Atanu Dey On India's Development

Open Thread — Say what you will

If you have been lurking, de-lurk for a bit. Feedback and questions welcome.

  • abhijatm

    Hi Atanu,

    Here is something that struck a chord and just wnated to share.

    Currently i am reading “The Origin of Wealth” by Eric D. Beinhocker and it is truely amazing. He writes about ‘traditional’ Economics being fundamentally being influenced by Physics. He believes that this lead to several erroneous conclusions. His view is that the economy is closer to complex adaptive systems with the concept of ‘equilibrium’ (supply-demand) being a redundant. In his view, the economy ‘evolves’ instead of reaching equilibrium. The process of change is the same as evolution (diffrentiate, select and amplify). A great read !

    A great example of multidiscliplinary thinking and he gives adequate credit to the Santa Fe institute…Would love to see a SFI in India. Alas, how many ppl in India take up anthropology, sociology, geology etc. for the love of it.

    Take care

    Abhijat

  • http://www.sundarmail.com Sundar

    Hi Atanu,

    I am reading your blogs for the past three months and love the style and contents. Able to understand and appreciate Economics through your thoughs.

    Can you please touch upon the following topics:
    a) Economics of scale and how can India leverage this?
    b) Why do we need FDI and FII (when we have so much of savings) and what are the merits and demerits
    c) Impact of excess consumption
    d) Why real estate prices are skyrocketing
    e) Agency cost (Owner vs Manager)

  • http://www.sundarmail.com Sundar

    I am tempted to add more:

    f) Why small scale industries are not encouraged?

    g) Why Capital gains in equity becomes tax free (or 10% if withdrawn in less than 1 year) except for a meager ST tax and why meager interest from Fixed deposit (which barely beats retail inflation) are taxed at full 33%.

    h) Why does the government always talk about WPI and comfortably ignores retail inflation (CPI)?

    i) What will be the impact on India if most of the youngsters in India get educated?

  • saurabh

    Hi Atanu, please update on your education venture … how is it shaping up… thanks

  • http://sudiptachatterjee.blogspot.com sudipta

    Echo Saurabh above: anything we can do? :)

  • http://www.deeshaa.org Atanu Dey

    Abhijat:

    I don’t know whether it is received wisdom that “traditional” economics deludes itself into thinking that the economy is in equilibrium. For that matter, I don’t even know what “traditional” economics means. It is a useful rhetorical device that people who want to set themselves in opposition to something that they perceive to be wrong by labeling it “traditional” and then arguing against it.

    Any competent economist knows that any complex system evolves. The word “equilibrium” is useful for comprehension and may not be practically realizable, something akin to “frictionless.”

    For my purposes, I like to focus my attention on basic underlying principles what are accessible to anyone, even to those who don’t have a deep knowledge of mathematics. I start with the individual as the object of analysis. From there, trade is the first step. Then you can enter into the notion of comparative advantage. Markets are the natural next step. Incentives round up the whole show. That’s all — trade, comparative advantage, markets, and incentives.

  • http://www.deeshaa.org Atanu Dey

    Saurabh, Sudipta:

    Sorry about the silence on my education venture. It is still in the works. When I make some progress, I am sure to tom-tom that on my blog. Thanks for asking.

  • http://www.deeshaa.org Atanu Dey

    Sundar:

    Thanks for the list of questions. Most of them are very broad and would require pages of explanation to do them justice — setting aside the question of whether I am competent to address them at all.

    But what I can do is to talk about the basic principles the knowledge of which can help in revealing the answers to a large set of questions.

    To take an example, consider your question “Why real estate prices are skyrocketing?”

    The broad general principle is that the price is discovered through the interaction of supply and demand. Every question of what the price is and why can be answered if you know that. It takes a few minutes, and a bit of pencil and paper to sketch out the simple diagrams.

    In India, the demand for real estate is rapidly increasing. The supply is strictly limited in the short term, and so the prices go up. In the longer term, the supply increases (due to the high prices) and if the demand drops off, then prices will come down.

    The price of land, however, will continue to go up unless they manufacture more land. Increase in the supply of land through manufacture of land will take a little longer.

  • pankaj

    Atanu, yours is a enjoyable blog,u write in a simple language using non techincal terms which is understandable by me.i sometimes watch economy based programmes on tv and i think they speak in greek ,using techincal terms and most importantly total disconnect with the common man.They say economy is fine ,but the public says the opposite.keep up the good work ,you are also very responsive like the foreigners very unlike stoic indians.

  • ankan

    Atanu

    You write extremely well. You have very good ideas, but your posts are a joy to read even when I do not agree completely with the ideas.

    They say good writing comes as a result of clarity of thought. Is it just that, or can one do something more to improve one’s written ability? Is there any advice you would like to give to someone who wishes to write well?

    Regards
    Ankan

  • http://sukeshkumar.blogspot.com/ Sukesh

    Hi
    I saw you first in IIIT, Hyderabad when you gave a speech in an business event of Felicity.
    I almost regularly read your blog and deeply influenced by the reasoning and arguments you present.

    But a negative trait is coming out. I find myself unable to reason beyond your arguments. I feel that my faith towards your reasoning is obstructing me to go beyond the scope and find more arguments or counter-arguments. That makes me paranoid. Maybe it is because of understandable limitation of knowledge of the field.

    Can you tell me any solution so that I can think from scratch with a new perspective? Well, in a way I am asking how to present counter-argument against your reasoning.

  • http://baawara.blogspot.com baawara

    wonder if “Feedback and questions welcome ” includes questions that might touch upon the personal/private domain ….

    if it does … then my question is – are you a single child ??

    by “single child ” I mean a person who does not have any siblings .. hindi word is “इकलौता”

  • tarang_72

    Atanu,

    I reallly enjoy reading these blogs. I would suggest some articles on following lines:

    1) Is PPP (Purchasing Power Parity) also a good index for life style comparison? I still doubt whether it really includes costs like education, healthcare, insurance etc in that; which really consume more percentage of expense than say food. I would like these kind of study to educate Indians that their lifestyle is not that inferior to the western world as these indices suggest.

    2) On the similar line, is HDI a good index or it favors westren world? Like it punishes for mal nutrition but does not include obesity. It does not include perils of nuclear family, violence in schools, drugs etc. Why not Indian/Asian thinktank should come out with differnt index more realistic to our lifestyles and culture then always compare ourselves on western parameters?

  • http://www.deeshaa.org Atanu Dey

    Ankan:

    With reference to comment #10.

    How to write well is an interesting question. Not all of us can write well but we can all write as well as we are potentially capable of. So if the question is how to write as well as we can as opposed to writing superbly from an objective point of view, then the answer is that it is possible but it is not easy. I will go into it in a separate post. Stay tuned.

    Sukesh:

    With reference to your comment #11.

    Reasoning independently is simple if you take care to build from the basics. Nothing that is not consonant with how you perceive the world can make sense to you. So I would not worry if I find myself in agreement with someone whose premises I agree with.

    The only, and most important caution, is that you should be totally skeptical of all claims of authority. As the Buddha said, if it does not accord with your reason, reject it.

  • http://www.deeshaa.org Atanu Dey

    Bawaraa:

    With reference to your comment #12.

    First, pretty cool the way you encode a word in devanagri. Wonder how that is done.

    Thanks for the clarification of what a “single child” means. I would have thought that to a person who is somewhat conversant with English, the meaning is clear.

    I also wonder why you care if I were an only child. I am not. I have siblings (one older and one younger brother, and a sister.)

    Perhaps the question is motivated by an attempt to explain how messed up I am psychologically. :)

    I assure you that my siblings bear no responsibility for my opinions and other failures.

    Thanks for asking. Why did you ask? Now the ball is in your court.

  • http://www.deeshaa.org Atanu Dey

    Tarang:

    With reference to your comment #13.

    1. I am not sure that I have ever quite understood what PPP is supposed to mean. It seems to be rather meaningless. I have suggested a different measure that makes inter-economy comparisons more meaningful.

    I think that PPP actually inflates the purchasing power of people in poorer economies. So I believe that people in India are poorer than what the PPP suggests.

    2. Metrics are developed by people. People differ in their motivations, history, and cultural contexts. As you correctly imply, the HDI is not an absolute metric. Anyone is free to define a different metric and if logically supported and widely accepted, then it can compete in the marketplace of metrics.

    It came as a bit of a revelation to me that depending on the metrics used in defining poverty, one can reach a wide variety of answers to the question of how prevalent poverty is. Sen, for instance, did some seminal work in defining the metrics.

  • SG

    Hi Atanu,
    This is Soniya, and you may recognize me as a long time reader of your blog. I remember reading that you spent some formative years for your life in Nagpur. Dr. Baba Amte, the visionary who devoted his life to the service of the less fortunate died recently had his ashram near Nagpur. I was wondering if you could write a few words about his life and work, and his philiosophy. As you have probably noticed, the international media barely took note of his passing, and the Indian media (not that I expect much from it) had more coverage of politicians eulogizing him. With the insight you bring to all the topics you write about, I request you to educate your readers about Dr. Amte’s work as well. Thanks!

  • SG

    I’m sorry for the grammatical errors in the above comment “formative years of your life”, I wish wordpress would let readers edit their comments.
    Anyways, thanks for your time. ~Soniya

  • http://www.deeshaa.org Atanu Dey

    Soniya:

    I am afraid that I know very little of the work of Baba Amte other than what I have read in the newspaper reports. I have little knowledge of his philosophy. My knowledge is second-hand and some time ago I posted on such second hand information. See the post titled the utility of suffering.

    Thanks for the suggestion. I should really find out more about Baba Amte.

  • http://baawara.blogspot.com baawara

    Thanks for your reply to an intrusive (hence slightly impolite) question

    Here’s a backhand reply, from the baseline of my court – hope the ball sails smoothly over the net to your side :-)

    first the easy one .. Devanagari came from a brilliant transliteration site run by google labs
    http://www.google.com/transliterate/indic/
    … I find their transliteration has an adaptive/intuitive element … very smart … if you fancy tamil telegu kannad or malayalam it can transliterate in the scripts of these languages as well

    a little warning – older version browsers may need some toggling of switches and selection/downloading of language-support before Devanagari shows up correctly on the screens .. the site has the details of what needs to be done.

    now to other things

    The reason I asked you this question is because I am fine tuning my stereotypes … testing biases

    A friend popped up the idea that a single-child behaves in a certain way … Reason runs like this – many single children are brought up steeped in affection .. largely in a similar fashion and have similar experiences & relationships in their formative years .. this leads to a peculiar kind of world-view, relationship with the society.. .. so on and so forth …
    conclusion being – most should favor a more confrontational/theoretical approach and not a accommodative/practical approach …

    I was trying to see if i can explain some of your writings by this stereotype.

    … and the answer to the obvious question is- I cannot …

    Which is good … it would be a really uninteresting and sad (prolly insanely divided) world if things could be explained with stereotypes

    so now we have a better idea on why they put a “pop” before psychology in the word pop-psychology

  • http://www.deeshaa.org Atanu Dey

    Baawara:

    Along the confrontational/theoretical — accommodative/practical spectrum, I am definitely at the extreme left end of the scale. Why this is so I suppose is the combined effect of nature and nurture. I imagine I would have been what I am even if I had been an only child.

    But this does not imply that the stereotype is wrong. As they are generalizations from empirical evidence, they must hold for the majority of the cases with some exceptions.

    A few weeks ago a friend offered to analyze my handwriting. A very silly venture. An attempt at explaining who I am based on the content of what I write makes more sense, even though one would question the attempt saying that it is not worth the time.

  • http://baawara.blogspot.com baawara

    I am sure there are world views that sit on the extremes of many spectrums … of many hues

    And that .. there are some people who write even PhD thesis on the writings of others …

    which is all okay

    the question is … what constitutes proof for various theories, hypothesis & propositions …
    My theory that your writings (not the economist part .. but the rest) can be explained by only one variable – Single child … was inherently a weak theory …

    As you pointed out … you could have been a single-child … and even then my theory would not have been proved … and even if I had gone a step further …and had done a rigorous hypothesis testing on a statistically significant sample … even then the model was likely to contain much difference from reality (which various poll predictors, on all news channels, find out after almost every election)

    In absence of solid, reliable, facts we can always indulge in interesting pop-psychology …when woven into the right stories it sure does look very convincing

  • http://jihadwatch.org/ Notsure

    LOL on Bawara’s question.

    its weird that he his looking for correlation on being only child. But not surprising he attempted something similar based on residence and degree to travel in india prior to that.
    that to me suggests a dude with a poor notion of causality and perhaps even worse retention of information read.
    Mr Dey has refered to siblings in his writing on more than one occasion.

  • http://jihadwatch.org/ Notsure

    Feed back to Atanu:
    You cover these topics which touch every one.
    i’d like you to keep writing on.
    (1) Freedom:-
    Freedom of discussion in person on print, web, any media Freedom to say FU to those, “who say how dare you offend me”

    (2) Productivity:-
    All aspects, ranging from personal, national, economic level to metrics regarding productivity.

    Its productivity on which I’d like to see more nitty gritty view rather than a 30,000 feet view.
    Enough said, Its your blog so keep writing whatever you wish to write about.

  • http://baawara.blogspot.com baawara

    @Notsure
    You trying to laugh off my earlier comments … but I can assure you – a person who has seen a good part of India and lives in India … knows a bit more about current India .. than someone sitting in Boston who prolly hasn’t seen anyplace in India (except prolly his mohalla/hostel, on that once-in-two-years vaccation) for a long time .

    I don’t claim to know the inside-outs of this blog … if you do ..maybe you can write your Phd thesis on it … (you being the resident troll of this blog … it shouldn’t be tough for you )

    All i could make out is that Atanu is a citizen of USA (hence a person of Indian Origin) who stays in Marathi Land and traces his roots to what is now Bangladesh (which prolly reflects in the choice of some of his targets) he has studied in the capital of chaddi-world, in IITK and Berkley… And more importantly that he covers economics in an interesting way.

    The US citizenship brings the question of alignment of his longterm interests with India’s interests … which props up for anyone whose grandchildren are not likely to remain in India … but since he has come back … I would like to assume that his interest and that of the land are aligned..

    but that all is secondary …I read his blog primarily for economics and not for his world view …

  • http://www.deeshaa.org Atanu Dey

    Notsosure:

    Thanks for the comments. But —

    Why the anonymity? It makes sense to conceal your identity if you are threatened for your opinions. I trust you are not in a citizen of a repressive state.

    Yes, I will continue to write on the matter of freedom — and freedom of expression. Freedom of expression is one thing that is available where much is hard to come by. Thank god for small mercies.

    I will write about productivity as seen from the ground level.

  • http://www.deeshaa.org Atanu Dey

    Baawara:

    It is true that my current passport is US. An US passport is a very convenient document to have while traveling around certain countries and that is precisely why I got it. I was getting tired of futzing around with the visa deal and finally succumbed to getting a US passport because it removed all hassles of visas.

    I have come to realize that in the end it is not what it says in your passport that determine who you are. You are who you are. You could have an Indian passport and your allegiance could be with that land called Italy because you were born there.

    In the end, blood is thicker than the printer’s ink. I know from personal experience that where you were born matters more than the where you live. It could not be otherwise. Have your read Sir Walter Scott’s poem — “Breathes there the man”?

    Will post it.

    PS: Here is the post: Breathes there the man …

  • http://idlinginc.blogspot.com idlinginc

    Bawaara, in your theory:

    What are the properties of the invididual entity/member
    What are the properties of the group

    Quantifiers: (ALL, SOME, NONE)
    Do these properties apply to all members of the group? Which specific properties? Are these properties absent in people who are not members of this group? If they are not absent, how do you explain these ‘anomalies’?

    Is your theory falsifiable?

    Correlation is not a scientific theory. If so, global warming can be reduced by increasing the number of pirates. Google for Flying Sphagetti Monster.

    Also, I have problems with your formulation: “confrontational/theoretical — accommodative/practical spectrum”

    Here, you are clubbing together confrontational and theoretical in one group and accomodative and practical in another. So, are all accomodative solutions practical and all theories impractical and confrontational?

    All scientific theories are confrontational and practical. There is no mid-ground (accomodative). When Galileo came up with heliocentric theory, it is based on facts and is confrontational. Surely it flies against conventional wisdom, everyone sees the Sun as revolving around the Earth. Ask 1 person, 10 ppl or thousands, you will always get the same answer. But scientists have to confront what people see and show data – and explain 2 facts with that data: (1) Why earth revolves around the sun (2) why we see it the way we do.

    Note that there is no mid-ground/accomodative about this. We can’t say, ok, sun revolves around the earth half the time and vice versa the other half. It would look ridiculous.

    I don’t understand why Atanu’s posts look as theoretical/confrontational to you. They are extremely reasonable, well thought out solutions and immensely practical.

    Perhaps we should start examining your childhood data and your experiences? That might give us some insight. J/K.

  • http://jihadwatch.org/ Notsure

    @Atanu
    Ouch on the anonymity. U got me there! Yes I am a pussy for that, but by no measure pusillanimous.
    U are by an 10′s of order of magnitude on log scale BRAVEr than I am for going forward with your real identity which I am uncomfortable revealing partly b/c I have no desire to confront a dumbass outside Web or Email.
    partly b.c I DO LIVE IN INDIA for more than months at a time.
    Infact in 2006 it was more than half a year living in india, and thankfully it was places were the neighborhood wasn’t referred to as a mohalla.

  • http://jihadwatch.org/ Notsure

    @Bawara
    Regarding operating the resident troll vessel,
    Yeah i did set the web too low looking for bottomfeeders and just take a lookie at the alleged fish I catch.

    [ ... rest of the comment deleted by editor ... ]

  • http://baawara.blogspot.com baawara

    @ Atanu
    Passports are convenient. But they make a statement-
    Besides If, hypothetically, things go horribly wrong in India then a US citizen will have USS XZY anchored at Indian coasts, backed by big military might, waiting to evacuate her/him … On the other hand an Indian citizen will live thru it all —> So an Indian Citizen has a much stronger incentive to keep the situation sane

    My point was about automatic alignment of interests. Not for your specific case , but generally … I think that if someone’s future (preferably grandchildren) is entwined with India’s future then s/he has a strong alignment (which rests on selfish self-propagation)… On the other hand if the link is not from the future but from the past … Link is emotional … not as strong … besides emotions can be positive or negative (example of negative – when someone is out to settle scores)

    Its from this reasoning that I am good with pakistan borns (Manmohan Singh, LK Advani) and Italy borns (Sonia Gandhi) as long as their future rests with this land … all this doesn’t mean that others (whose grand/children are settled in other places … like Switzerland) are bad for the country … just that, in their case, one way of a very strong interest alignment is missing.

    @idlinginc
    Some very complex questions … let me try to paraphrase and answer from bottoms up

    you want my childhood data -
    I see no reason to give it to you … maybe if you can show some proof of your expertise with interpreting such data I could think of giving it

    Atanu’s posts should not be called confrontational/theoretical -
    check comment #21 Atanu himself agrees with this characterization ..I agree (obvious) … you don’t .. big deal!

    All scientific theories are confrontational and practical –
    I don’t agree … but why has this crept into the discussion ??? surely you are not claiming that all of Atanu’s writings are scientific .. anyways reminds me of a link between science and certainty from school days – Heisenberg uncertainty principle

    Are all accomodative solutions practical and all theories impractical and confrontational? -
    The question stems from the assumption that options given by me are mutually exclusive and collectively exhaustive .. pls don’t assume that way

    All the “falsifiables” and “quantifiables” –
    i am sorry but i could not understand your question .. . can you put it in simpler language pls … I thought a pop-pshchology stereotype would not require too much of scientific rigor … don’t take it too seriously … Atanu said “ask anything” … I had a silly question in mind and I asked it … he replied … thats all

    @ Notsure
    Troll Alert!!! … Troll Alert!!! … ignore .. ignore

  • http://baawara.blogspot.com baawara

    sorry missed out something from the complex question
    @idlinginc
    Problems understanding confrontational/theoretical to accommodative/practical spectrum -
    if you are familiar with 2 by 2s then you can try using a 2 by 2 matrix with confrontational – accomodative on one axis and theortical-practical on another … Two diagonally opposite quadrants will help visualize.

  • http://www.deeshaa.org Atanu Dey

    Baawara:

    You wrote: “Its from this reasoning that I am good with pakistan borns (Manmohan Singh, LK Advani) and Italy borns (Sonia Gandhi) as long as their future rests with this land … all this doesn’t mean that others (whose grand/children are settled in other places … like Switzerland) are bad for the country … just that, in their case, one way of a very strong interest alignment is missing.”

    I had no idea that Advani, Singh were born after 1947, that is after Pakistan came into existence. I thought they were born in undivided India, just like Musharraf.

    In any event, there is a strong bond between a person and his or her land of birth. Even if one reluctantly takes the citizenship of a foreign land for practical purposes (like I did or Ms Antonia Maino did), the bond is too strong to break. Let me give you an analogy. I was born a Hindu and it will be a cold day in hell (pardon the expression) when I will change my allegiance. I can confidently say that about Ms Maino as well — her allegiance is to the Papa in Rome and she cannot possibly change her affections. Anyone who actually changes her allegiance is in the words of the poet “a wretch”. That is why I think that the framers of the US constitution were correct in barring people born in foreign lands from holding supreme executive power in the US.

  • http://www.deeshaa.org Atanu Dey

    Just to make it doubly clear, I will state again that I am indeed confrontational/theoretical. That is my nature and I make no apologies for it. I am quite fine with others being accommodating and practical. I am not one of those.

    I believe that bullshit has to be confronted, not accommodated. As it happens, I have taken up arms against bullshit and that is why I have to be confrontational. Don’t like it? Deal with it.

  • http://www.deeshaa.org Atanu Dey

    Notsure:

    I cannot claim that revealing who I am on the web is in any sense bravery. My work is primarily to look at the world and as far as I am capable of it, tell it like I see it. Now my views are not going to be palatable to the vast majority because it is not pretty. I call bullshit and stupid too often for me to be popular. I am pretty certain that I am right in my assessment. That is unfortunate. But what is the worse that can happen? That some idiot whose religious sensibilities are offended decides to kill me? Yes. But that is precisely what I am fighting against. No point in taking part in a battle if you fear that you will get killed.

  • http://baawara.blogspot.com baawara

    @ Atanu

    You would have trouble pin-pointing birthplaces of Manmohan Singh and LK Advani on India’s map … It maybe sad, but their birthplaces are not in today’s India …

    Good to hear that you are absolutely sure about all that you think… good for you… And you can write all the “bullshit” you want … its your blog ….

    Now sometimes I like to call a spade a spade … here’s one such moment – I don’t buy the “reluctantly takes the citizenship of a foreign land” crap

    If my guess is right … you were born an Indian citizen … Hell didn’t freeze over (had to borrow from your phraseology) when you did a “change my allegiance” act and switched over to the American side … see no reason why it should freeze over before the other “”change my allegiance” … unless religion is bigger than country

    Don’t like it? Deal with it.
    :-)

    Minor question -how does one put text in italics when using this comment box??
    let me try here

    @idlinginc
    Some reinforcement for you – comment #21 echoed in #34

  • http://baawara.blogspot.com baawara

    aha italics worked
    I should try something else

  • Rahul Kumar

    In one of the article you wrote that petrol / diesel etc are highly subsidized , where as many say that those are highly taxed . What is the fact ?

  • http://www.sundarmail.com Sundar

    Hi Atanu,

    Some more questions:

    a) Why part time employment is not encouraged in India?. It is ironic that many well educated women are required to leave the jobs to take care of their childeren, even though they could work say 4 to 6 hrs a day. This is prevalent in the west and quite successful.

    b) Why should sleeper and Second calss Railway fares be reduced when Railway is already the cheapest mode of passenger transport and apparently making loss!. (Also most of the trains go full and it is difficult to get ticket even two weeks in advance). I also feel most passengers can afford to pay more.

    c) Why does our government not adjust the price of utilities (Power, water, public services), etc., for annual inflation? It is easier to pay 4-7% increase than pay increase of 20-30% after losing heaveily (say once in say 5 years).

  • Pingback: On Writing Well | Atanu Dey On India's Development