9 thoughts on “Back to 1960s Nehruvian Socialist Poverty”

  1. Since you brought up Nehru, did you know Mises wrote on Nehru too?
    I am quoting this passage from his book “Economic Policy.”

    “A few years ago the famous statesman Jawaharlal Nehru published a collection of his speeches. The book was published with the intention of making foreign investment in India more attractive. The Indian government is not opposed to foreign investment BEFORE it is invested. The hostility begins only when it IS ALREADY invested. In this book—I am quoting literally from the book—Mr. Nehru said: “Of course, we want to socialize. But we are not opposed to private enterprise. We want to encourage in every way private enterprise. We want to promise the entrepreneurs who invest in our country, that we will not expropriate them nor socialize them for
    ten years, perhaps even for a longer time.” And he thought this was an invitation to come to India!”

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    1. Yes, I am familiar with what Hayek had pointed out. Along the spectrum reasonableness, at the high end you find Hayek who epitomizes clarity of thought, and at the other end you find Nehru who epitomizes retardedness.

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  3. “Have to think about manufacturing everything we import”

    The only thing wrong with that statement is the need to think about manufacturing. This should be a no-brainer. Manufacturing is how the UK, US, Germany, Japan, S.Korea and China became the economic power houses that they are today!

    Just do it!

    Becoming a nation of ENGINEERS/DESIGNERS/MAKERS rather than one of importers/shopkeepers will cure a whole host of problems. It is a hard path, but the only sustainable path to WEALTH.

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  4. A question irrelevant to the topic at hand:

    There was a blog by Atanu, many years back, about an island having few blue/brown eyed people. If an external wise man declares at a market place that “I see there are blue eyed people”, a process starts leading to exit of blue-eyed-people on Nth day.

    I need that blog entry. I have got the puzzle on internet. But I need that particular blog for the sake of discussion with my colleague. This puzzle still ties me in knots due to its solution as well as implication of the solution.

    Can somebody help me? I have tried for past half an hour searching Deeshaa.org for “blue eye”, “island”, “puzzle” etc.
    Thanks in advance.

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    1. See this post and then the following post.

      Excerpts:

      In a particular village in a land far away, there used to live only two kinds of people. One kind had blue eyes, and the other kind had brown eyes. Peculiarly, while everyone could see everyone’s eyes and note the color of the eyes, no one could ever see what color one’s own eyes were. There were no reflecting surfaces to reveal one’s eyes to one, and all discussions of eye color was tabooed and verboten. There was a rule that everyone knew: if one could ever logically conclude that one has blue eyes, then one has to leave the village the next day.

      Life in the village went on year after year with nothing remarkable happening. Then one fine day, when the villagers were busy minding their business, a visitor comes to town. He assembles the entire village and makes an oracular proclamation, “There are blue-eyed people in this village.”

      The question is: What happens next?

      General knowledge is when some information is known to all concerned. Common knowledge is when some information is not just known to all but all concerned also know that that information is known to all.

      Coming back to the logic problem. Everyone knows that there are blue-eyed people in the village. There’s an exception. If there is only one blue-eyed person in the village, all she sees are brown-eyed people and so cannot know for sure if there is a blue-eyed person in the village or not.

      When the visitor — perhaps David Attenborough there to make a documentary on people’s eye color — announces loudly before the entire assembled village that not all villagers are brown-eyed (meaning there is at least one blue-eyed villager), the fact becomes common knowledge. This means that all villagers know that all villagers know. It also means that if the village had only one blue-eyed resident, that resident now knows that there is a blue-eyed person in the village, and can now logically deduce her eye color.

      Now here’s the interesting bit. Attenborough’s announcement did more than just make general knowledge about eye-color into common knowledge. It implicitly announced a “Day 1” for the logical process to get started and made that “Day 1” common knowledge. Why was this important? Because without a date on which to anchor the start of the logical deduction, it would not be possible for people to logically deduce their eye color if there were more than one person with blue eyes.

      The thing to note is that the logical process of deduction requires a “coordinating signal” which says, “People, you may start figuring this one out from today.” It’s the coordinating signal function of Attenborough’s announcement that solves the problem.

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  5. The coordinating-signal is not the only trigger that enables the exit of blue-eyed-people. There would have been no exit on Nth day had the wise man just said: “Let the reasoning begin from this day”. It was equally important to assert in a public place that there are blue-eyed-people.

    Thanks, Atanu for this blog once more. I am fascinated by two aspects of this puzzle. The first aspect is the logical gymnastics. The second aspect is the real-life implications. Let us talk about the second aspect a bit more.

    While thinking about the second aspect I am reminded of “Emperor has no clothes” story. Please confirm that the story is an example of the same common-knowledge phenomenon.
    Can you give a few examples of common-knowledge and its implication (either due to presence or lack of it) in the Indian context?

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