ECONOMIC GRAFFITI, ESSAYS FOR EVERYONE BY KAUSHIK BASU: BOOK

REVIEW

DEVYANSHI AGARWAL
BCOM(H) 1ST YEAR

In any country, one of the prerequisites for successful economic policy-making is a minimal
economic literacy among its citizenry because if people are misinformed, they can end up
blocking a policy, not because they do not like its consequences, but because they have a false
notion of what these consequences are.This book is a collection of selective popular essays in
economics and a contribution towards bringing the ideas of economics within the reach of the
general reader. In characteristically lively and readable style, free of jargon and ambiguity, the
author writes on subjects of Indian and international concern. The themes vary widely- from the
sections on economics and opinions, and methodological issues, to essays on practical matters
like budgets and fiscal policy, inflation, infrastructural bottlenecks, trade and international credit.
Particularly thought-provoking are the author’s views on corruption, which can be a complex and
interesting subject of study.

The book was published in the year 1991 and the topics discussed are very much relatable even
today, our economy might have seen growth but certain problems are stagnant.

Kaushik Basu refers to corruption as a ‘status symbol’. It is so in India, because it was our upper
classes which have been indulging in big-time corruption , that it was generally becoming a
status symbol. Thus black money, far from being a matter of guilt, was in fact a sign of your
being a person who matters. A malpractice is directly undesirable in an obvious sense. When
corruption becomes widespread in a country, the first disturbing consequence is that it compels
those who would rather not indulge in such practices to nevertheless do so.
His central argument was that in devising rules and regulations to control corruption, we should
aim to hold corruption down to what will be described as the ‘optimal level’. At first this might
sound paradoxical but the thesis follows directly from some standard principles of economics,
which have been applied profitably to project evaluation, environmental protection and pollution
control.
 He explains the coin crisis in one of the most hilarious yet awakening manner. He says, a coin
crisis for most individuals has merely nuisance value. However, in totality it can be the source of
much harassment, particularly for the poor to whom the regular loss of small change can mean a
lot. It gives shopkeepers and traders the leeway not to return change under the pretext that they
have none.
Experiences such as this leave one wondering about the wisdom in the simple monetarist view
that money supply explains inflation. The emergence of money substitutes is a reminder that the
supply of money and its substitutes is itself a response to deeper economic forces. And while
governments so often boast of having controlled inflation, the unfortunate truth is that inflation
to this date remains, largely, an enigma.

The book also talks about some local matters such as Low-Voltage City Notes, how chronic
electricity shortage was taking on Calcutta’s academic and cultural life. The sad aspect of this
power crisis was that it had made the city’s lopsided income distribution even more unbearable.
He talked about Calcutta’s metro, conversations in a village, there in a household he noticed a
pile of unripe bananas, obviously the fruits would have fetched a better price if allowed to ripen,
but before that they would have been stolen from the trees. To beat the thieves they have to pluck
the fruits earlier and equilibrium was reached when the poor people made it a practice to pluck
them so early that the thieves find it uneconomical to take the trouble of stealing. The outcome is
sub-optimal for all, despite rational behavior on the part of everyone. One wishes that the
‘invisible hand’ would not be quite so invisible!
Kaushik Basu’s views on rent control and amending Delhi’s Rent Control Act are eye opening
and gives an insight on how forces of demand and supply work themselves out in establishing an
equilibrium between landlords and tenants.

The book talks about a lot of knowledgeable and interesting subjects such as Indians in the U.S.,
The Budget and Income Tax, Inflation and Evasion, Economics and the British Election,
International Credit, Drought and policy, The Phenomenon of Mass Unemployment and many
more.
Economic Graffiti truly stands by its name and gives an opportunity to the reader to form an
opinion on the issues with an insight on the subject matter of Economics.