On the road to Liberty

When political freedom is secured and the market is unrestrained, more people increases demand, and therefore also the supply, and at the end there is more available for consumption than ever before. People are the ultimate resource, they just don't come with a mouth alone, but also a mind and a pair hands. It is time to party and cut the cake on the arrival of the 6 billionth person on this planet. A shorter version of this article titled "6 Billion and Growing" appeared in The Economics Times on 12 October 1999. Birth of baby is usually a source of great joy. Therefore, on October 12, the date symbolically designated to mark the arrival of the 6 billionth person on this planet there should have been a grand party to celebrate the momentous event. This is the first time in history that the human population reached this figure. In the last quarter of a century, the population has increased by 50% from 4 billion. A four fold increase in just this century! Before that it h...

A version of this paper "Free Trade Protects Environment" appeared in The Asian Wall Street Journal on 23 November 1999 and The Wall Street Journal Europe on 26 November 1999. Are economic and environmental goals really in conflict with each other? Or can the market, which has proved its ability to meet economic interests of the consumers most efficiently, now meet the environmental preferences of the people as successfully? These are some of the basic issues that the participants at the WTO Ministerial Meeting at Seattle will have to try and answer. The battle lines are being drawn up. While developing countries like India are strongly opposed to any linkage between trade and environment, many of the developed countries are pressing for a working group to look into the relationship between these two areas. However, trade and environment need not be mutually exclusive. Nor need the interests of one be balanced against those of the other. Free trade and an open market, with d...

My article titled "India is that sacred land of cultural union which never sent anyone back" was published in November 1999. "India is that sacred land of cultural union which never sent anyone back", the Prime Minister quoted this line from Tagore, live on national television recently, on the occasion of the release of a special CD containing recitals and songs by the poet himself. It is ironic that the same Prime Minister also wants a "national debate" on whether any foreign-born person should be allowed to hold highest political offices in the land. One does not know whether the PM has lately read that poem of Tagore from Gitanjali (1910). Because just prior to the lines which the PM quoted, the poet says "hethai arya, hetha anarya, hethai dravir o chiin, shok, hun dal, pathan o moghoul, ek dehe holo leen". That is the Indian civilisation has successfully assimilated the aryans, the non-aryans, the dravidians, the chineese, the shaks, the hun...

Liberty Institute Briefing Paper on Trade and Development "Taking Advantage of E-commerce" was published in November 1999. The world e-commerce transaction is said to have touched $500 billion this year according to one estimate (including goods sold and purchased over the internet). There are over 2 million people whose jobs are now dependent on it. And this is just the beginning. India with a substantial presence in the computer software segment, and a large well-trained manpower, has the potential to gain significantly from e-commerce. However, there are serious bottlenecks. With barely one million PCs and 15 million telephones in India, India needs radical policy reforms in many areas if she is to take advantage of this emerging area of e-commerce. On the other hand, e-commerce has the potential of freeing the Indian economy and her people from the restrictive influence of the state. 1. How can India benefit from e-commerce? A. India has shown itself to be competitive in ...

Liberty Institute Briefing Paper on Trade and Development "International Trade and Child Labour: The role of the market" was published in November 1999. Social and labour conditions have become a highly charged subject, particularly after attempts to link trade and social conditions under the auspices of the WTO. On the one hand, lower labour conditions, including the use of child labour is said to give economic advantage to some countries, and therefore there is a demand for protection in some other countries. On the other hand, these poor labour conditions are said to be the fallout of market reforms and free trade, and therefore there is a demand for restricting trade. No doubt child labour provides an emotive shield for a range of other agendas. However, rather than a restrictive linkage between trade and child labour, historical experience clearly shows that an open market and free trade are the best instruments for improving the labour conditions, including elimination ...

Liberty Institute Briefing Paper on Trade and Development "Agricultural Trade Can Change the Poverty Ridden Face of Indian Countryside" was published in November 1999 For fifty years India has followed the most restrictive policy regarding agriculture. The result has been that while in 1947, 85% of Indians depended on agriculture which contributed to over 70% of Indian GDP, today the corresponding figures are 70% and 35% respectively. Not surprisingly the face of Indian agriculture we are most familiar with is one of abject poverty. Ironically, the much promoted India industry under the tutelage of the state while capturing a large chunk of the GDP has remained highly uncompetitive internationally, but Indian agriculture continues to enjoy competitive advantage in many crops despite years of neglect and denial of access to international markets. Opening up trade in agricultural products provides a tremendous opportunity to improve the lot of the farmers in developing countri...

Liberty Institute Briefing Paper on Trade and Development titled Costs of Protectionism:How Indian Consumers & Workers Lost Out was published in November 1999 In 1947, India's share of the world trade was 1.5%. In 1998, it was estimated to be 0.8%. Per capita income in 1998 was approximately $400 ($900 under PPP) Indian Economic Philosophy for the Past 50 years • National self-sufficiency • Import substitution • Trade is a zero-sum game Basic rationale for restricting trade: • Protecting domestic manufacturers • Encouraging domestic manufacturing and employment • Ensuring quality and safety for the benefit of consumers • Promoting indigenous growth of knowledge and technology Consequences of protectionism: • High price, low quality • Low levels of competition • Technological stagnation • Knowhow dependent on policy of subsidies • Smaller market, lower volumes • Perpetual Scarcity Loss to consumers - Choice, Price, Quality, Access Characteristics of the Protected Domestic Market...

Celebrating 6 Billion: More the merrier When political freedom is secured and the market is unrestrained, more people increases demand, and therefore also the supply, and at the end there is more available for consumption than ever before. People are the ultimate resource, they just don't come with a mouth alone, but also a mind and a pair of hands. It is time to party and cut the cake on the arrival of the 6 billionth person on this planet, writes Barun Mitra. A shorter version of this article title "6 Billion and Growing" in The Economics Times, on 12 October 1999. • Problems of Plenty! • More people, Higher consumption, Falling prices! • Free but expensive to priced but cheap • Rising value of labour • Policies, not population, responsible for poverty • Breeding inequality • More the merrier! • History of World Population Birth of baby is usually a source of great joy. Therefore, on October 12, the date symbolically designated to mark the arriv...

[A shorter version of this article titled “Who is a foreigner?” was published in The Economic Times, on 22 May 1999.] Tagore's India "India is that sacred land of cultural union which never sent anyone back", the Prime Minister quoted this line from Tagore, live on national television recently, on the occasion of the release of a special CD containing recitals and songs by the poet himself. It is ironic that the same Prime Minister also wants a "national debate" on whether any foreign-born person should be allowed to hold highest political offices in the land. One does not know whether the PM has lately read that poem of Tagore from Gitanjali (1910). Because just prior to the lines which the PM quoted, the poet says "hethai arya, hetha anarya, hethai dravir o chiin, shok, hun dal, pathan o moghoul, ek dehe holo leen" . That is the Indian civilisation has successfully assimilated the aryans, the non-aryans, the dravidians, the Chinese, the shaks, the ...

The market is the natural ally of the environment. Environmental resources, like other economic resources can be most efficiently allocated if these are brought under the discipline of the marketplace. It is ironic, therefore, that at a time when the economy is being liberalised, rather than creating a market for environmental resources, new restrictions are being imposed on the economy in the name of protecting the environment. Environmental quality is like a value-added product that becomes economically affordable and technologically viable with economic growth. It is no paradox therefore that the environment is much cleaner and safer in industrially developed countries that adopted a more market-friendly approach, than in centrally planned economies. Clearly, it is policy that is responsible for continued environmental resource depletion or pollution. Let us take a closer look at some of the policies that have had an impact on our environment. According to the WHO, much more serious...

My article titled "The Legacy of Hayek" was published in The Economic Times, 8 May 1999. Friedrich A. von Hayek, the philosopher of freedom and Nobel laureate economist, was born on 8 May, 1899 in Vienna, one hundred years ago. The man, who went on to become one of the greatest champions of liberty, however, had begun his life as a young soldier in the Austro-Hungarian Empire, and was sent to the Italian front in 1917. An academic, whose “controversial ideas” were eventually recognised by the Nobel committee in 1974, Hayek was also an activist who was among the founders of the Mont Pelerin Society in 1948, an organisation dedicated to pursue the intellectual battle against all forms of authoritarianism and tyranny. While we in India were fascinated by government planning, a quarter century ago, the Nobel Academy held that “von Hayek’s analysis of the functional efficiency of different economic systems is one of his most significant contributions to economic research in the br...

My article titled "Hayek's Road to Freedom-A Centenary that may hold the Key to the Next Millennium-A Tribute to Friedrich A. von Hayek on his Birth Centenary" was published on May 8, 1999. Introduction This month marks the birth centenary of Friedrich A. von Hayek, one of the greatest philosopher of freedom and Nobel laureate economist. While we in India were fascinated by government planning, a quarter century ago in 1974, the Nobel Academy held that "von Hayek's analysis of the functional efficiency of different economic systems is one of his most significant contributions to economic research in the broader sense. His conclusion is that only by far-reaching decentralization in a market system with competition and free price-fixing is it possible to make full use of knowledge and information." Impact of Hayek Today, a wide range of people has acknowledged his contribution all over the world. From philosophers like Karl Popper, Robert Nozick and Michael Fo...