“Gross Domestic Happiness”

 This article calls for using a new measure called “Gross Domestic Happiness” to assess whether people are happy or not.  The article makes the point that spiritual, rather than material wealth determines whether people are truly happy.

I don’t have any argument with the contention that happiness is a state of mind, not an inevitable product of material comforts.  However, happiness is subjective and the criteria for happiness is very different for different people.  Some might derive happiness from intereacting with their family.  Others might derive their happiness from religion, or from sports, or from their profession, or from serving others.  Yet others might derive happiness from hedonistic pleasures.  While source of happiness is highly veriable, free societies like India and the USA enable people to pursue it in whatever form/method they choose.  Since nobody can know or presume to know what makes all people happy, only such freedom can ensure that people are happy.

When the king of Bhutan says that he will pursue policies that will maximize the ”Gross Domestic Happiness”, what he really means is that he knows better than his subjects about what makes them happy.  The hallmark of a totalitarian/collectivist society is that an elite, whether it be the royal family (or pseudo-royals like the Gandhi family in socialist India) or a party politburo, arrogate powers to themselves with the presumption that they know better than the common man.  This elite frowns on “consumerism” and dictates to the common man about what he should eat, wear, or what movies he should watch and what books are appropriate, what profession he should follow and even what he should think.  Let us not be enamoured of countries like Bhutan which use bogus statistics like “Gross Domestic Happiness” as a smokescreen to hide the fact that they have a pathetic Gross Domestic Product (GDP).

While happiness does not necessarily flow out of wealth, it surely does not derive from poverty.  Thus, let us not glorify poverty.  It is common in our country for relatively prosperous people to opine that true happiness is in spirituality.  Of course, these people are rich enough to afford to spend many hours listening to metaphysical lectures at an Ashram.  They don’t realize what it means for a rickshaw puller, who puts it 10 hours of hard physical labor just to feed his family.  Thus, it is imperative that the government of a country not create conditions that depresses the productivity of its people and keeps them poor.

“Who Feeds Paris?”

http://ia.rediff.com/money/2007/apr/21spec.htm

This article at rediff.com talks about the benarasi silk trade.  It ends with a long prescription of what the government could/should do to “protect” this trade from Chinese competition.

 If the government has to act to “protect” every trade and industry in the country, then it needs to have awfully bright people and it needs to be really big.  But does the government need to involve itself in this? 

Charles Wheelan in the book “Naked Economics” poses the same question differently by asking “Who feeds Paris?”.  There are millions of people living in Paris and they need to eat three times a day.  It has to be a daunting task for any government to make sure that they get to eat what they want.  Yet the French government is not involved in this process.  No government bureaucrat is taking orders from Frenchmen every day and ordering the right amount of fruits, vegetables and meat for them.  In spite of very little government involvement, Wheelan says, “…somehow the right amount of fresh tuna makes its way from a fishing fleet in the south pacific to a restaurant on the Rue de Rivoli.  A neighborhood fruit vendor has exactly what his customers want every morning-from coffee to fresh papayas-even though those products may come from ten and fifteen different countries”.

If millions of people can accomplish the awfully important task of feeding themselves without the government getting involved, then why should the government get involved in more mundane tasks such as regulating and “protecting” this or that trade? 

While we have moved away from the license raj of times past to a market based economy, it is becoming depressingly clear that the vast majority of Indians view the market based economy as a different methodology to be used by central planners.  Most people still feel that it is necessary for the government to intervene and plan the economy for the well being of the country.  We neither need the government to plan our economy like it used to do during the licence raj, nor do we need it to “fine-tune” the economy now, using tariffs and import quotas and so on.  The governments needs to just let us be!  Laissez faire.

Why not torino?

Coca-Cola in trouble again

Back in the eighties, we used to drink carbonated soft-drinks like “torino”, “Bovonto”, “Thumbs-up”, “Gold spot” etc.  All these products were flavored, carbonated beverages with a whole lot of sugar, just like Coke.  But NGOs never complained about them back then !?  Was it because, they were wholesome, healthy beverages (Old Indian proverd goes “Thumbs-up a day keeps the doctor away”!) or was it because, these drinks were’nt owned by a multi-billion dollar multi-national company?

I am not a big fan of Coke, but I am going grab one now, just to show solidarity.

Wal-Mart in India?

Rediff reproduces a forbes.com article by one Gary Weiss about how disruptive Wal-Mart can be.

Even though Mr. Weiss concedes that Wal-Mart’s efficiencies of scale could ultimately benefit India, he still opposes its entry because it does not square with his exotic vision of India, of visiting the Taj Mahal and shopping in bazaars etc.

If the vendors who run these ramshackle shops in bazaars get richer, they will probably invest in their shops, maybe a bigger shop, more customer service, more products, cheaper prices etc etc. in short, the shop will become a department store and the street bazaar will no longer be a bazaar that the author envisions.  The customer would get a better deal too, with cheaper prices and shorter shopping trips.

But the people of India be damned!  What matters to Mr. Weiss is that his romantic, exotic vision of India be preserved.  We don’t need engineers, lawyers or other professionals in India.  Let’s all become snake charmers and bazaar shopkeepers who peddle exotic stuff to Mr Weiss as he vacations in India!

“Times of India” on Guns in the US

Excellent critque of a similar Times of India editorial on the Virginia shoot-out at indiancapitalist.com.

What was appalling here was the cheapshot at McDonalds out of nowhere.  What did McDonalds do to deserve being compared to a mass murderer?  Really, what is the punishment for the crime of selling tasty and cheap food!

“The Hindu” on Guns in the US

The blood hasn’t dried at Virginia Tech after the gut wrenching tragedy this week, yet the “The Hindu” has no doubts concluding what the problem is in the US.  Using Michael Moore’s widely discredited and inaccurate movie “Bowling for Columbine” as a launching point, the editorial blames the “banefully long lasting second amendment” for the tragedy.  Mixed in are some irrelevant low-blows about the United States, all this from “India’s National Newspaper”.

 As the article notes, the second amendment to the US constitution does forbids the government from infringing on the citizen’s right “to keep and bear arms”.  The constitution exists for a reason.  While simple matters such as the tax rate can be changed by simple actions of the Congress and the Executive, major changes (such as infringing on the right to “keep and bear arms”) require a constitutional amendment, which can be effected only through consensus, not through simple majorities.  This is evident from the fact that the US constitution has been amended only 27 times since 1791. 

In our country, constitution does not seem to serve the same purpose.  Our Constitution has been amended nearly at a rate of about 2 times a year since 1950, often by simple majorities of the parliament for purely political reasons.  To complicate matters, these amendments are subject to review by the judiciary.  For e.g., Indira Gandhi introduced the 39th amendment when her election was challenged by the Allahabad high court, which was later set aside by the judiciary.  Given all this, it is difficult to understand exactly what role the Indian constitution is supposed to play.

 In any case, no clear consensus exists in the US to limit gun ownership.  However, this is no time to start the blame game and point fingers!

Innovating out of poverty

Interesting piece at rediff.com about India’s pharmaceutical industry.

Being in this industry, it is extremely interesting to me to watch developments on this front.  Couple of interesting questions in the piece :

“India has drawn a lot of flak from the Americans for providing cheap labour — people who come here on temporary work permits — and also for outsourcing jobs to India. From that perspective what is the kind of social impact health biotech is going to have?”

and again,

“In North America, many industries are protected and entrepreneurs, like the shrimp importers, often go to the World Trade Organisation seeking protection for their products because Indian imports are cheaper. Now, when patents of most of the drug companies expire in some years from now in the US and generics from India flood the market, what is going to be the scenario?”

Just how many people think that prescription drugs are cheap in the US?  Furthermore, why is it that people in the US are worried that India is becoming more productive?  If certain goods become cheaper because Indians can produce them on the cheap, does that not make Americans who buy them richer?  After all, what makes a person rich or poor is the amount of goods and services he can consume, not the number green bills in his wallet.  You cannot eat, drink or live inside dollar bills!

Starbucks in India

Rediff is reporting that Starbucks is awaiting approval from the “Foreign Investment Promotion Board” before they can move forward with their investments in India. http://www.rediff.com/money/2007/apr/17star.htm

The key ingriedients for the gross domestic product of a country to increase are capital and labor.  India has plenty of labor but we are a poor country and hence short on capital.  Hence, we should welcome all the capital we can get from around the world.  Why do we need to waste money by setting up some board that serves as a gatekeeper?  The best way to promote foreign investment is to do away with the “Foreign investment promotion board”. 

Let’s welcome starbucks with open arms…Bring on your frappuccino and take our Madras Coffee back to the US!