Praxeology: My Reflexions on India

In the aftermath of the 2007 financial crisis, various central banks around the world have embarked on various policies to which they have given different names like quantitative easing, operation twist, LTRO, economic stimulus etc. etc. If you tear the linguistic veil surrounding these policies, then, you will find that, these policies are nothing but creation of money out of thin air i.e., inflation. Today's bankrupt mainstream economics profession, especially Keynesianism, believes that by simply printing truck load of money governments can get economies out of recession. They simply don't bother to understand that why there is this recession in the first place, and whatever explanations they offer are all wooly-minded and basically no explanations at all e.g., Keynesian 'animal spirit' argument. US Federal Reserve chairman Ben Bernanke is an epitome of this line of thinking and policy making. Despite repeated failures of his money printing policies, he is trying the...

I finished reading Condillac's Commerce and Government last night, and what a brilliant book it is. In the second part of his book Condillac discusses the evil effects of many different kinds of government restrictions on the free trade. He brilliantly uses the economic principles developed in the first part to prove his points. His arguments are so lucid and to the point that the whole book can produce hundreds of super brainy quotes. I am reproducing some of his arguments below. In chapter 4 of part II, Condillac discusses the harmful effects of 'war' on commerce. The Nobel prize winning economist [sic] Paul Krugman and his other Keynesian sidekicks are in love with war. He on camera has said that to bring the US economy out of recession, government can assume that some aliens are about to attack the planet, and to stave off this attack they start building a war economy via inflationary policies of money printing and spending. According to him, this big dose of monetar...

In last couple of weeks I came across few thing which again revealed the fact - with myriad of other things - that the political class is voting public's real master and the voting public, who erroneously think that they are the ones who are part of the government, is these political master class's slave population. The hype created around the word "democracy" is so powerful that people easily forget that there is no such thing as, government of the people, by the people and for the people! Government surely is not 'of' the people because, as I have mentioned in the past, the ruling elites come from handful of few families who are ruling this country since long, and the common man has no realistic chance whatsoever of becoming a prime minister or a president etc. The government also is not 'by' the people because voting is forced upon the populace by the political class e.g., Gujarat government explicitly made voting in local body elections compulsor...

Étienne Bonnot, Abbé de Condillac (1714-1780) As I mentioned in my past writing, I am right now reading French philosopher Étienne Bonnot, Abbé de Condillac 's monumental work, Commerce and Government considered in their Mutual Relationship. Condillac originally published this book in 1776, just few months before Adam Smith's Wealth of Nations . Today the book is published by the Liberty fund and is available in both paper and hardback. As I am reading one chapter after another, I am astonished by Condillac's brilliant wisdom and his deep understanding of human nature. The original reviewers and translators, Shelagh and Walter Eltis rightly said that, the case for competitive market economics has rarely been presented more powerfully, and that there is continuing relevance in Condillac’s account of the difficulties that those who seek to liberalise economies still encounter. In the following paragraphs I want to briefly present some of the major ideas of Condillac an...

Many people are thinking, that if Anna Hazare and Ramdev Baba can bring back the black money of corruption from the Swiss banks to India, then, India will become super rich, everyone will get crores of rupees, and no need to pay medical bills, electricity bills, etc., blah blah. I expose such silly talks and wishful thinking in my short investigation. Such influx of black money will mainly result in, most possibly, hyperinflation.

Dr. Raghuram Rajan - the finance professor from the Chicago University Booth School of Business - just took over the charge of the chief economic adviser of the UPA government's finance ministry. As expected from him, upon taking over the charges, he has straight away started to misguide the public. When Kaushik Basu - the former chief economic adviser - left his post, I said, that the new adviser will just like be the old one.  Dr. Rajan, in his opening interview with the press said this , "One of the concerns of the last few years has been food inflation, which has been not so much within the control of the government, but which has been sort of because our population has become richer ... and, therefore, demanded more sort of higher end food products like, milk, egg, meat rather than the old cereals." I don't know where should I begin to comment on this ridiculous and totally flawed statement, which is fraught with economic absurdities and pack of lies. Let...

I am reading Richard Cantillon's book, An Essay on Economic Theory , which is an English translation of his original French work, Essai sur la Nature du Commerce en Général. Richard Cantillon (1680-1734) was an Irish banker whose aforementioned only surviving work was hailed by William Stanley Jevons as the cradle of political economy . Murray Rothbard christen him as the father of modern economics rightly displacing Adam Smith from that position. I am mentioning Cantillon's almost 300 year old work because in the first chapter of his systematic treatise, he smashed the major tenets of Keynesian theory viz., printing money is wealth creation and consumption is the main driver of economic progress. Cantillon exposed the then famous mercantalist fallacies of considering  money as 'wealth', and because Keynesiansim is nothing but an old mercantalist wine in the new mathematical bottle, it is not difficult to see how his work also smashes today's Keynesianism too. Le...