Archive Page 2
Dayanidhi Maran must love his job. Kickbacks, fabulous dinners, insincere compliments – why wouldn’t he give away subsidies from our money to building the missing link in India’s semiconductor business?
The policy allows the government to offer subsidies of up to 20 percent of the project cost either through equity interest, tax breaks or other fiscal means.
Of course,
The subsidy will be limited to three chip manufacturing projects that a government appointed panel will approve.
Deven Verma, chairman of Hindustan Semiconductor Manufacturing Corporation, said:
“Today, the perception is: ‘Go to India if you want software. For hardware, go to China.’ We need to change that perception”.
Mr. Verma obviously doesn’t believe a word of it. Otherwise he would be putting his own money (and that of other believers) where his mouth is. He wouldn’t be bidding for free money from the taxpayer. And he even admits that he doesn’t believe what he says:
“We are here because of this policy,” said Deven Verma
. I rest my case.
Filed under: Political Auction, Special Interests, Technology | Leave a Comment
Yay! The ruthless, greedy price gougers at Big Cement have been taken over by generous, loving souls
Apparently, Big Cement in India was busy expanding capacity while extracting profits – what most people would describe as “building muscle” and not “putting on fat“. Look what the “excessive” profits have done:
The supply of the construction raw material is expected to overtake the demand in 2008-09 when the capacity expansion projects of cement manufacturers are completed. This would bring down prices by 7-15 per cent and weigh down heavily on the companies’ earnings, analysts at domestic brokerage firm SSKI said in a report.
As this shows, it is best to leave cement (as other things) alone to people who understand cement best – those who buy and sell cement. Meddlesome ministers like Kamal Nath would be advised to keep their hands off the information carried by prices about the relative demands and availabilities of goods. I doubt if they would be listening though. The only times they are not busy conceitedly believing they can serve the “aam aadmi” is when they are busy distorting this information, creating arbitrage opportunities for themselves and their cronies.
Filed under: Indian Politics, Prices | Leave a Comment
So…what’s he really saying?
Vikram S Mehta writes about Indian cricket and Enron in the Indian Express and gets several things wrong. The question is whether he gets them wrong intentionally.
He does not understand (or pretends not to understand) economics, incentives, cause and effect relations arising from incentives or for that matter cricket and concocts some theory about the downfall of Enron.
Incidentally he is chairman of Shell India. Why is Indian Express asking the chairman of the Shell Group in India to write about cricket and draw flawed analogies to unsubstantiated dirt on his energy market competitor? Someone know what I am missing?
Filed under: Cricket, Incentives, Indian Media, Special Interests | 1 Comment
Why is statism good in money?
Here’s a question from an amateur to all you Econ grads because I don’t understand this too well: “Why is state monopoly in money a good thing?”
Mint, an otherwise relatively liberal publication, is advocating statism in money and using the Swedish central bank as a guiding example:
“It [The Riksbank] uses a detailed annual survey that covers household income, debt and wealth. For the analysis, households are divided into five categories based on their level of disposable income,” says IMF.
There’s more. The Swedish Riksbank then carries out various “stress tests” to understand what can happen to households in case interest rates and unemployment go up. In other words, it tries to assess how well indebted households can manage economic shocks.
This is precisely the sort of data Indian economists and policymakers will need on their desks in the years ahead, if they are to adequately understand what damage higher interest rates, a drop in asset prices or an economic slowdown could have on indebted households—and the extent to which their woes can spread into the rest of the economy.
Replace interest rates with say…. shoes, and you have socialism. A state that collects information about shoes, the demand for shoes, the type of shoes demanded, who wants how many and fine-tunes production of shoes so that they remain cheap and everyone stays employed. Finding the perfect equation for the production of shoes and other goods while collecting data and keeping tabs on who is doing what for the public good.
Tell me, what’s good for shoes isn’t good for money?
Filed under: Indian Media, Liberty, Money | 2 Comments
Indians don’t care about liberty
Gurpreet Mahajan writes in the Indian Express:
In societies like ours, where politics is popularly linked with crass opportunism and unprincipled pursuit of self-interest, it is easy to understand why the association with politics and seats of power is often derided. The lure of reward can corrupt the individuals, make them servile and compromise their judgment. While these conclusions would appear to flow from the nature of our political life, they are supported by the argument that the world of party politics and ideological affiliations are (sic) in principle different from the world of reason that intellectuals are expected to inhabit.
She calls for candid expression of intellectual ideas and open debate on government policy as a measure to keep politicians accountable. She blames a culture that expects loyalty to clans and consensus among affected parties for the decline of bold political debate.
While she may be right about the lack of bold intellectual expression in India (I have not much insight into that), the irony is that the opening paragraph of her own op-ed serves as a great example of what kind of ideas plague intellectual debate in India. Neither is the crass opportunism of politicians a phenomenon unique to India nor is the self-interest to which she attributes “servility” and “lack of judgement” itself a thing to be shunned. On the contrary, the opportunism of politicians is a systematic and essential characteristic of the political world, and the self-interest which she is so wary of is the very basis of – to pomopusly plagiarize Ludwig von Mises – human action.
What intellectual discussion in India seldom appreciates is that societies which are better off did not become so by the continued good fortune of having providentially received benevolent politicians. They have politicians who, given a similar institutional structure, would be as villanous as any of our own. In fact, the very logic of political survival is such as to only attract unscrupulous egomaniacs. It would hence seem that wisdom lies not in intellectual – conventional or radical – contemplation on the misfortune we suffer. It would lie in the simple and cynical acknowledgement of the nature of politics and government. The answer would thus lie in recognizing the power of self-interest and encouraging it where crucially necessary (in private activity) and curbing it where unfortunately unavoidable (in political office). Dreams of being able to coax politicians into admission of guilt and self-reform are mere intellectual romanticism. It would seem almost trivial that the path to take is the one that curbs the authority of politicians – who we agreed to being utterly insensitive to their declared duties – into running our life and views every government expansion into private activity with suspicion, no matter what the professed intention of that expansion.
It is admittedly funny to speak of rights to life and property in a feudal, discriminatory society. However what good is the cure of a loving government when it is worse than the disease? Doesn’t government introduce additional layers to the existing feudal structure and reinforce existing ones by distorting reality always to the benefit of the already privileged? Government in fact lends strength and legitimacy to the feudal structures we already have, all the while professing to eradicate them.
In a society fed for decades on flawed ideas of “social justice”, “the greater good”, “maai-baap sarkar” (a government that loves like a parent) and “profit is a dirty word”, it is no wonder that it took decades before systematic erosion of natural rights was discovered. Demands for freedom from the state remain the pastime of a small fringe, while most Indians have been tricked into giving up their freedoms in the name of – variously – culture, patriotism, social justice, solidarity and whatnot.
We ought to be careful. The growing lobby of self-declared “economics reformers” is an object to be suspicious of, and is not to be mistaken for the pro-liberty lobby. The economic reform lobby is a lobby of business – Indian and foreign – and is anti-liberty. It cares for its own special interests and not for liberty. Given a chance, the economic reform lobby would like to give as much power to government as it could so long as it benefits its interest. That is hardly a sign of being pro-liberty. We ought to be similarly wary of so-called libertarians who give precedence to utility over rights – be that the cost-benefit analysis of building Special Economic Zones by “acquiring” land or school vouchers or “public-private partnerships”. They are all schemes based on the same premise of theft of private property and infringement on individual freedoms, this time in the disguise of economic dynamism and feel-good prosperity.
Some such Indian “libertarians” who delude themselves into favouring these policies of “gradual desocializing” implicitly favour a European style corporatized welfare state with skewed policies favouring the multitudes of special interests, raising political theivery to higher levels of sophistication and eroding freedoms while somehow managing a facade of prosperity. Is a European style welfare state preferable to socialism? Certainly, but only grudgingly and temporarily. Let our insistence on absolute freedom from the state not be wooed away by the relative prosperity that gradualism has given us. Liberty is the goal. Prosperity is an inevitable result.
Similarly, let the intellectual movement that Gurpreet Mahajan rightly chastises not demand “better” politicians who are more loving and sensitive to our needs but let it dream of overthrowing their coercive and unjust power to control our lives.
Filed under: Indian Politics, Liberty | 1 Comment
Fresh Start
This is my attempt at restarting blogging. Since I gave up the last time, I have read a lot, thought about a lot of things, researched a lot, discussed a lot, convinced a lot of people, finished grad school, started a job, travelled a lot, lost a lot of hair and gotten engaged.
I still procrastinate though, so let us see how long this lasts. But I plan to take it seriously. As usual. Until I stop.
Filed under: Misc | 3 Comments
