The crisis in Agriculture - another example of Indian institutional hypocrisy

What possible generalizations could possibly be generated about the Indian society? A couple of surveys that I have gone through tell me that Indians are extremely sensitive to power structures and the powe-distance equation is one of the highest in the Indian society. The other one tells that (after probably the United States) India is a deeply conservative society with a decidedly libertarian slant.

This then means that Indians intrinsically despise big, interventionist form of government and value private enterprise and the dignity of hard work.

But most of us would also agree – if not openly then in sercret, that as a race we also practice a certain deviant kind of hypocrisy. We proudly talk of our "unique" ulture yet shamelessly cling to western modes of lifestyles and status seeking in our minds as well as public lives. Our political class talks of “socialism” and “aam aadmi” yet “aam aadmi” is the one getting hammered and impoverished by the day.

One of the most corrupt politicians in contemporary India have been Mulayam Singh Yadav and Mayawati. And both standing for the downtrodden and the “aam aadmi”. While Mulayam has named his party as “samaajwaadi” (socialist) party, there is scant “socialism” that he practices. Witness his lifestyle and the way he runs his own party – and you would realize that he is the most “un-samaajwaadi” leader around.

Mayawati talks about empowering the down trodden and the underclass. Yet if you travel to UP you would realize that the only person she has empowered is herself.

Let me now draw this debate to Agriculture. Yes, India is an agriculture-dominant country with around two-thirds of the population directly dependent on this. Logic would say that Agriculture should be the focus of this country’s legislative and governance apparatus.

Yet, as we see in this article by P.Sainath, how the simple peasant are being given short shrift by everybody – the institutions, the bureaucrats, the government and even the “average thinking Indian”. All of them are too busy chasing the images of western lifestyles and worldviews.

You must pay attention to the following quotes –

“It means over a quarter of a million Indian farmers have committed suicide since 1995. It means the largest wave of recorded suicides in human history has occurred in this country in the past 16 years. It means one-and-a-half million human beings, family members of those killing themselves, have been tormented by the tragedy. While millions more face the very problems that drove so many to suicide. It means farmers in thousands of villages have seen their neighbours take this incredibly sad way out. A way out that more and more will consider as despair grows and policies don't change. It means the heartlessness of the Indian elite is impossible to imagine, leave alone measure.”

http://bit.ly/exbqkm

On the measurement of Emotions and new methods of Data Interrogation

In socio-cultural studies, one of the big pre-occupations in the last quarter of a century has been about mapping and measuring how people take decisions.

New disciplines have either been enhanced or emerged from this very quest. Neuromarketing has come to occupy almost a hallowed place in any serious marketing conclave. Behavioral Economics is no longer a fringe study, but rather something that is central to a substantial number of consumer discourses.

As somebody who’s job description will certainly include the phrase “culture watching” I am constantly confounded by how the positions taken by the Advertisers/Marketers/Neuroscientists and the Quant/Wall street types are diverged so as to occupy almost extreme ends of the spectrum.

While Marketing has come out of its obsession of accurately measuring people’s emotions. The dominant view point being that “sentiments” or “emotions” can never be accurately predicted leave alone measured. What one can measure are the physiological/cognitive surface markers of them. (Eye movements, head tilts, breathing rates etc)

Researches by Gerald Zaltman clearly posit that more often than not, the decisions that we become “aware” of consciously taking are actually being taken at least a couple of seconds ahead, deep in the brain.

Within Marketing research circles, the dominant wisdom is that one can never really “measure” how consumer feel and how are they going to act, as they themselves don’t know it entirely.

But the obsession to measure everything and this compelling desire to give a number to everything is probably what explains so much top dollar being spent in coming up with “better & robust” data sets, algorithms and softwares that track people movements and responses.

Here is something that I came across in the New York Times by Graham Bowley.

http://nyti.ms/h4OiPC

Finance - what is it? Who really understands it?

I have been reading about Finance and its importance in the modern day economy.

I am generally eager to know what is happening in Finance, as I believe that along with technology this is one of the defining curves of the present consumer culture.

After all, the share of the financial sector in American corporate profits was almost 40% in 2007- this was before the present crisis well and truly set in.And its share of the market was around 23%.

What astounds me more is the fact that this sector at its peak employed only 5% of the workforce! This explains why so many of the bankers that we knew were criminally rich. After all 40% of Corporate America's profits were accruing to just 5% of the people!!!!

Though the technical reason being bandied around for the present economic crisis (its not just limited to the financial sector anymore) is that it was precipitated by sub-prime loan originations and securitizations, the larger cause is of course unbridled human greed and the fact that no body really understood how big the risk was and where exactly did it lay....

Two writers whom the world is kind of rediscovering come to notice.

The first is Dr John Kenneth Galbraith-Keynesian and an economic theorist. I say economic theorist because I believe that he was right in asserting the Economics has to make sense withing the larger social and cultural framework of the society, and not completely tethered to the Neo-classical strands that it is now.

The second is a former economist with the Fed, Henry Kaufman. Now, Kaufman's concerns about the excesses of debt and the nebulousness of new financial instruments is nothing new.

I have been following him for quite some time and I reckon that he was so prescient about leveraged buyouts, securitizations and floating rate financing, as early as the 80s. And how far away the Fed's Establishment was from the truth can be gauged from the fact that as late at August 7th 2007, the Fed said that it worried more about the inflation than about a weakening economy.!!!!

May be it was because of the strong libertarian strands within the workings of the American economy, led by Fed and personified by none other than the belief and ideology of Mr Alan Greenspan. I still believe like many others that Mr Greenspan blundered by believing almost devoutly in the "incorrigibility of the markets".

Marcus Nadler was right when he said, that "no schoold of economic thought has a monopoloy on wisdom." And that "financial institutions must balance entrepreneurial drive with fiduciary responsibility."

I have tried to de-construct this blind pursuit of "the market can never go wrong" kind of thinking that has defined American Capitalism in the post war years.

One of the reason could be that the contemporary economic thinking in United states was almost completely defined by people who came in from either the Russian empire or pre war Europe - places where centralized planning was the dominant paradigm.

And its no surprise that most of them, often cite the Ricardo-Hayekian legacy as the intellectual force that defind their thinking. Hayek's "The Road to Serfdom" holds special signifiance in the heart of many such grandees.

Galbraith's "The Affluent Society" and "The Great Crash" is again flying off the shelves.

Gillian Tett's latest book "Fool's Gold" also postulates about the evolution of modern day finance.

One of the far reaching aspects of this evolution is the securitization of credit-the conversion of non-marketable assets like credit card receivables or mortgage obligations into marketable assets that are priced and subequently marketed.

This has created a dangerous arrays of derivative instruments. A very questionable innovation in finance, as it perpetuates the belief that credit risk could be reduced if the instruments became marketable!

And along the way, the public perception of liquidity has changed- from the one based on assets (what you can profitably sell) to one centred on liablities (how easily one can borrow)