Wednesday, December 31, 2014

Happy New Year

Links, December 31, 2014

Nancy Birdsall on Thomas Piketty and the Developing World:
"Recall that Piketty argues that the dynamic of ever-increasing inequality in capitalist systems is due neither to textbook imperfections and failures of markets nor to failures of economic and political institutions, but is inherent in capitalism’s process of growth itself. The way to control the resulting spiral of inequality is to implement a potent progressive tax policy.......In short, the rich democracies have built a capable and responsive state on the basis of a social contract forged over many decades of social confrontation and political compromise. That they are mature democracies matters. Economic growth has been accompanied by political growth over several hundred years, creating a virtuous political and economic cycle. In the fast-growing emerging markets— including Brazil, China, and India—economic growth over the last two decades has fortified the potential for that virtuous cycle to kick in. Still, in these and the poorer countries of the developing world, the challenge is not, at least not yet, the one Piketty outlines—that an inherent tendency of capitalism is to generate dangerous inequality that if left unchecked will undermine the democratic social state itself. The challenge is the other way around: to build a capable state in the first place, on the foundation of effective institutions that are democratically accountable to their citizens."
This is not clear. The same tendency outlined in the beginning seems to work between countries too: $2 lost for every $1 gained and Poorer countries loose more from profit shifting and this from IMF.

Tuesday, December 30, 2014

Saturday, December 27, 2014

Links, December 27, 2014

2014: The year propaganda came of age by Raul Ilargi Meijer
Spectacular real virgin births from BBC
Lada gears up to stay on the road from The Age
Why is Putin buying gold? from CNBC but lot of it may be Russian gold bought with rubles says Tim Worstall.
On Pain from The NewYorker
No ideal husband in Hindu scriptures, an old post by Renuka Narayanan (From the comments, there seems to be one).
I saw a friend doing some thin similar long ago:

And finally what I have been doing for a long time seems to be mixture of a herbaceous border and a kitchen garden

Reading 'Ardor' by Roberto Calasso

An agnostic/atheist most of my life but coming from a Hindu background, I was curious to know a bit about Hinduism. Given my background in mathematics and science, Calasso seemed more understandable than the other books I browsed before. I am halfway through the book and will probably reserve the rest for future reading. It has been very readable so far but it seems to be a book that somebody like me has to take slowly. The chapter on Yajnavalkya, I enjoyed, and may be it is enough for now. There is a lot of fog upon fog but they seem to have thought of every thing possible from cosmos, the very process of thought and meaning and at the same time very aware of the human nature and built an edifice (or edifices) of thought and ritual which still resonates with many today. They started with some developed theories and rituals, probably somewhere in Persia. The changes in the meanings of 'asuras' and 'deavas' suggests (to me, but it is possible there were originally three categories) a dissident group migrated towards India and along the way had enough leisure to develop more and more elaborate theories. May be they were accompanied by by others who sustained them or found local patrons. In the process, the language developed adopted local words and gods, the older gods became more and more minor, the rituals more elaborate and more sacrifices an integral part of the rituals. Anyway this book seems to be a part of a series of books and was in the planning for a long time. In a 2005 article  Roberto Calasso said:
"In fact, one of the arguments of the books is that one cannot fully understand what happened since the beginning of the French Revolution and up to today if one doesn't take into account the very complicated and deep thoughts of the ancient risis on violence and the act of killing, which are both part of their theory of sacrifice. So the book is at the same time a narrative and a tentative reading of the metaphysical texture of modern history. "

May be. But during this process, they were sustained by others who did the hard physical work. And slowly it emerged that physical work was demeaning, I cannot but help feel that right from the beginning the seers took care of themselves with various duties about giving gifts to the priests. The vedic rites are still practiced in some parts, even in the south of India. It has sustained a system of inequality for a much longer period than anywhere else in the world and India still seems unable to get away from that spell. It is possible that there may be some lessons for the modern man in these texts and rituals but it seems to me that they have done enormous damage which is still difficult to undo.

Tuesday, December 23, 2014

Some books I liked

Even though I read only a few books this year, it has been more satisfactory reading than before coming to terms with the sort of problems that have been bothering me. A few selections from this year: Piketty's 'Captal21', Emmanuel Todd's books particularly 'The explanation of ideology' and 'The causes of progress' and now 'Ardor' (which I am still reading) by Roberto Calasso. Some of the reviews of Calasso suggest that it is the final book in a whole body of work. But I think it can be read by itself and gives some glimpses of Hinduism to an agnostic like me. Ignore the horrible review by Pankaj Mishra (His review of 'The Namesake' I liked, but he seems to be writing a lot of rubbish) . Two books I read earlier and keep going back to are "The sources of Social power" by Michael Mann and "In an Antique Land" by Amitav Ghosh.
P,S. Some are surprised that I included Amitav Ghosh. I am not the only one impressed by his early work. I think that when he was young, he let things come to him and changed somewhat when he started having opinions. I am not an enthusiast of his later work including 'The Glass Palace'. There is a much better review of Roberto Calasso's Ardor by David Shulman (pointed out by Sreenivas Paruchuri); unfortunately it is behind a firewall.

Sunday, December 21, 2014

Ruble problems

From Couterpunch Ruble takedown exposes cracks in Putin defense (via Rao Nagisetty) "The prospect that there may be collaborators and fifth columnists at Russia’s Central Bank should surprise no one. The RCB is an independent organization that serves the interests of global capital and regional oligarchs the same as central banks everywhere. This is a group that believes that humanity’s greatest achievement is the free flow of privately-owned capital to markets around the world where it can extract maximum value off the sweat of working people. Why would Russia be any different in that regard?.....
Like we said, Putin might be a great chess player, but in his battle with the US, he’s getting his clock cleaned. So far, he’s been no match for the maniacal focus and relentless savagery of the Washington powerbrokers. Yes, he’s formed critical alliances across Asia and the world. He’s also created competing institutions (like the BRICS bank) that could break the imperial grip on global finance. And, he’s also expounded a vision of a new world in which “one center of power” does not dictate the rules to everyone else. That’s all great, but he’s losing the war, and that’s what counts. Washington doesn’t care about peoples’ dreams or aspirations. What they care about is ruling the world with an iron fist, which is precisely what they intend to do for the next century or so unless someone stops them. Putin’s actions, however admirable, have not yet changed that basic dynamic. In fact, this latest debacle (authored by the RCB) is a severe setback for the country and could impact Russia’s ability to defend itself against US-NATO aggression."

Yves Smith in Naked Capitalism quotes Dmitry Orlov "….at the moment Putin is pushing on a string. You see, once you staff the central bank with economic liberals trained to follow the dictates of the IMF, and do nothing to shut the revolving door between the central bank and other big banks (after all, if the Wall Street boys can do it, why can’t the Russians?) then why wouldn’t they rob their own people every chance they get, then attempt to use their ill-gotten gains to subvert the political system—just like the Americans have done?"

Keynes in 1933 which I do not tire of repeating "Let goods be homespun whenever it is reasonably and conveniently possible. Above all, let finance be primarily national'. 

Raghuram Rajan, RBI governor on December 12, "Slow industrial country growth has made more difficult a traditional development path for emerging markets—export-led growth. Indeed, in the last decade, even as China developed on the back of its exports to industrial countries, other emerging markets flourished as they exported to China. Emerging markets now have to rely once again on domestic demand, always a difficult task because of the temptation to overstimulate. That task has become more difficult because of the abundance of liquidity sloshing around the world as a result of ultra-accommodative monetary policies in industrial countries. Any signs of growth can attract foreign capital, and if not properly managed, these flows can precipitate a credit and asset price boom and exchange rate overvaluation. When industrial country monetary policies are eventually tightened, some of the capital is likely to depart emerging market shores. Emerging markets have to take extreme care to ensure they are not vulnerable at that point.
What implications should an emerging economy like India, which has weathered the initial squalls of the “taper tantrums” of the summer of 2013, take away for its policies over the medium term? I would focus on four: 1) Make in India; 2) Make for India; 3) Ensure transparency and stability of the economy; and 4) Work towards a more open and fair global system."

Saturday, December 20, 2014

A thumri from different films

Putin's kleptocracy

I thought that generally Putin was ok. But may be I was wrong. Here is a review of a recent book which is apparently heavily supported by documentary evidence. An excerpt:
 "Indeed, in the months since Putin’s invasion of Crimea, it has become fashionable to suggest that the harder-line face that Putin has more recently shown to the world is somehow, once again, the West’s “fault,” that we have provoked Russia into autocratic behavior through our talk of democracy in Ukraine or that—once again—the “reform process” was somehow brought to a halt because the Russians felt threatened by the expansion of NATO or by Western policy in the Balkans.
But after reading Dawisha’s book, and after absorbing the implications of the stories she has so carefully pulled together from so many sources, it is simply not possible to take this argument seriously. Since 2000, Russia has been ruled by a revanchist, revisionist elite with origins in the old KGB. This elite had been working its way back to power since the late 1980s, using theft on a grand scale, taking advantage of the secrecy provided by Western offshore havens, and cooperating with organized crime." (via Chris Blattman and from a comment, the book has a website )

Tuesday, December 16, 2014

Two from Brad DeLong

on "Convergence" "Lant Pritchett and Larry Summers are now trying to blow this up: to say that just as the neoclassical aggregate production function is a very bad guide to understanding the business cycle, as the generation-old failure of RBC models tells us, so the neoclassical aggregate production function and the Solow growth model built on top of it is a bad guide to issues of growth and development as well."
Cosma Shailzi's comment : "Also, I will remind you that aggregate production functions make no sense in terms of neoclassical microeconomics "
Prolegomenom to a reading course on Marx

Vijay Iyer on "Our Complicity With Excess"

These are the sort of questions I ask myself when I see many successful Indians abroad working as IP lawyers or for Halliburton... "That I humbly ask of you, and of myself, is that we constantly interrogate our own complicity with excess, that we always remain vigilant to notions of community that might, perhaps against our best intentions, sometimes, embrace a system of domination at the expense of others. Can we radically submit ourselves to the pursuit of equality and justice for all? If we choose to call ourselves Asian American, can we not also choose to be that kind of American that refuses to accept what America has been, and instead help build a better America even for others, who might not immediately seem to “belong” to us?"

Sunday, December 14, 2014

Links, December 14, 2014

Multiple Modernities by S.N.Eisenstadt
The anthropolgy of financial crises by Psedoerasmus "This is Part 2, continued from “Der Todd des Euro” (Emmanuel Todd on the euro), which critiqued his “anthropological” perspective on Germany. Here I make some observations on the role of social capital in financial crises, with a focus on Germany." But a commenter says that he is not too far from Todd.
Ukraine's frozen war brings dramatic changes to world economy by Anatole Kaletsky
Uruguay takes on London Bankers, Marlboro Mad Men and the TPP by Michael Meurer at Truthout
Business interests vs student interests at Cambridge University

Friday, December 12, 2014

Links, 12th December 2014

Do farmers want GM crops? by Glenn Davis Stone
How much of a winner is India in the trade facilitation agreement? by Jhinuk Chowdhury
Growth slowdowns: Middle-income trap vs regression to the mean by Lant Pritchett and Larry Sumners, discussion in The Economist's View
Democratizing Finance by Fred Block "The scope of this article will be
limited in the following ways. First, this paper will only briefly touch on the urgently
needed reforms to the global financial system that would complement the domestic
reforms described here. Second, the paper will not address reforms to corporate
governance and corporate finances that are a necessary part of any effort to renew the
U.S. economy.Third, the discussion of alternative financial institutions will focus on
the problems of consumer finance, small business lending, innovation, and infrastructure."

Michael Hudson on current affairs

In a July interview with RT "The basic principle to bear in mind is that finance today is war by non-military means."
This December Backfired! "The world’s geopolitics, major trade patterns and military alliances have changed radically in the past month. Russia has re-oriented its gas and oil trade, and also its trade in military technology, away from Europe toward Eurasia.
The result is the opposite of America’s hope for the past half-century of dividing and conquering Eurasia: setting Russia against China, isolating Iran, and preventing India, the Near East and other Asian countries from joining together to create an alternative to the U.S. dollar area. American sanctions and New Cold War policy has driven these Asian countries together in association with the Shanghai Cooperation Organization as an alternative to NATO, and in the BRICS moves to avoid dealing with the dollar area, the IMF and World Bank austerity programs."
Despite lot of pressure from USA about nuclear liability bill and for US reactors, according to today's report from The Hindu "The highlight of the meeting — part of an annual summit between the two countries — was the unveiling of a vision statement on atomic energy cooperation, where Russian nuclear agency ROSATOM and the Department of Atomic Energy and NPCIL have agreed to build at least 12 new reactors supplied by Russia over the next 20 years."

Wednesday, December 10, 2014

Item songs

Special issue 'item' of Motherland Magazine with several articles linking film item sonns to older traditions.

Long article on Angela Merkel

in The New Yorker. Lot of background material but I am not sure about the discussion on Ukraine. According to Emmanuel Todd "But basically, the new German system is based on the annexation of the active population. Initially they were used in Poland, the Czech Republic, Hungary, etc. The Germans reorganized their industrial system using their cheap labor. The working population of Ukraine of 45 million inhabitants, with its well-educated inherited from the Soviet era, would be exceptional grip for Germany, the possibility of a dominant Germany for a long time, and most importantly, with his empire, immediately passing actual economic power over the United States." Here is a little about what has been happening in Poland.

Monday, December 08, 2014

Some criticisms of Emmanuel Todd

Since, I may have some more posts about Emmanuel Todd, I thought that I should start with some of the criticisms.
Evelyn Rawski in her review of "The Causes of Progress" says "The attempt to encompass complex historical changes occur, ring over several centuries in all parts of the globe under one rubric suffers from inadequate data about various regional cultures and an overly simplistic analytic scheme." She gives specific examples from her own area of specialization: China. She also says "The great value of Todd's book lies elsewhere: it forces scholars out of the increasingly narrow specializations in which we tend to spend our lives. We may disagree with Todd's interpretation and his facts, but we can learn a great deal from the structural comparisons he makes. If comparative studies are stimulated by books like this, we may eventually achieve a more satisfactory synthesis to explain the demographic, economic, and cultural changes that are central to the early modem and modem historical ages."

William Roseberry in his review of "The Causes of Progress" (behind a firewall, is even more scathing. He says that the jump from family structures to attitudes leaves much to be desired. But he seems to go easy on Marx in Marx and Anthropoloy.

Lesly Page Moch in his review (again behind a firewall)of "The Explanation of Ideology" says "Problematic sources exacerbate the implausible aspects of the study..."

The above reviews are by academics. I do not know the background of the next reviewers.
Craig Willy in  Emmanuel Todd’s L’invention de l’Europe: A critical summary "Todd’s method is to correlate everything. Though a historian, he is as interested in correlation across space as across time. Did I mention the book is also an atlas? The method in a word: Correlate, then speculate. The “speculate” part is definitely Todd’s weakness. " But he goes on to say "Todd is addicted to the “power” of the prophet. His various books have forecasted: the fall of the Soviet Union (1976), the failure of EMU (1995), the dysfunction of globalization (1997), the decline of the United States (2002), the democratization of the Muslim World (2007), and I probably missed one. Todd has no divine knowledge – he can hedge his bets or be inaccurate, he tends to over-generalize from the news of the day and dismiss things that do not neatly fit into his system – but he has a very solid data-based method, looking at the longue durĂ©e, which allows him to be far more interesting and worthy of attention than your standard pundit.". 
The missed one may be about Nicaragua. Check also this review of "After the Empire" and 'Testing Todd':
"This paper has investigated whether the family systems that Todd attributes great explanatory power to for political and educational developments can be
corroborated with other data. This check came from ethnographic data collected in
Murdock’s Ethnographic atlas, translated to country-level data with ethnic
population figures from the Narodov Atlas.
In half the cases, Todd’s family systems can be reconstructed to the ethnographic data from Murdock.....There are also important mismatches in The Explanation of Ideology."

Saturday, December 06, 2014

Links, December 6, 2014

Did not see this in the main stream media Why Did USA, Canada, and Ukraine vote against 
condemning Nazism at the UN? (via Naked Capitalism)
Athens 1944: Britain's dirty secret (via Jo)
There is no language instinct by Vyvyan Evans (via Naked Capitalism) whose book 'The Language Myth' is reviewed here
Discussion in Economist's View on why economists are paid so much with a paper by Fourcade and ciollaborators. I read some Fourcade papers on the topic and found her convincing.
Vegetarianism and the idea of untouchability (via Rahul Siddharthan who says "Excellent article by Devdutt Patnaik, until the end where he goes Godwin")

Tuesday, December 02, 2014

Common Financial Language

In March 2012, Andrew Haldane and collaborators pitched for 'common financial language' and there is a response from SWIFT (written by M.Chisholm and A.Milne) in September 2013, where they explain the difficulties involved. In an April  2014 conference "Alistair Milne, professor of financial economics at Loughborough University, said that creating a single common financial language is not a realistic proposition as the industry does not perceive it to be a priority. “It is the deal that matters, as this is where the profits are made. […] The back-book becomes a secondary issue” said Professor Milne."  A recent report from The Scotsman "Alistair Milne, professor of financial economics at Loughborough University, found even apparently simple terms such as “arrears” or “loan performance” can have different meanings within the same organisation."
P.S. Andrew Haldane seems to be one of those rare species, a good banker. More about him by Justin Fox The regulator who explained the world which also has some links to the above topic.

Saturday, November 29, 2014

Flavours of Emmanuel Todd : Progress and Modernity

Recently I read three books by Emmanuel Todd: A) The Explanation of Ideology: Family Structures and Social Systems, Translated by David Garrioch, 1985 B) The Causes of Progress: Culture, Authority and Change, Translated by Richard Boulind, 1987 and C) The Convergence of Civilizations: The Transformation of Muslim Socities Around the World, with Youssef Courbage,Translated by George Holoch Jr, 2011. I will focus on [B].
It seems to me that Todd is an important thinker who grappled with intangible ideas like progress, came up with some verifiable methodology to study it where data is available with  policy options where broad patterns are discernible. The discussion can get muddy when there is diffusion, migration, shocks or when the data is unreliable but the methodology seems interesting and important and can be reined and developed by others. However there seems to be little follow up in the English speaking world except in a few blogs. Anyway, this is my take on what I read so far.
First the concept of progress/modernity is nebulous and Todd never explicitly says what it is. However Todd identifies several components, some which are related, of it towards which most of the world has been lurching. I will quote from different parts of his first two books [A], [B].

First hint from [A], page 33, "...urbanization, industrialization and the spread of literacy, in short by modernization..."

Second hint from [B], pages 2-3, "This is a cultural development, beyond the realm of the material. Cultural development first shows up as a rise in the rate of literacy....In the second stage, a fall in the rates of mortality and fertility follows the rise of literacy. Man thus takes control of his immediate biological environment. Only in the third stage does development appear as an increase in the production of industrial goods or, more generally, material wealth"

I think that Todd is trying to formulate measurable components of progress/development; for him literacy seems primary. Then he goes on to study the take-off stage, roughly 50 percent for some processes, male literacy, female literacy, percentages in different age groups. Female literacy or more accurately the learning period for females he puts at the marriage age (roughly the child bearing age before the current freedoms). There are striking maps on pages 32-33 of [B]; the areas where the per capita income in 1979 was more than 10,000 dollars in 1979 and the areas where the age of marriage of females in 1850 was more than 27. The two are the same. Another striking fact about literacy. From page 153 of [B]: "But the coefficient of correlation that associates literacy rates with life expectancy is one of the strongest that one can calculate, across the countries of the Third World. Such a correlation in no way indicates that the exogenous effect of the Western medicine is non-important, but it does show up the very important endogenous component of the progress that has been realized in medicine and health." He later discusses a similar correlation between literacy and birth rates.
It seemed to me from reading [B] that two important factors for 'progress' are literacy and status of women. In Chapter 6 of [B], he discusses the implications of male literacy reaching 50 per cent and more specifically, literacy of me between the ages of 20-25 reaching 70 percent. On page 139 "A world map of these qualifying dates- at which 70 per cent of young reached literacy- can be drawn. Coincidence with modern revolutionary phenomena is striking, if not always verified."

For empirical verification as well as to see the potential of different areas which have not progressed, Todd partly uses family systems discussed in [A]. In Europe there are mainly four classified by the two dimensions of liberty and equality: German (authoritative family), Russian (exogamous community family), English (absolute nuclear family) and Paris basin (egalitarian nuclear family) being the practitioners of different systems. If you add endogamy, exogamy in marriage there are seven (instead of 8) outside Africa (due to widespread polygyny). Two of these are 'endogamous community family' of the Arab World and ' assymetrical community family' of South India. This has been a popular topic in blogs recently and there are links in earlier posts of this blog and here. These have been discussed in the recent years in many blogs and I will just leave it referring to two articles
America, England and Europe-Why Do We Differ by James C. Bennett and Michael J. Lotus and

Emmanuel Todd’s L’invention de l’Europe: A critical summary by Craig Willy.

Coming back to Todd, in his own words,
"The anthropological model allows development to be accounted for without any need to suggest the existence or the will of historical agents that are at once so de-personalized and so anthropomorphic.The concept of State-so generally considered to be an essential actor in the development process, in both cultural and economic fields-is shown up as being particularly useless.
But the individual about whom we are talking about here is not economic man or rational man. He is only a dependent unit within a system of inter-personal relationships, of local or regional scope, whose central core is family structure.
Each family system sets up a cultural potential that is a function of two variables: the strength of parental authority and the status of women. Examination of available data shows that authoritarian and relatively feminist systems do appear on literacy maps as poles of self-generated take-off. This is true whether we are looking at Scandinavian, German, Japanese, or Korean systems-which are bilateral vertical ones- or the Keralese, Sinhalese or Menangkabau systems, which are matrilineal vertical. On the other hand, strong anti-feminism leads to a considerable slow-down in the development process, such as is demonstrated by the Arab countries and by North India. "

That is from pages 176-177 of [B] written in 1987. His views might have been refined/changed since then. It seems to be that his theories can be verified ( I remember reading somewhere a list of those but cannot find them now), refined and may be useful for policy initiatives in some contexts.

Thursday, November 27, 2014

Links, 27th November 2014

Whipping Boy by Allen Kurzweil (via Rahul Siddharthan)
The skeptics guide to institutions part-3. Most of these were linked before: Check the links here and they seemed plausible at that time. Chris Blattman's response.
About think tanks.
How professionals think?
More on TTIP
The Making of Ferguson (via Naked Capitalism)

Tuesday, November 25, 2014

Sitara Devi RIP

Richard Singer's tribute to her a few days ago for her birthday

This and that

Finally, after ten years of retirement, I seem to be getting some glimpses of the sort of things that I want to understand. It is probably due to the efforts that I have spent reading Piketty. Right or wrong, his lucid style seems to help thinking about economic and development problems. Two books that I am reading in this connection which I recommend are by Emmanuel Todd "The explanation of ideology" and "The causes of progress". He may be wrong but the books are stimulating and I am reading them slowly and not trying to finish quickly. I would be interested in feedback from people like Sreenivas Paruchuri.
During the morning walk, I met for the first time an aboriginal girl in our neighbourhood. She looked like a school girl, had a backpack and a sunny smile. Many of them could pass for South Indians. Sometimes Indian kids are called abos here, a term considered derogatory. Around 23 years ago, I met a fair girl in a Northcote bus stop who smiled and talked to me. I asked her "Here people at bus stops don't talk to Indians. How come you are talking to me". "I am an abo", she said. I hope that the new girl won't have problems at school. The school is full of Chinese now. I recently met a Chinese girl of around 5 months age at the shopping centre who left her mother and sat in my lap. But she refused to go to Jhansi. Her mother explained "She likes men".

Monday, November 24, 2014

Amitav Ghosh on the Death Railway

From his blog. The son of a worker on the Death Railway:
 "You must understand – the Burma railway was of course a horror beyond imagining for the English and the other white men who worked on it. But at that time, under colonial rule, conditions on rubber plantations were also terrible. For men like my father the difference between what they had to endure there and here was not so very great."

Recent stuff on Piketty

Deirdre McCloskey has a 55 page polemic against Piketty (via MR where there are a lot of comments). At one point, she agrees that r>g in the lon run, but says that the rise and fall of inequality probably is independent of that.

Emmanuel Todd in a 1987 book 'The causes of progress' says " It seems that accumulation of capital has no decisive effect in the long run' (page 31). He was comparing the 1860 scores of industrial development with 1979 scores of national wealth in Europe. I wonder whether part of what is called wealth is fictitious and has a tendency to vanish.

Daniel Stelter in Piketty, Right or wrong? The global wealth game says that Credit Suisse agrees with Piketty. But "Piketty, Summers and Credit Suisse only look at the symptoms – not at the true causes behind this development. The key element they neglect is the continued and excessive growth in debt. Without constantly increasing overall debt levels, the growth in wealth would be impossible."

"But can it go on?

It will not be possible to have debt grow faster than income forever. As long as the value of assets bought on credit grows faster than the interest expense, the game can go on.
But even in an environment of zero interest rates, this has come to an end, at the latest when no one has any debt capacity or willingness left. Once we have reached this point, asset prices will collapse. What remains is an unbearable debt load.
As debt is used to stabilize economic demand, it is only a question of time until we reach a limit. The debt capacity is limited and many countries have reached this limit.
All efforts to increase the debt capacity — whether by lowering standards and interest levels and/or to induce those with some countries like Germany which have some capacity remaining to take on more debt — can only buy time.
As attractive a world of ever increasing wealth would be, it is only a dream. It is much more probable that wealth and debt will shrink together. This will happen either because of a collapse of the house of debt that has been built up – or through drastic taxes as proposed by Piketty. As for politicians, it doesn’t matter whether or not Piketty`s theory is wrong, if it is useful."
Another possibility (my usual guess) is that ninety percent of the world could become essentially slaves.
P.S. a summary of Piketty, via a comment in MR

Friday, November 21, 2014

Still reading Todd

Still in the early parts of "The causes of progress" by Emmanuel Todd since I could not figure out what he meant by progress. He says that it is cultural/intellectual and economic progress is one aspect of it but only a secondary one. Female literacy seems to be a strong aspect of it. But learning aspect extends to the age of child bearing, and he uses female marriage age as one aspect of literacy in the old days. There are two maps of Europe  on pages 32-33; the first about countries with national product per capita exceeding $10,000 in 1979 and age at marriage of women over 27 around 1840. They are identical. Very intriguing and interesting book so far. It depends on good data and identifying the important factors for progress, whatever it may mean. Somewhere, he says that Kerala should have progressed much faster but is surrounded by backward areas. So, as usual other factors like geography diffusion come in. A review complains that Todd's data about China are disputed. So, some of his analysis would be suspect. Here is one review

Thursday, November 20, 2014

Mark Thoma on Piketty

From When Piketty argued for income redistribution, he changed economics "What Piketty has done in his book is revive the study of the distribution of wealth without violating the positive and normative distinction that economists hold so dear. It’s fine to leave questions about the distribution (or redistribution) of wealth to the political arena, but how can politicians make good decisions if economists cannot tell them about the laws of motion that determine the evolution of wealth and income distributions? Whether or not Piketty is correct about the fundamental determinants of these distributions remains to be seen, but he deserves much credit for reviving these questions and bringing them to the forefront of economic research. 
Another thing Piketty deserves credit for is the revival of the historical, narrative methodology as a means of evaluating theoretical models. I was taught that economists should follow a “scientific” methodology. One first writes down a mathematical model, derives hypotheses from it, and then takes those hypotheses to the data to be evaluated through formal statistical tests.
Piketty shows us an alternative where historical narratives rather than formal statistical tests can be used to draw important conclusions about the ability of particular models to explain the world. Economists, to a large degree, have lost the historical methods and perspective – knowledge of history would have served us well during the financial crisis – and Piketty deserves a lot of credit for reviving this important way of understanding the world."
Discussion at Economist's View and also another discussion on Branko Milanovic response.

Wednesday, November 19, 2014

Steven Landsburg on Alexander Grothendieck.

gives some glimpses of Grothendieck's mathematics. An earlier post by the same author.
See also the Wikipedia article on Grothendieck- Reiman-Roch Theorem for a glimpse of Grothendieck's approach "The significance of Grothendieck's approach rests on several points. First, Grothendieck changed the statement itself: the theorem was, at the time, understood to be a theorem about a variety, whereas Grothendieck saw it as a theorem about a morphism between varieties. By finding the right generalization, the proof became simpler while the conclusion became more general. In short, Grothendieck applied a strong categorical approach to a hard piece of analysis. Moreover, Grothendieck introduced K-groups, as discussed above, which paved the way for algebraic K-theory."

A Mukesh song from Bandini (1963)


Cosma Shalizi on Piketty

I missed his brief review from July 2014, where he reviews a few other books and links to some reviews he liked.

Monday, November 17, 2014

Depression special

in Nature. I hope that it is not a commercialisation of depression. Check also Crazy Like Us.

Misha Gromov

Though Alexander Grothendieck is considered one of the greatest mathematicians ever and I was aware of his name and influence from 1966 or so, I was completely untouched by his work. One great mathematician of recent years is Misha Gromov. I tried to learn a little bit of his work after the age of fifty and even wrote an expository article with Martin Bridosn (M. R. Bridson and G. A. Swarup, On Hausdorff-Gromov convergence and a theorem of F. Paulin, Enseign. Math. 40 (1994), 267-289 file:///C:/Users/swarup/Downloads/ensmat-001_1994_40_3-4_a_004_d%20(1).pdf , I am not sure whether it works) on one of his ideas. Here is a small article about him. An interview with Gromov.

Sunday, November 16, 2014

Back to Emmanuel Todd

 Now to the next book "The Causes of Progress". I seem to have found some thing for my old age. Some hints, empirical stuff, lot of speculation and hand waving, some things that can be tested but always other causes and alibis for exceptions. These are books from eighties, seem to be ignored in the Anglo-Saxon world and so probably not much research to check them against ( I found one. Testing Todd: Global Data on Family Characteristics). But engaging and stimulating.

Alexander Grothendieck RIP

An obituary in The Telegraph.
An earlier appreciation by Pierre Cartier
A longer article by Cartier 
P.S. (some reminiscences)Mathematically, I had very little interaction with Grothendieck or his work. I saw him a few times during conference in Bombay around 1968, I think. There were a few Fields Medal winners (past and future) around waiting on his every word. And I.B.S. Passi, then a lecturer in Kurukhetra was also at the conference. Passi was young and unknown at that time and came all the way to discuss with Grothendieck, though his research interests were very different. We were sniggering at the prospect. But Passi did meet Grothendieck in the park next to TIFR and talked at length to Grothendieck. What I vaguely remember is that Grothendieck after patiently listening to Passi expressed his lack of expertise in the topic and suggested other names like J.P. Serre with whom Passi could correspond. Another vague memory is that Grothendieck attended a formal dinner in Taj in bare feet. Another memory is of his student Pierre Deligne in 1974. I lived an an IHES apartment above his in Bur-sur-Yvette. Deligne used to leave his apartment unlocked. One reason given by others: there was young woman around with a child supposed to by Grothendieck. She seemed unstable and lost. Deligne apparently left the apartment unlocked so that she could use it when she wanted to feed her child. I do not know what happened to the lady or child. Apparently Grothendieck had five children by three different women.

Saturday, November 15, 2014

Friday, November 14, 2014

A seductive book

I completed a first reading of "The explanation of ideology: Family structures and social systems" by Emmanuel Todd. Lot of it went over my head and I am not sure about lot of the details and Freudian overtones. But it always seemed to me that childhood is important in forming one's outlook of the world and some of it stays with one throughout out one's life. But the processes are not clear. Todd starts with family systems and builds up a theory of its influence on one's ideology and the propensity of different regions for different ideologies depending on the prevalent family systems. As expected, the processes of change are complex depending on different family systems in the same area, growth of literacy, particularly female literacy, and various other factors like economic, war, migratory factors. I got only glimpses of some of the ideas but it already seems to have an effect on the way I look at various parts of the world, particularly the Moslem world. It is book that I will keep going back to for a few years.
Earlier links to Emmanuel Todd here, here and here.
P.S. A flavour of Todd here

Tuesday, November 11, 2014


two books for a while. The first is James Macdonalds's "A nation deep in debt". The second is Emmanuel Todd's "The Explanation of Ideology". Both are interesting but much of it, particularly in the first book, is going over my head. It may take a few weeks to complete reading them and much longer to assimilate some of the two books. IO remember reading off and on William Thurston's "The Geometry and Topology of three-manifolds" from 1978 to 1988 or so and assimilating about five percent of it and started using it about 1990. Long road ahead.

Sunday, November 09, 2014

Two interviews with Emmanuel Todd

Rising Literacy and Shrinking Birthrate: A look at the Root Causes of the Arab Revolution, May 20, 2011 from Spiegel International
An interview about Ukraine October 14, 2014. Todd:"It seems to me that Germany is increasingly moving to power politics, to veiled expansion. Germany’s reality since the reunification has been the undermining of unstable government structures in Europe. Remember the now nonexistent Yugoslavia and Czechoslovakia, and today it seems to be Ukraine’s turn.
For the majority of Europeans, Ukraine is not of much interest. But not to the Germans. Since its reunification, Germany has established control over practically the entire space formerly dominated by the USSR, and is using it for its economic and industrial benefit. Herein, by the way, lies one secret of Germany’s economic success. Faced with serious demographic problems and low birth rates, it needs a cheap and qualified workforce. So, in this logic, it is a very beneficial operation for Berlin to secure, for example, two-thirds of Ukrainian labor."

P.S.A criticism of Todd and

Saturday, November 08, 2014


"When massaging the erogenous zones of key demographics is not enough to guarantee a victory, American politicians are increasingly turning to the complimentary tactic of suppressing voting by demographics that tend to support their opponents." from US midterm result reveal dark art of voter manipulation
"The idea of a multilateral solution plays straight into the hands of the perpetrators, the multinationals, their lawyers and the big four. You can almost hear PwC, Ernst & Young, Deloitte and KPMG chuckling about the G20 from their city eyries. While solemnly pontificating to governments on tax policy, in the very next breath they go about showcasing the latest in tax avoidance fashions to the world's premier tax cheats." from Cayman Islands court leaves tax agreement in tatters

Thursday, November 06, 2014

Intimations of mortality

 I went to the main university library today to pick up some Emmanuel Todd books with Lawrence Reeves, a student here in the nineties and teacher now. The spaces between the shelves are narrow and it is difficult to reach those at the ground level.After a while Lawrence says "You go and sit down; I will bring the books". When we finally go to check out the books, it turns out that Lawrence can borrow them for three months whereas as I can borrow only a for a month.
Then went to visit a specialist whom I know for some time. At one stage, I told him that my health seems to have deteriorated during the last year. He says "I can see it" and also suggests that I also visit another doctor for a related problem.
In any case, I have Todd's "The explanation of ideology: family structures and social systems" to read or now. I have never been satisfied with materialistic systems of social philosophy; may be Todd has some hints.

Tuesday, November 04, 2014

Khursheed Bano

would have been 100 years old this year. A nice write up about her in Songs of Yore The Doyenne of Vintage Era: Khursheed
One of her best songs
A somewhat untypical song, a duet with Rafi, from Aago Badho 1947 starts at 41:22

Monday, November 03, 2014

Compliance sector

"In the last few days, a new industry has been identified which employs over a million people in Australia, making it one of the largest sectors, although no official data is published on it. This sector has been labelled in the press this week – the ‘red tape’ industry or the ‘compliance sector’. It is growing faster than any other industry in Australia and probably elsewhere, although there is no data available that can tell us that. It is largely unproductive because it undermines the productivity of other workers. " from Self-imposed corporate regulations control workers but choke productivity by Bill Mitchell.
From Sydney Morning Herald "However, a frightening report released this week by Deloitte Access Economics fingers the real red tape culprits – the private sector business community whose compliance costs leave the government looking like rank amateurs when it comes to creating and paying for what, in many cases, are unnecessary and unproductive self-imposed rules.....To most readers who work for large organisations there will be a clear moment of recognition with the assertions that the workday is littered with meetings that seem unnecessary or written approvals that need to be in triplicate.
The Deloitte report shows that the time required for employees to comply with self-imposed rules has become a crippling burden. Middle managers and senior executives chalk up 8.9 hours a week complying with the rules that firms set for themselves, with other staff spending 6.4 hours." 

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