Author: Atanu Dey

Economist.

Numbers – 3

Joel Cohen’s book How Many People Can The Earth Support should be required reading for Indian policy makers. Here is more from the introduction:

The unprecedented growth in human numbers and in human power to alter the Earth requires, and will require, unprecedented human agility in adapting to environmental, economic and social problems, sometimes all at once. The Earth’s human population has entered and rapidly moves deeper into a poorly charted zone where limits on human population size or well-being have been anticipated and may be encountered. Slower population growth, along with many other improvements in human institutions and behaviors, would make it easier for people to retain control of their fate and to turn their attention from the numbers to the qualities of humankind.

These themes have consequences for action. Stopping a heavy truck and turning a large ocean liner both take time. Stopping population growth in noncoercive ways takes decades under the best of circumstances. Ordinary people … still have time to end population growth voluntarily and gradually by means that they find acceptable. Doing so will require the support of the best available leadership and institutions of politics, economics and technology to avoid physical, chemical and biological constraints beyond human control. Migration can ameliorate or exacerbate local problems, but at the global level, if birth rates do not fall, death rates must rise.

India’s population problem is a sort of tragedy of the commons and there is little chance that ‘ordinary people will voluntarily and gradually’ solve this problem. The incentives simply don’t exist, even if the knowledge and the understanding existed about the social disaster of excessive population, for individuals to act for the social good.

The solution to India’s population problem has to “make sense” to those who produce the children. That is, they have to have an incentive to produce the socially optimal number of children. I have worked out a simple mechanism that would solve this problem. Details at — when else — 11.

[Continue on to part 4 of Numbers.]

HMS Titanic — 3

Those in charge of the Titanic disregarded the warnings. And those who were not in charge were blissfully unaware of the fact that those in charge were not fully competent.

The Titanic had sealed its own fate by the cavalier disregard to those ice warnings by their Marconi operators. Particularly the last two, from the Maseba at 7.30pm and the Californian after 11pm. Had they paid attention to them they would have seen they were heading straight into an icefield.[Source]

Continue reading “HMS Titanic — 3”

Numbers — 2

A few years ago, my college at UC Berkeley was searching for a dean. Prof. Joel Cohen was invited to check out the College of Natural Resources. I asked him about his book How Many People Can the Earth Support? (1995) over lunch.

A few years ago, he said, a journalist had called him up saying that he was doing a piece on world population and wanted to know from Joel how many people could the earth support. Joel told the caller that he could not answer that question off the top of his head. It could take him a few days and why didn’t he call back in four or five days.

It took Joel three years to definitively answer that question and a fine job he did, in my opinion. The book was published in 1995. I quote from the introduction:

Though the future is hazy, much that is very clear can be known about the present. First, the size and speed of growth of the human population today have no precedent in all the Earth’s history before the last half of the twentieth century. Human numbers currently exceed 5.7 billion and increase by roughly an additional 90 million people per year. Second, the resources of every kind (physical, chemical and biological; technological, institutional and cultural; economic, political and behavioral) available to people are finite today both in their present capacity and in their possible speed of expansion. Today’s rapid relative and absolute increase in population stretches the productive, absorptive and recuperative capacities of the Earth as humans are now able to manage those capacities. It also stretches human capacities for technological and social invention, adaptation, and compassion.

Like in all other things, humans have a limited capacity for compassion too. When resources are severely limited, the thin veneer of civilization is easily scraped off to reveal the underlying unyielding will to survive at the expense of others.

[Continue to part 3 of Numbers.]

HMS Titanic — 2

The HMS Titanic was a giant of a ship. It was doing 21 knots that fateful night.

Now it was 9.40pm, and still the ice warnings came. At no time had Captain Smith or the senior officers ordered a cautionary reduction in speed, or had gone to the trouble of having extra lookouts posted, something which Captain Lord of the Californian had already performed before he called it a day and brought his own vessel to a halt in the ice. When you put-together the ice warnings Titanic had received that day, it revealed that there was an ice-field 80 miles long directly in her path, and only two hours away if the current speed were maintained. Surely somebody in the next couple of hours must realise that Titanic is steaming at full-speed into an ice-field which has already made other vessels to heave-to for the night?

The warning messages kept coming in. Ice ahead. John Phillips was the radio operator in the Marconi room busy at the controls of the transmitters, sending messages to Cape Race in North America.

. . . under the immense pressure of sending commercial traffic, and at the same time having to cope with incoming warnings and messages, he snapped, as the nearby Californian sent an ice warning to Titanic. “Shut up, shut up. I am busy. I am working Cape Race.” Phillips’ now infamous snub highlighted how the commercial traffic had priority over the warnings. Perhaps if the Marconi men had not been so busy sending messages, the Titanic would never had foundered. But all of the previous warnings didn’t stop that happening either, so a last minute aversion was unlikely.

[Continue on to part 3 of HMS Titanic.]

Numbers

Exponential growth can be a terrifying thing. We all know the story of the king who was foolish enough to grant a boon to one who was familiar with the concept of exponential growth. To recount, the king said, “Ask and I will grant it to you.”

The man said, “All I want is a few pennies. I want one penny on the first square of a chess board, two pennies on the second square, four pennies on the third, eight pennies on the fourth, and so on till we reach the 64th square of the chess board.”

The king, like our present day innumerate kings, was immensely relieved. Here was this idiot asking for pennies when he could have asked for a ton of gold.
“Done,” said the king and asked his minister to make the arrangements.

The minister soon reported that he had finished counting the total amount the king had promised and it turned out to be around 184,467,441,000,000,000 or $185 million trillion. The annual GDP of the
US is $10 trillion. It would take the US about 18.5 million years to get that amount together.

~~~~~~~~~~~~~~~~~~~~~~~~~~~

We are talking large sums when exponential growths are concerned. It does not matter what the value of the exponent is. It could be as little as 2%. In a matter of just 35 years, the world population of 6 billion would increase to 12 billion at a 2% growth rate. It is estimated that it took all of human history till the year 1804 CE for human populations to hit the billion mark. The latest billion was added to the human population in about 12 years — a million times faster. 

World Population

Population      Year    Interval
----------      ----    --------
1 billion       1804    all of human
                        history
2 billion       1927    123 years
3 billion       1960    33 years
4 billion       1974    14 years
5 billion       1987    13 years
6 billion       1999    12 years

India’s population was around 350 million in 1947. Now we have three times as many people alive in India. Bihar, UP, Rajasthan, and MP make nearly 45% of India. They are also among the poorest states of India.

India has more people than all of Africa,North America and South America combined. And all these people, more than a billion,
or around 17% of all humanity, are jammed into only 2.4% of the world’s landmass.

It is crowded as all heck and still every year we add more people than the population of Australia.

Population in India density has risen concomitantly with the massive increases in population. In 1901 India counted some seventy-seven persons per square kilometer; in 1981 there were 216 persons per square kilometer; by 1991 there were 267 persons per square kilometer–up almost 25 percent from the 1981 population density. India’s average population density is higher than that of any other nation of comparable size. The highest densities are not only in heavily urbanized regions but also in areas that are mostly agricultural.

[Source.]

[Continue to part 2 of Numbers.]

The HMS Titanic

Rearranging the deck chairs on the Titanic.
What an absolutely evocative expression. I cannot get that out of my head every time I muster up enough courage to read the newspapers. Most of those out there on the top deck are busy with something trivial while below decks the situationis dire.
Continue reading “The HMS Titanic”

It is transaction costs all the way – Part 2

In my last post I claimed that the fundamental role of ICT is reduction of transaction costs. What, you may ask, is transaction costs? The answer is this: pretty much everything is transaction costs, with a little bit of physical stuff thrown in.

In California, you can buy a loaf of bread for about $2. The basic materials that go into the making of the bread — wheat, primarily — is about $0.07. Then there is some energy required for baking it and transporting it. Add a dime for that. The total material cost is therefore about 17 cents. The difference between the cost of the inputs and the price of the product is the value added. In our case, it is $1.83. That is, about 92% of the price of the bread is value added.

How do you allocate the value added in this case? Most of it has to be assigned to services — from the marketing of the bread, to the stocking of it in the store shelf. The cost incurred in bringing a loaf of bread to the market (less the cost of the material, the fuel and labor involved in the baking and transportation) is transaction costs.

Of course, costs seen from a different angle are revenues and incomes. And part of revenues are profits (if prices exceed costs.) The generalization of these costs are transaction costs.

Transaction costs are ubiquitous. Consider what happens in any organization, say a car manufacturing firm. Cars are produced by people using machines to transform steel and other stuff. If you add up the costs — labor, material, and machines — the car would not cost all that much. But when you add the fact that there are other people employed by the car firm who have nothing to do with the manufacturing of cars, you realize that they represent transaction costs. For instance, you have managers, and accountants, and secretaries, and human resources divisions, … the list goes on. They all represent transaction costs. And the greater the transaction costs, the higher the cost of production. Why do firms exist? Because they reduce transaction costs.

Ultimately, one can explain pretty much all organizations as an attempt to systematically reduce transaction costs. Economies of scale, scope, and agglomeration themselves arise from the reduction of transaction costs.

Information and communications technologies reduce transaction costs. Here is a simple demonstration of that. The next time you make a phone call, ask yourself what it would have cost you if you could not have made that call.

For instance, I called the store to find out if they had indeed installed the AC in my apartment. (They had not.) If I could not have made the call, I would have had to spend at least two hours and a lot of money to travel to the store to find out that information.

I will continue to ramble on the transaction costs theory of the universe in the next few posts. As they say on the radio, stay tuned.

Open Letter to Buddhadeb Bhattacharya

Dear Chief Minister of West Bengal Mr. Buddhadev Bhattacharya:

I have come to learn that there is some possibility of renaming Park Street as Mother Teresa street and erecting her statue.

I think this is a very bad idea. The image of Kolkata has been forever tarnished as a result of Mother Teresa’s activities. For greater details on why this is so, I would urge you to read what some neutral observers have to say about the lady. I have a few articles on the subject and I recommend a book by a son of Kolkata — Dr Aroup Chatterjee’s “Mother Teresa: The Final Verdict” which I have reviewed here.

We in India are totally brainwashed to accept uncritically anything that is Western and white. Mother Teresa, motivated by missionary zeal, used the poverty of the poor of Kolkata to enrich her mission. While I do not deny that India has abject poverty, she used that poverty and showcased it around the world not to solve the problem but to evoke pity from affluent people so that they would contribute to the welfare of her mission, not for the welfare of the people she so ruthlessly used.

I urge you to carefully review the evidence and reconsider.

Sincerely,
Atanu Dey

I have followed the Mother Teresa phenomenon with a sick feeling in my stomach because of a number of reasons. The primary reason for me is that she epitomizes what is the fundamental flaw that led to what we see in India around us today. The flaw is in not thinking through things, of busying ourselves with the symptoms of an ailment rather than eradicating the cause.

Mother Teresa ceaselessly championed for uncontrolled breeding. She did her best to derail any serious attempt at addressing one of the primary causes of poverty in the developing countries, namely, the growth of human populations way beyond that which can be sustained at a humane level. All she wanted was that there be sufficiently large number of abjectly poor in a place so she could gather brownie points to assure her place amongst the sainted. As she honestly put it, if there were no poor, there would not be any reason for hermission to exist. The poor, she held, were blessed because they suffer.

I feel that she should be called Teresa, the Merciless. Millions will be forced lead miserable lives because of what she has done and the institutions she supported (the Vatican, primarily) and the institutions she has created.

I expect hate mail as a result of this post. But I hope that the writer of hate mail at least read some of the articles which I have provided the links to above. My request is that you send me hate mail only after you have honestly read the articles.

The Triple Point of the World at Zero Degrees Humanity

MonsoonRain

I keep waiting for the real monsoons to show up in Mumbai. Do they have any thunder and lightening and huge downpours around here or does this anemic occasional rain showers pass for the monsoons? Thank goodness that I went to Lonavla last weekend with a bunch of guys from work. As we entered the Western Ghats, we passed through the mother of all rain storms. Waterfalls by the hundreds cascaded down the rocky cliffs at the edges of the Mumbai-Pune highway. When we reached Lonavla, the downpour had created fast-flowing rivers of the narrow roads of the busy tourist town. Being situated in a hilly area, shortly after the storm ended, the rivers vanished and the narrow streets reappeared. Continue reading “The Triple Point of the World at Zero Degrees Humanity”

The Elephant’s Trunk

In a collection of essays called The Origin and Evolution of Intelligence (Scheibel and Schopf, eds.), Steven Picker’s article Evolutionary Biology and the Evolution of Language starts off with the assertion In Biology Uniqueness is Common and then immediately proceeds to give a stunning counterexample of that claim.

The elephant’s trunk is 6 feet long, 1 foot thick, and contains 60,000 muscles. Elephants can use their trunks to uproot trees, stack timber, or carefully place huge logs into position when recruited to build bridges. They can curl the trunk around a pencil and draw characters on letter-sized paper. With the two muscular extensions at the tip of the trunk, they can remove a thorn; pick up a pin or a dime; uncork a bottle; slide the bolt off a cage door and hide it on a ledge; or grip a cup, without breaking it, so firmly that only another elephant can pull it away. The tip is sensitive enough for a blindfolded elephant to ascertain the shape and texture of objects. In the wild, elephants use their trunks to pull up clumps of grass and tap them against their knees to knock off dirt, to shake coconuts out of palm trees, and to powder their bodies with dust. They use their trunks to probe the ground as they walk, avoiding pit-traps, and to dig wells and siphon water from them. Elephants can walk underwater on the beds of deep rivers or swim like submarines for miles, using their trunks as snorkels. They communicate through their trunks by trumpeting, humming, roaring, piping, purring, rumbling, and making a crumpling-metal sound by rapping the trunk against the ground. The trunk is lined with chemoreceptors that allow the elephant to smell a python hidden in the grass or food a mile away.

Elephants are the only living animals that possess this extraordinary organ.

If you like elephants, check out The Elephant Encyclopedia for a bunch of neat pictures. But you may ask why I am suddenly going on about elephants. This was prompted by a post on Rajesh Jain’s weblog on a dream device which combines the features of a Blackberry and iPod. To which Brian put a comment and asked whether we really need all-in-one devices. That got me to thinking about the elephant’s trunk and so this post.

To my mind, a device may have various functionalities as long as there is an underlying commonality to the supporting infrastructure that the device incorporates within itself. For instance, if the various functions require digital storage, retrieval, and decoding, then aggregating these functions on the same device that has at its core a huge amount of storage is logical. So you could combine digital diary functions with MP3 functions because they both share the same underlying hardware. Now add a communications function and you have a handheld PDA which plays MP3. Camera and picture viewer also logically follow since a PDA has to have a screen and so they are shared.

But then, an all-in-one device has the obvious disadvantage that Brian pointed out in his comment, namely, you lose the device and you are up the proverbial creek without the paddle. Well, in that case, the obvious evolution of the device is to use the device for retrival and communications alone and keep the storage function outside the device, say, on centralized servers that are unlikely to get stolen. Ultimately, if you have broadband connectivity, then you really don’t need to drag your own harddrive all over the bloody place. This has the other advantage of lower power requirements.

Indeed, most of computing could be moved to centalized servers and all you need is a retrieval device that is not complicated at all. Think about it.