Monday 18 March 2024

Hattafat dam b'rit drowns the Deluge

 

'How circumcise my heart?' I ask of that which is Spinozan in Deleuze
For Buber has said the Schizophrenic can have no 'I and Thou'
That a pin's prick drop of hattafat dam b'rit blood drowns Pralaya's Deluge
Manu's Maya is the Vow of the How of the Now, of Bow fucking Wow.

Envoi- 
Prince! Because niddah can never apply to the nolad mahul's Mum
Christ is the blood, Christ, as Mohel, spills till but Christ come.

Sunday 17 March 2024

India's Man of Destiny's Jedi mind-tricks

In the Mahabharata, there is the story of Arjuna and how he came to be the best archer in the world. When asked to take aim at a bird, he saw neither the branch it was sitting on, nor its plumage. He could only see the eye of the bird. Such was the intensity of his focus and concentration. True, it also helped that a lower caste archer was asked to cut off his thumbs so as to ensure Arjuna's supremacy. Still, it is Arjuna's focus on the eye of the bird which India's Man of Destiny has adopted as his own political strategy.

It must be said, never in the history of democracy has one man caused so many hundreds of millions of people to change their votes over so long a period.  It is the iron determination and unshakeable ideological faith of that same man which has ensured that the BJP will get a third term. I am not speaking of Narendra Modi. I am speaking of Rahul Gandhi. He is India's Man of Destiny. That destiny, however, is to yield to Bharat- which is a living breathing Nation of great aniquity. India is a geographical expression. The dynasty of the 'last Englishman to rule' it, can either quit or continue to die nasty. 

True, Modi is an exceptional politician but would the BJP really have fielded him in 2014 if Rahul had shouldered aside Manmohan, after tearing up the latter's ordinance, and led his party into the 2014 elections as the sitting PM? I think not. Advani would have been allowed a last hurrah. Alternatively, if he was judged too old, Sushma Swaraj or Arun Jaitlery- seasoned Lok Sabha parliamentarians- would have nominated as the NDA's Prime Ministerial candidate. Why expose Modi to humiliation? He might lose Gujarat if he showed himself anxious for the top job. Look at what happened to Deve Gowda. Regional Chief Ministers, however successful, don't do well as Prime Ministers- at least that was the conventional wisdom till Modi won from Benares and became PM. But he wasn't running against anybody. Rahul had refused to step up to the plate but had also refused to let anybody else do so . It was a case of Modi vs Nobody. 

Suppose Rahul had followed his father's example and taken charge of the Commonwealth Games as Rajiv had taken charge of the Asian Games. His popularity would have soared. Once he became PM, the voters would have felt they should 'give youth a chance'. Moreover, Rahul could have said he was a 'Mr. Clean' who was sick and tired of the corruption in Manmohan's Coalition  Cabinet. It may not have been true but it was what people wanted to hear.

Congress did get a new lease of life when Rahul consented to become President of the Party at the end of 2017. For his part, Rahul felt that his own views had been justified by the Party's debacle in 2014. Under his command, the party would follow the correct strategy and thus annihilate Modi and the BJP.

What was that strategy? For Rahul, a votary of Vipassana, you triumph by ceasing to react to your circumstances. Don't accept what appears obvious or irrefragable. Your mind can create the reality you want. In an interview with India Today before the 2019 election he said, in response to a question about his favorite fruit- 'I do Vipassana.

Which means seeing things as they really are. It doesn't mean you can disregard reality and make up any shit you like. 

 The mind constructs the flavour of the fruit.

No it doesn't. The fruit we buy and eat has been selected for intensively. This has to do with out taste receptors, which, too, evolved. Buddhism could be considered a Bayesian approach to a Darwinian truth. 

You can like or dislike any fruit you want.

Unless you are allergic. 

You can choose to like mango, you can choose to hate it.

Up to a point. But what would be the point?  

You can choose to like poor people, you can choose to hate them. You construct everything in your mind. The mind decides everything. I might start off hating someone, but after a bit of interaction, I’ll see things through their eyes, and be like: Actually, I like him; he’s great’.

Rahul thinks that 'interaction' with poor people will cause him to like them. This will cause them to like him and think he is great. It turns out Rahul's Vipassana Jedi mind-trick is the the sort of thing you might tell an eight year old Richie Rich who, for some reason, has to admit a public school alongside smelly proles. If he can suppress his natural reflex of disgust, he is halfway to being able to manipulate them using his superior mental powers. 

But to answer your question: I like mangoes, I like bananas, I never used to like carrots, but now I do. I never used to like asparagus, but I do now.'

In the same interview, he revealed his strategy to defeat Modi. Briefly, the idea is that if people say 'X will win because X has Y quality', you can control your mind and refuse to react in the normal way- which would be to find some other Achilles heel to target- to this information. Instead, you can change the facts of the case by 'interaction'. Others will start seeing through your eyes. They will understand that Modi is not a Backward Caste person from a family which has not enriched itself in a corrupt matter. Actually Modi is a plutocrat. He is a British Lord in disguise who hates Hinduism.

Thus Rahul said in 2019 that Modi would be defeated because people would believe he was corrupt. ' don’t start with the idea that you can’t do it. You can. All it takes is persistence. It applies in everyday life too. Everyone told me Mr Narendra Modi can’t be defeated. I said, Yeah, you really think so?’ I asked them, Tell me what Mr Narendra Modi’s strength is.’ They said, His strength is his [incorruptible] image.’ I said, Okay, I’m going to rip that strength to pieces. I’m going to take it and shred it.’ And I’ve done it. Persistence, my friend! Keep going and keep going and keep going. And I will keep going until the truth on Rafale is out!'

Sadly, the Supreme Court gave a clean chit to the Government on Rafale. But, even prior to this, there seems to have been no impact on voters. On the other hand, Rahul's claim that Modi isn't OBC is bound to be believed. It is obvious that Modi is a Chinese lady who is also the King of Sweden. 

There is another reason why Rahul will go down in the history books as the man pre-destined by History to pull down the curtain on Bharat's long humiliation as a mere geographical entity which needed to 'negotiate' and compromise with external or internal enemies. This is because Rahul is trying to use his 'Vipassana' based super-powers to change the past. He says Congress was never a cadre based party even though the RSS was an imitation of the Congress Seva Dal. The BJP evolved out of the RSS backed Jan Sangh thanks to a revolt by 'Old Congress' leaders, together with 'backward caste' Socialists against the Dynasticism and Authoritarianism of Indira's Congress. Since it wasn't caste based, the BJP could evolve into a National Party though that process is, even now, far from complete. Still, since India's Man of Destiny has created an 'INDIA' alliance which has already self-destructed, Modi has the chance, in his term of office, to ensure that the BJP does gain traction in every State of the Union. However, it will take many years before the BJP's cadres will achieve as broad a geographic reach as did Congress even before Independence. God alone knows why Rahul wants Congress to forget that it was once dominant when it came to being cadre based. The simplest answer is best. If Congress isn't destined to decline, Rahul's destiny would be to get shot or blown up like Daddy or Granny.

More mischievously,  Rahul is using his Vipassana based Jedi mind-tricks to broadcast the idea that the different states- Tamil Nadu, Maharashtra, Assam etc- got together and 'negotiated' the creation of the Indian Union. The thing was 'bottom up', rather than 'top down'. Thus India is like the USA which was constituted by 13 colonies and which thus retains 'Dual Sovereignty', though the Federal Government has the upper hand. Indeed, Rahul says India is like the E.U. which permits the exit of any of its sovereign members. According to him the Constitution in describing 'India that is Bharat shall be a 'Union of States', recognizes the sovereignty of each constitutive unit. 

This is not the view of the Bench. It was not the view of Rahul's ancestors. The Bench has clarified that no State- including J&K- has a shred of sovereignty. Any State or Union or other Territory can be abolished, divided, renamed or amalgamated even without any consultation with the people of that State. In other words, India that is Bharat can decide how many, if any States, there should be. When the Constitution was promulgated, there was a Madras State out of which 'Tamil Nadu' was carved out. Subsequently Andhra Pradesh was split up. Rahul could see for himself that the latter event was 'top down' and did not involve negotiation with the people concerned. Why then is Rahul making this absurd claim? The most plausible answer is that he can't get elected in the North. In the South, he thinks there could be a type of secessionist sentiment which he himself can fan up and profit by at the ballot box. After all, C.P. Ramaswami Aiyar had wanted Travancore to go it alone. Later, there was a brief period when the DMK advocated a separate Greater Dravidian Nation in the South. The problem here is that Rahul does not speak a South Indian language. He can't be the head of a South Indian secessionist movement. All he can be is a 'useful idiot' for the sort of people who supported the Tamil Tigers and enabled that organization to kill Rahul's daddy when he visited Tamil Nadu. Sadly, if there is a war with China- as there was in '62- separatist sentiment will become anathema in the South. Tamil Nadu will rally behind Modi. Suddenly Annamalai might look like a future CM. Hopefully, the Chinese won't be foolish enough to start any trouble on the border and Rahul can continue to fulfil this destiny as the man who, if he couldn't destroy India, could still make Congress anti-National and yet more un-Indian. 


 




 


Saturday 16 March 2024

Kaushik Basu on why cats must sodomize dogs.

Mechanism design is reverse game theory. Get the incentives right and you don't need a coercive authority overseeing matters. This is not to say that a 'Stationary Bandit' might not try to muscle in on this lucrative activity. But, it is important to understand, that the State, or property rights, or contract enforcement, is not essential for economic transactions to burgeon.  It is just that these things are conducive to a bigger pooling equilibrium. Birds of a feather would flock together anyway- i.e. there would be separating equilibria. It is to extend these that the 'homonoia' of the Emperor or, the successor states to an Imperium- is enforced but only for a price. 

On the other hand if the people are unproductive- and that includes being incapable of civil behavior- then no amount of laws and judges and police men will generate good economic consequences.

Kaushik Basu, takes a different view. Writing for Project Syndicate, he claims that 'legal behavior has economic consequences'. The problem is that if that behavior pre-existed the laws, then the legal set-up codifies acceptable behavior- perhaps for the benefit of new entrants or the incorrigibly stupid or sociopathic. Equally, merely passing laws regardless of actual behavior won't have any economic consequences at all. One may as well repeal the law of Gravity. Nothing material would be affected.

On the other hand, it is true that Basu experienced good economic consequences because his Mummy behaved towards him in a legal manner. It was not her practice to laugh heartily while chopping pieces of him. Basu may think this was because his Mummy was only seeking to comply with the relevant section of the Indian Criminal Code. He is wrong. Laws about what Mummies should not do were only written down tens or hundreds of thousands years after Mummies had shown no such laws were required. This does not mean that judges did not have to deal with some crazy or sociopathic ladies of this type. 

The Economic Consequences of Legal Behavior

Many thriving societies, such as Germany and Japan, adhere closely to the letter of the law.

We say the Germans and the Japanese are disciplined and civic minded. No doubt, religion played a big part in this as did widespread conscription and a traditionally hierarchical society.  

However, allowing for a certain degree of latitude for individual interpretation, as the United States has done throughout its history, can foster creativity, enhance efficiency, and stimulate economic growth.

Nineteenth Germany and Japan were both extremely creative. German music, philosophy, mathematics etc. achieved high prestige as did Japanese art towards the end of the century.  Germany and Japan are still creative though it is true the German economy has overtaken Japan's However, there are geographic and demographic reasons for this. The US is a settler society which has received massive immigration over the centuries. It is foolish to compare it to 'Old World' countries. 



NEW YORK – The way people navigate traffic can tell us a lot about their respective cultures.

No. They can tell us a lot about what level of traffic they are used to. This has nothing to do with 'culture'.  In a country where traffic congestion is a relatively new phenomenon, older people may not know how to cross the road properly. When I was young, there was little traffic on the roads of New Delhi. Now, I sometimes hire a rickshaw to get across a broad highway so as to use the Metro. However, in London, I have no such difficulty. This does not mean I have two different cultures. Its just means that my 'reflexes' are not adapted to a Delhi which now has vastly more road traffic then it used to when I was a boy. 

Recently, while walking to my office in midtown Manhattan, I stopped at a red light when an elderly woman with a walking stick caught my attention as she cautiously looked both left and right. When she saw that no car was close enough to hit her – assuming they adhered to New York’s speed-limit laws – she gave me a puzzled look and crossed the street. I must admit, I felt a bit foolish.

Basu is elderly himself. Anyway, as an absent minded Professor, it makes sense for him to wait for the green light at the pedestrian crossing.  

Such an incident would be unthinkable in Japan. Years ago, on the first night of a weeklong visit to Tokyo, my young, jet-lagged children, who had lived only in India and the United States, were amazed by the law-abiding Japanese.

But the law-abiding Japanese also adhere to all sorts of norms and conventions which have no legal force. What Basu's kids were remarking was a country with an ancient culture in which the vast majority of the population was autochthonous.

Peering out of our apartment window at midnight, they observed a man standing alone at a crosswalk. Even with no cars in sight, he waited patiently for the light to turn green.

Japan was briefly occupied by the Americans but it has never been truly conquered. Its people feel that its norms and rules are indigenous. South Korea, which is even more creative and innovative and economically dynamic than Japan (its per capita GDP now exceeds that of its former colonial master) had a lot of traffic accidents because drivers and pedestrians ignored the rules. Apparently, the Government is using advanced technology to keep zombies engrossed in their smartphones safe when they cross the street.  

While these normative differences may seem trivial, societal attitudes toward the law can significantly affect a country’s economic performance.

Not in this case. South Korea is more dynamic than Japan, yet its people are more anarchic. No doubt, this is because the ordinary Korean felt subjugated first by the Japanese and then a Military dictatorship. It appears there is greater resentment of the oligarchs and crony capitalists. It may be mentioned that, during the Raj, travelers often reported that people in the big British administered Cities were more rowdy and undisciplined than those in the Princely States.  

Whereas the New Yorker’s actions could be interpreted as aligning with the spirit of the law, the Tokyo pedestrian adhered to its letter.

One might simply say that norms and expectations are different in the two countries. As a matter of fact 'jaywalking' can be quite a serious offence in parts of the US whereas it generally isn't in Japan. They have a saying ' 赤信号皆で渡れば怖くない- it isn't scary to cross the road when there is a red light, if everybody is doing it. Indeed, that is what happens in many countries. Britain doesn't have a jaywalking offence but I tend to be cautious. Still if others are crossing against the light, I do too. 

A system that emphasizes the spirit of the law gives individuals discretionary power, leading to potential misuse or abuse.

All legal systems are the same. You can have your day in court and explain why you think you adhered to the 'spirit of the law'. The fact is, there is a permissible element of discretion in the enforcement, not the interpretation, of the law. 

When individuals have latitude to decide how to behave,

everybody has latitude in this respect. It is a different matter that we won't break the law if there is a heavy fine and, because of CCTV evidence, it would be difficult for us to deny the charge brought against us.  

they might, for example, choose to disrupt traffic.

But they may simply be people who habitually behave in an undisciplined and disruptive way.  

This is evident in the streets of New York

No one has ever suggested that New Yorkers are docile and civic minded.  

and, to a greater extent, in my hometown of Kolkata (formerly Calcutta).

Kolkata has gotten a lot better. Instead of burning buses, young people earn good money producing useful goods and services.  

While the city is gradually adopting the Western model, during my youth Kolkata was a pedestrian’s paradise, where crossing the street required no more than a simple hand gesture.

Back then, India produced few cars and trucks. Traffic was lighter. 

It is crucial to understand the strengths and weaknesses of both systems. Japan’s remarkable transformation from a low-income economy to one of the world’s richest countries can be partly attributed to its law-abiding culture.

No. It can be attributed to the fact that them Japs are smart and work their asses off. That's also why the Koreans and the Taiwanese and Singaporeans and lots of Indians working in IT rose and are still rising.  

Adherence to the letter of the law fosters better organization, which fuels economic growth

Not if the laws are stupid. The law-abiding Indian bureaucrat strangled the Indian economy. Economic growth is about being more productive not about following the rules more blindly yet.  

and overall development.

Development arises where productivity rises. This has nothing to do with either the letter or the spirit or the heart or the soul or the vociferous farts of the law.  

Consider, for example, an orchestra: without a conductor to guide them, the musicians onstage may still make music, but it would not be the Salzburg Opera.

A leader solves coordination and concurrency problems. This can raise productivity. It has nothing to do with the law.  

The same is true for many other aspects of daily life. In a 2002 paper I co-authored with Jörgen Weibull, we argued that punctuality is not a genetic trait

this is because our genes don't cause us to have a smart-watch inside our head 

but a behavior cultivated through coordination.

No. It is behavior which is 'reinforced' by penalties and rewards. If you keep getting fired because you turn up late for work you either find ways to become punctual or decide that maybe being a homeless bum might be a life-style choice.  

Sticking to a fixed schedule becomes valuable when everyone is expected to do so.

No. All that matters is whether you gain by it. I once lived in a Student's Hostel were nobody was expected to turn up for meals at the stipulated times. Since I couldn't afford to eat out, I soon learned to be punctual.  

It is reminiscent of the stag hunt game described by Jean-Jacques Rousseau in his Discourse on Inequality, in which two hunters could kill a stag by cooperating but only a hare if they go it alone.

Very true. The two hunters could make an appointment with the stag. If either of them failed to turn up, the stag would express displeasure and refuse to be killed. Hares were less punctilious in these matters.  

Contemporary Japan is known for its fastidious culture of punctuality.

So is Germany.  

What is overlooked is that, barely a hundred years ago, Japan was known for its sloppiness with respect to time.

This is because there were multiple systems of keeping time and, in any case, the country was transitioning from agriculture. 

Japan’s ascent coincided with normative transformation from tardiness to punctuality.

Italy, too, ascended though its people claim to be unpunctual. What can't be doubted is that they are worth waiting for.  

Sociologists have emphasized the crucial role of social and institutional embeddedness in driving economic development.

Sociologists are as stupid as shit. What drives development is mimetics to raise productivity. Japan is very different from Germany. Yet both rose as industrial powers. China has very different 'social and institutional embeddedness'. Yet, it has in certain economic areas it is as developed as the US. Much of this has been achieved in the last three decades. Meanwhile, India has had 'Chief Economic Advisers' like Basu and Rajan who witter on about Polanyi type embedding. 

Simply put, in addition to its trade, fiscal, and monetary policies, Japan’s remarkable rise over the past century has been facilitated by a social transformation which enabled its economy to grow at an unprecedented rate.

No. Japan started raising productivity. This caused some social transformation in specific sectors of Japanese life. This is because there was 'reinforcement'. Those enterprises which were run in a shitty manner and those employees who were unpunctual and undisciplined were weeded out. 

It is a different matter than a particular 'Marshallian industrial district' may gain external economies of scope and scale of a type which can innovate and move up the value chain. We may speak of a localized culture of innovation and enterprise and we may associate this with a particular religious sect or ethnicity. But this isn't the type of 'embedding' Polanyi was talking about. Moreover, it has nothing to do with the law. After all, organized crime can be very fucking innovative. 

Nevertheless, the New York model, where individuals are given leeway to interpret the law, has its merits.

There is no such leeway. Jaywalking is illegal. The motorist has the right of way. Still, you could sue a driver who knocked you down even if you were jaywalking provided he too was negligent. 

After all, pedestrian traffic lights are designed to facilitate the smooth flow of traffic and occasionally allow pedestrians to cross. When the road is empty, ignoring the red light does not run counter to the law’s purpose.

You can still get a ticket for jaywalking. However, so long as you yield to the motorist where he has right of way and don't cut across diagonally, you may have a defense in law.  

It facilitates what economists refer to as a Pareto improvement, whereby some people are better off without hurting anybody else’s well-being.

Sadly, we can never know whether a thing is a Pareto improvement or not. When ever we do stupid shit we always say 'But I didn't think anybody would get hurt!' 

While enacting laws that accommodate every individual’s unique circumstances and preferences is not feasible, leaving laws open to some degree of individual interpretation can encourage creativity and enhance efficiency.

Basu has confused guidelines with laws. The former are more similar to helpful suggestions. The latter must be 'bright-line' or else they add noise to signal. Economic activity is eased when the behavior of concerned parties is consistent and predictable.  

This approach, which cultivates a culture conducive to technological and artistic innovation, has enabled the United States to become the world’s growth engine and magnet for talent.

American Judges and legislators strive to ensure that the rules are 'bright-line' not ambiguous. There may also be 'best practice' or other such guidelines in contexts where no law has been made. 

The US is a magnet for such talent as can be most productive there. But American talent may find itself more productively employed setting up enterprises elsewhere.  


To be sure, attempting to bring about a normative transition from adherence to the letter of the law to realizing its spirit could backfire,

Why not just attempt to bring about a normative transition such that everybody becomes very nice and sweet and thinks only pure thoughts?  

producing cacophony in the proverbial orchestra pit.

Also cats may start sodomizing dogs.  

Economists and legal scholars can play a crucial role in facilitating such a shift while mitigating potential risks.

Not if they are as stupid as shit. But the smart economists would actually be economizing on the use of scarce resources- thus permitting everybody to be better off. As for 'legal scholars', if they are any good they will be too busy making money.  

This cannot be achieved through precise policy prescription –

Yes it can. At any given time, there is some policy prescription better than any other. The guy who can supply it should be rewarded. Others should be told to fuck off.  

that would in fact be self-contradictory.

Nope. If you want to achieve something, there is a precise prescription which you can follow. I want to control my Diabetes. That is why I follow the precise prescription my Doctor gives me.  

The key to achieving this is in the realm of ideas that John Maynard Keynes emphasized.

Were they ideas connected to sodomy? Probably. 

We need to be aware of the two distinct modes of law enforcement,

We are all aware that the police might let us off with a warning for a misdemeanor.  

and, despite the risks, the surprising advantages of moving from following the letter of the law to the spirit.

Most people set themselves a standard higher than the law requires. After all, crimes and torts are exceptional occurrences.  Still, it is true that economic development can accelerate if people in one country voluntarily choose to abide by the more exacting laws and regulations of a more advanced country. 

As the British conductor Charles Hazlewood observed, for good music you need individual musicians to follow the conductor’s instructions exactly.

Symphonic music- maybe. Jazz can be quite good. I'm kidding. It's fucking horrible.  

Great music, however, relies on “trust” and “personal freedom for the members of the orchestra.” They need space for judgment and creativity.

Orchestras need subsidies. Currently, none are financially viable. Basu thinks economic activity is stuff which makes a loss. Spirit of the law consoles it by saying 'pimp out your kids so as to get the money to keep playing shite snobs have to pretend to find sublime'. This will cause lots of innovation and economic development in a Galaxy far far away. Also cats will sodomize dogs even though letter of the law is weeping and wailing and pleading with pussy to spare their Doberman. 

Friday 15 March 2024

Raghuram Rajan- saving savers from having any fucking savings

People with an engineering background who did PhDs on Banking related issues in the Eighties and Nineties tended to make three big mistakes

1) they thought Banks merely bundled discrete services which, the math said, could be unbundled and each assigned a mechanism to overcome moral hazard or incentive incompatibility. This meant that deregulation was fine so long as they themselves were the, wholly independent, regulators with discretionary charge over the repo rate and forex interventions. 

Sadly, Banking is more like priest-craft- if not smoke and mirrors type thaumaturgy- rather than the sort of mathsy shite studied in Fintech. Unbundling and securitization and the entry of novel types of financial intermediary can endanger the entire financial system because Credit, that is Faith, is now serving not the one true God but a host of warring demi-gods.

The Central Banker should be more obedient than Aaron, the high priest, and bow down before Moses as he descends from Mt. Sinai carrying the commandments of the new Finance Act. Like the suave Archbishop at the court of a medieval King, the Governor of the RBI must have an emollient personality, an ability to keep channels of communication open with the FM, and a firm understanding that his role is to get money for the Government, not safeguard the interests of 'widows and orphans' or save the middle class from some putative Hitler by preventing inflation. 

Even smart guys like Rajan- who, however, was a good communicator and 'added value' by inspiring confidence in financial markets- could make the mistake of trying to defy the Government even though in a poor country like India, the Governor of the RBI has no mandate to do so. Urjit Patel and Viral Acharya and were less diplomatic and paid the price by having to quit before completing their term. The lesson was obvious. India should stop bringing in foreign trained egg-heads who didn't understand India's political economy or their place in the grand scheme of things. 

2) the Financial Engineers didn't understand the difference between appropriable control rights and ownership. Thus their mechanism design could be self-defeating or counter-productive. A complicating factor is the Supreme Court's predilection for striking down anything or everything on the grounds that it is ultra vires or that it violates the basic structure of their stupidity.

3) they didn't understand just how shitty Indian statistics and indices are or which of them are suitable as policy targets. All in all, these were decent and patriotic people who, however, lived in a fantasy land. 

 The contrary view is that they were cretins- one and all- even Raghuram Rajan. Was this always the case? Perhaps. What is certain is that he had delusions of grandeur. A mere fifteen years after moving to Capitalist America he thought he had found a way to 'Save Capitalism from the Capitalists' and co-authored a book with an Italian, which came out in 2003. 

 Wikipedia summarizes it thus. 

The book is neither a defense of pure laissez-faire capitalism, nor is it an anti-capitalist polemic. Instead, the authors develop the following arguments in the book:

1) The free market is the form of economic organization most beneficial to human society and for improving the human condition.

That is a defense of laissez faire capitalism.  Don't forget there can be free markets in all sorts of things including market regulation. Markets can vote for the best mechanism for their own functioning and reward the custodians of that mechanism appropriately. Where there are externalities, the market can create Institutions or Enterprises which internalize them. The State is one such enterprise. It has to compete with other States which might covet its territory or other resources. 

As for 'the human condition', not fucking dying horribly would be what would improve it most. Why can't I jump out of the window while high on acid without suffering grave injury? No doubt, if scientists can make a breakthrough in organ regeneration, there will be a market for stuff which improves the human condition in this regard. 

Free markets can flourish over the long run only when government plays a visible role in determining the rules that govern the market and supporting it with the proper infrastructure.

This isn't true. During the nineteenth century, Western navies or armies forced several countries to open up their economies and permit free markets- including repugnant ones, e.g. the opium trade- to flourish. The East India Company was not a government but it played a visible role in promoting free markets however horrible the outcome. The IMF and World Bank played a similar role as have consortiums of international creditors. 

It is a different matter that Governments tended to either go extinct or find ways to take a commission or 'Manorial rent' from markets in their jurisdiction. Sometimes they determined 'the rules' but gave up if this meant a loss in tax revenue. As for 'proper infrastructure'- that shit costs money. Entrepreneurs may provide it, if they have plenty but so might foreign donors or the Church. It is not the case that a country with no effective central Government will wholly lack infrastructure or 'rules' for market transactions. 

One may as well say 'Free markets can flourish in the long run only when people are nice. If they are naughty and keep stabbing each other, free markets will collapse. The same thing will happen if people start pretending they are cats. This is why it is important that we save Capitalism from Capitalists by enforcing strict rules against everybody pretending to be a cat while stabbing all and sundry.' 

Government, however, is subject to influence by organized private interests

So are people. We must save organized private interests from themselves by insisting that they don't pretend they are cats in between stabbing people.  

Incumbent private interests, therefore, may be able to leverage the power of governmental regulation to protect their own economic position at the expense of the public interest by repressing the same free market through which they originally achieved success.

They may also be able to pretend they are cats. We must save incumbent private interests from themselves by requesting them not to pretend they are cats because this would have the effect of repressing the same free, or unfree, markets through which they originally achieved success. This is because people who pretend to be cats seldom accumulate much wealth through entrepreneurship or arbitrage.  

Thus, society must act to "save capitalism from the capitalists"—i.e. take appropriate steps to protect the free market from powerful private interests who would seek to impede the efficient function of free markets, entrench themselves, and thereby reduce the overall level of economic opportunity in society.

In this case there are countervailing 'powerful private interests'. Let them duke it out by all means. There can be a market for the power they covet. We may think of this as like the Edgeworth contract curve or 'core'. Different coalitions make different proffers and stakeholders vote with their money- unless money has already been spent such that they vote with actual votes. In this scenario, Capitalism is self-regulating because anti-Capitalism is itself a market phenomenon. However, this whole discussion is foolish. The fact is Societies have to defend themselves against external and internal threats. This means they must either seek to imitate, one way or another, what the more successful countries are doing or else fall behind in productivity and military and economic power. That road leads to enslavement by aliens or serfdom in a Spartan militaristic State like North Korea.  


The authors offer the following recommendations: Reduce incumbent capitalists' incentives to oppose markets,

Why not reduce the incentive for incumbent Socialists or Woke nutters to fuck over the economy? There may be people who believe they are cats and who spend all their time purring and trying to catch mice. Why not concentrate on giving incentives to those who can cure them? Why reduce the incentive to say miaow of people who aren't pretending to be cats? What good will that do? 

especially by limiting the concentration of ownership of productive assets.

If there are substantial scale and scope economies, all you have done is reduce your country's competitiveness.  In any case, what is important is appropriable control rights, not ownership. Any way, the Common Law can develop a competition policy all by itself. Even if it doesn't, a monopsony can gain countervailing power over a monopoly such that the dead weight loss is minimized. There are many ways to skin a cat- unless the cat is actually a person who is in the habit of saying miaow, because skinning people can attract a charge of homicide. 

Provide a social safety net for the economically distressed to help maintain broad political support for free markets.

Equally, such a safety net can provide broad political support for a Theocracy or Monarchy or Dictatorship. The trouble is such safety nets tend to disappear when people need them most.  

Keep the borders of the economy open to support free trade

It is estimated that 750 million people would immigrate to the US if they were allowed to do so. This won't support free trade because Americans will no longer be able to export or import very much. Also their 'social safety net' would collapse- not to mention all the raping and looting which would occur. 

and maintain a high level of competitive pressure on incumbent firms.

how do we maintain this? One way would be to tell incumbent firms that there are highly educated cats which are seeking to enter their market and steal all their customers. That will scare them straight. 

I suppose you might say 'Vivek, enough with the cats. All that Rajan is saying is that policy makers should seek to increase elasticity of supply and demand perhaps by sponsoring research into close substitutes. The problem here is that Rajan isn't saying any such thing. A production engineer- which is what Rajan was trained to be- might give us ideographic information of this sort for a particular market. Regret minimization, more particular during periods of increased Knightian Uncertainty, may militate for developing such capacities 'just in case'.  

Educate the public regarding the benefits of free markets to build political support for free market policies,

Why not educate the public to discover the secrets of cold fusion? Better yet, why not educate them in the Maharishi's technique to achieve yogic levitation? Education costs time and money. Why educate people regarding the benefits of free markets or the great advantages to be had by not pretending to be a cat all the time? 

True, if you have a charismatic orator, like Ronald Reagan, Wall street may hire the dude to go around giving stump speeches. But that is entertainment more than it is education.  

or more specifically, oppose governmental interventions in the market designed to protect incumbents at the expense of overall economic opportunity.

Two decades later another Tambram, gained political traction by saying that 'wokeness' and 'DIE' were being used by 'incumbents' as a barrier to entry. In other words, the State's sponsorship of a liberal agenda raised compliance costs and strangled potential competitors. The problem with Vivek Ramaswamy's pitch, as with Rajan's, was that Americans don't really believe they need to be 'educated' into seeing that stupid self-serving shite is just stupid self-serving shite no matter what virtue it is meant to signal.  

Raghuram Rajan, Inclusive Localism & banning sexy quantum entanglements

Worried by the rise of right-wing populists who oppose immigration, Raghuram Rajan champions 'inclusive localism'- in other words, people should run their own local communities in the manner Rajan thinks they should. One could go a step further and suggest that everybody's brains and bodies should only function in the manner Rajan thinks best. However, as I have repeatedly pointed out, it is only once all elementary particles in the multi-universe are nice and sweet and do what my bidding that we can have a truly inclusive Cosmos which is free of sexy quantum entanglements and other such naughtiness. To my mind this clears up the problem of 'non-locality' or 'hidden variables' which so vexed Einstein. 

Rajan's inclusive localism is like my theory of how elementary particles should behave. The fact is, the real problem with the Universe is that, so as to exist, it has to compete with other possible Universes with different fundamental constants. However, by discouraging 'black holes' and ensuring that the Universe is informationally isometric- which I think would be nice- the Universe could become the sort of place for which I'd leave a positive Yelp review. Sadly, the Universe is not listening to me probably because it is watching porn. Fuck you Universe! Fuck you very much!

DISCOURAGING SORTING OF RESIDENCE AND COMMUNITIES BY INCOME Let us turn from production to residence, specifically the issue of residential sorting, which we encountered earlier. While nations have the right to control the inward flow of people, communities should not have that right, else that risks perpetuating inequality and segregation within the country.

A right exists iff an effective remedy is available. Countries which can't seal their borders can't control the inward flow of people- more particularly if they are better armed. Communities have various legal methods by which to restrict the influx of people. For example, they can enforce laws against squatters, or homeless people, or the enrollment of students in their Schools if those students live outside the District. In the past, some communities in America had restrictive covenants and other racially biased laws. It may be that such practices continue in an informal manner. 

Turning to the country which has grown the most rapidly over the last four decades, we find China thrived despite having a hukou, or household registration system which was effectively a sort of internal passport. This meant there was service provision discrimination which increased rents, and thus incentives to invest, for affluent urban communities. It is not clear that what might be termed a 'guest-worker' system- e.g. that of Singapore or Dubai- is inequitable in itself or that it reduces allocative or dynamic efficiency. Indeed, the reverse is likely to be true. Going forward, we expect to see more and more affluent countries move to this system. Thus, in the UK, the Government has restricted the ability of Care workers to bring their families. This suggest that going forward, the needs of an ageing population will be met by workers from poor countries on fixed term contracts but no right to domicile or path to citizenship. Rajan may disapprove, just as I disapprove of sexy Quantum entanglements, but there is nothing he can do about it. By contrast, my latest book- titled 'The Turd Pillar' pillories quarks which are engaged in perverted behavior. This is causing many elementary particles to rethink their life-choices. 

Yet many well-off communities, while ostensibly open, set zoning rules in a way that effectively discriminates against less-well-off people.

Which is why those well-off communities remain well-off.  

For example, some communities forbid the construction of apartment buildings, rental occupancies, or single family homes smaller than a certain size, thus keeping out anyone who cannot afford high housing costs.

They may go further by arranging for a low income area in a different district to bus in the gardeners and nannies and cleaners that the wealthy need to maintain their affluent life-style.  

Effectively, they keep out lower-income folk through a nontariff barrier. Economic segregation ensures those with lower incomes do not benefit from the institutional, social, and intellectual capital that the more well-to-do create for themselves—such as better schools. The individual’s desire to sort is understandable, but it will exacerbate inequality of opportunity, and increase potential social conflict.

This is a type of Tiebout sorting. At the margin, activists may be able to seize political control of such a district. But what if they kill the golden goose?  There are always places to which the wealthy can retreat leaving behind an aspirational middle class which will soon sink to the level of the poor who have taken control. 

Indeed, the more that zoning creates moats and battlements that protect the upper classes, the less incentive they have to worry about what happens to the rest.

Ultimately, they can just offshore themselves completely and run things from their super-yachts or tax havens.  

A state intent on creating more equal opportunity communities should offset some of these incentives to sort, by ensuring the poor can follow the rich anywhere.

Also the State should ensure that stalkers get to rape their victims. Why are super-models only marrying other handsome and wealthy people? Diversity, Inclusivity and Equity demand that I too get an equal opportunity to contribute semen to their vaginas.  

One way to get more economically diverse communities is to eliminate some of the most egregious constraints on what can be built, especially when local house prices are high. A bill introduced by a California state senator, for example, would allow all housing being built in California within a half mile of a train station or a quarter-mile of a bus route to be exempt from regulations regarding the height of the building, the number of apartments, the provision of parking spaces, or specific design standards. 

Which is great if you are a property developer. If you are merely middle class and paying off a mortgage, it may mean you can never retire or else will never be able to leave any money for your kids or grandkids.  

This is a bill that local property owners hate because it will create more housing supply and depress the value of their homes, but it will be tremendously beneficial for economic inclusion.

Very true. Earlier this week, I dined with a friend who had bought a plush riverside apartment some years ago. I suspect he is in trouble with the Enforcement Directorate which is why he is lurking here in London. He complained to me that his apartment complex was virtually empty. The owners lived in far away countries. Still, they were very ethnically diverse. It is important that we are locally inclusive of  poor suffering Billionaires from Turd World shitholes. 

Every such solution has some downsides since they interfere with community choice but, I repeat, in the trade-off between inclusion and localism, inclusion should be given more weight.

Drug dealers and whores need to be located near major railway stations. Why are they suffering economic exclusion? We need high rise buildings to house this diverse community.  

Consider some other possibilities. The state could mandate that some fraction of the residences in any community, say 15 percent, should be affordable for low-income residents.

Plenty of places have such laws. The upside is that the super-rich have some neighbors if, for some legal reason, they think it safer to lurk in an advanced country which might refuse to extradite them on the grounds that their country of origin is a fucking shithole- albeit one where they were able to loot a lot of money.  

If the community would like to maintain its aesthetic look and allow only large single-family residences, then a sufficient number of these should be rented or sold to low-income families,

not to mention victims of horrendous sexual self-abuse. I am thinking of myself here.  

with the rest of the community bearing the cost of making these affordable.

The struggling middle class should welcome this opportunity to line the pockets of property developers.  

Such a solution works most easily for new developments, where “set-asides” can be mandated for low-income housing. The city of Chicago negotiates set-asides for new developments, but certain states in the United States prohibit set-asides, perhaps because developers do not want to be burdened with the cost.

Race based 'set-asides'- e.g. in the granting of contracts to minority owned enterprises- are banned in some States. Developers don't mind their costs rising if they can pass them on with a mark-up to the tax-payer.  

Moreover, set-asides will be harder to mandate for established older communities, where there may be little vacant land for development. Another way of encouraging mixing, or at least discouraging sorting, is through the tax code.

Americans love paying taxes. Fuck with their tax code and you are sure to be re-elected.  

For instance, high income households whose children are enrolled in public schools in low income districts could be given a tax rebate, essentially because of the positive spillovers that their children are likely to contribute to their classes.

Very true. If your kid was thrown out of Andover because he kept stabbing teachers, you should get a tax rebate if the only school which will take him is a public school in a District where stabbing people is not considered a social faux pas. 

Private incentives could also help. For example, top universities could give incentives to students studying in public schools in low-income districts by allocating a fraction of admits to each public school in the state.

Top universities can make money by driving up fees and 'voluntary' donations by restricting supply. This is classic price discrimination. 

Not only will this incentivize the less-well-off to apply to the elite universities,

which may be wealth enough to do 'needs blind' admission 

it may also be the carrot for some well-to-do parents to stay or even move into those school districts so that their children will have a leg up in admissions.

This is also a good reason to ensure your child is a transgender Eskimo  

While this may seem like a violation of the spirit of the plan, the presence of these well-prepared children and their pushy highly educated parents in the schools will be beneficial to all.

How? The kid from the poorer family suddenly finds the rich thicko is doing better than him in the exams. Why? His parents have hired the best tutors for him. Also, he gets in on the sports quota for 'dressage' or some other such elitist shite.  

In this vein, some states in the United States are already allocating some places in the state university to the top students in each public school.

Nothing wrong in that. Universities traditionally recruited some poor but bright kids if only so as to have a ready pool of ill paid pedagogues at their disposal.  

Much of the incentive to sort comes because students coming from different households are at very different levels of educational and social preparation.

The rich may have some extra polish which is cool in non-STEM subjects. But for mathsy stuff make sure you are getting in plenty of nerdy Asians.  

Attempts to mix students with very different preparation—for example through state-mandated busing from poor communities into well-off communities —obviously leads to resentment and dissatisfaction on all sides.

It was a boon to the private, especially Church based, educational sector.  

The students who are bused in feel inadequately prepared and fall behind, while the students in the receiving schools feel they are being held behind.

But the Schools basketball team wins the State championship. Also, African Americans are as cool as fuck. Nerdy Asians, not so much.  

The problem is the differential preparedness, which needs to be addressed before mixed classes can work. Early childhood programs that attempt to equalize preparation could be enormously beneficial, especially if they are then followed by mixed classes in public schools which ensure differences in educational capabilities do not build.

What is even more beneficial is not going to a school where you will be knifed if you don't join a gang and start selling drugs at the street corner.  

Accelerated remedial education programs could also help, though the later they are in a child’s life the less effective they will be.

If we don't want to bother with keeping inner-city kids safe from gangs, we can always futz around with this sort of shite.  

New technologies that can allow teachers to address students with different levels of preparedness (see later) can also help the process of equalization.

Somali parents in London started sending their sons back to their war-torn country because they were safer there. Why not admit that killing gangsters is what stops 'disadvantaged' communities from being so fucking disadvantaged? The answer is that there's money in being a virtue signaling libtard. There is none in stating the obvious. 

Countries that have a severe sorting problem could build in stronger tax incentives to mix, including residential congestion taxes that require rich households to pay higher taxes if they stay in communities with other rich households, and lower taxes if they stay in low-income communities.

Rajan hasn't noticed that rich peeps can employ clever accountants to reduce their rate of tax to below what the struggling middle class has to pay. On the other hand, you can have some level of redistribution of property taxes. The devil, sadly, is in the detail. Whatever mechanism the bien pensant can come up with will be quickly 'gamed' so that we end up with perverse outcomes.  

There are plenty of ideas, some more problematic than others, but we have to be open to experimentation if we want to avert the hereditary meritocracy emerging in many countries.

It emerged long ago in every affluent country. True, conscription during World Wars could trigger social mobility as the business of warfare became more managerial and technological. But there has been a reversion to the mean. 

Are there practical ways to promote an egalitarian meritocracy? Sure. Reduce the requirement for expensive, time-consuming, educational credentials. Working class boys need to start earning as soon as possible after puberty or else they can go down a bad path. Let them 'Earn and Learn' by all means. They need to build up some financial capital by the time they are in their mid Twenties. Young people will postpone marriage if they can see a clear path to, if not affluence, then solid middle class respectability. 

What about competition policy? One might expect Rajan to focus on the manner in which wealth can get concentrated in a narrow hereditary caste. 

Antitrust authorities should examine mergers for the possibility of industry dominance, not just from the perspective of whether the customer is better served today, but also whether competition will be irretrievably altered.

Very true. Before deciding what to do today, we should first discover what will happen in the future. It isn't the case that your guess is as good as mine.  

For instance, acquisitions that have the primary objective of closing an innovative competitor, or absorbing a rival who might prove a competitive threat, should be prohibited.

So should every action, including farting. How are we to know if the fart of the CEO of a company might not result in an innovative competitor closing down his business in protest? Things like that happen all the time. I wrote to Mahuaji explaining how Adani's fart, in 1984, so disgusted me that I decided not to start an enterprise which would have been much more innovative than his because all my employees would be cats. Sadly, since I didn't offer her any money, Mahua did not raise this matter in the Lok Sabha. Yet, there are people who say India is a democracy! 

Preserving competition today may also be essential so that the stock market does not give a dominant incumbent the resources with which to shut out competition tomorrow.

Very true. It isn't the case that doing stupid shit won't cause the Chinese to eat our fucking lunch.  

The pragmatic solution is to adopt once again the clear and defensible rules of thumb of the past, whereby antitrust authorities opposed corporate actions that increased a single corporation’s dominance of any market beyond a preset specified point, no matter what the claims about greater efficiency and consumer welfare were.

Cool! That way there would have been no Apple or Microsoft or Amazon. Also, smart peeps like Rajan would be writing books in Chinese.  

Antitrust authorities must be broadminded about what constitutes the relevant market and competition, recognizing that technology can bring product and geographic markets together that were separated in the past.

They should also recognize that Bill Gates farted in 1977, thus causing me to quit the software industry in disgust. This was clearly a per se illegal anti-competitive action.  

However, arguments that innovation or entry by rivals will make the market more competitive in the future should be met with some skepticism—today’s dominance can allow the incumbent to alter conditions so as to make it much harder for rivals to get their foot in the door in the future.

Which is why it is a big deal if China continues to overtake us in vital high-tech sectors. Rajan could learn a thing or two from fellow Tambram, Vivek Ramaswami.  

The economic costs of rule-of-thumb antitrust enforcement may not be large as information technology improves,

Sadly, IT is 'footloose'. It can relocate to a better jurisdiction and thus escape the dead hand of competition policy.  

and as contracting and monitoring costs fall. Instead of a company owning the entire supply chain, we could get a more nimble, competitive supply chain consisting of many corporations contracting with one another.

You will have that anyway because of Trade Unions and higher compliance costs for bigger employers.  

Instead of a company merging with all competitors who produce a product, ostensibly to obtain economies of scale, we could instead retain many competitors who cooperate on specific projects through alliances whenever the economies of scale of doing so are really significant.

This is also a great way to offshore the profits so as to escape the Tax-man's greedy mitts.  

Put differently, corporations will adapt to effective antitrust enforcement,

by making it ineffective or a profitable barrier to entry for themselves, through 'Agency Capture'  

and given the improvements in contracting and communications, we will likely get both competition and productive efficiency at the same time.

We may do. The trouble is that if China is quicker to develop Quantum Computer based AI or stuff weirder or more wonderful yet, then our whole Intellectual Property regime will collapse. The terms of trade will move against us. It will be China which has the 'exorbitant privilege' of, if not providing the global currency, then writing the rule-book and practicing price and service provision discrimination in a manner adverse to us. 

Rajan does not understand that Econ is about choice under scarcity. We can, like Condorcet, dream of a more inclusive community where sexy Quantum entanglements are strictly forbidden, but as Malthus pointed out, scarcity will cause that paradise to be invaded. The State is needed to seal the frontiers. The Market, it turns out, is better than the feudal system, in providing the resources the State needs to fight wars. Thus, both are essential for communities even if the members of those communities don't give a shit about their neighbors.

Rajan concludes his vapid book thus- 

The three pillars that support society—the state, markets, and the community—are in constant flux, buffeted by economic and technological shocks.

Nonsense! The State in India, US or UK has not been in constant flux for centuries. This is because these countries were able to defeat invaders and put down insurrections. Markets have evolved on rational lines. There is no great discontinuity, or flux, in its functioning save under conditions of Total War. Communities which have risen in material terms have seen a lot of geographical and occupational mobility but, once again, there has been no 'flux' save during the Civil War or during India's partition. 

Society does need two things to survive. One is the ability to kill invaders or insurrectionists. The other is economic productivity. There is a close link between the two. If your productivity stagnates, it is likely that you will become the subject of a more economically productive, and correspondingly powerful, nation or (in the case of India) enterprise.  

Society perpetually strives for a new equilibrium, through a rebalancing of the pillars.

No. Society does not want an equilibrium. Like other things which evolved on an uncertain fitness landscape if thrives when 'far from equilibrium'. Otherwise there is stagnation, involution (which is very inclusively localist), and- sooner or later- subjugation to an alien race.  

The ICT revolution, accompanied by the Global Financial Crisis of 2007–2008, has once again highlighted the need for rebalancing.

No it hasn't. The virtue signalers of the West needed to pipe down because the rest of the world was ceasing to be a 'Rules taker'. Talk of DIE can kill off good quality research in Universities while turning innovative Corporations into lazy rent-seekers.  That may be cool, but as Vivek Ramaswamy well understands, it means our grandkids need to start learning Chinese in nursery skool. After all, if Tambrams like us are now writing in English, not Tamil or Sanskrit or Persian, it is because a bunch of British merchants decided they could run our country at a profit. They created the 'steel frame' which supported our Society- till, that is, we were able to emigrate to a place where Anglos still ruled. 

Recent elections across the developed world suggest people are deeply dissatisfied with the current state of affairs.

They are furious that local communities are not being more inclusive of Jihadi terrorists and transgender prostitutes of diverse ethnicities. Trump and Orban and Modi only won elections by promising- quite falsely!- to arrange for vast quantities of such people to be delivered to your doorstep.  

The ICT revolution has created a meritocracy, which is close to hereditary in some developed countries.

Nonsense! The kids of IT billionaires don't need to bother with coding and other such boring shite.  

Moreover, in reaction to the competition generated by global markets, those who can, such as large corporations and professionals, have created protected enclaves for themselves,

This began to happen about ten thousand years ago. Wealthy peeps in the Fertile Crescent began putting walls around their palaces and pleasure grounds. Indeed, the word 'Paradise' is derived from the Persian word for a 'protected enclave' of this sort. Rajan is under the impression that Maharajas and Dukes and Pittsburgh millionaires lived in shanty towns. They sent their kids to public schools. Indeed, Harvard and Yale were originally leper colonies rather than a place where rich kids were sent so as to acquire a bit of polish.  

further enhancing the benefits of being part of the higher meritocracy.

It took great merit for Akshata to be born as the daughter of a billionaire. As for Anant Ambani,  whose pre-wedding was attended by Bill Gates and many a former head of State, did you know that he worked so hard as a fetus and got such outstanding grades that, a bare nine months later, he was born as a billionaire? 

For the rest, outside the walled and moated enclaves, competition from man and machine from across the globe has been fierce.

But competition from beasts has decreased. Still, it is true that I lost a pissing competition with a photocopier machine. I still don't understand how it happened. I suppose, since the machine in question was Japanese, there was a little Japanese guy inside it who had a very large bladder. The truth is, my memory of my days as an Auditor is rather hazy.  

For the unprotected, new opportunities, preserved for the privileged by walls of credentials and licenses, have been hard to access, in part because educational ladders have been too short and rickety.

No. They have been too fucking long and have led nowhere. Take a degree in Econ and, provided you stayed drunk through the entire course, you can go on to actually economize on the use of scarce resources and thus end up wealthy. Even taking an MA doesn't turn you into a cretin. But a PhD is a step too far. Look at Rajan. He could have been a billionaire like Purnendu Chatterjee if he had stuck with OR or something useful of that sort.  

In part, they also have been inaccessible because the greatest opportunities have emerged in global cities, where limited space and zoning laws have made residence unaffordable for most.

Actually, having to live like a fucking battery chicken for the first few years of your professional life gives you an incentive to stay late at the office and thus get fast tracked for promotion.  

As economic activity has moved away from rural and semi-urban communities, despair and social disintegration has moved in.

What's wrong with that? Surely increased diversity is a good thing? Why is Rajan turning his nose up at his new neighbors? Is it coz he thinks Despair didn't go to the right School or disapproves of the fact that Social Disintegration wears a MAGA cap and chews baccy?  

With the establishment discredited, there is widespread desire for new answers.

Sadly, this isn't true. I keep giving new answers to my neighbors who ask why I can't turn down my music. They show no desire to hear them.  

The demagogues of the left and right propose answers people want to hear, not what they should hear.

They should hear Rajan explaining to them that he is not an animal. He is a human being.  

All too often, there is someone else or something else to blame, which then imposes the burden of change elsewhere.

Very true. Zelensky keeps blaming Putin when the truth is he should inclusively localize his own rectum so that more Wagner Group mercenaries have access to it. 

I am reminded of what Mahatma Gandhi said when people asked him why he didn't change his diaper. 'You should yourself become the change you want to see in the world'.  Admittedly, this happened in the Eighties and it might not have been Gandhi but some other baby who said this. The truth is, I was very drunk throughout that decade.  

That is comforting to their audiences but dangerously misleading. The reality is that we all are part of the problem, and we all can be part of the solution.

By emigrating.  

In the last five chapters, I have laid out a possible path to a new balance, a way to resist the seemingly inexorable diminution of the community, even while preserving the open access that markets provide us.

That possible path consisted of doing stupid shit of a type which has already been tried and which has already failed.  

The intent is to build the pillars up, rather than reduce them to the lowest common denominator.

My intent is to get elementary particles to give up sexy quantum entanglements. They should think pure thoughts and take cold showers.  

The essence of this new balance is inclusive localism.

It is one thing to invite all your neighbors to a barbecue. It is another to permit them to have an orgy with your wife. 'Good fences make good neighbors'. A community which keeps trying to include you in its orgies- more particularly if the only female invited is your wife- is one you may wish to be less fucking inclusive.  

We can use the tools we have obtained through the ICT revolution to empower communities more,

No. The guys who are in the vanguard of that revolution may have those tools. We don't. I did offer to borrow Bill Gates tools but he called me a tool and told me to fuck off. Mahatma Gandhi reproved him for this unkind suggestion.  

to give people more of a sense of control over their futures,

Why not over their pasts? Why discriminate in this matter? Let people control their present, their past, their future or, at the very least, let them have a sense that they have these super-powers.  

in the process creating and distributing economic and political power.

Rajan's Daddy and Mummy created economic and political power. 'Chellame', they said to him, 'be nice and distribute these powers. Don't be mean and hog them all for yourself.'  

At the same time, I argue for a national framework that is inclusive, in that all ethnicities are seen as part of the nation, and the nation does not entrench differences in economic opportunity between ethnicities or classes.

Why should the 'Nation' bother to do something which happens anyway?  

Inclusive localism breaks down gigantic walls protecting privilege,

by farting loudly at those walls. This is the reason Amrika does not have a 'Great Wall' unlike China. Trump said he'd build one, but Rajan's farts broke them down. Sadly, people in his locality did not want to be included when it came to smelling his farts. True, I don't know if this actually happened but had I been Rajan, it is what I would have done. 

while encouraging tiny walls to preserve community character.

Why not encourage cats to say miaow instead?  How can we achieve inclusive localism when the State is not letting local cats perform CAT scans? 

The hope is that such a path helps us hold on to the best aspects of a system that has contributed to global prosperity —primarily the open access and competition stemming from global markets—while dealing with the inequality and fear generated by technological change.

My hope is that my path will enable multiverse to become truly nice by persuading elementary particles to give up sexy quantum entanglements. Did you know that millions of quarks are looking at Porn? Army should take action.  

Specifically, for some of us, inclusive localism fulfills at the community level the natural human instinct to congregate with others similar to us.

Americans are more similar to Rajan than Tambrams like me. To be fair, my relatives have an instinct to escape by the back door if they hear me banging on the door, demanding to be fed thair shadam.  

It thus heads off more divisive and artificial attempts in diverse nations to fulfill that tribal instinct at the national level through populist nationalism.

Mahatma Gandhi's tribal instincts caused him to demand the Brits 'quit India'. True, this would have meant that the Japanese would have conquered the country but, since the Japs were much more horrible than the Brits, this was what 'Ahimsa' required.  

Also, by enhancing the local infrastructure, the means of building capabilities, and the safety net at the community level, inclusive localism attempts to broaden and equalize opportunities.

Why not just kill gangsters and sack teachers who are shit at their jobs and find ways for the majority of boys to start 'Earning and Learning' from around the age of 15?  

It allows each community’s members to participate in, and benefit from, global markets.

Previously they were not allowed to buy or sell stuff on Ebay by Exclusive Non-Localism. Thankfully, Inclusive Localism kicked its head in.  

The proposed path builds on what we have. I do not advocate dispensing with any of the pillars—I neither recommend eliminating markets and private property

very good of you I'm sure.  

nor do I suggest putting everything, including governance, for sale.

Rajan is also not suggesting that everybody should stick their heads up their own rectums. As I have said before, Rajan is one of the smartest of the Congi intellectuals.  

The state is necessary, but has to cede power to the community and can be much more effective.

This happens anyway through the political process in democratic countries.  

The community is essential for us to express our humanity,

only in the sense that expressing our humanity to the Pacific Ocean isn't particularly rewarding. 

but it needs to carve out space from both markets and the state to flourish.

It already has that. There is such a thing as Local Government.  

Even if seemingly moderate, the reform path is ambitious

No. It is stupid.  

for it eschews easy but often wrong solutions.

in favor of stupid if not meaningless verbiage.  

We also need to recognize realities. Deep down, the vast majority of us recognize the human in one another.

A small minority recognizes the camel in one another.  

Yet we need to come close enough to do that,

Rajan was walking with his Mummy and Daddy. 'Look!' he said suddenly 'that camel is wearing a sari!' His parents said 'that is not a camel. It is an elderly Tamil lady- your granny in point of fact. The took the young PhD scholar closer to the supposed camel. That was when Rajan recognized the human in his granny. Strangely, insights like this haven't procured Rajan a Nobel despite the fact that he is darker than either Amartya or Abhijit. Give him time. His next book may be even more vacuous than this one. 

and all too often, we label at a distance. Understanding and tolerance of other cultures is not a weakness, not a sign of inadequate patriotism, not an indication that we are rootless “citizens of nowhere.”

It may be all these things.  

In reality, it reflects our preparation for the world of tomorrow, where we will become ever more mixed as peoples, even as we study, value, and preserve our collective cultural heritage.

We will also inter-breed with various types of animals and plants.  

The world is not there yet.

Which is why Sandra Bullock is not actually a bullock.  

Therefore, we need to take smaller, easier steps, where there is room for all as we develop a better understanding of one another.

One small and easy step is to write an utterly vacuous virtue signaling book. Still, Rajan is right. Inclusive localism requires that his neighbor's stop thinking of him as a camel. He is a human being! Americans should come close to Rajan to satisfy themselves that this is indeed the case.  

The strengthening of proximate communities

which is what happens when Rajan farts and blows down Trump's Great Wall 

will not just allow a diversity of views, including the most tribal and the most cosmopolitan, to exist.

They already exist without anybody permitting or allowing them to do so.  

It will also allow us to preserve direct social interaction, which may well be where more of the jobs of the future lie,

Rajan will give blowjobs to local hobos 

as automation depletes jobs in sectors that produce commercial goods and services.

Prostitution is a commercial service.  

It may be that the changes that are about to hit us will be more extraordinary than anything we have seen.

They may hit Rajan. Since I eat and drink too much I will be safely dead before Biden has gene therapy and turns into a transgender camel so as to appease Hamas. 

Maybe most of us will be unemployed in a decade, rendered redundant by robots and generalized artificial superintelligence. I doubt it— ever since the 1950s, experts have been predicting that generalized artificial intelligence, that is algorithms that can replace humans fully, is less than a couple of decades away—but I also do not fear that outcome, so long as we preserve the balance.

Sadly, the West has been unable to preserve a balance of economic, military and 'soft' power which was greatly in its favor. Going forward, it is a case of doing what your smartest rivals are doing but trying to do it better and cheaper.  

That we are unemployed will mean that machines are doing our work more cheaply, that the cost of goods and services will fall, and their quality increase, to reflect the greater productivity of machines. As Keynes argued nearly a hundred years ago, we will be freed to contemplate the finer elements of our existence, to create and cherish great art and beauty, to value goodness rather than just commercial success.

Keynes was a racist with a dim view of working class people of his own color. He didn't understand that 'great art and beauty' has been produced by poor people throughout the ages.  

Many of us fear that we will not have the incomes for such a fine life, since the machines will be owned by a few, and all income will flow to them.

What we should be worried about is that when the next 'gain of function' Virus starts killing millions, the Chinese will refuse to give us the necessary vaccine unless we do what they tell us to do.  

Yet as our excursion through history suggests, social values change.

Often because of conquest or relative economic decline.  

We glorified the victorious warrior,

we still do.  

we then turned to praise merchants and bankers,

not unless we were paid to do so.  

today we place successful entrepreneurs on a pedestal,

more particularly if they tell the woke nutters to fuck the fuck off 

and we may exalt community workers tomorrow.

Just as medieval Pope exalted lepers and washed their feet.  

If the distribution of wealth becomes skewed towards a very few, the few may decide their accumulation of wealth unseemly and find ways to give it back.

Or pretend to do so.  

Society will aid that process by muting its applause for the captains of industry who only accumulate, while increasing it for those who distribute wisely.

Rajan has noticed that the good folk who go the Opera don't applaud the prima donna. They cheer only for the captain of industry more particularly if he is drunk and insists on singing along.  

Indeed, this already seems underway with the Giving Pledge, where billionaires across the world have pledged to give away at least half their wealth.

If a rich man makes a promise, he always keeps it- right?  

Even if values do not change, the feared outcome of mass poverty amid productive plenty will not come to pass if we

insist on 'workfare' rather than 'welfare'. Poor people produce poverty by having babies who are bound to be poor. If they find some more productive way to occupy themselves they will choose a more entertaining type of recreation as an alternative to procreation.  

maintain our democracy, and the separation between behemoth corporations and the leviathan state.

No Common Law jurisdiction has ever had a 'leviathan state'. I suppose Tatas, which Rajan joined after getting his MBA, was a behemoth corporation. But since the Eighties, there are many other such giants.  

For property rights are a social construct, created and enforced only with the tolerance of the people.

Not in India. The East India Company enforced its property rights by killing those who did not tolerate their depredations. Yet it was John Company and, its successor, the British Raj, which set India on the road to being a Democracy under the Rule of Law. 

If incomes and wealth do get more skewed toward a few owners, democracy will turn from protecting the property of the few to preserving opportunity for the many, as it has done before.

Not if the income and wealth are off-shored. Democracy may find it can't bite the hand that feeds it for fear of getting punched in the face.  

Only the coalition of the behemoth and the leviathan, subverting democracy to enforce the property rights of the few and the poverty of the many, can stand in the way.

Nonsense! Control rights may be off-shored as may working Capital. States will have to play 'beggar my neighbor' to retain investment and higher value adding economic activities.  

This possibility is still in the future, and we need to ensure we never get there by keeping our democracy strong and vigilant,

Strength requires money. Sleepless vigilance can swiftly turn into paranoia.  

and the realm of the market and government separate. The path I propose will help us do this.

Whereas my proposal- viz. that elementary particles give up sexy quantum entanglements- would help us do things we are already doing even more inclusively and locally while keeping the dick of the Leviathan out of the mouth of the Behemoth because that is like totes gross.  

A more immediate problem many countries face is population aging. In the near future, some countries will have a surfeit of jobs they need to fill, rather than too few jobs. They will have excess physical capital—infrastructure, plant and machinery, buildings and houses— that will go waste.

Nope. They will crumble away because of depreciation. Rajan must have heard of the 'Rust belt'. But this happens even if there is a normal population distribution.  

For countries like Japan that have largely homogenous populations, the temptation will be to use more machines, thus avoiding the problems of coping with the diversity that stems from immigration.

Elderly Japanese farmers using robots are helping sustain a market that will soon be global. Apparently there are already some big AI equipped robot farms. 

That is a choice aging countries with homogenous populations will have to make—to choose loneliness for their elderly or to accept initial culture shock and then adaptation.

But this can be done with fixed term guest workers. There is no need to change the demography if the problem is self-eliminating.  

For aging countries with already diverse populations, the responsible choice ought to be steady and controlled immigration, with the objective of integrating immigrants and making them full and active citizens.

But what will actually happen is lots of guest workers for the shitty jobs while smart and entrepreneurial people find legal channels of immigration.  

Once again, the path I propose offers ways to attract and integrate immigrants, while maintaining the support of the native-born population.

But, guest-workers represent a superior path.  

I have said little about one of our most pressing problems, climate change and associated problems like water scarcity.

This is because economists are too stupid to understand sciencey stuff.  

It may well be that technological change will allow us to address this more easily in the future. For instance, cheap renewable energy like solar or wind power, storable in large batteries and powering our cars, trucks, and factories, can help us reduce carbon emissions significantly. If it also powers reverse osmosis plants generating fresh water from sea water, and helps pipe that water inland, we can solve problems of water scarcity, and transform many a desert into lush farmland.

We can't do shit without money and smart peeps. That is why we ought not to listen to stupid economists. Just look around and see what smarter countries are doing. Imitate them. That's it. If Singapore's workforce consists of 38 percent guest-workers, that's probably the smart way to go. 

We must also be prepared, though, for the possibility that technology develops too slowly, and we do have to deal with climate change through more painful collective measures. We cannot afford selfinterested, zero-sum nationalism if the fate of the world is in question.

We can't afford shit if we have no fucking money. It is all very well advising a rich dude how to spend his money. Try doing that to a poor as fuck cretin like me and see what you get.  

Instead, we need responsible internationalism.

Because irresponsible internationalism can lead to a rise in the number of unwanted pregnancies.  

By weakening our propensity for jingoistic nationalism,

Rajan has a propensity for shouting 'Remember the Alamo!' and burning down Mexican restaurants. To be fair, he also burns down Indian restaurants and merely wanted to show inclusivity to local eateries serving similar, burn-your-arse-off, cuisine.  

inclusive localism will allow us to embrace responsibility as a nation.

Whereas previously we were cuddling it as a species.  

Finally, the historical excursions in this book suggest hope.

The hope this fucker would finally say something interesting. It was a forlorn hope.  

Our values are not static—they change.

More particularly, if we are paid to pretend to have values.  

Dr. Martin Luther King Jr. said, “The arc of the moral universe is long but it bends towards justice.”

This is because the dude was a Minister of the Christian Religion. The arc of the moral universe ends in Paradise for the good Christian. The bad Pickaninny goes to the other place.  

When seen over short stretches, it seems that history repeats, that racism and militant nationalism erupt periodically in the world to sow hatred and spawn conflict.

There is only one 'short stretch' where that was true- viz. the interwar period.  

Yet the society that experiences these movements is not the same, it trends toward being more tolerant, more respectful, and more just.

When Biden was born, almost 90 percent of the American population was pure white. Now, the number identifying as White might be about 70 percent. However, as boomers start to die off, this figure will shrink. Realistically, non-Hispanic Whites may become a minority within a decade as the incentive to seal the border decreases. 

Around that trend line, we do go up and down. We may be down today, and we have a long way to go, but the distance we have come should give us hope.

Rajan wrote this in 2019. Five years later we in the West have less hope. On the other hand, because Modi seems set to win big later this year, India has more of that commodity.  

Let us not let the future surprise us.

Rajan wrote this before COVID or Ukraine or the Hamas atrocities.  

Instead, let us shape it.

By doing gain of function research in poorly run Chinese laboratories.  

There is much to do. We have to, we must, choose wisely if we want to live together well and in peace. I am confident we can,

Rajan may also have been confident that his book wasn't shit. Still, those he lives with didn't tell him he was was wrong because they preferred a peaceful existence. The rest of us, very wisely, refused to read his book or only did so so as to laugh at him. It is all very well trying to be the next Amartya Sen. But Sen peppers his books with highly arousing material of a sexual nature. Obviously, you have to read between the lines but the one benefit I gained from studying at the LSE was the correct manner in which to decode every theorem in mathematical economics as a delineation of highly perverted sexual activity. Sadly, when I tried to take up the study of Quantum theory, I encountered the same problem. This is why I am so insistent that elementary particles give up sexy quantum entanglements and other such ungoldliness. Just take cold shower and think pure thoughts. This is the only sane way to deal with the problem of non-locality in an inclusive and equitable manner.  

Thursday 14 March 2024

Raghuram Rajan's 'proximate community' as 'third rail'.

Subsidiarity is the notion that decisions should be taken as close as possible to the people affected by it whether or not they form a community or exhibit strong bonding and bridging ties. Tiebout sorting is the notion that different towns, regions, or Marshallian industrial districts, should be allowed to choose their own mix of local taxes and 'club goods' and that free movement between such 'Tiebout models' would raise allocative and dynamic efficiency and improve Social Choice. The problem is that there will be winners and losers. Mobile factors of production shift to where growth is rapid. Those left behind face a narrowing horizon. It is now recognized that there are 'externalities' here such that some type of Government 'levelling up' program is required. One reason is that declining communities have less incentive to educate kids who are bound to leave. Japan has come up with a scheme whereby declining areas give a small present to those of their young people who relocate. This triggers the instinct to reciprocate by voluntarily ticking a box such that the tax system automatically transfers some of their money to your natal Prefecture. In Germany, they have a different system. Unless you opt out, a portion of your tax money is automatically sent to your religious denomination. 

Both the State and the Market already have evolved ways to 'internalize' externalities associated with the existence of geographically defined communities. Sadly, because of increased Knightian Uncertainty, the associated problems are likely to worsen rather than improve. What is worrying is that structural economic and geopolitical changes may be giving rise to an irrational type of xenophobia which might impose foolish restrictions which worsen the underlying problem. It may be argued that Racism was the foundation of the prosperity of settler colonies like America and that a return to racist or nativist policies would restore prosperity to the indigenous working class. Thankfully, there is a notion of 'koinonia'- or fellowship and joint participation- which Theistic religion promotes as an alternative to a narrow, racialist, conception of 'oikeiosis' or 'natural belonging'. However, an amelioration of racial or regional animosities can go hand in hand with pro-nativist policies. 

A separate problem has to do with bad actors and bad 'mimetic targets' in bad neighborhoods or 'proximate communities'. Poor people or those with dependents may be unable to flee from crime-infested ghettos. There is a 'third rail' which electrocutes the aspirational dreams of its young residents. They are dragged down by their peers. Here, arguably, bleeding heart liberals worsen the underlying problem by refusing to permit the type of punitive policing which had enabled other communities to become affluent- essentially by killing or permanently incarcerating bad actors. 

The other problem, for which Liberals are blamed, is mass immigration more particularly of bogus asylum seekers or genuine refugees who, however, might wish to impose their own bigotry on the host community. Once again, we may speak of an undesirable change in the 'proximate community' which acts like a 'third rail'- i.e. increases hazard for ordinary people. It may be that 'competitive virtue signaling' leads the libtard community to make more and more horrible suggestions for how to totally fuck up Society and the Economy. If one says 'we must help those fleeing Islamic persecution', the other ups the ante by suggesting we must take in all the Islamic persecutors whose victims have banded together against them. Just as the 'proximate community' in a gang-ridden ghetto causes bad outcomes, so too may the proximate community for Ivy League academics force them to pretend to love Hamas and want to boycott Israel- which produces very good quality academic research. 

This is not to say that illiberal policies from the past should be revived in a mindless fashion. Prior to 1965, America severely restricted immigration from countries like India. The American Dream was for White Men, not darkies or females. Once the US permitted the immigration of more highly skilled or entrepreneurial Asians, quite predictably, there was a higher return on education- more particularly in STEM subjects and Management Science- and thus, ceteris paribus, lower relative wages for less educated and skilled White males. Females joined the workforce thus permitting some families to maintain a middle class lifestyle. But marriages came under pressure. There were more divorces and single parents and greater use of alcohol, drugs, etc. Angus Deaton speaks of 'deaths of despair' amongst the White male non-College educated American. Robert Putnam describes the increased loneliness and anomie of the less affluent condemned to 'bowl alone'. Meanwhile, immigrants to America have tended to do very well for themselves more particularly if they retain their traditional family and spiritual values. Raghuram Rajan himself has certainly done well. Yet he writes in 'The Third Pillar' of the need to revive 'the community' (which, in America, is racialized and wants immigrants to fuck the fuck off) as a counterweight to the State and the Market. 

 Markets and the state have not only separated themselves from the community in recent times

Rajan comes from India. The reason his parents and grandparents spoke English was because financial markets in England had created an East India Company which was taken over by the British Crown. Thus, in India, both the market and the State 'separated themselves from' both the British and the Indian community centuries ago. It is only in recent years that more and more of India has come to be ruled by people who struggle to speak English. Markets too are increasingly dominated by people who were 'vernacular medium'. Their English may be perfectly functional. But they are rooted in their own communities even if Rihanna and Bill Gates turn up for their weddings.  

but have also steadily encroached on activities that strengthened bonds within the traditional community.

Kipling and other such late Victorian writers did indeed reject a Bismarck type Welfare State for this reason. Chesterton described a dystopia in which Prohibition was imposed on the Brits by an army of Turks hired for that purpose by a rabidly Wesleyan Liberal politician. In another novel, there is a National Health Service which certifies as insane and incarcerates every decent English man and woman. By decent, obviously, I mean those who thought Jews should fuck off to Palestine and take the fucking Wogs with them.

However, the English working class didn't buy any of this guff. They were even prepared to tolerate colored immigration for the sake of a better National Health Service. 

The truth is, Rajan's Polanyi type notion of 'embeddedness' has no evidentiary basis in English economic history. This is because Karl, unlike his brother, was a stupid refugee who knew shit about Economics and shit about English history. 

The FT has this to say about Rajan's book- '

The “third pillar” of the title is the community we live in. Economists all too often understand their field as the relationship between markets and the state, and they leave squishy social issues for other people.

But both markets and the state deal with such squishy social issues as crime, drugs, abortion etc. Economists do make recommendations for improved mechanism design in these areas.  

That’s not just myopic, Rajan argues; it’s dangerous.

It is false. There are plenty of economists working on 'squishy' policy issues. Rajan scarcely mentions any of the interesting ones.  

All economics is actually socioeconomics – all markets are embedded in a web of human relations, values and norms.

None are. There is a wide difference between a Cartel or Club where transactions occur and an open market. The plain fact is that the market destroyed Polanyi type 'embedding' some time after the Black Death killed of serfdom or the rising price of wool made it profitable for 'sheep to eat men'. But that was a couple of centuries before English 'Political Arithmetic'- which was empirical and data driven- first appeared in the sixteenth century. 

It is a different matter that some agents who move to an area associated with a particular open market or which they think will become Schelling focal for it may form close mutual relationships and adopt 'values and norms' which promote in-group trust and increased frequency of transactions. But such agents may belong to diverse communities. In the diamond trade we may have pious Gujaratis as well as pious Haredi Jews. Their 'values and norms' are different. They belong to different communities and they may different languages to communicate with each other. Yet their communities may be embedded in the same market.  

As he shows, throughout history, technological phase shifts have ripped the market out of those old webs and led to violent backlashes,

Backlashes cease to be violent if, as General Napier said to the Chartists, one side has greatly superior 'physical force'. Markets supply the money for such superior force. If British Generals suppressed Luddites and Chartists in their own green and pleasant land we might think this has to do with 'embedded' class relations. But when we notice that British Generals- like 'Chinese Gordon'- were also doing this in China, first with the Opium Wars and then by helping to suppress the Taiping rebellion- we must acknowledge that embedding works in the opposite manner to the one Polanyi suggested. The 'Great Transformations' occur where violent backlashes can be easily crushed by superior military technology. On the other hand, it is true that American Indians organized a violent backlash against the English at the Boston Tea Party. George Washington personally scalped a number of British Lords. Jefferson was kinder. He was content to make William Howe his squaw. Sadly, Howe was unable to furnish Jefferson with a papoose and so he drove her out of his wigwam and began a relationship with an African American lady who had been ripped out of her old webs by technological phase shifts. 

and to what we now call populism.

unless we, like Jason Stanley, call it Fascism. Did you know that Trump personally gassed to death six million of his son-in-laws?  

Eventually, a new equilibrium is reached,

nobody wants to reach a fucking equilibrium. Evolution is a far from equilibrium phenomenon.  

but it can be ugly and messy, especially if done wrong.

is what brides say on their honeymoon night.  

Right now, we’re doing it wrong.

No. Right now we are merely talking bollocks.  

As markets scale up, the state scales up with it,

The opposite happened in post-Napoleonic England. Income Tax disappeared. Free Trade triumphed. Government spending as a proportion of GDP was lower in 1869 than it had been in 1689. It is only when war 'scales up' and becomes 'Total', that there is a 'ratchet effect' whereby 'Wagner's Law' comes into operation. Interestingly, one of the few countries where there is strong empirical support for the notion that Government spending rises more rapidly than National Income, is India.  

concentrating economic and political power in flourishing central hubs and leaving the periphery to decompose, figuratively and even literally.

That's not what happened in the UK. As financial markets burgeoned, there was more economic activity in the North and other now 'peripheral' areas. However, a 'Dutch disease' effect set in because the 'invisible' surplus caused the currency to appreciate relative to industrial competitors. That's why it became 'grim ooop North'.  

Instead, Rajan offers a way to rethink the relationship between the market and civil society

Since Aristotle,  koinōnía politikḗ, the free citizens of the City State, have been defined as 'civil society' separate from the King or Emperor and distinct from the Pope or Archbishop. Civil Law is Roman law dating back to the Republic. Common Law is its supposed Anglo-Saxon equivalent. King's Equity was the Royal form of Justice. Canon Law came under the Church. The 'third Estate' was neither feudal nor ecclesiastical but bourgeois. As markets developed, burghers could buy Charters from the Crown for their Cities and even their mercantile enterprises. 

and argues for a return to strengthening and empowering local communities as an antidote to growing despair and unrest.

One way to do this would be to appoint Dukes to lead Duchies and Counts to lead Counties. Corvee labour could be introduced for public-works- e.g. the peasants having to devote thirty days per year to road-maintenance and the practice of Archery. Rajan can lead a violent backlash to the Sheriff of Nottingham who, notoriously, is a fucking Neo-Liberal who goes to Davos every year.  

Rajan is not a doctrinaire conservative,

he is a verbose gobshite competing with Amartya Sen to be the most vacuous virtue signaler out of the UPA stable of libtards.  

so his ultimate argument that decision-making has to be devolved to the grass roots or our democracy will continue to wither,

though American democracy is bottom up. That's why America has dual sovereignty. Sadly, Indian democracy is becoming bottom up which is why a 'Backward Caste' dude is PM instead of Rahul.  

is sure to be provocative. But even setting aside its solutions, The Third Pillar is a masterpiece of explication, a book that will be a classic of its kind for its offering of a wise, authoritative and humane explanation of the forces that have wrought such a sea change in our lives.

It is ignorant shite. Rajan studied electrical engineering. He doesn't know shit about Economics or History. The IMF hired him even though he wasn't a macroeconomist. Why? He had co-authored a silly book titled 'Saving Capitalism from Capitalists'. No doubt the IMF hoped he would produce a sequel titled 'Saving Savers from having any fucking Savings by making sure the Banking sector collapses.'  That way the IMF would have a bigger role. 

Returning to Rajan's tome, we find that 16 years after he saved Capitalism, he has turned his attention to delivering babies. 

Consider some functions the community no longer performs. In frontier communities, neighbors used to help deliver babies;

which is why a lot of those babies died. In India, as Kipling pointed out, wolves would often provide essential child-minding services to village ladies. Snakes and bears too were very helpful in this regard. We need a fourth pillar- one which involves wild animals- to support the 'third pillar' which is the community.  

today most women check into a hospital when they feel the onset of childbirth.

Also they send their kids to a creche rather than abandon them in the Jungle so as to obtain the child-minding services of a kindly she-wolf.  

They naturally prefer the specialist’s expertise much more than they value their neighbor’s friendly but amateurish helping hand.

India decided that it didn't want the specialist expertise of a Rajan or Kaushik Basu or the more egregious yet, 'Viral' Acharya. Thus they have returned to their American communities where they often serve as mid-wives to their elderly male colleagues. What? Couvade is a real thing. 

On a more mundane level, we used to offer to take our elderly neighbor shopping because she did not have a car.

Nor did we. Thankfully, a passing elephant would seize her with his trunk and get her to her destination.  

Today, she orders her groceries online. Similarly, the community used to pitch in to rebuild a household’s home if it caught fire;

But the community would also pitch in to burn that house down. Then, they took turns raping and killing those who escaped the flames.  

today the household collects its fire insurance payment and hires a professional builder.

The first Fire Insurance Company in America was set up in 1735. Sadly it could not get itself insured and thus failed quite quickly. For Insurance to work, you need a re-insurance market. 

Indeed, given the building codes in most developed countries, it is unlikely that a home reconstructed by neighbors would be legal. The community still plays a number of important roles in society. It anchors the individual in real human networks and gives them a sense of identity; our presence in the world is verified by our impact on people around us. By allowing us to participate in local governance structures

which arise by State action 

such as parent teacher associations,

which arise by State action in publicly funded schools.  

school boards, library boards, and neighborhood oversight committees, as well as local mayoral or ward elections, our community gives us a sense of self determination, a sense of direct control over our lives, even while making local public services work better for us.

But public services are provided by the State or else are subject to regulation and oversight by the Judiciary which too is a branch of Government. 

Can Rajan point to any non-market, purely private, activity a community can accomplish on its own? I can. In America, there is no established Church. Thus every sect is based on a particular community. No doubt, that community may send out missionaries and thus a particular sect may spread to other communities. It may also be that inter-marriage between people of the same faith but different original ethnicity creates a new community.  

Importantly, despite the existence of formal structures such as public schooling, a government safety net, and commercial insurance, the goodness of neighbors is still useful in filling in gaps.

Neighbors may be of different communities. The analogy is with fellow travelers on a plane or ship who help each other for the duration of the journey.  

When a neighboring engineer tutors our son in mathematics in her spare time, or the neighborhood comes together in a recession to collect food and clothing for needy households, the community is helping out where formal structures are inadequate.

Equally, when a neighbor rapes our child and the community gets together to burn down our house, the community is doing something which 'formal structures' might not be able to achieve. The Rwandan genocide was community based.  

Given the continuing importance of the community, healthy modern communities try to compensate for the encroachment of markets and the state with other activities that strengthen community ties, such as social gatherings and neighborhood associations.

The Ku Klux Klan, the Mafia, Hamas etc.  

Economists Raj Chetty and Nathaniel Hendren attempt to quantify the economic impact of growing up in a better community. 

They found that the children of non-Mormons do better if their parents relocate to a Mormon neighborhood. This is 'Tardean mimetics'. If you move to the ghetto your kids may want to become gangbangers or coke-whores.  

They examine the incomes of children whose parents moved from one neighborhood into another in the United States when the child was young.

Those with money try to buy their way into a better neighborhood, better schools, colleges etc. The Market is what enables this type of Tardean mimetics. Equally, if the State keeps slaughtering gangbangers and incarcerating coke-whores, bad mimetic models are removed and the life-chances of the young improve. There is evidence that longer prison sentences actually improved outcomes for the families of habitual criminals. Indeed, for some cohorts, 'three strikes' improved life expectancy, educational attainment etc. In prison, you have to make a shiv before you can knife a guy. On the outside, guns are easily available. 

Specifically, consider neighborhood Better and neighborhood Worse. Correcting for parental income, the average incomes of children of longtime residents when they become adults is one percentile higher in the national income distribution in neighborhood Better than it is in neighborhood Worse.

Which is why property values there are higher. There is a 'separating equilibrium' based on a 'costly signal'- viz. having the dosh to buy a house in the good School District.  

Chetty and Hendren find that a child whose parents move from neighborhood Worse to Better will have an adult income that is, on average, 0.04 percentile points higher for every childhood year it spends in Better.

Parents who move away from the crime ridden ghetto probably also invest more in their kids which is why they have better life-chances.  

In other words, if the child’s parents move when it is born and they stay till it is twenty, the child’s income as an adult will have made up 80 percent of the difference between the average incomes in the two neighborhoods.

This is why so many Black Economists and Jurists are socially conservative. Even if they themselves don't feel like going to Church, they do so for the sake of the kids. This also means they are less quick to have affairs, take drugs, and get divorced. 

Their study suggests that a child benefits enormously by moving to a community where children are more successful (at least as measured by their future income). Communities matter!

Real estate markets matter. That's why darker skinned people wanted to get rid of 'restrictive covenants'. Sadly, 'bussing' as Thomas Sowell pointed out, could worsen outcomes.  

Perhaps more than any outside influence other than the parents we are born to, the community we grow up in influences our economic prospects.

Tardean mimetics matter. The State should proactively get rid of bad mimetic models- lock up the too-cool-for-school gangbanger- and promote good mimetic targets- e.g. letting the nerdy Vivek Ramaswamys of the world get rich and politically influential.  

Importantly, Chetty and Hendren’s finding applies for a single child moving—movement is not a recipe for the development of an entire poor community. Instead, the poor community has to find ways to develop in situ, while holding on to its best and brightest.

Kill or incarcerate the bad element. Build Churches not Brothels.  

It is a challenge we will address in the book.

No you won't. You are a fucking libtard.  

There are other virtues to a healthy community.

Provided there is free entry and exit based on market transactions in a free real estate market. Things like rent-control can cause the decline and death of a community. So can electing paranoid populists with a woke agenda.  

Local community government acts as a shield against the policies of the federal government,

Which is why America could have Jim Crow and Southern trees which bore strange fruit.  

thus protecting minorities against a possible tyranny of the majority,

Jews and homosexuals living in areas with a rising Islamic population would be well advised to sell up and move out. The Hindus would have already fled.  

and serving as a check on federal power.

Crime is a check on the power of the State. Fuck the laws! Let's just rape and loot and commit arson as a way of subverting the Neo-Liberal Patriarchy.  

Sanctuary communities in the United States and Europe have resisted cooperating with national immigration authorities in identifying and deporting undocumented immigrants.

The Church as taken a leading role in this. The concept of sanctuary arises from Canon Law.  

Under the previous US presidential administration,

Obama's administration. This book was published in 2019.  

communities in the state of Arizona resisted in the opposite direction, ignoring the federal government while implementing stern penalties on undocumented immigration.

About 29 percent of their population is foreign born or first generation American. I think this proportion will rise. Still, as Hispanics get increasingly reclassified as White, xenophobia there should decrease. The problem is that Hollywood won't accept that Hispanics are decent Church going people rather than crazy Cartel members who worship bloodthirsty Aztec gods. 

Although no country can function if every community picks and chooses the laws they will obey, we will see that some decentralization in legislative powers to the community can be beneficial, especially if there are large differences in opinion between communities.

This already exists in the shape of 'Tiebout models'- i.e. different districts having a different mix of local taxes and 'club good' provision- which, ceteris paribus, should raise allocative and dynamic efficiency. Sadly, increased Knightian Uncertainty has complicated the picture. We don't know if current 'tech hubs' might not be wiped out by an innovation or scientific discovery which has just been made. 

In 1987, Rajan joined the Tatas but soon left for America. At the time, the received wisdom was that a smart chap like him would do much better for himself  overseas. Few would have predicted that some of Rajan's fellow IIM graduates would help create new industries and become billionaires.

Rajan writes-

The technological revolution has been disruptive even outside economically distressed communities.

No kidding! It is extremely fucking disruptive to discover that a guy like Adani, who dropped out of school at the age of 15, is worth 80 billion dollars! Rajan has done well for himself but he hasn't done that well. No wonder he likes Rahul who is now shouting himself hoarse against Adani and 'neech' people like the 'chai-wallah' who has usurped Mummy's throne.  

It has increased the wage premium for those with better capabilities significantly, with the best employed by high-paying superstar firms that increasingly dominate a number of industries.

There is a Pareto law which becomes more extreme when the market is expanding rapidly. You can narrow wage differentials in a sick or dying industry. Where talent pools in a particular sector, there is 'synergy' and 'network effects'- i.e. external economies of scope and scale. This creates new Tardean mimetic targets. Why be an andoloanjeevi like the cretin Rahul when you can aspire to be an Adani? 

This has put pressure on upper-middle-class parents to secede from economically mixed communities

i.e. places with lots of muggers 

and move their children to schools in richer, healthier communities,

where the local police, or security companies, quietly kick in the heads of muggers 

where they will learn better with other well-supported children like themselves.

There are better mimetic models in posh skools.  

The poorer working class are kept from following by the high cost of housing in the tonier neighborhoods.

Wow! Rajan figured that all by himself! He truly is a genius.  

Their communities deteriorate once again, this time because of the secession of the successful.

Actually communities deteriorate when poor immigrants move in or there is rent-control leading to a 'doughnut' effect. The same thing happens when rabid woke nutters get into City Hall and tax enterprises and the wealthy till they run the fuck away.  

Technological change has created that nirvana for the upper middle class, a meritocracy based on education and skills.

Productivity. Rahul has plenty of education. His great skill is to keep Modi in power. That way Rahul won't meet the same fate as his Daddy and Granny.  

Through the sorting of economic classes and the decline of the mixed community, however, it is also becoming a hereditary one, where only the children of the successful succeed.

Only the children of Soniaji can succeed in leading the Congress Party. Rajan is cool with that.  

The rest are left behind in declining communities, where it is harder for the young to learn what is needed for good jobs. Communities get trapped in vicious cycles where economic decline fuels social decline, which fuels further economic decline . . .

Rajan is describing the India of his parents. His generation was encouraged to emigrate. The country would remain trapped in a Gandhi-Nehru-Pappu Yadav ideological quagmire. 

The consequences are devastating. Alienated individuals, bereft of the hope that comes from being grounded in a healthy community,

emigrated to Amrika 

become prey to demagogues on both the extreme Right and Left,

Rajan was eager enough to serve the demagogues of the Dynasty.

who cater to their worst prejudices.

Gandhi and Nehru, though personally very friendly to the Brits, catered to the worst prejudices the Hindus have about 'Mlecchas' who are probably draining our wealth by stealing the oil in our hair.  

Populist politicians strike a receptive chord when they blame

Adani and Ambani? That's what Rahul is doing.  

the upper-middle-class elite and establishment parties.

Gandhi dressed up as a peasant to appeal to the masses. Even Jinnah donned a sherwani.  

When the proximate community is dysfunctional, alienated individuals need some other way to channel their need to belong.

Rajan ran away to Amrika and got his Green Card. He needed to belong to a White dominated Capitalist country. Now he is whining about 'community', though he has worked very hard to get away from his own community. As a fellow Tambram, I can't say I blame him. 

Populist nationalism

like that of Gandhi, Nehru, Jinnah etc.  

offers one such appealing vision of a larger purposeful imagined community— whether it is white majoritarianism in Europe and the United States,

Why can't those damn whites at least paint on black stripes like the Zebra? By refusing to do so they are engaging in majoritarianism. Biden must undergo gender re-assignment surgery so as to promote the minoritarianism of the Trans community.  

the Islamic Turkish nationalism of Turkey’s Justice and Development Party,

Ataturk, of course, wasn't a nationalist. Also, he had gender reassignment surgery and painted black stripes on his body.  

or the Hindu nationalism of India’s Rashtriya Swayamsevak Sangh. 

Hindus should support Hamas. Why are they not clamoring for the establishment of a Global Caliphate? Majoritarianism truly is the pits.  

It is populist in that it blames the corrupt elite for the condition of the people.

Rahul and Mahua are saying that the Indian power-elite is stealing from the poor to give to Adani and Ambani. Rajan has no problem with that.  

It is nationalist (more precisely, ethnic nationalist, but I will leave the nitpicking for later) in that it anoints the native-born majority group in the country as the true inheritors of the country’s heritage and wealth.

Which is what the Palestinians are doing. Will Rajan denounce Hamas because it objects to Jews whose ancestors only began to immigrate to Palestine about a 130 years ago?  

Populist nationalists identify minorities and immigrants—the favorites of the elite establishment—as usurpers, and blame foreign countries for keeping the nation down.

There were plenty of 'populist nationalists' in the UK from the 1880s onward even though the country was 'top dog' and regarded immigrants as a valuable resource. (Though staunch Imperialists, like the Indian MP, Bhownagree, supported curbs on Jewish immigration) 

These fabricated adversaries are necessary to the populist nationalist agenda, for there is often little else to tie the majority group together—it is not really based on any true sense of community for the differences between various subgroups in the majority are usually substantial.

Very true. Churchill fabricated adversaries like the Kaiser and then Hitler. There was never any such thing as a German Army. During the Blitz, the RAF bombed British cities and blamed the Luftwaffe. Look at Zelensky. He is pretending that the peace-loving Putin has sent sociopathic mercenaries to invade his land. As for India, when did Pakistan or China ever attack India? This is all a myth cooked up by the RSS.  

Populist nationalism will undermine the liberal market democratic system that has brought developed countries the prosperity they enjoy.

Though populist nationalism replaced Emperors and Popes who had no truck with liberalism or financial markets or democracy. Still, it is true that Rajan's grandparents were wrong to demand independence from the House of Windsor. But this was only because the House of Nehru was shittier.  

Within countries, it will anoint some as full citizens and true inheritors of the nation’s patrimony while the rest are relegated to an unequal, second-class status.

Which is why Rajan was in a hurry to emigrate to Amrika where the police are very good at shooting darkies.  

It risks closing global markets down just when these countries are aging and need both international demand for their products and young skilled immigrants to fill out their declining workforces.

Rajan wrote this before Putin invaded Ukraine for the second time. He had got away with seizing Crimea in 2014 because of 'the war on terror'. Rajan doesn't seem to have objected to his tax money going towards the slaughter of 1.3 million Muslims.  

It is dangerous because it offers blame and no real solutions, it needs a constant stream of villains to keep its base energized,

Rahul certainly thinks Adani is a villain. Oddly, he also seems to hate Aishwariya.  

and it moves the world closer to conflict rather than cooperation on global problems.

What moves the world closer to conflict is invading armies or crazy terrorists.  

While the populist nationalists raise important questions, the world can ill afford their shortsighted solutions.

Does Rajan have any solutions? No. He says 'Communities are very nice. Be nice to your neighbor. It is nice to be nice but not to the fucking RSS because they are Hindu, rather than Chinese, nationalists.' 

You may ask, what is wrong with saying 'it is nice to be nice'? Surely virtue signaling is still a useful signal if people will pay for its product- e.g. this shitty book? 

The answer is that virtue signaling is bad if it is done by a Professor who is spouting ignorant shite. Consider the following

Schools, the modern doorway to opportunity,

in ancient times, if you went to skool, the door of opportunity was shut and barred against you- right?  

are the quintessential community institution.

No. In most countries they are the quintessential State or State funded institution though, if the State Schools are shitty enough, people may have to send their kids to private schools with poor facilities. 

Why shouldn't 'communities' set up and run their own schools? This does happen in some areas at the primary level. But why isn't it more common? The answer is that there are 'externalities' and 'coordination problems' which require State intervention. Poor communities will underinvest in education more particularly if many of the young are bound to move elsewhere. Also, some will be disadvantaged because they were not taught to a common curriculum. There is a better 'correlated equilibrium' based on public signals from the Government. That is why, even in laissez faire England of the first half of the Nineteenth Century, there was a demand for capitation grants, a set curriculum, common examinations and a system of School Inspectors.  

The varying qualities of schools, largely determined by the communities they are situated within, dooms some while elevating others.

No. What determines the quality of the school is resource allocation and discipline. Thomas Sowell mentions a Black School whose alumni did as well or better than those of comparable White Schools. Sadly, the Black School had higher attrition rates for socio-economic reasons. Later, after de-segregation, that School declined. Better educated Black teachers (who were trapped into teaching there because of prevailing bigotry) were replaced by stupider, less educated Whites.  

When the pathway to entering the labor market is not level, and steeply uphill for some, it is no wonder that people feel the system is unfair.

No. People understand that the distribution of income and wealth has nothing to do with their notions of fairness. It is a different matter if the law compels the Government to spend money to improve educational outcomes but that money gets stolen or misspent. In India, since it is difficult to sack teachers in State Schools, many refuse to teach or else have bogus credentials and thus are unable to do so.  

They then are open to ideologies that propose abandoning the liberal market system that has served us so well since World War II.

We have had a mixed-economy since 1945. High inflation and 'fiscal drag' during the Seventies caused a popular revolt which led to the rise of Reagan, Thatcher etc. However, the State's share of the economy (if you include legislatively mandated 'compliance costs) has probably risen (though this does not take account of the offshoring of income and wealth). 

The way to address this problem, and many others in our society, is not primarily through the state or through markets.

There is no third way. If the people of a community say to each other 'let's set up a truly excellent school so all our kids will become IT mavens or medical doctors', they will fail unless some billionaire provides the funds. Things may be different in a very affluent area but it is a pipe dream to suggest that some rural shithole can create a school which is the equal of Eton.  

It is by reviving the community and having it fulfill its essential functions, such as schooling,

Very true. Essential function of the hunter gatherer community is running a school which is better than Eton or Harrow.  

better. Only then do we have a chance of reducing the appeal of radical ideologies. 

Killing or incarcerating such ideologues reduces their appeal. On the other hand, if material standards of living are rising and no existential national security threat is on the horizon, people are less inclined to give ear to ranters. This is why Rahul's antics are actually helpful to Modi.  

We will examine ways of doing this, but perhaps the most important is to give the power the state has steadily taken away back to the community.

The community was previously allowed to burn witches and chop off the dangly bits of those they didn't like. Sadly, the State put an end to such pleasant pastimes.  

As markets have become global, international bodies, driven by their bureaucrats or the interests of powerful countries, have drawn power from nations into their own hands, ostensibly to make it easier for global markets to function.

But if the Judiciary- which is a branch of the State- is shitty at enforcing Treaty Law, then the thing does not matter in the slightest.  

The populist nationalists exaggerate the extent to which power has migrated into international bodies, but it is real.

Only if the State enforces Treaty Law. The UK could have avoided Brexit if it had simply cheated like other countries.  

More problematic, within a country, the state has usurped many community powers

Previously, the good folk of my village had their own nuclear deterrent and aircraft carriers. The State usurped this power of ours. Fuck you State! Fuck you very much! 

in order to meet international obligations, harmonize regulations across domestic communities, as well as to ensure that the community uses federal funding well. This has further weakened the community.

No. A community is stronger if it is protected from external and internal threats and if 'coordination problems' have 'universal' Muth rational solutions.  

We must reverse this. Unless absolutely essential for good order, power should devolve from international bodies to countries.

Those countries will then find it expedient to create multi-lateral or even international bodies. It is all very well to say 'by getting rid of the wheel, communities will once more thrive because people won't be able to walk very far from home'. The problem is that even if you succeed in getting rid of the wheel, it will be re-invented.  

Furthermore, within countries, power and funding should devolve from the federal level to the communities.

This is 'subsidiarity'. Will Rajan go on to talk of the economics behind 'Tiebout sorting'? No. He is merely virtue signaling. There is no intellectual content to this book.  

Like many vapid libtard Indian Professors, Rajan witters on about not 'Constitutional patriotism' but 

CIVIC NATIONALISM Instead of allowing people’s natural tribal instincts to be fulfilled through populist nationalism, which combined with national military powers makes for a volatile cocktail,

No. It makes for a country free of the danger of invasion, insurrection, civil war or ethnic cleansing.  

it would be better if they were slaked at the community level.

It can't be because of economies of scope and scale. Some nations- e.g. India may be militarily and economically viable even if 'non-aligned'. But most nations don't have that luxury. As for communities, they would soon perish if left to defend themselves. Even the valiant Ukrainians need a lot of help to hold Putin's hordes at bay. 

Still, Rajan is right that communities in Arunachal Pradesh should be allowed to 'slake' their patriotism by battling the Chinese People's Army all by themselves.  

One way to accommodate a variety of communities within a large diverse country is for it to embrace an inclusive civic definition of national citizenship— where one is a citizen provided one accepts a set of commonly agreed values, principles, and laws that define the nation.

This has already happened. However, in most countries there is no requirement to agree to shit. It is a different matter that you may be punished for waging war on the State.  

It is the kind of citizenship that Australia, Canada, France, India, or the United States offer. It is the kind of citizenship that the Pakistani-American Muslim, Khizr Khan, whose son died fighting in the United States Army, powerfully reminded the 2016 Democratic National Convention of, when he waved a copy of the United States Constitution.

Khizr Khan had moved to Dubai to earn money so as to be able to emigrate to the US. As a dual-citizen, he chose to brandish the US Constitution rather than the Islamic Constitution of his other country. Nothing wrong with that. But his story- and that of his son who joined the Army to earn money for Law School- is about Markets and the State. It has nothing to do with 'Community'. 

That document defined his citizenship and was the source of his patriotism.

It was a Supreme Court decision, not the Constitution which established 'citizenship by birth'. Previously, Chinese origin people born in the US were being excluded from re-entry despite the 14th Amendment. 

However, the source of Khizr's patriotism was his desire to move from Dubai, where he was doing well, to America where he and his children would do even better. Nothing wrong with that at all. What isn't true is that one day, Khizr Sahib was browsing in the library and came across a copy of the US constitution. As he read it, he fell in love with America. He rushed home to tell his wife and kiddies to pack their bags. 'Hubb al watan min al-Imam'- love of country is part of religion, even if the country you love is far away. What matters is whether or not its Constitution gets you hard. 

Within that broad inclusive framework, people should have the freedom to congregate in communities with others like themselves.

This costs money. If they have it, no problem. If not, they are fucked. I wish to congregate with super-models in expensive night-clubs. Sadly, I am poor and few believe that I am actually Kendall Jenner.  

The community, rather than the nation, becomes the vehicle for those who cherish the bonds of ethnicity and want some cultural continuity.

But that community may have to relocate to a place where the State will protect them from murderous mobs.  

Rajan gives the example of Pilsen, in Chicago, as an area that pulled itself up by the bootstraps. Once the area became thoroughly Hispanics and the Churches and local community leaders got behind a 'Resurrection Project', it has certainly turned a corner. But this is because Hispanics are hardworking, Church going, and have strong family values. It took some time for immigrants to assert themselves against criminal gangs and a corrupt and incompetent City Hall. 

Is there a moral here? Certainly. Koinonia- community- is only good if it is on the basis of Sacred and Family based values. Just babbling about communities is useless. Some ought to decline or will do so regardless of their virtue. Others will burgeon. Both the Market and the State can support better outcomes but only if people are willing to pay for it. There is no magic money tree. Rajan should explain that to Rahul. Sadly, RSS has brainwashed that moon-calf. He is now saying he is a janeodhari Brahmin! Chee Chee! That is totes majoritarian. He should have gender reassignment surgery and paint black stripes on this body and campaign for the establishment of a Global Caliphate. The only reason he is not doing so is because, as a Member of Parliament, his 'proximate community' is heavily Hindutvadi. 

It must be said, in an educational context it makes sense to speak of the 'external' costs and benefits of physically interacting with other students. Go to school with dullards and you yourself might become dull. Go to a top school and you and your chums might soon be ahead of your teechurs. Sadly, we can't say in advance if a guy like Modi, who got his degrees as an external student, will be better or worse than a chap- like Rahul- who went to the best Schools and Colleges. 

THE PROXIMATE COMMUNITY We are shaped by the people who surround us.

Unless we choose a 'mimetic target' far far away. I myself decided to quit Chanakyapuri and try my luck in Hollywood. 'Pretty Woman' is based on my youthful struggles in that City. True, I wasn't a hooker but rather an external auditor and I was in London rather than LA. Still, no one can deny that Julia Roberts closely copied my mannerisms in that film of hers.  

Our joys are more pleasurable when they are cherished by our friends, our successes more enjoyable when they are applauded by those whose opinions we care about, our protests are less lonely and our indignation less unsure when shared by our supporters, our hatreds more corrosive when goaded by fellow zealots, our sorrows less burdensome when borne with our family.

The opposite is equally likely. I recall telling an old college buddy whom I bumped into on the street about the daring speculation by which I was able to make a profit of ten thousand pounds. Then I Googled him and found out that fucker was a billionaire. 

Moreover, we gauge our actions based on how they affect people near us, on the indentations our actions make on their lives.

This is not the case with our important actions. You take the job which pays best even if people near and dear to you would prefer to watch you suck off hobos. 

Without such effects, we would be ephemeral passersby, with little evidence of ever having existed.

No. By ignoring the opinions or needs of people around you, you can make something of your life. However, this may involve relocating so as to enjoy a more dynamic 'proximate community'.  

Each one of us draws from multiple overlapping communities that help define who we are,

No. We make choices. Rajan quit the Tatas to emigrate. He couldn't remain with the Tatas while being a Professor in Amrika.  

that give us identity over and above the core we think is uniquely us.

That core is our body. Different predicates apply to it at different times and in different contexts. But our identity remains singular and unique. It isn't really the case that I am Kendall Jenner. 

There are varieties of communities, some more tightly bound than others. A community could be a group of people who are linked together by blood (as a family or clan)

This would be true of endogamous sects or sub-castes. However, 'mixed marriages' tend to dissolve the 'community' as opposed to biological aspect of the identity class.  

or who share current or past physical proximity (as people in, or having emigrated from, a village). A community could be those who have a common view on how to live a good life (as in a religious sect),

this is not necessary. People with very different ideas of how to live well in this world, may still want to go to the same 'Good Place' after death 

share a common profession (as in the movie industry),

you have colleagues but those colleagues don't constitute a community save if they face a pressing collective action problem.  

or frequent the same website or chat groups (as in my college alumni group, where everyone seems to have a different opinion on everything that they absolutely must express). Each one of us has multiple identities, based on the groups we belong to.

Sen-tentious shite! We have one identity though many predicates can be applied to it.  

 Moreover, some of us have virtual identities in addition to real ones.

Mine is that of a super-model. Honeytits Cumbucket is my 'Only Fans' screen-name.  

As communication has improved, and transportations costs have come down, more distant communities have gained importance.

Rajan's ancestors belonged to the Brahmin community. Even with poor communications and high transportation costs, there was a remarkable homogeneity re. orthodoxy and orthopraxy within it across the length and breadth of the sub-continent.  

For some of us, these communities may be much more important than our neighborhood.

Which is why, during Partition, millions fled from their murderous neighbors.  

Indeed, a central concern in this book is about the passions that are unleashed when an imagined community like the nation fulfills the need for belonging that the neighborhood can no longer meet.

Rajan thinks Islam was an 'imagined community'. He should very kindly explain this to Owaisi. The truth is nations and religions existed before any extant neighborhood was created.  

Nevertheless, we will focus on the proximate community for much of the book for a variety of reasons.

There is only one reason to do so. Virtue signaling. Rajan is pretending that Markets and the State are very evil. We should return to the autarkic village existence Gandhi advocated. There would be no Hindu or Muslim or invidious distinction between Mummy and a nice she-wolf who might want to raise you up alongside her cubs.  

Through most of history when distances really mattered, it was the only kind of community that had a serious influence on most people’s lives.

Nope. We now know that the influx of agriculturists could lead to the almost complete replacement of indigenous hunter-gatherer populations. At the time of the great 'folk wanderings' of the Dark Ages, vast territories came under the sway of invaders who imposed their own language or religion.  Neighbors might band together but Atilla's or Genghis's hordes slaughtered them easily enough. 

Even today, it is where much economic activity is centered.

No. We produce for a global market. It is not the case that Rajan's neighbors buy his books in return for which he introduces their children to nice she-wolves willing to raise them up alongside their own cubs.  

For most of us, the neighborhood is still what we encounter every day, and what anchors us to the real world.

Not if you have a job. You know your colleagues pretty well. You may not know your neighbor at all. 

It is where we participate as sociable humans, not as clan members,

clan members are anti-social beasts 

coreligionists, professionals, or disembodied opinions on the web.

In which case, few who read this book are 'sociable humans' even if we don't have jobs. This is because our neighbor's work for a living and are less than delighted if you invite yourself to dinner more particularly if it is four o'clock in the morning. 

It is where we have the best chance of persuading others that our humanity unites us more than our ethnicity, profession, or national origin differentiates us.

Rajan spends hours every day haranguing the residents of his apartment building on why they should look upon him as a human being. 'I am not an animal!' is his cry. They pretend to be persuaded.  

It certainly is where we debate and persuade as we elect officeholders and participate in the governance of the local public services that affect us.

This may be true of Rajan. Sadly, where I attempt to debate with the good folk down the boozer, they tell me to fuck off. This is probably because they think I am a camel, not a Tamil. 

It is where we congregate to start broader political movements.

Rajan congregated to Amrika to start broad political movement- thinks nobody at all.  

As we will see later in the book, a healthy, engaged, proximate community

which you have to pay a lot of money in property taxes and mortgage payments to belong to 

may therefore be how we manage the tension between the inherited tribalism in all of us

Rajan is a Red Indian. He used to scalp White people. Thankfully, he has now buried the hatchet and smoked the peace pipe because of the nice 'proximate community' he has bought his way into.  

and the requirements of a large, diverse nation. Looking to the future, as more production and service jobs are automated, the human need for relationships and the social needs of the neighborhood may well provide many of the jobs of tomorrow.

Servants, handymen, prostitutes, Indian economists who knock on our door to persuade us that they aren't camels.  

In closely knit communities,

there's a lot of incest 

a variety of transactions take place without the use of money or enforceable contracts.

Uncle raping you is an example.  

One side may get all the benefits in some transactions. Sometimes, the expectation is that the other side will repay the favor, but this may never actually happen. In a normal family, members typically help one another without drawing up papers and making payments.

Which is why, if those 'normal families' get rich, they spend a lot of time suing each other. Look at the Hindujas.  

In many societies, friends don’t really care who pays the bill at dinner, indeed the ability to not keep count is the mark of true friendship.

This is true if the cost of the dinner is a small fraction of the value of the time you are spending.  

Contrast transactions within a community with a typical market transaction. I just bought a bicycle tire tube. I searched for one of adequate quality at a reasonable price through an online platform, paid by credit card, and the tube was delivered within the time promised. Even though this transaction took little time, there is an elaborate explicit understanding or contract behind it. If the tube is not delivered or it proves defective, I have contractual remedies. The transaction is arm’s length and one-off. Neither the seller nor I know each other. Each one of us is satisfied we are better off from the transaction even if we never transact again. We do not look for further fulfilment through a continuing relationship. The more explicit and one-off the transaction, the more unrelated and anonymous the parties to the transaction, and the larger the set of participants who can transact with one another, the more the transaction approaches the ideal of a market transaction.

There is no 'hold out' problem on open markets 

The more implicit the terms of the transaction, the more related the parties who transact, the smaller the group that can potentially transact, the less equal the exchange, the broader the range of transactions and the more repetitive transactions are over time between the same parties, the more the transactions approach a relationship.

In which case, I am in a relationship with Jeff Bezos. I should sue him for palimony.  

The thicker the web of relationships tying a group of individuals together, the more it is a community.

Or a Gulag or slave plantation.  

In a sense, the community and the market are two ends of a continuum.

Only in the sense that rape and murder are at the center of that continuum 

In his magisterial work, Gemeinschaft und Gesellschaft (“Community and Society”), nineteenth century German sociologist Ferdinand Tönnies

who thought people in a Community subordinated themselves to the Group's goal.  The "essential will" ("Wesenwille") of the individual is whatever the Community says it should be. Hitler would have agreed. 

argued that in a community tied together by strong relationships, individual interests are suppressed in favor of the collective interest whenever these interests diverge.

Only if there are punitive sanctions. There are plenty of communities tied together by strong relationships where anarchy prevails. Indeed, the system of collective punishment or the levying of 'blood money' on an entire clan was a step towards the establishment of a 'Stationary Bandit' who would make a profit by 'netting out' such claims between clans and gradually enforcing his own laws, again for a profit.  

By contrast, in a market transaction, “nobody wants to grant and produce anything for another individual, nor will he be inclined to give ungrudgingly to another individual, if it not be in exchange for a gift or labor equivalent that he considers at least equal to what he has given.” 

Nonsense! The drug-pusher gives you drugs for free to get you hooked. But 'streaming services' too offer you a free trial period. We give ungrudgingly if we know that the other will come to depend on us and thus have to remunerate us properly.  

In this sense, only individual interests matter, and they have to be met transaction by transaction.

No they don't. There are plenty of mechanisms by which 'memory-less' equilibria are improved by various public signals which simulate such memory. Large firms use algorithms to build 'relationships' even with small fry customers like me.  It isn't really the case that Sky TV loves me very much and keeps wanting to reward me for being a 'VIP customer'. Some computer algorithm is entrusted to massage my ego and retain me as a customer. 

Rajan seems to think that geographically 'proximate' communities have some intrinsic virtue. Perhaps they do. The problem is that we live in a world of scarcity. If our productivity is lower then sooner of later our command over resources declines even if we spend a lot of time hugging and kissing our neighbors. Modern economics begins with Malthus. Rajan, who ran away from an over-populated shithole to a country where productivity was high, should understand this better than most. 

A question economists of my generation (I am the same age as Rajan) must answer is why China soared ahead of India. After all, thanks to Mao, in 1990, China had lower per capita Income. When Edwin Lim from the World Bank moved from China to India, he thought India could grow much faster because it already had many of the things that China was desperately trying to acquire. Indeed, Mao had told Nehru, back in 1954, that India was ahead. Why did India do so badly compared to China? The answer is simple. Productivity. China wanted to raise it by any and all means- though, no doubt, under Mao, some of those means were as stupid as shit. Indians worried about the distributional consequences of letting vulgar little traders or artisans rising up and become super-rich. 

Rajan takes a different view-

WHY INDIA HAS NOT DONE AS WELL AS CHINA- China and India used to be sleeping Asian giants, but China awoke first.

Sun Yat Sen wanted China to get rich by raising productivity. Gandhi wanted India to retreat to autarkic villages. Later, when China began to embrace the free-market, Edwin Lim of the World Bank tells us that they were even ready to work with the Japanese- whom they hated- if the Japs were the most productive in a particular sector. But then the Japs themselves had emulated higher productivity America in the Fifties. 

Development is about Tardean mimetics. Find the guy who is doing best and try to mimic what he is doing. Sadly, the credulous Indians thought Stalin and Mao were the guys doing best even though millions of their people kept starving to death. 

They used to be equally poor, but now China has raced ahead. China’s initial advantages of a healthier and better educated workforce were perhaps more important in the early flush of liberalization,

China had suffered terrible famines, Civil Wars and ferocious invading Japanese troops.  That is why, if the Chinese were healthier and better educated it was only because of Darwinian survival of the fittest.

The Communist Party had to wade through an ocean of blood to establish its rule. In India politics was a tea-party, though Gandh & Co would occasionally go sulk in jail, and the administration which the Brits handed over to the Indians was pretty much idiot-proof. Nehru showed ruthlessness in slaughtering Muslims and Commies if they wagged their tail which is why Mao wanted to meet him. Sadly, Nehru didn't want to raise productivity. True, he had some sort of magical belief in 'heavy industry' but productivity is about capacity utilization and making a fucking profit so as to do capital widening and deepening. Also, what agricultural shitholes should do is get girls out of the villages and into giant factory dormitories till there is demographic transition. True, there will be a rising class of producers who will want lots of TV Channels and Temples and nice things to eat, but what the Stationary Bandit should understand is that, as Joan Robinson said, you first have to plant the tree and let it flourish before you can grab all the fruit. Even then, it is more sensible to just take some of the fruit so as to create an incentive for fruit production. What India should have done is taxed export industries just enough to provide better infrastructure while letting the more productive to gain in material terms.  

and its lack of a competitive market or private property rights were not disadvantages—

yes they were! That's why South Korea and Taiwan shot up while Mao's China went through a big famine.  

indeed, they allowed the state to push favored industries.

This failed. The binding constraint was foreign exchange. China's ship building industry was a joke compared to South Korea in the Seventies and even the early Eighties.  

Construction is probably the most important sector in the early phases of industrialization.

No. It is wage-goods- e.g. textiles. India chose to strangle the textile sector in the Fifties. Construction only matters at a later point when people have the money to build 'pucca' houses.  I should explain in India 'construction sector' is defined as 'Real Estate and Urban development'. It was only in 2009 that a separate Ministry for Highway construction was created. 

It is a sector that employs unskilled workers—and hence can absorb many that leave agriculture.

Mills can employ rural girls with zero education. The same is true of the more docile type of male. But a spell of military service for boys greatly raises their employability as Japan found.  

Why did India not do more highway construction in the Fifties and Sixties? One answer is that there was a paucity of cars and trucks. The other problem was that people firmly believed that once the Highway got out of sight of the State Capital, the contractors would steal all the money. Rajan must have heard stories from his Uncles about how they tried to drive down a Highway which the Chief Minister had just inaugurated and discovered there was no fucking highway- not even the sort of kaccha road that zamindars had been forced to maintain. 

It is also a sector that contributes to the growth of other sectors, as businesses spring up to make use of the infrastructure. For example, it is quite magical in India to see the economic growth of a village as a good allweather road is built connecting it to the city.

That is transport infrastructure, not construction. A.O Hulme, who founded the Indian National Congress back in the Eighteen Eighties, explained in his book on Indian agriculture that the State needed to devise new taxes (and get rid of the 'Permanent Settlement') so as to set off a virtuous circle of infrastructure investment leading to higher tax yields which in turn leads to more and better infrastructure. Hulme was foolish enough to think that Hindu barristers wanted their country to rise in this manner. All they wanted was to talk bollocks, preferably while occupying one of the nicer bungalows the Brits had built for themselves. 

The Indian State still does not understand that it isn't Santa Claus. It is a 'Stationary Bandit' which should use tax revenue so as to get more tax revenue in the future.  

The road allows trucks to transport goods to the city quickly,

only if trucks are available 

so farmers undertake new activities like dairy and poultry farming and horticulture.

only if this enables them to have a higher material standard of living 

As they get richer, shops selling packaged goods and clothes open up in the village.

Only if they get richer. India didn't want its farmers to get richer because they would then want a bigger share of political power. Instead of chaps with Oxbridge accents, you'd have rustics in Parliament jabbering away in some ungodly vernacular dialect.  

Soon a kiosk starts selling prepaid cell phone cards, and not too long afterward, the village gets its first bank branch. Construction thus multiplies jobs and facilitates development.

Infrastructure does that. It doesn't matter if people live in shacks.  

Perhaps the most obvious consequence of their starting conditions is that China has been able to expand its construction sector enormously, while India has been less successful.

It was only in the Eighties that the Chinese got serious about Highways. 

China has moved ahead because it has been able to fund construction projects with cheap credit, and land acquisition has not been problematic because all land belongs to the state.

Edwin Lim says that the World Bank could have provided cheap credit for infrastructure. Sadly 'andolanjivi' activists were better rewarded for preventing development than guys like Montek Singh Ahluwalia. That is why Manmohan tried to crack down on these foreign funded NGOs.  

In India, by contrast, credit comes at market rates.

Because the bureaucrats- even those of the World Bank- are afraid of the 'andolanjivis'. Thus Adanis and Ambanis do the infrastructure using funds provided by the nationalized banks. To say this is at the 'market rate' is howlingly funny.  

More important, any new project requires a painful and long acquisition of the necessary land from owners. If land rights are not well established, it can take even longer. The time delay involved itself undermines the economics of the project. While the law permits forcible land acquisition for public projects like roads and airports, opposition politicians, sensing the political opportunity, are always willing to organize protests against these.

Why mention 'opposition parties' when 'andolanjivis' are bad enough?  

India’s well-developed civil society, with each organization fighting for a special cause, often joins in. If the Indian state were effective, then these elements would provide an appropriate check on its power—indeed, Indian land acquisition laws are models of trying to balance the rights of the owner against the imperatives of development. The state, however, is ineffective, so land acquisition, and hence construction, is unduly delayed.

The bureaucrats are timid. The politicians are nervous of the 'andolanjivis'. The Courts add an extra layer of capricious delay.  

India’s infrastructure projects are, for the most part, too little and too late. In the early stage of growth, China has had an advantage.

No. The Chinese knew they were at a massive disadvantage. They imported White English teachers and relied heavily on the Chinese diaspora to begin to rise. Thankfully, they slaughtered the pro-Democracy students and thus prevented the West from fucking them up pre-emptively. Hilariously, they even hoodwinked Jimmy Carter into helping finance some supposed 'grass-roots' democratization! However, it was 9/11 which was the game changer. The Americans took their eye of the ball permitting China to rise. By about 2012, they were in a position to tell Carter & Co to fuck off anytime they started gassing on about Yuman Rites or Tibet or Democracy. 

India needs to speed up land acquisition.

It needs to kill people who make a nuisance of themselves. Just one or two will do. Andolanjivis can always find some other cause to get excited about.  

It would be tempting but shortsighted to lighten protections for the land owner. That would only bring the politician in to agitate against acquisitions that are deemed arbitrary in the court of public opinion. Instead, India needs to make the land owner a partner in development by giving them back a share of the developed land, as some Indian states are doing successfully.

There is still the problem of nuisance law suits and crazy andolanjivis running amok. Look at Singur. The people there thought Mamta would get them more money. Instead they got shafted. The 'hold out problem' here arises out of the interessement of 'Civil Society' and ranting politicians- like Rahul in his new incarnation as the Messiah of the Backward Castes.  

It could also focus some of its limited state capacity on establishing clean property rights in land, thereby easing ownership and sale, while giving up other activities it does less well, such as running an airline or bank. If it does this, India has plenty of easy catch-up growth still ahead of it, building roads, ports, railways, airports, and housing. Moreover, if it continues improving the education of its youth—and the quality of their learning needs to be the focus going forward—it will have the lowcost labor and the infrastructure to establish a larger presence in manufacturing, to add to its capabilities in services.

Fuck that. Reduce expenditure on higher education and the dream of getting into the IAS. Just raise the participation rate for rural girls by shifting them into big factory dormitories. Don't subsidize their remaining in Malthusian shitholes even if they all get MPhil in Gramscian Grammatology from JNU.

Given the right reforms, India can still grow strongly for a long while. And with its vibrant democracy, it is probably better positioned than China for growth once it closes in on the frontier. It needs to get there first, though. 

So, Rajan thinks that first you have to get to the frontier after which you can close in on it. That's the sort of thinking which can get you a Nobel Prize in mathematical economics- provided you are brown and say 'boo to Modi!' on a regular basis.  

One final observation. China saw a great expansion of literacy in the first Millennium. Unlike India, where literature was either courtly or religious, Chinese literary culture aimed at creating a patriotic 'Mandarin' class. But affluent merchants, artisans, etc, invested in that type of education because it was and remained a 'positional good'. Thus Chinese 'koinonia' was always patriotic and nationalistic rather than religious or other-worldly. Productivity was a good thing. The Magistrate who 'ruled without ruling'- i.e. by letting the productive element rise- was able to send back lots of money to the Capital. On the other hand, 'rain-cycle' based famines (which India also experienced) had a direct political effect. The Mandate of Heaven was withdrawn when the rains failed and there was large scale agricultural distress leading to rebellion. In India, sadly, drought and dearth could be blamed on God not the King. I suppose one might say that China's relative homogeneity is a product of its literary culture. On the other hand, we must admit that the first Utilitarian was Moh Tzu, whom we might call an engineer,  who sought to spread peace by giving Cities defensive technology. Thus, underneath a Confucian overlay (which stressed filial piety) there has always been an utilitarian aspect to Chinese thought. There is no reason why India should not adopt a pragmatic 'Arthashastra' which allows the Vyadha (butcher or meat vendor) to live in affluence indifferent to the strictures of Pundits or Princes, while tasting the honeyed wisdom of the Chandogya. 

To end on a personal note- I recall Mrs. Thatcher's attempt to impose a 'Community Charge' (poll tax) on me. I protested vociferously that I would gladly pay to leave the shitty community where, because I was poor, I was obliged to reside. It seems the vast majority of Brits agreed. The poll tax was scrapped. My point is that communities can be shitty or, if they actively emulate nicer communities, they might be worth paying to be part of. Koinonia is a function of the mysterious economy by which the Day of Wrath is held at bay by our seeking to emulate the more successful. I myself spent the first fifty years of my life trying to persuade my Mummy that she was actually Indira Gandhi- in which case, I, not some Gujju, would be PM. Sadly, this also meant that I became as stupid as Rahul- albeit without the advantage of an MPhil in 'Development Studies' from Cambridge.