The Labour Day: The Attack Of The Primitive

The primitive societies could not visualise that anything can be work other than hunting and gathering. Both involve muscle. Though actually both involved mind more than muscle. If only muscles were needed for even hunting and gathering, Homo Sapiens stood just no chance. Even the monkeys would thrash us anyday.

But the primitive mind could only see moving limbs, it could not even know that what was guiding and seeing the limbs move was mind. So it engraved on its genes that the work meant only the moving limbs.

This genetic encoding has resulted into untold misery and millions upon millions of deaths. We still are not able to visualise the work as anything other than limbs moving. But only limbs moving gave us only kills and fruits both obtained with great struggle against the competitors. Even the cooking of the kill was the doing of the mind. And then growing of the fruits we liked, many of which later became “crops,” was purely the plan of the mind.

So everything up from the kills after great chases and the wild fruits is doing of the mind, not of limbs, not of labour. Mind makes steel, not limbs, and mind assembles that steel into a car, not limbs. Everything up from the kills and wild fruits is the division of labour, and the division of the labour is purely a doing of the mind. Human mind. And only mind can do valuation of the doings of the mind. No muscles can evaluate the output of a mind. And the division of labour and capacity to assign values to the products of this division is what we call modern industrial society. In fact Civilisation was always this only: division of labour and valuation of the resultant products. Industrial age is just the addition of machines to it, machines, again a creation of mind.

But the genetic encoding continues. We idolise limbs, and we curse the mind as the exploiter. We idolise workers, and we demonise as exploiters the minds who organise activities that engage those workers. Without those minds, the workers will not remain “unexploited,” they will in fact not remain even workers. They will have to become hunter gatherers again.

So on this “Labour Day,” disinfect your mind. Disinfect your language. And teach the workers that “work” isn’t movement of limbs. Work is the mind in use, not only moving the limbs, but also creating the opportunities which make it possible for the limbs to move at the levers of a machine, at the buttons of a cockpit, at the keyboard of a computer, most of these now air conditioned, instead of the limbs moving in chase of a hard-to-get deer.

If you could cure human mind of this cancer that makes “worker” not only a separate entity of limbs and no mind, but a separate species that is supposed to rule Homo Sapiens, no questions asked, you would have actually served the Labour. If you could exorcise the ghost called “Leftist” from the minds of the “workers,” you would truly liberate mankind from all exploitations.

Mr PM, Liberalise The Economy Even As You Reopen It

1990. India was bankrupt. Bajaj scooter had five year wait, telephone had ten year wait, Delhi Mumbai airfare was Rs. 5000 and you needed to know a Jt Secy to get a seat. Entry level salary of Class A officer was Rs. 3500 pm. A desert cooler was a luxury. Maruti 800 was a car for upper class.

We had to pledge gold to avoid default, and as the men involved later recalled, they were shivering till the plane carrying our gold touched down in London, as had the plane crashed in sea, we had no more gold to pledge.

Enter P V Narasimha Rao. We don’t know whether he was aware of the power of free market, or his hand was forced by IMF, as commies love to say. But Indian economy was partially liberalised, and our lives got transformed.

At 30 crore in 1947, we used to starve, at 130 crore we export grain. Entry level salary of a class D staff is Rs. 20000 pm. You can just walk in and walk out with a scooter/phone. Nobody buys Maruti 800. Company discontinued the model. They go for higher models. Maruti 800 has become too pedestrian. Most urban homes have AC.

And Delhi Mumbai airfare is still Rs. 5000. Anytime you walk into the airport, you will have a flight.

Another crisis is upon us thirty years later. Can Modi use it to set the economy totally free and complete the liberalisation?

Let us see. After all, his own party worships Red if it is wrapped in saffron. And the section that most benefitted from Liberalisation, salary wise and perks wise, the government employees, is dead against it. That is the power of economic illiteracy, reinforced daily by the Leftist thugs in schools, colleges, media, popular culture, and politics.

After all, only the fools, or blinds, or evil minds, can not see the magical difference in our lives post 1990.

Corona Lockdowns And Economy

Consider the following:

Before Corona epidemic
1. 26000 persons were dying in India per day
2. 1600 persons were dying in Italy per day.
3. 7000 persons were dying in the US per day.

Now compare that with Covid deaths, in say, the US. Total 37000 dead in about 45 days. That is, an increase of 822 per day, that is around 10% of the normal, and the US is shaken. Or take Italy. 22000 deaths in 45 days. That is, an increase of about 500 deaths per day, an increase of 30% over the normal, and Italy is ravaged.

And now consider that 10 crore persons died in Spanish Flu of 1918, 2 crores of them in India.

Two things have led to shut down of the countries: We had grown confident that with better medical facilities, pandemics are a thing of the past. Second, now we have TV cameras. Churchill could happily puff at his cigar even as bodies were lying in piles in the markets of Bengal in the famine of 1940s. Nowadays, the dead body of a single child shook the entire world and led to chain of events consequences of which will be for decades with us.

The difference between natural deaths per day in a country and Corona deaths is that, natural deaths occur all over the country, most people die in their homes, and most die in old age. Society knows that births and deaths are part of life. As against this, in a pandemic like Corona, people of all age groups die, they mostly die in hospitals, and die concentrated in few cities, leading to choking of hospitals and crematoriums. Bodies even in a developed country like the US are being transported in trucks loaded like goods, and are being buried in mass graves. With TV cameras, no politician can survive if not seen acting against the pandemic.

As for businesses, they won’t survive even if lockdown is not imposed. Corona will explode, will take away key workers, will terrorise others, and people will simply stop buying.

We do not realise that money is just our imagination, and all business is our trust in the future. We buy today because we hope to earn tomorrow also. We invest today because we hope to sell tomorrow. Take away the trust, and businesses collapse in a heap, which people call depression. The imagination that is money simply evaporates.

What to do? Just cooperate with the leaders. They are facing something in which they are truly helpless, though they won’t admit it.

As for businesses, they will survive exactly as before, as if reopening after a Sunday, if they continue to pay salaries during the lockdown, even if they need to borrow. That applies to individuals also. They must continue to pay bills, salaries of maids and drives, rents, and EMIs. And that applies to governments also. They must also not stop salaries. Even if they need to borrow. Like Corona, economy is also just a chain. Even as we are trying to break the Corona chain, we have to make sure that the chain called economy, the लेन देन, buying and selling, must not stop.

Otherwise we will take years to recover from the economic depression, and we will all suffer equally: the employers and the employed.

Indian Spending On Health

Why exactly can’t we even see the obvious dancing before our eyes? How did we become so shallow and superficial, living mediocre lives?

The Dumbs of Hindostan have discovered that Europeans are spending such and such percentage of their GDP on health services, and we are not; how cruel of us.

So my dear Dumbs of Hindostan, we do not spend much on our health services simply because we have nothing to spend on health services after we have spent on our bare daily needs.

Just one example. Germany has been claimed to be spending over 12% of its GDP on health services. Indian figure is cited around 1.5%.

German GDP per capita is USD 48000. Take away 12%, and the German guy is still left with USD 42240 to spend on himself. Indian GDP is USD 2900. Take away 1.5% and the Indian is left with USD 2856. And even if you take away 12%, you will still have only USD 348 per capita to spend on health care, as against USD 5760 per capita in case of Germany. And if you tax Indians so high, they will clobber you, because they will starve before they ever reach the fancy Germany-like hospitals you dream of constructing.

We do not have Europe like schools, hospitals, roads, public transport, roads, and municipal services simply because we do not earn like Europeans. We do not earn like Europeans because we do not work like Europeans. We want unearned. And we vote for charlatans and liars who lie to us that they can give us European cities without us having to work like Europeans.

Indian States Want Corona Loot

States are demanding fantastic amounts from the Centre to tide over the revenue loss caused by the lockdown.

Suppose they lose two months’ revenue (March April). That would be one twelfth, 8.3% for each year. Can’t they bear this downtick in revenue?

Actually they can’t. All state governments are bankrupt. Each year they borrow to the limit set for them by the Central government. (Yes, India is solvent only because the states can’t borrow beyond a pre set limit. Otherwise the vote bank managers would borrow entire House of Morgan, will buy whole blocks in New York, and run away as India would collapse. Centre has no such limit. But it has IMF, World Bank, and other rating agencies which immediately raise red flag when borrowings go out of hand. We were saved from bankruptcy ten years ago only by the international rating agencies.)

Coming back to economy. Relax, sit back and relish Ramayana and Mahabharata. They are still captivating, mesmerising.

Entire agriculture is alive and kicking. No effect of lockdown. Farm implements and fertiliser suppliers are doing business as usual. Goods traffic of Indian Railways is running. Passenger services cause only the loss, so IR is actually saving money. Power industry and mines are open. So are most heavy industry plants. Software engineers are of course can and are working from home. So Are many other professionals.

As individuals, I hope we have not become Americans in India. I mean, I hope we have savings to tide over the three months if incomes go to zero, which in many cases won’t be the case. As for construction industry, labour would have left for the villages by the first week of April for harvest in any case. Nobody could have stopped them.

States see this as the opportunity to extort money from the Centre so that loot actually increases post-Corona. That is, like every natural calamity, they want to make sure that Corona is also just another loot festival.

They would not have been bankrupt, of course, if only they had allowed citizens to do business and trade and production. But then, who would bribe them? How would the junior study in America then?

Inequality Con Once More

Thugs of Oxfam
You would expect that the thugs who promised to make the poor rich by looting the rich and redistributing their wealth would go into hiding in guilt after failing to do so but murdering 120 million human beings and destroying countless countries in the attempt.

But to feel guilty a person needs to have conscience but the Leftist thugs do not have any, and therefore every few months they again take the centre stage with the calculations of the fabulous wealth of the rich that they would redistribute and eradicate poverty and inequality.
The newest gang of the Leftist thugs, Oxfam, has now come up with a fantastic claim that 1% rich Indians own four times the wealth owned by the bottom 70%, and the government is doing nothing about it.

In reality, the rich of India, or of any other country for that matter, do not have any wealth stashed away in the lockers of their bedrooms. For example, Mukesh Ambani is claimed to be worth Rs. 4,27,700 crores. But this is not the amount in his bank account or cash in his locker for the Leftists to loot. This is OUR valuation of his companies expressed in the price of shares of his company. The share value is our trust that the share will earn this much dividend in the coming years. If we lose that trust, the share value, and hence net worth of Mukesh Ambani will be reduced to zero within hours. Even his residence, Antilla, will become worthless as there won’t be any buyers as all those with capacity will be similarly ruined if Leftists take over the country, and if Leftists seize it, they won’t be able to meet even its electricity load.

Actually all the wealth of the rich over which the Leftist thugs salivate is nothing but our trust in the abilities of the rich to create future returns on our investments. That is why Leftists are left holding trash of the collapse of the economy when they have seized power in any country.
The poor are poor only because other members of the society do not have much trust in their abilities and so do not invest in any venture they try to start. Still the poorest today are the richest they have ever been. They have not become poor because the rich have become rich or are getting richer. They have in fact become richer than they were because of the reflected glory, because the rich are able to generate employment for them also, matching their skills. There are countries where there are no rich, and the poor in those countries live in the most abject conditions, not in better conditions.

In reality, there is no wealth in the world to loot. All that we recognise as wealth is actually our trust in the future, shaped by the able of the society. The only wealth a society has is the ability and skills of its citizens, and their integrity. Where men have enough integrity to let the men of ability to produce unhindered and un-endangered, that society, and only that society, becomes ever richer.

But the Leftist infantiles are not able to grasp this simple fact, and the freeloaders are too corrupt to accept it. And so cyclic destruction continues to visit us and continues to wreak havoc in the lives of the poorest of the society.

Infantile Environmentalism Kills

Australia has been ravaged by forest fires.
There is nothing new about forest fires. In summers, every forest is a tinderbox. Any spark, result of stone on stone impact, lightening, and now careless human beings, can start a fire. The scale of a forest fire means there is little human beings can do. Fire dies out when it finds nothing to burn.

Human beings knew this for millions of years. The forest dwellers had nothing to save, so they simply fled in the face of a fire.

Permanent settlements took care to clear the forests around them. Forests and human beings do not gel close together. They both do not like each other much.

Enter the infantile environmentalists. They banned all tree cuttings. Unresisted, forests are very powerful force. They soon reclaimed land around human settlements in places where environmentalists have a free run.

But forest fires have not forgotten forests. Nor have they lost their natural ferocity. As the permanent human settlements and forests came closer as a result of the “conservation” efforts, forest fires are also coming ever closer to human settlements. Wherever environmentalists have free run. In places like Australia……like California.

Development doesn’t kill, it saves. Till 1920, every year 500000 human beings died in natural calamities. Now the number is 20000 per year. In 1800 AD, world average child mortality rate was 43%. Today it is 4.5%

How and why are we listening to loonies like Greta Thunberg? And dying as a result. How could loonies take over the world?

Ricardo’s Law of Comparative Advantage

Ricardo’s law was framed for international trade, but it is equally true for two individuals also.

Suppose there are two persons A and B. A produces 10 pieces of Article 1 in one day and produces 8 pieces of article 2 in one day.

B produces 5 pieces of article 1 in one day and 6 pieces of article 2 in one day.

Both work for two days and each produces both articles.

A = 10 and 8
B= 5 and 6

Total article 1= 15, article 2=14 Total production 29 pieces

If on both days A produces only article 1 and B produces only article 2

Then A= 10+10= 20
B= 6+6= 12

Total production 32 articles. The two persons working together have become more productive, that is productivity per capita has increased for the society of these two persons as a whole.

So, the total production has increased by the division of labour. This happened even though A was more productive in both the articles than B. This holds true for two individuals, two households, two villages, two cities, or two countries, and for very large number of commodities and for large number of individuals. Total production will always increase when each produces only what he is better at among his various skills, instead of producing everything himself.

Division of labour assumes that production of each of them is safe, and they are free to trade, because they will need to trade their produce and buy what they do not produce themselves.

Cities always continue to grow in size because they facilitate division of labour. Trade is essential because only it makes division of labour possible.

It also doesn’t tell who will produce what. A person can produce anything so long as he is able to supply it cheaper than everybody else. That is, at more efficiency than everybody else. This will force people to do something for which there is an unmet demand or current cost is higher than what it will be if they produce it. That way, it is cruel, it is heartless, it forces a person to do what is required by others, not what he likes to do. But it also gives choice: you can opt out and do whatever you like, so long as you produce everything that you need yourself. Only consequence will be that you will always be poor. If you want to grow rich, you will have to participate in division of labour, and in trade, and hence will have to do not what you like, but what is you are best at among various things that you can do. Or you will need to become more skilful than others in one of the production activity.

Division of labour also means that a person is producing only one thing, so he becomes ever more skilful in that, and is able to beat competition.

That is how a society that ensures safety of private property and allows full freedom of trade and allows everybody to produce whatever he wishes becomes ever more efficient and hence richer and richer.

And it is also clear that when these conditions are not present, the society’s productivity will not grow. That is, private property is not safe, or trade is not free or safe, or government/some other system decides who will produce what; then society will always remain poor.

That is all to it. This is the only cause of prosperity or poverty. Nothing else.

“Farmers” Are The New Trade Unions (The 4.5 GDP Story)

The survey team called to say that the villagers had come and stopped the survey. “No work related to the plant X will be allowed.” They had declared. Plant X was in operation for a decade and wanted to expand. The villagers had been given fair compensation. The land where survey was planned amounted to few more double digit acres.

I ordered the team to leave the area. You hire people to do survey, not to die.

I knew that they had blown the compensation on liquor and to live a life for which they were not working. Money gone, they just wanted to extort some more.This is the story now all over India. “Farmers” can now come and stop any project for any length of time. Four times the cost, or eight times the cost, whatever one gets paid will run out someday if not invested and instead used for daily expenses of a life which only the families with high regular income can afford. Not much of a mob is required, hardly a dozen are needed to paralyse the sarkar.

Trade Unions were concentrated in West Bengal, Kerala, Mumbai, Modinagar, and Kanpur. But “farmers” are everywhere, all over India.

And the plants which escape the sights of farmers catch the fancy of NGT. Or numerous Pollution Control Boards, Or Pollution Control Authorities. Or courts. The lower courts, the higher courts, or supremely higher courts. Some time they all come together to pin down the industry.

Then there are over 150 clearances, permissions, and NOCs to obtain. Then a dozen more new Acts to comply after every parliament session.

And after all these efforts to kill Capital Creation come the never ending crop failures, and loan waiver programmes to consume the accumulated Capital. Weather was always like this, capricious. I remember many childhood summers when harvested wheat came under a heavy downpour before it could be thrashed. People used to salvage whatever they could. Or sugarcane flattened in a hailstorm. But nobody ever thought that government would or should compensate them. Suicide over crop failure? Never, never heard of that till 1980s.

Loans had disappeared by the time my generation came on the scene, because of Green Revolution. Otherwise debt was a constant of life for thousands of years. Again nobody ever thought that government would “waive” off those loans. Now the debts are back, and this time not because of the loan-sharks, but because governments waive them off every five years. Sometime sooner.

Then farmers’ children spend about ten lakhs to get an Engineering degree, only to queue for sanitary workers’ jobs. With applicants to posts ratios in the range of 1000 to 1. Population dependent on agriculture still remains above 50%. The figure is 1% for all the developed economies. Imagine the same ratio, and farmers’ income would increase 50 times in our country.

But for that farmers’ children need to be absorbed in industries, and for that farmers need to not beat up the survey teams, or not gherao an existing plant or an ongoing work to extort some more compensation. First the Leftists consumed five decades of the country, and before they were overthrown, they infected the “farmers” with a deadlier strain of the same virus. And why farmers, every time I post about the PhDs queuing up for peons’ jobs, the “economists” on social media jump in with long posts about how the “education standard” can be improved and how that will solve the problem. For at least last 15 years I am writing that industries, trade, businesses give us jobs, not our degrees. But the song never stops: “Spend more on education, and problem of unemployment will be solved.”

The Leftists with the saffron flag are as clueless today as they were during those five decades. They sincerely, most sincerely, believe that they can make Socialism work because they are honest as against those Lootians over there. Many in fact hate prosperity and believe in the ideal of a self-sufficient village populated by the subsistence farmers.

Chile, Columbia, Lebanon, Iraq, Iran…….. media doesn’t tell you. Hungry mobs are burning cities everywhere. France, and Europe, is now relatively quiet. Because it has no unemployed youth because it actually has no youth. The “youth” it is importing are not interested in jobs. Welfare does it for them. Nobody can control a hungry mob. Not even the man who has almost wiped out terrorism and scrapped the 370, and is about to give the long cherished grand temple. Did he not hear the age old wisdom of his own countrymen: भूखे पेट भजन न होत गोपाला………

Knowing all this, even now one can survive only by numbing the mind. But I doubt even a numb mind will be able to withstand the catastrophe of the return of the Lootians. Because next time they come, they will come to tip us over. राम भली करे।

Rupee Dollar Exchange Rate Explained

Value of a currency is its power to purchase goods, and depends upon its quantity relative to the total goods produced in the country. If goods produced are constant, and quantity of currency is increased (by printing it), its value will decline, that is, goods will become costlier as same denomination currency notes will be able to buy fewer goods now. This is called general inflation. महँगाई। (prices of individual goods may increase or decrease depending upon demand supply mismatch specific to goods also.)

What happens when people in two countries are buying and selling goods to each other?

If an American wants to buy something from India, he would need rupees. He may buy these rupees from an exporter in America who may have chosen to receive price of his export to India in rupees, or from the open currency markets. If rupees are not available to him, he may buy gold in America and pay his Indian seller in gold. So how many rupees he will get by selling one American dollar? That will depend only on two things: what those rupees can buy in India, and what that one dollar can buy in America. Or say in a third country, what a rupee can buy and what a dollar can buy. If there are no restrictions on the movement of gold across national boundaries, then price of gold in America in dollar and price of gold in India in rupees will straight away give the exchange rate.

Now, if Indian government wants to control the exchange rate between rupee and dollar, what it will need to do? Firstly it will have to control the entire currency market in India. That is, it will be a law that only it can sell a foreign currency in India, and all exporters will have to surrender to government all the foreign exchange they earn.

Secondly, suppose it holds the rate down. That is, instead of 70 rupee a dollar (real market rate) it wants to keep it 35 rupee a dollar. To the exporter, it will give only 35 rupees for each of his dollars, stealing from him 35 rupees. Soon he will go out of business. To the importer, it will give two dollars for every 70 rupees he gives to government to buy the dollars, enriching him. But this extra dollar will come from exporters, so importers will be enriched at the expense of exporters. But since exporters in this scenario are dying, government will have less and less dollars to give away to importers, and favouritism and bribe market would grow like anything. Rationing will be ever tighter. Finally govt may have to buy dollars by selling its gold abroad, and giving them cheap to importers. That is, it will be selling its gold to enrich importers in India. That is, collective stock of gold in country will be sold abroad to enrich the few (the importers).

What if government takes its decreed rate higher than real rate, say Rs 100 a dollar instead of present rupees 70 a dollar? To the exporters it will give 30 rupees extra for every dollar they earn, enriching them. To the importers, it will charge 30 rupees extra, impoverishing them (they will need to spend 100 rupees for each dollar instead of 70 rupees). Soon the imports will decline. So from where will government than bring rupees to buy dollars from the exporters? It will have to buy them in exchange of its gold. So when government artificially jacks up exports by keeping dollar price of its currency low, in the long run it can do so only by selling country’s gold to its own people. If it instead uses tax money to buy dollar for 100 rupees apiece from the exporters, it is simply transferring tax money to the exporters. Enriching them at the expense of taxpayers

This is the whole story man, which they don’t teach you at Harvard, and media and economists don’t tell you because they are on the payroll of those who benefit from govt control, that is, the licensed importers/exporters.

(So what is hawala? Hawala is the mechanism to beat the government controlled exchange rate. Suppose exchange rate is government controlled. So dollars will have to be rationed. You want to go abroad for, say, treatment. The babu decides he will give you only 1000 dollars. You give him 35000 rupees and get your 1000 dollars (in first scenario above). But you need 2000 dollars. So you go and buy balance 1000 dollars from the black market. But he doesn’t give you 1000 dollars here. He charges you 75000 rupees (70 rupees per dollar real rate, 5 rupees his commission) and takes from you rupees 75000 here in India, and gives you a chit and an address in New York. You land in New York and go to that address, produce the chit, and lo, you get your 1000 dollars. हवाला हो गया। (from where do the 1000 dollars in New York come? From the exporter who left those dollars there, instead of bringing them back to India and surrendering to government for rupees 35000. He gets his 70000 rupees from the Hawala operator, who pockets his 5000 rupees. As I always tell you, but you never listen, government control of economy will always corrupt the citizenry.)

So what does it all mean? It means only one thing. That if we want to buy something from America, we will first need to export to America something of similar value. In the short run we may borrow dollars, but even they will have to be repaid, with interest added. So, in the long run, we can never import more than we export. And in the long run, the Leftists may be dead, but country remains, and the country is left holding the debt, the debt that is Leftists’ stupidity converted into hard currency (at the real rate, not government decreed rate of stupidity per kg.).

Therefore, government’s control of currency exchange rate is meaningless. If we are not exporting, we can not import, come what may. COME WHAT MAY. If without exporting, government is importing something, or giving dollars to importers, it is doing only by either of two means: either it is selling gold, or it is borrowing dollars. Neither can be continued for long. Even if the Leftists are all dead.