Course Evaluation

Thank you for participating in this 10-week course.

Now that the course is concluded, it is time for a course evaluation. There are two ways: one, you post a comment to this post. This of course will be public. The other is to send me an email:, which would be private.

Continue reading “Course Evaluation”

Is China Capitalist?

The question — ‘Is China capitalist?’ — is surprisingly hard to answer for many reasons, not the least of which is that one could disagree on what the words ‘capitalist’ and ‘capitalism’ precisely mean. They get used in ordinary conversation, not just in academic writings, frequently enough that it misleads us into a false sense of certainty about their meaning. Much confusion ensues from differing semantic priors. Continue reading “Is China Capitalist?”

The Concluding Part — 3


The material well-being of a nation depends on the productivity of its workers. How much workers produce—the productivity of workers—is a function of how skilled they are in their various occupations, which is directly related to how good their education is. The fundamental determinant of a nation’s prosperity is the quantity and quality of its educational institutions.

India’s education system is arguably the worst among the major economies of the world. That’s not because Indians are remarkably natively incompetent to run educational institutions or have some special handicap that prevents them from becoming educated. It’s because they are prevented from creating world-class educational institutions in India and lack the opportunity to get an education that they are capable of. Continue reading “The Concluding Part — 3”

The Concluding Part — 2

Prosperity is Downstream of Freedom

To understand why freedom matters for prosperity, we have to recognize that nobody is simultaneously all wise, all knowing, and all prescient. Our altruism, rationality and foresight are severely bounded.

Therefore we cannot predict with any certainty what people will figure out if they have the freedom to experiment in whatever field they are naturally inclined to do so. The progress that humanity achieves is a result of trial and error by people who could not have been identified in advance. We get to know of the eventual successes but only ex post; ex ante we can’t. We don’t learn about the failures but we can be certain that there must be many more of them than the successes.

That fact requires the philosophical stance of epistemic humility. We have to be humble because our knowledge is limited, not just about the future but about the past and present too. Continue reading “The Concluding Part — 2”

The Concluding Part — 1

In the final session of the class we address a question that’s been leading up to this. The question is the one that motivated my professional study of economics: why is India poor in the modern world of widespread economic prosperity?

Normative and Positive Analysis

In much of the previous part of this course, we engaged in what is called positive analysis. Positive analysis seeks to understand what the world is, how it came to be that way, and how the world is likely to evolve. In contrast to positive analysis, normative analysis seeks to address the question of how the world should or ought to be. Note that the word ‘positive’ is not a value judgement; it’s neutral and does not imply good in any moral or ethical sense. Continue reading “The Concluding Part — 1”

Trade Deficits and other Disasters – 2

This is  a continuation of a previous post which was in response to points that Mallikarjuna asked about trade deficits and Chinese exports to India.

First let’s understand trade. Voluntary trade is good for both parties. This is true in the case of individuals trading among themselves within a region, for obvious reasons. If both parties didn’t gain something from the trade, it would not happen since by definition the trade is voluntary. For less obvious reasons, in general voluntary trade across political borders also leads to gains.

We have discussed an important theoretical concept called “comparative advantage” in this class. In the context of international trade, even if country A has a lower productivity in every activity compared to country B (meaning A has no “absolute advantage” over B), both countries would have an “comparative advantage” in some activity. Continue reading “Trade Deficits and other Disasters – 2”

Steven Pinker on Human Progress

Oxford Union Web Series published this presentation with Steven Pinker on Jan 31st, 2021. Pinker touches on some of the same points that we discussed on our first online discussion on Jan 15th (here are the recordings of that session.) Pinker’s presentation lasts for less than 20 minutes. Though by now you may be familiar with some of the points he makes, it still makes sense to watch his presentation.