The one-lakh car will mean the return of the saree in the workplace.

“Sub-prime rates in India are given to the highest rated industrial group… You and I don’t get sub-prime rates. Somebody like NTPC may get a sub-prime rate or Tatas… I am only speculating.

That’s P Chidambaram, our smart Finance Minister reassuring his countrymen that the sub-prime wreckage won’t hurt India much.

Except of course, that sub-prime rates are not below the Prime Lending rates, but above.

Subprime lending, also called “B-Paper”, “near-prime” or “second chance” lending, is a general term that refers to the practice of making loans to borrowers who do not qualify for market interest rates because of problems with their credit history. Subprime loans or mortgages are risky for both creditors and debtors because of the combination of high interest rates, bad credit history, and murky financial situations often associated with subprime applicants. A subprime loan is one that is offered at a rate higher than A-paper loans due to the increased risk. (source)

To be fair to Chids, I too was fooled by the “sub” in sub-prime till my brother explained to me that what was “sub” about it was not the rate, but the quality of the borrowers. But I am a mere blogger, not the country’s finance minister.

I have a review of Arun Shourie’s book in the latest edition of Pragati. I had titled it “The Parliamentary Kleptocracy”, but Nitin changed it to “First Past the Post”. It starts:

When India celebrates the diamond jubilee of its independence, it will have as its president a person who, when she was running a bank, took money from women depositors, distributed most of it to her relatives as loans and, according to the RBI, did pretty much nothing to recover the money, thereby causing the demise of the bank. This fact will be celebrated as a victor for women. To understand how India managed to accept a person in the Rashtrapati Bhavan who in any mature democracy would be in jail for fraud, it is important to read Arun Shourie’s latest book.

Comments welcome here.

No Shruti, reducing the proportion of women will not improve the lot of women. Yes, the “price” of women will go up, but the price will not be paid to women. It will be paid by men to fathers of women. You don’t have to theorise about this. We know what happens when the sex ratio declines. It has been happening in Punjab, where men have been alleviating the shortage of women by purchasing them from Bihar. Strangely, an increase in the price of women has not resulted in an increase in the quantity supplied. This is probably because the price of a woman will never go up so much that it pays for the 20 years of bringing her up, so all sales of women are distress sales.

Yes, there is a problem in the future if female foeticide does not stop. A world with fewer men than women is tolerable for both men and for women. A world with fewer women than men is not tolerable, neither for men nor for women.

But no, we shouldn’t try to use the police to stop the practice, simply because it will be futile. It is a simple matter for the doctor to find the sex of the child, and it is an even simpler matter for him to convey this fact to the parents. Back alley abortions are also trivial to perform. Unless you start policing every single clinic and the police are incorruptible, you aren’t going to be able to stop it.

The practice will however stop when people stop being dependent on their children to look after them. It will stop when people live on jobs rather than business or on land so that it is less important that someone continue after them. It will also stop when it becomes acceptable for daughters to take care of their parents or when it becomes acceptable for daughters to continue after their parents.

Proximately, it will stop when it becomes socially unacceptable to abort girls and when not aborting girls becomes a sign of modernity.

All this will happen in a generation, but till then, let us accept that there will be a problem regardless of what we do. There will be a generation when there will be more men than women in certain communities and there will be problems of social instability and violence. Just as glib calls to prevent this problem through laws will not work, glib assertions that demand and supply will take care of the problem will not work either.

I will most probably have a review of Arun Shourie’s latest book “Parliamentary System” in the next issue of Pragati. In that book, Shourie is contemptuous of popular sovereignty. He proposes a Presidential system because that will apparently reduce the influence of popular moods. I take issue with much of his logic in the review, though I support the Presidential form.

But since doing the review, I’ve had another thought. Was adopting universal franchise right from independence a bad idea? Of course, I am not the first person to have this idea; many others have had it. Nani Palkhivala used to say the same. But I always used to dismiss the idea, because it rests on the assumption that voting is a duty you perform for your nation rather than something you do in your self-interest. Even assuming that educated voters have a better grasp of issues and are more “qualified” to judge the candidates (an assumption I am doubtful about) I am highly sceptical of the argument that they will use these superior powers to elect candidates who will do good for the country rather than just for themselves.

But now I have found two plausible reasons why starting off with a limited franchise was a good idea:

1. It reduced the size of constituencies. Smaller constituencies means better control over representatives
2. Because the voters were rich, confident of their rights and peers the idea that governments existed for the “people” rather than the other way round could be established.

The two points need to be taken together. When you have a small group of people, democracy works much better. Everyone can participate, voice their views and come to a decision. In large groups, voting every five years is the only job for the average individual. Power gets delegated to the “representatives” and very soon they become rulers. This problem gets worsened when you have poor and illiterate people who are unaware of their rights.

So the hypothesis is that limited franchise led to the development of a tradition of good governance which stayed stable even when voting was expanded. When the barons got together and got King John to put his seal on the Magna Carta -for themselves but not for the laymen under them – or when the property owners established the United States, they also established principles of good governance and actually practised them. Yes, the principles and practices were only for themselves, but when the poor started demanding the same rights for themselves, they had a running vehicle to hop onto rather than one whose engine needed priming.

Anyway, this is a hypothesis and I am not fully convinced of it. This is not an argument for restricting frachise now (I am not even sure it would have been a good argument for restricting it in 1950). I do not know if these allegedly positive aspects outweigh the negative effects of disenfranchising large numbers of people, but it does give us an idea for how to improve governance.

There will soon be a massive redesign of this site. I have not yet finalized the details, but what is for sure is that the blog will no longer be located at http://www.ravikiran.com, but at http://blog.ravikiran.com/. So if you have bookmarked my blog, please update the bookmark. There is no hurry; I will remind you many times till the changeover is done and till then both links will be valid. You do not need to change the permalink to any individual post, and you do not need to change the URL of the rss feed. Thank you!

It is now time for you to make up your mind. There is an important topic you have avoided discussing so far, and it is high time you did it now.

The topic you need to talk about is restriction you put on farmers, preventing them from selling their land for non-agricultural purposes. No, please don’t change the topic or use euphemisms. Your romantic view of farming is directly responsible for keeping farmers in penury and bound to their land.

Because of your support for those rules, farmers cannot sell their land. If an industrialist wants to set up a factory in a rural area, he cannot approach the farmers directly and cut a deal. He has to approach the government to acquire land for him. Because of you, local politicians can run reigns of terror over entire districts, because they have feudal power over which land gets acquired and which doesn’t. Your support for these rules is directly responsible for thousands of crores worth of corruption in India.

Your support for this idiotic restriction forces landless labourers to travel long distances, to cities in different states to get seasonal jobs. If you had let industries come up in backward areas, they would have got jobs close to their homes.

Your support is directly responsible for the stunted and haphazard growth of our cities. You are responsible for not letting small towns in India develop. These restrictions put inordinate amount of pressure on large cities and have made them unlivable. You are directly responsible for that, and if you own a house or piece of land in those cities, you are directly benefiting from the cruelty you are inflicting on farmers.

No, please don’t give me excuses for why you do not support lifting this restriction fully. I have heard those and I don’t care. I don’t care for what your theoretical ideal of village life is. These are the facts. 60% of our people are working on an activity that contributes only 30% to the GDP. There are more farmers than needed, producing more food than can be consumed, using land less efficiently than necessary. There really is no way to get a better income for the farmers without making food more expensive for the poor. Don’t try to juggle the numbers. There really is no way. The only way out is for us to have fewer farmers working more productively on less land. But the rules you are supporting make it tougher for the transition from agriculture to industry to take place gracefully.

I am accusing you, the middle-class Indian, with good reason. Usually the reason for the existence of idiotic laws is that some interest groups benefit from them. This is true of laws related to agricultural land too. Corrupt politicians, bureaucrats and land sharks derive their power from this rule. Industrialist prefer to grab land through politicians rather than buy it and leftists use the opportunity to extract their pound of flesh in the name of protecting the interests of the poor. And people like you who have no idea of village life, whose parents or grand parents have abandoned a lifestyle in favour of city dwelling, still continue to insist on romanticizing the village and agriculture. It is this attitude that makes it almost impossible to find any columnist or editor who will say that farmers should be allowed to sell their land.

The root of so many of the problems you find in India lies in this problem, whether it is the BMIC or Singur. The next time you want to ask someone “Why have the benefits of liberalization not reached the poor even after 15 years of liberalization?” ask yourself “Do I support the right of farmers to sell their land to anyone they want?” If your answer is “No”, then the you have found the answer to your first question. It is because of you.

Amit says “it’s common sense that you have to judge actions on the basis of their outcome, and not their intent.”

No it is not common sense and it is not even true. It is one thing to say that policies should by judged by their outcomes rather than by the intention of their proponents. It is quite another to say the same when you are judging culpability for an individual’s actions. Unless you want to prosecute a driver on the Mumbai-Pune expressway who inadvertently kills a pedestrian running across the road for murder, you have to take the intentions of people into account.

The reason why we take intentions into account is obvious. We punish crimes so that there is less of them in the future. Punishing someone who had no intention of committing a crime will neither deter him nor deter others.

I realise that the previous sentence is simplistic. Between an honest mistake that anyone could have committed and cold-blooded, premeditated murder, there are many gradations. At one end lies the Mumbai-Pune expressway case I gave where any just system will simply let the driver go free after taking down a statement, because there is absolutely nothing he could have done without putting his own life, that of his passengers and probably other cars too in jeopardy, and even if there was, it is too much to expect a person of reasonable driving skill to take that action in the split second he had. But a person who drives too fast in a pedestrian area and ends up killing someone, should be punished, though depending on what exactly he did, the punishment should certainly be less than that for murder. You need to apply a “reasonable person” test, i.e. whether a reasonable person could have avoided the tragedy by acting or not acting. There are also situations where your position gives you a special responsibility to take greater care than an average person would have taken – the obvious case is where you are a doctor and a patient entrusts his life to you. It is not enough to plead ignorance of the fact that your treatment had a high chance of killing the patient. You have a responsibility to be well-armed with the facts. Once again, the situation is different, if, say, you are on a battlefield and you are treating a large number of patients within a short period.

The last difference we make is between hot-blooded and cold-blooded actions. Sidhu’s crime is supposed to be a hot-blooded one and not cold-blooded murder. Usually we punish the latter a little less than the former. Come to think of it, I don’t know why. If we want to deter crimes, I’d expect that heavy punishment is more likely to deter you in the heat of the moment than when you have time to think of it. Personally, if I were planning to murder someone, the prospect of even one year in jail would seem unbearable at this point in life for me. But if I am in an argument, have access to a weapon and I am have lost my mind, I am more apt to just make light of a year in jail while the prospect of a hanging will probably cool down my ardour. But I guess punishing people severely for acting in the heat of the moment will offend people’s sense of justice – and, well, it is ultimately pointless to make sense of our theories of justice.

Amit also says that it is difficult to gauge intentions. Well, perhaps, but it is no more difficult than proving murder. If you took your wife out on a trip, carried a gun with you and it turns out that you had not bought a return ticket for her, then it is reasonably certain that your killing her was premeditated and not hot-blooded.

Finally, what about blaming people for bad policies? Should we do that if their intentions were good? (Please note that this is different from the question of whether we should adopt well-intentioned, but bad policies. The answer to that is clear. We shouldn’t. The question is what view we should take of people who espouse those policies for honest reasons. )

I think that by and large, we should criticize such people. Policies aren’t adopted in the heat of the moment. You are supposed to think through them. The question is not just what you knew, but also what you should have known if you had kept your eyes open. Even there I try to be reasonable. I don’t blame Orwell for advocating central planning in his essay The Lion and the Unicorn written in 1942. At that time, it was possible for a reasonable person to believe that socialism did a better job than capitalism. Also, policies tend to have both good sides and bad. It often takes time to process all the information and make up your mind about whether, on the whole, the policies are doing good or bad. You also tend to think that your policies may give bad results initially, but start giving fruit later on. But there is a point beyond which your support for bad policies moves from being an honest mistake to being a wilful crime. I cannot absolve Nehru who lived through Hayek, Friedman and B R Shenoy, saw the consequences of his policies and still continued to implement them. And anyone who remained a communist after the Hungarian revolution of 1956 has blood on his hands.

After some thinking, I have found the cause of unhappiness. It is nuclear weapons. The economics and psychology behind my finding is simple. The reason for your not figuring it out is also related to the reason why we are unhappy.

People have long noted that money does not make us happy. This is true, and should have been obvious to anyone who has conceptual understanding of the human mind. The human mind has a finite capacity for happiness. Just because you possess more material wealth than your parents, you are no happier than they, because, after all, you inherited your mind and consequently the capacity for happiness from them. Besides, it is well-known that your mind obtains satisfaction by comparing itself with what it had yesterday, and what others have today, not with what your parents had a generation ago. This fact combined with the laws of diminishing margin return and diminishing marginal utility are adequate to explain why we are unhappy. The law of diminishing marginal return ensures that our economic growth slows down as our economy grows, and the law of diminishing marginal utility means that every percentage point of growth gives me less additional happiness than the last one gave me.

I have not expounded anything new so far. Many philosophers, psychologists and economists have figured this out. But having discovered this, they then make the mistake of assuming that money does not matter. That is nonsense. We are happy when we are getting rich, not when we are rich. I am happy now that I have a house with a bedroom window that opens out to greenery, but that is only because I spent my childhood in a Maharashtra Housing Board house that opened out to other people’s windows. The problem is that my son will grow up used to such relative affluence. That will not make him happy and so he will join a religious cult in search of happiness. What can be done to avoid such an eventuality?

One idea that I thought of is to slow down economic growth to a crawl, so that people can savour every moment of it. Unfortunately, this is unworkable. People will get bored of slow growth and soon rebel. Besides, this will only postpone the problem, not solve it.

I had gotten thus far in my ruminations and was getting no further, when enlightenment struck me in the checkout counter of Shop Rite here in New Jersey, where I am currently located. The medium for the enlightenment was the cover of the latest edition of “Cosmopolitan”, which promised that the reader would find inside “8 sex positions we have never told you before about!”

It occurred to me that this was impossible, given the laws of Physics. Cosmopolitan has been introducing supposedly new sex positions in every one of its issues. The human body’s skeletal structure puts certain limits on how many degrees of freedom it has. Assuming sex between two people, it is easy to calculate the upper limit on how many sex positions there can be. It is reasonably certain that the there have been more issues of the Cosmopolitan than this theoretical upper limit. The Cosmopolitan, I reflected, has fallen victim to the same malaise that afflicts society as it tries to squeeze out the last vestiges of interest from readers who are saturated with information.

I concluded that in today’s society, life was difficult for moderately intelligent people. In the past, they’d read books by more intelligent people and interpret them for others. But now with easy access to information, everyone has access to information, interpretations of information, interpretations of interpretations of information, ad nauseum. So the moderately intelligent economist, not finding a job explaining basic economics to people, is often engaged in the supremely pointless task of discovering “Islamic banking”, which is basically an exercise in finding new words for interest, or “Socialism with a market face” which is basically an exercise in finding new words for profit-making, etc.”

The same crisis affects the moderately talented novelist who has to find an aspect of the human condition unexplored before, the moderately talented artiste who has to find a dance routine not danced before and the moderately talented comedian who has to find a joke not made before.

The culprit in all these cases, I mused as I paid for my groceries (and completely forgot to pick up a case of orange juice, thereby losing 2 dollars – 90 rupees!) was society’s ready access to information. If society could periodically lose its store of knowledge, then it would make life better for a large number of people as they rediscovered essential philosophical truths, invented the same sex positions once again and explored the same aspects of the human condition once again.

I then realised that I had the key to human happiness, viz periodic destruction.

The long period of relative peace that we are enjoying now is unnatural. If society were periodically destroyed by war, pestilence and famine, then the period between those disasters would be spent in rebuilding society. The daily struggle for existence would make people aware of the value of acquiring and building wealth. Having watched the death of their brothers, men would realise the importance of family and would be closer to their fellow men. They could afford the joys of a large family, in fact they’d need to have large families because when the next wave of destruction comes, most of their children would be killed and only a few would remain to carry on the family name. Great art could be written, because it is only in times of suffering that meaningful art is written. Great discoveries would be remade and great sex can be had, but then I repeat myself.

Now the perceptive and the moderately intelligent among you might have an obvious question. You might say that while people might be at their happiest in the interval between waves of destruction, would not the periods of destruction be times of great unhappiness? Would a netting out not occur, leaving us no happier than before?

No. That would not be true. Remember that it is much easier to destroy than to build, which is another way of saying that the period of recovery would be inevitably longer than the period of destruction. When the plague comes, or a war happens, people are very unhappy of course, but then they quickly adjust to their new condition, and they reconcile themselves to the long, but immensely fulfilling task of rebuilding from the debris of their previous world.

This then is the recipe to happiness. What prevents us from achieving it? A moment’s thought tells us that the culprit has to be nuclear weapons. While it is clear that economic progress will inevitably cure us of famine and plague, there is no reason why it should have caused an end to wars. Wars are fought with other humans who also have access to the fruits of progress, so in theory we could have fought wars for ever, and wars would have brought famine and plague back with them. These three horsemen would together take us back to the paradise where there was a world waiting to be rebuilt, and a whole ocean of knowledge to be rediscovered.

Unfortunately, one awful invention came about to bring an untimely end to the endless cycle of human happiness and, by causing a pestilential peace, has left us in a state of uneasy unhappiness, and that is the nuclear bomb. I don’t need to tell you how it has made war unthinkable – you know the deal. You will hear the spiel from many “peace activists” who will simultaneously warn us that we shouldn’t fight each other because nuclear weapons have made war too awful to contemplate, and in the next breath call for an abolition of nuclear weapons, without realising that they are in fact contradicting themselves. But I call for the abolition of nuclear weapons for a truly justifiable purpose – the advancement of human happiness by periodic destruction of society.

This then is my contribution to happiness research. Many economists are trying to come up with a measure for happiness, so that they can improve upon the GDP as a measure of how well we are doing. They do not realise that what they are faced with is not a measurement problem, but a conceptual and philosophical problem: What is happiness? I hope that by shedding light on this tricky subject, I have advanced the cause of the human race, and I also hope that the next great wave of destruction will erase this knowledge from our consciousness, to be rediscovered by my happy intellectual descendants.

As promised, this post will consist of unabashed speculation about where the taboo on incest comes from.

You might know about the Kibbutzim – the great Israeli experiments in communal living. Though as societies they did not do badly, as experiments in socialism, they were failures. A lot of studies were conducted by many learned and wise men on what we can learn from those experiments and a lot of interesting things were learnt. For example, one of the interesting things that these wise people learnt was that gender roles invariably came back, even though the participants in the Kibbutz were nominally committed to stamping out gender differences – i.e. men and women invariably ended up doing different things, and they ended up doing the same things that men and women do in the outside world.
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Of course, the standard libertarian answer to this question is, “If no non-consenting third party is harmed in the action, there is nothing wrong with it.”

Right?

Wrong!

I know that many libertarians, including my fellow Cartelians say such a thing lazily, but the precise way of saying it is: “If no non-consenting third party is harmed by the action, then the Government has no business legislating against it”

But either way, I am sure Gaurav did not ask the question so that he could hear the standard libertarian answer. He must have known the standard answer because he explicitly clarified the question in a way so that the answer would be tough. He asked me to “Forget inbreeding”, i.e. he set up the question in such a way that the action of incest would cause no harm to anyone else, including to a newborn baby. So essentially, I can paraphrase his question as:

I happen to think that incest is “yuck”. From the “yuck”, I intuitively feel that it is morally wrong. However, I cannot give a logical reason why I think that it is morally wrong, beyond that I feel “yuck” when I think of it. I am pretty sure you feel the same, and yet your principles prevent you from criminalizing the action. So I am curious how you will reconcile your principles with your intuitions.

Is that a valid paraphrase of the question? If it is, here is my answer.

I freely confess that incest makes me too go “yuck”. Let me also concede (for argument’s sake) that there is something morally wrong with the action, independent of the harm it causes by inbreeding. For that reason, let me assume that both I and Gaurav want to see less of it. Does that mean that there should be a law against it?

Not really. Even if I drop my objection to laws against actions that do not hurt any non-consenting party, here is my next question: “Why do we need the law?”

The taboo against incest seems to be one of the most deep-rooted in human society. Even if there were no law against it, there is an incredible amount of social pressure against it. Practically every child that grows up in any current society grows up with a feeling of “yuck” that will act as a barrier to his committing the act. So I think that it is safe to assume that millions of brothers and sisters aren’t quite waiting for the law to be repealed to jump to bed with each other.

So given this fact, why is there a need for a law against incest? What purpose would it serve? Why waste enforcement resources and give the government more powers to stop the miniscule number of brothers and sisters who have sex with each other?

Note that this argument is actually an inversion of what we instinctively feel. We instinctively feel that something that is utterly wrong and which practically everyone agrees is wrong should automatically be banned. That does not really follow. We should write laws to achieve something, not to express our feelings.

This last sentence, more than any platitudes about individual freedom and personal liberty, explains why I am a libertarian.

This naturally brings up Gaurav’s next question, i.e. what do I think of Social taboos? What is the “correct” libertarian way to think of them? I will tackle that two posts down the line, because in the next post I want to ruminate on where the taboo on incest came from.

OK, so I promise to return and then go off for more than a month without posting. Forgive me, for I have been very very busy. In fact, I still am. But I shall still make an attempt to restart blogging.
For those who need to be reminded, I had promised to answer interesting questions, something like three months back and then got very very busy. When I broke off, I was due to answer this question by Gaurav (not Sabnis).

1) What is libertarian position on incest? What is yours?
2) (Supplementary) What is libertarian position on social taboos? What is yours? To be specific, are they just smokesscreen for good old power play or do they provide some sort of equilibrium

PS. Forget inbreeding for 1), I am not concerned with propogation of species at this instant.

I had actually drafted a response before I grew dissatisfied with it. So I will be starting fresh. In the meantime, let me hear your thoughts.