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Picking a Policy

Montek Singh Ahluwalia’s book, Backstage , is (in his words): “A travelogue of India’s journey of economic reforms, in which I had the privilege of being an insider for 30 long years.” At college, he loved to debate. In real life: “I realized the art of persuasion is very different from the art of debating, and much more challenging.”   It is easy to criticize Soviet style central planning. But only with hindsight, says Ahluwalia . In Nehru’s time, central planning seemed to be working – it had transformed the USSR from a “feudal society into an industrial power within a few decades”. In fact, in the 1960’s, several top American economists felt that it was entirely possible that the Soviet planning could make their national income higher than America’s by the end of the century!   Ahluwalia’s stint at the World Bank (WB) “would give me first-hand experience of development problems in a range of developing countries”. WB aid to countries came with terms and conditions ar
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Hedgehogs and Foxes

There’s this famous 1953 idea called the Hedgehog and the Fox by Isaiah Berlin. It refers to how different people view the world . “The hedgehogs are more the big idea people, more decisive," while the foxes are more accepting of nuance, more open to using different approaches with different problems.” At first glance, it seems obvious that the foxes must be right, but in real life, hedgehogs are abundant (capitalism is the best system, everything boils down to physics, religious tolerance is the best course…).   Why do so many people become hedgehogs? The most common reason is that when you start to understand or appreciate an idea or theme, it can become like that famous line in the movie Inception: “What is the most resilient parasite? Bacteria? A virus? An intestinal worm? An idea. Resilient... highly contagious. Once an idea has taken hold of the brain it's almost impossible to eradicate. An idea that is fully formed - fully understood - that sticks; right in
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Randomized Selection

Recently I read a couple of articles from two different parts of the world – India and the UK – that recommended randomizing selections in various fields. Our instinctive reaction to such a suggestion is negative, as Tim Harford wrote : “We do not usually draw lots to allocate duties, jobs or privileges.”   I want to state at the outset that both articles are not saying that selections (for whatever field) should be entirely random. Rather, they mean set a minimum criteria or qualification that needs to be met. Then, from amongst the shortlisted entries, select at random – not by ranking them as 1 st , 2 nd and so on.   University grants, says Harford, could be given at random (provided the applications meet the minimum criteria). After all, he argues, sometimes a thorough evaluation of each application (to decide on merit) can end up costing a significant chunk of the grant amount itself! In any case, he says, the assumption that experts know best (and can rank ideas and
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Zoozve, Weirdo in the Solar System

We think we know our solar system. Obviously not every single object and rock, but at least the categories of objects in it. Sun, planets, moons, comets, asteroids, asteroid belt, meteorites, we’ve covered everything, right?   Not entirely, as Latif Nasser found out. His discovery started off from a kiddish solar system poster on his 2 yo son’s wall. As per that poster: “Venus had a moon called Zoozve. ” What, he thought? Among the rocky planets (Mercury, Venus, Earth, Mars), wasn’t Earth the only one with a moon?   The NASA site said Venus had no moons. He googled up Zoozve. No results, at least not in English. That could have been the end of it – an error in a kid’s poster. But Nasser didn’t stop. He called up the illustrator of the poster – the man said he didn’t cook it up, that he found Zoozve on some online list of moons.   And then Nasser’s friend at NASA called him back. It wasn’t Zoozve, it was 2002-VE, an actual object near Venus. That fit – the “2” may have
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"Too Many Needles"

In the bad old days of the Internet, finding what you were looking for was, well, like searching for a needle in a haystack. Clay Shirky called it “filter failure”. And now, the pendulum has swung to the other extreme of “filter success” as Nicholas Carr calls it. (Think of the effect of Google search, or the recos of Amazon and Netflix). But that’s just created a new problem, writes Oliver Burkemann - the “Too many needles” problem: “(You have) a large pile (or digital equivalent) of books or articles you've been meaning to get around to reading, plus maybe a long queue of podcast episodes to which you'd love to listen, if only you had the time.”   Burkemann says this is a broader problem most people face. It occurs outside the digital/ Internet domain, in pretty much every aspect of life: “If you're blessed with work you love, or a creative passion you're good at, you may often feel torn between multiple projects you're excited to launch. Others are the f
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Paying for UPI

That UPI has been very useful and successful is unquestionable. But valid questions exist about its viability, specifically on the “Who pays for it?” topic. After all, it costs money for PhonePe or GPay or the banks or the government-owned backend system behind it to develop, maintain and keep things running.   When it was launched, most people had assumed a fee would be charged for its usage. Either as a percentage of the transaction, or as a flat amount. But in 2019, writes Rahul Matthan, the government passed a law prohibiting banks and service providers from charging any fee for it.   There were good reasons behind that decision. For high value transactions, history had shown that shops are willing to foot the fee because nobody carried that much cash and the benefit of closing a sale was worth the fee. But for low value transactions, the fee became a significant fraction of the profit, which is why credit cards never caught on in most places in India. “It is to address
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Contradictory Signals

Raghu S. Jaitley makes an interesting observation about the upcoming Lok Sabha elections. On the one hand, almost everyone says “it appears like the most pointless LS election in living memory”. The BJP’s victory appears to be a foregone conclusion (Modi talks of winning 400 seats), and the opposition seems to be in disarray with endless arguments over seat-sharing arrangements. “It is either the failure of the political imagination of the opposition leaders or the relative success of this government that we might not have any overarching theme that serves as the connective tissue to the multiple state or local issues.” Which is why Jaitley says: “While I can foresee lots of drama and rhetoric in campaigns at the state level, this will be a ‘no wave’ election, which means it will be impossible to dislodge the incumbent.”   And yet, there are other signs and actions of the BJP that “belie this optimism”. “The eagerness to stitch alliances across states and political spectru
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