Economics 101

Where I try and explain things as simply as I can (really long post)

We live in very interesting times, say the Chinese, and they’d be correct. For things have come full circle. In 1989, a wall, and an Iron Curtain, came tumbling down. Along with that, the Specter that hung over Europe also disappeared. Communism had failed. Capitalism had won.

And so began the heady decade of the 1990s. A period where America, Europe and Southeast Asia prospered, China gained momentum, and India finally woke up, to a non-‘Hindu growth rate’. Looking at the abject failure that was, and is communism, the world realised that ‘Capitalism’ was the only way forward.

Well most of us thought it was, at any rate. Except for those who insisted on keeping their blinkers on. These blinkered folk continued to plod on, spewing their nonsense, talking about how we needed to think about ‘The Poor’, ‘The Common Man’ , and tried to expose the ‘seedy underbellies’ of many a success story. But they fought a losing battle.

Until now. 2009, and the world finds itself in a crisis. Unemployment rates are high, growth rates are low, and General Motors is owned by the United States Government. Our old blinkered folk have come out of the woodwork saying the time has come at last, and what they had been saying all along has come true and that ‘Capitalism’ has failed, or the ‘Free Markets’ have failed. In saying so, they reveal their ignorance about Capitalism, Free Markets & Economics.

Before delving into any technicalities, let’s begin at the beginning: What the Hell IS Economics.

A ton of people have tried to answer this question, most have done so with the simple sentence I am about to write below:

Economics deals with the ‘allocation of scarce resources’.

Basically, there is a fixed amount of chocolate cake in this world. Say about 10 Kilograms. But there are a 100 people (and growing) who want that cake. Now…

  • what is the ‘best’ way to distribute that cake?
  • Can we bake more cake?
  • Can we bake something else which takes the place of that cake?

Economics tries to answer that question. Now, when you talk about Economics, you are likely to come across many ‘-isms’. Capitalism, Communism, Socialism, otherisms.

In the view of this author, Communism and Socialism aren’t economic theories. They’re religions, kinda like Scientology. You will find people who believe in these last two, in the face of 100 years of solid evidence that they don’t work, and yet, they still feel this is the best way to live. Again, if you try to argue against the fanatics who believe in Marx, Guevara and any other murderer, the feeling one gets is the same as when one tries to tackle religion.

Now I don’t consider Capitalism an ‘-ism’ either. Why? Because many of its tenets are simply human nature. More on this later. if you got this far, it’s time you moved on to my next post: the definition of a Free Market.

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Whaaa….?

So… apparently, there are at least 2 people with nothing better to do with their time, and one of them is impersonating me – I’m complimented and touched. My blog has pretty much lying disused, and I had pretty much forgotten about it until I started receiving a barrage of comments today…. one of these kind commentors alerted me to some hilarious goings on at Dilip D’Souza’s site, which has made my morning, requiring to forgo my morning coffee – thanks guys you saved me $2.10 today. Actually, I’ll probably buy the coffee anyway.

Not that it will count for anything, but I have not been commenting on his site – and have pretty much been out of the ‘blogging scene’ for ages, except for the occasional rant here or there. I find myself mostly obsessed with Facebook these days, and for somebody with my level of bombast it is a lot more real-time than blogging.

But whoever has been commenting, I have to say, I am quite impressed at the amount of time on your hands, and like the Pakistani Government, I extend my diplomatic and moral support to your cause.

Initially, I was thinking of not publishing most of the comments left on my site (simply because it’s a chore), but it goes against my comment policy, so I am going publish them now. Anyway, I am going back to work, I really do have better things to do – so, my dear impersonator, thanks for driving traffic to my blog, but I don’t ake any money off it, and I don’t even really look at it myself. So feel free to mess with it. All I ask is don’t impersonate me while abusing Barkha Datt, lawsuits are painful.

Lies, Damned Lies, and Deesha dot org

Why statistics truly can be used to prove anything

Let’s suppose there is a country called UnequalStan.

In UnequalStan, there are 2 people –  Gareeb, who earns $1/day and Amir, who earns $100/day.

By the World Bank’s definition, Gareeb falls below the widely accepted ‘Poverty Line’ and therefore, you could say that 50% (or 1 out of 2 people) in UnequalStan are poor.

Now let’s suppose that UnequalStan’s population increases by 3. You now have 5 people in living in UnequalStan. The new additions are Gareeber, Amirer & Bill Gates.

Gareeber earns 50 cents (or $0.50) / day, where as the other two earn $100/ day as well. So, applying the definition of ‘Poor’ as explained above, UnequalStan looks like this:

Poor

  • Gareeb
  • Gareeber

Rich

  • Amir
  • Amirer
  • Bill Gates

So kids, what is the change in poverty levels in UnequalStan? Is it:

  1. A reduction of 10% (going from 1/2 to 2/5 or from 50% to 40%)?
  2. An increase of 100% (because there was 1 person before, and now there are 2 )
  3. Farmers are dying in Vidharba
  4. Aishwarya Rai married a tree

Now since I am not a famed economist, and nobody calls me for conferences, my answer was 1 (although I was dying to answer 4 as well…)

However, apparently the correct answer is ‘2

From the above link, we can draw the following conclusions:

  1. The author of said article has a huge bias against the Congress
  2. The author is in favour state-sponsored murder
  3. The author is in favour of women getting the shit kicked out of them for going to a pub
  4. No matter how ‘intelligent’ somebody claims to be they are still human beings, subject to the regular human emotions, and capable of making an ass of themselves.

Enough is Enough

oh my beloved India, why must you take 3 steps back for every step forward? Why? why? why?

By now, we must all have heard about what happened to a poor blogger who dared to criticise NDTV. What that blogger said, we will never know, because he has removed is post (and I have been unable to find in the Google Cache, despite people’s attempts to link to it).

This is a sad and despicable state of affairs – and reeks of plain gunda-gardi. There was NO reason for NDTV to do what it did. The fact a large news organisation had to resort to petty lawyering to silence a blogger simply shows what prehistoric times these people still live in.

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Liveblogging Slumdog Millionaire

7.00 – Irfan Khan never acted so bad….
7.18 – cue the ‘Poverty in India’ scenes…
10.39 – I never remember any KBC host being such an a-hole to the contestants
11.04 – cue the sweet naive kid who dreams big (yawn)
11.25 – all poverty in India stories must have someone farting loudly, and talking about defecation – check.
13.48 – Crawling thru shit to meet amitabh bachchan – look ma, these natives are so savage!
16.14 – Irfan Khan just developed an Irish accent – as did Jamal (or is it Scottish? Sorry, Scotland/Ireland)

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Some more photos….

Pedestrian Safety....

Pedestrian Safety....

 Hmm, somebody said something about pedestrian safety. Is there anybody around to guide this idiot to proper crossing before I squish him to a pulp in my car?

More pedestrian safety

 Ah Safety. You see we have got the buses on one side of the road, and pedestrians/cyclists on the other. But somebody obviously forgot to tell the cars that. When the traffic jam gets awful, as it does on a regular basis on the BRT stretch, cars resort to using the cycle path, with impunity. Nobody stopped that blue maruti, or the 2 other cars my inferior cellphone camera failed to capture (oh yes, I have a cellphone with a camera . Can you imagine how many people died in Africa to make that Cellphone for me?).

Cars hanging out on the BRT...

Cars hanging out on the BRT

 

More 'buses'

VIP Buses

 

DTC Mercedes

DTC Mercedes

 Although it may be hard to spot, the DTC has started investing in Mercedes Benz luxury sedans. How else does one explain Merc waiting at a BRT bus stop? This is of course, under the nose of a BRT ‘Martial’, someone I feel really sorry for – an impotent wand waver…