Nahar Dinur

So low in the West, the arrest of our Solar Noon

To caves of frost, lost- Autumn Moon

For Life is Thirst & Time its River

Not Lethe laves Love's first mirror.

Envoi

Prince! Proletarian sweat being as but petroleum to Heaven's horseless chariot

Thy heart's houseled yet, sucking off the concierge at Gehenna's Marriott.

Ratik Asokan looking for 'Reason' in all the wrong places

Reviewing Parwardhan's film 'Vivek' in the NYR, Ratik Asokan writes

(Dabholkar, Pansare, and, to a lesser extent, Kalburgi) are presented as classic figures in the tradition of the Enlightenment, promoting rational thinking to fight Hindu superstition, and the hierarchy of caste.

Dabholkar was a Doctor who sponsored a bill against black magic and fake 'healers' which was passed after his assassination in his native Maharashtra. He belonged to a long established 'Rationalist' tradition in India. 
Pansare was a Communist politician though of declining influence. Kalburgi was a Lingayat who favored separation from the Veerasaivas. 

It is likely that they were killed because they were easy targets who, nevertheless, had enough prominence to generate publicity for the perpetrators- thought to be influenced by a self-proclaimed God-man who used to work in the UK as a hypotherapist. 

All this has nothing to do with Narendra Modi. The murders occurred under Congress rule. Yet Asokan titles his piece 'Looking for 'Reason' in Modi's India'. Yet, it is scarcely reasonable to blame a politician for things which happened under his predecessor. 

Similarly the following incident occurred before the BJP came to power in Uttar Pradesh. A man was, probably falsely, accused of stealing and killing a calf, and then his family was attacked. But, this sort of incident has been common since much before there was any BJP or RSS. 

In the second section Patwardhan visits two places that have become infamous for religious violence. He speaks to the family of Mohammad Akhlaq, a Muslim man who was lynched by his Hindu neighbors in the village of Dadri, Uttar Pradesh, for the alleged crime of consuming beef (this crime sparked huge protests)

By contrast, Gujarat was firmly under the BJP when the Una atrocity occurred-

 Later, with the Dalit parliamentarian Jignesh Mevani, he travels around Gujarat on an inspiring civil disobedience march sparked by a gruesome incident in the town of Una, where seven Dalit men were beaten in public for skinning a cow carcass.

What was the BJP's reaction? The CM resigned, though citing old age. 4 policemen (all high caste) and all the perpetrators (except perhaps two Dalit boys) were charged and the trial has been expedited. Mevani did well out of this atrocity but he is still only a Legislator, not a Parliamentarian. Rajesh Chudasama kept the seat at least partly because the BJP pulled out all the stops in placating Dalits in the constituency.

It is plausible to suggest that the BJP is behind attacks on Muslims- because only 8 per cent of Muslims vote for the BJP. It is not plausible to suggest that they will tolerate attacks on Dalits because they need their votes and, in any case, their Hindutva ideology requires the elimination of this invidious distinction.

This is the central problem with Patwardhan's film. Its narrative contradicts common sense. It is reasonable to believe that Trump is against Mexicans, it is unreasonable to believe he is also against New Mexicans or Hispanics in Florida. Similarly, to say Modi is anti-Muslim is plausible. But to say he is also anti-Dalit is crazy. His party will become un-electable.

Asokan next writes something yet more absurd-

 The final section is set at two premier Indian universities. Here the Hindu right’s fear of rational thinking is given its purest expression. At the Jawaharlal Nehru University in Delhi, the BJP’s student wing harasses progressive students and teachers who question the basis of Hinduism and its caste order; at Hyderabad Central University, they launch a smear campaign of such ferocity against the Dalit students’ association that a brilliant scholar, Rohith Vemula, is driven to suicide in what has been labelled an “institutional murder.”

JNU is a bastion of the senile Left which is incapable of rational thinking. Its 'jhollawallahs' are a godsend to the BJP. Why? They are similar to the 'circular firing squad' represented by the fringes of the Democratic Party. Their antics get a lot of media exposure and generates a huge backlash in favor of the BJP. Look at Kanhaiya Kumar- the JNU's rising star. He helped the BJP to gain the Begusarai constituency by splitting the Opposition vote.

What about Rohith Vemula, who blamed both the Communists and the Ambedkarites for his suicide? His grievance was that the Left wanted to use the Dalits for their own ends while the Dalits would not recognize him as one of their own because his Dad was OBC. Moreover, he had given up a STEM type subject- which could have got him a well paying job on the basis of his skill-set- for Sociology, which is useless and where his belonging to the wrong caste meant he couldn't become a Kancha Illiah type icon.

Even when he'd done what every sensible student leader does- viz. bash up his opponent- he had not gained money and prestige as an extortionist because his opponent had gone running to his Mummy who had filed a court case against him! To do well, he'd need to actually kill a few people and spend some time in jail so as to gain recognition as a 'made man'. But, what the poor fellow actually wanted to do was write books like Carl Sagan! No wonder he killed himself when the payment of his stipend was held up. Still, his Mum and brother got Government jobs out of it. Incidentally, JNU is located in Delhi which is not ruled by the BJP. Vemula too did not study in a BJP ruled state.

Asokan says Hinduism is very evil and represents a threat to Democracy. Perhaps he is thinking of Tulsi Gabbard. The fact is India is a Democracy only because it is so largely Hindu. Why? Well, we need Democratically elected politicians to slowly change our personal laws and institutions. If this does not happen we get trapped in caste restrictions. Wealthy people can defy these but the middle sort are afraid to be the 'first mover' in breaking a taboo because of the risk of ostracism. That is why we have a Tardean mimetics mediated by Parliamentary elections. Hindu Law itself says that tradition overrides Scripture when it comes to Laws and Conventions. However, these can change where there is consensus that the 'best people' are changing the relevant 'achar' (righteous behavior).

Asokan says- 'On the whole Vivek leaves little doubt that political Hinduism is a dangerous threat to Indian democracy. In scene after scene, we witness how dogma is manipulated by cynical godmen and politicians, and how in turn the forcefield of faith pushes us to indulge our worst instincts. This menace isn’t new—in fact, it has been building for decades. To understand the rise of modern Hindutva, we have to look at Patwardhan’s older films.'

Patwardhan is an old fashioned sentimental ;useful idiot' to the Communists who thinks 'Religion is the opium of the masses'. He does not understand that Communism is the enemy of Democracy. In India, it was too cowardly or weak to actually kill off all opposition and establish single party rule. Furthermore, in the mid-Nineties, the CPM politburo refused to let Jyoti Basu become Prime Minister for some silly ideological reason. It then doubled down on the Comintern's failed 'Popular Front' strategy of the Nineteen Thirties and ended its 'Long March through the Institutions' in near total Political Oblivion.

Asokan, despite his Indian name, is completely ignorant of India. He writes 'In a narrative poem written in Sanskrit a century later, Tulsidas popularized the idea that this town is the birthplace of Lord Ram—who, until then, was not really a major Hindu god.'

Wow! This guy can't even look up things on Wikipedia! No wonder his 'looking for 'Reason' in Modi's India leads him to a senile cretin like Patwardhan!

BhuVai- a Tambram Chemist's Utopia

Bhuloka Vaikuntham means Paradise on Earth. Vaishnavites don't want Heaven or Gnosis. They want to remain on earth serving 'Daridra Narayan'- the God amongst us who is lonely and poor. Though, strictly speaking, they reject the notion of a jivanmukta (one who has achieved liberation in this life), yet the True Vaishnavs appear to have this quality. Though in the world, they are not of it. Though their cares and worries are the suffering of others; by taking on those cares and worries, they diminish that suffering. They represent 'Economia'- a type of management which is mutual, accommodative, merciful and joyous- as opposed to rigid, rule-enforcing, 'Akrebia'. These Greek concepts have a corollary in every Spiritual tradition. The Japanese 'peasant-sage' Ninomiya fused Confucianism, Shinto & Buddhism into a practice of agricultural economics which Christian Missionaries found inspiring. They translated a book about his work into many languages. A copy of this book is to be seen in Mahatma Gandhi's library- though it is not known if he read it. Perhaps he did and was repelled by the story of a Buddhist monk who takes up fishing to provide the poor with a source of protein. I mention this because 'Akrebia' when it comes to 'Ahimsa'- i.e. the Indian reluctance to violate the prohibition on taking even the life of a fish- constrained Hindu 'economia' from ever actually lifting the great mass of the people out of Malthusian poverty. Similarly, though Sufi savants like Fariduddin Attar had shown how Nishapur had been turned into a 'workfare' Utopia, Islamic jurisprudence reacted to the shock of the Mongol invasion by embracing beggary. Attar was saying no one should be a dervish. Everyone should be enabled to work and rise up. Rumi- who ran away to Anatolia (hence his sobriquet)- thought it was safer to be a dervish, preferably one who was completely insane, because otherwise you just end up being the slave of some genocidal Great Khan or the other.

In recent years, Hindus and sub-continental Muslims are increasingly influenced by our highly educated and successful diaspora in America. Unlike us, they have shaken off the miserabilist Akrebia involved in becoming a 'Sadhu' or a 'dervish'. Moreover, in contrast to British trained Indian intellectuals, these Americanized Indians aren't holier-than-thou elitists interested only in 'playing the race card' and leveraging their connection to a vast, seething, 'subaltern', mass of suffering, into personal advancement or sinecures in various Universities and NGOs and UN organizations.

As a case in point, l may mention Venkat Venkatasubramaniyam- whom I assume, on the basis of his sonorous name, to be a Tamil Brahman by ancestral origin- who is a Professor of Chemical Engineering concerned with the problem of economic inequality & distributive justice. He has coined the term 'BhuVai' to signify an ideal society whose members are equal in ability. Is there a way to also render them equal in happiness? Venkat believes so and he sets out his theory in a well-written, well-researched, book titled 'How much Inequality is Fair?'

In the Past, the basic problem for 'distributive justice' was thought to involve the theory of Value. The problem is that the Knightian Uncertainty of our fitness landscape means Value itself is Uncertain. Moreover, co-evolved processes defy the mathematics of complexity, getting rid of hysteresis but at the price of rendering ergodicity 'anything goes'.

 Breaking up ensembles by means of 'dis-coordination games'- spatially, this happens in 'Tiebout sorting'- permits mimetic, or bandwagon, effects to have a stabilizing, rather than runaway, effect. Incidentally, this would yield 'proportionate growth' in line with Gibrat's Law and hence generate a log-normal Income distribution. But, this does not mean such a distribution is 'fair' or 'natural'.

An alternative way of looking at this is to use the theory of congestion, or potential, games- indeed, this is what Venkat does. Here the Muth rational solution is to have an Aumann signaller dividing up the population. Thus, to reduce congestion, we may have a public signal- e.g. all those born in the first half of the year can use the congestible resource at such and such time. Those born in the second half of the year get a different time-slot. My point is that correlated equilibria based on public signals reduce the price of anarchy like nothing else and therefore we must expect them to arise and to 'partition' the relevant configuration space. This militates for a Schutzian 'ideal type' theory being heuristically useful or even approximating to the Muth rational solution.

In any case, from the point of view of Mechanism Design, there must, by the Spilrajn extension theorem, be a 'Revelation Principle' such that a Regret-minimizing, Hannan Consistent, multiplicative weight update algorithm exists which is 'natural'- i.e. similar to the sort of algorithms we believe Nature itself uses. This allows us to demarcate Nomos from Phusis. We can then create 'positional' goods to reflect the spread between the Imperative and the Alethic- i.e. Values and Facts- so this turns into a 'mechanism design' problem. However, doing nothing is an even better option. This is generally the case for any armchair exercise. Catatonics and Corpses are the most suitable candidates for conducting this type of research. At any rate, this is the common sense view. Nevertheless, there are elderly mathematical economists who have been discovered to be wholly useless and who are neither catatonic nor cadavers. A sense of 'there but for the grace of God goes I' militates for letting these pedagogues pretend to be Prophets of a new dispensation.

When I was 16, I attended the lectures of Professor Morishima (who had been chased out of Japan by his students) at the LSE. He thought he had solved this problem- thus reconciling Karl Marx and Adam Smith- with a 'rational distribution of Income' based on 'shadow prices'- i.e. the scarcer 'ability' gets a higher reward. The problem here is that 'Shapley values'- which factor in 'bargaining power'- are not aligned with 'shadow prices'. In other words, a Sociological 'Game theory' is at odds with the Production Engineer's view of the World. In 'Mechanism Design' (which is a reverse Game Theory) there is a trade off between incentive compatibility and efficiency. The theory of incomplete contracts is now the cutting edge of this type of research. However, from a historical point of view, this conflict simply recapitulates Pareto's own trajectory- he started off as an engineer (discovering power-laws in Income distribution in the process) in the laissez faire tradition before transitioning to Sociology with its sticky 'residues and derivations', thus becoming an intellectual pillar for everything from Mussolini's Fascism to post-Pigouvian Welfare Economics.

Interestingly, back in the 1950's in Venkat & my native India, two White savants, both Leftists, came up with what is known as the Goodwin 'Class Struggle' model- a predator-prey model in which Workers are the Wolves and Capitalists are the Sheep!

Turning to Venkat's 'Bhuvai' which is more in the Econophysics vein, it would be interesting to compare it to the recently published magnum opus of Anwar Shaikh (whose Mum was South Indian) and his Marxist analysis of 'turbulent flow dynamics' in Capitalism. Both Venkat and Anwar are good and decent men who write clearly and whose motivation is entirely good. However, in this branch of scholarship it is vain, worthless, hypocrites- people like Nussbaum, Piketty & Sen- who win the jackpot. Thus has it always been. Consider the notion of entropy and its possible application to economics. Venkat quotes Samuelson derisive comments on any such possibility. Yet Samuelson must have been aware that smart Jewish emigrants to the US- like smart Russian or German or even British emigrants- had used such notions to critique Capitalism. Their motivation was moral. In general, these guys worked hard and did quite well for themselves and for society. Anwar and Venkat have certainly done well by their students and made a very positive contribution to America. But, to hit the jackpot and advance themselves, they'd have been better off writing hypocritical, holier-than-thou, shite and playing the race card at every convenient opportunity. Thus, the reason their books on Econ aren't making them very rich is also the reason that Income and Wealth inequality has burgeoned. The good guys lack sociopathy. Yet, it seems to me, they populate an ontologically dysphoric 'BhuVai' which enriches our own world.

Venkat writes-

we study a competitive, dynamic free-market environment in BhuVai, comprising a large number of utility-maximizing rational agents as employees and profit- maximizing rational agents as corporations. Let us assume an ideal environment in which the free market is perfectly competitive, transaction costs are negligible, and no externalities are present. 

If no externalities are present, then there can be no coercive service industries- e.g. Police services or Armies. Also, there would be no corporations because there would be no Coasian need to 'internalize externalities'.  Thus, the solution concept is the folk-theorem, or Myerson general feasibility theorem, of repeated games. There may be Aumann 'signallers' permitting better correlated equilibria. However, Venkat proceeds to rule out this possibility by stipulating that there is no way to discriminate between signallers. Thus, either everything is 'common knowledge' or else there is no way to extract signal from noise.

There are no biases due to race, gender, religion, etc. We assume
that no single agent (or small group of agents), whether an em-
ployee or a company, can significantly affect the market dynamics;
i.e., there is no rent seeking or market power. In other words, our
ideal free market is a level playing field for all its participants.

However, under these circumstances, there would be no market. Society would be a wholly non-transactional repeated game- like family life. Mummy does not demand payment for nursing the baby. Daddy does demand money from Mummy for sexual services so he can go to the pub and get drunk, but Mummy beats him and makes him get a job as a Cost & Management Accountant instead.

We also assume that neither the companies nor the employees engage
in illegal practices such as fraud, collusion, and so on. We also as-
sume moderate scarcity of resources.

So, Venkat is describing a situation where a purely relationship based Society could thrive. History shows us that such Societies break down when there are exogenous shocks in demand or supply. That is why Venkat & me aren't living happily in some rural Agraharam.

Relationships are 'incomplete contracts'. The Market is a way of turning some 'incomplete contracts' into complete contracts of adhesion. However, there must be 'missing markets' unless complete fungibility- i.e. interchangability between commodities, but also agents- obtains. But, in that case, distributive justice is easily achieved by 'antidosis'- i.e. letting any agent swap places with any other agent. In ancient Greece, if your tribe decided you had to bear the expense of a liturgical duty, you could get out of it by offering to swap estates with some other guy in return for his discharging the duty. This is like the solution to the cake-cutting problem. Clearly, this is impractical. When Mummy beats Daddy for wanting to go to the pub, he says 'okay, let's switch places. You go be an Cost and Management Accountant. I'll stay home and breast-feed the baby. You just see, after a miserable day at the office, you too will need to go to the pub to relax and blow off steam.' Mummy beats Daddy some more because she knows nipples on a man are as useless as Amartya Sen as Chancellor of Nalanda University.

In our ideal free market, employees are free to switch jobs and move between companies in search of better utilities. Similarly, companies are free to fire and hire employees to maximize their profits. We also assume that a company needs to retain all its employees in order to survive in this competitive market environment. 

WTF? Why make such a foolish assumption?

Thus, a company will take whatever steps necessary, allowed by its constraints, to retain its employees. Similarly, all employees need a salary to survive, and they will do whatever is necessary, allowed by certain norms, to stay employed. 

Venkat has clearly never had to supervise an ordinary bloke like me. Elsewhere he says- 'The intrinsic properties of an employee are innate attributes that are exactly the same for all employees.'
If this is so, employees are 'fungible'. This means there can be an open market for them. But this means you buy their labor service on a just in time basis, you don't employ them. Thus there are no enterprises. Everybody buys and sells labor services on the open market in a frictionless manner.

Venkat's motivation is different. He thinks he is solving a deontological problem- 'These are the fundamental rights, such as the right to life and liberty, to a discrimination-free, healthy work environment, etc. 
Why employ anybody if you have to provide remedies for any breach of their right to life, liberty etc? You can just buy the labor service you need on a just-in-time basis.

These ought to be guaranteed to be absolutely the same for all the employees, and all employees are to be treated equally in this regard. This requirement in our theory corresponds to the first principle, the liberty principle, in the Rawlsian framework, where every individual in a civil society has equal basic 
liberties. Rawls arrives at this fundamental principle of equality through the application of his “veil of ignorance” concept to a group of rational agents in the original position. In our theory, we arrive at this by using the maximum entropy principle, which we discuss in chapter . 

The maximum entropy principle says ' the probability distribution which best represents the current state of knowledge is the one with largest entropy, in the context of precisely stated prior data.' Given the data Venkat has chosen for his gedanken, we know that maximum entropy is achieved when nobody is an employee. Labor services are fungible and sold on a frictionless open market. Everybody is his own employer and must safeguard himself from sexual harassment by himself- a full time job for wankers like me. Yet, I don't get paid to do it so I have gone on strike and thus am sexually harassing myself even as I type these words with one hand.

Venkat offers me some encouragement for my view that the Government- not of any existing State, but perhaps that of 'BhuVai'- will pay me for protecting myself from sexual harassment by me because it is only fair that I be adequately recompensed from my labor in this regard.

Venkat says-

It is important to emphasize that the free market itself, ideal or otherwise, is a human creation and “does not exist in the wilds beyond the reach of civilization”

Actually, the reverse is the case. Free markets only exist on terra nullis- i.e. 'in the wilds'. If there is a civilization, then there is a coercive contract enforcement mechanism. There is no 'free market'. All you have is a regulated market from which Manorial (or Tiebout) rents are drawn either by a 'Stationary Bandit' or by a Municipal Authority representing Civil Society.

(Reich 2015, 4). As Reich (2015, 3–5) observes, “Few ideas have more profoundly poisoned the minds of more people than the notion of a ‘free market’ existing somewhere in the universe, into which government ‘intrudes.’…A market—any market—requires that the government make and enforce the rules of the game.

Utter nonsense! Which government is enforcing 'the rules of the game' when it comes to drugs or prostitution or bribing senators?

In most modern democracies, such rules emanate from legislatures, administrative agencies, and courts. Government doesn’t ‘intrude’ on the ‘free market.’ It creates the market.” 

Sheer poppycock! Markets are created by Supply and Demand. Governments can't create a Supply of 18 year old virgins who want to sleep with fat, middle aged, very poor, men like me. On the other hand, if I had 'effective demand'- i.e. lots of money- I probably could find a girl ready to make this deeply repugnant sacrifice so as to rescue her family. This is why, I personally don't want a laissez faire utopia. Repugnancy markets- like the prostitution of innocent young people- would burgeon. I want cops to come and beat the shit out of pimps. I want a social welfare safety net, so young people can pursue their dreams. I also want good people, who have done useful work, to think about how to make 'BhuVai' a reality. Even if their general scheme is silly, they may have a practical 'mechanism design' type suggestion which improves at least one existing market or non-market mechanism.

Venkat, nice guy that he is, describes an ideal company which compensates workers according to their transfer earnings (which, in his model, would be their shadow price). He does not get that being required to simulate sociopathic behavior imposes a high psychic cost on non sociopaths. Most people don't want to be the guy who fires people. But, some people like firing people because they are sociopaths. Repugnant but necessary activities- e.g. firing the drunken Accountant who keeps bringing his baby to work and then tries to breast-feed it- get delegated to the sociopath who therefore commands a higher 'threat-point' independent of his shadow price. This is a story we have seen play out on a thousand TV shows and Movies since the time of J.R on Dallas or Gordon Gekko in Wall Street.

I recall my first job as a shop assistant. Suddenly the Assistant Manager- a weedy looking specimen- ordered us all to take off our shoes. He then came and searched us and looked at our socks. Why? He had found the discarded plastic wrapper of a pair of socks and assumed one of us had stolen the pair. Thus, for the theft of a measly pair of socks, this guy was keeping us in after work and treating us like criminals! I was fuming with anger at this humiliation. Some of my co-workers were tough guys who carried knives. I asked them whether they were going to teach this Assistant Manager a lesson. They averted their eyes and explained that his bonus was directly linked to 'stock shrinkage'. His anger was justified because money was coming out of his own pocket. He had 'skin in the game'.

Mechanism Design can get us to behave like sociopaths but sociopaths still have the advantage because they do the thing naturally and for pleasure. The same is true of risk-taking and telling lies and being a Nobel Prize winning Professor of Economics. Behavior we normally have to be compensated for, comes naturally to sociopaths. The smarter among them work out how to sell this ability of theirs to the highest bidder. Be it under Capitalism or Communism or Gandhian Socialism- the scum always rises to the top.

Venkat gives a brief account of Game theory and mentions that it can be found in the Talmud as Aumann has described. However, like most Indians, he is unaware that the first text to explicitly state that the 'Just King' (Dharma Raja) must study statistical game-theory to overcome his 'vishaada' (mental malaise involving choice theory) was the Mahabharata. Just as the 'Bhagvad Gita' helps Arjuna overcome his 'vishaada', so to does the Nalopokhyanam (along with the Vyadha Gita) help Yuddhishtra to overcome his fatal addiction to skill-less gambling.

Venkat may not know the work of the Jain polymath Umaswati. However, his ontology features an entropic end state or heat death wherein all beings attain kevalya. This concept was developed in parallel with Vaishnav notions of 'BhuVai' and is complementary to it. Umaswati, Nagarjuna and Sankara have different, but 'observationally equivalent', ontologies and epistemologies. Vaishnavs are not backwards in this respect. In other words, there is a synoptic Indian tradition in such matters and it can work very well in promoting the common-weal save when it runs up against the narrow Akrebia or deontological principles like 'Ahimsa'. But Indian jurisprudence has a workaround for this. The problem is that Hindu 'public intellectuals' are completely ignorant of Indian thought. They are credulous and naive when it comes to shitheads like Rawls and Dworkin. They also believe, against all the evidence, that Amartya Sen isn't a complete waste of space.

Is there anything valuable in Venkat's book? Yes. It is well written and sincere. Students should read it. I may write another post about some specific aspects of his model, but his quest is futile- its Grail is a crock of shit. On the other hand, if we regard it as what ethologists call 'displacement activity', then we should measure its worth by the other things Venkat and his colleagues are doing in their lives. I imagine these things would be very good and worthwhile in themselves. The same could be said of Yoga. The thing doesn't help others directly, but- if practiced by good people- it makes them better at serving others, which is their true path to 'Union'- which is what the word Yoga means.

I am not saying that there is no 'Revelation Principle' such that a Grothendieck Yoga of Mathematical Economics might not have univalent foundations. We know, a priori, that this must obtain and that is sufficient to create Schelling focal solutions which are 'indicative', not substantive or computable. That's good enough. A smart guy could write a long book describing this but the map would be larger than the territory. Why? Co-evolved processes get rid of complexity faster but less robustly than it can be generated. There is 'anti fragility' but the release of evolutionary capacitance depends on the future fitness landscape- so the underlying process is ergodic in one sense but not memory-less at all. Currently, the socio-technological landscape has become more uncertain. Thus, non-sociopathic Muth Rational agents, behind the veil of ignorance, would prefer a more skewed Income and Wealth Distribution because (1) they are only concerned with Friedman type 'Permanent Income' and (2) they are regret minimizing. What I mean is this. For an ordinary bloke like me, it is more difficult and depressing to suddenly become poor and lose my customary life style than to live high on the hog in good times and return to penury during a down-swing. So, it is regret minimizing for me to prefer that asset bubbles affect only sociopaths or 'lucky gene' legacy holders. Both may find an ordinary life more satisfying than their enjoyment of a tawdry type of wealth and privilege.

One final point. Venkat is a Professor of Chemistry. Yet his English is excellent. Why is it that our Professors of English Literature write like shit while our Chemists and Doctors write beautifully and clearly? The answer is that Higher Education in STEM subjects is not a Credentialised Ponzi Scheme. Mathematical Economics, sadly, can make no similar claim.

Sen on Capabilites & Functionings

 Amartya Sen says his Capabilities theory is 'a particular approach to well-being and advantage in terms of a person's ability to do valuable acts or reach valuable states of being.'

So Capabilities are abilities. Does the Capabilities approach tell people how they can improve their abilities? No. It does not have a 'Structural Causal Model' of any ability whatsoever. If it did, people would study Sen and his acolytes' work so as to personally profit by being better at their job or better at relationships or better at sports or better at some other thing that matters to them. This has not happened because Sen's Capability approach represents nothing more than his ability to talk worthless shite.

Stuff like this-

The expression was picked to represent the alternative combinations of things a person is able to do or be- the various 'functionings' he or she can achieve.

Abilities are 'functionings'. One possible ability, or 'functioning'  a person might have is to intuit all the alternative combinations of things a person is able to do or be. Such a person would be in great demand. We would consult them about what we should study, where we should work, whom we should marry, how we should educate our children and so on and so forth.  Governments would hire such a person to choose Cabinet Ministers and Senior Civil Servants and decide which Scientist pr Artist should get funding. No doubt, a person with this ability could spot others with the potential to gain this functioning. Soon you would have a class of people whose function would be to judge the capabilites of the population and direct them into the vocation in which they are able to do and be at their own personal optimum. There would be no need for Free Markets or Representative Democracy or Public Discussion. An elite class of self-recruiting 'Capabilities' savants would run things so much more efficiently such that a Benthamite paradise would come into existence. All would be the humanly possible best without the vast majority of humans having to make any major decisions on their own.

Sadly, even if there were people with this 'Capabilities' functioning, we would be foolish to trust to the judgment of those purporting to have that ability. There are plenty of charlatans who claim to know what is best for everybody and for Society as a whole. Generally, this turns out to involve your doing unpaid agricultural labor while your little children get raped by that sociopath.

Sen, of course, is not a sociopath. He is simply stupid.

The capability approach to a person's advantage is concerned with evaluating it in terms of his or her actual ability to achieve various valuable functionings as a part of living.

This is an ability everybody already has. I often say, if only everybody would give me all their money, I could be a wealthy venture capitalist. Similarly, if only beautiful virgins would form an orderly line outside my bedroom, I could achive the valuable functioning of fathering lots of cute babies thus replenishing the population.

Perhaps Sen means- 'The Capabilites approach is about looking at people who have ability but not the scope to use it to their best advantage'.  The problem here is that the free working of the market has already caused a class of 'talent scouts' and 'head hunters' and so forth to actively seek out people with valuable abilities who, currently, aren't able to use it profitably. Furthermore, there is a large Voluntary Sector where a similar things happens even if there is no arbitrage or brokering opportunity. Indeed, within every Vocation or well run Organisation, there are people who look out for people with ability- natural or acquired- and who seek to give them wider scope for the use of that ability.

Has Sen, or any of his acolytes, contributed anything either to the theory or the practice of developing actual Capabilities? No. They are useless tossers who write stupid shite. They already knew that 'utilities' or 'preferences' can't be aggregated. So they spoke of 'Capabilities' as if they could be aggregated. But they can't. They are unknown. Anyway, what good would aggregation do? No doubt, a pedagogue may think the mechanical process of adding up the marks a student gets to decide whether or not she gets a Diploma is very important. It isn't. Most Diplomas are shit. They are just a rationing device which may or may not have a signalling function.

The corresponding approach to social advantage-for aggregative appraisal as well as for the choice of institutions and policy- takes the sets of individual capabilities as constituting an indispensable and central part of the relevant informational base of such evaluation.

Some people do have the ability to evaluate Institutions and Policy Proposals. Sen does not have this ability. He is a cretin. He thought the creation of an International University in rural Bihar was a swell idea coz there was a famous Seminary there a thousand years ago when Bihar was ahead, not behind, most other parts of the world. Under Sen's Chancellorship, Nalanda University became infamous as a place where students couldn't even get yoghurt. They were robbed and sexually harassed. Instead of being taught by Internationally renowned Professors, they were consigned to PhD students of remarkable stupidity.

Since Sen's Capability approach to evaluation has no Structural Causal Model of what it is which is being evaluated- i.e. it can't say how an Institution or Policy Proposal can be improved- it is wholly worthless. To take a case in point, Venezuela under Chavez appeared to be cutting poverty. From Sen's point of view, Capabilities had gone up. But the reverse was the case- as everybody now knows. My standard of living can go up if I borrow and spend recklessly. But, in the medium to long term, I've impoverished myself. A proper Structural Causal Model would warn Venezuela, or me, against improvidence. Sen's approach can do no such thing. Its business is telling stupid, albeit holier than thou, lies.

Why does it exist? The answer is that various stupid pedagogues had put up various similar schemes which were all, almost immediately, shown to be wholly worthless. By changing the name of the scheme, Sen was hoping to keep a worthless type of pedagogy on the road for a little while longer.

It differs from other approaches using other informational focuses, for example, personal utility (focusing on pleasures, happiness, or desire fulfilment), absolute or relative opulence (focusing on commodity bundles, real income, or real wealth), assessments of negative freedoms (focusing on procedural fulfilment of libertarian rights and rules of non-interference), comparisons of means of freedom (e.g. focusing on the holdings of 'primary goods', as in the Rawlsian theory of justice), and comparisons of resource holdings as a basis of just equality (e.g. as in Dworkin's criterion of 'equality of resources'). 

Everyone knows personal utility can't be measured. Similarly 'commodity bundles' only matter if they represent recurring, sustainable, income. A guy who borrows and steals so as to drive around in a Rolls Royce isn't 'opulent'. He is headed for Poverty- perhaps by way of Prison. A 'deontological' approach is not concerned with aggregating or evaluating anything. In a Rawlsian world, people 'behind the veil of ignorance' have access to the correct economic theory and thus support Social insurance of some ideal type such that his own prediction is falsified. Thus 'evaluation' and 'assessment' at the aggregate level do not arise.

An ability is a 'primitive term' in Tarski's sense. It is undefined and depends on the context. One could say that a particular ability is made up of a set of 'functionings'. Thus shooting a target depends on the functioning of one's eyes as well as the functioning of one's hands and the functioning of one's nerves and so forth. However, an ability to do something does not depend just on one's own functioning- someone else may have a reason to do it for you. Sen doesn't get this. He says-

Perhaps the most primitive notion in this approach concerns 'functionings'. Functionings represent parts of the state of a person-in particular the various things that he or she manages to do or be in leading a life.

A man unable to breathe for himself may be attached to a device which pumps oxygen into his blood. His ability to breathe does not depend on his own 'functioning'.  Capability, thus, is not a reflection of 'functioning'.  Sen holds a contrary view-                                                                   

The capability of a person reflects the alternative combinations of functionings the person can achieve, and from which he or she can choose one collection. 

The problem here is that no one, save God, knows 'the alternative combinations of functionings a person can achieve'. We don't even know what combination of mental operations gives rise to our choosing things. Thus 'capability' is unknowable while 'functioning' is indefinable. This means, inter alia, that there can never be an enumeration of functionings or a method of demarcating them fully from each other.

Sen says ' If there are n relevant functionings, then a person's extent of achievement of all of them respectively can be represented by an n-tuple.' However, there can't be 'n relevant functionings' unless a full structural causal model of each functioning has been found in which case the functioning is not undefined but is specified as the outcome of a particular process. Having a structural causal model means being able to enhance or weaken that functioning. It would enhance or retard an ability. Genuine Economic activity does seek for such structural causal models and may use statistical means to test the efficacy and cost effectiveness of various measures to enhance ability. Fraudulent armchair economics does not seek for structural causal models and simply shits itself continually by parodying the methods of useful branches of inquiry.

Life mustn't be viewed as as a combination of any x and y, unless we can actually create life by combining that x and y. Why not? What's the harm in telling stupid lies? The answer is that stupid lies breed yet greater stupidity and even more worthless lies. It is a waste of resources and crowds out useful stuff we could be doing.

Sen says-

The approach is based on a view of living as a combination of various 'doings and beings', with quality of life to be assessed in terms of the capability to achieve valuable functionings.

I suppose a Doctor may use such an approach. She may say- 'the patient is breathing more easily- as can be seen from such and such instrument. However, the patient's brain activity has decreased. I wonder whether this is because of a problem with the functioning of such and such organ. I shall order a test to find out.' This approach seems entirely reasonable to us. We know that over the centuries, the Medical Sciences have greatly improved. They do enable us to improve our bodily functioning and general capabilities. True, Doctors can't yet create a human life in the laboratory- but, it may be, they could find a complete Structural Causal Model for the human body, perhaps even for the mind, and so the artificial creation of human life is a possibility we can't wholly discount.

By contrast, nothing is gained by viewing life as a combination of 'doings and beings' whose mechanisms remain unknown to us. The thing is pointless. We can't assess 'quality of life' because we don't know whether a 'doing' or 'being' is adaptive given the circumstances or whether it represents a pathology. Consider the case of a very thin person who seems to have a miserable life stuck in a tiny bed-sit without company. This person may be doing something whose nature we can't understand. It turns out that being thin gets them laid and the time they spend alone doing abstruse research may win them great acclaim and social status.

In Economics, a person- or people's- quality of life should not be assessed purely on the basis of present indicators. That person, or that nation, may be burning through its capital in an improvident manner. If it were sensible, it would be experiencing guilt and remorse, not a high quality of life.

Some functionings are very elementary, such as being adequately nourished, being in good health, etc., and these may be strongly valued by all, for obvious reasons.

Having lots and lots of babies was strongly valued by almost all societies till relatively recently. Notions of 'adequate nourishment' may turn out to be wrong headed. Public Health improved during the Cuban famine. Similarly, 'good health' may dictate the opposite of what is conventionally assumed. In the old days a stout body and florid complexion was considered a sign of robustness. Now, Doctors are likely to treat them as risk indicators.

Others may be more complex, but still widely valued, such as achieving self-respect or being socially integrated.

It is not a good thing if rapists and murderers achieve self-respect. Being socially integrated into a sociopathic regime should not be 'widely valued'. Why? Sooner or later, Nemesis will catch up with the miscreants.

Individuals may, however, differ a good deal from each other in the weights they attach to these different functionings-valuable though they may all be-and the assessment of individual and social advantages must be alive to these variations.

What good is this 'assessment' doing? If it is doing no good at all, it would be better if it were dead to everything. Put corpses in charge of the Assessment mechanism. Don't pay them. If they go on strike, who will notice?

In the context of some types of social analysis, for example, in dealing with extreme poverty in developing economies, we may be able to go a fairly long distance with a relatively small number of centrally important functionings and the corresponding basic capabilities (e.g. the ability to be well nourished and well sheltered, the capability of escaping avoidable morbidity and premature mortality, and so forth).

In dealing with extreme poverty, don't do any fucking assessment. Don't give money to assessors. Give it to the poor. Disintermediate Econ or Philosophy Professors the way that Mathematical Development Economics was disintermediated from the actual development of countries which actually developed. Indira Gandhi appointed Sen's mentor as head of the Planning Commission. She put a Bengali Philosopher in as Minister of Industries. What was the result? Stagnation. India only started to grow once people like Sen were excluded from decision making.

Valuation should be done on the basis of a proper Structural Causal Model. Surgeons may disagree on the proper sequence of operations and other therapies required to restore health to a severely injured patient. However, there is an objective way- at least after the fact- to determine this sequence. This is because some 'functionings' are more vital- hence valuable- than others in terms of preserving life and enabling recovery. This is a purely scientific matter. No doubt, there may be special circumstances where this does not appear to be the case. The Police Detective may say 'Doc, you gotta restore this criminal's power of speech. Only he can tell us where the terrorists planted the nuke. Millions of lives are at stake.' The Doctor may reply 'I am bound by my Hippocratic Oath. My only concern is the well-being of the patient'. But, there is no real dilemma here. Society has a workaround. The Detective pulls a gun on the Doctor and thus extracts the information he needs. But, he gets sent to jail for this offense.  His ex-wife, now the First Lady, persuades the President to pardon him. However, just at that moment, the Vice President- who was actually the head of the Terrorist group- jumps into the air and kicks off the President's head. Luckily, the President doesn't need his head to do his job. Indeed, his ratings shoot up. All's well that ends well coz the Vice President is put in charge of Evaluating Capabilities because the First Lady sat on his face and drowned him and thus he is a corpse. This does not mean the Veep get off easy coz as Sen remarks-

There is no escape from the problem of evaluation in selecting a class of functionings in the description and appraisal of capabilities.

This is only true if you are a corpse or if the 'class of functionings' does not correspond to a structural causal model. But even if it true, it doesn't matter in the least because the problems of dead or very very stupid pedagogues are wholly inconsequential.

The focus has to be related to the underlying concerns and values, in terms of which some definable functionings may be important and others quite trivial and negligible. The need for selection and discrimination is neither an embarrassment, nor a unique difficulty, for the conceptualization of functioning and capability.

The focus of worthless shitheads doesn't have to be related to anything because shitheads produce only worthless shite even if they are related to smart people.

3 Value-Objects and Evaluative Spaces 

In an evaluative exercise, we can distinguish between two different questions: (1) What are the objects of value? (2) How valuable are the respective objects?

It is true that, if you are asked to evaluate the performance of your students, you can distinguish between two different questions. (1) Who are your students?
and (2) How well have they performed? However, if you weren't an utter cretin, you would not in fact make any such distinction. Why? You already know who your students are. An evaluative exercise has a pre-specified domain.

Even though formally the former question is an elementary aspect of the latter (in the sense that the objects of value are those that have positive weights), nevertheless the identification of the objects of value is substantively the primary exercise which makes it possible to pursue the second question.

Nonsense! The 'primary exercise' has no 'halting' mechanism. Before we can say what are the objects of value, we first need to say what objects are. But before doing so we need to specify what saying is. But before that we need to be clear about what 'specify' means. But before we do so we need to understand what is meant by 'meaning' and so on and so forth.

Furthermore, the very identification of the set of value-objects, with positive weights, itself precipitates a 'dominance ranking' (x is at least as high as y if it yields at least as much of each of the valued objects).

If you are asked to do an evaluative exercise, the only proper result of doing that exercise is a ranking. But, if it is not tied to a proper Structural Causal Model, it will be shit. I could do an evaluative exercise on gene therapies, but because I don't know anything about gene therapies, the ranking I produce will be shit. To be on the safe side, I may content myself with cutting and pasting some math equations and claim to have developed a method for evaluating such therapies. But, it will still be shit unless it is applied by a smart guy who understands the relevant field. But, an even better result would arise if the smart guy didn't use my method.

This dominance ranking, which can be shown to have standard regularity properties such as transitivity, can indeed take us some distance-often quite a long distance-in the evaluative exercise. 

It can take you quite a long distance to being and remaining a stinky piece of shit.

 The identification of the objects of value specifies what may be called an evaluative space.

Evaluation is itself an ability or functioning. We don't know to what degree it is entangled with other abilities or functioning or, indeed, whether those abilities or functionings are themselves independent. Thus, there can be no 'evaluative space' corresponding to a 'commodity space'. Economists know that the 'general equilibrium' of a 'commodity space' is 'anything goes' precisely because of 'income effects' and 'hedging' both of which arise precisely because of 'entanglement'. Why is Sen, an Economist, importing something that failed with respect to commodities into a field where 'entanglement' is a much bigger problem? The answer is that, though he knows utilitarianism was useless, he wants to show he is a nicer guy than them and so, though doing something equally useless, he should get brownie points for being a nicer guy.

In standard utilitarian analysis, for example, the evaluative space consists of the individual utilities (defined in the usual terms of pleasures, happiness, or desire fulfilment). Indeed, a complete evaluative approach entails a class of 'informational constraints' in the form of ruling out directly evaluative use of various types of information, to wit, those that do not belong to the evaluative space.

Standard utilitarian analysis failed. Why? Because if it succeeded it would be a cardinal measure even if it tied itself in knots to avoid that outcome. But the moment it was discovered to be a cardinal measure, everyone who didn't like it would say it was subjective shite. The mathematics was just window dressing- which, indeed, it was.

This is not to say that we can't have useful 'evaluative spaces'. But that would involve having a useful 'Structural Causal Model' which people could use to directly enhance their abilities and functionings. In other words, evaluation would be useful- rather than an exercise in mental masturbation for armchair Pundits. But, if it were useful then smart people would be gaining acclaim and making money of it by helping people improve their own lives. This would mean that stupid pedagogues like Sen would lose salience as 'Mother Theresas' of Economics. People would say 'how many people has Sen lifted out of poverty'? The 'Mother Theresa of Pakistan' is a German nun who works with lepers. But she is a proper Doctor who actually helps people. Mother Theresa was not a Doctor. She was a Nun who helped the Pope by raising money and speaking out against contraception and abortion and so forth. Since she was genuinely Religious, Religious people liked her. Sen, similarly, is genuinely a worthless, hypocritical, holier-than-thou, shithead. That is why genuine, hypocritical, holier-than-thou, shitheads love him.

They think shite like this is profound-

 The capability approach is concerned primarily with the identification of value-objects, and sees the evaluative space in terms of functionings and capabilities to function.

Everybody is concerned primarily with the identification of value-objects. However, some people are hypocritical shit-heads. Thus they are primarily concerned with fooling other people into thinking they are actually 'identifying value-objects' for an altruistic reason. But they do no such thing. Sen does not go to the poor people of Bengal and say 'guess what guys! I've just found out that if you grow this particular strain of seed you will get a lot more money out of your farm. Thus your ability to eat well and educate your kids will increase!' Instead, he writes nonsense like this-

This is, of course, itself a deeply evaluative exercise, but answering question (1), on the identification of the objects of value, does not, on its own, yield a particular answer to question (2), regarding their relative values.

Wow! What a fantastic discovery! Identifying who your students are does not, by itself, yield a ranking of them!

The latter calls for a further evaluative exercise. Various substantive ways of evaluating functionings and capabilities can all belong to the general capability approach. The selection of the evaluative space has a good deal of cutting power on its own, both because of what it includes as potentially valuable and because of what it excludes.

Very true! By excluding cats who do are not your students, the cutting power of your 'evaluative space' increases greatly! Why not do yourself a favor and also exclude giraffes?

For example, because of the nature of the evaluative space, the capability approach differs from utilitarian evaluation (more generally 'welfarist' evaluation ) in making room for a variety of human acts and states as important in themselves (not just because they may produce utility, nor just to the extent that they yield utility). 

If something is important in itself, a utility can be assigned to it. But why bother? Assigning utility to things is just shitting higher than your arsehole. It does not help anybody. You may as well grade the stars according to the sort of perfume you think they use or which magazines you reckon they subscribe to.

Being happy and getting what one desires may be inter alia valued in the capability approach, but unlike in utilitarian traditions, they are not seen as the measure of all values. It also makes room for valuing various freedoms-in the form of capabilities.

But these freedoms, taking the form of capabilities, can be assigned a utility in the same manner as eating an ice-cream. Indeed, one could look at how much 'transferable utility' (money) people spend on preserving a freedom they don't currently use- like my paying a Gym subscription just so I could work out anytime I wanted to, though in practice I prefer watching Netflix while typing up this drivel.

On the other side, the approach does not attach direct-as opposed to derivative-importance to the means of living or means of freedom (e.g. real income, wealth, opulence, primary goods, or resources), as some other approaches do.

Those other approaches were less shit than this approach because they focused on things which could be measured- however imperfectly. Metrics re. real income and wealth are useful to businessmen and bureaucrats.

 Sen's innovation is to create an approach which can't be operationalized at all.  However, there is a disutility attached to this type of cretinism. Furthermore, at the margin, it may crowd out genuine research on Structural Causal Models. It's like what happens to a School when all the Teachers have to spend more and more time 'evaluating' and less and less time teaching. This could yield a benefit, if evaluation is on the basis of objective tests. It is wholly useless if teachers can make up anything they like or, even worse, if they are forced to make up imaginary qualities possessed by the child upon which they can make flattering comments. Come to think of it, I did attend a 'Progressive School' where the teachers would write nice things about my artistic ability on the basis of my drawing pictures of cats on my Maths answer sheet. My parents thought I should be a painter. Actually, thanks to my personality, Accountancy is my vocation. However, my inability to add and subtract led to my forcible exit from that profession. I'd have been better off having a teacher who slapped the black off me for getting sums wrong. Sen, too, would have been better off if he'd stuck with Physics- where his imbecility would soon have been apparent to all- rather than moving over to Economics at Sukhamoy Chakroborty's suggestion. Still, at least the fuckwit emigrated rather than join his old mentor at the Planning Commission. But, according to Meghnad Desai, Sen only left because of his divorce. Patriotism was not his motive. But that too has become obvious in recent years.

Pratap Bhanu Mehta on Kashmir

Pratap Bhanu Mehta has an article portentously titled 'The story of Indian democracy written in blood and betrayal' in the Indian Express. 

Reading between the lines, we can form an idea of what Mehta used, in place of ink, to write this piece. The question is, how did he procure it? Careful reading of the article can throw light on how it is Mehta comes to use his own shit to write his bombastic screeds.

There are times in the history of a republic when it reduces itself to jackboot.

Nonsense! The jackboot is associated with Germany. The Weimar Republic's history does not feature any jackboots. Why? It was the successor state to the German Empire and was followed by Hitler's Third Reich. America is a Republic. Its history has never been reduced to a jackboot. Mehta is talking ignorant shite.

Nothing more and nothing less. We are witnessing that moment in Kashmir.

If so, what were we witnessing during Jagmohan's tenure as Governor of J&K? Did India turn into a police state under Rajiv Gandhi or V.P Singh? 

But this moment is also a dry run for the political desecration that may follow in the rest of India.

A rehearsal is not a performance. A 'dry run' has no practical impact. During 'war games', no actual soldiers are killed. If all that is happening in Kashmir Valley is some sort of theatrical rehearsal, why worry about it?

Notice Mehta does not say that 'political desecration' will follow in the rest of India. He says it may follow. Similarly, Mehta may say something sensible for once in his life, but we have good reason to doubt he will actually do so.

The manner in which the BJP government has changed the status of Jammu and Kashmir by rendering Article 370 ineffective and bifurcating the state is revealing its true character.

What has been revealed? That it keeps its campaign promises? That it is capable of cutting the Gordian knot and bringing about the sort of change poor people need? That it does things by the book and in a manner which is in consonance with the Constitution? 

This is a state for whom the only currency that matters is raw power.

So, Mehta is not just against a particular political party, he is against the Nation State of India! He says India wants nothing except 'raw power'. It is an evil, Fascist, country. Imran Khan is right. The World should unite to wipe this evil Nation State off the map!

This is a state that recognises no constraints of law, liberty and morality. This is a state that will make a mockery of democracy and deliberation. This is a state whose psychological principle is fear. This is a state that will make ordinary citizens cannon fodder for its warped nationalist pretensions.

Mehta says India is evil. It recognizes no constraints of law, liberty and morality. It is not a democracy. It is a country run on the basis of fear. India will make ordinary citizens cannon fodder for its warped nationalist pretensions- e.g. maintaining the territorial integrity of the country even though Imran Khan has clearly hinted that Pakistan should be given J&K.

I hope Imran Sahib takes note of Mehta and gives him some nice sinecure as a reward. Sadly, even the Pakistanis don't want Mehta because everybody knows he is a worthless tosser. 

What is Mehta's major malfunction? He doesn't see the elephant in the room. Kashmir Valley, like other parts of the world targeted by Islamic extremists, has a serious terrorism and insurgency problem. Funding from India to a corrupt political class finds its way to the bad guys. The police are cowed and intimidated. India needs to do what other countries do in the face of this sort of threat. Luckily, the problem is easily contained because Pakistan itself was killing off extremists who did not side with them.

The 'narrative' on Kashmir Valley reflects the wider, still unfolding story, of how Islamic extremists are being dealt with across the globe.

Mehta pretends otherwise. Pakistan did not have to conduct very extensive military operations in Swat Valley. America did not have to put boots on the ground in Afghanistan. Saudi Arabia did not have to crack down on militants within its own borders. There is no such thing as extreme jihadist ideology. All that obtains is a very evil and Fascist Indian Nation State which is running amok.

The narrative supporting a radical move on Kashmir is familiar. Article 35(a) was a discriminatory provision and had to go. Article 370 was not a mechanism for integration but a legal tool for separatism. The Indian state, despite the horrendous violence it has used in the past, has never had the guts to take a strong stand on Kashmir.

India is not just evil, it is cowardly. It uses horrendous violence but doesn't have the guts to do something non-violent- i.e. take a strong stand on Kashmir. Why? I can take a strong stand on Kashmir and Palestine and the Uighurs and anything else. It doesn't cost me anything to do so. But the Indian State, prior to Modi, would get very frightened and its guts would start churning and it would have explosive diarrhea if it was asked to 'take a strong stand on Kashmir'. 

The radicalisation within Kashmir warrants a crackdown. The treatment meted to Kashmiri Pandits has never been recompensed either through justice or retribution. The international climate is propitious. We can do what China is doing: Remake whole cultures, societies. We can take advantage of the fact that human rights is not even a hypocrisy left in the international system. We can show Pakistan and Taliban their place. Let us do away with our old pusillanimity. Now is the time to seize the moment. Settle this once and for all, if necessary with brute force.

What is the alternative? Do nothing? Why not let Islamic State recruit students at Ashoka University to fight the jihad in Kashmir and Syria and London and Paris and Colombo? Surely that is the decent, democratic thing to do? The answer is no, that is the stupid thing to do. Only a fucking moron, like Mehta, would take such a path- if allowed to do so. 

There are kernels of truth to many of these arguments. The status quo was a double whammy: It did nothing to address the well-being of Kashmiris who have now endured two generations of what was effectively military occupation. And it increased the gulf between Kashmir and the rest of the nation. So some movement was inevitable. But the kernel of truth is being deployed with an armoury of evil.

Truth is truth, no matter who is deploying it. Mehta may say that India is evil and thus its armoury is evil. He is welcome to emigrate. However, he must stop pretending he cares about truth and thus resign from any sort of academic work.

The solution being proposed is an annihilation of decency.

But Mehta has already told us that the Indian State is evil and routinely unleashes 'horrendous violence'. Why speak of decency being annihilated? We say Hitler was monstrously evil. We don't say he lacked decency or wasn't quite a gentleman.

The fact that these measures had to be done under stealth, with a tight security noose and informational blackout is a measure of the evil of the step taken.

Nonsense! The aim was to cut off the trouble-makers from their pay-masters and to disrupt their networks. This plan succeeded because the 'mainstream' politicians were disintermediated.

This is not the dawn of a new constitutional settlement, designed to elicit free allegiance. It is repression, plain and simple, reminiscent of the Reichstag or Chinese constitutional ideology that sees federalism as an obstacle to a strong state and homogenous culture.

The Reichstag was the parliament of the Weimar Republic. It burned down and so Hitler's goons met somewhere else. Mehta probably meant to write 'reminiscent of the Third Reich'. China has no 'constitutional ideology'. It has a 'Party ideology'. On conquering the country, the Communist Party initially toyed with paying lip service to Stalin's theory of Nationalities which had also been a feature of KMT ideology. But it soon abandoned any such pretense.

India's case is quite different. It is a multi-party democracy under the Rule of Law. The framers of the Constitution chose a unitary not a federal model. As Dr. Ambedkar pointed out, it is the Union of India which decides what is or is not a State or Union or other type of Territory. Mehta knows very well that States have been partitioned or reconstituted by the Center regardless of what the majority in the State Legislative Assembly demands. This enables minorities to thrive on their own rather than be exploited. In the case of J&K, Ladakh has been separated in keeping with the desires of the majority of its population. The same has not been done for Jammu. It remains to be seen whether this is tenable.

Think of the proposal’s broader ramifications. India has betrayed its own constitutional promises.

The Indian constitution contains provisions for its own amendment. It does not make any promises whatsoever. It was drafted by smart people like Ambedkar, not cretins like Mehta. There is no question of 'betrayal' here. It could be argued that there was a betrayal of the Princes when Indira Gandhi snatched away their privy purses. But that was a political betrayal, not a betrayal of the Law. 

India has many asymmetric federalism arrangements outside of Kashmir.

India is not a Federation. It is a Union. There are no 'federal arrangements' in Indian Law. The Union of India- that is the Center- has the constitutional power, subject to due process, to change how any part of India is governed. This has always been the case.

This act potentially sets the precedent for invalidating all of them.

Either a thing sets a precedent or it does not. Anything can potentially affect anything else. Suppose my neighbor's cat, currently sleeping in the sun on the roof of a garden shed, suddenly wakes up and jumps down into the street. This could, potentially, give a shock to a little old lady walking on the pavement causing her to swerve onto the road. This could, potentially, cause the driver of an oncoming car to swerve and hit the lamp-post. This accident could potentially cause a super-strain of Ebola- which the driver was transporting- to be released into the air. This deadly virus could, potentially, spread across the world killing off everyone save Iyengars. Since Iyengars are very evil, they are bound to do something very nasty to the Indian Constitution. Thus, my neighbor's cat could potentially invalidate not just the Indian Constitution but also the Constitution of every other country.

How can we justify offering Nagaland asymmetric federalism but deny it to Kashmir?

We are not called upon to make any such justification. Suppose someone comes up to you and says 'You wipe your own bum. Yet you don't come to my house to wipe my bum. How do you justify your asymmetric bum wiping?' You tell the guy to fuck off. He calls up Pratap Bhanu Mehta who turns up at your door demanding to hear your justification. What do you do? Well you could punch him in the face- but then how would you get that nasty smell off your knuckles? Thus, you may say 'My bum-wiping is a self-regarding action. I gain by wiping my own bum. I don't gain by wiping anyone else's bum. Fuck off before I call the police.'

Its implication is that the government can unilaterally declare any existing state to be a Union Territory.

Quite true.

This is a constitutional first.

Nonsense!  The National Capital Territory of Delhi, Chandigarh and Lakshadweep were formed by separating each territory from pre-existing states. Mehta actually lives in Delhi. Why does he not know this?

We are simply a union of Union Territories that happen to be a state at the discretion of the Centre.

No. Article 1 of the Constitution says 'India, that is Bharat, shall be a Union of States. The territory of India shall consist of: The territories of the states, The Union territories and Any territory that may be acquired.' It has been clarified that the Union of India alone decides what is a State or Union or other type of Territory. This is not a matter of discretion. It is not the case that the President can say 'I exercise my discretionary powers to declare that Tamil Nadu is no longer a State. It is a Union Territory.'

Let us also not put too fine a point on this.

Let us also put not too fine a point on things which, potentially, Mehta shoves up his arse.

Even if Article 370 were to be scrapped, the proposal to alter Jammu and Kashmir’s status to Union Territory, even if temporarily, is designed to humiliate an already subjugated population.

If J&K has a 'subjugated population', then Pakistan is right and India is in the wrong. However, if Hindu majority Jammu feels subjugated by Muslims and Buddhist and Hindu majority Ladakh feels subjugated by Muslims, why not let them go their own way? Mehta may feel that India should let the Muslim majority go to Pakistan but why can't they just walk there? There are plenty of non Muslims in Pakistan and Bangladesh who would gladly trade places with them. As for the Muslims of India- how did they benefit by having a Muslim majority State in the Union? 

How dare a Muslim dominated state exist in India? Kashmir can now not even be trusted to be a state. The optics of this measure is not integration, it is humiliation, of a piece with subtle and unsubtle reminders to minorities of their place in India.

J&K has been so frequently under President's Rule that it would be true to say that it could not be trusted to be a state. Mehta may believe that the Government of India does not care about National Security. Its raison d'etre is to humiliate people. That was certainly the impression most Indian formed when they had to interact with organs of the State. However, under Modi things have gotten better. I never expected to hear NRIs praise Indian Embassy staff or the Ministry of External Affairs. Yet, under the late Sushma Swaraj, this miracle actually occurred.

Let’s take the argument that this pain is worth the price, if it actually solves the problem. But will it?

Yes. Killing people who try to kill you solves the problem of murder.

There will be a sullen peace, militarily secured, that we will mistake for victory.

Nobody will mistake it for anything because nobody cares about this shithole with just half a percentage of the total population. Whether the Valley is sullen or smiling does not matter to anyone. 

The very army, behind whom every patriot now hides, will now potentially be put in even more harm’s way:

Potentially, my neighbor's cat could put all of humanity- except for them evil Iyengars- in harm's way.

To be used more and more as the sole basis for keeping India together.

This fuckwit does not get that China and Pakistan have territorial claims against border regions. Our Army is the sole factor keeping their Armies out of those areas. However the vast mass of the Indian population live far away from any such borders. They are not menaced in any way. Mehta may pretend that the only way to prevent Maharashtra or Bihar from breaking away is by sending in the Army but, potentially, this causes him to put too fine a point on stuff he shoves up his arse.

And even if we concede to the tragic necessity of force, that force can work only in the context of a larger political and institutional framework that inspires free allegiance, not fear.

Which is why Tibet and Kurdistan are free and independent countries.

But even if Kashmir resigns to its fate, pummelled by military might, the prospect of radicalisation in the rest of the country cannot be ruled out.

Because, potentially, my neighbor's cat may put too fine a point on stuff Mehta, for reasons that can't be ruled out, shoves up his arse.

There are already incipient signs of that. The theatre of political violence will shift. In the context of the communally sensitive arc from UP to Bengal and in Kerala, India will seem more fragile.

Yes. This is the Congress game-plan. 

For, fundamentally, what this change signals is that Indian democracy is failing.

Because it rejected the Dynasty and elected a 'chai-wallah'. 

It is descending into majoritarianism, the brute power of the vote; it will no longer have the safety valves that allowed inclusion.

Inclusion of cretins like Pratap Bhanu Mehta in 'National Knowledge Commissions' and other such boondoggle. 

The feckless abdication of the Opposition will only deepen the sense of alienation. There are no political avenues for protest left.

Because protest is a good in itself.

Most of the so-called federal parties turned out to be more cowardly than anyone anticipated; the Congress can never stand for any convictions. Not a single one of us can take any constitutional protections for granted. Parliament is a notice board, not a debating forum.

It is true that Indian politicians are less cretinous than Mehta, but then so is everybody else. However, Mehta is right to say he himself can't take constitutional protections for granted because, potentially, he may put too fine a point on some large object he, for reasons which can't be altogether ruled out, shoves up his stinky bum.

Let us see what the Supreme Court does, but if its recent track record is anything to go by, it will be more executive minded than the executive. Kashmir is not just about Kashmir: In the context of the UAPA, NRC, communalisation, Ayodhya, it is one more node in a pattern hurtling the Indian state towards a denouement where all of us feel unsafe.

Because Mehta may put too fine a point on stuff he shoves up his bum and thus this cretinous bag of shite might explode at any moment. Since, potentially, Mehta may be in your vicinity when this happens, you too should feel unsafe.

Not just Kashmiris, not just minorities, but anyone standing up for constitutional liberty.
The larger worry is the fabric of our culture that is making this possible. There is a propaganda machinery unleashed with the media that builds up a crescendo baying for blood and calls it nationalism.

As opposed to a propaganda machinery unleashed by clients of the Dynasty which insists that the Indian Nation State is evil and has always unleashed 'horrendous violence' and subjugated and humiliated minorities.

There is the coarsening of human sentiments that makes empathy look worse than violence.

Very true! If we empathize with this sad sack of shit putting too fine a point on something which he shoves up his arse, then the consequence is worse than the violence we would have had to employ to restrain the stupid cretin. Potentially speaking, of course.

There is the sheer political impatience with any alternative. The old Congress system of dealing with these issues appears so decrepit and corrupt that even a total carpet bombing of institutions and morality will be better. There is a kind of cruel aestheticism in our politics where audacious evil will be celebrated for its audacity, and mundane goods will invite contempt because they are mundane.

As opposed to non mundane goods like putting too fine on something Mehta, potentially, shoves up his arse.

These proposals are not about solving a problem. What is playing out in Kashmir is the warped psyche of a great civilisation at its insecure worst. The BJP thinks it is going to Indianise Kashmir. But, instead, what we will see is potentially the Kashmirisation of India: The story of Indian democracy written in blood and betrayal.

The BJP thinks the Hindus of Jammu and the Hindus and Buddhists of Ladakh will do better if they are no longer at the mercy of the Muslims of the Valley. 
My guess is the Valley will be a Puritanical remittance economy supporting low level stone-pelting. Once the Center's money is diverted from Muslim politicians to Hindus and Buddhists, the non Muslim areas will continue to 'Indianize'. The Valley can stew in its own juices. However, there will be one big change. Previously, Kashmiri traders got visas to China. That will stop. Why? The ideology driving the Valley will be equally noxious to the Chinese. Indeed, what China is doing to the Uighur is the template for something similar along its 'Belt & Road'. Peak Jihadism is over. The Chinese are coming and they take no prisoners.

It is sad to think of Mehta potentially penning cri de coeurs like the above using his own shit because he put too fine a point on his pen and shoved it up his ass. Still how else can the story of Indian democracy be written by an utter cretin?

Katherine Pistor's Da Vinci 'Code of Capital'.

Katherine Pistor, has written a book called 'The Code of Capital' about which her publisher states- ' Capital is the defining feature of modern economies, yet most people have no idea where it actually comes from. 

Capital means stuff you use to generate Income. The hunter gatherer has a throwing stick and a couple of flints to make fire. That's Capital. So are tanks and air craft carriers used in the Nation's defense as well as Police Stations and Casinos and Brothels.


What is it, exactly, that transforms mere wealth into an asset that automatically creates more wealth?

Economic activity turns wealth into more wealth. Suppose you own shares in Apple. You have to claim the dividend on your shares and put them in your Bank Account. That is economic activity. You may prefer to pay a broker to do it for you. Then she is doing most of the work. Still, you stirred yourself enough to put her in charge. 

 The Code of Capital explains how capital is created behind closed doors in the offices of private attorneys, and why this little-known fact is one of the biggest reasons for the widening wealth gap between the holders of capital and everybody else.

Attorneys may try to grab wealth for themselves or their clients to which they are not entitled. Sometimes, these attorneys get knifed or beaten to death. Sometimes they get beaten in court by other attorneys. Sometimes the police arrest these attorneys and their crooked clients and put them in jail. However, there have been occasions when attorneys have succeeded in redistributing wealth. But so have black-mailers and extortionists and muggers. 

I can hire a couple of tough guys to beat other people and take their stuff. The problem is that those tough guys may beat me and steal my stuff. Alternatively, other people may kill my tough guys and fuck me over. If people pay taxes, they may be able to get a police force to kill or incarcerate those who try to 'redistribute wealth' using fraud or violence. However, wealthy people can always protect their own wealth and, at the margin, use their goons to grab other people's wealth absent any Law or Police Force. 

In this revealing book, Katharina Pistor argues that the law selectively “codes” certain assets, endowing them with the capacity to protect and produce private wealth.

Guns and knives and heroin and cocaine are assets. Criminal gangs use selective 'codes'. This endows them with the capacity to protect and produce private wealth. The law is impotent, unless there is a mechanism over which it presides which kills or locks up the gangsters and takes away their ill-gotten gains. However, this mechanism, if let loose on the producers of merit goods, will also destroy Society's wealth and impoverish everybody. 

 With the right legal coding, any object, claim, or idea can be turned into capital—and lawyers are the keepers of the code. 

There may also be a 'Da Vinci Code' but unless some albino guy is going around killing people, it has no effect whatsoever. Enforcement matters even if there is no Code and no Law. The 'Black Economy' by definition is outside the Law. It may have better contract enforcement than the 'White Economy'. Some years ago, a Judge in India hired a goon to get rid of a tenant of his who wasn't paying rent. The Judge could have gone through the legal system but the thing would have dragged on for decades. The public sympathized with the Judge for doing what everyone else was doing. 

Pistor describes how they pick and choose among different legal systems and legal devices for the ones that best serve their clients’ needs, and how techniques that were first perfected centuries ago to code landholdings as capital are being used today to code stocks, bonds, ideas, and even expectations—assets that exist only in law.

All this is bullshit. Landowners existed before there was any Law or Lawyers. So did Mercantile Capital. Guilds enforced 'intellectual property' by beating and killing transgressors. The legal system was a comparatively late development and initially featured 'trial by combat'. 

There are many assets that don't exist in Law but which are safe and highly productive. Being beautiful and smart and well connected does not, according to the Law, entitle you to a higher return on your labor or capital. By contrast, being a disabled woman from a minority may, according to the Law, entitle you to equal returns. Yet, invariably, the extra-legal, or even illegal, asset yields a safer and higher return than the one 'encoded' by the Law. No doubt, from time to time, there may be one or two instances where enforcement of purely ornamental, virtue signalling, laws do occur. But then some poor people do get to win the lottery or get to become celebrities after appearing on a Reality Show.

A powerful new way of thinking about one of the most pernicious problems of our time, The Code of Capital explores the different ways that debt, complex financial products, and other assets are coded to give financial advantage to their holders. 

Nobody would lend or invest money if they weren't promised 'financial advantage'. The existence of the Law can mislead people into investing with a Bernie Madoff. All that matters is Enforcement. But, illegal enforcement is generally better than going through the courts. Why? Because shysters are disintermediated. 

This provocative book paints a troubling portrait of the pervasive global nature of the code, the people who shape it, and the governments that enforce it.

This nonsensical book doesn't get that where free entry and exist obtains, rights are allodial. The attempt to render them otherwise generally fails. There is 'jurisdiction shopping'. People 'vote with their feet'. Rents are purely a function of elasticities of demand or supply. The Law, at best, serves an Aumann signalling function.

Pistor wrote a paper a few years back outlining the main props of her imbecilic thesis.

This paper develops the contours of a legal theory of finance (LTF) for contemporary financial systems, i.e. systems that mobilize capital today for future returns. The history of money and credit dates back millennia (Hodgson 2013), but the configuration of global financial capitalism is of more recent vintage.

What does 'configuration of global financial capitalism' mean? I don't know. Nobody does. Even Soros or Buffet can't tell us what the price of such and such currency or bond will be tomorrow. The real interest rate remains unknown till after the fact. Yet, real interest rates and real exchange rates and real per unit labour cost and so forth are the parameters global financial markets look at. But they don't fully specify the system. Because of Knightian Uncertainty, the thing is impossible. The configuration space is radically unknowable. Is this cretin saying that there is any Legal system in the world which asserts that there can be a justiciable vinculum juris specified upon the configuration space of the entire Global Financial system? Did nobody tell Pistor about force majeur or Acts of God?

It is this system that is the concern of this paper and the theory it develops. LTF asserts that finance is legally constructed; it does not stand outside the law.

So, LTF asserts a lie. Finance stands outside the law. The law may bid for 'contract enforcement' services, in return for a fee, and Finance may or may not take up the offer.  However, there is a portion of Finance- stuff related to Government debt instruments and shares issued by Public Corporations- where the Law has an originating role. In other words, the Law has financialized itself to survive or thrive. But this means the Law is under the discipline of Financial Markets, not the converse.

In the short run, a tyrant or demagogue may think that passing laws can force Finance to pay for the Government. In the medium to long term, the Government either has to change tack or goes bankrupt. The Law has no magical power over Nature. Economics is a game against Nature. Chrematistics is grounded, not in Nomos, but Phusis, because different socio-economic regimes have to compete with each other on an Uncertain fitness landscape. The Akrebia of the Law is out of place in the Economia of the Agora.

Financial assets are contracts the value of which depends in large part on the  contemporary global financial system, including its inherent instability, its organization into an apex and a periphery, the differential application of law in its different parts and last but not least the locus of discretionary power.

Nonsense! Financial assets are contracts whose value depends only on their own market. If put options are 'in the money', then call options are 'out of the money'. The 'global financial system' is irrelevant. 'Apex' and 'periphery' are irrelevant. The Law is irrelevant- unless it tries to fuck things up, but even then the effect will only short run because the market will move to another jurisdiction.

As such LTF can serve as the foundation for a political economy of finance.

No it can't. Only some cretinous shite can be founded upon stupid lies.

Within this framework there is ample room for analyzing the behavior of actors using rational choice models, but also a more socially embedded approach in socioeconomics (see infra under 5). LTF’s critical contribution is to emphasize that the legal structure of finance is of first order importance for explaining and predicting the behavior of market participants as well as market-wide outcomes.

The legal structure of finance changes slowly. Thus, though expectations re changes in that structure can have some effect, by the time they occur they have been discounted and evaded.

Uncertainty, Liquidity and the Instability of Finance Before explaining the elements of LTF in greater detail I turn to the two premises on which it rests – uncertainty and liquidity volatility – and their implications for the nature of finance, namely its inherent instability. Frank Knight argued long ago that any attempt to capture dynamic rather than static phenomena must grapple with the problem of fundamental uncertainty; that is, with risk that cannot be quantitatively measured (Knight 1921). This is the case whenever circumstances are unique and deviate from “invariable and universally known laws” (ibid at III.VII.3). Such circumstances cannot be reduced to variables that lend themselves to probability calculations, and the distribution of possible outcomes is unknown (ibid at III.VIII.2). These cases call for judgment, not calculus. Keynes developed a similar concept in his Treatise on Probability, also published in 1921 (Keynes 1921(2010)). Building on this insight, he later emphasized that the process of accumulating wealth is necessarily a long-term project that is beset by our inability to  know the future. Writing in 1937, he elaborated: The sense in which I am using the term [uncertainty] is that in which the prospect of a European war is uncertain, or the price of copper and the rate of interest twenty years hence, or the obsolescence of a new invention, or the position of private wealthowners in the social system in 1970. About these matters there is no scientific basis on which to form any calculable probability whatever. We simply do not know. (Keynes 1937, 214) It follows that we cannot fully predict the future and that, therefore, any investment strategy devised today will have to be adjusted should the future deviate from assumptions made today.

This is ignorance simply- but it is not uncommon. A regret minimizing strategy fully incorporates Knightian uncertainty. This means that only tactics change, the strategy remains 'Hannan consistent' in some respect.

This does not have to but frequently goes hand in hand with a financial crisis, in particular when substantial readjustments have to be made throughout the economy. The frequency of financial crises in the history of financial markets corroborates these predictions (Kindelberger 2005). Reinhart and Rogoff offer eight hundred years of evidence that financial crises occur much more frequently than people are willing to believe (Reinhart and Rogoff 2009). In fact, there is little disagreement even among proponents of the efficient capital market hypothesis (ECMH) that at least some aspects of finance are beset by inherent instability. Specifically, entities that engage in maturity transformation, i.e. banks, are widely held to be vulnerable to crises (Allen and Gale 2001; Levine 1998). They finance long-term commitments with short-term funds that can be withdrawn on demand. Whenever too many depositors seek to withdraw their money these entities face extinction with potential repercussions for other entities and the system. The vulnerability of financial markets to such bank runs has found a regulatory response in the form of deposit insurance. Private intermediaries that engage in similar bank-like activities, such as hedge funds, have instead unilaterally imposed at times redemption restrictions to ensure their survival in times of liquidity shortage. Where there is disagreement is whether instability extends beyond intermediaries to financial markets, or whether financial markets can instead solve the instability problem by diversifying risk. Financial innovation has made possible the splitting of credit, default and interest rate risk; prior to the global crisis it was widely believed that this kind of risk diversification had ushered in a period of “great moderation”, where instability was contained. There are, however, good reasons to believe that the root causes of instability are the same for banks and markets. Both offer mechanisms for investing capital today in the hope and expectation of positive future returns, and both have to confront the conundrum that knowledge about the future is imperfect and liquidity is not a free good. Under these conditions, splitting risk cannot offer full protection against future events or a reversal of liquidity abundance.

Nothing offers 'full protection' against future events. There are no riskless assets. No doubt, there was and is some bad economics at work in the discourse of the market. But the remedy for this bad economics is not bad jurisprudence. It is mechanism design to reduce principal agent hazard. We are speaking of 'incomplete contracts' here. Pistor, cretin that she is, pretends otherwise. The result is bad Law and worse Economics.

The concept of liquidity as used in this paper is the ability to sell any asset for other assets or cash at will.

Without realizing a loss. You can sell your Rolex for a 100 dollars to the guy at the 7/11. But, since its value is much greater, we don't say your Rolex is liquid.

Selling or buying assets is intertwined with balancing one’s assets and liabilities and as such necessarily links funding liquidity and market liquidity.

Nonsense! Only arbitrageurs are doing this balancing. Everyone else in the market is either a net lender or net borrower. How stupid is this cretin?

This definition differs from others used in the literature. Brunnermeir and Pedersen (2009), for example, define market illiquidity as the “difference between the transaction price and the fundamental value” and funding illiquidity as “speculators’ scarcity (or shadow costs) of capital”  fundamental value as compared to its value or volatility relative to other assets and to conceptually differentiate speculators from other investors.

Arbitrageurs, not speculators. A speculator may have zero liabilities.

Yet, as the US Supreme Court has put it, while “scholastics of medieval times professed a means to make such a valuation of a commodity’s ‘worth’”, this may not be a meaningful exercise for today’s courts nor arguably modern day academics in economics or law .

So, the US Supreme Court is ignorant and babbles about 'scholastics of medieval times'. But the Bench is of no greater account to Wall Street than it is to NASA.

In fact, it is not what market actors do: they are more concerned with relative, not absolute value (Frydman and Goldberg 2011). Lastly, in a market-based credit system that is largely reliant on “Ponzifinance”, as Minsky has defined financing strategies that rely ex ante on refinancing in the future (Minsky 1986 at 226), the distinction between speculators and other market participants becomes less tenable.

This is because Pistor is a cretin. She does not get that her argument refers to arbitrageurs, not speculators. No doubt, you can have periods of collective irrationality but that is the consequence of bad mechanism design. The broker is wrongly incentivized and misleads the gullible man in the street who wants to get rich quick. But the brokers themselves get infected and end up jumping off skyscrapers- at least in movies.

Adjusting existing investment strategies to new facts entails selling some assets and/or buying new ones.

No. The Hannan Consistent strategy involves simply updating weightings in a multiplicative weight update algorithm. The strategy remains the same. It is regret minimizing. The tactics change- i.e. there is portfolio adjustment on the basis of a m.w.u.a which incorporates new information.

Yet, not all assets may find takers, or only at a substantial loss, and not all sellers will obtain refinancing, which they must when confronting shortfalls in cash or other sellable assets to meet their own liabilities.

So, there is a shakeout. Nothing wrong in that. It happens in every field. Some lawyers keep losing cases coz they are as stupid as shite and so they become academics or take to dealing drugs.

In the worst case scenario a fire sale of assets may occur which can trigger an economy wide downward price readjustment and potentially mass insolvencies. The likelihood of such an extreme scenario depends on how many investors will have to seek refinancing at the same time; the number will be higher the more investors have built their strategies on the ability to refinance on demand. In short, for a crisis to occur uncertainty must meet liquidity shortage.  

 Mass stupidity leads to misery for the masses. Mechanism design is about preventing that. Consider Hitler's Germany. The German masses believed something very stupid. This caused a lot of them to get killed or raped or ethnically cleansed from what had been German territory. Why did the Germans- and other Europeans- fuck up so badly? Bad mechanism design. Within Germany, General Blomberg should not have got the Army to take an oath of loyalty to Hitler. The Judiciary should have asserted its independence. The French should have, as De Gaulle warned, developed an offensive doctrine etc, etc. Mechanism design is about incentives and checks and balances. Pistor isn't interested in it. She just wants to talk paranoid shite about 'Codes of Capitalism'. This is neither Law nor Economics but Stupidity simply. But there is a Globalised market for stupidity and good luck to her if she makes some money of it. Still, she'd better keep a weather eye open for albino assassins coz like I read about how Opus Dei controls the Rothschilds who control the British Monarchy who control the Lizard People from Planet X. Wake up sheeple! Its bleeding obvious that the Illuminati have been anally infiltrated by Elizabeth Warren! Time to put on the tin-foil hats!