Praxeology: My Reflexions on India

Prof. Kaushik Basu - who apart from being a professor of economics at the Cornell University, USA, is currently the chief economic adviser of the Ministry of Finance, Government of India - recently published a paper titled " Understanding Inflation and Controlling It " in the journal Economic and Political Weekly (EPW) , which is a well known journal in India published from Mumbai. Since inflation is the grave problem being faced by any economy and because Prof. Basu is the chief economic adviser of the Indian government, I decided to read the article to know his economic views, especially re inflation. It is important to know what the chief economist of Indian government has to say about Inflation. Knowing his views is important because billions of common man's lives depend on this one person's economic views. If his economic views are erroneous then our lives are in a big danger. If his understanding of inflation is faulty then we all are doomed. And as it tur...

Inflation is killing the common man and the Indian government and RBI is hell bent on debasing the currency. This debasement is a type of inflation which government is taking resort to to finance its boondoggles. The evidences of this inflation which I am presenting here are of Indian currency coins. The pictures clearly reveal the deteriorating quality of these coins because of government debasement. Since years they are doing this, but recently the speed of debasement has increased rapidly. So without any further delay I present the evidences. The first picture presents 1 rupee coins. First 1 rupee coin (all coins described from the left hand side) is from year 1998. This coin had at least some fine print work. When you compare it with others, you can at least say that it is bit heavy and had better print work on it. Next coin is of year 2000. Next to that is year 2008 coin. Just in 10 years time the 1 rupee coin has lost all its quality of weight and fine print. This coin is very ...

Recent economic troubles of Kingfisher Airlines has brought in focus many important issues re how the centrally planned Indian economy is faltering, how these so-called business tycoons like Vijay Mallaya are a disgrace, and how government is always helping their cronies in the business world and elsewhere. As I have noted many times in the past, the whole story of emerging Indian economy is bunkum. Sure some people are doing extra ordinary hard work and producing the economic goods which every other lazy bums like politicians, bureaucrats, government workers, and other such parasite class of society are enjoying shamelessly. But, notwithstanding that, whatever phony growth figures Indian officials are reporting are just figures on the paper; mostly a result of Keynesian money printing programs of Indian central bank RBI. Indian economy is a classic example of an artificially (paper) inflated boom, which is now busting e.g., growth figures are now revised downward , industrial product...

Inflation in India is edging up steadily and stubbornly. It is not abating a bit, and people are getting frustrated. Such relentless rise in the prices of goods and services is now testing the patience and nerves of the Indian populace. Amidst all these hardships, the politicians - who are in charge of policy making - are evading any serious discussion of inflation and its causes. Not only they are not serious, but their mind numbing and irresponsible statements regarding the causes of inflation are now becoming very frustrating, especially for someone who knows economics. I can understand the ignorant statements of finance minister Pranab Mukherjee and Mr. Advani , but it is hard to fathom what is wrong with prime minister Manmohan Singh who is an academic economist having a PhD degree from Oxford! A former economics teacher of famous Delhi School of Economics seems to have forgotten his economics. After the recent hike in petrol prices by the government owned petrol companies (PSU...

The American economy and society both are crumbling. European Union [sic] is in tatters. Majority of western world countries are on the brink of a disaster or as Doug Casey says, have entered in an eye of the hurricane. Just like the Middle Eastern countries waves of angry protests are filling the streets of Greece, Italy, Spain, UK, USA and many other occidental countries. The recent Wall Street Protest movement in America is symbolized by many as peoples' anger against Capitalism or the 1%, who are painted as wicked capitalist pigs! Many writers and so-called intellectuals are claiming that this episode in Western world is an evidence of the failure of Capitalism e.g., see here and here . Tragically, many OWS protestors are demanding Socialism ! So, is this finacial crisis and now sovereign debt default threats a wrongdoing of Capitalism? Is Capitalism responsible for peoples' misery? What is actually Capitalism? Do these writers  - who attack Capitalism - even understand ...

Yesterday's newspaper The Hindu reported that India's tainted home minister Mr. Chidambaram wants to raise taxes on rich people (you can read the full story here ). He was quoted as saying, “We must raise the tax revenue to defend [the expected aggregate decline of resources]. I know many people won't like this. But, I think, I can summon up the courage to make the statement...I [was] the Finance Minister who slashed your tax rates. Therefore ... you must be prepared to pay higher tax rates, especially the rich must be prepared to pay higher tax.” Is Chidambaram right about his proposal for raising tax on rich people? Is his policy economically and financially sound? Readers of my blog will know my answer that any kind of taxation is an outright theft of peoples' hard earn money. But I will let one of the greatest economist of 20th Century, Ludwig von Mises, answer these questions. I am reading his extremely important book The Causes of the Economic Crisis right now a...

Yesterday Indian prime minister Dr. Manmohan Singh delivered a speech in New World Order's headquarter i.e., UN (United Nations) in Washington D.C. I just casually read couple of paragraph and found many things which are worthy of critical comments. Below I am critically analyzing PM's speech. PM's speech excerpts will be quoted and will be followed by my comments. 1. Till a few years ago the world had taken for granted the benefits of globalization and global interdependence. Today we are being called upon to cope with the negative dimensions of those very phenomena. Economic, social and political events in different parts of the world have coalesced together and their adverse impact is now being felt across countries and continents. Comment: This means that neither the prime minister nor his team of economic advisers had any idea about the economic bubble which was developing in the western world. With the whole world (except few Austrian economists) he too took...

Recently the Business and Economy magazine which is published by IIPM asked me to write a column on Indian economy's future. They specifically wanted to know whether the Indian economy will overheat i.e., will it experience high rates of inflation or possible hyperinflation. Below I am reproducing my column which I wrote for IIPM. This will give an idea to all of you for what economic dangers we all are facing in coming future.   Will the Indian Economy be overheated by 2012? By Madhusudan Raj, Alumnus, Ludwig von Mises Institute, Auburn, Alabama, U.S.A. and Visiting Lecturer in Economics, Department of Human Resource Development, Veer Narmad South Gujarat University, Surat, Gujarat, India. If I reinterpret the economic meaning of this nonscientific Keynesian language of overheating [1] of the economy then the question is, whether the Indian economy will experience very high level of inflationary effects by 2012? Although we Austrian economist ...