Bulky Beasts

"The Planning Commission’s internal systems are run on the lines of a government ministry. It has a secretary like all other ministries. The secretary reports to the deputy chairman who is a “minister” with independent charge. All officers in the planning “ministry” report to the secretary. Members of the Planning Commission are ranked as “ministers of state” for protocol purposes, and like ministers of state in other ministries they have no say in the appointments, transfers, evaluations, and quality of the staff in the divisions they are notionally responsible for. Thus the organization is run like a “ministry” albeit with a “commission” of a few full-time members attached to it. These members are expected to deliver high-quality guidance on the subjects assigned to them and to change the ways in which the Commission engages with the country and plans for its progress. They do not have the resources to do this." More here.

"Two hundred and fifty years have passed since the great debate between Burke and Paine. The 21st century has commenced with a noticeable decline of trust in elected governments in India and in the West too." More here. 

India's cockpit, 

"Povertarianism"

"He was always warmed by how magnificent India was in so many aspects and felt that his role in life was to amplify this. He was attracted towards the idea of India as a Hindu nation, and it is in the company of like-minded people that he became certain of what was wrong and what it was that needed fixing. In their company he flowered."

"Nobel laureate Michael Spence, while presenting the report of the World Bank’s growth commission that he chaired, admitted that though the commission had found the ingredients for high growth, they had not discovered how to accelerate inclusion with growth, which was becoming an increasing demand everywhere."

" The Congress party's rented intellectuals, led by the NAC, took over the entire discourse and nobody dared to question them, although some fretted behind the scenes."

• "NEVER in India's history has the economic discourse been so one-sided. In the past, there was at least the unabashedly contrarian Forum of Free Enterprise of Nani Palkhivala, A.D. Shroff and M.R. Pai. Now, we have all the venerable chambers, the CII, FICCI and ASSOCHAM, hold grovelling conferences on "inclusive growth". Even in the red-hot Sixties, there was the Swatantra Party, which may not have counted for too much in numbers, and was easily reviled as a chamber of decrepit princes, but was represented by formidable parliamentarians like Chakravarti Rajagopalachari, K.M. Munshi, V.P. Menon, Minoo Masani, Piloo Mody, N.G. Ranga and Gayatri Devi."

"In India, too much credibility is given to ideology and not enough to facts, and especially on issues pertaining to the poverty industry. Yes, I have chosen my words carefully — the poverty industry complex is huge, well nurtured, and encourages corruption. Most economists, politicians and intellectuals, of all ideological persuasions, believe that the PDS system of distributing foodgrains to the "poor" is the most corrupt system in the world. Yet, this is what the FSO will enlarge, encourage and endorse."

"They say we are immoral. But they have no shame in coming and raiding the bars in order to extort money from us. What does that make them?"

Some links

Same old story about B R Ambedkar and his social and political life.

Impossibility theorem for 2014

Economists and economics vs policy making

Imported  Economics Teaching

Capitalism = Insights

From A N Shroff memorial lecture delivered by Arun Maira on 9th October, 2012.

"Revisiting the role of India’s Planning Commission

When I joined the Planning Commission as a Member in 2009, one of the tasks the Prime Minister assigned to me was to determine what role the Planning Commission should play in 21st century India. I asked Montek Ahluwalia, the Deputy Chairman of the Planning Commission to give me a list of 20 persons to whom I should ask this question. He gave me a list of 20 respected citizens of the country. Some of them had worked in Government in very senior positions, in the Reserve Bank, in Parliament, some even in the Planning Commission in the past. And several others were respected industrialists of the country.

I asked each of these 20 leaders the following questions:

• Is the Planning Commission playing a useful role for the country?
• If not, is there another role that the Planning Commission could play in India’s progress?

The answer to the first question was unanimous. The Planning Commission was no longer making a significant contribution to the progress of the country. The country had changed. It was more decentralized politically and administratively. The private sector was playing an increasingly large role. The Indian economy was more connected with the international economy. For all these reasons, five year plans and budgets made by some experts in Delhi, which had then to be implemented by people all over the country, was an outmoded idea. 

However everyone, including the industrialists, said that the dynamic nature of changes in India and outside required a strategic group that, like a radar, could sense the forces that were causing change to happen and that could provide governments in the center and in the states, and private industry too, with insights into the forces shaping the future.

A More than Perfect Storm
I will now give you a picture of the forces shaping our future. I will also explain their effects on institutions of democracy, capitalism and government. I will use two images for you to visualize these forces and their implications. One, an image of a storm. The other, an image of a globe in stress.

First the image of the storm. Many of you may recollect the ‘Perfect Storm’ that Sebastian Junger described in his book. Not two, but three storm systems converged in the North Atlantic. This was unprecedented. No ship had been designed for such conditions. And no captain had the skills to steer a ship in such a ‘perfect’ storm.

As the 21st century unfolds, there are four strong winds blowing across the world and converging to create a more than perfect storm which is challenging captains of business and government institutions that are not designed for these conditions.

Free Markets and Capitalism
The first strong wind is the idea of free markets and capitalism. This is not a new idea. Often attributed to Adam Smith, it has been around for at least 200 years."

Make that republic institutions work for resource-poor people

Mr. Arun Maira wrote on 26^th January, 2011 that: 

• One school of thought proposes that the quality of public services will improve by handing them to the private sector, which, with its focus on efficiency and profits, will cut out the waste. The same school of thought also believes that environmental damage is caused by a “tragedy of the commons” when no one “owns” the water, the forests, and the atmosphere. It believes that creation of private property rights (including tradable rights to pollute the atmosphere) will induce human beings to behave more responsibly. 

• The basic premise of this school is that a market in which self-interested persons can trade, will always produce good outcomes. It believes that institutions for progress must be founded on principles of private property rights and competition.

• Institutions are the wheels on which the cart of progress moves. The need to tune up government is evident. And the need to redesign market-and-property based institutions to meet challenges of inclusion and sustainability is evident too: in increasing public interest in new concepts of business accountability, social entrepreneurship, producer companies, and so on.

Three beautiful books

This is the first time in my life received three beautiful books in January (2011) month. First (received on January 1^st) one on “Institutional Theory of Poverty: A General Theory of Change from Poverty to Plenty” by Prof. Vedagiri Shanmugasundaram. It is a must read one. Few lines from his this book is worth to validate my likeness (don't forget to read the last line in the below points): 

• Many errors in reasoning left the economist blindly trailing one or other of the hypotheses… 
• The blind adherence of Keynesian deficit financing by Dr. VK.R.V Rao and his associates preferred their advice to Pandit Jawarhalal Nehru thus “Buckets of cement in Bhankra Nangal were better than of gold in the Reserve Bank of India vaults” 
• The brilliant brains in the bureaucracy were put to work in wrong directions and much of the blame attributable to those in authority and policy making….. Bureaucracy to my mind is more sinned against than sinned. 
• Keynesian fiscal extra veganza or model builders who are oblivious of important limitations which the centralized planned economy is unable to overcome.. 
• ……the blunders of socialism in early decades 
• Bureaucrats have kept the experts under their thumb, and politicians in their turn have sent the bureaucrats on wrong scent. The consequence is domestic poverty of ideas under the illusion of planning.  
• Poverty is real. It is deliberately caused, and purposefully maintained. 

The second book (received on 10th) is “The New Asian Hemisphere: The Irresistible Shift of Global Power to the East” by Professor Kishore Mahbubani. I have already posted about the book here.

And the third book (received on 21st) is “Remaking India: One Country, One Destiny” by Arun Maira.

 I am currently reading this book and will post few things about the book and perhaps need of writing it!

Dr. Manmohan Singh, J M Keynes and Politicians

Radhika Ramaseshan’s introduction is necessary for this post. Radhika writes in The Telegraph:

• Prime Minister Manmohan Singh today quoted John Maynard Keynes to suggest that “practical politicians” should not become enslaved to “defunct economics”.

• The quote didn’t figure in a speech Singh delivered as part of a series of “thought” lectures organised annually by the Khazanah Nasional, whose past speakers have included Grameen Bank founder Mohammed Yunus and American economist Joseph Stiglitz.

• It was part of an answer he gave a young student this morning. She asked: “To what extent are you guided by theoretical reasoning as against gut instinct?

• Singh said: “I have no definitive answers to this. But I do know that Lord Keynes had said that the most practical politicians are slaves to some defunct economics. Everybody who is in politics and who seeks to influence the course of economic policy and history has some notion about what is workable and feasible. He must have some theoretical proposition while formulating (his) views.”

‘Can’t remain slaves of defunct economics’ said Prime Minister Singh recently but P. Vaidyanathan Iyer writing in the IE ask is it a “THEORY vs GUT FEEL” and Singh answer:

“I have no definite answer, but I do know Lord (J M) Keynes once said that most practical politicians are slaves to some defunct economics... Real challenge is not to remain slaves of defunct economics.”

Veteran of industry urges that:

• Old theories cannot show the way. Economists have begun to speculate about the ‘new normal’ into which the world is moving . They know that the world must not revert to the old normal in which dilemmas remained unaddressed and crises brewed. There is a tension in their minds between the need for a new capitalism , founded on different principles than the gung-ho casino capitalism that has driven big economies to the brink, and the need for a new socialism as well, to include masses of people who are insufficiently included in the benefits of economic growth, that does not require large state hand-outs and large governments . What will be the architecture of this new economy?

Central plan kills aspiration of individuals plan

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

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

Societies design processes

Mr. Arun on “Diversity is attractive. It is also a great source for innovation; whereas homogenisation and specialisation create efficiency but kill creativity.”

“Success is a journey, not a destination.”

Arun Maira on:

• Sociologists and economists do not understand each other’s perspectives, do not talk the same language, and do not even want to talk to each other! Unfortunately science, and also education, has been advancing towards narrower specialisations, producing people who may know more and more about less and less.

Ram on human and their action in cosmos:

• “AS HUMANS, we have a need to be successful in our own eyes and in the eyes of society. Our definition of success — or more accurately, society’s definition of success — is what drives our behaviour. If we need to change the way people think and act in the Connected Age, we need to redefine success.
• Adam Smith, the father of moderneconomics, declared that if every individual operates out of his own self-interest, an ‘invisible hand’ will ensure the good of the society as a whole. This has been the fundamental premise of free markets and capitalism for over two centuries.”
• Governments do not create wealth. People do. The role of government is to provide good education, health care, infrastructure, security, and law and order to all its citizens, thereby giving them a platform to flourish as individuals.
• As Confucius said: “In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of”.
• In Emerson’s beautiful words: “To laugh often and much; to win the respect of intelligent people and the affection of children; to earn the appreciation of honest critics and to endure the betrayal of false friends; to appreciate beauty; to find the best in others; to leave the world a bit better, whether by a healthy child, a garden patch, or a redeemed social condition; to know that even one life has breathed easier because you lived; this is to have succeeded“.