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Sauvik Chakraverti was in Mangalore and he writes about his observations. As usual, a good read.

The other day I was taken to a beach just beyond the New Mangalore Port Trust. What struck was the wall. The entire port is surrounded by a 20 ft high wall.

… because of some theory, Mangalore has moved away from having a port open for the citizens to trade, and now possesses a walled port to which citizens are denied entry. The gates to the walled port are manned by armed guards paid for by the taxpayer. Also at the taxpayer’s expense are a whole lot of customs officials who do not permit trade without prohibitive exactions.

To unravel the sophisms in the theories justifying the wall, I recommend Frederic Bastiat, who did not have a formal education in economics, who never taught at university, and who was just a journalist and pamphleteer. In one essay he put the point across thus: There is this steel magnate in France . He sees cheap steel imports coming in from Belgium and this threatens his profits. He now has two choices. One, he can hire a posse of men and arm them with guns, with instructions to shoot anyone who brings steel into France from Belgium . But such a course is highly inadvisable.

So there is the other option: Go to Paris and pay some politician there to do it for you. He will deploy armed men at the borders at the taxpayer’s expense. And the two of them will share the profits, while the taxpayers who paid for the guards will now pay out even more for steel. After reading Bastiat I arrived at a conclusion: We don’t need the WTO; we need unilateral free trade. Get every government out of trade. And every trade economist too.

Econlib has Bastiat’s works online with a superb review by Sheldon Richman. Another economist who has “never attended a single economics class” is David Friedman. His book Machinery of Freedom was what inspired me to see anarcho-capitalism as a serious alternative to the politics and democracy of today. There’s more from Sauvik:

… Sudha Shenoy, an eminent liberal economist, in a recent interview, said that nearly every economics department in the world could be shut down without having an ill-effect on the world of ideas.

Strong words indeed. She bemoaned the sad fact that economists do not study the real world of human action any more; they are all lost in theories and models and mathematics and statistics. I entirely agree. The wall proves it.

I had written about Shenoy’s views two months back. There is more and more confirmation about the mathematical morass into which economics seems to be slipping. Last week’s Economist writes about the work of economists Dierdre McCloskey and Stephen Ziliak who

found that 70% of the papers published during the 1980s in the American Economic Review (AER), one of the most respected journals of the dismal science, failed to distinguish between “economic” and “statistical” significance. They relied too much on numbers, and too little on economic reasoning.

The two had hoped things might be getting better in recent years. The reverse seems to be the case. In their latest work, Ms McCloskey and Mr Ziliak looked at all the AER articles in the 1990s, and found that more than four-fifths of them are guilty of the same sin. Indeed, so pervasive is the cult of statistical significance, say the authors, that ever more economists dispense altogether with the awkward question of whether the patterns they uncover have anything meaningful to say about the real world.

One of the reasons why I like Sauvik’s pieces is that he makes sharp observations and links them well with ideas, telling us why some ideas and theories bring prosperity while others lead to stagnation and despair.