I’m sure Yazad will find this interesting. Its about how order can arise even when there is no one to do the ordering, and why it means that a centrally planned economy is a bad thing.
Hopefully you will too.

Is Dalda an inferior good?
Definition: A good that has the property that when a person’s income rises the demand for this good falls (because people start affording superior substitutes).

This is distinct from a Giffen Good

Definition: A Giffen Good is a good that exeriences increased demand for when the price rises and decreased demand for when the price falls.
Usually happens with snob-value items.

I’m allowed to show off my knowledge once in a while. Am I not?
Oops Looks like I’ve ended up showing the depths of my ignorance. It seems Giffen goods are a special case of Inferior goods. Not what I said above. The link also gives examples that Swami wants. Also there is lots of controversy over whether these beasts actually exist.

I have disagreed with Swaminathan Aiyar before, but this time I am in the disagreeable position of having to disagree with either Swami (permalinks don’t work -topmost post) or Swami, because contrary to what Swami says, I think Swami makes some valid points.

He says that Victory changes everything
The US went into South Vietnam to contain global communist expansion. Unable to win a decisive victory, it signed a peace agreement with North Vietnam, took its troops back home, and secured Nobel Peace Prizes for the signatories of the accord. Shortly afterwards, North Vietnam violated the peace agreement, invaded and took over South Vietnam. Did anybody (except the Americans) really care that Hanoi’s victory had violated a solemn peace agreement, enshrined in a Nobel Peace Prize? Did anybody hold street demonstrations against unilateral military action, or violation of international law by Hanoi? Not at all. History was rewritten by the victor, and the world fell in line.

I’ve wondered about that. The US fought in Korea and it fought in Vietnam.

It was the good guy in Korea . Any reasonable person must admit that by saving South Korea from falling into communist hands (at the cost of 35000 of its soldiers) it provided the world with the starkest illustration of the fact that capitalism is a better system- after all, where else can you find a first world country and a fourth world country separated by nothing but an artificial line?

It was the bad guy in Vietnam. But by withdrawing from there, it paved the way, not only for the fall of South Vietnam, but also (my knowledge of history gets hazy here) the victory of Pol Pot in Cambodia.

Could anyone have predicted that intevening in Korea was a ?ood idea, but intervening in Vietnam was a bad idea? My post on foreign policy isn’t much help there. Depending on how you interpret it, either the US was either right at both places or wrong at both places, but not right at one place and wrong at the other.

The next Bharatiya Blog Mela will?be hosted here.

Please send in your nominations to me at site @ ravikiran dot com, or you can put it as a comment to this post.
• Please send in individual blog entries only
• You can nominate your own posts or someone else’s
• The posts have to be dated between 26 March 2003 and 1 April 2003
• They have to reach me by April 2 2003 9 AM IST (so its tuesday evening for those in phoren lands.)

Dakshina Kannada district (Mangalore to most of you) is served by fast and efficient private bus services. The bus drivers on this route honk their horns for the following reasons:

1. To tell vehicles ahead that they intend to overtake
2. To tell vehicles coming from behind that the latter can overtake.
3. To tell vehicles coming from behind that the latter can’t overtake.
4. To warn vehicles coming from the other side not to hit them.
5. To greet drivers of buses coming from the other side.
6. To call people waiting in their houses, just in case they wish to catch the bus.
7. To express happiness and joy at finding a good, open and empty road
8. To pay homage at one of the many temples that dot the route.
9. To call the faithful to prayer at one of the many mosques that dot the route.

For two weeks, I have shamelessly reneged on my promise to Ashwini, that I’d at least nominate my own posts for the Bharatiya Blog Mela. This time I had an excuse – I was out for most of the week. Nonetheless, this week’s &?t;a href=”http://www.ashoo.org/blog/archives/cat_blogs_bloggers_and_blogging.html#000085″>blog mela is up, and which is more, one of my posts has got nominated, because, according to Ashwini, “someone else has really liked what you have written. Don’t forget to thank that somebody.” So thank you somebody, and please do visit!

To an undisclosed location. Examination of Life suspended till wednesday or thursday.

The best thing about writing a polemic (via Shanti) against the US is that 80% of the article gets written without any effort or thought on your part.

Long long ago, I had posted on the question of why the dollar is strong even though the US has run up a huge current account deficit. That post was based on this article in the Economist

Swaminathan Aiyar weighs in on the same question. He too claims that the dollar is not in danger of a collapse although economic fundamentals dictate that it ought to. He says that “In effect, the US can pay for its imports by exporting its own currency. No other country can.” Why? Because

the US can literally export dollars, because the world has decided that this is the world’s monetary anchor….
unlike other commodities, the dollar is used not for consumption, but for building up foreign exchange reserves.

But how long can this continue? The dollar is a stable currency, but that only means that it will be used as a means of exchange right? Surely people won’t hoard dollars for ever? If demand for dollars is entirely driven by the fact that there are others who will demand the dollar and pay inflated rates for it, doesn’t that make it a bubble? Of course, the only thing that we can definitely say about bubbles is that they will burst eventually, even though the eventuality may take place in months, years or even decades.
But given that the US is going to be dependent on imports for the foreseeable future, given that its population is ageing (though not as much as European countries, mainly because of migration) and its social security system is broke, am I right in assuming that the bubble will burst sooner rather than later?

I hope some real economist can answer this question. I wouldn’t want the US economy to collapse – if it does it will probably plunge the world into a prolonged recession, – but if it does, remember that you read it here.

As my loyal readers know, I have recklessly predicted that the war will get over in 10 days. I thought that if my prediction goes awry, I can always take refuge in terminological inexactitude by shifting the start of the war as much later as possible. The US military has come to my rescue by calling today’s airstrikes “preparatory strikes”, whatever that means. That reminds me of the way management institutes have shortened the placement week to 2 days by introducing a Day 0 and a Day -1, etc.

In any case, I guess such games won’t be necessary. The invasion by the army has started.
BBC is providing a timeline of the war’s progress.

I had promised Swami a while back that I’d give proof of how Saddam has been playing a game of deception. Tony Blair laid it out very well in his speech to the House of Commons. Here is some more evidence.

By the way, I watched Blair’s speech on BBC. He is everything that Bush isn’t. He is intelligent where Bush is dumb. He is articulate where Bush is tongue-tied. The amount of irony he could infuse into the phrase “full and final declaration” (of Saddam’s weapons) had to be heard to be believed.
Those who oppose the war because Bush is dumb should, in the interest of consistency, support it because Blair is smart. Though I must agree that it would be a strange sort of consistency.

Lakshmi wants to know how, given that the various schools of Indian philosophy contradict one another, they can all be said to derive their authority from the Vedas. I’ve often wondered the same thing.

My guess is that the Vedas act like the centre of gravity of the sphere of Hinduism.
If you remember your physics, you’ll recall that the earth’s gravitational force can be thought of as being exerted from the single point at the centre of the earth, the centre of gravity. This is an illusion of course. There is no massive object at the centre that is doing the pulling. The force of gravity is in fact being exerted by the entire earth.

I think the analogy applies to the Vedas and Hindu philosophy. The Vedas were compiled over a period of 1500 years ( from 2500 to 900 BC by conservative estimates) obviously by many people, by a culture that did not have a tradition of writing down stuff permanently. The version that we have now was finally edited by a person called Sakalya. Unless you believe that they were divinely revealed (as tradition requires you to – they are “Shruti” – i.e “heard” by the sages from a supernatural source, probably under the influence of soma!) it is more or less inevitable that contradictions will creep in.
Secondly, the absolute core of the Vedas – the samhitas comprise of mostly religious hymns. They do ?ear a relation to philosophy, but only a tangential one, and more importantly such relation as they bear would be highly subject to interpretation.

The second concentric sphere around the Veda Samhitas are the Vedantic literature – the Upanishads. These are highly mystical stories, which often have great philosophical significance.

Then come the great schools of Indian philosophy. I won’t go into them – follow the link for that. It is fascinating to find that such questions were even raised in those times. But please note that the various schools fiercely debated one another, and some of them claimed the “authority” of the Vedas. I guess that they did it to bolster their own reputation, but I also suppose that in the process they ended up enhancing the authority of the Vedas themselves. Think of it. Then, as now, very few people actually read the Vedas. So if a profound philosophy is put forward with the humble disclaimer that what the philosopher is doing is only interpreting and clarifying what is already written in the Vedas, wouldn’t the authority of the Vedas themselves rise in your eyes?

The tradition has continued till date. The Bhagavad Geeta summarises the major schools of philosophy, and is called the “Fifth Veda”. Sankara, Madhva, Ramanuja all claimed to be capturing the “true essence” of the Vedas, as were the Arya Samajis and the present-day purveyors of Vedic Mathematics.

I don’t mean to belittle the Vedas. They did contain the seeds of our philosophy. Vedic literature like the Sulvasutras contain the beginnings of Mathematics, and the Samaveda is said to be the beginning of music. They were great achievements for their time, but they also contained errors. The year consisted of 360 days during the Vedic period. The Sulvasutras set a value of 3 for pi. Later day astronomer Bhaskaracharya deduced that the earth rotated on its own axis and moved around the Sun. Our mathematicians also came up with better values for pi in later periods.

I just want to point out that the achievements of Indian philosophers, mathematicians and astronomers were achievements in their own right. They did not come about by cracking some secret code that was present in the Vedas, but by thinking for themselves.

BTW, I am really happy that the Vedas are vague and subject to interpretation. Otherwise they would have been rigid like the Quran and Hinduism would have been a very different religion.

I am typing all of this from memory, so I might have made a lot of factual errors which I’ll be happy to correct if you point it out. But my guess is that it won’t affect my main point.