Wednesday, 31 December, 2008

Minority is ok

Many tears are shed for callous citizens who never vote. Someone gets elected in spite of only 60% or so voting. Worse, he may have the support of the minority of those voters.

I can't understand what the hullaballoo is all about, because a little thought shows that the damage, if any, is only to the losing contenders. For the citizens, both non-participation and election with minority support are immaterial.

For why do we need to know each voter's preference when a representative, random sample should give us a very good idea of what people want? In a populous country like ours, even the voters in a municipal election will yield a sample size that's large enough to give a truthful picture of the population's preferences.

It may be argued that the voters do not usually constitute a representative sample. For instance, poor people are more likely to vote. So the richer classes would be underrepresented.

However, it can just as easily be argued that those who stay away have reasons for doing so. If an electorate (those who can vote) is 1% rich and 99% poor, does it really matter if its electors (those who do vote) are 0.75% rich and 99.25% poor? Is it unreasonable for the rich to believe that their concerns won't count in the elected body? Or that they will have to use something other than votes to make themselves heard?

In fact, it is the insistence on making every vote count that keeps many away from politics. Let me explain. Let's say the poor decide to vote en block for a certain candidate (and agenda). They vastly outnumber the rich. So some lazy poor decide to stay at home believing, rightly, that their absence will make no difference, more so because the rich will be underrepresented.

The rich, on the other hand, know that for their votes to count, they must turn out in full force. They are, to begin with, marginal. Now, let's say Rich Guy A says, "What is the probability that my neighbour will vote? 15%. That's slim. And the chances of my other neighbour's voting? Well, 20%. That's bad. I wanted to vote, and I know it's my duty, but thanks to the callousness of my class, my vote won't count. So, why should I waste my time? Let me watch a movie instead."

His neighbours have more or less the same thoughts and stay away, not just from the polling booth but also from the entire election process. In short, they are doubly damned: first, for being a minority; second, for thinking cynically.

Of course, you cannot have election an electorate formally divided by class, religion, caste, and the rest. That would divide our already fragmented society even more, and we'd forever be at each other's throats. So, we better not insist on representative sampling. But we can insist on random sampling, hoping, again very reasonably, that the sample that yields will be representative as well.

This may, who knows, bring the added benefit of improving overall interest in politics among the previously 'doubly damned', who should get rid of their cynical reasoning (for staying away) once they don't have to bother about 100% turnouts any more.

Let's look at the problem of getting elected by a minority. This is slightly complex. But let's take an imaginary situation where there are 5 candidates; 3 get 20% each; 1 gets 19% and the winner gets through with 21%. Only about 1 in 5 voted for him; 4 in 5 didn't want him. Bad? Yes, if you want a simplistic answer. However, if you take a step back, it hardly looks horrible.

The split of the vote says that while none of the candidates was very good, none were very bad either ('good' and 'bad' merely being measures of ability to align oneself with the electorates' preferences). So, how does it matter to the voters who won!

Perhaps no important legislation was to be decided in parliament. So the choice of legislator became a popularity contest. While who proves most likable matters to the contestants, it makes little difference to the public.

Perhaps the legislation was important, but debating it wasn't. For example, let's say a bill proposes, "No person can be executed without proper trial." It's critical, but scarcely debatable.

Or take a verdict that goes thus: Winner-31%, runner up-30%, spoilers-29%. Wouldn't we like voters to have indicated their second and third preferences in such cases? Such methods are actually followed in quite a few elections. But it may be quite unnecessary.

Because the moot question for the voters is not Who won? Instead, it's What happened because he won?

If you got through by the narrowest of margins, and wanted to improve your (or at least your party's) chances next time around, what would you do (Only a mad electorate will elect someone who doesn't want to be re-elected)? Would you become very biased? Not unless you can indulge in some large scale ethical cleansing. If you can't, you'll look after everyone's interests. In either case - can or cannot commit mass murder – your getting a minority vote is, by itself, no major tragedy. (If the winner can commit mass murder, elections and elected bodies have long ceased to make any difference.)

The complacency about winners with a minority of the votes becomes more justifiable these days because many of our governments are post-election alliances. The very fact that politicians can get into bed after blooding each other's noses in public shows that they were fighting for power (which concerns them) and not principles (which concerns us).

Actually, in a democracy with a diverse population, it's high turnouts and overwhelming majorities that we should be worried about.

When everyone turns out to vote, they are probably worked up about something. Either riot is in the air, or revolution. And an overwhelming majority can only be a goon's. 

Tuesday, 23 December, 2008

Hang Kasab

He’s a terrorist. We have enough evidence, tapes and eyewitnesses, who have seen him kill. Why do we need a trial? As Bal Thackeray has suggested, he should be hung before the Taj, and the world be invited to watch and learn how we deal with terrorists. One noted lawyer, Masjid Menon, has said that he won’t defend Kasab because he’s indefensible. His guilt is beyond any doubt. A Muslim organisation has argued that executing him is in line with the divine law of an eye for an eye.  

Other voices argue that we should have due process precisely because we are not barbarians like Kasab and his ilk are. 

What both sides miss is that trying him is not necessarily to just affix his guilt and punish him – his guilt doesn’t need more proof; nor his punishment much debate – but to find out who else was involved and how. 

A trial is a logical end of an investigation. This devil was trained, equipped and financed. Those behind him are just as guilty as he is. Their names need to come out in a court of law, unless there are deep and indisputable reasons for keeping their identities and involvement secret. 

(Of course, we know who’s responsible. Pakistan is. So? Imprison the whole country? Hang the lot? Can we? No wonder those suave Pakistani diplomats snigger at us, adding insult to injury.)  

Also, some guilt needs to affixed, again in a court, on those who let him through (though I am far less sure than the rest of my countrymen that he was stoppable in the first place). Or is all that talk about accountability just gas? 

Hang terrorists by all means, even if it makes them martyrs for a batty fringe. However, make sure you try them first, to find out who else was behind the terror. (There is no record of Hitler killing anyone with his own hands, is there?)

Suppose you were to be 10 feet tall...

10-feet tall men have no place outside fables. However, they sometimes get into bad science fiction, forcing saner writers to point out that such giants are biologically impossible. 

I get a sense of déjà vu while reading books on the stock market. “Suppose you were to hold such and such a set of stocks over such and such a period...” a guru would begin, then go on to show what a silly fool you’d be if you did that. 

Now, how many actual investors get into the situations illustrated in these books? If not may do, why talk about these? Are these to be taken solely as constructs for instruction? Well, there is merit in that, more so when you consider how far science has come with theoretical models that grossly simplify the natural world. 

Yet... it somehow doesn’t jell. The scientist is well aware that he’s approximating within the limits of computing power and perception (the greatest mind would burst if it was to have a handle on every gory detail). Does the stock market guru? More importantly, does his reader? 

Why 40:40:20 is 40:40:20

The 40:40:20 rule says that 40% of the ‘success of direct mailer’ depends on the list, another 40% on the offer and only 20% on the creative (all inclusive, copy, layout, plain Jane or 3-D, bells & whistles). 

So creative is less important than list and offer.

I never understood what this rule really means or how it came about. It probably means that ‘40% of the variation can be explained by the list’ and so on. 

Anyway, let’s take the somewhat vague meaning given in the first paragraph. Can it lead to the conclusion that creative is relatively unimportant? Actually, it can’t. Because the creative is never randomly selected in a test! Each competing piece is produced by a competent team, judged, revised and, within the limits of practicality, perfected. Why on earth should you expect creative to make much difference?  

To draw a parallel, take basketball players. All of them are giants. Naturally, height and muscles cease to make any difference.  

Friday, 19 December, 2008

The simple economics of frightening Uncle Sam and his nephews

 I am listening to a series of lectures on international affairs by a Stanford professor. His analysis offers a simple explanation on why America should find the 'war on terror' very hard to win, and should it emerge victorious, the victory will almost certainly be a Pyrrhic one.

In war, the Americans have always emphasised materials over men. (Cynics may add myths to materials, but that's not the point; in fact, myth-making may be democratic necessity.) Most of America's wars were against weak powers, both relatively and absolutely, like Mexico, Spain, the tiny Caribbean islands, Iraq, and, lest we forget, Vietnam (They killed far more than they lost, never gave up territory, and pushed back all attacks, including the famous Tet Offensive. Yet, the body bags had them losing the war, first in their minds, and then at the conference table). In the Second World War, the preponderance of material in the American contribution becomes easily apparent when one compares the blood split by America to that lost by Germany, Japan and Russians. Americans believe, reasonably, that they came out tops in the Cold War because they outspent the USSR.

All this, plus the geographical isolation of mainland USA, gives the American citizen almost the god-given right to expect bloodless victory. The first Iraq War demonstrated that this presumption was not misplaced.

However, crushing your enemy with the quantity and quality (technological superiority) of weapons is expensive, more so for a government described as a 'retirement fund which happens to have an army'.

Now, the terrorist strikes, mostly at client states and accomplices, sometimes at embassies and tourists, and once, with devastating effect, at symbols (churches?) of American (big) business and military.

The staggering military might of the American state renders inadmissible anything less than complete, fail-safe and deathless security. Providing such security to voters requires wars of propaganda (for morale), denial of certain values (liberties) that they assume essential, perhaps unique, to their particular civilisation and, above all, lots of money.

The terrorists' main cost, on the other hand, is time and lives, both of which they have in plenty. 

What makes matters worse for the US is that its juniors, like Pakistan, India and Israel, demand that it protect them – at any rate, their elites – from terror too. Unfortunately, the Americans can't colonise these places (in the sense that they could take over, say, a Pacific island inhabited by some aborigines during WW2), yet need them for bases and cannon fodder. Worse, these juniors are often at each other's throats and justifiably or not, like to trace their problems to Uncle Sam. An expensive and complicated war becomes more of both. 

In a nutshell, America must maintain perfect Pax America. It must be the world's sole army and main police. And the terrorist needs to only keep up a steady stream of suicidees to bleed America dry. 

Monday, 15 December, 2008

Terror script

The other day we had a filmmaker over to talk about her experiences in Kashmir during the riots about the Amarnath shrine. She was scared, of course. And felt very odd at the way Kashmiris thought of themselves as different from other Indians. But she also talked about mass murder, mass rape and mass terror by the Indian army. The national shame made more credible by admissions to personal, normal (Just like you) fear and bewilderment (“They don't think like we do. Which becomes understandable when you consider the circumstance they have lived under for the last sixty years.”) And by putting faces and places to the suffering (“Her husband has been missing for the last 16 years. He was picked up at the bazaar.”)

And she's going to turn her observations into a feature film about these poor women.

There's something not quite right here. Can I stay with a Muslim family for a fortnight and understand enough about the 'Muslim problem' to write even an essay on it? If not, are two visits and an abiding interest enough for a script? What does one have to do to write a script? How long must a man walk in others' shoes to talk about them? How many different shoes must he wear? Can you write anything if you have to tell everything? Valid questions. And they do need answers.

Why USA is in recession

My brother and sister-in-law went to Wal Mart to pick up some gifts for her office, and couldn't find a shopping cart. He was bewildered that there were no carts when the American economy was in recession. She replied saying that it was in recession beause all the carts at Wal Mart were taken, that too during recession. That's telling.  

Who will take care of poor us?

Down with the politician. 

Fair enough. They are all fat and ugly. But who will rule us?

Why, we. You and me. The educated middle class.

We! We can't even run a housing society. Every housing society president acts as if he's god. While the rest of us simply refuse to follow any rule that our own society may make. We even make the security guard run personal errands, security be damned. 

Just see the sports page of any newspaper and you'll be nauseated the extraordinary amount of mudslinging and underhand deals that go around every sports body election. Who populate these bodies? There may be a politician at the top, but the voters are largely middle class fellows. (Not the economic middle class, but the self-declared real middle class, because class is perception that decides reality.)

We can't run a company without flouting laws and rules. Of course, we know that all laws that make us pay bribes were framed for the express purpose of collecting those bribes. But why begrudge the politician the same cynicism. He can just as well argue that conventional morality exists merely to turn him into a convenient scapegoat.  

Ok. Then let's outsource then. We'll get Israel for internal security, USA for external security, Chidambaram can run the economy, Narayan Murti will be made benevolent dictator to run the rest. 

Don't know about the last two gentlemen, but how is a country bogged down in two silly wars, and sundry even stupider civil wars qualified to look after us? What's their record? Ok, mainland USA hasn't been attacked since 9/11, but just too many people under US safeguard - in Europe, Iraq and Afghanistan - have been killed for any sane man to seek such safeguard. 

Moreover, if one looks at the cost of wars, and the stuff that money could have otherwise bought for the American voters, their government looks even worse. Can we afford such expensive security? At least, let them get rid of those Hummers, which, incidentally, didn't save GM from begging, before we say yes. Perhaps careful analysis would show them to be the best among alternatives, but lets at least look at China before choosing.

As for Israel, here's a police state with suicide bombings every month. This in spite of almost all their prime ministers being ex-generals. They may give the Palestinians a hiding from time to time, with helicopters, tanks and rockets (That's what we want to do to our minorities, don't we?) but they haven't been able to stop the killing of their own people, in spite of winning the War on Terror over the last six decades. 

Now, we are clever people. We don't care about hollow honour, do we? We think profit? So, do the Israelis run a profitable show in terms of protecting Israeli lives? For sure, we're buying lots of weapons and security systems from them, but should we give them charge to run our show as well? 

Again, we need some cost-benefit analysis. Reportedly, some Israeli security expert (and who isn't an expert these days) was quick to announce that hadn't Indian commandos blotched up, the rabbi family at Nariman House would have been saved. Now, how did he know they blotched up? Who told him what happened there?

Wednesday, 3 December, 2008

Simple

Throughout my copywriting career, my account servicing people’s constant favourite word has been ‘simple’. Make it simple. Better still, ‘Keep it simple, stupid.’

I wonder if any one of them have every stopped to think what ‘simple’ means.

Take walking. To you and me, it’s very simple. But to a physiotherapist, it’s probably a fairly complex process. 1 + 1 = 2 if simple for us; hardly so for the philosopher. So simplicity, like beauty, is in the eyes of the beholder.  

Or take a briefcase book, the type one picks up before a flight, at the airport bookshop. Typically, it’d quote two score research studies. ‘Research shows this and researchers say that’. Nine times out of ten, the data is meaningless. You can twist it and quote it at a cocktail party, but if you try to take a decision based on it, you’re inviting woe. The barebones is useless - worse, counterproductive - without the flesh and blood. But the worthless ‘basics’ may sound simple. 

Or do they think simplicity lies in boiling down the world into rules? Keep to the left. Sell dear, buy cheap. Honesty is the best policy. The boss, and the customer, is always right. 

Even a baby knows that if he tries to live by the rules, he’d be dead. A world without ifs and buts will collapse under its inherent contradictions before it can begin. Then why bother with such simplification, that the mind will reject alertly if not intuitively? 

Rather strangely, this drive for simple runs parallel to the rise of the visual, with pictures of ever-increasing complexity (that is, loaded with culture-specific clues) being used in all sorts of communication. 

One reason for this shift is that we do diagrams because we can. Click on a few dingbats, and you have a diagram. Never mind that the diagram is completely unnecessary, takes up far too much space, and illustrates something you’ve already written. It’s supposed to make the whole thing friendly. 

Friendly for whom? Someone who has neither time to read or think but has the time to act or buy? 

Another reason may be the hope that since computer drawings are such fun to make, they’re fun to see too. And whatever is fun, is good. 

Anyway, let’s come back to simplicity. My firm belief is that ‘simple’ actually means ‘different’. And ‘different’ means ‘what I think’. Long before a client starts a job, he makes up his mind about what he wants. The copywriter, because he starts with another point of view, or with none at all, arrives elsewhere. That may not necessarily be a bad place, but it’s not where the client wanted to go. For him there is only one road and one Rome. Anything else is complicated. 

So guess, guess and guess again.

And if you somehow guess right, if it fits, you’ll be crowned with Simple.

Tuesday, 2 December, 2008

For honest government, vote rich

We are routinely shocked by the asset disclosures made by election contestants, as millionaires and billionaires line up to represent the downtrodden. But their concern for the poor is actually our only hope out of the cesspool of corruption. Here’s why? 

First, as every economics book tells us, the rich are the salt of the earth and will turn this place into heaven if we let them seek profit unhindered. Out of self interest, that is, to generate goodwill for their businesses, they will serve us diligently.

Second, if the rich are greedy, they’ll very greedy. 

If you have a million, a thousand won’t interest you, because the marginal satisfaction is minimal. So you’d become incorruptible for most direct supplicants. There remains the question of indirect bribes, i.e., your share of the smaller bribes collected by underlings, that collectively come to a tidy sum. Well, here you’ll doubtlessly want more than the career politician, thereby oppressing the people under bribes so heavy that they’ll rise in revolt and establish the altruistic people’s republic. 

Now, since the rich are wiser than they are greedy, or since their greed makes them wise, they will never allow the revolution. In other words, they’ll ensure honest government and happiness for all.

Third, the controlled corruption the oligarchy will usher in will untimely make us all rich. Any money given to the rich, lawfully or illicitly, is good for society because the rich create wealth, i.e., multiply money. While career politicians will use a large part of their ill-gotten wealth to get re-elected, and the rest on vulgar display of wealth and power, the rich will first increase the amount obtained, then use some of the ‘profits’ for re-election. 

The cycle will shift from an entirely vicious one to one that is largely virtuous, though somewhat circuitously. One can call it a forced investment from a public which will, foolishly, not invest otherwise.

Monday, 1 December, 2008

Votebank terror

One of the strangest things we keep politicians that their opponents are 'soft on terror because of vote-bank politics'. In the same breath, they declare that everyone is against terrorism. In other words, no voter has any sympathy for terrorists. Which means, does it not, that for a politician to do or say anything that favours a terrorist is to go against his vote bank? 

There can be only two ways out. Either we are probably far more evil than we realise; or Deputy-CM RR Patil is right, and terrorism doesn't in fact matter: We just don't care if a politician is soft or hard on terror.

Hang the politician?

Ever since the terrorists landed at the Taj, politicians of every hue have been under attack by the talking heads on TV, the general population on streets, and each of us over emails, posts and blogs.

I’m sure the politicians are at fault in many ways. The way that the opposition has sought to gain from this crisis is disgusting too. Yet, I believe we are getting it frightfully wrong by making politicians the scapegoats.

First, by doing so, we do precisely what the terrorists want. They want us to be headless, have no faith in democratically elected leaders, and even ask for military or foreign takeover. Of course, the leaders have done little to deserve our faith (What have we done to deserve better?) and blaming them is logical, but that misses the point.

Terrorists wage psychological, not logical, war (if there is any logic in killing). Under terrorist attack, we need to rally around something, to fight the terrorist in our heads. By definition – ‘terror’ is the operative word here – that’s where the war will be fought for most of us. Probability dictates that far more among us will die under the wheels of a car in an accident than by a terrorist’s bullet or bomb.

The rallying point is the state, and the person who rallies the people is their leader. We don’t have even one leader who can do that. We are making matters worse by displaying our paucity to the world.

We have a right and a need to be angry, but that can be directed at (a) asking meaningful, not oratorical, questions and (b) taking whatever immediate steps we can.

Thankfully, many are already doing the first. Each day newspapers and websites are coming out with questions from ordinary Indians. Some professionals, ex-cops and ex-soldiers, are asking even tougher questions: One cannot accuse them of being theorising cowards, because they have been in the line of fire. Incidentally, most of these questions are to the police, the military and to the management of the hotels.

A fewer number suggested training to face crisis and use arms as well. Guests and staff outnumbered terrorists 100:1 at both the Taj and the Trident. The former were not lacking in courage; there are enough eyewitness accounts to prove that. Yet, they could only take bullets, not fire back. If some of them were armed, we might have had a very different story today.

To come back to the main point, blaming the politician also shows we don’t quite understand what their role can be under our system of government. We think they are our mai-baap, expecting far more from them than is possible under a democratic set-up, where their job is primarily to legislate, scrutinize (ask questions in parliament, etc) and set the overall policy (as ministers).

The enormous gap between the nature of the system and our expectations from it may be at the root of many of the ills that besiege us, now literally. When things don’t happen, we bribe politicians to exercise power, forgetting that their influence, and duties, should be very limited in the first place. In fact, the politician’s job is supposed to be voluntary. We are supposed to send our best and brightest to legislature to speak, think and vote on our behalf for a limited time, welcoming them back to their previous lives once they have done their work to the best of their abilities. Obviously, that is very far from how the system functions, but its design, and our minds, refuses to take reality into account.

So, I fail to see how a chief minister or even a legislator can be directly responsible for fire brigade trucks and bulletproof jackets. Police and fire brigade are services bought with, in the end, tax money. We are also supposed to pay for them by volunteering time. So, caveat emptor? Well, no customer has the right to expect a service provider to lay down his life on line of duty. Nonetheless, some questions and rage ought to be directed at lower rungs, babus and municipal counsellors, rather than at MPs and central ministers.

Besides, what did we do as citizens (service customers) to protect our own backs (literally again) besides cheat on tax and make snide remarks now and then? How many of us know the names of our local counsellor, the chap who’s supposed to see to it that our streets are patrolled and fire engines have pipes? If we know the system is rotten, and have known it all along, why haven’t we replaced it?

We have set up, by voting with our feet, parallel education, medical and distribution system (private schools, hospitals and shops) respectively. Since we’ve done that, we refuse to ‘subsidise’ the corrupt and wasteful state systems, by not paying taxes. Perhaps that is fair.

Anyway, we underestimated the odds of terrorist attack, and didn’t set up parallel security and damage control systems. We guessed wrong. We’re paying the price - psychologically now, materially later. If the politician has done nothing since the 1993 blasts, neither have we. If the politician has repeatedly come in the way of investigation, administration and reform, surely he knew very well that none among us bother to even ask if he has any right to influence what he supposedly dictates.

Finally, do we know what we want from politicians? I’ve repeatedly heard the terms ‘soft state’ and ‘tough terror law’ over the last few days. Does one need tough terror laws to act on tip-offs? To have trained and well-equipped police? To learn how to use a gun? To hang condemned criminals? Are we mad that we need new laws to submit to security checks conducted for our own safety? Is there any evidence that hard states (Who? Israel and USA?) Do better against terrorists than soft states (Who?)? Why should a suicide bomber fear a law, no matter how tough it is? Or are these laws targeted at local operatives? Are we sure the locals are sinning for money alone?

Or do we want them to bomb Pakistan? Are we sure that bombing Pakistan will not have the Pakistanis and Chinese nuking us in return? Has bombing Iraq and Afghanistan has solved America’s problems, or anyone’s problems, except the terrorists’, by turning their own hate into entire populations’ hate? Anyone who thinks beyond Stage One can figure out that even if war can stop direct terror killings, and there is no evidence that it does, war’s price invariably leads to far more deaths than it prevents.

Wednesday, 26 November, 2008

It works - for whom?

Every text or podcast on basic economics maintains that the market works because people are selfish. A fund manager will not take stupid risks and will lookout for customers’ interests because that’s what gets paid for, and if he fails his customers he’ll find himself without a job. The manufacturer will give you a fail deal, otherwise his competitors would. Those who are rude to customers will lose business because customers will tell.

Sounds logical. But so do all platitudes.

Yet how many platitudes apply to the daily lives and decisions of ordinary people? Think about the money manager. Who are his customer? You and me with our tiny investments? Or his fellow money managers who can pour millions into each other’s funds at the press of a button? And even if push comes to shove and our friend finds himself without a job, doesn’t he have a wonderful golden parachute to ensure a comfortable landing? In fact, wasn’t the golden parachute put in so that he may not worry about his personal future while taking risks? What is his personal downside? Is it in any way comparable to the (relative) losses of lay investors?

Think of a parallel. A general of a democracy’s army will probably never use his troops as cannon fodder. Why? Because of his values, of course, but also because such a thing will be criminal under a democracy. Can he assume that his opposite number will be just as careful? Not if the enemy is a dictatorship.

Look at politics. It’s supposed to be highly competitive; most probably, it is. The midnight orgies of political rivals is likely to be a figment of the disgusted public grasping for some logic (They must have formed a cartel, or they can’t screw me so badly). Yet, by all accounts, quality doesn’t improve, in either governance or legislation. Most agree that it declines all the time. Can an invisible master mind of the marketplace for votes have decided the optimal quality level, as the invisible hand guides all good capitalists to create a good earth?

Or are the troubles and tribulations nothing but kinks that will get ironed out in the long run, after we little worms are dead and gone? Why do we swallow the economics 101 day in and day out? Because we are helpless? Because we are afraid? Because if we don’t we’ll have to grow beards, take up Kalashnikovs and head for the jungles? Or because we never had it so good? Had it not been for our invisible gods we’d all be pulling rocks under slave-drivers’ whips?

Monday, 24 November, 2008

Orphaned terror

“The terrorist has no state, politics or religion.” Every show on terrorism has someone or the other mouthing this platitude. Now, if this is true, then why do we have the panel of experts representing political, religious and state groups? Shouldn’t terrorism be left totally to psychiatrists and policemen?

Wednesday, 19 November, 2008

Silly numbers

I refrain from writing about personal experiences, especially bitter ones, for fear of sounding like a cry baby. But this one is an example of such downright stupidity and high-handedness, that I cannot but put it on record.

I had asked several American universities if they'd accept my 3-year BS degree as minimum qualification for their MBA programmes. Some replied they won't, because, according to them it wasn't equivalent to an American 4-year degree. Some said they would. And some wanted my numbers evaluated by a 3rd party.

There was no question of applying with the first group; and I generally steered clear of the third. But one course I badly want to attend wanted the 3rd party evaluation, so I had to approach one of the agencies. So far, so bad.

I sent them copies of my transcript, attested by my university. On receiving them, they sent me mail confirming they had the documents, and saying my marks will be evaluated in a week or so, but I can hurry the process by making an extra payment. Since the last data for the application in question was in February 09, I didn't may any extra payment.

On the promised data, I went online to see my results. To my shock, it said my numbers couldn't be evaluated because I hadn't sent them a copy of my diploma or a provisional certificate. Now, my university's transcript clearly states that it doubles as a provisional certificate. Besides, the final certificate, which I got four whole years after passing, doesn't even carry my percentage. I couldn't see why they needed it. Even if there was a reason, why did they wait so long to tell me that my application was incomplete. Clearly, they hadn't opened the envelope till the day on which they were to deliver the evaluation.

Anyway, I called them up, after a futile search for an email ID. And was put on hold. A recorded message informed me that the average on-hold time was 12 minutes! My any standards, this is pathetic. Worse, the time kept changing every half a minute. Once it the 7 minutes 36 seconds, then 10 & 42, and then 13 & 3... This was technology without commonsense. Instant averaging for the sake of it, never mind if it mislead and irritated callers.

Finally, someone turned up. “Why do you want a copy of this diploma?” “Because that's the policy, and it applies to everyone, not just you.” “Of course, but why do you have such a policy, more so when the transcript clearly says it's a provisional certificate?” “To make sure you really took the diploma you say you have.” “And why should an university attest its 15-year-old transcript if I hadn't? Never mind, do you have an email ID to which I can mail a scanned copy?” “No. You have to fax it.”

So I faxed a copy the next day. And went through another 12-minute wait, whence I was informed that the executive (clerk is far more apt) had no clue if my fax had reached.

But today was the worst, because I got my marks. Apparently, my BS is equivalent to a GPA of 2.85. I knew I hadn't done well, managing just 59% in those bad old days, but I was pretty sure I was a better student than this. So how did I fall so hard?

I looked up their evaluation method. This depends on two things: (a) the credits assigned to a paper and (B) the grade equivalent of your score in it. I need that quarrel with the latter, but the former left me flabbergasted.

In my university, University of Calcuatta, at my time, 1993, a student's BS percentage and class (1st or 2nd) depended solely on his eight Honours subject (3 Theory & 1 Practical in Part 1; 2 Theory & 1 Practical in Part 2).

He merely had to get through his two Pass papers in Part 1, after which both were discontinued. The English papers didn't count at all.

So, one can reasonably expect maximum and equal weight to all Honours papers, less weight to the Pass papers, and none for English.

Instead, this evaluation agency assigned the same weight to all papers, Honours and Pass and English – except the two Part 2 (Honours) practical papers!

Every market struggles with exchange rates. I wonder how many accept whimsical balderdash, topped with horrible service, as the solution?

PS: When I tried to complain online, I found their email takes only 255 charecters. I asked for an ID, and was told to fax.

PS: It's 3rd December today, a week since I faxed them my points. I haven't even got an acknowledgement. 

Wednesday, 12 November, 2008

More from buyology

“In short, based on viewers' brains' responses to the three programs we tested that day at Los Angeles, The Swan was the least engaging, How Clean Is Your House? The most engaging, and Quizmania lay somewhere between the two. Therefore, we concluded (with a 99 percent degree of statistical certainty) that Quizmania – if and when it is ever aited – would be more successful than The Swan, but less successful than How Clean Is Your House?”

If there were a smiley for a dropping jaw, I'd put it here.

Our boy genius, Lindstrom, and his brain scanning friend were showing some people reality shows and measuring how their brains lit up to these. And then linking existing shows' TRPs, or whatever they use to rate shows out there, predicting success for future shows. The more a new show fries your brain, the more likely it'll be a hit.

Very nice, but is the luminosity of the frontal lobe the only thing that matters to the success of a reality show? How about culture? The economy? War? Show timing? Publicity?

Oh, but we do all know that our boy wonder means that 'all things being equal', it's the heat in the head that matters, don't we? Do we? Or are we doing a hallelujah to this sure-shot method of predicting everything to do with anything?

It's one thing to design an experiment that allows for every possible influence, and then measures the effect – if any – of the factor under investigation*; it's quite another to blissfully ignore the universe and measure only one specific change coincident with a given factor (Did they measure, say, the twitching of the subjects' ears?).

It is yet another thing to extrapolate a straightforward observation (brain engagement => glowing frontal lobe) into something heavily pregnant with possibility (not only glowing frontal lobe => hit show; but also rating = k times glow).

I'm afraid there are such suspicious logical jumps throughout the book. Worse, he doesn't give references to the original research. So, one giant leap for Lindstrom, many steps back for marketing research. I tremble for the day when my headlines will be glow tested on any dimwit with time to kill.

*What is beyond measure can be immeasurably important. But we shouldn't engage in 'semantics'.

Monday, 10 November, 2008

Chance and compensation

In an article titled Proximity is key to raking it in in today’s Times of India, columnist Santosh Desai argues that you get paid according to your closeness to money. He says, “We get paid not for what we do, but for where we are. Salaries are all about location; the closer one is to money, the more of it one makes. Like the arms dealer who makes a few hundred million dollars for putting the right people in touch with each other, the key is proximity to money. Schoolteachers and college professors sit very far from money, so no matter how much their personal ability or how much value they add to our lives, they earn what they do. The market is impatient with distance; it discounts one's worth, the further one gets from it.”

The same point is expanded in John Kay in Culture and Prosperity: Why Some Nations Are Rich but Most Remain Poor. At any rate, that’s what I made of that book.

But somewhere else I remember reading another, probably complimentary explanation. Income is also reward for taking risks. The superstar is paid millions to attract thousands to stardom; only a few make it; and the average income of actors is quite low, because for each superstar there are literally hundreds of out-of-work actors, surviving on handouts or part-time jobs, and scores of minor ones who live no better than a middleclass life.

Similarly, executives, especially in finance, can have prolonged lean periods where they earn little or nothing. And a CEO who sits through bad times will have his career and reputation terminally ruined. The ruin of one’s good name can hurt one more than the loss of several fortunes.

Fat paycheques are compensation for these risks. It’s not just nearness to wealth; it’s also closeness to ruin.

Thursday, 6 November, 2008

Caveat believer

Before you buy Lindstorm’s buyology – or at least after you have read it – do click here: There's a Sucker Born in Every Medial Prefrontal Cortex (http://query.nytimes.com/gst/fullpage.html?res=9B07E1DE113EF935A15753C1A9659C8B63)

According to Lindstorm’s online resume, he opened his first agency at 12 and has been advising people since. He has been a certified genius for the last two decades. It does mention an Academy of Advertising, which he attended in between heading companies. One wonders what this is. Though, of course, one shouldn’t because all the research he sites are done by doctorates of this and that on machines that cost at least a couple of million. 

And therein lies the catch. Tremendous intelligence and even more gusto extrapolating whatever data that looks nice, taking enormous and audacious leaps of logic whenever necessary. 

This may be good enough in the boardroom, but is it good enough in the classroom? Will a social scientist build hypotheses on data like that used to take business decisions on a regular basis? If not, why not? An academician’s work will be read by a select circle and effect fewer still, if any, materially. Yet, it’ll probably appear with far more ‘timid’ than even the most junior executive’s proposal. Is that because, unknown to us, society does indeed value the ‘truth’ than the dollar, because the truth can sometimes become very big, very powerful?

Thursday, 30 October, 2008

Who's melting?

Will we say that a fall in book prices is an educational meltdown or a reduction in medicine prices is a medical meltdown? Surely, publishers and pharmaceutical companies lose money unless demand picks up at the lower price. Surely, the two effects do not always happen simultaneously. Yet we see the larger picture. We want ever more people to have medical care and education. 

Why then is a fall in share or real estate prices as a meltdown? Don’t we want more people to have homes or own shares in companies and be able to grow money? It may well be argued that those who stayed out of share markets because they thought share prices were too high will not come in once prices fall. 

It can be similarly argued that a poor person will be wary of medicine’s effectiveness once he can afford it. Does he actually feel so? There may be stray cases, but, in general, we see only good in being able to afford better health and education. 

Yet on purely economic terms, it isn’t so straightforward. When everyone is a MA, doctorate becomes the new MA. When everyone can work till 70, 20-year-olds find it harder to land jobs or negotiate salaries. By that logic, educated people should not want lower book prices and each layer of society, ranked in terms of access to medical care, should want medicines it can afford to be out of reach of the layers that come next. 

Of course, it’s more complex, because productivity increases, quality of life improves and the rest of it. Can’t similar good things happen with the stock market, at least over the proverbial ‘long run’?  Why can other meltdowns be confined to industries, but market meltdowns not stay confined to a class?

Jobless Muslims

On the 27th, the Times of India published an article titled ‘More Muslims studying, but can't find jobs’. Said it, “...does better education lead to better jobs? The NSSO reports reveal a mixed picture. Between 1993-94 and 2004-05 the proportion of employed who had studied beyond secondary level increased much more for Hindus than for Muslims. In rural areas, the increase was about 6% for Hindus, but only by about 3% for Muslims among men, and around 3% for women from both communities. In urban areas, among men, the increase was about 7% for Hindus compared to 5% for Muslims while among women it was 8% for Hindus and 6% for Muslims.

This is starkly reflected in unemployment rates, especially among educated persons. 

In rural areas, while 7% of Hindu graduates were unemployed, among Muslims this was more than double at 15%. In urban areas too the unemployment rate among Muslim graduates was double that of Hindus. 

This means that despite more and more persons getting educated, they are not finding jobs at the same rate — a share of the educated are remaining out of the workforce. It also indicates discrimination — your religion can make all the difference in getting a job, even if you have the same educational qualification. This is starkly reflected in the shares of educated among those employed. 

In rural areas, among men, 19% of employed Hindus had completed secondary or higher levels of education, while among Muslims only about 10% had studied to that level. In the urban areas, 48% of employed Hindus but only 26% of Muslims had secondary or higher levels of education.” 

The article was expectedly followed by more than thirty comments. By and large, the Hindus were criminally communal while the Muslims lamented. Only two offered explanations that disagrred with the discrimination theory. 

All focused on the difference in employment levels among the graduates, which is to be expected because most commentators are probably graduates themselves. (I doubt if the Hindus are educated in any other sense of the word.)

One gentleman said that Muslims were, in general, bad students. Another looked at the data from a different angle. He said the figures can reframed as saying 93% and 85% of Hindu and Muslim graduates, respectively are out of work. Put this way, the difference does not seem so horrifying.

I suppose the first had a well-founded point; the second didn’t. In a survey like the NSSO you expect little margin of error. Showing figures in your own way is to self-deceptive.

Some more things can be considered. 
1. What subjects did the two communities study? Obviously, not all subjects have equal demand.  
2. How long have the candidates been looking for jobs? If the number of educated among Muslims has increased rapidly recently, is it not possible that the average Hindu unemployed has been looking for a job longer than the average Muslim unemployed have? How do the chances of landing a job change with the length of job search? 

3. Is it possible that self-employed people reported themselves as unemployed? It is illogical to attribute an 8% difference to misrepresentation, inadvertent or deliberate. Yet history tells us that states have been boundaries have been redrawn, at least partially, based on misreporting. When Haryana was carved out of Punjab, it was alleged that many Punjabi Hindus reported their first language as Hindi so that they may have a Hindu state, separate from the largely Sikh west Punjab. 

4. How are the unemployed spread geographically? This one can lead to a chicken & egg problem.

If we explore these questions, will be denying discrimination? I don’t think so. I think we will just be separating the real from the reported. Let me recall the incident that makes me say so.

Many moons ago, I saw a TV programme where writer and lyricist Javed Aktar gave out a series of statistics to show that Muslims were grossly underrepresented in government jobs. Some months after that I came across a book on Kashmir, whose author I forget. Anyway, this fellow contended that Muslims were overrepresented in government jobs in Jammu & Kashmir! He argued that the key figure was not ‘population’ but ‘qualified population’. Once you looked at the latter, you realised that in J&K, especially the Valley, at every level, the Muslims’ share of government jobs was considerably larger than their share of the eligible population.  

Now, both gentlemen had axes to grind. Nonetheless, the latter’s point of view was more credible since it went deeper. That is not to say that bigotry against Muslims does not exist, or that we should provide fuel to Hindu bigots. It is to plead for some thinking.

For put yourself in the shoes of a young Muslim college student. The deck is most probably stacked against you in every way. Then, you read this headline: ‘Unemployed among Muslim graduates twice that among Hindus’. The related article insists that negative bias is the only reason for this disparity. What motivation will remain in you? Why will you want to ‘act Hindu’ any more?

Friday, 24 October, 2008

Bad language

The other night I was watching a Muslim gentleman being interviewed on TV. Quite typically he said that Muslims were being called terrorists and traitors while their contributions to the country are being forgotten; and that all political parties had cheated the Muslims giving them nothing in return to their votes. He added that the time had come for Muslims to unite in a separate party.

The interview triggered a question: Who is calling Muslims these vile names? 

I cannot deny that there is raving and ranting about ‘all terrorists being Muslims though all Muslims being terrorists’ and ‘the government is being soft on terror only because of Muslim votes’. Yet most of the discussion in media seems to be against such rubbish, not for it. 

Perhaps we’d all be better off if there was no discussion at all, because the more widespread and enduring damage of terror is psychological division. Ignoring the issue partially removes the terrorists’ – or their controllers’ – raison d'être. 

At the least, can’t the Muslim intellectual concede that most people, at least when appearing in media, speak against smearing them? Isn’t he too paying far more attention to a minority (the Muslim-baiters) than it needs? Will the protestors (against smear) continue if unacknowledged? 

Also, when we say that a particular community rebelled, do we, generally, mean a mass movement or do we mean that a few rebels came out of that community, though the vast majority of its members did nothing? Surely, we mean the latter. 

And this is not very unfair considering that the silent majority reap the benefits of rebellion if there are any; and if there are none, do nothing to disassociate themselves from the rebels, either because they don’t want to be branded collaborationists, or because they have better things to do than prove their innocence in ‘crimes’ they didn’t commit.  

Nonetheless, the layman in the majority community does want to hear more from the minority mouthpiece than justification for rebellion. He wants them to at bring a few home truths to the rebels. “Don’t kill, because we suffer the repercussions. Ask yourself what you have done to help yourself before blaming others. Don’t just say your government representation in jobs is disproportionately smaller than your share of the population: Ask why it is worse in the private sector, where, supposedly, merit rules. When you’re about it, look beyond raw population figures and count the number of candidates with minimum qualifications that you put up. Does the picture look so bad when you do that?” 

From the majority community needs to hear these for credibility’s sake. Or we go back to the logic of the Round Table Conferences: Since the Indians cannot sort matters out between themselves, we need to be there to keep them from each other’s throats.  

Finally, when a leader continuously complains about how his community is being marginalised and maligned, what is the solution he suggests? Is he for separation or integration? If he wants out, what is in it for him? Will he create another Pakistan or Israel? 

That is not to suggest that there was any lack of justification for either nation. However, it is to suggest that those about to be rescued should ask why the rescuer is so bothered, more so because he repeatedly insists that he has no personal axe to grind. Or they may find themselves trading one tyranny for another. Not that the new tyrant thinks he’s one; he believes he’s the only person who can keep chaos at bay.

Wednesday, 8 October, 2008

Buddhu and Buddha

This morning’s Times of India has a longish interview of Ratan Tata. Essentially, the old man is relived that "There is a bad M and a good M and we have made the transition." 

Very well. But certain excerpts are telling: 
TOI: What made you go to West Bengal in the first place? Buddhadeb Bhattacharjee? 
Tata: Did you say Mamata? (Laughs) Yes, it was Mr Buddhadeb Bhattacharjee. I have known him literally from the day he took over as chief minister from Jyoti Basu. We were at that time with the Haldia Petrochemicals Complex and because we had a problem, not with the state government, but with Purnendu Sen, we withdrew. At that time, I met Mr Bhattacharjee and was extremely impressed with his sincerity. And that sincerity has been there throughout. He told me that I should not withdraw and I told him we must but we would come back with a bigger investment to West Bengal because I believe he was doing the right thing. Then one day when we were inaugurating the cancer hospital in Kolkata he said why don't you bring your automotive project to West Bengal. I told him the incentives you have will not match with what other states are offering. And both he and Nirupam Sen (industry minister) set themselves the task of meeting what was needed. 

To be honest, he first offered us land at Kharagpur. But then that was far from Kolkata. I told him that if we wanted the project to be showcased to the world as a world-class enterprise, we should have it at a location where we could bring in our best people, give them the best schools, best colleges etc. In deference to my wish, he showed several plots out of which we found Singur most suitable. 

Unfortunately, what followed was something unexpected while we had something wonderful going. It would have brought investments to a part of a country which has been neglected. It was a forerunner of future investments in that part of the country.
 

In other words, he held a gun to Buddababu’s head. 

TOI: What is the loss to the Nano project because of time overrun? 
Tata: First of all, all the equipment will come good. So there is no loss on equipment. One may ask what have you left behind and how much of it is totally wasted. You can retrieve a fair amount of the fixed assets that you may have and relocate it. It is our view that in terms of the current year we will not have to reflect any appreciable loss in our books. We have also not discussed with the state government what we would do with the land because its still leased to us. The state government wants us to look at other projects, which we have agreed to do. We just said that we will do it if the environment is conducive, otherwise we will not. So it's not that we have walked out of West Bengal and left a crater or a barren piece of land behind.
 

Oh, but all along we were told that the slightest alteration in the configuration of the plant will make the project unviable. Now it’s being shifted across the subcontinent with minimal loss!

And some questions are not being asked at all. The Tatas were and are being given land virtually for free. The state governments are ready to bloody their hands and noses for the Nano’s sake. So what is Tata’s exit penalty? I mean, if you and I are in a deal, and I’m doing the dirty work, what do I get if you don’t, or can’t, do the good work? 

Second, we were told that this deal will generate jobs. Jobs for whom? If nearness to Kolkata was a criterion simply because the city gave better facilities to the employees at the plant, does it not mean that they were not looking at signing up hundreds of unlettered, underfed villagers. 

And why was all that followed the MoU so unexpected? Did Tata think that our most sincere Buddababu had dictatorial powers over Bengal, even if it was a benevolent dictatorship? Was one man’s word good enough to take a decision that big that it could make or break a state’s industrialisation? Is corporate social responsibility about charities or is it first about due diligence in running a business? 

TOI: From Bengal to Gujarat, it's the same country and two very different stories. What lessons do you draw as a senior business leader? 
Tata: I don't know how much problem that we faced was really that of the famers. I would just say that political opposition and political aspiration should always be subordinated to the better welfare of the country or the state. I don't know who would be the losers. You have talked about ourselves being one of the losers in the sense of losses owing to time overruns. But I wonder what we have left behind. I am sure West Bengal can attract other investments and will attract other investments and we will be as supportive as we can in attracting new investments. But what about the people who had aspirations for jobs? The people who have made this issue of land-for-land — will they prosper? Has anything been done to increase their yeilds, their income levels? Many of them are below subsistence levels — they say so themselves. On the one hand, they talk of drinking their money away or not having money, and on the other hand, they talk of having their land back. I mean are we doing anything to improve their lot? These are the questions that come to my mind. So, political opposition should hold the country first and not themselves. That's all I am saying. 


Wonderful! Politicians shouldn’t interfere in economics… or religion, or education, or sports, or culture. What is the politician supposed to interfere in? The politician is probably very happy to be everyone’s favourite scapegoat as long as he can enjoy his ill-gotten millions. But can we afford to do without politics? Who takes the decisions for the state, for us? 

Or are we switching to anarchy (as in the political term, not mayhem)? Does that work? Or will we need a state in cold storage to bail us out when everything crashes? Even Lord George of Bagdad is having a tough time rescuing Wall St. What happens when Main Street gets all dug up too?

By the by, why didn’t anyone bother about what form compensation will take? I mean, doctors don’t just push medicine done patients’ throats, do they? Why didn’t good corporate citizen Ratan Tata think a bit about the starving millions he was rescuing with his factory, instead of asking his minion Buddababu to give them cake since they didn’t have bread? 

Marx toiled in vain. Mr Tata and his ilk will bury capitalism without Das Kapital

Monday, 6 October, 2008

What matters is when

I just finished reading The Last Durbar by Shashi Joshi. This book portrays Mountbatten as the selfless umpire-cum-manager who guided the two infant domains and their infantile leaders through their darkest hour, insisting on certain minutes of protocol only because they were vital for prestige, which, in the absence of real administration, was the only leash on demonic rage.

In his India After Gandhi Guha complains that Mountbatten spent his entire life after his viceroyalty making sure a picture just like the one described above should emerge. This may not be wholly true, because he make it to the top of the British navy as well, though it was, perhaps, by then no longer a force to reckon with.  

Let us, for a moment, assume that the interpretation in The Last Durbar and similar books, like the pedestrian, popular Freedom at Midnight, is basically right. It begs a question.

Nehru, Jinnah, Patel and the rest were moderates. They were very far from revolutionaries, by any definition of the word, though they did fight for and, in the end, bring about momentous change. (For now, we discount the smart alecks’ attitude that all change in Asia, however large, is either evolutionary or a result of Western benevolence.) Why did they then behave ‘irresponsibly’? 

They may be some merit in the hypothesis that the politician’s and the historian’s (or umpire’s) time horizons, which force them to look from very different perspectives. 

Let’s look at a different area. A business professor may be all for long-term investments, in bets that, in spite of every possible precaution and calculation, leave plenty to chance. The businessman may realise that the future of his company in, say, a decade, lies in the bets he places now. But his shareholders will not always take the same view. Their needs and wants are likely to be immediate. 

In anciant times, when the stock market was coming into being, the time horizons were probably not so different. Technology was probably more predictable. If you didn’t commission a boiler this year, because shareholders were not for it, you could commission it the next, when the shareholders were more agreeing, and still carry on ‘as usual’. Therefore, the structure worked. 

It may not work so well today. That’s why some writers complain bitterly about the tyranny of the share market.

There may be parallels with politics here. Policymakers and lawmakers may well recognise the need for long-term thinking and the risks involved. But can their hands are tied by electoral politics, which would rather have Robin Hoods robbing the future for the present than philosophers starving the present for the future. 

In short, we are to blame for the bestiality of our leaders. We should decide our priorities and invite them to lead us accordingly.  

Why extreme

I just finished reading The Last Durbar by Shashi Joshi. This book portrays Mountbatten as the selfless umpire-cum-manager who guided the two infant domains and their infantile leaders through their darkest hour, insisting on certain minutes of protocol only because they were vital for prestige, which, in the absence of real administration, was the only leash on demonic rage.

In his India After Gandhi Guha complains that Mountbatten spent his entire life after his viceroyalty making sure a picture just like the one described above should emerge. This may not be wholly true, because he make it to the top of the British navy as well, though it was, perhaps, by then no longer a force to reckon with.  

Let us, for a moment, assume that the interpretation in The Last Durbar and similar books, like the pedestrian, popular Freedom at Midnight, is basically right. It begs a question.

Nehru, Jinnah, Patel and the rest were moderates. They were very far from revolutionaries, by any definition of the word, though they did fight for and, in the end, bring about momentous change. (For now, we discount the smart alecks’ attitude that all change in Asia, however large, is either evolutionary or a result of Western benevolence.) Why did they then behave ‘irresponsibly’?   

They may be some merit in the hypothesis that the politician’s and the historian’s (or umpire’s) time horizons, which force them to look from very different perspectives. 

Let’s look at a different area. A business professor may be all for long-term investments, in bets that, in spite of every possible precaution and calculation, leave plenty to chance. The businessman may realise that the future of his company in, say, a decade, lies in the bets he places now. But his shareholders will not always take the same view. Their needs and wants are likely to be immediate. 

In olden times, when the stock market was coming into being, the time horizons were probably not so different. Technology was probably more predictable. If you didn’t commission a boiler this year, because shareholders were not for it, you could commission it the next, when the shareholders were more agreeing, and still carry on ‘as usual’. Therefore, the structure worked. 

It may not work so well today. That’s why some writers complain bitterly about the tyranny of the share market.

There may be parallels with politics here. Policymakers and lawmakers may well recognise the need for long-term thinking and the risks involved. But can their hands are tied by electoral politics, which would rather have Robin Hoods robbing the future for the present than philosophers starving the present for the future. 

In short, we are to blame for the bestiality of our leaders. We should decide our priorities and invite them to lead us accordingly.  

Monday, 29 September, 2008

More awards than funds

Why do mutual fund rating services give so many awards? Best this, and best that, and best this of that? They are marketing tools, of course, but should there be some body to check on these awards?

Socialist America

The ongoing economic crisis has prompted many comments from many commentators. Here’s Swaminathan S Anklesaria Aiyar in ToI (21 Sep 2008), in an article titled Is America becoming socialist?

Says he, “Leftists suspect the US takeovers aim to rescue rich shareholders. Not so. The government will acquire 79.9% of the shares of these companies at virtually zero cost, pushing down the share price close to zero. So, rich shareholders have been wiped out, and the bosses of all three corporations have been sacked. 

This is not a rescue of the rich. It is a rescue of ordinary people who need mortgages and a functioning housing market, which would have collapsed had Fannie May and Freddie Mac gone bust. The takeover of AIG will save millions of insurance policy holders from losing their coverage and annuities. The takeovers aim to prevent financial panic from spreading and dragging down the whole economy, as happened in the Great Depression of the 1930s. 

The usual procedure in a capitalist welfare state is to let mismanaged companies go bust, penalising the shareholders and managers, and then provide safety nets to those adversely affected. But when corporations are so large that their collapse would endanger the entire financial system, it’s sensible even from a capitalist viewpoint to have a government takeover before they collapse. This is a sort of pre-emptive safety net. Moreover, preventing distress wins votes (or at least doesn’t lose them), and that’s vital in a democracy.”
Hey, are we missing something here? “Size matters.” Is that what our great champion of the great free market (nee capitalism) has to say? Why is it ok for a lot of small companies to go bust all the time, and a lot of people suffer the resultant misery in ‘small lots’, but not ok for a few big companies to go kaput in quick succession throwing a great many people into the deep end in job lots of thousands? Because people will lose faith in the system? Does that mean the system runs on faith and faith needs gods like the giant corporations? 

And whoever thought the capitalism and socialism had anything to do with the bosses? In the former, the super-talented become CEOs; in the latter, they become commissioners. In either system, they can fend for themselves. It’s the countless small fry that economists worry about, don’t they?

Finally, if these shares are a bargain, why is Uncle Sam picking them up? Why doesn’t he let ordinary citizens gain from the opportunity? Because he has the money? In that case, shouldn’t uncle also be handing out loans to small entrepreneurs, taking shares in their companies as collateral, so that he can make big bucks - for running the welfare state – when these entrepreneurs grow big and string? Maybe he should be aiming for the commanding heights of the economy while he’s about it, using his tax dollars to dominate sunrise businesses and turn around sunset industries. What is he, really, state as capitalist? Or does he know things lay investors don’t? 

Jago to nonsense

Two companies seem to have this social relevance thing all figured out. They are Tata Tea (the Jagoo spots) and Idea Cellular Services. The former’s ads show (a) a voter asking a candidate if he has any experience in roads, bridges, and the rest and (b) an obnoxious young chap telling a middleclass group that if they are not voting on election day, they are asleep. Idea’s ads equate learning English with education.  

The reason why Idea disgusts me needn’t be explained. It’s shameful we have to indulge this racial bullshit in 2008.

But Tata Tea is more subtle. The voter’s ire with the candidate is all wrong. He says the candidate should have experience of ‘running the country’. Actually, that’s only the ministers’ job, and only to a well-defined extent. A legislator’s main task is making laws. Even if he is to be included in a cabinet, he should bother more about policy than day-to-day operations. In fact, the trouble with our corrupted systems can be drilled down to legislators getting out of the law, which we elected them to frame, and getting into ‘running the country’, which we actually pay the civil servants to do.  

And too many statisticians have pointed out too often that single votes cannot count. If the middleclass, as a group, decide that none of the candidates reflect their ideas, or they’d be equally unhappy if any of the candidates gets elected, they are better off treating election day as a holiday. Anyway, I wonder what this tea company wants to be associated with, and why. 

Has someone out there figured out that if we perceive them as wasting money, we will also think they are doing so well that they have money to burn, and this is only possible if their product is exceptionally good (Much like a great batsman mocking bowlers). 

Friday, 19 September, 2008

Ad secretary

We have a simple way defining professionalism: “Hum kam bechne aye hain, izzat bechne nehin.” We have come to sell work, but our honour is not for sale. 

And what does a professional find the ultimate dishonour? I think it’s when a buyer tells him what to do. You don’t tell a doctor how to diagnose, you don’t tell a hair stylist how to hold his scissors, you don’t even tell a charwoman how to sweep. Why does a client want to tell his agency’s art directors and copywriters how to make his ads? 

On the face of it, it makes no sense. At times, the agency people may not ‘get it’. Yet, shouldn’t the client then ask himself why he hired the agency in the first place, and what may have gone wrong since? Are the people on both sides the same? Can he be blowing up an ordinary mix-up? Can a little chat clear up the matter, and bring the work back on track? In any of these cases, he’d get more for his money than by interfering to the level of insult. 

I’m told this behaviour is not confined to the humble ad agency, but extends to even to the hoity-toity consulting agencies. Their reports are routinely dictated. 

So why keep a dog and bark too?

I suppose there are two reasons. 

First, the interfering client never wanted an agency in the first place; he wanted an ad secretary - an DTP operator-cum-typist (There is nothing wrong with either, but a typist's pride comes from words-per-minute and an operator's from his knowledge of software. Copywriters and art dircetors do not seek these.) He never hired an agency; he merely kept a scapegoat. The hiring process was a charade played to get his colleagues’ buy-in to his choice. 

Second, he’s perverted. He trip in life is telling other people what to do, in other words: power. He’s like the director of a pot-boiler who ropes in a much feted art film actor to do an minor role just to slight the latter. “See, I bought him. For all the holier-than-thou platitudes about socially relevant art, he’s a commodity first and an artist next.” 

It’s futile to attempt to explain his actions by ascribing him with rational mind of homo economus. The gains he seeks are beyond money. 

But how does the agency cut its losses? Does business need to bring in ego massage as an acceptable service, not a kickback? 

Tuesday, 9 September, 2008

Peculiar dignity

In a recent function, MP and actress Jaya Bachchan said, “Hum toh Hindi mein bolna pasand karenge. Hum toh UPwalle hain. Maharashtrawalle humein maaf karenge.” When translated it means, “I would like to speak in Hindi since I am an UPite. Maharashtrains will forgive me.”

This was taken as slight to Maharashtra and Marathi. Raj Thackeray gave a call to boycott not only all films starring the Bachchans, but also all products endorsed by the family. But he didn't stop there. He 'ordered' his partymen, indeed all Marathis to destroy all hoardings and posters featuring the family. The latter threat was promptly implemented.

Mrs Bachchan has since apologised for the remark, saying she said it in jest, and meant no harm.

But I hope the story doesn't end here. Let's say she didn't say it in jest alone, and it was pregnant with political meaning. So what? It was a civilised joke. And deserves, at worst, a civilised rebuttal.

Notice her words: “Maharashtrawalle humein maaf karenge.” Maharashtrains will forgive me. She demands forgiveness, doesn't beg for it. It can only mean that she expects, if not fairness, at least civilisation from her adversaries. She expects them to be agreeable when they disagree. This is a necessary condition for democracy, isn't it? What sort of dignity do we want that excludes basic democratic rights?

By deniying non-Marathi politicians the right to free speech and gentle dissent here, Thackrey and his goons is forfeiting all Marathi speakers' rights to these fundamentals elsewhere. He forgets that effectively Marathi is the second language in Goa and Karnataka. And there are large numbers of Marathis in MP.

Also, the Bachchan's don't own any of the ads the goons damaged. Companies do. Why punish companies for their ambassadors' politics?

And even if Mrs Bachchan owned those hoardings, how can you damage her property because you disagree with her politics? Even if what she did was wrong, who is Thackrey to decide (a) the occurrence of crime and (b) the amount and nature of punishment. What sort of dignity excludes the rule and protection of law? Is that the dignity that Thackrey will give this state if elected to office?

Thackrey's justification is that Marathi-speakers' feelings have been hurt! I respect feelings. I believe that those outside a problem undervalue feelings and face of the people involved, and over-value logic. Yet, I think this is way over the top.

Finally, we heard another politician saying that it was a political incident which must be resolved politically. Is it? Isn't it plainly a law & order violation involving politicians that must be tackled by the police and decided by the courts?

Why do Thackry's supporters believe that the hand the thrashes others will pet them? Or does he have no supporters at all, only goons?

Friday, 5 September, 2008

Employers' Union Zindabad

“Labour unions are bad because they force poor employers to set floor wages. This either drives employers out of business or makes them replace labour with machines. In either case, the poorest workers are rendered jobless or unemployable. There are any number of examples where unions have insisted on outdated rules be complied with, not caring of the harm to business by doing so. For instance, American railroad unions made railroads keep three men in the engine long after the companies had switched to diesel and electric trains which can be run by one driver alone.” 

And so my author drones, all the time maintaining that he is not against unions, and if I can hardly hear him say anything in their favour, it's completely my fault. 

Very well. May I ask, though, why he must pick an industry like railroads, which has long ceased to be economically viable across the world? 

No matter how you look at it, you cannot probably run a railroad that people will use unless you subsidise it highly. Hence, it is convenient to blame any player you hate. You can always show failure. Few will ask you to establish causality (Prove that unions' unfair demands broke employers' back). 

Also, why does he never talk about an employers' union or cartel setting wage ceilings? Instead, he, and many like him, keep repeating that an employer unwilling to pay 'market' wages will find his workforce lured away by others. 

Now, I'd like to bring real life to bear on this, if I may. Let me take the example of computer operators in ad agencies. The thinking goes like this: “The operator's job is more or less mechanical. Anyone who has time can teach himself the designing software. It takes memory and hard work but neither talent nor aesthetic sense. There is no dearth of boys who desperately need work, so why pay 'too much'. We'll stick to an 'industry rate'. If that doesn't suit someone, too bad. He'll have to look elsewhere.”

I'm sure the 'industry rate' is not a price point, but a price band, and agency owners believe the band is wide enough to allow sufficient competition.

What if it isn't? What if the 'industry rate' is actually a wage ceiling, enforced by an unspoken diktat, the force of which will only be felt if anyone dares to step out of line. (“How dare you pay your operator so much, mister? You may be running a charity, we aren't. Back off, or we'll break your legs.”)

How does one know that employers do not meddle with market forces, more so in situations where employees are not united, leave alone unionised? 

Does existence of market shifts – wage rises within the wage band or the upward shift of the entire band – prove the absence of wage ceilings? Can the market change preempt the shift, and render it redundant? For instance, can operators turn free-lancers in drove, and start marketing themselves as cheap art directors, competing with the agencies that refused to 'recognise' their worth. Can this lead to an overall lowering of quality, because these self-proclaimed art directors are nowhere near the real thing, yet agencies just cannot match their rates and retain their prestige? 

If this does in fact happen, and I'm quite sure it is, surely it'll be an 'efficient result' of the agency managers' conspiracy. But is it a good one? 

If giving good solutions is not the economist's responsibility, whose responsibility is it? The market's?

Thursday, 4 September, 2008

All roads lead to hell

I am listening to an audio book on basic economics delivered by Dr X. In the lecture on subsidies, he first argues against price control, then for broadly social taxes to generate targeted prices. I’ve read this sort of thing in every introductory economics text and heard it repeated again and again on TV debates. I hold it as an axiom that when too many people agree on something, only three things are possible: 
(a) What they agree on is so obvious that their saying it is redundant, e.g., the sun rises in the east 
(b) They are actually saying different things without realising it, e.g., all men are equal (but I am more equal than you)  
(c) Thinking has stopped and rote has taken over.

I strongly suspect that the third has happened in this case. Targeted subsidies assume perfect identification of beneficiaries. It also assumes the targeting will be wholly fair and seen as fair. 

Now, educational reservations for scheduled castes & tribes are a form of targeted subsidy. If we think of marks as a currency, scheduled caste students have to have less of it to get reserved seats. Thousands of years of discrimination should make it extremely easy to identify the beneficiaries too. And since the benefits are, for all practical purposes, available only in state-funded educational institutions, the price is, in effect, paid by the broadest range of people. 

Yet SCST reservation is one of the ugliest issues today, and has been so for as long as I can remember. 

One reason for that is beneficiaries cannot be branded anywhere as easily as economists think. There are too many poor Brahmins out there who believe reservations should be income-based and not caste-based, and any number of other backward castes too, who are sore for being left out. 

Second, education is directly linked to jobs. Being deprived of seats due to reservation is as bad as being deprived of jobs, and so on. In other words, subsidising a certain purchase of a certain group instantly and invariably affects all other purchases of all other groups.  

If proponents of ceiling prices of farm products are brainless because they don’t think through the hundred and one unwanted penalties of their short-sighted policy, one can’t see how those who call for food coupons are vastly better. 

And if a government is insanely overambitious in wanting to control every production and price so is one that thinks it can inspect every purchase. What stops me, a person with a Brahmin surname from paying a bribe and obtaining a SCST certificate? The temptation is huge.

Besides, if price control leads to unforeseen harms, why can’t it lead to unforeseen gains as well? For instance, paying less for food than I should (don’t see how though) allows me to buy more economics books than I otherwise could... which lets the bookseller keep a maid... which means the poor woman to send more money to her village... which lets her brother, the farmer, buy more fertiliser... I mean, why can’t a web of flawed markets cancel out each other’s shortcomings and create a unflawed economy?

Finally, can someone please suggest a book that defends price control in a way an economic innocent of above-average intelligence can understand? I don’t care if it was written by Marx himself. 

Wednesday, 27 August, 2008

Even more admission nonsense

This follows from More Admission Nonsense (http://directindia.blogspot.com/2008/08/more-admission-nonsense.html). Apparently, the normalisation math goes thus: 'The average of the top 10 scores in a particular board is calculated; the scores of a student from the same board is then divided by this average; the number is then multiplied by 100 to arrive at the student's normalised score.'

At least that's what yesterday's (26 Aug 08) Times of India says.

If there is any logic to this, it escapes me.

The top students of any board score almost full marks these days. So the whole exercise effectively becomes multiplying a student's score by 0.99987 or some figure very close to 1. 

Anyway, since when did these outliers become representative of a board? Shouldn't they be looking at the median, mean or mode, or some such central measure? Why don't they simply ask boards to give all their marks, whereupon one call easily calculate each student's percentile (with a OTS software)? What do other boards do?  

Monday, 11 August, 2008

Seeing beyond Stage One

As often, I open with a rather lengthy quote, this time from Basic Economics, by Thomas Sowell: “Both excellent service and terrible service can occur in the same country, when there are different incentives, as a salesman in India found: ‘Every time I ate in a roadside cafe or dhaba, my rice plate would arrive in three minutes flat. If I wanted an extra roti, it would arrive in thirty seconds. In a saree shop, the shopkeeper showed me a hundred sarees even if I did not buy a single one. After I left, he would go through the laborious and thankless job of folding back each saree, one at a time, and placing it back on the shelf. In contrast, when I went to buy a railway ticket, pay my telephone bill, or withdraw my money from a nationalised bank, I was mistreated or regarded as a nuisance, and made to stand in a long queue. The bazaar offered outstanding service because the shopkeeper knew that his existence depended on his customer. If he was courteous and offered quality products at a comparative price, his customer rewarded him. If not, his customer deserted him for the shop next door. There is no competition in the railways, telephones, or banks, and their employees could never place the customer in the center.’”

Dr Sowell is a Stanford professor. His main purpose of writing this popular economics book is to instruct us on ‘looking beyond Stage One’, that is, what is immediately visible. 

He repeatedly holds up the Socialist India economy as an example of what goes wrong when naive politicians decide policy; post-reform India illustrates how the market sets things right. 

The comment above is typical. In fact, I’ll go a step further, to complain that it is typical of how most western authors (and Indians writing for Westerns) that I’ve read tackle India – through illustrative examples rather than inclusive overviews. 

But that’s a different story. Let me try to apply what I have learnt from Dr Sowell’s books and go beyond Stage One on this comment.

Let’s take a closer look at the dhaba first. 

First, more likely than not, it’s illegal. It pays no taxes; it breaks all laws regarding hygiene, safety and labour regulations; encroaches on public land; steals electricity and water; bribes officials of every type; and keeps law-abiding entrepreneurs away through a mixture of muscle power and undercutting. 

Not surprisingly, there are no restaurant chains in India that come anywhere near the ones in the US in terms of number of outlets, leave alone turnover. 

Dr Sowell’s salesman doesn’t bother to see these. Or he thinks that all laws, taxes and rights (especially labour rights) are bad. If it’s the latter, that’s a totally twisted interpretation of the ‘free market’. Perhaps he wants a ‘free-for-all economy’, which is what exists in much of the Third World. Fat lot of good it does us.  

Our observant salesman also turns a blind eye to the hyper-exploitation brought about by hyper-competition. Or he would note that the waiter who gets him his rice plate and hot rotis is wears rags, is half-starved, and sleeps on the kitchen floor with the rats. Beside leftovers, he gets only a pittance from the dhaba owner, and is sometimes treated with demonic cruelty. 

Because he cannot send any money home, his sisters become prostitutes, spreading every type of STD among the truck drivers he serves. His brothers may take to petty crime, and, who knows, terrorism. 

There are enormous costs of all these, but these are beyond Stage One.

Let’s come to the saree shop now. Everything one says about the dhaba more or less holds true for the shop. It may be legally somewhat better, but you can be sure that it cheats heavily on taxes and payment for utilities. 

Also, it doesn’t strike our salesman that the shopkeeper who shows him hundreds of saris without making a sale is wasting his time. If businesses should treat all customers well (and profitable customers, better), doesn’t quid pro quo demand that customers return the favour by respecting the business’s time? Can one imagine wasting a lawyer or doctor’s time like this, or an economics professor’s? Would our selling friend treat his Western counterpart as callously as he treats his Indian cousin? How is it that (supposedly) wasting rupees makes all planners socialist fools, while wasting time paves the way to customer service heaven?

Of course, he doesn’t think it worthwhile to ask how much the weavers get on those sarees. And if that is a fair price, by which I don’t mean a simple thing: Would he had been ok if he were the weaver?  

Finally, let’s stop by the nationalised bank, the railway station and the phone company. 

As a loyal customer of the Bank of India, I can vouch that I have hardly ever faced any problem with the bank’s employees. Instead, I have found them most helpful, across branches and cities, in spite of having to serve several times the number of customers that MNC banks do. In fact, several nationalised banks run ad campaigns that talk about the excellent relation they have with their clients. Are they, and their (private sector) ad agencies, mad to show the opposite of real life?  

All the MNCs are interested is the HNIs or High Net-worth Individuals, that too in big cities. I don’t begrudge the choice. They have the right to their profits. 

However, they are under legal obligation to provide services to anyone who can produce a certain minimum deposit. MNC banks just don’t do that, mainly by behaving abominably with the ‘common man’. Would this discrimination be allowed in a developed market economy? 

Denial (more so, of something one is lawfully entitled to) is the worst form of customer service. Yet this denial goes unnoticed.  

For sure, the salesman’s experience may have been very different, but then he was the exception rather than the rule. It’s a pity that his comments are being used to tar a entire section of the banking industry. 

As for the ticket counter at the railway station and the phone exchange, the salesman was at the wrong place. 

Both these services are heavily subsided and essentially meant for the poor. That doesn’t mean they are out-of-bounds for the relatively well off, but it does mean that their standards are set to deliver a bare minimum. 

Would you expect taste and nutrition if you were standing in a soup line? Then why expect smiles and courtesy from these vastly over-extended services? 

Also, regular travellers will tell you that railway ticket clerks are not consciously rude. Besides, their work is boring, thankless, and futureless; and working conditions, plainly wretched.

I am not armoured by Indian Railways and BSNL. Nevertheless, who am I to judge them? Their main customers are probably grateful that they exist at all. 

Are salesmen’s rants and selective data (‘India voted so many times against the US at the UN, in spite of accepting so many million dollars in aid.’) enough for figuring out the choices and changes of a nation that houses every seventh human being? Are we being ultrasensitive if we dare suggest that that some coins may have other sides? Will great good come out of labelling everything from pre-Manmohan Singh days as wasteful Socialist populism? (Give a dog a bad name and hang him.) Are we sure that the West that seeks to open our eyes keeps its own eyes open? Finally, who loses most when they refuse to see beyond Stage One, they or we?

More admission nonsense

The front page of today’s Times of India announces that Percentiles favour SSC students hugely: Data, and the article argues, “Now there is statistical evidence to prove that the percentile system has given an unfair advantage to state board students vying for junior college admissions with ICSE and CBSE students. 

Just a handful of students from the non-state board have made it to the premier colleges this year, reveal figures submitted by the state government to the Bombay high court. 

In fact, the data submitted after the close of the second round of admissions shows campus composition has altered dramatically this year.” 

This goes on and on, without sparing a thought that the evidence may actually be showing the exact opposite of what they claim, that is, the percentile system is fair to SSC students. And non-SSC board students had an unfair advantage all these years when their marks were not converted into percentiles.

Either knowingly or unknowingly, ToI is oversimplifying a complex issue, that too one that’s sub judice.  

What saddens me most is that the world’s largest selling English newspaper can publish this tripe without checking with a statistician. I can’t imagine how one worth his salt would have let it pass without adding an encyclopaedia of qualifiers.  

Thursday, 31 July, 2008

Extreme nonsense

An article titled Dump theory, act on facts, the Mumbai Mirror (July 31, 08) reports the counsel for the ICSE board arguing in court that the percentile system of evaluating students marks (introduced this year for admissions to colleges in Maharashtra) is not justifiable because 'this year the ICSE topper got 98.29 percent and the SSC topper 97.84 percent. The difference is hardly 0.4 percent.” 

Was he deliberately misleading the judges or is devoid of commonsense, not to speak of the preliminaries of statistics? Either has to be true. Or why would one quote the maximum marks? 

To do so here is no different than arguing that the Dutch (average height 6' 0.8" for men) are no different from the Chinese (men's average height 5' 4.9") because the tallest Dutch (7' 7.33") is shorter than the tallest Chinese (9' 5.39"). 

The idea, as far as I know, is never to look at the extremes but the middle measures (mean, median, mode) while comparing two groups, and then ask if they are dissimilar enough, and if they are, which one is exceeds the other on average.  

(I got the heights from the Net, and they are probably as wrong as the lawyer's logic.) 

Thursday, 24 July, 2008

Highly suspicious

During the recent Vote of Confidence in the Lok Sabha, quite a few members' (54?) votes couldn't be counted electronically, and they had to be issued paper slips. 

TV commentators found this very funny. One remarked on the irony that while 60 million people voted without a glitch using electronic voting machines during the general elections, their representatives were having trouble with the (relatively) few machines in parliament. He suggested that Infosys be brought in to better the situation.

Just a thought: How can we be so sure that all those machines worked perfectly during the general elections? What if many of them malfunctioned? Who'd know? The illiterate voter? Or the literate voter who couldn't care less? Or the callous election official? 

The fraction of eligible voters who vote was always low, and is becoming abysmally low (I have never voted, for anything). Can malfunctioning voting machines have something to do with this (not everything; something)? 

While we're on the confidence vote, there's another, completely different, matter: representatives' educational qualifications.

A few days before the vote, I was eavesdropping on a debate at my office. The unanimous conclusion seemed to be that all legislators should be, at least, graduates. 

Today morning paper gave a list of cross-voters, members who had disregarded their parties' whips, and abstainers. Conventional opinion maintains that these are the worst of the lot (I wish one could say that these were the most moral, and they followed their consciences). 

Of the 28 (including 6 absentees and abstainers), only 5 hadn't gone to college. There were, incidentally, 6 lawyers, 2 doctors, and an engineer. 

More to the point, which us understands anything about the nuclear deal? 

The interpretation that comes out in the popular press and TV channels is so simplistic, it's bound to be misdirecting. 

And Frontline, the Communist mouthpiece, writes Latin. Even if its argument is right, it's so badly written that it's impossible to decode. I wonder if even the authors of these pieces understand them. 

The best one can hope for is, probably, to have a multiparty team of experts in international law go into the intricacies of the various documents involved and reach a consensus.  

An alternative would be to give law students the task of translating the public documents into everyday language as an exercise, have an all-party panel of lawyers evaluate their work, and release the documents on the parliament's website, perhaps with dissenting arguments and counter-arguments.

That way the interested layman would be able to make out more or less what the ruckus is all about.  

But then who's an 'interested layman'? We're either indifferent, illiterate or ideologues.  

Monday, 21 July, 2008

Not inferior, murderous

In The Armchair Economist (1993) Stephen Landsburg, while explaining 'why he isn't an environmentalist', writes, “In the current political climate, it is frequently taken as an axiom that the U.S. government should concern itself with the welfare of Americans first; it is also frequently taken as an axiom that air pollution is always and everywhere a bad thing. You might, then, have expected a general chorus of approval when the chief economist of the World Bank suggested that it might be good thing to relocate high-pollution industries to Third World countries. To most economists, this is a self-evident opportunity to make not just Americans but everybody better off. People in wealthy countries can afford to sacrifice some income for the luxury of cleaner air; people in poorer countries are happy to breath inferior air for the opportunity to improve their incomes. But when the bank economist's observation was leaked to the media, parts of the environmental community went ballistic. To them, pollution is a form of sin. They seek not to improve our welfare, but save our souls.”

While Dr Landsburg has taught me many things through this book and its successor, More Sex is Better Sex, I do think he does need a few pointers on basic biology on this one.

Many of the industries exported to Third World countries like India are not just polluting: They are banned in the West. One prominent example is certain types of shipwrecking; another is asbestos. 

All pollution kills, but some kill very quickly and cruelly, more so when the victim is a dirt poor worker with no protection while working and no medicines when ill. Such a person is employed for a couple of years or so, becomes an unemployable and infirm dependent on his family for the next decade, and is dead thereafter. It's not 'inferior air'; it's 'murderous air'.

And there is no trade-off. The Third World labourer doesn't take up a killing job knowing full well that he's going to die. The employer doesn't tell him; the media has better things to do; and NGOs have their head blown off if they open their mouths. He is not even choosing between immediate death, from starvation, and death a few years later, from work-related disease and with a great deal of pain.  

Also, from the Americans' point of view, clean air shouldn't be a luxury but a right. Just as clean water or edible food is. Polluted air kills. So how is clean air a luxury? I suppose a degree of severity matters, even in economics. (Taking your money via trade is not the same as taking it via theft.) 

The environmentalist, at least here, is trying to save lives, not souls.  

While accusing environmentalists of hysteria, our economist needn't be cynical, need he?.