AspiringbuddhA

Free Kareem

2007-02-15T01:53:00.000-08:00

Shruti Rajagopalan, India's favourite new blogger, made a personal request I could not refuse. I reproduce her post below. If you blog or have friends who do, please register your protest by posting about it.

Today is Free Kareem Day to protest the detention of 22-year-old Egyptian blogger Abdul Kareem Nabeel Suleiman (better known as Kareem Amer), who was arrested for expressing his secular views on his personal blog. His trial is on Thursday, February 22, 2007, and if convicted he is expected to be sentenced for 11 years.

Today there will be peaceful rallies to support both Kareem and the right to freedom of expression. Drew, from DI, has taken up this cause and will be protesting in London. These are the cities where protests will take place London, Washington DC, Chicago, New York, Bucharest, Rome and Ottawa. More information about the protests is here.

I think the Indian Bloggers will share my sentiment especially after the Indian Government blocked the access some blogs a few months ago. The question is not about Kareem's views. I personally don't agree with any of them. But he has the right to express them and shouldn't have to go to prison.

It's sad the in this century we are still being intellectually enslaved, now with sovereign and constitutional sanction, and our right to freedom of speech and expression is either not recognised, and if recognised is infringed.

I request my readers to protest this, participate in the protests in the various cities if possible, or join the blog protest in India by writing about it.

Apocaplypse or Technology upgrade

2006-12-06T11:15:00.000-08:00

A substantial issue which John Tierney raised in the New York Times, is that combating global warming might seriously dent the growth of the poorest countries in the World.

But we need to balance uncertain future benefits against certain costs today. Most steps to combat global warming will be expensive and will slow economic growth, inevitably affecting poor people around the world. More of them will be sick, and more of their children will die. They'll be less educated and live in less technologically advanced societies.

If the past is any guide, the chief plagues and disasters afflicting future generations will be different from the ones forecast by Al Gore or any other popular prophet. The best insurance policy is to build free, prosperous societies of smart, adaptable people.

NYT (14th October 2006)

One of the dividends that we in the developing world are harvesting, is the redundancy of developing new technology.

Since much of the available technology for power production and industry relies on fossil fuel energy, the developing world does not have to invest in its development. If it were necessary to develop exclusively clean technologies, who would bear the cost both in money terms and in terms of the opportunities lost while the technology is developed, implemented and matured?

I might be wrong here, but if there are technologies available to cheaply deliver ecological benefits in excess of the cost of developing or adopting them, then why aren't people already using them?

If mature environmentally friendly technologies exist... The question then is how best to use the scarce resources available for awareness and advertising. Rather than being spent on apocalyptic prophecy about global flooding, perhaps highlighting the solutions and pushing for their widespread adoption would be more socially productive. As well as to focus the efforts on those living in the high risk coastal zones and helping the handle the impending change.

HT: Julian Morris via email on the Spontaneous Order mailing list.

The Limitedless Market

2006-11-25T03:59:00.000-08:00

I've been hiding under some stone, which has kept the wit of Ramchandra Guha safely hidden from my knowledge. An email this morning managed to rectify this gross shortcoming in my education. [Update: Thank you Makarand.]

In a piece in The Telegraph, Guha proposes an interesting theory about why Indian intellectuals hold markets in disdain:

My own theory about Indian economists is more specific and hopefully less facetious. It runs as follows; Gujarati economists place faith in the market, while Bengali economists are prone to trust the state. In the Fifties, when P.C. Mahalonobis drafted the Soviet-inspired second five year plan, A.D. Shroff responded by starting the Forum of Free Enterprise. In the Sixties and the Seventies, about the only economist of pedigree advocating Indian integration with the world economy was the Gujarati, Jagdish Bhagwati. He was opposed by an array of Marxists, many of whom (naturally) were Bengali.

On a broader level this issue has been addressed (but perhaps not satisfactorily tackled), by intellectual heavy weights like Ludwig von Mises in "Anti-Capitalistic Mentality", Friedrich von Hayek in "The Intellectuals and Socialism" and Robert Nozick in "Why do Intellectuals oppose Capitalism?". There is also a Mises Institute commentary here.

Guha's theory is amusingly similar to the Commanding Heights documentary that proposes a clash of ideas. He takes it a step further Indianising the concept to identify the ideas closely with communities. Presenting the clash of ideas as a conflict of attitude between different ethnic groups, playing on well-worn stereotypes of cosmopolitan India. I am always amused at how intellectuals use stereotypes in public discourse (or is it discord).

My own theory of attitude of intellectuals is that the market is too big to control, so massive that it can't be understood in conventional frames of thought too caught up with the overt symptoms to delve into the underlying framework. If it can't be easily controlled, or easily understood, it evokes fear. This fear prompts calls for regulation and state intervention. I wish it prompted a fresh look at the frames of thought. Alas...

That aside, the main object of interest and disagreement I have with Guha's otherwise pro-market piece is his attempt to hold the middle ground with a very weak argument:

The market does have its imperfections. One is that left to itself, it tends to pollute and degrade the environment. A second is that employers generally do not pay attention to the health and safety of the worker. A third is that without consumer vigilance and action, industrialists do not always deliver on quality. A fourth is that the market disregards those without purchasing power. A fifth is that one cannot rely on the market to deliver on goods and services whose value cannot be reduced to monetary terms, such as primary education and basic healthcare.

The limits he perceives are at best a product of ignorance and at worst, conviction. All five points are perhaps illustrative of the problem that will face the Bengali intellectual of Guha's cosmology once he/she overcomes his/her disdain of the market. The challenge is to look beyond the obvious symptoms which are easily attributed to the market and to the underlying regulatory framework within which it functions.

All the objections he lists are founded on the mistaken notion that the market is some independent autonomous entity. In more virulent mythology it is perhaps controlled by a cartel or a syndicate managed by a group of scheming capitalists.

We are the market! If only intellectuals realise and understand that our anonymous interactions with people we will never meet are the driving force of this wonderful spontaneous institution perhaps such popular mythology would be dispensed.

------------
For those with the patience to read I have refuted each of the 5 points he raises, below:

1. The Market tends to degrade and pollute the environment.

This is true of our current situation where a lot of property is owned by no one at all. Of course the title lies with government, but ownership also means active management. The public perception of rivers, lakes, air etc. as public property also prevents any specific members of the public from taking responsibility for them.

Say the Ganga belonged to the Ganga River Cooperative, whose stakeholders were the people living along the river. They would be able to charge the Mathura oil refinery for the chemicals it pours into the river. This would force the refinery to think through the technology it uses, so that it can minimize the pollution charges.

Blaming the market for pollution caused by the government's insistence on maintaining its control over the environment is more than a little unfair.

2. Employers don't pay attention to the health and safety of workers.

This varies. There are industries in which workers get the short shrift. However the regulation of industrial employment, through imposed health and safety standards raises the cost of doing business, and would perhaps have a negative effect on the industries ability to hire more workers.

The group of employers worst affected are start-ups and small businesses, for whom such regulation would just raise the entry barriers. If new competitors do not emerge for the existing pool of labour the large established employers will likely find ways to cut corners on health and safety.

In industries and professions where companies compete with each other for the best talent, employees come out the winners. Software companies and call centers are classic examples. The best workers protection is minimum entry barriers for employers, competition and technological progress.

3. Consumer vigilance and the quality of output

Consumer vigilance is important, but competitive pressure is far more potent force keeping quality and standards high across industries.

The simplest instance I know of is the dramatic improvements in quality at my local pani puri shops. Initially there was only one shop, which served the standard fare. Then shop next door noticing the traffic, started its own stall. Over the next 12 months there was a dramatic series of quality improvements. When I last visited the stall, apart from embellishment to the product the pani puri walas had uniforms and put on disposable plastic gloves, while the stuffing was covered in cling film. There was no consumer movement for better pani puri.

The threat of business going elsewhere causes producers to compete on quality, without any consumer vigilance. The problem with vigilance movements is that they will tend to suffer from the problems of rational ignorance. Most of the time people just wouldn't care enough to go out and act politically or civically. They would just switch to using another product. So the best consumer protection and quality assurance is competing producers.

4. Markets disregard those without purchasing power (i.e. the poor)

This is perhaps the most brutal misrepresentation of them all. Take the simple instance of drinking water in urban slums.

Two enterprising interns at CCS (Aditi Dimri and Amiya Sharma), spent 2 months walking around and observing Sanjay Colony a slum in South Delhi. They surveyed various aspects of the colony's economy, but their findings relating to water are pertinent here.

The Delhi Jal Board is responsible for the provision of water. However since the colony is illegal they can't provide taps in each house, because that would imply legalisation. Instead they send in tankers, which are assigned to individuals who are responsible for its distribution. This politically distributed water is insufficient and unsafe for drinking. So where does Sanjay Colony get its sip of water? Small sachets of water sold for Re. 1 each. Here is the market explicitly creating solutions for those with "limited purchasing power".

There are innumerable products ranging from water, to primary education to health care to shampoos, cold creams and telephones (here I am thinking of the PCO) that are packaged and priced especially for the poor. The real question is why are the poor poor? The answer will lie in the regulatory framework that continues to strangle their lives, a framework supported by unjust laws that empower and enable corruption.

5. The market doesn't provide primary education and primary health care

A quick glance at Aditi and Amiya's paper on Sanjay Colony will disabuse the reader of this myth as well. But it is important to get into a few specifics just to know how badly off the mark this statement is.

The most comprehensive work here is done by James Tooley, who has looked at instances around the world where private schools provide access to primary education to the poor for a price. The standards are not the greatest in the world, but often exceed free government schools, and parents are willing to pay to secure their children's future.

The problem here again is regulatory. In Delhi most private primary schools providing education to the poor are unrecognised. This means that children going to these schools have a tough time moving into secondary education. The quality or access to government schools is often bad enough for parents to send their children to these unrecognized schools.

Transparency

2006-10-08T21:13:00.000-07:00

At work I have been immeresed in developing a measurement for government compliance with proactive disclosure or transparency. The libertarian perspective on this has tended to conflict with that of the hardline transparency guys, atleast in the Indian movement. I am told the latest Indian Magsaysay Awardee, Arvind Kejriwal believes that even Doctors, Lawyers and other "professionals" should be subject to provisions similar to the Right to Information Act. Something libertarian inside revolts at that thought.

On a much (much) broader level, is the issue of privacy in the face of technological advancement. I remember reading Arthur C. Clarke's prediction for the 21st century, that privacy would suffer, because of more easily available surveillance technologies, and inspite of protests from civil libertarians. Over here I came across a link to a wikipedia article about The Transparent Society a book by another sci-fi author (I had never heard of before), who seems to undertake a thorough analysis of the issue, comparing the illusion of privacy mantained by a government monopoly on intrusive technologies, and the total destruction of privacy, through open access to technology and private information/surveillance.

Choices are always good, but one needn't like the choices at hand. I hate these choices. It is difficult for me to accept the proliferation of transparency as a fait accompli, but that seems to be the trend in technology, which promises to get more exciting, and useful, yet more intrusive. Perhaps a rare moment, when I am torn between my love of technology and my love of liberty.

Eventually, I guess I'll settle with the total destruction of privacy, but for now I enjoy what little I have.

What's the similarity between...

2006-09-20T05:25:00.000-07:00

...for-profit sex and for-profit education in India?

They are both illegal.

Well... that might seem a little strong.

There is much for-profit sex in India, and the government even distributes condoms to prostitutes, just that they can't go around legally telling people that they provide sex for-profit.

There is much for-profit education in India, just that the government says that only charitable trusts can run schools. Small schools in poor areas, run by enterprising guys who are trying to solve a problem for their community... they try to make a profit too. Neither the big DPSs nor the Happy Flour School/ hairdresser/ mehndi shop in Sanjay Colony, Delhi, are allowed to legally tell people that they provide education for-profit.

Wouldn't it be a more honest India, if they could both legally say that they were solving someones problem, and making a profit doing it?

An Introduction

2006-08-15T09:40:00.000-07:00

For better or for worse I share with India, a birthday. Everytime it comes around, a wrenching feeling makes itself known in my soul. Like India I have difficulty describing who I am, like her I have to dig into the past to find excuses for my existence. I suspect, that when she turns 60 and I 26, the wrenching feeling will return.

I don't know politics but I know the names
Of those in power, and can repeat them like
Days of week, or names of months, beginning with
Nehru. I am Indian, very brown, born in
Malabar, I speak three languages, write in
Two, dream in one. Don't write in English, they said,
English is not your mother tongue. Why not leave
Me alone, critics, friends, visiting cousins,
Every one of you? Wy not let me speak in
Any language I like? The language I speak
Becomes mine, its distortions, its queerness
All mine, mine alone. It is half English, half
Indian, funny perhaps, but it is honest,
It is as human as I am human, don't
You see? It voices my joys, my longings, my
Hopes, and it is useful to me as cawing,
Is to crows or roaring to lions, it
Is human speech, the speech of the mind that is
Here and not there, a mind that sees and hears and
Is aware. Not the deaf, blind speech
Of trees in storm or of monsoon clouds or of rain or the
Incoherent mutterings of the blazing
Funeral pyre...
[from Kamala Das' An Introduction in "Summer in Calcutta"]

A clot and half a tear

2006-07-12T04:30:00.000-07:00

Not a tear rolled down a cheek, but hearts were beating, dials were depressed, lines were choked. Bombs had burst, splintering bodies and destroying the shoulders that bear the brunt of the burden of life's suffering.

A weight grew in my heart and refused to lighten. I don't know how many have died, I don't know those that have died. A tear finally struggles over the corner of my eye. It is not the city, it is not the meaningless mass murder, it is not the burden of knowing the cruelty of men. Just the pain of commuting a life sentence of suffering to death, a gash in humanity's battered but hopeful soul.

It is both too early and too late to ask questions of why. An honest thought slips between my sophistic perambulations over difficult terrain: had it been my heart that was hurt there would be none left of it. All I can offer is a clot in my chest.

Bad rules make bad politicians

2006-04-09T10:05:00.000-07:00

I recently made an unqualified statement about the Office of Profit controversy. Writing on the same issue Subhash Shukla at NDTV says:

The makers of our Constitution were legal luminaries. They tried to plug all the loopholes in our Constitution. But what they could not envisage was that the politicians of today would stoop to such low levels in their lust for power and self–aggrandizement.

The writers of the Indian constitution were indeed legal luminaries. Contrary to Mr. Shukla's contention though this seems to have caused them to willfuly punch holes in the constitution. The first and biggest hole is its massive size. Even today, just as at the time that it was written, most people can't read the constitution. That is indeed quite tragic, because it is the basic document that governs their lives.

The Constitution of India has 395 articles, 7 schedules and 5 appendices, and it has been amended 93 times. The first time, by the Constituent Assembly before the first General Election, and most recently in January of this year. This is a direct side affect of the size and scope of constitution, which gets into minutae, which could easily be handled by supporting legislation, rather than the basic document. If plugging loopholes had indeed been a concern of the writers of the constitution, it would have been a far smaller document with a very specific focus on defining the terms on which the new nation was to be based.

Good advice is wasted on more than just the youth. Mary Schmich's advice to Chicago Tribune readers in 1997, that became famous as the Sunscreen Song, rings true:

Accept certain inalienable truths: Prices will rise. Politicians will philander. You, too, will get old. And when you do, you'll fantasize that when you were young, prices were reasonable, politicians were noble and children respected their elders.

Politicians always have and always will abuse power. They will always be embroiled in controversy, because the game they play is zero-sum. If politicians were to play win-win games they wouldn't have to be so corrupt, but the nature of politics is zero-sum so you can't blame them for much more than choosing to be a player.

I think of politicians as lobbyists. Often a false seperation is attempted between non-elected public relations firms, and elected representatives. The former are viewed with derision as sleazy, the latter venerated as noble and selfless. I don't think that seperation is true except in the public imagination. Politicians are elected to lobby for their constituents, their supporters and their parties, and most importantly their own self interest.

Deriding modern politicians as perversly corrupt, does little to fix the problem. The problem which lies in the terms of the game they play as lobbyists. The terms are set by the constitution, which allows politicians to do anything, as long as they don't denounce it altogether. In some sense this is an insoluble problem atleast in India.

Some steps I'd like to see though, which might be feasible, were outlined in my post about Offices of Profit. Most importantly that politicians should become more responsible to their constituents. This can be effected if their pay packet is negotiated with local panchayats and municipal wards, and paid out of local taxes. This would turn the power pyramid upside down.

Another kick in the shin...

2006-04-08T13:30:00.000-07:00

... for the enterprising Indian.

An enterprising, free spirited Indian in the heartland starts an endeavour, he helps build a community bond, and makes a small income.

Bored with running an electronics repair shop, Raghav stumbled one day on an innovative way to broadcast radio from his thatched roof shop by slinging a transmitter on a bamboo pole with a total investment of Rs 50. The do-it-yourself community station became an instant success.

Raghav was happy and popular, besieged by requests from his fans to play their favourite songs. He earned Rs 2,000 a month — a nice return on his Rs 50 investment — fed his family of five and won the respect of villagers in the surrounding districts of Muzaffarpur, Vaishali and Saran within a 35 km radius of his radio station.

The Government of India in all its wisdom and magnanimity, promptly throws the book at him.

Two weeks ago, on March 27, his station was closed and his equipment seized because he broke two laws, he did not possess a licence and he gave news on FM radio. A formal police complaint has been lodged against him.

I wonder whether there is any end to this hypocritical stupidity. On the one hand the government promulgates a budget busting National Employment Guarantee scheme, that throws crumbs at the poor. On the other it goes around breaking the back of anyone who wants to stand on his own feet. India still hasn't won freedom, atleast not all of India.

Read Gurcharan Das' whole column here.

MORE: This is BBC article that shed light on Raghav. In this case it might have done him in, as well. One of his fans said:

"The boy has intense potential, but he is very poor. If the government lends him some support, he would go far," says Sanjay Kumar, an ardent fan of his station.

To their credit the government did do something. I am wondering though whether a reverse policy, i.e. government subsidies. I wonder whether the same could be said of this as Rockefeller said of Alcoholics Anonymous:

"I’m afraid money would spoil this thing." [Ref: DeKruif 1960]

EVEN MORE: Amit Varma chimes in, with some thoughts about pragmatic libertarianism. The gist of what he is saying seems to be, the government sucks, but it shouldn't do any harm.

The French are rioting...

2006-04-01T15:33:00.000-08:00

...again. Apart from love and art, the French now seem to have found a new national recreation in rioting. In fact it seems to be so innate a cultural trait, that even massive social barriers couldn't prevent this habit from passing on to the immigrant enclaves. Let us set that aside for a moment and think about the latest predicament that has brought the French into the streets in hoardes, destroying the property and livelihoods of... the French.

So the immigrants rioted because they didn't have jobs. Something like 40% of the youth in that community don't have jobs. These aren't all first generation immigrants mind you, many of their parents and perhaps grandparents fled Africa in hope of finding a comfortable life, or perhaps just a more comfortable one. They did, but paid for it by being locked into those well planned suburbs, La Cité.

Young non-immigrant French don't have too many jobs either. 10% of the population at large has no jobs. They aren't going hungry ofcourse, but the government has been reneging on its commitments to balance its budget to pay for their well being. The reason for so much unemployment is the rigid labour market, which almost locks employers into life-long contracts with employees.

This prevents employers from firing people when they don't need them, say for instance during an economic downturn, or when productivity booms and labour has to be shifted to alternative occupations often not in the same firm or industry. This puts a strain on resources, and firms choose to either write-off their existing employees as a regulatory cost, or do other drastic things like move their production overseas. What they don't do is hire more people. Often this means that they don't hire more young people, because older people are difficult if not impossible to fire.

In this instance, perhaps France can look to India for some lessons. The infamous droves of educated-unemployed who infested their parents' homes and the popular cinema right from the 1970s through the mid 1990s were suffering from the same plight that the French hoardes face today. Little or no economic growth, seeing other world economies surge ahead, seeing the evil capitalist as the cause of one's troubles, seeing a socialist government as the only cure. Atleast on the last count they both get it wrong.

If the government of France does not take the steps it is taking now, it will perpetuate two trends in French business. The first is the bonsaisation of French industry, by which I mean the trend towards having more small firms which don't have to face as many government regulations. This will prevent new French firms from growing, leaving the old established firms in 'power' so to speak. The second is the continuation of a large group of unemployed youth, ready and willing to destroy everyone elses property. To paraphrase Karl Marx, 'Youth of France Unite! You have nothing to lose, not even your welfare cheques!'.

The French as a nation are a puzzle, but then I think of Maharashtra and our own local luminaries who give the French administration's distilled myopic nationalism a good run for its money. If you went, 'Huh!, how did our great state come into the picture!', I don't know. Head works in strange ways sometimes. I discovered the France-Maharashtra link in a wikiconversation^TM with Nikhil Bhat once, perhaps if I decide to start keeping promises I'll get around to writing a proper post on that too.

Cool Capitalism

2006-03-30T06:40:00.000-08:00

The Bombay summer is kicking in. Though I have the comfort of an occasional cup of tea in an Air Conditioned room, most of my day is spent trying to get an often reluctant table fan to throw enough humid air my way.

The development of Air Conditioning is a Capitalist story, and Ed Hudgens of the Objectivist Centre tells it and more...

(Willis) Carrier's achievement was that of a capitalist at his best. He made scientific-engineering discoveries and applied them to create equipment to manage temperature and humidity in a controlled, uniform manner. He and his company then went further, doing what only private entrepreneurs can do: They commercialized their products, making them widely available first for manufacturers, then for retail establishments and finally for our homes, cutting prices and increasing quality. Carrier's initial $35,000 investment resulted in a company with sales of $9.2 billion in 2003.

Of course, air conditioning not only keeps us comfortable, as important as that is; it literally can keep us alive. A recent Centers for Disease Control publication found about 4,780 heat-related deaths in the U.S. between 1979 and 2002, about 200 per year. In light of omnipresent AC in America, we suspect most of those tragedies occurred outdoors. By contrast, during the heat wave in Europe in 2003 some 15,000 French, most of them elderly and in non-air conditioned dwellings, died; throughout Europe as many of 35,000 might have succumbed to the heat. With fewer regulation to drive up their costs, many of those lives could have been saved with a $150 AC window unit.

But don't air conditioners mean more energy consumption? Absolutely! It's great that the human mind and entrepreneurs in the free market can figure out how to dig for coal, drill for oil and discover the quantum secrets of the atom, all in order to produce power so that we can all live in comfort. In distant centuries, when we actually run out of oil - a different problem from government prohibitions on drilling in politically correct locations - entrepreneurs will figure out commercially viable ways to employ the energy from wind, ocean waves and even solar power -- not only here on Earth but from giant orbiting solar collectors. That will give us cheap, clean power. (Hyperlinks added)

Hudgens has a sweet tooth for science-fiction and is a future-optimist. He isn't a crisis-guy who gets caught up in short-term, often fabricated dillemmas. He looks back at history, and sees the grit and determination of individuals who have looked beyond the pale of the possible, and created the wonders of the modern world. This lightens up his view of the future, driven by creative individual actions.

Hudgens is a Rand devotee, and it shows in his writing, or if you have met him even in his stark sartorial style. I am not as devout a Randian, but I do see the creative capacities of people who put their mind to small problems, and change the world in big ways. A few weeks ago I discovered Stan Ovshinky and Isaac Berzin. Their personal missions seem to indicate that part of the long-term thinking about energy that Hudgens alludes to has already started picking up pace.

For Hudgen's take on the implications of Friedrich Hayek and Isaac Asimov on space policy and the human condition, look here.

Offices of Profit

2006-03-29T11:21:00.000-08:00

Members of Parliament and Legislatures should not be allowed to hold any other offices of profit or otherwise in government, apart from those in cabinet, and within parliament.

Further I think the salaries of MPs and MLAs should be determined by the Panchayats within their constituencies on an annual basis, and should be drawn from the taxes collected at the local government level.

Would you vote for her?

2006-03-26T13:59:00.000-08:00

If you lived in Ukraine, you'd have had a chance yesterday. Yulia Tymoshenko one of the Orange Revolutionaries, former Prime Minister and according to exit polls the second highest vote getter in yesterday's Parliamentary election. I wonder if Sonia or Priyanka will ever put out Wallpapers (scroll to the bottom of the page) - in 5 different sizes - featuring themselves on an Enfield Bullet.

On a blander note, Ukraine just shifted into a proportional representation system. This got me thinking about the implication of a proportional representation system in India. The rather messy dataset is available at the ECI website. Perhaps in a couple of days I'll put up what the 2004 elections would have looked like with proportional representation.

Perhaps the personality driven polity of India would be better suited to this system. But more on this at some later date.

Firing up on Child Labour

2006-03-26T13:32:00.000-08:00

In today's NYT/Op-ed Katharine Weber joins the popular and fallacious chorus:

...There may never be another tragic factory fire in America that takes the lives of children. We don't lock them into sweatshops any more. There are child labor laws, fire codes.

But as long as we don't question the source of the inexpensive clothing we wear, as long as we don't wonder about the children in those third world factories who make the inexpensive toys we buy for our own children, those fires will occur and young girls and boys will continue to die. They won't die because of natural catastrophes like monsoons and earthquakes; they will die because it has become our national habit to outsource, and these days we outsource our tragedies, too.

My first reponse is despair. Despair about the author's now typical disdain, which runs counter to both the fact of the matter in country's such as mine which are blighted by outsourcing in her opinion, as well as the history of her own country. There are lots of things that are wrong with her argument including massive logical leaps, that would put even the most adept athlete to shame. I will just look at her contention about the impact of laws on child labour and fire hazards.

There is no Child Labour in America today because life expactancies have risen, adult incomes have risen and they can afford to send their children to school rather than being forced to send them to work. There was a study about Child Labour in the America in 1920 that found that by that time most of the money that kids earned went to fund their education. The implication being that in a low income setting Child Labour may have an augmenting effect on child welfare, rather than the reverse suggested by the author. Here is part of the abstract of that study:

I also find a strong negative externality among children: as the proportion of working children by household rises, everything else equal, the probability that each child works falls while the probability that he attends school rises. This suggests that parents redistribute entirely the returns from child labor to the children in the household, consistent with a model of household labor supply with fully altruistic parents.

Fires still happen in America, though the risk is definitely smaller because of the luxury of not having to run gas into all houses and buildings, because of plentiful electricity. Wiring is better not because of regulations but because of technological improvements and greater material wealth that allows more precautions to be taken.

I don't know whether this is an artefact of being a bleeding heart, but Weber in an effort to instigate the guilt of her fellow consumerist citizens, seems to confuse the causes of poverty and deprivation in poor countries. India, Bangladesh and Thailand are not poor because of outsourcing, but quite to the contrary because the Americans and Europeans sat behind walls of quotas and tariffs for nearly a century. The trade and the incumbent 'outsourcing' that she so disdains are infact the glimmer of hope that I pray will one day consume the poverty that I see around me.

Link via email, courtesy 'The Great Bombay Blogger' Amit Varma.

Lord Bauer of Market Ward

2006-03-14T12:47:00.000-08:00

The second example concerns the importance of microcredit, including the role of new initiatives, such as the Grameen Bank of BRAC in Bangladesh. The unsung hero in the ideas behind this movement is surely Peter Bauer. Through the 1950s to 1970s, Peter’s was the lonely voice arguing for the economic role and business responsibility of the poorest people in the world. If the role of microfinance in development is seen today as something of a radical departure (and this it certainly is in terms of institutional development), it must also be seen as being entirely in line with Adam Smith and Peter Bauer, in its emphasis on the massive promise of domestic trade, based on the responsibility of the resource-poor underdogs of society who can, given supportive institutions, make great use of trade—with dignity, wisdom, and trustworthiness.

Peter Bauer was not only a great champion of trade, he was also a strong defender of trade for all—not just for the fortunate few. Peter was not at all an egalitarian in political philosophy. That, in fact, is a considerable understatement (we often argued on that subject), but he was very clear—as Adam Smith had also been—on the constructive role of shared opportunities in vastly broadening the domain of fruitful trade. The so-called left-right divide has been epistemologically counterproductive in clouding this issue. Trade is not just what the bankers and industrial magnates seek—it is sought, among other things, by the poorest in the world, in their efforts to make themselves a little less miserable...[PDF]

Says Amartya Sen of Peter Bauer in the Cato Journal. Here is Sen's less flattering review of Bauer's book Equality, the Third World and Economic Delusion. You can also catch Sauvik Chakraverti's take on the Lord Bauer of Market Ward, here.

Seems to be a nice guy, not unlike some of the other people who have contributed to that issue. The star line-up includes Milton Friedman, Thomas Sowell, Israel Kirzner, James Buchanan, Deepak Lal and Vito Tanzi.

My kind of environmentalism

2006-03-04T04:52:00.000-08:00

STANFORD OVSHINSKY I don't ask for, when I introduce a brand new thing, I never ask for taking a vote. We offer solutions here to what people think are the most serious problems right now -- pollution, climate change, and wars over oil. As well as building new industries. So I think if you want to change the world, this is a better way than making political speeches.

...

ISAAC BERZIN Exactly, so that's one of the reasons we think it's going to catch. Because if you want to make an environmental revolution, you have two ways. OK, one way is take stones and throw stones on the bad guys. Another way is, look guys, let's make more money. Yes, it's environmental, but let's make money. So it's making a more efficient use of the current infrastructure of power production in this country.

Alan Alda has a great show on PBS called Scientific American Frontiers. It is available online as streaming video. This is the transcript of the episode Hydrogen Hopes, from which I've quoted above.

I think Stan and Isaac have got it exactly right. If you care about the environment you should make it profitable for others to care about it, not impose costs on them or throw stones at them. I wish people invested more of their money and resources into such intiatives than in destructive environmental posturing, such as Green~~curse~~peace.

Here is a link to Stan Ovishinky's Ovonic Hydrogen Solutions and to Isaac Berzin's Green Fuel Technologies Corporation.

Are any Indian firms into environmental/fuel innovation?

Mucking around

2006-02-27T06:10:00.000-08:00

I often get caught up in the contemporary debates about Iraq, and the lack of historical context in the debate. This is not the first time that the "West" has been mucking around in the Middle East. Although the area was never really colonised like India. (With the exception of the Levant that was divided between Britain and France.) In the aftermaths of the First and Second World Wars, arbitrary or "strategic" lines were drawn by the Allies across the sands, to create the states of Syria, Jordan, Lebanon, Israel, Palestine and Iraq.

I remembered the complexities in the Middle East's 20th Century history, reading Daniel Yergin's article "It's not the End of the Oil Age" in the Washington Post. He writes:

This is not the first time that the world has "run out of oil." It's more like the fifth. Cycles of shortage and surplus characterize the entire history of the oil industry. A similar fear of shortage after World War I was one of the main drivers for cobbling together the three easternmost provinces of the defunct Ottoman Turkish Empire to create Iraq. In more recent times, the "permanent oil shortage" of the 1970s gave way to the glut and price collapse of the 1980s.

So much trouble has been wrought by Englishmen drawing lines across the sand, and through the hearts and hearths of men. I often wonder what world history would have been like if an alternative course, say if Napolean had won and there had been a Pax Gallica or if Bismarck's colonial ambitions had borne fruition. My guess is that there would have been as much trouble wrought by Frenchmen and Prussians drawing lines across the sand. :-)

Train of Optimism

2006-02-25T22:48:00.000-08:00

I have a conditioned soft spot for Laloo, which he is consolidating:

The real reason is that this country has more than its share of obstructionists. They won't let you do anything good. [TOI, Mumbai 25.02.06 Pg. 12]

What I love is the insidious reform of price competition reforming government. I have believed for a while, that there is no hope of directly attacking the railways morase because of the unions. But airlines are a great way to improve infrastructure. I had overlooked the wonders of price competition. My pessimism about the railways, have atleast briefly been brushed aside by the unbounded optimism about the triumph of common sense.

I think this 'reform of Laloo': the consumate populist, into a pragmatist is perhaps one of the most insanely roundabout unintended positive consequences of liberalisation. It gives hope that with time even the toughest nuts will crack. Not from some ideological remooring, but simply because reform makes sense for everybody.

On a broader note, has Laloo's tarnished reputation more to do with Bihar than with himself?

"May you never...

2006-02-15T12:53:00.000-08:00

...come to power."

This last birthday of mine was spent in Washington DC. It was the first time in my life that it wasn't a public holiday, and I didn't hear "Aye mere watan ke logon..." on the old red National tape deck, or ignore the PM's address from the plastic matchbox on TV. I missed all that sorely, not to mention my family. But as these stories go it was one of the most interesting birthdays in my life. A friend (he's still a friend, worry not) wished upon me a fate which I've wished many times - "May you never come to power."

What brought me this accolade was my assertion that one simple yet meaningful policy measure the Indian government could take, that would significantly change our lives for the better was to unilaterally drop all internal and external trade barriers. This is my, not so secret dream, which is perhaps more ambitious than Naveen's.

I'm leaving the comments open for feedback on these questions:

1. What is the best case scenario if my golden policy were adopted? Why?
2. What is the worst case scenario? Why?
3. What is the one big meaningful policy change you would like to see India make?

You are allowed to go wild, I only delete comments that are out and out spam.

My rope

2006-02-14T05:19:00.000-08:00

I wrote this 2 years ago now, it is truly amazing how time passes in the human mind. I rediscovered it and thought I'd put up a slightly edited version. Most of what I write about is policy and economics, those are rather intrinsic to my being. But like all blogger's worth their salt, I would someday like to be a writer, a translator of emotion, a peddler of rehashed experience. This is a short step away from that direction :-).

It is amazing how 6 years can help bury some memories, so deep that trying to pull them out, is like pulling a book out from the bottom of a tall unbalanced stack. There is always the danger that the delicate balance might give, bringing the whole affair to a sorry end.

On April 15 1998, things were moving around on the 3rd floor, in a non-descript building next to a school lot. Boxes that had been packed and waiting for 6 months were being moved out by hired hands. Clothes, vessels, books - lots of books - a washing machine, a large 3 door refrigerator of the kind that was still a new thing back in the early liberalisation days, folding director's chairs, two large Godrej Almirahs... many memories, pent up emotion, hate. All packed and parceled into the waiting Canter.

When the fridge was being packed with a long blue nylon rope, an old man tottered out of his armchair on the way to the bathroom. He was part leaning on the wall, part on his walking stick, which was made of steel and adjustable with spring loaded button. It's base was a tripod, and the man had used it for nearly 10 years, the paint had flaked, though some vestiges of the manufacturers silver and red label remained, surrounded by dark patches of dust and grime settled on the glue. He passed by at first glumly on his way to the sink. He sat himself down on a wooden chair, lifted the hem of his lungi over his knees, picked up the plastic pot darkened with blood and urine, relieved himself in it and poured the contents over the corner of the sink. Ran the tap. With some effort he lifted himself up again, and commenced his journey back to the chair.

Entering the kitchen where the refrigerator was being packed, he noticed the blue rope, and his sullen eyes and haggard septuagenarian face, suddenly flushed with fury, he suddenly started screaming "My Rope.. my rope, give me back my rope". When no one seemed to be paying attention to him, he started to quiver with anger, and yell abuses, threatening to call the police and have all the perpetrators arrested. Someone yelled at him to shut up, but he continued his tirade. He tried to use his stick to snag the rope, but the others were stronger, and he could do nothing.

In a little while, he retreated to his armchair, and from there continued the free flow of invective. In half an hour it was all over, the rope, the refrigerator gone. The house was now half empty. The old man sat in his armchair, pulled out a copy of the Lok Satta, and continued to read the article about fertilisers that he was reading before his trip to the sink.

Now, the old man is dead and the rope... well the rope is drying clothes somewhere.

Another kick in the shin...

2006-02-13T05:03:00.000-08:00

... for small enterprises and the people they employ.

New Year's Day was a hot afternoon, and when the bell rang at about 3pm, I was half expecting to find a guest. Instead of which I found a late middle aged man, with a letter from my bank. Sweat curled on his forehead, and the stench of his unwashed shirt reached me about 3 feet away. I asked him if he wanted some water, since he seemed in need of it. I got him some, and then offered to give him the whole bottle which he politely declined. As he started down the flight of stairs he said: "God Bless You!".

I have never seen him again. Though I think about him sometimes (like right now), and wonder what lead him to work for a low paying job in his middle age. Perhaps he had some bad luck in business, perhaps he is one of the mill-employees who never got there jobs back, perhaps his wife is sick and he needs the money. What I am almost sure off is that he isn't doing it out of a fancy of roaming the hot streets.

About a week earlier there was another ring on the door, it was the postman, dressed in a clean khaki uniform.He wanted his annual bade din ki baksheesh or christmas bonus. Our building has a common mailbox on the ground floor, and the only times a postman is seen at the door is when there is a registered letter or when he wants a baksheesh. He spends a lot of time in the sun too, but he has a secure job, and gets done by 5 pm everyday. He wouldn't be caught dead delivering a letter on Christmas, New Year, Sunday or any of the 14 official holidays he is entitled to.

He was handsomely rewarded 20 Rs., which is a pure surplus for him, because he gets a salary paid for by stamps and taxmoney. He screwed up his face and ventured down the same staircase. I am assured of atleast a few missing letters this coming year I am sure. Especially since the government is benevolently trying to ensure that only the disaffected postman has a legal monopoly on bringing letters to my door.

Courier guys, sometimes less polite than the nice man I talked about, and sometimes better dressed, eke out a living from the delivery of letters and small packages that are sent across the city for as little as 10Rs. with an assurance of delivery on the next day. Many of the smaller courier services have only a few offices and have inter-connection arrangements that they have arrived at without government coercion (think TRAI in India, FCC in America). They solve the problem of package delivery for many small businesses, and individuals, who would rather not sample the customer friendliness of IndiaPost which stops accepting registered letters by 2 or 3pm everyday.

But ofcourse, we shamefully have to look on as the government takes steps to ensure that the postman always rings after Christmas, but never on it.

(Link via email from Madman)

Expounding on vouchers

2006-02-08T00:07:00.000-08:00

Just to elucidate Gaurav's point, if the objective of the government's responsibilities regarding education and other social concerns is to transfer resources from the better off, to those in society who are in need of that particular service, then our current system does not succeed by a longshot.

Our current system in education specifically, transfers resources from taxpayers to teachers, rather than from taxpayers to students. A 2004 study by Harvard economist Michael Kremer and a bunch of folk at the World Bank illustrates why. Their survey: Teacher Absence in India, finds that if you walk into a random government school in India there is a 25% chance that you won't find a teacher in the classroom. The state's fair differently, with 5 year old Jharkhand, doing the worst with 42% teacher absenteeism. So on average atleast 25% of the salaries given to teachers are simply a unrequited transfer of resources. Here is there a bit of their abstract:

We do not find that higher pay is associated with lower absence. Older teachers, more educated teachers, and head teachers are all paid more but are also more frequently absent; contract teachers are paid much less than regular teachers but have similar absence rates; and although relative teacher salaries are higher in poorer states, absence rates are also higher. Teacher absence is more correlated with daily incentives to attend work: teachers are less likely to be absent at schools that have been inspected recently, that have better infrastructure, and that are closer to a paved road. We find little evidence that attempting to strengthen local community ties will reduce absence. Teachers from the local area have similar absence rates as teachers from outside the community. Locally controlled non-formal schools have higher absence rates than schools run by the state government. The existence of a PTA is not correlated with lower absence. Private-school teachers are only slightly less likely to be absent than public-school teachers in general, but are 8 percentage points less likely to be absent than public-school teachers in the same village.

Private-aided schools not only have lower teacher absence rates (20%), but also have higher teaching activity rates. Public schools have highly paid teachers but bad monitoring and enforcement, private schools have low pay and heavy monitoring and enforcment. However private-aided schools, have both high pay and heavy monitoring.

This is one approach to the empirical evidence, it is based on a sample survey and comes with all of its charachteristics and problems. Another empirical angle is James Tooley's research on small, often unlicensed private schools that are burgeoning all over our vast sprawling slums.

This approach provides some important insights about the instincts and motivations of poor parents. The fact that these schools exists, notwithstanding the existence of government schools, and that parents send their children there for a fee, indicates both their discernment and the percolation of the importance of education. You can catch a video about such schools in Hyderabad here (requires RealPlayer), and look at their broader research at the E.G.West Centre.

Education vouchers, would be a logical, if radical step forward in this scenario. They would ensure that students from poor families are not excluded from an education, simply because of the accident of birth. At the same time, funding for schools is not allowed to slip, allowing them the resources neccessary for a quality education.

[Note: I work with CCS in promoting their ideas.]

Evading and Squashing

2006-02-07T06:11:00.000-08:00

Here is more damning evidence of government evasiveness and cruelty:

To evade any sort of inconvenience, the website provides an option to check the availability of the desired Domain Name, thereby squashing any chances of a clash between similar Domain Name...

Alas they only provide this premeir service for the .gov.in domain.

Capital destruction

2006-02-01T10:16:00.000-08:00

Neelakantan has an interesting post up [ht Aadisht]where he observes that the much martyred poor have latent instincts to trade, which should not be systematically stifled by loose laws and looser officials. I find myself, rather unsurprisingly, in violent agreement.

There is a samosa stall near my house. Typical of its kind, it is a wooden board on top of four cycle-wheels and a welded frame. On a recent evening I wasn't able to spot the thela, where it is usually parked. A little puzzled I moved on to finish some other errands. When I got back to the busy street corner, I spotted the bespectacled owner, but no cart. I enquired about the possibility of buying a couple of samosas and he said that the cart would be there momentarily, there had been a Municipal raid.

I was not surprised, having seen whole crowded markets in Girgaum, suddenly empty of hawkers, leaving only stranded customers when a herald came running through warning of the Municipality's arrival.

Upon a little questioning, he revealed that he was willing to pay upto 1500Rs. a month as rent, just to get rid of the annoyance. But he did not want to pay bribes because he knew that it would not go to the government. Recently the raiding parties have changed their policies and destroy the confiscated property, whereas earlier they would release it after a fine was paid.

This last piece of news kind of hurt me inside. The government which has been entrusted with protecting the lives of people, is destroying the livelihoods of those on the very margin of our society, those perhaps in most need of protection. This was not happening far away in Orissa where Forest officials harass tribals, or elsewhere in the city, but 100 metres from my home.

On the one hand the government clamours for investment and capital accumulation from large capitalists and through the stock markets (which I believe are good things), but on the other destroys marginal capital owned by the poorest and perhaps hardiest entrepreneurs around.

Capital is not just money, stocks, factories and offices. Street carts, autorickshaws, a simple woven basket, a pencil in the hand of a school child it is all capital. All these things which we use in our day to day lives, that help us live, and help us be productive contributors to society are capital. When the government destroys the hard-earned capital of the poor, it literally snatches the means to wealth from their hands.

The most bewildering thing about this particular practice is that it is absolutely unjustified, even by the standard justifications of government intervention.This destructive activity is not a source of revenue, and neither is competition encouraged in the market place. In certain places perhaps the roads get clogged, but does that justify the destruction of the rozi-roti of the hawkers.

Can't more humane and less corrosive means be found to resolve, (what I think is just a trumped up) "the problem of hawkers". Hawkers are finding solutions, they are solving the problem of distribution, they are solving for themselves the problem of abject destitution, they are not a problem.

No amount of attention to the poor can achieve the objectives of alleviating poverty, as the simple act of leaving them alone can. Leave them alone and watch them get rich.

Perhaps it is the watching them get rich part that makes people squirm.

Privatising Dharavi

2006-01-25T12:20:00.000-08:00

80% of the land in what we proudly call Asia's largest slum belongs to the government (central, state and the bulk to the BMC). The government has approved a Rs. 6000 crore project to redevelop the area. The plan essentially amounts to a privatisation of the land, and the conditional transfer of central Mumbai into the hands of property developers.

I am sceptical about the current plan, because of the poor experience that other cities have had with 'rehab' programmes for slums. The New York 'Projects' are infamous as pockets of unrelenting poverty, and 'La cite' around Paris aren't the epitomes of suburban utopia they were planned to be. [Also St. Louis, MO, USA]

What is common amongst all 'rehab' projects is that they try to uproot the existing culture and society of the slums, and impose a top-down development plan, that pays little or no heed to the real needs of the people who are purportedly the beneficiaries, but turnout to be the victims.

How about not giving the people of Dharavi the princely sum of Rs. 20,000 per family, and a sprawling 225 sq. ft. flat (which will likely be something other than carpet area) as the 'plan' suggests. Since the idea is to privatise the land, why not transfer ownership to the people who are in possession of the land right now? The slum dwellers.

There are various ways of doing this, but since there are large communal spaces and a lot of shared services in slums, perhaps setting up cooperatives is the easiest. So the land is transferred into the hands of the cooperatives, with equal voting rights for each member. The cooperatives can be setup for every 100 or 200 contiguous dwellings that share common water resources and public hygiene services.

Creating property rights, giving the slum dwellers a deciding stake in their own environment and encouraging grassroots democracy. This would achieve the dual goals of privatising the slum land into the hands of those who have the biggest stake in it and helping the poorest amongst us to have something they can truly call their own.