Audiobook Bleg

In general, I prefer reading content rather than listening to it.

I read much faster, for one. And while it is certainly true that I can listen at 2x, it still is faster in my case to read. Plus, no matter how hard I try, listening at 2x doesn’t seem like a – for lack of a better word – nice experience. I know I should be defining this better than simply saying “not nice”, but that’s the best I can do for the moment.

There are exceptions, of course. If it’s an Amit Varma podcast, 2x is an imperative (although I do know folks who listen at 1x). And given the quality of each episode, and given the fact that transcripts aren’t yet available, the opportunity costs are worth it. But in general? Reading trumps listening.

But even in the case of Amit’s podcast, my preferred location for playing it is in my car. I get far too easily distracted during walks – could be a chain of thought that develops because of something that was said on the podcast, could be a dog that walks past me, or it could be a nice little bout of daydreaming. Shouldn’t be happening, and I ought to be worried about my attention span, but now what to do?

In a car, though, it is a different story. The hassle of trying to drive a car through the dynamic jigsaw puzzle that is Pune’s traffic is the perfect semi-distracted environment in which I just have enough attention to give to the podcast and nothing else.

But audiobooks? Never been able to consume them. I’ve tried with a couple, but rarely gone past the first two chapters. I did listen, with my daughter, to a couple of Harry Potter novels during the lockdown (Stephen Fry was a major reason why), but that apart, I haven’t had much luck.

Recently though, David Perell recommended a book called “The Goal”, and specifically recommended the audiobook. I’ve been listening to it, and it has been a very enjoyable listen. I’m about halfway through, and in this case, definitely plan to finish it.

  1. It’s got a lot of dialogues, and the audiobook does a nice job of making them seem very stylistic and entertaining.
  2. The rhythm of the conversations sounds much better when you’re listening to it, and because the book doesn’t contain a lot of dry descriptive sentences, the format really works.
  3. Each chapter is fairly short – about ten minutes or so, and these bite sized chunks work for me when listening.
  4. There is also some background music that plays at the start and during the chapter, and that enriches the experience of listening, at least for me.
  5. The concepts that are being spoken about in the book are directly related to economics, and the treatment is novel enough for me to remain interested.
  6. The fact that these concepts are interwoven with at least two different stories involving the protagonist make for an interesting tale, and that acts as a lovely bonus. It’s a hook that has kept me interested so far.

All of which was to explain to you why I like this particular audiobook – and to explain why I’m more than willing to try some other audiobook content once this one is done.

So: here’s the bleg.

What audiobooks do you think I might like?

Please do let me know, whether in the comments or however else you like.

A Rare Ol’ Treasure Trove

After yesterday’s post, I asked some folks for their choice of textbooks that undergraduate students should definitely be reading before getting their BSc/BA degree in economics. And what a list we have, already!

If you are an undergraduate student, please bookmark this post, and keep coming back to it when you want book recommendations. And I would argue that even if you are not an undergrad student of economics, you might still want to keep checking on this post, because I will be updating it regularly.

In what follows, I have not mentioned who has recommended what. That’s simply because I’m writing this post out on the fly, and haven’t had time to format it, add hyperlinks or even figure out how I want to tabulate this data. More than one person has recommended some of the books on the list too, and that’s an additional complicating factor. Note that not all of them are textbooks, and some aren’t even books (they’re essays), but hey, when it comes to reading, there’s no bureaucratic stuffiness in these parts.

Folks who have read some of these books might wonder at the very broad political and economic ideology spectrum over here, but surely this is a plus and not a minus. As an undergrad student, read far and wide, and figure out over time what resonates and what does not (and why).

Finally, to everybody who took time out of their busy schedules to reply, thank you very much!

Here is this most magnificent list, in no order whatsoever:

  1. On the Wealth of Nations, by Adam Smith
  2. That Which We See and That Which We Do Not See, by Frederic Bastiat
  3. (Bonus points if you saw this coming) Economics in One Lesson, by Hazlitt
  4. Micro Motives and Macro Behavior, by Schelling
  5. Free to Choose, by Milton Friedman
  6. Both the Freakonomics books, by Levitt and Dubner
  7. Road to Serfdom, by Hayek
  8. Modern Principles of Economics, by Cowen and Tabbarok
  9. Public Finance and Public Policy, by Jonathan Gruber
  10. Economic Growth, by David Weil
  11. The Effect: An Introduction to Research Design and Causality, Nick Huntington Smith
  12. Economics Rules, by Dani Rodrik
  13. An Uncertain Glory, by Amartya Sen
  14. Everybody Loves a Good Drought, by P Sainath
  15. In The Service of the Republic, by Vijay Kelkar and Ajay Shah
  16. Of Counsel: The Challenges of the Modi-Jaitley Economy, by Arvind Subramanian
  17. In Spite of the Gods, by Edward Luce
  18. The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy, by Thomas Sowell
  19. The Meaning of it All, by Richard Feynman
  20. Delhi Rape: How India’s Other Half Lives
  21. Principles of Economics, by Mankiw
  22. Intermediate Microeconomics, by Hal Varian
  23. Macroeconomics, by Dornbusch Fischer and Startz
  24. International Economics, by Dominic Salvatore
  25. Introduction to Econometrics, by Woolridge
  26. Complete Business Statistics, by Aczel and Sounderpandian
  27. Using Econometrics: A Practical Guide, by Studentmund
  28. Introduction to Economics, by Richard Leftwich
  29. Theory of Econometrics, by Koutsoyiannis
  30. Principles of Economics, by Koutsoyiannis
  31. The Worldly Philosophers, by Heilbronner
  32. Macroeconomics, by Alex Thomas
  33. Economic History of India, by Tirthankar Roy
  34. India After Gandhi, by Ramchandra Guha
  35. Macroeconomics, by Snowdon and Vane
  36. Causal Inference Mixtape, by Scott Cunningham
  37. International Economics, by Paul Krugman
  38. Capital, Vol. 1, by Karl Marx
  39. Classical Political Economy and the Rise to Dominance of Supply and Demand Theories, by Krishna Bharadwaj
  40. Three Essays on the State of Economic Science, Koopmans
  41. Universal/University Economics by Alchian and Allen
  42. Introduction to Econometrics, by Cristopher Dougherty
  43. Studies in Indian Public Finance, by M. Govinda Rao

The Economist on What To Read To Understand How Economists Think

Here’s the article, and I hope you’re able to access it.

Just in case it is behind a paywall for you, here is a quick summary:

  1. The Economist says that thinking like an economist is primarily about two things:
    1. There is no such thing as a free lunch, which is another way of saying you can never avoid opportunity costs
    2. When possible, try to put numbers on things
  2. The article then lists out five books that help you think along these lines:
    1. Capitalism and Freedom, by Milton Friedman
    2. The Worldly Philosophers, by Robert Heilbroner
    3. Africa: Why Economists Get it Wrong, by Morten Jerven
    4. Capitalism Alone, by Branko Milanovic
    5. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

I’m about to share my own list, but before I do that, a couple of points.

I’ve read the first, second and fifth book, and they’re all great books to read. I look forward to reading the other two, and the description of the fourth in particular sounds particularly exciting to my ears:

This is the book to read if you want to understand why capitalism—and economists’ way of thinking—has triumphed the world over. By the beginning of the 1990s, it was clear that the capitalist system had defeated the communist one. Today, however, many people yearn to move to a new system, such as “millennial socialism”. A left-leaning scholar, Mr Milanovic sympathises with these feelings. But ultimately he finds many radical prescriptions unconvincing. A country which tried to de-marketise on the scale envisaged by socialists would, he says, be unstable and dissatisfied in other ways. Shifting towards a much shorter working week, for instance, would leave it poorer than its neighbours. For how long would people put up with that? Capitalism is far from perfect, his book shows, yet it is hard to shake the notion that it is the only system that broadly works.

In a way, this reminds me of Churchill’s quote about democracy being the worst form of government, except for all the others that have been tried. And it rings true – there’s many things that we all wish could be “better” when it comes to capitalism, but one of my favorite econ questions is very apposite here: relative to what? That is, if you say capitalism is not good/not perfect, you need to answer the question “relative to what”?

Second, please don’t interpret this blogpost as a critique of the list put out by the Economist. This blogpost is very much in the spirit of “Yes, and” rather than “No, but”. But that being said, my own opinion of the main features of thinking like an economist are slightly different. I couldn’t agree more with the first feature (opportunity costs), but I do disagree with the second one. I would argue that it is entirely possible to get the most out of life without having to put a number on it. In fact, as Russ Roberts recently pointed out in a podcast, it simply isn’t possible or desirable to put numbers on some things. I haven’t read the book yet, but the podcast was instructive in many different ways. Here’s one apposite quote (Russ is answering a question by Tim about how to decide whom to marry):

Alain de Botton has a wonderful YouTube video I recommend on that; I think the title is “You’re going to marry the wrong person.” Fantastic short video. Don’t show it to my wife because she thinks she married the right person, I don’t want her to see it and depress her. But seriously, there’s no best. And part of the theme of my book is that most of life is a matrix. And by that, I don’t mean the movie, the red or blue pill. What I mean is that it’s a set of complicated attributes that are pluses and minuses for all kinds of things.
So the person you’re with, that you’re seeing now, whoever’s listening out there, there are certain levels of attractiveness, there’s a certain level of kindness, there’s a certain level of intelligence, or a certain level — many, many, many attributes. And then there’s chemistry and sexual attraction. We’ve got all those things working. And so, which is the best one? Oh, well I need a formula to add up all those measurements so I can get a single number, and then I’ll just pick the one that gets the best score. And I’d argue that’s the wrong way to think about life. It’s the wrong way to think about how to pick your friends. It’s the wrong way to think about how to find the best job. It’s the wrong way to think about most things.

As I mentioned, I haven’t read the book yet – sometimes I think I should get a T-Shirt with this line printed on it. But I very much belong to the school of thought that would argue that not everything in life need be quantified.

So if I disagree with “if possible, put numbers on everything”, what according to me are the main features of thinking like an economist? If I had to pick just two, here they are (and I’m going to cheat, so there):

  1. Opportunity costs are everywhere
  2. Incentives matter
  3. Life is a non-zero sum game

Getting incentives right, and worrying about what happens if incentives go wrong ought to be part and parcel of your toolkit an an economist. And if you asked me to recommend a book about this topic, my pick would be Discover Your Inner Economist, by Tyler Cowen.

Bonus: check out the podcast between Russ Roberts and Tyler Cowen on this book.

Bonus Bonanza: reflect on the very first comment at the top of the page!

More Bonus Bonanza: Learn about callbacks.

And re: life being a non-zero sum game, I would recommend In The Company of Strangers, by Paul Seabright. If you do end up reading the book, you might end up coming away with the “complaint” that it is about much more than just life being a non-zero sum game, but in my world, that’s a feature, not a bug. But for the moment, here’s a relevant excerpt from the book:

Once bands were willing to make tentative peaceful contact with other bands, they could exchange with them, thereby enormously expanding the kinds of foods, tools, and resources to which they had access. We have evidence of exchange between hunter-gatherers from many thousands of years before the foundation of agriculture, although their lifestyle must have made such contacts sporadic and limited by comparison with the opportunities available to sedentary farmers in later millennia. Some of the oldest known symbolic artifacts, carved beads dating back over forty thousand years, may have played a role in facilitating such exchanges.7 In more recent times, the Yir Yoront aboriginals of Northern Australia had stone axes even though they lived many hundreds of kilometers from the nearest stone quarries (they exchanged stingray-tipped spears for them with neighboring tribes) and even steel ones, well before their first contact with European traders at the end of the nineteenth century. Trade allowed access not only to their neighbors’ skills but to those of their neighbors’ neighbors, and so on.

Seabright, Paul. The Company of Strangers (pp. 46-47). Princeton University Press. Kindle Edition.

And a final recommendation: please also do read The Undercover Economist and The Undercover Economist Strikes Back, both by Tim Harford.

How Quentin Tarantino Wrote Inglorious Basterds

The odd obscenity here and there, but it’s Tarantino talking, so I’m guessing you knew that already 🙂

Interesting Times Indeed

Shown here are two people who, in my opinion, have perhaps done more for India than anybody else. That’s the kind of remark that can keep Twitter going for days, but I would honestly be surprised if these two didn’t make at least the top ten for most people.

Who are they? M.S. Swaminathan on the left, and Norman Borlaug on the right. And what, you might ask, are they famous for? Almost every student in India is likely to say “The Green Revolution!” by way of response, and they wouldn’t be incorrect.

Read the entire Wikipedia article, because it is quite the story. And if, after reading the article, you still wish to learn more, consider reading a book called The Wizard and the Prophet:

In November 1963, Swaminathan received the next shipment of Borlaug’s wheat: 220 pounds each of four commercially released varieties and samples of another 600 breeding lines that were promising but not yet commercially available. IARI researchers divided the wheat among five-acre plots in four different experimental stations. The results were remarkable. Indian farmers typically reaped less than half a ton per acre. The four Mexican varieties yielded a per-acre average of about a ton and a half, and some plots came in at almost two tons.

Mann, Charles C.. The Wizard and the Prophet: Two Groundbreaking Scientists and Their Conflicting Visions of the Future of Our Planet (Kindle Locations 6706-6710). Pan Macmillan. Kindle Edition. (Emphasis added)

How and why India (and other nations) fell short in terms of food production, Borlaug’s research in Mexico, and the fascinating story of how both Borlaug and his wheat made it to Asia is told incredibly well in the book (there is much more in the book besides, and I mean that as a compliment), and I would strongly recommend you read it.

Their work has gone a very long way towards making sure that the so called Malthusian Trap hasn’t really been a problem for most countries.

But well, we live in interesting times.

Russia and Ukraine supply 28% of globally traded wheat, 29% of the barley, 15% of the maize and 75% of the sunflower oil. Russia and Ukraine contribute about half the cereals imported by Lebanon and Tunisia; for Libya and Egypt the figure is two-thirds. Ukraine’s food exports provide the calories to feed 400m people. The war is disrupting these supplies because Ukraine has mined its waters to deter an assault, and Russia is blockading the port of Odessa.
Even before the invasion the World Food Programme had warned that 2022 would be a terrible year. China, the largest wheat producer, has said that, after rains delayed planting last year, this crop may be its worst-ever. Now, in addition to the extreme temperatures in India, the world’s second-largest producer, a lack of rain threatens to sap yields in other breadbaskets, from America’s wheat belt to the Beauce region of France. The Horn of Africa is being ravaged by its worst drought in four decades. Welcome to the era of climate change.
All this will have a grievous effect on the poor. Households in emerging economies spend 25% of their budgets on food—and in sub-Saharan Africa as much as 40%. In Egypt bread provides 30% of all calories. In many importing countries, governments cannot afford subsidies to increase the help to the poor, especially if they also import energy—another market in turmoil.

The effects are already being felt the world over, and as the article points out, this is likely to get much worse before it gets better, and for a variety of reasons. These are worth listing out:

  1. The war in Ukraine has resulted in supply chain disruptions
  2. Unexpected changes in weather patterns the world over. You may wish to debate the word “unexpected”, and I would be in agreement with you!
  3. Raging inflationary pressures due to loose monetary policies (how loose for how long with what effects is a topic that will turn into a miniature cottage industry in academia)
  4. A steep rise in oil prices, which impacts and is in turn impacted by 1., 2. and 3.

And the worst of it is that none of these factors look likely to subside anytime soon. And once you bake in the inevitable political response in most countries, you have found a way to make a bad problem worse:

Since the war started, 23 countries from Kazakhstan to Kuwait have declared severe restrictions on food exports that cover 10% of globally traded calories. More than one-fifth of all fertiliser exports are restricted. If trade stops, famine will ensue.

This is a story worth keeping track of, and you can be assured that all governments will be doing just that. Working through the myriad implications of multiple scenarios in a geopolitical situation as volatile as the one we’re going through right now is a migraine inducing thought, but it needs to be done.

Make no mistake, these are very interesting times indeed.

But on the plus side, imagine where we might have found ourselves today had the Green Revolution not taken place.

Read The Wizard and the Prophet, please.

Happy Birthday to Kevin Kelly

70th birthday that too!

Who is Kevin Kelly, you ask? Lots of ways to begin, but my favorite learning from Kevin Kelly (so far) has been the idea of 1000 true fans:

To be a successful creator you don’t need millions. You don’t need millions of dollars or millions of customers, millions of clients or millions of fans. To make a living as a craftsperson, photographer, musician, designer, author, animator, app maker, entrepreneur, or inventor you need only thousands of true fans.
A true fan is defined as a fan that will buy anything you produce. These diehard fans will drive 200 miles to see you sing; they will buy the hardback and paperback and audible versions of your book; they will purchase your next figurine sight unseen; they will pay for the “best-of” DVD version of your free youtube channel; they will come to your chef’s table once a month. If you have roughly a thousand of true fans like this (also known as super fans), you can make a living — if you are content to make a living but not a fortune.

I cannot for the life of me remember where I read about 1000 true fans first, but it most likely was via Tim Ferriss. (As an aside, Kevin Kelly has advice about this as well!) The extract above is an assertion, and if your reaction is along the lines of “but why is this assertion true?” – and I hope that is the case! – you will want to read the rest of the essay. It’s got spin-offs too, this essay, which only drives up my opinion of the original.

But Kevin Kelly is a person who you should spend time learning more about. Start with his Wikipedia page, listen to his multiple episodes with Russ Roberts over on EconTalk, visit the Cool Tools section on his website, subscribe to his related newsletter, listen to his podcasts with Tim Ferriss, and as a bonus, listen to Tyler Cowen’s podcast with Stewart Brand. And read his books, of course.

Long story short, he is a person worth knowing about, and trust me when I say we’ve only scratched the surface, if that. But today, I wanted to point you to his birthday gift to all of us, a lovely set of 103 observations that he has called “103 Bits of Advice I Wish I Had Known“. It goes without saying that all 103 are worth a ponder, but I’ll list here ten that especially resonated with me right now:

  1. About 99% of the time, the right time is right now.
  2. Anything you say before the word “but” does not count.
  3. When you forgive others, they may not notice, but you will heal. Forgiveness is not something we do for others; it is a gift to ourselves.
  4. When you lead, your real job is to create more leaders, not more followers.
  5. It is the duty of a student to get everything out of a teacher, and the duty of a teacher to get everything out of a student.
  6. Productivity is often a distraction. Don’t aim for better ways to get through your tasks as quickly as possible, rather aim for better tasks that you never want to stop doing.
  7. The consistency of your endeavors (exercise, companionship, work) is more important than the quantity. Nothing beats small things done every day, which is way more important than what you do occasionally.
  8. Half the skill of being educated is learning what you can ignore.
  9. When you have some success, the feeling of being an imposter can be real. Who am I fooling? But when you create things that only you — with your unique talents and experience — can do, then you are absolutely not an imposter. You are the ordained. It is your duty to work on things that only you can do.
  10. Your best job will be one that you were unqualified for because it stretches you. In fact only apply to jobs you are unqualified for.
  11. It’s possible that a not-so smart person, who can communicate well, can do much better than a super smart person who can’t communicate well. That is good news because it is much easier to improve your communication skills than your intelligence.
  12. For the best results with your children, spend only half the money you think you should, but double the time with them.
  13. Don’t bother fighting the old; just build the new.
  14. You are as big as the things that make you angry.
  15. Efficiency is highly overrated; Goofing off is highly underrated. Regularly scheduled sabbaths, sabbaticals, vacations, breaks, aimless walks and time off are essential for top performance of any kind. The best work ethic requires a good rest ethic.

The observant among you might have noticed that I ended up picking fifteen rather than ten, but why short change myself and my readers? I didn’t bother culling out five – and to be clear, this is not to imply that the other eighty-eight are somehow inferior. These fifteen resonated the most with me, and I sincerely hope that your list is completely different from mine.

Note to self: of the ones I have selected here, the fifth one is the one where I really need to pull up my socks.

And speaking of hope, it would be nice if this list sparked conversations and your own lists!

Past mentions of Kevin Kelly on this blog are here.

Reflections on Whole Numbers and Half Truths

Single narratives have never been able to explain all of India.

S, Rukmini. Whole Numbers and Half Truths: What Data Can and Cannot Tell Us About Modern India (p. 220). Kindle Edition.

There is this line that is often quoted when big picture discussions about India take place, and it is only a matter of time before it comes up: whatever you say about India, the opposite is also true. The quote is attributed to Joan Robinson, and I can’t help but wonder if I will end up creating a paradox of sorts by agreeing wholeheartedly with it.

But I do agree with the spirit of the quote, which is why that one line extract from Rukmini S’s book, Whole Numbers and Half Truths, resonated so much with me. All countries are complex and complicated, but India takes the game to giddying heights.

Take a look at this map, a version of which is present in Rukmini’s book:

What is India’s TFR? First, for those uninitiated in the art and science of demography, what is TFR? It stands for Total Fertility Ratio, or as Hans Rosling used to put it, babies per woman. Well, it’s 2.0, which is good, because roughly speaking, two parents giving birth to two children will mean we’re at the replacement rate (note that this is a very basic way of thinking about it, but useful as a rough approximation).

But as any student of statistics ought to tell you, that’s only half the story (or half the truth). Uttar Pradesh, Bihar and Jharkhand are well above the so-called replacement rate, and that will have implications for labor mobility, taxation, political representation and so, so much more in the years to come.

Data then, is only half the story. How is the data collected? If it is a sampling exercise rather than a census, how was the sampling done? Has the sampling method changed over time? If so, are earlier data collection exercises comparable with current ones?

How should one think about the data that has been collected? What does it mean, and how much does context matter? For example:

‘That’s data about marriage, madam,’ he said—not about love. ‘I think if your data asked people if they have ever fallen in love with someone from another caste or religion, many will say yes. I see that all around me among my friends. But when it comes to getting married, most of us are not yet ready to leave our families. That’s why your data looks like that,’ he said. As for the rest? ‘There is a lot we will not admit to someone doing a survey. But things are changing. At least for some of us,’ he said.

S, Rukmini. Whole Numbers and Half Truths: What Data Can and Cannot Tell Us About Modern India (pp. 127-128). Kindle Edition.

Rukmini’s excellent book is, in one sense, a deep reflection on the data that we have, have had, and would like to have where India is concerned. It speaks about how data has been collected, which are the agencies and institutions involved, how these have changed (and been changed) over time, and with what consequences.

But it also is a reflection on a truism that many economists and statisticians underrate: data can only take you so far. As the subtitle of her book puts it, it is an analysis of what data can and cannot tell you about modern India.

And what data leaves out is often as fascinating as what it includes:

Yet, most people know little about the NCRB’s processes and methodology. For instance, the NCRB follows a system known as the ‘principal offence rule’. Instead of all the Indian Penal Code (IPC) sections involved in an alleged crime making it to the statistics, the NCRB only picks the ‘most heinous’ crime from each FIR for their statistics. I stumbled upon this then unknown fact in an off-the-record conversation with an NCRB statistician in the months after the deadly sexual assault of a physiotherapy student in Delhi in September 2012. In the course of that conversation, I learnt that the crime that shook the country would have only made it to the NCRB statistics as a murder, and not as a sexual assault, because murder carries the maximum penalty. This, I was told, was to prevent the crime statistics from being ‘artificially inflated’: ‘If the FIR is for theft, there will be a[n IPC] section for assault also, causing hurt also. If you include all the sections, people will think these are separate crimes and the numbers will seem too huge,’ he told me. After I reported this,2 the NCRB for the first time began to include the ‘principal offence rule’ in its disclaimer.3

S, Rukmini. Whole Numbers and Half Truths: What Data Can and Cannot Tell Us About Modern India (p. 13). Kindle Edition.

The paragraph that follows this one is equally instructive in this context, but the entire book is full of such Today-I-Learnt (TIL) moments. Even for those of us involved in academia, there is much to learn in terms of nuance and context by reading this book. If you are not in academia, but are interested in learning more about this country, recommending this book to you is even easier!

Rukmini’s books spans ten chapters on ten different (but obviously related) aspects of India. We get to learn how Indians tangle (or quite often choose not to!) with the cops and the courts, how we perceive the world around us, why Indians vote the way they do in the first three chapters. The next three are about how (and with whom) we live our lives, and how we earn and spend our money. The next trio is about how and where we work, how we grow and age and where Indians live. The final chapter is about India’s healthcare system.

Each chapter makes us familiar with the data associated with each of these topics, but each chapter is also a reflection on the fact that data can only take us so far. When you throw into the mix the fact that the data will always (and sometimes necessarily) be imperfect, we’re left with only one conclusion – analyze the data carefully, but always bear in mind that the reality will always be more complex. Data is, at the end of the day, an abstraction, and it will never be perfect.

One reason I liked the book so much is because of its brevity. Each of these chapters can and should be be a separate book, and condensing them into chapters can’t have been an easy task. But not only has she managed it, she has managed to do so in a way that is lucid, thought-provoking and informative. Two out of these three is a good achievement, to achieve all three and that across ten chapters is a rare ol’ achievement.

If I’m allowed to be greedy, I would have liked a chapter on the world of data that the RBI collects, and to its credit does share with us via its website. But it does so in a way that is best described as unintuitive. In fact, a book on how data sharing practices with the citizenry need to improve out of sight where government portals across all verticals and at all levels are concerned would be a great sequel (hint, hint!).

I’d strongly recommend this book to you, and I hope you enjoy reading it as much as I did.

We will be hosting Rukmini on the Gokhale Institute campus this coming Friday, the 29th of April. The event will be from 5.30 pm to 7.00 pm at the Kale Hall. She and I will speak about the book for about an hour, followed by a Q&A session with the audience.

If you are in Pune, please do try and make it!

The Case For Doubling Spending on R&D

Timothy Taylor, author of the blog The Conversable Economist, has a nice post out on the case for doubling R&D spending. He speaks of doubling spending on R&D by the US government, but the point is equally applicable to all governments, including India’s.

The post is a reflection on a chapter in an e-book published by the Aspen Group. The chapter has been written by Benjamin F. Jones, and is titled “Science and Innovation: The Under-Fueled Engine of Prosperity.” (pp. 272 in the PDF that has been linked to above). Timothy Taylor shares an extract that ought to familiar to us in terms of the direction in which scientific progress has been headed, and perhaps even the magnitude – but every now and then, it helps to remind ourselves how far we’ve come:

Real income per-capita in the United States is 18 times larger today than it was in 1870 (Jones 2016). These gains follow from massive increases in productivity. For example, U.S. corn farmers produce 12 times the farm output per hour since just 1950 (Fuglie et al. 2007; USDA 2020). Better biology (seeds, genetic engineering), chemistry (fertilizers, pesticides), and machinery (tractors, combine harvesters) have revolutionized agricultural productivity (Alston and Pardey 2021), to the point that in 2018 a single combine harvester, operating on a farm in Illinois, harvested 3.5 million pounds of corn in just 12 hours (CLASS, n.d.). In 1850, it took five months in a covered wagon to travel west from Missouri to Oregon and California, but today it can be done in five hours—traveling seven miles up in the sky. Today, people carry smartphones that are computationally more powerful than a 1980s-era Cray II supercomputer, allowing an array of previously hard-to-imagine things—such as conducting a video call with distant family members while riding in the back of a car that was hailed using GPS satellites overhead.

The latter part of the extract, which I’ve not quoted here, is about the increase in life expectancy, and is also worth reading. Post the extract, Timothy Taylor goes on to speak about how it is important to celebrate the fact that we were able to push out vaccines in the space of a little less than a year, which is a stellar achievement. And indeed it is! You might have differing opinions about the efficacy of these vaccines, and you might even be of the opinion that the firms doth profit too much from their creation, but I hope you agree that the fact that we were able to do this at all, and as rapidly as we did, is testimony to have far we have come as a civilization.

As an aside, read also this Washington Post editorial about the discovery of the virus, and how the message didn’t get out nearly quickly enough (duh.)

Both points are important to understand as students. Which two points, you ask? That progress as a civilization depends on two things: the rate of technological progress, and the underlying culture that enables it, embraces it and uses it properly. For reading the editorial, I came away with the opinion that China had the technology, but lacked the culture.

I would urge you to think about how this might resonate with each of us as individuals: we have the technology to be ever more productive, and the technology improves every year. But have we built for ourselves a culture of allowing ourselves to use this technology as efficiently as we should? What about the institutions that each of us work for or study in? What about the countries we stay in? Technological progress without an enabling culture doesn’t work, and as students of productivity (that’s one way to think about studying economics), you need to be students of both aspects.

Anyway, back to scientific progress. One of the points that Jones makes in his chapter is that the US has been lagging behind the current leaders on two different metrics: total R&D expenditure as a percentage of GDP, and public R&D expenditure as a share of GDP. China’s R&D expenditure has seen an annual increase of 16% since the year 2000, while the US is at 3% annual growth.

What about India, you ask? Here’s a chart from an Indian Express article about the topic:

As the article points out, let alone trying to compute the rate of increase, we actually seem to be on a downward trajectory for a metric called GERD, which stands for Gross Domestic Expenditure on Research and Development. Here’s the link to the data from the World Bank.

We clearly need to do better. That article in the Indian Express ends with this paragraph:

A commitment from the Centre to raise GERD to 1 per cent of the GDP in the next three years could be one of the most consequential decisions taken in the 75th year of India’s independence.

And that is a nice segue back to the blog post that we started today’s post with. If you’re asking (and I hope you are!) questions along the lines of why it should be the government and not the private sector, I have two answers for you. One, the truth always lies somewhere in the middle, and so you need both private and government spending. And two, there is an economic argument for your consideration:

Jones’s essay reviews the argument, fairly standard among economists, that a pure free market will tend to underinvest in new technologies, because in a pure free market the innovator will not capture the full value of an innovation. Indeed, if firms face a situation where unsuccessful attempts at innovation just lose money, while successful innovations are readily copied by others, or the underlying ideas of the innovation just lead to related breakthroughs for others, then the incentives to innovate can become rather thin, indeed. This is the economic rationale for government policies to support research and development: direct support of basic research (where the commercial applications can be quite unclear), protection of intellectual property like patents and trade secrets, tax breaks for companies that spend money on R&D, and so on.

Now, how much of the lifting should be done by government, and how much should be done by the private sector is a debate that will never end, but here is an EFE post that might help you start to think through the process.

Timothy Taylor and Benjamin F. Jones argue that the US needs to spend more on R&D, and that the U.S. government should do more in this regard.

My contention is two-fold: that this point applies with even more urgency in the Indian context, and that an enabling culture is an equally important concept, but an underrated one the world over.

In Praise of Last Among Equals

In 1997, I experienced a life changing event.

I had gone with my parents to their friends’ house for dinner, and rather than being bored to death (which is the usual experience for all kids of that particular age), I spent the most fascinating evening of my life until that point.

They had, you see, a Compaq desktop. I don’t remember now which specific model it was, and I don’t remember which website I visited, but that was the first time I heard the unforgettable crackle, hiss and pop associated with a dial-up connection. I was online, for the very first time in my life.

It was a life changing event for me because I discovered a world I didn’t know existed back then.

Contrast my experience with that of Sanjay Sahni’s, when he first went online:

And then he spotted it. In a corner, sandwiched between ‘Munger’ and ‘Nalanda’, was a familiar name: Muzaffarpur. His heart racing, he clicked on it. He then saw another unfamiliar set of names in English, but soon he found his block (Kurhani) and then, with another click, he navigated to his panchayat (Ratnauli). One final click more and, suddenly, he saw names, not of places, but of people. The first name he saw—etched clearly in his mind almost a decade later—was ‘Mahender Paswan’. As he went down the list, he saw more names, all familiar: ‘It was like I was sitting in Delhi, but also in my village.’

Sharan, M.R.. Last Among Equals: Power, Caste & Politics in Bihar’s Villages (pp. 27-28). Kindle Edition.

Me, I discovered a world I didn’t know existed back then. Sanjay? He discovered that his world was also online, and therein lies the tale narrated in M.R. Saran’s excellent, excellent book: Last Among Equals. I have dropped the “h” in his last name deliberately, and to find out why, you’ll have to read the book.

What is the book about?

It is about Bihar, as the title suggests, but it is not a dry academic tome that you might have to force yourself to read. It is, instead, a warm, rich history of real people with real problems. It is a narrative that is instructive, engaging and thought-provoking. It is, above all, a wonderful way to start to learn about one of India’s largest states. Largest not in terms of area, but in terms of population, and that’s a good point to keep in mind as you read the book.

The book is about many things, all at once. It is about NREGA, it is about the fascinating journey of one man in particular, Sanjay Sahni, but it is also about the lives of people in Bihar’s villages. And what makes the book work is the choice that M.R. Sharan makes in shaping the form that the book takes:

In writing it, I tried to follow a style that the economist Albert Hirschman endorsed in his brilliant 1970 essay ‘The Search for Paradigms as a Hindrance to Understanding’. Following Hirschman, I eschewed exciting, novel ‘insights’ for facts, and forwent theory for stories. This was partly because I am not sure I am the type of scholar capable of formulating a theory of anything, let alone the entire rural political economy of Bihar. In addition, I believe it would be a travesty to rein Bihar in. To straitjacket its trajectory—full of chaos and brilliant humanity—into neat, summarisable boxes would be doing disservice to it.

Sharan, M.R.. Last Among Equals: Power, Caste & Politics in Bihar’s Villages (p. 12). Kindle Edition.

There are, indeed, no boxes, no tables, no dry statistics, and although there is a mention of a Regression Discontinuity Design, it is a harmless threat that breezes past the reader without the slightest inconvenience. Why, Sharan actually explains what an RDD is using the English language, which is a rare feat for folks from my tribe.

But stories there are aplenty. There are stories involving Sanjay Sahni, as I have mentioned, and there are stories involving the people he works with, works for, and works against. The book is eminently readable for this reason, but I do not recommend it just because of this factor. Sharan achieves what I would have thought was impossible: he narrates each of these stories with an adroit mixture of dispassionate analysis and passionate involvement, all of it backed up by minute observations. The word “ethnography” doesn’t come up once in the entire book, but if you are a student wondering what the word means, this book is a very good introductory answer.

But not just people! He also writes from the point of view of the state, and we get a sense of the state’s empathy, apathy and rage, all in just the one book. Keep an eye out for narratives involving BPGRA, Circular 6278, and the tale of a guy called Jeetendra Kumar to learn more about each of these, in that order.

For having done the work that he has in the state, and for having written the book, M.R. Sharan leaves us with five key takeaways as regards challenging (and distributing) the power of the mukhiya. But I would argue that these five points matter for more than just challenging and distributing the power of the mukhiya alone. These five points form a good framework to think about power and its distribution more generally in India:

  1. Reservations
  2. Decentralisation
  3. Building transparency
  4. Social movements
  5. Voting and elections

You don’t need to agree with all, or even one of them. In fact, as students, I hope you approach the book wanting to disagree with some or all of these points. But I also hope that you finish reading the book, and then ask yourself if your view regarding any of these has changed, and whatever your answer, the why behind it.

It’s a short book, spanning nine chapters and 244 pages, and it shouldn’t take you much time to read it. But I hope you spend much more time reflecting on it. And I also hope you use the bibliography to add to your reading list, as I have.

I was chatting with a student of mine yesterday about the book, and he mentioned that the book exuded “the kind of research I want to do” vibe. My sincere hope is that many more students read this book, and are inspired along similar lines.

The world will be a better place for it.

The Most Important *Economic* Event of the 20th Century

Before you read any further, I have a question for you: what, according to you, would be the most important economic event of the 20th century?

There is no right or wrong answer, of course. This exercise is, by definition, subjective in nature, and I’m hoping that there will be many different responses.

Here’s how I would set up my framework to answer this question:

  • The event should have affected a significant number of people
  • That effect should persist and preferably spread (positively) over time.
  • The opportunity cost of that event shouldn’t be too high
  • It would be great if positive spillovers from that event could be plausibly identified

Consider, for example, the end of the Cold War. In my view, it ticks almost all of the boxes, with the possible exception of the second, and maybe the third. But it would certainly make my shortlist.

Or what about India’s independence? Again, definitely makes the shortlist, although you could argue that the partition was a very, very high cost to pay.

China moving towards a reform based process? India? The next fifteen years after the second world war, and the slow move away from colonialism and imperialism? The defeat of Japan and Germany in the second world war? Keynes’ magnum opus being published in 1936 (or am I just being a wee bit provocative)?

Chris Blattman points us towards his choice:

We estimate the impact of the Green Revolution in the developing world by exploiting exogenous heterogeneity in the timing and extent of the benefits derived from high-yielding crop varieties (HYVs).
HYVs increased yields of food crops by 44 percent between 1965 and 2010. The total effect on yields is even higher because of substitution towards crops for which HYVs were available, and because of reallocation of land and labor.
Beyond agriculture, our baseline estimates show strong, positive, and robust impacts of the Green Revolution on different measures of economic development. Most striking is the impact on GDP per capita. Our estimates imply that delaying the Green Revolution for ten years would have reduced GDP per capita in 2010 by US$1,273 (PPP adjusted), or 17 percent, across our full sample of countries. (Note that the excerpt is from a paper that he has quoted from)

And well, it’s hard to argue against his pick! It gets an endorsement in one of my favorite books of the past decade:

In the 1970s, when I was in high school, about one out of every four people in the world was hungry—“ undernourished,” to use the term preferred by the United Nations. Today, the U.N. says, the figure is one out of ten. 1 In those four decades, the global average life span has risen by more than eleven years, with most of the increase occurring in poor places. Hundreds of millions of people in Asia, Latin America, and Africa have lifted themselves from destitution into something like the middle class. In the annals of humankind, nothing like this surge of well-being has occurred before. It is the signal accomplishment of this generation, and its predecessor.

Mann, Charles C.. The Wizard and the Prophet: Two Groundbreaking Scientists and Their Conflicting Visions of the Future of Our Planet (Kindle Locations 63-68). Pan Macmillan. Kindle Edition.

Elsewhere in the book, the author (Charles C. Mann) points us towards a Wall Street Journal editorial that praised Norman Borlaug, the ‘Wizard’ in the book for having saved potentially a billion lives because of the Green Revolution.

But that book also contains a warning about the opportunity costs of this signal achievement:

Vogt, born in 1902, laid out the basic ideas for the modern environmental movement. In particular, he founded what the Hampshire College demographer Betsy Hartmann has called “apocalyptic environmentalism”— the belief that unless humankind drastically reduces consumption its growing numbers and appetite will overwhelm the planet’s ecosystems. In best-selling books and powerful speeches, Vogt argued that affluence is not our greatest achievement but our biggest problem. Our prosperity is temporary, he said, because it is based on taking more from Earth than it can give. If we continue, the unavoidable result will be devastation on a global scale, perhaps including our extinction. Cut back! Cut back! was his mantra. Otherwise everyone will lose!

Mann, Charles C.. The Wizard and the Prophet: Two Groundbreaking Scientists and Their Conflicting Visions of the Future of Our Planet (Kindle Locations 89-94). Pan Macmillan. Kindle Edition.

Please do read the book, I cannot recommend it highly enough. One reason I enjoy ed the book as much I did is because it doesn’t take sides, but shows both the pluses and the minuses of the Green Revolution, and that as thoroughly as possible.

But while Mann doesn’t take sides, I do. On balance, it is hard to argue against the Green Revolution having been the most significant economic event of the twentieth century.