Ok, the title of my post is more alarmist than necessary, since even I do not think this is a huge warning sign. Now, how can they spin this to blame it on the people for voting out the rightwing BJP? 

BBC NEWS | Business | Indian stocks rebound after pause

Indian shares have rebounded after a drop of more than 10% prompted the Bombay Stock Exchange (BSE) to suspend trading for an hour.

The BSE's benchmark 30-share Sensex index closed 456.84 points, or 4.2%, lower at 10,481.77.

Earlier it had lost 1,111.71 points, its biggest intra-day drop, amid heavy selling by domestic and foreign funds.

Investors said they were worried that recent record gains had come too fast to be justified by the profit outlook.

[...] 

On many left lists, in the West in particular, if you talk about the unsustainability of current human population and consumption, you are often labelled a "neo-Malthusean" and further, an enemy of the common folks and an advocate of population control of the worst kind. A popular modern version of this debate is the Simon-Ehrlich wager, between conservative economist Simon and eco-activistic (and in that sense leftist) biologist Ehrlich; the twist being that it is the conservative who argues against any dangers posed by human population. For the record, Ehrlich lost that wager handily.

Ehrlich offered a newer list of criteria that Simon found unnacceptable (see link above). What is interesting about the new list is that Ehrlich finally starts thinking outside the [human] consumption trap (and the rephrasing of the issue as one of the effects of human consumption).

Recently, biologist Eric Pianka, at the University of Texas, has been in hot water over his own doomsday predictions about disease and death among human populations. I do not know the background of this guy and his affiliations. However, the following note from his website is an excellent argument of why human arrogance and ignorance, in this context, are morally repugnant.

What nobody wants to hear, but everyone needs to know
Eric R. Pianka

I have two grandchildren and I want them to inherit a stable Earth. But I fear for them. Humans have overpopulated the Earth and in the process have created an ideal nutritional substrate on which bacteria and viruses (microbes) will grow and prosper. We are behaving like bacteria growing on an agar plate, flourishing until natural limits are reached or until another microbe colonizes and takes over, using them as their resource. In addition to our extremely high population density, we are social and mobile, exactly the conditions that favor growth and spread of pathogenic (disease-causing) microbes. I believe it is only a matter of time until microbes once again assert control over our population, since we are unwilling to control it ourselves. This idea has been espoused by ecologists for at least four decades and is nothing new. People just don't want to hear it.

Population crashes caused by disease have happened many times in the past. In the 1330s bubonic plague killed one third of the people in Europe's crowded cities. Smallpox and measles decimated Native Americans when Europeans transported them to the new world. HIV is a relatively new disease wreaking havoc in Africa and Asia. Another population crash is inevitable, but the next one will probably be world-wide.

People think unrealistically because they have lost touch with the natural world. Many people today do not really know where and how our food is produced, and on what our life support systems are based. As we continue paving over natural habitats, many think that we can disrupt and despoil the environment indefinitely. We have already taken half of this planet's land surface. Per capita shares of all the things that really matter (air, food, soil, and water) are continuously falling. Our economic system is based on the principle of a chain letter: growth, growth, and more growth. Such runaway growth only expands a bubble that cannot be sustained in a finite world. We are running out of virtually everything from oil, food and land to clean air and water.

Some politicians, economists, and corporations want us to believe that technology will come to our rescue. But we have a false sense of security if we think that science can respond quickly enough to minimize threats from emerging diseases. Microbes have such short lifecycles that they can evolve exceedingly fast, much faster than we can respond to them. Many bacteria have evolved resistance to most antibiotics, and viruses are resistant to just about anything. Defense always lags behind offense. So far, modern humans have just been lucky. A reactive approach to problems isn't enough, we also need to be proactive and anticipate problems before they become too severe to keep them from getting out of control.Many people believe that Earth and all its resources exist solely for human benefit and consumption, this is anthropocentrism. We should allow the millions of other denizens of this Earth some space to live — they evolved here just as we did and have a right to this planet, too.

I do not bear any ill will toward humanity. However, I am convinced that the world WOULD clearly be much better off without so many of us. Simply stopping the destruction of rainforests would help mediate some current planetary ills, including the release of previously unknown pathogens. The ancient Chinese curse "may you live in interesting times" comes to mind — we are living in one of the most interesting times humans have ever experienced. For example, consider the manifold effects of global warming. We need to make a transition to a sustainable world. If we don't, nature is going to do it for us in ways of her own choosing. By definition, these ways will not be ours and they won't be much fun. Think about that.

While he may be temporarily (or even entirely) wrong on the predictions about disease, he is (IMHO) absolutely right on human crowding out of other species, human faith on technology, and in particular our attitude towards the world and how we "consume" it. It is fashionable today (within the left) to dismiss this sort of thing as "new age" sentimentality or "primitivism". The argument deserves more respect.

I sometimes think Economics has more interesting questions than Physics, but less interesting answers than the latter. Perhaps that is so because an ideological position seems almost a pre-requisite before any work in the field is started. Below are a set of links on the issue of globalisation and its effects. Broadly speaking, its somewhat of the same old debate abou free market vs protectionism, but the agents are reversed, and it seems, so are some of the ideologues.

The old story was that, despite its intuitive appeal (and caution gained from the experiences of colonialism), protectionism was bad for developing nations and adopting a free market system was a quicker (and perhaps only) way to achieve economic progress. The Asian Tigers were a clear demonstration of this, it was argued. Closed and protected economies like India, which languished for decades, blossomed into dynamic capitalist success stories within years of “liberalising” their economies. China was a bit of an outlier, but could be explained away.

Then we hear from Ha-Joon Chang about the development history of today’s “first world” nations and the credibility of the critique of protectionism:

Kicking Away the Ladder:
How the Economic and Intellectual Histories of Capitalism Have Been Re-Written to Justify Neo-Liberal Capitalism

Ha-Joon Chang (Cambridge University, UK)

There is currently great pressure on developing countries to adopt a set of “good policies” and “good institutions” – such as liberalisation of trade and investment and strong patent law – to foster their economic development. When some developing countries show reluctance in adopting them, the proponents of this recipe often find it difficult to understand these countries’ stupidity in not accepting such a tried and tested recipe for development. After all, they argue, these are the policies and the institutions that the developed countries had used in the past in order to become rich. Their belief in their own recommendation is so absolute that in their view it has to be imposed on the developing countries through strong bilateral and multilateral external pressures, even when these countries don’t want them.

Naturally, there have been heated debates on whether these recommended policies and institutions are appropriate for developing countries. However, curiously, even many of those who are sceptical of the applicability of these policies and institutions to the developing countries take it for granted that these were the policies and the institutions that were used by the developed countries when they themselves were developing countries.

Contrary to the conventional wisdom, the historical fact is that the rich countries did not develop on the basis of the policies and the institutions that they now recommend to, and often force upon, the developing countries. Unfortunately, this fact is little known these days because the “official historians” of capitalism have been very successful in re-writing its history.

Almost all of today’s rich countries used tariff protection and subsidies to develop their industries. Interestingly, Britain and the USA, the two countries that are supposed to have reached the summit of the world economy through their free-market, free-trade policy, are actually the ones that had most aggressively used protection and subsidies.

[...]

Shortly after came the stories of the workings of the IMF and WB capped by a series of criticisms of erstwhile enthusiast Joseph Stiglitz.

Fast forward to today and we come to the role reversal, where countries like India and China are growing at near 10% rates while the US (and other parts of the West) is bogged down — of particular interest: jobs and outsourcing. And the result has been a strange morphing of positions among the intellectuals, theorists and assorted heavy-weights:

Guru of economics does an about-turn on free trade

At 89, after decades of speaking in favour of it, Paul Samuelson says it’s not such a good thing after all
Jay Bhattacharjee

A battle royale has just been initiated in the rarefied world of economic theory, although the rumblings have not yet reached these shores. The first salvo has been fired by no less a person than Paul Samuelson, and the targets he has chosen include some of his most prominent acolytes and disciples.

The MIT professor, winner of the Nobel Prize in 1970 and research mentor of countless economists, who later became major scholars in their own right, has re-assessed his entire stand on globalisation and the benefits that accrue from the process. In doing so, Samuelson has been scathing in his critique of some of his students, including Jagdish Bhagwati, once a member of his innermost circle.

[...]

The thrust of Samuelson’s analysis is that a country like China, basically a low-wage economy, will create a net negative impact on the American people, when it manages a substantial rise in productivity in an industry in which the United States was earlier a leader. Initially, American consumers may benefit from low-priced goods in their supermarket chains, but their gains may be more than neutralised by large losses sustained by American workers who lose their jobs.

[...]

Needless to say, this has not gone down well with Bhagwati (whom I like to think of as the intellectual version of Thomas Friedman ;-)). Not just a liberal like Samuelson, but also conservatives like Paul Craig Roberts have switched to a protectionist (of sorts) position, and Bhagwati takes on Roberts in the WSJ:

Top Economists Square Off In Debate Over Outsourcing[...]

[Bhagwati:]

Look at the facts for 1999-2002. The Bureau of Labor Statistics shows that, counting four IT-related sectors, the jobs expanded; slowly no doubt, but contract they did not. In 2002, the number of jobs in these sectors was over 17 million.

Contrast that with the estimate of gross numbers of outsourced jobs: They were around 100,000 per annum, and the upper estimates of job loss annually over the next 15 years has been put at 225,000, which is less than 1.5% of the stock of available jobs in 2002. I must add that the net estimates show that the U.S. has many more people employed in services that are exported than are “lost” in services that are imported.

And these jobs will surely expand because the main driver of growth in our economy is our prodigious technical change. Technical change nearly always substitutes for unskilled labor, but it creates new skilled jobs, both by creating new products and processes but also because the maintenance of technology also requires skilled labor.

[...]

[C]ountless … new jobs in unforeseen and unforeseeable occupations, requiring new skills, have emerged and will continue to emerge.

True, we will need to extend our adjustment assistance programs beyond manufacturing. We will also need imaginative programs to assist the older folks who cannot readily acquire new skills for the new jobs. We will finally need to delink medical benefits from employment: a change whose time has come, now that increased exposure to trade means that flexible responses to changing opportunities are possible.

But what we do know is that protection will only compound manifold the difficulties of adjustment for our skilled workers.

[...]

[O]ur social safety net is not as strong; and the family has been frayed, so neither the social nor the personal safety net is available to meet difficult problems of adjustment to import competition. So, when the fear of job losses is high, anxiety
is immense, as now.

[...]

Astonishingly, a liberal leadership of the Democratic Party that professes to better credentials on altruism in regard to developing countries is now committed to policies that are aimed at the developing countries which are using the trade opportunity to work themselves out of poverty, while a Republican president has taken the high road on both outsourcing and on foreign investment!

I think Bhagwati is right[er] (as are people like Krugman who have made similar points) about the last point he raises, and it is interesting to note that he is willing to talk about things like safety net or the difficulty of retraining.