 Good afternoon, everyone. The topic for my lecture today is, how poor countries become rich or stay poor. So the broad topic is about economic growth, which is a big or core component of the broader field of development economics. Of course, that's a field where every fallacy alive exists. Anybody familiar with development economics, every fallacy ever refuted is still part of that canon as of today. I mean, not too long ago, I was sitting where you were actually a few, probably three or four years ago. So it's great to be on the other side of the podium. And I thank Dr. Salerno, everyone else at the Institute for giving me the chance to speak. Now, I want to start with this quote by Robert Lucas, the father of rational expectations in macroeconomics. He also wrote some stuff about growth. Now, in a paper in 1988 titled on the Mechanics of Economic Development, he said, I do not see how one can look at figures like these, that is, of GDP growth, without seeing them representing possibilities. Is there some action a government of India could take that would leave the Indian economy to grow like Indonesia's or Egypt's? If so, what exactly? If not, what is it about the nature of India that makes it so? The consequences for human welfare involved in questions like these are simply staggering. Once one starts to think about them, it is hard to think about anything else. Now, of course, there's a lot of truths to what Lucas is saying, and largely because once you start reflecting on the phenomenon of economic growth, you begin to, the first thing which pops into your head is how recent it all is, and how lucky you are to have been born at this time and living in a certain place, where you take so many things for granted, we take so many of our consumer goods and services that we utilize on a day-to-day basis for granted, but the sliver of human history through which this has been true is extremely small. And what makes it even more fascinating, of course, is that even today, if you were to go to parts of Africa, parts of rural India, many other places in Latin America and Asia, you almost like you're stepping into a time machine. You go back to the way human beings lived generation after generation after generation, except for probably the last three or four generations, when, of course, we have this common expectation, especially in the developed part of the world and a few parts of Asia that are developed and other parts of Latin America as well, that every generation succeeding is going to have a better standard of life than the previous one, that the consumer goods and services available to every succeeding generation is going to be better than ours. This, of course, is only true for about three or four generations. So what makes economies grow, right? That's what Lucas is saying here, that once you start thinking about these questions of what makes growth possible, what makes the sustained improvement in standard of living possible, it's a fascinating question. And then, of course, as Mises once remarked, and he was writing around 1949, that even the average Joe or the average guy on the common is now able to enjoy luxuries that are goods that were impossible for even kings of old to enjoy. Think of how much pleasure, tyrants like Louis XIV or Henry VIII would have taken from an iPod or a smartphone. They loved it, but, of course, they didn't even have clean water. And most of their infants died, not even of the kings, but, of course, of the general population before the age of one. So once you start thinking about this, you begin to realize this is the core, a very, very big part of what an economist should be thinking about. Now, the Austrian school, of course, has had a long history of talking about growth. And in this lecture, what I want to do is, to begin with, I just wanted to talk about, very briefly, some of the preconditions for growth that many thinkers in the Austrian tradition have pointed out should exist for growth to happen. Then I want to talk about a case study of a country where these preconditions or these recommendations were not followed and take a look empirically at what happened. And I'll be talking about the case of India under central planning in the second half of the 20th century. And then, time permitting, I'd like to finish by just talking briefly about the pitfalls or the possible problems with using GDP as a measure of growth, especially where the government plays a huge role in allocating resources. Now, of course, in the Austrian school itself, all the great minds have contributed, have said something about growth, right from Minger down to Rothbard, including others who would, you would classify in a broader Austrian tradition like Frank Fetter and William Hutt. Everyone said important things about growth. What I'm going to present here is just a very brief summary. And probably the best way to understand it is just to go back to basics, talk about the simplest construct that economists use. We use it very often, that of Robinson Crusoe. Or if you would rather have it, you can think of Tom Hanks and Castaway, but I'd rather think of Robinson Crusoe. And basically, think of this guy stranded on the island as being faced with two possible production processes that he could undertake. There is one process where he can devote an hour of labor time to fishing with his bare hands. This is a very short process. He will fish and he'll probably get the fish very soon, probably within the hour itself. And his productivity will be about one fish per hour worked. On the other hand, he could, of course, devote an hour of labor time to constructing a raft in the net. But of course, it'll take him a long time to construct the raft in the net and then use the raft in the net to fish. I've just thrown up numbers here of 200 fish after 40 years of work. And so productivity of roughly five fish per hour worked. Now, even though this example highlights different processes of production and two different periods of production, that is time periods between when production begins and when the consumer good arrives, what Robinson's really faced here is an inter-temporal choice. He's got two choices or a choice between fish now versus fish or fish in the near future versus fish in the more distant future. And to begin with, we could just think of this example and completely abstract from time altogether, right? We could just assume or what I, in other words, completely abstract from what role time could play in his choice. So assume that he doesn't care whatsoever about whether fish come now or fish come later, right? Now, in that situation, of course, he would always undertake the more productive process. He would always undertake the longer process, simply because given that he's devoting one hour of labor time, a certain amount of leisure he has to give up, a certain amount of cost involved with that devotion of one hour of labor time, he's going to get more bang for his buck. And so he will always, if we completely abstract from the temporal element of the present and future, undertake to the longer process. Now, of course, just thinking about this makes one realize that that's quite an absurd assumption that that is probably not how he will act and that it is likely, not definite, but likely that he could choose the shorter process. Now, of course, the very fact that we can even conceive of him being able to choose the shorter process in the condition or in the example we have chosen says something about how human beings value satisfaction at different periods of future time, right? So the present and the future and when satisfaction arrives matter. And this, of course, gives rise to the crucial concept of time preference, which is basically that individuals, all else equal, would prefer satisfaction in the present as compared to the future. Or in other words, consider if Robinson was faced with two different production processes, both of which yielded him a certain, let's say two fish per hour worked or 10 fish at the end of the process, but one was short and one was long. He would in that case never choose the longer process. So in other words, time needs to be economized and we don't undertake a longer process just for the sake of undertaking the longer process. That in a nutshell is what the concept of time preference really implies. That what that also implies is that we care about when we obtain satisfaction in future time, right? Now, an implication of time preference, of course, is that Robinson, in order to undertake the longer process, is going to have to overcome whatever time preference he has. Another way to understand time preference is to say that future satisfaction is discounted as compared to present satisfaction or that you place a premium on the present as compared to the future. That a given amount of satisfaction is preferred in the present as compared to the future. And so he would undertake this process if he can overcome whatever his rate of time preferences. By rate of time preference, what one means is the amount of additional satisfaction that will satisfy him in order to wait longer or engage in this longer production process, right? Overcoming that rate of time preference, which is something that is subjective, right? Is something, is a decision that he would have to make while making this decision between two different production processes. And assuming that his time preference, rate of time preference is low enough, that is he places a low enough discount on the future as compared to the present, and assuming he does undertake this longer process, the first thing he has to do, of course, is save, right? And by saving what one means is reducing present consumption below its possible level, right? In fact, as Bumbawa pointed out, saving is just another way of saying that you have to release resources from the shorter process and devote it to the longer process. Now, of course, the form that saving can take could be in many different forms. He could decide to just work longer, and so he fishes with his bare hands, but then he also works longer and gives up leisure in order to obtain the more fish in the future. But of course, then he's giving up leisure, which is present consumption, and he's reducing consumption in the present below what it could be. Or he could fish with his bare hands and gradually set aside fish bit by bit so that his fish accumulates and then he goes on this longer process and consumes the fish that he saved in the meantime. The form of saving might be different, but saving is necessary for undertaking any extension of the period of production. And that, of course, the amount of saving, therefore, is limited by the amount of the actor's rate of time preference. Another way to think about how time preference can be subjective is to think about different Robinsons on different islands. So you could think of a Robinson with a low rate of time preference and a Robinson with a high rate of time preference. The Robinson with a low rate of time preference will be much more productive. Why? Because he would have saved and invested in a raft and a net, in a bow and an arrow. Maybe he's built himself a house, et cetera. But the Robinson with a high rate of time preference is probably still fishing with his bare hands. He can't obtain any meat. He's probably sleeping under the stars, et cetera. And what we mean by the rate of time preference being subjective is that it can vary for the same person across time, and it can vary for different people at the same point in time. So everybody places a discount on the future, on future satisfaction as compared to the present, but the rate at which you do so can be different and therefore your decisions of which production process to undertake in this scenario would be different. So the reason I went through this example in a little detail is to call two important lessons for economic growth, which also apply in the more complicated scenario where you have division of labor. The first, you can quote Hayek, where he says, which of the many known technological methods of production will be employed is determined by the supply of capital available at each moment. Or in other words, the rate of time preference restricts the amount of saving we're willing to undertake. And as a result, it limits the possibility or determines which of the different production possibilities that confront us we will undertake, whether we do go for the longer, more productive process or the shorter, less productive process. And of course, the fact that life constantly places before any individual in our example, this choice between present and future and a more productive process, which is longer as compared to a shorter one, which is less productive, is something which is just an empirical fact, as Bombawar pointed out. If nothing else, he would have to maintain the capital goods he's produced in the past, which again is an inter-temporal choice. But even if he doesn't want to add to his capital goods, which he's already, he would still have to maintain, in other words, he'd have to replace them as they wear out because they're not permanent. And again, that means trading off the present for the future, because he could fish with his bearer, he could fish with a raft and net and then not care about the future, or as he's fishing with a raft and the net, he could still set aside some time to build a new raft and the net, which he can use once this one wears out. Now the other insight is, we can quote Mises on this. He says the difference between production without the aid of capital goods and that assisted by the employment of capital goods consists in time. He who produces with the aid of capital goods enjoys one great advantage over the man who starts without capital goods. He is nearer in time to the ultimate goal of his endeavors. So think of the two Robinsons, right? And think of you and a helicopter and maybe you're a producer of one of these shows where these guys get stranded on the island and then fend for themselves. But you're looking at these two different guys and one of them has a low rate of time preference, one of them has a high rate of time preference. And you're looking at their activities and you see how he's far richer, he's far more productive. The stream of consumer goods that is flowing out every moment in his economy is much more than this guy. And if you know this economic theory, you say, oh, of course, that means that in the past, the guy with the low rate of time preference was willing to give up presents satisfaction and trade it off for the future. He was willing to save in the past. But now that he has these goods, it's like he doesn't have to save anymore as long as he has those goods, right? So it's like if you could airlift the goods from where the low rate of time preference is to the guy with the high rate of time preference, he would essentially be given almost like he would be saving time because he wouldn't have to give up in the present. He wouldn't have to make sacrifices in the present, but he would have all the goods, right? Which he would have, otherwise it would be impossible for him to produce without saving and trading off present satisfaction for the future. Or he could think of Robinson waiting out into the ocean and finding his ship and saying, oh, all of a sudden, there's actually a little, maybe a little trunk in there with a bow and an arrow and an axe and all these tools which otherwise he would have had to take time to produce. Essentially, that is what Mises is saying. So it's almost like with capital goods, you are further along in time towards the attainment of goals which he could not attain, but for the fact that you had to save, right? Because you could not employ and you could not be more productive if you had not sacrificed consumption in the present in the past. All right, so these are the two main conclusions I wanted to derive from that simple example. And of course, while these are true in that very simplistic scenario, they're also true in the world of today. And that's the power of the constructive problem of that guy stranded on the island because the only difference if you transfer these concepts from the case of Robinson Crusoe to modern society is that it's much more complicated because in any modern economy, you don't just have one man's labor. You have lots of different types of labor services, lots of different types of land. You have many different capital goods which you carry over from the past but nevertheless, you still have the same choices. You still have different temporal patterns in which you could allocate these resources, but you still have the choice of how much you want to save, how much you would like to invest, how many of those resources will be deployed towards embarking on production processes which will yield their fruit later as compared to now. So these choices, of course, exist in any possible institutional framework both for the man stranded alone in the island as well as in any modern economy. And so therefore these conclusions apply just as much to a modern economy as they do to the case of Robinson Crusoe. But the big difference, of course, when we start thinking about a modern economy is this is where we have to bring in a Mises' discussion of the problem of economic calculation because when we spoke about the individual on the island, the production processes we were talking about were extremely short. He could make decisions about how to allocate his labor because the production processes involved, even though one was shorter and one was longer, were relatively short. And I'm sure you've discussed this in depth in your lecture on the problem of economic calculation. The big criticism Mises made of socialism was that, well, in a socialist framework where production processes, you're assuming that this czar wants to create a modern economy like the ones we live in where production structures involve many, many different kinds of capital goods, heterogeneous capital goods, also very long production processes which sometimes take years to complete. And there are many different relationships of complementarity and substitutability between all of these different producer goods and capital goods that basically a dictator or a czar who is essentially in the same position as Robinson Crusoe, except facing a much, much more complex situation, will not be able to make any meaningful choices about how to allocate the producer goods or the higher order goods in his possession. So if he wants to decide how to allocate a unit of coal, whether to this purpose or that purpose, he won't be able to make this decision simply because he won't be able to impute value from the consumer goods back to this higher order good because in order to do that, since value has no unit, he would have to work through all the different relationships of complementarity and substitutability within the production structures. So that implies therefore that if we wish to grow beyond very, very basic production processes, one has to have private property and exchange and money prices for both consumer goods as well as producer goods. So in a sense, once we use, take these lessons and we start to translate them into the case of an economy with division of labor, we realize that calculation and calculation using money prices forms the key and the institutions needed to generate the possibility of economic calculation become absolutely crucial for growth because if growth is supposed to be about embarking on longer and more complicated production processes which are more productive, then that implies that one has to be able to calculate with money prices in order to be able to make meaningful choices about which processes to embark on and which not to. And of course, and as Mises notes, he's talking about all these ventures and processes, he means these different production processes being carried out in any modern economy are intellectually controlled by capital accounting, the acne of economic calculation in monetary terms. Capital accounting starts with the market prices of the capital goods available for further production, the sum of which it calls capital. It records every expenditure from this fund and the price of all incoming items induced by such expenditure. It establishes finally the ultimate outcome of all these transformations in the composition of the capital and therefore, and thereby the success of the failure of the whole process. So in other words, capital goods have to have prices and these prices are of course prices that are appraised by different entrepreneurs and they have to make use of the tools of modern day accounting and in order to be able to calculate profits and losses and capital gains and capital losses in order for these allocations of resources to be made and in order for economies to grow. Now Mises makes another point which is also very important once we start talking about growth in the framework of division of labor and that is a point with respect to international trade and this goes back to the second lesson which we were talking about in the world of Robinson Crusoe. What Mises says and it's very interesting is that he says the capitalist West lent to the backward countries and this he's talking about when the international capital market really became important in the 19th century, lent to the backward countries the capital goods needed for an instantaneous transformation of a great part of their methods of production. It saved them time and made it possible for them to multiply very soon the productivity of their labor. These nations of Eastern Europe, Asia and Africa have been able thanks to the foreign capital imported to reap the fruits of modern industry at an earlier date. They were to some extent relieved from a necessity of restricting their consumption in order to accumulate a sufficient stock of capital goods. So in other words, trade in capital goods is like airlifting goods from the Robinson who would save more in the past and transporting them to the Robinson who'd not saved as much in the past. So what Mises is pointing out is that trade of course also of course helps each region, each country whatever region you wish to choose specialize in the production processes in which it has a comparative advantage. But it also very importantly once the trade reaches capital goods effectively implies that nations can essentially save time to reap the fruits of modern industry at an earlier date than would have been possible. So in other words, the preconditions for growth from this very brief summary that I've provided basically involve the necessity of saving as well as a certain institutional framework of private property and market prices and international trade. So in other words, if a poorer country developing nation was to come to somebody and ask for what advice would you give us if we want to trade, if we want to grow and if you want to improve our standards of life? Well, you'd say, well, put in place the institutions which will ensure that the savings that you generate are allocated in the best possible way and open up doors to trade, especially including in capital and capital goods, right? But this is precisely what in soon after World War II when development economics first originated and became a self-conscious discipline, a separate discipline within the broader field of economics, this is essentially what the advice that developing countries got from development economists was essentially the opposite. Now, one point on which development economists did stress and stress correctly was the necessity of saving. They did say that the poorer parts of the world suffer from a lack of saving if they have to improve, if they have to grow, they need savings in order to produce capital goods, but they neglected the institutional underpinnings. So they said, well, trade is bad, right? There was a lot of trade pessimism that it won't help developing countries to engage in international trade. And of course, markets are bad. So in other words, the best pathway to industrialization is of course to generate savings and invest in these capital goods, but do it all domestically. So produce all the capital goods yourself and secondly, do it led by essentially planned economic regime, right? And one of the poster trials of development in that era was India. And if you look at the structure of the Indian economy at independence, now of course it was highly agrarian. So to give you just a brief history of India, so India was ruled by the British from about 1857 to 1947. Officially it gained its independence in 1947. There had been some industrial activity in India while the British were there, but it had not been extraordinary or had been really clustered in a few geographical clusters or areas. And so the country remained highly agrarian. Most of the labor force was employed in agriculture. The industrial sector, most of it was geared towards production of consumer goods. So most of the capital goods were being imported from abroad as of independence in 1947. Now of course, greatly influenced by most of the advice given by the newly emerging field of development economics, India did a number, took a number of steps. Firstly, in 1950, it set up a planning commission. You know, decided to plan, have five year plans a lot like Russia or the Soviet Union, except of course that in India, not all of the industries were nationalized. So what happened was that you had a huge public sector which developed and which continues to exist despite the reforms recently. And what you also had hand in hand with the huge public sector developing was a huge amount of controls on whatever private industry that had developed in the pre-independence time. So you had a very stringent licensing regime. So if a private entrepreneur wished to expand production, if he wished to change his line of production, if on a certain, in his plant, if he wanted to stop producing one kind of motorcycle and another kind of, and switch to another kind of motorcycle, if he wanted to change his input mix, if he wanted to move from one area to another, all of this was licensed, right? So in other words, he had to get permission from a licensing committee who would then grant him permission and say, okay, you can do this or not that, you can produce X number of these, X number of that. And the idea was to coordinate all of these licenses in line with this five year plan. So in other words, to make the private sector essentially do the bidding of the central planners. It's very similar to the economic regime which existed in many, during war, for example, in the US or even in Nazi Germany, where, and Mises talks about this in depth and Hayek as well about the kind of regime which prevailed in Nazi Germany where you had private property in law, but as far as economically it was concerned, there was effectively no real private property because you had to follow the commands of, in the case of India, the Planning Commission. Now, of course, you also had huge restrictions on international trade. So India became nearly autarkic in many ways, especially with respect to imports. And so you had this huge, along with all of these licenses which you had to get from, in order to change any kind of make any decisions on what you can produce and how you can produce, et cetera. You also had to get licenses if you wanted to get imports of any inputs and you had separate set of bureaucrats who dealt with that. And of course, you had many other regulations which I'm not getting into. So in many ways, India adopted what the economist Michael Heilperin in his book, Economic Nationalism. I think it's for sale at the store here. He termed economic nationalism. He said it's a mix of socialism with autarky. And of course, in a way, a lot of the growth theories of that time were leading countries exactly to this path of economic nationalism because the recipe for growth was supposed to be increased savings, industrialized, but do everything domestically, don't trade, right? Which is kind of like reinventing the wheel because why wouldn't you trade capital goods? Anyway, so this I picked up a little quote from the first five year plan in India. So you can see that the economists who drove the whole planning process, they admit that they accept the fact that the key is stepping up the rate of capital formation. The level of production and material wellbeing a community can attain depends in the main on the stock of capital at its disposal. That is the amount of land, productive equipment, et cetera. But of course, this is a quote from the first prime minister, India. This is a classic. He says, I believe as a practical proposition that it is better to have a second rate thing made in our country than a first rate thing that one has to import. So this was the kind of mentality with respect to trade. And so what you really had was a philosophy of trying to rapidly industrialize a nation by producing all the capital goods domestically. And of course, in order to do that, you have to plan because in order to have that kind of control over the allocation of resources, you would have to have a planning authority. So what happened as a result of this experiment? And as you can see, this violates or this does not take seriously the recommendations made as to the institutional preconditions needed to adopt or to develop a modern production structure which is complex and which can be yield much greater levels of productivity. So India started planning in 1950 and the first 15 years generated quite respectable rates of GDP growth. So GDP growth was about 4%, averaged over the first 15 years. Population, of course, as ever in India was booming along. So per capita, it came down to about 2.1% to 2%, which was not great, but much greater than what existed before independence from all measured data. So in the literature, even recently, this was considered a period of great, of a big step forward. A small, maybe not a huge step, but nothing like the GDP numbers coming out of the Soviet Union, but much better than what existed in a market-oriented economy before independence. Now, of course, you can see here, this is the, I've given you a few numbers on the percentage output change. What I call basic industry there is a term used, you can think of those as really the commanding heights, kind of like iron, steel, cement, aluminum industries like that. You can see the huge difference between the percentage change and output over the period 1955 to 65 in consumer goods, especially like food-related and industrial and the capital goods and intermediate goods, you know, and this kind of reflected the planning process and how they wish to allocate resources, right? But of course, as a result of all of that, and again, there are more numbers here about specific goods, so you can see textile machinery grew at a rate of 440%, machine tools by some 3,500, of course, the base in this is very small, so that's why you get these crazy figures, but basically, there are a lot of resources that are being funneled. The idea is to get, you know, what I want to get, the idea I want to give you is that lots of resources were being funneled to these capital goods industries and the consumer goods industries were kind of being starved for any sort of output. Now, of course, you might, someone might turn around and say, well, of course, this is exactly how growth occurs, right, you save, you give up, consumption in the present, you allocate resources towards those goods that will yield you consumer goods in the future, that's how growth is supposed to work, except no growth happened. So, you can see here, I take, there are two consumer goods which basically entered the consumption basket of literally every Indian. You know, this is a time when India was much poorer than what it is even today, and really the only, you could, in many, for many people, the only two goods that they acquired through the process of exchange was cloth and food. And as far as cloth was concerned, it was mostly cotton cloth. And as you can see here, there was some update, you know, increase in the per capita availability of both of these goods, but that was mostly in the first five years and that was mostly kind of a, that was all the war, there had been a lot of dislocation because of the Second World War and there was some recovery post-war which can account for some of that improvement, but really if you look at it from 55 to 65, there's literal stagnation. In fact, you had the curious case of the amount, the third point there of actually the level of domestically produced food grain availability being constant at 14.9 ounces per head per day through this period. And that's very ironic because actually during this period, the share of employment in agriculture actually went up. So, at the end of this period in 1966, India suffered from what was a near famine. You know, there was a huge failure of rains and there was drought and there was a big failure in agriculture output and it was ironic in that most of the imports which saved, you know, Indians was coming from the US, right? This is the famous PL-480 scheme where wheat was shipped from US to India. So you had this irony that the most industrialized nation in the world was shipping food to the most agricultural nation in the world with 72% of its workforce is employed in agriculture. As a result, you know, at the end of 15 years of this sort of experiment of rapid industrialization through planning. Now, of course, nothing happened from 65 to 80 either, right? The numbers stay more or less the same. There wasn't much improvement in per capita living standards or anything of the sort. Let me just skip ahead here, do you do? So I also analyze the period of the 1980s because that's another period when GDP growth in India was quite respectable. But I want to come to these figures here which kind of give you an idea of like the per capita intake of calories in 1989, 90 in India was lower than that of Brazil, China, Mexico and Egypt and kind of rough figures for the average consumption of cloth in 87, 88, the average Indian male consumed three meters of cloth in the forms of shirt of shirts and 0.6 meters as trousers. So that basically amounts to one shirt and half a trouser per annum. So dire poverty on average. And this is after about 45, 50 years of this experiment. Now, of course, things improve much better post reform and I won't get into that here. Another point I want to hit on is the quality of the goods. So you can see that this massive reallocation of resources towards funneling all these resources towards industrializing the country domestically through planning didn't really work as far as the output of consumer goods was concerned, right? But that's how it's supposed to work. You're supposed to save in the present in order to get something in the future, except Indians were forced to save but didn't get anything in the future, right? Or the vast majority of them didn't, a small percentage who lived, who were politically connected did, which is as the usual case here as it was in the Soviet Union. Just some figures on the quality of some of the consumer goods which were being generated from all of this production on the third point there. So in 84-85, the average call completion rate, so if you've made a phone call, that was only 40%. So in other words, you had to call 2.5 times to reach somebody else, right? Why was that? Because the equipment, and that's the first two points there, which the kind of switching equipment within telephone exchanges was mostly pre-World War II or just post-World War II technology, largely dilapidated. Now, of course, that was local calls. So if you make long distance calls, you had to make five attempts in order to get through. So in other words, it's not that the other person isn't picking up, you just don't get through it. It falls somewhere along the way. And in fact, I remember as a kid, you couldn't call, you would have to actually call somebody and they would manually connect you. Even this is as late as like in the early 90s. This is something which went out of, which in the West is unheard of, but we had to do that when you call long distance. And of course, the lines were terrible all the time. So even if you got through, you could barely hear the other person. And so everyone's always shouting. And so even today, I make fun of my parents and their generation. They have cell phones now, but they still shout. It's like, what's the point? We can hear you. This is a much better era. You don't live in the socialist era anymore. Of course, televisions, so as of 1989, 75% of annual production was still black and white TVs, even though most of the world, including large parts of the world in Asia had moved to color televisions. Why was this? Because well, the licenses weren't given out to produce color television. The quality of these TVs, as measured by government report, was well below international standards. And of course, the best part of it is that you had only one TV channel, which wasn't even 24 hours. So you basically had to wake up in the morning and look at a, you know, a clock run down gradually. So at 7 AM, the TV would start. And as far as watches are concerned, you can see as of 85, 86, 96% of watches made in India were mechanical. And some of them, I think, you still had to like wind every night. But of course, worldwide, the proportions stood at 24%. And all of these changed quite rapidly after liberalization. I have a paper on this, which you can look at in the independent review if you're interested. So with the time remaining, I just wanted to sum up a few thoughts, end with a few thoughts on the use of GDP accounting. So as you can see, most of the periods I looked at in my research were periods when India's GDP growth went up under this regime of planning, much like the way Soviet Union was producing these gigantic GDP growth figures. And so the question is, why does GDP as a measure fail, you know, in these sort of, in these scenarios? For example, the research of Warren Nutter in, I think, was it the 60s? I believe it was the 60s, even then showed that, you know, a lot of the goods being produced in the Soviet Union, despite the high GDP growth rates were of poor quality. You know, most of it was going into producing armaments, etc. A lot of it was not even trickling into consumption expenditure. And the real problem here is, of course, again, the institutional framework doesn't exist. And so there is no connection between investment and consumption, right? So you have, because, of course, the Austrian argument of the need for calculation assumes that the socialist dictator will actually try and make any calculations. Of course, in reality, they don't. It all becomes just a whims of politics, right? Someone wants a factory of this in his region, you know, the resources are funneled there, etc. So what happens ultimately is that you have all of these resources funneled to the capital goods industries, but without any price system or any sort of profit loss system at work. And so you have all this idle capacity building up. You have roads going to nowhere, right? You have a glass factory which won't have the raw material source close by. Milton Friedman, when he went to India, called these the modern monuments, right? Like the pyramids. Of course, all of this contributes in the year in which it was undertaken as opposed to capital goods production. And it's a final good. If you're familiar with the term, then of course, all of this goes in as part of GDP, except nothing comes out from consumption. So as the great classical liberal economist, the only one before, I believe, I think 1985 or so that India ever produced, B.R. Chenoy, whose daughter, Suda Chenoy, was a famous Austrian economist, and her, I think, denoted, and her library to the Institute. He said that when you have such planning, you should look at consumption figures. You should forget about GDP figures. Just look at per capita consumption figures. And in fact, some of the figures I showed you were from some of his work and his daughter's work. Suda Chenoy. Robert Higgs, Dr. Higgs also points this out in his famous paper, talking about the myth of prosperity in World War II. He makes the same point that once you lose the framework of private property and the market system, then of course you kind of lose all track of how investment is being undertaken and GDP growth, and GDP growth rates kind of lose their meaning. And so you have to take all of these with a huge pinch of salt. So I think my time is up, and thank you for listening, and I hope you enjoy it.