Saturday, September 30, 2006

Of preserving languages and culture!!

The Karnataka government wants to remove English as a medium of instruction and promote Kannada as the sole medium of instruction in their educational institutions. The stated purpose is the preservation of the language. During my brief stay in Bangalore I noticed a deep resentment among local students and bureaucrats towards people from other states who had settled in Bangalore. I was once rudely asked to leave a government office (where I had gone requesting for some data), because I did not speak Kannada. My co-worker was resentful of North Indians who with their fancy english accents were getting all the jobs in Bangalore. I do not have much experience with the language issue in other places. Tamil Nadu of course is a whole different matter. The same politicians who say we have to preserve Tamil send their kids to English Medium schools and abroad. I was studying in Tamil Nadu during the anti-hindi movement. Sixty years since independence it is obvious that Hindi as a language is essential to travel within India and world over Indians have a new respect because we speak English. I have nothing against the Karnataka and Tamil Nadu governments wanting to preserve Kannada and Tamil. I know most parents aspire to send their children to an English Medium school. I would like to know which vote bank Gowda is targeting.

Friday, September 22, 2006

Papers to go!!

I am pretty impressed that in the last year or so I have learned to write 3-4 page papers, as first draft ideas without much effort. Some of them seem like very good ideas and others need to be trashed. The problem however seems to be going beyond the first draft and churning out a meaningful story out of the scraps. That is the next stage I need to progress to. Prof. Wagner's class is an awesome opportunity to do become comfortable articulating ideas. I usually shy away from scholarly comments because of incomplete knowledge. That is another hill to climb now. I am reminded of what KP said long back. The trophy is always at the top of the next hill. However, I am pretty impressed with myself that I have atleast learned to articulate first ideas and not be quiet atleast in paper workshops.

Thursday, September 14, 2006

Why I hate hardcore Austrians sometimes

Sometimes I wish to completely dissociate myself from hardcore Austrians or anarcho capitalists. They live in Utopia. They think they can just get rid of the government in one wide sweep and a spontaneous order will just emerge within society and take care of everything despite generations of individuals in society who have grown up with the unshakeable belief that the government has to take care of them come what may. I am not saying those who think government has to do all are right; however, there is no reason to be rude to those who think we have to start from how things are right now, rather than think in terms of ceteris paribus and an ideal world all the time.

These 'elite' may be extremely intelligent and have high IQs but they have no sense of ground reality. They believe that a million jobs will be created overnight and that hunger and starvation will just disappear. They do not understand that even with emergent systems things do not happen overnight and there is a time lag between mechanisms falling into place and benefits spreading out. All they want to do is theorize sitting in their comfortable couches and complain about how the government is screwing everything up. I DO NOT DENY THAT THEY SOMETIMES HAVE WONDERFUL IDEAS ABOUT HOW THINGS CAN BE MADE BETTER. What they do not realise is that if they were to preach the same truths in milder language without abusing others and sounding insensitive to the real concerns of the population a lot many more people would listen to them.

I have attended on an average two seminars a week on Austrian lines. for a whole year now. Not a single one of them has been devoid of tirade. For a conservative person like me it is difficult sitting there listening to verbal abuse. But I know these guys have interesting and truthful points to make and am willing to give them concessions. Not everyone does. I think this is why everyone dismisses the Austrians as a bunch of lunatics. From stories I have heard of Murray Rothbard to the current leading Austrians there is much verbal abuse and less progressive action, and I am embarrassed that three generations of brilliant Austrians have still been unable to make mainstream economists look up and listen to them. Menger, Mises and Hayek are still respected, I believe because they put their anger and frustration towards leading a community towards change, not by fussing and fuming and using the f word everytime the words government and macroeconomics are mentioned. The fact is both of these are here to stay and will remain as long as the other. The Austrians cannot wave a magic wand and make these disappear overnight or even in one generation. It is going to be a few generations of persistent reforms without abusive language to make them go away.

Milton Friedman brought in a revolution in just a few years. But he is also a mild mannered man who sticks a knife through your bad ideas with smiles and laughter and without you even realising that you have been struck down. I wish the Austrians would take a leaf out of this short man who has the respect of academics and commoners alike around the world.

Wednesday, September 13, 2006


I am not ready for methodological studies. I do not think I get it. It took 5 days and several re-readings to understand the first chapter in Menger's "Investigations into the method of social sciences with special reference to Economics", and it is only 5 pages. What was the learning? Left my brain muddled and uneasy and unclear about even the things I knew for sure about methodology. I am guessing it was easier in the original German version and translation has rendered several sentences cumbersome to read. However, its not just the language, its the content that is too heavy for me at this point. I just do not know enough to internalise these things. Hopefully things will improve soon.

Monday, September 11, 2006

Economics of Prayers

I think we can make a model of 'Prayer Optimization'; i.e, we can find out the optimum number of prayers that are required to a desired goal. In my case the last week or so, I urged everyone I met to pray for me so that I passed my Macro Prelims. The request got passed around and I know several people prayed for me in addition to my additional prayers. Result!! I passed!! I did not do the same for Micro and the results were disastrous. Now I know what I need to pass exams, irrespective of my preparation or performance, just the optimum amount of prayers.

Its not difficult for me to imagine that prayers help achieve goals, after all Indian politicians, movie stars and other public individuals (private individuals do the same, but the media does not care about the common man as much as about why Urmila Matondkar should receive the Guinness Book mention) offer elaborate offerings and prayers to succeed in election campaigns and such. The presence of multiple gods and goddesses makes it complicated though, especially because some gods are not happy if you show lots of attention to other gods and crave all the attention to themselves, and will go all out to disrupt your prayer cycle in any way possible (something like the Greek gods in the Iliad). So the number of constraints in the Lagrangian will be a lot for some gods than others. I have in my classes worked with a maximum of two constraints and with equality conditions. However optimizing prayers for any god or group of gods involves using the Kuhn-Tucker conditions and multiple constraints. Besides I need to account for the fact that I live in the US and Indian Almanacs are yet to be drawn for US skies so I am disadvantaged already in not knowing the auspicious and inauspicious times to pray, study, start new projects etc.

So to optimize my potential success, I need to first, with the utmost haste, learn the ancient Indian texts to make the Indian Almanac for US skies. Then I can calculate the optimum amount of prayers I will be required to do using a simple lagrangian (well not so simple, but hey I can use computers to do most of my dog work can't i?). Hopefully I will have all of this done by the time I take my exams again in January!! :) Then in addition to being successful in my exam and my course, I can also become a successful entrepreneur!!

See!! I can use economics everywhere. All I need is an incentive, and I have a lot of incentive to develop 'prayer models'. Imagine all the power and attention I will get from the Indian community here and also politicians etc. I can predict elections outcomes and since I intend to be the monopoly, I will charge just below the average cost of my potential entrants and I am assured of keeping my monopoly status for a long time (not forever of course!!).

Hmm!! Seeing that I do know micro somewhat, atleast enough to know that incentives matter and where a monopolist should price to avoid potential entrants, and know that I cannot keep my monopoly status forever due to innovation, I see clearly that it was lack of prayers that led to disastrous results!!

ps: Count the number of personal pronouns that point to me!! Self centred glory!!

Saturday, September 09, 2006

H1-B Visas

Is it true that H1B employees are paid below what similarly qualified local Americans are? If that is true, then American fears of job security would be heightened, because the cost to company of hiring H1B guys would be lower than that of hiring local Americans and rational profit motivated organisations would prefer to hire the former. The H1B cap has been reached for 2006. However, a considerable chunk of the 20,000 (each for 2005 and 2006) exemption for individuals with US Masters or higher degree still exists. This study here, shows that there is no clear correlation between increase in immigrant employment and loss of jobs for American born individuals. The H1B cap is like a quota on employment and works the same way. Companies employing foreign individuals spend increasing amounts of resources on finding different ways to go around the quota restrictions which is wastage of resources.

Friday, September 08, 2006

Voting and Violence

Prof.Levy's History of Economics classes have been fun. I have had other history classes before but this is the best history class I have ever had. We are doing the economics and public choice of Homer's Iliad right now. Yesterday, we talked about how the pre-history of the gods was violent and bloody, and how Earth and Olympus were common to all gods and the rest of it was chosen by lot. The distribution was unequal so that it remains 'fun' for the gods. What I came back home with was the following idea, which is so obvious now in retrospect. If every vote counts and if there is a bimodal distribution then the population size matters a lot and both groups know that by killing one or a few people in the opposite faction they can win. Thus there is inherent instability, violence and lots of killing.

I can take this idea home to the small town and village politics in India. The way the political system works (to my limited knowledge) is that there are local representatives in the state assembly and parliament. In many cases there are two strong contenders and others vying for the same constituency. The contenders can try to persuade through fiery speeches or bribe the population to vote in their favour. However, there is no assurance in the absence of threats and coercion that individuals will vote the way they said, since ballots are secret. So kill a bunch of people in the opposing camp, that increases your chance of winning in two ways, one through the number of people capable of voting for you, and the second the killing sends a signal to the rest of the population that they should vote for you if they value their life.

Hmm! That does not seem like a bad idea at all. Especially since violence does escalate during elections in India. By the same logic booth capturing also makes sense. If you know a certain locality is the strong hold of the oppositon and all those votes matter then just capture the booth and ensure that your candidate wins. It would be a cool statistic to find the correlation between number of election violence deaths and margin of victory.

Wednesday, September 06, 2006

The Stepping Stone for success

I remember a few years back I spent the day after the FPM Comprehensive results with Karthik trying to console him and plan strategies to make sure he passed the next time. Our combined efforts helped him pass and since then he has graduated and has a great job. He did take his failure very much to heart and worked hard to be where he is today. Guess its my turn to console myself and move on. I know not what went wrong, but I am ready to go on the offensive now and beat this thing.

Sunday, September 03, 2006

Demand curves always slope down!!

A few weeks back Ali and I were at the Indian store buying stuff and we saw notices that said "Please limit your lentils purchase to one packet". The lentils cost more than usual, and I was wondering why when we noticed the notices. Although, I needed lentils I put off my purchase for later and decided to shop around for cheaper prices. I could wait a couple of weeks or even go without lentils for a while and have kidney beans instead. The economist in Ali was curious about the notices and we asked the owner about them. There had been a shipment delay and therefore a reduction in supply. Obviously prices went up and the owner also placed quantity restrictions. The price increase made sense, and it was more than enough to deter me from purchasing lentils, but why the quantity restriction?

The buyers at the store are a good mix of students, middle and high income families. About half the student population does not have aid and the other half has low after tax incomes (yours truly included). My guess is that the first two groups atleast would respond reasonably well to price changes, so the case for the notices is weak. If the store owner knows that demand curves slope downward, and I am pretty sure he does, why would he put up those notices? Are they just additional deterrants? Any ideas?