Saturday, January 23, 2010

Debunking the myth called Economics


Recently I came across an interesting article in which the author takes heavily on all the proclaimed economists of the world. He laments their overdose of advise precisely after everything is over. Like one economist himself wrote "Everything in retrospect is obvious. But if everything were obvious, authors of financial debacles would have been millionaires." Such are the caprices of the field, that the best minds fail to realize whats coming. In the words of some of LSE economists "It was the failure of the collective Intelligence ...", to the question posed by the queen on why none of them(the best minds in the field) could predict the economic crisis which overtook the world.
Economics is a brilliant field. One which closely tracks our everyday living. But alas, it is made so complex with a myriad of numbers that the common man simply cannot seem to decipher the science. I have always been dumbstruck by the variety of figures that keeps coming every now and then. Whether Inflation or Interest rate, the CRR or reverse repo, Its all like a fancy theoretical figure. Sometimes, it is simply difficult to comprehend the underlying meaning. I am no economic major, but I like to know what all these figures talking about my day to day dealings are. I do try reading articles, but most of them make it seem so complicated.
Then I came across some very interesting literature - the types of freakonomics - where the authors Lewitt nd Dubner, who call themselves as rogue economist and who admit very honestly that they can tell you nothing about stock market movements or profit margins, but that they can tell you stories; they analyze numbers and give you some very interesting conclusions. And they make economics seem so relevant that you can relate to the field. The amusing anecdotes coupled with their witty style of writing gives you a rare pleasure. So when you read about crime rates and the relation it has with one lady who fought it out for abortion rights, or how the grading system makes the teachers corrupted, or how the whole system of Sumo wrestling makes it so vulnerable to bribing, you gain a whole new range of insights. In their more recent sequel, superfreakonomics they bring on the same style to even more interesting themes.
One which will surely bowl you out is how television and more importantly soap operas transformed the lives of Indian women,empowering them much better than any other goodwill initiatives ever taken in this direction. Yet another equally unbelievable story is about the greatest threat Industrialization brought about in New York city - horse shit. Oh yes, turns out the modern automobile was an innovative improvisation to address the grave concern caused by the enormous equine problem. :D
The killer of all the story is that of global warming. With all the gung-ho made out in the run to copenhagen, one can be forgiven to think of doomsday to dawn upon us very soon with our current carbon emissions. They give you some juicy figures and turn the whole argument upside down. Of course this is not to say that there is no cause for concern, but only that there's a whole lot to the story than the Inconvenient truth that Al gore wants us to know.
The authors go into some radical experimentation mode too and in the process, among other things, helps us understand the altruistic nature of human behavior. They show you a whole new world of behavioral economics and in the process bring out the fundamental trait of every homo sapien - they respond to incentives. Incentives govern human behavior. Now incentives could be very different. For some it could be money, for others social stigma. But in this rests the universal solution to every existing human problem. They get underneath every imaginable problems and explains it with a whole new dimension. Whether its with cold blooded murder, or raw prostitution, we are governed by the incentive system. Any policy decision of any body, government or otherwise is made keeping in mind the incentive system. Given the right incentives, human behavior can drastically change. They even extend their games to our closest resembling species - the monkeys, and find to their amazement, that much like us, even monkeys are governed by incentives and motivated primarily by food and sex. :D
Well, I thoroughly enjoy reading this sort of economics. One which is simple, lucid and understandable for a common man like me. Most importantly, one which we can relate to.
If only we had more economist to bring out such interesting stories rather than cry foul over some undecipherable data!!!

Thursday, January 14, 2010

Pongal, Al-Barak and Nandan

As people geared up to celebrate the harvest festival, it did not bring good news to us. ‘Us’ would mean me and my roommates – with our cook going on a long leave and all nearby shops closed. Now, I don’t live in a place to boast of hospitality choices. So it was a major blow. And with the government mandating an obligatory holiday, we were homed without food L... By the way an interesting article on the history of Pongal can be found here. Seems it has its origin from the Sangam ages, during the ruling of Pallavas during 4th – 8th Century A.D - http://www.pongalfestival.org/history-of-pongal.html
Coming back to our food woes, lazy that we were, none of us wanted to cook; so we thought of hitting out at one of our usual place – Thattukada – A popular Keralite restaurant in Tambaram – the closest suburb. Sadly, they were exhausted of all their supplies. A surprising wave of customers swept all their food supplies. That’s how we land in Al-Barak – a newly sprung Arabic restaurant serving multi cuisine food. Well, an Arabic restaurant on the outskirts of Chennai is surely an ambitious project. Speaks about the changing dynamics of the city; with more and more companies being set up in these areas, there is a growing demand for quality services, especially in foods.
We walk in cautiously to their first floor (they don’t have anything in the ground floor J). A freak looking lad from the eastern parts open the door for us. All around, we see only people from that part of the world which left us wondering if we were in a Chinese restaurant. Then lo, we see a mallu right in the middle. When I ask him of their speciality, he promptly replies grilled chicken – “It will taste very different sir”. Well, we decide do try that out. But not with the usual khubboos but with kerala porotta prepared by Bengali cooks. A truly Indian restaurant- wont u say? Thanks to our hunger we order for mutton masala as well. In the next few minutes, we were served with one of most delicious grilled chicken I’ve ever had. The shawahi, as it’s usually called, is one of my favourite dishes. I’ve had that in almost all the Arabic restaurants in town. But this one was special. Absolutely mouth watering; together with the kerala porotta, it melted in our mouths. The mutton was so soft that we dint feel the need to chew . Just to add on, we order for crispy lamb as well. Though not as great as the chicken, it adds to the variety.
Now this is one place I would recommend to all my friends living anywhere in the vicinity of tambaram. And for my readers living outside, you could try this if you happen to land in Chennai anytime. It’s relatively close to the airport; it’s in a place called Tamabaram sanitorium. Ask anyone in the city and they’ll ask you if its in Chennai. J Trust me, Chennai is a really big city.
After that sumptuous lunch, none of us even bothered to think of dinner. Burp!! I can steel feel the gas inside. J J
Another good thing about today – I finally managed to complete Nandan’s book – Imagining India. It has taken me so long to complete this. The size and the hard cover would not allow me to carry this book with ease. And the content required some hard reading as well. So I ended up reading this only at home and when I am completely relaxed. I must say – a thoroughly informative and interesting book. Nandan explores various aspects of our country – Starting from his own journey of ‘accidental entrepreneurism’ to exploring a new paradigm in India’s demographic shift – he gives a wealth of information. As you walk through the pages, you can gain amazing perspectives on a wide variety of issues. The enviable positions he held till now – as co-chairman of Infosys(which he relinquished recently to head the National ID project) , President of National Council of Economic research, member of Knowledge commission, member of the review committee of the Jawaharlal Nehru National Urban Renewal Mission, member of the National Advisory group on e-Governance, Chairman of Government of India’s I.T Task Force of Power gives him access to people like few others can. And he has used all of his powers to paint the canvas with his imaginations. He has put in the books views of stalwarts of various fields – from Sam Pitroda to Ahluwalia to Joseph stiglits to numerous reformist civil servants.
All this coupled with his impressive narrative makes this a jewel to own. He speaks with passion on the importance of English and the powers it has in opening up employment. He gives an insider account on how I.T came into governance right from the time of Rajiv Gandhi. And then goes on to dwell on the power it can play in governance. He sings the Friedman song on globalization and takes you through to the various swings our country took towards opening up to the outside world. His account of how the government viewed entrepreneurship, immediately post independence – as a profit thirsty wicked soul ( got from the East Indian experience) to the more later realization in the power it could create, which showed up post the economic reforms Mr singh took.
What has amazed me is the deep insights he provides on every topic. He has got expert views on every subject he has touched. His research assistant has done a brilliant job too. He makes a strong case for a uniform ID and rightly got appointed to head it. He speaks for more reforms in tax, pension scheme and vouches for sustainable development. Lastly, he speaks on the importance of how our optimistic views of the future can transform our present. He gives a brilliant example too – jugaad – which literally means ‘everything put together’ (this is an innovative car which many people in rural north India use to travel, built on whatever they can lay their hand on. Check this pic out http://3.bp.blogspot.com/_zfDuy4-yDB8/Skh5niraKLI/AAAAAAAADi8/DPBrtDAezHw/s400/jugaad_cheap_pick_up.JPG ). He rightly points out that in our people lies our strength. And a bottom up approach is what can transform us. For too long, the government has played a paternalistic role, always looking at the masses as needing pampering and care and thereby creating ineffective policies which do no good in the long term. And he minces no words in lashing out at the politicians for their election time freebie offerings.
Anyway, this space is too small to write a review of a humongous work as this. I only wished to share a few thoughts. I can assure you, after reading the book, you will feel invigorated. You will feel enlightened and glad to have learnt of the nuances of policy making. Of nation building and governing;
I would recommend this to all my readers...
On that note I’ll call it a day wishing all of you a happy pongal and Makr Sakranti ... J