The Gatekeepers to India

It is said that our country is divided into an India and a Bharat. I hate this terminology because it is unnecessarily pejorative towards “Bharat”, but let’s go with it for now.  These two nations are often identified with Urban and Rural India respectively, but sometimes the borders are not so clearly geographical. Some people say that the border is in fact between the rich and the poor. I believe that there are in fact two nations, but the line of separation is different from what is commonly assumed.  On one side is India, a nation that exists in spite of government hindrance.  On the other side is Bharat,  a country that would not have existed in its current state without the overbearing presence of government.

Guarding the frontier between the two countries are the Gatekeepers. They are a loose coalition of politicians, government offiicials, NGOs and other activists, caste and community leaders, local strongmen, industrialists, and the like. The Gatekeepers may have access to the levers of government, the capability for violence, or both, to achieve their end.  The Gatekeepers guard both countries against each other. To the Indians, they say that they are protecting them against the hordes from Bharat. To the Bharatiyas, they say that they are preventing the evil Indians from encroaching on their domain, and ensuring that the wealth created in India is equitably distributed.

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Tipping Point

I am rather amused to hear opinions that argue that tipping to waiters is an act of generosity, and a barometer for how we treat those less fortunate than we are.

From a first order economic perspective, tipping shouldn’t matter. What you are willing to pay at the restaurant table depends on the economics of dining, and what the restaurateur pays his staff depends on the vagaries of the labour market.

 An economist would point out that a tip comes out of your pocket as much as the rest of the  bill does, and if you are in a society where a 15% or 20% tip is customary, you will factor that into your dining decisions. In other words, when deciding whether to eat out or not, or when deciding whether to eat at a particular place or not, you should mentally translate an expected bill of Rs1,000 to Rs1,200 ( assuming a 20% tip) and decide on that basis.

 Likewise, when a waiter’s salary is negotiated, the tips that he can expect must surely be taken into account. How can it not be? A restaurateur  will certainly tell a candidate for the post of waiter: “Look, your official salary is X, but you can expect tips of Y per month, so your take home is actually X+Y.”

 So, at first glance, it must seem that the custom of tipping should make no difference. If there were to exist two cities that were identical in all respects except  that Stingy City has a culture that tips 5% and Generous City has a culture that tips 20%, the menu prices and waiter salaries in the two cities must adjust themselves so that diners pay out approximately the same amount to the restaurant and the waiters take home around the same amount in both cities.

 As I have taken care to mention, all this is the first order perspective. What about when we look more closely? This is where things get a little more interesting.

 Suppose that you have a culture where tipping up to 20%  is customary, but any tip in the range of 0 to 20 is acceptable, depending on how much you think you can afford, and how much you liked the service. What will happen then?

 First, from the perspective of economics, this increases flexibility, which is a good thing. One of the biggest problems that economies face is that wages and prices are rigid. Actually, it is worse than that – wages are rigid downwards (i.e. it is difficult to reduce wages) while prices aren’t very rigid, but to the extent that they are, they are rigid upwards – i.e. it is difficult to raise prices. This makes it difficult for economies to get out of a downturn, because you can’t reduce people’s salaries when faced with reducing profits. So you hold on to employees, and when you can’t do that, you lay them off (or if labour laws make it difficult to do even that, you struggle for a bit and close down the company)

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The Fourth Nickname of My Life

It takes some  people years to shake off detested childhood nicknames. My son managed to do it smoothly at the age of 3.

One look at my son’s face as an infant convinced me that he had a haughty demeanour. I therefore decided to nickname him Gatthu  (Hindi:????? Kannada: ?????) which means “haughty” in Kannada. This name met with indignant protests from everyone in my family except my wife, but I persisted.  “Doesn’t  he look haughty? Just look at him!” I’d ask anyone who objected.  No one could convincingly argue that my son does not  look haughty.

You tell me. Doesn't he look haughty?

So we called him “Gatthu”  – at least, I did consistently. His mom used, in addition to “Gatthu”, a mishmash of endearing names many of which she’d make up on the spot, use once and never use again. We’d rarely call him Samvaadh, which is his given name.

Then my son joined playschool, where his teachers called him Samvaadh. Then, one of the two things must have happened:

  1. My son realized that Samvaadh was the right name for him, and that “Gatthu” was the nickname he must shake off ASAP
  2. My son realized that Samvaadh was his real name, and wondered who “Gatthu” was. After making a few logical leaps, he settled on the obvious answer.

So now,  he is Samvaadh, my wife is Amma, and I am Gatthu.

Rules and Principles

Kunal and Gaurav are right. In this post, I was talking of the trade-off between rules and principles in policy enforcement.  Actually, when you think of it, rules vs. principles is not a simple dichotomy, but a spectrum of choices.

Imagine that these choices are spread from left to right. At the left end of the spectrum is automation. Rules are enforced automatically, without anyone having the responsibility of enforcing them. The best example  of automation in my stories was actually the turnstile – it automated the task of checking for tickets, leaving very little scope for discretion.

Another example is the jugad “automation” that the Hyderabad police enforced. Blocking off the right turn doesn’t seem like an example of automation, but for our purposes, it is, because it enforced the rules without the police having to intervene.

To the right of automation come rules – clear and transparent rules that leave no scope of discretion to the enforcers. But then, whether to follow the rule or not is still a choice – and ensuring that officials enforce the rule depends on the existence of procedural mechanisms.

As you move further to the right,  you find that the rules have more and more discretion embedded in them. For example, consider the difference between enforcing a red light and ticketing someone for rash driving. The former is easier to enforce fairly than the latter.

At the extreme right of the spectrum is the idea of “principles-based regulation”.  This distinction  between rule-based regulation and principles-based regulation is used most often in the financial sector, so let me use an example from Banking to illustrate.

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Three Stories and a Lesson

Story One

This was when I was in Bay Area for a few months on a project.  I was a  frequent traveler by the BART.    In the train stations of the BART system, they have turnstiles where you one has to swipe the ticket both during entry and exit.  Presumably, the idea is that if you buy a ticket for a certain distance and overshoot that distance, the turnstile at the exit won’t let you out and you have to call for help from an official  who will then proceed to ticket you – I never tested this, but it sounds plausible.

Once, at the exit turnstile, I found to my chagrin that I had lost my ticket and I was stuck.  I looked around and realized that there was  a broader gate that one could open without swiping a ticket – this was to be used by handicapped travelers on wheelchairs and people like me. Of course, there was a booth with a BART official directly overlooking this gate, and as soon as I opened the gate to pass by, he walked up to me and asked me what I was up to.

I told him, with as sheepish an expression as I could muster, that I had lost my ticket.  The official took one look at me and said: “Oh you have lost your ticket? In that case, I will have to…”

I took a deep breath. Memories of my misadventures in Mumbai’s local trains came back to me. While I have never travelled ticketless, I’ve had experiences where I got confused and landed up at the wrong platform. Upon realizing my mistake, I would have to get to the overbridge to reach the correct one, and I would be stopped by the TC. On finding that the ticket or pass I had with me did not entitle me to that platform, he would tell me that he would have to fine me – and of course, that meant that I would have to offer a bribe. I didn’t expect to get away with a bribe here, but of course wouldn’t that mean that I would have to pay a hefty fine that was many times the ticket’s value?

“… charge you for the ticket.”

Wait, what? Not a fine? Just the price of the ticket? It was still a loss, but wasn’t a big deal anymore.

I nodded in assent, and he asked me where I had boarded the train from. I truthfully told him that it was the stop previous to that one.

“Oh just one stop? Foggetaboutit.” and he let me go. He had evidently decided that it wasn’t worth the effort collecting the small ticket fare for one stop.

I was grateful to be allowed out of the station without being poorer by the dollar and fifty cents it would have cost me otherwise. I also had that NRI reaction – you know the sinking feeling that an NRI experiences when he realizes that he would be treated worse in his own country than by the officialdom of a foreign one. On reflection, I found the whole  thing strange. What if I had lied about the stop I had boarded the train from? Also, did the official commit an “irregularity” by not following the rules and collecting the ticket fare?

Story Two

I was visiting my uncle in Bangalore. My uncle was then working in a public sector insurance company, and he introduced me to some of his colleagues. We got into small talk about the nature of my work. This was around 13 years back, and “computerization” was still a new thing and not accepted as a matter of fact as it is now.  So I ended up waxing eloquent about how awesome software was at automating routine tasks leaving you free to focus on the big decisions. While grunt work would be eliminated, computers would not take away the potential for knowledge work. All basic stuff, but remember that I was doing small talk, not giving a lecture, and that this was 13 years back.

At some point, I started realizing that we were speaking at cross-purposes. While I was trying my best to assure my uncle’s colleagues that computers would not make their decisions for them, it turned out that they, or at least the one person who was talking in a most animated way, wanted computers to automate decisions -his boss’s. Specifically, he wanted computers to somehow automate things in such a way that it left no scope for his boss to indulge in favouritism and politics during appraisals and promotions.  And this was a fairly senior person in the organization.

The discussion never got anywhere after that.

Story Three

I work in Hi tech city, Hyderabad. On my commute to work,  there is a T-junction, where a minor road connects to a major road. In the morning, vehicles have to turn right at the T to join the rush of vehicles that are getting to Hi tech city. The volume of traffic ought not to have caused a gridlock in any city except Hyderabad. In most western countries where traffic rules are enforced, the problem could have been solved by a simple stop sign. In Mumbai, they would have put in place a traffic light. But this is Hyderabad, where no one obeys traffic lights, let alone stop signs. When putting an actual traffic policeman to direct traffic did nothing to prevent an insane mess from developing every morning, the police hit upon a solution that is increasingly the norm in Hyderabad. They simply blocked off the T junction, forcing vehicles to take a left and a U to join the traffic.

These are three different stories, but all three have a common theme. The theme in question is about a particular trade-off in public policy. What is the theme?

A Rant About Poverty Numbers

The good Pragmatic Desi asked me to write about the release of the latest poverty numbers from NSSO. I do want to write a follow up post to my Pragati article. But the bad news is that I have accumulated a lot of heavy reading material in preparation for that follow up post which I need to read. The good news is that a long weekend is coming up, and I hope to get the reading and the post out by then.

But in the mean time, here is a rant.

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A Tale of Love and Heartbreak

I don’t know how many remember the story of Syed Modi, who was murdered in 1988. He was a star badminton player who had fallen in love and married Amita (Ameeta?) Kulkarni, also a badminton player. He was shot dead in Lucknow while returning from practice.

Suspicion fell on his widow and on Dr Sanjay Singh, then sports minister of UP. The allegation was that they were having an affair. The case ended up with the CBI.

As it happens Sanjay Singh is a relative of the late VP Singh, who, at that time, was leading the fight against the Rajiv Gandhi government over corruption and misgovernance. Sanjay Singh is also the “Raja” of Amethi. It was the height of the Bofors scandal – a few newspapers, notably N Ram’s Hindu and Arun Shourie’s Indian Express were courageously exposing the bribery. I had just started reading newspapers, was following the various scandals with avid interest and virtually hero-worshipping Shourie.

Arun Shourie decided that the CBI investigation into the murder was intended to persecute Sanjay Singh, and mounted a full-scale defence of Amita Modi and Singh. Looking back, it is incredible how much of it I swallowed. I don’t remember the specifics, but a few things stand out. The CBI had found Amita Modi’s diary, where she had written about the conflict she felt in choosing between “S1” and “S2”. It should have been obvious even to a stupid 14 year old what S1 and S2 were, but I bought the Indian Express version where it quoted Rani Jethmalani (Ram Jethmalani and his daughter were fighting on behalf of the defence) to say that the diary just reflected Amita’s disturbed mind and nothing else. The Indian Express also went to Amethi where they interviewed the people there. They were quoted as saying that while it was imaginable that their Raja would do a bit of womanizing, they couldn’t believe that he’d committed the murder. Garima Singh, the then wife of Sanjay, stood behind her husband.

Eventually, the case came to trial in 1990, by which time VP Singh was the prime minister. The CBI had weakened the case sufficiently that Amit and Sanjay were acquitted.

I forgot all about the case till I read a small news item tucked away somewhere, to the effect that Sanjay had married Amita. By then, VP Singh had gone from being the darling of the middle-class, the crusader against corruption, to its most hated symbol, with his Mandal agenda. Arun Shourie had gone from campaigning vehemently for VP Singh to fighting him. I don’t think he has ever mentioned the Syed Modi murder ever since VP Singh became Prime Minister. But the news of the wedding made me feel profoundly stupid. It’s difficult to believe now, but at that time, I had honestly thought that even their supposed affair was a story concocted by the CBI as part of its witch-hunt. (That is how the mind rationalizes. I suppose I could have believed that they did have an affair, but did not commit the murder. But then, how could it be a with-hunt to investigate the suspicion?)

So, quite clearly, Shourie had been perfectly willing to lead his newspaper on a campaign to subvert justice even as it was fighting the government on corruption. I am sure he did it with the highest of motives – I think he thought that getting the Rajiv Gandhi government out was then the highest national interest. But something didn’t seem right.

Of course, Sanjay Singh then had a fairly typical political career for a UP politician. He switched parties a few times. He was with the BJP for a few years before finally landing up with the Congress. Now, he and his wife are the feudatories of the current royal family.

The story faded to a dim memory for me, but I suppose the lesson has always stayed with me. It accounts for my cynicism over the Lok Pal and the concept of “Persons of unimpeachable integrity”. It accounts for my scepticism over the idea that the dynasty represents everything that is wrong with the country, or that if only the country rediscovered its Hindu soul, we would be great. It accounts for my discomfort with idolizing or demonizing (Narendra) Modi. In general, I am sceptical of any solution that relies on people’s character rather than structures and incentives.

White Rice

I just finished reading “Nothing to Envy: Ordinary Lives in North Korea” by Barbara Demick, who was the Los Angeles Times correspondent for the Koreas at the time of writing. Published in 2009, the book follows the lives of six defectors, all of them from the Northeastern city of Chongjin, as they starve through the famine of ’94-’96, escape to South Korea through China, and struggle to remake their lives in the new country.

 The stories are horrifying. It is one thing to read the newspapers and learn that North Korea’s criminally mismanaged economy, propped up almost entirely through assistance from the Soviet Union collapsed when the Soviet Union did.  To view the account through the eyes of the people chronicled in the book is another thing entirely.

 There is the story of Mrs Song, a loyal party worker who finds that the party can no longer supply  the regular rations that  provided for her family. Forced to work in the free market she has been taught to despise, she is stymied at every turn by the sheer lack of anything to produce or sell, and has to witness the deaths of her mother-in-law, husband and her only son before she is rescued by the daughter whose loyalty to the party was always suspect.

 There is Mi Ran, the daughter of a South Korean POW who works as a kindergarten teacher. She sees her class strength go down from 50 to 15. She also trains herself to walk by children starving to death on her way to work without helping.

 There is also Dr Kim who works as a paediatrician at a time when her hospital has run out of medicines to provide, and is reduced to writing prescriptions in the hope that the patients have the foreign currency or contacts to procure the medicines. She eventually has to write prescriptions for her young patients when what they need is food. She has to scavenge for food, and unable to take it anymore, decides to defect. She still retains some loyalty to the regime and tells herself that she is going away only temporarily in order to eat and regain strength.  She finds herself in a Chinese village and sees that there is a bowl of rice and meat left on the ground for the dog, and realizes that dogs in China eat better than doctors in North Korea.

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Poverty in Pragati

As promised, I have an updated and expanded version of my post on The Poverty Numbers at Pragati. From my blog post, I have subtracted some things in the interest of space – the discussion on the recall period being most prominent. More importantly, I have added some things, so you should read the Pragati piece even if you’ve read my post.

I have referred to some papers in the Pragati article. Here are the original links to those:

  • The Tendulkar Report on the methodology on estimation of poverty.  Suresh Tendulkar, by the way, was an excellent free market economist.
  • Angus Deaton’s 2008 paper on why Indians are consuming fewer calories is here (PDF link). Look at pages 53 onwards for discussion on the calorie decline.
  • Deaton’s other paper on how the divergence between the NSS data and the CPI affected poverty numbers is here.
  • All of Deaton’s work on poverty can be viewed here.

The Journalism of Outrage

After retiring from the Supreme Court, Justice Markandey Katju now heads the Press Council of India, a role that everyone knows is a sinecure.  Nonetheless, he has managed to stir up a controversy by saying nasty things about the competence of Indian journalists. He also wants additional regulations on newspapers.

 We don’t have to agree with his proposed solution to recognize that he is right about the quality of Indian journalism. Take, for example, last week’s outrage of the week.  Apparently, little children are dying in hospitals of West Bengal.

If you read news reports like this, you will “learn” that the “death toll” in the hospitals has reached 45. You will also learn that the Chief Minister has not woken up to the gravity of the crisis,  has parried the questions asked of her, while her minister  of state for health has made light of the crisis. The Governor, you will learn, has taken the government to task on the question.

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Avatar, Technology and Steve Jobs

I recently watched Avatar. The movie is set in a future  where humans have colonized other planets. The protagonist, Jake, is an ex-marine who has lost the use of his legs in war and is confined to a wheelchair. (Apparently, he has not been able to obtain treatment that would make him whole because his insurance wouldn’t pay for it. Of course, no matter how advanced  a society we visualize, we can’t help imagining that it will face the same problems we do.) He’s taken a job with a company that intends to mine the planet Pandora  for a rare mineral, but they are facing resistance from a sentient species Na’vi that have a deep and abiding connection with the planet’s flora and fauna.  Jake is given the ask of infiltrating into the Na’vi  ranks. This is achieved by taking a backup of his mind and installing it in the body of a Na’vi-human hybrid and sending him to live among the Na’vi.  Jake ends up liking the Na’vi way of life so much that he switches sides, eventually leading the Na’vi in their violent resistance to the aggression of the humans. Jake prefers to abandon his human form, choosing to live the rest of his life as a Na’vi with his love.

 What accounts for the attractions that the Na’vi lifestyle held for Jake? Supposedly, it is the fact that the Na’vi were much more in tune with “nature”  than the humans. But that doesn’t explain why Jake felt so comfortable in a Na’vi skin. Wouldn’t abandoning your human body and taking on another one be a profoundly umm… alienating experience?  To put it in another way, while being “in tune with nature” may explain the happiness the Na’vi experience, it doesn’t  explain why Jake felt so comfortable switching.  It also doesn’t explain why the viewer would be expected take the side of the Na’vi. Why would an artificially constructed nature be more attractive to us than our technologically enhanced lifestyle that should be more familiar and hence more “natural” to us?

 The more likely explanation is that Jake was attracted to the Na’vi experience because it was a path to escape from the limitations his disabled body imposed on him.  It was either taking on a Na’vi body, or a human lifestyle that was enhanced through machines. In the movie, humans have access to large robot-like war machines  that are controlled by a human standing inside .  And if you think of it, Jake’s disability is beside the point.  Set against what the Na’vi were “naturally” capable of, all humans were handicapped.

 Perhaps the point of Avatar was that the Na’vi lifestyle was better because they were more peaceful? Yeah right. Yes, they were more peaceful, but the last 20 minutes of the movie was taken up in a violent war where both sides used the best possible weapons available to them. The humans used their magnificent flying machines, while the Na’vi  were mounted on their 100% natural, organic, tamed birds.  If the denouement of the Avatar story had involved the Na’vi winning over the hearts and minds of humans by demonstrating the superiority of their peaceful, harmonious lifestyles, it would have been a different matter, but the fact that the makers felt it necessary to end the movie with a special-effects laden war tells us a lot about what we, the viewers, like.

 I didn’t mean this post as critique or even a review of Avatar, though it might be 600 words too late to put in that disclaimer. Instead, my intention is to understand the appeal of Avatar for the viewer, and through it, to investigate what exactly we seek when we seek to go back to nature. The yearning for “nature” has always been a little fake. Peter Drucker noted over five decades back that even when Americans went camping, they took along an entire van full of modern amenities.

 Perhaps what we are looking for in a more “natural” lifestyle is some combination of elegance, simplicity and a more human scale. We are looking for technology to enhance our capabilities, but in a way that is elegant, simple and seems within our control. When we achieve that, it seems more “natural”; our tools seem more like an extension of our bodies rather than an intrusion on them.

 Put in another way, it was only fitting, and yes, “natural” that someone like Steve Jobs who set out find enlightenment in India, failed and found only chaos, then went back and found it while developing elegant, simple devices that extend human capabilities without overwhelming us.

The Scrap Over Poverty Statistics

What should we make of the latest scrap over the Tendulkar committee report? Here are some thoughts.

 Poverty isn’t a binary variable. There is no switch that, when turned on, defines a household as poor vs.  non-poor.  There are various degrees of deprivation, and we have differing intuitions about at what level of deprivation we should classify a family as poor. Part of the root of the outrage over the seemingly low household income (Rs. 26 per day per person in villages to Rs. 32 per person per day in cities)  comes from the fact that our intuition about what constitutes poverty has changed.

 My uncle started his career after completing his graduation in the mid-70s in Bombay’s weather office. He was single and lived alone then, but he’d send part of his salary home to his family. Towards the end of the month, his money would run out, and the last few days of the month, he’d be able to cook and eat only one meal a day.

 Then, as now, if you were a graduate and you were earning an entry level salary in a government firm, you would be categorized into the middle-class – lower middle-class to be sure, but middle-class nonetheless. When did you last hear of a middle-class person lacking for food in India? But that’s how things were till the 70s, and my uncle’s situation wouldn’t excite comment then.  One can only imagine the situation of the others who were poorer than my uncle.

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