Saturday, July 22, 2017

Understanding Economics

Ashok Sanjay Guha speaks on his latest book Economics without Tears: a New Approach to an Old Discipline published by Penguin Random House India, which is revelation of economics to the layman, demonetization drive and more.

Talks on economics might go over your head if you do not that background. But what if it is made easy for you without giving you grief? That is what Ashok Sanjay Guha has done for you in his book Economics without Tears: a New Approach to an Old Discipline. It is economics revealed to the layman without the difficult language or jargons to confuse you. Right from basic theories to some in-depth ideas, Guha makes sure every reader connects with economic concepts easily. It is published by Penguin Random House India.
Professor Emeritus at the School of International Studies, Jawaharlal Nehru University (JNU), Ashok Sanjay Guha has been with this institute since its beginning as a professor of economics. A visiting professor prominent educational places the world over, he has written in important write-ups in leading economic journals, he has also written An Evolutionary View of Economic Growth.

Did any experience made you think of writing this book to demystify economic jargons for the public?
The book is the outcome of my classroom encounters with bunches of very bright students whose primary interests lay outside economists and who were terrified of maths.

What aspects can we expect in this book? How have you tried to cover them?
The book introduces economic theory to the general reader, starting from first principles, avoiding Maths altogether and seeking to capture his interest right from the outset by emphasizing the applicability of economic principles to areas outside conventional economics. In the process, it clarifies even some of the most advanced and contemporary concepts in economic theory without using mathematical methods or jargon.

There might be books out there on similar lines. How will yours differ?
As far as I know, there are no other books that try to give the general reader a glimpse of the entire canvas of economic theory. There are of course similar books that touch upon specific areas of the subject. There are also very popular & entertaining books that apply economic methods to a wide range of problems. One such is Steven Levitt’s international best seller, Freakonomics. It asks a variety of strange questions and uses the data analysis methods of economics to come up with extraordinary answers. However, it does not explain the econometric theory behind these methods so that, to the reader, Levitt appears to be a magician pulling rabbits out of a hat. EWOT doesn’t ask such exotic questions.  It doesn’t ask “What do school teachers have in common with sumo wrestlers?” or “Why do drug dealers live with their moms?” The questions it asks are more conventional, though no less puzzling. And it makes the economic theory behind the answers crystal clear, so that the reader can answer similar questions on his own.

Book Cover

Do you feel there should be more such books in India?  
There is certainly a gaping hole in the literature in this area, but I am hoping that EWOTS will gather enough readers to fill the gap.

With the demonetization drive, do you feel we are on the right track despite teething problem?  
Unlike most economists, I believe that demonetization, coupled with the government’s subsequent measures discouraging cash transactions and incentivizing digitization, are positive steps, despite their potential short term economic costs. High-value notes have always been the preferred medium of transactions in criminal activity, terrorism, smuggling of drugs, arms and other contraband, commissioning of murder and other contractual crimes, bribery, prostitution and sex-racketeering, under-the-counter deals to evade tax like those that were universal in the real estate market as well as in other goods before Nov. 8. Large stocks of unaccounted high-value currency are a strong incentive for betting (with match-fixing as its corollary), for luxury expenditure (as in high-end restaurants or on expensive liquor) or on ostentatious weddings or celebrations – all of which, so many would contend, add little of value to national income. Obviously, a relatively cashless economy would lack the wherewithal for such activity, and would therefore be better-equipped for productive activity. It would also generate more tax revenue. A major policy error however was the Rs 2000 note.  Obviously, it made no sense if the objective was to reduce the proportion of high-denomination currency and it was too large to be of any use in common and legitimate day-to-day transactions. In consequence, it tended to disappear from circulation and so was a most inappropriate replacement for the old banned notes. 

You have been associated with the School of International Studies at JNU as a professor of economics. How has the journey been like at such a leading institute? 
Over the years, I have learnt much from my students and colleagues. The process has been facilitated by the fact that the Centre for International Trade and Development, to which I have been affiliated, has been an island of academic calm amidst the tumult that seems continuously to engulf JNU.

How do you see India when it comes to handling its finance & economic and also its education? 
As I have indicated in Ch 10 of EWOTS, India, along with China and most of East and South Asia, is riding the crest of a world-wide wave of rapid growth in labour-abundant countries. There is very little that any government can do to mess this up. Of course, the previous Congress government attempted national hara-kiri through its ‘rights-based approach’ that led to the disastrous inflation of 2011-13. But at the 2014 elections, the country itself corrected course by sending the Congress into what looks like permanent exile. It should however be appreciated that our comparative advantage lies in raw labour, not human capital. During the first two decades of liberalization, government emphasized relatively human-capital-intensive activities like services and IT while surrendering manufacturing to China and other Asian countries. The result has been jobless growth. The present government’s stress on manufacturing is a welcome change in approach. Whether it succeeds in its objectives of course remains to be seen.
As for education, our obsession with quantity has resulted in a catastrophic collapse of standards.  I have written on this issue several times in the press, so I will not repeat myself.

What are you planning for your next book, if any such idea is lingering in your mind? 
The Epilogue of EWOTS describes several questions that I would like to address in my next book. In part, this would also constitute an updating of An Evolutionary View.

BOOK TITLE: Economics without Tears: a New Approach to an Old Discipline
AUTHOR: Ashok Sanjay Guha
PUBLISHER: Penguin Random House India
PAGES: 246
PRICE: Rs. 299


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