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… Read More ›
Economics
On the Distress of Indian Farmers – The Introduction
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… Read More ›
Does capitalism destroy jobs?
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… Read More ›
Did Britain Impoverish India?
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…. Read More ›
Saving and Investment
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… Read More ›
Credit-constraint — the Inability to Borrow
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… Read More ›
Disasters, Price Gouging, Greed, Ignorance, and Stupidity
You can bet on this fact: that occasionally there will be natural disasters like floods, fires, and earthquakes. You can also bet on a follow-on fact: that in those places, prices of essential goods and services will go up. And… Read More ›
McCloskey on Economics, Economists and Physicists
When Nobel laureate physicist Ernest Rutherford (1871 – 1937) claimed that “Physics is the only real science. The rest are just stamp collecting” he was perhaps displaying the arrogance that comes with the territory of knowing certain fundamental truths that… Read More ›
What is Socialism?
Robert Heilbroner (1919 – 2005) defined socialism as “a centrally planned economy in which the government controls all means of production.” Why is Heilbroner worth quoting on this matter? Because he knew what he was talking about. He was a… Read More ›
AMA – Order Out of Freedom of Choice is a Scientific Mystery
“At the heart of economics is a scientific mystery: How is it that the pricing system accomplishes the world’s work without anyone being in charge? Like language, no one invented it. None of us could have invented it, and its… Read More ›
