Are we killing them with our love?

" In a society so often intoxicated by consumerism and hedonism, wealth and extravagance, appearances and narcissism, this Child calls us to act soberly, in other words, in a way that is simple, balanced, consistent, capable of seeing and doing what is essential," said Pope Francis, talking about Jesus in his Christmas message. He means well. The Pope is asking everyone to control our greed, our insatiable desires for material possessions at the cost of ruining the earth and our own lives. Atheists might say that it is easy for him to talk because he has a very nice job, a nice apartment at the Vatican and a Popemobile to roam around in. This is in place of sedia gestatoria, which was a chair carried on the shoulders of attendants, until stopped in 1978. Priests in India do pretty well, with some of the richest temples in the world, despite India being a very poor country. In that respect they are little different from politicians, especially in India, who tax us heavily in the name of the poor, while giving themselves hefty pay rises and many other juicy perks with a being called a 'companion', while spending time abusing others in uncouth language and wasting parliament time on completely false pretexts so that there is no debate on any bill. But in all this discussion about helping the poor with handouts no one bothers to ask the poor what they want. Do they want to remain poor so that they can be showered with kindness, while being killed softly with love or do they want to become one of the reviled rich, with cars and beautiful clothes and gorge themselves on good food, with 'companion'? Even a professor from MIT in the US has a solution to Delhi's problem with pollution. Raise taxes and parking charges to unaffordable levels and levy heavy fines so that no one will dare to buy a car. Except that the US has over 800 cars per 1000 people while India has just 18, yes a measly, shameful 18 cars per 1000 people. Does the good professor find old Dilip Kumar movies romantic, wherein he is driving a bullock cart while singing patriotic songs? Doubt the poor in India aspire to such romance while watching Formula One. Why is the professor so enamored of the poor? Because he is head of the famous Abdul Latif Jameel Poverty Lab at MIT and has won prizes for his work. He will become redundant if there are no poor to research on. In that respect poverty is like cancer. People get prizes and build fortunes for discovering various cures while the sufferers keep dying. Venezuela, where Hugo Chavez helped the poor, has virtually collapsed and now Brazil, where President Lula Da Silva did the same, is in deep recession. So, are we killing the poor with our love?

Does the west create terrorism?

The BBC is reporting that the Taliban has taken over the district of Sangin in Helmand province. The short report twice mentions that a quarter of British casualties in Afghanistan took place in Sangin, as if it was a tremendous sacrifice. It does not say anywhere how many civilians were killed by British troops. It is the good old "White Man's Burden ". Brand someone a baddie, kill thousands of innocent civilians to get rid of said baddie and then expect them to be grateful to the white sahib for killing their children. The US has never grown out of its cowboys and injuns mentality, so glorified by John Wayne, who was a draft dodger, apparently to continue an affair with Marlene Dietrich. The coward. Where were the valiant west from 1992 to 2001, when the Taliban was ravaging the country? They did not want to get involved. It was Ronald Reagan's support of the Afghan Mujahideen that later gave rise to the Taliban. The Brits came in to support the US when it attacked Afghanistan, looking for Bin Laden, after 9/11. Where are the Taliban coming from, if they were wiped out by the west? From Pakistan. What arms are they fighting with? They are fighting with US weapons. Who supplied them with arms and training? The ISI in Pakistan. Who supplies arms to the Pakistan army? The US, who else. Why are the Taliban resurgent in Afghanistan? Because the US, Britain and NATO withdrew all forces leaving an inexperienced Afghan army to fight without air support. Now they are blaming the Afghan army because a few British lives were lost defending Sanjin. They really are masters at lying. Earlier this month Cameron was pleading at the House of Commons for permission to bomb ISIS in Syria. All this time western countries were holding off because they wanted the Syrian opposition to get rid of Bashar al-Assad. Because he has been labeled a baddie. Now that Russia has started to bomb ISIS they also want to join in the fun. Meanwhile, Assad has been accepted as part of the solution and not the problem. How did ISIS become such a fighting force? Because former officers of Saddam's army are guiding them. But surely Saddam's army was destroyed by that efficient fighting machine, the US army? Turns out that Iraqi generals were bribed with millions of dollars to betray Saddam so valiant Americans rolled into Baghdad without challenge. Then the US withdrew all forces, as they have done in Afghanistan, leaving behind an inexperienced army without air cover. The Shia government of Iraq neglected the Sunnis who supported the ISIS. Assad is being assisted by Iran and Hezbollah from Lebanon who are experienced fighters. The only country which has managed to retain some control is Tunisia which has been awarded the Nobel Peace Prize. Because it kept the gang of western marauders far away. 

The only way to stop being bullied is to become rich.

As expected the WTO meeting in Nairobi ended in failure, without even a fig leaf of an agreement full of bromides, as in the Climate talks in Paris. While in Paris it was mainly the US which put the onus of cutting greenhouse gases on developing countries, this time Europe joined the US in demanding cuts in subsidies in agriculture from developing countries, while preserving their own. India was blamed both times. An average American home is 2,600 sq ft for an average family of 2.4 people, while an average home in India is 504 sq ft for an average family size of 4.8 people. 32% of urban homes are 258 sq ft or less for families of 4.3 people, which means 60 sq ft for each person, which is the size of a prison cell in the US. The US is 4 times the size of India with 300 million people, while we have 1,300 million crammed into ever decreasing space. It is our fault. Our government has a program of subsidies targeted at poverty, which only encourages more children among the poor, increasing poverty. Instead subsidies should be targeted at those who do not produce children or have just one child. The reason why the US wrecked the Nairobi talks is because it signed the Trans Pacific Partnership with 11 Asian countries in October and can isolate India. The US already has the NAFTA agreement with Canada and Mexico and wants a Transatlantic Trade and Investment Partnership with Europe. The US, being the largest economy, has natural advantages which it wants to enforce. It wants to force genetically modified foods on others and the Investor-State Dispute System in which a private enterprise can sue a government if it loses business due to changes in policy. Recently there was huge controversy in the US when Turing Pharmaceuticals bought rights to Daraprim and increased its price from $13.50 to $750 per tablet. Daraprim, or pyrimethamine, is at least 50 years old and is not covered by patent protection, so this was a brutal act. People have a choice in buying a cheaper car or not buying one at all but such choices do not exist in illness. Perhaps, the US government thinks that by allowing its companies to rip off its own people will justify ripping off people of other countries, which will be very lucrative. The US economy may not be as hot as they would like us to believe. Yields on junk bonds are rising and that has predicted a peak 8 out of 10 times in the past. Yields on junk bonds in the US rose by 47 basis points before the Great Depression of 1929, by 85 basis points before the Great Recession of 1937 and have risen by 120 basis points in the last 6 weeks. Record low interest rates have led to a boom in personal debts in the UK and 27 stock markets have given negative returns in 2015. By bullying weaker nations the US maybe precipitating a collapse of the global economy. Who will it trade with then?

What will we export when we make nothing?

A mid-year review by the Finance Ministry says that the GDP will grow between 7-7.5% this year, against a forecast of 8.1-8.5%. The plus points are that inflation is down, because of low commodity prices, especially oil, fiscal deficit will be within target of 3.9% and public investment in infrastructure has been galvanised. The minus points are that exports are falling, private sector investment is slow and the fiscal deficit target of 3.5% will be difficult to meet next year. The report suggests that government spending should be raised next year to stimulate growth, so a fiscal deficit of 4% would be acceptable. " The mid-term report recognizes weak demand as a key constraint and argues for the need to provide a policy stimulus to stoke it. There is no monetary or fiscal bazooka available to quickly revive demand. The rate cuts by RBI will mildly support the economy in the coming year. But this may not be enough," said DK Joshi, Chief Economist at Crisil. We have written many times that lower rates do not stimulate growth. We get less interest for our money while the rich borrow cheaply to increase their assets, so low interest rates merely transfer wealth from the middle class to the rich. Low taxes will increase demand by bringing prices down but this the government is unable to do because of the need for increased spending on infrastructure, to pay for the huge increase in salaries of useless civil servants, and the One Rank One Pension scheme. Allowing the fiscal deficit to increase, as the report suggests, is not easy. The government borrowed Rs 5.5 trillion this year to fund a deficit of 3.9%. The Reserve Bank raises money by selling bonds but the demand was so low that yields for 10 year bonds were at 7.8%, even though the interest rate has been reduced to 6.25%. If fiscal deficit is 3.5% next fiscal the government will need to borrow Rs 5.18 trillion, plus redemption cost of Rs 2.6 trillion, making a total of Rs 7.7 trillion. That will push bond yields over 8% and reduce liquidity by sucking out so much money from the market. Oil prices have reached bottom, so may start to rise and the Federal Reserve may increase rates further, putting pressure on the rupee, which will raise prices. What no one is telling us is whether increased consumer demand will boost our economy. Whatever we buy seems to be made by foreign companies. Cars, refrigerators, and even drinks are made by foreigners. Why do they keep whining about low interest rates when they are not interested in investing in India? A private company, Spacex has successfully brought  its first stage booster rocket back to earth. Who is the CEO of Spacex? Elon Musk. Our Prime Minister met him on a recent visit to Silicon Valley to request him to invest in battery technology in India. Americans invest, our fellows only ingest. So depressing.

Can you make liquor from milk?

One very big reason for Mr Nitish Kumar's victory in the recent elections in Bihar was that 63.6% of women turned out to vote, as against 56% of men. His promise of stopping the sale of all alcoholic drinks in the state drew in women and minorities. Even a couple of weeks back he promised to close down all liquor shops and enforce complete prohibition from 1 April next year. Bihar earned over Rs 30 billion from taxes on alcohol last year, whose loss will put a big dent in state finances, so a few days back Mr Kumar said that he will ban only country liquor, which are drinks brewed locally, but allow foreign made liquor sales to continue. Which is cute because the so-called foreign liquor is actually Indian Made Foreign Liquor, or IMFL, which is the official jargon for whisky, vodka, wine or beer. IMFL is brewed and bottled in India but the names sound foreign. To maximise revenues he has said that only government shops will be allowed to sell alcohol, so it will earn from commissions as well as taxes. Perhaps he is inspired by Tamil Nadu where the government earned Rs 210 billion in 2012-13 from its drinks marketing arm, known as TASMAC. Its revenues have rocketed from Rs 38 billion in 2002-03. This is certainly not what the women had in mind when they voted for him. To pacify the ladies of Bihar Mr Kumar has come out with a new wheeze. All liquor stores will be converted into shops selling milk. Maybe because the senior partner in his coalition government, Mr Lalu Prasad Yadav loves the " fragrance " of cows and his twitter campaign was conducted from a cowshed in Danapur. Bihar desperately needs investment. Will business leaders and foreigners be impressed drinking milk with soda or tonic water or on the rocks, we do not know. Perhaps, locals will find a way to ferment milk to make it more cheerful. Power is so addictive that politicians make wild promises which only increase the suffering of people as widows are finding out in Punjab where a bankrupt government is selling off widows' ashrams, jails and asylum land to raise money. Politicians and civil servants are protected for life at taxpayer expense while taxpayers get nothing. Delhi Chief Minister had made lofty promises to appoint a powerful Lokpal, or ombudsman, which will hold his government accountable. Turns out that those were total lies and the poison-pen bill introduced in the assembly is deliberately designed to precipitate an argument with the central government so that an effective check on government can be avoided. From 1 to 15 January cars with odd and even numbers will be allowed on roads on alternate days. Schools have been closed during those days, which will take thousands of school buses as well as private transport, used to take students to school, off the roads so that the government can claim success with its strong-arm tactics. Do politicians have a genetic defect?

If there is vendetta, why not seek political asylum elsewhere?

In the event it turned out to be more of a whimper than a roar. Mother and son turned up in court yesterday with posse of lawyers and were freed on bail of Rs 50,000 each and someone to stand as surety. Ms Sonia Gandhi is reputed to be worth $2 billion, although no one knows for sure because it is well hidden. Almost on the same day Martin Shkreli, CEO of Turin Pharmaceuticals, had to post a bond of $5 million on a charge of running a Ponzi scheme, so Rs 50,000, which is less than $1000, is a joke for someone worth a fortune. As expected the Congress resorted to insulting the Prime Minister, accusing him of " politics of vendetta ". Politicians are accomplished liars but even by their standards this is pretty pathetic because the case has nothing to do with the government, the Prime Minister or the BJP. It was filed by Mr Subramaniam Swamy in January 2013 when the Congress was in power and Modi was still the Chief Minister of Gujarat and had no way of knowing that he will win in a landslide in May 2014. In fact BJP supporters are astonished and disappointed at how restrained Mr Modi has been, considering the culture of corruption created by the Congress. The Gandhi family is not accustomed to anyone daring to question them so they were naturally furious at this audacity. At first they thought that they would refuse bail, daring the judge to jail them which would bring out millions of people on to the streets in protest and weaken the government. Comparisons were drawn with Mrs Indira Gandhi whose arrest in 1977 brought down the Morarji Desai government. That is probably why Ms Sonia Gandhi defiantly declared," I am the daughter-in-law of Indira Gandhi. I am not scared of anyone. I am not disturbed." It must have donned pretty swiftly on wiser heads in the Congress that Ms Sonia Gandhi is no Indira. Indira Gandhi was Indian, she was the only daughter of Jawaharlal Nehru, while there is another daughter-in-law of Indira Gandhi, named Maneka Gandhi, a minister in Modi's government, and Indira Gandhi won the war of 1971, which created Bangladesh. Also Morarji Desai was a Congressman and had been a minister in Nehru's government, so was seen as a traitor. Modi is no Morarji. The Gandhis can always seek political asylum in another country. The problem is that the Congress needs the Gandhis because without the family all the others will fight each other for power which will fulfill Modi's promise of making India free of the Congress. Their rage is born out of fear because Modi has no interest in collecting wealth, because he has no heirs to leave it to. If he dismantles the entire rotten structure built up over 67 years it will be impossible to build it up again. Hence the hatred. 

If everyone is too clever who wins?

Quaking with uncertainty and swallowing hard the US Federal Reserve raised interest rate by a timid 25 basis points, while repeatedly reassuring the world that the next hike, if it comes, is in the distant future. There has been enormous anticipation of when the Fed will raise rates with detailed analysis of how that will affect the global economy. As it happens there has been no reaction. Stock markets actually went up. So why bore us to death? Because low interest rates help the rich and the rich control the media. The rich have collateral and so can borrow at very low rates with which to buy assets, such as real estate and stocks, while those lower down the ladder get no returns from their savings. As cost of real estate rises the poor pay more in rent, which is a total waste, to those who own properties. This has given rise to a heated debate about how inequality is rising as wages have stayed stagnant, as productivity has risen sharply, while the rich have gained from non-productive financial markets. The top 1% already owns 48% of global wealth and another 5% owns 46% of the remaining 52%. To be fair, the strength of the dollar acts as a rise in interest rate by restraining inflation, because imports become cheaper, while exports become more expensive. If low interest rate helps the rich why did Joseph Stiglitz, certainly no right wing, write so strongly against raising rate? He says that keeping rate low will increase employment as people spend more on borrowed money, encouraging businesses to expand capacity on cheap credit. A tight labor market will raise wages and improve living standards. Stiglitz feels that an arbitrary upper limit of 2% on inflation should be abandoned and financial speculation should be curbed, but he does not say how. Global growth since the financial crisis of 2008 has been fueled by easy borrowing. Companies in emerging markets have borrowed $24 trillion and will have to more in interest. The rising dollar will also make the debt more expensive. Countries which depend on exporting commodities, such as Brazil, Russia and South Africa, will be very hard hit. And then there is China. In August China devalued its currency, the renminbi, by 2% but has been selling dollar securities ever since, to stem its fall. This had the effect of raising bond yields in the US and stopped the Fed from raising rate in September. This time the People's Bank of China announced an end to its dollar peg and moved to an exchange rate against a basket of currencies. This is apparently to depreciate the renminbi without revealing the extent to which it is falling so as to avert a currency war with other Asian countries, who will devalue their currencies to protect their economies against a flood of Chinese imports. Are the Chinese being too clever? Maybe they are not as inscrutable as they think they are.

Why is it so difficult to do simple things?

Courts are not meant to take policy decisions, only politicians can. A court can pronounce judgement on a matter before it, based on arguments made by lawyers, who are biased by whoever is paying them, but a judge cannot consult various sections of society and arrive at a compromise to benefit all, without victimising one section. The Supreme Court has banned registration of all diesel cars and SUVs in Delhi, with engine capacity above 2,000 cc, because these are owned by rich people. Why is it a crime for Indians to be rich? Last year 1.85 million cars were sold in India, that is less than half of what Volkswagen alone sold in China. A total of 23 million cars were sold in China and 16.5 million in the US last year. The Supreme Court also doubled the tax, cutely known as cess, on commercial vehicles entering Delhi which will increase prices of goods in Delhi, hitting long suffering citizens, while raising more money for politicians and civil servants to enjoy themselves. Motorcycles and scooters emit more harmful gases than cars, because they cannot have catalytic converters, but they are exempt, although they vastly outnumber cars. The order has confused car makers who do not know whether to continue to manufacture diesel vehicles. The automobile industry comprises 10% of the GDP, contributes 18% of excise duties and employs 19 million people, including in ancillary industries. Any damage to this industry has serious implications for the whole economy. Yet, the problem could have been solved so simply. The price of a barrel of oil dropped from around $115 to less than $40 last year, which was a golden opportunity to increase taxes on diesel and reduce them on petrol so that both cost the same as they do in the US and Europe. That would have increased tax revenues without increasing prices, because of the fall in input costs. More important, it would have moved car buyers away from diesel vehicles to petrol ones and given time to manufacturers to change their engines, without losing jobs. It would become profitable for truck owners to buy new vehicles with more efficient engines, which would increase sales and reduce emissions. We have written many times but we have no voice. Meanwhile, Ms Sonia Gandhi and her son Rahul may not seek bail in the National Herald case. We do not know if the Congress is planning to create riots in Delhi if mother and son are sent to jail, though they are saying that they will not. Of course, people could riot 'spontaneously', as they did in 1984, and then the biased media will mount a hysterical campaign against the BJP government. Delhi Police mercilessly beat up protesters of Nirbhaya's gruesome rape 3 years ago. During Congress times. The pollution of politics. In Delhi.

Tax breaks do not create genius, freedom does.

A well reasoned article asks if tax breaks are really necessary for Indian companies to invest in research, or not. Indian business leaders plead for cuts in taxes based on " misinformation and alarmist propaganda ". Earlier India did not protect product patent but only the patent on process, so pharma companies copied new drugs by a different process, to sell at cheap rates in India. So, they did research on copying but not on discovering new drugs. Why? Because it takes a lot of money to discover a new molecule and years of trials before they can be licensed for sale to the public and even then, there is a danger of lawsuits in case of side effects. It is much safer to cheat on a drug that has already gone through the process and has been licensed in other countries. In some ways it is good to delay the introduction of a new drug, as was dramatically shown by the Thalidomide disaster in the sixties which we largely avoided. Today Thalidomide is used under strict supervision in reactions to treatment in leprosy, which is sadly still a scourge in India. The author suggests that R&D can only come from competition as firms are forced to innovate or become irrelevant. Companies which adopt new technology, like Google, Amazon or Uber will create massive disruptions in the market and those that are unable to adapt will disappear. Most research in the US takes place in universities with funding from private companies, philanthropists and some from the government. In India politicians and civil servants keep a tight control of all funding and scholarships for further study abroad are available only to their children. Our best science students migrate abroad on scholarships from foreign universities so their inventions, such as the USB port and the Pentium Chip, benefit foreign companies. Indian companies cry for tax breaks partly because other countries give tax breaks to attract multinationals, partly because decades of socialism has created a culture of crony capitalism, which favors some while excluding others, and partly because all companies will try to pay as little tax as possible. US companies are stashing over $2 trillion overseas to avoid paying taxes in the US and the recent takeover by Pfizer of Allergan for an eye-watering $155 has given rise to accusations of 'inversion', because Allergan is based in Ireland. Perhaps the biggest reason for the lack of research in India is that our laws are unstable. Special Economic Zones were set up with great fanfare, where companies would get tax breaks to set up manufacturing, but when the Congress needed money for social schemes to win elections they suddenly imposed a Minimum Alternative Tax. The government does not need to encourage, the government needs to disappear.

Why are we always begging?

At the recently concluded climate conference in Paris India was pleading to be allowed to use coal to produce electricity for millions of people who are still living in darkness. All kinds of figures were trotted out: 300 million people in India are without electricity, 10-12 million young people will need jobs every year for the foreseeable future, China produces 28% of global CO2 while we produce only 6%, and average electricity consumption per person  in the US is 13,000 units per year, as compared to 1000 units per Indian. The conference was a complete stitch up because the 2 biggest polluters, China and the US, had already signed a deal which allows China to peak its pollution by 2030 and the US to cut pollution below 2005 levels. They get the biggest pieces of the emission cake while we were left begging for crumbs. The scene shifts to Nairobi for a meeting of the World Trade Organisation where again we are pleading to be allowed to dispense a few pennies in subsidies to our poor farmers while the US and the EU insist on the right to dish out tens of billions of dollars. We were beggars in 1965 when an American, Lester Brown could foresee a famine coming to India and was able to persuade President Lyndon Johnson to provide millions of tons of grains in aid. We now have buffer stocks of 61 million tonnes of grains by paying farmers a Minimum Support Price, which is fixed above market price, on 25 agricultural products. This is what India is fighting to protect. With such measures our farmers should have become wealthy, as they are in the west. Yet, farmers, even in prosperous districts, keep killing themselves. Why? Partly because excess numbers of children mean that farms have been divided into smaller bits until they are unable to provide enough income for families. But mainly because irrigation was not developed, leaving farmers dependent on the vagaries of monsoon rains. The European Union has strict rules about the quality of fruits and vegetables that maybe sold to the public. Indians, on the other hand, have to spend lots of time finding good pieces. Even so apples maybe full of worms, mangoes maybe rotten inside, while looking perfect from the outside, and cucumbers maybe intensely bitter. Instead of wasting money on subsidies why can't our agriculture department sell seeds of top quality fruits and vegetables to farmers at reasonable prices? Instead a vocal group of scientists is clamoring for genetically modified food, which will give control of our food production to foreign companies. GM plants resistant to one variety of pests can succumb to another. Ask the farmers in Punjab. Meanwhile the Prince of Congress is so worried about our farmers that he will not allow any land to be sold, so farmers will locked into their miserable poverty forever. So, we continue to beg at various forums. We should be so proud.

It is the color of money which decides prices.

Retail inflation in India has gone up again and it seems that wholesale prices will also start going up soon, after falling for one year. Why is India so prone to rising prices, but not China where the inflation rate was 1.5% when the government is trying to move the economy from investment led growth to consumption led growth? Per capita GDP in China is $7593.9 compared to that of India at $1595.7, so spending should be many times that of India, putting upward pressure on prices. Because a great part of the Indian economy is conducted in cash and employs 90% of the workforce. It is estimated at 40% of GDP, at $780 billion. Although this money maybe defined as black because it generates no income tax there is another economy floating parallel to the real one, financed by bribes, extortion and scams. A report by a think-tank estimates that $51 billion in black money flowed out of India every year from 2004 to 2013, during Congress Raj. No wonder the Congress is using every trick to block the Goods and Services Tax bill, which will eliminate evasion of taxes to a large scale. They disrupted the Lok Sabha because the Chief Minister of Kerala was not invited to a function, organised by a backward community in Kerala, and attended by the Prime Minister. Firstly, the chief minister does not own the state and secondly, organisers have the right to invite, or not, anyone they please, to a meeting. The nation held hostage to manufactured outrage by a party which has kept the country poor for 67 years and destroyed the economy in the last 10 years of its rule. If $51 billion is flowing out of the country many times that amount is flowing into real estate inside the country. Land grabbing in the name of the poor is an extremely lucrative way to make billions. Slums have taken over more than 60 hectares of prime land belonging to Indian Railways, in Delhi. This is said to cost Rs 60 billion but it could be double that if the black money part is taken into account. The AAP government, which is planning to increase auto-rickshaws by another 10,000, by banning private cars, has forbidden demolition of the slums. Add to the vote bank by making us miserable and destroying the rule of law. The Railways, which is the lifeline of the country, spent 97.8 paise for every rupee it earned last year. This is set to rise to 110% once the unjustified pay hikes of over 23% kicks in. Since independence a vast system of corruption has locked the country into its tentacles. Politicians, civil servants and business fellows are collaborating in looting the people and they have bought the media to mount a series of false hysterical attacks on the government to stop it from functioning. The dark side always wins in real life.

If there is no work what will people do?

Our Prime Minister is frantically trying to increase manufacturing in India under the 'Make in India' initiative to create millions of jobs for around 69,000 people who are turning 25 years old everyday in our country. The revolution in Egypt that overthrew Hosni Mubarak is a lesson of the dangers of unemployment and poverty. But can India become a manufacturing hub like Japan, South Korea and China did? Regardless of all the advances in computers and space travel, human beings will still need clothes to protect us against the weather. To make clothes we need yarn which will come from cotton, which has to be grown by farmers, or from polyester, which is manufactured in factories from petroleum. The yarn will need to be tailored into clothes before being transported into stores for us to buy. So for every shirt or trouser that we wear a chain of people is working to provide it. Likewise for every car we drive in, every house we live in and every bulb we use to light the house at night. Manufacturing will always be needed, so all we have to do is to provide the infrastructure and simplify the rules and companies will rush in to build factories to take advantage of the cheap labor that we have in abundance. But it is not that simple? The nature of work itself is changing as efficiency of production has resulted in the manufacture of higher quality goods with fewer people. Developing countries, like India have moved into services without first establishing a large manufacturing base. This has been labeled " premature deindustrialization " by a professor. As artificial intelligence and robotics develop more and more manual jobs will be done by machines, which work 24/7, produce prefect results every time and do not need salaries. Therefore, those who are educated or highly skilled will get high end jobs with huge salaries while others will be employed in part-time or low end service jobs which pay little and offer no benefits. But strangely, by 2014 the global Total Factor Productivity, which measures combined productivity of capital and labor, was zero for 3 years running. TFP was down 1% from 1996-2006 and down 0.5% from 2007-2012. Surely if productivity is declining then employment of young people should be rising? But that is not happening. As technology changes the resulting disruption results in falling productivity at first which then begins to rise. This is best illustrated in how medical records are filed. As electronic systems take over there is increasing confusion as these systems are incompatible and hence do not communicate with each other. The first industrial revolution resulted in vast numbers of deaths as western countries conquered peaceful peoples to exploit natural resources, finally resulting in the 2 world wars. Is that what is happening now as new technology disrupts the old order? In which case more wars are yet to come. Terrifying thought.

Should we be forced to walk while they travel in convoy?

Like mafia bosses Indian politicians are used to making arbitrary decisions and enforcing them on us, because it suits them to do so. The decision to ban cars with odd and even registration numbers on alternate days has been taken, not because it will help people by reducing pollution, but because it is a means of earning cheap popularity by socialists who seek to please their 'vote bank' by tormenting the middle class. It is shameful, because it is mean and vindictive. Of course, politicians cannot get away with their nefarious activities without the support of an army of sycophants, known as 'chamchas', which means 'spoons'. A poll has found that 58% of people in metro cities think that restricting private cars will reduce pollution. How many people were asked? A grand total of, wait for it, 528 people in 6 metro cities, of which half, or 264, were in Delhi. The population of Delhi alone is over 18 million. We are not told whether these are car owners or are plain jealous. True, Delhi, at 10.79%, has the highest rate of people commuting to work by car, followed by Chennai at 6.14%. That is because public transport is very poor in Delhi, distances are vast, sexual harassment is rampant in buses and very often you need a vehicle to get to the nearest metro station or bus stop. Very few people drive for pleasure because poor traffic management results in massive traffic jams. The Traffic Police in Delhi never help the people by ensuring a smooth flow of traffic but are used to extract fines from drivers, often on flimsy grounds. Why is this order pure political thuggery? Because two-wheelers will not be affected, even though they cause 31% of pollution as against only 20% by cars. A study by IIT Kanpur says that car and jeeps contribute less than 10% of pollutants. Dust particles are a major hazard and huge amounts of dust are produced by construction activities, most of it illegal, in Delhi. Since that is where the black money is politicians conveniently ignore it. Not only that, motorcycles and scooters are greater pollutants than cars. They emit less CO2 but far more of other toxic gases which are worse for human health so exempting two-wheelers shows that the Delhi government is fooling people while potentially increasing earnings of auto drivers, who are great supporters of the Chief Minister. No doubt politicians will continue to be escorted by a posse of police cars with flashing red lights, known as 'lal battis' by the hapless suffering populace. To put it in perspective, 30% of people do not commute to work, 22.6% walk, 13.1% travel by bicycle, 12.7% travel by two-wheelers and 11.4% by bus. That comprises a huge 89.8%. Shouldn't our politicians be trying to ensure that everyone is rich enough to possess cars? Then they would not be able to win elections with socialism. So keep everyone poor. Scum.

Should promises not be made expensive?

Bihar has always been the bottom state in India in development, education and poverty. But it is very high in fertility and in the rate of violent crimes, second only to UP on both counts. Unless these states are brought up to the standards of the front runners, such as Haryana and Maharashtra we will have to see more shameful headlines about having the highest infant mortality in the world. Mr Nitish Kumar who has been Chief Minister since 2005, in alliance with the BJP, has a reputation for development. He was reelected last month, but this time as junior partner to Mr Lalu Prasad Yadav's RJD. His victory was partly due to votes based on caste and religion and partly on the promises of spending Rs 2.7 trillion on free electricity connections for all, unemployment benefit of Rs 1000 per month, new roads, water for every household and a toilet in every house. Perhaps Mr Kumar's victory was possible because women outnumbered men, because of promises of jobs for women and a ban on all forms of alcoholic drinks. He will lose Rs 40 billion in taxes on alcohol. Nepal, where alcohol is freely available, should sort out its problems with its new constitution quickly because it stands to make serious profits from smuggling. Politicians, police and civil servants will succumb to huge bribes from criminals. Illegal hooch will kill people. It will be interesting to see how Mr Kumar will keep control. It will make Bihar less attractive for investments. Since 1980 Bihar has been the poorest state in India by GDP, as well as by per capita income. Investments tend to go where there is good infrastructure and a pool of educated workers to pick from. That is why Maharashtra, Tamil Nadu and Gujarat attract investments, even though Gujarat is a dry state. No investor will go to a state where his children are in danger of being kidnapped, his wife raped or his fancy car taken away by force by local goons, protected by politicians. That is where good governance is so important. How much blood money Mr Kumar will have to pay his new partners for his victory remains to be seen but the immediate problem will be how he will pay for all the extravagant promises he has made. His friend Mr Kejriwal, Chief Minister of Delhi also made many extravagant promises which he cannot fulfill, except for free water and cheap electricity for the poor. Delhi is a dirtiest capital city in the world, with broken roads and frequent power blackouts, while Mr Kejriwal spends his time in histrionics and insulting the Prime Minister in crude language. Promises are free and prohibition has failed in every country where it was introduced. Mr Kumar campaigned on a slogan of " Bihari (a native of Bihar) vs Bahari (outsider) ". What should be his punishment if Bihari remains a word of abuse in the rest of India? Perhaps he is the best person to tell us.

The ultimate revenge?

Anyone who follows daily news will have been alarmed by reports of rising antibiotic resistance in bacteria. Bacteria containing the MCR-1 gene, resistant to every known antibiotic, have been discovered in China and Denmark, giving rise to predictions of a massive rise in mortality in sick people. How do bacteria become resistant to antibiotics considered 'strong' by humans? We have to remember that humans, or Homo sapiens, have been around for a maximum of 200,000 years while bacteria have been around for over 3 billion years. How do bacteria become resistant? Some maybe naturally resistant, and these strains take over when the susceptible ones are killed by antibiotics. Others may develop resistance through genetic mutations and still others pass resistance genes between each other. While we can transfer genetic material from one species to another only in very high-tech labs bacteria can transfer resistance genes to a completely different species, for instance from E coli to Klebsiella, naturally. Clever little blighters. In 2013 there were 480,000 new cases of Multi Drug Resistant tuberculosis in the world and 100 countries have reported Extreme Drug Resistance. The sexually transmitted bacteria, the gonococcus, has developed resistance to almost all drugs used in its treatment. Doctors are told not to prescribe antibiotics unnecessarily, for instance in viral infections, and to prescribe the right dose so as to prevent resistance developing. Our government is to issue guidelines so as to restrict prescription of antibiotics by doctors. It would be laudable if it were honest. Surely, pharmaceutical companies have a lot to gain by discovering new molecules to treat infections? Turns out that there has been no significant discovery in half a century. Why? Because it is expensive to find new molecules, they maybe be open to court cases in case there are side effects and their main sales are not from humans from but from animals. Vast amounts of antibiotics are used in animal farming, often in sub-therapeutic doses to prevent infections and promote growth. Apparently, 12,000 tons of Colistin, used as a last resort in humans, is used annually in livestock. Antibiotics are also used in salmon farming. No one can stop them because farmers are 'vote bank' in India and in every other country in the world. While human doctors are regularly lectured on restricting the use of antibiotics veterinary doctors are not. Dogs affected by Parvovirus are treated with Ceftriaxone+Tazobactam, used to treat serious meningitis in humans, Piperacillin+Tazobactam, used to treat the dangerous Pseudomonas, gentamycin, used for gram negative bacteria, and metronidazole, used for amoebiasis. We are super predators and animals are helpless but we maybe wiped out by resistant bacteria due to animals. The ultimate revenge. Ironic.

Should they be so sanctimonious?

Donald Trump has done it again. He said that all Muslims should be banned from entering the US until " our country's representatives can figure out what is going on". The statement looked totally premeditated and it seemed that he enjoyed making it because he repeated " what the hell is going on ", knowing that it would unleash a firestorm of outrage. Earlier he has suggested surveillance of all mosques in the US and a database of all Muslims living in the country. Criticism was swift and severe, especially from liberals. " The fact is what Donald Trump said yesterday disqualifies him from serving for president, and for Republican candidates for president to stand by their pledge to support Mr Trump, that in and of itself is disqualifying," said the White House Press Secretary. Some think that Trump is a closet Democrat who is dragging the Republican Party to the right so as to help Hillary Clinton win the presidential election next year. Whatever politicians may say many Americans support Trump's views. 49% of Republicans and 41% of Democrats supported a database on Muslims and 56% of Americans agree that " values of Islam are at odds with American values". 68% of Trump's supporters will vote for him even if he runs as an independent. So, are all these Americans redneck Christian fanatics, like the man who killed 3 people, including a police officer, at a Planned Parenthood clinic, because he is against abortion? An American Muslim wrote an angry article, listing wrongdoings by the US and European countries against Muslims. True, but why do millions of people from Muslim countries beg to enter western countries if they are so bad? The US used nuclear weapons against Japan, napalm in Korea and cluster bombs and agent orange in Vietnam but citizens of these countries do not go around killing innocent people as happened in Paris and San Bernadino. The writer says that these are a " vast minority of the Muslim world ". Are they? ISIS did not emerge from the air like some jinn but received financing from wealthy Arabs from Gulf countries. The governments of these countries are known to be financing Sunni terrorist groups throughout the world. Turkey has been bombing Kurds, who are the only group fighting ISIS on the ground, as opposed to bombing them from the air. And then there is Pakistan. The Mumbai attacks were planned and coordinated by the ISI when anti-Hindu Congress was in power. Hafiz Saeed is walking around free as is Dawood Ibrahim, both protected by the ISI. Even now Pakistan is trying to hide terrorist schools in Multan. We know about Bin Laden. If governments are financing and protecting terror groups then we are not talking about 'tiny minorities', are we? Not only do so-called liberals keep insisting that it is a tiny minority but if anyone disagrees he is a bigot. Sanctimonious liars. 

Socialism is here to stay.

At last some sanity in Venezuela. The opposition has won two-thirds majority in the National Assembly, bringing an end to 17 years of socialism, started by Hugo Chavez and followed by his successor Nicolas Maduro. He started free clinics for the poor, redistributed land, subsidised education and distributed cheap food. Quality of life improved, literacy rates went up and the Gini coefficient dropped from 50 in 1998, when he first came to power, to 39 in 2011. It all sounds fantastic but, as has been proved repeatedly from the collapse of the Soviet Union to the fall of the Berlin wall, redistribution does not work. Socialist policies resulted in hyperinflation and when the price of oil fell Venezuela suddenly found that it had no money to import products essential for daily life. People were forced to queue overnight to buy food. This in a country with the largest oil reserves in the world. The currency, the Bolivar Fuerte, which means the 'strong Bolivar', is officially pegged at 6.35 to the US dollar but in the black market it was 730 Bolivars to one dollar in September. Last month Argentina elected Mauricio Macri as president, to succeed Cristina Fernandez de Kerchner. Again her socialist policies have resulted in an inflation rate of 14.3% in October, down from 23.91% in January. The country defaulted on its foreign debt in 2001 and again in 2014. Argentina apparently produces great economists but has always had a lousy economy. In Brazil inflation rate is at 9.93% even though the interest rate is at a high of 14.15%. The GDP contracted by 4.5% in the third quarter which is 3 straight quarters of contraction, which means that it is in recession. The currency, the Real, is down 26.7% against the dollar in the last 6 months, which will only add to inflation by making imports more expensive, even as the collapse in global commodity prices is hurting revenues. The opposition is preparing to start impeachment proceedings against President Dilma Rousseff. Yet, for a while, it was going very well. The Bolsa Familia program, started by the previous president, Lula Da Silva, was hailed as wonderful because it paid mothers in cash for every child sent to school and for regular medical checkups. That was what gave rise to the hysterical demands for 'targeted subsidies' in India. This after the socialist policies of the Congress resulted in inflation soaring over 14% in 2009. It is shown repeatedly that distributing handouts based on high levels of taxation causes inflation, reduces growth and results in increased poverty. So will socialism die in ignominy, as it deserves to. No. Because wealth produces envy, even though capitalists like Henry Ford, Larry Page and Steve Jobs invent new products which enrich our lives, while Marx, Lenin and Mao produced nothing. Politicians exploit this envy to promise instant riches and the cycle keeps repeating.

Why blame the climate, just admire the benevolent stickers.

Although this is the time for northeast monsoons in Chennai, it has been flooded as it received double the amount of rain that it receives every year. Chennai is on the coast of the Bay of Bengal so the water should run quickly into the sea but water has built up inside the city instead. Of course, being a coastal area it is flat but the real cause is construction of 150,000 illegal structures, cutting down of 52 acres of forest, including 8,000 trees and the disappearance of 300 tanks, canals and lakes, because of construction. Why do the authorities allow illegal constructions? Because that is where politicians, civil servants and business fellows park their black money. We remember the trillions of rupees in black money generated from scams during the 10 years of Congress raj. We can get a rough estimate of the enormous scale of black money in India when we see that a 3-bedroom apartment in Malabar Hills in Mumbai costs $1.9 million while the median price of an apartment in Manhattan in New York is half at $980,000. The other reason is buying votes by regularising unauthorised construction in the name of helping poor people. But what it does is to legalise criminal land grabbing and building of unsafe structures which will collapse instantly in an earthquake and, to add to the fun, the lanes are so narrow that rescue personnel, such as the ambulances and fire tenders, will not be able to enter. No doubt, the land mafia contribute handsomely to political parties for election campaigning. Help politicians to help the poor, how noble. Except when Mother Nature decides otherwise. To show their concern for the victims in Chennai party workers would not allow relief packets to be distributed unless they had stickers of benevolent pictures of Tamil Nadu Chief Minister, also known reverentially as Amma, which means 'mother'. Luckily, heroic efforts of ordinary people helped to mitigate some of the suffering of the victims. The phenomenal rise in land prices has corrupted the entire economy. The Securities and Exchange Board of India is worried about diversion of funds raised from Initial Public Offerings on the stock markets by the promoters of companies. Public sector banks are unable to deal with the pile of bad debt because business fellows had borrowed huge amounts with no intention of repaying the loans. Special Economic Zones set up Congress to boost trade, in an imitation of China, failed miserably because IT companies shifted there to take advantage of the tax holiday and 52% of the land lay idle, presumably because fellows were waiting for prices to rise before making windfall profits. Once the waters recede the media will move on to some other event and everyone will forget. Except those who have lost everything.

Why are we cursed in Delhi?

Ever since he came to power in Delhi earlier this year by a landslide, winning 67 seats out of 70 in the assembly, the Chief Minister, Arvind Kejriwal has been engaged in a guerrilla warfare with the Prime Minister. Burning with hunger for power his attacks on Mr Modi lack any basic courtesy, manners or respect. He came to power promising 1.5 million CCTV cameras for safety of women, making Delhi a hub for education and tourism, building primary health centers, schools and colleges and reducing VAT. He has done nothing. There was a massive Dengue epidemic this year, 38 people died. Why? Because Dengue is spread by mosquitoes, mosquitoes breed in stagnant water, water stagnated because drains were blocked, because Kejriwal would not release funds for the municipalities, which are controlled by the BJP. When people started to die he forced hospitals, including private ones, to accept more patients, for political grandstanding, completely ignoring the fact that hospitals cannot increase the number of beds in Intensive Care or trained nurses to care for very sick people in a short space of time. What he has done is to stop police from booking auto-rickshaws so that they are charging whatever they want, driving dangerously and creating traffic jams by indiscriminate parking. There are electricity black outs almost everyday, which never happened last year when there was no government in Delhi. In response to the High Court describing Delhi as a gas chamber, because of air pollution, Kejriwal has decreed that from 1 January vehicles with odd and even numbers will be allowed on streets on alternate days. Because Beijing did so. He probably fancies himself as a dictator, as in China. Which will create the mother of all chaos. Delhi does not have a public transport system like Kolkata, distances are enormous and there are no pavements for walking safely. Rich people can have 2 cars with odd and even numbers but the middle class will be severely restricted. They will be forced to take auto-rickshaws or taxis so we can expect fares to soar. The worst affected will be Delhi's offices and businesses because most of their employees commute on two-wheelers. Deliveries for e-commerce companies and takeaway food outlets depend exclusively on motorbikes, which would presumably be cut in half. If he had overseen cleaning and repairing of roads so that traffic moved smartly vehicular pollution would be cut in half as jams would disappear. To get cheap publicity Kejriwal wanted to facilitate cricket players on the playing field in Delhi, while a test match is in progress. Our lives have become miserable since this man grabbed power over us. To reward himself for our misery he has increased salaries of Members of the Assembly by 400%. Presumably his salary as well. What a curse on all of us.

What is the collective noun for a group of villains?

We know that President of Turkey, RT Erdogan is a cunning Islamist dictator who has increased his power by tying his opponents in a series of false cases. First he took help from a Muslim cleric, Fethullah Gulen, founder of the Gulen movement, to emasculate the army. Having achieved control over the armed forces Erdogan has turned against his former friend and accused Gulen of plotting a coup. Gulen is now hiding in the US. Prosecutors investigating corruption charges against Erdogan's family and top officials have fled the country before they were themselves arrested. Only a few years back Erdogan was signing business deals with Syria's Assad, yet now hates him so bitterly that he is helping ISIS to destroy Assad. Saudi Arabia and Qatar have been financing terrorists in Syria through Turkey, much as the US financed Afghan Mujahideen through the ISI in Pakistan and allowed Pakistan to develop nuclear weapons. Western powers are bombing ISIS from the air but the only trained fighters who are engaging them on the ground are the Kurds. Instead of bombing ISIS Turkish jets are bombing Kurdish fighters in Iraq and in Syria. In general elections in June Erdogan's party failed to win absolute majority in parliament and the Kurdish party, the HDP won seats for the first time. Erdogan wants to increase his powers as president so he mounted a vicious campaign of intimidation against the HDP which was so successful that his party won majority in parliament in new elections last month. He must have thought that he was invincible. Until Russia joined the fight against ISIS. One of the main sources of revenue for ISIS has been oil from Syrian refineries that it has captured. Russia started targeting ISIS oil trucks which enraged Erdogan because his son, Bilal is making handsome profits from smuggling ISIS oil. Russia has revealed satellite images as proof of ISIS trucks going into Turkey. Seeing his machinations beginning to unravel Erdogan got his air force to shoot down a SU-24 jet returning from a bombing mission in Syria. The plane had apparently crossed Turkish territory for 17 seconds. The plane was shot from the rear. The 2 pilots bailed out and were shot at by terrorists on the ground, no doubt having been primed by Turkey. Instead of contacting Putin, Erdogan quickly contacted NATO, in an effort to precipitate a war between Russia and NATO. The US apparently knew the exact flight path of the doomed plane which would not be a surprise because US and Russian commanders agreed to work together so that their planes do not clash accidentally. Obama has been inciting Russia, first by engineering an armed coup in Ukraine, then by applying sanctions and now by inviting Montenegro to join NATO. Meanwhile, David Cameron has been itching to bomb Syria, not having learnt from having caused a disaster in Libya. Seems that all the stupid villains have come to power at the same time. God help us.

If the world grows equally present inequality will remain.

Macroeconomics is enormously complex because the world keeps changing, new countries emerge, number of people keeps increasing, access to information means that people are no longer willing to accept the permanent hold on power of the old ruling class, as the Arab Spring demonstrated, and what happens in one part of the world influences events far away.  Economists are realising that a lot of classic teaching in economics is wrong, probably because human beings do not react logically, like machines. Their models are insufficient in today's world and they must study how historical events have shaped economic development. One says," Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist." Another has worked out that for Canada to reduce its carbon emission the economy has to shrink to 1976 level and working hours of Canadians must decline by 75%. So, will the world survive if economic growth falls to zero? In the first millennium of the Common Era personal incomes fell in Byzantium and Egypt. In the 500 years preceding the industrial revolution there was no growth in Europe. " Zero growth gave us Genghis Khan and the Middle Ages, conquest and subjugation." The industrial revolution, fueled by fossil fuels, increased wealth, ended slavery and led to democracy. That may have been the end result but the industrial revolution was based on colonisation of Asia, Africa and the Americas, resulting in the deaths millions of original inhabitants and marginalisation of indigenous peoples. Inca and Mayan civilisations were wiped out, hundreds of millions died in famines in India, as the British looted our grains, and Inuits in Canada, Native Americans in the US and the Aborigines in Australia are still fighting for their rights. After World War II western powers cornered top positions in all international institutions, such as the UN Security Council, the World Bank and the IMF. They had advanced technology so they could buy commodities from the newly independent countries and sell them finished products at inflated prices. The sudden rise in the price of oil from $3 a barrel to $12 dollars a barrel in 1973 resulted in a steep recession in western countries and led to the invention of the term 'stagflation'. Economies of Japan, South Korea, Malaysia and China grew fast on exports of manufactured products, using energy from fossil fuels. India and African countries are following suit. Western nations are trying to protect their superiority by bullying poor countries at the WTO and the Climate Conference but no one is listening. It is no longer possible to colonise other nations through force so the US has resorted to negotiating trade blocks like NAFTA and TPP and is negotiating TTIP with Europe. Resources of the world being finite growth can only come through exploitation so conflicts will increase. If the world grows equally the west will retain its superiority. That is what they are trying for.

Should we not control our climate before nature does it for us?

Having contributed their share of hot air, adding to global warming, strutting world leaders have returned home, leaving their lackeys to continue with the talkfest at the UN Climate Change Conference in Paris which is scheduled to end on 11 December. The US and China have already agreed a deal to hoodwink the rest of the world with the usual diplomatic rhetoric. The US will try to cut emissions to 2005 levels by 2025 and China will peak its emission by 2030. The US generates 67% of its electricity from fossil fuels, 39% of it from coal. With a population of 300 million the US produces 4.686 billion MW.hr/year while India, with a population of 1.3 billion, produces 939 million MW.h/year of electricity. Yet, the BBC has been concentrating on India's use of coal in producing electricity. The US and Europe point to the total amount of greenhouse gases emitted by India, which makes us the third largest net polluter, while we talk about output per capita. India says that rich countries industrialised over 100 years ago by using vast amounts of fossil fuels and should now pay for poor countries to shift towards renewable sources of energy, which cost a lot more than coal. The US is the highest consumer nation in the world, with consumer spending of over $11.3 trillion in the second quarter of this year, while consumers in India spent around Rs 16 trillion over the same period, which converts to just $267 billion. Much of world trade depends on consumption in the US. The average size of an apartment in the US occupies 2,600 sq ft for an average family size of 2.4 people, while an average of 4.8 people are crammed into an average flat of just 504 sq ft in India. And therein lies the problem. We have 3 times the number of people, compared to the US, which has 4 times the land area, compared to India. What the rich countries are not saying, because it will be politically incorrect, is that it is India's fault for not bringing down the number of people. Not only are we reluctant to discuss ways of reducing the number of people, we are actively encouraging excess of births, especially among the poor, by a vast number of social schemes, distributing handouts. Our exports have fallen for 10 months in a row to $21.84 billion in September. While consumer spending is the same money going from one pocket to another, exports bring in new wealth. China exported over $200 billion in September, which is why it is so rich. But the US is also a net consuming nation, so why is it the richest? Because it is the only nation which can print dollars and we need dollars to buy oil, gold and pulses. Rich nations consume a lot of meat which add to greenhouse gases while we are still calculating how many grams of pulses are needed for our children to grow. The floods in Chennai are a proof that poor nations will suffer much more from climate change. We have tot act now. Else mother nature will do it for us. That will be brutal.

Why such intolerance of reforms?

How have Japan, Korea, Singapore and China become so rich while India has remained poor? They took advantage of an abundance of cheap labor to manufacture cheap goods which they exported to other countries. In other words, they used the poverty of their people to grow rich. Businesses are of 2 types - tradable and non-tradable, explains a professor from Harvard. Grocery stores, beauty parlors, and movie halls are examples of non-tradable activities. However, countries cannot produce everything and so have to import them from other countries. Oil, planes and even food have to imported. To pay for these we have to sell products that other people want, a kind of gift exchange system. But other nations cannot be forced to buy our products because they have a wide choice of producers from different parts of the world, which means that the products we manufacture must of high quality, at reasonable prices, so that they can beat the competition. Quality can only come from a high degree of specialisation and a low price from very high productivity. Our diamond polishing sector is an example of using cheap labor to produce high quality finished products, 90% of which is exported. To manufacture goods for exports requires highly skilled labor, great infrastructure and a constant upgrading of technology so as to be the best. Nokia, once the largest handset maker, has almost disappeared after the appearance of the IPhone and oil prices have dropped more than 60% because of US shale oil production. It is very hard work. Much easier to have a protected market, with import restrictions, which make it easy to sell shoddy products to fellow citizens, and lots of tax exemptions to make easy profits. The Ambassador car started to die when the tiny Maruti 800 hit the roads in India. Socialism was written into the constitution by the Congress which protected our fellows and allowed redistribution. That brought the country to near bankruptcy in 1991, when Narasimha Rao instituted the first phase of reforms, by devaluing the rupee and opening up many sectors of the economy to foreign competition. The Congress has tried to wipe out his achievements. AB Vajpayee continued the reforms which led to the high growth rates between 2004 to 2007, which was squandered by the Congress on expensive social schemes to buy votes. Now Modi wants to continue their path with tax reforms, which will bring down corporate tax rate but eliminate all exemptions. He wants to stimulate manufacturing so that people have jobs and are not dependent on handouts. In the US 34 to 56 cents leak out of every dollar spent on redistributing wealth from rich to poor. In economics this is known as 'Okun's bucket'. In India 84 paise leak out of every rupee. Reforms will severely cut this loot. That is why there is a manufactured outcry against 'intolerance'. Actually it is intolerance of reforms. By the crooks.