Wednesday, December 3, 2014

Why the Prices of Petrol and Diesel are NOT Falling Much?

The international prices of Crude Oil are falling fast since last few months in the international market as can be seen in the below graph.

Despite this big drop in the international prices, there is no drastic cut in the prices of Petrol and Diesel in India. Why is this? What is the cause of this price drop in the international market? In my latest economic report I answer these questions.

Friday, November 28, 2014

Narendra Modi's Flip-Flops have begun ...

In this continually updating article I am going to keep track of the flip-flops of Narendra Modi's election and other promises. He and his BJP party has already began the flip-flop journey.

1. Black money: Before and during election Modi promised to bring black money back to India - some saying within 100 days (Baba Ramdev here claiming it, and Modi was in full support of Ramdev during elections) - of its government's formation (see here, here (I must say the speech of Modi in this video is the worst form of lies, socialism and propaganda of using peoples' "envy" to come to power!, and here).

And now after 6 months in power when he failed to do anything substantive about black money, his party FM is denying any such promises. They are now flip-flopping over this issue. Here's what Venkaiah Naidu recently said in parliament: "Listing out the measures taken by the BJP government to deal with the black money menace, Naidu said whenever 100 days is said, it means "action will be initiated within 100 days". The linguistic juggling of taking out different meaning has already began to fool the public once more.

2. Price inflation: Modi and his BJP party promised to control price inflation when came to power. First of all, a promise to control inflation is like a promise to rob/loot people, especially poor, of this country in a controlled manner every year i.e., instead of looting 10% of annual income they will only loot 6%!!! Anyone with a basic knowledge of economics knows that inflation is a hidden tax and taxation is nothing but a nice name of robbery (see this, and this) So, like any other government, Modi and his government will rob and pillage us daily.

Now, after spending almost 200 days in office, is Modi or his government serious about bringing down the prices? The recent episode of rapidly declining prices of crude oil (see figure 1 below) in the international market tells us that instead of reducing the prices of petrol, diesel, which are essential energy consumption components of any household, and other crude oil related items, Modi and his government is busy filling their own coffers by imposing higher excise and other duties (i.e., taxes) on oil companies! Here is the news story:
Taking advantage of the resulting fall in pump prices, his government has raised factory gate duties on petrol and diesel twice in the last month. That means state coffers, and not drivers, will benefit to the tune of $1.6 billion this fiscal year and nearly $5 billion next year.
Figure 1: International Crude Oil Prices

 So, the major benefit of this falling crude oil prices is going to Modi and his government, and not to people whom Modi promised during and after election of low prices of everything. Remember, he himself has done nothing in India to reduce prices. And when he is getting some help from the intentional markets of fulfilling his promise of reducing prices of petrol, diesel, gas etc., substantially, Modi, in fact, is busy robbing us of our purchasing power. No politician have ever fulfilled or can fulfill the promises he made to people because those promises are empty rhetoric to fool the public. Their actions will always be contrary to what they are saying.

Thursday, November 20, 2014

Narendra Modi: The War Monger

Since coming to power six months ago, the new prime minister of India, Narendra Modi, is mostly busy developing a new war machinery in India. Modi calls himself a "Hindu nationalist" and like a true nationalist he is busy consolidating power by whipping the public frenzy for war. Remember what the great American journalist Randolph Bourne said about war: the war is the health of the state. The state was born out of conquest and war, and it is only via war that it strengthens its powers. Modi knows this and he is using the war propaganda - actually one of the reasons why people voted him to power is because he has an image of a "strong man" - to consolidate and increase his powers.

Here is a list of measures which Modi took after coming to power to increase the war machinery production in India:

UPDATE 1: And today the new defense minister Manohar Parrikar also announced a deal of 15,750 crore rupees for buying 'artillery guns' (see here). Some excerpts:
In a fresh bid to break the Bofors jinx, Defence Minister Manohar Parrikar today cleared proposal to acquire 814 artillery guns for Rs 15,750 crore while deferring decision on joint bid by Tata Sons and Airbus to replace IAF's Avro transport fleet and also procurement of 106 Swiss Pilatus basic trainer aircraft.
UPDATE 2 (2nd December, 2014): Today war monger Narendra Modi's government again announced a deal of 1500 crore rupees to buy French fighter jets (see here). Some excerpt:
The French and Indian defence ministers agreed on Monday to overcome any differences and finalise the sale of 126 fighter jets to India in a deal worth an estimated $15 billion, the Indian defence ministry said.
UPDATE 3 (3rd December, 2014): Now the Modi government is going to rebuild its fleet of Navy submarines! They have joined the 'arms race'. Here is the news:
India is speeding up a navy modernisation programme and leaning on its neighbours to curb Chinese submarine activity in the Indian Ocean, as nations in the region become increasingly jittery over Beijing's growing undersea prowess.
UPDATE 4 (6th December, 2014): They are now purchasing Sikorsky helicopters in 6,000 crore rupees (see here).

UPDATE 5 (10th December, 2014): Now Indian government is ready to export its first weapons of mass destruction war product of a warship to Mauritius (see here). The sinister "military industrial complex" is now widening. Pretty soon it will become so big that Indian government will wage wars just to sustain it for its own sake. Totally disgusting. War, war, and more war related machines. No bread and butter.
UPDATE 6 (11th December, 2014): And now Modi told the visiting Russian president Vladimir Putin, that Russia will remain India's top DEFENSE partner (see here). That means, more wars. Russia will remain a top defense (i.e., war) partner, but not a top FREE TRADE partner, which is a peaceful alternative of bloody state wars. Modi war monger is surely taking India on a path of some kind of war in future.  

1. Modi and his government is doing increasing war business with the rogue state of Israel (see here, here). Some excerpts from the news reports:
Since Modi came to power in May, ties between Israel and India have been in overdrive, with the two signing a series of defence and technology deals that have underscored their burgeoning commercial and political relationship.
The same month as the UN meeting, Modi's cabinet cleared a long-delayed purchase of Israeli missiles for its navy. In October, India closed a $520 million deal to buy Israeli anti-tank missiles. And last week, a jointly developed aerial defence system passed a major trial, which India called a "milestone".
2. On his recent visit to Australia again Modi signed deals related to war machinery (see here). Some excerpts:
Sources told The Hindu that the two sides will announce an “action plan” for cooperation in defence and other areas.

This will include exercises between armies, navies and air forces, as well as counter-terrorism, maritime security, non-proliferation and cyber security. The joint maritime exercises will be kicked off in early 2015. In other exercises, an Australian Coast Guard ship is expected in Indian waters next month, said sources.

In a first, India and Australia will also set up a mechanism to discuss “synergies in integrating defence system”, including research and development cooperation on integrating defence equipment that both countries currently purchase, for example, U.S’s C-17 Globemaster III, according to officials.
3. Russia is coming to India mainly to manufacture war machines like military helicopters etc. (see here).
One proposal that will be studied by interest in India is to set up a joint USD 3 billion dollar fund to promote joint start-up companies in the nanotechnology field with applications from defence to aerospace and manufacturing.
4. Many Indian companies like Godrej, Mahindra & Mahindra are now increasing their investment in manufacturing war machinery like guns, bullets, bombs, missiles etc., rather than bread and butter for the common men (see here, and here). Some excerpts:
Some of India's biggest companies are pouring billions of dollars into manufacturing guns, ships and tanks for the country's military, buoyed by the new government's commitment to upgrade its armed forces using domestic factories.
This is a beginning of the dreaded "military industrial complex" in India. The ties between the corporate world and the state is very dangerous. Once in place firmly, this complex will be hard to dismantle in future. As many jobs will be involved in this "military industrial complex", in future the Indian government will have to continue waging wars or whip the frenzy for wars to continue production in these war factories. This has happened in America (US president Dwight Eisenhower warned of this complex in his departing speech many years ago; his prophesies turned out to be correct), and very likely will happen in India.

5. Modi's government is also going to help Vietnam modernize its military forces (see here). By doing this, Modi is only angering the mighty military of China. There is no point provoking your neighbors like this.

6. In Modi's Gujarat the BJP government is gearing up to recruit more Gujarati people in the Indian military forces as the local Gujarati newspaper articles show below. They are also planning police training for college and school students.

 7. In past six months only Modi and his government has cleared military spending bills of lakhs of crores of rupees without letting anyone know about it e.g., this 80,000 crore project, and this 21,000 crore project. 

8. Modi is also buying more guns, bullets and missiles from the USA (see this). Some excerpts from the news report:
In a boost to U.S. weapons makers looking for ways to offset lower domestic military spending, India is expected to choose Sikorsky Aircraft's S-70B Sea Hawk helicopters at a 16-aircraft tender worth over $1 billion.

The decision could come during a high-profile visit to the United States by Prime Minister Narendra Modi that starts on Friday.
9.  Modi government immediately after coming to power increased its so-called "defense budget" (see here).

10. Modi also said this: Prime Minister Narendra Modi on Saturday said India must build up its military might to the point that no other country ‘dare cast an evil eye’ on the South Asian nation.

What is the meaning of all these war preparations and propaganda? Remember one thing, these guns and bullets can only be used in war. They have no other alternative use. There is a huge opportunity cost involved in this wastage of tax payers money in the production of war machinery. Every bullet that the Modi government is going to produce will be at the cost of not producing one bread or roti! Common man is not going to benefit at all from these war preparations. And if someone is saying that such war preparation is necessary for "national defense" then they are sucked in by the myth of national defense. Remember, in wars only war-profiteers like the politicians, bankers and crony corporatist industrialists will win with the undertaker. Wars will kill innocent civilians mostly. There is a big danger that Modi's war rhetoric might start some war with the neighboring countries, and that war will be a big disaster for India and everyone else. War is a big horror (see these ghastly images of war in Iraq), and we must stop Modi and his government from wasting our tax rupees in preparing and making wars.  

Monday, October 13, 2014

How to Make India Clean?

On 2nd October - the birthday of Gandhiji - newly sworn in prime minister of India Narendra Modi launched his ambitious "Clean India Mission". This scheme is likely to cost whopping rupees 62,000 crore! In my latest economic report I analyze this scheme. Is Modi's "Clean India Mission" going to clean anything except the pockets of poor hapless tax payers? More importantly, what other alternatives are available to make India clean other than using the government apparatus?

Monday, October 6, 2014

Modi's Make in India Campaign

Last week prime minister Narendra Modi launched his economic scheme of "Make in India" with a big fan fare. In my latest economic report I disentangle this scheme.


Thursday, September 11, 2014

Narendra Modi Wants to Dismantle, No No, Replace the Planning Commission ...

On 15th August Narendra Modi, from the Red Fort, announced that he is going to do away with the old Soviet style central planning model so he will replace the Indian Planning Commission with some other new Institution. Many people and Modi himself is saying that this replacement institution is a move in the direction of Free Market economy! Is it so? He also launched his ambitious Jan Dhan Yojana. In my latest economic report I analyze Narendra Modi's latest policy moves.

Saturday, August 23, 2014

Lies, Damn Lies and Statistics

Benjamin Disraeli, the 19th century British Prime Minister said in the parliament, that there are three types of lies: Lies, damn lies and statistics.

The word statistics itself has statist (politica) roots. It was first popularized by the German political scientist  Gottfried Aschenwall.
"The word statistic indirectly comes from the medieval Latin word status, for a political state although there is also a closely related word in German (statistik) which is also used in a political sense. “Statistik” was popularized by German political scientist Gottfried Aschenwall (1719-1772) in his “Vorbereitung zur Staatswissenschaft” (1748).

According to Leiden University, it’s difficult to know exactly when the word ceased to have a meaning close to a “political state” and became more of a mathematical term. The first time the word was used in the Oxford English Dictionary is in 1770, in W. Hooper’s translation of Bielfield’s
Elementary Universal Education: “The science, that is called statistics, teaches us what is the political arrangement of all the modern states of the known world.” The Online Etymology Dictionary states that the first recorded time the word meant “numerical data collected and classified” was 1829 and the abbreviated form stats first appeared in 1961.

Webster’s 1828 dictionary defines statistics as:
A collection of facts respecting the state of society, the condition of the people in a nation or country, their health, longevity, domestic economy, arts, property and political strength, the state of the country, &c. (source:
Nation state governments around the world are crazy after statistics because they want to use them to centrally plan the economy. But, as Professor Ludwig von Mises a century ago said:
In the sphere of human action there are no constant relations between any factors. There is consequently no measurement and no quantification possible. Ludwig von Mises (Socialism, p. 62)
Nobel Prize winning economist Frederick von Hayek in his famous article The Use of Knowledge in Society said that no central planner can have and ever use the vast amount of complex knowledge to solve the economic problem of the society. Only individuals can use this fragmented knowledge to plan their own lives.   

Not only the central planners' socialist calculation is impossible, but there are gigantic problems even with the collected data themselves. These data are full of substantial errors as Oskar Morgenstern showed in his important but highly neglected work, On the accuracy of economic observations. In his book Morgenstern discussed various sources of errors and amongst those errors one of the error was, and I quote,
Governments, too, are not free from falsifying statistics. This occurs, for example, when they are bargaining with other governments and wish to obtain strategic advantages or feel impelled to bluff. More often, information is simply blocked for reasons of military security or in order to hide the success or failure of plans. (p. 19).
In this light of the political jugglery of data and abuse of statistics, recently there are spat of events which illustrates what Disraeli meant when he uttered those words in the English parliament. I give the list of this statistical manipulation below:

1) India poverty rate manipulation: The Indian planning commission's manipulation of the poverty line numbers is well known by now. Recently the talks of poverty rate reduction - on paper of course - were in the newspaper again when the World Bank decided to revise its base year for calculating purchasing power parity (PPP) from 2005 to 2011 (the news is here). So, just by revising the base years governments can reduce poverty! This is the brilliant (mis)use of statistics which Disraeli was talking about.
2) USA unemployment rate: When the American economy is going through the worst recession after the 1929 Great Depression, the US government is also desperate to manipulate the sensitive unemployment number. To bring down the unemployment rate figure they simply ignore those workers who are looking for job for a long time but because they couldn't find the job simply drops out of labor force i.e., the discouraged workers phenomena.

3) Europe GDP prostitute case: Many of the governments in the European Union's depressed economies are so desperate to boost their GDP numbers that they are now going to include the profession of prostitution as well as drug industry income into their official GDP calculation (see here for the case of UK government; and here for the similar case of the Italian government; and here for EU wide declaration of including both industries in the GDP calculation).

4) Chine manipulating numbers: Chinese government is also manipulating their official statistics, just like any other governments, since ages.

And many more such manipulation goes on everyday unabated and unknown from the eyes of the gullible public. In light of this knowledge of the use of statistics for fooling public it is important to keep in your mind George Carlin's wise words: I have certain rules I live by. My first rule: I don't believe anything the government tells me.

Update (12th September, 2014): It is not only couple of weeks ago that I wrote this blog on the misuse of statistics by the state officials, and Indian government politicians have decided to revise the GDP measurement for the Indian economy this year. They are saying that due to this changes the Indian economy will now be bigger than before (i.e., on paper!). You can read this news here. Here are some excerpts:
"India will soon revise the way it measures gross domestic product to reflect under-represented and informal economic sectors, two government sources said, in an initiative that is expected to show the economy is larger than previously thought...
The government of Prime Minister Narendra Modi, which is committed to raising economic growth and slashing the fiscal deficit, plans to adjust the measurement early in 2015, a senior official at the Ministry of Statistics said...
"We plan to release GDP data based on the 2011/12 base year by early next year, that could theoretically revise up the growth estimates," the official said."
So, this is how Narendra Modi and his government is going to raise India's GDP!!!

Wednesday, August 6, 2014

Modi's First Budget, Failed WTO Deal and BRICS World Bank

Narendra Modi government presented its first budget recently as well as, as per the news reports, Modi personally advised the Indian commerce minister to block the recent WTO deal on trade facilitation (the Bali Package). Modi did this allegedly to help the poor people of India and to further the national interest. Also recently the BRICS nations decided to create their own World Bank. In my latest economic report I analyze all three events.

Monday, July 28, 2014

Are Speculative Hoarders Responsible for Inflation?

The price of various vegetables, fruits, grains etc., is rising fast in India e.g., the price of tomato has gone up from around 20 Rs/kg to 100 Rs/kg! New Narendra Modi government, who promised to battle inflation during his election campaign, is blaming speculative hoarders for this price rise (see this and this). This same lame excuse was also given by the former UPA government finance minister P Chidambaram (see here). So, is there any grain of truth in what UPA and NDA finance ministers are alleging? Are speculative hoarders responsible for inflation (defined as a rise in the general price level)? I answer this question in my following economic analysis. In short, the government's fiscal policies and central bank RBI's monetary policy are responsible for inflation, but the politicians, whether that be Narendra Modi or Manmohan Singh, will never put the blame on themselves! As always, they will blame people - like speculators and hoarders - for their own follies.

For a more detailed analysis of speculators and hoarders I would advise everyone to read Walter Block's fantastic book, Defending the Undefendable.  

Monday, June 23, 2014

Narendra Modi's Railway Fare Hike

Recently Narendra Modi government increased Railway passenger and freight fare by whopping 14.2% and 6% respectively. Modi government and his fans are giving reasons that it is necessary to raise prices for providing better services and safety in Indian Railways! Is it true? Is it necessary to raise price to provide better services? Or is there a better alternative available? Also, recently the inflation numbers came out and the WPI jumped to 6.01% in the month of May. Immediately Modi and his finance minister Jaitley started blaming 'speculative hoarders' for this price rise. Again, is this true? Are 'speculative hoarders' responsible for price rise? I tackle these two questions in this week's economic report below.

Sunday, June 8, 2014

Narendra Modi and His Economic Policies

In my latest economic report I discuss the slowly unfolding economic policies of Narendra Modi and his BJP government. RBI, mostly under the pressure from the Modi government, recently reduced its SLR by 50 basis point releasing 40,000 crore new credit in the market. This is nothing but inflation. I discuss this and other important matters below.

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Sunday, May 25, 2014

A Note on Arvind Panagaria's - the likely chief economic advisor of PM Narendra Modi - Economic Views

Arvind Panagaria is a, as newspapers are describing him, renowned economist from the Columbia university. He and his senior professor colleague Jagdish Bhagwati are famous for supporting and favoring Narendra Modi's so-called market oriented economic model of Gujarat. Panagaria recently gave an interview to TOI where he outlined his main economic views for the Modi government if he becomes PM's chief economic adviser. One look at his views makes it clear that if Panagaria gets his way and becomes PM Modi's adviser, then, we are surely heading for more economic troubles. Below I present Panagaria's views immediately followed by my comments.

1. Upon asked what should be the three priority areas of Modi government, Panagaria said:
End the paralysis in decision-making in the Central government, end the policy uncertainty for investors including retrospective taxation and other surprises visited upon entrepreneurs by the authorities, and replace the current draconian land acquisition act by a more pragmatic one.
Except the second policy of removing the policy uncertainty (he should better focus on removing the much broader problem of 'regime uncertainty' (as first discussed by Prof. Robert Higgs) which is quite different from the narrow idea of policy uncertainty), both measures of ending paralysis of decision-making and replacing current draconian land acquisition act by a more pragmatic one will be a big danger for the common man. Ending paralysis of decision-making can be good for people only when those decisions are in the direction of ending government intervention in economy or in peoples' lives; only when the government is rolling itself back, people can be free to pursue their ends of living a happy life. If decisions are made for more interventions and more crony capitalist fascist policies where businesses will loot the public, then, it is better that such decision making process remains paralyzed.

And, the only interpretation of land acquisition act is that many more land owners - mainly poor farmers - are going to lose their land to the State in the name of phony development and growth. Arvind Panagaria or Narendra Modi or general voters who voted for Modi have no idea of 'Justice' in their mind. The thought that you can not take away someone's property against his wish never crosses their mind. People won't bother for property rights issues as long as they are not losing their land.

2. He was asked about the possibility of lowering the rate of interest to kick start the lack luster economy, and the following was his answer:
The real issue is whether we are willing to tolerate 8-10% inflation or insist on bringing inflation below 5%. If the latter, the answer has to be in the negative. On the other hand, if we show more tolerance for inflation, it is possible to ease up on monetary policy and let the interest rates fall.
In simple words, get ready for more inflation. The whole idea that people are tolerating even 5% inflation is insane. No one tolerates even 0.1% inflation willingly. Will you tolerate government stealing 5% of your annual income every year? And who are these "We"? "We" here only means common man. Inflation benefits government officials and other people who are well connected with the government (people like Panagaria himself), so they are never going to bother about inflation. It is only the common man who gets crushed beneath the weight of creeping inflation. If Modi government is going to go and print more money to fund these mammoth infrastructure projects, then, that will surely kill the Indian economy because printing and spending money is not real growth.

3. On Welfare programs like MGNREGA, Panagaria has this to say:
Definitely. In the current form, both Public Distribution System (PDS) and MNREGA are failing miserably in meeting their objectives, with vast leakages along the distribution chain.
So, Modi government is not actually going to totally end these wasteful welfare programs; they are only going to rework them and change their current form! That is a pure baloney. Making an economically wasteful program more efficient means making the whole process of wasting our precious resources more efficient!!! Changing current form of so-called welfare program is not free market economics; it is not even leaning in the direction of market. Such middle of the road interventionistic policies, as Ludwig von Mises said, only leads to disaster and full socialization of the economy in the long run.  What we need is an end of the whole welfare state itself. We don't need the Nanny government itself.

As I said above, if Panagaria becomes PM Modi's chief economic adviser, then, expect more inflation and more fascism in India. This ain't any free market economics; This is pure fascism.

Thursday, May 22, 2014

On Narendra Modi and his alleged Free Market Economic Vision

So, Narendra Modi and his BJP party won a clear majority in the just concluded 16th Lok Sabha election. On Monday Modi will become the new prime minister of India. The atmosphere all around the country, mostly as seen in the mainstream media frenzy, is euphoric at this moment of so-called historic win of Modi. Most people see Modi as some kind of messiah who will save this country from corruption, economic stagnation, lack of political power and influence with her neighbors etc., etc. I want to focus here on one alleged thought that is going around mainstream media re Narendra Modi's economic vision. Many articles are describing Modi's economic vision - I have dealt with his development model in past article - as, lo and behold, "Free Market" vision (see this for example)!!! Is it really true that Modi's economic policies in Gujarat were free market policies? The best way to tackle this question is to first see the true definition of the free market, and then contrast Modi's actual policies with this definition. If what Modi did resembles this definition then the mainstream media is correct in terming Modi as a free market prime minister. Any deviation means media is, as usual, lying.

First, we see some definitions of 'free market' from varied sources. Wikipedia defines 'free market' in this way:
A free market is a market economy in which the forces of supply and demand are free of intervention by a government, price-setting monopolies, or other authority...The laissez-faire principle expresses a preference for an absence of non-market pressures on prices and wages, such as those from government taxes, subsidies, tariffs, regulation (other than protection from coercion and theft), or government-granted or coercive monopolies.
Investopedia defines it as:
A market economy based on supply and demand with little or no government control. A completely free market is an idealized form of a market economy where buyers and sells are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulation.
World English Dictionary defines it as:

an economic system that allows supply and demand to regulate prices, wages, etc, rather than government policy 

Merriam-Webster dictionary defines it as:
an economic market or system in which prices are based on competition among private businesses and not controlled by a government
And most importantly, the famous free market economist of the twentieth century, Ludwig von Mises, defined a market economy as:
The market economy is the social system of the division of labor under private ownership of the means of production. Everybody acts on his own behalf; but everybodys actions aim at the satisfaction of other peoples needs as well as at the satisfaction of his own. Everybody in acting serves his fellow citizens.
Another champion of free market, Murray Rothbard, outlined the necessary condition for the existence of the market economy:
This means that the key to the existence and flourishing of the free market is a society in which the rights and titles of private property are respected, defended, and kept secure. The key to socialism, on the other hand, is government ownership of the means of production, land, and capital goods. Thus, there can be no market in land or capital goods worthy of the name. (Read the whole article What is the Free Market).
Now, contrast these characteristics of a free market economy with Modi's policies in Gujarat. Do Gujarat has any private property rights regime - which is secured by the State itself - in the means of production? Not at all. In fact, Modi has robbed many farmers of their land during his 13 years stint in power. Do we have different prices like wages, rents etc., being regulated by the free market forces of demand and supply in Gujarat without any interference from Modi's state? No. Just like any other state we have myriad of legislative acts interfering the free exchange between a buyer and a seller. Modi's government taxed like any other government. Modi's government gave subsidies to farmers and industrialists like any other government. Modi's government gave monopoly powers to business tycoons like Tata, Adani etc., like any other government. Modi government has put the people of Gujarat under a heavy burden of public debt like any other state government in India (see this). In fact, Narendra Modi dictated every policy in Gujarat from the get go.

If someone truly understands the system of free market, then, he can immediately see the logical fallacy of the term 'Narendra Modi's Free Market Policy'. If there is a free market, then, there is no Narendra Modi because, as Ludwig von Mises explained:
The market economy [capitalism] was not devised by a master mind; it was not first planned as an utopian scheme and then put to work. Spontaneous actions of individuals, aiming at nothing else than at the improvement of their own state of satisfaction, undermined the prestige of the coercive status system step by step. (The Ultimate Foundation of Economic Science, p. 109)
And, if there is Narendra Modi's free market policy, then, there is no free market. It is Modi's whatever vision that is forced on people!

Actually, Narendra Modi is a fascist leader. There is no free market in Gujarat. It is only socialism where, in reality, government owns the means of production. It is fascism where the state and big corporations loot the hapless public. It is crony capitalism. There ain't any free market in Gujarat, and there won't be any in India now that Modi is the PM of India.   

Saturday, May 3, 2014

Inside the Belly of the Election Beast: My Experiences of Lok Sabha Election 2014

I am back from my drafted duty of working as a presiding officer in the on-going Lok Sabha election 2014. As you all know I and thousands of others like me were forced by the Indian government and its Election Commission to work in this one of the longest rounds of election. In this short article I want to describe the harrowing experiences that I had during two days of my duty - 29th and 30th April - as a presiding officer.

The Training Period
Before the day of election - 30th April in Gujarat - the district collector and his other election officers arranged three training programs for election officers like polling officers, assistant presiding officer and presiding officer. Anyone who attended this training program would have immediately noticed how confused the trainers themselves were regarding various election proceedings. I have already discussed elsewhere about the kind of bureaucratic mess this election is. There are so many rules and regulations that anyone will go crazy remembering let apart following them. This was reflected in those three training sessions e.g., in the last training session the master trainer for EVM (Electronic Voting Machine) himself was confused about how to seal the machine! He was frequently forgetting to fold A side of the strip seal on B and B on C and C on D etc.! He was, in fact, properly guided by some experienced presiding officers who were sitting in the training session. Not only that, the whole training sessions were a sheer waste of time because instead of giving a logical step by step presentation of the whole election process, all the trainers were explaining various things to us as it came into their mind. In such situation it was very hard to keep track of the logical process of each steps of conducting election voting. All the top officers - like the Mamlatdar, Deputy Collector and Collector himself - were so confused in between themselves that they were confusing the polling officers too e.g., when Mamlatdar told us that we need to submit two Mock poll certificate, the deputy-collector told us to submit only one! There were many such issues and queries of the election staff which was simply ignored by these training officials. And the irony was, that in such state of their own confusion the district collector decided to take exam of the polling staff! During all sessions trainers were assuming that all polling staff is experienced, which was not the case because there were many novices sitting in the audience. In whole training program they were just showing videos from Election Commission's website. It would have been better if they just instructed us to watch these videos of YouTube and learn everything instead of wasting time and money in such sessions!

The Dispatch Day: 29th April
After the training sessions were over, the actual day of dispatching election teams to voting booths arrived. Training sessions didn't clear anything, and the same state of confusion was visible on 29th April too at the receiving and dispatch center. Most presiding officers were looking for their respective teams till the moment when they were given all the election material! All the government staff at the center was busy making sure that they don't have to do much work. Everyone there were busy passing the buck to the presiding officers. I personally shouted numbers of my team's booth and assembled my team finally. The real mental harassment started the moment I was given the election voting material. After receiving these material, I have to check if something is not missing! The tedious work of counting everything took more than couple of hours. I am presenting below the photos of the check-list of this material. You can see for yourself how anyone will go mad going through this check list. There are at least 30 to 40 items in each list which we have to check in the sack bag which they have given to us! If you have seen all the teams going through this labyrinth, you would've surely laugh and cry at them at the same time.

During this check list counting, we were told that we can get any missing item from room no: 2. When I went there to find some address tags, there was total chaos. There was no official person attending anyone; all team members ransacked the whole room; all forms were lying on the floor teared and other material too misplaced all over the room. In such chaotic environment me and my team, after hours, somehow managed to check all the items. After that ours and other teams were ready to go to the polling booth. Our team's route was route 9, and our bus number provided on the room notice board turned out to be wrong! So, at the parking plot, I had to go around asking all drivers whether they are going to route 9. After checking 10-15 buses personally, I could figure out our route bus. I called my team and we boarded the bus finally. In the bus there was chaos again. They hijacked some small school buses in which they stuffed at least 5 to 6 teams with 5 members each with heavy voting material! Those teams who came late couldn't find place to even sit in the bus, so they came standing!

Upon arriving at the voting booth we left the bus and tried to settle down. My booth was a village community hall so it was thankfully bit clean. But, as usual, the toilet and bathroom were in a horrible condition. There was no running water supply, and all the sleeping mattresses were dirty, as usual. I was totally confused about various forms, but my experienced assistant presiding officer and husband of one of my female polling officers helped me a lot to arrange all covers and forms properly. Once that work was done, I stamped and partially sealed all the forms thus completing most of the election day work. It took 5 hours for me to do this work! My mind already was numbed by now. I was not in a position to think anything properly. I had to spend night over there guarding the EVMs and election material! Election commission has given this responsibility to the presiding officers, so I had to stay there overnight with my peon. Collector and his election team sent some food packets prepared by a local NGO called Akshay Patra. Food was horrible; It was all stale. I was never going to eat anything outside for two days so I straight away declined to eat it. My peon decided to try the food, but he couldn't put one bite in his mouth. He said, it is all stale and he don't wanna get sick. We throw away both food packets. Similar things happen in all other booths. I am sure the local election officials and Akshay Patra NGO made lot of money in this botched food contract. That same stale food they sent to us even on the day of election, which we again threw away! Somehow I tried to sleep. I could sleep only for 3-4 hours because of the horrible condition over there.

The Day of Election: 30th April
I woke up at 4 am early morning. It was night time and dark outside, so I took my bath in open!  Bathroom was not in a working condition, so I had to take my bath in open. By 5:30 my staff came and I conducted mock poll, sealed EVMs and at 7 started the actual voting. From the local BLO (Block Level Officer) I came to know that all male voters in my booth area are drunkards! The first male to arrive in my booth was BJP party booth agent, and he was drunk! Then two Congress booth agent arrived who were drunk too! BLO was absolutely right. Whole day such drunkards voted in my booth. This is the true color of the dreaded demoCRAZY. Almost all the voters were totally clueless about even which button to press on the electronic voting machine to cast their vote. How can anyone with a sane mind seriously think that such people can choose the leader who is going to lead this country on the path of progress? The whole election process is total farce. If you will watch these voters whole day voting, whatever little (false) faith you have in democracy will vanish in a blink of an eye. Everyone over there were blindly pressing buttons. Many of them didn't even know how to hold a pen (many held it in reverse and tried to sign in the voter register!!!). This comic situation continued whole day. I just sat there laughing at this mad state ritual of election. At 6 we closed polling, and after that it took further one hour for me to fill all the forms and put them in their respective covers! There were around 40 different types of covers that the presiding officer will have to prepare and seal or keep unsealed. Total chaos. I am producing the check memo of all these various forms and their respective covers below. See for yourself how horrific and nonsensical this work is.

After sealing the EVMs and all covers we sat in the bus to go back to the receiving center. My team was the first to board the bus, so we have to take other teams with us on the way. When we reached other voting booths, I realized that my team finished work pretty early because most other teams were struggling to arrange forms even after two hours of closing of the poll. It took 3 hours for us the gather all the teams and reach the receiving center. Upon reaching the center, there was again that scene of utter chaos. All teams were confused about the places were they have to give back various forms and all other extra material. Election officials again changed some rules, and team members were furious about that. Many were fighting with the receiving staff. I saw many teams sitting on the ground sealing and unsealing various covers or doing some other work upon arrival! My assistant presiding officer was smart, so he and I submitted all our covers and materials within half an hour. But even that half an hour was like a hell for me. In the end the guys who were receiving the material also realized that if they sat to check everything, then, whole night will pass, so they also started accepting everything quickly. I don't know what happened to other teams, but I came back home only at 10 pm in night! After coming home I realized that my brain stopped working for few hours due to this harrowing experience of two day chaos. Any sane person will go crazy in such messy environment.

This is the short story of my two days in this election hell.

As I said above, if someone wants to see the ugliness of demoCRAZY, then, they should work in elections. DemoCRAZY and its election ritual is a pure dungeon; pure hell. The whole idea that on election day people can chose their rulers is totally lunatic. Why the heck people want to get ruled in the first place is the most important question no one wants to ask or answer. Election commission is spending crores of rupees on these crazy elections. It is a sheer waste of society's resources. Innocent productive people like me and others are forced to work in a process which is going to elect bunch of criminal unproductive politicians! For whom we are wasting our resources? For criminals like Narendra Modi or Rahul Gandhi or Mulayam Yadav or Banerjee or Jaylalita? How can these bunch of fools run our country? Central planning is a disaster. None of these people, even if they are angels, can run our or any other country. It is a technical problem. A problem which no government can solve. Only free market capitalism is capable of solving our economic problem. Instead of wasting our resources in these political elections, we need the everyday election process of the market place. Free market is a true democracy where every vote, which an individual consumer casts via his money, counts. This fact of the market democracy was very nicely explained by the great Austrian economist Ludwig von Mises. In his magnum opus Human Action he wrote:
With every penny spent the consumers determine the direction of all production processes and the minutest details of the organization of all business activities. This state of affairs has been described by calling the market a democracy in which every penny gives a right to cast a ballot. It would be more correct to say that a democratic constitution is a scheme to assign to the citizens in the conduct of government the same supremacy the market economy gives them in their capacity as consumers. However, the comparison is imperfect. In the political democracy only the votes cast for the majority candidate or the majority plan are effective in shaping the course of affairs. The votes polled by the minority do not directly influence policies. But on the market no vote is cast in vain. Every penny spent has the power to work upon the production processes. The publishers cater not only to the majority by publishing detective stories, but also to the minority reading lyrical poetry and philosophical tracts. The bakeries bake bread not only for healthy people, but also for the sick on special diets. The decision of a consumer is carried into effect with the full momentum he gives it through his readiness to spend a definite amount of money. 
The day Indians will chose this market democracy of free market over the evil political democracy, things will start to change for better. Until that time arrives, we all must get ready for more troubles ahead.

Saturday, April 5, 2014

Narendra Modi's Development Model

Narendra Modi, the lead prime ministerial candidate of BJP party, is having an eight point development model, which he is proposing to implement if he comes to power in 2014. In this succinct write-up I want to analyze this Modi model. Although for those who have a thinking head on their shoulders this model presents nothing new, we, in any case, need to analyze it because Modi is likely to be the next PM of India. Let's take a look at the eight points of this development model one by one. My analysis follows the description of this eight point development model. Here is the model:
  1. Education & Job Opportunities for Youth: IITs, IIMs and AIIMS in all states
  2. Children & Women’s Empowerment: Beti Bachao Programme
  3. Urban Develeopment / Infrastructure: 100 smart Cities, Twin City Concept,
  4. Satellite Cities, Interlinking rivers, Golden Quadilateral of bullet trains
  5. Inflation/Price Control: Price Stabilisation Fund, Special courts for black marketeers
  6. Agriculture Reform: Data bank for Agri Produce, National Agriculture Market 
  7. Health Care for All: Preventive health care
  8. Federal Structure: Addressing regional aspirations
  9. Anti Corruption Measures: Bring Back Black Money Stashed Abroad 
First thing that catches any thinking head's attention in this model is, how Modi wants to achieve these goals? What are the various means that he wants to use to fulfill the goals of his model? There is no mention of these means in this description of his model. Without the knowledge of what kinds of means he wants to use, it is difficult to analyze anything concretely. The absence of the discussion of these means itself shows how serious and sincere this model is! Notwithstanding the absence of the discussion of means, we can make few educated guesses, by using thymology, about what means Modi is likely to use. Modi is a hardcore politician, so he will definitely use political means for achieving his political goals. He basically will use the State powers of robbing Peter to pay Paul. He is very unlikely - almost impossible - to use the system of free market capitalism to achieve his model goals. The idea of Freedom won't even cross the mind of totalitarian dictator politician like Modi.

Can government provide education? Or Can government create jobs?

Government's compulsory schooling - we should strictly differentiate between schooling and education because for real education going to school is not necessary and going to school doesn't mean you are educated in a real sense - system is specifically designed for brainwashing children and create obedient zombie citizens out of them who will never question the legitimacy of the state authorities. I will let H L. Mencken, the great American journalist, speak in this regard:
“The most erroneous assumption is to the effect that the aim of public education is to fill the young of the species with knowledge and awaken their intelligence, and so make them fit to discharge the duties of citizenship in an enlightened and independent manner. Nothing could be further from the truth. The aim of public education is not to spread enlightenment at all; it is simply to reduce as many individuals as possible to the same safe level, to breed and train a standardized citizenry, to put down dissent and originality. That is its aim in the United States, whatever the pretensions of politicians, pedagogues and other such mountebanks, and that is its aim everywhere else.”
Government can not also create any jobs. To understand this I will strongly advise my readers to understand the broken window fallacy. Modi or any other politician can never ever create anything new let apart jobs by using the political means of taxes, subsidies etc. Government is a meat grinding machine and it can only destroy societal resources.

Gujarat itself, where Modi is CM, is doing miserably when it comes to infant mortality rate and maternal mortality rate or broader human development indicators (see here, here, and here).  

In the name of infrastructure and urban development Modi government has looted farmers in Gujarat, and the same is likely to happen all over India if he wins this election. Moreover, the broken window fallacy shows that building such cities or interlinking rivers or running bullet trains [sic] represent no real development; it only shows transfer of real wealth from the productive tax paying class of the society to the unproductive tax consuming class. And above all, all these economic goods, if really demanded by the consumers, can very well be produced by the system of free market capitalism. For their production we don't need any Modi or Gandhi or Kejriwal! 

Price control means disaster. 4000 years old human history shows that whenever governments have used price control measures to stop inflation, they have failed miserably. Can Modi falsify economic laws and do something which no other ruler was ever able to do in last 4000 years? No. He doesn't even understand what inflation is! His talk of price control itself shows that he is totally clueless about the true meaning of inflation. And, scapegoating black marketeers won't stop inflation because they are not responsible for it. RBI, the central bank of the Indian government, is wholly responsible for creating inflation via its loose money policy. Is Modi going to dismantle RBI? Absolutely not. Without dismantling the RBI and the adoption of pure gold standard with 100% reserve banking, inflation monster can never be slain. In fact, what actually will happen is Modi will increase government spending to fulfill his model goals, which, in turn, will create more inflation!!!

Government health care for all will be a total disaster also in the health care market like India were private providers are doing good work. Obamacare in USA is a prime example of how government health care programs create havoc amongst the populace.

Bringing back black money won't stop corruption. As I have discussed in past, the root cause of corruption is the presence of the bloated Indian government bureaucracy. Without demolishing these bureaucratic departments, corruption can't be ended. As long as bureaucrats are standing in between the peaceful buyers and sellers, they will continue to demand their share of state loot from both buyers and sellers. As long as government bureaucrats have the power of making various decisions, they will continue to gobble up tax payers' money. Bringing back black money is a pure nonsense talk.

Regarding federal structure I am thinking, and I definitely can be wrong in my thinking, that Modi will break-up this country, and for good. As I have said in past also that instead of having one central state power ruling over billions of lives, it is better to have smaller private cities in this geographic region called India. India never was united historically. It was always a decentralized place full of smaller independent principalities. If Modi's coming to power can again divide this country into such decentralized local powers, then, that will be much better compared to today's centralized federal structure.

Overall, this so-called Modi development model is a pure baloney. There is nothing new in this model. It is a same old boring politician's promises of doing this and that. Modi and his BJP party has no clear cut vision. They cannot have one because they, like all other state officials, are only interested in getting elected and re-elected. They want power and nothing else. Pretty soon peoples' delusions are going to end regarding Modi. Pretty soon people will start complaining about his government too!   

Saturday, March 8, 2014

The State is a Mother of All Forces

Anyone who understands the true criminal gang nature of the state (aka government) knows that it is a mother of all forces. The fundamental basis of every government, whether that be fascist, socialist or a liberal democratic, is force. Without coercion no state can ever survive. Taxation is the quintessential of this force. Without coercive taxation no government can come into existence. I have made this point time and again in front of people, but still many refuse to believe this eternal truth. Many people bring out age old boring and long refuted argument of government - especially a democratically elected one - as a voluntary institution just like any club. They say that people voluntarily go and elect their representatives in elections! Nothing can be farther from the truth. I have explained in my past write-ups that these democratic elections actually present no true choice in front of people. They are an illusion of choice e.g., hapless voting public can never elect a no government for themselves for five years or more. When you have to choose a lesser evil, it is still choosing an evil!

But I digress. In today's article I want to focus on the coercive nature of the whole election process itself from the side of those who are involved in conducting these elections. Indian election commission has announced the dates of the general 16th Lok Sabha elections 2014. In this election more than 81 crore citizen slave voters are going to forcefully elect who is going to loot them for next five years. This time around they are given a false choice of NOTA (None of The Above). NOTA is a tool of fooling public yet again. If someone is thinking that by giving a NOTA vote they are fundamentally going to change the outcome of the election process, then, they sure are day-dreaming. Here is what Wikipedia entry of NOTA says about the possible outcomes if  majority votes for NOTA:
When None of the Above is listed on a ballot, there is the possibility of NOTA receiving a majority or plurality of the vote, and so "winning" the election. In such a case, a variety of formal procedures may be invoked, including having the office remain vacant, having the office filled by appointment, re-opening nominations or holding another election (in a body operating under parliamentary procedure), or it may have no effect whatsoever, as in the state of Nevada, where the next highest total wins regardless. (See here).
Not only that, in India NOTA has no importance whatsoever as the same Wiki entry again discusses:
Although frequently termed a "right to reject" in India, a former head of the Election Commission has noted that it is not in fact such a thing. The Election Commission also clarified that the NOTA votes are considered as invalid votes and will not be considered for determining the forfeiture of security deposit. (Footnotes removed).
So, NOTA votes are basically considered invalid votes! Good luck people if you decide to waste your time on election day for voting for NOTA.

Now, I said I want to focus on the coercive nature of this election itself from the side of those who are conducting it. I will give you my own example because in this general election my home town authorities have picked my name also for the election duty work. Few weeks back I received an order from the local body election authorities notifying me about this misfortune of mine! What I want to do here is let my readers see the scanned copy of a selected paragraph of this order where the State election officials are clearly threatening and forcing me to do this work compulsorily. You will see in this order that I don't have any other choice but to carry out this work under all kinds of duress. There is no choice open in front of me over here. If I refuse to do this work, they will take punitive actions against me. They will take me to the court and police will come and harass me. And I won't take names of my friends here, but they have faced these headaches in past for refusing to do this work. Below I present the scanned copy of relevant part of my election duty order:
My Election Duty Order
It is in Gujarati and it basically says, that I have to remain present for the election duty training program otherwise they will take legal actions against me as per the Representation of the People Act 1950! This is a typical Statist language of aggressive force and intimidation!  

I know Statist people will always say, that there is nothing wrong in this use of force for the sake of keepping democracy alive in India! They will always think it is alright to push people around to further their own end of ruling over them. But, any sane person with a thinking head will realize that there is no choice involved over here. When people who are conducting election are being forced to do this work, how can one think that this election represents any choice for the voters also? There is NO CHOICE. In the name of dreaded democracy these thug state officials are exploiting people, period.  

As I said in the beginning, the state is a gang of criminals and it represents no choice in front of us. It is a mother of all forces. Everything it does is always compulsory for the hapless slave citizens. You can't say No to the State. It is better that people realize this fact quickly. As long as we don't realize this fact, the State will continue to plunder us.