Praxeology: My Reflexions on India

Amidst the on-going severe recession in the Indian economy, the Indian central bank RBI is trying to do something impossible. Driven by its   Keynesian   logic of lack of aggregate demand as the root cause of the recession, RBI is trying to boost both consumption and investment at the same time. In its recently published bi-annual Financial Stability Report RBI   said , Aggregate demand has slumped in Q2FY20 … Reviving the twin engines of consumption and investment while being vigilant about spillovers from global financial markets remains a critical challenge going forward. This is theoretically and practically an impossible task. Let us see why. Income, Consumption, Saving and Investment Both consumption and investment come from income and so we need to see the definition of income first.   Income refers to the flow of new consumer goods (and services) that an individual has the potential to acquire during a period of time   ( Murphy 2010 ). A ...

Society and Polity India is descending into a dark abyss. It is becoming a lawless and barbaric nation state. The evidence of this is everywhere e.g., recently in Hyderabad four boys allegedly   raped a veterinarian   doctor and burned and killed her. Such rape cases have become a daily occurrence in India and   public anger   was high. There were public protests in form of rallies etc., and the politicians and incompetent police, who initially refused to file FIR of this case, were under tremendous pressure to do something about it. Public wanted the blood of these accused rapists. A lady member of parliament Mrs. Jaya Bacchhan went as far ahead as to demand a   public lynching   of these rapists in the lower house of the parliament! Such demands are typical of a lawless society. A civilized and mature society handles such cases with care by using a sound judiciary system   so that no innocent is punished . Public anger plays no role whatsoever in...

Delhi and with it India is again rocked by protests by JNU, Jawaharlal Nehru University, students who are opposing a so-called steep hike in their hostel fees. As   reported   by newspapers, Under the new hostel charges, students have to pay a service charge of Rs 1,700 per month. This charge did not exist earlier. Rent for a single room has been increased from Rs 20 per month to Rs 600 per month, and for a double-sharing room from Rs 10 per month to Rs 300 per month. People on the political Left are supporting JNU students and on the Right are opposing them. Let’s see what they are saying. What the Left is saying? Many on the left of the political spectrum in India are calling this fee hike a conspiracy of the Modi government to shut down Jawaharlal Nehru University because it is its fierce ideological opponent. JNU students, NSUI (Congress party student wing), Dalit group Bhim Army, student unions like SFI, KYS, AISF and other civil society members, most of these...

Book Review: Sowell, Thomas. 2016.   Wealth, Poverty and Politics . 2 edition. New York: Basic Books. Thomas Sowell is a world renown African American economist. He is a fellow of the Hoover Institute, Stanford University, USA. He is known for his straight forward logical and undaunted views. Looking at the corpus of his vast amount of work, he should’ve long been a recipient of the Swedish National Bank prize in Economic Science in memory of Alfred Nobel. I think he hasn’t won this prize only because of his politically incorrect ideas, which are hard for the establishment to digest. Dr. Sowell’s work on the factors affecting wealth and poverty of individuals and nations is very important but mostly neglected. All his life’s research work in this field is contained in one of his magnum opuses   Wealth, Poverty and Politics . Let us see what Dr. Sowell has to say about the causes of wealth and poverty. Causes of Poverty About the causes of poverty, and causes of pover...

In the second episode of Mises Interviews I sat down with Mr. Jayant Bhandari to discuss Indian economy, society and culture. Mr. Bhandari throws light on the underlying cultural factors that are necessary prerequisite for the progress of India. He also analyzes the economic policies of Modi and all other past governments while discussing the future of the Indian economy. P.S. This interview is in Hindi language to cater the Indian listener.

As we all know, the Indian economy is going through one of the worst economic recessions it has ever witnessed in modern history. Starting from   auto   and realty sector, manufacturing, FMCG (Fast Moving Consumer Goods), agriculture and even   underwear   industry are facing big sale drops and inventory pile ups. All these symptoms are of a typical business cycle. I do not want to discuss the causes of this business cycle here in detail as I have already done that   elsewhere . In short, the Indian central bank RBI and its master government are solely responsible for the recession. Industry leaders were panicking and demanding that the government announce some kind of a relief and rescue package. The finance minister Nirmala Sitharaman so far was in denial about this recession as she was not ready to accept publicly that there is any recession in the Indian economy, but major policy decisions declared last week  show that she can no longer ignore this ...