Praxeology: My Reflexions on India

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 ...

I have not commented much on the recent market collapse all over the world, including Indian markets because there is nothing more to say about it then what I am already saying since long time, that all these so-called recovery and growth story is bogus. Economies around the world never recovered from the 2007 financial collapse. What happened actually was governments printed and pumped lot of phony paper currency after the collapse and because of that Stock market was rallying as well as due to inflation prices of commodities are going up. This phony market had to collapse one day and it happened the moment governments and their central banks stopped printing money i.e., end of QE2 and raise in interest rates e.g., RBI's 11 increases in last one year. India, China and all other countries around the world are economic bubbles which will bust sooner or later. Whatever real growth is taking place due to hard working population of these countries is being destroyed by their governme...

Of late I am noticing increasing incidents of the thug government forcefully stealing poor peoples' - mostly farmers - land all over the country e.g., Singur  (West Bengal), Sanand (Gujarat), POSCO (Orissa), Greater Noida (U.P.), and other smaller cases in Gujarat and other states which goes unreported and thus unnoticed.  This land grabbing has a nice cover-up name - land acquisition. But, this is not an acquisition of any sort.  In all these cases poor land owners are not willing to sell their land to the government. The reason they don't want to sell their land is because that land is their Home, it is their only source of income, it is their life's wealth, it is the place where they are living since ages. In short, it is their private property. Many of the farmers who willy-nilly have to sell their land are also not happy with the price which government is paying them. And when the buyer is not voluntarily ready to sell his land and seller still forcefully takes his...

A couple of days ago famous industrialist Ratan Tata commented about the lavish life style of another billionaire business tycoon Mukesh Ambani quoting his 27 storied Mumbai house viz., Antilla. Tata said that Mukesh Ambani's house Antilla represents the rich Indian's lack of empathy for the poor . His remarks: "The person who lives in there should be concerned about what he sees around him and [asking] can he make a difference. If he is not, then it's sad because this country needs people to allocate some of their enormous wealth to finding ways of mitigating the hardship that people have."  Is Ratan Tata right in his remarks or is he misguided in his judgements? Is he aware about the role of an entrepreneur in an economy or is he ignorant of this basic economic fact? Or is his remarks has some underlying assumptions which make those remarks perfectly apt for Mukesh's lifestyle? Let me deal with these questions one by one. I take two scenarios to carr...

Recently prime minister Manmohan Singh visited Afghanistan government to meet president Hamid Karzai. This visit was in the wake of recent event of the murder of Osama-bin-Laden by the US government. During this visit he pledged to donate US$ 500 million to the Afghanistan government for the said rebuilding infrastructure works. He announced that the total commitment from the Indian government to transfer the funds to Afghan government is approximately US$ 1.5 billion. In this region Indian government is the biggest funding institution for the Afghan government. This whole transfer of funds by the Indian government raises many questions in my mind, and should raise in every Indian citizens' mind too. First, what is the real motive - and not just stated - of giving this large sum of money to the Afghan government? Second, who actually is going to pay for it and in what form? Is it morally and legally right to give this money to Karzai government? Third, who will actually benef...