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India! I dare you to be rich

India needs clear headed and articulate liberal leaders

These are extracts from a couple of emails I wrote recently:

Liberty does not (yet) resonate with the people of India, who can’t make the link (which is complex) between liberty and integrity/prosperity. It is the job of leaders to show them how this works; else they are going to remain in medieval backwardness for ever.

The key is political leadership. We need to find and build leaders who will engage with the people directly on this issue. No amount of ‘think tanks’ will help. No amount of people writing against socialism on blogs will help.

The “masses” are a readily available audience, but leaders to explain things to them are very scarce. I’m not looking for full time leaders – that will come much later. What is needed are people who devote part of their time to promoting political liberty.

The few leaders of India who believe their job is it make liberty realistic in India have worked together over the past few years to create (and register) India’s first liberal party: Swarna Bharat Party.

Even if you are an OCI (Overseas Indian Citizen) like me, you can join SBP. This is the only registered party with a specific provision for OCIs to take membership (although they can’t contest elections).

Anyone who joins SBP and wants to be a leader at some level must also join FTI – the team of liberal leaders. That’s to ensure the leadership team works closely together and understands each other. We have some extremely challenging debates within the team.

SBP party is about freedom, with the American declaration of independence coming close to articulating the underlying Lockean philosophy. Plus the First Amendment (absolute freedom of speech).

Gokhale and Ambedkar were the more sophisticated classical liberals in Indian history. Rajaji’s Swatantra came closest to this approach – by opposing Fabian socialism.

The task of Gokhale, Ambedkar, Rajaji and Masani (and I’d argue, Chanakya) is an ongoing one. There is no party in India today (except SBP) that is focused squarely on liberty.

SBP does not believe in the welfare state. There are now (for the first time) tiny social democratic parties that advocate a modicum of economic liberalism but want a strong big-government welfare state. E.g. Lok Satta, Liberal Democratic Party of Prodyut Bora). SBP is committed to directly eliminating absolute poverty (see SKC agenda). That’s part of social insurance for extreme events, not part of any welfare.

Note that while asking for minimal intervention by the state even in social affairs, there is no intent in SBP to remake nature. We do not support gay marriage, for instance, but some fostering rights could be provided under supervision; or as evidence emerges from various global experiments in this area.

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Perhaps the best introductory lectures on Indo-European languages: by John McWhorter

I don't know what's happened to me. I was not particularly interested in languages or ancient Indian history, but since I discovered the debate re: AIT/OIT and began to understand that European languages are very similar to Indian ones, a number of questions have arisen that I am curious about. Curiosity has set in, and I must keep exploring. That's why I am reading/ learning about linguistics in my spare time.

I chanced upon these talks which are extremely well-presented. These two lectures (lectures 8 and 9) are part of a 36 lecture series by Dr. John McWhorter, 'one of America's leading linguists and a frequent commentator on network television and National Public Radio'.

These two (out of 36) lectures relate to Indo-European languages. Enjoy. 


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It is time to regulate the collaborative economy (Uber/Airbnb etc.) for basic accountabilities to their customers

There is no freedom without accountability. The very reason we have a government is to ensure that no undue harm is caused by markets (which are, otherwise, a glorious thing), and that accountability for any harm so caused is placed on the appropriate person or persons. There is no benefit to be made (selling a product) without taking responsibility. 

I'm a great fan of the collaborative economy (link takes you to a FB group that I started on this topic). There is much good that has come from the collaborative economy, and even greater benefits to productivity are surely on the way. But some of the key companies involved have repeatedly demonstrated a lack of basic due process to deal with a range of man-made physical risks that they might place their customers into. [E.g. this]

Declaring such companies as co-employers (in the case of Uber)/ co-landlords (in the case of AirBnB) is an urgently needed regulatory reform. The moment there is a significant commercial stake/involvement, then responsibility must co-vest with these companies.

Employers/ landlords have a duty of care that arises largely from the fact that they offer a commercial product in the market, and their profits are not expected to be obtained from fraud, misrepresentation or murder. They are not required to physically protect customers, but they are required to act on behalf of customers when they are in physical trouble. These companies are washing off their hands. That shows they are pirates, not good faith companies. Pirates have no place in a civilised free society.

I was waiting to see whether such companies self-regulate. Self-regulation is best, but if companies repeatedly show disinterest in the safety of their customers, then they need to be hit with a ton of bricks. Their CEOs and directors must be held to account for failure to take reasonable steps to ensure safety of their customers. Just like these companies are avoiding payment of taxes, they are also avoiding basic responsibility for the produce they facilitate/ provide. There are cases where these companies have refused to act responsibly – by palming off the burden to the owner/customer. There is a breakdown in the chain of responsibility, and people don't need to be raped/ die just because of such a breakdown. 

Competitive alternatives may not be available in abundance, either; thereby creating a lack of concern in these companies for their customers. In any event, it should not be possible to escape a duty of care merely by defining one's contract in a particular way. Customer/s would never have undertaken such risky activities (collaborative economy can potentially raise the level of risk, e.g. of traveling with strangers, of living in stranger’s houses, to the stratospheric level) without a belief being created by these companies that they are responsible in some way.

We need to force these irresponsible companies undertake risk management and mitigation, and appropriate emergency management. All we need is to ensure that the standard duty of care provisions already applicable to owners/employers are imposed on such companies. It is the role of a government in a free society to define the rules by which the market will operate. Defining rules and clarifying contractual obligations is not interference. It is an essential part of ensuring a functioning marketplace. Without such regulations, such new markets can disappear. The cost-benefit test of any such regulation would need to be undertaken, no doubt. But the idea that these companies are not responsible for basic things like security is simply not tenable. 

Regulation is about necessary, not unnecessary intervention. There can be no commercial gain made by any party without responsibility for delivery of the proper – and safe – good or service. The law is largely intended to fix responsibility. There is now enough evidence that these new companies, like most others across the world in all areas of commerce – will NOT take responsibility seriously unless these are legally mandated.

I had a bit of a discussion on this on FB, and received some objections, which I’ll note and address, below.

Objection: Risks (e.g. of being raped/ killed) are known to the customer before he/she books the property. It was a voluntary decision to take such risks.

Airbnb is not your typical Indian Third World company where everything (including rape/murder) is on the menu. Citizens are entitled to safety first, in any commercial transaction.

Objection: The consumers should sue the company

It is wrong to put the burden of suing the company on a consumer who has been raped/ killed. The goods (safe ride/ safe rental) have not been provided, and the company must pay a penalty under a law that acts uniformly on behalf of all citizens.

Objection: The police should punish the rapists. The company is not responsible

This is not about the police issue. This is about the accountability of the company for undertaking due diligence/ immediate actions to create a safe environment. These companies are refusing to do so. They want the money but will not take responsibility. That's the reason we have to force such companies to undertake appropriate risk management and to ensure that all reasonable steps are taken to provide a safe service. 

They can't take money over the dead body of their customers and escape responsibility because this is a "police" matter. 

Objection: This is interference in the free market

Defining the obligations of parties to a contract is not interfering in anyone's freedoms. There is no freedom to rape/kill your customers. Companies must demonstrate that they have taken reasonable steps to prevent criminal harm as part of the service they are providing.

Objection: Regulation doesn’t remove risks

Regulation has radically reduced risks in a vast number of industries. While commercial interests have driven most risk reduction, there is no doubt that regulating the responsibility of employers for a safe workplace, etc. has forced companies to invest in R&D to work out ways to reduce unnecessary risks. 

Objection: This is a slippery slope towards socialism

It is not socialism to demand accountability. There's some rather loose usage of language when "slippery slope"/ "socialism" is used in such contexts. There is absolutely no freedom to take money from someone and wash your hands off when he/she is being raped/ likely to be killed.

Objection: In hindsight, every accident, injury, death & disaster could have been prevented, given sufficient effort. When does one recognize, just enough 'safety' has been produced, but not 'too much'?

There is a term called reasonably practicable, which courts can readily test. That is, effectively, a cost-benefit test. But for Airbnb to essentially punt off the mother of a person being raped, and to have calls go to voicemail, is beyond deplorable. That's someone who is not even trying to help.

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The sad case of incompetent lefties like Kanishka Sinha – an alleged “topper” in economics from Indian School of Business

I'm disheartened, but it must be kept on record, that "top" Indian schools of business are producing hardcore socialists with ZERO (I mean zero) understanding of basic economics. Note that the man wallows in his ignorance and incompetence!  (The man talks about Nobel prize – without knowing anything about the many economics Nobelists who stand for liberty; but Nobel means nothing more than the opinon of some people. What matters is the truth of that opinion; the morality of that opinion). 

India is overrun with BIG GOVERNMENT, ANTI-LIBERTY MANIACS. 

India is fundamentally doomed to remain unfree, poor and corrupt.

MY FB POST:

THIS WAS KANISHKA SINHA'S RESPONSE TO MY EFFORTS TO SHOW HIS CONCEPTION OF SOCIALISM, MARKET FAILURE ETC. IS ENTIRELY MISPLACED.

HE HAD NOT TAGGED ME SO I MISSED IT. NOW I'VE LOOKED AT IT, AND WILL LET GO KANISHKA. SUCH PEOPLE ARE THE BANE OF INDIA. LET INDIA CONTINUE TO SUFFER, ITS MESS IS ENTIRELY SELF-INVITED.

===HIS RESPONSE==

Thanks for the effort taken in your reply.

I'm afraid that I'm really not impressed enough by any of the arguments to think it's worth the while debating them. You'll have to simply call me an idiot like you've labelled Piketty (Centennial Professor at the London School of Economics, Head of the Paris School of Economics, awardee of the French Legion of honour, winner of best thesis of the year awarded by the French association of Economics and a former winner of the best young Economist of France)

I would be honoured to be in the same company as those you've labeled as idiots.

Let me know when you win the Nobel Prize for Economics. I will definitely pay more attention to your views then.

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The continuing disgraceful inhuman menace of the caste system in India. India Untouched, a documentary by Stalin Kurup.

A couple of years ago I had come across (and commented on) a snippet from the documentary India Untouched, by Stalin Kurup. I never got around to seeing most of the documentary.

Today a snippet from this documentary chanced my way on FB and I was reminded by a FB friend that it is from this documentary. 

Stalin has written a blog post about this. I understand extracts from this doco were broadcast on Satyamev Jayatate in 2012.

It is unfortunate that I had not got around to seeing the whole documentary in 2013. This is absolutely mandatory viewing by anyone with any interest in India's future.

Today, I saw the whole documentary – nearly two hours.

It can be clearly said that whatever the reasons caste was originally designed for, it is now playing the role of the biggest enemy of India, on par with socialism. 

If you never got around to watching this documentary, please do so. I'm linking all four parts below.

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Let’s please stick to the standard definition of socialism, Kanishka Sinha. And no, socialism does not originate in market failure.

Upon my pointing out to Kanishka Sinha that Scandinavian countries are not strictly socialist but perfectly fit within the mould of capitalist societies – with highly distorted welfare systems, he has pointed out a few things, the first of which took me by quite some surprise.

He suggested that my characterisation of the first welfare theorem was wrong – that hadn't I heard of "market failure", and that socialism is a solution to such "market failure". Well, to me his jumping to market failure while I'm talking of the first theorem has seemed rather mystifying.

The first theorem is a highly stylised way of proving Adam Smith's 1776 insights. Arguably, it is the single most beautiful piece of mathematics in the world. It proves how ALL (each and every one) of the uniquely placed individuals across the world will, in seeking to maximise their utility (based on their preferences – some might not seek money, etc.), subject to their budget constraint, will successfully do so WITHOUT THE INTERVENTION OF ANY CENTRAL PLANNER. There are effectively trillions and trillions of equations being solved SIMULTANEOUSLY and effortlessly, with all prices, all preferences, all constraints taken into account by the price system. EACH MOMENT OF EACH DAY.

The entire concept of trade, price theory, hinges on this basic understanding, first. Everything else comes later. One can't talk about economics without understanding this theorem at many levels – anecdotal (e.g. I Pencil), intuitively (e.g. Hayek's The Use of Knowledge in Society) or formally (the first theorem in its simpler and more advanced shapes, to arrive at the pareto-optimality of a Walrasian equilibrium, with numersous extensions such as for the Arrow-Debreu economy). This is about the hyper-plane "dance" or "jig" by Prof. Magill (of USC) that I've alluded to on a number of occasions, earlier. 

Anyway, only AFTER this theorem or concept (and its counterpart – the second theorem) has been very firmly understood can we start looking at the relatively TRIVIAL (extremely minor in the big scheme of things) "failures" of markets. For instance, no one in his/her right sense talks about "market failure" without at the same time identifying and elaborating on the MUCH bigger (by an order of magnitude) government failure (e.g. public choice analysis). Moreover, economists' solutions to market failures rarely (if ever) involve direct government "take-over" of an activity, or the significant diminution of property rights.

In most cases, regulatory solutions are arrived at, based on general rules that apply to everyone. Now Kanishka Sinha surely knows that over the past three decades, regulation itself has become strongly market-based. We call it incentive design or market design. The great Jean-Jacques Marcel Laffont (who received the economics Nobel last year) has been perhaps the most influential in this regard. He'd be horrified at the idea that "market failure" leads to socialism! In fact I recall reading his stinging rebuke of crazy ideas of the "socialist" type (such as those advocated by idiot Piketty).

Anyway, this minor matter of linking market failures with socialism aside, the bigger issue now is that Kanishka has made up his own definition of socialism. Now, I don't quite recommend such an approach. It is not typically a good idea for a biologist to make up definitions for astronomers, or astronomers to do so for archaeologists. The idea of socialism is a purely political idea. Its roots go back to the socialist movement in Europe in the early 1800s (which, in turn, was inspired by the Utopians). The idea of socialism is about the economic system but it is NOT based on any economic analysis of equality or market failures (although Marx did try to put some economic mumbo-jumbo around it, but miserably failed; his only sensible piece of work is the first half of the Communist Manifesto where he faintly understands – hence appreciates – the great boost to human progress by capitalism). Socialism is, at its heart, ENTIRELY about power, about a battle between capital and labour.

Socialism doesn't say it is will achieve higher allocative efficiency than markets where there are market failures. It doesn't even care for market failures, e.g. information asymmetries, undersupply of public goods or oversupply of situations with negative externalities. Not ONCE did any socialist thinker refer to such things. 

Yes, they did refer to equality, but that was in the context of the misappropriation of the "surplus" created by labour. This is the by now thoroughly discredited labour theory of value (even Smith fell prey to it, but he could see through the veil of economics despite his failure to understand the meaning of value).

Socialism is not about a "desire to proactively create a society with reduced inequality through laws, taxes and educational systems – including wealth redistribution where required". Socialism is much more direct and bold. It says it will ABOLISH private property and ensure everyone gets the same outcomes. It authorises the direct seizure of property from the rich (NOT through taxes! – for there is no parliament in a socialist society, no taxation without representation concept). It argues that all profit is unearned, that labour's share has been deprived. It argues that price system can't value anything, and value must be calculated based on the input of labour into a product (it thereby creates its own price system, or at least administers prices, vastly distorting allocative efficiency)

Socialism is therefore a POLITICAL philosophy with its own economic system. Marx did not invent socialism. He built upon the works of Plato, the Utopians, Rousseau, and many other before his time.

I've discussed socialism (and its definitions) at length in BFN and DOF

But for now, I'm simply cutting and pasting (below) some standard dictionary definitions of socialism

I hope thse will persuade Kanishka that the two objections he has offered to my analysis (1) that I've forgotten market failure (2) that socialism is to be defined idiosyncratically as per his views, are not valid.

Once these two objections are agreed by him to be invalid, I'd be happy to discuss any other objections he has to my analysis of the Scandinavian situation.

===DICTIONARY DEFINITIONS OF SOCIALSM===

Merriam-Webster

a way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies

Full Definition of SOCIALISM

1:  any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

2

a :  a system of society or group living in which there is no private property

b :  a system or condition of society in which the means of production are owned and controlled by the state

3:  a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

Dictionary.com

1. a theory or system of social organization  that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.

2. procedure or practice in accordance with this theory.

3. in Marxist theory the stage following capitalism in the transition of a society to communism, characterized by the imperfect implementation of collectivist principles.

Investopedia

An economic and political system based on public or collective ownership of the means of production. Socialism emphasizes equality rather than achievement, and values workers by the amount of time they put in rather than by the amount of value they produce. It also makes individuals dependent on the state for everything from food to health care. China, Vietnam and Cuba are examples of modern-day socialist societies. Twentieth-century socialist governments were overthrown in Czechoslovakia, East Germany and the U.S.S.R. While capitalism is based on a price system, profit and loss and private property rights, socialism is based on bureaucratic central planning and collective ownership.

Webster's New World College Dictionary

1. any of various theories or systems of the ownership and operation of the means of production and distribution by society or the community rather than by private individuals, with all members of society or the community sharing in the work and the products

2a) a political movement for establishing such a system

2b) the doctrines, methods, etc. of the Socialist parties

3. the stage of society, in Marxist doctrine, coming between the capitalist stage and the communist stage, in which private ownership of the means of production and distribution has been eliminated

World Socialist Movement [THESE ARE THE SOCIALISTS THEMSELVES SPEAKING. LISTEN TO THEM!]

Central to the meaning of socialism is common ownership. It means nobody being able to take personal control of resources, beyond their own personal possessions. In socialism, everybody would have free access to the goods and services designed to directly meet their needs and there need be no system of payment for the work that each individual contributes to producing them. All work would be on a voluntary basis.

ADDENDUM

Welfare is NOT Socialism – I'm not linking this to suggest I support welfare. I don't. But the things are different.

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