A LIFE THROUGH THE AGE OF EXTREMES

‘Many years later, another Marxian rephrased this as the choice between socialism and barbarity. Which of these will prevail is a question which the twenty-first century must be left to answer.’

                                                               

                                               -Eric Hobsbawm

Having seen a century come alive with ideas and hopes of humanity, Justice V.R. Krishna Iyer touched so many lives wandering in many worlds- as a lawyer, jurist, minister, writer and humanist. His was a time and age both enriching and challenging, it was an era of two worlds battling out for narrow supremacy of ideologies and he stood by those who were left out of as the vanguard of justice and the voice of the voiceless. His reading of the overarching architecture of justice was through the mind of a meticulous philosopher but also with eyes that acknowledged human struggles. Towering personalities of his generation have left us a legacy and a message that the purpose of life is a life of purpose. The miracle of life is not to fly but to walk on earth. To wipe a tear and to bring a smile has been his mission in life, a literal translation of Gandhi’s Talisman. To fill what is empty, we have to empty what is full; as the Bible says, ‘If the clouds be full of rain, they empty themselves upon the earth.’ 

Nations exist not only as a testimony to territory or integration of a people but also to the aspiration of something more inclusive and just. This re-ordering of the social system is what is envisaged through a ‘transformative’ Constitution like that of India. Our Constitution is unique in having the just reordering of the social order as its ‘grundnorm’. Our lives are horizontally and vertically divided by the hierarchies of gender and caste, but the vision document and the well spring of law speaks of an egalitarian world and the well being of the poorest through not only Fundamental Rights but Directive Principles of the State Policy. That it is a directive to the state and speaks about the outcome of governance is often forgotten. Justice Krishna Iyer’s judgements on the bench reflected the highest ideals of this aspiration whether it be trade union rights or Muslim personal laws. His verdicts brimmed with the melody of justice along with the felicity of the English language itself.

No country is perfect let alone a country like ours of gigantic proportions. It is simply unacceptable that 400 million go to bed hungry every day and only about 3% children make it to post-graduate level education. The nouveau riche is in a stupor from which they do not want to wake up. The ones in the squalor are crying hoarse yet we build our edifice of development razing down the hovels of the poor to conquer the earth and beyond. A partition in our souls will be more dreadful than the partition of our soil and an India that belongs to only a few will easily become an India that belongs to none.

To build a just and fair world, the beginning lies not only in imagining the future but also in re-imagining the past. The past is the mirror that holds us in firm stead of actions- it is the ashes from which we are reborn as new. In an age when idealism is slowly fading away and armed violence and wilfully created epidemics are invading our vision of future, Justice Iyer’s presence will remain an assurance and inspiring example of never retiring from being human and humane.

Rethinking Poverty

Poor Economics: Rethinking Poverty and the ways to end it, Abhijit V Banerjee and Esther Duflo, Random House India, 2011, pp.404

Development Economics has grown in content and importance in the last few decades. With the ushering of the Human Development Index, a distinct way of looking at development began that encompassed not only improvements in economic indices but also in human life indices. This picture sometimes complemented the GDP sketch but often contradicted it. Ideas regarding national economic policies, allocation of resources and the role of the state and market have undergone tremendous transformation. So have our assumptions regarding poverty and especially how the poor live, think through and make choices in their lives. This ‘othering’ of the poor and the generalizations that we make of them in economic and social theory and literature are at best plausible guess and at worst complete misunderstanding. ‘Poor Economics’ is an important book that brings the narrative of the poor from eighteen countries to the poverty story, as the dramatic personae of history, source of creative thinking and as human beings with agency and power who are as sophisticated and as capricious as everyone is. It is in capturing this complexity and richness without reducing those who are economically poor, that the book succeeds.

Lives and Choices of the Poor

The celebrated economists Abhijit Banerjee (MIT professor and Infosys Prize winner) and Esther Duflo (winner of the prestigious Clarke Medal and the Infosys Prize this year) have pioneered the use of Randomised Control Trials (RCTs) that are basically experiments with people as they live their lives. RCTs are used in medicine to test new drugs and by imitating them in Economics, we can analyse policy prescriptions and judge their efficacy. By observation method, the authors argue that it is possible to make good judgements and accurate assessments of what life situations impact the poor and what does not, through the evidence of their own lives. For instance, in the chapter that explains why schools fail, it was found that the schools do not expect the students to do well in the first place. Changing expectations required a little commitment, expendable energy and effort of the teacher. Despite laws and policies in place, if this simple human factor is missing, the policy will be a huge failure on the ground. Often, it was small changes that made all the difference to a policy and not complete overhaul or rethinking.

Policy Implications

This study has policy implications as understanding the real causes of poverty will help channelize global resources through the appropriate projects of alleviating it. Placing distributive (government services) and redistributive (welfare schemes) of the government and donor aid and support in context, the book discusses different policy issues - poverty trap, public health issues like malaria eradication, education policy and the Constitutional framework, pensions for the elderly- with real time case studies and some accessible solutions.

The insights of the book have implications both to policy design and implementation. The authors agree that eradicating poverty through creative interventions is extremely important on two counts- the moral imperative that it is unacceptable for so many not to have a dignified life and the economic imperative expressed by Amartya Sen as ‘intolerable waste of human talent’. The reasoning of the book is by pondering over specific questions as opposed to broad strokes of universal preoccupations. Secondly, the work stresses on the evidence from the ground not only as empirical but also the only litmus to theoretical understanding.

The message of such an exhaustive and interpretative analysis is that ideology and ignorance should not blind policy makers to scientific rigor, openness to learn and understand with fresh perspective and prioritise those policies that are relevant to the lives of the poor. It is in bridging the gap between the expert and the public through nuanced understanding of human lives that this book sets a trailblazing trend.

THROUGH THE LOOKING GLASS

Ha Joon Chang, the Cambridge economist enjoys myth busting. His engaging work ’23 Things they don’t tell you about Capitalism’ explains how the economic system works in an increasingly capital intrusive world while deconstructing myths and beliefs about it. This book is both important and persuasive for this reason, and leads the way to open up other ways of understanding the global economy and how nations perceive it , act and interact in it. The financial crisis of 2008 was the second largest economic crisis in human history and paved the way for a systemic change in responding to perceived economic laws. There was a huge drive world over and significant pressure on the developing countries to reduce budgetary deficits through the curtailment of welfare entitlements and public investments. This push has been the result of a particular brand of capitalism called the ‘free market ideology’. This school of thought puts faith in the unlimited rationality of individuals and the capacity of the unfettered market to bring out just and efficient outcomes. The belief in the capability of the unrestrained individual and the market comes from the idea that wealth creation benefits everybody. It is this credo that espoused credit fuelled consumer boom and it is this line of thought that Ha Joon Chang’s work attacks.

Toward Active Economic Citizenship

23 things proceeds like a user manual to understand and critique free market ideology by dissecting 23 points that counterpoises general received wisdom about the economic system. The objective of the book, the author claims, is to equip the average citizen with enough robustness of judgement to question ‘expertise’ so that eventually capitalism works for all of us in a better way. The author begins with the important disclaimer that attacking the free market ideology is not the same as attacking capitalism itself. Capitalism is the best form of economic system that humans have invented so far. But the main challenge is to make it work for everyone, the developed and the developing, the expert and the novice, equally well. This calls for an active economic citizenship that enables each individual to defend her interests well.

In order that the way to enlightened economic participation begins, 23 different myths about our beliefs are engaged with in a lively and pertinent manner. These 23 things include the mundane, the abstract and everything in between. For instance, ideas about capital, capitalism, decisions of governments and the working of technology are discussed with trenchant examples and contrasts from different parts of the world. Propositions like whether the washing machine has revolutionised the world more than the internet has been taken afresh and debated with the logic of the economist and the author’s inimical humour. Nothing escapes the rigour of economic thinking. The instances are from everyday lives of peoples and nations, even though the explanations are lucid and the examples extra ordinary. Every myth begins with a statement of the obvious thinking and an analysis of that in the following passages with examples that prove the contrary. Active agency is implied throughout the work beginning with ‘what they tell you’ to the responsive counter arguments.

Chang does not just stop with critiquing the present model but goes a step further and proposes an alternate model for rebuilding the economy. He does not believe in the tinkering of the existing system through regulation, codes of transparency or restraints. What he challenges is the fundamental premise of such an economic thinking and hence looks for systemic overhaul. He believes that in order to organise capitalism in a more efficient and rigorous manner, recognition of the limits of human rationality, presence of human agency and the significance of moral core of humans is important. We have to separate the financial from the real economic activities. The emergence of a strong government and active economic citizenry is important in this respect. This deceptively powerful work is both a commentary on the present economic system largely followed in the world as well as a vision document for an alternate future.  

(This review was published in The CSR Analyst, November 2014)

'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.