On Livemint, I have an opinion piece titled “Why India Needs a New Constitution” which is part of a series on the book Liberalism in India: Past, Present and Future.

Here it is, for the record:

Why India needs a new Constitution

Continue reading “Why India Needs a New Constitution”

Two shocks rocked the world: Donald Trump’s upset victory in the US presidential elections, and the demonetization of high-denomination currency in India. Both can be expected to have profound repercussions. I will pass commenting on the tears of Hillary Clinton — delicious though they are to yours truly — except to say that to me the result was as unexpected as it was delightful.

The Indian economy experienced a massive shock with the announcement that Rs 500 and Rs 1000 currency notes will no longer be legal tender starting from just a few hours after the announcement. An astounding 86 percent of all currency was rendered worthless for transactions, and only the remaining 14 percent was expected to serve for a short term (hopefully) the myriad purposes that money usually serves in an economy. A monetary shock of that magnitude cannot but have complex intended and unintended consequences. Continue reading “A Tale of Two Shocks”

From the description of the book “Politics by Principle, not Interest” (1998) by James Buchanan and Roger Congleton.

“The very logic of majority rule implies unequal treatment or discrimination. If left unconstrained, majority coalitions will promote the interests of their own members at the expense of other persons. This book focuses on the effects of applying a generality constraint on the political process. Under this requirement, majorities would be constitutionally prohibited from treating different persons and groups differently. The generality principle is familiar in that all persons are to be treated equally. In summary, this book extends the generality norm to politics. Continue reading “Politics by Principle, not Interest”

With all the great advances in the technology and engineering of global telecommunications systems, it is often claimed that the world has become integrated and is now a “global village.” Is it really?

What’s a village? One definition states that a village is “a group of houses and associated buildings, larger than a hamlet and smaller than a town, situated in a rural area.” Therefore a village has a few hundred people, and there is a high degree of dependence among them, they know and mind each other. Their knowledge of, and their interest in, the outside world is limited and their concerns are primarily parochial. A village, by its very nature, is not an agglomeration of millions of people. That would be a modern metropolitan area, or a mega-city.
Continue reading “The Global Village”

“Wealth comes from successful individual efforts to please one’s fellow man … that’s what competition is all about: “outpleasing” your competitors to win over the consumers.”
— Walter E Williams.

Part II.

I ended the previous bit of this essay with these questions: First, why is it that central planning appears to work in familial situations and in firms but not in economies? Second, does planning really work for firms and corporations? Finally, if it is indeed true that centralized planning does not work at the economy level, why do petty despots (like Nehru) go for it despite the ruin it causes?

I will address the first two questions here and the third question in the next part.

Let’s see why planning works in families. The parents are emotionally motivated to do what’s best for the family and are best placed to plan for the family simply because they care. They know the preferences of family members, know the means available, the tradeoffs involved, and so on. The information and computing power required to get to an approximate solution to meet the objectives are well within their cognitive capacity. Though not trivial, planning for a family is a manageable task.
Continue reading “Planning Works but not Always”

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

Friedrich August von Hayek.

Part I.

Conscious deliberate planning is a uniquely human activity. Non-human life forms don’t have the cognitive capacity to plan. But we do it all the time. It involves at a minimum some evaluation of the present conditions, a set of reasonably well-defined and reasonably stable preferences over present and future states of being, and an understanding of the various available means to achieve some selected or desired future state. Continue reading “Planning is Ubiquitous and Uniquely Human”

This is a work in progress. It is my take on what is wealth, how it is created, what motivates that creation, what are the barriers to it, and what can be done to remove them. The series so far:

Part 1. What’s wealth and where does it come from.
Part 2. Competition and the creation of wealth.
Part 3. The Nature of wealth. (The current part below.)

The topic is very exciting if you are the kind of person who like me is interested in figuring out how the world works, and are not that interested in the shenanigans of politicians and other such lowlife. Otherwise all this is very boring stuff that you’d be well advised to give a miss. So with that warning . . . Continue reading “The Nature of Wealth”

Yesterday I predicted that Britain will vote to remain in the EU. I also said that it would be better for them to leave. I am thrilled that the popular vote proved me wrong. A little ray of sunshine in the general doom and gloom.

There’s too much news coverage of the decision. So let me point to two excellent voices that were arguing that Britain should and must leave. Watch these, not just for understanding a point of view but also how that point of view was expressed. These are object lessons in persuasion and oratory.
Continue reading “Brexit — Yes, it is exiting. Good for them!!”

So tomorrow (I am writing this on Wednesday at 4 PM Pacific), Thursday, British voters would choose to remain or leave the European Union. I think it should leave. I don’t think it will.

The reason I think it should leave is summed up in this piece over at HumanProgress.org: Britain’s Democracy is a Sham. Reason I think that it will remain is that I don’t hold voters (all voters, not just British) in very high regard. They are generally ignorant, myopic and gullible.

Ignorance, like mortality, is universal. All of us are mortal, all of us are ignorant. We are necessarily ignorant because the amount that is collectively known exceeds the capacity of any individual to know by several orders of magnitude. Each of us probably knows about 10 billionth of what there is to be known. My claim about voters being ignorant, though, has a different emphasis.

I think voters are ignorant about the specific issues that they are usually asked to indicate their preferences through their votes. Some of the smarter voters understand that they don’t understand the issues. That is they are not ignorant of their ignorance.

Richard Dawkins falls into that group. He confessed that he is not qualified to vote on the EU matter: “I don’t have a degree in economics. I’ll try to make up the deficiency by reading. But in a representative democracy we pay MPs to do such detailed homework for us. There may be simple issues for which a plebiscite is appropriate (fox hunting, perhaps). But why does anyone think an issue as complex as membership of EU is one of them?”

So there.

One of the occasionally useful but not very well known resource on the web is related to the web itself. It’s the Internet Archive Wayback Machine.

As the name indicates, it saves snapshots of the internet content as it appeared at some times in the past. As of now, it has saved 487 billion pages. The wiki has more details, which is definitely worth a read. Where is it physically located? Wiki says:

“The Archive has data centers in three Californian cities, San Francisco, Redwood City, and Richmond. Its collection is mirrored for stability and endurance at both the Bibliotheca Alexandrina in Egypt and at another facility in Amsterdam.”
Continue reading “PSA: Use the Wayback Machine, Luke”