Dollar Auctions and Deadly Games

Some years ago during the Kargil episode, I had analysed the conflict between India and Pakistan over Kashmir as a dollar aution (DA)and written a piece called Dollar Auctions and Deadly Games.

I believe that the model has interesting implications and is worth pondering. The DA game involves the auctioning of a dollar bill similar to an ordinary auction where the winner gets the dollar but with the special requirement that the second highest bidder has to pay the second highest bid amount to the auctioneer.
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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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Why don’t they feel the pain?

Ever wonder why poor nations are poor and rich nations are rich? I don’t. I believe I know why the poor stay poor and the rich get rich. Consider this from The Wall Street Journal of Jan 19th. The report is titled India and US to Improve Ties. Here is an excerpt:

Washington also sees India becoming a big buyer of U.S.-made arms. In the past two years, India has purchased roughly $200 million of American arms and is in negotiations to purchase P3 Orion maritime-patrol aircraft from the U.S. The deal, valued at about $1 billion, could be the biggest arms deal ever between the two nations.

There you have it. The rich sell arms to the poor and the poor pay for it through the blood, sweat, and tears of its starving millions. To be sure, it is not the starving millions who are interested in fighting the poor of the neighboring countries. These millions of poor unfortunates are merely the slave labor that supply through their toil goods that the rich buy in exchange for the arms they ship to the armies of the poor nations.
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We are Made of Stuff

… We are such stuff
As dreams are made on; and our little life
Is rounded with a sleep.

   
Shakespeare’s The Tempest

Writing in the Dec 28th, 2003 edition of The Week, President Kalam says, “In the 21st century, knowledge is the primary production resource instead of capital or labour.”

I have been unable to fully comprehend that insight, fundamentally because it does not make any sense. Sounds profound but makes no sense. What is a ‘primary production resource‘? Did Kalam imply that once upon a time capital and labor were primary production resources but knowledge wasn’t? What changed so that labor and capital got displaced and now knowledge holds that position?
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Two stories about development


FOR A HUMAN CHARACTER to reveal truly exceptional qualities, one must have the good fortune to be able to observe its performance over many years. If this performance is devoid of all egoism, if its guiding motive is unparalleled generosity, if it is absolutely certain that there is no thought of recompense and that, in addition, it has left its visible mark upon the earth, then there can be no mistake.

Thus begins one of the most inspiring stories that I treasure. It is by Jean Giono and the story is called The Man who Planted Trees. It is a short story and there is a story about the story itself which I will go into another day. I have yet to meet someone who did not find it inspirational. The story concludes thus:

I am convinced that, in spite of everything, humanity is admirable. But when I compute the unfailing greatness of spirit and the tenacity of benevolence that it must have taken to achieve this result, I am taken with an immense respect for that old and unlearned peasant who was able to complete a work worthy of God.

Stories teach us a lot provided we take the trouble to think about what they mean. I like stories that teach a deep lesson — a lesson that has wide applicability. One such story I came across in Douglas Adam’s book Last Chance to See and the story is called Sifting Through the Embers.
From areas such environmental degradation to economic development to personal striving — that story has something important to say. I will not give the punch line away right now. For now, I hope you enjoy the two stories.

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