Thursday, November 20, 2014

Narendra Modi: The War Monger

Since coming to power six months ago, the new prime minister of India, Narendra Modi, is mostly busy developing a new war machinery in India. Modi calls himself a "Hindu nationalist" and like a true nationalist he is busy consolidating power by whipping the public frenzy for war. Remember what the great American journalist Randolph Bourne said about war: the war is the health of the state. The state was born out of conquest and war, and it is only via war that it strengthens its powers. Modi knows this and he is using the war propaganda - actually one of the reasons why people voted him to power is because he has an image of a "strong man" - to consolidate and increase his powers.

Here is a list of measures which Modi took after coming to power to increase the war machinery production in India:

1. Modi and his government is doing increasing war business with the rogue state of Israel (see here, here). Some excerpts from the news reports:
Since Modi came to power in May, ties between Israel and India have been in overdrive, with the two signing a series of defence and technology deals that have underscored their burgeoning commercial and political relationship.
The same month as the UN meeting, Modi's cabinet cleared a long-delayed purchase of Israeli missiles for its navy. In October, India closed a $520 million deal to buy Israeli anti-tank missiles. And last week, a jointly developed aerial defence system passed a major trial, which India called a "milestone".
2. On his recent visit to Australia again Modi signed deals related to war machinery (see here). Some excerpts:
Sources told The Hindu that the two sides will announce an “action plan” for cooperation in defence and other areas.

This will include exercises between armies, navies and air forces, as well as counter-terrorism, maritime security, non-proliferation and cyber security. The joint maritime exercises will be kicked off in early 2015. In other exercises, an Australian Coast Guard ship is expected in Indian waters next month, said sources.

In a first, India and Australia will also set up a mechanism to discuss “synergies in integrating defence system”, including research and development cooperation on integrating defence equipment that both countries currently purchase, for example, U.S’s C-17 Globemaster III, according to officials.
3. Russia is coming to India mainly to manufacture war machines like military helicopters etc. (see here).
One proposal that will be studied by interest in India is to set up a joint USD 3 billion dollar fund to promote joint start-up companies in the nanotechnology field with applications from defence to aerospace and manufacturing.
4. Many Indian companies like Godrej, Mahindra & Mahindra are now increasing their investment in manufacturing war machinery like guns, bullets, bombs, missiles etc., rather than bread and butter for the common men (see here, and here). Some excerpts:
Some of India's biggest companies are pouring billions of dollars into manufacturing guns, ships and tanks for the country's military, buoyed by the new government's commitment to upgrade its armed forces using domestic factories.
This is a beginning of the dreaded "military industrial complex" in India. The ties between the corporate world and the state is very dangerous. Once in place firmly, this complex will be hard to dismantle in future. As many jobs will be involved in this "military industrial complex", in future the Indian government will have to continue waging wars or whip the frenzy for wars to continue production in these war factories. This has happened in America (US president Dwight Eisenhower warned of this complex in his departing speech many years ago; his prophesies turned out to be correct), and very likely will happen in India.

5. Modi's government is also going to help Vietnam modernize its military forces (see here). By doing this, Modi is only angering the mighty military of China. There is no point provoking your neighbors like this.

6. In Modi's Gujarat the BJP government is gearing up to recruit more Gujarati people in the Indian military forces as the local Gujarati newspaper articles show below. They are also planning police training for college and school students.

 7. In past six months only Modi and his government has cleared military spending bills of lakhs of crores of rupees without letting anyone know about it e.g., this 80,000 crore project, and this 21,000 crore project. 

UPDATE: And today the new defense minister Manohar Parrikar also announced a deal of 15,750 crore rupees for buying 'artillery guns' (see here). Some excerpts:
In a fresh bid to break the Bofors jinx, Defence Minister Manohar Parrikar today cleared proposal to acquire 814 artillery guns for Rs 15,750 crore while deferring decision on joint bid by Tata Sons and Airbus to replace IAF's Avro transport fleet and also procurement of 106 Swiss Pilatus basic trainer aircraft.
8. Modi is also buying more guns, bullets and missiles from the USA (see this). Some excerpts from the news report:
In a boost to U.S. weapons makers looking for ways to offset lower domestic military spending, India is expected to choose Sikorsky Aircraft's S-70B Sea Hawk helicopters at a 16-aircraft tender worth over $1 billion.

The decision could come during a high-profile visit to the United States by Prime Minister Narendra Modi that starts on Friday.
9.  Modi government immediately after coming to power increased its so-called "defense budget" (see here).

10. Modi also said this: Prime Minister Narendra Modi on Saturday said India must build up its military might to the point that no other country ‘dare cast an evil eye’ on the South Asian nation.

What is the meaning of all these war preparations and propaganda? Remember one thing, these guns and bullets can only be used in war. They have no other alternative use. There is a huge opportunity cost involved in this wastage of tax payers money in the production of war machinery. Every bullet that the Modi government is going to produce will be at the cost of not producing one bread or roti! Common man is not going to benefit at all from these war preparations. And if someone is saying that such war preparation is necessary for "national defense" then they are sucked in by the myth of national defense. Remember, in wars only war-profiteers like the politicians, bankers and crony corporatist industrialists will win with the undertaker. Wars will kill innocent civilians mostly. There is a big danger that Modi's war rhetoric might start some war with the neighboring countries, and that war will be a big disaster for India and everyone else. War is a big horror (see these ghastly images of war in Iraq), and we must stop Modi and his government from wasting our tax rupees in preparing and making wars.  

Monday, October 13, 2014

How to Make India Clean?

On 2nd October - the birthday of Gandhiji - newly sworn in prime minister of India Narendra Modi launched his ambitious "Clean India Mission". This scheme is likely to cost whopping rupees 62,000 crore! In my latest economic report I analyze this scheme. Is Modi's "Clean India Mission" going to clean anything except the pockets of poor hapless tax payers? More importantly, what other alternatives are available to make India clean other than using the government apparatus?

Monday, October 6, 2014

Modi's Make in India Campaign

Last week prime minister Narendra Modi launched his economic scheme of "Make in India" with a big fan fare. In my latest economic report I disentangle this scheme.


Thursday, September 11, 2014

Narendra Modi Wants to Dismantle, No No, Replace the Planning Commission ...

On 15th August Narendra Modi, from the Red Fort, announced that he is going to do away with the old Soviet style central planning model so he will replace the Indian Planning Commission with some other new Institution. Many people and Modi himself is saying that this replacement institution is a move in the direction of Free Market economy! Is it so? He also launched his ambitious Jan Dhan Yojana. In my latest economic report I analyze Narendra Modi's latest policy moves.

Saturday, August 23, 2014

Lies, Damn Lies and Statistics

Benjamin Disraeli, the 19th century British Prime Minister said in the parliament, that there are three types of lies: Lies, damn lies and statistics.

The word statistics itself has statist (politica) roots. It was first popularized by the German political scientist  Gottfried Aschenwall.
"The word statistic indirectly comes from the medieval Latin word status, for a political state although there is also a closely related word in German (statistik) which is also used in a political sense. “Statistik” was popularized by German political scientist Gottfried Aschenwall (1719-1772) in his “Vorbereitung zur Staatswissenschaft” (1748).

According to Leiden University, it’s difficult to know exactly when the word ceased to have a meaning close to a “political state” and became more of a mathematical term. The first time the word was used in the Oxford English Dictionary is in 1770, in W. Hooper’s translation of Bielfield’s
Elementary Universal Education: “The science, that is called statistics, teaches us what is the political arrangement of all the modern states of the known world.” The Online Etymology Dictionary states that the first recorded time the word meant “numerical data collected and classified” was 1829 and the abbreviated form stats first appeared in 1961.

Webster’s 1828 dictionary defines statistics as:
A collection of facts respecting the state of society, the condition of the people in a nation or country, their health, longevity, domestic economy, arts, property and political strength, the state of the country, &c. (source:
Nation state governments around the world are crazy after statistics because they want to use them to centrally plan the economy. But, as Professor Ludwig von Mises a century ago said:
In the sphere of human action there are no constant relations between any factors. There is consequently no measurement and no quantification possible. Ludwig von Mises (Socialism, p. 62)
Nobel Prize winning economist Frederick von Hayek in his famous article The Use of Knowledge in Society said that no central planner can have and ever use the vast amount of complex knowledge to solve the economic problem of the society. Only individuals can use this fragmented knowledge to plan their own lives.   

Not only the central planners' socialist calculation is impossible, but there are gigantic problems even with the collected data themselves. These data are full of substantial errors as Oskar Morgenstern showed in his important but highly neglected work, On the accuracy of economic observations. In his book Morgenstern discussed various sources of errors and amongst those errors one of the error was, and I quote,
Governments, too, are not free from falsifying statistics. This occurs, for example, when they are bargaining with other governments and wish to obtain strategic advantages or feel impelled to bluff. More often, information is simply blocked for reasons of military security or in order to hide the success or failure of plans. (p. 19).
In this light of the political jugglery of data and abuse of statistics, recently there are spat of events which illustrates what Disraeli meant when he uttered those words in the English parliament. I give the list of this statistical manipulation below:

1) India poverty rate manipulation: The Indian planning commission's manipulation of the poverty line numbers is well known by now. Recently the talks of poverty rate reduction - on paper of course - were in the newspaper again when the World Bank decided to revise its base year for calculating purchasing power parity (PPP) from 2005 to 2011 (the news is here). So, just by revising the base years governments can reduce poverty! This is the brilliant (mis)use of statistics which Disraeli was talking about.
2) USA unemployment rate: When the American economy is going through the worst recession after the 1929 Great Depression, the US government is also desperate to manipulate the sensitive unemployment number. To bring down the unemployment rate figure they simply ignore those workers who are looking for job for a long time but because they couldn't find the job simply drops out of labor force i.e., the discouraged workers phenomena.

3) Europe GDP prostitute case: Many of the governments in the European Union's depressed economies are so desperate to boost their GDP numbers that they are now going to include the profession of prostitution as well as drug industry income into their official GDP calculation (see here for the case of UK government; and here for the similar case of the Italian government; and here for EU wide declaration of including both industries in the GDP calculation).

4) Chine manipulating numbers: Chinese government is also manipulating their official statistics, just like any other governments, since ages.

And many more such manipulation goes on everyday unabated and unknown from the eyes of the gullible public. In light of this knowledge of the use of statistics for fooling public it is important to keep in your mind George Carlin's wise words: I have certain rules I live by. My first rule: I don't believe anything the government tells me.

Update (12th September, 2014): It is not only couple of weeks ago that I wrote this blog on the misuse of statistics by the state officials, and Indian government politicians have decided to revise the GDP measurement for the Indian economy this year. They are saying that due to this changes the Indian economy will now be bigger than before (i.e., on paper!). You can read this news here. Here are some excerpts:
"India will soon revise the way it measures gross domestic product to reflect under-represented and informal economic sectors, two government sources said, in an initiative that is expected to show the economy is larger than previously thought...
The government of Prime Minister Narendra Modi, which is committed to raising economic growth and slashing the fiscal deficit, plans to adjust the measurement early in 2015, a senior official at the Ministry of Statistics said...
"We plan to release GDP data based on the 2011/12 base year by early next year, that could theoretically revise up the growth estimates," the official said."
So, this is how Narendra Modi and his government is going to raise India's GDP!!!