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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Author: Atanu Dey
Economist.
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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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.“
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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Open Thread: The Directed Society
Long time since we had an open thread. So say what you will. Today’s quote is by Walter Lippmann (1889 – 1974), the celebrated American writer, political commentator and journalist. I am currently reading his book The Good Society (1937). A brief quote below the fold.
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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
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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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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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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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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Atanu Dey : Life is a Random Draw 