Monday, October 18, 2010

RBI purchase of Dollars to stop the strengthening rupee: Justified?

The rupee is appreciating or rather I should say, it is the dollar that is weakening (due to heavy quantitative easing i.e., dollar printing by the US Fed) against the major currencies of the world including Indian Rupee. Strengthening rupee is being closely watched by Indian government, particularly by the RBI officials, and the business people. All kinds of discussion is surfacing on the table. The focus of all these discussion is on, whether Indian government - through RBI's purchase of US dollar - should try to tame the rising rupee against the dollar? Actually, RBI has already started taming the rise in rupee by intervening in the currency market through their purchase of US dollars last Thursday. Is this RBI dollar purchase and rupee weakening policy justifiable from the sound economic perspective? To answer this crucial question we first need to understand the fundamentals of the currency market.

What determines the exchange rate of rupee against the other currencies?
The exchange rate i.e., the purchasing power of rupee vis-à-vis other currencies is determined by the demand for and supply of rupee in the international market. If the demand for rupee is high and supply stable (or falling) then rupee will appreciate in value against other currencies (assuming other currencies are stable in their value or their value is declining), and if the demand for rupee is falling or its supply is rising through RBI's printing of more rupee then it will weaken (depreciate) against other currencies (again assuming other currencies as stable). The demand for rupee in turn is determined by various factors, out of which the main factor is the strength of Indian economy. If Indian economy is very strong then foreigners will want to trade more with India (buy goods/services from India, as well as invest in Indian markets), which will increase the demand for rupee. Alternatively if Indian economy is weak then few people will want to trade with India, and few will want to invest in India which will result in low demand for rupee and its weak exchange rate against other world currencies.

Now, the above outlined fact should always be kept in mind while we analyze RBI's dollar buying and rupee weakening policy. If rupee is appreciating then it is a healthy sign because international community see India as a strong economy and thus are eager to spend and invest their resources in the Indian market. Of course this can also happen when foreign economies are becoming weaker, but it still proves the relative strength of the Indian economy during such dire times.

Why government don't want rupee to be strong against other currencies?
We need to understand that, why Indian government do not want rupee to appreciate? From an Indian consumer's perspective the policy of weakening Indian rupee makes no sense because as a customer Indians will benefit from the strong rupee, which will lower their import bills. The whole import sector will benefit from the strengthening rupee, and ultimately whole Indian economy will benefit as I will make clear in next few paragraphs.

A strong rupee is said to be the problem of the exporters. Export industry - mainly IT - is lobbying government for not allowing rupee to become stronger because that will, in short run, lower their earnings by making their exports costly in the international market. Is this demand of the export sector legitimate? We need to take a look at the import-export sector realities to fully comprehend the impact of government policy of deliberately weakening the rupee under the lobbying pressure of export industry.

Is this economic policy logically sound on economic grounds?
Henry Hazlitt's first lesson of economics says that, "the art of economics consists in looking not merely at the immediate but at the longer effect of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."

So, let us see what is the impact of this policy of weakening rupee on all the sectors of the economy, and not only in short run but also for a longer run.

The export sector will surely be a beneficiary from a weak rupee, but the import sector will be a loser. What will happen to Indian economy? Will it be a net gainer or a net loser? Indian economy will be a net loser for sure because India imports more than what it exports. Since independence its current account is always in deficit because of higher imports than exports. For example, as per the latest data available from RBI, in 2008/9 India's total export was 8,40,755 crore rupees, and its total import was 13,74,436 crore rupees! A simple back of the envelop calculations show that, suppose in 2008/09 the Indian rupee would've appreciated to 44 rupees per 1 dollar (from 50:1 rupee dollar ratio of 2008/09) than India's export would've reduced to 7,39,864 crore rupees. But, on the other side the import bill would've also reduced to 12,09,503 crore rupees. At the original exchange ratio of 50:1 the trade deficit was 5,33,680 crore rupees, and now at a new strong rupee ratio of 44:1 the same deficit would be 4,69,638 crore rupees - A net gain of 64,042 crore rupees!!!

Indian economy will surely benefit from appreciating rupee. At the benefit of few exporters we cannot make the whole economy suffer by artificially making rupee weaker. And, as Japan's history tells, by appreciating currency the export sector might get hit in a very short time period, but over a longer time zone Japanese export industry became more competitive and their export actually increased because they cut down their cost and made their operations more efficient. Indian exporters also need to do the same. Instead of lobbying government for protection (through weakening rupee policy) they need to make their operations more efficient and should gear up for the international competition. The strong rupee is a sign of strong Indian economy, and exporters will also gain when Indian economy is strong. More investment will be forthcoming into these export industries which will help them becoming internationally more competitive by reducing their costs.

In any case, such artificial competitiveness can never make India's export grow over a long period of time. It will only hurt the economy overall. Exporters will never learn how to be competitive in the international market and so when other countries will compete heavily they will lose out because India cannot make its rupee very weaker. There is a limit to this policy. So, it is better that exporters become competitive and only then Indian economy can grow concretely.

RBI should start buying more GOLD instead of useless dollars
The way events are unfolding in USA, the dollar will continue its nose dive in the deep dark abyss. In such a scenario, one day the Indian government will have to reckon with the fact that it can no longer depreciate its currency against the ever weakening dollar. Once dollar is gone the world will move on to a new global reserve currency (or may be a world single currency in the form of Gold under a quasi or full gold standard!). And on that day India automatically no longer needs to depreciate the rupee against the dollar. If the world is gearing up for a gold based currency system then instead of wasting Indian rupees in buying useless dollars the Indian central bank needs to buy more Gold right now, as many other central banks are already doing (see here, and here), especially Chinese central bank (see here, and here). RBI did buy 300 tonnes of Gold in first quarter of this year, but that is not enough in a coming future currency regimes. RBI must buy more and more gold.

For India the sound economy policy is to let the rupee float freely in the international currency market and free the domestic economy from State's shackles. As Indian economy will embrace free market it will become stronger lifting standard of living of its more than billion people. An artificially weak rupee will benefit only export sector and that too in short run, but a strong economy and a strong rupee will benefit everyone of us. The choice is clear cut. We have to now see which path India takes.

Tuesday, September 28, 2010

Surat District Human Development Report - Inside reflexions on Government's uselessness

A couple of months ago I was an obliged member of a team preparing the Surat district human development report for the Gujarat State, and the Central Planning Commission, India. Following are my anecdotal observations about my encounters with the government bureaucrats and politicians during this work. Although those who know the nature of the government won't feel at all surprised to read my observations, and it will all sound very obvious to them, but others might find it very useful to understand how the government really works. This will also prove the worthlessness of preparing such reports.

To begin with, when GoG's human development directorate assigned this work to my department, the first instruction from them was not to write anything against the present government; to highlight the success [sic] stories of their various welfare plans even when no such successes were seen on the ground level, and to falsely praise the local and state government. Basically, avoiding the sour ground realities and preparing a report like a fantasy story. The idea is pretty simple: if someone picks up the SDHDR then he must get an impression of everything hunky-dory in Surat district, and Surat must look like a garden of Eden under the present government.

Despite these instructions my team prepared a report which contained lot of material depicting the sad ground realities. It was impossible to be blind to the plights of a common man living in Surat district. This is because team members were actually having a field visits to check the situation, in contrast to those politicians who never visit their constituencies once the election is over, who are busy in their ivory towers propagandizing about phony growth and development of their State. I knew, that because of such material in the report the team is going to get some strong rebuking from the government top officials like the principle secretary of human development directorate! And exactly that is what happened later on during the meetings with government bureaucrats. I share minutes of my meetings with various government officials.

The director of human development directorate, Gandhinagar told the team not to prepare such exposing reports because he can lose his job! He never understand that, just to save his useless unproductive job he is going to make millions of productive people unemployed through his insane developmental policies, which he and his government will formulate by using the botched report that they are asking us to prepare. On any given day I will be more than happy to make the human development director unemployed (actually I will help the society by getting rid of such parasite bureaucrats!) instead of millions of productive people.

The collector of Surat district told us in a final meeting with all the district administrative officers that, we should remove all the sad ground realities information from the report, and instead prepare a report which only focuses on some fake success stories [sic] of their public programs. A simple counterfactual analysis will show us the real harm of such policies in terms of the fantastic productive opportunities lost because of those programs' implementation. What we need to think is not what society has achieved through such public programs, but what it has not achieved (or lost) due to such programs which has diverted society's scarce resources in its direction. For example, what is the use of constructing a giant indoor stadium, endless unnecessary fly overs, suspension bridges etc., in Surat city without even asking how the taxpayers want government to use their hard earned money which is been robbed from them by the State.

The brouhaha of the Surat district education officer was another feather in the cap of rogue government officials. He was very annoyed when he show some pictures of dilapidated school buildings in unusable conditions in many of the rural (and urban) areas of Surat district. His plight was: We are only showing such pictures that exposes his negligence, and not those which show his so-called impressive work! The fact of the matter is that, if Mr. Education minister had come with the field team to see the areas of Surat district then he would have find no such places where his administration's good work is on exhibition. Wherever the team went with their cameras they found unhygienic, pathetic, useless school buildings with barely any facilities which is a precondition for starting a primary school. His obnoxious ingenious solution was for us to lie in the report about this whole matter!

District collector was uncomfortable at my reporting of the Ukai Dam on Tapi river as a potential threat for the existence of Surat city and many villages of the district. I called it a sleeping monster (with Kakrapar atomic power station just 100 kms away from Surat city as another sleeping monster about which I discuss in next para) His horrid claim was: Ukai dam pauses no threat to Surat city and villages because it is absolutely accident proof!!! I don't have to say a word about the hollowness of this claim to the people of the city which sees a major flood in Tapi river because of human mismanagement of Dam about every four years since last couple of decades. The administration which is not even ready to accept the fact that such dams can cause havoc to the people of the city at any time in future will never be prepared for such major catastrophic events. They are only interested in seeing through their terms as collector without any difficulties and so they have found a cunning way of simply assuming away the difficulties!

Same thing happened during a UNDP organized workshop of our team and district administrators. First of all, as a researcher I don't have to go and ask any government officials in such workshops about what to write in my report. The moment academicians are told by the government officials about what to write and what not to, the report becomes a political junk in stead of a sound scientific report addressed to solve the specific issues of human development. Notwithstanding such underlying principles, we were told to work in tandem with the bureaucrats. During the workshop the mayor of a remote Mandavi taluka approached me for expressing his discomfort about my nomenclature of the Kakrapar nuclear power station as a sleeping monster waiting to explode at any time. Just like the dupe district collector who believed that Ukai dam is not a threat for Surat city, this Mr. Mayor was convinced that Kakrapar nuclear power station is absolutely well guarded and accident free! He fretted over about this issue with me for long hours in which I was just amazed by his naïveté as a mayor whose city is lying in the surroundings of that nuclear power station. Just after couple of months of this episode, a nuclear leak accident happened in Karnataka power plant! I wish that mayor was with me when that accident happened.

Encounter with Tapi district D.D.O. (District Development Officer, an I.A.S. officer):

Recently I attended a conference with the Tapi district development officer. She was a young lady, surely a fresh batch of I.A.S. officers. Her sheer arrogance and inhumane insensitive attitude towards the local poor people was ubiquitous, and it didn't astonish me a bit because the arrogance and hypocrisy of the official class is well known to me.

A basic demand for proper roads (and other transportation facilities) by the poor people was quite boring for her, and she dismissed those demands by saying that, they will always ask for roads which approach till their doors! That means, poor people must feel content under her administrator with roads which are million miles away from their homes!!! Her hypocrisy was to such an extent that she herself was unashamed when she was parking her (tax funded) luxury car right next to her (tax funded) office door! I guess, with such attitude, the D.D.O. should be quite happy if the road leading to her home is not reaching up to her home's front door, right ms. D.D.O.?

She was also administering an environmental ban on the use of rat killing chemicals in her area. This chemical was used to kill those rats which are spreading a deadly disease of Leptospirosis amongst the local people. They banned the chemical to save the Rats (and kill people)!!! When we asked about why the ban on such chemical, she jokingly said, well the wild life activists also need to do something!!?? She is again happy to see that her administration is killing innocent people to save few useless rats, and to please those loggerhead lefty environmentalist/wildlife activists.

Another evidence of boondoggles of the Gujarat government I witnessed when we visited a small boarding school near Songadh. The videos of this green environment boondoggle you can see here.

More on this in future blogs......

Wednesday, September 15, 2010

Kashmir Solution

Kashmir is burning again! Civil uprising is on going since past couple of months, and tension is running extremely high. More than 100 Kashmiri have already lost their lives totaling more than 80,000 deaths since the beginning of Kashmir dispute some 62 years ago. The beautiful Kashmir valley is in dispute since the time of Indian independence. Everything apparently seems convoluted, but it's not. The solution of Kashmir problem is straight forward, but because the solution is politically incorrect no body will implement it. Moreover, politician gangs, who are uncontested rulers of the valley, will surely won't wish their empire to end very abruptly, which it will if they adopt the solution I am going to outline in the following paragraphs.

Kashmir is yet another legacy of British Raj in India. The smart-ass Brits gave Israel - Palestine conflict to the middle east when they left from there, and gave Kashmir to India and Pakistan who separated at the time of their independence from the Britishers more than 60 years ago. During the partition many princely Indian states decided to remain with India and others parted with Pakistan. The king of Kashmir was Hindu with a predominantly Muslim populace. The king wanted to join India, but his population wanted to go with Pakistan. Not seeing the real solution in his sight then prime minister of India, emotional Nehru took this matter in United Nations, which ordered a plebiscite. India determined not to let go the so-called crown of his head - Kashmir, decided to ignore the plebiscite and installed the Army and a special constitutional rule. This friction resulted into this long endless bloody conflict, which still awaits its final solution.

The solution
Kashmir dispute is a straight forward case of violation of the property rights of the Kashmiri people by the Indian government. The land of Kashmir is a private property of the people of Kashmir who have homesteaded it since centuries. Kashmiri or Indian government has no legal rights to violate these private property rights of Kashmiri people.

I feel it absolutely insane when many Indians living outside Kashmir heedlessly keep on saying that Kashmir is an integral part of India. They need to understand, that it is none of their business to interfere in the private matters of the Kashmiri people. I just ask: how they will feel if the Kashmiri people say, that the land of Gujarat or Maharashtra don't belong to Gujarati or Maharashtrian people, but to the Kashmiri government!!!

So, the simple solution of Kashmir problem is to give back the original private property titles to the Kashmiri people, and let them decide their own future. If they want to go with Pakistan after given their rightful ownership then that's fine, and if they want to remain independent then that is also absolutely fine. Once they will be the owner of their land, they will protect it at any cost against any invaders, if that is going to be their fate.

In any case stealing the land of Kashmir from their legal owners (Kashmiris) is wrong, and Indian government must immediately correct this mistake by giving back the property titles to Kashmiris while simultaneously removing the Indian army from their land. Without this the blood spill in Kashmir will never stop.

Tuesday, September 7, 2010

Global Warming/Climate Change Fraud Reading

Dear friends,

Here I list some of the important resources which you all require to uncover the hoax, lies, frauds of Anthropogenic (man-made) Global Warming (AGW)/Climate Change:


1. The Deniers, Fully Revised: The World-Renowned Scientists Who Stood Up Against Global Warming Hysteria, Political Persecution and Fraud
2. Climate Confusion: How Global Warming Hysteria Leads to Bad Science, Pandering Politicians and Misguided Policies That Hurt the Poor

3. The Great Global Warming Blunder: How Mother Nature Fooled the World's Top Climate Scientists

4. Climategate: A Veteran Meteorologist Exposes the Global Warming Scam

5. The Politically Incorrect Guide to Global Warming (and Environmentalism)

6. Red Hot Lies: How Global Warming Alarmists Use Threats, Fraud, and Deception to Keep You Misinformed

The Really Inconvenient Truths: Seven Environmental Catastrophes Liberals Don't Want You to Know About--Because They Helped Cause Them

Green Hell: How Environmentalists Plan to Control Your Life and What You Can Do to Stop Them


10. Climate Change Reconsidered: The Report of the Nongovernmental International Panel on Climate Change (NIPCC)

11. Watermelons: How the Environmentalists are Killing the Planet, Destroying the Economy and Stealing Your Children's Future


1. The website of The Nongovernmental International Panel on Climate Change (NIPCC)

2. Climate Realist: The Realists Take on Climate Change

3. Climate Change Fraud (Also see links to other websites on their links page)

4. A True Inquiry Into Climate & Weather (1/2): A Hot Potato (Great 2 hrs podcast which covers most of the man-made climate change hoax related issues). Part 2 is here. And the discussion continues here, and here.

5. Ice Age Now (It's not warming, but natural cooling that is looming danger on humans)

6. Climate Change: The Skeptics Handbook (Rise above the mud-slinging in the Global Warming debate. Here are the strategies and tools you need to cut through the red-herrings and avoid the traps.) You all should surely download this gem of a handbook, which will enable you to ask critical questions in global warming debate, and help understand the underlying realities.

7. CO2 science (CO2 is not BAD for us and our planet. Quite the contrary. It is in fact GOOD for plant and animal growth. Take a look at this website for a true understanding of CO2)

8. Climate Depot

9. Piers Corbyn's (If you want to know about the real scientific true accurate weather forecast then Piers Corbyn is your man. He is a real weather man. WeatherAction long-range forecasts are produced using Piers Corbyn's Solar Weather Technique which is the most advanced and reliable long-range forecasting system in the world. Although you have to purchase his forecasts if you want to use it, but he gives this forecasts for FREE to all the major governments/politicians beforehand so that they can use it for making their policies. So far governments and politicians have IGNORED him totally because he uses Sun and not CO2 to predict weather!)


1. The Great Global Warming Swindle (You must watch this documentary to uncover the lies of man-made global warming. If you have seen Al Gore's, The Inconvenient Truth (lies!) then you must watch this documentary, which will totally debunk Al Gore by using science, and not propaganda like Gore).

2. Global Warming or Global Governance?


Greenies/lefties/commies want to kill people (especially in poor countries) so that only they can have control over the resources of this planet, and for that they are using this man-made global warming/climate change hoax on a global scale. The recent environmental terrorist, who attacked Discovery channel headquarters is a prime example of this Green environmental madness.

The earth is actually naturally cooling, and possibly slipping into a 30 year cycle of Ice Age. This is nothing new because climate has always changed naturally. ‎"Over the past one million years, we have experienced eight ice ages. Eighty percent of the last million years was ice age. We are lucky to live in this short inter-glacial period."

So, what we now need to do is to prepare ourselves for the coming cooling (and not warming), and for that first of all we all need to understand the hoax/lies/frauds of man-made climate change, which is been told to us by our ugly politicians and those evil environmentalists. I have given enough reading reference to you in my above post. I wish you all study the real science of climate change and educate yourselves as well as your friends/family member/community members while passing on the messages to others.

Thursday, August 5, 2010

Shorabuddin encounter: Just another lollipop in the hands of sheeples

The recent so-called fake encounter case (as if real encounters are in anyway justifiable!) of Mr. Shorabuddin and the follow up events of CBI arrest of various politicians has stirred the environment in Gujarat and India. Every news channel and newspaper is running this story. On every nooks and corners of the streets, at every restaurants, almost at any place people are busy discussing this case. In my view the issue is getting an attention which it does not deserve because of the reasons I am going to elaborate in the following paragraphs.

The problem with the whole issue is not that the encounter was just or not, but the issue is, such government (which political party that question is irrelevant because the matter always is between the citizens and their governments) killings of their citizens take place everyday all around the world. As I have reported elsewhere, Hawaii University professor R J. Rummel's data records shows that governments around the world have killed total 26.20 crore of their own citizens, so far! (see here - The ways in which governments kill people are sometimes not directly apparent and requires astute economic reasoning which is hard to come by in the sheeples and so such everyday killings escape peoples' attention. For example, government created economic problems like inflation, unemployment, recession/depression, poverty, and the crimes of government like wars, riots, homicides etc., kill scores of people around the world everyday. Such killings go on everyday without any uproars by the media establishment or any serious discussion by the citizens on the street. A keen eye who sees such events everyday and a critical mind who analyzes these killings will be hardly surprised to see Mr. Shorabuddin being killed by the government. As I said such events take place daily.

The fundamental form of relationship between the governments and their citizens is of a slave-owner relationship. As brilliantly analyzed by Franz Oppenheimer a century ago and even more brilliantly and eloquently put forward by Murray Rothbard, The Government is nothing but a Gang of Robbers, Looters, and Murderers writ large! The fundamental job of every government is to loot, pillage and kill those who oppose their power regime, and that is exactly what Gujarat government did by killing Mr. Shorabbudin. Democracy etc., fancy words are artificial veils behind which power continues to exert and assert itself daily in the form of such killings.

What people don't understand is this fundamental slave-owner relationship between themselves and their government masters. To win votes they have invented one more gimmick of this fake encounter case and now for few months the citizens will play with this toy, will get sucked in to the political propaganda of one or the other party and as the next election will come they will go and once again elect their own murderers and pillagers! Nothing can be more sad than this. People will continue to stab in their own backs because that is what is their fate being slaves of government.

It is much better if people can see the larger picture of this slave-owner relationship instead of toying around with the issue of this fake encounter. They need to stop voting, stop paying taxes and stop supporting the governments with whatever means possible, if at all they want to live a peaceful secure prosperous life. Unless and until that happens such cases will continue to take place and governments will continue to kill its people everyday unabated.

Wednesday, July 28, 2010

Surrogacy: Exploitation of Poor?

The recent episode of NDTV's We the People (the word WE, with its collective connotations, is itself a misconceived and misguiding notion. Read the novel WE to understand what I am saying) discussed the surrogacy matter. Following are my comments on this program.

One thing is crystal clear from all such programs is, that a poor person and his poverty is a medium of employment for millions of people around the world. No one is really interested in solving any problems of the poor, but everyone is ready to take advantage of their poverty by conducting bogus researches (in State funded brick and mortar universities and research institutes) and airing such useless harmful programs.

The hipocrisy of such programs is that they themselves are exploiting the poor! On one side NDTV's tv rating is reaching to the roof and on other side their stupid arguments of regulating the surrogacy trade with some dumb state legislation will inspire the government to enact nonsensical anti-surrogacy law. This law will harm the poor and hence their exploitation by NDTV.

All those eggheads, who participated in that program, do not understand a thing about how the voluntary exchange works i.e., how the market process works. Those rich participants of the program were just imposing their subjective value judgments on poor people and thus doing them immense harm in the name of protecting poor's interest. By harming the poor people they were doing a profoundly unethical work under the motive of promoting ethical practices in the surrogacy business! Such hypocrite people do not have any idea of the concept of ethics and justice, but still they will open their big pompous mouths to harm the poor. I just don't understand that who in the world will know more about their self interest other than the poor people themselves! What right do those bunch of so-called elite minds have to take decisions on behalf of poor people? It was absolutely disgusting to watch such stupid tv programs where few eggheads will get together to decide the fate of billions of poor people of this country. Such programs are a real shame. What these guys are doing is demeaning and insulting the poor people. They are dehumanizing the poor.

Before uttering a word against the surrogacy trade one has to understand why in the first place such voluntary exchange processes take place. This voluntary exchange takes place simply because it benefits both the parties of this trade. If that is not the case then the exchange simply will not take place in the first place. Socialists/communists have twisted the whole meaning of word exploitation. If a poor person voluntarily agrees for surrogacy then it is not exploitation of their poverty. In fact those who are contracting with them are helping the poor financially, and financial incentive in the first place is the main factor for such contracts between a rich customer and a poor seller of such service.

Third person like any professor/researcher/government has nothing to do with this voluntary exchange of market process. To satisfy their own whims they are simply enforcing their subjective value judgments on the trading parties, which will harm both the customer of surrogacy and the poor rentier of the womb. The only winner is some professor or the government.

And suppose if a poor person is misinformed or cheated in the contracting process then again it is a clear cut legal case, which should be fought by both the parties in a private court.

If anyone is serious about improving the condition of poor people then they must immediately stop interfering in their lives and their voluntary actions. Those commie and lefty professors and tv channels should mind their own business. NDTV should stop such dubious programs and instead should use their journalistic energies in exposing the insidious government like Julian Assange and his Wikileaks is doing to help the poor people.

Tuesday, July 20, 2010

Democratic Dynasties

Democracy is the most venerated political organization in the whole of human history. It is supposedly the most ingenious invention of the statesmen for the alleged cause of human welfare. But, is it so? The question I want to answer in this blog is - is there any difference between monarchy, medieval serfdom etc., on one side and democracy on the other side? And my answer is NO. Why? Let us see.

Under the disguise of the idea of the government ‘for the people, by the people and of the people’, democracies around the world are just another continuation of the power beneath the surface. As brilliantly put forth by De Jouvenel, it is the power that spreads itself under the disguise of different political systems like monarchy and democracy. Among many similar characteristics, one characteristic which I want to emphasize here is the control of power by a singly family. Monarchy is a quintessential example of such power control by one family, but democracy also has similar characteristics! Let me list down some of the major political families in India to drive home my point.

  1. The Nehru-Gandhi family (still ruling this country)
  2. The Karunanidhi family
  3. The Abdullah family
  4. The K Karunakaran family
  5. The Patnaik family
  6. The Pilot family
  7. The Yadav family
  8. The Nandmuri family (NTR)
  9. The Scindia family
  10. The Thackeray family
  11. The Pawar family
  12. The Chautala family

As we can see from the above list, democracy is not any government ‘by the people, for the people or of the people’. The mass is still being ruled and robbed by few elite families even in democracies. There is no government of the people. It is a government of some oligarchs who are controlling lives of the subjects of their respective states.

Friday, May 7, 2010

Inflation and Its Cures

Inflation is a major problem facing all of us, not only in recent time, but since ages. The true understanding of this problem is lost in the antiquity. Today's mainstream economics is intellectually so bankrupt, and their clandestine aims of becoming the government apologists have obscured the subject matter to such a degree that hardly any of those economists talk or know about the realities of inflation. In all these propaganda game only Austrian school of economics is speaking truth about inflation.

I, recently published an article titled, Inflation and Its Cures in India Economy Review. My article uses Austrian economics to dissect the problem of inflation. It discusses its true definition, causes and real solutions. For downloading the paper for your reading please go here - (my paper is on page number 174, Vol. VII, 31st March 2010 issue).

Friday, April 9, 2010

Naxalites: Poor peasant's war with a communist leader at the helm

The whole Naxalite movement in the eastern part of India reminds me of such similar poor peasant uprisings of 14th and 15th Century central Europe Germany and France. The phenomena are very much similar: Poor peasants are dissatisfied and exploited by the State (Indian government with the Corporate world in this case), Some communist leader (Maoist in this case) presents himself in front of this desperate peasants as their savior, tells them to rebel against the status quo (church in those centuries and State in present time), promises them the future garden of Eden in the form of communism, brotherhood, humanism and other such Utopian fantasies, Peasants get sucked into their propaganda and take up arms and the uprising, killing, murdering massacre starts!

During the 14th and 15th century there were this communist cult figure messiahs like Thomas Müntzer, the whole Anabaptist movement, the Brethren of Free Spirit, Taborites, Hussites etc., who were misguiding the poor peasants and now in India there are similar communists like Charu Majumdar, Kanu Sanyal etc., misguiding the same poor.

The crux of the whole matter is: Neither the Status quo (Indian government) nor the Communist maoist are going to do any good for the poor peasants. Peasants are going to be exploited by both the parties for their own program.

Tuesday, March 9, 2010

Women's Reservation Bill : Women too want their share in the government LOOT!

Now women also want 33.3% reservation in national and state level governments. If I have to describe this proposed bill in one line then it would be that, of course women also want their share in the government LOOT of their slave citizens. Why they should left behind? In a welfare distribution state everyone wants to be on the side of looters i.e., tax consuming class, and that is what the women are asking now.

Monday, February 8, 2010

Corruption, Is GOOD!

Yeah I know, you all must be wondering and probably scratching your heads after reading the title of this blog! But wait before you declare me a loony; my assertion has strong logical basis.

All Indians, especially the youth, believe that corruption is the biggest enemy of this country's progress. It is holding back India from moving forward. But nothing more can be further away from the truth. Actually, corruption is GOOD because it is making little bit freedom available to the Indians. Without corruption life will be very difficult in this socialist country. It would be impossible for businessman to do their business, consumers to find products of their choice on store shelves, workers to find jobs, and the masses to express their wishes freely. Let us see why.

What is corruption?

Paying a bribe to the bureaucrat is an illustration of corruption for everyone. We must analyze this process of paying bribe to understand corruption. Let us ask an important question, why people pay bribe to the public officers? Of course to bypass various restrictive rules and regulations. So, Corruption is nothing but citizens' method for bypassing the draconian rules and acts of the socialist bureaucratic State. Now, is it wrong to bypass such arbitrary rules and regulations? Not at all. In fact, it is good, because as I said above only by breaking the rules and regulations citizens can live their life freely. Let us take few examples to understand this point more clearly.

Case: 1 A Businessman
Suppose a businessman wants to start a Car factory in the outskirts of the city. Every preparation is complete for starting the factory except taking government permission. Now, just imagine if the bureaucrats in the licensing department are all very honest, and do not take bribe. They will deny the permission. The consequences of this denial will be dire. Firstly, consumers will be worse off because the supply of cars will be less in the economy in absence of this factory, and this will drive up the car prices. Standard of living of people will be immediately minimized. Secondly, laborers are worse off because one employment opportunity is denied to them. Thirdly, the businessman himself is a looser because he cannot start his car factory. We all are losers. Only government is the winner.

Contrast this situation with a corrupt licensing department. If the bureaucrats are corrupt, then, at least, after taking bribe they will approve the permission, and the factory can start. Starting of factory will benefit all of us. The businessman has to bribe the bureaucrats because there are draconian government red tapes, which every one of us will have to by pass to live our life freely. These unnecessary rules and regulations increases the price of every activity for which they are enacted! In absence of such absurd laws, rules and regulations none of us will have to pay higher price of all those activities, and our life will be a whole lot better.

In this process, we cannot blame the businessman, and all those of us who pay bribe. The blame should be on the government rules and regulations, and on the bureaucrats.

Case: 2 Employers breaking various labor laws
Minimum wage laws, and with that all other laws, such as, child labor laws, working condition laws, working hour laws, anti-peddler laws etc., are supposedly enacted to better the condition of the laborers. But, actually, they make their life awful. Minimum wage law unnecessary increases the cost of hiring workers for the employers, and thus it makes laborers unemployed. Similarly, child labor laws results into child unemployment, who need those jobs because their economic condition is not well enough to do any other activity. Working condition and working hour laws also hurt the interest of consumers and the laborers. If all these laws are strictly implemented by the governmental departments, without any corruption, then it will harm every one of us.

Corruption of the labor welfare officers at least allows the employers to by pass these restrictive laws. By paying bribe they can hire people below minimum wage, giving them employment and wages according to their marginal productivity; they can work for long hours, and provide their valuable services to the consumers for those extra hours; they can hire laborers at a working condition term which is favorable to them, and not to the labor welfare officers.

Case: 3 Tax evasion - Income tax
Just envisage a situation where the income tax department is very efficient and honest in collecting taxes! I am sure such situation will be horrible for all those people who pay taxes. Taxation is a robbery, and we certainly do not want our robber (tax) department to be very efficient and honest in their looting activities. Corruption again help all of us in evading taxes. And remember, the less taxes we pay, the less intrusive governments we get, and the more free life we all can enjoy.

So, as we can see, corruption is actually GOOD for all the citizens! Corruption is the way of market to work in a socialist state. In absence of corruption our lives will be ruined quickly. We surely do not want corruption, but for that we cannot tell citizens to be honest, and do not pay bribes. Telling people to be honest against such restrictive paralyzing rules and regulations is like telling them to kill themselves. The only solution of corruption is abrogation of all those government rules and regulation, and removal of all the bureaucrats from their offices, period.

Wednesday, February 3, 2010

Letter of my wishes to the Indian finance minister failed to be delivered!!!

As I expected the letter of my wishes which I sent to the Indian finance minister's email id just bounced. The delivery failure message has arrived in my inbox. This is how those finance ministers are going to fulfill wishes of the populace! I am attaching a copy of that delivery failure notice below:
Note: Forwarded message is attached.

The following message to was undeliverable.
The reason for the problem:
5.4.7 - Delivery expired (message too old) [Default] 451-'4.2.1 mailbox temporarily disabled:'
Reporting-MTA: dns;

Final-Recipient: rfc822;
Action: failed
Status: 5.0.0 (permanent failure)
Remote-MTA: dns; []
Diagnostic-Code: smtp; 5.4.7 - Delivery expired (message too old) [Default] 451-'4.2.1 mailbox temporarily disabled:' (delivery attempts: 76)

Fw: My budget wishes
My budget wishes
Sunday, January 31, 2010 11:37:04 AM
"Madhusudan Raj"
To all the Finance Ministers of Indian Government,

You have asked the populace to present their budget wishes. Following are my own wishes. I know you cannot and you never will fulfill my wishes but anyways I am making them.

1. Abolish all taxes,
2. Reduce all government expenditures to zero,
3. After doing this you resign from the government and do some productive work in the market.

Yours truly,

An individual who is fade up with the government.


Madhusudan Raj, Ph.D.
Lecturer in Economics,
Department of Human Resource Development,
Veer Narmad South Gujarat University,
Surat - 395007,
Gujarat, INDIA.

Mobile: +91-9537236920
Office: +91-261-2256071


Saturday, January 30, 2010

An open letter to all the finance ministers of Indian government

Mr. Finance Minister,

Budget year is here and you are again in the prime focus. As is the tradition, you have asked the populace to present their wishes for the coming budget to you (as if you can fulfill their wishes!). I doubt and I am sure that none of you can and none of you are going to fulfill my following wishes but anyways I am making them.

My wish list:

  1. Abolish all taxes,
  2. Reduce government expenditure to zero,
  3. Once you do this, you resign and leave government for some productive work in the market.

Yours truly,

An individual who is fade up with the government......

Thursday, January 28, 2010

Hypocrisies of Gujarat Chief Minister: Garib Kalyan Mela OR Garib Ko Aur Garib Banao Mela?

On one side Gujarat chief minister is handing out free cash doles to poor people (see here) and on other side he is blaming central government for the rising prices. This shows the ignorance and hypocrisy of the chief minister. If he knew what actually inflation is, then he would have never blamed the central government. Inflation is, increase in the quantity of money and credit without any backing of production. Stated otherwise, handing out free cash doles to poor people, under his “Garib Kalyan Mela” is itself inflation! Chief Minister is creating inflation on one hand and is blaming central government for inflation on other hand! Now surely central government is also responsible for inflation but this does not deny the fact that even state governments are responsible for inflation. Actually, government taken as a whole is the chief source of inflation. Shifting the blame of inflation on central government by the chief minister is hypocrisy.

Poor people (and the masses) do not understand the situation. They feel as if their chief minister is a benevolent person. But is he really? His actions show that he is NOT. Because handing out of free money to poor will only result in increasing prices or alternatively speaking will erode the purchasing power of that free money. When those poor people will go to spend that money in the market they will find that their free money buys them less goods and services than before! Their condition is now worst and not better. They are made more poor by their chief minister! What looks like a help to the poor person actually is a harm done to their standard of living.

Citizens of this country need to realize that no governments have ever helped anyone, except their buddies. Citizens and those poor people need to understand that by giving free cash dolls chief ministers (or for that matter anyone) cannot make a poor person rich. If that was the case then we would have eradicated poverty years ago simply by printing more money.

Monday, January 25, 2010

Happy Slavery Day Indians!

Indian people celebrate their 61st Slavery Day (I mean, Republic Day, which is a false connotation) today. On 15th August, 1947 Indian people were freed from the slavery of one master i.e. the Britishers, and today on 26th January, 1950, they again became (and continue to be) the slaves of their new master, their own Government! Very few people realize the similarities between lives of Indian people under the British rule and their life under the rule of their own government, but, similarities are there for sure. Here is a list of these similarities:

  1. As Aamir Khan has depicted very vividly in his movie "Lagaan", Indian people were robbed by the Britishers through heavy taxation called "Laggan" under their rule. Is there any difference between that era of "Lagaan" and today's era of heavy "Income Tax" and all other, around 24 different forms of governmental taxation (see details of different forms of tax in India here)? No. Indians are still paying their "Lagaan", but, now to their new owners i.e., to their own government. Britishers use to punish those who do not pay their "Lagaan". Has this situation changed a bit? No. If you do not believe me then try not to pay your income tax and you will see the legal robbers knocking on your doors next day to rob you and put you behind the bar. This "legal robbers" is your very own Income Tax department! It is in reality a "Robbers Department"! I wish Aamir Khan make a movie where Indians are shown to resist paying "Lagaan (Income tax)" to their own government!
  2. Britishers use to "divide and rule". Has that situation changed a bit now? No. Indian politicians use the same modus operandi of "divide and rule". They have divided Indian people based on their different caste (e.g., SC, ST), religion (Hindu-Muslim divide is the starkest one) etc. And yes, the biggest divide is of two major castes. One is a "tax paying" caste and other is "tax consuming caste". Through this various divisions Indian politicians are ruling over Indian people since last 61 years.
  3. Britishers use to kill the rebel people. Has this situation also changed a bit? No. Indian government has killed (Khalistan) and is killing everyday thousands of rebel people in the areas of Assam (ULFA), Andhra/Bihar/UP/MP (Naxalites), Kashmir etc. All these movements are secession movements by different region population. They just want the Indian government off their back.
  4. Whatever problems were there under the British Raj, were still here with us. Poverty, unemployment, widespread government induced inequality, inflation, wars/riots, corruption are still rampant. Situation has changed a bit but the change is only of degree and not of kind.
  5. Common man use to be afraid of the Britishers and today they are afraid of their own government.
As you can see, in all these similarities, the only difference we can find is that, the Indian people were ruled by a foreign master in olden times and now they are ruled by the local masters! So, Happy Slavery Day Indians and I wish and hope that one day you all open your eyes to see that you all are still slaves and not free people, as you all are falsely pretending to be!

Saturday, January 16, 2010

3Idiots: An Idiot Movie

The movie 3Idiots created lot of controversy these days, without any concrete reasons though. More than anything else, the movie proved the idiocy of bollywood producers/directors in understanding the very important concept of, freedom.

The movie, basically, tries to send a message of 'freedom of thoughts' in Indian education system, which in its present state is simply a system of rot learning. Unfortunately, the movie turns out to be completely against the 'freedom of thought' message, when in the end of the movie hero (Aamir Khan) becomes very rich scientist by having 'patents' of some 200 inventions! Now any person who favors 'freedom of thought', as is the case with our hero of this movie, can never ever support the system of 'patents'. But the hero not only supports 'patents' he actually uses that system. By taking 'patents' our hero restricts the very 'freedom of thought' which he tried to promote while in his engineering college! He forgets that, his 'patents' will stifle the creative imagination of other inventor scientists. His 'patents' will kill the very innovative thoughts which the movie is trying to promote! In fact, taken to its extreme, the IP system can stifle the free education system which movie is supposedly trying to promote (see here for the evidence of this where some Harvard professors are trying to take 'copyrights' of their lectures!).

This grave logical error is made by the script writer and the movie crew simply because probably no one of them know, let apart understanding, what actually 'freedom' is. India is a socialist country and a repressive society where words like 'freedom' are complete strangers to most of the people. I am sure, if the movie script writer was aware about the ideas of libertarian thinkers like Stephane Kinsella (here), Jeffery Tucker (see above article of Harvard professor and copyright issue), and economists, Boldrin & Levine (here) then he would have not made this logically contradictory error in his movie. But Alas!

And in between all these, ironically, the movie producer and the book writer Chetan Bhagat, on whose book the movie is supposedly based, quarreled openly about the 'copyrights' of the book. Such a nice way of promoting 'freedom of thoughts'! Chetan Bhagat proved himself to be a 4th Idiot by making such noise about his copyrights once the movie was a hit. He, in this particular case, proved himself to be a bad entrepreneur who could not foresee the success of this movie in advance at the time when he sold his copyrights in few lakhs rupees to the movie producer. He could not see that the movie will make 175 crore rupees in just one week. If he was a good entrepreneur then I am sure he must have sold his book not in lakhs but in crores. Actually copyright itself is not any rights because no one can own an 'idea'. So the whole quarrel was useless and illegitimate from Chetan's side. The movie script was very different from Chetan's book and that made it a different product and not a copy of his original book. And these people forget the advantages of copying and the dangers of copyrights (see this nice video on this issue).

Without a deep understanding of the libertarian ideas one cannot truly promote freedom and that was the case with this movie too. In the end the movie 3Idiots turned out to be an absolutely IDIOT movie.

Friday, January 15, 2010

Compulsory voting in Gujarat: A State gone wild

The recent bill of “compulsory voting in local elections” passed by the government of Gujarat is absolutely unethical, immoral, unconstitutional, and undemocratic. Gujarat is a state which is passing bills and enacting legislations which are in direct contradiction with the Indian constitution and more importantly are against human ethics. For example, Article 25 of the Indian constitution gives a right to every citizen to follow religion of their choice. India describes herself as a secular country. But Gujarat government recently has passed an anti conversion bill where any person who wants to convert (change) their religion has to take State government’s permission! I fail to understand what kind of secularism is this? Notwithstanding the Indian constitution, this bill is a direct attack on person’s liberty and thus is absolutely unethical. The recent bill of compulsory voting in local elections is also similarly unethical, unconstitutional and undemocratic act of the government of Gujarat. The absolute human ethic principles say that, it is unethical to physically force or threaten to force someone to do things against his/her will. Moreover, the Indian constitution gives a fundamental right of freedom of expression to every citizen. The state cannot force an expression of vote on any of its citizen.

This step, more than anything else, shows the increasing desperation of the government for gaining the much wanted political mandate in elections which is required for its continuous existence. For survival state needs to at least demonstrate the support of its people and that support they are loosing slowly as reflected in declining voting percentages in various elections. It is very characteristics of all the governments that it never likes to loose people’s attention. They know that if people will realize that government is not important for their life and they can easily avoid it then government will become unnecessary evil (and not a necessary evil!). This very well can result in government’s demise. Realizing this threat to their existence, government tried to resolve it first by television advertisements (remember that “Jaago India!” campaign). Despite that, in recent elections people did not turn out to vote. Frustrated by this, government has now done what it is known to do best i.e. to force people to vote and thus the present ‘compulsory voting bill’.

The impact of this bill will be myriad. On one hand, it will result in increased tax burden on tax paying caste of the society for funding the bureaucracies, which will come into existence because of this bill. This step will bring India one step closure to totalitarianism. In an already socialist country people will come under little bit more pressure from the government and their already difficult life will become more difficult. And, on other hand, this step itself can very well be self defeating. Government is inherently highly inefficient in all its various activities. Similar case will be with this bill. Implementation will be impossible and it may very well result in vast protest from the populace who is aware about their natural rights. This bill will give chance to people to go and tell the politicians why they are not voting in the elections and results of that will be indigestible for the politicians themselves. Under the pressure from their own politicians government will be forced to repeal this bill. The former effects will surely take place while the later may or may not. In any case people’s life will be more difficult for sure.