Conversations can be very powerful. Sometimes, all it takes is one phrase or word to change your perspectives completely. That’s what this week’s conversation did to us—changed our perspectives towards economics, markets, pricing, and most importantly—India’s Constitution.
This week, we have lawyer-turned-economist, Dr Shruti Rajagopalan, who researched about the Indian Constitution and its economic impact for her PhD. How she got there? That is an interesting conversation in itself. It all boils down to the controversy of giving farmer’s land in Singur to produce Tata Nano.
But here’s the most interesting tid-bit to come out of this hippoBrain conversation—the Indian Constitution is at conflict with itself.
You want to understand why India is not rich, look at the fault-lines etched in the Constitution. You want to understand the dynamics of Indian markets, look at some of the contradicting rules in the Constitution.
And that is just the tip of the iceberg. Listen to Dr Shruti Rajagopalan talk to Rajesh Jain and Jaimit Doshi about the economic cost of a loose Constitution.
She also talks about how we look at markets and pricing isn’t correct. A market, she defines, is an invisible social cooperation. Pricing, meanwhile, is a signal wrapped in an incentive. “When prices are allowed to function naturally, markets coordinate beautifully,” she says.
Seems like Civics & Economics 101? Not at all. These will be ideas that will last a lifetime with you, we can bet.
Here’s the map of the entire conversation:
00:00 - Introduction
02:30 - Journey from law to economics to Indian Constitution
09:55 - Why PhD on economics of Indian Constitution
15:50 - India’s Constitutional backdoor
17:53 - Why India’s Constitution is at conflict with itself
21:55 - The Market as a form of social cooperation
30:00 - Why Price is about signals, not money
36:45 - How Constitution can cripple markets using Tata Nano & Farmer protests as examples
46:40 - Why government should not intervene in markets
52:45 - India’s moonshot entrepreneurship
58:00 - Behind Dharavi’s Covid-19 success story
1:02:00 - Last words and summary
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Connect with us:
hippoBrain: https://twitter.com/hipp0brain
Rajesh Jain: https://twitter.com/rajeshjain
Jaimit Doshi: https://twitter.com/jaimitd
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Here are the books mentioned in the conversation:
- The Calculus of Consent: Logical Foundations of Constitutional Democracy by economists James M. Buchanan and Gordon Tullock - https://www.amazon.in/Calculus-Consent-Selected-Gordon-Tullock/dp/0865975213
- I, Pencil by Leonard E. Read - https://fee.org/resources/i-pencil/
- Modern Principles of Economics by Tyler Cowen; Alex Tabarrok - https://www.amazon.in/Modern-Principles-Microeconomics-Tyler-Cowen/dp/1319182119
- Marginal Revolution (Blog) - https://marginalrevolution.com
