It begins:

SOME stray voices in the media have been questioning, with surprising nonchalance and lack of depth, the wisdom and expediency of retaining Kashmir as a part of India. This matters not because such voices reflect any growing view in our country but because they play into the hands of enemies of the nation. Their suggestions embolden subversive forces both within and outside the country, and encourage our adversaries to entertain the hope that with a little more effort, Kashmir will secede from India.

OK, so there are “stray voices” that do not represent the mainstream view, and they give hope to Kashmiri secessionists. If that is so, I agree it is not a good thing. Further down in the piece they write:

India has successfully overcome all secessionist threats faced by it. No responsible government can ever compromise India’s territorial integrity by even contemplating the secession of Kashmir.

This is not a trifling issue. If the Indian state is seen as weak enough to let Kashmir go, other states and disaffected groups within India will only get emboldened, leading to the unraveling of India.

So it appears that even “contemplating the secession of Kashmir” would lead inexorably “to the unraveling of India.” Which means that the fabric of India is rather tattered. One day you merely contemplate (not actually do anything) Kashmiri secession and soon enough “other states and disaffected groups within India” will want out and India unravels.

The tacit admission by the group that India is built on very shaky foundations — that there are groups all around that want to get out of the union — is pretty interesting. Perhaps they should sit down as a group and contemplate the matter and answer clearly whether there are so many groups tottering on the verge of secession that letting Kashmir go would immediately push them over the edge, and if so, why.

If there are so many disaffected states and peoples, then clearly the “stray voices” in the media alluded to earlier are articulating a problem that needs to be addressed. It appears to me that the writers of that op-ed are not so concerned about the underlying reality of the problem (if indeed there is a problem and I am not saying that there is) as they are concerned about talking about it.

“Let’s not mention the 800-lb gorilla in the room,” said he, “because if anyone does mention it, we will have to deal with it. We cannot deal with it and so if no one acknowledges the gorilla, we can all pretend that it does not exist and we will not have to fight it. We would lose the fight if it came to it. So let’s not go there.”

Their solution is to stifle voices that question the correctness of holding on to Kashmir.

India is a free and democratic country with a vibrant media and we are proud of it. But freedom of expression does not mean unbridled licence to flout the law of the land by airing or fanning seditious views.

Really now? So one has freedom of expression but only if the views expressed are officially welcome? We are not merely importing stuff from China, it would appear.

Such views also do a disservice to the people of Kashmir. We call upon the intelligentsia that has the power to shape public opinion to use their power with wisdom and maturity.

Ah I just so love the implicit assumptions and implications of the above. The implicit assumption that the people of Kashmir do not want secession. It may have been true 50 years ago but it is certainly no longer true. The ethnic cleaning of the Kashmiri pundits and the radicalization of the Muslim Kashmiris — thanks to Pakistan-mediated Saudi money and a bit of indirect help from the US — leaves very little room for the notion that the people living in Kashmir now want to be part of India.

The writers are essentially asking the “intelligentsia” (which I presume includes the ones with those “stray voices”) to use their power wisely and well. A clear admission that the people are sheeple (that is, they can be herded and believe anything that is told to them by an authority figure.)

The next lines leave no doubt that the writers have all but used the branding iron on the sheeple.

Irresponsible slogans do immense damage in open and democratic polities and can mislead people to take partisan positions without understanding the grave implications. We also urge the media to exercise restraint and show responsibility in the larger national interest.

For me the most puzzling line in the op-ed is this: “India is a free and democratic country with a vibrant media and we are proud of it.”

That line is inconsistent with pretty much the rest of the piece. If India is a free country, then why are people not free to express their opinions? And what is all this talk of “democracy” about? Is it a good thing or a bad thing? If democracy means what it is popularly understood to mean, should not the people have a say in what they want to be a part of? How does one square the idea of a “vibrant media” with the idea that only those views that don’t rock the boat are welcome?

My perspective is that the problem of Kashmir is not new at all. It fits in quite consistently with the pattern that was very clearly and forcefully demonstrated with the division of India into two parts in 1947. What was the primary motivating factor? Whether one’s “secular” sensibilities likes it or not, that factor was that Islam forbids Muslims from co-existing with kafirs (kuffars, or non-believers, idol worshipers.)

India was divided not along some political, linguistic, or ethnic lines but along strictly Islam and non-Islam lines. That distinction cannot be wished away without questioning the very definition of what Islam is all about. Islam divides humanity into the good (the Muslims) and the evil (the non-Muslims) and divides all lands into Dar-ul-Islam (the land of Islam) and Dar-ul-Harab (the land of War). Pakistan is in the former and India is the latter.

Cut it any which way you want, Islam does not allow non-Muslims equality with Muslims. That is why when the occasion arose, Pakistan was formed. That is why numbers of non-Muslims in Pakistan (and Bangladesh) have dropped consistently. That is why the Pandits have been driven out of Kashmir. That is why the Muslim Kashmiris will not want to be part of India.

My recommendation

All things considered, I am disappointed by the op-ed but I am heartened that at least it was written. It is a good beginning and perhaps they would consider a resolution something along these lines.

India was partitioned once and the division of land between the Good (Pakistan, the Land of the Pure) and Evil (India, the land of the Filthy Unbelievers) was largely fair (with the Good naturally getting a better deal), in my opinion. Populations moved and people decided which side of the border they wanted to be on. I am glad that India was divided. One should not have as one’s neighbors people who consider one evil and unclean.

Now that partition should be read as done and over with. No more division of land and no more bitching about how co-existence with kuffars is a pain.

Now if someone — anyone, not just Kashmiris — don’t like it within the present day borders of India, they are free to leave. India should not behave like the former East Germany and prevent people from leaving India. Indeed, India should have a fund which subsidizes the travel for people who wish to take a one-way trip out of India. Not just that, India should make it mandatory for people who wish to not be part of India that they take a one-way trip.

I think that Kashmir is part of India and therefore Kashmiris are Indians, regardless of their religion. But if any Kashmiri wants to be a Pakistani instead, I think he or she should be encouraged to go to Pakistan.

I think that a referendum would be a great idea. Let them decide if they want to be a part of India or part of Pakistan. If they vote to be part of Pakistan, let them pack up and leave without delay. I am sure that the Kashmiri Pandits would be delighted to have their land back and not have to get ethnically cleansed.

I think what India (and by that I mean the people, the press, the “intelligentsia,” the government, and all) needs to do is to declare that the borders are non-negotiable but the people are free to go wherever they want to go. After that, let’s talk about Kashmir or any other part of India. Most of all, let’s not stifle stray voices. They add entertainment.

NOTES: Please visit The Acorn and check out the excellent discussion “On psywar and sedition.”

At the shining bright core of our galaxy of ideas lie a bunch of super-massive ideas that are tightly bound to each other. The core’s gravitational attraction holds the galaxy together, draws in stuff and transmutes them into higher elements.

Exploring the metaphor a bit further is interesting. At the center of galaxies dwell huge black holes which destroy both matter and time. And like the great god Shiva — the Mahadeva as Nataraja, the king of dancers, dancing the Tandava, the cosmic dance of creative destruction — the galaxy core produces novelty and thus advances the evolution of the entire galaxy. Black holes, just like Shiva, destroy time. Curiously, the Sanskrit word for time is the same for black: “kala”. The universe evolves because ceaseless change is imposed upon it through the dance of creative destruction.

Evolution. It is hard to escape the gravitational pull of the idea of evolution. The idea goes back into antiquity. But it was only recently (in terms of historical time) in the mid-1800s that Charles Darwin (1809 – 1882) pondered the biological variant of evolution and figured out the mechanism. It was natural selection. That is one of the superstar ideas that populate the core of our ideas galaxy. Everything that is known about biological evolution can be explained through natural selection.

Natural Selection

Darwin had patiently observed nature and cataloged a heap of facts during his voyage on the HMS Beagle which ended in 1837. Then another idea pushed him to an inspired guess on the mechanism which produced the diversity of species in the world. That idea came from a professor of political economy and Fellow of the Royal Society, Thomas Malthus (1766 – 1834).

Malthus had considered the matter of how societies function and concluded that the struggle for food is critically important. The competition for food would result in winners and losers. Populations would increase till the standards fell to subsistence levels for the most fecund segment of society. The biological imperative to reproduce as profligately as possible lead inexorably to a situation where natural resource limits are reached and the weakest sorted out of the race. At the center of the drama of life was competition for resources.

Darwin had observed the natural world, pondered the evidence, and read Malthus. That’s what he needed to figure out natural selection. But then so had another contemporary of his: Alfred Russell Wallace (1823 – 1913). Like Darwin, he studied the natural world, pondered the puzzle of the diversity of species and he too had read An Essay on the Principle of Population (final revision published 1826), by Thomas Malthus, and arrived independently at natural selection. Darwin was about to be scooped by Wallace and rushed to publish On the Origin of Species by Means of Natural Selection in 1859.

Competition

The centrality of competition in the natural world is immediately understandable to anyone who has observed nature. Economists appreciate the power of competition and it is not surprising at all that natural scientists like Wallace and Darwin incorporated competition in their explanation of the biological world. (Darwin and Wallace were competitors!) They realized that there was no divine designer involved in the creation of variety in the natural world. There was no grand planner and consequently no grand plans.

The biological world evolves autonomously. There was only competition for resources and the universe was supremely indifferent to who were the winners and who the losers. Natural selection is the mechanism which all living systems rely on for their evolution.

The twin ideas of evolution through natural selection and competition are inseparable. I find it unsurprising that the central organizing principle of biology owes something to economics.

It should be noted that natural selection and competition are descriptive rather than normative features of the world. We are merely noting how things are, and no claim has been made so far on how they ought to be. The universe is neither moral or immoral; it is amoral. That eventually it gave rise to sentient beings that are capable of making moral judgments is itself a result of amoral processes.

In the rest of this essay I will argue that from a certain perspective, competition is good. That is clearly a normative statement and requires some support. My claim is that it is very significant that competition leads to outcomes that are on balance good and desirable.

Only Likes Compete

Let’s leave the biological world aside and for now focus only on the world of artifacts and manufactures. I am writing this on a laptop and using all sorts of hardware and software tools. I consulted the wikipedia, searched using google, used Firefox and Chrome. The tools keep improving. The Microsoft internet browser, Internet Explorer, was born retarded. Relentlessly, the competition has forced it to become much better. Why? Because in the struggle to survive, it has to compete. Absent competitors, Microsoft would have little incentive to invest resources in making IE better.

The iPod was pretty cool when it was first introduced. Yet the constant improvements that Apple made to it were not altruistically motivated. Today’s iPods are better than yesterday’s. Look around and note that improvement and competition go hand in hand. Note that where competition is prohibited, things don’t get better; they don’t have any reason to.

Let’s keep in mind that only likes compete. Only those entities that occupy the same ecological niche compete against each other. Predators compete with other predators; prey with other prey. Toyota does not compete with Pepsico or with Microsoft. Google competes with Microsoft, not with Delta Airlines. More generally, on one side of the market, producers compete with other producers, and on the other side of the market, consumers compete with other consumers. Producers and consumers don’t compete in the marketplace.

Producers Must Please

It is very important to understand this point. It is fatally wrong to imagine that producers compete with consumers. Socialist thinking is born dead because it does not understand that. Socialists imagine that the producers interests are opposed to the interests of the consumers. This is wrong. Producers and consumers appear to have divergent interests — producers want to sell as dearly as possible and consumers want to buy as cheaply as possible. To maximize the appeal of its products to consumers, however, a producer has to produce quality products and price them such that it wins against competing producers.

{I swear on everything I consider sacred and dear to me that I am not making this up. While I was writing that last paragraph, I received a spam message which begins thus:

See what I mean?}

Note this down. Producers don’t compete with consumers but rather producers compete for consumers. Producers compete with other producers for consumers. It is that competition that drives innovation and that is what evolution is in the artificial world of things. Competition in the world of things is fine and good. But what really matters is the competition in the world of ideas. Ideas trump things. The evolution of ideas through competitive pressures leads to innovation. That is what accounts for all human progress. I’ll come back to that shortly.

Societies that permit producers to compete develop good products. All monopolies are therefore harmful for society. It does not matter if the monopolist is a public firm or a private firm. If the producer does not face competition, it has no need to improve. Examples are legion. But just as an example for those who are familiar with India’s post-colonial history, consider the evils of Nehruvian socialism which restricted most competition in the private sector, and in many important cases created public sector monopolies. The result was widespread impoverishment of the economy and legendary levels of poverty. Material poverty in India is unquestionably the predictable outcome of not allowing competition.

Freedom from Control

Why the government did not allow competition is fairly easy to state. Monopolists collect super-normal profits (which economists call “rent.”) Rent-seeking by those who control the levers of government makes public sector ownership of important sectors of the economy very attractive. Furthermore, by handing out licenses to private sector firms, the government makes sure that it restricts competition in those sectors that would be the most valuable for extracting rents. The government of India thus directly controlled activities such as railways, power, steel, telecommunications, etc., directly and indirectly though license, quota, and permit requirements, controlled other aspects of the economy such as manufacturing, and services.

India is one of the least economically free countries in the world. You don’t need to go consult any well-researched academic report to conclude that: you merely have to walk around India with eyes open. The obvious poverty and economic backwardness could not be the result of economic freedom. Four out of five Indians subsist on less than $2 a day. That’s 800 million people — more than the combined population of the US and EU.

Want another telling piece of evidence that the Indian economy was (and indeed is still is) a slave economy and not a free one? Well, have you heard the prime ministers of India talking about impending or on-going “liberalization” of the economy? Surely, if the economy were not enslaved, there would be no reason for anyone to claim that they stand for freeing the economy. One would be very surprised if any Hong Kong politician were to proclaim that he would liberalize its economy because HK is already free.

Free people don’t need emancipation. Free economies don’t need liberalization.

India is apparently politically free (except for foreigners influencing India’s political fortunes), but India is not economically free. And until it becomes economically free, it will continue to remain what used to be called “underdeveloped” and which is now euphemistically called “developing.”

Ideas trump Things

So what exactly is the foundation on which a free economy rests? Free ideas. If you are free to think and free to express the results of your thinking, it leads to wealth. The preceding discussion about competition holds in the arena of thought. The heterogeneity of humans implies that different people will have different ideas. These will compete in the ideas space just as vigorously as products compete in the products space.

Gautama, the man who became the Buddha, said that all compound phenomena are impermanent and therefore all things must pass. I would add that all things are imperfect. Biological things evolve through natural selection and diversify and become “fitter.” All human-created things are imperfect but tend to become less imperfect as a result of evolution in the product space. Compare today’s cell phone with one of just a decade ago. Ideas — the product of human cognition and rationality — too are imperfect and tend to become less imperfect as the machinery of competition refines them.

The way to kill progress is to monopolize the production of ideas, or even worse to prohibit the creation of new ideas. The US is a shining example of a society which allows and encourages ideas. (There will always be aberrations from time to time, but I am speaking broadly.) The ideas compete and thus evolve. The better mouse trap is produced by a better idea about mouse traps. The browser continually gets better because somewhere someone is thinking up better ideas. Free people produce innovation because free people compete in the plane of ideas.

The Failed World

They call advanced industrialized countries the “first world.” There is another world which I call the “failed world.”

Contrast the American society (and more generally the Western European society) with its polar opposite: the Arab world. First fact: they are abysmally poor in general. Material poverty is endemic. There is a wealthy segment of the Arab world but that is not earned wealth. They did not produce it; due to a geographical accident, they found that they were sitting atop oil. But remember that the oil was fairly worthless till the non-Arab world developed the technology for using oil.

What prevents the Arab world from developing? It is their ideology. It is an ideology that is limited to what was known to a bunch of fairly ignorant people in the Arabian peninsula (even by the standards of 7th century CE world.) That ideology claims that it had been created perfect and therefore it cannot be ever improved upon. In fact, it prohibits at the pain of death any changes in it. All its ideas are frozen in time, and it arrests the development of any society that falls prey to the ideology. If one were to segregate and isolate the Arab world from the rest of the world, the Arab world will never see any innovation or progress. It is the constant infusion of goods (not ideas) imported from outside the Arab world that maintains it even at the low levels of existence. Without this “aid”, it would rapidly regress to the conditions that prevailed in 7th century Arabia.

India and its neighbors

Closer to home (speaking from an Indian perspective), there is a natural experiment that occurred in the Indian subcontinent. India used to extend to the east and west of present day India. Many centuries ago it even included Afghanistan, then a place of great learning and prosperity. Islam defeated the land centuries ago and now it is a place known better for relentless war and crushing poverty. Afghanistan is so poor that India sends it aid. Just a few years ago, the people of Afghanistan even destroyed the remnants of their illustrious past — the Bamiyan Buddhas — because Islam decreed it.

In more contemporary times, India’s borders shrank further with the creation of Pakistan (and Bangladesh.) The population of all three countries are similar in many respects and naturally so because they occupied the same geographical niche for millennia. Yet the fortunes of Pakistan and India have diverged significantly in the last half century. For all practical purposes, it is a failed state about to implode. That it lasted so long is thanks to the geopolitical strategic games of the post-cold war era. Now that Pakistan has outlived its use for the US, the US is discarding it with all the finesse of handling a used condom. What distinguishes India from Pakistan and Bangladesh is that they are Islamic states and therefore rigidly wedded to an ideology that does not permit ideas to flourish.

Market versus Command-and-control

What distinguishes the successful from the unsuccessful economies of the world is that the former are market-driven and the latter are command-and-control. By market driven is meant that there is competition among buyers and competition among sellers. This competition among producers and consumers is not limited to just the product space but extends more importantly to the ideas space. Exhibit A: the former Soviet Union and other communist states. They controlled what was to be produced by whom and in which quantities and when. More damagingly, they controlled who was to think what. Result: economic collapse.

Communism is an ideology that prohibits free enterprise. It wants a monopolistic control of the entire economy, not just bits and piece of it here and there. And it wants the monopolistic control to be in the hands of a select few. The same with monotheism. There is only One True God ™ and there is a book which has every truth eternally recorded in it, and the founder of the religion has absolute control over it for eternity, and no novelty is allowed. There is only one Lord and everyone has to submit to it — both in the here and in the hereafter. Submit now so that you can get your rewards in the hereafter. Pay now, travel later. Good to be in control of such a great scheme.

Monotheism

Monotheism in the ideas space is the equivalent of monopoly in the economic space. They are supremely harmful.

The market system, in contrast, has no central controlling authority. It is most significantly a marketplace of ideas. Sure many of the goods bought and sold are things, not ideas. But look under the hood, and you will see that the engine is an idea. All things are born first as ideas.

The market, like the dominant Indian faith, has millions of gods. There is no one authoritarian, vengeful, cruel god that you have to obey or else you get eternal punishment handed down from it. The non-monotheistic gods are like a competitive marketplace of ideas.

How did the Americans succeed in creating a market economy when traditionally they are followers of a monotheistic faith? They did that because the founders of the country were smart and built a wall of separation between the state and the church. It is the United States of America, not United Christian States of America. Some in the US are busy trying to bring down that wall but I am pretty confident that it cannot be done.

How about Western Europe? They don’t have a wall. True they don’t have the wall but they just ignore religion. They don’t need the wall because they are too smart.

The End

So where does all this lead to? Economic freedom is critically important for economic growth, which in turn is the basic for development. As long as a monopolistic control is in place — whether the State or monotheistic faith — there will be no marketplace for ideas. Lacking a marketplace for ideas, there will be no competition. No competition would mean no evolution and no innovation. No innovation means that progress will be impossible. But populations would continue to grow and bump against natural resource constraints and end up in a Malthusian trap.

Note that a marketplace where ideas compete is itself an idea, and it is a fertile idea. Monotheism is also an idea but it is a dead idea. It marks the end of all ideas because it prohibits a marketplace for ideas to compete in. It imposes a monopolistic control over human minds which is more pernicious than its control over the human body.

At the core of human civilization are a set of ideas so powerful as to thrill the prepared mind and give meaning and purpose to life. The idea of enlightenment and freedom expounded in the Indic philosophies like Buddhism, Jainism and Hinduism are the philosophical equivalent of the Western ideas of free markets and economic freedom. The two are natural allies and complement each other, just as monopolies and monotheism are natural allies and have similar outcomes in their respective fields.

Free markets and economic freedom is humanity’s destiny. Liberation from monopolies is as assured as the liberation from the prison of monotheistic mental prisons. It may take some time, however.

With terrorists using unsecured wireless fidelity (WiFi) networks to shoot off emails every time they carry out bomb blasts, TRAI is examining a series of measures to have security processes in place to protect such networks. [Source]

Once the WiFi networks are secure, Islamic terrorists will not be able to use them to send emails to mass media claiming responsibility and justifying their mass murders based on ideology. This will have the salutary effect of the terrorists stopping their mass murders because (if one were to go by the reasoning of the telecom authorities) their main reason for killing innocents was clearly that insecure WiFi networks are scattered all over the country.

I suppose soon enough internet service providers will be forced to look over your shoulder while you use their services. Lots of employment possibilities here. But wait! What if terrorists figure out that they can use phones to call the media? No problem. The government will require people to sign a register somewhere stating who you are calling and what you are calling about. That would close that loophole. Now at last there will be no bombings. Unless of course, the holy warriors of Islam decide to use the postal service. One cannot be too careful, can one? So the next step will be to get a bureaucrat’s permission before using the postal services.

Good. So we have finally got the terrorism problem licked. Just prevent the terrorists from communicating with the mass media. Don’t bother looking into the ideology that motivates them. After all, their ideology cannot be very important. They merely claim that it is their ideology of subjugating the whole world through terror is what motivates them to commit mass murder. That is just a claim and it is clearly smart to totally disregard that. What the government must focus on is to foil the terrorists’ attempts at emailing, telephoning, and writing letters. Do that and the terrorists will lose all interest in their avowed goal of claiming India for Dar-ul-Islam.

India’s experience suggests that democracy can also hinder development in a number of ways. Competitive populism– short-run pandering and handouts to win elections– may hurt long-run investment, particularly in physical infrastructure, which is the key bottleneck for Indian development. Such political arrangements make it difficult, for example, to charge user fees for roads, electricity, and irrigation, discouraging investment in these areas, unlike in China where infrastructure companies charge full commercial rates. Competitive populism also makes it difficult to carry out policy experimentation of the kind the Chinese excelled in: for example, it is harder to cut losses and retreat from a failed project in India, which, with its inevitable job losses and bail-out pressures, has electoral consequences that discourage leaders from carrying out policy experimentation in the first place. Finally, democracy’s slow decision-making processes can be costly in a world of fast-changing markets and technology.

The very name Pakistan inscribes the nature of the problem. It is not a real country or nation but an acronym devised in the 1930s by a Muslim propagandist for partition named Chaudhary Rahmat Ali. It stands for Punjab, Afghania, Kashmir, and Indus-Sind. The stan suffix merely means “land.” In the Urdu language, the resulting acronym means “land of the pure.” It can be easily seen that this very name expresses expansionist tendencies and also conceals discriminatory ones. Kashmir, for example, is part of India. The Afghans are Muslim but not part of Pakistan. Most of Punjab is also in India. Interestingly, too, there is no B in this cobbled-together name, despite the fact that the country originally included the eastern part of Bengal (now Bangladesh, after fighting a war of independence against genocidal Pakistani repression) and still includes Baluchistan, a restive and neglected province that has been fighting a low-level secessionist struggle for decades. The P comes first only because Pakistan is essentially the property of the Punjabi military caste (which hated Benazir Bhutto, for example, because she came from Sind). As I once wrote, the country’s name “might as easily be rendered as ‘Akpistan’ or ‘Kapistan,’ depending on whether the battle to take over Afghanistan or Kashmir is to the fore.”

Tata Indicom is a pathetic, worthless, vile corporation run by a gang of stupid cretins whose head honcho must be a lobotomized comatose moron if this is the best that it can do.

Think of the rest of the world’s central banks who hold dollar reserves as the bank and the US as the creditor who is in danger of defaulting. It puts the US in a very interesting position — it can take a lot of folks down if it starts to drown. The rest have a very good incentive to keep the US afloat.

That thought was triggered by a Council for Foreign Relations special report by Brad Setser “Sovereign Wealth and Sovereign Power: The Strategic Consequences of American Indebtedness“. (Your for only $10.) [Hat tip: The Acorn.]

The abstract follows:

America’s current account deficit is financed by foreign purchases of such assets as Treasury securities and stakes in U.S. firms. A good deal of these purchases today are made by the central banks and sovereign wealth funds of countries that do not share many American political values and foreign policy goals.

Some argue that this is no cause for concern. But Brad W. Setser makes a compelling case that the U.S. deficit matters for economic and strategic reasons alike. The United States may have more to lose than its creditors if they sell American assets or stop accumulating them at their current pace. This gives creditors potential leverage over U.S. policy. Setser also argues that indebtedness limits America’s ability to influence other countries’ policies, for example through sanctions and lending arrangements.

The problems associated with U.S. indebtedness cannot be addressed overnight. But the report proposes ways for the United States to guard against the effects of a disruption in foreign financing, such as consulting with allies who hold dollars and encouraging other creditor countries to spend and invest surpluses instead of accumulating reserves. It also suggests measures to reduce the need for financing in the first place, such as working to balance the U.S. budget and, most importantly, taking steps to reduce U.S. oil imports.

Sovereign Wealth and Sovereign Power raises the potential strategic implications of U.S. indebtedness, challenging the sanguine view that global economic interdependence guarantees prudence. The report is a significant contribution to the debate on America’s political and economic position in an age of globalization.

Moral of the story: If you have to borrow, be the biggest borrower in the world.

This blog had its first post on this day in 2003. For five years, I have been expressing my opinion and perspective on a range of topics that deal with development and India. I had been writing a blog at Berkeley, “Life is a Random Draw”, for a while before I started on this one. I shut down the Berkeley blog as maintaining it was becoming a bit of a bother. It was my colleague Rajesh Jain who suggested that I should write a blog on economic development of India.

Economic growth and development is at the center of this blog’s concern. With very rare exceptions, every opinion and perspective here is somehow tied to development. Education, urbanization, energy, transportation — are obviously connected with development. But so are the institutions and ideologies that have a strong impact on economic activity. Communism and monotheism are religious ideologies that are corrosive and harmful to development.

Rule of law, as opposed to the rule by people, matters. India gets infected with personality cults repeatedly. Gandhi (the man), Nehru, all the other Gandhis (starting from Indira and anyone related to that family) are prominent examples. Perhaps “rule by people” happens because “rule by law” is not an option for India given its conditions. I think that rule by law requires knowledge and understanding of what laws are, and appreciation of what the distinction is between laws and people. Unfortunately, too many Indians are illiterate and uneducated. The education system is flawed. But even among those who are literate (and many of whom are even educated), the constitution — the set of rules and meta-rules — is a big fat closed book.

I am fascinated with the phenomenon of personality cults. That explains my fascination with Sri Sri Ravi Shankar (SSRS, for short) who has anointed himself as “His Holiness”. I suppose if sufficiently large numbers of people consider you holy, you can wear the “His Holiness” without embarrassment even though you continue to preach humility and service. SSRS matters because understanding the associated personality cult helps explain the fanaticism that motivate people to extreme acts of good and evil. Monotheism is just an example of personality cults taken to an extreme by billions of people. Jesus and Mohammed are personalities whose cult followers basically impede development, not just economic growth.

Freedom is at the core of being a sentient being. Liberation from bondage is what development — personal as well as social — is essentially. Liberation from the tyranny of others is political freedom. That is why I am a liberal. That is why I support freedom of expression. Liberation from the tyranny of the state is economic freedom. That is why I oppose socialism, and support free markets. Liberation from slavery to evil ideologies is human freedom. That is why I oppose monotheism and support the Indic philosophies, particularly Advaita Vedanta and Buddhism.

Economic development is tied to economic policies. They are like recipes. With the same ingredients, you can cook up a fabulous dish or you can cook up something quite unpalatable. It depends on which recipe you use. Recipes are ideas. You don’t have to invent all recipes yourself. You can look and learn from others. Recipes accumulate and they don’t get used up when you use a recipe. I believe that economic growth and development is possible provided we use the right ideas. Determining which ideas are right is difficult for some. Nehru got those wrong and India continues to suffer from his socialistic ideas.

I believe that ideas matter more than objects. Technology is embodied ideas. Technology is ideas made into objects. The greatest change the world has seen of late has occurred in the information and communications technologies (ICT). The tools it has made possible have become accessible to billions of people. Its impact on development will be profoundly transforming — most of it will be for the better. Why ICT matters for development more than other technologies is that ICT transforms the marketplace of ideas. It increases the supply by reducing all sorts of costs related to the generation, storage, transportation, and distribution of ideas. Cost-reducing technological change in competitive markets always implies a reduction in price. Lower prices imply greater quantity consumed. Better ideas in more heads mean greater possibility of good things. Hence development.

A word of thanks

Thanks to all of you who have bothered to read and comment. I do get hate mail from those who find my frankly stated opinion challenge their core beliefs. Mostly they are monotheists and followers of SSRS. But the hate mail is more than compensated for by the emails of support that I get. I hope to continue to be of use in this blog.

Be well, do good work, and keep in touch.

Thanks to Sudipta Chatterjee for the link.

The first attempt to circulate a beam in the LHC will be made on 10 September at the injection energy of 450 GeV (0.45 TeV). This historical event will be webcast through http://webcast.cern.ch, and distributed through the Eurovision network. See http://www.cern.ch/lhc-first-beam for further details.

[Via Cosmic Variance.]

Watch a documentary on the LHC on the History Channel.

After 40 years of planning and construction, the biggest science experiment in history is ready to be tested. The “Large Hadron Collider” is an experiment created by the greatest minds in physics. It cost $10 billion and its resulting data has the potential to explain why we and the Universe exist. Their idea is to smash protons towards one another at the speed of light, trying to mimic what happened in the milliseconds after The Big Bang. Viewers will go on an amazing journey involving the struggles to plan and build the LHC, how it was constructed and what are its mechanics. Explore the future of what’s possible through the geniuses of today. [The History Channel]

For some absolutely stunning pictures (27 of them), go to boston.com’s The Big Picture.

To get a quick tutorial on how a particle accelerator works, play the LHC game. (Click on English, then click on the green arrow, the click on 1, 2, 3, etc.)