Tag Archives: growth

You Still Think I Do Not Have Empathy

I am an Aspie. I have a near-photographic memory, a razor-sharp mind, and the ability to focus on a problem for an unbelievably long period of time. If you know me, you know that I tell you exactly what I think—on your face. You feel bad. But, I don’t see why you should. I think you shouldn’t. In nine out of ten cases, if you had gone along with me, you would have done a lot better. A lot, lot better. Now, I am being modest. Deep down, you know this. You have even told me this, not always in so many words. But, you still betray yourself—and me—for the momentary pleasure of being petty.

You made a torture rack for me, and yourself, with your poor self-esteem. But, you still think I do not have empathy.

Now, you are probably thinking that this is about you. I know that this is exactly how you think. Common people—They always think that it is about them. Now, you are mad that I called you a “common person”. If you are so convinced, this is probably the truth you do not want to admit about yourself. But, this doesn’t occur to you.

That’s how common people are.

Tell them that Facebook is good for kids, and they will say, “Don’t ever tell me how to raise my child.” Tell them intelligence is genetic, and they will think you just called them stupid. Tell them that there is no trade-off between inflation and growth, and they will think that you don’t like them. If you write that half the people in Mumbai live in one-room houses, they will remove you from their friend lists. Tell them that their parents are “bad”, and they will faint. But, they will still admit, “I know that you are right, but this makes me so weary….so weary…”

But, I believe in Eugene Gendlin’s words, “What is true is already so. Owning up to it doesn’t make it worse. Not being open about it doesn’t make it go away. And because it’s true, it is what is there to be interacted with. Anything untrue isn’t there to be lived. People can stand what is true, for they are already enduring it.” This doesn’t mean that I am honest. All this means is that I tend to do this. If people were not so weak and pathetic, I would have been happy to do this all the time. Now, that doesn’t seem to be a tempting prospect to you, does it?

Reading me so far, what you have noticed is the arrogance, the self-righteousness, the condescension, the many “I’s”. You would not have noticed that all this is so true. But, that is exactly how you think. I know it.

Inflation In India:A Reading List

The plain truth is that our political leaders have brought on inflation by their own money and fiscal policies.

Government action is the reason why inflation exists. The monetary base is under the Fed’s complete control, and it virtually always goes up. Thus, if the Fed took no action, inflation would almost always be lower. In fact, as George Selgin emphasizes, the natural tendency of a growing economy is mild deflation. If you think this is obvious, let’s see what happens if inflation gets much higher. Not only will the public hunt for scapegoats; but even a lot of economists will avoid pointing the finger at the Fed. (And needless to say, the Fed will not point the finger at itself!) The Fed (like all central banks) virtually never “fights inflation.” Of course, sometimes the Fed creates less inflation than at other times. But popular talk about the Fed moving into “fighting inflation” mode is pure obfuscation. It makes about as much sense as saying that an orange farmer who cuts back orange production by 20% is “fighting oranges.” If you’ve taught monetary for years, you may dismiss this as obvious, too. But when I was an economic novice, it was a revelation. And if you don’t hit your students over the head with it, most of them will never get it.-Bryan Caplan, What The Mainstream Can Learn From Murray Rothbard Continue reading

Mises On India

India is as hostile to the domestic accumulation of capital as it is to foreign capitalists.

My engineering mechanics lecturer loved to say that a picture is worth a thousand words. I never found this convincing.  Many think that economics is dry and boring, but they are surprised when they hear that there were great economists who never used a graph or a chart, and that their work was far more important than that of the large majority of the economists who used them.

The great 20th century economist Ludwig Von Mises never used a graph or a chart in any of his works. I was an instant convert to Mises’ worldview because the “Library of Economics and Liberty” described him as an economist who believed that all sorts of government interventions lead to harmful consequences. It just made a lot of sense to me. Mises believed that statistics is not economics, and cannot produce economic theorems. I too believed this with some strength of conviction in my late teens and early 20s, though I no longer think that empirical data is worthless.

It is easy to find fault with Mises’ anti-empirical stance, but as Bryan Caplan says, Mises’ take on democracy is sounder than standard public choice, not because he had more data, but because he paid attention to the date he had. He had no illusions about the virtues or wisdom of the common man.

Most Indians, for instance, might think that his views on India are silly, and that he does not really understand India: Continue reading

The Power Of Abstract Thinking

The Power Of Abstract Thinking

The root cause of most social ills is not that people are not activists or poverty-eradication thinkers. These are character flaws, and weak character is never in short supply. I am perhaps the first person to make this claim, but even “eminent” Indian intellectuals are not capable of making rapid fire abstract associations. By this, I mean the power to think quickly, to build arguments and counter-arguments, to spot non sequiturs, and to instantly pick holes in the arguments of their opponents. This is a major cause of social evils.

Look at the Sen-Bhagwati debate.  A key position of Amartya Sen is that “There isn’t a single place where growth has taken off without an educated and healthy workforce.”

Is it true that Indian poverty and weak economic progress is largely a result of a physically weak and uneducated workforce? The assumption is that Indian workers earn less because they are capable of exerting less physical and mental effort. Now, don’t deny this. Taken seriously, this is what this claim implies.

If this is true, transporting them to a different country, keeping their education level and health constant won’t improve their productivity and income levels significantly. But, we know that a low skilled Indian worker who moves to the US might see his income instantly rising twenty fold. In a prosperous country, they will live longer and healthier, being incomparably more productive. This means that there are cheaper and quicker ways of raising their income and productivity than building huge schools and hospitals, and hoping that growth will take off in a generation or two. This also means that the problems lie elsewhere. Continue reading

The Sen-Bhagwati Debate

Sen Versus Bhagwati

Once when I asked an economist how the government should cure the fiscal deficit, he said, “The government should cut the spending—anywhere and everywhere. The government is not capable of running the schools and colleges. The government is not capable of running the hospitals. The government is not capable of running the police and the court system. The government is not capable of doing anything—except perhaps running the NHAI roads.”

And then he asked, laughing, “Do you disagree with that?”

I said, “No. I do not disagree. That is obvious. Everywhere I see idiots. It is the first time I am talking to an honest guy.”

He said, “Thanks. But, you can’t quote me on that.”

Is there anything controversial in what he said? This is the most obvious statement one can make. He said it because unlike these people who can’t make heads or tails out of what they read, he was no fool. But, it is hard to get away with such statements, especially in a poor country. Continue reading