Author: Atanu Dey

Economist.

Eliminate Poverty, not the Rich

“Maybe the main function of economics in general is not, as we usually think, the systematic building of theories and models, or their empirical estimation. Maybe we are intellectual sanitation workers. The world is full of nonsense … Maybe the higher function of economics is to hold out against nonsense, … All those theories and models we invent and teach are just nature’s way of making people who know nonsense when they see it.”    — Robert Solow[1]

It takes only a bit of economics to realize how much intellectual garbage there is in the world. Learning economics is depressing in that regard. You see piles of intellectual garbage all around. And you cannot do anything about it. You clean up a bit and it keeps piling up. It’s enough for a body to despair.

People’s minds are so full of garbage that it’s a wonder that the world functions at all. That’s when one realizes, if one understands basic economics, how truly marvelous the Smithian invisible hand is: even though people generally systematically believe in all sorts of garbage, their self-interested actions produce an aggregate outcome that they don’t really intend or even comprehend. The good that arises is accidental, not intentional.

Warning: This is a long read — about 12 minutes. Continue reading “Eliminate Poverty, not the Rich”

Thanksgiving

Today’s Thanksgiving. It’s my favorite among American traditions. The story goes that it started exactly 400 years ago — in the fall of 1621. The wiki says that it —

“… is traced to the Pilgrims and Puritans who emigrated from England in the 1620s and 1630s. They brought their previous tradition of Days of Fasting and Days of Thanksgiving with them to New England. The 1621 Plymouth, Massachusetts thanksgiving was prompted by a good harvest. The Pilgrims celebrated this with the Wampanoags, a tribe of Native Americans who, along with the last surviving Patuxet, had helped them get through the previous winter by giving them food in that time of scarcity, in exchange for an alliance and protection against the rival Narragansett tribe.” Continue reading “Thanksgiving”

Danger

American Founding Father, John Adams (1735 – 1826):

“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.”

American politician, Abraham Lincoln (1809 – 1865):

“From whence shall we expect the approach of danger? Shall some trans-Atlantic military giant step the earth and crush us at a blow? Never. All the armies of Europe and Asia…could not by force take a drink from the Ohio River or make a track on the Blue Ridge in the trial of a thousand years. No, if destruction be our lot we must ourselves be its author and finisher. As a nation of free men we will live forever or die by suicide.”

English historian, Arnold Toynbee (1889 – 1975):

“Civilizations die from suicide, not by murder.”

French philosopher, Jean-Francois Revel (1924 – 2006):

“Clearly, a civilization that feels guilty for everything it is and does will lack the energy and conviction to defend itself.”

Not Guilty

I followed the trial of Kyle Rittenhouse very closely, particularly the closing arguments by the prosecutors and defense. It was riveting. I was convinced that Kyle acted in self-defense and hoped that the jury also came to the same conclusion. Just a couple of hours ago, the jury reached a verdict after four days of deliberations: Not guilty on all five counts. For a quick summary of the case, see Reason.com.

I am delighted and relieved. Continue reading “Not Guilty”

No Excuse

Tweet from Oct 12, 2021

In a tweet on Oct 12th, Prime Minister Modi boasted, “I feel proud that even at the peak of COVID-19, 80 crore Indians got access to free food grains.”

It takes an extraordinary amount of self-deluded arrogance for a prime minister to claim credit for something that any person of average morality and sensibility would be ashamed to admit. It is shameful that India is so desperately poor that 800 million (out of a total population of around 1,400 million) would starve under adverse conditions without government food assistance.

“If you feel driven to feed the poor, get your checkbook out and keep your tyrannical mouth shut about it.” – Lewis Goldberg

If it was Modi’s personal fortune that was the source of the largesse, he could have been justifiably proud for having helped the poor in distress. But it was not his money; he merely extracted the wealth from about 600 million at the point of a gun and transferred it to the 800 million. In doing so, he forcefully demonstrated that Indians can be conceptually partitioned between two mutually exclusive and exhaustive groups: those 800 million who are reduced to beggary, and the 600 million who are reduced to slavery. Continue reading “No Excuse”

Inflation

Inflation is what the government does. By printing fiat money, the government imposes a vicious tax on people. Taxation is theft and inflation is the most damaging of theft. Yesterday I paid twice as much for gas as I did just a year and a half ago. In April 2020, I paid $1.69 a gallon (see the image above and note the date stamp; also note it says 1.69 for regular, and 1.89 for premium) and yesterday I paid $3.40 a gallon for regular at the same gas station.

May Biden rot in hell. Let’s go, Brandon.

Smart People, Stupid Ideas

Even stupid people can do smart things. Contrarywise, even smart people can do stupid things. Here’s a post hauled from the archives where I make that point. When Smart People Have Stupid Ideas.

What is Wealth?

Cryptocurrency is not wealth

“The serious fact is that the bulk of the really important things that economics has to teach are things that people would see for themselves if they were willing to see. And it is hard to believe in the utility of trying to teach what men refuse to learn or even seriously listen to.” — Frank H. Knight

Conflating the words money and wealth is an easy mistake to make because in most everyday parlance we use the two interchangeably — if you are wealthy, you have a lot of money, and if you have a lot of money, you are wealthy — without loss of comprehension.

But money is a measure of wealth, not wealth itself, just like kilogram is a measure of mass but is not itself mass. They are not the same. They have to be distinguished if we are to reason cogently about the nature and causes of wealth of people (and progress in our “inquiry into the nature and causes of the wealth of nations.”)

I have written a fair bit about wealth and money over the years. Time for a TL;DR version. Continue reading “What is Wealth?”

Inequality – Part 2

Prabhudesai, in a comment to the recent post on inequality, wrote that envy motivates the concern for inequality; otherwise, to demonstrate their commitment to equality, people would give away that portion of their wealth that exceeds the average wealth of the society (or the world at large, if they are really sincere.) I agree. 

People who are exercised about what they consider to be an “unfair distribution” of wealth insist that the wealth of the super-rich should be confiscated and distributed “fairly” to all. Bezos, Musk and other multi-billionaires come in for special censure. Why, the cry goes out, should they have billions when there are starving millions? They have more than they could possibly consume while there are people who are starving. It’s immoral and sinful. The government must do something about that.

I disagree for various reasons. First, I present a consequentialist argument why the wealth of the super-rich should not be redistributed by government edict. As I am not a utilitarian, I reject this argument for a much stronger claim. Continue reading “Inequality – Part 2”

Inequality

Figure 19.12

In a comment to the post CORE – The Economy, Raghuram quoted from the book:

In November 2016, we asked students beginning economics at Humboldt University in Berlin, ‘What is the most pressing issue that economists today should address?’ Their replies are shown in the word cloud in Figure 19.12, in which the size of the word or phrase indicates the frequency with which that term was mentioned. Students in other universities around the world gave similar answers.

Inequality is, by far, the main problem that students think economics should address.

Click on the image above in case you wish to read the chapter on “Inequality” but it is not necessary for this post. Continue reading “Inequality”