer our affairs as was done till recently. It is a sacred duty, if there be any purpose in life and if we are not just spinning tops...When the morality of the nation and its elite is being undermined and threatened with destruction, there is no question of any alternative or surrender to superior force. We must fight and protect the soul of the nation from being overwhelmed and destroyed. It is the duty of each citizen to resist it to the utmost without waiting for others or counting the cost. For if the nation’s morality is lost, there will be nothing thereafter to save."

The mighty Kumbhkaran of socialism and communism

2011-12-06T16:08:00.000+05:30

There are 'evil goondas' who does all kinds in getting away of some works published. It is also true in the case of spreading liberal values in India. Here is the evil goondas who are none other than the bloody lover of communism and socialism.

You might be wondering why I suddenly rreferring lover of socialism and communism as evil. Read this nanny article and you will realize.

Why there are no much works/talk on Rajaji, B R Shenoy, R B Lotvala, VS Srinivasa Sastri, Bankim Chandra Chattopadhyay, Minoo Masani, B R Ambedkar etc.

Surely, the Indian academic is in coma. It is also the mighty kumbhkaran yet to awaken for the truth rule out.

Economist Mark Blaug passes away, 1927-2011

2011-11-30T17:27:00.000+05:30

I had better feeling of my own interest in doing research in the area of history of economic thoughts. But some how that feeling was broken when I heard the news that one of the greatest economists of history of economic thought Mark Blaug passed away. Though I differ on many of his views in methodology of economics applications. I learned a lot from Mark's articles on the pathetic situation which is still prevailing in the development of history of economic thoughts.

See here for brief bio of professor Blaug.

The New Menace of Gandhism by Murray Rothbard

2011-11-30T17:11:00.000+05:30

A friend of mine sent me the following excerpts from 1983 essay (PDF) by Professor Murray Rothbard on M K Gandhi:

"Gandhi's India, which led t o Mrs. Gandhi's dictatorship and the horrifying experiment in compulsory sterilization" ...... AND ........."The comparative record of non-violent revolutions is, then, worse than that of violent ones, for the violence of the American Revolution after all brought forth a pretty good result, while non-violence has accomplished nothing fruitful at all.

‎"Let us not mince words: Mahatma Gandhi was an economic crazy. For Gandhi , not only modern technology but almost any technology was sinful and evil. Railroads were evil, the industrial revolution was evil, cotton textiles were evil, modern medicine was evil, education was evil."

"It should be clear that the life of Mahatma Gandhi was essentially a scam, from start to finish. Making a big show of his allegedly deeply-held principles, claiming t o make his life and thought a seamless web, he always ended up betraying those principles. H e rode on railways, he fell back repeatedly on Western medicine and surgery, and he continued to "test" his chastity with various females until the end of his life".

Thus, after the first nationwide pogrom against the Jews in Germany, in December 1938, Gandhi counselled the Jews t o react in a non- violent manner: "if the Jews can summon t o their aid soul-power that comes only from non-violence, Herr Hitler will bow before the courage which he will own is infinitely superior to that shown by his best storm troopers." And after the news of the Holocaust became known, Gandhi, in 1946, counselled retroactively.

The Jews should have offered themselves to the butcher's knife. They should have thrown themselves into the sea from cliffs . . . It would have roused the world and the people of Germany. (Geoffrey Ashe, Gandhi: A Study in Revolution, London, 1968, p. 341.) Perhaps what the Jews lacked was little Bapu to give them their "training."

20 years since India’s economic reforms

2011-11-29T18:01:00.000+05:30

Here is our latest piece on Indian economy published by The Cobden Centre, UK. This piece is co-authored with my friend Vipin. French version of this article was also published here.

Blinking links

2011-11-28T10:46:00.000+05:30

Manish Sabharwal writes "...the most articulate non-economic case for urbanisation was made by Nandan Nilekani in his book Imagining India: “It has been fashionable in our cultural commentary to refer to India’s cities as places of vice, corruption and loss of innocence. But cities are, and have historically been, a powerful catalyst for political reform. Leaders such as B.R. Ambedkar recognised this and found the Indian city liberating after the sink of localism and den of inequity that was the village. Upward mobility for the backward castes is therefore most tangible in our cities because it becomes difficult to enforce silly notions of caste purity and pollution in the forced proximity of our city buses and trains.”

Niranjan reviews a new book Grant Pursuit..."The Industrial Revolution had shown glimpses of a better future, though there was little historical reason to believe that societies could escape the poverty trap. Karl Marx and Friedrich Engelspredicted that capitalism would inevitably push workers into penury and the entire economic system would collapse in a heap. Engels comes across better than Marx in Nasar’s book. Marx, it seems, wrote about the horrors of industrial life without even once seeing the inside of a factory. He lived in London not too far away from two outstanding thinkers: Charles Darwin and George Eliot. He never bothered to either meet or correspond with them."

Break for better governance, rule of law and economic freedom II

2011-11-23T18:38:00.000+05:30

There are interesting confrontation on breaking larger states into smaller one in India. I am not taking about the current confrontation which is surely at the misplaced one, I am referring the confrontations prevailed between and among the founding fathers of this nation. Some excerpts from the B R Ambedkar's views on Rajaji.

From Linguism trap by A G Noorani.

The other disclosure is far more startling. C. Rajagopalachari, better known as Rajaji, had, in a press statement issued on November 26, 1955, said, “If it is impossible to put the States Reorganisation Schemes in cold storage for the next 15 years, the only alternative is for the Centre to govern India as a unitary State and deal with district officers and district boards directly, with regional Commissioner’s supervision. It would be utterly wrong to fritter away national energy in dispute over boundaries and divisions conceived in the drawing room and not on the background of conditions that have resulted historically.

“Apart from the general convictions of mine, I feel that a large southern State is absolutely essential for preserving the political significance of that part of the country. To cut the South up into Tamil, Malayalam, and other small States will result only in complete insignificance of everybody and, in the net result, India as a whole will be the power.”

Commenting on this, Ambedkar wrote “Mr. Rajagopalachari has not expressed himself fully. He did so fully and openly to me when he was the Head of the State and I was the Law Minister in charge of drafting the Constitution. I went to Mr. Rajagopalachari for my usual interview which was the practice of the day. At one such interview Mr. Rajagopalachari, referring to the sort of constitution which the Constituent Assembly was making, said to me, ‘You are committing a great mistake. One federation for the whole of India with equal representation for all areas will not work. In such a federation the Prime Minister and President of India will always be from the Hindi speaking area. You should have two Federations, one Federation of the North and one Federation of the South and a Confederation of the North and the South with three subjects for the Confederation to legislate upon and equal representation for both the federations.’

“These are the real thoughts of Mr. Rajagopalachari. They came to me as a revelation coming as they did from the innermost heart of a Congressman. I now regard Mr. Rajagopalachari as a prophet predicting the break-up of India into the North and the South. We must do everything to falsify Mr. Rajagopalachari’s prophecy.” That has been accomplished by Indian nationalism.

Also read "why is everyone one scared of small states?"

Break for better governance, rule of law and economic freedom

2011-11-22T17:08:00.001+05:30

From Niranjan Rajadhyaksha column published on November 17:

B.R. Ambedkar set down certain principles about state formation with his characteristic clarity inThoughts on LinguisticStates, a book published in 1955, soon after a states reorganization commission was set up by the Jawaharlal Nehru government in response to the snowballing demands for states based on linguistic groups. In that book, Ambedkar had suggested that Uttar Pradesh should be divided into three states. He had also suggested the bifurcation of Bihar and Madhya Pradesh, a plan that was eventually carried out by the Atal Bihari Vajpayee government in 2000.

Ambedkar proposed a fundamental principle: every state should be unilingual to protect the unique linguistic cultures of India. He argued against mixed-language states. However, Ambedkar also added that this does not mean that every linguistic group must necessarily be clubbed into one state. There could be two or more states with the same language.

A lot of what Ambedkar wrote seems politically incorrect, but he was never one to let such niceties come in the way of logical thinking. His core arguments continue to be of contemporary interest, though the bigger issue today would perhaps be the consolidation of the Union government in New Delhi and the Balkanization of the states.

Also read Ajit Ranade's "Small is manageable":

Smaller states, therefore, make more sense on the following grounds: (a) administrative ease and manageability; (b) correcting historic skews in federal finances of India through downsizing the problem; (c) greater possibility of inserting appropriate centrifugal mechanisms to thwart the GST juggernaut; and (d) reduced distance between the governed and government. Many naysayers will cite reasons of history, culture and dislocation. People will also cite how the creation of smaller states leads to loss of economies of scale in governance, law and order and “expertise” capital. All this talk is just a proxy for the centralising force. The Uttar Pradesh Cabinet’s decision is bold, whatever its timing and motivation. It should be welcomed and other states should draw inspiration.

What I have been reading?

2011-11-18T19:50:00.000+05:30

Ever since I came to the availability of original writings (and some other rare book on his life and works) of the great Rajaji in my office library I immediately collected them and took time to read one by one. And its time to share with you!

I was surprised to know two facts which may be least important! One was that in his 94 year life time only once he visited abroad! Secondly, he was never made as president of Indian National Congress!

It is always pleasure to read his works which is original and thought provoking. The following are the books I read. Some of them I am going to reread.

I meet Rajaji by Monica Felton: This is a great book to know about Rajaji's strong convictions and ethics of life and liberty. This book is also not any usual format which you might think and ignore it. This book contains the conversation about his life and works until he formed the new political party with like minded people.

C.Rajagopalachari His Life and Mind by K T Narasimhn Char

Rescue Democracy From Money Power by C.Rajagopalachari

The Question of English by C.Rajagopalachari

Satyam Eva Jayate (Vol I) by C.Rajagopalachari

The voice of the uninvolved: Speeches and statements on atomic warfare and test explosions by C Rajagopalachari

Rajaji's books are collection of articles published in different newspapers, journals etc.

Biased human life

2011-11-15T12:51:00.000+05:30

Read this four part articles by Nobel prize winner in economics. He says "the people who have the greatest influence on the lives of others are likely to be optimistic and overconfident, and to take more risks than they realize."

Journal of Quest-India

2011-11-14T18:04:00.001+05:30

Here is a great story in the Livemint, which gives you the death of a journal called Quest which was published for 20 years soon after India's Independence (political Independence as I often say!). Just one point:

Masani became one of the country’s most vocal advocates for a liberal economy. Culturally, the ICCF’s members had always found themselves closer to Ambedkar than to Gandhi. While some of them remained sceptical of Jawaharlal Nehru’s politics, others thought him a worthy counterweight to the advancing global influence of Mao Zedong.

Go and read the full story nicely narrated.

Rajaji on Prof F A Hayek!

2011-11-11T15:18:00.000+05:30

Those you have read a bit of Rajaji's views on political economy of India would not have surprised to know what he wrote in connection to professor F A Hayek's wisdom, read it yourself:

Rajaji was one of the earliest thinkers in India who were profoundly influenced by the writings of Prof. F. A. Hayek _ ``The Road to Serfdom'' _ who later won the Nobel in Economics in 1974. Rajaji distilled Prof. Hayek's critique of planning in a cryptic statement: ``The Socialist philosophy of controlled economy is based on the two false assumptions of the omniscience of Government and the stupidity of the people.'' In advocating competitive private enterprise based on ``responsible individualism'' or the extended concept of corporate social responsibility, Rajaji was clearly distancing himself away from the law of the jungle or the phenomenon of unethical competition.
He did not consider the controlled economy as the barrier for monopoly. ``It is not good certainly to let men with money become powerful. But as Hayek has written, it would be worse if only men politically powerful can make money. ..... The oxygen of competition has been displaced by the foul air of monopolies.....''
It was not surprising that Rajaji considered the controlled economy as a bane for its wasteful centralisation of the national economy in the hands of the ministers and the bureaucrats.

Read the full article "Rajaji — the forefather of liberalisation ethos" By S. Swaminathan

Population, the resource from problem

2011-11-09T17:21:00.000+05:30

Here is my piece on "Population in the 21st Century — TheUltimate Resource, If only they are skilled". I did not posted this piece earlier as it was not available in online.

As the reader will note that this piece is entirely different from my deep interested area of history of Indian economic thoughts.

This piece is essentially to remind the population wallas in India who keep telling us that the population is a problem rather than resource for the wealth creation. By telling population is a problem they stubbornly ignores what needs to be done to improve the skills of people by using their own common senses!

Hope you will find the piece useful.

Blinking links

2011-11-09T15:16:00.001+05:30

Interesting reading:

From What G-20 Achieved at Cannes by T.C.A. Srinivasaraghavan

Or, if you like, Keynes, by being instrumental in providing the intellectual basis for removing a metallic anchor for paper currency, got it horribly wrong.
That is, as long as the amount of currency that a country could issue was tied to its gold reserves by some multiple, there was an automatic limit on how much could be issued.
The moment this tethering was eliminated by the US in 1971, and it began to finance its war in Vietnam by printing even more notes than it had done in the 1960s, the balloon floated off and, like all balloons, became subject to random gusts of wind blown by speculators.
That produced volatility in the commodity markets, which was a private problem. But the freedom to print notes without restraint soon became a public problem.

From Time to Rock the Vote by Prem Shankar Jha

She did this because her purpose was not, as her party claimed, to reduce the influence of big business on policy-making. The second Industrial Policy Resolution of 1956 had already done this. It was to cripple a rising threat from the right by depriving it of funds. In 1967, the pro-market Swatantra Party, formed by C Rajagopalachari in 1961, and the Bharatiya Jana Sangh (BJS) had fought the elections jointly and become a serious threat to the Congress in three states. These were Madhya Pradesh, where the BJS won 78 out of the 296 seats, Gujarat, where the Swatantra Party won 66 out of 168 seats, and Rajasthan, where, by winning 72 seats, they succeeded in reducing the Congress to a minority.
The Swatantra, being the most dependent on funds from the corporate sector, simply threw in the towel: most of its members merged with the Jana Sangh. The two socialist parties, the Praja Socialist Party (PSP) and the Samyukta Socialist Party (SSP), weakened rapidly, merged, then joined the Janata Party in 1977 and finally, disappeared altogether. Their place was taken by a host of caste and ethnicity-based political parties that we are familiar with today.

From Nationalised family, privatised state by S. Gurumurthy

Milton Friedman, regarded as the most influential economist of the second half of the 20{+t}{+h} Century and a Nobel Laureate, denounced social security as creating entitlement for all based on merely age, not an economic or poverty index. It is therefore not an anti-poverty measure. And what started off as support to families slowly expanded to supplant the families themselves.
The result: by such welfare schemes, the US government gradually took over the responsibilities and burdens of US families, and rendered them duty-free and functionless. By taking over normal functions of almost half the US households, the state has virtually replaced the household — that is, nationalised the families. While the next part of this article will be on the causes and consequences of this fundamental shift in the state-society relation, here is a brief on how this shift seems set to dynamite the US economy itself.

From Economics of Bahuka and Greenspan by S. Gurumurthy

Milton Friedman declared that ‘as children stopped contributing voluntarily to the support of their parents and began contributing through a system of government fiat, a serious erosion of family values became inevitable' and saw ‘social security system as a detrimental influence on social patterns'. The NBER work also pointed out how ‘family functions such as production of food, clothing and fuel and some other staple items were taken over by business firms, and responsibilities such as education, childcare, and social insurance have been assumed by the state.' What the NBER meant here is that business firms and the state had, together, robbed the families of their functions, leaving them functionless, therefore, dysfunctional.
Conceding that ‘the market system is the most efficient, and most conducive to individual freedom yet devised', NBER pointed out that the market itself ‘doesn't provide for the organisation of the society' but its ‘success during the last 200 years is attributable in good part to the existence of strong non-market institutions such as the family; also adding that the ‘decline of the family and the growth of the government will jeopardise the market system and associated social, political and cultural freedoms.'

Biggest RBI's deregulation move!

2011-11-01T17:20:00.000+05:30

In my previous assignment I use to attend the review meeting of RBI, and kept on pointing out the silliness of not REFORMING the interest rate from savings in bank, RBI regional director (Chandigarh) use to ask me more questions and clarifications why we should do and how!! later many others joined with me!!!! the good news is finally the RBI has done this in the last Tuesday review. See here for the full statement.

The goodness of RTI Act

2011-11-01T17:08:00.000+05:30

Do Government School Teachers in Tamil Nadu educate their own children in Government schools or Private Schools?

what good stories after death!

2011-11-01T09:00:00.000+05:30

"A true life story of Veerappan that shows him to be a person different from the one most of us are familiar with."

It is still worth to read sauvik's 2004 piece "Veerappan as a respectable businessman" published in the Indian Express!!

It's all about SPARE time

2011-10-31T16:45:00.000+05:30

Whatever in my small way have written till now is a profit from my killing of spare time...this led me to search people who have done great things in spare time!! Finally All I am into the Sir C V Raman's world of great new biography by Uma Parameswaran. Raman too did all his discoveries in his SPARE time in the first ten years (1907-1917).

CAPitalism

2011-10-29T11:33:00.001+05:30

From "Capitalism in jeopardy: Why India holds thekey" by R Jagannathan

For evidence, look at the number of capitalisms competing for survival. In Europe we havewelfare capitalism in crisis. In America we find the Occupy Wall Streeters questioning laissez faire capitalism; in China we have a thriving authoritarian capitalism, and we also have partly successful chaebol-keiretsu capitalism in the rest of Asia (minus China and India).
In India we have what I would call “Hindu capitalism” – a huge diversity of approaches where we have an Infosys at one end that runs to western notions of institutional capitalismand corporate governance, and huge, family-controlled business empires that are representative of feudal capitalism, at the other. Corporate governance is a secondary goal here.
In nowhere land is Indian muddle-path state capitalism – encompassing highly profitable companies in the raw materials and energy sectors (ONGC, Coal India, Nalco) and unprofitable basket cases that operate in competitive industries like telecom and aviation (BSNL, Air India).
Little wonder, The Economist, which has devoted a special issue to India Inc, concludes that “while India’s capitalism does have oodles of vim, it is writing its own rules, some better than others.” In the magazine’s view, Infosys is the exception, not the rule. “A Martian investor landing on Mumbai’s streets of gold might judge its business scene a mix of Sao Paulo, Seoul and Shanghai, with only a dash of Silicon Valley.”
Where The Economist goes wrong is in assuming that India needs a Deng Xiaoping or Margaret Thatcher to give Indian capitalism a new lease of life.
However, Indian capitalism is about diversity, not homogeneity. Which is why it is more appropriate to call it Hindu capitalism – which is the acceptance of multiple approaches to capitalism without prejudging what will work. It is a non-ideological approach to see which capitalism works.
As any evolutionary biologist will tell you, when you have diversity and multiple approaches, you are more likely to stumble upon the right answer in due course.
Different countries in the world are adopting different approaches to capitalism. In India, we have adopted all the major approaches. May the best approach win.

The paradox of inequality (income)

2011-10-27T14:05:00.000+05:30

There is a movement in the USSA for the issue of what has been the business of top 1 percent of wealthy people for the rest of the population.

I am more than reminded of the great 1955 essay by Von Mises on “Inequality ofWealth and Income”. Some excerpts:

Inequality of wealth and incomes is an essential feature of the market economy. It is the implement that makes the consumers supreme in giving them the power to force all those engaged in production to comply with their orders. It forces all those engaged in production to the utmost exertion in the service of the consumers. It makes competition work. He who best serves the consumers profits most and accumulates riches.

…country enjoys the highest standard of living ever known in history because for several generations no attempts were made toward "equalization" and "redistribution." Inequality of wealth and incomes is the cause of the masses' well-being, not the cause of anybody's distress. Where there is a "lower degree of inequality," there is necessarily a lower standard of living of the masses.

There is no use in fooling ourselves. Our present taxation policy is headed toward a complete equalization of wealth and incomes and thereby toward socialism. This trend can be reversed only by the cognition of the role that profit and loss and the resulting inequality of wealth and incomes play in the operation of the market economy.

Nani Palkhivala’s Vision for India

2011-10-25T17:41:00.000+05:30

The more I read of my own i become frustrated with the fractured Indian classical liberals, what can I say more, let alone say or murmur by themselves on the shelves of the death by democracy in India. That is it.

The below paragraphs is from a great lecture beautifully delivered by late great Indian economist Nani A Palkivala at Australian College of Defence and Strategic Studies in 1998.

As early as January 1987, The Economist rightly remarked that socialism as practised in India has been a fraud. Our brand of socialism did not result in transfer of wealth from the rich to the poor but only from the honest rich to the dishonest rich.
We built up state-owned enterprises called the public sector in India. The sleeping sickness of socialism is now universally acknowledged, -- but not officially in India. More than 240 public sector enterprises are run by the Union government, and more than 700 by the state governments. These public sector enterprises are the black holes, the money guzzlers, and they have been extracting an exorbitant price for India's doctrinaire socialism.
There is a tidal wave of privatisation sweeping across the world from Bangladesh to Brazil, but it has turned aside in its course and passed India by.
The most persistent tendency in India has been to have too much government and too little administration; too many laws and too little justice; too many public servants and too little public service; too many controls and too little welfare.
My own thinking is that our greatest initial mistake was to start with adult franchise. No democracy has ever paid, all things considered, a heavier price for adult franchise than India. I am not aware of any great democracy which started as a republic on the basis of adult franchise: all of them started with a more restricted system and then graduated to adult franchise. When the Constituent Assembly was in session, two of our greatest statesmen -- C Rajagopalachari and Sardar Vallabhbhai Patel -- recommended that we should not start with adult franchise but educate our people first to make them worthy of discharging their duties as citizens of a great democracy; but they were out-voted.

I strongly recommend you all to read the full lecture and ponder over it.

Blinking links

2011-10-25T11:48:00.001+05:30

SA writes; "Political philosophers tracing the evolution of society define the period before governments as the State of Nature where every man was a law unto himself. It is the period before social contracts, commandments and rule of law came into being to bring order in society. It is only after the evolution of social contract, defining rights and obligations, that society migrated from the State of Nature and accepted the Nature of the State. If one looks at the headlines of the day and raging rant beamed into living rooms, it does often seem that India is drifting into an ungovernable chaos. The Nature of the State is seemingly regressing into the State of Nature."

The demand doctor who killed the world economy in the past and is still killing the same.

TCA on the quality of chief economic advisers who served in the Indian Federal Finance Ministry. Just to note (from TCA column):

"The good, the bad and the undeserving

Sometimes, you tend to look back and wonder about this and that. My time has been largely misspent in the company of economists who, I have concluded, are of three types: the good, the bad and the undeserving.

The best amongst the good ones speak in murmurs, the bad ones do regressions and the ugly ones preen like a brigade of frogs at a beauty parade. I write this because recently I had to put up with some very self-congratulatory talk.

My own view, after having studied the matter in depth, and at close range, is that the worst of the last group are the ones who served as chief economic advisors (CEAs) between 1982 and 2002.

During this period there were five and a half, the half being a “chief consultant”. He was the best by far and therefore ousted after 15 months. In the 1980s, one left after two years and another after about a year and half."

Great Chidambaram wisdom!!

2011-10-24T10:27:00.000+05:30

So, here goes exact lines from the Hon Home Minister, then was out of power both in the ministerial and parliament,

This article was published in August 18, 2002 in the Indian Express. Don't look at P.Chidambaram, now with the backdrop of scams and all other odd news, I read his columns three years ago when it was published in Book form. A View from the Outside: Why Good Economics Works for Everyone. It is must read one!!

The article I refer here is in page number 277-280.

Last three paragraphs from his hot article titled "Laughing All the way to the vote bank".

"What we need is a comprehensive law to regulate political parties. Just as we have Companies Act to regulate the affairs of companies, we must have a law that will lay down detailed rules to govern the functioning of political parties.

The Income Tax Act must visit political parties with the same consequences for breach as it does in the case of companies and individuals. We also need a body like the Company Law Board to oversee the functioning of political parties and resolve internal disputes.

Just as corporate governance has become a big issue, governance of political parties must also be raised as an important issue. Because, if we have poor governance in our political parties and if they do not observe any principles or ethics, the governance of the country will also descend to more abysmal levels." (p.280)

Was it planned?

2011-10-22T12:11:00.000+05:30

Prime Minister Dr Singh said something very interesting,

Yeah don't miss it!!

Here his words:

"I am happy to say that in the past two decades, different political parties, ruling in different times in different States, and also in the Centre, have pushed in the same general direction to ensure that my prediction is now a widely accepted reality."

Moneyball vs Blink

2011-10-22T11:19:00.000+05:30

Many people are exploring the inner wilderness. Kahneman and Tversky are like the Lewis and Clark of the mind.

Don’t Blink! The Hazards ofConfidence

Team Anna is deep in crisis

2011-10-22T10:18:00.000+05:30

"Let’s explore this further. Another member of Team Anna overstays his leave from his government job, flunks his employment bond, and is asked to pay back what is due to the government as per the law and procedure; it is still only Rs 9 lakh or so. And what is the answer? It is not that the government’s claim is fake or even vindictive. It is just that, what do my former employers (the Central government in this case) think I was doing? Was I whiling away my time? I was campaigning for the RTI, which is so important for my countrymen. So even if I did not come to work meanwhile, or was effectively AWOL, the government should have the good sense to waive all claims on me. Waive all claims? Use discretion? Didn’t you think this entire campaign was about curtailing discretion, ensuring rules are followed fully and no exceptions are made? And what if lakhs of absentee teachers in our government schools, who the Jan Lokpal is expected to straighten, find similar excuses?"

See here for full article.

RBI polity

2011-10-22T10:07:00.000+05:30

Indian economist Bhalla plea "Note the close correspondence — and especially note the economically criminal vote-getting policy of the Congress after it came to power in May 2004. Starting in 2006, procurement prices literally exploded, with an 18 per cent increase in 2008 alone. Between 2006 and 2009, the relative price of food increased by a record 33 per cent. The normal pattern is for the relative price to move in a plus/minus 5 per cent range."

See more here.

Dalits polity

2011-10-22T10:04:00.001+05:30

From Rajdeep “Maya & Ambedkar: Incongruous? May be not”

“At a time when Mayawati's Dalit memorials have sparked off a raging debate, it might be instructive to consider what the original Dalit icon, Dr Babasaheb Ambedkar, would have done in a similar situation. What is almost certain is that, unlike the UP chief minister, he would not have ordered the construction of his own statues. A fierce rationalist, Ambedkar disliked all forms of political idol worship. "In politics, hero worship is a sure road to degradation and eventual dictatorship," he said in a seminal speech before the Constituent Assembly in 1949.
Sixty two years later, there is little doubt that Mayawati has emerged as the great dictator of Uttar Pradesh, someone who controls India's most populous state with an iron fist - which is why she can insist on having her own life-size statue alongside those of Ambedkar, Phule, Shahu and Kanshi Ram. Which is also why she can brazenly claim that the 675 crores spent on the Dalit Prerna Sthal has come entirely through party donations when the fact is that the UP government had already budgeted a whopping Rs 3000 crore on Dalit memorials and parks across the state. This in a state where 38 per cent of Dalits have never attended school, where 70 per cent is still the estimated school dropout rate among Dalits and where hundreds of children die of encephalitis every year because of lack of healthcare facilities.”

Jaithirth Rao’s from Elitesdon’t get it

“Even as they indulge their pride (misplaced or otherwise) contemplating the architecture and the names of the past and present, India’s elites seem to forget the ironical fact that the Dalits do not have much of a place in these sanitised propaganda efforts. Upper-caste Hindus may take pride in the Madurai temple; Muslims may take pride in the Gol Gumbaz; Jains may take pride in the Gomateshwara statue; Sikhs may take pride in the Amritsar Golden Temple; Buddhists may take pride in the Sanchi Stupa; Christians may take pride in the San Thome Cathedral. What are Dalits to take pride in? The grand temples of India (including the ruined ones) are only reminders of buildings where the ancestors of today’s Dalits were denied entry.
It is this lacuna in Dalit identity formation that Mayawati has brilliantly recognised. She is not at all stupid when she builds a park and erects statues with the conscious motive of overawing visitors with a sense of gigantism. She is imitating Rajaraja, Shah Jahan and Hardinge. And she understands that, in a century or two, a Dalit parent can proudly take his or her children to the monument and show it to the young ones with a measure of pride whispering in their ears, “We had a great leader — look around you and take pride in what she built.” We fail to understand the important political purpose of Mayawati’s projects, but we overlook the DMK’s aesthetically challenged statues, we dare not criticise the repeated use of Shivaji’s name and we acquiesce in the monopolisation of the public space by the Nehru-Gandhi family.
Mayawati is a superb politician and will go down in history as one who did what great statesmen from Augustus Caesar down have done — she is using architecture to achieve political ends. Dalits get this. The chattering elites need to abandon their double standards and understand this.”

A book of its kind

2011-10-21T15:52:00.001+05:30

Yesterday, I had a chance to participate in the new book launch.

It was a great fun to participate in the discussion of a new book on top corporate leaders and social activists in the country. The book is "Uncommon Ground: Dialogues with Business and Social Leaders" By Rohini Nilekani.

The book is a "...rare dialogues between leaders who have sometimes been adversaries, a number of common concerns emerge. Among others, Anand Mahindra and Medha Patkar discuss land acquisition and use; Mukesh Ambani and R.K. Pachauri debate decentralized energy options; Sunil Mittal and Aruna Roy imagine an Indian model to enhance the employability of our labour force and Yogi Deveshwar and Sunita Narain explore how industry can become more environmentally sustainable." More here.

Was all kinds of child labour bad?

2011-10-20T15:55:00.000+05:30

A Young CEO of Nalli says:

"Child labour was a big part of this industry especially when it comes to contrast border (Korvai) sarees? How has that situation changed?
At least in Kancheepuram it has gone away after the government abolished child labour. Contrast border sarees that are in the market now are not (perfect), there is some bleeding (of colours). And the reason is if you want something that perfect, you need nimble hands, which means only children can do it. Previously, children used to help out their parents. Now they don’t and you will not see that product on our shelves."

Note the point!!

A line of thought

2011-10-19T14:07:00.002+05:30

Ponder over this lines from Professor Mehta's article in the Indian Express:

"...The terms of the social contract have to be rewritten. Capitalism has to justify itself in terms of social gains, and democracy in terms of empowerment. But at the moment no one quite understands what all of this might mean."

A K Ramanujan essay

2011-10-19T14:05:00.000+05:30

So, there is a huge wolf cry over the removal of a great essay by late great poet and professor A K Ramanujan.

The below are the original essays.

1 (extract) 2 (full essay)

Some links on controversial essay.

1, 2 3

From an article published on Oct 16, 2002 in FE

2011-10-18T17:59:00.001+05:30

Full article is here.

It is indeed sad that most Indian economists still believe in the Keynesian analysis that recessions are caused by insufficiency of demand and that the solution is a fiscal stimulus. Indian economists — barring Brahmananda and perhaps Surjit Bhalla — are totally oblivious to the Austrian business cycle theory, best articulated by Hayek. According to Hayek, recessions are brought about by excess supply, which is brought about by overinvestment. Each boom contains the seeds of the subsequent recession and each recession, the seeds of the subsequent boom. Readers would do well to study the above-mentioned Economist special issue which succinctly explains the Hayekian analysis (pages 8-9).

Hayek argues that if central banks hold interest rates below the equilibrium rate (that is, the rate at which the supply of savings equals the demand for investment funds), credit and investment would rise too rapidly and there would be a shortage of savings. Cheap credit and inflated profit expectations cause overinvestment and malinvestment in the wrong kind of sectors. Eventually, the mismatch between savings and investment can be resolved only by a rise in interest rates, making some investments unprofitable. Excess capacity will reduce profits and lead to investment collapses, ushering in a recession. As excess capacity is cut, profits rise and investment eventually recovers.

According to this analysis, the only way to prevent the turn of the cycle is to inject more credit which becomes unsustainable. A recession is not only inevitable, but necessary to correct the imbalance between saving and investment. The Economist argues that recent business cycles in the US and Japan have typical Hayekian features. The right policy response is to raise interest rate well before the boom spins into a downturn. But if inflation is low, central banks are reluctant to raise interest rates and as the cost of capital is way below the expected return, there is a surge in credit and investment to unsustainable levels. It is overinvestment which causes the return on capital to decline. The Hayekian analysis would point to the repeated easing of interest rates to be wrong as it merely delays the correction of past excesses.

Sir John Hicks,as far back as 1966, argued that developing countries typically fit into the Hayekian overinvestment mode. A recession is necessary to work off an imbalance between too much investment and too little saving. The moral is that injecting created money and lowering interest rates only delays the cleansing process. The output losses would be much less if central banks prevent the boom from reaching unsustainable levels by a timely increase in interest rates when growth rate and investment goes into an unsustainable upswing. Monetary policy is most effective when it cools the overheating; it is totally impotent during the downturn of activity. Lowering interest rates would be ineffective and only delay the adjustment.

I too missed the great economist: Sudhir Jayantilal Mulji (1938-2005)

2011-10-18T17:52:00.000+05:30

Few days ago I somehow got a link by reading through an article on Indian economy. I once really thought about the ideas or the way Mulji wrote this article which I posted here yesterday. That is a different story.

Later I read about this man who was so close to the Indian classical liberal community. But no one ever told me about this man in my interaction with any of the so called living Indian classical liberals, let alone we all learns from the genius of GOOGLE!!!

I keep telling my readers and friends who utter a word on Indian classical liberals that they (Indian classical liberals) do not believe in the words-unity in diversity.

Here is my bit of reading and knowing about this great man Mulji. I am sure you will enjoy reading his articles, it is really fun and he brings the tradition of history of Indian economic thoughts into the present day political economics that is what amazes me.

CCS President Dr Parth Shah wrote “I remember my last conversation with him about our first seminar on Austrian Economics that we are planning in late August. He was very keen to participate in it and debate the ideas with youngsters at the seminar. He reminded me several times during the conversation to make sure that he got his invite. I know the economics students at the Seminar would have benefited tremendously from his theoretical insights and extensive understanding of the real world. We all will miss it now.”

I had attended the Austrian Economics Seminar. I too missed this great man!

According to Shankar Acharya “During his early Bombay years, Sudhir also served as secretary to the Maharashtra wing of the Swatantra party, a responsibility quite consistent with his liberal, market-friendly views.”

Mulji on Kayek:

For as with (Friedrich A) Hayek and Kahn on policies of unemployment, wrong signals may lead to bad policies. The story is that during the period of sustained unemployment Kahn asked Hayek the question: "Is it your view that if I went out tomorrow and bought a new overcoat, it would increase unemployment?" Hayek: "Yes, but it would take a very long mathematical argument to explain why." Read full article here. See here at Mises blog whether Hayek said such a thing!!

"These are market trivialities; but allowing the rupee to fluctuate is to embark on the voyage of economic discovery that Hayek so magnificently wrote about. Through trial and error, the true value of the rupee will emerge."

Some beautiful tributes

Mulji’s articles (many of his works is interesting, but never assume in one go that he was a lover of Keynes!! though his writings may appear).

His views: 1,

There are several other articles which I have not mentioned here.

India's role in Keynes economic theory

2011-10-17T18:43:00.000+05:30

But it seems to me that if you take account of continuous Indian behaviour in years of booms and slumps the generality of Keynes’s Theory is rather more obvious. Not only in the diagnosis of the causes of economic difficulties but also its cures.

Blinking links

2011-10-17T14:53:00.000+05:30

Despite PM's vow, govt ignores Chandra anniversary

National Interest: The Officer Raj

NREGA is not GOOD for dalits

Eclipse-India, China and USA

2011-10-13T15:30:00.000+05:30

Day before yesterday, I attended a Session on new book "Eclipse: Living in the Shadow of China’s Economic Dominance" by Arvind Subramanian. It was organised by CPR and you can see the panelists from here.

YOu know, an author talking means- always if and buts, so what then why not, how does that matter to India so on and on!

As always in the past, Montek did not read the book, despite that spoke for no less than a panelist!! nodded the Chair. The other co-panelist said he had read the book and made few remarks, yes you guess it is all if and buts!.

The book is very slim. Swami had sort of reviewed this book in the Economic Times.

The full book is freely available here, though you cannot print it!!

Though, no connection, but read and think about it "One-Dollar Bribes for India Licenses Contribute to World's Deadliest Roads"

Economists rarely blame fellow-economists for the bad advice they gave.

2011-10-13T10:10:00.000+05:30

“Rare is the economist or adviser who adopts acontrarian position and like Shenoy in the 1950s, such economists areostracized and shunned.”

" Meanwhile, kirana stores in many citiesdevised new methods to stay competitive. Many of them installedair-conditioning, created aisles, introduced trolleys, computerised billing andstarted accepting credit cards. Not only that, the traditional stores stockproducts relevant to their neighbourhoods—sticking to packaged foods in areaslike Bangalore with its tech workers, but adding gourmet foods, wasabi paste,morels, refried beans and the likes to cater to the upmarket residents of, say,south Mumbai. On top of that, kirana stores formed groups in many cities togain better bargaining power with distributors and offered discounts toconsumers."

IS not is Kambara!!

2011-10-12T19:41:00.000+05:30

A few days ago was listing the All India Radio after very long time. It was news time. I hear one interesting thing which led me to write here. It is the interview of Mr Chandrashekhara Kambara who is according to Wikipedia:

a prominent poet, playwright, folklorist, film director in Kannada language and the founder-vice-chancellor of Kannada University in Hampi.^[3] He is known for his effective usage of North Karnataka dialect of Kannada language in his plays and poems and is often compared with D.R. Bendre.
Dr. Kambara's plays mainly revolves around folk or mythology interlinked with contemporary issues,^[4] inculcating modern lifestyle with his hard-hitting poems and has became a pioneer of such literature.^[5] His contribution as a playwright is significant not only to Kannada theatre but also to the Indian theatre in general as he achieved a blend of the folk and the modern theatrical forms.^[6]
He has been conferred with many prestigious awards including the Jnanpith Award in 2011 for the year 2010,^[7] Sahitya Akademi Award, the Padma Shri by Government of India, Kabir Samman, Kalidas Samman and Pampa Award. After his retirement, Kambara was nominated Member of Karnataka Legislative Council, to which he made significant contributions through his interventions.^[8]

In one of his interview he said:

Age has not hampered my creativity, be it poetry or plays. In fact, I am planning to write a satire on forest brigand late Veerappan, who wielded a lot of clout in the political world. Many Kannada newspapers have requested me to write columns. But I refused as I am someone who uses a lot of metaphors. Newspaper style is dull and does not suit my temperament which is why I have not accepted offers to write columns.

Hope some of you might have read free market economist Sauvik's article on Veerappan (Veerappan as respectable businessman).

I am really looking forward the satire on veerappan!!!

Beyond RED

2011-10-12T19:14:00.000+05:30

Yesterday I read a new book called "Beyond RED an apostate on communism" by Kesavan Nair who was a practicing communist in the State of Kerala for long time.

This very slim book is not only thoroughly analyses and rejects all communists theory and practice but also shows through scientific analysis how the communists are DEAD against the very people.

The full book is available from here in the authors blog. The book was first published in the Malayalam language, however, the English version is as author says is rebirth of what is written originally in Malayalam.

This article reviews the English version of the book. It is enough to say that "P. Kesavan Nair closely analyses the nihility and blunders of Marxism through his book Marxism Communism".

It is a must read book. However there are few wrong notional analysis in the book, i consider it is the flop side of the book.

Nobels-political prizes

2011-10-12T09:58:00.000+05:30

The today's Indian Express editorial says:

The Nobel prizes, we are sure, incorporate political signals. The literature prize rewards political consciences: Dario Fo to the left, Mario Vargas Llosa to the right, Günter Grass to the centre. And, of course, Harold Pinter, the eternal dissident. Peace has been even more obvious: Pinter-like European disdain for George W. Bush was expressed though awarding political alternatives — Carter, Gore, Obama. The surest sign, perhaps, that economics is far from being a pure science is that its award, too, is invariably seen as political. Amartya Sen’s prize marked the move towards an inclusive development economics, and the rise of the Indian growth model. Edmund Phelps’ 2006 prize was seen as a warning to triumphalist free-marketeers; and Paul Krugman’s seemed to have obvious political overtones. So how should we judge this year’s award, to Christopher Sims of Princeton and Thomas Sargent of NYU?

And further

Although they unquestionably deserve the prize, the question remains: why now? As Europe teeters on the brink, has the Committee passed up the opportunity to make a statement about the solution?
It may well have not. Sargent’s most memorable paper is from 1981, on the futility of trying to control inflation through monetary policy. In today’s high-inflation times, as central banks worldwide struggle with their mandates, that’s hardly apolitical. And Sims’ work focused for years on trying to make sense of simple Keynesian models; he ended up concluding that it underestimated the links between fiscal and monetary policy, the degree to which they are inextricably twinned through the government’s budget constraint — precisely the error that has landed the European project in such trouble. That’s a relief: the prizes are not, after all, completely apolitical. They wouldn’t be as much fun if they were.

Why NOT Hayek! (and Mises)

2011-10-11T17:44:00.000+05:30

Why Mises (and not Hayek)?

The Shala at Chennai!!

2011-10-10T13:42:00.000+05:30

I had great experience in participating at the Shala event at Pune in this May.

What I liked about Shala event even more is the fact that the people talked about things at not easy things but important to understand them especially in today's dynamic political economy situations.

At Pune, I was given a great chance to speak on my research of digging into the free market ideas from our very founders of modern India. There is even more interesting ideas coming out soon from my research!!

The Takshashila Institution has just announced another Shala event in Chennai early next month.

Those of you are interested to participate in the event can register yourself. There is no fee charged for this event. In my view, The Takshashila Institution has many committed people for reforming the ills of systemic issues in our country.

Let's join together to make this event happen like our own!!

NG-means nuked gundas

2011-10-10T10:39:00.000+05:30

Senior BJP leader says:

Ravish Tiwari: Your NDA government is held responsible by some for converting the Public Distribution System from universal to a targeted one. What is your stand on NREGA and schemes like targeted PDS?

I was the chairman of the Public Accounts Committee in this Parliament for a while and I examined NREGA. I found that NREGA is not a success story, it is a disaster story. It is simply a hand-out and not always to the deserving. A great deal of this money goes to the village sarpanch. NREGA is a criminal wastage of money.

Failure is again a thing

2011-10-10T10:07:00.002+05:30

Dr. Atanu Dey argues in his Indian Express article that "The failure of the Indian education system must count as the Indian government’s greatest failure. Over 90 per cent of students drop out of school by the 12th grade; only 6 per cent go on to tertiary education, to cite just one dismal statistic. We have to understand that the failure is primarily due to flawed policies that the government has consistently imposed on the education sector. Aakash, like its predecessor, the “$10 laptop”, is just another distraction — but a very costly distraction."

Blinking links

2011-10-10T09:45:00.001+05:30

Swapan Dasgupta: "Everyone loves a good poverty business" India except the poverty stricken on poor human being.

"It certainly didn’t need a familiarity with complex econometric models and either Keynes or Hayek to realize that the Planning Commission’s extrapolation from the Suresh Tendulkar method of poverty measurement was just another example of economists living in a make-believe wonderland. The wise men of Yojana Bhavan had once again demonstrated to the public’s satisfaction that after lies and damned lies comes statistics."

Gurcharan Das on, "Duty or revenge":

On a sweltering afternoon on September 29, 2011, principal district judge S. Kumarguru began to hand out sentences. There was a hushed silence in the packed courtroom in Dharmapuri, Tamil Nadu. He began at 3.30 pm but could not finish until 4.40 pm because he had to read aloud the names of 215 government officials. Among those convicted were 126 forest officials, 84 policemen and five revenue officials. Seventeen were convicted of rape and they were sentenced from seven to 17 years; others received from one to three years on counts of torture, unlawful restraint, looting and misuse of office. Had 54 of the accused not died in meantime, the sentencing would have taken longer.
Early on June 20, 1992, four teams of government officials descended on the adivasi hamlet of Vachathi, near Sathyamangalam forest, also home to the dreaded brigand Veerappan. They assembled the villagers beneath a neem tree and let loose a reign of terror as they searched for smuggled sandalwood. They picked up 18 teenage girls and dragged them into the forest, where they raped them repeatedly. They only brought them back at 9 pm.
Claiming a haul of sandalwood from the riverbed, the officials then put 133 villagers in jail. How does the human mind begin to cope with this soul-numbing news? My first reaction was horror at the rape of teenage girls by men in uniform. Second, was a feeling of relief and catharsis when punishment was meted out to powerful men. The third emotion was outrage at those who allowed the case to drag for 19 years. Then questions arose in my mind. How could this happen in the first place? And was this not as serious an act of corruption as the 2G scam? And why was the nation quiet?

Education programm at The Takshashila Institution

2011-10-08T15:29:00.000+05:30

INTRODUCING THE GRADUATE CERTIFICATE IN PUBLIC POLICY PROGRAMME

Don’t count on it

2011-10-08T13:35:00.000+05:30

"Unless one is living in a pure dictatorship of thelike the world has never seen (remember that inequality was more severe inCommunist regimes where the Politburo members and their ilk slept peacefullywhile the masses went hungry), strict equality in consumption is neitherdesirable nor achievable."

Karl Marx’s malady

2011-10-08T11:10:00.004+05:30

This news item in The Economics says that Steve Jobs realized that "Thomas Edison did a lot more to improve the world than Karl Marx and Neem Karoli Baba (the guru he was seeking, who died before they could meet) put together"

I remember two things after reading this news item:

A recent interesting article "Marx to Market" by Peter Coy. The opening para of article is worth to ponder over:

Society generally moves on from its mistakes. Doctors no longer drain blood from patients. Aviators don’t try to fly by strapping wings to their arms. Nobody still thinks that slavery is a good idea. Karl Marx, though, appears to be an exception to the rule of live and learn. Marx’s most famous predictions failed; there has been no dictatorship of the proletariat, nor has the state withered away. His followers included some of the 20th century’s worst mass murderers: Lenin, Stalin, Mao, Pol Pot. Yet the gloomy, combative philosopher seems to find adherents in each new generation of tyrants and dreamers.

I strongly recommend to read the full article.

The other thing I remember is that in the great article "No History of Ideas, Please, We're Economists", Mark Blaug said:

“How can we possibly forget, or even pretend to forget, modern economics when we read Karl Marx? Why did the poor fellow try to attribute the value of the product to a single input, labor, without knowing anything about marginal productivity? One might well talk to a psychoanalyst about one’s childhood while pretending that amnesia occurred at puberty.”

Free market is good for dalits

2011-10-08T10:14:00.000+05:30

Milind Kamble, chairman of Dalit India Chambers of Commerce and Industries said:

Casteand capital can't coexist: "Capitalism dismantles rural societies and feudalism. Capitalism dismantles traditions and traditional cultures. Capitalism produces urban societies, democracy and modernity. India's caste system thrived and survived on agrarianism and traditional culture. Caste is losing its grip over dalits because India is industrializing, urbanizing and modernizing. Dalit capitalism will accelerate that process and will accord a human face to Indian capitalism. Caste and capital can't coexist. One has to give way to the other."

Also read “Caste and the Market Economy” by Sauvik Chakraverti

“I suggest Dalit leaders get interested in the Economics of prosperity. We urban liberals dream not just of making India prosperous; we dream of making India obscenely rich.
The Dalits will gain enormously from open markets, economic freedom and urbanisation. As they claim, in their respective economic niches, a greater share of a rapidly growing pie, and as they mingle with caste anonymity in bustling metropolises, they will find the old caste equations disappearing.”

Chetan Bhagat writes:

“I have nothing against commercialisation of education. Commerce and business are a good thing. However, when it comes to education, it needs a sense of ethics and quality. Good people must be incentivised to open colleges. Say, by a simple policy fix like allowing private institutes to make a profit……………. These private colleges have played the role of providing students with a chance to earn a degree of their choice. There is nothing wrong in this. It fact, it is even good that the private sector is playing a role in educating our students.”

Blinking links

2011-10-05T09:20:00.000+05:30

Gandhi was wrong, says London mayor

It is ironic to see comments like the one from no less than a person who attach with compassionate capitalist.

Yes I am talking about Mr Narayana Murthy. He said during a address recently that:

"Thanks to the coaching classes today, the quality of students entering IITs has gone lower and lower."

Economics of language

2011-10-04T19:14:00.000+05:30

"Information is central to the economics of people as diverse as F.A. Hayek and
George Akerlof. Hayek’s greatest contribution to economics was to tell us about the role of knowledge in society and how information is transferred between economic agents in a market. Akerlof showed how markets can implode when there is asymmetric information. McCloskey seems to be pushing the research agenda further, by pointing out that we transmit information through language."

Jobs is no Edison!

2011-10-04T18:58:00.002+05:30

"The twentieth century’s Thomas Edison has stepped from the stage ... the scope of the technologies that sprang from or were transformed by Jobs’s Apple laboratories—the Mac, the mouse, the laptop, Pixar, iTunes, iPod, iPhone, iPad—is awesome, as was that from Edison’s Menlo Park. And Jobs, like Edison, accomplished his imaginative feats without the crutch of survey research, of endless polls to tell him what people wanted."

Economics in the Next Ten Years?

2011-10-04T18:51:00.000+05:30

From Economic Principles:

A young economist, or an economics journalist interested in what the young are working on, could do a lot worse than reading through, as I did the other day, 55 very short papers written by distinguished economists describing the large questions they think are likely to dominate the next generation of research in their respective fields.
They are among 252 papers by experts in various disciplines who responded to an invitation by the National Science Foundation’s Directorate for the Social, Behavioral and Economic Sciences to describe “grand challenge questions” that transcend near-term funding cycles, questions which therefore might benefit from investment in infrastructure.

Reading history of Indian economics

2011-10-04T18:38:00.000+05:30

Arvind Kumar & Arun Narendhranath have written a 7 part series of articles on Indian economic history covering a range of issues in the last sixty years.

A bit from the concluding part:

"The government must respect the rights of the people by getting off the fiat currency regime and allowing the unregulated use of any commodity including gold as the currency. In addition, it must shutter the Reserve Bank and stop interfering in the interest rate market. Such steps together with curbs on the fractional reserve banking system will lead to a stable economy with a stable currency."

I strongly recommend to read all the seven part articles from here. It is worth reading them and of course will have to ponder over a few issues/policy suggestions.

But never think that those ideas/suggestions are not from our our country!!

India's malinvestments

2011-10-03T19:00:00.000+05:30

The below paragraphs are the concluding part of my friend G P Manish's argumentative article on India's three Plan periods.

"Most economists have concluded that the institution of planning in India increased the rate of growth of GDP and therefore led to a marked improvement in economic performance. However, the analysis here shows that despite the impressive growth rates of GDP and GDP per capita during this period, the planners’ efforts caused stagnation in the output of the two goods consumed by the masses—cotton cloth and food grain. The growth in availability per capita of both of these goods was far less than the growth rate of GDP per capita in this period. It follows, therefore, that the masses’ living standard did not improve significantly. Nor did it improve in the following period. The per capita availability of cotton cloth fell from 14.23 sq. meters per annum in 1970–71 to 14.05 sq. meters in 1980–81...."

The vast amount of resources invested in the heavy and basic industries were malinvested. A great deal of capital was invested in producing capital goods and industrial intermediate goods at home that could have been procured from abroad at much lower cost. The bulk of these goods proved to be uncompetitive on the world market. Furthermore, as predicted by the argument of the impossibility of economic calculation under central planning, the forced industrialization was characterized by economic irrationalities—phenomena that never would have occurred in a marketbased system with an operational profit-and-loss mechanism. Thus, many of the capital goods produced were either in excess of domestic requirements or could not be utilized because of the lack of adequate supplies of complementary production factors, and their designs marked them as inefficient and obsolete even by developingcountry standards. Most important, all of this investment in the economy’s “commanding heights” failed in its primary purpose of increasing the future output of consumer goods and agricultural commodities."

What Do Economists Contribute?

2011-10-03T18:51:00.000+05:30

That is the introduction chapter from Daniel B. Klein in a beautifully collected articles of eminent economists.
In his own words:

"The essays gathered here speak of the choices economists make. Which subjects to write on, which premises to follow, which authorities to appeal to, which methods to use, which tones to assume, which audiences to address, which challenges to respond to, which social purposes to serve: all these choices are made each time an economist acts as an economist. Are economists today, in making their individual choices, led to promote ends of human betterment? Most of the present authors suspect that much choosing by economists is not for the better.

Economists are quick to find flaws in markets, governments, and other institutions. Yet they rarely aim their flaw-finding at their own professional institutions (not publicly, anyway). In such matters, their public attitude is rather like their attitude toward their children: acceptance without critical examination. Some economists harbor doubts about normal professional practice and standards, doubts confined to private thought and discreet conversations. A few, such as Arjo Klamer, David Colander, Thomas Mayer, Deirdre McCloskey, and Lawrence Summers express their doubts publicly.

The impetus for the present volume stems from the belief that academic institutions are failing and that they take a dim view of certain research activities which do advance the sound practice of political economy. If so, economists might find that pressures to pursue academic work divert them from contributing to the art and science of political economy."

Idea of choices in currency-Ambedkar, Hayek and Ron Paul

2011-10-03T10:03:00.000+05:30

Ron Paul on Hayek and Competition in Currency:

Hayek concluded “Denationalization of Money” by calling for what he termed “a Free Money Movement comparable to the Free Trade Movement of the 19^th century.” He came to the view that the gold standard was not the solution, though it was “the only tolerably safe system” if the management of money were going to be the preserve of the government.

The Free Competition in Currency Act got an early hearing in Congress this month in the House Subcommittee on Monetary Policy. The hearing wasn’t widely attended, but there was testimony by the president of the Foundation for the Advancement of Monetary Education, Lawrence Parks, and by a professor at George Mason University, Lawrence White, who talked about how FedEx and UPS’s private competition with the Post Office has brought benefits to American consumers. He extended the analogy to money.

It’s too bad Hayek couldn’t have been at the hearings. He viewed the denationalization of money as the “cure” for “recurrent waves of depression and unemployment that have been represented as an inherent and deadly defect of capitalism.” In other words, as a cure for ills like the current crisis. How Hayek, who once called for a global debate on socialism versus capitalism, would have thrilled to the moment, pausing only for the occasional pinch of his favorite snuff.

Wild dreams

2011-10-01T10:30:00.000+05:30

Ok let me ask "what can we reasonably expect the level of our economic life to be a hundred years hence? What are the economic possibilities for our grandchildren?"

These are not my questions my dear!

Of course, I did not say this "in the long run, we are all dead", did I say this.

By this time you might have guessed the wild dreams of Lord Keynes!! Those questions were all asked by Lord Keynes in 1930s.

Yes Lord Keynes wrote a article in 1930 tattled "Economic Possibilities for Our Grandchildren"

How does that matter in blog Hayek Order: of course it matters.

Note what Lord Keynes wrote in this essay:

"he commencement of the modern age was already known to man at the dawn of history. Language, fire, the same domestic animals which we have to-day, wheat, barley, the vine and the olive, the plough, the wheel, the oar, the sail, leather, linen and cloth, bricks and pots, gold and silver, copper, tin, and lead-and iron was added to the list before 1000 B.C.-banking, statecraft, mathematics, astronomy, and religion. There is no record of when we first possessed these things."

No State had helped to produce these things, yet they were spontaneous order or natural order like the Professor F A Hayek pioneered.

And further, he notes that:

"From the sixteenth century, with a cumulative crescendo after the eighteenth, the great age of science and technical inventions began, which since the beginning of the nineteenth century has been in full flood--coal, steam, electricity, petrol, steel, rubber, cotton, the chemical industries, automatic machinery and the methods of mass production, wireless, printing, Newton, Darwin, and Einstein, and thousands of other things and men too famous and familiar to catalogue."

And lastly.

"If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!"

From Hayek's own words:

" However reactionary in politics such figures as Coleridge, Bonald, De Maistre, Justus Möser, or Donoso Cortès may have been, they did show an understanding of the meaning of spontaneously grown institutions such as language, law, morals, and conventions that anticipated modern scientific approaches and from which the liberals might have profited. "

Proof does not matter in policy

2011-10-01T10:15:00.000+05:30

"Henceforth, all professors are rich by the gospel according to the UPA......

When Chidambaram argues for higher tax rates, what is he indulging in — politics, populism, or wild dreams? He doesnot know, and what is worse, neither does the government. Is this how policy on one of the most important economic issues is made in India — without any data? Yes, because in India, no proof is required, for people who make policy and for those who want to make policy."

Keynes folly on trial

2011-09-30T17:53:00.000+05:30

Keynes, Hayek Preside at Washington Jobs Debate: Caroline Baum

China's eclips

2011-09-29T09:50:00.000+05:30

"China is a keen student of economic history, and can be persuaded that multilateralism is better for a superpower: it produces world order, yet leaves lots of space for superpower bullying."

Some one said to me some years ago when I was attending the international workshop for Young Scholars on Social Sector in China that "If you are able to read Chinese mind, well, then you can pass any exams on this earth!!".

Asian Swaraj

2011-09-29T09:07:00.001+05:30

The iron lady of today's opposition politics in India argues (rightly so) that:

"A maritime perspective necessarily means sea power but I do not imply by this just the need for a strong navy. It is rather a web of economic, commercial and political ties with the countries in Southeast Asia and North Asia, as well as the wider Pacific community, that we have to reach out to. This perspective, in fact, means also returning to our roots in ancient maritime history — the Mauryas, the Chalukyas, the Cholas and other kingdoms and dynasties who were flourishing maritime entities... It is my view and conviction that in the next decade or two we will see a full flowering of this maritime perspective in India with its attendant scholarship and also retrieving from the annals of history our ancient and historical links with the countries of Southeast Asia and beyond."

I G Patel on Indian economics

2011-09-28T10:33:00.000+05:30

Given the periodic drought-fuelled food price-led inflation in India, IG’s policy prescription was forthright. “The only solution when it comes to controlling inflationary pressures which arise from periodic shortages of basic commodities is to eliminate these shortages — either by producing more on an average, or by importing more while the former is being attempted.” He felt “inflation ought to be controlled not just by control of demand but by stimulating supplies. Indeed in the long run, the latter is the only acceptable solution…”

Godscience

2011-09-28T10:24:00.000+05:30

"Hindu thought was inclusive; the healer Charaka, the astronomer Aryabhatta and the mathematician Brahmagupta were as much part of the Vedic ethos as Agastya. The great Bhaskara—whose work on the calculus predates Newton—was taught math by an astrologer. His thesis, the Siddhānta Shiromani, is not just about arithmetic and algebra, but also covers planets and spheres—the fundamentals of astrology. From antiquity, cosmic mysteries were part of Hindu science: architecture has a spiritual aspect, like the Thachu Sastram of Kerala; so does Ayurveda, that celebrates the animistic aspects of botany and the arcana of planetary influences. Divinity wasn’t segmented: science, mythology, mysticism and mathematics together made up God."

Consultants for Courts in Jharkhand

2011-09-27T13:22:00.000+05:30

There is a news which says;

"Jharkhand High Court has moved to appoint 24 professionally qualified court managers — armed with B-school degrees in management and IT systems — to reduce the tottering backlog of cases."

CPI

2011-09-26T10:15:00.000+05:30

Do you know, how Communist Party of India (CPI) lies?

Here is an example:

"Vajpayee’s NDA appointed a committee under Aditya Birla to recommend reforms in higher education in 2009"

Let me say what I heard about the writer of the above line-D Raja. He is my district in Tamil Nadu, in the north western part of the State. He was a middleman for disputes cases, yes all kinds of cases. Mostly he got huge money from farmers by playing middleman in doing all kinds of odd jobs between the high officials of district collector and the farmers.

Secondly, during my visit to Kolkata early this year in one of the function organised by some local group reportedly circulated some notices that under the 2G spectrum it was D. Raja who looted all that thousands of crorers and not the A Raja! Whatever may be the mistake, the story is aptly fitting.

Property or Poverty

2011-09-24T10:04:00.000+05:30

T N Ninan writes: "The poverty industry has its own rackets, and if public money is to really go to the poor, we need realistic definitions based on proper data."

"Property rights are not universal entitlements. If I own some land then you do not own it. You lack entitlements that I enjoy, such as the profits made by farming that land. Such inequalities are inherent to property rights. Which may explain why human rights activists do not care for them."

Old mind

2011-09-23T10:31:00.000+05:30

In this high-tech age. When so many things are in public domain to have better view on it. Many take escape root to be on wrong side. That is how it has been happening with the Planning Commission figure mentioned in its reply to the apex court in India.

To my surprise, I was on a discussion in telephonic-call from London!! I was trying to tell them what Sunil Jain has greatly pointed out in his column today in the FE. Finally, they-the London wallas could not get it!! and kept on and on asking how does that matter. Yes, it does matter a big way.

Without the body

2011-09-23T09:49:00.000+05:30

Sufferings are as universe as the happiness in the human life. It's not just that I discovered from the book "Does he know a mother's heart How suffering Refutes Religions" by Arun Shourie. But the fact that if any one try to understand his/her actions of at least past few years, one can surely get the answers nearly for the sufferings. but always questions remain questions.

Bad politics kills easy life

2011-09-21T16:56:00.000+05:30

It's raining laptops in Tamil Nadu

Poor ranking of India (85 in 2011 in 141 countries) in the world economic freedom index of 2011. See page 85.

Refuting the sufferings of gods child

2011-09-21T15:56:00.001+05:30

“The secret to writing 26 books is to be unemployed from time to time,” quipped Arun Shourie, author, journalist, scholar and politician, releasing Does He Know a Mother’s Heart? - his 26th book."

It only sounds modest when Arun himself says" “I am not a creative writer. I am lawyer, and all my books are arguments for the prosecution, whether it is on Ambedkar or on suffering.”

I just received the copy of this book, was curious to read this book as I read his other book worshiping false god.

Foolish governments, smart women

2011-09-21T09:52:00.001+05:30

The title of this post is the beautiful chapter in the great slim book "India Unincorporated" by Professor R Vaidyanathan.

SOme blinking Links:

The another round of crisis is already underway either by the actions of Indian government or by the actions of other countries especially the USA and the EU. More here.

"Put the three together and you get the logical conclusion that the government’s heavy role in the sector has been only to distort pricing. Its involvement has neither resulted in energy availability for the consumer nor a friendly climate for investors"