Wednesday, January 11

Amartya Sen: The economic consequences of austerity


Here is a good speech made by Amartya Sen, the Nobel Prize winner. And what do I know about austerity, eh? Or economics? Not much at all. I also take his point about how the Allies went too far in punishing the Germans after WW1. Carthingnian levels of punishment. When the Romans ripped out the entire country, after killing as many as they could, they sold the rest of the carthignans into slavery, destroyed pretty much every vestige of the civilisation was wiped out. Not content with that, they literally sowed the fields with salt. Its the last piece which I absolutely admire from one point, sowing the fields with salt means that it will be impossible to grow anything there. There are many other examples. Think about what the mongol hordes did in the various parts of the middle East, they knew that their nomadic and horse borne soldiers were too few to control the teeming millions so they simply cleared them out, literally depopulated the middle east like in Iran and Iraq, this put paid to the development of the Islamic state for centuries. 

You can ask if Versailles was indeed that bad, the desire for revenge is strong but there is a big difference, that was war. And in wars, the losers are dammned. At this moment, we are very nice and polite to the losers, there are ceasefires and there are united nations peace keeping forces and and and, so in the early days, they had total war where the losers did lose out in a big way, but remember one other historical fact. But think about other cases where war happened, yes, war happened but the victors conquered their lands and also wanted to use that land and civilisation, that's why most wars ended up with the life going on pretty much as it was before the war with a small blip as the victors wanted it to, so this example is rubbish 

The other aspect that Amartya Sen missed out was this argument. Fine, you take on debt, but that debt has to be paid by somebody, right? And the key thing is that the repayment has to be made out of productivity gains. Now think about it, where is the productivity gains? Frankly, there have not been that much of productivity gains. And as I have mentioned before, if you bring on debt and use it to do day to day spend, then that's wasted spend. So the question is, at which point in time do you say, sod this, I am not going to take on more debt? Because I cannot pay for this. Think about it, what can Greece do? Say for argument's sake, we remove all debt today. Make it debt free. Ok? Then what? They will again pick up large amounts of debt and will it get productively employed? How? Where? I doubt it totally. So what you do is to stop taking on more and more debt when you know you cannot repay it. You have to draw the line, reduce spending. If you cannot do it right now, you cannot do it later, but you have to start now. Otherwise you are borrowing from your children and both YOU AND YOUR children will be poorer. 

Nobody likes to spend less, right? But this is the question, how do you do it? When you cannot raise the money / revenues, where do you get the revenues? People have to realise that Keynesian economics which expects investment in dire times to help prime the economy so that it will grow. But what Sen didnt answer, what do you do if the growth doesnt happen or the productivity does not happen? You end up with a giant amount of debt and worse even and end up with more problems. What can you do is to then reduce spend and try to make do with less, save money to reduce the debt and interest payments. You have to reduce spend. Adam Smith's equation, have good economic opportunities for the populace and revenues for the state to provide public services. What if there are no good economic opportunities? Where do they get the monies for the state? Its obviously not coming from the populace, so it comes from others (other countries, other companies, other people like other children in the future). So who pays for this borrowing when the populace isnt earning enough? Nobody is asking that question, the emperor has no clothes. 

So you reduce spend, reduce public spending, tighten the belt, train your populace in better education and skills and slowly build back the economy so that it becomes productive again and has a public sector which is sustainable at their level of development and economic poweress. 

Anyway, have a think about it son, its an interesting argument and in this case, I think the general populace understands, you cannot spend more than you have.... 



Amartya Sen: The economic consequences of austerity 

The judgements of our financial and political leaders are breathtakingly narrow. Nobel Prize-winning economist Amartya Sen considers the alternatives. 

by Amartya Sen Published 4 June, 2015 - 16:33 

On 5 June 1919, John Maynard Keynes wrote to the prime minister of Britain, David Lloyd George, “I ought to let you know that on Saturday I am slipping away from this scene of nightmare. I can do no more good here.” Thus ended Keynes’s role as the official representative of the British Treasury at the Paris Peace Conference. It liberated Keynes from complicity in the Treaty of Versailles (to be signed later that month), which he detested. 

Why did Keynes dislike a treaty that ended the state of war between Germany and the Allied Powers (surely a good thing)? 

Tuesday, January 10

The Tampon: A History

Quite an interesting topic son. And nothing to be embarrassed about. You'll face this if you haven't done already. From an economic perspective, think about the fact that improvement in handling menstruation for women can help them be more productive. Unlike in countries in India where they are locked up for the duration of their periods. Or they cannot work properly because of lack of tampons or pads or what have you. Truly ridiculous. 
You have to learn to be sensitive about this son. Women have interesting reactions to their periods and men interested in this. Heck there are apps out there which track a woman's periods so that men can manage their behaviour around them during this time. Some women have strong reactions mentally physically sexually or what have you. Some don't. It's a matter of delicacy. Their biochemical balance changes and one should learn about how and what and where. No rules son, you just have to be cognisant of this and be there for your girl. Hugs and cuddles help along with a thick skin. 
This story will help you understand a bit. 

SASIMOTO / Shutterstock / Kara Gordon / The Atlantic

On Aug. 18, 2011, a thread titled “I design tampons. AMA!” appeared on the news-conversation website Reddit. Hosted by a user named “karnim” who identified himself only as a college-aged male research-and-development intern at one of the “big three” tampon brands (Tampax, Kotex, and Playtex), the thread began with a polite invitation to “ask me anything” (AMA) and a disclaimer. “Much of my work is confidential, so I can't give details about my projects,” karnim wrote, but he could answer “overall” questions about tampons.
In the grander canon of AMA threads—online Q&A sessions hosted by Reddit users with compelling life stories or careers—karnim’s wasn’t the most glamorous or flashy. President Obama, for example, participated in an AMA in 2012. But karnim soon found himself avalanched with reader questions about tampon technology, ranging from the curious (“Why don't they just stop making the cardboard ones?”) to the wisecracking (“Can you make medicated tampons to make women stop actin’ fool when they get their menses?”) to the imploring (“Can you please make tampons with a black or flesh-coloured string? Please?” “How about one that you can leave in for 10 hours and not worry about it?”).
Ten hours later, karnim ended his IAmA, exhausted. “Sorry y'all, but it's been 10 hours, and the questions just keep coming. I need a break.”

Monday, January 9

How John Adams and Thomas Paine Clashed Over Economic Equality

Hope your populism essay went well? I was reminded of our discussion yesterday when I read this article on how john Adams and Thomas Paine went head to head. Reminds me a bit of how Gladstone and Disraeli went ding dong. 
But you can see the populism perspectives here in this article. The chancellor of the British exchequer today, who incidentally read history at oxford, plans to resurrect a body last seen during Disraelis time to retire the government debt. 
Fascinating to see how political ideas and economic ideas dovetail. I'm always reminded of the old quote, if you want a new idea, read an old book. 
My search for a university goes on. Oxford is out. Cambridge doesn't allow part time PhDs. Brunel is considering my application. LSE, SOAS and UCL applications are pending. Let's see what happens. I even contacted Kings. I think the problem is that I'm crossing too many subject areas, legal, history, religious law and two geographies. Maybe I have to rethink this through if I don't get admission. 
Anyway. Have a lovely weekend kannu. I'm going for a gay parade this weekend, a 10 km hike. Also lecturing at the King's college here twice on Friday and Sunday night. And there's an MBS lecture on Monday. Keeping myself busy. I'm missing you all and you gadha haven't told me what you wanted from Singapore! 

How John Adams and Thomas Paine Clashed Over Economic Equality
(via Instapaper)

Here’s John Adams on Thomas Paine’s famous 1776 pamphlet “Common Sense”: “What a poor, ignorant, malicious, short-sighted, crapulous mass.” Then comes Paine on Adams: “John was not born for immortality.”
Paine and Adams may have been alone among the founders for having literary styles adequate to their mutual disregard. “The spissitude [sic!] of the black liquor which is spread in such quantities by this writer,” Adams wrote of Paine, “prevents its daubing.” Paine: “Some people talk of impeaching John Adams, but I am for softer measures. I would keep him to make fun of.”
They went on and on.
The Paine-Adams antipathy wasn’t just personal. Its sources lay in the founding generation’s deep political divisions over economic equality. Those who don’t know there was a founding political division over economic equality can thank the many historians — including even some biographers of finance-savvy founders like Superintendent of Finance Robert Morris — who feel more comfortable with philosophies of government, issues in constitutional law, and (if they get into economics at all) the legacies of Robert Walpole, Jacques Necker, and David Hume than with day-to-day American economic realities, and with the full range of 18th-century thinking from elite to working-class, on monetary and finance policy.
Things John Adams hated about “Common Sense” are revealing. One was the pamphlet’s widespread reputation as the tipping point for America’s declaration of independence from England. Adams thought that was nonsense. The only novel thing in “Common Sense,” Adams believed — and he meant it in a bad way — wasn’t what he cast as its belated, derivative call for American independence. It was what he blasted as Paine’s “democratical” plan for a new kind of American government, which flew in the face of the balanced republicanism that Adams loved. That part of the pamphlet was its only important part to John Adams, but it is often ignored or glossed over in favor of celebrating what Adams thought the pamphlet never did: persuade Americans to support independence.

Sunday, January 8

23 Emotions people feel, but can’t explain

  1. Sonder: The realization that each passerby has a life as vivid and complex as your own.
  2. Opia: The ambiguous intensity of Looking someone in the eye, which can feel simultaneously invasive and vulnerable.
  3. Monachopsis: The subtle but persistent feeling of being out of place.
  4. Énouement: The bittersweetness of having arrived in the future, seeing how things turn out, but not being able to tell your past self.
  5. Vellichor: The strange wistfulness of used bookshops.
  6. Rubatosis: The unsettling awareness of your own heartbeat.
  7. Kenopsia: The eerie, forlorn atmosphere of a place that is usually bustling with people but is now abandoned and quiet.
  8. Mauerbauertraurigkeit: The inexplicable urge to push people away, even close friends who you really like.
  9. Jouska: A hypothetical conversation that you compulsively play out in your head.
  10. Chrysalism: The amniotic tranquility of being indoors during a thunderstorm.
  11. Vemödalen: The frustration of photographic something amazing when thousands of identical photos already exist.
  12. Anecdoche: A conversation in which everyone is talking, but nobody is listening
  13. Ellipsism: A sadness that you’ll never be able to know how history will turn out.
  14. Kuebiko: A state of exhaustion inspired by acts of senseless violence.
  15. Lachesism: The desire to be struck by disaster – to survive a plane crash, or to lose everything in a fire.
  16. Exulansis: The tendency to give up trying to talk about an experience because people are unable to relate to it.
  17. Adronitis: Frustration with how long it takes to get to know someone.
  18. Rückkehrunruhe: The feeling of returning home after an immersive trip only to find it fading rapidly from your awareness.
  19. Nodus Tollens: The realization that the plot of your life doesn’t make sense to you anymore.
  20. Onism: The frustration of being stuck in just one body, that inhabits only one place at a time.
  21. Liberosis: The desire to care less about things.
  22. Altschmerz: Weariness with the same old issues that you’ve always had – the same boring flaws and anxieties that you’ve been gnawing on for years.
  23. Occhiolism: The awareness of the smallness of your perspective.