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Showing posts from January, 2021

Decision Making as Output and Bounded Rationality

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  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra
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Judiciary and Hindu Sentiments: Some Notes

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  A couple of judicial orders relating to freedom of expression and Article 32 among others attracted attention in the last few days. There was show ‘Tandav’ which apparently showed Hindu gods in a poor light. This naturally led to an out roar and leading to filing of complaints. The actors and producers and writers of the show were complained about. As police registered FIRs at multiple places, these grieved parties approached the Supreme Court for stay on the FIRs and anticipatory bail for the same. The Supreme Court refused any interim protection. Similarly in Madhya Pradesh, a stand-up comedian and his team were arrested for allegedly hurting the Hindu sentiments in their show. They approached the High Court for bail which rejected the same. These two issues have again opened up the wide debate on the freedom of expression and the limits that apply to it.   Unlike in the US where the freedom of expression is absolute, freedom of expression in India is subject to reasonable rest
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Gamestop Games!

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  In the US, there is an interesting battle going on between a group of redittors and the Wall Street. It has to do obviously with booking profits in the market. In pursuit of research on this battle where a group of redifftors are bringing down the Wall Street hawkish hedge fund to their knees, there appeared an inquisitive thread on Twitter. The tweet and the thread is available here . It would be interesting to understand what is happening through a perusal of this thread and the explanation given.   Short selling is not unusual nor something new. It has existed for years in the market. It is about booking profits through the reverse. Even in the great financial crash of 2008, there were quite a few who made money by shorting them something captured in the book Big Short by Michael Lewis. Traditionally, the speculators in the market would buy shares at lower prices and seek to sell them at higher prices. Yet, there are speculators who opt for the reverse. They sell securities w
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Notes on Punjab Politics

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  The events at the Red Fort and other parts of Delhi in the guise of farmer protests have brought the spotlight back on to the politics as it exists in Punjab. There is no doubt, a rising clamour for the arrest and crackdown of the farmer’s movements or at least the movement that is going on in the name of farm laws. The protest leaders might be busy disowning the actions at the Red Fort but cannot absolve themselves of the responsibility of their actions which led to this fracas. The protestors might have the backing of the media and the opposition parties, each wanting to hit back at the Modi government for their own reasons, but their agenda seems to be suffering a setback. However, the setback might not be visible in Punjab as it would be perhaps in Haryana or Rajasthan or Uttar Pradesh. There is very distinct Sikh identity to the current protests and thus the events would reinforce the perception that Sikh and Khalistani agenda in specific was the real agenda of the protest group
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Red Fort- A Trailer for the Future of Protests?

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  The government had warned of Khalistani infiltration in the farm protests and possibility of violence on January 26. The Supreme Court had chosen to believe the lawyers like Prashant Bhushan or Dushyant Dave representing the farm protest groups. It was an uphill task on the Republic Day to maintain security given the resources that are essential for providing security on the Rajpath. The outcomes are very evident with what happened in the Red Fort. It is no doubt a huge psychological defeat given the symbolism associated with the structure. Yet such moments have come in the life of a nation across the globe. India too has faced moments similar in the past but have conquered and reclaimed back. This too would be reclaimed. The might of the state will exert itself in the days to come. The movement as it exists might die soon. The narrative would see a distinct shift to the anti-national nature of the movement. It would perhaps be difficult to defend even though the might of the media i
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Fiscal Policy-A Note

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  The government without doubt plays a critical role in the economy. Given its volume and domineering presence, one cannot ignore the centrality of the government in giving direction to the macroeconomic plane. The role of course has been controversial and subject to many debates. There exists little consensus on the ideal nature of governmental role. While the classicalists believed the role of government in the economy to be minimal with focus on ensuring law and order, the Keynesians emphasised the centrality of the government intervention. While the classicalists favoured the supply creating its demand, it found its limitations in the Great Depression of 1929; John Keynes formulation was there was lack of demand and the government must step in to create the demand that became the foundation for macroeconomics and thus greater fiscal intervention. While the monetary school emphasised the role of money thus favouring a greater role of the Central Bank in framing the economic trajecto
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Farm Protests, Tractor March and 1982 Asiad Disruption

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  It is apparent that the talks between the government and the protesting farmers have broken down with no end to the deadlock in sight. The farmer groups apparently want a corner solution and seem to be in no mood to settle for any other solution. The government did offer them a sort of face-saver in suggesting a postponement in implementing the laws upto a year or year and half. This was perhaps in view of the upcoming Punjab elections next year and something for the farmers to boast about in those election. Yet as expected the farmer groups have rejected the same. The government would perhaps be anticipating some divisions in the groups over the latest proposals. It is conceivable there would be divisions, but would take time to manifest. The government is perhaps prepared for a long waiting period. Most groups are basically from Punjab with some from Haryana and a sprinkling from other states including Rajasthan and Uttar Pradesh.   Meanwhile there is a clamour for a crackdown
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Celebrating India's Series Win in Australia

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  One more edition of Gavaskar-Border trophy is over. The Indians have won second time in a row a test series in Australia. Two years back in 2019, India had won a series in Australia for the first time, something that eluded since their first tour Down Under at the end of 1947. Australia so as to speak was a sort of final frontier for the Indian team. Now that they have won a series in Australia twice, it need not be a mental block. The current final frontier would be South Africa where India are yet to win a series though they have won tests over there. India has won a test series in West Indies, England, Pakistan, New Zealand, Sri Lanka and of course the minor countries like Zimbabwe and Bangladesh. India is yet to play a test in Afghanistan and Ireland, the two babies of Test cricket. As India came back to win the series, the natural point of discussion revolves around the relative greatness of each of those series victories. It might be moot to have a subjective perception often b
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Judicial Restraint : A Note

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  The judicial activism in India has attracted consternation in many quarters. The past posts too have discussed at certain length the dangers of judicial activism and the possible repercussions it might have on the balance between the three organs of the state viz. the legislature, the executive and the judiciary. As long as they functions within the confines of the boundaries, they would be ok. Yet when one encroaches the domain of the other irrespective of the circumstances, then the decay starts. To the legislature, it is the fixed term that acts as a check and balance. The executive functions as subordinate to the legislature and too survives as long as it has the majority in the lower house of the legislature. Given the five year term and the consequent election or re-election, the governments keep changing. Therefore, they are elected and accountable to the people. They are punished if they do not perform. If there is transgression, there would be severe retributions from the el
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the Great Indian Vaccine Drive

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  India has begun the vaccination drive against the Chinese virus induced COVID-19 pandemic. Given the population size of nearly 1.4 billion, it would perhaps be the largest vaccination drive ever undertaken. The fact that it has to be undertaken in a very short time say about less than a year, the ambitions would be sheer audacity given the logistics involved in such a mammoth effort. It is not just about production of vaccines, but going beyond into the quality control, the transport from the plants to the different storage centres further to be distributed to the states and the districts and then to the vaccination centres. To add, the supply must be continuous with little disruption. The conditions for transporting the vaccines would have to be adhered to. Furthermore, the preparations at the each of the centres in terms of administering the vaccine apart from training the vaccinators itself would be daunting. There is furthermore need to coordinate with the people in fixing their
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Nehru and Buffer State Thinking

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  Former President Pranab Mukherjee seems to have stirred a hornet’s nest when in his posthumous book “My Presidential Years” apparently has made a reference to Prime Minister Nehru rejecting an offer from Nepali king to merge his state with India. This apparently happened during the restoration of King Tribhuvan while ousting the Ranas. The story has been floating around for decades, of course with semi-authenticity but with Pranab Mukherjee referring to the same in his book has reinforced the authenticity of the offer. It is highly conceivable that Tribhuvan did make an offer and it would not be unusual for Nehru to have rejected the same. Nehru did allow Bhutan and Sikkim to remain independent. In fact, the people in Sikkim wanted to join India, but PM Nehru allowed the monarchy to continue. It was left to his daughter Indira Gandhi as PM to ensure Sikkim acceded to India. It is possible that she would have annexed Nepal and Bhutan too at some point of time had not other domestic fa
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Central Vista and Modern Indic Architecture

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  Sometime after January 15, the construction of the Central Vista is likely to begin. The aim is to hold the Parliament Session in the Central Vista in the 75 th year of our independence. It marks the departure of holding sessions in the current parliament building a product of the colonial times. There is no doubt, that the current building while dilapidated does represent many memorable in the journey to what India is today. In emotional terms, it is not very easy to replace the current parliament building with a new one. Indubitably, there exists a case for growth into modernity of the 21 st century, there exists definitely a strong case for making buildings and by extension the architecture adaptable to the current needs. Yet, there would be traditionalists who would yearn for those days of yore. In a country’s lifetime, there are moments when one moves from the past to the present without necessarily destroying the past but through a careful preservation of the past in building
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Self Interest, Collective Interest and Evolutionary Biology

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  Market economics is based on the foundations of Adam Smith theorising the ‘Invisible Hand’. To Smith, it was an individual’s pursuit of self-interest that lead unintentionally to collective interest and thus enhances social welfare. Of course, the term social welfare was an innovation that came decades later after Smith. Many economists have built their models and theories based on the Invisible Hand paradigm. There are no doubt many examples of the same. For instance a cab driver comes to pick up after travelling for 3-4 kilometres not because of his benevolence but because of his self-interest, his interest in earning daily bread, his interest in stepping to higher levels of income. A hotelier would keep the restaurant open even in times of pandemic not because he or she cares for the hunger of the people but for their own interest in earning and sustaining their daily bread. E-commerce delivery agents functioned in the pandemic partly because of their self-interest rather than an
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