… We are such stuff
As dreams are made on; and our little life
Is rounded with a sleep.
    Shakespeare’s The Tempest
Writing in the Dec 28th, 2003 edition of The Week, President Kalam says, “In the 21st century, knowledge is the primary production resource instead of capital or labour.”
I have been unable to fully comprehend that insight, fundamentally because it does not make any sense. Sounds profound but makes no sense. What is a ‘primary production resource‘? Did Kalam imply that once upon a time capital and labor were …

The anniversary special of the newsmagazine The Week of Dec 28th, 2003 has lots of stories of the warm and fuzzy feeling variety. I went through the breathless prose of a large number of luminaries in it, including that of President Kalam’s. What especially caught my eye was an article in the section BestofTheWeek2003 section from their Jan 26th issue — the Republic Day issue — titled simply SOLD.
The story was about panchayats in rural India, specifically about women being ‘fined, humiliated, and sold to the …

Do I dare Disturb the universe?
The Law of Unintended Consequences is pretty well known, I suppose. It is part of a more general law which I call the Zeroth Law of Ecology which says that you can never really do only one thing. That is, you want to do only A and instead you find that you have also done B and C, both of which you had no inclination to do. This is because the universe is complex and all its parts …

The transition from an agrarian to an industrial society was the great challenge that faced economies before. Much attention was paid on ways to make the transition. Of the various models of development (such as export-led growth, import-substitution industrialization, and others) used it is instructive to recall one called agricultural development led industrialization, or ADLI.

ADLI recognized that cost-reducing technological change increased agricultural productivity and therefore increased rural incomes. Increased rural incomes provided a demand boost for manufactured goods both for consumption as well as for use in agricultural production. The …

India’s rate of economic development has not been very impressive by most standards. But compared to what it was prior to independence, there is cause for celebration. At independence in 1947, India was an extremely poor country with an annual per capita income of only $50 for its 350 million people. Life expectancy was 32 years and literacy rate was 17 percent. National savings rate was around 10 percent. Agriculture accounted for 60 percent of GDP and 80 percent of employment. Per capita food production and …

So here is something that does not surprise me in the least: Vajpayee has called for a common currency for the Indian subcontinent.
Actions recommended and taken on the basis of pious hopes are par for the course. Let’s be nice and in turn they too will be nice, that is the pious hope. Let’s take a bus yatra and shake hands and recite some neighborly poetry and they too will respond in kind. Yeah, really. Never mind the fact that a thousand of our miserably equipped soldiers had to …

These days one of the dangers of reading newspapers is that one is faced with yet another article on business process outsourcing (BPO) and how there is a backlash from specific sectors in the developed countries. It makes for breathless copy and many of these articles are mere regurgitation of rehashed articles on the same subject. What is the broader context in which to locate all this talk of BPO?
Let’s step back a bit and look at an economy from a macro viewpoint. Economies are usually …

This is a continuation of my previous post on HRD and management institutes. I had ended that post with the recommendation: Increase fees to be more aligned to the fees for comparable schools around the world and provide student loans to all students who require it to pay for their IIM education.

This one is in the context of an entry on HP’s Thin Client at Rajesh Jain’s weblog. In response to a bunch of comments on that entry, Rajesh wrote to me:
I think we will need to create the large domestic markets for the affordable computing solutions.
I totally agree. And I am thankful for one positive factor in India’s favor.
The most significant positive factor in India’s favor is its size. It is what we economists call a “large economy”. Large economies have the luxury of changing parameters which define …

Anish Sankalia sent me an article where Andy Mukherjee warns that India’s Enemy Within Can Douse Explosive Growth. The enemy he identifies is government debt.

For India to emerge from being an impoverished country, some degree of sanity in policy makers must be an absolute precondition. The situation is so bad that one cannot read a paper without being hit in the gut with yet another insane policy being proposed. Take the matter of the Indian Institutes of Management (IIM) and what the Ministry of Human Resource Development (HRD) is proposing.

Francois Gautier is one of my favorite journalists. In rediff.com he asks why the Indian government considers foreigners as cows to be milked. Blatant discrimination against foreign visitors cannot go unnoticed and cannot but have an effect on the volume of foreign tourism.
Who are these bureaucrats that make such brain-dead decisions? How can we bring about a change in their thinking? How can we persuade these cretins about the need to be somewhat intelligent in their policy making? Is there any hope for India if we continue to …

It is important to remind ourselves from time to time what poverty is all about. Poverty has something to do with production. Not exactly the most esoteric bit of knowledge but often it gets forgotten in the shuffle. To produce you need to have what we call factors of production which are usually broadly classified into land, labor, and capital.

Why the law of one price astonishes people is astonishing to me.

BusinessWeek online in its Dec 8th 2003 cover story The Rise of India says “Growth is only just starting, but the country’s brainpower is already reshaping Corporate America.” It is worth the read. Here is an excerpt:
If India can turn into a fast-growth economy, it will be the first developing nation that used its brainpower, not natural resources or the raw muscle of factory labor, as the catalyst. And this huge country desperately needs China-style growth. For all its R&D labs, India remains visibly Third World. IT service exports employ …