To The Prime Minister Narendra Modi

India-EU Free Trade Agreement1Globalisation has a bad press. Free trade was never popular. When the UPA government announced the decision to allow 51% foreign direct investment (FDI) in multi-brand organised retail in 2011, the BJP and other opposition parties claimed that this would ruin the nation. A politician even said that she would set fire to the first Wal-Mart store when it opens. But, do you really believe that this would inspire faith and trust in industry?

I do not know about your followers, but it is no longer acceptable to claim that you will set fire to the store of a Muslim or a Christian. Why should different standards apply to foreigners? In a sane world, it would not matter whether a corporation that invests in India is native or not. The ideology of anti-globalisation is based on the belief that foreigners are not people—that they do not have equal rights. That is all there is to it. It is, of course, not true that foreign investment would ruin the ruin local retailers. But, even if it would, so what? I understand why the idea of nationalist appeals to you and the Hindu nationalists, but are local retailers the master race for whom everyone else should suffer privation?

Now, is there anything wrong with an American multinational retail corporation investing in India? You seem to be keen on empowering the poor people in India, by transforming them into skilled workers. But, Indian wages are shockingly low by global standards. This is not primarily because Indian laborers are unskilled, but because the technological means of production are primitive. An ordinary Indian laborer who moves to the developed west might see his wages instantly rising, even up to twenty times of that of the wage he could have earned in India. But, this cannot be because he became incomparably more skilled overnight. He has become far more productive overnight because western firms employ more sophisticated machinery.

Read my column in DNA.

The Interviews with Tyler Cowen, Avinash Dixit and Cyn-Young Park

Tyler Cowen

Tyler Cowen is one of the greatest minds of our times, and one of the economists who have influenced Bryan Caplan—my favorite living thinker.

Excerpts from the interview I did for Business Standard when he was in Delhi:

“Q. You think that an artist is as much a trader as a businessman, and that the making of a Bollywood movie demands as much talent as that of a Satyajit Ray movie. Many would disagree with that.

A. They should try making a good Bollywood movie. When you make a Bollywood movie, a lot of co-ordination is required. In my view, it is not less of an art than a Satyajit Ray movie. It is harder to make a commercial movie, because the audience has less patience with you.  You really have to grab their attention somehow.

Q. Why do you think that Amartya Sen has done good work in economics, despite the fact that he underestimates the importance of corporations and capitalism in eradicating poverty?

A. I think that he grossly underestimates the importance of corporations and capitalism, but, he has done a lot of good work. His work on missing women is important. His work on development and capabilities is very important. But, when it comes to policy, I think he is often wrong.”

Read the whole interview here: Wal-Mart will help improve agricultural productivity in India: Tyler Cowen