Prof Kaushik Basu’s dogma

According to Wikipedia and “The U.S. State department in 1976 estimated that there may have been a million killed in the land reform, 800,000 killed in the counterrevolutionary campaign.^[20] Mao himself claimed that a total of 700,000 people were executed during the years 1949–53.^[21] However, because there was a policy to select "at least one landlord, and usually several, in virtually every village for public execution",^[22] the number of deaths range between between 2 million and 5 million.^[23][24] In addition, at least 1.5 million people were sent to"reform through labour" camps.^[25] Mao’s personal role in ordering mass executions is undeniable.^[26][27] He defended these killings as necessary for the securing of power.^[28]”

Now it is unsurprising to me when Mr Kaushik Basu says notoriously in his recent column that “during the deep Communist period of Mao, China had had stretches of remarkable growth. During 1964-66 and 1969-71, it grew at over 16 per cent per annum. What was special to the period of deep Communism was the occurrence of recessions. In 1961, China's output declined by 27 per cent; there was another deep recession in the mid-1960s. In contrast, during the period of market-oriented policies, there were no downturns. No other nation in the world has seen the kind of sustained growth that China has achieved over the last three decades.” 

Though I respect his opinion but how long an open mined person like me can or should tolerate? And how people these misleading idea will kill in future? 

I have no idea.

State is a “weak substitute” to Market…..

Almost, Mr TCA become a bogus analyst with horrified mind said a friend of mine. 

Well, if any one I wanted to call notorious in the analysis of Indian economy it will be “Cornell economist Kaushik Basu”. 

Mr Basu said in his Sage - Madras School of Economics Endowment Lecture (2007) “one undeniable factor is that India’s savings and investment rates had risen sharply from the late sixties to the late seventies. What caused this? Clearly, the nationalization of banks in 1969, with the state-owned banks being forced thereafter to open branches in remote areas of India, and the start of Unit Trust of India in 1964 were key factors in boosting the savings rate, which in turn was the first impetus for rapid growth”. 

Nonetheless, the question is important Mr. Basu “once asked why everyone held an opinion on economics but not on aircraft design. He was arguing that economics was a specialisation requiring technical skills that were no less rigorous than those required of an aircraft designer”. 

Some time back Mr TCA seems to be good analyst of economics and politics but now I realised that he also misdirected his readers. He simply scraped the India’s reforms of past 15 or more years. “….This was a big intellectual leap, made largely in the 1980s, which became mainstream faith in the1990s and in this decade. Its consequences confront the world now in the form of the financial disaster it has caused”. 

No doubt, I agree with at least this point that “It was that if you got the market design right, the danger of market failure was almost nil. This assumption led to the influx of engineers, scientists and physicists into a domain that superficially looked like their own but contained, alas, humans also, with all their foibles”. 

No matter how many business analysts, journalist, and other “…..harking back to Keynes now but nowhere did he say that the taxpayers should pay the price of private folly and greed via bailouts What he said was governments should buy goods and services when private demand fell short of what installed capacity could provide. He was treating a different problem, namely, the survival of the poor, not of the rich”. 

Our academicians including the economics departments of Indian universities are in deep sleep. They cannot back to Keynes nor look forward to Hayek or anyone else. 

It is no less folly to blame only “private folly and greed via bailouts”. Election after election, schemes after schemes, law after law, Acts after Acts, rules after rules, etc goes with publically announced “bailouts” in the name of “poor”  without mining whether it reaches or not. 

What remains a big mess is the Constitution of India which becomes focal point for everyone to speak but not to adhere, morally, mentally and physically and be responsible when get elected by people of this country.

Shameful legacy

Kaushik Basu writes in the Outlook (Why) “..tax the rich more and subsidise the poor” if that is the case, the revive of government created slavery which is a government funded death penalty will amount to cascade rather to enrich the ‘poor’. Best example is the malfunctioning India’s subsidy system. It is sad that Mr Basu has paid little attention to this big issue. And in once sense it is not surprise to see because he is also student of Mr Sen. 

However, he concludes that “that Obama spoke about redistributing wealth. I do not think he will be able to do much in this area, but if such a call from an American president causes a shift in public opinion, that could well clear the way for a more equitable and better world. ”