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Where we stand: Bird's eye view



I know I am spending too much time communicating with this blue xterm
screen on my computer: It almost seems that this discussion between a
global village is addictive. Yet I cannot but gloat a bit: I did mention
the problem of planning being related in some way to the Heisenberg
principle. Well, there is this old man called Paul Samuelson, considered
as a kind of bridge between the schools of Keynes and Friedman. Not quite,
of course, since things are really much more complex. However, I was
skimming thro' his article in the Journal of Business Administration, 18,
no. 1 and 2 (1988) pp. 21-32 and found some interesting confirmation that
seems to show that all of India is on one side of the fence and economic
science, despite its various shades of color, is on the other. 

About predictions (by planners/ business cycle theorists: the
deterministic Chicagoeans):

"it is as if there is a Heisenberg-like indeterminacy principle,
specifying that we may go just so far and no further in reducing down the
variance of our estimates." 

	=> clearly, the world is too "chaotic" for deterministic models.
	(also, we are the only great "planners" left in this world.
	And one fine day, you'll find Indians claiming that planning is
	part of their swadeshi culture!)

"Here are some crucial questions that I think command among economists, a
remarkable consensus, and often their answers are at variance with those
from non-econmist groups.

"1. Flexible exchange rates, imperfect as they are, must be preferred to
pegged exchange rates.

"2. Most of a nation's resource allocation is best left to the market
mechanism.

"3. Irreplaceable natural resources and environmental interdependencies do
constitute future problems of importance, but Club of Rome pronouncements
of Doomsday downplay the contribution that rationing of scarcity by
market pricing can contrive and overlook the age-old struggle against the
law of diminishing return that is provided by scientific discovery and
technological innovation."

I believe that of all the manifestos floating around in India, the one
under preparation on IP is closest to the best one that economic science
might design today. Add to that a good dose of self-respect (free
citizen's agenda and choice), a good dose of human rights, and good
incentive contracts between social agents, and we might be soon done.
Maybe we can get endorsements on it from a dozen Nobel Prize winners, to
add some more weight to it, so that other developing countries can also
adopt it.

By the way, John, while you were off for your exam, I had suggested
sometime somewhere if you could take up the task of starting to write
simple flyers to enhance the communication process. Do you want to give it
a shot? 

SS


	













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