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Herr Dr Prof Friedrich August von Hayek is one of my three favorite economists—the other two being James Buchanan and Milton Friedman. Like them, I too am a classical liberal. Since Hayek was born on May 8th, 1899, today’s a day to celebrate.

I confess that I did not fully appreciate the core lessons of economics until after I had finished my formal studies. I had learned the usual neoclassical stuff — including impressive looking math involving the calculus and maximization of twice-differentiable continuous functions, Lagrange multiplies and other sillinesses. I am not dissing the use of math; just that the mathiness is silly. Continue reading “Happy Birthday, Prof Hayek”

Property

At a very abstract level, the formula for prosperity is to have a liberal market order and institutions that support that liberal market order, namely those that protect property rights, enforce contracts and settle disputes, and provide the rule of law.

Property rights does not imply the privileging of the rights of property over the rights of humans, although socialists mistakenly believe that that is what it means. The right to private property is the source of all human rights. Without the right to own property, one is hardly a human being; one becomes mere chattel or property. Continue reading “An Essay into the Nature and Causes of Poverty — Part 4”

It is hard to overemphasize how critically important exchange is in any economy, including that of primitive hunter-gatherer societies. Only hermits who voluntarily choose to live in extreme isolation don’t engage in exchange, and those who are marooned on deserted islands are forced to be self-sufficient.

Exchange 

For the rest of us, we rely on exchange for meeting practically all our needs. Just reflect on the fact that every one of us consumes a very tiny fraction, if anything at all, of what we actually produce. The factory worker produces cars but most of his consumption consists of non-cars; the doctor produces medical services but consumes very little of that; similarly the architect, the farmer, the green grocer, ad infinitum.  Continue reading “An Essay into the Nature and Causes of Poverty — Part 3”

I like to think that I am a reasonably rational person. Given enough evidence (information) and time to ponder the facts, I believe that I generally reach correct conclusions. I also believe that the average person is capable of rational thought but it requires determined, effortful practice and lots of time. It really is hard work. Unfortunately, most people are not inclined to do that because they irrationally and wrongly believe the cost of doing so exceeds the benefits.

The Wikipedia introduces rationality thus: “Rationality is the quality or state of being rational – that is, being based on or agreeable to reason. Rationality implies the conformity of one’s beliefs with one’s reasons to believe, and of one’s actions with one’s reasons for action. “Rationality” has different specialized meanings in philosophy, economics, sociology, psychology, evolutionary biology, game theory and political science.” Continue reading “Steven Pinker’s Harvard Course on Rationality”

“War is a judgement that overtakes societies when they have been living upon ideas that conflict too violently with the laws governing the universe… Never think that wars are irrational catastrophes: they happen when wrong ways of thinking and living bring about intolerable situations.”                        — Dorothy L. Sayers

In the near future, we are likely to call this the Third World War, or WW3.

World Wars are events that are global, cause severe economic damage, and result in very large numbers of deaths. Unlike ordinary wars, which are localized, by definition world wars involve the entire planet and no nation is entirely immune from the death and destruction that follows.

This world war, unlike the previous two in the last century, is not a military war. But like them, it will lead to some economic, social, and political upheavals that could not have been anticipated at the start. The start of world wars can only be identified in hindsight, when the whole world is engulfed in conflict. Continue reading “The Third World War”

Today is “May Day,” the first of May. In many European cultures, it’s a traditional spring festival holiday, celebrated since ancient times. For communists and socialist, it’s the “International Workers’ Day” and they too call it “May Day.”

India being a socialist / communist country, 1st of May is “Labour Day” and is a public holiday.

It’s kind of fitting that the communist/socialist celebrate “May Day” because “Mayday” is the international life-threatening distress call for mariners and aviators. It’s derived from the French m’aider (‘help me’). That use originated in 1921. When a population falls victim to socialism, it’s in life-threatening distress and needs urgent assistance to recover from the disease that kills in the scores of millions. I remember the countless victims of collectivism on this day.

And finally, there’s an old favorite love song “First of May” by The Bee Gees. Here, have a listen: Continue reading “First of May”

Value and Wealth

Since this is an essay on poverty (part 1 here), it is useful to consider its polar opposite, namely wealth. Defining wealth precisely is therefore the first order of business. Wealth is anything that is of some value to some person. Value is hard to pin down because it varies according to the person doing the evaluating. Just as beauty lies in the eye of the beholder, value lies in the mind of the evaluating person. 

Exchange

One man’s garbage is another man’s treasure, as the adage states quite correctly. Therefore two people may value the same thing quite differently. That difference is the only reason that people exchange stuff. For example, when Jim buys a sandwich for $5 from Joe, clearly Jim values the sandwich more than he values $5, and conversely Joe values $5 more than he values the sandwich. Also worth noting that exchange involves distinctly dissimilar things. Continue reading “An Essay into the Nature and Causes of Poverty — Part 2”

Economics

In the following, I explore a few fundamental ideas relating to the core subject matter of economics. One can precisely date the founding of the discipline with the publication in 1776 of Adam Smith’s seminal work titled An Inquiry into the Nature and Causes of the Wealth of Nations.

Note that the focus was on the wealth of nations, and not  the poverty of nations. Poverty is the default condition of all peoples in all times; it is the nature and causes of the wealth of nations that require explaining.

Economics is a branch of social science. Social science is devoted to the study of human societies and human interactions. Today economics is a vast field with dozens of specialized areas of inquiry. But the discipline was started by, would you believe, philosophers. What we call classical economists today — Adam Smith, David Hume, John Stuart Mill, et al — were philosophers. Smith’s first book Theory of Moral Sentiments (1759) laid the ethical and moral foundations for his later book on the wealth of nations. Continue reading “An Essay into the Nature and Causes of Poverty — Part 1”

April is the National Poetry Month in the US. “Inaugurated by the Academy of American Poets in 1996, National Poetry Month is now held every April, when publishers, booksellers, literary organizations, libraries, schools and poets around the country band together to celebrate poetry and its vital place in American culture.”
Continue reading “The Love Song of J Alfred Prufrock”

So last month I tweeted this:

People are recognizing that WHO is China’s bitch and is in bed with Xi and his gang. Good news is that Trump halted the US donation to the WHO. I hope this is the first step to giving the WHO a quick burial. And I hope that the UN is also dismantled soon. If Trump can do that it would be marvelous, and all his insanity will be forgiven.

Here’s a short take on why WHO is China’s bitch. Continue reading “Who is China’s Bitch?”