Tuesday 28 August 2018

Joseph Scheiber on why I can't be racist

Prof. Joseph Scheiber writes in 3Quarks
Mac Donald, in her diagnosis of where the social justice warriors have gone astray, schools “the victims and the gatekeepers of victim culture” on what they’ve misunderstood about language:
The meaning of language arises in a particular context and with reference to authorial intention, implicit or explicit. … It was a breakthrough in philosophy, starting with Plato, to recognize the conventional nature of language—that a linguistic sign is not the same thing as the signified. That understanding opened the way for the sophisticated study of language and interpretation, known as hermeneutics. A return to a belief in word magic, however, whereby words directly impinge on their referents, radically limits human expression and imagination.
According to Mac Donald, the social-justice leftists have forgotten that the meaning of language isn’t fixed, but relies on “authorial intention” and “particular context”. Mac Donald discusses in particular “the elaborate rituals around the ‘n-word’” as evidence for the sort of belief in “word magic” that she criticizes. 
Scheiber believes this response reveals 'a glaring lack of understanding of how language works.' He says
“Speech acts” is a term coined by the British philosopher J.L. Austin to characterize the ways we “do things with words”. In addition to rules governing the syntax, or grammar, of a language, and its semantics, or meaning, there are also hidden regularities underlying the pragmatics of language — how the words we utter can bring about predictable effects in the world around us. 
The problem here is that 'predictable', for pragmatics, must be Bayesian and based on the user's priors- even if they are wildly off the mark. I may believe that my jihad against the Iyengars of Dollis Hill is succeeding because all the Iyengars I drunk dial to roundly abuse for their blasphemous denial of the possibility of a jivanmukta confess to actually being Iyers who killed and stole the identity of the original occupants of the house and so, for fuck's sake, could you move on to harassing Iyengars in a different post code?

Since Bayesian priors can't be common knowledge- otherwise speech acts would be redundant- it follows that, if either 'income effects' are non-neglibible or 'hedging' features, then pragmatics must be anything goes.

Schieber believes otherwise- He says if McDonald is right
then it would not be a feature of the way language normally functions that someone, regardless of their intention, could either (1) fail to perform a particular speech act or (2) be unable to avoid performing a certain speech act — due largely to structural, social facts.
This is quite mad. I fail to perform particular speech acts in German coz I don't know German. I can't avoid performing certain speech acts in English because I may be sent to prison if I don't. McDonald never denied this plain fact. Nobody ever has. Austin's notion of a 'performative speech act' is one which can be substituted for. Thus, if it falls to me to nominate the Fuehrer of the German Chapter of my Anti Iyengar Jihad, some translator will do the job for me and there will be some protocol by which I give assent.

Schieber gives the following example of a person being unable to perform a particular speech act regardless of their intention.
Prior to the 1980’s, it was legally impossible in most states of the United States for a husband to rape his wife. This is because the law contained what was called a “spousal rape exception”.
Does Schieber think a woman couldn't say 'he raped me' just because she was married to the rapist? Even the Judge could say 'you, Sir, are a depraved and evil rapist. However, such being the law of the land, I can't sentence you for that crime. So I'm giving you the maximum sentence for grievous bodily harm.'
To put it another way, prior to the 1980’s, a wife uttering “No” or “Stop” to her husband would have had no – legal – right to expect that her words would have their intended effect.
Schiber is being silly. Plenty of women said 'no' or 'stop' and quite rightly expected their words to have the intended effect. Why? Rape is unconscionable. There are extra-legal sanctions which can be applied. Even from the legal standpoint, marital rape would have had consequences- for e.g. in a divorce case or claim for alimony. Mental suffering, even from an act not illegal in itself, can still feature in a civil case.

Schieber next tries to imagine a situation where 'it is impossible for that speaker, whatever his intentions (contra Mac Donald), to avoid performing certain speech acts when using certain words.'
Suppose you’re the boss of a crime syndicate, and your henchmen regularly engage in nefarious practices to solidify your hold on your crime empire. One day, thinking about a person who has been a thorn in your side for a while, you muse out loud, in the presence of your henchmen, “That guy has been a pain in my neck for far too long. It would be better if he’d just disappear”. The next day, you read in the paper that the person has turned up dead.
Schieber is being silly. The boss of a crime syndicate is known to kill any of his henchmen who misunderstand him or, indeed, fail to read his mind. Scheiber's scenario is not a realistic. Suppose we are henchmen. I say to you 'listen, we'd better go bump off that guy. The Boss just ordered us to do so.' You reply, 'Did he say that to you explicitly? Think about it. Why has the Boss not killed this guy  already? He must have a reason. Let us clear it with the Boss first. Don't forget he'll kill us and our families if we bump off a guy he's still got a use for.'
Assuming that it was your henchman who did the deed, then you bear at least some responsibility for the person’s death.
Hilarious! Schieber thinks Crime Bosses care about their 'responsibility' for some wiseguy's death!
This strikes me as being true even if, in fact, you did not intend for your henchmen to draw the inference that you were ordering a hit when you said that you wanted the person to “disappear”. Given your role and status, and the power that you have over your henchman, you should have been more aware of the effect that your words would have.
Wow! Schieber thinks Mob Bosses aren't aware of the effect their words have. What he doesn't get is that killing more people or getting more of them killed is what increases the effect of the Don's words.
What this case illustrates is that one’s social position and status can endow their words with a power that the same words, when uttered by others, would not have. When you, the crime kingpin, wish out loud that a person who is a nuisance to you would disappear, you can make yourself culpable for that person’s murder. When I, a meek philosophy professor, wish out loud that an annoying colleague would disappear, nothing happens.

The Mob Boss's Bayesian priors are likely to be common knowledge for his henchmen- because otherwise they just get killed and replaced- thus his performative speech acts are likely to be more, not less, intentional from the point of view of pragmatics.

By contrast, a meek philosophy professor may have a homicidal nutjob in his class- indeed, I think the thing is pretty much de rigueur at them fancy-shmancy East Coast Collidges- and so his speech act is more likely to be unintentionally performative. To be clear, a henchman checks before killing a wiseguy. A crazy sophomore doesn't. Why? The Mob boss will kill you if you screw up. Your Philosophy Professor, will probably just say something sarky about your grasp of the later Wittgenstein.

Scheiber thinks
The same words, with the same literal meanings, can have completely different effects – and have them in systematic and predictable ways. And the reasons for those different effects – and for why those effects differ systematically and predictably – are “institutional and systemic”, rather than resulting from the speaker’s intentions or the literal meaning of what he says.
This is foolish. Either the speaker is stooopid- like me-  and has crazy Bayesian priors and thus doesn't understand anything about the 'institutional and systemic' features of Reality- in which case the systematic and predictable effect of his speech acts is people tittering politely and edging away- as happens to me at cocktail parties ; or else, where salient performative speech acts occur, 'institutional and systemic' facts have already been factored into the speaker's utterance leaving a pure intentionality whose pragmatics all concerned parties will have invested time and trouble to accurately decipher.

Scheiber says-
The cases show that Mac Donald is wrong because they show that, regardless of intention, some speakers are either incapable of performing certain speech acts or unable to avoid performing certain speech acts.
In other words, Scheiber is saying a raped wife couldn't say she was raped whereas the truth is she could. Moreover, if she said it to her brother, the Mafia Don, guess what would happen to the rapist? He'd sleep with the fishes with concrete boots and his dick in his mouth.

Similarly, the Don who is blowing off steam against a made man won't actually be making a 'performative speech act' because his henchmen know they have to be double and triple sure before pulling the trigger because their own necks are on the line.
In other words, Mac Donald focuses too much on the intention of individual speakers, and ignores the ways that forces outside of those speakers can shape the impact that their words may have.
It is perfectly reasonable for MacDonald to do so. Language wouldn't be much use to us if it genuinely suffered from the signal extraction problem Schieber attributes to it on the basis of his assumption of the universality of a stupidity unique to himself.

Actually, Shieber probably isn't really stupid. He is just pretending to be so as to be able to make the following claim-
  Plausibly, much of what makes speech racist is that it functions to reinforce and sustain an historically established social hierarchy built on subordinating “whole groups of people, based on hoary stereotypes”.
No group of people has ever been subordinated on the basis of 'hoary stereotypes'. They have been subordinated on the basis of beating and killing.

The fact that people like me continue to claim that Darwin was wrong- the Earth does not go round the Sun because my grandpappy was a monkey and climbed the sky tree and cut the string- does nothing to reinforce and sustain anything whatsoever. 
The history of the N-word, for example, is inextricably linked to a society that brutalized black bodies and saw people of African descent as less than human.
That particular Society got rich of African and indigenous peoples. It did so by beating and killing them- not by saying rude things. Then it found a way to make even more money by letting such people move up into more productive jobs and professions. No doubt, the courage and patriotism African Americans showed on far flung battlefields was also a factor. The N word or the K word or the I word (for Iyengar) don't matter very much.
So in fact it is Mac Donald who indulges in magical thinking when she supposes that a single person’s intentions, however innocent or well-meaning, could be enough to change the racist effects of using that word. A white person using that word cannot, simply through the force of his or her own will, erase that history.
The history they can't erase is that of the Sixties. Also, getting stomped on discourages the thing. America has its own rules. I don't suppose they'd tolerate Tottenham Hotspur's traditional chant 'We are the Yids' or 'Go Yiddoes' either. Indeed, with the rise of anti-semitism in England- something few of us ever thought we'd see- the younger generation is turning against the use of certain epithets us old geezers use among ourselves with affection and nostalgia for the good old days when instead of women wearing hijabs, we were obliged to put a brown paper bag over our heads in order to get our end off. My friends deny that any such thing happened to them probably coz they were all virgins. My memory is that even the sluttiest girls insisted on it- probably in the mistaken belief that it constituted 'safe sex'.

Returning to Scheiber, this is the punchline to his article-
There is no corresponding history of the systematic subordination of white people by black and brown people on which to draw.
 There is a corresponding history of white people beating the fuck out off black or brown people who tried to subordinate them- or, that failing, simply running away, like the French from Haiti.

It is a good idea to beat up or run away from a bunch of guys coming at your people shouting racialist or confessional slurs. 'Fighting words' are exactly that- you either fight or run away or else get so ground down you can't run away.

The fact that something hasn't happened doesn't mean a particular course of behaviour is irrational or mischievous. It may be the principal reason the thing hasn't happened.
So, while someone from an historically oppressed group can be criticized for employing false generalizations about white people, for indulging in unfair or even hateful negative characterizations, or – yes – for their boorish trolling of white people, they cannot engage in racist speech against white people.
Sure they can, if their Bayesian priors are such that they believe they can win in a fight and get to subjugate white people. Take ISIS type nutters. They thought they could win. So they went on spewing hate speech and knifing people till even the Brits lost patience and cracked down on their brand of racism. This was 'eusocial'. Even if a guy can't beat you up, it makes sense to stop him from working himself up to make the attempt. Fewer of his bones get broken and you too are saved time and trouble.

In Economics there is a theory of wasteful competition. Virtue signaling is an example. Some Jewish intellectuals in London felt they had to be more Anti Zionist than the Palestinians. Poor old Jeremy Corbyn was currying favour with them and ended up spewing vicious lies against Israel which has the same right to self-determination as any other nation. He's now being dragged over the coals for it. For the rest of us, this type of competitive (but, I believe, insincere) anti-semitism is simply a nuisance. It is perfectly proper for the Law to step in and curb it. On the other hand, my sacred jihad against the Iyengars must be allowed to continue. Far from ever having oppressed any Iyengar, the only one I was able to press a little forced me to wear a paper bag over my head. Come to think of it, what happened to me was statutory rape. My 'Yes! Yes! Yes!' actually meant, according to Scheiber, 'No! No! No!'.

Monday 27 August 2018

Megethology is a Maricha, Mathematics ever blows off

'O woodland encountered wolf who'd pounce and bite my nose off
'Know Megethology a Maricha, Mathematics ever blows off!'
For all thought is a baby, think not with thought to play
Else, taking Luv & Kush, Vaidehi goes away.

Prince! Slay Shambuk to save the grit of Class from Confusion
Viscous deicide the gunk of all mereological fusion.

The Seventies to every Mom's inner hippy

A chrematistic Eusebia cashing out as Hermetic Stealth
A cacophonous Mousike hushing up its Midas Wealth
The Seventies to every Mom's inner hippy
Was Sarasvati's boon to Xanthippe.

Prince! Alcibiades' trampled cake is thy homonoia
Eris, thy Iyer, all metanoia

Netflix's Insatiable & a Girardian Schopenhauer.

The word 'insatiable' arises in the philosophy of Schopenhauer- for whom Spinozan conatus- the principle of inertia by which every being seeks to continue to be itself rather than evolve to fit some higher purpose- is the blind, proto-Darwinian, Will whose choices are always ironic.

The article on Schopenhauer in the internet encyclopaedia of Philosophy gives this summary-

Because the will has no goal or purpose, the will’s satisfaction is impossible. The will objectifies itself in a hierarchy of gradations from inorganic to organic life, and every grade of objectification of the will, from gravity to animal motion, is marked by insatiable striving. In addition, every force of nature and every organic form of nature participates in a struggle to seize matter from other forces or organisms. Thus existence is marked by conflict, struggle and dissatisfaction.
The attainment of a goal or desire, Schopenhauer continues, results in satisfaction, whereas the frustration of such attainment results in suffering. Since existence is marked by want or deficiency, and since satisfaction of this want is unsustainable, existence is characterized by suffering. This conclusion holds for all of nature, including inanimate natures, insofar as they are at essence will. However, suffering is more conspicuous in the life of human beings because of their intellectual capacities. Rather than serving as a relief from suffering, the intellect of human beings brings home their suffering with greater clarity and consciousness. Even with the use of reason, human beings can in no way alter the degree of misery we experience; indeed, reason only magnifies the degree to which we suffer. Thus all the ordinary pursuits of mankind are not only fruitless but also illusory insofar as they are oriented toward satisfying an insatiable, blind will. 
Since the essence of existence is insatiable striving, and insatiable striving is suffering, Schopenhauer concludes that nonexistence is preferable to existence. However, suicide is not the answer. One cannot resolve the problem of existence through suicide, for since all existence is suffering, death does not end one’s suffering but only terminates the form that one’s suffering takes. The proper response to recognizing that all existence is suffering is to turn away from or renounce one’s own desiring. In this respect, Schopenhauer’s thought finds confirmation in the Eastern texts he read and admired: the goal of human life is to turn away from desire. Salvation can only be found in resignation.
Netflix's 'Insatiable', however, which too has a conatus- it wants to come back as a second series pretty much the same as the first series- doesn't make Buddhist, but rather Girardian, mimetic rivalry based, Christian choices. Thus it gets baptised while high on Molly. It seeks to resolve a Satrean 'No Exit' type problem by evoking the notion of a 'trouple'- this time featuring two gay men and the social climber wife of one of them- which however is an unstable bond- the husband, having to choose between his rival and his wife, is about to commit suicide when the son of a Pastor is sacrificed to the Plot so he and the pageant Queen he is coaching can have a life more abundant- though once again fraught with insatiable conatus whose narrative is one of recuperating Will through the sort of metanoia we associate with Drew Barrymore films.

Insatiable's cascading satire or skandal highlight's the stumbling block to Faith in Chrematistic, winner take all, as opposed to Open Market, Capitalism, and also to such irenic Christianity as must, to cast out its demons, itself enter into the swine. The foundational axiom to its ironic economia is -'Choice is the the act which destroys what it affirms'- for example, if you are tempted to embrace being a bad person- thus permitting yourself to murder a rival- you can still choose to be a good person though loudly affirming this choice will accompany bludgeoning your ex to death.

The critics complain of the 'scenes a faire' nature of the stereotypes featured. Fatty Patty is always about to eat her own body weight in cake or fudge weiners or whatever; the gay dudes are super gay all the time; the ex-trailer trash Suburban Socialite is always on the point of turning into a 'Momentrepreneur' marketing a tasseled tampon funded by Big Tobacco and the Ku Klux Klan; the Pastor is constantly casting out demons whom, however, his Rock & Roll loving son hopes to ingratiate himself with and somehow monetize... Insatiable has an insatiable appetite for every trashy meme on TV and is all the better for it- at least for those of us whose long satiation with network TV has made us the victim of the Schopenhauerian Fata Morgana of Choice as incarnated in 'on demand' services like Netflix and Amazon Prime.

Will this series succeed and win accolades in the same manner as 'the Good Place'? Currently, we think of Red State, working class Whites as the Divinely appointed pharmakos, or scapegoat, whose ritualised humiliation and slaughter is the salutary public spectacle which can serve as an inoculation against self-laceration or internecine violence in the face of The Donald's apotheosis or impeachment.

This is a deeply silly- a shameful- thought. There is nothing wrong with either working class White people or ignirrint fat black peeps like myself. We think Schopenhauer can go suck Girard's balls- or the other way round- we simply don't care. Christianity has nothing to do with scapegoats or 'mimetic rivalry' and holier-than-thou bullshit. It's about enjoying being together while still being able to get to work, with a clear head, the next day.

Similarly, Buddhism isn't about 'resignation', its about cool stuff like Shao Lin Kung Fu and Basho's haiku and Steven Seagall...before he got fat. Except he didn't really. It's a fat suit dude! Steve is like totally buff. As am I. Fuck is wrong with you sheeple? Why can't you see the truth?

Saturday 25 August 2018

Economia, Akrebia & Abraaj Capital's downfall

Can we help poor people in Third World Countries by turning a few brown people with degrees from places like Harvard or the LSE into billionaires?

Of course! First there was Dr. Akula who was not a Vampire and did not suck the blood of millions of poor Telugu women through his for-profit Microfinance initiative. Akula, btw, wasn't a banker, or even an Economist.  His PhD was in Political Science. Somehow, he didn't predict that poor Indian women would use democratic political processes to put an end to his blood-sucking.

Akula explains how he wowed Bill Gates-
The Gates Foundation was considering launching a microfinance funding program and Bill and Melinda Gates had set out to learn everything they could about microfinance. Melinda Gates had already come to India to see microfinance at work in villages. Their next step was to invite eight MFI practitioners to a roundtable in Seattle. We met in a conference room in a nondescript (but, as I was later told, bulletproof) building. Bill Gates Sr. would be joining Bill and Melinda, along with another “friend” of theirs. When they walked into the room, we saw that the friend was Warren Buffett. We had a wide-ranging discussion on the basics of microfinance and how it was practiced in various parts of the world. Then Bill suddenly asked, “Hold on. What are people possibly doing where they can pay 28% interest on a loan and still make money?” I took a deep breath and started explaining what I call “goat economics.” I described how a landless agricultural worker might use a 2,000 rupee loan (about $40) to buy a goat. She continues with her daily work and takes the goat along with her to the fields. The goat eats grass and virtually anything else, so there is no investment from her end. A goat gives birth to one or two kids a year and the value of the offspring is about 50% of the mother, or about 1,000 rupees. Even if a borrower took a 28% loan, she makes a return of about 70% on invested capital. An interest rate of 28% might seem high, but demand for SKS loans was exploding. We had almost no defaults among borrowers, and re-payment rates were about 99.4%, higher than re-payment rates in the west. Clearly, the system worked for the poor. There are four other reasons why microenterprises yield very high returns. First, borrowers tend to draw on family to help with microenterprises, which is far more productive than hiring wage laborers. Think of your classic immigrant-owned grocery story in the US where sons and daughters help out. Second, in the informal economy, the poor make too little to pay taxes (they typically make less than $2 a day when they join SKS.) Third, poor entrepreneurs have little infrastructure and overhead costs. A village grocery is a homefront shop, not a separate rental property. And fourth, for the first three reasons, capital is only a small percentage of a new micro-venture’s input. What’s far more important for a micro-entrepreneur is timely access to capital. As I finished my explanation of “goat economics” I watched Bill Gates scribble on his note pad. A thought popped into my head: “I’m explaining to the richest man in the world how poor people make money on goats.” It was an amazing and affirming moment
It was also a crock of shit. Livestock loans for the very poor tend to either have negative returns or else, in the case of goats, are ecologically very damaging.

So much for Dr. Akula- though it appears he is seeking a comeback- which however is likely to be on a very modest scale. Let us now turn to the case of Arif Naqvi- an Accountant- who, it transpires, is either a crook or doesn't understand Accountancy at all. He too was beloved of Davos Man, indeed he rose higher than Akula, and appeared for a while to be a major Prophet, if not the Messiah, of a new Secular Religion devoted to Saving the Global South from itself.

This wonderful creed already has its own theology thanks to Professors like Sen and Nussbaum. Let us now consider its theory of 'economia'.

Wikipedia tells us-

 economia is discretionary deviation from the letter of the law in order to adhere to the spirit of the law and charity. This is in contrast to legalism, or akribia (Greekακριβεια)—strict adherence to the letter of the law of the church

Abraaj Capital- founded by Arif Naqvi- had emerged as the poster child for a new 'moral economy' in which super-star Private Equity moguls would earn high returns for Pension funds and Sovereign Wealth or Development funds, as well as private investors, through ethical 'impact investing' in developing countries so as to meet the UN's Sustainable Development Goals.

Naqvi was a darling of the U.N and the Davos set. However, his highly publicised partnering with Bill Gates led to his downfall. Why? Well, the Gates Foundation had developed a strategy of using strict forensic accounting to force their partners to cut costs and improve corporate governance. Thus Gates's 'tough love' for Root Capital improved outcomes for smallholders. However Root Capital was a small non-profit. Abraaj was a 14 billion dollar behemoth promising high returns and paying vast salaries. The Gates Foundation may have only intended to reform 'impact investing' but, it appears, they have killed the thing off completely. Henceforth, any Private Equity guy who starts gassing on about effective altruism or UN Sustainable Development Goals will be seen as a budding Madoff or Naqvi. 

Earlier this year, the Medium reported-
Abraaj’s Arif Naqvi’s strategy for building integrated health systems across megacities like Mumbai, Karachi and Lagos was developed with Bill Gates himself.
What was this strategy? Buying and selling health care companies for a big profit so as to pay high salaries and vast bonuses to a bunch of jumped up accountants while simultaneously generating steady 15 to 20 per cent returns for Sovereign 'Development' Funds and 'Ethical Investors' like Teacher's Pension funds.

Stupid people might think 'building integrated health systems' would involve enriching Doctors and nurses and medical researchers- not a bunch of shady accountants. Gates, of course, isn't stupid at all. 'Populist' Government regulation, in countries like India and Pakistan, will limit entry and cause a shake out in any industry whose pricing policy impacts upon ordinary voters.  This means monopoly profits for those with political clout and insolvency for all the rest. Thus, the only money to be made arises by being part of the problem, not part of the solution.
Bill Gates has flagged the rise in the developing world of chronic diseases such as heart disease, diabetes and cancer as a huge challenge. The Bill & Melinda Gates Foundation seeded the health fund with a $100 million program-related investment and helped recruit other investors, including International Finance Corp., the U.K.’s CDC Group and the Overseas Private Investment Corp. By targeting lower-middle and middle-class customers rather than the poorest of the poor, the health fund aimed to crack the code for providing 21st-century health care to the rising billions in emerging megacities like Lagos, Kolkata and Karachi.
In other words, Gates and Naqvi planned to take stakes in, often family run, Medical chains in developing countries, generate some worthless hype about economies of scope or 'vertical or lateral integration' and then flog the thing off for a profit. Obviously, these great philanthropists would claim to have saved the life of every lower middle class patient who paid through the nose for treatment at one of these clinics or hospitals.
“Bill was instrumental in that vision,” Naqvi said on a panel in Davos early this year. “It all started with a discussion with him, that you can tackle the base of the pyramid, but there are so many measures that have to be dealt with. ‘Let’s come up with an innovative solution.’”
The innovative solution was to get a brown dude with delusions of grandeur to deal with the dirty end of the business- lying and cheating and fudging the books- before pulling the rug from under this stupid Chartered Accountant by hiring a slightly less stupid bunch of forensic accountants to show the man was a crook.
The Gates Foundation, along with several other foundations, also helped trigger the spate of investigations into Abraaj’s finances, calling in auditors to resolve questions about Abraaj’s use of funds in the Growth Markets Health Fund.
Did Gates make a mistake? Was this a case where 'economia'- i.e. sympathetic hand holding- was the way to go- not forensic accounting based 'akrebia'? After all, Abraaj had sold its Karachi Electricity business quite profitably and was waiting for clearance to get the money- though that might not now happen because of...wait for it...'populist' Government regulation.

 No doubt, there had been 'commingling of funds', but it did look as though some genuine profits were in the pipeline. Abraaj might have muddled through a little longer. I suppose, the founder and his brother in law and so forth would have to be eased out and their profligacy curtailed. However, Naqvi was charismatic and the international face of Dubai's Private Equity Industry. Sympathetic locals were prepared to do their bit to bail him out and some regional institutions might have taken a haircut in return for something juicy down the road.

Did the Gates Foundation shoot themselves in the foot because of lack of local knowledge? Or was Abraaj always doomed to fail because of the hubris of its founder?

The answer, sadly, is that the Americans got it right. They saw through Naqvi's claims  
to have sound local knowledge- evaluating business opportunities by 'kicking the tyres' as he put it- because he was an outsider to the Middle East and had no core competency specific to the region- or, indeed, the Developing World. 

The truth is he was an LSE graduate trained by Arthur Anderson who then worked for American Express in Karachi. While this might have opened doors for him, those doors were political and just as likely to suddenly spring shut trapping him into illiquidity.  

Naqvi arrived in the region in the early Nineties. Initially, he was the protege of an older Pakistani Chartered Accountant, Imtiaz Hydari, who was a longstanding employee of the Olayan Group. Hydari left Olayan in 1995 and returned to London where he became involved with Inchcape- a legendary 'Managing Agency' with roots in the sub-continent- regarding divestment of its Middle East business.

Hydari partnered with Arif Naqvi to launch an audacious and successful bid which remains to this day a matter of rumor and speculation with a spokesman for Naqvi dismissing Hydari's recent book- 'Leverage in the Desert' as an 'act of fiction'. An article sympathetic to Hydari  gives the following account of what happened-

Raising $150 million was no small task but the Imtiaz and Arif team was excited by the challenge. How the landmark acquisition was completed with a mere $3 million in equity has been the subject of much discussion and often rumour mongering in business circles. “We had pipe dreams of building up the business and then IPO’ing it on the local stock exchange, but those dreams went up in smoke pretty much immediately after we purchased the business,” he recalls. “Having never done anything like this before, we did not anticipate that the biggest challenge was not raising the money, it would be managing our local partners. I think in hindsight the local regional partners were in shock when they were told that Inchcape, a FTSE 250 company which was founded in 1847 was no longer involved in the business and ‘a company called Cupola owned by Pakistanis’ were their new partners,” he says with a chuckle. “They reacted to this perhaps with some moral justification and did not let us manage the business as per our legal rights. We were literally up against giants, some of the most powerful local businessmen in the region. A melee of discussions, legal proceedings and intense negotiations ensued and in the end I think we made even more money than our original plan allotted for.”  
It took Imtiaz and Arif four years to settle the disagreements with their local partners but in the end a series of concessions were made and various pieces of the business were sold off to various individuals which netted Cupola more profits than it would have if they sold it all together; a true blessing in disguise.
This is the crucial point. The Inchcape deal was so profitable precisely because of unexpected delays against a rising market. Hydari and Naqvi's next big success was with Aramex which, once again, was based more on luck than cunning. Naqvi, however, took a different view. In an article sympathetic to him, he is depicted as the prime mover-

 More deals followed after Naqvi founded Abraaj in 2002. He and his team moved quickly to acquire Aramex International Courier in the wake of the September 11 terrorist attacks, shortly after the Mideast company lost more than 15% of its value. Abraaj paid for the company with $25mn in equity and $40mn in debt and made 6.6 times its investment when it took the business public in 2005. The company chalked up more than half a billion dollars in profit in 2007 when it sold a 25% stake in Egyptian investment bank EFG-Hermes to Dubai Financial Group.
“I led those deals, I did those deals,” Naqvi says. “The reason I stopped being a dealmaker is because the business grew so I couldn’t oversee everything.”

Hydari's account is somewhat different- he stresses the importance of building relationships with highly experienced indigenous entrepreneurs- thus, after resolving things with the local stakeholders in Inchape's operations

 the next leg of the journey sees Imtiaz and Arif team up with Ali al Shihabi, founder and then CEO of Rasmala Private Equity, but soon after, there was an amicable separation and the split from Rasmala led to the founding of Abraaj Capital. “We conceived the idea and plans for private equity in Al Moosa Tower 1 on Sheik Zayed road and later moved to Emirates Towers when we joined hands with Ali Shihabi and Rasmala. It was 2002 and Dubai was nothing what it is today and no one could have predicted what a wild ride we were in for,” he narrates. “After completing the Inchcape transaction we were introduced to Fadi Ghandour, the founder of Aramex which was the first Arab company to list on the NASDAQ in New York. In reality though, it did not make sense to be listed in the USA and so we went on to help him de-list the company, add value and then re-list it on the local stock exchange. I must say getting the chance to work briefly with a visionary like Fadi was exciting.'
Hydari, parted amicably with Naqvi in 2004. He bought ex-Inchcape retailer Spinneys Jordan and restored it to profitability by increasing, not reducing, inventories of Fast Moving Consumer Groups. This was by no means a glamorous business but it had high visibility and thus enhanced Hydari's reputation as a genuine businessman- not a fancy-shmancy Accountant from London.

Since then, Hydari has gone in the direction of family based, Shariah Compliant, 'special situations' strategic leveraging often involving long standing relationships with local stakeholders while working within the religious and business ethos of the region.

A sympathetic article in 'The Accountant' gives this conclusion to his story-

 By 2004 Imtiaz was ready for a new challenge and seeing as his son had just completed his MBA it seemed like a great opportunity to start his own firm and mentor him in the art of private equity. Imtiaz founded HBG Holdings and in an odd twist of fate, HBG took a major position in European Islamic Investment Bank, which in 2012 acquired Rasmala Investment Bank; bringing Imtiaz almost full circle to where he is now the Chairman of Rasmala.
It seems this Pakistani Chartered Accountant who came to the region more than 40 years ago and who survived a near miss from a Scud attack during the first Gulf War has made a home for himself in the region. His son will carry on the tradition. What will happen to the far more high profile Naqvi? It appears he bounced a cheque to the Jafar's of the Crescent Group and may face a prison sentence if he returns. Comfortably ensconced in Britain, it is unlikely that he will face any very serious consequences.

However, as with 'for profit' Micro-finance, so too has Leveraged Buyout based 'impact investing' bit the dust as a way of reconciling God with Mammon. It is doubtful whether Government backed Development Funds- like the UK's CDC or Norfund- will learn their lesson. It is even more doubtful that International Auditing franchises will mend their ways. However, it is likely that the Gates Foundation will change its approach and get rid off dodgy middle-men whose inflated rhetoric might upstage the Great Bill (& Melinda).

Is there a lesson to all this? Yes. Economia is linked to oikos- families operating in an akrebic manner and relating to other families according to the rules of a common eusebia or conventional piety. This gives some leeway for 'economia'- some sympathy and forgiveness and reciprocal acts of gratitude and generosity- which Accountancy can't capture. In order for this 'economia' to survive from generation to generation, there have to be acts of pure philanthropy- moral potlatches- such that residuary control rights are surrendered and reputational benefits get diffused because of inter-marriage or shared ideology.

The problem with the Gates Foundation is that its interventions are not in keeping with the eusebia prevalent in the countries where it can get 'the biggest bang for its buck'. It now appears that Davos type eusebia was pure horse-shit. Thus, going forward, either the Gates Foundation becomes truly autonomous and goes the way of the Ford Foundation, or else it either exits the market or just shuts the fuck up.

Thursday 23 August 2018

Is Free Speech on Campus desirable?

Should there be privileged spaces in Society that are freer than other places? In an autocratic or elitist society, the answer must be yes. Some people who have or will have great power over the common ruck should have access to alethic sources of information and freer forms of discussion than the masses who must remain ignorant and engrossed in a 'noble lie' or ignoble state of metaphysical terror or paranoid hatred.

Furthermore, if the elite have a safe space where they can rape children and torture virgins in an emotionally supportive, tastefully decorated, milieu, then they can blow off steam before resuming their pastoral duties ministering to their flock.

In a Democracy under the Rule of Law, on the other hand, we would want the maximum freedom to be associated with private spaces available to the ordinary person. Freedoms and immunities should only be curtailed in public spaces with greater restrictions being placed on public spaces with more specialised functions or on the basis of greater vulnerablility imputable to those more constrained to use them.

Thus you can say what you like and exclude or include who you like in your own home but you must be more circumspect on the street. Entering your place of work or education or accessing health or other services, further constraints apply. In specialised professions- the law, medicine, accountancy etc., we expect higher standards and lower immunities.

How does this relate to the University Campus? Should speech be freer there than elsewhere? The obvious answer is no. Paying a fee or passing an exam can't entitle one to superior freedoms. 

The NYBR takes a different view.

When members of the National Socialist Party of America planned to march through the largely Jewish Chicago suburb of Skokie, Illinois, in 1977 with swastikas on their banners, they were not supposed to be interfered with. That was their right; that was what the First Amendment required as far as the regulation of speech on the streets was concerned.
Nonsense! The Village of Skokie, where many Holocaust survivors resided, had a perfect right to ban the Nazis from marching. A Jewish lawyer with the ACLU stuck his nose in needlessly. There was no victory for 'free speech' at Skokie. All that happened was that an elite asserted obligatory passage point status for itself and tainted Liberty with an obnoxious interessement mechanism.

Who benefited? Reagan. He would soon refer to Liberalism as 'the L word'. The backlash against virtue signalling, holier than thou, Public Intellectuals had begun.
But does that right also apply on campus? When a few hundred white supremacists staged a nighttime march through the University of Virginia in August 2017 carrying torches and chanting “Jews will not replace us,” should that have been protected as free speech? Would the campus setting and the link with education have made it just as wrong—perhaps even more wrong—for university authorities and student groups to try to stop the white supremacists in Charlottesville as it was for the village of Skokie to put legal obstacles in the way of Frank Collin and his little band of Nazis forty years ago?
Of course! Villages should be able to stop hate-mongering nutjobs from invading their streets. So should campuses.
I don’t ask this as a constitutional question. Technically, the First Amendment constrains only government actions, so it applies differently to state colleges like the University of Virginia and private ones like Middlebury College. But let’s put that technicality aside. Behind the First Amendment there is supposed to be a principle of free speech that applies to everyone in our society—a strong ethic that says we should never shut down the expression of controversial views just because of their content. The question is whether that ethic of free speech matters more or less on campus than it does in society generally. Should we say, as Sigal Ben-Porath says in her book Free Speech on Campus, that “colleges and universities hold a unique place in the conversation about speech”?
No. We'd look silly saying any such thing. Campuses represent a social process of neoteny- they artificially infantilize their clients and prolong their heteronomy and emotional and intellectual dependency.
The question seems to crop up every month, with some new concern about speakers invited onto campuses being heckled or disinvited because of the prospect of protest. In February 2017 Milo Yiannopoulos, a provocateur from Breitbart, was invited to campus by the Berkeley College Republicans. On the day of his speech it was canceled because protesters lit fires and started breaking windows. In March, Charles Murray, the coauthor of The Bell Curve: Intelligence and Class Structure in American Life (1994), a discredited study of the correlation between race and intelligence, was invited to Middlebury by the student chapter of the American Enterprise Institute. The event culminated in an ugly confrontation between Murray and some students in the audience who jostled and assaulted him after he was shouted down. His faculty interviewer, Allison Stanger, suffered whiplash and a concussion as a result of the melée. In April, students interrupted a speech at Auburn University in Alabama by the white nationalist Richard Spencer (of “Hail Trump! Hail our people! Hail victory!” fame). The university had tried to cancel the event (which had been booked by Spencer himself, not by a student group), but a judge held that it could not prevent Spencer from speaking on campus.
So, there is no such thing as free speech on campus. All that obtains is one form of bullying is  condoned while another is stigmatized. But bullying has nothing to do with liberty or fundamental rights or Public Justification or Epistemic Discourse. The truth is, certain types of bullying are a good thing. I recall being mercilessly ridiculed whenever I spoke up in my Topology class. Slowly but surely, the nerds convinced me that the subject referred to 'Set theory' not 'Sex theory' as I had ignorantly thought. Anyway, that's when I decided to switch to Accountancy- till the same thing happened again with reference to the true meaning of the phrase 'Double Entry'.
There are concerns too about students on campus being disciplined for or prevented from offending other students. In 2015 at Youngstown University, signs advertising Straight Pride Week—“brought to you by the students that are sick of hearing about your LGBTpride”—were taken down by the campus authorities because they were “counter to our mission of being a diverse and accepting campus.” Incidents like these—and one could cite hundreds of them—recently led Attorney General Jeff Sessions to say, in an address at Georgetown’s law school in September, that “a national recommitment to free speech on campus…is long overdue.” There’s a sort of moral panic going on: writer after writer, politician after politician, says we ought to be frightened about what’s happening on campuses because that is where the future of free speech will be determined.

This seems perfectly reasonable. Straight people have never been stigmatized or persecuted. These kids were being silly.
Most people leave the campus and get jobs and become proper grown ups. They may retain irrational loyalties of a tribal sort and this may have unfortunate political consequences. But this isn't the fault of 'free speech' on campus. It is the result of the adolescent tendency to form gangs and bully each other.

Are campuses special because they are isolated and self-contained? No. They are special precisely because of their connection to the rest of society.
Quite false. A campus located in America which trains doctors and engineers and constitutional lawyers from another country may be very special indeed in determining the future of that society though it has absolutely no connection to it.

What makes campuses special is that anyone entering it has an opportunity to gain skills and qualifications which can give them a secure place in some wholly different socio-economic milieu or, indeed, a different country and community.
John Palfrey is head of school at Andover, and in his book Safe Spaces, Brave Spaces: Diversity and Free Expression in Education he says that “our campuses ought to be connected to the world from which students and faculty come and to which they will go.”
A Campus should function like a membrane, not a pipe. It should filter out certain things existing in the student's natal milieu and should absorb what is best from other epistemic communities which have no connection at all to the world from which students come and to which the vast majority of them will return.
It is precisely the coming and going that worries the free speech advocates. High school students leave their homes and their families and go to college. Four years later, after graduation, they fan out into the wider community, taking with them whatever attitudes they have become accustomed to on campus. What they learn about free speech at college determines what sorts of citizens they become and in the long run determines what free speech principles survive in society at large.
Sheer nonsense! People get jobs and conform to the 'free speech principles' set down by their employer or professional association. My contemporaries at Uni, who wore Che Guevara t-shirts and Punk badges and who affected a 'Mockney' accent, quickly turned into good little Thatcherite drones. Thus has it always been.
A number of the books I discuss here are quite insistent on this. Colleges are “both the mirror of American democracy and the window into its future,” writes Ben-Porath, a professor of education, philosophy, and political science at the University of Pennsylvania.
American Democracy was founded and burgeoned without any connection with its Colleges till the Morrill Acts enabled the creation of 'land grant' Universities which would concentrate on agricultural sciences, engineering and other such useful subjects.

Free speech simply did not exist on the vast majority of such campuses. Indeed, some were segregated. In the Fifties, McCarthyism forced many American Professors to emigrate. Yet America remained a Democracy.

In the late Sixties and early Seventies, many American campuses presented a very different appearance. But, this wasn't a 'window into the country's future'. It was a wholly delusive appearance. Ronald Reagan was elected Governor of California for, among other things, promising to 'clean up the mess at Berkeley' (i.e. tackle anti-war protests on campuses). Reagan failed, but was still a two term Governor. When he lost the Republican ticket to Ford, a lot of people assumed that he was too old and too out of touch with the 'boomers' to have a chance at the White House. College enrolment had peaked during the Vietnam War and so, it was thought, Reagan would be anathema to larger and larger cohorts of new voters.

The reverse happened. Why? Part of the reason was because Campuses turned to shit save in STEM subjects- i.e. those that voters had wanted taught in land grant colleges.

Why did Campuses turn to shit? Part of the answer was that the Academy did not understand what freedom meant. They assumed it had something to do with saying stupid shite and bullying anyone who didn't immediately punch them in the face.
In a book that has the same title as hers, by two university administrators, Erwin Chemerinsky (the dean of Berkeley Law) and Howard Gillman (chancellor of the University of California at Irvine), we are told that “the generation now in college will soon be our society’s leaders.”
Only if they leave college and get proper jobs and don't talk worthless shite at every opportunity. Peter Thiel's dropouts are more likely to take leadership roles, as are certain celebrities who didn't go to College.
Everyone seems to believe that if we want leaders who will fight for free speech in the courts and in our political institutions, we have to teach them its value while they are on campus.
Nobody believes this at all. It is an absurd idea. We don't have to be taught to like eating food or to enjoy speaking our mind and telling those with power over us a few uncomfortable home truths.

On the other hand, if we wish to learn some arcane skill or acquire some difficult type of knowledge, we want 'free speech' to be suppressed for the duration of our instruction. I may not enjoy a Mathematics lecture- I may welcome an interruption by a gorgeous student who argues that the correct solution to every equation is 69- but, if I wish to make something of my life, I want this sort of 'parrhesia' to be suppressed.
To fulfil this mission, college needs to be a place where any idea can be expressed.
Nonsense! College needs to be a place where only those ideas which are useful to the students are expressed. It is perfectly proper to clamp down on bullying and name-calling and other such uncivilized behavior even if the claim is made that some 'idea' is being thereby expressed.
If students learn to shout down speeches that, in the words of Sessions, “insufficiently conform with their views,” then heaven help us when they come out into the real world and have to deal with the radical diversity of opinion they will find in the streets and squares of our cities. That’s what is generating the panic.
Fuck off! When I am told that I'm a fat fuck and should trade in my levis for a mumu, I shout down the speaker with all my might. Shouting down abusive shitheads is a good idea.

The real world consists of spaces dedicated to specific purposes in which freedoms and immunities are drastically curtailed. I can say what I like within my own home. I can't do so at work. Campuses which are successful do in fact curtail freedoms and immunities in a systematic way. Otherwise they turn to shit and their graduates are unemployable.

People get awfully solemn in the United States about the civic function of our institutions of higher education. They talk about college as the nursery of democracy and the care that we must take with our young people. As educators, the future is in our hands.
Which people? Stupid ones clearly.
I believe it is worth puncturing this solemnity with some awkward questions.
Isn’t college supposed to be a place for the dedicated and intensive study of particular subjects rather than some vague ideal of civic education?
Some Colleges certainly had that declared purpose. But so did various other collectives. Most Colleges, however, are only valued for the manner in which they alter individual life chances. How they do it is irrelevant. What matters is the ratio of cost to benefit received.

Civics may be one of the functions of secondary education—there is an excellent discussion of how high school teachers can discuss controversial topics like the influence of human activity on climate change in Jonathan Zimmerman and Emily Robertson’s book, The Case for Contention—but it can’t be the point of college.
No- nor High School neither.
As Ben-Porath puts it, students come to college to learn, and classroom learning—in history or biology or science or French literature—requires “adherence to discipline-appropriate, scientific- and evidence-based practices.” There isn’t much debate about free speech in a chemistry lab. But Ben-Porath doesn’t quite stick to this, for she adds that even so, there’s always an element of civic education, so it is sensible to have some instructors in college who are preparing students for broader political engagement.
Sensible? Or convenient to the administrators?
Palfrey says something similar about college campuses: “We teach more than just mathematics, science, writing and reading, languages, the arts, and other academic topics in our schools. We also teach character and moral development.”
Employers inculcate character and motivate moral development because it is in their interest to do so. Colleges have no similar incentive which is why they fuck up in these two respects- unless they are linked to a specific Religion or cadre based Ideological party. But, in that case, free speech is either  off the table or the game has been rigged in advance.
Are we supposed to think that colleges should dedicate lectures or seminars to moral development? Probably not; the idea seems to be that civic character will emerge naturally from the way other subjects are taught. I wonder if this is a reasonable expectation. Why should we expect tolerance to be the virtue that emerges from intensive study of trigonometry? Why not skepticism or self-assurance, a sort of learned superiority or the expectation of privilege? You don’t need to go to college to be a good citizen. Might not the virtues we need in modern politics be better taught on the streets, at work, or in the family?
Finally, some common sense! But will the author stick to his guns? .
Perhaps the more convincing case for free speech on campus is that colleges and universities cannot work as institutions of higher learning unless there is a spirit of unfettered inquiry in the research they undertake.
Nonsense! "Unfettered inquiry'  means being allowed to conduct alchemical experiments with money from the Chemistry department.
It often happens that a senior savant becomes dictatorial and forbids work on anything save his pet projects. But this has nothing to do with free speech. It could happen in Stalin's Russia just as easily as in Reagan's America. So long as students can move from one College to another and so long as Colleges compete, the final outcome need not be too dire.
Historically, the university- in England- was a place where the Established Church jealously policed the views of those in statu pupillari. It was not till the franchise was broadened that Dissenters, Catholics and so forth, could set up their own Degree granting bodies.
Campuses cannot censor or punish the expression of ideas, or allow intimidation or disruption of those who are expressing ideas, without undermining their core function of promoting inquiry, discovery, and the dissemination of new knowledge.
History says otherwise. China and Singapore have already overtaken India's much older elite Colleges and Universities though the latter enjoy far more freedom for radical students to run amok.

Claims like this sound more convincing than they are. Is the free research of mathematicians or philosophers or physicists really in peril because of how one group of students responds to an invitation to Ann Coulter or Milo Yiannopoulos? Most of the free speech issues on campus have nothing to do with the lectures, laboratories, or seminars in which academic freedom is implicated.
Aside from commencement addresses, a college or a university rarely invites or hosts speakers itself. Academic departments sometimes do, but few of the incidents that people complain about have involved speakers invited as part of a classroom series. Mostly it’s students showing off and trying to provoke and annoy one another. So we have to ask: What’s the connection supposed to be between the rough-and-tumble of student politics and academic freedom in the disciplined research undertaken in the schools and departments of the university?
Once again, the author has had a brief flash of sanity. Can he keep it up? Let us see-
I ask this because sometimes the complaints about student protests are quite absurd. Here’s a report from January 2016 in The Guardian:

Chris Patten, the chancellor of Oxford University, has told students involved in the campaign to remove a statue of Cecil Rhodes that they must be prepared to embrace freedom of thought or “think about being educated elsewhere.” Patten accused students who had criticised Rhodes, who regarded the English as racially superior, of trying to shut down debate. He said that by failing to face up to historical facts which they did not like, students were not abiding by the values of a liberal, open society that “tolerates freedom of speech across the board.”
This is nonsense. The students weren’t trying to shut down debate; they were trying to open it up. A dreary statue of Cecil Rhodes on the front of Oriel College is hardly a focus of higher learning. (I don’t remember tutors taking their charges out onto the High Street to study it when I was at Oxford. If they had, why on earth wouldn’t a debate about Rhodes’s views on imperialism have been a perfectly appropriate learning experience?) It is typical of a moral panic to run together all the issues that make us uneasy. Patten’s comments here are an egregious instance of that. He is worried about students disrupting provocative political speeches and he is worried about students questioning the value of cherished memorials. He wants us to believe that the questioning and the disruption are the same thing, whereas they are more or less polar opposites.
Patten was right. He knew that the British voter would react to 'Rhodes must fall' by turning against the campaign for a better deal in terms of University Fees and Student Loan conditions. Clearly, the most problem young people have is with statues of dead dudes which pigeons shit upon. Screw them! The rest of us are struggling to pay off our mortgage and save enough for dental implants.

Rhodes gave money to his alma mater. If Rhodes's statue is taken down, donors will be less generous in future. After all, as Balzac said, at the root of every great fortune is a crime.

One person who should have heeded Patten's implied warning was Priyamvada Gopal. She has now shown her true, elitist, colours by picking a fight with the Kings College porters. Why? They are white and thus privileged and engaged in enslaving brown wimmin from JNU.  Almost immediately, 'Dr. Gopal' as she wishes the hoi polloi to address her, has created a backlash even amongst Black and Asian people against these worthless 'Culture Warriors'.

The truth is that if people like Dr. Gopal didn't exist, then the Daily Mail would be forced to invent them.

Maybe a college campus is special in a different way. Perhaps we should think about college students as vulnerable—young, apprehensive, away from home for the first time, finding their feet, and so on. Sigal Ben-Porath says that campus might be the most diverse environment that the young people who study there have yet encountered. Many come from suburbs and towns that in the age of “The Big Sort” are increasingly segregated by race, politics, economics, and cultural attitudes.1 And now suddenly they are face to face with attitudes quite unlike those they are familiar with. Is it a good thing for them to be thrown into the deep end of these currents to learn to swim? Yes. But we must expect that some of them—minority students, especially—will throw out a range of responses to the provocations and hostility of their peers.
We must also expect a lot of them to take drugs and bully and sexually assault each other.  It is important that we prevent this sort of behaviour spreading to the teaching and custodial staff.
Roderick Ferguson’s book We Demand: The University and Student Protests is an attempt to put campus activism in a radical historic context. Since the 1960s, official responses to student agitation have been conditioned not just by vague civic ideals but by the quite specific intentions that corporate America and the American state have had for university research. And those intentions have run up against the student aspiration for the enfranchisement of minorities and the transformation of the curriculum. We Demand is not an easy book to read, but it conveys how shallow most concerns about free speech on campus tend to be.
Certainly, in our assessment of student activism, we need to bear in mind the history of exclusion. Some of our students may feel a little shaky about their right to be on campus, or about others’ perceptions of their right to be there. In living memory, some of our colleges were explicitly race-restricted institutions. And that sort of history doesn’t just evaporate with the good intentions of highly paid administrators. Think about racist songs, “blackface” parties, and white supremacist processions and put that alongside images of crowds jostling and jeering young men and women like the Little Rock Nine coming into colleges and high schools to desegregate them in the 1950s. Those who dismiss the concerns of twenty-first-century minorities by calling them “snowflakes” and telling them to cultivate “thicker skins” should imagine being nineteen and living in a world that did not always seem fair or unthreatening.
Nobody is dismissing the concerns of minorities which have voting or money power. A supposed 'snowflake' on campus is likely to be positioning herself to leverage some of that voting or money power to advance her own career.

There is no point imagining what it is like to be something which does not exist.
When the Middlebury American Enterprise Institute Club invited Charles Murray to speak on campus in 2017, it could defend the invitation as part of an open and reasoned debate. (Chemerinsky and Gillman note that it was free criticism, back and forth, that led to the discrediting of The Bell Curve in the years after its publication.) The club no doubt relished the element of provocation as their liberal opponents rose to the bait of the invitation. But revulsion against speakers of this ilk is not just intolerance on the left. If we remember the history of inclusion and exclusion then, as Professor Ben-Porath observes, Charles Murray’s very presence on campus, even if to speak about matters unrelated to The Bell Curve, was seen as undermining the dignity of African-American students, robbing them of their standing as full and equal members of the campus community.
Seen by whom? Not the President of the University in question. Nor by any substantial section of the actual African-American community. Why does Professor Ben-Porath not mention African American custodial staff? Do they have no dignity comparable to that of students?
Civil rights law requires us to be alert to the danger of what is called “a hostile workplace environment.” Why not on campus as well? In 2016 Jay Ellison, dean of students at the University of Chicago, wrote a letter to freshmen announcing that the university does not “condone the creation of intellectual ‘safe spaces’ where individuals can retreat from ideas and perspectives at odds with their own.” But safe spaces on campus for minority groups are not incompatible with there also being places on campus—classrooms, for example—where the same people have no choice but to face up to views with which they disagree.
Students can choose what courses to take. They can also create their own social spaces. The reason they are interested in 'Social Justice' type movements is because in recent history Corporations needed to hire compliance officers familiar with relevant legislation regarding discriminatory practices.
The problem here is that the old fashioned 'incomplete contract' offered by Corporations has become too expensive. In a 'gig economy' there will be little demand for compliance officers. Universities too are pricing themselves into oblivion because of high administration costs.

This is a worthless debate which economic forces are already rendering irrelevant.
We don’t necessarily have to choose, although Chemerinsky and Gillman seem to believe that we do. They quote a bon mot of Clark Kerr, the famed administrator of the University of California: “The University is not engaged in making ideas safe for students. It is engaged in making students safe for ideas.” But even if they are right, making students safe for ideas is not the same as pacifying them or requiring them to sit still in silence and just listen when hateful ideas are expressed. The stakes are high, and this is not a game. If civic engagement on campus is what we want—especially outside of the classroom—then we have to accept that it is going to be noisy.
What Universities have to accept is that, long run, only money matters. In the short run, they have the best of monopoly profits- a quiet life where meaningless shite can be discussed ad nauseam. Long term, they have to truckle to who ever it is that pays their bills.
Should hate speech be tolerated on campus? A neo-Nazi march across the quad, a racist song booming out from a fraternity?
The law tells us what we are obliged to tolerate. Currently, American courts are imposing a big financial burden on Universities. When Ben Schapiro spoke at Berkeley, the University had to spend 600,000 dollars on security. Had Steve Bannon spoken there, the cost would have been over a million.

Clearly, the law needs to change.
John Palfrey writes that “those who use hate speech often seek to press the limits of free expression purposely.” They are like children testing the rules their parents have set. The transgressive character of their speech is probably key to its attraction. And those who engage in it often give it a spurious justification by citing the First Amendment—as though freedom of speech itself gives one a reason for saying anything in particular.
Hate speech as such is not prohibited in the US, and hate speech prohibitions of the sort one finds in Canada, the UK, and almost all other advanced democracies are of doubtful constitutionality in this country and would probably be struck down by the courts.2 In the UK, what is regulated is speech that is intended or that is reasonably likely to stir up hatred against some racial or ethnic or religious group. Should we be comfortable with the stirring up of hatred on our campuses?
Clearly the thing is a nuisance which diverts resources from what is useful to students. Young people need to understand that politics is about wasting their money as well as their time.  They need to organise only on issues of genuine importance to themselves. 

Monday 20 August 2018

Prabhat Patnaik on the 'Nehru-Mahalanobis' strategy

Prabhat Patnaik has explained that the 'Nehru-Mahalanobis' strategy assumed a bleak export outlook and thus required investment in heavy industry 'bottlenecks' in line with the 'turnpike theorem'.

Obviously, this was quite mad. Trade was booming in the Fifties and Sixties. India had cheap labour and its people wanted the sorts of things other people wanted- cheap clothes, nice food, bicycles and so forth. India needed to mass produce these items both for its own people as well as to export to other poor countries as well as working class people in countries recovering from the War.

Clearly India could not invest in capital goods- machines to make machines- because it was technologically backward. Far better to import capital goods to  make 'wage goods' which could then be exported so as to buy better capital goods and perhaps invest in domestic R&D.

The other reason to take this route was so as to give farmers an incentive to grow more food and rationalise production so as to have nice shiny things rather than just struggle along in hand to mouth manner. Indeed, they would have been forced to do so because their captive labour pools would increasingly run away to the bright lights of the big city where they could get jobs in factories making stuff they could actually afford to buy.

Patnaik accepts that India could have gone for export led growth just like Japan and Taiwan and so on. However he says that Mahalanobis was actually being very clever because by refusing to let India turn into a country selling labour intensive products- the mark of a poor country- he was ensuring it would sell capital intensive products, like wot them rich countries do. This is a very brilliant strategy. A guy currently flipping burgers in McDonalds should immediately quit and buy a yacht with a nice helipad and then start up his own hedge fund coz that's what rich dudes do.

Patnaik also says that Mahalanobis wasn't ignoring agriculture at all. The farmers were welcome to increase output without any incentive or increase in inputs whatsoever. Anyway, the best way to raise output would be land reform because taking land away from guys who know how to grow stuff and giving it to guys who don't is a genius idea. Obviously the plants or crops or whatever will feel sympathy for the neophyte and start growing like crazy. Also they will harvest themselves and then roll down to the market. What's more, the land will start to reproduce to keep pace with all the additional babies the new landing owning class will start having.

Why did India not have 'the committed cadre' of Communist China? The answer is that the Chinese Communist cadre had gotten very good at shooting people because they had conquered the country as part of the Red Army. Indian cadres, by contrast, hadn't conquered anything. They would have been quickly beaten to death if they had tried to take land away from 'kulaks' who had served in the Army and had a strong martial tradition. These dominant castes were perfectly happy to boost output, if they received necessary inputs and if they could buy cool stuff with their agricultural earnings. Without such inputs or the incentive of getting cool stuff, they preferred a traditional mode of life- i.e. they were just as autarkic as Mahalanobis's model.

The Indian farmer could be drawn into a national division of labour only if coerced or if he got to buy cool stuff. If he couldn't buy nice shiny things, he used his food surplus to buy local services of a positional type. If there was a drought and there was no food surplus, the service castes were welcome to run to the cities and starve there in the queue for the soup kitchen.

The Indian farmer wasn't the only one to pursue an autarkic policy. Indian economists and public intellectuals followed suit. They stopped bothering with the Indian reality and just babbled anything that came into their heads. Some of the smarter ones migrated in order to get paid in hard currency for their babbling. Others just stuck to their posts babbling deafly  for all they were worth.

Actually, the first group wasn't providing 'food and clothing for all'. AID was filling the gap. Had there been no Green Revolution, you would still have an autarkic agricultural sector producing solely for itself and gaining some cash wages or rents from other sectors of the economy. The mining and mineral based sector would need to export to fund itself.  'Universal Intermediaries' would be of poor quality.

Consider a country like Iraq. Did its agricultural sector increase production so as to meet the increased demand for food once the oil started flowing? Of course not. On the other hand, a lot of blood did eventually flow. Had India had a 'resource curse'- instead of imbecilic mathematical economists who did the paperwork to get 'free money' from America- our land too would be dyed Red in the best approved Communist tradition.

Dr. Bickerton & Cilla Black

Dr. Christopher Bickerton writes-
We need to steer British growth away from its reliance upon consumption to allow room for the expansion of other sources of aggregate demand, such as net exports, private investment and government expenditure. Our goal should be to rebalance the components of British economic growth.
Why should this be our goal? Consumption is good in itself. Exporting stuff may be if it allows us to consume more. Private investment is only good if it boosts consumption now and later on. Government expenditure is either a type of consumption- that of 'club goods'- or permits consumption through transfers- or is wasteful and not a good thing at all.

What sort of Government expenditure does Dr. Bickerton have in mind?

 On how to pursue this project of economic rebalancing, we make two recommendations. Firstly, changing Britain’s political economy will require a more effective exercise of actually existing sovereign power. The problem of recent decades – in areas such as skill formation or regional policy – has not been over-centralization. On the contrary, it has been the absence of the exercise of public power over the private activities of markets. Any effort at rebalancing will meet deep and sustained resistance from some sectors of society, making the political will to implement change more necessary than ever. 
So the central Government must spend money fighting 'sustained resistance' to centralized 'skill formation'- e.g. kids not wanting to sit through shite courses on how to drive a forklift truck and taxpayers not wanting to pay for these shite courses- and also to centralised 'regional policy'- i.e. telling the regions what they can and can't do and getting everybody to fill out lots and lots of forms for some grant or the other.

Naturally 'political will' needs to be very well paid in order to sustain itself in beating down howls of rage and ridicule and yobbos headbutting bureaucrats and yokels turning up to dump truckloads of slurry on your driveway.

Still, just paying officials a lot of money isn't enough because the masses- an ignorant lot- will simply get yet angrier when the Daily Mail informs them of how their tax money is pampering this class of gobshites. How then are we to crush 'sustained resistance'?

Dr. Bickerton has an answer-
Secondly, the UK needs not only new policies but also a new social settlement. This settlement must mediate the relations between individuals, the state and markets such that the whole is more than just the sum of its parts. Without such a settlement, any fundamental shake-up of the British economy will only lead to fragmented support whilst opening up multiple opportunities to resist change.
We already have a 'social settlement' as expressed by a regime of taxes and benefits by altering details of which we can cause people to prefer to save rather than consume, to export rather than supply the domestic market, and to fund much higher levels of Government expenditure without causing inflation or raising the real interest rate.
Changing this 'social settlement' opens one single opportunity to resist change- viz. voting any one who tries it on out of power.

Dr. Bickerton has a solution to this problem- viz. before changing the 'social settlement' we must pursue a new social settlement. This involves getting people to believe stupid shite like 'we lost our sense of society 40 years ago. Jim Callaghan took it into the loo with him but forgot to bring it out. Then some bastard shat all over it and so it got flushed down the drain. We've got to locate the sewage farm where it ended up and dig around there in pursuit of it.'

 Over the last forty years in Britain, as individualist outlooks have prevailed over any belief in collective action, we have lost our sense of society as a collective macro-subject, able to legislate and act in the common interest. This loss is not only at the level of sentiment but also reflects a material transformation in the British economy that has left us without a ‘national economy’ properly speaking. The pursuit of a new social settlement is a pre-condition for implementing policies that aim at fundamentally rebalancing the British growth model.
Pursuing some stupid shit is not a precondition for anything. It is stupid shit. Growth models get rebalanced where incentives change. This happens through fiscal policy and changes in the interest and exchange rate. To a large extent, these are self-equilibrating provided financial markets are free of certain types of agent principal hazard- which is a matter of regulation and mechanism design.

Still, it may be argued, that a superior outcome might arise by changing the Supply Side, if only Democracy and the Rule of Law did not prevent us from doing so.

Bickerton says-
At the same time, our service sectors need to change radically. Automation for the lowest skilled activities should accompany a fundamental revalorization upwards of the most ‘social’ of the service sector jobs.
The problem here is that Bickerton himself has one of the most 'social' of service sector jobs. We don't want it to be 'revalorized'. We just want him to concentrate on teaching thickies from foreign countries who will pay through the nose for a Cambridge degree. We don't want him interfering with ordinary blokes like me who are so low skilled our economic activity can't be automated because machines are simply too smart. Also, it would be a fucking disaster if us townies started pursuing 'a sense of society as a collective macro-subject.' Not having been to Oxbridge, I can't prevision all the details but do know it would feature a lot of men my age dressed up as Cilla Black roaming the streets pairing off dogs with cats for Blind Dates on Blackpool Pier.

Why is this not already happening?

Bickerton explains-

 Introduced in April 2017, the apprenticeship levy requires companies with a pay bill of more than £3 million to put aside an equivalent of 0.5% of this towards levy-approved training (Moules 2018). Money not spent on the scheme would be reclaimed by HMRC as tax. Intended as one way of raising the skill level of school leavers entering the labour market, the levy has been used as a new funding stream for business schools. Sensing an opportunity, they created levy-compatible MBA programmes that have proven extremely popular with many senior managers “returning to school” as new “apprenticeships” (Moules 2018). For firms, it has proven far easier to sign off on executive sabbaticals of this kind than to create the proper frameworks and training structures that could absorb the much younger school leaver apprenticeships. An apprenticeship scheme intended to reduce the gap between low and high skilled workers has had exactly the opposite effect. Firms and business schools should be criticized for their short-termism and opportunism. However, given the absence of any labour market pressure to train the school leavers, it is unsurprising that businesses have sought to use the levy to train managers instead.
Deloittes advised the Government on this scheme and has very cleverly redesignated its graduate intake as 'Apprentices'. However, it is the Chartered Management Institute which is keeping middle aged men like myself off the streets, dressed up as Cilla Black lookalikes, by providing courses in 'Leadership Training'.

No doubt, Bickerton- who teaches Politics- could provide some similar facility for superannuated tea-ladies who now think they are Donald Trump. I'd be grateful because I happen to be the spitting image of Omarosa- give or take a couple of hundred pounds.

Sunday 19 August 2018

Roger Myerson on political leadership & effective economic development

Nobel laureate, Roger Myerson, has argued in a 2014 paper (in the context of Aid to Africa) that 'a theory of economic development is incomplete without a model of how effective states are built by political leaders.'

This seems reasonable. The alternative to 'political leaders' building 'effective states' is that mercenary Corporations or self-interested coalitions do so. We may consider assisting the latter type of entity to be repugnant or in conflict with 'Alien Torts' type legislation in our own country.

Myerson states that 'a key to successful democratic development in a nation is to increase its supply of leaders with good reputations for using public funds responsibly.'

What if the country has an independent Civil Service and Judiciary and is empowered to prevent irresponsible usage of funds? Surely, this would have an ever better effect? Now, any and every leader, whatsoever her reputation, would be contributing to the supply of 'leaders who use public funds responsibly'.

However, it could be argued, a leader with a reputation for using public funds responsibly would be even more effective because 'multiplier' and 'mimetic' effects would be stronger thanks to Expectations being more responsive.

However, the opposite point could also be made. If leaders have a reputation for using public funds responsibly, then judicial and administrative checks and balances may grow weaker. In this case, it would be Muth Rational or 'Regret Minimising' to have sceptical expectations cashing out as a sort of 'Ricardian equivalence' such that no multiplier or mimetic effects remain. People assume that if more is done in the political sphere then less will be done in the voluntary or purely private realm.

Given Myerson's extraordinary brilliance and theoretical contribution to the subject, I think ordinary Economists will understand Myserson's statement thus- 'Good Leadership can do something mere Good Administration can't do. It can change the nature of correlated equilibria. It does more than affect Expectations, it changes Preferences. Thus the set of incentive compatible as well as that of allocatively efficient solutions changes in an eusocial manner.'

No doubt smarter economists will phrase this differently or add value in some other way, but when Myerson speaks- precisely because of his leadership role in our discipline- we hear much more than is said and, what's more, our spirits are raised in a marvellous manner.

Myerson next says
-But it is not enough to focus only on national leaders; local leadership is also essential. Economic investments depend on local security and other public services from local agents of government, while profitable relationships of inter-regional and global trade rely on transportation networks and legal protection at the national level
This may sound like common sense, but unfortunately, for many ordinary economists from the Global South, it sets off alarm bells.
It seems to presuppose an ethnically or otherwise homogeneous country. Such homogeneity is likely to be the effect of previous effective, if not exactly good, governance. In practice, if ethnicity itself evolves in 'shatter zones' for Imperial governance and is strongly linked to 'Zomia' type decentralisation, or incremental tribalization, of authority and norm enforcement, then it is unlikely that any 'successful democratic development' will arise because local leaders using exogenous transfers (or 'resource curse' revenues) will compete to destroy, not support, the fabric of the nation.

In order to benefit from Myerson- our 'leader' or 'Big Chief's'- paper we need to read between the lines and use our own local knowledge to flesh out the bare bones of his purpose- viz. to

 outline a general political theory based on leadership and trust and, from this theory, argue that the chances for successful economic development can be maximized by institutions of decentralized federal democracy. We begin in section 2 with a basic theoretical perspective on the foundations of the state, followed in section 3 by some historical perspectives on the role of local government in development. Then section 4 examines the role of leaders' reputations in constitutional change, and section 5 shows how local democracy can promote the competitive political leadership that is essential for successful democratic development. Section 6 concludes with suggestions of how political reform and development assistance can more effectively help poor nations to increase their increase their vital supply of leaders who have good reputations for using power responsibly in service to the public.

 Foundations of the State
 the state is a network of agents who enforce laws that sustain property rights and reduce moral hazard in other organizations of society
Suppose I am a Judge. I receive a transfer to the State Capital and so I rent out my house in the District Capital and move to my new official residence. The tenant does not pay me any rent and refuses to leave.  I file various motions but the tenant files other motions and I know from experience that it will take approximately 3457 years to resolve the matter legally. Thus, I pay the local Don to evict my tenants.
He does so for a nominal fee because he respects me as a law minded person who does not take bribes. The tenant, quite naturally, retaliates by charging me with rape, genocide and insult and atrocity to a particular religious or ethnic minority and the Free Press has a field day at my expense. I find that my hapless husband and myself are suddenly getting invited to the best parties.  A low budget, Regional language, film is made in which I am shown beating up hundreds of the Tenant's goons and then raping them one by one. Quentin Tarantino sees that film and praises it and 'Rapist Judge' becomes a meme in his oeuvre. Meanwhile my ex-Tenant lost his deposit in the local elections. People would not vote for an Harvard alumni, ex-Goldman Sachs, amateur cage fighter who got raped by an elderly grandmother who also happens to be a retired Judge.

Still, bien pensant public intellectuals have a duty to reflect on the manifest and manifold injustices perpetrated against vast subaltern classes- e.g. that of Tenants- by Rapist Judges, many of whom belong to the Majority Community. The practice of a truly Secular, Democratic process of Public Justification must concern itself with the multiple violations of Human Rights suffered by raped Tenants more particularly if these were carried out by retired Judges belonging to the supposedly 'fairer sex'.

On the other hand, many ordinary people would feel, this is a situation where Justice was done- that too in an exemplary fashion. But, the 'State' did not do that Justice. Rather it made Justice impossible to achieve through any legal means- even for a Judge. This does not mean that contracts won't be enforced nor that rapists won't be punished. It just means that the State, as defined by law or economics, is seldom 'a network of agents' enforcing anything 'law-like'.

Bearing this in mind, how can we read Myerson- our leader, who we know expends intellectual resources in a responsible manner- such that we ourselves can gain?

I suggest-
networks of agents who enforce laws that sustain property rights and reduce moral hazard in other organizations of society may have an incentive compatible relationship to the State even if that State is hell-bent on destroying incentive compatibility and constraining allocative efficiency iff Judges have to rely on the local Don to avoid being rendered homeless in their old age.

The Foundations of the State arise in networks of ontologically dysphoric agents who vicariously suffer at the hands of Rapist Judges of the above description.

Myerson says-

Agents of the state could profit from abuse of their powers, and so they must be motivated by the expectation of greater long-term rewards for good service. But promised rewards for good service become a debt of the state which its leaders might subsequently prefer to deny. So the motivation of agents in the government itself is also a moral-hazard problem, which must be solved by political leaders who establish the government (Myerson, 2011) 

This is clearly nonsense. The State does not revoke pensions- even to Rapist Judges. Moreover, 'good service' may involve prosecuting such Rapist Judges who, despite being grandmothers, nevertheless rape ex Goldman Sachs employees who are also amateur cage fighters. The fact that many witnesses heard this heartless and genocidal rapist, utter casteist slurs while violating the anal integrity of my client with her massive cock shows that the nature of Power in our Society is still firmly founded upon Racialist theories of Hegemony instrumentalized by Colonial Powers. Indeed, not till this foundational act of epistemic, Eurocentric, violence is addressed and redressed will we, as a Society, prevent our grannies raping their delinquent tenants while uttering casteist slurs  and offending their religious sensibilities.

An official who is 'law minded' gains a local reputational benefit- the local Don only charges a nominal fee for evicting their mischievous tenant- whereas one who is corrupt is himself kidnapped and has to surrender a portion of his accrued rents. Official pensions or other entitlements are a different matter. They may be subject to delay, but- in general- the class interest of the bureaucracy ensures they are upheld.

Amending Myerson, we may say that the foundation of the state is a network of agents with common values such that Rapist Judges become folk heroes.

We must similarly amend statements like the following-
The critical question of political economy, then, is whether property rights are securely protected only for a small elite who actively support the national ruler, or does the circle of trust extend more broadly to include people throughout the nation. 
The property rights of this small elite do not represent wealth- they are not fungible and have no capitalizable value- unless much wider property rights exist of an essentially uncontested type.

Small elites are characterised by the arbitrage of capital flight of one sort of another. Assad has survived because of previous capital flight which, however, was not secure once the West decided to paint this Doctor and his London born Merchant Banker type Wife as genocidal tyrants. What was to stop the West from going the whole hog and expropriating that entire crew? Suddenly, the Alawi-Sunni elite needed to reassert its claim to what a Pakistani economist calls 'a geopolitical rent'. It is stuff like this which sustains States.

If the following had been written by anyone but Myerson, we would consider it the maundering of a fool- (my comments are in bold)

Members in the securely protected group require some legal and political power that could be used against a government official who failed to protect their rights.  Because 'being securely protected' does not mean being 'securely protected'. What Myerson means is 'members of the securely protected elite need protection against not being members of the securely protected elite. They can't have it. The thing is impossible. Louis Phillipe can become King but his Throne is no more secure than that of Charles X.  A broad distribution of such power to threaten the privileged status of government officials may naturally seem inconvenient to established national leaders, but people who have been admitted into this circle of political trust can invest securely in the state, increasing economic growth. Nonsense! A South Korean dictator forced corrupt people to invest their ill gotten gains in a particular way but this did not mean that any great decentralisation or broader distribution of power occurred. Rather, the reverse was the case- and this still has hysteresis effects. A fundamental fact of modern economic growth is that it requires decentralized economic investment by many individuals who must feel secure in the protection of their right to profit from their investments. Thus, modern economic growth requires a wide distribution of political voice and power throughout the nation. It needs an independent Judiciary which can take speedy action. Otherwise, there could  be a 'wide distribution of political voice and power' featuring pitched battles on the streets on every and any occasion. 
Myerson has a 2006 paper which presents a simple game theoretic model which shows that if corrupt leaders have no effective competition then there will be centralisation. However, decentralisation would have the opposite effect.

Even with free elections, a corrupt political faction could maintain a grip on power if the voters believed that other candidates would not be any better.
Why? A corrupt faction would be subject to factionalism. Suppose the Oil Ministry is easier to loot than the Foreign Ministry. The Foreign Minister will split the party claiming to combat the notorious corruption of the Oil Minister who is from such and such ethnicity or region or whatever.
Successful democracy requires more than just elections; it requires alternative candidates who have good democratic reputations for using power responsibly to benefit the public at large, and not merely to reward a small circle of supporters.
Nonsense! Successful democracies require corrupt bastards being arrested and locked up. This means an effective and independent Judiciary and Federal Vigilance Squad or Bureau of Investigation.
In a nation with a long tradition of democracy, there are typically many politicians who have such good democratic reputations.
Not necessarily. They may all be shite, or else there may be a parliamentary deadlock because of ethnic or other divisions- look at Belgium. What matters is if the Rule of Law prevails and administrators can get on with their jobs knowing 'rotten apples' will be removed, not promoted by corrupt politicians.
But in a new democracy, politicians with good democratic reputations are typically lacking.
Rubbish. The new democracy probably has more, not less, clean and competent people to choose from. Politics would not yet have become a repugnancy market.
Aspiring politicians who have no real power can make fine speeches about better government, but they cannot demonstrate any ability to allocate public funds and patronage in a way that provides public goods and services for the population.
Quite false! Aspiring politicians collect funds for propaganda and other similar purposes. Their talents or limitations as administrators would already be known. Thus, an impractical demagogue may be paired with a pragmatic deal-maker.
Voters may be reasonably skeptical of candidates' promises when they have no evidence of good public service in the past. Then voters would have no incentive to turn a corrupt incumbent out of office, if the alternative candidates were expected to be just as bad or worse. But if blatant corruption would not reduce the leader's chances of re-election, then he should have no incentive to prevent his supporters from enjoying corrupt benefits of power. In a simple game-theoretic model, I have shown (Myerson, 2006) how such failure of democracy can be a rational equilibrium for a centralized unitary state, but this bad equilibrium can be eliminated by decentralizing a share of power to independently elected local and provincial governments. The key is that local governments create independent opportunities for local leaders to begin cultivating good democratic reputations. Then, if political leaders at all levels of government were expected to be uniformly corrupt, a local leader who offered better public service could establish a good reputation with the voters that could make him a serious contender for power at higher levels of government.
This is all very well in theory but in a large heterogeneous democracy, a local leader who does well in one District may not do equally well at the State or Federal level.

All that matters is that the Law punish corruption and that the Administration be subject to independent Audit for competence and fitness for purpose.

Decentralisation may lead to overlapping jurisdiction- consider the case of Genoa, where a bridge has recently collapsed. The reason the place got into such a mess is that there are 5 different levels of decentralisation- from the EU which gave an infrastructure grant for repair, to the National Government, to the Provincial, to the Municipal authority.  One or more could always paralyse an needful initiative on the part of the others. Subsidiarity is all very well, but- as in the case of the bridge in Genoa which is part of a crucial commercial highway- the level at which the decision needed to be made was the European- which was releasing the required funds. Decentralisation meant delay and corruption.

This argument for decentralized democracy can also be derived from the basic economic  concept of barriers to entry. A successful system of democratic competition should reduce political leaders' ability to take corrupt profits from their positions as suppliers of government services.
Criminals can supply 'government services' like killing your daughter's rapist or kidnapping the bureaucrat who extorted your business and forcing him to disgorge his loot. In India, these Criminals disintermediated politicians in areas where the Government wasn't providing much in the way of services. Barriers to this sort of entry are low where the Police are not trusted or the Judiciary is dilatory.
Economists understand, however, that the expected amount of profit-taking in a competitive market equilibrium may depend on barriers against the entry of new competitors. By enabling more local politicians to prove their abilities to govern responsibly, federal decentralization and local democracy can reduce barriers against new entrants into the national political arena, and so can make national politics more competitive, thus sharpening the incentive for elected national leaders to provide better public services.
Alternatively, the young kid who rapes and murders his sister gets an education in juvenile home which helps him to set up as an extortionist. By the age of 30 he is a legislator. By 50 he may be Chief Minister. By 70 he may become PM in a coalition government.
In the United States, for example, many candidates for president have served previously as governor of a state (province). The interactions between local and national politics can go both ways. I have argued that local democracy strengthens national democratic competition as successful local leaders can become candidates for higher offices.
Right! George W Bush was a 'successful local leader'! The Governor of Texas actually runs the State. It isn't a decorative office at all.
But national democracy can also strengthen local democratic competition, as national parties can support alternatives to established local bosses. The risk of local government being dominated by an unpopular local autocrat can be countered by the participation of competitive national political parties in local elections. Local political bosses should know that, if they lose popular support, they could face serious challengers supported by a rival national party. Competitive national political parties played an important role in the successful introduction of local democracy in Bolivia as described by Faguet (2012). Crook and Manor (1998), Enikolopov and Zhuravskaya (2007), and Ponce-Rodriquez et al. (2012) find cross-national evidence that the benefits of political decentralization can depend on strong competitive political parties at the national level. 
Bolivia? That's a successful democracy? Evo Morales came up as a Trade Union leader and vocal champion of the indigenous people- the majority. Myerson makes it sound like he started as a Mayor of a small town who became Mayor of a larger town and then the Governor of a region before being elected to the top job. Opportunities for corruption have increased under Morales because State control has increased. Per capita GNP is lower than a generation ago. He may be a good man- a Chavez not a Maduro- but what matters is what happens after he dies.

What point is Myerson making? It is that International donors can better fuck up their victims by finding the Maduros of the future and subsidising them. He may not be aware that this has always happened.

donors could help to increase the nation's supply of leaders with good reputations
Osama bin Laden had a great reputation
by distributing some share of developmentassistance funds to autonomous leaders of provincial and local governments.
So they can kill their rivals and bribe the Judges
Donors could even consider funding some development projects for minority parties in the national assembly. 
So they can do ethnic cleansing in the districts they dominate
For this reputational goal, and to clearly distinguish foreign development assistance from covert efforts to achieve political influence, donors must also insist on transparent public accounting for all funds that are spent by political leaders at all levels.
Yes! They should be audited by KPMG or which ever auditing company is most in the pocket of the regional equivalent of the Gupta brothers.
The essential accounting here must be to the local population, however, not just to foreign donors who provided the funds. Local people must be able to learn what funds were spent by their leaders and must be able to monitor what public services were provided by these funds.
Even local C.P.A's would lack the time and resources to monitor any such thing. However an independent Auditor General backed up the Courts could do so.
Sadly, Rossi's Metallic Laws predict that such independent evaluation (e.g. by the Indian C.A.G) will show every program has zero or negative net impact. Cash transfers are the current panacea, but more than that is required.

A better approach is to catch bad guys the way the Tax man catches bad guys- i.e. focus on what the guys are spending and jail them for 'disproportionate assets'.
Doubtless, many will be seen to have wasted money on graft and corruption. But if the national government cannot achieve public benefits commensurate with the assistance funds that it has received, then other local leaders who are seen to do better with their assistance funds may be recognized as the new leadership that the nation needs. Such a mechanism may seem inconvenient to established national leaders, but it would provide an incentive for them to improve governance and eliminate corruption. 
Nonsense. Only Courts can catch and convict criminals. National leaders have no business doing so. One can always co-opt people with proven administrative or other skills and get them elected to Parliament- in India this happens through the Upper House- and then give them the top job. That's what happened to Myerson's fellow economist Manmohan Singh. Interestingly, Modi had never stood for election before being appointed CM of Gujarat. This sort of 'lateral entry' is just as good or better than Myerson's foolish proposal.