Decision Making as Output and Bounded Rationality

  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

Quad Summit: A New Triple Entente?

 

A few days ago, the Quad hosted the first summit at the leadership level. The Quad has been an informal grouping of four countries having stakes in Indo-Pacific region. These countries are United States, Japan, Australia and India. The groundwork for Quad grouping had begun quite earlier, yet for a fairly long period of time in the last decade, the moves were tentative. The exercises planned for navy and other armed forces did hit roadblocks since Australia backtracked ostensibly under the Chinese pressure. It was only in the last five or six years that Quad has got a fresh lease of life. Under Donald Trump, the United States moved into a sort of confrontation from a denial with China. As the move gathered speed to counter China, the Quad became a tool. India too has been seeking to build up some counter though officially denied towards China. Interestingly of the Quad countries, it is only India that shares land borders with China and has had a long standing conflict with it. India has been the only one that resisted the Chinese initiatives like One Belt One Road which was nothing but colonial exercise in disguise.

 

The grouping has shied itself from claiming to be some kind of new NATO. NATO originated in the post World War II era when the Soviets seemingly challenged the US. It was essentially force to keep the counterparty at bay and continue with the balance of power doctrine in the European continent, just that US replaced Britain as the flank power on the West. China without doubt has emerged as the power in its own right and seeks to use it unabashedly. It doesn’t pretend to follow international rules and carries on its own when it comes to its interests. Not that this is something surprising, but it remains unhesitant to use money to buy influence in the global market. It was considerably helped by the movement of the US manufacturing to its shore in search of lower costs. To add, the political advantage of playing to the US gallery of being anti-Soviet helped it to gain currency in the Cold War years. It did not mind being treated as some sort of subservient in the Cold War and bid its time. It in a very soft and implicit manner captured the Western institutions that would act as decision influencers. Given its influence peddling, many Western countries as with countries in the global South have been hostage to Chinese interests and ambitions. In this context, despite the informal acclaim, the leadership summit of the Quad is something significant.

 

The first meeting of the Quad saw it delineating its priorities. These have manifested in the form of the working groups. The first one without surprise was related to tackling the pandemic induced by the Chinese virus. The plan is to produce the US based vaccines in India with financing from Japan and helped in logistics by Australia. While it might reinforce the perception of India being pharmacy of the world, critics do point out of US seeking to take the glory while the hard work being done by the others. Yet, it is an important step since it would help in diversifying the supply chains away from China. However, given the US propensity to deliver vaccines first to itself as is evident currently, one must await how this plan would take off. If it were to take off only after US fulfils its priorities domestically, it might not be sending a right signal of providing global healthcare to the rest of the world.

 

Secondly, the Quad leadership proposes to set up working group on climate change. This is a radical transformation from the times of President Trump who had withdrawn from the Paris accord. President Biden brings back the Obama era focus on climate change. India has been strong on climate change in recent years. The focus now is on being the leadership role in the solutions than the obstinate hurdle in the guise of global North-South divide in the earlier years. India’s transformation is somewhat significant in the climate change negotiations that are underway. The Quad might be of significant help as India transits to clean technologies in its bid to reduce greenhouse emissions.

 

The third proposition has been to set up the working group on critical technologies. This is perhaps the most important of the steps the Quad seem to be taking. India has been kept away from accessing US technologies on various grounds. This might see a shift with India gaining access to these technologies as it helps in climbing the value curve. This occupies a greater import in view of the Chinese quest for capturing the 5G space. Huawei has been facing flak in many countries yet there is reluctance in banning the firm in its quest to monopolize 5G. As the world seeks an alternative, it would be of importance for the Quad to come together and collaborate in building the 5G network. While the US firms have made some headway, Indian firms like Reliance too have been working in the similar direction. Japan’s expertize in technology too would add lot of value in the collaboration. India’s gain in this would learning the technological expertise which would help in its own journey of capturing the top spaces in the Smiley Curve. China might have captured the spaces in means that were perhaps not above board but what cannot be denied is the outcome of their ventures. They have managed to capture critical technologies and are now using against the West itself. It is not something different in the way US captured the frontier technologies from Britain in particular and Europe in general during the heady days of the Industrial Revolution. Critics might point towards US getting a taste of its own medicine. However, from the Indian point of view, the greater threat is from China.

 

The summit has avoided making any ostensible explicit references of being the military alternative to China as such, yet its statements on the Indo-Pacific and South China Sea are enough pointers towards its objectives in the long run. The Quad might not be pointing to be a Indo-Pacific equivalent of the NATO with China replacing the Soviet Union in the new Cold War, yet in the years ahead one cannot rule it out. What it seems currently is the Quad summit is the first step in creating a twenty first century Triple Entente. If the original Triple Entente was a reaction to the European geo-political winds that eventually led to the World War I, the current round would perhaps be the answer to the Chinese attempt to change the geopolitical equations that have held steady over the last few decades.

 

 

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