In a comment, Akshar asked, “As a lay person one of the question I have always had in my mind about economics is that how exactly should I separate good opinion from bullshit vending. … If as a layman I can’t tell the difference between informed opinion on economics v/s Bullshit why should I take Mr. Atanu Dey more seriously or why should I waste my time supporting Milton Friedman’s ideas.”
It is an unalterable fact of life that since time is a scarce resource we have to rely on others for most of what we value, whether physical or non-physical. We don’t have the time to discover for ourselves all the truths of mathematics, the laws of physics, the facts of nature; or invent technology (i.e., how to do things), grow food, build houses, engineer machines, make clothes, and so on. Given the limitations of time and cognitive abilities, we depend on trade and the division of labor that it entails. Each of us specializes to some degree. What I earn by writing code I exchange for everything else I need.
So how do I choose from among what’s on offer? As it happens, there are institutions in society that help in this regard. For most goods and services, we reply on the markets for signaling quality. If something continues to appeal to a large number of consumers for extended periods of time, it is probably OK for me. And of course my own taste guides me to choose among the many alternatives. Continue reading
Economic development of nations is a vast topic that people are unlikely to reach a consensus on ever. It lies beyond what’s even theoretically feasible. It’s a big enough elephant that defies easy characterization, and the best we can hope for is that the necessarily partial views are not obviously wrong.
Economists have debated the topic since the very beginnings of the discipline of economics. Indeed, the enterprise of economics was motivated by the very question of what economic development is. Adam Smith’s book, “An Inquiry into the Nature and Causes of the Wealth of Nations”, published in 1776 represents the first comprehensive attempt at systematizing the subject.
It’s the nature of the beast that makes it so intractable. An economy is an organic, living, breathing, dynamic, evolving thing. Unlike the inanimate objects that the natural sciences (physics being the foundational science) study, economists have at the core of their subject something that thinks, has volition, acts and reacts — the individual human. Economics is not, and cannot be, a science in the sense that physics is. Continue reading
The title of this post is borrowed from a YouTube video. Shri Rajiv Malhotra interviewed Shri S. Gurumurthy recently and the first two of a three-part series have been published on YouTube here and here. I confess to great trepidation in addressing myself to the matters that the two discussed, not because I am not confident of my own position but rather because of who they are.
I have deep respect for Shri Malhotra whom I have had the distinct privilege of spending time with. He is inspired and inspiring. He is one of those rare successful American NRIs who employ their fame, fortune, talents and energy in the service of not just the mother country but all humanity. The members of that tribe you can count on the fingers of one hand. Continue reading
OK, here’s something interesting. Who said the following:
It’s a rare person who can achieve a major goal in life and not almost immediately start feeling sad, empty, and a little lost. If you look at the record – which in this case means newspapers, magazines, and TV news — you’ll see that an awful lot of people who achieve success, from Elvis Presley to Ivan Boesky, lose their direction or their ethics.
Actually, I don’t have to look at anyone else’s life to know that’s true. I’m as susceptible to that pitfall as anyone else . . . Continue reading
There’s little doubt that the US health care system is not good. The US health care costs are around 20 percent of GDP, or $10,000 per capita per year. That’s unreasonably high compared to other developed nations. There are many reasons for this but the primary reason, as I see it, is the tacit collusion between the health insurance business, the hospital business, the pharmaceutical business, medical professional bodies, and governmental regulatory agencies.
Insurance has an important role to play in any large, modern society. Random events can be insured against in a population. Insurance distributes losses arising from random events across the insured population. Suppose in a population of 100 people, it is statistically certain that within a year one person at random would incur a loss of $200, then to cover that loss, if everyone paid an insurance premium of $2, then the loss can be spread over the entire population instead of just that unlucky person bearing the entire loss. In effect, everyone in the insured population bears a small definite loss so that no one bears a huge loss. When we buy insurance, we trade a guaranteed small loss against an uncertain big loss. Continue reading