'Mind Blowing' Book!

Thinking Fast and slow, Daniel Kahneman, Penguin Allen Lane, Pg 499.

This review was published in the August issue of The CSR Analyst

Daniel Kahneman, a Nobel Laureate in Economics contributed his groundbreaking work on biases in decision making and uncertainty with Amos Tversky. The process of how the human mind works, the manifestation of heuristics and the application of different types of thinking process have been at the heart of his research. Such an exploration of individual cognition through both the fast intuitive thinking process and the deliberate logical thinking mechanism has had a significant impact in the understanding of unobserved flaws and prejudices of human intelligence. This telling revelation abou flawed intuition and quick interpretation has changed the way in which not just academics but powerful people in seats of decision making view themselves and their failure to realise their own dogmatic assumptions. That human mind is susceptible to systemic errors has made our understanding of our selves by giving us, as Kahneman remarks in the introduction, ‘a richer and more balanced picture, in which skills and heuristics are alternative sources of intuitive judgements and choices.’

The Power of Recognition

The key to understanding flaws in intuition is to primarily decompose intuition itself into a process worth scrutiny. Though expert intuitions seems marvellous to our untrained minds, every human being is capable of making excellent intuitive judgements every day of her life. As Herbert Simon remarked pithily, ‘Intuition is nothing more and nothing less than recognition.’ If intuition and the associated fast thinking process means simply skipping the steps of laborious logical thinking because we identify the pattern, then it is an extremely useful tool in the functioning of human beings. These entirely automatic mental activities through perception and memory serve us well in certain situations but give us a completely wrong picture in others. ‘Our blindness to the obvious and our blindness to our blindness’ is at the core of judgement fallacy.

Kahneman uses the concept of ‘two systems’ to understanding these two variants in thought process- the rapid intuitive understanding and the slow and tedious logical thinking. The ease of the first one and the mental effort required for the latter are dependant not only on the circumstances but also on our state of self at any given point in time. Both internal and external factors influence our choice of thinking and humans in general rely much on intuitions since they find logical thinking ‘mildly unpleasant’ most of the time. The interesting juxtaposition that Kahneman makes is between some internal factors that control our intelligence- people with greater self control usually have a greater ability to use their logical apparatus by taking control of the cognitive task at hand and allocating attention and effort efficiently even as four year old children as an experiment conveys. This association of certain personality traits and intelligence is not new but the experiments and conclusion with respect to heuristics is illuminating.

Overcoming Illusions

The pleasure of cognitive ease and inversely the strain of cognitive effort are instrumental in creating ‘illusions’ of reality in our lives. The machine for jumping into premature conclusion works with a complex system of association, memory and even lack of will and laziness. Understanding the dual self in humans has wide implications in dismantling economists and philosophers in surprising ways. The engaging read divided into five parts slowly unravels the mechanism of our cognition, the biases that favour or hinder it, the impact it has in our choices and decision making and finally the lack of recognition of our own other self. There is never a dull moment while engaging with this book since it prods and provokes us through activity based learning, enriches us through lucid interpretations and direct introduction to an astonishing range of ideas. In a way, this book encompasses the three stages in the author’s intellectual life- that of cognitive bias, alternative process through prospect theory and his recent venturing into the science of ‘happiness’. In the end, it appeals to the sceptic within us to question our easy assumptions and our exaggerated sense of understanding of the world and temper it with a more conscious effortful way of thinking and understanding that might lead us towards a more fruitful assessment of ourselves and the world around. This book is a valuable read that gives immense intellectual satisfaction to those who would like to understand the mechanism of understanding and the cornucopia that the human mind is.

Hard Choices

 

What Money Can’t Buy: The Moral Limits of Markets (2013), Michael J Sandel, Penguin  UK, pp 256

Renowned political philosopher, public intellectual, professor of Politics at Harvard University and the author of the best-selling book ‘Justice’, Michael Sandel asks some of the most important questions facing the market driven world in which we live in today in his book ‘What money can’t buy’. Sandel points out with provocative illustrations and examples, both from the developed and developing countries, the way in which market norms like sales and profit have crowded out the non-market norms and values that humans have cherished in their social lives for centuries. In a world where everything is up for purchase and consumption, where do values come in and how much ethics is practically viable? More importantly, what is the tipping point beyond which markets should not be allowed to invade society? 

Sandel sets the tone of the debate with patiently collected examples and illustrations from various fields and cultures. From paying for wombs in surrogacy to paying someone to stand in the queue, the cases range from the commonplace to the unacceptable where market values have been literally taken too far. Ideas like ‘stranger originated insurance’ where big corporations make a windfall by taking insurance on its employees to asking late arriving parents at an Israeli day care to pay up a fine, lucidly bring out the point where a fine turns into a fee and what is morally reprehensible becomes the norm. Thus, Sandel puts forth the idea that economics as a discipline has fostered a culture of monetary incentives and has simultaneously taken away stronger non-monetary incentives for inducing morally upright behaviour. This subtle corruption that has crept into our social psyche has far reaching consequences for the evolution of social behaviour and our collective conscience in determining cultural norms.

The author is not against market per se. Money is an effective way of allocating goods and services and in today’s world gripped by the economist’s way of thinking, even an acceptable way to do so. That Governments think of branding their country new, Sandel says, is a sign of times. Commercialisation, commodification and privatisation have emerged as the three powerful sources of coercion and corruption. Ultimately, the way in which a product is sold affects the moral value of the product itself. In a world aspiring to be more democratic and equal, we owe others a minimum level of equal chances and dignity that an absolute focus on wealth potential is likely to destroy. It is in our interest to resist this pernicious tendency and prevent ourselves from transforming from a market economy to a market society.

(This review was published in the July issue of The CSR Analyst, Mumbai)

A Capital Read!

A version of this review was published in the June issue of The CSR Analyst.

Capital in the Twenty-First Century (2014), Thomas Picketty, Translated by Arthur Goldhammer, Harvard University Press, pg. 685

“What the bourgeoisie produces, above all, are its own gravediggers. Its fall and the victory of the Proletariat are equally inevitable.”

                                                     Karl Marx, The Communist Manifesto, 1848

“Growth is a rising tide that lifts all boats.”

                                                       A neo liberal aphorism

The much awaited, enormously important book of the decade is out! Thomas Picketty, Professor of Economics at the Paris School of Economics and one of the world’s leading experts on wealth, income and inequality has come out with his remarkably ambitious book that dwells on the important questions of Political Economy with a meticulous historical analysis. Unearthing data collected through fifteen years of collaborative research on the historical records of twenty countries spanning three centuries, is an Olympian task that Professor Picketty undertakes to unravel the economic patters that the elusive Capital takes as it grows and dominates at times and then dwindles and evaporates only to resurface again later. The central concerns of our generation regarding the unprecedented concentration of wealth in the hands of some and the widening inequality that portends a bleak future for many is at the core of this book. In this monumental work, Professor Picketty is ably aided by his collaborators who defined new grounds in economic history- be it Anthony Atkinson who studied historical evolution of income inequality or Emmanual Saez who unearthed the growth of the top 1 percent in the US since the 1980s. This gives a solid foundation of facts and figures to back intellectual arguments. The book is divided into four parts- the first three sections devoted to developing the concepts of income, wealth, capital and the structure of inequality by a process of inter-national comparison of European economies with that of the US. The last section dwells on the measures that the author recommends to reduce inequality while being wary of economic determinism and prophetic predictions.

Acknowledging the Pioneers

The author devotes a considerable space for the work that went before him acknowledging the merits of the early pioneers and pointing out the flaws in their methodology. A generous acknowledgement is also given to the intuitive understanding of many literary writers of early eighteenth and nineteenth century on the economic travails of their times. Jane Austen, Victor Hugo and Honoré de Balzac were sensitive to the importance of wealth in the structuring of individual destiny and depicted the minute details of property ownership and rents, debts and means through an evocative language that impresses an economist today. Unfortunately, the economists themselves had to work with ‘an abundance of prejudice and paucity of fact.’ The extreme and radical positions taken by Thomas Malthus through his Essay on the Principle of Population (1798) or the travel diaries of Arthur Young prove this point. Even David Ricardo and Karl Marx through their respective works on Capital were deeply unnerved by the increasing prosperity of Capital in the hands of some at the expense of many. Till Simon Kuznets came up with a fairy tale rendering of growth that lifts everyone (not discounting his enormous contribution to the documentation of US national income data), optimism was fragile and radical prophesies was the norm. What is important about Ricardo and Marx is that they asked the right questions and did their best with the meagre economic data available even though they were subject to personal prejudice in the interpretation and their empiricism was at best rudimentary.

Capital through History

Throughout the modern economic history, Capital has executed two important functions- that of being a source of saving or housing and that of being a factor in production. From the industrial times, two major threats to Capital were thought to be technology and the abundance of Capital stock (that gave rise to the aphorism ‘too much Capital kills itself). The perception about Capital has been inconsistent with what was actually transforming it as is evident from the case of France that altered the structure of Capital twice in its modern history without knowing why. Nations hard pressed by economic downturns and political and military upheaval have experimented with different degrees of involvement and withdrawal from controlling Capital by transforming the form wealth takes, but without altering the structure of Capital stock. For instance, from the time of the Ancien Régime in France to the present day, wealth has taken the form of land, income and wages and presently business and financial capital; but the basic structure of the Capital stock has seldom altered. This is important to understand the revival of Capital especially that from inheritance in the twenty first century and the forms it will take in the long run.

In the economically tranquil years of the eighteenth and nineteenth century besotted by low growth and near zero inflation, wage stagnation and improved access to foreign capital bestowed by Colonialism, Capital prospered in Europe. What truly shattered the core of Capital was the first World War in the twentieth century. The tumultuous years following the war and even the inter war periods saw the intervention of the State at unprecedented levels, the documentation of national income, the advent of income taxes and the journey of democratic hopes and meritocratic ascent began. The United States, which had lower levels of domestic inequality than Europe and limited foreign capital owing to absence of colonialism, became the creditor to Europe. The war that destroyed the Capital of many developed countries like Germany and Japan also led to their eventual catching up with the US that led to the coinage ‘Trente glorieuses’ (the glorious thirty years) in Europe and ‘The Gilded Age’ in the US. Post Thatcherism and public disinvestments coupled with low growth, the beginning of the twenty first century at least expects the return of the Capital and accumulation of private wealth leading to ever widening inequality between the poorest and the richest.

Structure of Inequality

The reason why this book was written is explained by the author half way through the book at the juncture inequality is explained. Wealth is so concentrated that a large section of the society is unaware of its existence; so that some people imagine it belongs to surreal and mysterious entities, he says. There are perennial sources of convergence and divergence in the distributive aspect of wealth. While diffusion of knowledge (skill, education and technical know-how), free and open trade that mobilises finance and in turn encourages large investment in education, a stable legal environment with a legitimate and efficient government, demographic growth, inflation and time (through the process of catching up) are all agents of convergence that reduce inequality, there are equally potent sources of divergence in today’s world. The astronomical pay of top managers that is inexplicable in terms of marginal productivity, we know of the ‘black holes of growth’ that we observe in the developing countries. In countries like India, for example, the liberal estimate of growth does not match with the squalor of lives in many sectors leading economists to believe that a disproportionate share of growth might be apportioned by the top deciles in the economic hierarchy.

The impact of the book

The return of Capital and the increasing inequality compels us to take a different approach. The author recommends the return of the State albeit after an economic modernisation that is willing to invest in skill dissemination, setting wage scales and evolving progressive taxes on income and Capital. The modern redistribution has to be in terms of services that the poorest half can avail of. A rethinking on marginal productivity of the top managers, increasing economic transparency, Capital control and protectionism, the question of public debt, inflation and austerity and the role of the central banks would be put to scrutiny. What sets this book apart from others on these questions is many. The intellectual rigour of the arguments backed by meticulous research of historical records and comparative analysis of data is primary. The fundamental focus of the book is long term which in part justifies the ambitious title that encompasses a century to come. Professor Picketty is wary of economic determinism and boldly criticises a school of economists that has failed to get over ‘its childish passion for mathematics’ so that theoretical speculation precedes historical analysis and collaborative research. This point particularly augurs well for the discipline by compelling it to look inwards and transforming its methodology and shedding its pretence of scientific security at the cost of honesty. The book also scores in the method of presentation clarifying definitions and using a gripping narrative to take the momentum along. Finally and most importantly, the core of the book testifies to the central contradiction of Capitalism and keeps the well being of the least well off at the centre of focus through a democratic control of Capitalism and economic transparency. The book encompasses what we refer to as the developed world, but its lessons may after all prove to be uncannily relevant for the developing.

Bond With The Best

The quintessential Bond stories are to be read in long train journeys that most Indian families take annually when the schools close for summer. Summer in India is not just monotonously long days with heat waves; it is one of the most beautiful times of the year, with cassias and flames of the forest bursting in a riot of bright colours, with the ice-candy man matching his gastronomic treats to the vibrant summer hues, kite flying during the days as much as mango stealing, star gazing at nights where meteors shoot past delivering wishes like postmen who bring love from old friends and pen pals and even the much cherished mango showers with its thunder and deep rumbling. It is a festive time of sorts and new friendships are to be made with books and authors. 

 

When I was growing up, the staple of my summer holidays was an issue each of Tinkle and Amar Chitra Katha during these famed train journeys (that I would finish very quickly to the deep consternation of my father) and the occasional Champak. Tinkle and Amar Chitra Katha are Indian comics while Champak is a literary magazine in English and Hindi for young readers.  I did come across the beautiful mountain stories of Ruskin Bond, that Anglophone writer from the Himalayas who wrote poignantly, the angst of adolescent life amidst an indifferent adult world and a deeply empathetic natural world. The Chirs and Pines, the railways, the cottages with cherry trees, the languid town of the hill people- all of this  was an alien exotic land for the sea breeze loving beach going ‘plains’ girl that I was.

 The best of Bond came when he was just seventeen, fresh out of a public school and on his way out of India into the world. He carried the Himalayan town with him and while abroad at his aunt’s in Channel Islands for a year, working and going to the movies every day. He went back to his memories of friendship and his earliest literary encounters in India to quell his loneliness elsewhere. In the year he spent as a civil servant at the Island and thereafter in London, he always roamed quietly like the leopard of Kasauli, restless and fretting inside, while darting about from one island of solitude to another. He wrote The Room on the Roof, that was kindly encouraged by his editor and it went on to win the prestigious John Llewellyn Rhys Memorial Prize for the best first book by a writer under thirty.

Ruskin Bond lived the rest of his sixty years until this day, writing to pay his bills, just like the other writer who the same editor introduced to the world- V.S. Naipaul. He has over 500 works to his credit, an oeuvre that includes poetry, short stories, novellas and essays all filled with his delightful vantage point and his impish humour. His latest book Love Among the Bookshelves speaks fondly about his early literary influences with excerpts from his favourite authors. It is a glimpse into the adventures of a bookish boy who skipped sports in school to read and wrote stories only to be flogged. The banality of the adults around him only spurred him on to more adventures with Wodehouse and Bates, a stock of British fiction, comics and classics that he goes back to this day.  A rare account of his London days and Channel island days add a wonderful background to the works and foreground to a stunning career of over forty books for children alone.

The illustrated verse volume Hip Hop Nature Boy and Other Poems is a joy to read.  It has poems on animals, birds and trees, on love, loss and longing, on peace and collective aspirations of humanity. Of course, ghosts haunt a few pages and truants play in the bright morning sun. It seems as if Bond would dream with such tenacity that the world would change with the sheer force of his words. In his poem ‘IF Mice Could Roar’, he says

‘If a tortoise could run

And losses be won,

And bullies be buttered on toast;

If a song brought a shower

And a gun grew a flower,

This world would be nicer than most!’

Such a flight with poetry to reclaim happiness and beauty, childhood and innocence, silence and solitude and summers with love and books is within our reach now.

The Luminaries

 

   

The Luminaries, Eleanor Catton, Granta, 2013

“There is no truth except truth in relation and heavenly relation is composed of wheels in motion, tilting axes, turning dials; it is a clock work orchestration that alters every minute, never repeating, never still.”  

                                              

Eleanor Catton, all of 29 years won the 2013 Man Booker Prize for her second book, The Luminaries. Born in Canada and raised in New Zealand, Catton had literally travelled pole to pole, wondering at the sky turned upside down and all the restless inhabitants of the firmament, who with their limitless influence on the human life beneath, would partner her in grand and breathtaking story telling. The book begins with the arrival of a stranger in the gold fields of New Zealand in the 19^th century. He abruptly enters a stormy world of greed, passion and ambition and soon becomes an impromptu witness and inevitable insider. The intimate world of a digger’s town, rankled by a series of mysteries too incredible even for the schemers and conspirators, is slowly brought to light. It seems as though every man in town has an insignificant piece of the puzzle and a great claim to the outcome of fates. The sea farers, opium traders, masters and slaves are thrown into a devilish world of death, disappearance and treasure. In a land where every fellow is a stranger to the next man and foreign to the soil, the muddied and stained states of affairs conjure up unlikely alliances. 

A young heir to great wealth goes missing on a night an infamous prostitute tries to commit suicide. A hermit in the woods ends up dead with immeasurable wealth stowed away in his cottage. A harmless trunk disappears, a strange woman appears with occult powers to exorcise secrets from planets and stars. A rich tapestry unfolds to reveal a brilliant and exquisite story that gradually impacts the reader with a style that is substantial, grounded and strong. 

Catton remains true to the moods of strange times in a virgin land that is slowly being ravished by all kinds of men. The subtle pull of tension between the white man and the aborigine, master and slave, man and woman- all of whom covet wealth and safe passage to a serene future- is brought out exceptionally well. The capricious ambience of a gold mine that lures and traps men, smothers and nourishes their ambition, leads to unimaginable conflicts in the lives of the characters. In a land where one wills his destiny through the sheer acuity of one’s perception as if one is playing at whist, death and danger lurk like shadows. The only thing that is fixed and unassailable is what the mythical stars weave with their cold hands over slouch hats and flayed corpses- inchoate tales of elusive destinies. A brilliant book from a promising author!