Why all internal reasons are actually external prejudices

Bernard Williams' doctrine that all reasons for a person doing something must be internal to that person- i.e. involve a motivation within himself rather than arise out of some Social Convention- appears easy to dispose off- at least on the assumption that human beings evolved by Natural Selection. This is because, assuming it is costly to have motivations which are subject to some calculus such that they inhibit or permit an action; it follows that for any given action, the Evolutionary Stable Strategy will militate for some proportion of actors not possessing an 'internal reason' but proceeding by mimicry, including lagged mimetic effects- i.e. for an external reason- to complete the same action. Indeed, Amotz Zahavi's work on warning calls and predator 'mobbing' shows how 'external reasons' can improve predator-prey outcomes and hence are trans-species Eusocial.
The same point would be true for artificial agents- e;g. those used in a simulation- provided it is costly to acquire information and apply reason to it and there is heterogeneity in terms of either information access or processing capacity amongst agents.
True, one could simply change the way one defines 'internal reasons' or 'motivations' such that we now speak of a desire to mimic or a desire to be lead or a desire to roll the dice and so forth. However, since these desires or motivations are encoded in Language, then- by Wittgenstein's argument against Private Languages- clearly these are 'external reasons' merely. The one doing the action may not even be aware of it, let alone have an internal reason for doing it. Certainly, it would also be a case of quod nescis quo modo fiat, non facis.
 However, since Public Language has different granularity than either 'Mind stuff' or whatever Cognitive process determines action, and furthermore, since we know in advance that any given set of terms available to Public Language for use as explanans is either incomplete or misleading or both- it follows that no external reasons exist save by way of prejudice.
The literature on this subject, in so far as it relates to counter-factuals, misses the point that for agents who have evolved by Natural Selection, Uncertainty always exists as to which World we live in- this one or a counter-factual. Indeed, the Evolutionarily Stable Strategy- assuming it is costly to find out the answer- is to always remain in a state of 'buzzing blooming' confusion in this regard, at least for some proportion of the population. Philosophy has no Archimedian point here. On the contrary, opening its jaws to digest Game Theory it  becomes merely the Ouroburos of the latter's shed skin.

No doubt, those familiar with the literature may think I'm missing the point. Perhaps, Williams is referring to ideal agents with infinite and instantaneous computing power? The problem here is such agents would have a type of Theory of Mind which would disintermediate Language and the essentially linguistic distinction between 'internal' and 'external'. Indeed, it is far from clear that the word 'reason' would retain any utility.

Alternatively, we may posit some special barrier to perfect Theory of Mind. But, in that case, Language would be entirely strategic because arising wholly from that barrier and the reason for it. Here again the distinction Williams makes becomes wholly hypocritical and empty of Philosophic content.

What about William's criticism of 'external reasons?'

The answer, of course, is that the agent believes he's hit on a 'cheap talk' ploy in a particular sort of game. To turn it into a 'costly signal' he may pretend to be undergoing some terrible inward struggle productive of the costive truth in question. Indeed, there's a Kavka's toxin type twist to this such that he has an incentive to convince himself that this is what is genuinely happening.
A bit like Bilgrami's Gandhi.

If Muslims get richer, Hindus try to kill them.

Consider the following

Implications of an Economic Theory of Conflict: Hindu-Muslim Violence in India

Anirban Mitra, Debraj Ray

NBER Working Paper No. 19090
Issued in May 2013
NBER Program(s):   DEV   POL 

We model inter-group conflict driven by economic changes within groups. We show that if group incomes are low, increasing group incomes raises violence against that group, and lowers violence generated by it. We then apply the model to data on Hindu-Muslim violence in India. Our main result is that an increase in per-capita Muslim expenditures generates a large and significant increase in future religious conflict. An increase in Hindu expenditures has negative or no effect. These findings speak to the origins of Hindu-Muslim violence in post-Independence India

.

The full paper is here.
On the assumptions of the authors,  assuming the Police are non-functional or that they side with the majority, then -if a riot breaks out- the majority will
1) kill more than the minority unless the minority has rational expectations and quickly runs away
2) loot more than the minority and thus, potentially, come out ahead.
Thus only Minorities which are stupid or which have very poor Leadership or which have a suicide wish will ever participate in riots. Instead, they will be prepared to pay a Protection Tax till such time as they can safely emigrate. Similarly, Majorities with rational expectations will launch periodic predatory assaults on the Minority if for no other purpose than to keep their numbers down.
Prima facie, this model predicts that minority share of population wlll fall as indeed has happened in Bangladesh and Pakistan and now Iraq and Egpt and so on.

Examining the empirical evidence, the authors find something strange.
In India, the majority community doesn't slaughter and dispossess the minority (unless the majority happens to be Christian, as in Nagaland, or Muslim, as in Kashmir). Instead, if its Income goes up, it gets less aggressive (provided it is Hindu). Not so the Minority (unless it is Hindu- in which case it runs away). If its Income goes up it is more prone to go on the rampage. But this means it will lose more and so its Income will fall back down after a riot. Still, once Income starts rising again, they just go on the rampage  again and the pattern continues till either they become the majority (assume poorer people have bigger families) or they become so de-skilled that their Incomes can never rise.

Obviously, the Identity categories 'Hindu' or 'Muslim' have no natural or inevitable connection with 'majority' and 'minority' and thus can't be used as explanans in a scenario like this, yet this is what the authors do. Their conclusion is that when Muslims get richer, Hindus attack them. This is entirely inconsistent with their assumptions and findings. What is warranted is the conclusion that you don't have to be a Bengali Hindu to be a shite Economist, but it sure seems to help.

Rich People belong to a different Species.

I recall drunkenly watching the 1992 cult movie, Society, where, it turns out, the Rich really are, as Fitzgerald said, different from the rest of us not because they have more money but because they turn into pullulating, pustulating, disgustingly pink giant amoebae at high toned incestuous orgies- before proceeding to eat us.

Alex Tabarrok has a lucid- therefore obviously ludicrous- post at Marginal Revolution which compares Piketty's pataphyique model with the standard Solow witted shite we were all forced to learn at School.

Tabarrok is commenting on Krusell & Smith who highlight Piketty's definition of Y (Income) as net of Depreciation- i.e. Income is what you can spend such that future Income doesn't fall- so if stuff you need to maintain your standard of living needs repair, then your Income is what's left over after you've done the repairs. Now, some 'Capital' (i.e. man-made stuff needed to sustain your standard of living) is 'Social' or 'Communal' or relates to Education, Training and Psychological Motivation and Boulding 'Psychic Capital'.  If this depreciates by wear and tear or whatever and you don't (either collectively or by yourself) repair it, then- in some sense- though your consumption may have gone up, still you have 'dis-saved'- you have less Wealth.
Similarly, suppose the value of your house has gone up because rents in your area have gone up. You still spend the same and earn the same in dollars. Still, according to the National Income Statistics, you now get an 'imputed rent' from owner occupation. This could be considered an increase in your yearly Savings, which is why your 'Wealth' increases over time and why, hopefully, you will be eventually reconciled to that selfish little shit of a son of yours who, disgusted by your parsimonious refusal to buy him a burger for his birthday, stormed out of the house when you insisted, by way of judicious reparation, on telling him for the umpteenth time the tragic tale of your brutal date-rape at the hands of his mother that time she took you to see Sir Partha Dasgupta lecture on Optimal Depletion and everybody else was so engrossed in the lecture that they failed to come to your aid... and...sorry this stuff is still just too painful. How would you like it if someone stuck their titty in your mouth just when you'd raised your hand to say "I'm sorry Sir Partha, that equation is wrong?'

Anyway, turning to less horrific topics, this is Tabarrok's mistake- ...' Piketty’s model ... defines output and savings in a non-standard way (net of depreciation) but when written in the standard way Piketty’s saving assumption is that I=dK + s(Y-dK). What this means is that people look around and they see a bunch of potholes and before consuming or doing anything else they fill the potholes, that’s dK. (If you have driven around the United States recently you may already be questioning Piketty’s assumption.) After the potholes have been filled people save in addition a constant proportion of the remaining output, s(Y-dk), where s is now the Piketty savings rate.'
I haven't read Piketty- indeed, my Literacy Worker is no longer allowed to read Econ type books out to me coz of my incontinence issues- still, surely, that smelly Malinvaudian snail-eater wouldn't have committed to homogenous agents just to get in with the Anglos? At worst, he might have 'Schutzian ideal types'. However, a more radical possibility is opened up by my own comment, given below, which now proudly besmirches Marginal Revolution's meretricious web-site.

Windwheel June 2, 2014 at 11:08 am

One way of saving Piketty’s conclusion within the above framework would be to permit depreciation to sometimes be negative savings for one class of agents which, by some bizarre convention re. imputed rents, counts as positive savings for another class of agents. Then what you actually have is two different populations with something like a speciation event occurring- i.e. there is now no  driver for ‘canalisation’.

 Perhaps it’s the visceral feeling that the Rich really are now a different Species- like in the classic 1992 film ‘Society’- which explains Piketty’s appeal. 

For my part, I thought Growth theory had died an unlamented death in the Sixties. To be clear, heterogenous Accounting Identities can always be made to line up if you are Paranoid enough.

P.S- You will be pleased to hear my subsequent comments have been barred.

Akeel Bilgrami on Modi

Prof Akeel Bilgrami writes-
'In the Europe of the 1930s and 1940s, the term “fascist” came to be associated with two defining features. First, the finding of an external enemy within a nation (in the case of Germany, the Jews, the gypsies) and despising and subjugating them.

No. Fascism was associated with increased State control of the Economy such that Aggregate Demand was boosted and thus the effects of the Great Depression were mitigated. In Britain, a Labour Member of Parliament- Oswald Moseley- advocated Keynesian policies. He created the British Union of Fascists after the 'New Party' he formed in 1931, with five other Labour MPs, failed at the polls. Initially, some Jews did join Mussolini's Fascist party and this was also true of Moseley's outfit. However Moseley became more and more attracted to Hitler whose Nazi party promoted a 'stab in the back' theory for Germany's defeat in the Great War, which falsely blamed German Jews of disloyalty. 

 Second, what Mussolini offered as an explicit definition of fascism: the fusion of the interests of corporations and the state. 

Corporatism advocated the total integration of divergent interests- including that of organised labour, and the peasantry- into the state for the common good

I ask the reader to look at Modi’s record with Muslims

In Gujarat, he ended the cycle of politically instrumentalized communal riots which began in 1969 and which disproportionately harmed Muslims. 

 and his avowed economic programme

which is pretty much the same as that of Manmohan Singh.

 and decide for herself where the lack of intelligence really lies. '

Bilgrami knows that Muslims in the sub-continent have shown great hatred for 'kaffirs'. They have ethnically cleansed them wherever they have been in the majority- including the Indian administered Vale of Kashmir.

Bilgrami also knows that Nehru was Prime Minister when the Muslim population of Delhi fell from 33 to 5 percent. Under Nehru, industrialists who had supported Congress were able to displace British concerns and take control of the Economy. Why does Bilgrami not call Nehru a Fascist? Indira Gandhi went the extra mile and imposed a Fascist dynasty on India. Sonia Gandhi's father was an actual Italian Fascist. Manmohan Singh's regime represented peak corruption and crony capitalism. Industrialists got themselves elected to Parliament and shamelessly looted the Public Sector Banks. 

Bilgrami is unaware that Gandhi was an admirer of Mussolini. Govind Vallabh Pant described Gandhi as the Fuhrer and Il Duce of India. Nehru was a Socialist but himself spoke of his Dictatorial tendencies. Incidentally, when Indira became President of Congress, she dismissed the Communist Government of Kerala. Her husband described her as a Fascist for this action. But it was only when she suspended the Constitution and jailed her opponents did this become manifest.

 The word Fascist, in the 1920's, as popularized by Mussolini had nothing at all to do with Jews. It did however have everything to do with
1) Defeating the Communists and other Leftists who
a) had opposed Italy's participation in the War
b) aimed at Bolshevik style Revolution. Mussolini was a  former Socialist who supported the War and had the backing of the Army for this reason.
2) Stressing the role of the Military and seeking for a revival of Imperial glory. This was to be done by making Business Corporations and Trade Unions and other elements of Civil Society- including the Education system and, after the signing of the Lateran treaty, even the Church- subordinate to the interests of an expansionist State. Mussolini's 'Corporatism' meant subordinating, not fusing, the interests of the Capitalists to the greater glory of the Nation.

Which other European countries could be described as Fascist?
1) Hungary. Bela Kun had led a Communist Revolution. With help from the armies of neighboring countries like Romania and Czechoslavakia, Admiral Horthy launched a 'White Terror' and became Regent.  Kun and many of his comrades were Jewish but Horthy wasn't Anti Semitic because Jews had traditionally been loyal to the dynasty.
2) Germany also faced the problem of Red Insurrection which was put down by 'Freikorps'- disbanded soldiers. The size of the Army had been drastically cut by the Peace Treaty. Hence, the German Army wanted a 'force multiplier' in the shape of a Mass Movement. They were also keen on projecting the 'stab in the back theory' so as to absolve themselves of War guilt. Hitler was a paid agent of the Army when he joined the Nazi party. Luddendorf was beside him during the Munich Putsch. But, the mentally unstable Luddendorf refused to go to jail to pose as a martyr and so Hitler gained salience.  Hitler's path to power was paved by Generals like Schliecher (whom Hitler killed) and Blomberg (whom he hounded out of the Army in disgrace) and all this happened when Hindenburg was President. Hitler had no particular love for the Corporates. They and the German Army however agreed to subordinate themselves to the State- which, thanks to them, Hitler came to embody.
3) Spain. The Left came to power and went a little crazy. General Franco, with help from Mussolini and Hitler, invaded from Morocco having first declared the Virgin Mary to be the Captain General of his Army. But Franco wasn't serving Corporate interests. Primo de Rivera's idiotic Falangism hurt Corporates. Unlike the First World War, the Second War was a period of stagnation for Spain. It was only after ditching the ideologues that Spain, from the Fifites onward, took a Technocratic direction under American tutelage. Franco wasn't particularly anti-Semitic.
4) The Romanian Iron Guard- vicious anti semites but they thought they were serving the Archangel Michael, not the Corporations. They considered Capitalism sinful.
5) Pilsudski's 'Sanation' in Poland featured massive State action. Hiter's Germany did see Privatization but Corporations had to serve the interests of the State. Had German Capital been in the same parlous state as Poland's, Hitler and Blomberg and so on would have gone the Pilsudski route. Indeed, to a certain extent, they did.

One can multiply instances but one conclusion is inescapable. Inter-war Fascism was a product of-
1) Fear of Communist Revolution and/or invasion or subversion by the Soviets. The Military had a disproportionate say and they considered Capital to be a junior partner.  Some military men, but also some Business men like Henry Ford, came to believe in the 'Protocols of the Elders of Zion'- i.e. a paranoid fantasy in which the Jews controlled both the Kremlin and Wall Street and were aiming to destroy Spiritual 'Christianity' or 'Aryan Values' by 'Materialist' ideologies like 'Capitalism' and 'Communism'.

2) Anger at or anxieties arising out of the Peace treaties. Defeated powers looked to get back territory by Armed Might; Victorious powers sought to keep their gains by the same means.

3) One reason for militarism and Imperialistic policies was that International Trade had declined as countries pursued autarkic policies and beggar-my-neighbour tariff barriers were erected. Japan moved in a Fascist and Imperialist direction for this reason. 

Some 'Fascist' countries had an 'internal enemy', some, like Japan, did not. Equally, some Democratic, Theocratic or Monarchical countries had 'internal enemies'. The Tzar had persecuted the Jews as had Catholic monarchs at certain periods. The Gypsies had always been badly treated. Some Protestant countries persecuted or expelled Catholics and 'Non-Conformists', while Catholic countries did the same to Protestants. 

 What the Axis powers shared in common was Militaristic rule and a willingness to abandon International Treaties and the League of Nations in pursuit of their National Interest. When people thought of Hitler or Franco or Mussolini, or Tojo, they didn't think- 'oh that fellow is in the pocket of Big Business and his only other passion is killing some specific minority'. 
Instead, what people thought was 'that nutjob is willing to start a World War to expand his territory. He will ruin his own country- including its Businessmen- but he doesn't take care.'
Suppose Hitler was a puppet of Big Business. Then, there would have been no War. Just pay the German industrialists to rein in Hitler. After all, money is what those guys care about, right? France and England had plenty of money to buy peace. They didn't use their money in that way because it couldn't be used in that way. Big Business wasn't in charge in Germany. Hitler was- but only because people like General Blomberg had come to see that he would push through the Army's maximal program better than they could do so themselves because
a) he was simply more ruthless
b) he could pose as the Charlie Chaplin like 'Little Corporal' whom the English assumed would be anti-War because he'd experienced its horrors himself.

Now let us look at Modi. Is he in the pockets of Big Business? No. Adani is a junior partner in the development of Gujarat. Jindal, the former Congress M.P, wasn't anybody's junior partner. Manmohan scarcely wanted Coalgate. Yet it happened. The country got no benefit whatsoever. 
Some people can make money even in a failed State. However, the Business Sector as a whole goes down the toilet.
It is undeniable that Corporates, as a class, backed Modi this time round. What was the alternative? If the Economy continues to stagnate- which it would have done because Congress didn't even have a P.M candidate- then many of them either go bankrupt or have to severely retrench. If Growth gets back on track- which it will under Modi simply because he isn't a senile idiot- most of them will be able to raise money and get back to profitability. It is an Existential question. 

What about Bilgrami's second assertion- viz. Modi has risen to power by attacking an 'external enemy within the Nation'? Surely the secret of his electoral win is that he himself was attacked by all other parties as that very 'external enemy'? There was 'Hindu vote consolidation' because Modi was painted as the one man who would slaughter Muslims if they started killing Kaffirs. Another factor was that 'Secular' politicians, with great cynicism, were claiming to have given Muslims a special most favoured status. 

Still, the fact remains, people have voted for Modi because they believe he's a 'Good Governance' man who will treat everyone equally and not play caste/creed vote-bank politics.  
If Bilgrami were correct, wealthy Muslims would now be fleeing the country. To my certain knowledge, they are not doing this. Instead, we see Muslim N.R.I businessmen ramping up their investment plans and planning to spend more time in India and not just Gujarat or Rajasthan or M.P or the N.C.R either. People even are talking of opportunities in U.P and Bihar.

Ghalib ghazal 76

bīm-e raqīb se nahīñ karte vidāʿ-e hosh

majbūr yāñ talak huʾe ay iḳhtiyār ḥaif

jaltā hai dil kih kyūñ nah ham ik bār jal gaʾe

ay nā-tamāmī-e nafas-e shuʿlah-bār ḥaif

We quit not Consciousness for fear of the Rival- Alas!

Love constrains Love for its very Survival- Alas!

Oh arsonist heart, why spared you my factory?

A bankrupt so burnt, yet Love is refractory- Alas!

Nehru's Economic Policy

This is a link to an erudite article on Nehru's Economic Policy which is misleading precisely because it is erudite; erudition being, as our folk wisdom has it, the thing that most makes one stupid and blind.

Mathematical Growth theory and Capital theory are inherently silly. Let that Silliness feed into how National Income is calculated and you have permanently increased the noise to signal ratio for Everybody in the Economy- i.e. a bunch of eggheads, who should have stayed in Cambridge buggering with each other's brains to get into Wittgenstein's good books, manage to permanently harm the Economy by at least a couple of percentage points of GDP.

It's simply crazy to let a Physicist like Mahanalobis, or a Cambridge graduate of any description, near Econ policy. Vishveshvarayya was an old fashioned engineer turned Diwan. His thinking was simple. Govt. picks a smart guy- like Kurien for Amul- who has an engineering or similar qualification and puts him in charge of a project- be it irrigation or Milk production or whatever. The technocrat gets a pragmatic grass-roots type political backer who can broker deals with stakeholders. Finance Ministry commits money. Those guys who do well get more money. Other who talk who a good game but can't deliver are quietly shunted off to Academia.

I suppose you can call this 'Industrial Policy'. Why bother? Just let it happen and don't give it any fancy name because ordinary blokes understand it immediately. It's Nation building is what it is.

Like the pre-war U.S. Dept of Agriculture which did a truly spectacular job just by keeping a low profile and acting locally; under this informal rubric, you have a lot of local initiatives and innovations being supported by a decentralised Govt. bodies- so this is a type of Public Sector entrepreneurship whose gains remain in private hands- and thus which entails no bureaucratic rent contestation. The wider co-ordination and Capital allocation problems can increasingly be left to the market with the Govt reserving a signaling functioning to itself and only stepping in if there is Market failure.

Vishveshvarayya wanted 10 per cent growth. That was back in the the mid Thirties. He saw there was no bottleneck in terms of educated youth or Social Mores of the sort that had existed when he himself was a young man. Furthermore it wasn't really the case that India had stagnated. Parts had sunk down, other had shot up- everything depended on Governance- but, perhaps foolishly, Vishveshvarayya and others of his generation thought that Independence would mean that the supposedly public spirited lawyers- Jinnah, Nehru, Patel etc- would fix the Criminal Justice system, fix lacunae in the Law relating to Property and Inheritance, impose equitable Taxes and thus improve Governance.
They didn't. 
The industrialists behind the Bombay Plan, which wasn't really a Plan at all, scaled down the target to 7.5 percent so as not to attract the wrath of the Socialist/Gandhian nutjobs but still got a bad scare from Liaqat's alliance with the Left- which Indira Gandhi was to repeat so as to cut her opponents down to size.

The author mentions the charismatic charlatan, Alexander Gerschenkron, and calls him Russian.  True, he was Russian born. So were a lot of other smart Americans, like Nabakov, who moved on from Germany or Austria after the rise of Hitler.  Like Polanyi who, being a foreigner, didn't understand England and so got the Speenhamland system wrong, Gerschenkron wasn't German and got German industrialisation wrong.  Investment Banks didn't just emerge out of nothingness. There was a long history of Princes working with Bankers, including Jewish Bankers, to develop their demesnes employing Technocrats like Count Rumford and Actuaries like Novalis to get the job down. Finanzkapital is Commie bullshit- actually Wikipedia says Gerschenkron might have joined the Austrian Commie party at some point- but, thank's be to God,  a charismatic charlatan he remained.

Nothing wrong with that.  Bruno Betthelheim was a charlatan. But, because Medicine is Scientific and has advanced for that reason, no great harm is currently done by his foolish theory of Autism. Indeed, it was just a restatement of the then popular thesis that 'Momism' was destroying America. If Mummy kisses you- you turn homo. If she doesn't- you go Autistic.

Betthelheim escaped from the Nazis by pretending his PhD in Aesthetics (which he'd only got so as to marry his sweet-heart who found him too ugly and rich to marry without this High Culture Credential) was actually a Medical Degree in Psychoanalysis. He stumbled on 'Autism'- actually he didn't treat any really Autistic kids; he just set up a Concentration Camp for 'difficult' Trustafarians- i.e. Rich people sent their kids to his School as a form of Punishment- and his own Charisma and Capriciousness, at least in some cases, turned out to be a good thing.

Similarly Gerschenkron discovered 'Backwardness' and used it as a means to turn his favourite corn fed Mid Westerners  barbarians into Mitteleuropean, Karl Kraus type, assholes. BUT, HE DIDN'T OPPOSE DROPPING ECON HISTORY AND KNOWLEDGE OF FOREIGN LANGUAGES AS A REQUIREMENT FOR AN ECON PhD from Harvard- i.e. he wasn't genuinely shit. Just lonely.

So Gerschenkron never had anything to do with Economics or 'Development' or whatever.  While he was in Academia, the guys who did have power w.r.t Econ and Development hadn't heard of him, and the same thing was true after he faded into obscurity. He may feature in some worthless Academic 'Availability Cascade'. But he had no influence. Everybody knows this. Yet the author of this piece on Nehru pretends otherwise.

This is what he writes-

' ...the government was to take the lead in industrialisation. This was very much part of the development consensus of those years. The early success of the Soviet experiment had, unfortunately, enchanted many intellectuals. But there was a deeper historical learning (sic) as well. The Russian economic historian Alexander Gerschenkron had argued in his theory of economic backwardness that countries that had not yet industrialised did not have to wait for the right conditions to appear. Gerschenkron had studied the development experience of Europe in great detail. He said that institutional innovation was the way forward for those who were late into the game: Germany had used investment banks to push its initial industrialisation, while Russia had used the state (he was referring to imperial Russia before the communists took over).

The Nehruvian plans had a similar logic of using the state as an entrepreneur as well as providing capital to private industry through special development banks in the absence of deep financial markets. This is the famous quest of controlling the commanding heights of the economy. A more technically correct explanation would be that Nehru wanted the state to dominate the production of capital goods and intermediate goods so that the Indian economy has enough strategic depth to withstand any future attacks on its political autonomy.

Why is this fucked?

1) Gerschenkron's Economic Backwardness shite appeared in 1962. Too late to affect Nehruvian policy.

2) India has had Econ Professors since the 1880s. Ranade, Gokhale and the Servants of India represent one strand of thought, Shyamji Krishna Varma (& Ambedkar) represents another. But the mainstream was solidly Marshallian- well, early Marshallian, when the guy was still reading Lasalle and Marx and tramping around England lecturing to Women and Working Class people and looking into the faces of real poor people seeking to divine the secret causes of poverty.

3) India had a large and growing class of 'technocrats' who were also Socially Aware, Patriotic, Philanthropists- people like Baroness Flather's grand daddy- Sir Ganga Ram. Incidentally, the bad guys in this story aint the Left. My grand daddy was a Leftist Trade Union leader. But, like Anuerin Bevan, back in Blighty, the Indian Left- at that time, not later- knew from what we now call the 'theory of externalities'. Even if they didn't, it is a FACT that ordinary Mill workers were able to see that genuine Technocratic Capitalists were Heroes of the Nation- not evil bastards. Amazingly, this included not striking against WHITE factory owners for no reason. The reason given to my grandfather- this is recorded my grandmother's memoir published in Tamil- was that the elderly Scottish Mill owner had come to India without a penny and worked damned hard. Tamils are Black- they aint stupid. The Mill Owner- maybe because he was some sort of Low Church Scot- had banned drink shops because they are the enemy of the Working Class. Obviously, due to he was a fucking working class WHITE MLECCHA, he had to back down because the High Castes could only tolerate Mill Workers making a decent wage provided they were all forced to drink and then prostitute their own wives so as to pay their bar-tab. My grandfather- who had gone to live in a worker's 'bustee'- despite his education, was able to see sense. He even sacrificed the chance to go to Jail- a la Kejriwal- and worked with the Mill Owner and the Workers- and, later, during the War, even the WHITE Superintendent of Police, to raise up the Mill Workers. They wanted Schools instead of grog shops. Self Respect Weddings. Fuck off with your theories of Backwardness. It is the 'Backward' people of India or Africa or England who want the Rule of Law and the chance to come up through Decency, Abstinence, Education and so on. Whether your name is Aggarwal or Iyer, you are fucking Backward. Doesn't stop you Building the Nation provided you don't go to College or- like my Grandfather- you are too fucking stupid to retain whatever shite you were taught there.

4) Nehruvian plans weren't Nehruvian at all. This is a guy whom the 'Mody-Lees pact' made uncomfortable. True, he couldn't join his fellow Harrovian, Winston Churchill, in denouncing it- but he definitely didn't like it. The truth is, Nehru wasn't very bright but, instead of this being a good thing, it caused him to fuck up because he genuinely didn't know (as Gandhi did) that bright people fuck up big time. The difference between Nehru and Gandhi was that Gandhi genuinely wanted Indians to be weak, poor and utterly shite. Nehru didn't. That's why people loved him. Yes, he was a stupid as shit. That's why Gandhi appointed him his heir. He thought 'this kid is as stupid as shit. In power, he will fail big time- i.e. the country will be reduced to even more shitty conditions than under the Brits. Then, Nehru will come round to my way of thinking and act accordingly'.  Gandhi wasn't entirely wrong.  Rahul's Election pitch to the Indian Public proves that a seed had indeed been sown. But some fucking Shudra of a Ghanchi- called Modi- has upset the applecart for now. Never mind. Have faith in Manu Smriti.  Sooner or later, some Pankaj Mishra type will don a diaper and return home to lead us all back to a Holier than Thou Holocaust.

Returning to the erudite Livemint article under discussion- I may mention that re-reading Bhagwati's 1969 survey article, mentioned by the author, gives us a flavour of the stupidity, ignorance and downright craziness of the  Econ Availability Cascades of the 50's and 60's. The expensive academic training received by young Indian men proved to be the blinkers of stupid Bureaucratic cart-horses. Sen escaped by waxing philosophical. Bhagwati grew a pair after leaving and concentrating on mathematical Trade theory. But what is astonishing is that these bright young guys couldn't see the obvious stupidity of their profession when it most mattered. Everybody else did.

It is completely fucked that India lost its place in the top ten manufacturing nations after Independence just because Growth theory which ignores International Trade is easier to do. It is even more crazy that Indian people- natives, guys who could speak Indian languages- didn't get that 'disguised unemployment' in Agriculture doesn't mean there's workers there who can be costlessly transferred to Industry. People still need to eat and migrants will change their dietary preference to things like rice and wheat rather than the subaltern rustic alternative. Of course, Sen's theory that they will eat five times more than they did before is stupid. Still, the kind of stupid simplyfing assumiptions you make in the class room- and Sen, to his credit, never left the class room- simply oughtn't to be made when you're playing with people's lives.

If there's one lesson from the Nehru-Gandhi years, hopefully now behind us, it is that you must first shoot all the Economists. If you want to fix Agriculture, hire agronomists and Agricultural Scientists- like Borlaug. Shoot Amartya Sen. If you want sound Money- shoot Raghuram Rajan and put in some fat bloke called Jain or Shah who has a lot of diamond rings on his fingers.
Smriti Irani for HRD, however, is fine. Nejma Heptullah has a PhD from America so keep her in Minorities even though she is now threatening to make the Parsi community embrace their bahu, Smriti, so as to boost their numbers. Don't forget, Indira was also a Parsi bahu. Give Rahul minority status. He is an educational institution in himself showing the stupidity of studying Development Economics at Cambridge.

Prof Debraj Ray, Capitalism and the inevitability of increased Inequality.

Apropos of Piketty's book on Inequality, this is Prof. Debraj Ray's- Fundamental Law of Capitalism. Uneven growth or not, there is invariably a long run tendency for technical progress to displace labor. 

There is a simple argument why this law must hold. It is this: capital can be indefinitely accumulated, while the growth of labor is fundamentally limited by the growth of population. Therefore there is always a tendency for capital to become progressively cheaper relative to labor, and so all technical progress must be fundamentally redirected away from labor. But there is a subtlety here: that redirection must of necessity be slow. If it is too fast, then the demand for labor must fall dramatically, resulting in labor being too cheap. But if labor is too cheap, the impetus for labor-displacing technical progress vanishes. So, this change must be slow. But it will be implacable. To avoid the ever widening capital-labor inequality as we lurch towards an automated world, all its inhabitants must ultimately own shares of physical capital. Whether this can successfully happen or not is an open question. I am pessimistic, but the deepest of all long-run policy implications lies in pondering this question. 


Can Capital be indefinitely accumulated? Let us take
1) Physical Capital. Urm, either it occupies space or it provides an input to something which takes up space. Space isn't infinite. So Physical Capital can't be infinitely accumulated. It can be periodically junked and sometimes even replaced.
2) Financial Capital. Can it indefinitely accumulate? Perhaps in nominal terms but not in terms of a claim on present day goods and services. However, only a small subset of what is in circulation comes under this rubric for all sorts of reasons- Legal, Customary, Government Policy etc. Furthermore, Financial Assets are less like pots of gold and more like a software program. They are the product of engineering and can go obsolete or get buggy or just do a Madoff. Assuming the Stationary Bandit of the State is on the prowl, what we can say about Financial Assets (and the sort of Inequality Piketty highlights) is that, insofar as they keep their value, under Red Queen type pressure (i.e. exhibit co-evolved complexity) they show typical Predator Prey cyclicity. Sure, from a peak, looking back, this may not appear because we no longer recognize genotypal variants which went extinct as belonging to the same species. 
3) Human Capital. Are you shitting me? Rahul Gandhi has an MPhil from Cambridge. Smriti Irani is a Tenth standard drop-out. Whom would you rather see in charge of the HRD Ministry? Nuff said.

What about the 'growth of labor'? It certainly isn't limited by the growth of population. First World War- women started to work- the labour supply increased. In a sense, Technological advances, embodied in fresh Capital goods, determine the potential increment in the Labour supply at any given time. A guy who would have had to retire at 70 may be able to earn a wage at 90 thanks to new technology. A kid of 8 might create an app and sell it for more than a Computer Studies graduate circa 1980.

I can't make sense of the rest of the Professor's remark. He's a real smart guy and knows from multiple equilibria and complementarity and re-switching and so on. His story about indefinitely accumulating Capital ignores rats- Madoff type rats (Principal Agent hazard) and Red Queen type Stationary Bandit, Bureaucratic rats, not to mention good old fashioned Depreciation.
Of course, he may be right. Maybe them smartypants on Wall Street really do know what the future fitness landscape will look like AND what's more incentive compatibility obtains such that no Principal-Agent hazard exists and what's more all the Politicians have been bought off a la Arundhati Roy or Arvind Kejriwal.

If so, History really has ended. However, this still doesn't tell us anything about Inequality. Why? Well, if History has ended then there is no driver for 'canalisation'- human beings will separate out into different species. 
I personally hope to be a pedigree breed of pussy-cat prized by bosomy women who will cook me plenty of treats and let me sharpen my claws on Amartya Sen.
OMG, if only Rahul had taken the same course, he'd now be PM! Seriously, scratching Amartya Sen's face and saying miaow and then jumping into Smriti Irani's cleavage is the only way to defeat Hindutva.