This ad is probably from the mid-1980s. A massive 26MB hard drive for only $5K. As the ad points out, that’s less than $200 per MB. Now that’s a deal you couldn’t have refused. We should note that $5K in those days is equivalent to $10K in today’s dollars. Imagine, paying $10K for storage just enough for a few mp3 songs! Continue reading “Ask me anything: I am always amazed edition.”
Author: Atanu Dey
Economist.
The Wealth of Nations — Part 4: What’s Wealth?
Most people would readily identify a heap of gold ingots as wealth. But a moment’s reflection is enough to conclude that what can be considered wealth depends on the context.
Imagine Robinson Crusoe alone on his otherwise uninhabited island coming across a pile of gold nuggets in a stream. What’s more valuable to him: the gold or the fresh water in the stream? Gold is pretty useless to him because he cannot use it for anything. Gold is a heavy, soft metal. A piece of iron would be more valuable for making a knife or a pickax. Gold is of little value to him.
Continue reading “The Wealth of Nations — Part 4: What’s Wealth?”
The Wealth of Nations — Part 3: How Rich was India
The persistence of the canard that India was once a rich country is understandable. A quick glance at the simple graph illustrates very clearly why it is easy to conclude that India was rich.
This piece has loads of graphics — more than any other piece I ever wrote. No arguments here, just a lot of data-based graphics.
Here’s the TL;DR version: India is not rich today, and really never was rich in the past. In fact, all countries were poor until about a thousand years ago. India had a large share of the world GDP because India’s population was a large share of the world population. India was not rich. It was merely big. Just like it is today: big and poor. Like China used to be just a few decades ago.
Continue reading “The Wealth of Nations — Part 3: How Rich was India”
The Wealth of Nations — Part 2: Freedom
If you ask me what are the necessary causes of the wealth of nations, I will answer — having spent decades learning about and pondering that question — in just one word: Freedom!
Freedom is the sweetest word I know in English.
The advancement of civilization is essentially the expansion of individual freedom — the release from constraints imposed by nature, by other humans or by one’s mental and physical limitations. The notion of the freedom of a group has content only when individuals of that group are free. If the individuals are not free, the group cannot be considered to be free in any sense.
Freedom means you have the right to do whatever you please, provided you respect the corresponding right of others to do as they please. In short, mind your own business. A free society is one in which everyone minds only his own business. Free societies are prosperous societies.
The greater the collectivization of society, the greater the size of the government, the greater the constraints on individual liberty, the less free the society, and consequently the less prosperous the society. Unconstrained democracy is inconsistent with individual freedom, and therefore group freedom, and consequently leads to impoverishment.
Below I outline briefly why the universal application of the notion of minding one’s own business leads to the possibility of universal prosperity through individual freedom. And conversely, when people poke their noses into other people’s businesses, it leads to needless misery.
Continue reading “The Wealth of Nations — Part 2: Freedom”
Diogenes of Sinope
Diogenes of Sinope lived in a tub in the marketplace. Since it was a long time ago, around the 4th century BCE, the details are few. He is also known as Diogenes the Cynic.
I feel a certain intellectual kinship to Diogenes because I too am a cynic. He must have been a remarkable man, going by the stories told about him.
It is said that he sometimes walked around with a lamp even in broad daylight. When asked why, he replied, “I am looking for an honest man.” A cynic to the core. Continue reading “Diogenes of Sinope”
The Demand and Supply of Fines and Corruption
A comment on the last piece prompts this tiny lesson in microeconomics.
“Corruption is one big pain point in the economic growth of a country. I have this funny idea but would like your inputs from an economists perspective. If things get costly it reduces its demand. Can corruption be made costly? This may increase compliance. Just to illustrate. If we raise fine for a fault, say traffic violation, which suppose today is Rs 500 to Rs 5000. Today the violator gets away by paying Rs 100 to traffic police. This is 20% of legal cost. If the penalty is 5000 and assuming traffic police acts rationally thereby asking for bigger bribe…won’t that deter future violations by the offender? Here I presume that traffic police will act smart knowing fully well that offender isn’t going to pay 5000 but at the same time he himself won’t settle for just Rs 100 and may raise ‘price’ to Rs 200 or 300. This is effective 100-200%% jump in bribe money that may pinch offender at some point in time. Pls throw some light.”
To start off, let’s examine the statement “If things get costly it reduces its demand.” In lay terms, that is true but economically speaking, prices don’t affect the demand or the supply of a product. To understand why not, we have to clearly understand what economists mean by “demand” or “supply” and distinguish them from “the quantity demanded” and “the quantity supplied.” Continue reading “The Demand and Supply of Fines and Corruption”
The Wealth of Nations — Part 1
In his 2016 annual letter (pdf, 28 pp) to the shareholders of Berkshire Hathaway, Warren Buffett makes this observation about America’s economic dynamism.
“One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers.
“You need not be an economist to understand how well our system has worked. Just look around you. See the 75 million owner-occupied homes, the bountiful farmland, the 260 million vehicles, the hyper-productive factories, the great medical centers, the talent-filled universities, you name it – they all represent a net gain for Americans from the barren lands, primitive structures and meager output of 1776. Starting from scratch, America has amassed wealth totaling $90 trillion.”
Buffett is right about the factors that create wealth — ideas (or human ingenuity), ambition, the free market system, and the rule of law. Let’s explore some of these in more details.
Continue reading “The Wealth of Nations — Part 1”
Churchill on Mohammedanism
Winston Churchill (1874 – 1965) was no saint. The English should thank god for that. He was a patriot.
He served in the British army and was a writer before he entered politics and eventually became the prime minister of Britain in 1940. He was instrumental in the victory of the Allied Powers (UK, US and USSR) over the Axis Powers (Germany, Italy and Japan) in World War II. He suffered electoral defeat in 1945 but was re-elected prime minister in 1951.
All in all, a remarkable man. He hated Indians, particularly Hindus, with a white-hot passion. Not an uncommon affliction among the colonial rulers of India, past and present. He despised MK Gandhi and called him a “half-naked fakir” — in my opinion, a description that is more accurate than Churchill intended or realized. I suspect stooges however useful cannot possibly earn the respect of those they serve.
Continue reading “Churchill on Mohammedanism”
Of Prizes and People
We humans instinctively categorize, especially people. We are amateur primitive set-theoreticians. There are infinite ways to categorize people since humans have a humongous number of characteristics.
Consider the categories of people who award prize and people who win prizes. In my view, people who institute prizes belong to the most prestigious set. I order the sets as:
- People who institute prizes.
- People who win prizes.
- People who don’t win prizes.
- People who award themselves prizes.
For example, Alfred Nobel belongs to the first set; Einstein to the second set; ordinary grunts like us, who never come within shouting distance of any prestigious award make up the majority of humanity, belong to the third set. We are mostly harmless and generally unimpressive. Continue reading “Of Prizes and People”
There are 10 Kinds of People
A comp sci joke claims that there are 10 kinds of people: those who understand binary numerals and those who don’t. Being a former computer science student myself, I find it tickles my funny bone. Continue reading “There are 10 Kinds of People”
Atanu Dey : Life is a Random Draw 