Poor Economics--- By Abhijit Banerjee and Esther Duflo

 

 

Almost a decade ago,long before they won the Nobel Prize,Economists Abhijit Banerjee and Esther Duflo published 'Poor Economics'.The book was a runaway success and remains immensely relevant today.

'Poor Economics' is written simply and clearly -- not one econometric model or Game Theoretic theorem in sight -- and argued convincingly with solid data backup. For anyone concerned about the issue of poverty and all that goes with it, the book is an essential read -- both educative and deeply disturbing.

The authors begin by highlighting a seemingly obvious but oft disregarded proposition -- to tackle a problem one needs to understand it in painstaking detail. And if it involves human beings, one needs to get up close and personal and understand the mind sets, the motivations and the basic emotional drivers of the people involved. In practice, despite pious protestations about the emergent need for poverty alleviation by both academics and policy makers, poverty tends to be studied from a distance and the poor set up as two-dimensional caricatures.  ‘Ideology, ignorance and inertia’ appear to be the key determinants of both theory and policy and the result is that the outcomes are less than satisfactory, to say the least.

Such trenchant criticisms are not simply a radical rant of fringe looneys -- these are mainstream Ivy League economists and, besides, they offer logical argument to counter ideological theories and  also a practical method, the much hyped Randomized Control Trials, to evaluate  policy measures. To top it all, they present an 18 country database derived from field level studies to back up their conclusions.

The authors are suspicious of broad, simple and sweeping solutions that promise to wipe out poverty in one fell swoop. They insist that a more appropriate approach is to focus on particular issues in specific environments and design policy measures after rigorous testing in the field using RCT for validation. Randomized Control Trials, brilliantly borrowed from the medical field, are best described in the authors’ words:

 ‘In an RCT…individuals or communities are randomly assigned to different “treatments”— different programs or different versions of the same program. Since the individuals assigned to different treatments are exactly comparable (because they were chosen at random), any difference between them is the effect of the treatment.’………

 

‘A single experiment does not provide a final answer on whether a program would universally “work.” But we can conduct a series of experiments, differing in either the kind of location in which they are conducted or the exact intervention being tested (or both).’

The authors don’t confine themselves to general assertions; instead they examine a series of poverty related issues ranging from nutrition, public health, primary and secondary education to fertility and finance and throughout, the focus is on the poor – their circumstances, their compulsions and deriving therefrom their life decisions.

The process is simple and immensely powerful—from grass roots investigation and interaction to comprehensive understanding; from understanding to policy formulation; from formulation to validation and from validation to implementation or acceptance for implementation.

In every one of these explorations one finds fascinating insights. One revealing conclusion relates to ‘time inconsistency’ in human behaviour. Most humans tend to place a higher value on present gratification as opposed to future gratification and this impacts many decisions including those relating to present consumption versus saving. “I’ll consume today and save tomorrow, definitely!” But that tomorrow never comes. This tendency is aggravated when the future is both uncertain and unpromising or frankly bleak and resources are obviously inadequate to make any difference even in the medium to long run. Some of the seemingly ‘irrational’ consumption and savings decisions of the poor may well be very rational given their circumstances! 

The same logic applies to a tendency to avoid the immediate inconvenience of standing in line for a child’s vaccination today and postponing it to some undefined future occasion. Even when the benefits of vaccination for future health of the child are known, the immediate ’headache’ of getting it done is small but significant. But since it is small it can be overcome with a slight ‘nudge’— a small but significant incentive. This was tested and found effective -- a gift of a modest amount of dal was enough to tilt the balance in favour of immediate vaccination instead of postponing it in a study done in Udaipur district in Rajasthan.

A whole series of other poverty related issues are examined by the authors. What are the consequences of the ‘Elite Bias’ in primary education? Has the focus on the best and brightest and the neglect of the rest in school education severely damaged educational outcomes? Is cheap food through the public distribution system the best way of dealing with poor nutrition amongst the poor or are there other areas that should be focussed on? Why have the plethora of nationalized banks not met the credit requirements of the poor? How come the money lender is still important in their lives?

 Are microfinance institutions the new miracle cure for the credit requirements of the poor wannabe entrepreneur? A detailed study of this issue reveals that while MFI’s do help significantly, the miracles are few and far between. The rags to riches stories peddled by these institutions are exceptions not the average rule. The ‘businesses’ most of the poor run are simply not profitable enough to transform their lives, MFIs notwithstanding! Other solutions have to be found.

Why are preventive health measures which are both cheap and effective neglected and expensive cures focussed on? What makes the admittedly inadequate state expenditure on health largely infructuous? What are the consequences of asymmetry of information amongst the poor, and moral hazard amongst medical practitioners, for the health of the poor?

The list goes on and on.

The best that the blog format adopted here can do is to give a brief glimpse of the insightful nature of this work. The book is long and by no means a light read but the effort to work through it is enormously rewarding.

Happy reading!

Masters of Thriller Writing --- Gavin Lyall

 

 

Gavin Lyall (1932-2003) flew with the RAF, worked as a journalist and then, from the early 1960s, switched to full time thriller writing.

Lyall wrote about fifteen odd thrillers and several of them are amongst the best examples of the genre, no exaggeration!

My personal favourite is ‘Midnight Plus One’ set in Europe in the early sixties. Just in case someone looks at the setting and feels it is dated and therefore likely to be boring, think again. Once you start the book it is almost impossible to put it down. The hero, a Brit, worked in France during the Second World War with the French Resistance and built up a very tough reputation. Post war, he is back in Paris as a business consultant, when a wartime acquaintance offers him a lucrative and rather simple -looking contract -- to escort a rich businessman by road to a European destination.

The journey begins rather inauspiciously with a murder and then races across Europe at high speed, gathering gun-battles, double-crosses and assorted thrills en route. The protagonist is seriously impressive in a silent, strong fashion; the plot is a piece of twisted cleverness and the pace is gripping. In addition to the high-grade thrills, Lyall adds one rare and impressive feature to the narrative -- a quiet love story that is knitted into the tale with a very delicate touch and establishes an effective counterpoint to the high intensity violence all around it.

Lyall has, in addition, written a set of aviation thrillers -- pilots and planes involved in all sorts of mayhem -- and a series featuring Major Harry Maxim, a widowed SAS officer, who finds himself dealing with secret and sensitive situations in the company of secret servants, one of whom is female, attractive and unattached.

All of these books are simply outstanding thrillers and Lyall a grand-master of the genre. Availability is, however, a problem and several of his books are very highly priced -- even the Kindle editions. The good news is that Midnight Plus One is priced reasonably on Kindle. Of course, second hand book shops, where such entities still exist, are the logical places to look for Lyall.

Good luck and happy reading.

  

An Introduction to Haiku – An Anthology of Poems and Poets from Basho to Shiki with translations and commentary By Harold G Henderson

 

 

Clouds come from time to time

And bring to men a chance to rest

From looking at the moon

                                           Matsuo Basho

(Translated by Harold Henderson)

Good translations of poetry are particularly difficult because the translator needs to be not only a master of the two languages involved but also a poet of serious ability. Reading Harold Henderson’s translations of some of the major Japanese Haiku poets of the 17^th and 18^th centuries confirms that he meets both criteria. From 1927 to 1929 he worked as the Assistant to the Curator of Far Eastern Art at the Metropolitan Museum of Art. He then went to Japan for three years and returned to teach Japanese at the University of Columbia, New York. Professor Henderson thus meets the academic criterion very easily. And when you read his translations of some of the greatest Haiku ever written, you will agree that he has, in addition, poetic sensibility of a very high order indeed.

The book has two chapters that introduce the reader to the main characteristics of this poetic form and tell us a little about the early developments of this genre. And then begins the poetry, and that is seriously powerful stuff.

It can be argued that the ‘classic’ introduction to Haiku in English are the four volumes titled Haiku by RH Blyth, scholar of Japanese culture and, apparently, a contemporary and friend of Harold Henderson. The four substantial volumes  certainly have a great deal more content than Henderson’s one slim volume-more haiku and many references to haiku equivalents in English poetry etc etc. However, Henderson fans will argue, in turn, that Henderson’s translations have more poetic value, if that means anything at all.

Just for a bit of fun, I shall offer translations of a few major haiku by both scholars, and readers can decide which versions they like best.

 Matsuo Basho (1644-1694) (Poet and Zen Buddhist monk of Samurai blood)

Context is often crucial in understanding haiku. On one of his many travels Basho writes that he climbed up to Takadate, the site of a famous castle and of the final battle of Japan’s most famous warrior hero, Yoshitsune, ‘thinking of bygone glories’. On reaching the site Basho found just ‘a wilderness of grass’, and he sat down and wept.

 

 

He then composed the following haiku

Summer grass:                                                                  

Of stalwart warriors’ splendid dreams                       

The aftermath                                                                                                       

(Henderson’s translation)    

 

Ah summer grasses!

All that remains

Of the warriors’ dreams

(Blyth’s translation)

 

One summer night Basho went for a boat ride in the Bay of Akashi. On the shallow sea floor fishermen had laid out earthenware pots which functioned as traps -- an octopus would, in the dark, enter the pot thinking it to be a crevice in the rocks and then it would be unable to come out.

Basho composed the following haiku:

Octopus traps; how soon                                                                                         

They are to have an end-these dreams                       

Beneath the summer moon (Henderson’s translation)                                                  

 

 

 

 

The octopus trap

fleeting dreams.

Under the summer moon

(Blyth’s translation)

When it was evident that he was dying, Basho’s friends asked him for his ‘death poem’. Basho initially refused saying that all his poems of the last ten years were death poems but the next morning he presented the following haiku:

On a journey, ill,

And over fields all withered, dreams

go wandering still.

(Henderson’s translation)

 

In Henderson’s words “Surely as lovely a farewell as any poet ever gave to the world.”

Henderson’s book is available on Amazon and the Kindle edition is cheap-- INR 333.39! The paperback edition is ridiculously expensive. Blyth’s Haiku in four volumes does not appear to be available at present.

Happy reading!

Identity -Contemporary Identity Politics and the Struggle for Recognition By Francis Fukuyama, Stanford University

 

Francis Fukuyama, political scientist, author and Professor published Identity in 2018 and his very first sentence, in the Preface, is a dead give- away of his focus and concern in this book.

Fukuyama begins by saying “This book would not have been written had Donald J Trump not been elected President in November 2016.”

The author’s obvious concern is with the rise of “populist nationalism” led by charismatic and megalomaniac leaders who use the democratic electoral process to rise to power and then undermine the very institutions that provide checks to power and constitute the core of liberal democracy.

For those who value the liberal democratic paradigm, the emergence of Trump, Putin, Erdogan and their ilk to leadership positions is a political phenomenon that needs understanding and explanation.

The author argues that understanding politics requires an understanding of human behaviour which in turn needs a basic understanding of human nature. Amongst the primary drivers of human nature are reason, desire and the need to be accorded recognition and dignity.

This last need manifests in two forms- the need to be recognized as a human being fundamentally equal to everyone else and, in some cases, to be recognized as superior to others. The latter need is characterized by a compulsive exceptionalism that seeks ‘large effects’ and big bangs. The transition from feudal autocracy and authoritarianism to liberal democracy involves control and regulation of this need to be recognized as superior and the award of equal recognition and dignity to all. The success of this effort, however, is not always sustained and sometimes suffers a rollback as appears to be happening in contemporary USA.

The Industrial Revolution and the emergence of market economies in the West, and elsewhere, led to both major economic change-growth of national incomes and of income and wealth inequality- and social disruption. Traditional social structures crumbled with migration, urbanization and industrialization. Over time this led to a growing alienation and resentment especially among those who were, or thought they were, unfairly left behind. Resentment from growing inequality is, of course magnified by any additional economic shocks that may occur like , for example, the 2008 recession.

The social upheaval consequent on rapid and unequal economic growth and technological change also raises problems relating to personal identity.  If an inclusive national identity integrating the pluralities of most modern societies is not built, identity tends to coalesce around narrower emotionally charged social formations like race and religion.

The need for recognition, a strong undercurrent of resentment and the potential for emergence of narrow sectarian identities together create opportunities for the emergence of populist leaders. Such leaders create and mobilize a constituency by fanning the flames of resentment, defining and demonizing an enemy and providing support and recognition to large -group identity structures. Using the democratic process to come to power they proceed to undermine the very foundations of liberal democracy.

The result is the emergence of ‘illiberal democracy’ characterized by the politics of resentment and narrowly defined identities.

One significant attribute of identity politics is the barriers it erects against free reasoned discourse essential for a democracy. All issues of public significance are viewed thru the prism of identity and the  passions attached thereto. Logic and reason are therefore set aside in favour of the emotional compulsions of identity.

The author emphasizes that national identity can be built from the ground up and underlines the importance of   inclusive national identities for security, development, conflict resolution and good governance and social welfare.

The assertion that inclusive national identities that incorporate ‘a culture of tolerance and mutual sympathy’ can overcome narrow ‘partisan passions’ is heartening. However, the ground realities of hate and intolerance in the USA and elsewhere, cast a dark shadow  on the future of the liberal- democratic paradigm.

Some more gems from Verse and Worse by Arnold Silcock