Prospects for Indian Development Models – Part 2


All revolutions begin in dictionaries.[1] I think that all confused thinking begins with an improper understanding of words — and often ends in needless man-made misery. To think and discourse effectively, we must define precisely the words we use. In the context of economics, words like “capitalism” have been misused and the concepts abused to the point that all related discussions are pointless. Douglass North said, “I don’t know what the word capitalism means and therefore I have never used the term.” [2]

If North, a Nobel laureate economist, hesitated using that word, who are we to use the word without at least attempting a definition? Dictionary definitions don’t quite serve the purpose. Every shorthand definition is inadequate for complex concepts. Understanding comes prior to the formulation of a concise statement of the idea, not after. It’s like the mathematical equation E=mc² — you have to understand a truckload of basic physics ideas before you can come anywhere close to understanding what the equation implies. Continue reading