LibertyVoter.Org

By Swaminathan S. Anklesaria Aiyar

Swaminathan S. Anklesaria Aiyar

Many expected Prime Minister Narendra Modi to follow the radical reform path of other muscular, popular leaders such as Ronald Reagan and Margaret Thatcher. Instead, in his first 100 days, he has opted for incrementalism, with more continuity than radical change. To reformers, he looks less like Reagan or Thatcher than Pappu in AR Rahman’s hit song a few years ago.

“Hai muscular. Hai popular… But Pappu can’t dance, saala!” Modi prefers a slow, steady jog to a vigorous break-dance. The budget was a clear sign of continuity with incremental change. This newspaper called it a Chidambaram budget with a dash of saffron lipstick. It accepted all the budget projections and future fiscal targets of Chidambaram that BJP had flayed as unrealistic before coming to power. It stuck with retrospective taxation, the old tax structure and old subsidies.

The Railway budget was a diluted version of Congress’ interim rail budget.

Modi has proposed incremental changes but no radical reforms in labour laws, land acquisition, anti inflation strategy, fiscal strategy, subsidies or privatization.

Like Congress, he embraces financial inclusion, public sector bank dominance, public-private partnerships in infrastructure, higher spending on health and sanitation, food security and Aadhaar. He has built on Congress’ approaches to a BRICS bank and WTO rules on farm subsidies.

His one big change has been abolition of the Planning Commission, but that has few policy implications. Modi has tweaked old Congress ideas, proposing two bank accounts per family rather than one, plus an overdraft of Rs 5,000 per family (shades of the Congress’ old loan melas). MNREGA will be tweaked to create more durable assets.

Analysts say Modi is avoiding radical change till the Maharashtra elections are over. That’s very unlike Thatcher, and more like traditional Congress dithering. Yet incrementalism plus firm, decisive administration is clearly achieving significant gains (just as it did in 12 years of Modi’s rule in Gujarat).

Gone is the administrative paralysis and business gloom of the UPA era. He has disciplined Cabinet members seeking foreign junkets and favours for pals. Files are moving, stock markets are booming, and businessmen are raising record sums for investment.

Environmental rules have been diluted to expedite projects.

Around 15 million tonnes of grain will be dumped on markets to cool prices. Animal spirits have soared. This has not yet created an economic boom. Industrial and trade growth are improving, but slowly. Inflation remains high and bank lending subdued.

The poor monsoon has been a dampening factor, offset by the fall in Brent …read more

Source: OP-EDS

By Ryan McMaken

 The August Issue of The Free Market Is Now Online!

Hans-Hermann Hoppe is back with a new lecture on the social virtues of the entrepreneur this month:

What can be unambiguously stated about a capitalist’s profit or loss is this: his profit or loss is the quantitative expression of the size of his contribution to the well-being of his fellow men, i.e., the buyers and consumers of his product, who have surrendered their money in exchange for his more highly valued (by the buyers) product. The capitalist’s profit indicates that he has successfully transformed socially less highly valued and appraised means of action into socially more highly valued and appraised ones, and thus increased and enhanced social welfare.

We also interview Mark Thornton about his recent debate at Oxford University:

Mises Institute: Why were you invited to debate at Oxford?

Mark Thornton: The Oxford Union can pretty much get whoever they want to debate, including presidents, prime ministers, Mother Theresa, the Dalai Lama, and even Julian Assange, so I was honored that they invited me. I met several students in the Oxford Union and at Oxford University who were familiar with my work on the drug war and at the Mises Institute. Each side of the debate generally consists of a student presenter and three experts. The debate is similar in structure to the House of Commons and has been that way since 1823.

We recounted the highlights of the Summer Fellows program and the Rothbard Graduate Seminar here in Auburn. Be sure to also find the latest updates on new translations, and new publications, degrees, and media appearances from our scholars and alumni.

…read more

Source: MISES INSTITUTE

By Ryan McMaken

Eric Phillips’s Mises Daily article  on military spending from 2012 is as timely as ever: 

Military Spending and Bastiat’s “Unseen”

by Eric Phillips

[An army of] a hundred thousand men, costing the taxpayers a hundred million of money, live and bring to the purveyors as much as a hundred million can supply. That is which is seen.

But, a hundred million taken from the pockets of the taxpayers, ceases to maintain these taxpayers and their purveyors as far as a hundred million reaches. This is that which is not seen. Now make your calculations. Add it all up, and tell me what profit there is for the masses?

-Frédéric Bastiat

You will often hear self-styled conservatives say, “I support the free market and a strong national defense.” But if by supporting a “strong national defense” they mean supporting a large and aggressive conventional military — as they almost invariably do — these two positions are mutually exclusive. A military establishment funded by taxation, inflation, and debt is just as destructive to the market economy as a welfare establishment funded by taxation, inflation, and debt. Every dollar spent on the military, just like every dollar spent on the Department of Health and Human Services, is a dollar not spent or invested in the civilian economy. Every person employed by the military or the firms that supply the military with equipment is a person not employed in the civilian economy. And since civilian employment and capital accumulation are the foundations of a prosperous capitalist economy, a conventional military can only exist at the expense of a fully functioning free-market capitalist system.

Pork-seeking congressmen, crank economists, and many laypeople believe that generously funding the conventional military is good for the economy. They point to the factories that manufacture tanks and fighter jets, the ports that build ships and service the navy, and the booming economies that surround military bases. But as Bastiat explained, they err in focusing on only “that which is seen.” They neglect to consider the private-sector jobs and investment projects that do not exist because of the taxes necessary to fund the military. In other words, they miss “that which is not seen.” Economists call these foregone alternative uses opportunity costs. The opportunity cost of funding the military is the sum of what could have been produced if the resources devoted to the defense establishment had not been drained from the private sector.

Of course, some …read more

Source: MISES INSTITUTE

By Ryan McMaken

Mises Daily Thursday by Karen De Coster:

The nonprofit form of enterprise is indispensable to both recipient individuals and the benefactors who fund them.

…read more

Source: MISES INSTITUTE

By Ryan McMaken

Mises Daily Thursday by David D’amato:

If, for good reason, we generally distrust the concentrated power wielded by coercive monopolies, we ought to avoid at all costs placing more power in the state, the ultimate embodiment of monopoly.

…read more

Source: MISES INSTITUTE

By James A. Dorn

James A. Dorn

This year’s symposium at Jackson Hole, Wyoming, sponsored by the Federal Reserve Bank of Kansas City, focused on the difficulties faced by monetary policymakers in reading the tea leaves of labor market conditions and thus the puzzle of when the federal funds target rate should be increased.

As early as July, Richard Fisher, president of the Federal Reserve Bank of Dallas, stated: “I believe we are at risk of doing what the Fed has too often done: overstaying our welcome by staying too loose, too long.” Most economists, however, believe the fed fund target rate won’t be increased until mid-2015.

St. Louis Fed President James Bullard questioned that assumption at the Jackson Hole meeting. In an interview with Bloomberg’s Kathleen Hays, he predicted rates would begin to increase near the end of the first quarter of 2015 and that the Fed would use its overnight reverse repo facility to engineer the rate increase.

In her keynote address, Federal Reserve Board Chairwoman Janet Yellen noted that “our understanding of labor market developments and their potential implications for inflation will remain far from perfect. As a consequence, monetary policy ultimately must be conducted in a pragmatic manner that relies not on any particular indicator or model, but instead reflects an ongoing assessment of a wide range of information in the context of our ever-evolving understanding of the economy.”

“Lawmakers and the public must get involved with discussion over whether Fed should move from role as activist to one limited by rules”

The Fed’s dual mandate of maximum employment and price stability means the Federal Open Market Committee (FOMC) must forecast the degree of slack in labor markets as well as determine how best to achieve long-run price stability. If Congress amended the Federal Reserve Act to limit the Fed to a single mandate of achieving stable prices — that is, safeguarding the purchasing power of the dollar — monetary policy would be simple and pragmatic; it would recognize the limits of what the Fed can actually accomplish. In particular, a simple monetary rule would significantly reduce reliance on macro-models and forecasting.

In this sense, the Jackson Hole symposium on “Re-evaluating Labor Market Dynamics” would have been better directed to the debate over rules versus discretion in the search for stable-valued money, rather than how discretionary monetary policy might manipulate interest rates to achieve full employment. Questioning the status quo, however, is …read more

Source: OP-EDS