Author: Atanu Dey

Economist.

Enlightened Reformation

The depth of the Indic civilization is awe inspiring when you consider that it has been around for many thousands of years. The Vedas were composed long before the start of the Common Era. The people of India can claim direct lineage to those who composed the Vedas and the Upanishads. The Rig Veda epitomizes in one of its invocations what I am concerned about: adoption of ideas.

Let noble thoughts come to us from all universe.

The puzzle therefore is why has modern day India been so insular and close-minded? (By modern day I mean the last few centuries, and not the period variously called ‘internet era’ or ‘post-industrial era’.) Other countries appear to have become enlightened in that regard.

(Talking of enlightenment, the most well-known enlightenment appears to have happened in India about 2500 years ago. The fall-out of that event radiated from India to other lands but vanished from ground zero almost without a trace. Fortunately, the echoes from far-off lands can now be heard in India. Given enough time, once again that enlightenment will be back home in India.)

Consider, for instance, the Meiji Restoration:

The Tokugawa bakufu came to an official end on November 9th, 1867 with the resignation of the 15th Tokugawa Shogun Tokugawa Yoshinobu and the “restoration” (Taisei Houkan) of imperial rule. The 15-year-old Mutsuhito succeeded his father, Emperor Komei, and the following year took the reign name Meiji (明治) or “enlightened rule,” and signed the Five Charter Oath.

What was the Five Charter Oath?

The Five charter oath (Gokajyo no Goseimon) was an outline of the main aims and the course of action to be followed by the new Meiji era government of Japan after the fall of the Tokugawa Shogunate in 1867 during the Meiji Restoration. The oath set a new path in Japanese history with an emphasis on modernization and the establishment of a new social structure.

I draw your attention to the fifth oath which read:

“Knowledge shall be sought throughout the world so as to strengthen the foundation of Imperial Rule.”

That, ladies and gentlemen, is what transformed Japan and made it strong enough to dream of world domination and to ultimately grow so economically powerful that the US was forced for the first time after the Second World War to do some very urgent soul-searching.

The successes of the Meiji Reformation can be traced ultimately to their thirst for knowledge and understanding from around the world. They used ‘noble thoughts’ from all universe to learn and then out-do what others had done. They adopted and adapted to the modern world — a world that they indeed helped create at least in part.

It is time for India to have a reformation of its own. It has to have enlightened rule if it is to survive. There is no other way.

Adopting Innovations

In my previous post I wrote

As a development economist, I have often asked myself what are the invariants that underlie development. I know for sure that high technology (computers, internet, cell phones) are neither necessary nor sufficent for development. Most of the developed economies of the world developed at a time when all those were not yet invented. I believe that one invariant is the ability to adopt innovations.

People, societies, economies which can successfully adopt innovations tend to do better than those that don’t adopt innovations. The operational word is adopt. Innovations happen all over the place and all the time. Who innovates and how is not what I am concerned about although it is a fascinating subject in itself. What I am concerned about is the adoption of innovations rather than the causes of innovations.

Innovations are primarily discovered or invented by what I call ‘micro-agents’. That is, the suppliers of innovations are individuals or very small groups of people. These are the real smart people who have understood some problem very well and figured out a solution to the problem. This is hard work and it requires truckloads of inventiveness, intelligence, luck, and all sorts of fortuitous circumstances for innovations to arise. Therefore, the number of successful innovators is small relative to the overall population and so is the number of real innovations very small. But what is significant is that any real innovation has a multiplier effect in its implementation when the innovation is adopted by society at large. We all don’t have to invent a wheel or a wheel-barrow. Someone somewhere came up with the innovation of a wheel-barrow and for ever not so intelligent people have been using wheel-barrows to cart stuff around with much less effort than would be required without one.

Ever been to a construction site or a farm where they did not use wheel-barrows? The answer is: depends. I have seen hundreds of constructions sites in India and they don’t use wheel-barrows. The one right outside my window, where three massive buildings are being built, don’t use use wheel-barrows. They pile the stuff up on their heads and carry small loads. The lever and the wheel (two innovations that form the basis for a wheel-barrow) have been known for ages. I have seen the use of wheel-barrows all over in developed nations. But not in India. In India, it is stuff on their heads. Go to a railway station and coolies will be lugging stuff on their heads for the majority of the loads. If you insist they will get a huge luggage cart but then you will have to wait for a while for them to track down one and they will have to charge you extra for that.

So as I was saying, micro-agents invent the stuff and macro-agents adopt them. Micro-agents have to be very smart to invent clever things. The society at large, the macro-agents, don’t have to be particularly smart: only smart enough to be able to use them. You have to be a veritable genius to invent the wheel-barrow but you have to be a certifiable moron to not use a wheel-barrow after it has been invented.

I am going on about adoption of innovation because that is the important bit. It does not matter who came up with the innovation. What matters is whether a society uses or adopts the innovation. What causes one society to adopt innovations and others to neglect them is a fascinating question and I have my theories about them.

For now, I will continue to explore this topic next.

It’s the Small Stuff, Stupid

An ironic bit of popular wisdom goes

  1. Don’t sweat the small stuff.
  2. It’s all small stuff.

In the context of economic development, I totally agree with the latter bit, but strongly disagree with the former bit. If we don’t sweat the small stuff, we don’t have much hope of managing the big stuff since the big stuff is exactly what arises from an aggregation of all those small bits of stuff.
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Growth and Development

Prasad requested a bit more on the distinction between development and growth. Consider the life-cycle of a normal human being. The initial stages are marked by growth and development; the later stages by a cessation of growth but continued development (hopefully). Growth, apart from that required in the initial stages, is neither necessary nor sufficient for development. One can have one without the other.
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Abolishing Natural Laws

Like a bad penny, articles on BPO and its backlash keeps turning up again and again. The best I have seen so far was a New York Times article by Hal Varian of UC Berkeley called What Goes Abroad Usually Comes Back, With Benefits. (Thanks to Reuben for the link.)
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Shifting Focus from Bharat to India

Thomas Friedman is a one-man factory churning out outsourcing stories by the dozens. He asks and answers the question below in his latest column.


How did India, in 15 years, go from being a synonym for massive poverty to the brainy country that is going to
take all our best jobs? Answer: good timing, hard work, talent and luck.

I would have asked a slightly different question:

How did India, in 15 years, go from being perceived as a country of massive poverty to being perceived as the brainy country that is going to take all our best jobs? Answer: Spin, racist zenophobia, and ignorance.

Let’s take the last one: ignorance. People are generally ignorant of the fact that there are two distinct Indias. Sharad Joshi distinguised them by calling the urban, rich, educated one India and the rural, poor, uneducated one Bharat. I will borrow that nomenclature. India is small, say about 100 million people at most. India has programmers and BPO call centers and cars and Baristas and McDonalds. Indians get educated at IITs and IIMs and travel abroad and talk to each other in Hindi sentences such as, “mera sleep bahut disturbed ho raha hai these days.”

In contrast to that, Bharat is a huge country of about 900 million, most of whom live in rural areas. They are largely illiterate, poor, have little education, don’t speak in English, do manual labor in farms, wouldn’t know what to do with a computer even if one came and bit them on their skinny behinds, have no illusions about anything shining and are generally ignorant about feeling good.

Ignorance about the existence of Bharat is widespread in India. Examine any magazine published in India and you would learn that the most pressing problems in India include what to do about a waist-line, which car to buy, where the hottest shopping spots are in the world, which movie star is sleeping with whom, and how India is shining.

How foreigners perceive India depends on what they have been fed by the news media. Sometimes the news media concentrates on Bharat and the focus is therefore on poverty and hunger. Then for some reason, Bharat is ignored and India comes into the limelight. The focus is then on the IT industry and all BPO and call center and job loss to brainy Indians. The reality is pretty much what it was before.

The other two factors — spin and racist zenophobia — I may take up later or leave it as an exercise for the interested reader.

Lajja

This one is to be filed under “INDIA IS A SUPERPOWER” category.

The newsletter from US-India Political Action Committee (USINPAC) contained this:

We need support and financial contribution from at least 50,000 Indian Americans by March 2004 to persuade the US government to support India in its fight against HIV/AIDS. The US government has already funded 14 nations in curbing the HIV/AIDS menace. With your support, India can become the 15th country to receive the much-needed US funds for fighting the epidemic.

Begging bowl all shiny and ready, I suppose. What the heck is wrong with these people? Do they have no shame? Begging for their living? Because I don’t doubt that they fly first class from one end of the country to the other shiny begging bowl in hand.
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What I Believe

It is easy to defend the view that resource scarcity is a crucial causal factor in most conflicts. And since scarcity of resources increases with increasing populations, a greater balance between resources and population numbers could reduce strife.

I see the result of extreme imbalance between resources and populations every day in Mumbai. People lose their dignity in the face of dehumanizing poverty. I have also seen the other extreme — of affluence. I have lived in the US for over a couple of decades and witnessed their profligate over-consumption which is also unsustainable. Somewhere between the thoughtless affluence of the few and the de-humanizing poverty of the many, is the middle-path of sustainable development of all humanity. The problems of our system are easy to see and are stated easily enough though they are hard to solve.

Although I am not a religious person in the traditional sense of the word, I hold some things sacred. I believe that life in the universe is the most profound mystery second only to the mystery of why something, rather than nothing, exists. And that mystery of life is deserving of our most profound respect and wonder. Preservation of all life on Earth, therefore, is the most sacred of duties. Not just preservation but to see that it flourishes in all its infinite variety and diversity. I believe it is a moral imperative that every human being born to this life should have the opportunity to live a life of dignity, purpose, and meaning. Living in harmony with nature and with other fellow life on earth is axiomatic to a good life.

My interests lie in the interaction between the environment, the world economic order and humanity. I have spent some time thinking about growth, development, sustainability and the environment. I recognize that there is a distinction between growth and development. The natural evolution of any system in the initial stages requires growth but that there is a natural limit to the growth past that stage. Development could go on without limits at all stages without it being linked to growth. I feel that if in a system growth is a necessary condition for its continued development, then the development of that system is unsustainable due to the limits to growth in a world of finite resources. How to develop without growing is one of the greatest challenges that faces India.

We need to understand the meaning of progress, what its implications are with respect to the impact on the ecological systems we inhabit and what are the limits to growth: of populations, of the economic system’s physical throughput and other related factors.

Education as the linchpin

Rajesh Jain is continuing on his series of posts on As India Develops. His focus is on education and it set me thinking.

India is a land of opportunities. By that I mean, that we have so much to accomplish, so much to get done, so much has been neglected for so long, that everywhere we look, we find things that need to be done. There is a veritable surfeit of opportunities and one has a hard time figuring out where to begin. The whole set of opportunities is overwhelming. More so because we have severe resource limitations. So much to do, and so little to do it with. Consequently, one has to prioritize the tasks. To my mind, one issue wins hands down when it comes to priority. It is education.
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A Set of Hard Problems — Part 2

An attitude to life which seeks fulfillment in the single-minded pursuit of wealth –in short, materialism– does not fit into this world, because it contains within itself no limiting principle, while the environment in which it is placed is strictly limited.
E. F. Schumacher in Small is Beautiful

THE ETHICS OF POLICY

Economist Thomas Schelling defined the ethics of policy ‘as what we try to bring to bear on those issues in which we do not have a personal stake.’ It can be convincingly argued that there are no issues in which we do not have a personal stake. Every action in an interdependent global system has far-reaching consequences. My desire for cheap hamburgers could translate however indirectly to rainforest destruction.

One has to grapple with the notion of social obligations and what we owe to the poor and the disadvantaged who have legitimate claim to the resources that are required for a decent human existence.

Continue reading “A Set of Hard Problems — Part 2”