Order! Order whose? By Chandra

When I read the article OURVIEW yesterday livemint news paper it sited quote from Nobel winning economist, it read “Nobel economist Douglass North has divided human societies into two categories. First, “limited access orders” which create orders by using the political system to limit economic participation, a process that creates excess profits (or what economists call rents). These rents are used to impose political stability and limit violence. Second, “open access orders” which maintain order by competition rather than rent seeking”.

Apparently, it shows that the coercion is the former system and the F A Hayek musings of spontaneous order is the later one where individuals are the orders and decision makers.

Luckily I have North book (Understanding the Process of Economic Change) in front of me, when I write this. When I saw this book first time in 2006 I come crossed two interesting lines in the book. They are as follow:

“Uncertainty has a long history in economic literature” p.13

“The development of well specified property rights, for example, will make the overall environment more predicable but will increase uncertainty for those who traditionally have used the land in question without having formal title. Hence an essential question we must ask is, who makes the rules and for whom and what are their objectives”. He went on to say “individuals are the decision makers”…. “and market has the lowest production and transition costs attainable” p.15.

This book is everyone must read book!

In fact the 1st Chapter of the book is available in online go ahead and muse what change he premise.

Yesterday’s RAJAS Today’s Rascals by Chandra

My mind musing goes often like this, when India was ruled by other then present Indian, people were blamed on rulers, still blaming story is fresh. How present elected government rulers are different from those? Why blame mania exist like hay on the common street where the market function by the virtue of man.
One senior economic journalist wrote very interesting interpretation no matter how one muse with some ideas told by teacher both in the class room and outside lay man teacher.
“Look around you, and you will see why India” adopted socialist pattern of centralized economic system instead of least free market tag line. “Thanks to non-governance for nearly a decade, no one, just absolutely no one, has any clue as to what is going on in the country”.
The rest is Line and Length in which TCA Srinivasa-Raghavan writes. A few paragraphs here.
Take the economy first. Is Inflation high? Yes. Should interest rates increase? Yes. Would that slow growth down? Yes. But does it? No, sir, it doesn't. Why? We don't know? Black money effect? We don't know. Does anyone know? No, sir
Or take agricultural growth. Is it a cause for concern? Don't be silly, of course it is. Then how come agricultural growth has been the healthiest at almost 4 per cent in several years? No one knows. Base effect? Maybe, maybe not, we don't know.
Consider the fiscal situation. Is it bad? The finance minister says no but everyone else says yes. The combined deficit of the centre and states will touch 10 per cent soon. True or false? No one knows for sure. Does it matter? No one knows for sure.
Infrastructure: Has it improved? No, yes, maybe, again no one knows. Monetary policy: Sensible, stupid, delivering results? No one knows. Exchange rate policy: Good, bad, idiotic? Depends on who you ask. Employment: Up, down, stagnant? No one knows. Why, the Planning Commission hasn't got the 11 th Plan out yet and it has been beavering away for four years now.
One can go on and on like this but the point should be clear: Even after allowing for the usual amount of nonsense in a democracy, India takes the cake when it comes to not having the foggiest about its whereabouts.
Focusless, directionless, leaderless, governanceless, mindlessly and senselessly, India is stumbling along. Sooner than later, it will take a tumble, a bad one at that.
Read fully here

The muddled Indian economist: Nothing is guarantee by chandra

The muddled Indian economist turned to argue differently with no surprise "the NREGA pays people for 'work', it keeps them away from other productive, income-generating activity. This is bad for the nation and also for the workers. If they were just given the money, they could have done more work and earned more".
My question is simple whether he will agree for education voucher also in the same logic? I don't think so,

Worth, which is that reading, are the questions evaluated between the tale of good and evil? By Chandra

The Market Corrects Itself
Posted 2008-04-04
Adam Smith Was Right
Leave it to political economist Thomas Sowell to provide perspective and a dollop of simplicity to the tangled web that is the current state of the American economy. If anything, Mr. Sowell, in a recent column, reminds us that whenever Washington takes it upon itself to resolve problems, particularly economic ones, precedents are set and special-interest demands for like treatment multiply.
In this particular instance — intervention in the housing industry crisis — the implicit danger is that when steps are taken to minimize risk, the potential for reward, the linchpin of capitalism, is ultimately compromised. Government cannot always be expected to save people from themselves — and their capricious financial decisions.
Still, the urge to make things right is an irresistible one for politicians and their appointees, particularly in an election year. Hence, the gadarene rush for government to do the work of markets. But here's the rub: As The Wall Street Journal observed editorially Tuesday, the market, in the spirit and tradition of its everlasting guiding light, the 18th-century Scottish economist Adam Smith, had already begun to self-correct, sans government regulation.
The last few weeks, the Journal reported, have witnessed a gradual return to more conservative principles, as "the decade's great experiment in direct, unmediated lending is undergoing an Adam Smith cleansing ... In his wisdom, the Professor from Glasgow is now moving more of those direct-lending assets back on bank balance sheets where there is a capital safety net to write off the losses without busting the entire financial system."
Now, does this exercise in self-realization render a 218-page remediation plan advanced Monday by Treasury Secretary Henry Paulson superfluous? Not necessarily. Like the spirit of Dr. Smith, Mr. Paulson assumes the role of "untangler." His plan to overhaul regulation of the nation's financial system seeks not only to simplify, consolidate, and correct, but also to untie the knots of a regulatory approach increasingly incapable of adapting to the challenges posed by a technologically intricate market economy. In this sense, the plan is commendable.
But, in saying this, we offer a caveat, courtesy of The Journal: "Today's credit panic isn't some ‘crisis of capitalism' that needs a vast new layer of regulation. We are living through the aftermath of a societal credit mania fueled by excessive money creation. The regulators are as much to blame as the regulated, and Adam Smith is providing more punishment and reform than Washington ever will." Opinion mania

Americans just won't do those jobs by chandra

Immigration economics nice analysis yet Sowell research yields! "Stanford economist Thomas Sowell puts it this way: "Even in occupations where illegals are concentrated, such as agriculture, cleaning, construction, and food preparation, the great majority of the work is still being done by people who are not illegal aliens."
Sowell notes that even in agriculture, the industry with the highest concentration of illegal workers, more than three-quarters of the work force is legal. Adding a measure of enforcement to the current no-match letters might, in fact, have the salutary benefit of prompting employers to consider hiring the 478,553 Texans who were unemployed in February. Hundreds of thousands of Texans are part of a readily available work force who can fill low-skill jobs.
Furthermore, Sowell's research puts the lie to the argument that "Americans just won't do those jobs." Americans can and will fill the jobs currently held by the illegal work force -- they need a chance to do so. The president's proposal should prompt businesses to look to the unemployed as the best option for filling jobs, and it just might help alleviate strains on taxpayers".Read further here not apocalypse.

Gulpi Welfare by chandra

It is interesting line for muse and man a fish, as the Thomas Sowell, an American economist, stated, "One of the consequences of such notions as 'entitlements' is that people who have contributed nothing to society feel that society owes them something, apparently just for being nice enough to grace us with their presence."