Viswanathan K's Thoughts

In her book on the small inventions that make a huge difference, Nuts and Bolts , Roma Agrawal starts with the humble nail: “The nail enables us to connect things together. That might not sound like much, but the act of joining two things was once radical.” Complex systems could only be built when we could fasten things together. She includes the derivatives of the nail (rivet, screw, bolt) as part of her description, since all of them “enabled robust connections… at a vast range of scales”.   To make nails, one first needed to find metals, understand their properties, and figure ways to shape them. Metals can be hammered straight into other materials; and can be shaped into a sharp point. This isn’t a trivial point – most other materials snap or deform if you hammer them. But to shape metals into nails, humans had to find way to generate very high heat and then invent other tools to hold and beat them.   For a long time, nail making was hard (and skilled) work, wh...

Everyone has heard of Moore’s law . (It was and is a prediction, not a law like the laws of physics). It says the number of transistors that can be packed in a chip will double every 18 months or so. For decades, it has held true. The other side of that equation is less well known and is called Rock’s law . It says the cost of setting up a chip manufacturing unit doubles every 4 years. Why? As transistors get tinier, the tech to manufacture gets more expensive. Foundries have to keep pouring money into improving manufacturing capabilities. The manufacturing units for the highest end chips are very expensive, writes Pranay Kotasthane in When the Chips are Down .   Obviously the majority of chips do not need to be at the cutting edge. And the further away one moves from the cutting edge, the more one finds Asian countries at the pinnacle.   While the cutting-edge lithography machines are made in the Netherlands (ASML), Japanese companies (Canon and Nikon) dominate the ...

Donald Trump is fickle on so many things (Ukraine started the war; no, no, Russia started it). But he does seem to be consistent on doing what he thinks is best for America. His policies may or may not achieve his intent, I am only referring to the underlying theme.   Why should America pay for others is a consistent theme of Trump’s, even from his last stint. Each time he harps on that, it is Europe that is maximally impacted. After all, the EU had happily outsourced its military security to the US. Now if the US either doesn’t want to be the protector and/or demands the EU pay more for security, it is Europe that is impacted either way.   Unsurprisingly, the old guard in NATO, both American and European, hates this. You can make out they are all old because they will refer to World War II, the Normandy landing, and the Cold War. It still doesn’t strike them that all those wars, cold or hot, ended decades back… They are living in the past.   Trump’s stance o...

A lot of us dislike pro-poor policies to varying degrees. Reasons include misuse and abuse of such schemes, leakage (corruption), and resentment that tax payers money is “diverted” to the poor. But, says Karthik Muralidharan in Accelerating India’s Development , we should support such schemes for 3 reasons.   Altruism : If one is charitable at a personal level, then surely one should support such measures “at scale”. But, yes, the effectiveness of the state has to improve.   Patriotism : If one wants the country to be strong economically, a strong and productive workforce is key. That requires education, health and justice systems to be well established, so we should support policies improving those.   Selfishness : The elites and middle class suffer too. An inefficient workforce translates to lower productivity and higher cost of goods. An ineffective health system means the cost of illness has to be borne by individuals. ~~   There are many who b...

Who are the top players in the semiconductor industry today? Pranay Kotasthane looks into that in When the Chips are Down . We instinctively think of the chip design companies only, but there are a lot of other elements.   A technology node in semiconductors can be taken to represent the size of a single transistor. In 1965, one chip could hold a few tens of transistors. Today, it can hold more than a billion transistors. The smallest technology node today is 3 nm (nanometers).   The smaller the size, the more expensive it is to manufacture. “Tools must be able to print the design onto a silicon disk precisely, and lasers must cut it finely.” Achieving this required both technological and economic revolutions. The latter was done via the creation of lean supply chains. Each stage has become more and more specialized over time, and different countries are the apex in different steps.   Start with chip design . Some firms design for their own use; while ot...

In recent years, the US has started the “Chip Wars”. No, it’s not a physical war with planes and bombs. Rather, it is a war over various aspects of the ubiquitous semiconductor chips. For now, it focusses on these aspects: (1) Which kind of chips should be on the forbidden list? (2) Who should they not be sold to?   In When the Chips are Down , Pranay Kotasthane analyzes this new war. He concludes there were 3 major triggers for this. First , geopolitics. With China snapping at America’s heels, the US is very worried. Since China is far, far behind in the chip design and chip manufacturing sectors, the US decided to try and lock the Chinese out now, before it is too late. The other factor here is that the world’s highest-end chip manufacturer (TSMC) is located in Taiwan. The aggressive Chinese stance on Taiwan worries the US. If Taiwan were attacked or blockaded, the availability of all highest-end chips would be at risk.   Second , geoeconomics. The COVID-19 afterm...

United Breweries suspended beer supply to Telangana recently, the reason being: “Despite our continuous efforts over the past two years, there has been no increase in the base prices offered for our products. This has resulted in escalating losses.” This got Pranay Kotasthane thinking. Why couldn’t the company increase beer prices in the state?   The answer is revealing. State governments don’t just want the tax revenue that comes from alcohol; they also want that revenue to be predictable . “In Karnataka, for example, alcohol-related duties alone comprise 11 per cent of the total budget.” Being such a significant contributor, one can see why state governments would hate to see fluctuations in it. And fluctuations are inevitable if alcohol prices can be set by alcohol companies. After all, an increase in alcohol prices could result in additional revenue for the state; or it may cause a drop in demand and thus a dip in tax revenues to the state.   So state gove...

As mentioned earlier, India’s first-past-the-post (FPTP) system leads to bad governance. To recap Karthik Muralidharan in Accelerating India’s Development , FPTP incentivizes governments to focus on the sub-groups who are “enough” to win elections instead of trying to deliver for everyone.   One alternative to that is called ranked-choice-voting (RCV). The idea is that voters rank candidates in the decreasing order of their preference (They can rank as many as they want, not necessarily all the candidates). “If a candidate wins over 50% of first-choice votes, they win. If not, the lowest-ranked candidate is dropped and the votes of those who ranked them first are transferred to their second-choice candidates. This process continues until a candidate receives over 50% of the votes.” An example helps. Say, there are 3 candidates, A, B and C who gets 36, 34 and 30 votes. C got the least, so he is dropped. The second-preference of the 30 votes for C are checked. In this case, s...

As the Roman empire fell apart, Indian traders started to look east. Sanskrit place names in South East Asia like Takkola (Market of Cardamom) and Karapurdvipa (Island of Camphor) indicate there were important ports attracting Indian merchants, explains William Dalrymple in The Golden Road .   Since the intent of trade with South East Asia, whether by India or by China, was trade and not religious evangelism, a “free mixing of Hinduism and Buddhism is a striking feature of South-east Asian religion”. The Buddha, Hindu gods and local religious practices all intermingled.   The “Indosphere” now didn’t end in Tamil Nadu, but extended to the other side of the Bay of Bengal. South East Asia was becoming a “Sanskritic union of monsoon Asia” (the monsoon winds were what powered the ships). Cultural and religious transformations were underway.   How much trade was happening though? Was it tiny? Or large? How can we know? A 10 th century shipwreck just 25o feet deep ...

Historically, countries moved jobs from agriculture to manufacturing and then to services, writes Karthik Muralidharan in Accelerating India’s Development . The move from agriculture to manufacturing increased worker prosperity for 3 reasons: (1) Enabled specialization and economies of scale; (2) Goods could be exported to other countries, which meant production wasn’t limited by domestic demand; (3) Jobs became more reliable.   India’s trajectory has been different –Manufacturing never took off because of the kinds of government policies we had. India went directly into services (think IT, BPO, Uber/Ola, Swiggy/Zomato etc). One reason for going to services was timing. As India liberalized, the Internet started to take off transforming “many non-tradable services into IT-enabled tradable ones”. Another reason was India’s decision at independence to focus on high quality tertiary education in English. And lastly, many folks who worked for outsourcing arms of the best Western ...

If a region has a well-established and ancient belief and value system, whether one calls it a religion or not, it is hard to replace it. Since China had Confucianism, how was Buddhism able to replace it? The starting point for the transformation, as per William Dalrymple in The Golden Road : “It was war and devastation.” Not external war or devastation by external forces. Instead it was triggered by the fall of the Han dynasty in 220 CE. This power vacuum was soon followed by natural disaster like floods, famines and plague. The power of the Confucian elite eroded, and the general belief in Chinese cultural superiority too got chipped away. A vacuum now existed for new ideas…   Buddhist missionary work exposed the population to Buddhist practices, art and imagery. The emperor Wen soon became the most “enthusiastic champion” of Buddhism in Chinese history (he had been born in a Buddhist temple and raised by a Buddhist nun). He ordered the construction of many monasteries ac...

All roads lead to Rome. All supply chains lead to China. As the global mood changed and such heavy dependence on China began to be perceived as a risk, it was also clear that total decoupling from Chinese manufacturing was impossible. Hence the West has started aiming for what is called “China + 1” policy (China + one other major manufacturing country).   This was considered an opportunity for many countries to get manufacturing jobs, including India. But while India has benefited only a little, Vietnam has benefited a lot. Why? The biggest reason turns out to be that Vietnam has a much better work force relevant to manufacturing . India does not, and its poor primary education system is a major cause for that. Which raises the question as to why India’s primary education system is so much worse?   While looking into that question, I found Apurva Kumar’s post comparing China and India’s education systems. In 1950, both countries had a literacy level of around 20%. Chi...

Someone asked Benjamin Franklin, one of the framers of the American constitution, “Well, Doctor, what have we got, a republic or a monarchy?” His famous answer was: “A republic, if you can keep it.”   Pranay Kotasthane says Franklin’s response is not understood even today across democracies. Sure, we hear a lot of people talk of democracy being at risk. This is confusing and misleading because the response usually goes something like this, “Elections are happening as scheduled. Power transfer happens peacefully based on the outcome (other than Trump’s supporters running riot when he lost in 2020). In which democracies have any of these things stopped happening? So how exactly is democracy at risk?”   Those who are concerned are not articulating their concern correctly. When they say things like “majority rule is not right”, they don’t seem to realize democracy has always been about the rule of the majority! After all, democracy is a system by which the people who g...