Praxeology: My Reflexions on India

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 ...

Population control   is back on the agenda of the present Indian government of Narendra Modi. In his 15 th   August Indian Independence Day speech prime minister Modi put his government’s focus back on population issue, and he went as far as to   say   that, But there is a vigilant section of the public which stops to think, before bringing a child to the world, whether they can do justice to the child, give them all that she or he wants,” he continued. “They have a small family and express their patriotism to the country. Let’s learn from them. There is a need for social awareness. Those who follow the policy of small family also contribute to the development of the nation, it is also a form of patriotism. So is Indian population really a problem like what Modi is terming it to be? The French Liberal economist J B. Say had a lot to say about the issue of population.  In his masterpiece ‘ A Treatise on Political Economy ‘ Book II, Ch. XI, OF THE MODE I...

The Indian, and world economy, is entering in one of the worst phases of modern day recession right now. The warning signs of rapidly slowing Indian economy are everywhere. Auto companies are firing workers at a rapid pace and halting production. Even age old manufacturing company like Parle, which makes famous Parle-G biscuits, is firing 10,000 workers. GDP growth has collapsed and India has slipped to 7 th place, from 5 th previously, in global GDP ranking. The stock market has already lost 4000 points from its pre-budget high level of 40,000. Indian currency rupee has again touched a low of 72 rupees per dollar mark, and it is poised to go even lower. On the other side the precious metal Gold has gone ballistic to near 40,000 rupees per 10 gram level amidst this fear of a slowdown. Most major Indian commercial banks are drowning in debt. Big corporations are drowning in debt and buckling under debt pressure one after another. Amidst this slowdown it is natural t...

India’s new and first female finance minister Nirmala Sitharaman in an interview recently   said   , At this stage, what we are looking at is making sure that consumption is encouraged through various steps that we’re taking, actually get the money into the hands of people, rural, particularly. This whole DBT-based transfer of entitlements to those who need to get it and get it instantly, being enabled by technology, was one very big way in which we’re pushing money into the hands of people. As you are spending on infrastructure, in-situ promotion of labour is what is happening. Giving money they need in their hands instantly is what is needed. So if government’s expenditure is diverted to only prioritising on infrastructure, the ripple effect, I expect, will be on labour, everywhere rather than concentrated in one place…The virtuous cycle kicks in from there. Consumption increases, demand increases, investment increases, as a natural course. Is Sitharaman right in s...

Chapter 2, Vol I of the Economic Survey of India 2018-19 begins with this title:   Policy for Homo Sapiens, Not Homo Economicus: Leveraging the Behavioural Economics of “Nudge” . It starts with the following Sanskrit stanza:   We cannot rely totally on rational thinking to gain information, as it is not without its bias . The following is the short abstract of this chapter: Decisions made by real people often deviate from the impractical robots theorized in classical economics. Drawing on the psychology of human behaviour, behavioural economics provides insights to ‘nudge’ people towards desirable behaviour. This chapter illustrates how the Swachh Bharat Mission (SBM) and the Beti Bachao Beti Padhao (BBBP) have successfully employed behavioural insights. Using such learning, the chapter lays out an ambitious agenda for social change: (i) from BBBP to BADLAV (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi); (ii) from Swachh Bharat to Sundar Bharat; (iii) from “Give it up” for ...