The REGS Guarantees Poverty

The Rural Employment Guarantee Scheme (REGS) has the word guarantee in it and whatever else it may or may not guarantee, it certainly guarantees greater overall poverty than would be the case without the REGS.

In brief, REGS does not increase the aggregate production of the economy, nor does it increase productive capacity; it merely redistributes incomes by giving money to those in the rural areas. The first order effect of this diversion of resources is that other projects which have the potential to increase production and increase productive capacity do not get done; that is, the opportunity cost of the REGS is very high. The second order effects are increased public corruption, making the population much more dependent, increasing population, etc. This means in the future, the economy will produce much less than it would have otherwise produced and thus more people would face poverty as a result of the REGS .The rest of this essay is an elaboration of this argument. Continue reading “The REGS Guarantees Poverty”

Puzzler #2

Guess who said the following and about whom?

“Throughout the 20th century small groups of men seized control of great nations, built armies and arsenals, and set out to dominate the weak and intimidate the world.”

See the comments for the answer.

Sept 11: The Looking Glass War

Some events have the power to imprint themselves on one’s memory. One morning about four years ago, my roomie Wayne knocked on the door at the ungodly hour of 6 AM to say “you may want to watch this.” In the living room, the TV was on. His mother had called from the east coast to tell him to turn on the TV. From then on to about 2 PM I stood transfixed watching the towers fall down. If I hadn’t had to teach that afternoon, I would have been there the whole day.

A few days later I wrote a piece for Tehelka (not available anymore, I notice) which I call the Looking Glass War. Not too bad even though I say so myself. 🙂

Missing in action since 1945

What is the real story behind the disappearance of Netaji Subhas Chandra Bose? Why should we–60 years after the event–care about what happened? Who was he and does it really matter?

I think that there is a deep mystery and the solution of that mystery may have profound implications in our understanding of our own history. Only recently I have started to learn something of the issue and I wrote about it last month. Desh Kapoor recently pointed me to a site that could serve as the starting point for educating ourselves about who Bose was and the mystery surrounding his disappearance: Mission Netaji: Missing in Action Since 1945.

Where do they come from?

A few days ago, I plugged in a gizmo to this blog which keeps track of where the visitors of this blog come from. Here is the Clustermap for this site. Currently the site lists about 2800 visits in the last 5 days.

I am surprised to note that the US counts for the largest number of visitors to this blog. One solitary dot (1-9 visitors) for Canada; none from Mexico (Carlos Munos, I thought that you would visit your old officemate’s blog occassionally); a few dozen from the South American continent; moving east across the Atlantic, the UK and the western European countries are well represented (hi Marita, Ville, Courtenay, Alexis, …); the whole of Africa has a few dozens, which I find surprisingly high; more people from the Middle east visit than from Africa; I note a few Pakistani visitors even; then comes India, which I guess accounts for about 20 percent of the visitors — this I find really surprising because I thought visitors from India would outnumber others, c’est la vie; then the far east sends a few, including some from China; I note Singapore especially; moving east and south, I note that Australia and New Zealand (hi Gordon) send a few.

Well, that is about it. There was no real point to this post. Just a bit of curiosity.

Update: Navin says he is the big dot in London. Hi Navin. Jyoti says she is the BD in Texas. Hi Jyoti.

Confusing weddings and marriages

In response to my post about the KGB and Indian democracy, one reader responded by writing that “should we abide by your definition of democracy, there would be very few truely democratic countries around.”
Continue reading “Confusing weddings and marriages”

Puzzler #1

OK, if you thought that this blog has no mysteries associated with it, you are wrong. Here is a mystery for you to ponder. About a year and a half ago, I made an offer on this blog: I will send a gmail invite to anyone who emails me a request. I made it clear that sticking a comment at the end of the post asking for an invite will not get a response from me. One has to email me.

People started posting comments asking for gmail invites. Then I edited the post with additional wording in big bold red type saying don’t post a comment, just email me. Now I get about 10 requests a week posted as comments, most of which I delete and only keep the odd one for demonstration purposes.

Now here is the puzzler: what do you think these losers who post a comment asking for a gmail account are going to do with it anyway, considering that they lack basic reading comprehension skills and have the intelligence of a doorknob?

The KGB and Indian Democracy

It’s not surprising but it is still news to me that the KGB attempted to steer the Indian ship of state. I grew up hearing rumors of the CIA doing all sorts of nasty things around the world, of course. The KGB, as the other spy in the real life adaptation of the Mad Spy Versus Spy, was as active I conjectured. Clearly India had enough commies crawling around for the KGB to find willing agents. So when I read (via The Acorn) the TIMESonline of the UK report that KGB records show how spies penetrated the heart of India, I was a sadder but wiser man:

A HUGE cache of KGB records smuggled out of Moscow after the fall of communism reveal that in the 1970s India was one of the countries most successfully penetrated by Soviet intelligence.
A number of senior KGB officers have testified that, under Indira Gandhi, India was one of their priority targets.

“We had scores of sources through the Indian Government — in intelligence, counter-intelligence, the defence and foreign ministries and the police,” said Oleg Kalugin, once the youngest general in Soviet foreign intelligence and responsible for monitoring KGB penetration abroad. India became “a model of KGB infiltration of a Third World government”, he added.

Continue reading “The KGB and Indian Democracy”

Recall George W Bush

Bill Maher is funny. I always liked his politically incorrect stance. Here he is asking for a recall election for the president as they have in California. The open letter to GW Bush is priceless. Here is the link to the show.

From ‘Nehru Growth’ to Productivity Surge

It is common knowledge that the Indian economy which was securely imprisoned since independence in 1947 has undergone a radical transformation and has seen a departure from its dismal 3 percent “Nehru Growth” to a more respectable 6 percent and more since the 1980s. There is little room for debate on that fact. What observers appear to disagree on is what were the factors that led to the transition from the “Nehru Growth” to the present.

Very broadly speaking, here is a thumb-rule I use to figure out what factors led to the Indian economic growth 1980s onwards. List every policy—domestic, international, industrial, education, health, banking, etc—that Nehru and his descendents imposed on the economy. Systematically reverse the policy and as you do so, you see the economy accelerating. In other words, if your goal is to create a set of policies that would ensure economic stagnation and deepening poverty of a large economy, the shortest route for you would be wholesale adoption of all the Nehruvian policies. Conversely, the quickest method of figuring out what to do to for economic growth, is to take any component of the Nehruvian policy prescription and apply the reverse.

To the extent that Nehruvian policies have been reversed, India’s economy is prospering. If the economy has not attained its potential growth rate yet, it is because not all of the mindless Nehruvian (but I repeat myself) policies have been discarded yet. I have no doubt that the nation will become slowly wise eventually. How many hundreds of millions will suffer poverty in the meanwhile is a question that is best not contemplated.

What got me thinking about the “Nehru Growth” rate is a recent paper in “IMFstaffpapers: A journal of the IMF” by Rodrik and Subramanian “From ‘Hindu Growth’ to Productivity Surge: The Mystery of the Indian Growth Transition.”
Continue reading “From ‘Nehru Growth’ to Productivity Surge”