India doesn't need FDI in retail to grow : Joseph Stiglitz

Inequality is bad for economy, democracy and society. Much of the inequality in the US arises out of rent-seeking -monopoly, exploitive practices by banks and corporate exploitation of public resources. In the Indian context, you will call it corruption but we call it corruption American-style, where you give away natural resources below market prices. India is doing it now but America has a long history of doing this.

There is a clear association between inequality and instability. People at the top don't spend too much, they save a lot but people at the bottom spend everything. So you redistribute income from the bottom to the top and demand goes down. That makes an economy weak. That is what happened in the US. We would have had a weaker economy, but the Feds stepped in by creating a bubble that created more demand to offset the demand that was going down. Of course, creating a bubble was creating instability.

The advocates of FDI have probably put too much emphasis on it. India is in a different position than a small, developing country. You have a large pool of entrepreneurs. They are globally savvy, have access to global technology and they have a lot of wealth. So, if there were large returns to large-scale supermarkets, the domestic industry would have supplied it. Not having access to FDI is not an impediment in India. Wal-Mart is able to procure many goods at lower prices than others because of the huge buying power they have and will use that power to bring Chinese goods to India to displace Indian production. So the worry is not so much about the displacement of the small retail store but displacement further down the supply chain. 

Joseph Stiglitz in The Times of India Here

Procrastination : Facts, myths and remedies

Some years ago, the economist George Akerlof found himself faced with a simple task: mailing a box of clothes from India, where he was living, to the United States. The clothes belonged to his friend and colleague Joseph Stiglitz, who had left them behind when visiting, so Akerlof was eager to send the box off. But there was a problem. The combination of Indian bureaucracy and what Akerlof called “my own ineptitude in such matters” meant that doing so was going to be a hassle—indeed, he estimated that it would take an entire workday. So he put off dealing with it, week after week. This went on for more than eight months, and it was only shortly before Akerlof himself returned home that he managed to solve his problem: another friend happened to be sending some things back to the U.S., and Akerlof was able to add Stiglitz’s clothes to the shipment. Given the vagaries of intercontinental mail, it’s possible that Akerlof made it back to the States before Stiglitz’s shirts did.

There’s something comforting about this story: even Nobel-winning economists procrastinate! Many of us go through life with an array of undone tasks, large and small, nibbling at our conscience. But Akerlof saw the experience, for all its familiarity, as mysterious. He genuinely intended to send the box to his friend, yet, as he wrote, in a paper called “Procrastination and Obedience” (1991), “each morning for over eight months I woke up and decided that the next morning would be the day to send the Stiglitz box.” He was always about to send the box, but the moment to act never arrived. Akerlof, who became one of the central figures in behavioral economics, came to the realization that procrastination might be more than just a bad habit. He argued that it revealed something important about the limits of rational thinking and that it could teach useful lessons about phenomena as diverse as substance abuse and savings habits. Since his essay was published, the study of procrastination has become a significant field in academia, with philosophers, psychologists, and economists all weighing in.

Academics, who work for long periods in a self-directed fashion, may be especially prone to putting things off: surveys suggest that the vast majority of college students procrastinate, and articles in the literature of procrastination often allude to the author’s own problems with finishing the piece. (This article will be no exception.) But the academic buzz around the subject isn’t just a case of eggheads rationalizing their slothfulness. As various scholars argue in “The Thief of Time,” edited by Chrisoula Andreou and Mark D. White (Oxford; $65)—a collection of essays on procrastination, ranging from the resolutely theoretical to the surprisingly practical—the tendency raises fundamental philosophical and psychological issues. Indeed, one essay, by the economist George Ainslie, a central figure in the study of procrastination, argues that dragging our heels is “as fundamental as the shape of time and could well be called the basic impulse.”

James Surowiecki in the New Yorker. More Here