Atanu Dey On India's Development

November 1, 2015
by Atanu Dey
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Open Thread: The Daylight Saving Time edition

snap1784 The twice a year reminder that daylight saving time (DST) is a prime example of collective idiocy is here. This morning (Sunday Nov 1st), at 2 AM, clocks in North America were set back one hour to 1 AM. Today will be 25 hours long, and to reverse this gain of one hour, March 8th 2016 will be only 23 hours long. Oh the insanity!
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October 25, 2015
by Atanu Dey
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Fast Food Enlightenment

Markets work. That’s the “First Law” of the Extended Order of Social Interactions. I just made up that EOoSI bit but the ‘markets work’ bit is a genuine law in the sense that it expresses an observed regurality in human societies.

What does it mean? Among other things, it means that when the need (the demand) for something arises, the market spontaneously figures out a solution (the supply) without the need for some controlling authority passing orders to get that need met. Those who address the needs of people are sometimes referred to as entrepreneurs. These are the people who look around for unmet needs and figure out some way of meeting those needs.
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October 24, 2015
by Atanu Dey
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Cult of Personality

People all across the world follow personalities. There’s something in the human psyche that makes this particular failing so prevalent. Perhaps it confers some selective survival advantage to groups that follow personalities instead of principles. Maybe principles-based thinking is hard for people and there are gains from “outsourcing” the thinking to some chosen person who is believed to be wiser. It shows up everywhere, from messiahs (Jesus is the prototypical example), to gurus (the Pope and other charlatans come to mind), to politicians (Mohandas Gandhi, Hitler, Stalin, etc are exemplars of this breed).
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October 23, 2015
by Atanu Dey
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Shubho Bijoya Greetings

snap1543 On Wednesday, it was Mahanabami of Durgotsav or pujo as we Bengalis refer to it in short. I went to check out some puja in the neighborhood with a friend Sudipta and his wife Suvagata. We first went to the Bay Area Durga Utsav Santa Clara, and then to the Paschimi Durga Puja at the Santa Clara Fairgrounds. Both were done quite nicely. The crowds were reasonably large, all dressed up and excited to be there. Pujo is always fun.
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October 21, 2015
by Atanu Dey
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Fast Trains

I find fast trains fascinating. Hence this little item caught my attention.

A Japanese magnetic levitation train has broken its own world speed record, hitting 603km/h (374mph) in a test run near Mount Fuji. The train beat the 590km/h speed it had set last week in another test.

Maglev trains use electrically charged magnets to lift and move carriages above the rail tracks.
Central Japan Railway (JR Central), which owns the trains, wants to introduce the service between Tokyo and the central city of Nagoya by 2027. The 280km journey would take only about 40 minutes, less than half the current time. [BBC. April 2015.]

fast trains

japan maglev

I find it interesting that the BBC did not explicitly mention the French TGV in the list of fast trains. The “Eurostar” category subsumes the TGV trains. Anyway, the TGV are the only fast trains I have had the pleasure of traveling in. Here are a few facts about the TGV:

  • The LGV opened to the public between Paris and Lyon on 27 September 1981.
  • The TGV holds the world speed record for conventional trains. On 3 April 2007 a modified TGV POS train reached 574.8 km/h (357.2 mph) under test conditions on the LGV Est between Paris and Strasbourg.
  • The TGV has carried over 1.6 billion passengers.
  • In almost three decades of high-speed operation, the TGV has not recorded a single fatality due to accident while running at high speed.

October 18, 2015
by Atanu Dey
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Hayek: Liberty and Organization

“The argument for liberty is not an argument against organization, which is one of the most powerful tools human reason can employ, but an argument against all exclusive, privileged, monopolistic organization, against the use of coercion to prevent others from doing better.” ~ F. A. Hayek

October 16, 2015
by Atanu Dey
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Rating Achievements Through “Rate of Growth”

“. . . how absurd it is to judge relative performance by rate of growth, which is as often as not evidence of past neglect rather than of present achievement. In many respects it is easier and not more difficult for an undeveloped country to grow rapidly once an appropriate framework has been secured.”

Source: F. A Hayek. The Political Order of a Free People. 1979. Page 190. Volume 3 of Law, Legislation and Liberty.

October 16, 2015
by Atanu Dey
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Snowden’s German TV Interview

This video is from 26th January, 2014. Truthdig.com has the details: The Edward Snowden Interview the U.S. Media Didn’t Want You to Watch. Excerpts from it below the video.

“Every time you pick up a phone, dial a number, write an email, make a purchase, travel on the bus carrying a cell phone, swipe a card somewhere, you leave a trace, and the government has decided that it’s a good idea to collect it all, everything, even if you’ve never been suspected of a crime.”

That revelation is actually from a second interview given by former Central Intelligence Agency and former National Security Agency (NSA) contractor Edward Snowden, this time to German broadcast giant ARD.
And even though ARD is the second largest public broadcaster in the world (after the British Broadcasting Company), and Snowden’s message easily unearths the largest violations of the Constitution by the US to date, our dinosaur media does not believe this is mainstream enough to cover.

To be clear, you cannot find the 30-minute interview – released via the international video-sharing site LiveLeak on Jan. 27 – on one single American news outlet.”

October 15, 2015
by Atanu Dey
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The Proper Role of a Government

People should be free to do whatever they can and wish to do. But that does not give license to people to do such things that cause harm to others. Since it would be too inefficient for each of us to individually protect himself or herself from harm by others, it is prudent to collectively create a mechanism that provides “policing services” that prevent anyone from causing harm to others, and in case harm is caused, to provide a means for the redressal of the harm and the punishment of the culprit. This fundamental function of providing policing services is the government’s proper role. Thus the proper role of the government must be limited to restraining people from harming others but not to forcing people into doing particular things.

In other words, the government’s job is solely to protect the negative right of every person, namely the right to be unharmed by others. Of course, there has to be a mechanism for determining what actions are harmful to others. The design of the mechanism that determine the rules — the rules of just conduct — has to be specified by a set of meta-rules. These meta-rules we call the constitution.

October 12, 2015
by Atanu Dey
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Who won the Nobel Prize?

Actually nobody “won” any Nobel prize in anything ever. Nobody wins a Nobel prize in anything simply because “to win” implies a contest that participants engage in. Nobel prizes — and other prizes of that nature such as the Indian “Bharat Ratna” — are awarded to certain people or institutions based on the judgement of a select group of people. This process of selecting an awardee is more subjective than say the process by which we decide who won the 100-meter dash in the Olympics in 2004 because in the latter uninvolved bystanders can agree whether or not Charlie crossed the finish line ahead of the other sprinters. In the case of Nobel prizes, people outside the selection committee can — and do — disagree with the judgement of the committee.
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October 12, 2015
by Atanu Dey
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India Needs a New Constitution

Human societies are rule-based. Rules not just define human societies but rules also differentiate between societies. Sufficiently large collectives of of people (say 100,000 or more) are indistinguishable in terms of their endowments because we all belong to the same species and we are just random draws from the same gene pool with minor variations. IF that is so, then what’s the origin of the inequality we observe in the wealth of nations? Why is Burundi not as wealthy as Sweden? The answer is that different societies follow different sets of rules, and the outcomes differ. Out of all the rules, norms, customs and traditions of a people, the formalized high-level set of rules is called the constitution.

In the following piece, co-authored with Rajesh Jain, I argue that India needs a new constitution. It was published today in Quartz. Here it is, for the record.
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October 5, 2015
by Atanu Dey
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Violence and Development

A couple of quotes related to violence and development.

“. . . all societies must deal with the problem of violence. In most developing countries, individuals and organizations actively use or threaten to use violence to gather wealth and resources, and violence has to be restrained for development to occur. In many societies the potential for violence is latent: organizations generally refrain from violence in most years, but occasionally find violence a useful tool for pursuing their ends. These societies live in the shadow of violence, and they account for most of human history and for most of today’s world population. Social arrangements deter the use of violence by creating incentives for powerful individuals to coordinate rather than fight.”

Source: In the Shadow of Violence: Politics, Economics, and the Problems of Development. Edited by Douglass C. North, et al. Cambridge Univ Press 2013.

“Political development occurs when people domesticate violence, transforming coercion from a means of predation into a productive resource. Coercion becomes productive when it is employed not to seize or to destroy wealth, but rather to safeguard and promote its creation.”

Source: Prosperity and Violence: The Political Economy of Development. Robert H. Bates. (2001)

A related post worth a read is “Of Kakistocracies, Principals and Agents.

October 4, 2015
by Atanu Dey
6 Comments

Jinnah, the Realist v. Gandhi, the Delusional Megalomaniac

When a fist fight breaks out between two people, the first step is to immediately separate the two combatants. Bystanders quickly pull the fighters apart and effectively stop the escalation of violence. This action is prompted by intuition and basic common sense. If two people can’t ever get along, it makes no sense in forcing them to be in each other’s faces. This idea that people who cannot get along should be separate is not exactly quantum mechanics. But somehow it seems that the great celebrated Mr Mohandas Gandhi could not — or would not — understand it. His one-time friend and fellow Congress leader, and later the leader of the All India Muslim League, Mr Mohammed Ali Jinnah, understood that idea very well. Clearly Jinnah was intellectually superior to Gandhi (which, I hasten to add, does not elevate Jinnah’s intelligence very much) and certainly more rational.

Below is an excerpt from a speech that Jinnah: Presidential address by Muhammad Ali Jinnah to the Muslim League, Lahore, 1940.
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September 27, 2015
by Atanu Dey
2 Comments

PM Modi in Silicon Valley

Oh what a circus, oh what a show. Silicon Valley NRIs have gone to town. Over the visit of the Indian PM Narendra Modi.

Thousands have gathered in the SAP Center in San Jose, CA, to hear the great man speak. A lot of self-congratulatory speeches will be made, and the successes of NRIs in the US recounted. There is only one truth that will not be mentioned: that all these NRIs are in the US because they voted with their feet. They voted with their feet and came to the US because of what India is. This fact should actually shame Indians and its leaders. But instead they are oblivious to its implications. And it will be a cold day in hell when Indian leaders will ask themselves, these questions: “Why is it that so many hundreds of thousands of Indians vote with their feet? Why do they create wealth for themselves and for those foreign lands instead of creating wealth in India? Could it be because in India the government of India has put massive barriers to the creation of wealth?”

Dear PM Modi, when the circus is over, when the performers have done their song and dance, when the photos have been taken, when the NRIs have all patted themselves on a great event they made possible, do ponder the simple question of why are there so many NRIs? Because there is another phrase that describes these NRIs — economic refugees and economic migrants. When will India be such a place that there will be very few NRIs to welcome Indian politicians in foreign countries?

I don’t mean to rain on the parade but those questions need some attention if not a response.

I remain an NRI supporter of yours,
Atanu

September 27, 2015
by Atanu Dey
1 Comment

Governments Don’t Create Corporations

Governments of successful economies don’t create large corporations.

The economic prosperity of a country is usually the consequence of the economic freedom that its citizens have. Entrepreneurs create a large number of small enterprises. Some of these grow up to become giant globe-spanning multinationals not because of government largesse but because some of those small enterprises created value for its customers and grew organically as more people found its goods and services worth buying.

Google, Facebook, etc etc, were not conjured up by some politician, or a bureaucracy, or through government diktat, or any “Make in India” type marketing campaign. For large corporations to grow in India, what is needed is an environment that is conducive to the small enterprise. This will of course not happen because there’s little hoopla one can engage in by freeing the little guy.
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September 26, 2015
by Atanu Dey
3 Comments

2. Goodbye, Yogi Berra

Four days ago, Tuesday, I was in NJ. It was the end of a very hectic East coast visit. I returned the rental car around 9 AM. I had put around 1,500 miles (about 2,500 kms) on it doing trips to Washington DC, Philadelphia, New York City, and Boston. The Hyundai Elantra was comfortable and spacious but it handled turns rather uncertainly. Could have been due to the tires but it could also be because I am used to a firmer suspension on my Saab 9-3. Anyhow, the rest of the day was spent in transit from Newark NJ to San Jose CA on Southwest Airlines. The layover was in Austin TX, a city famous for its music (Austin City Limits).

Upon arrival late evening, I got to know that Yogi Berra had passed away that day in Caldwell NJ. Although I have no interest in baseball, I had always loved “Yogi Berra-isms”. Indeed, I consider knowing them as part of a complete American education. In the final exams I set for econ courses I have taught, I always included one bonus question for extra points: “What is your favorite Yogi Berra-ism?” I kid you not.
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September 26, 2015
by Atanu Dey
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Indians Make it in the USA, not in India

Prime Minister Modi is visiting the SF Bay area this weekend. Entreaties to “Make in India” will echo all around. Sadly, little attention has been given to why Indians themselves are unable to make in India, or even make it in India. Indians make it anywhere except in India. Particularly, Indians make it in the US. They are immensely successful as entrepreneurs and as top level managers in major corporations in the US. Why?

I wrote this in February earlier this year. Here it is, for the record.
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September 24, 2015
by Atanu Dey
1 Comment

1. Turbulence at Houston

My little visit to the East coast — which started very early in the morning of Thursday Sept 10th — ended when I arrived at San Jose on Tuesday 22nd night around 9 PM. I had an exciting visit which included a great deal of going places, meeting people, giving talks and generally having a good time. My colleague, Rajesh Jain from Mumbai, and I met lots of new people and discussed the work that we propose to do. I am sure that I will be writing about that in future blog posts. Right now, I am going to generally ramble on, a stream of consciousness kind of reporting.
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