On Rich becoming richer and poor becoming poorer in India

Wealth is not gold. Wealth is not Rupees.

Wealth is human effort - working hard to make each other's life better.

Indians are poor because they are illiterate and unable to be productive. They have a useless parasite govt. Much effort is wasted makings things over and over again because they were not done right the first time

Americans, Japanese, Europeans etc are wealthy because they are highly capable and are highly productive - and because, unlike Indians they understand what wealth means.

In a free market, anything that has value and is tradable is wealth. But it is not finite - as many of you said in the previous thread, which prompted my response. It is infinite, limited only by the capacity of humans to generate it. Many things which do not have value but are tradable (like art etc) are also wealth. (Note, that also requires human effort.) Name one item which is wealth but does not require human effort. Resources are finite. Wealth is infinite, limited only by human effort. Wealth includes a society with law and order, cleanliness, decent human values, entertainment, politeness, just rewards for human endeavour and other similar intangibles, which are not tradable except in a barter system. Nevertheless, these are a part of our wealth and contribute to out well being. In a dysfunctional society like India, there is no amount of money which can buy it for you. We are poor because we dont have these.

Gold doesnt come out of the ground without human effort. There is a cost to extraction of gold which is currently some 4-500 dollars. The price over and above that for gold is just a nominal tradable premium. If by using your brains, you figure out a cheaper way to take gold out of the ground, you have made yourself wealthier using the same resources. This use of brains is human effort.

In the past, India was the wealthiest nation in the world per capita, because God had bestowed the maximum of all resources on India. Human effort was hardly necessary to be wealthy.
All other nations became wealthier than us by their human effort - by working hard, being more inventive, fighting harder than us, being more productive. We, being already blessed, continued in our laziness and have become one of the poorest countries in the world. Because of lack of human effort.

Without labour, there is no produce. India is a good example of labour without produce. We build bridges which fall down, we make roads which wash away. These are examples of capital destruction i.e. waste of human effort. Because it does not generate wealth.


Whole of society is co-operative effort. Obviously individual effort is needed and self interest is also needed. You wont be very wealthy living in a forest alone. You may not even sleep well, given the dangers. Here, wretched examples of laziness exist. India, Sri Lanka, some African and South American countries come to mind. People despite their self interest being against it, live in laziness. These countries are not wealthy - despite the abundance of resources - because human effort is lacking.

Essentially, efficient allocation of capital is better achieved through market economics than through govt fiat. India is poor because it allocates too much capital through govt. Soviet Russia collapsed for the same reason. That is why China is trying hard to embrace market economics and so far has exeeded the original capitalist countries in its abilities

Capitalism has worked out exceptionally well for last 400 years.

Markets by nature are made up of traders who try to maximise their gain. There are some markets which are zero sum (like stock derivatives) and some markets which are not sero sum (like stock markets, commodity markets, land, commercial or residential real estate). In zero sum markets, for every winner, there has to be a loser. Other markets everyone wins, except when greed gets ahead of fundamentals and "efficiency" decreases.

Re. Quantitative easing, the govt of USA projects itself as a buyer of its own debt. It creates a bond bubble, which is currently on, as bond prices are bid higher and higher in a game of passing the parcel - safe in the knowledge that US govt will be finally left holding the parcel.
The US fed is making an educated gamble that this will stoke economic activity and inflation - at which time, the US bonds can be dumped, deflating the bubble with yields rising again to match inflation levels.

All current indicators point towards this gambit succeeding