Thoughts on economics and liberty

My note to Indian “intellectuals” (who don’t understand the basics of incentives)


Thanks, everyone, for keeping me in the loop.

I've gone through the material including the article on kleptocracy

I don't see any solution being offered, since no analysis has been made by anyone of the incentives underpinning our system.

Like blind men who try to describe an elephant from different perspectives, all that is going on amongst Indian "intellectuals" is a description of the problem from different angles, ad infinitum

But here's the key. Everyone knows there is a problem. And knows most of the aspects of the problem. The question is why do we have such a system? What causes people to behave this way – even as the same Indians behave quite differently when they go abroad?

Many of you have heard my message before in some form or shape, but this message needs to be repeated till it breaks through the various mental barriers that people have erected around themselves. 

In summary, without a proper analysis of underlying incentives, you will never resolve this issue.

The incentives in India's governance system are all driven (as shorthand) by the hypocritical socialist model we have implemented across the board at every level since independence. 

The detailed analysis of India's incentives (political/ bureaucratic) has been provided in my book, Breaking Free of Nehru ( and numerous other writings, including the Sone Ki Chidiya total reform agenda ( I have spoken at length about these incentives in detail in April 2013 at the Indian Institute for Public Administration (the video is listed here:

The analysis shows that it is INEVITABLE – an iron law, no less – that only the corrupt will join politics; that only the corrupt will flourish at all levels. 

Like the laws of physics, the laws of economics cannot be violated. Let everyone be clear about that.

It will be necessary to change these incentives to create the reverse iron law: that prevents corruption and ensures freedom. For that you will need to understand Arthashastra. Chanakya was not only the world's first economist, he was smarter in most ways than most economists who came on the world stage after him. He was able to apply the economic way of thinking to everything, including to governance. His brilliance is unparalleled. 

The answers for addressing India's mess are RIGHT IN FRONT OF YOUR NOSE (as one may say) in the works of Chanakya, Adam Smith, Hayek and Buchanan. But that requires looking elsewhere from where you are currently looking.

I think I have said enough. 

Thanks for keeping me in the loop. 




As Isaiah Berlin declared, “intellectuals are not that much interested into reality”.

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Sanjeev Sabhlok

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2 thoughts on “My note to Indian “intellectuals” (who don’t understand the basics of incentives)
  1. Kishore

    I’ve gone through the material including the article on kleptocracy. Sir, can you share the material including the article on kleptocracy? If it is private, you can remove the author’s details. I’m quite curious to know the way and kind of thinking, of these, as you put it, “intellectuals”

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