Viswanathan K's Thoughts

Why do people believe false things?   Dan Williams takes a stab at that question… in a very different way. Before we get into his analysis, let’s first understand the method he uses for this and other questions. Take a different question: Why is there poverty in the world? Invert the question. In this case:             Why is there wealth in the world? Ask yourself which of the two conditions – wealth or poverty – has been the norm through most of our history: “(Poverty) is humanity's default state. Until very recently, everyone lived in what would now be regarded as shocking poverty.” Wealth then is the surprise. So try answering why there is so much wealth today. “Wealth creation depends on complex, improbable, and fragile institutions and incentives for coordinating human activity and the division of labour.” The Industrial Revolution. Property rights. Rule of law. Infrequent wars. Competitive markets. Education system. “There is nothing “natural” or “aut

The list of the richest Indians includes the Adani’s, Ambani’s, Birla’s… but not the Tata’s. Even though their business empire covers everything under the sun.   The answer, writes Shashank Shah in The Tata Group , lies in the ownership structure. The first set of Tata’s donated a huge part of their estate to two charitable trusts. Those two trusts hold a lot of shares in Tata Sons. What is Tata Sons? It is the promoting company of the entire Tata Group and a significant share holder in many of the companies shown in the pic above. Today, all the trusts (more were created over the generations) put together hold over 66% of Tata Sons.   What is Ratan Tata’s share of Tata Sons? A mere 0.83%. That is the answer as to why the Tata family and Ratan Tata don’t show up as the richest folks in India.   Note : The trusts are mandated to spend 85% of the dividends received from all those Tata companies. That’s a huge amount of money that the Tatas have been ploughing back into societ

Kids these days don’t appreciate the value of money. You may be saying that’s been true throughout history, but there are reasons this generation is worse. Unlike most of us, they never see cash change hands and have genuinely no clue of the cost of anything – after all, if everything is paid for via credit cards, the phone, or (even more invisibly) online, how can they possibly have the faintest clue as to what anything costs?   William Guppy’s post on the topic very amusing. And eerily close to where our kids are probably headed. This guy is like the future of our kids – the generation that grew up well off, but didn’t take any steps to stay that way. With Wodehouse-style humour, he starts off by saying: “Two days ago I had the misfortune of finding out that an old friend of mine, who I hadn't seen in some years, has done very well for himself. The fact was related to me over dinner, and in such a way that I was expected to congratulate him.” And adds: “His is an old C

After her recent visit to the US, my wife was telling me that her Indian-by-birth boss wouldn’t allow her (American) kids to do some of the American way of life things, like dating. That reminded me of Malcolm Gladwell’s book, David and Goliath , where he talked about the “immigrants to wealth” problem. Huh? It’s a phrase coined by James Grubman, explained thus by Gladwell: “For most of us, the values of the world we grew up in are not that different from the world we create for our children. But that’s not true for someone who becomes very wealthy.” This group is the “immigrants to wealth”: “They face the same kinds of challenges in relating to their children that immigrants to any new country face.” A much milder version of that is faced by post-liberalization Indian parents: “How do you teach “work hard, be independent, learn the meaning of money” to children who look around themselves and realize that they never need to work hard, be independent, or learn the mea