Knowing Basic Microeconomics — Part 2

This is a follow up to the previous post on Knowing Basic Microeconomics where I had claimed that micro theory is essentially codified common sense and that it is never too late to learn a bit of microeconomics. Many people have written to me (and some commented on the post) that they would like references to some work that makes micro theory accessible to the lay person.

I am not familiar with what is available and therefore I am not qualified to answer that question. I have read a few non-academic books on economics but they are the type that attempt to address the concerns that are usually macro in nature. I find macroeconomics only mildly interesting. But macro stuff (dare I call it nonsense?) is what you normally read in the popular press — stuff about the business cycles, interest rates, unemployment, inflation, etc. Pundits on TV and newspapers are always going on about GDP growth rates and how the developing economies are doing and what will happen in the year 2030 or some such remote date. I find it uninteresting because most of those stories are “just so” stories and everyone has his favorite.
Continue reading “Knowing Basic Microeconomics — Part 2”

Of Kakistocracies, Principals, and Agents

Enclaves of Private Luxury

Just off the expressway from Mumbai, on the road leading into Pune, you see huge billboards advertising new housing developments with fancy names like “Whispering Pines” and “Orchard View” crowding each other, promising idyllic lifestyles of lavish comfort. They convey very urgently a palpable sense of how rapidly the market for private luxury dwelling is blossoming thanks to increased salaries and easy housing loans.

These billboards reflect the increased aspirations of the growing upper middle-class in India. Curiously, one set spoke to a deeper and disturbing reality. One billboard said, “Power Cuts? No problem. We have 24-hour generator backup.” Another one down the road said, “Water Shortage? Have a shower. We have our own water supply.”
Continue reading “Of Kakistocracies, Principals, and Agents”