Monday 28 November 2016

Prof. John Weeks on neo-liberalism's irresistible rise.

Remember 'Occupy Wall Street' and all the fuss about the 1 %?
 It was bound to fail. 
Prof. John Weeks of SOAS has an interesting theory- Neoliberalism makes US Presidents, whatever their party affiliation or ideological orientation, do bad things to poor people so as to make rich people richer. This causes poor people to vote for Donald Trump because...urm... well, it's all neoliberalism's fault.

Judge for yourself-

Ushering in Trump
Fifty years of democratic capitalism was the historic accomplishment of the New Deal. Relatively low and stable inequality provided the basis for what some call the “Golden Age” of US capitalism. In 1974 under a Republican presidency (Richard Nixon, replaced in mid-year by Gerald Ford) US income inequality dropped to its lowest as measured by the Gini coefficient.

Subsequently, under presidents both Democrat (Jimmy Carter, Bill Clinton, Barack Obama) and Republican (Ronald Reagan, George H W Bush, George W Bush) inequality rose inexorably. Rising inequality revived social divisions subsumed by prosperity during the “Golden Age.” Donald Trump encouraging and exploiting those divisions is the vehicle for a transition to authoritarian capitalism.

With Donald Trump neoliberalism fulfils its logic, destroying even the illusion of a just society.

Weeks is American. He must know the New Deal failed. What got the U.S out of the Great Depression was the Second World War and then high and sustained military expenditure thanks to the Korean War and the formation of what Eisenhower termed the 'Military Industrial Complex'.

Democratic Capitalism never existed. If it had, Weeks wouldn't have imbibed Marxist Economics back in the late Fifties and early Sixties. His life would have taken a very different turn- viz. hot gospelling the magic of markets and the virtues of the ballot box to the developing world.

What did exist, when Weeks was a young man, was high tax rates inherited from the War years. The US decision to finance the Vietnam War by printing money unleashed inflation which in turn pushed working people into higher and higher tax brackets. This is called 'fiscal drag'. At the same time, Welfare payments soared on the excuse of inflation and because the Govt. was awash with cash. By the time tax thresholds were index linked and monetary policy was reconfigured to squeeze inflationary expectations, the damage had been done. Ordinary people didn't trust the tax and welfare system to redistribute income to the poor or deserving. Rather they resented having to pay for 'welfare queens'. Bill Clinton got the message and did a U turn. This had nothing to do with 'neo-liberalism' or any other catch phrase featuring what had become 'the L word' under the first Bush. The fact is, Govts. don't like handing over cash to poor people. They do like taking cash from working people on some excuse or other but working people understand that Govts. waste most of what they take.
The other big problem was that the elderly were  more numerous, more politically active and also much wealthier and smarter than ever before. Being net creditors, they wanted both high real interest rates as well as soaring asset prices. They couldn't have both which is why we now have a liquidity trap. 

Perhaps what Prof Weeks means by 'neo-liberalism' is a situation where ordinary working people have to pay Income Tax and thus resent re-distributive fiscal policy- more especially in an increasingly heterogeneous society where people of a different ethnicity are visibly worse off or more deserving of help.
Clinton and Obama- the first and second Black Presidents- were aware that Welfare dependency was considered a curse by African American intellectuals and this view was quite prevalent among other minority communities as well. Thus neither Obama nor Hilary could put fiscal policy at the center of a reflationary policy to compensate for the monetary shock from the Financial sector. But then FDR too had failed with a reflationary Fiscal policy. Indeed, Kennedy wasn't a Keynesian- he cut taxes rather than raise Government expenditure. Nixon was the first and last avowed Keynesian. He was also the only President to try a Prices and Incomes Policy.

Perhaps if the Democrats had put up a proper 'tax and spend' Liberal- say Biden- in 2008, things might have worked out differently. Still, the Republican minority had a strong card- in the shape of a pretended zeal to see a Wall Street shake-out- which they used very effectively against the Democrats. Perhaps a President who came across as a stupid loudmouth could have called their bluff. Neither Hillary nor Obama fit that bill. Worse still, Obama, as a Black man, didn't want to put cash in the hands of poor and needy people because, for well known historical reasons, a lot of such people have darker complexions. If such people get a little more money in their pockets then their rate of incarceration will go down. They will disengage from Govt. bureaucracies. They will shit upon a 'talented tenth' who have built meretricious careers by claiming to represent their surd alterity. 

Oddly, things for them might be about to improve.

Unlike Hillary or Obama, Trump can do stupid. He can do it sublimely well. That gives the White House a 'threat point' which the wonkish Obama sadly lacked. The other thing about Trump is that a lot of people think he is racist. Suddenly redistributive fiscal policy doesn't look such a bad thing from the White working class point of view.

 Put cash in the hands of the needy while starving penal or paternalistic bureaucracies. Do infrastructure. Ensure regular 'bail-ins' and 'haircuts' to correct incentive incompatiblity in asset markets. That's what Economic theory counsels. 

Weeks disagrees. He thinks Americans have less agency than sub-Saharan Africans. Clearly there must be some sort of I.M.F- a secret Masonic Fellowship of the 1%- which imposes a 'neo-liberalism' invented for the Global South upon the richest and most powerful nation in the world. How does it do it? I think it must be the thought control rays emitted by the Television set. Time to put on the tin foil hats sheeple! Or maybe that's what neo-liberalism wants us to do...

Sunday 27 November 2016

Amartya Sen on why India can't be a global economic power- unless it can.

'India is the only country in the world which is trying to become a global economic power with an uneducated and unhealthy labour force. It’s never been done before, and never will be done in the future either. There is a reason why Europe went for universal education, and so did America. Japan, after the Meiji restoration in 1868, wanted to get full literate in 40 years and they did. So did South Korea after the war, and Taiwan, Hong Kong, Singapore and China.' Amartya Sen

Rwanda has 97 percent Health insurance coverage. It will never be a 'global economic power' but remain a basket case kept going by foreign aid. South Korea, which could have stagnated like India- its politicians were even more corrupt- pursued global economic power under a ruthless military dictator from the early Sixties. Still it wasn't till 1977 that modest health insurance coverage was mandated for employees of big firms. Universal coverage only came in 1989. The country first grew economically and then looked after the health of its people. Still, even under Kim Dae Jung- the Nobel peace laureate and former political prisoner- the State put a cash limit to its support for the Health Insurance scheme. There was no blank check. Nevertheless, significant deficits built up from '96 and the Government response has been irrational causing some bizarre pathologies to develop in the Health system. The health of Koreans has suffered as a result. However, their rise to global economic power status has not been affected at all.
Similarly Taiwan, which ended martial law in 1987, waited till 1995 to institute universal health coverage. Why? It first had to get rich enough to afford to do so. India, contra Sen, has in fact been committed to free universal Health Care for some time. It fails to meet this aim because Doctors won't go to the villages and, as Dr. Jack Prager pointed out, the money in the budget gets misspent. Predictably, the Public Health Service is horrible, as is the Public Education System, while the Private Sector does most of the work- for which however, in medicine, it charges too much.
 Economic development by itself isn't enough to improve Health coverage. It is also important that not-fit-for-purpose Public initiatives be shut down so as to free up resources. Cash transfers or a Voucher system are one way to make Govt. spending on Health and Education somewhat effective. Sen, of course, is against this.

Countries which want to end up healthier, better educated and richer have to make sacrifices in the short run and even the medium term.
Economic development, initially, means the vast mass of people take up jobs which endanger their health and reduce their educational prospects. Being a coal miner is bad for your health and interferes with your education. Quitting your PhD in Gramscian Grammatology at Nalanda International University and moving to a highly polluted city like Delhi to work in a call centre is bad for your health but good for the economy.
Over time, as a country gets richer, it has the resources to protect health and promote education. If no sustainable economic development occurs, health and education will worsen anyway for demographic reasons.
Amartya Sen is a very old man and the quotation given above is from an interview, not a book. Still, ordinary people of his age know full well that every country which became a 'global economic power' started with an uneducated and unhealthy labor force. Nobody said, 'first we must spend ten years educating our people and making them healthy. Then we can start earning money globally to pay for that education and health care.' Why did this not happen? Aren't under-developed countries like children? Shouldn't we first vaccinate an under-developed country and put braces on its teeth and then send it to Cambridge for a degree and only then ask it to start earning money as a global economic power?
The answer is countries are not like children. They don't have loving parents with plenty of money in the bank. No one will pay for their education and health care and then wait patiently for them to start earning so as to pay back the investment.

Which countries, by common knowledge, became global economic powers while displaying a cruel indifference to their  uneducated and unhealthy labor force? Answer- all Democratic ones. America did not introduce Social Security till 1935. Britain did not introduce free compulsory education till 1870- and its relative economic decline began a few years later. It didn't have a National Health Service till after the Second World War.
An unhealthy uneducated workforce- kids working down mine shafts- turned Britain into the richest and most powerful maritime nation in the world. Professor Sen has lived in England for many years. Why does he not know this?
What about the US? Surely it had an 'educated and healthy' workforce before it became a global economic power? Nope. Between 1870 and 1890, school enrollment rates fell to below 50 percent. Illiteracy, however, increased more because of the influx of migrants. Health outcomes worsened for the majority because of poor living and working conditions as well as simple ignorance and superstition. Still, America had a dynamic economy and the returns to education- even for disadvantaged groups like African Americans- were high. 

By contrast, authoritarian militaristic regimes- Germany, Japan, Korea, Taiwan- saw universal education and improved health care as a way to indoctrinate and turn their populations into better soldiers and more productive workers in the factories and mines which furnished the sinews of war. Italy is a good example of how authoritarian regimes, like that of Mussolini, can raise school enrollment where liberal societies fail.  In Law, free compulsory education had existed from 1860 but illiteracy was rampant especially in rural areas. Interestingly, East Germany did better than West Germany in education- an effect which still persists- because authoritarian regimes have more power to force kids to acquire useful skills.

In a sense, India is in advance of America because the Government, not the parent, bears the legal obligation to educate all children. However, India is not an authoritarian country. It can't even punish teachers who play truant, in State Schools let alone force parents to educate their children. Sen knows full well that such schools are often very badly run. However, the teachers count votes in the elections so nobody has the guts to crack the whip on them. Similarly, there is massive corruption in Public Health provision. In China, a bunch of corrupt Doctors or lazy teachers can be shot to set an example. In Cuba, Doctors are punished if infant mortality goes up- as a result their statistics show a suspiciously high rate of third trimester miscarriages. In India, Doctors can't be forced to do what the State requires. Nobody can.

Some countries have high literacy but pursue stupid economic policies and thus don't fulfill their economic potential. Japan had a literacy rate similar to European countries before the Meiji revolution. But it was stagnating economically. 
Countries which have low literacy but pursue sound economic policies will see an increase in education because the return to investment in human capital has increased. After a demographic transition, other human development indices also rise. Sometimes the State plays a role, sometimes the impetus is from Religious organisations or is a feature of traditional culture. 

Turning to Health, Cuban health outcomes improved during the famine because people had to do more exercise and got less nice food to eat.. This effect was reversed after economic conditions started to improve. Even if reforms now come to Cuba, which does have well educated people- especially in Health & Pharma- and a healthy population, it is unlikely to do particularly well because it has gone through demographic transition and has an average age of 38. India too may get a demographic transition without becoming a manufacturing giant. What matters in determining whether a country will become 'a global economic power' is whether or not it has risk-takers with a global perspective. Health and Education are irrelevant. Rising real wages may worsen health outcomes initially. Education levels may fall because young people can earn more in a factory than doing a PhD in Gramscian Grammatology while waiting for a Government job as a peon.

Amartya Sen has wasted his life comparing apples to oranges. Totalitarian regimes can do things which are not feasible for Mixed or Free Market Economies. But, the latter can- if it has risk-takers with a global perspective- turn a nation into a 'global economic power' if some comparative advantage exists and 'the gravity model' of Trade does not forbid it. India is now well placed in that respect. Bureaucratic restrictions haven't improved Health or Educational outcomes but have strangled Economic activity. Sen must bear part of the blame for this.

Epiousion, Wilde & anacreontics' salvic power

Man does not live by bread alone. For poets, inspiration- which itself must involve 'apoorvata', hermeneutic novelty- is the very breath of life. But Art, as Decadence, programmatically suffocating in the odor of its own ordure, yet is a Theodicy in that it is a practice of Death- God's highest gift.

Oscar Wilde, in Prison, took delight in two things- his quotidian ration of white bread, not black, not brown, supplied to him on medical grounds and...but let him tell you the story himself-

Of late I have been studying with diligence the four prose poems about Christ. At Christmas I managed to get hold of a Greek Testament, and every morning, after I had cleaned my cell and polished my tins, I read a little of the Gospels, a dozen verses taken by chance anywhere. It is a delightful way of opening the day. Every one, even in a turbulent, ill-disciplined life, should do the same. Endless repetition, in and out of season, has spoiled for us the freshness, the naivete, the simple romantic charm of the Gospels. We hear them read far too often and far too badly, and all repetition is anti-spiritual. When one returns to the Greek; it is like going into a garden of lilies out of some, narrow and dark house.
And to me, the pleasure is doubled by the reflection that it is extremely probable that we have the actual terms, the IPSISSIMA VERBA, used by Christ. It was always supposed that Christ talked in Aramaic. Even Renan thought so. But now we know that the Galilean peasants, like the Irish peasants of our own day, were bilingual, and that Greek was the ordinary language of intercourse all over Palestine, as indeed all over the Eastern world.

If Wilde were right about ancient Palestinians speaking Greek, then the word 'epiousion'- signifying 'daily'- as in 'give us this day our daily bread'- would be a hapax legomenon unique to Lord Jesus.

Fittingly, perhaps, it poses a puzzle for the aesthetically inclined philologist- and Wilde was academically very accomplished- because it isn't the word they would consider collocationally correct or rhetorically resonant.
Theologians might see in it a conflation of two different types of bread- one which is necessary for existence in this world and, thus, quite naturally, give rise to our temporal duty (καθῆκον- kathekon) or attachment to the 'Loaf Lord', and which, by God's mysterious economy or 'invisible hand' is part of the 'katechon' (κατέχον), delaying God's day of wrath- and a quite different type of bread which is for the  day to come, past the eschaton, or beyond nature's scope. Catholics, I suppose, would substitute 'super-substantial', or 'super-essential', for 'daily'.  Yet, 'daily' is a word which alights gaily upon scarlet lips. 'Super-substantial' is grey, and graven upon a tongue of stone. 

Plato's Phaedrus, Wilde well knew, concludes that the written word is but the image of the living and breathing utterance of the one who knows. But the certification of that Knowledge must involve the 'synoida' of a 'beloved disciple' who- for such is Love's leaven to its own longed for loaf- is told to tarry while all the rest must follow.

The unleavened bread here is that of the Eucharist, which must be accompanied by the fermented grape- not to mention such zeon agitated water as renders a drink 'toddy'- which topers espouse as polyandrous fraternity; whether by rye, or barley, we are barely that futility we can, but, crapulous, know : and this dipsology's ditopology renders Christ literally superfluous. Such at any rate would be, the least marked, 'Vulgar-Wildean' reading of what went before- no matter what went before- for a malamati fuckwit like me.

But Wilde was smart. He was writing for himself. What might the hapax legomenon of Christ's ipsissima verba have meant for Wilde- a late Victorian poet and lover of paradox?

Consider what a contemporary critic wrote of Browning-

Wikipedia tells us- 'In the original Greek, the word is in an adjectival form, epiousion – here from Matthew – and is the only adjective in the Lord's Prayer: Τὸν ἄρτον ἡμῶν τὸν ἐπιούσιον δὸς ἡμῖν σήμερον[20](Interlinear: "The -- bread -- of-us -- - -- epiousion -- give -- us -- today")[2]

The paradox here, for Wilde, whose bread was now prescribed as a medicine- a pharmakon- would be that Jesus, who gives his own flesh as a medicine to sinful humanity- i.e. he himself is the sacrificial animal, the scapegoat, which is another meaning of pharmakon- Jesus chooses to use a unique adjective in a poem which truly makes God adjective to man. But this flesh made bread, or bread made flesh, is a poison- a third meaning of the word pharmakon- only to the author, though an eternal cure for everyone else.

Why is this bread which is ours for the day to come so important that it alone gets, all to itself,  a unique and enigmatic adjective? Alternatively, can it really be the substantive of its own adjectival Scapegoat God?

I suppose, if we have been deprived of white bread for any length of time, we might view Time itself through the lens of that loaf's recurrence. Prisoners know that even if their trespasses are forgiven them, they still 'have to do their own Time' , yet, Wilde intimates, there is a type of bread- fine white bread, not black or brown- the restitution of whose recurrence enables one to hope that there is some all healing pharmakon we partake in common which actually belongs to tomorrow but which we can yet legitimately pray to receive today. But only because repetition is the essence of the prison regime. The hope of release is the dangled carrot which keeps the treadmill turning.

Similarly, the repetition of the Lord's Prayer, which invokes the hope of seeing the Messianic reign established in our life-time, reconciles us to passing from one generation to another within the same prison walls.

At the center of every paradox is the hiatus valde deflendus between Being and Becoming and irony is what populates that abyss of eternal repetition which gapes between them. In rhetoric, paradox is governed by kairos- timing- and permits truth to have a double without violating the protocols of the account it gives of itself. In life, however, the paradox requires untimeliness, it must hesitate or otherwise miss the mark; it is a martyrdom that stands witness only to its own stupidity. To deal in paradoxes, as Christ or Socrates did, is to die squalidly, not suavely, taken in a self-spun snare. Dialethia is the other side of the coin of Divinity whose spendthrift's palm is seared by what its own prodigality has rendered too hot to hold.

There are two possible etymologies for epiousion- this word impossible, it seems, to any Greek tongue save Christ's.

As William Barclay puts it-

Going a step further down the path of speculation, if Wilde did indeed consider epiousion as the unique ipsissima verba of the veritable Lord of the Lord's prayer, then what that archetype of the romantic artist was actually praying for was to receive His own coming Eucharist in common with all men, not- as in Luke, eternally- but now, just once, though for all Time- without that Time having in any sense actually having supervened. This is Pater's Dionysius who, to make Wine a Religion, must be torn to shreds by maenads and woven again by nympholepti yielding the wordy widsiths of his personae the but gall of knowing all they have contrived is the little masks upon the vine which scare away sparrows. This too is Ibn Arabi, upholding Christ as mathalan bi-takvin- a neutered symbol of engendering- giving life to clay birds- cashing out as, for not Sophist Anacreotics but Sufi Khamriyaat, that 'spirit of fire and dew, alive and leaping in a thousand vines', which, if envisaged as 'a higher intelligence brooding over things', breeds a but blasphemously expended sperm confirming there can be no repetition in theophany no matter how merely romantic or imaginal, id est fetishitic or phantasmic, its fabulously failed, therefore familiar or sacred, deontological detective work or worthlessly didactic ontological framing.

Thus, Wilde's adjectival epiousion exception, in favour of repentant sinners, to Agathon's - 'not even God can change the past' - proved a more atrocious substantive sentence than any merely dialectical or dialogic ratio could hand down. In repenting our sins we change the Past only to become prisoners of a snagged Time-line plucked from the common-too-common sleeve of the heart.

By contrast, Eros repairs itself.
Indeed, a full stomach militates to no other end.
Bread's whiteness, its refinement, helps.

Metanoia, alas, as the maiuetics of a mere couvade, transubstantiates the contents of its communion cup, to a but municipal hemlock while increasingly arid grow such Symposia as have abandoned anacreotics.

Kairos, once linked to the oracular krater- just as the Soma of the Indo-Iranians was once linked to an amphetamine rich beverage helpful in child birth- when taken up by philosophy, becomes untimeliness, inauspiciousness, an esoteric whispering in the ear, a contagion of unease and ontological dysphoria at the spectacle of the universal celebration of, but, Seasonal change.

Returning to epiousion as inspiration- the daily bread of the poet- Wilde wrote- 'If ever I write again, in the sense of producing artistic work, there are just two subjects on which and through which I desire to express myself: one is 'Christ as the precursor of the romantic movement in life': the other is 'The artistic life considered in its relation to conduct.''

It may be objected, that no two duller subjects can be conceived. But Wilde well very knew that true dullness is nothing if not a hiding in plain sight of a horror too monstrous for utterance- like John 22- a lover told to out tarry Time- so Love's Word flesh out- John 25- a book too big for its World.
Thus Wilde, taking Christ as his mot theme, turns his prison loaf into yearning's unrepeatable Paschal epiousion equal only to another prodigal son's 'swine-herding hunger for husks.'

Thankfully, Wilde's decadence was merely a Victorian veneer.
The trough of Antisemitism not yet Gallic & de rigueur
But Chesterton would see to it that base was covered for babu literature.
I believe there's a move afoot to Canonize the cunt.
Not that a good drinking song isn't worth a Sainthood.
It's just litterachur's bread & butter sticks so in one's craw.

Saturday 26 November 2016

The death of Soft Power.

A few months ago the FT published an article saying that the US had overtaken the UK as leading in 'soft power'- Joseph Nye's notion re. the attractive power by which a nation can get other nation's to do what it wants without coercion or bribery.
Interestingly, both voters in the UK and the US have chosen to turn their back on 'soft power' and 'political correctness' and 'universal human rights' and the 'liberal world order'.
No doubt, Frau Merkel will be declared the new 'soft power' leader- till she loses upcoming elections.

Why is 'soft power' dying? Well, if an attractive person tries to make money out of their attractiveness they become vulnerable to a more or less plausible, or more or less brutal, pimp. What then ensues is not the accumulation of 'soft power' but a long history of more or less self-deluding prostitution.
Nation States, of course, don't actually hang out at street corners in stilettos and push up bras. Well, Belgium maybe but, generally speaking, it's not de rigueur.  Still, any attempt to instrumentalize soft power will produce a reaction including an attempt to game that instrumentalization.

One way to 'lock in' present soft power is through multilateral agreements or resolutions passed by international fora. The problem here is that small countries get a blackmail opportunity by using their veto power or else ganging up in voting blocs. When this happens, big countries go back to bilateralism and so 'soft power' becomes irrelevant.

One big problem with 'soft power' is that it attracts Labour and Capital flows which may provoke nativist xenophobia. In the end, it is fears about migration which is killing off 'soft power' dreams at this moment in time. However there is a bigger problem relating to Capital flows, global supply chains and the costs and vulnerabilities associated with locking in to a foreign controlled Knowledge Ecology.

Thursday 24 November 2016

Aati kya Khandala?

Granny wrinkled up her nose as if about to sneeze.
It was a sign she was going to say something I'd find disagreeable.
'Thailand is Hindu, no?'
"No, paati. Buddhist.'
'So, they have gone to Thailand for Buddhist pilgrimage?'
I chuckled.
'Young people, nowadays, are intelligent and broad minded.
'Shraman & Brahman worthy of equal veneration'.

'But, when I asked if they wanted to come with me to Tirupati...'
'Paati! Maybe some sankalpam of theirs- remember no baby as yet is forthcoming'.
'What? They told you like that is it?'
'No, no- not as such but, you know, nowadays for these high earning young couples, pilgrimage to local place seems too easy. So they take sankalpam that when God's Grace vouchsafes such and such, then only we will take the bliss of going this or that teertham.'
"Oh! Like that is it?'
Her dismayed pout disarmed me.
I became voluble. 
'See, paati, times have changed- don't you know it? Both are IIM alumni. Earning extremely well. Your San Francisco son is reckoned a billionaire, I say! Her parents too are wealthy. Just young couple are going three four days to Thailand to enjoy. What is wrong?'

'Why not they save and tie up house?'
'Paati, you don't understand young generation. They will never leave home.'
'Except for going Thailand?'
'This Puja holiday it is Thailand. Christmas it will be London. But Pongal with you only.'
'Why not Pongal also?'
'What are you saying paati? You are the one at fault.Why cooking so delicious? How anyone can ever leave?'
'Oho! Buttering is it?
'What buttering? Cholesterol problem, sugar problem. How I can butter anyone?'
A plaintive note had entered my voice.
The frail old woman had little sight left. But within her own two little rooms, at the side of this vast ultra modern bungalow, she moved swiftly and with confidence. Her maidservant- whom I still mentally called vitavai- though, by now, all my 'grannies' were widows- was going deaf. From their shouting in the kitchen I became reassured that I was going to get a proper 'ghee roast' dosa cooked in clarified butter.
But then, these old women thought I was a widower.
That's why paati could be so frank with me.
You see, I never told anyone back home I was divorced.
Instead, whatever I had madly raved was that Black Sun, the truer truth of the Truth.

My wife used to cook for me. I would sit on the sofa in our little two room flat and the mouth watering aroma of sizzling pancakes would waft its way to me. 
We both worked, but salaries in those days were tiny for young people like us whose only ancestral wealth was an aptitude for academics or arcane actuarial professions.
I should have split the household chores with her. Treated her as an equal.
Instead, when despite all our precautions, my son came along, I...
I had to earn more money
Get out of the back-office.
Carouse with Clients...

I'm not a Sales guy.
Sales guy knows how to make it up to the wife for working all hours
He knows an affordable little getaway place that will revive and restore the Honeymoon's rising sap.

Aati kya Khandala?

I never had that...what?... streak of vulgarity?
That masculine something which makes up for the miserabilist horizon of the struggling, ethnically challenged, lower middle class?
Be honest.
Shame the Devil.
I just wasn't bright enough.
Hadn't the drive.
Didn't have what it took to take from the World so as to recompense that Wife which is the Soul.

Aati kya Khandala?

A joyless desert of a life redeemed by the desertion of that spouse who
to the suttee's eternal flame consigns you too.

I didn't have the money to take her to Thailand.
But, and this is something I lied about to paati, I could have done metaphorically what her grandson was doing with his wife in Phuket in actuality.

 Thai Surgeons are expert at transferring the genitals of couples to each other. Each then experiences what the other felt at the receiving end. Young highly qualified couples, nowadays have the money, the security, to go to Thailand and swap genders for a 'long weekend'. It strengthens their relationship and makes them more, not less, attached to their grannies and parents and own culture and native place.

Enough words!- the vitavai servant is bringing me my butter fried dosa.
Paati cooked it but only that perpetually dependent child widow is allowed to serve me.
When I came here after my breakdown it was something I shouted and screamed.
I am a Hindu widow!
Not widower.
Don't talk to me of remarriage.
Let only the vitavai serve me food.

Ah! paati, don't you see!
A son is that Thai Surgeon who, once he departs with the wife you drove away,
Does to you what yuppie couples now do in Phuket by way of but play.

Privatize Nalanda

Update- George Yeo has, very sensibly, resigned as Chancellor. Singapore is off the hook for the 5 million library.
One reason Yeo mentions for resigning is that he thought the Indians would amend the act relating to Nalanda such that financial contribution is taken into account when giving seats to foreign countries. Thus Laos gets a voice because it has actually given some money, but not Japan or Singapore because they haven't kicked in any money at all.

In 1957 India and China were great chums. As a symbol of their eternal friendship, the Chinese gave the Indians some money for the construction of a Memorial Hall in honor of a Chinese scholar who had come to Nalanda to study Buddhist scripture a dozen centuries previously. Within a few years, India and China were at war. Thus, it wasn't till 1984 that the Hall was actually built. But it served no purpose and remained empty till, in 2001, it was handed over to the Buddhist Pali College of Nalanda. They have done a good job of decorating it with official Chinese help.

In 2006, a wholly new Nalanda International University, not specifically Buddhist, was mooted. Japan and China were vying for 'soft power' and identified Buddhism as a possible vehicle to claim leadership of South and East Asian countries not locked into either Islam or Christianity. The Japanese, who had previously built a highway to Rajgir (near the original site of Nalanda) and who have a Monastery and a Pilgrim Hotel already in that town, were in a strong position to push the project through by themselves and promised to shoulder the whole cost. Later they scaled their offer down to a 100 million dollars, out of an envisaged final sum of one billion dollars, to get the job done. This was by no means infeasible. The Japanese could have used Nalanda to make their investments in India more productive. Indian students would have paid up to 10,000 dollars for courses tailored to secure them good jobs in Japanese Companies.
The sensible course would have been to let the Japanese get on with it. However, the Chinese were alarmed at Japan entrenching itself in this manner and came up with some actual cash- a million dollars- with the result that Japan paid nothing and let the project wither on the vine.
Perhaps this was inevitable once the global financial meltdown got under way. However,  the fact remains, a Japanese run University could have succeeded. What couldn't succeed was a multi-lateral effort such that no country's actual interests were advanced.

The Singaporeans- proud that they have 2 world ranked Universities of their own- saw an opportunity to put their own stamp on Nalanda. Unlike Japan and China, Singapore is fully integrated into Anglo-Saxon Academia though, it must be said, its strength is in STEM subjects. Indeed, Singapore is the only country in the world where an Econ Degree from Stanford is considered a Liberal Arts qualification! They have promised 5 million dollars for a library and, perhaps to encourage them to pay up, the new Chancellor is a well-regarded former Finance Minister of theirs. The problem here is that this new Chancellor has a more attractive offer from the Pope (he is Catholic). If the new University taught STEM subjects then the Indian bureaucracy would be prepared to let the Singaporeans take over and do things their way. But Singapore- very wisely- doesn't go in for hippy dippy 'soft subjects' such as those Nalanda has confined itself to. Even if Singapore builds the Library, it will remain empty- like the Chinese Memorial Hall for the first 20 years of its existence.

Nitish Kumar, the Chief Minister of Bihar (the State where Nalanda was located) was enthusiastic about the project. He wanted an international airport to be sited near the new Nalanda but this idea has been quashed as impractical. Still, in those heady days before the meltdown, the pipe dream of a new Nalanda located next to an international airport, financed by Japanese money, and attracting 'clean & green' knowledge based industries to Rajgir was hugely seductive.
Now, sited a couple of hours down a potholed road (that portion not built by the Japanese) from a domestic airport, Nalanda is an uninviting prospect.

What- apart from Location, Location, Location- went wrong?

1) Money. The Ministry of External Affairs views the thing as a money-pit. About 7 million dollars had been spent by the time the place started with just 13 students and 11 faculty. Fees  had to be slashed but even now, two years later, the place only has a 100 odd students. .
There are successful Private Universities with far smaller budgets in India- that too in remote places- but they don't have to pay 'internationally competitive' salaries. Furthermore, they can concentrate on bread and butter courses for which there is a huge demand.
Nalanda is like the proposed Vedanta private University in Orissa. During the early oughties boom time, these visionary projects looked appealing. Also they were an excuse to grab land from peasants. When the economic climate turned chilly, the money- whether promised by Governments or a private Company- disappeared
2) Subjects on offer.  Ashoka University, like Nalanda, is Liberal Arts but it has concentrated on building itself up as an Undergrad institution. It is far more favorably located but its fees are very much higher than Nalanda. Will it succeed? 20 million dollars isn't a great deal of money to start off with. Surely, its chances of success would have been higher if it had just the one corporate sponsor? It's early days yet, but Ashoka might succeed in a qualitatively different way precisely because it is a network of like-minded, tech savvy, individuals rather than a corporate behemoth. Rather than turning out whining Lefties conversing in horrible Po-Co jargon, it might produce articulate young people who can think for themselves. The recent brouhaha over its 'illiberal' handling of student and faculty protest about Kashmir has probably sent its stock up because, after all, a private College has the right to assert its own values and credo just as students have the right to transfer to a more congenial campus. In this sense, Ashoka has remained true to its original mission.
Nalanda, by contrast, has no such ambitions. It remains a State sponsored project with a rapidly eroding multi-lateral veneer. At best, it could have been a post-grad version of A.C Grayling's New College of the Humanities in London which had about fifteen million dollars in seed capital. N.C.H will probably be profitable once it is licensed to accept foreign students at which point big name Professors can be retained for an equity share. N.C.H could succeed because London already had expensive private Universities awarding American degrees not recognized by the U.K. Furthermore, London has benefited from 'flight capital' escaping volatile parts of the world. Oligarchs have bought hugely expensive properties here and can easily afford to pay double or triple the going rate for their children's tuition.
Still, N.C.H couldn't have succeeded if it had aimed to be a P.G College ab ovo because even very Rich people, who send their kids to tony 'Party Schools', don't want those kids getting Post-Grad credentials from a Vanity Institution.

3) Amartya Sen was Chancellor. He quite rightly put the then PM's daughter's chums in charge but had no interest in presiding over the shit-show once that PM was gone. Still, this meant that only the former PM's chum was left with any interest in the institution. Unfortunately, the University's statutes didn't permit her being retained for ever. So, by a decision by the President, she has to go. But, who in their right mind would take over now? Nobel laureate Sen vouching for you is one thing. It makes you academically credible. What protection can Yeo offer? Yes the pay is good but tenure isn't permanent. The thing isn't a CV builder, it is a tombstone.

There are other problems. Bihar's Nitish Kumar- who grabbed land from the peasants for this project- will pull the plug if a native Hindutva nutjob is appointed because that will give the BJP a permanent hold on Nalanda District. The new Buddhist Studies school may attract a decent person but China might take umbrage because of its hardening line on the Dalai Lama. Yeo isn't likely to stick around much longer because 'soft power' is now dead in the water. So, what happens next?

My suggestion is privatize Nalanda. Let the market find a use for this White Elephant. It could run courses in Yogic foxy-boxing and hydroponic-Gramscianism. That last might turn a profit.

Prerna Singh inspired by Modi?

Nationalism used to be a dirty word for the Liberal Academy. Is it slowly on its way back to acceptability?
Prerna Singh, an up and coming assistant Professor at Brown, has published a book, whose innocuous title linking Solidarity & Welfare belies a mischievous misprision, backed up by 'drive by regression', that 'sub-nationalism'- not the big beast, true, but something that might grow up into it- is a good thing for social development. She writes-

The Union Territory of Delhi is a 'political unit with primary jurisdiction over social policy'. It is doing well by comparison with most parts of India. People are willing to move there in order to enjoy a higher living standard and better life chances for their children. Does it have a 'shared identity'? Nope. It doesn't need one. Even under Kejriwal, there is no Delhi 'sub-nationalism'. Recently, post-Brexit, some newspapers have talked about an independent London remaining within the EU. In other words, a Londonian sub-nationalism has been mooted. Nothing similar has happened with respect to Delhi. Why?
Sub-nationalism is only meaningful if it can become a full fledged Nationalism. Its conventional definition is 'The policy of asserting the interest of one's own state/region/province, as separate from the interest of the nation and the common interest of all other states/regions/provinces.' It is stupid and pointless to use the term where there is no economic or cultural or religious or political divergence of the interest of people living in a particular province from that of people belonging to the Nation as a whole.
Modi, as C.M of Gujarat, was castigated by the National Media and Liberal Academia. It was alleged that he had only managed to get re-elected by appealing to Gujarati 'asmita'- i.e. chauvinistic Gujarati sub-nationalism. The EPW and other Left-Liberal publications continually repeated the mantra- 'Gujarat is not India. Modi represents a Gujarati pathology of hyper-masculinity. Gujarat is splitting off from India, using its coast line to attract international investment in petro-chemicals and other such evil un-Gandhian things.'
Had the BJP lost the election, no doubt Prerna Singh could have included Gujarat under Modi as an example of rapid socio-economic development because of, not good governance, but 'sub-nationalism'.
Instead, she highlights Nitish Kumar's Bihar. Previously, thanks to Jayprakash Narayan and Vinobha Bhave, Bihari 'Solidarity' had reached such a peak that 98 % of all the land in the state had been gifted away for communal use. This was not just bhoodaan but 'Bihar-daan'. In other words, the issue of who owned what got muddied. The State was disintermediated by the strong right arm. Reversing Proudhon's adage, Theft was Property. Stupid 'Solidarity' based politics had upset what was previously a well-run State. That's why no one there now mentions 'Bihar-daan' or 'Sarvodaya' or Leftist shite or Hindutva nonsense.
Instead, people vote for Nitish because he doesn't just say he will improve governance- he actually does it.  I recall a Bihari cycle-rickshawallah- a Brahman- in West Delhi telling me the road to his village was better than the one he was taking me down. I said I'd visited Bihar in 1998 and the roads were horrible. He explained that Nitish Kumar had cracked down on corruption. This was not 'sub-nationalism', it was people taking pride in good governance in their natal place and telling others about it not to rub their noses into the dirt but to point out that elections do matter, not all politicians are worthless. Delhites got the message and threw out Shiela Dixit. It doesn't mean they have become 'sub-nationalists'. They are Nationalists because what is good for Delhi is good governance. But that same type of good governance is good for every part of India.

Which parts of India have or had a genuine 'sub-nationalism'- i.e. the belief that a particular territory or ethnicity would do better on their own even if pursuing policies enmical to the Nation as a whole?
Some Indian Muslims from the Thirties onward espoused a 'sub-nationalism' which resulted in the formation of Pakistan from which Bangladesh split off. However, this 'sub-nationalism' negatively impacted development indicators in so far as it involved military and or internecine conflict. It is far from clear that improved 'solidarity', by itself, had any positive impact. On the contrary, the lesson to be learnt here is that only good governance matters.
Sub-nationalism of the Khalistani, Kashmiri or North Eastern sort have had no benign impact at all. Even if Nations were created in line with the demands of these genuine examples of sub-nationalism, the resulting wars and internecine conflicts are likely to destroy whatever fragile prosperity and governance these areas have achieved.
What of Kerala and Tamil Nadu? Singh makes great play with the notion that the 'Aikya Kerala' movement was 'sub-nationalistic' and that it led to Kerala's success as a Human Development model.
This is nonsense. Rulers were under pressure from the British to improve governance or lose their thrones. At the same time, old internecine rivalries had to be controlled to prevent recurrent civil disturbances and quasi-military insurgencies.
Why did Kerala do so well educationally? The answer is that it already had a tradition of scholarly excellence and moreover had large Christian and Muslim populations with an interest in maintaining and cultivating ties with the paideias of their own wider Oikumenes.
Once Kerala realized the value of English- because it was a gateway to learned professions and clerical employment- the expected return on modern education increased, hence demand for it rose. Since Kerala had a lot of Christians- for whom teaching was considered a spiritual vocation- as well as a traditional 'Ezhutachan' teacher caste- the quality of their schools, even in small villages, soon came up. For geographical reasons, there were 'economies of scale and scope' which quickly came on tap. The native brilliance of the people asserted itself. V.P Menon was an 8th standard drop-out. Sheer ability took him to the very top of the Bureaucratic pyramid. Why? He understood Constitutional Law better, and could write more cogently, than Oxbridge educated barristers or 'twice born' ICS officers.
Kerala began to export Doctors, Lawyers and Civil Servants. In New Delhi the joke was you had 'to run from Pilliai to Pillai' to get things done.
However, the other side to the story of educational success was declining opportunities at home- with Hirschman 'Exit', not 'Voice' or 'Loyalty',  serving as a safety valve. Initially this was because of inherited legal and institutional factors but, after independence, crazy Leftist militancy was the decisive factor in holding the region back. Still, like Cuba, Kerala saw a perverse benefit from Economic strangulation in that the Education industry (making 'Exit' possible) did not suffer 'Baumol cost disease', rather (this is the exception Baumol later noted) it was temporarily reversed with a one-off gain in Knowledge based Public and Merit good provision.

The Aikya Kerala movement could be called an example of linguistic sub-nationalism featuring the merging of princely states with British territory. It was supported by the King of Cochin and perfectly sensible as such. However, it had no real salience after '56. Thenceforth, there is no question of 'sub-nationalism' in Kerala as there was in Tamil Nadu where Dravidian parties were contesting Congress hegemony. Communism however did have salience in Kerala. The first elected Communist Govt. took office but there was a 'caste arithmetic' aspect to it. That Govt. came a cropper when it tried to take control of Christian schools.
Since Kerala has no real rancor directed at its neighboring states- Tamil Brahmans taking jobs there in the late Nineteenth century were not resented as Tamils or as Brahmans but envied because they had gotten access to English education- the large number of migrants it has received, more especially in recent times, don't seem to have caused any type of backlash. Moreover, Malyalams's long tradition of literary excellence has rendered the threat of 'Globish' rather benign.
Far from Keralites ever demanding English be banned, they have always been insisting that their kids learn English and other 'modern' subjects because they too wanted to get the same type of jobs as the 'Iyers' who had come up a little thanks to British Rule. In fact, an 'Iyer' (Tamil Brahmin) Dewan of Travancore, who had taken a strong anti-Communist line, was almost assassinated because it was thought that he was holding up accession to the Indian Union.
What about Tamil Nadu? The Dravidian parties did indeed toy with separatism at one time. However, the mass patriotic groundswell in response to the Chinese invasion showed that 'sub-nationalism' had no mass appeal. What people wanted was good governance. Kamaraj had come up with the free school meal idea. M.G.R (a Keralite) implemented it. Who gives a damn where 'Amma' comes from? If she understands that ordinary people need affordable food and sets up proper canteens then it is a matter of upholding basic dignity not 'sub-nationalism' or any other such bogus concept.
What bloody 'Solidarity' is involved if an elderly person gets a portion of idli sambar at a reasonable price? Are you telling me the rich people are showing 'Solidarity' by giving this as charity? No. They are paying taxes because they will go to jail if they don't. If they don't want to pay taxes they are welcome to emigrate to some country where taxes are not collected. Otherwise, not 'Solidarity' but proper Economic 'Mechanism Design' is what builds schools and runs hospitals and provides canteens so that people can live with dignity.
This at any rate was the message of Tamil Cinema- which was market driven. Those films which showed the hero standing up for the dignity of ordinary people and fighting against their oppressors did well at the box-office. Those film writers or actors who gained popularity entered politics and, once again, gave the people what they wanted- not all they wanted by any means- but a product slightly better than what their rivals were selling.
 As a Tambram myself, I can tell you that Rajaji was considered a senile casteist buffoon by people of my grandparent's generation. That idiot, nobody else, supported the Pakistan demand. That shithead, nobody else, thought kids should learn their father's trade. Yes, Tanguturi Prakasam- who wanted to demolish Textile factories to show himself the true inheritor of Gandhi's mantle- was a bigger idiot. But he was a Telugu idiot so not our problem.
Interestingly, Telugu speakers after getting a linguistic state, have opted for a further division so as to improve governance. Mayawati, in Uttar Pradesh, is calling for a similar re-organization to improve administration. There is a linguistic argument for this but no-one wants to have their kids schooled in what is perceived as a rustic dialect as opposed to 'shuddh Hindi'. Indeed, Uttarakhand has Sanskrit as its second official language so as to preserve what is perceived as its scholastic advantage in this respect. But, even there, access to English and instruction in STEM subjects is what people are clamoring for. Solidarity can go hang, if it involves stupid nativism.

Good governance- as the term is used by Narendra Modi, not Amartya Sen- means the individual's dignity is upheld. I am a 53 year old man. I'm perfectly ready to lift up my dhoti and urinate and defecate on the side of the road. My dignity is not compromised. Rather I am asserting my equality, as a Brahman, with the Holy Cow which wanders the streets in a similarly random, though admittedly not inebriated, manner. However, even I have to accept the situation is different for a young person or female. 'Swacch Bharat' is not about Solidarity or Sub-Nationalism. It is about a person's dignity by virtue of being a person, not some entitlement arising from membership of a collective. 

Economic theory is aware that Social Choice requires a Goldilocks condition re. diversity in endowments and preference profiles. Too much or too little diversity means every possible information aggregating mechanism has a pathology. The precondition for 'good governance' is that a sequence of co-ordination game yields an allocation in the 'core'. But, that's stuff we have evolved to sort out for ourselves without the need for any bogus Academic lecturing us about 'Solidarity' or spouting mischievous nonsense about 'Sub-Nationalism'.

Social life is possible because it is a coordination game with a pooling equilibrium. Nationalism is a dis-coordination game because it requires a 'costly signal' giving rise to a 'separating equilibrium'. At the margin, it penalizes Exit, rewards Loyalty and channelize's Voice. Sub-Nationalism, by definition, is a dis-coordination game aimed at overthrowing a 'pooling equilibrium'. If there really is a 'costly signal' which it correctly discriminates- if for example it were true that Scots have some traits which others don't have, or which it would be very costly for others to acquire- then, absent massive exogenous coercion, Scottish sub-nationalism would have triumphed long ago by entirely non-political means.
It is mischievous to suggest, in the Indian context, that Kashmiri or Khalistani or Bodo or Naga sub-nationalisms create 'Solidarity'. They don't. They involve mayhem, nothing more.

Why would Prerna Singh, whose first degree was from Delhi, praise 'sub-nationalism'? 
It seems she has been misled by, Harvard shithead, Gershenkron's argument that the State must take a vanguard role in Industrialization in 'backward countries'. India certainly believed some such nonsense in the Fifties. But, because the State relied on the Credentialized Academy, it did very stupid things.  The reductio ad absurdum of this type of 'Solidarity' based Nationalism, involved Lal Bahadur Shastri, a tiny little man, appealing to Indians to skip a meal so as to 'save the Nation'. This was idiocy pure and simple. The State had no choice but to allow the Army to grow in fighting capacity and to allow the peasants to get hybrid seeds to grow more food. Otherwise, 'Solidarity' demanded that everybody keep skipping meals till everybody looked like Shastri and some beefy Pathan General was emboldened to invade. 
Slowly but surely, the Academics were confined to the Ivory Tower and even some patriotic bureaucrats turned pragmatic and ready to wield the knife upon their own unsustainable racket. 
Prerna Singh, now securely tenured within the Ivory Tower, can write-

Why is the above fucked in the head? Well, we all know that Saint-Simon paved the way for Napoleon III, the defeat at Sedan, the revanchist but stupid alliance with the Tzar which paved the way for two World Wars, and the crazy attempt to resurrect French 'glory' in Indo-China and Algeria. Similarly, List paved the way for Luddendorf's notion of 'total war'.

Solidarity is stupid. At best it is cheap talk which establishes a bilateral 'threat point' which is imaginary and gives rise to a pathological dynamics. At worst, it is a 'costly signal which assures mutual destruction. 
Far better is methodological individualism- mechanism design which is about the price of bread, the cost of a hospital stay or a College education, stuff that matters to individuals. Left to themselves, people can solve the underlying co-ordination game associated with channeling preference and endowment diversity such that Tiebout sorting occurs and the proper correlated equilibrium is reached.

Still, perhaps Singh's book represents the Liberal Academy's slow accommodation to the notion that Nations want not worthless universalist pi-jaw based upon some Platonic conception of the 'Good', but limited and pragmatic governance somewhat better than what went before.
Has Prerna Singh been inspired by NaMo?
Is she the future Donald Trump of the Politically Correct Academy?
She observes all the pieties and her wild misprisions and drive-by regressions are 'friendly fire' simply. As such she deserves promotion.

Tuesday 15 November 2016

Varoufakis's latest bromide

It's good to know in these uncertain times that we can always rely on Varoufakis to say the most fatuous thing possible under the circumstances. This is his latest bromide- my comments are in bold-

The election of Donald Trump symbolises the demise of a remarkable era. No demise is expected by the money markets. There was a brief period of jitters. Things have settled down now. It was a time when we saw the curious spectacle of a superpower, the US, growing stronger because of – rather than despite – its burgeoning deficits. A super-power can borrow. A weak and shitty country can't. Super-powers run deficits if markets believe they will remain super. Shitty little countries can't do the same thing no matter how much they beg and plead. It was also remarkable because of the sudden influx of two billion workers – from China and Eastern Europe – into capitalism’s international supply chain. Sudden influx? Nonsense! Marxism turned out to be a pile of shite. The 'Socialist division of labor' didn't work.  China and Eastern Europe don't have two billion people put together, let alone workers involved in 'international supply chains. Oh! I forgot! Varoufakis can't do Arithmetic. This combination gave global capitalism a historic boost, while at the same time suppressing Western labour’s share of income and prospects. So, the demise of Marxist stupidity left Capitalism king of the castle both at home and abroad. People teaching Marxist Economics are just wasting everybody's time.

Trump’s success comes as that dynamic fails. What dynamic failed? America's unchallenged hegemony means it can grab more of the gains of trade and decide how to distribute it so as to serve a dominant political coalition. His presidency represents a defeat for liberal democrats everywhere, but it holds important lessons – as well as hope – for progressives. Which liberal democrat was defeated? Hillary? She couldn't push anything through the two houses. She had no political capital at all. Still, her rich friends scared up plenty of votes for her. But, it turned out, they were doing it in a stupid way. The Democratic party machine ended up paying to turn out GOP voters.

From the mid-1970s to 2008, the US economy had kept global capitalism in an unstable, though finely balanced, equilibrium. An unstable but finely balanced equilibrium is a saddle point just as a coin landing neither heads nor tails but on its edge is a saddle point. It could happen but it doesn't. It sucked into its territory the net exports of economies such as those of Germany, Japan and later China, providing the world’s most efficient factories with the requisite demand. Okay Varoufakis, we all know you are very good at sucking at Economics but the American Economy was not your student. It doesn't do sucking or blowing. It's a fucking Economy not an organism with orifices. There is no mechanism known to Economic Science whereby an Economy starts acting like a vacuum cleaner. How was this growing trade deficit paid for? The Balance of Payments balances because a trade deficit or surplus must equal a Capital account surplus or deficit. It's a fucking accounting identity dude. By the return of around 70% of the profits made by foreign corporates to Wall Street, to be invested in America’s financial markets. Coz that's how the Capital account works if there is a Trade deficit. Foreigners either by stocks or bonds- including Gilts.

To keep this recycling mechanism going, Wall Street had to be unshackled from all constraints; leftovers from President Roosevelt’s New Deal and the post-war Bretton Woods agreement which sought to regulate financial markets. Rubbish! Any institution facing an irrational constraint would be, in fact was, disintermediated. Bretton-Woods didn't regulate financial markets. It was about currency convertibility in a situation where the US held all the cards. This is why Washington officials were so keen to deregulate finance: Wall Street provided the conduit through which increasing capital inflows from the rest of the world equilibrated the US deficits which were, in turn, providing the rest of the world with the aggregate demand stabilising the globalisation process. And so on. Did any fucking 'Washington official' or other such parasite in the history of the Universe ever go 'I must do x coz that's what's good for my country?' No. They did what it paid them best to do. Suppose there had been no 'Washington officials' at all. Foreigners would still have sold stuff to the US so as to build up assets in that country. Why? Because it is the only fucking global superpower left as well as a swell place to live if you're rich.

Tragically, but also very predictably, Wall Street proceeded to build unfathomable pyramids of private money (also known as structured derivatives) on top of the incoming capital flows
. America has a lot of capital. Wall street has gained scale and scope economies on the basis of American capital. That's one reason why foreign money likes to find a home there. I might think China or India is a great place to invest because those countries are growing rapidly but the Capital markets just aren't very well developed there.

Any country, no matter how small or underdeveloped can fall victim to what is essentially a crazy Ponzi scheme. Post Communist Albania did. 
What happened in 2008 is something small children who have tried to build an infinitely tall sand tower know well: Wall Street’s pyramids collapsed under their own weight. Some did, some didn't. There were sound sectors and there were toxic assets. A big shake-out took place- from the Economic point of view, it should have been bigger but politicians panicked.

It was our generation’s 1929 moment. Not really. How many people do you know who used to drive around in limousines in 2008 who are now dependent on soup kitchens? Central banks, led by US Fed chief Ben Bernanke, a student of the 1930s Great Depression, rushed in to prevent a repetition of the 1930s by replacing the vanished private money with easy public credit. There was no such thing as 'private money'- we're not talking about bitcoin or stuff with Beyonce's face on it. What happened was that private credit, and hence liquidity dried up because of contagion fears till Quantitative Easing stepped in to ensure that the real economy had a soft landing.Their move did avoid a second Great Depression (except for weaker links such as Greece and Portugal) but had no capacity to resolve the crisis. Greece had the misfortune to elect Varoufakis just as it came into primary surplus- so it is still in the shitter. Portugal is on the mend. Ireland is fine. Italy somehow seems to be able to defy gravity. Banks were refloated and the US trade deficit returned to its pre-2008 level. Why? Because the World believes that America is still a pretty safe place to invest in. Nobody thinks Greece is a safe place because Varoufakis's brief reign is still remembered.  But, the capacity of America’s economy to equilibrate world capitalism had vanished. This idiot doesn't get that the Balance of Payments is self equilibrating coz it's a fucking accounting identity. Foreigners earning dollars by exporting goods and services want to invest a portion of their earnings for prudential reasons. America has a well developed capital market compared with the new kids on the block like China and India (forget Brazil and Russia) so it has a Capital inflow which must match its Balance of Trade otherwise either the dollar rises or its interest rate falls. 

The result is the Great Western Deflation, marked by ultra low or negative interest rates, falling prices and devalued labour everywhere. As a percentage of global income, the planet’s total savings are at a world record level while aggregate investment is at its lowest. Why? Because Capital Markets and the necessary Institutional framework to give them credibility take time to build.  Ten years ago I thought China and India would be a lot further along now in this respect. I also thought the internet would make me smart enough to tell a bogus hi-tech startup, like Theranos, from the real cheez. I was wrong. So were a lot of my friends who are way smarter than me. 
The fact is there just is a lot more Knightian Uncertainty around than there was even ten years ago coz older people like me just don't understand, forget about the underlying Technology, we don't even get what the Technology is gonna be used for.
When so many idle savings accumulate, the price of money (ie. the interest rate), indeed of everything, tends to fall. This suppresses investment  WHAT! Varoufakis thinks Investment falls when the interest rate falls! Why is this guy teaching Econ? How fucked is the University of Athens?  and the world ends up in a low-investment, low-demand, low-return equilibrium. This is the Keynesian liquidity trap in a closed economy. But, since we in the West don't live in a closed economy, it is Knightian uncertainty which has caused an inward shift of the marginal efficiency of Capital schedule. 
Just like in the early 1930s, this environment results in xenophobia, racist populism and centrifugal forces that are tearing apart institutions that were the Global Establishment’s pride and joy. So nothing to do with migrants then. Take a look at the European Union, or the Transatlantic Trade and Investment Partnership (TTIP).

Before 2008, workers in the US, in Britain and in the periphery of Europe were placated with the promise of “capital gains” and easy credit. They were not placated, they were fucking fraudulently seduced by greedy little bastards in shiny suits. Their houses, they were told, could only increase in value, replacing wage income growth. Actually, we were told our incomes were bound to rise which is why we could afford the McMansion. We walked into high street Banks and the greedy little bastards in shiny suits let us put down any number we liked in the 'net income' box. Then they took their fat commissions and fucked us over. In the meantime their consumerism could be funded through second mortgages, credit cards and the rest. The price was their consent to the gradual retreat of democratic process and its replacement by a “technocracy” intent on serving faithfully, and without compunction, the interests of the 1%. Nope, that didn't happen. Nobody said 'oh, btw, you get this loan for a loft conversion for your motor-home on condition that you permit a gradual retreat of democratic processes and its replacement by a 'technocracy' intent on sodomizing your grandmother without compunction in the interests of the 1%.  Shit like that don't god down in the real world. Now, eight years after 2008, these people are angry and are getting even. Why did they wait 8 years? Who are they getting even with? Is the neighbor's cat talking to you. Are you worried strange orange people are putting something in your coffee? 

Trump’s triumph completes the mortal wounding this era had suffered in 2008. Right! A mortal wounding occurred under a Republican President. The people waited 8 years and then got so angry they went and put another Republican in the White House! A mortal wound is one which results in death. Is Varoufakis saying that everybody died in 2008 but now have risen up as the undead and they have elected Trump coz he's probably undead too? Wow, that University in Athens where this guy teaches sure has good pot! But the new era that Trump’s presidency is inaugurating, foreshadowed by Brexit, is not at all new. It is, indeed, a post-modern variant of the 1930s, complete with deflation, xenophobia, and divide-and-rule politics. Trump’s victory is not isolated. It will no doubt reinforce the toxic politics unleashed by Brexit, the undisguised bigotry of Nicolas Sarkozy and Marine Le Pen in France, the rise of the Alternative für Deutschland, the “illiberal democracies” emerging in Eastern Europe, Golden Dawn in Greece.
Yup, it's the Zombie Apocalypse right enough featuring Nazi Vampires from the Planet X.

Thankfully Trump is not Hitler and history never repeats itself faithfully- unlike Varoufakis who repeats his idiocy very faithfully indeed. Mercifully, big business is not funding Trump and his European mates like it was funding Hitler and Mussolini. But Trump and his European counterparts are reflections of an emergent Nationalist International that the world has not seen since the 1930s. Nationalist International? Oxymoron much?

Just as in the 1930s, so too now a period of debt-fuelled Ponzi growth, faulty monetary design and financialisation led to a banking crisis that begat deflationary forces which bred a mix of racist nationalism and populism. Just like in the early 1930s, so too now a clueless establishment aims its guns at progressives, such as Bernie Sanders and our first Syriza government in 2015, but ends up being upended by belligerent racist nationalists.
Why compare Bernie Sanders, who ably represented his State, with your brief and disastrous spell in office?
Can the spectre of this Nationalist International be absorbed or defeated by the Global Establishment? It takes a great deal of faith to think that it can, in view of the Establishment’s deep denial and persistent coordination failures. Is there an alternative? I think so: A Progressive International that resists the narrative of isolationism and promotes inclusive humanist internationalism in place of the neoliberal Establishment’s defence of the rights of capital to globalise.
OMG! 'Inclusive Humanist Internationalism'! That's got to mean something right? 
In Europe this movement already exists. Founded in Berlin last February, the Democracy in Europe Movement (DiEM25) is attempting to achieve that which an earlier generation of Europeans failed to do in 1930. And 1920, 1910, 1900 and every previous and succeeding decade. Why? Because the thing can't be done. In 1976, I called upon the world to unite to put an end to all naughtiness and evilry. Perhaps, as the year 2016 comes to a close, my call will at last be heeded. Already there are promising signs. Last week the Ending Naughtiness and Evilry Worldwide Movement was inaugurated down my local boozer. We want to reach out to democrats across borders and political party lines asking them to unite to keep borders and hearts open while planning sensible economic policies that allow the West to re-embrace the notion of shared prosperity, without the destructive “growth” of the past. Sensible economic policies? Well, in that case you can't be involved.
But Europe is clearly not enough. DiEM25 is encouraging progressives in the US, who supported Bernie Sanders and Jill Stein, in Canada and in Latin America to band together into a Democracy in the Americas Movement. Coz that's worked so great in Europe. We are also seeking progressives in the Middle East, especially those shedding their blood against ISIS, against tyranny, and against the West’s puppet regimes to build a Democracy in the Middle East Movement. Lovely! Please come to Aleppo immediately to discuss it. We'll meet you at ground zero for Putin's bombs. 

Trump’s triumph comes with a silver lining. It demonstrates that we are at a crossroads when change is inevitable, not just possible. But to ensure that it is not the type of change that humanity suffered from in the 1930s, we need movements to spring out and to forge a Progressive International to press passion and reason back into the service of opposed to writing worthless shite.

Saturday 12 November 2016

Why Nye's 'Soft Power' can never be 'Smart'.

Be it Duhring's Eros, finitistic, or Donne's Biathanatos, infantalistic,
Rendering a fleeing rump courant, Trump's ineffable bouffant
Reveals 'Soft Power's' kalokagathia a blind Samson's Calvary
Yet again, my slapstick Delilah, desolating to but thee.

Thursday 10 November 2016

Entropic entanglement as the kairos of every Equivalence Principle

'Currently the first steps are being taken towards a new theoretical framework in which spacetime geometry is viewed as representing the entanglement structure of the microscopic quantum state. Gravity emerges from this quantum information theoretic viewpoint as describing the change in entanglement caused by matter.' Erik Verlinde.

Be it 't Hooft's Holographic or Gibbard's Revelation
The only Principle to abide aught's matter to it
Is Love- that Gravity whose Devastation
As Black Hole, who survive again never view it.

Prince! Since Entropic entanglement is the kairos of every Equivalence Principle
To knit & purl the rule for McKelvey Chaos- Keep it Stupid- is Simple

Wednesday 9 November 2016

Why Trump won.

Trump won because he said he would and what's more he'd be truly awesome.
It couldn't happen save by poll rigging. 
And he'd fight that no holds barred.

People who wanted change believed him.
Because he was the only person offering change not because he wanted to be elected President but because he believed he would be elected President and change was something the country would have to do coz no way he'd preside over a country that wasn't getting more awesome real fast.
In other words, there was no 'Agent-Principal' hazard.
He wasn't promising Change only so as to actually do Continuity.
What you saw was what you'd get.
The answer was his colossal ego.
Becoming President was like grabbing pussy- something he was entitled to coz he was awesome at everything and everything became more awesome when he did it.
Hilary lost precisely because she was so evidently doing everything necessary to win- which meant she didn't think herself just naturally entitled to the top job. Thus, in office, she would believe herself beholden to those who had provided her the means to achieve her ambition which not even she believed was what was best for everybody by reason of her in-born awesomeness.

Hilary had lost before.
Not despite, but because she had locked in the support of everybody who mattered.
Mattered, that is, at that moment.
Ergo, these were people who would lose their salience if she brought genuine Change about.
Thus, she was the candidate for a continuity the electorate wanted anything but.

By contrast Obama's ticket was change- if only of a token or occultly wonkish variety.

Obama hadn't promised he'd deliver change.
The man was a Harvard educated Law Professor not Kanye West.
What he said was 'WE can!' Not 'I will!'
He had absolved himself of responsibility in advance.
Hence the untarnishability of his cool, detached, style.
Clearly, the same We Can! wave which put him twice in the White House had been derelict in its duty elsewhere. Nothing was his fault. He was a proof that the We Can! wave could do improbable things but, so long as he remained in the White House, it wasn't down to him if it collapsed into a puddle in the face of Big Media or a gerrymandered Legislature. 
By contrast, Hilary, by joining his administration to build her C.V, became identified with everything that had blocked the 'We Can! Wave'.
Now there is no We Can.
There is only Trump's 'I will'.
Will it be awesome?
Trump comes into office unhampered by a 'vetocratic' Legislature. The GOP has belatedly woken up to the fact that he is a vote-catcher. They need to keep him sweet. The Bench too is likely to be tractable. Trump can actually launch the sort of massive infrastructure scheme that will turn things round for the Rust Belt. He can bring tax-cuts at the price of fiscal reform. His hundred days could end with a sustained Bull Market of a sort we've all but despaired off. But only if he gets Foreign Policy right.
Here too there is cause for optimism.
Obama said American foreign policy was 'doing stupid shit'.
But he didn't stop doing stupid shit.
His alienation of Duterte was a particularly pointless piece of stupid shit.
& it wasn't just Duterte.
Erdogan, Netanyahu, Xi Jinping, Putin, Khameni- every one- except Merkel, who is soon to vanish- has a good reason to wish him off the stage.
But then Obama's real post White House role- assuming all his wonkish 'inside game' tinkering is washed away- is as some sort of International Human Rights advocate. He will spend the rest of life pointing out that he did too censure everybody under the Sun- except the Saudis- for Human Rights violations. Narendra Modi may not have minded. Duterte did and suddenly the balance of power in the South China Sea was upset.

Trump has sent a powerful signal that 'Human Rights' will have no place in his foreign policy. American self-interest will be the only criteria. But, such self-interested actions are predictable and so deals can be struck across the board which foreign governments can have confidence will not be upset by Presidential grandstanding on supposedly 'moral' issues. In Economic jargon, Trump's Mercantilism makes policy space, in International Trade, uni-dimensional. By contrast treaties like TPP are multi-dimensional. They take in the environment and human rights. But, this means that Mckelvey's chaos theorem has salience. The outcome of the Trade or other agreement has become highly manipulable. Countries with a poor record on the environment or human rights or judicial independence or effectiveness fear that their gains from trade could be confiscated arbitrarily. Worse, they are weakened internally. This makes for increased uncertainty and hence volatility in the international arena.

Trump's pitch for the White House started off with his claim to be good at making deals. Certainly, such success as he enjoyed in Real Estate arose from his ability to shift risk onto the suppliers of capital- financial or otherwise. Curiously, an indebted America borrowing heavily abroad for infrastructure investment, is a good thing for global stability- provided the Americans are making deals clearly advantageous to themselves. Why? Alternatives to the dollar, as a universal currency, no longer look as feasible as they did even four years ago. Multilateral trade and currency areas may burgeon or atrophy but no feasible unilateral solution exists save one where American seigniorage is backed by massive infrastructure overhaul such that the relevant risk is properly hedged on American stock markets. 
Not everything is going to come up roses with Trump in the White House.
But, unlike Brexit, there is at least a chance of a win win for both America and the World it loves to do stupid shit to.