The price of onions: The best thing for the govt would be to do nothing

The right immediate action is inaction. The right preventive action is to get traders to constantly hoard too much

The economist Ashok Desai has a marvellous little book that provides insight into the workings of the Indian economy and the crafting of effective economic policy. He calls it The Price of Onions.

Mr Desai shows that a relatively small fall in the onion crop leads to a huge surge in the price of onions. Every student of economics learns in her very first class that supply curves slope up, and demand curves slope down. So when supply falls, the price rises until demand matches supply. Mr Desai explains that for an item like onion, which is widely consumed but