Saturday, May 4, 2013

Narendra Modi: An Extraordinary Popular Delusion

I was recently reading Charles Mackay's famous book, Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, which discusses some of the major popular delusions like the Mississippi bubble, the tulip mania, the south sea bubble, the alchemists, the witch mania, crusades etc., of the known human history. These popular delusions exhibit a kind of madness of crowd which we see every now and then in all ages and at all places wherever human beings are present. The evolutionary brain, which has primed human nature for a kind of herd behavior, is the root cause of this phenomena, but I won't discuss this matter at length here in this post. I want to focus on one such extraordinary popular delusion and madness of crowd type of episode which is right now on-going in India. This episode is of the cult of the popular chief minister of Gujarat, Narendra Modi. The crowd is in frenzy re his name. Many deluded people want him to be the next prime minister of India and rescue the country from the evil hands of Congress party, particularly now hated Gandhi family. Many people are seeing him as a kind of messiah, a savior who can increase India's economic growth, remove political corruption and make it a Super Power! Although Modi's popularity is mostly manufactured by his own lackeys via false propaganda campaigns, but as always happens, this has fooled many people. The next national assembly election is approaching, and it is important to expose this Modi cult. That is the task I am attempting in next few paragraphs. This surely will not be an exhaustive treatment of this subject. I will only focus on major theoretical arguments which are not only applicable to Modi, but to every other state official.

Is Modi responsible for Gujarat's growth?

The first major delusion re Modi is that he has single handendly put the economy of Gujarat on the path of growth and development. Modi's fans don't get tired of telling everyone, that he is solely responsible for Gujarat's high economic growth rate. Is it true? Is this possible? For those who understand the true nature of the state and who are having a knowledge of sound economic laws, the answer is easy, a clear cut no. And for those who don't understand the true nature of state and economic laws, I have to draw their attention to Bastiat's famous 'Broken Window Fallacy'. Broken window fallacy (see video below) is a logical method of analyzing any governmental action.



People need to understand, that whatever work government is doing on the one hand is done by taking money forcefully from the productive sector of the society on the other hand e.g., when Narendra Modi government builds a road, this road is financed by Gujarat tax payers. Without tax payers' productive work this road will never come into existence. That means, Narendra Modi is not building this road; tax payers of Gujarat are building it. People very easily forget, that society comes first and then only comes the government. Government exists because of society and its productive people and not otherwise. Without the work of productive tax payers, governments won't be able to do anything. But without the government, productive people will not only survive, but, in fact, thrive. And we also need to remember, that whatever works government is doing is all political in nature. There is no market test of profit and loss to evaluate the efficiency and desirability of such works. Politicians love power, and all their works are directed only in the direction of gaining more power. They use these phony works to purchase voters for their elections. All the special interest groups - big corporations and other government cronies - determine what kind of work government officials are going to carry out. Anyone familiar with the 'Public Choice Theory' knows this fact. The most important fact that these works were not carried out by the private market itself suggests that they were not demanded by the market participants. 

Not only Narendra Modi didn't carry out any of these works on his own, he, in fact, diverted precious scarce resources from the productive sector of the economy towards the unproductive parasitic consumption sector. The unseen effect of Modi's so-called growth drive is those projects which private entrepreneurs could not accomplish because their profits were forcefully taken away from them via taxation by the Modi government. In the absence of this taxation, entrepreneurs would've surely used these resources to fulfil the most urgent needs of their consumers in the best possible way of producing highest quality products at the lowest possible prices. But they couldn't fulfill these consumer wants just because Modi robbed them of their profits. When I talk about entrepreneurs here, I am  talking about honest entrepreneurs only, and not those fascist corporatists like Adani, Reliance, Tata etc., who are enriching themselves by working in cahoots with Modi government. They are not real capitalists. They are fascist robbers who are looting Gujarati public, especially small farmers. What Modi is doing in Gujarat is nothing but stealing farmers' land and giving it to his crony corporatist friends at absolutely discounted prices. This is not growth. This is not development. Some urban dwellers are benefiting because of this robbery, and they are the major cheerleaders of Narendra Modi. Modi is a shameless liar e.g., his claim that his government is providing 24 hr electricity supply is totally bogus. I live in the financial capital of Gujarat, Surat, and here itself there are frequent power cuts every week!  

What is more important to understand is, that Gujarat's growth is possible because Gujarati people themselves are very hard working since ages. Gujarat is a prosperous state since ages. The entrepreneurial populace of Gujarat is world famous. The business acumen of Gujarati people is known everywhere. Gujarat is prosperous because of its hardworking entrepreneurial populace. To think that some fanatic guy like Modi is responsible for Gujarat's growth is showing a disrespect to the hardworking productive populace of this state. It is undermining the importance of productive members of this society. It is a supreme folly. A madness of crowd who believes in such fairy tales.

In fact, what is true is that Modi has put Gujarat under a heavy burden of debt in the name of his growth policies and extravagant expenditures (see this, and this). He recently said, that I have repaid mother Gujarat's debt and now I am ready to repay mother India's debt. It will be more appropriate to say, that he has put mother Gujarat under heavy debt, and now he is aspiring to put mother India also under a burden of heavy debt. Watch out, mother India!!!

What kind of development is taking place in Gujarat under Modi government?

I already alluded to this issue above. Narendra Modi is a fascist dictatorial chief minister and whatever growth and development people are talking about is nothing but enriching his corporate buddies at the cost of common man, especially poor farmers (see this, this, this, this, this, and this).  I am sure people know about the recent CAG report which implicates Modi's favors for his criminal fascist pals like Adani, Reliance, Essar, L&T etc. (see the CAG report here, here, here, and here. Also see, this, this and this).

Modi cult will be exposed if he becomes PM of India

Notwithstanding the fact that no Narendra Modi is responsible for Gujarat's growth, I wish he becomes PM of India just so as to break the delusion of people re his charismatic powers. Once on the national stage, this fascist dictator's real colors will be in front of everyone, and that will spell a doom for his cultist figure. Modi is a mad leader and I won't get surprised if on the first day of his inauguration itself he declares a war on Pakistan or China! It will be very comic to see him deal with national political morons like Lalu Yadav, Mamta Banerjee, Mulayam Singh, Nitish Kumar, Jay Lalita, Benni Prasad etc., etc. To handle 20-30 different parties won't be easy for him because he is ruling like a king in Gujarat, and so is not habituated to any kind of opposition. I wonder he will turn out to be even a good politician on the national stage!

As Charles Mackay said in his book, such delusions are seen in every age and at every place. What we are witnessing on the Indian political scene right now is just another example of that popular delusion and madness of crowd. I am quite sure, that when Modi bubble will burst in future, people will find another Modi for themselves instead of learning the supreme fact, that no one person can rule over their life and make it better. Government is a parasite and it can only suck productive society's blood. It can never do any productive work. To expect that some guy will come and save peoples' lives is a height of (false) human expectations. 

As long as individuals don't assume responsibility of their own lives, their situation won't improve for better.  

13 comments:

  1. "...evolutionary brain, which has primed human nature for a kind of herd behavior"...?
    I think Mises would disapprove of this remark. If not, I do since it overlooks individual purposiveness. Herding is an instinct common in fish or other animals that have less individual consciousness.
    ABCT offers explanation why bulls may dominate for a while (i.e., due to distortions in pricing signals for credit, etc). But is is an anomaly.
    This smacks of Keynes' sort of pop-psychology with "animal spirits", something that is bunk....

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    1. My article is not about the evolutionary psychology of herd mentality, but about peoples' purposeful action of supporting Modi (falsely) believing that he will help them achieve the ends like higher growth, less or no inflation, removal of political corruption, India being a super power etc., etc., which they think are desirable. Mises's praxeology doesn't' depend upon psychology.

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  2. This piece started nice with the broken window fallacy and everything but, it became very biased later on which might lead to most people not taking this article very seriously.

    Of course Modi did not develop Gujarat all by himself (a humanly impossible task by the way).
    Of course he has used tax payer's precious money for all the projects. Is he supposed to pay from his pockets?

    People are not rooting for Modi because he is the most perfect leader on the planet, they're rooting for him because he is kind of one of the best out there right now (you might disagree, but that can't be helped :) ).

    With all the extra ordinarily corrupt ministers out there you chose to criticize Modi. Feels like there's an agenda somewhere (maybe there's not, but it sure feels like).

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    1. Yes, he is supposed to pay from his own pockets. Everyone is supposed to pay from their own pockets, if they want to claim that they are responsible for some growth or development. People should give credit where it is due. Unfortunately, poor tax payer is always a 'forgotten man'.

      And, I only have one agenda in my mind: human welfare. I will be the most happiest person on this earth if Modi will prove me wrong. I will be very happy to see Modi dismantling taxation, the RBI, all governmental bureaucratic departments to remove the political corruption etc., etc. If Modi can rollback and end the Leviathan, then, all well and good for me. Do I think he is going to do such things? No. He is a crooked politician, just like others. He likes power. He won't give-up his power. In fact, he wants to be a PM to become more powerful. Few years back, when his chances were not bright for being a PM, he was telling Gujarati people, that he is of Gujarat and will serve Gujarat always. Now upon seeing his chances brightening up, he has changed his tone - just like a typical politician - and saying, that I have served mother Gujarat, and now want to serve mother India! If you take this yet another crooked politician seriously, then, I will say best of luck.

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  3. A comment by C. Lingle on FB (pl. connect with me on FB): ""...evolutionary brain, which has primed human nature for a kind of herd behavior"...?
    I think Mises would disapprove of this remark. It violates individual purposiveness. Herding is an instinct common in fish or other animals that have less individual consciousness.
    ABCT offers explanation why bulls may dominate for a while (i.e., due to distortions in pricing signals for credit, etc). But is is an anomaly.
    This smacks of Keynes' sort of pop-psychology (i.e., "animal spirits") something that is palpable bunk...."

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  4. Excellent article Sir! Much needed dose on the evils of big Government.
    Another thing that irks me is that a majority the very farmers whose land has been taken or purchased have voted him to power thrice. Now they are crying foul. Let them go to the very man they were devoted to and bear the consequences.

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    1. Are we not discussing all this after establishing the evils of big government? If not, we are discussing out of a blank thought. So we go to pure skepticism.

      In the context of big government, Modi has done well. I am no fan of big governments, but lets have the context in place. Discussions must always begin from a point where two parties agree. Fair enough?

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  5. Notwithstanding the fact that no Narendra Modi is responsible for Gujarat's growth, I wish he becomes PM of India just so as to break the delusion of people re his charismatic powers. Once on the national stage, this fascist dictator's real colors will be in front of everyone, and that will spell a doom for his cultist figure. Modi is a mad leader and I won't get surprised if on the first day of his inauguration itself he declares a war on Pakistan or China! It will be

    buy a parrot....start your SEER fortune telling business...you will do good and next time u write something about Modi Please give link/citation

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  6. Hello Sir,

    Very enlightening post. I would like you to have a look and give your feedback on the article I wrote a long back with the focus on the driving force behind Modi's rise. I had a talk with a few journalists and although many media houses ran the story of APCO I was surprised to see how they could not see beyond the very obvious financial connections; or maybe they did but was never reported all the same. What I'm referring to is the geo-political factors that plays a role in it and their serious implications.

    Do have a read when you get time.

    Mechanics of Narendra Modi’s PR agency : APCO Worldwide – Orchestrating our Future

    http://greatgameindia.wordpress.com/2013/04/16/mechanics-of-narendra-modis-pr-agency-apco-worldwide-orchestrating-our-future/

    Thanking You,
    Shelley Kasli
    shelley.kasli@gmail.com
    (btw I'm from Billimora :))

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    1. The way US empire is putting their puppet governments all over the world since long, I am not surprised to know that Modi is using these professional lobbying groups for marketing purposes. They want to use India as a buffer against China. I remember John Perkins and his whistle blower book on the use of 'Economic Hit Man' by the US government to benefit their corporations.

      And don't expect the mainstream media to air any of these important stories. They are just mouth piece of government's propaganda.

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  7. I've also read your other post on Paper Gold and Fiat money. This is the only site where I saw an analysis concerning India. Have you wrote anything on the Bank of International Settlements and the recent Basel III that is being implemented ? Though I'm not an economist or have a financial background but I do have a geo-political perspective from where I did like to approach the subject. Would like to know your thoughts on it.

    Regards,
    Shelley Kasli

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    1. All these banking norms like Basel I, II, III which are designed by the central bankers - BIS is central bankers' central bank - are all phony. They don't address the underlying fraud banking practice of 'fractional reserve banking'. Fractional reserve banking is a legal fraud called embezzlement. As long as we don't go back to 100% reserve banking and a purely market based commodity money - mostly Gold and Silver - standard, nothing is going to change. Tweaking capital adequacy ratio etc., is not going to change the status quo. As long as governments continue to control the supply of money, they will rob their respective populace blind via inflation.

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    2. Rightly said Sir. BASEL II destroyed all the farmers in India and is mainly responsible for farmer suicides. I think they're planning for a major crisis with BASEL III. As per my limited understanding the market is already in panic after the high frequency paper-gold trading and huge chunks of gold inventory getting off the records from JP Morgan and COMEX. The situation is very interesting with huge demand for gold and major banks gold vaults almost empty. With no gold left and BASEL III is introduced asking to go back to the Gold Standard is going to make the situation worse. They're planning to crash the fake fiat system that they created themselves in the first place; however to what intent I'm not sure at the moment. Maybe to introduce electronic currency. China's role in all this is going to be crucial as it's been hogging gold like anything since a more than a decade now. Would like to know your thoughts on this.

      Regards,
      Shelley Kasli

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