This is a Friedrich Hayek interview by Bernard Levin at the University of Freiburg which was broadcast in May 1980. Hayek was, in my professional opinion, one of the greatest economists of all times. We are wonderfully privileged to be able to watch videos of his brilliant exposition on the web. I am also impressed … Continue reading An 1980 interview with Hayek
Sudipta, a dear friend in the Silicon Valley, asked me to comment on a March 2013 article titled "Orphaned currency, the odd case of Somali shillings." The piece is about how the Somali shilling continued to circulate even after the Somali central bank was literally destroyed in the civil war around 1991. The bank notes … Continue reading The Peculiar Case of the Somali Shilling
Of the three major sectors of any economy, agriculture is the primary sector. It is prior in time and naturally enough forms the basis for the other two sectors -- manufacturing and services. Without a solid foundation provided by an efficient agricultural sector, no society can prosper. Everybody -- factory workers, quantum physicists, doctors, programmers, … Continue reading On the Distress of Indian Farmers – The Introduction
If by capitalism one means “free market exchanges and production through the use of privately owned capital”, then indeed capitalism destroys jobs -- those jobs that are made redundant by increasing the productivity of labor. Imagine an economy which only produces food, and the only input to food is labor. Further imagine that the productivity … Continue reading Does capitalism destroy jobs?
Asking "Did Britain impoverish India?" is like asking "Is water wet?" Of course, Britain impoverished India during their rule as the colonial masters of India. To extract wealth from a colony and exploit its people is the primary motivation for colonization. Expecting the colonial masters to be a benign, self-sacrificing force is delusional. Colonization is not … Continue reading Did Britain Impoverish India?
To understand the relationship between producing, consuming, saving and investment, it is useful to start with a simple story. Imagine a Robinson Crusoe economy -- just one person in it. RC's consumption is limited to what he can produce by fishing, hunting and gathering. He allocates his time either laboring or enjoying leisure. If he … Continue reading Saving and Investment
For anyone concerned about the poor and poverty, the first task is to clearly define the words "poor" and "poverty." Wealth and income are reasonable measures that usually serve in defining a poor person: one who has less than some defined minimum of wealth and/or income. But that definition is not comprehensive. What if a … Continue reading Credit-constraint — the Inability to Borrow