On Anna Hazare... And Bangalore's Metro

I thought that this perceptive article on India and Anna Hazare from TheDailyBell.com titled "The Corruption of India's Economic Miracle" is well worth a read. It rips a Wall Street Journal article on the subject apart - and I place the concluding remarks below:

For another, the article assumes that the current Indian vitality is the result of inexorable cultural and entrepreneurial shift. We would argue this is entirely incorrect. India's resurgence is driven by central banking money printing and may not be seen as a natural expression of industry and society.

It is extremely important that the progress of the BRICS be placed in perspective. Brazil, China, India, even Russia, all have aggressive central banking policies. China and India, especially, have economies that are obviously being stimulated by excessive money printing. Both countries have a problem with price inflation as a result.

Progress built on printing money from nothing is ephemeral. In America and Europe, thanks to the debasement of money and the vast resources it grants (temporarily) to government, economies can seem quite healthy  one moment and then ill the next.

Money printing hollows out economies. It distorts business and job growth. It makes people feel wealthier than they are in reality. In both China and India, economic implosions will eventually take place. It cannot be otherwise, because central bank money stimulation inevitably leads to an exaggerated business cycle and subsequent busts.

For this fundamental reason in particular, the Wall Street Journal article is flawed. India has not necessarily experienced a resurgence of business and market creativity. It is simply going through the same cycle of monetary stimulation that the European PIGS and America went through recently.

As Ludwig von Mises cautioned in his great book Socialism, an ideology he abhorred and battled against all his long life:

There is no evidence that social evolution must move steadily upwards in a straight line. Social standstill and social retrogression are historical facts which we cannot ignore. World history is the graveyard of dead civilizations.

We can go backwards any time.


And the proof of that is the photo above of the Bangalore Metro on MG Road. They have DESTROYED MG Road, the prime property in this Fair City, with this ugly overhead train. If it had been underground, the properties on MG Road would have trebled in value. Now, the open space around this magnificent thoroughfare has been blocked. Property prices may not rise much in this ugliness.