Tweets for 25th July 2020

The Mumbai Coastal Road and Other Stories (Episode 3 in the Urbanization Series)

Editing video is time consuming. That isn’t the most important learning that has come my way this week, but it has been the most relevant one.

This week’s episode of the Urbanization series (YouTube Playlist here) with Binoy Mascarenhas is a full four days late, but that’s solely down to me. I have been struggling with ways and means to make these videos slightly more professional. You can be the judge of whether I have succeeded!

In this episode, Binoy speaks about his issues with the Mumbai Coastal Road. We also touch upon the Pune University Flyover (don’t get me started), the Charles River Esplanade in Boston, and inevitably, Jane Jacobs and Robert Moses show up as topics.

There’s much more in the video, do let me (and Binoy) know what you guys thought.

Episode 4 will be out next week – I wanted to say Tuesday, but we’ll see about that. Thanks for watching!

Five Articles I Enjoyed Reading This Week

  1. “Talking of spectacular clerical buildings the Middle Ages are of course the age of the great European cathedrals. Roman architecture was block buildings with thick, massive stonewalls, very few windows and domed roofs. The art of building in stone was one of the things that virtually disappeared in the Early Middle Ages in Europe. It came back initially in an extended phase of castle building. Inspired by the return of the stonemason, medieval, European, Christian society began the era of building their massive monuments to their God, the medieval cathedrals. Introducing architectural innovation like the pointed arch, the flying buttress and the rib vaulted roof they build large, open buildings flooded with light that soared up to the heavens in honour of their God. Buildings that are still a source of wonder today.”
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    A review of a book called “The Clock and the Camshaft: And Other Medieval Inventions We Still Can’t Live Without.”
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  2. “What this basically does is, it pushes the can down the road. The question is, what will happen one year later? Of course, the hope is that demand will come back, real estate companies will be able to sell the inventory they have built up, and use the money to repay loans. As far as hopes go, even cows might fly one day.”
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    Vivek Kaul uses a whole lot of logic, and minces no words in helping us understand why we should be very, very pessimistic about the real estate sector in India
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  3. “Sea power can be used flexibly to send calibrated signals to Beijing without necessarily having to cross its lines. At the least threatening level, New Delhi should increase the frequency and duration of naval deployments in the region, expanding the types of naval assets so deployed. Vessels on such deployments should regularly call at friendly ports of South East Asian countries, including Timor-Leste, and have frequent rendezvous with ships of the US, Japan, Australia, Vietnam, Singapore and Indonesia, away from disputed waters.
    Stronger signals can be sent by sending the navy on longer voyages to Japanese and Russian ports, especially if the routes are planned for saying a “Hi, Hello” to the Taiwanese along the way. Such voyages offer New Delhi forms of diplomatic leverage that it currently does not have with Beijing.”
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    Nitin Pai advocates a hawkish stance when it comes to China, but in a surprising part of the world. The essay is part of a series, all worth reading, of course.
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  4. “That being said, it is hard to learn much about how it works. First, a big part of the system is informal and thus only discoverable by observing it personally or by asking the locals. Second, it’s strongly decentralized. Different rules apply in different cantons and municipalities which makes the topic confusing to study. Third, Swiss aren’t especially interested in promoting their own system abroad. A lot of the resources therefore exist only in local languages.”
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    Via Tyler Cowen on MR, a great read on what makes Swiss democracy so great. The excerpt that he chose to include on MR comes towards the end of the very long post, mine is the second paragraph itself. The first and second points in the excerpt above are worth thinking about (and see Taleb on this as well, of course)
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  5. No excerpt, but I found this interesting, and might make it next week. Chicken biryani made with coconut milk!
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    Maybe one recipe every Friday? Especially in these times, seems like a good idea

*Really* Understanding Jio

A while ago, I wrote an essay called “Airtel, Amazon and Untangling some Thoughts“. Today’s essay is a continuation of that one, and we’ll begin with a diagram I’d put up in the last one:

The basic thesis in that essay was that the reason the Amazon/Airtel, Google/Vodafone ideas made sense was because all the major players wanted to be present in the entire space.

But the recent investments in Jio take our story down a different path:

I wrote that Daily Update on the occasion of Facebook investing $5.7 billion for a 10% stake into Jio Platforms; it turned out that was the first of many investments into Jio:

In May, Silver Lake Partners invested $790 million for a 1.15% stake, General Atlantic invested $930 million for a 1.34% stake, and KKR invested $1.6 billion for a 2.32% stake.

In June, the Mubadala and Adia UAE sovereign funds and Saudi Arabia sovereign fund invested $1.3 billion for a 1.85% stake, $800 million for a 1.16% stake, and $1.6 billion for a 2.32% stake, respectively;

Silver Lake Partners invested an additional $640 million to up its stake to 2.08%, TPG invested $640 million for a 0.93% stake, and Catterton invested $270 million for a 0.39% stake. In addition, Intel invested $253 million for a 0.39% stake.

In July, Qualcomm invested $97 million for a 0.15% stake, and Google invested $4.7 billion for a 7.7% stake.

With that flurry of fundraising Reliance completely paid off the billions of dollars it had borrowed to build out Jio. What is increasingly clear, though, is that the company’s ambitions extend far beyond being a mere telecoms provider.

https://stratechery.com/2020/india-jio-and-the-four-internets/

That excerpt is from an essay written by Ben Thompson over on Stratechery.com, and it is one I will be quoting from extensively in today’s post, along with two other essays.

The last sentence in that essay is the basic idea behind my essay today: what exactly are Jio’s ambitions, why are those ambitions whatever they are, how is Mukesh Ambani going about meeting those ambitions, and what will the ramification be on India – and then the rest of the world.

What are Jio’s ambitions?

Think back (or scroll up) to that diagram I have above. Jio doesn’t want to (and never did want to) build out a large telecommunications firm and stop there. Building out the telecom infrastructure, expensive though it was, was the means to an end. And when I say expensive, I mean expensive: 30 billion dollars!

From a strategic point of view, this is impressive, but one has to call out RIL’s execution and ability to deliver on its vision. Here it is really important to circle back to the core petroleum business. Not many companies in India would have the ability to plough in ~$30B+, the biggest private sector investment in the country’s history, to build a broadband network to cover the country. The legacy business gave RIL the buffer and cash reserves to do this (see below for RIL’s capex over the past five years).

https://hind.substack.com/p/from-oil-to-jio

I came across this essay via Ben Thompson himself on Twitter, and I wish I had been aware of this newsletter earlier:

But why did Jio spend those 30 billion USD? With what objective in mind?

I suppose all of you are sick and tired of the phrase “data is the new oil”, and I am too – but the bad news is, there really is no better answer to our question in this section.

Oil, its linkages, its by-products, and its enabling nature is what attracted Dhirubhai to oil as a business. It wasn’t just about oil itself – it was always about all of what oil allowed one to get into as a business. And it is the same now – it’s not about telecommunications and data. That just enables Reliance to get into – well, everything, really.

The distinction is important: when I say data is the new oil, I don’t mean the fact that data about you (and everybody else will be collected). Mukesh Ambani understands that statement to mean that whoever controls the pipe through which data (or oil) flows wins.

Jio’s ambition is to be in the 21st century what Reliance was in the 20th: the sole controller of oil data

Why are those ambitions whatever they are?

People love to talk about moats in the tech world:

The term economic moat, popularized by Warren Buffett, refers to a business’ ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms. Just like a medieval castle, the moat serves to protect those inside the fortress and their riches from outsiders.

https://www.investopedia.com/ask/answers/05/economicmoat.asp

But perhaps a better way to understand both what Dhirubhai and Mukesh Ambani have done (with oil and data respectively) is to not think of those businesses as having moats around them but to think of these businesses as walls around the Indian consumer.

A moat protects a business. But Jio in particular is a business that is a moat. If other businesses want to get at the Indian consumer, you must literally get Jio’s permission. And the other way around too: if an Indian consumer wants to get at the Internet, she must do so through the Jio moat.

Mukesh Ambani, in an analogy that might make sense in today’s day and age, wants Jio to be Heimdall.

Heimdall is the brother of the warrior Sif. He is the all-seeing and all-hearing guardian sentry of Asgard who stands on the rainbow bridge Bifröst to watch for any attacks to Asgard. He partly won the role through using his eyesight to see an army of giants several days’ march from Asgard, allowing them to be defeated before they reached Asgard, and making their king a prisoner. (emphasis added)

https://en.wikipedia.org/wiki/Heimdall_(comics)

Another way of thinking about this is to liken Jio to China’s Great Firewall:

The Great Firewall of China (GFW; simplified Chinese: 防火长城; traditional Chinese: 防火長城; pinyin: Fánghuǒ Chángchéng) is the combination of legislative actions and technologies enforced by the People’s Republic of China to regulate the Internet domestically. Its role in Internet censorship in China is to block access to selected foreign websites and to slow down cross-border internet traffic. The effect includes: limiting access to foreign information sources, blocking foreign internet tools (e.g. Google search,Facebook, Twitter, Wikipedia,and others) and mobile apps, and requiring foreign companies to adapt to domestic regulations.
Besides censorship, the GFW has also influenced the development of China’s internal internet economy by nurturing domestic companies and reducing the effectiveness of products from foreign internet companies. (Emphasis added)

https://en.wikipedia.org/wiki/Great_Firewall

I don’t mean that analogy as a criticism – far from it. Quite the opposite, in fact, I say it with great admiration. In the part that is emphasized above, substitute Jio for GFW, and Mukesh Ambani’s playbook starts to make a lot of sense!

Ben Thompson makes a similar point in his essay…

The key to understanding Ambani’s bet is that while all of the incumbent mobile operators in India were, like mobile operators around the world, companies built on voice calls that layered on data, Jio was built to be a data network — specifically 4G — from the beginning.

https://stratechery.com/2020/india-jio-and-the-four-internets/

… but to my mind, doesn’t go far enough. Yes, data first, and yes, Jio got it right, but it is the strategic thinking behind “OK, what’s next after I’ve won the telecom sector” that’s truly impressive.

This section is titled “why are those ambitions whatever they are?” The answer boggles the mind.

How is Mukesh Ambani going about meeting those ambitions?

Three excerpts, all from the same author, but across two essays:

It’s very common now to talk about Reliance’s political connections and proximity to the government. This too has a deep seated history. Quite simply, you couldn’t be an industrialist or entrepreneur in India in the 1970s without currying favour with the government or having the right friends. Ambani became adept at this, forging ties with close aides of Prime Minister Indira Gandhi, like R.K Dhawan and T.A. Pai.

https://hind.substack.com/p/reliance-origins

Reliance at the time was seen as such a creature of the Congress that Rajiv Gandhi, who had become Prime Minister in 1984 after his mother’s assassination, wanted to keep a distance from Ambani. S Gurumurthy and Shourie both have ties to the BJP, the ruling administration now. Gurumurthy is co-convener of the Swadeshi Jagaran Manch (affiliated with RSS) and currently on the Board of the Reserve Bank of India.

https://hind.substack.com/p/reliance-origins

There’s, of course, also the question of regulatory capture and how much of a role that will play in RIL and Jio’s continued success. Pretty much every time an investment in Jio was announced over the last couple of months, a pointed note was made of Reliance’s closeness with the current government. These allegations have dogged Reliance regardless of administration. One argument is that Ambani basically controls whichever government is in power.

https://hind.substack.com/p/from-oil-to-jio

You couldn’t have built an empire around polyester, or oil, or data, without at least the tacit help of the government. Mukesh Ambani, and his father before him, learnt an obvious, if difficult to master, lesson. You need to be friends with whoever is in power. This is always true, but especially so in a country like India.

Because our babudom delights in coming up with rules and then making money off of the inevitable violation of those rules, the only way to avoid this problem is by making friends with the people who sit on top of the babus in the pecking order. And that’s not the BJP, or the Congress, or the United Front: it’s all of them. And when whoever happens to be in power wants a particular tune to be sung, it will be sung.

That, like it or not, is just good business sense.

So no, Mukesh Ambani is not especially close to Narendra Modi, and neither was Dhirubhai Ambani especially close to Indira Gandhi/Rajiv Gandhi. The key word in the previous sentence is “especially”. The Ambanis are especially close to the throne, and they don’t particularly care who is occupying it at just the moment.

They do care that the occupant not get in the way of their business, and that they have managed quite magnificently. Again, I mean this in an admiring sense, not as a critique. It remains the only way to do business in India on a very large scale, like it or not.

I think an easier answer is that Reliance knows how to work the system. I recently read this article by Mark Lutter, which argues that one thing that constrains Silicon Valley’s ability to build is that it hasn’t engaged seriously with politics. “Part of politics will be co-opting old institutions. Get innovation sympathizers in key positions of power.”

https://hind.substack.com/p/from-oil-to-jio

My only contention in this section is that you can’t answer the “how” without getting creative about working around the inevitable regulatory hurdles, and nobody is more creative in this regard than the Ambanis.

What will the ramifications be on India and the rest of the world?

India will – I don’t see any alternative to this – eventually become a duopoly when it comes to telecommunications. Vodafone is a dead man walking, and BSNL/MTNL are deadweight that the Indian government can support for only so long. Airtel remains the only credible competitor, although it’s challenges are going to be many, and very painful

Original chart here: https://hind.substack.com/p/from-oil-to-jio

And eventually, a very large part of India’s communications, commercial transactions will all go through Jio’s services. This, as the author mentions, may or may not be true, but I love the uniquely Indian example:

One use case I recently heard anecdotally was of JioMeet being used for day-long satsangs. This could be an apocryphal story, but to be honest, it is such a specifically Indian use case, that I can believe it. Can you imagine the kind of customer connections Jio can build if it becomes the default satsang app during the era of Covid?

https://hind.substack.com/p/from-oil-to-jio

Second, where the rest of the world is concerned:

Jio’s network and its work on 5G, which takes years, was by definition not motivated by a phrase Prime Minister Modi first deployed two months ago. Rather, Ambani’s dedication hinted at the role Jio investors like Facebook and Google are anticipating Jio will play:
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Jio leverages its investment to become the monopoly provider of telecom services in India.
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Jio is now a single point of leverage for the government to both exert control over the Internet, and to collect its share of revenue.
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Jio becomes a reliable interface for foreign companies to invest in the Indian market; yes, they will have to share revenue with Jio, but Jio will smooth over the regulatory and infrastructure hurdles that have stymied so many (emphasis added)

https://stratechery.com/2020/india-jio-and-the-four-internets/

Remember the Heimdall analogy? The emphasized part above is the Heimdall play at work. You can enter Asgard India, sure, but only at Heimdall’s Jio’s pleasure, and Facebook and Google, among others, already have agreed, and backed up their agreement with cold hard cash.

Could I be completely wrong about all this?

Yes, and in two ways. Here’s the first, via Benedict Evans:

Every five years or so, a big telco thinks it can move up the stack and compete with the internet. This is a little like a municipal water company trying to get into the soft drinks business. Jio may be different: it has a more captive, less sophisticated base, a retail arm to leverage, and maybe more ability to innovate and understand the market. Or maybe not.

Benedict Evans’ Newsletter from the 21st of July

He elaborates on this further (read the entire conversation on Twitter):

Essentially, Evans’ point seems to be that other companies in other countries have tried what Jio is trying to do now, and maybe it won’t work out here because it hasn’t worked out there.

Maybe. The thing that makes me want to bet against Evans’ contention is how close Mukesh Ambani is to the government, and how involved the government in India has always been when it comes to regulation. In other words, I’m not betting just on how good Jio is (and it is good, but Evans has a been there done that gut feel – and he could be right). I’m also betting on how not laissez-faire our regulation is in practice. And that, weirdly, is the ace up Mukesh Ambani’s sleeve.

And the second way I could be wrong? Two words:

Jeff Bezos.

What a battle this is going to be.

What do small groups do?

You might want to read my previous posts about online education and learning before reading this. See this essay about the state of higher education in India, this about signaling and bundling in higher education, this about unbundling college,this about measuring efficiency in education and this from yesterday about large classes and small groups.

The latter part of yesterday’s post spoke about the importance of small groups, and how to go about forming them. I mentioned how the process isn’t clear at all, and about how you might have to iterate until you get the right groups for most people concerned.

But a supplementary question is, well, all right, we have the groups. Now what. As in, what do these groups do?

The beauty of a group lies in the fact that a well-knit, cohesive group that shares certain traits but also has diverse skill sets is able to accomplish so much more than an individual ever can.

So asking the group to just help each other learn achieves – nothing. Not only will it be the case that the group will achieve the goal of learning better fairly quickly, but worse, it will stop being challenging.

But, on the other hand, if you ask the group to apply what they’ve learned – ah, that’s where the magic has a pretty good chance at beginning.

Or, as Seth Godin says: ship, dammit. Not, to be clear, in those exact words, but the point he’s making is that learning all you’ve learnt isn’t worth a damn thing until you’ve put it out there in the real world.

Put what out in the real world? Anything! A blog, a podcast, a vlog, a write-up, a website, a dashboard – anything at all. But unless you use what you’ve learnt to create something, and unless that ‘something’ is up for people to see, like, love, hate and criticize… it doesn’t count.

For example (and this is the point of today’s post), go visit this page. It is a page that hosts a podcast called “The Undismal Paradox”. This is a podcast started by nine FYBSc students at the Gokhale Institute of Politics and Economics (GIPE), which is where I teach.

Mondays is a podcast about the rise of China (and related issues), Wednesdays is about the electricity sector in India (ditto) and Fridays are about understanding how consumption habits have changed because of the pandemic (ditto^2).

This podcast was started by the students themselves, with the gentle encouragement of a colleague of mine – Saylee Jog – from the Institute. I was roped in to help in any way I could, but honestly, both I and my colleague have ended up not doing all that much.

We put a basic structure in place, created a basic workflow, and put in place simple rules to follow about minimizing errors. After that, we just stepped back, and watched these nine students learn more about economics than a class could ever have taught them.

The learning happened, make no mistake. The colleague I mentioned has taught them a course in Principles of Economics and Microeconomics-I. But learning while sitting in a class is different from learning in order to teach other folks. Plus, the pressure of shipping your work to a fixed cadence, and that too, shipping something out to the world at large, is a much better incentive to learn than the threat of an examination at the end of the semester.

The podcast is about to take a hiatus in a bit, because they have exams (oh, the irony), but it will be back in one form or the other in late August/ early September.

My personal hope is that when it will be back, I and my colleague will have to do even lesser than we did this time around. Maybe these nine students can recruit others, and the podcast will end up taking on a life of its own.

But that, to me, is a concrete answer to the question, what exactly do small groups do in an online course? They apply what they’ve learnt, and make their learning available to the world at large.

Without having shipped a product on the basis of what you’ve learnt, an education simply isn’t complete.

There are problems with this, to be sure:

  1. It by definition doesn’t scale well, because the job of the teacher/college is no longer to just teach, but also to mentor each group
  2. It is also to guide this group through a variety of stages: the formation, the inevitable adjustment pangs, the pressure of shipping, the disagreements that will crop up. Again, this isn’t a scalable thing, and so costs will rise.
  3. Getting the number of students in each group, and the number of groups in each class right will always be a challenge.
  4. Some groups will not work out, especially online. Devising fallback measures and alternatives is important.
  5. Setting up these groups, and setting up the systems associated with these groups is hard work, but hopefully, it will be a one time thing.
  6. Tackling the inertia of the education system, and convincing it of the merits of ship-the-work is hard!

But, all that said and done, it still is worth it. Because what you learn by doing simply can’t be replaced by what you learn by memorizing.

Small groups, and shipping your work is the only way online education will work.

Large classes, small groups

You might want to read my previous posts about online education and learning before reading this. See this essay about the state of higher education in India, this about signaling and bundling in higher education, this about unbundling college and this about measuring efficiency in education.

In addition, Aadisht had a great comment about optionality and higher education, which really deserves a post in its own right – but you can click on the link in this paragraph and scroll to the bottom to read it for now.

All that being said, today’s post ties together the thoughts and deeds of three people whose thinking I try to follow very carefully when it comes to online education.

The role of community in education

Let’s begin with this tweet from one of them, David Perell.

Both the thread of which 4. is a part, and the Twitter thread referenced in 4. are worth reading.

But today, I wanted to focus on the community bit.

A quick reminder: my thesis is that college sells you three things. The education itself, the access to peer networks and the credentialing. If there is to be an online model that will work for colleges, it must successfully provide all three (and more) at the same price (or less) as college does today.

When it comes to peer networks, can they ever be as successful online as they have been offline?

That begs the question: have they been successful offline? And that is really two separate questions.

About Peer Groups

  1. Are peer groups worth the effort in the first place?
  2. Is there something special about peer groups you form in college?

With regard to the first, I’m going to take a pass on answering it in depth for at least two reasons. First, I know nowhere near enough sociology to be able to speak about this sensibly for any length of time. And second, isn’t the answer obvious?

About the second question, you might want to read this essay – a part of which is excerpted below:

As external conditions change, it becomes tougher to meet the three conditions that sociologists since the 1950s have considered crucial to making close friends: proximity; repeated, unplanned interactions; and a setting that encourages people to let their guard down and confide in each other, said Rebecca G. Adams, a professor of sociology and gerontology at the University of North Carolina at Greensboro. This is why so many people meet their lifelong friends in college, she added.

https://www.nytimes.com/2012/07/15/fashion/the-challenge-of-making-friends-as-an-adult.html

The entire essay is worth your time, but the crux of it is those three points above: proximity; repeated, unplanned interactions; and college life.

Anecdote Time

Two of the best years of my life were spent while studying for my Masters degree at the Gokhale Institute in Pune. There was a fair bit of reading/learning involved, but most of those two years were spent in just hanging out with a group of people I am still close friends with.

And of the three things that Gokhale Institute gave me when I purchased a Masters degree from it, it is this group of friends that I value the most. Then comes the degree, and the least important – as it turns out – was the learning itself.

Don’t misunderstand me – learning was and is important! It’s just that for me, sitting in a class and listening to professors talk wasn’t the best way to learn. I have learnt much more by speaking one-on-one with some professors, arguing heatedly and passionately about random topics with friends, and by reading/listening/viewing to stuff on my own time.

But therein lies a dilemma.

How to reconcile online education with forming your college gang?

Random bike rides, conversations at three in the morning sitting on a ledge on the hostel terrace, giggling at a joke while sitting towards the back of a classroom is not just an important part of college. In my personal experience, this pretty much was college.

And not just during the pandemic, but even beyond, the key challenge is to figure out ways and means to achieve something approaching the same experience in this brave new online world of ours.

What might be an answer to this conundrum? That brings me to the second person whose thoughts about online education matter to me, Tyler Cowen

Small Group Theory, via Tyler Cowen

If you are seeking to foment change, take care to bring together people who have a relatively good chance of forming a small group together. Perhaps small groups of this kind are the fundamental units of social change, noting that often the small groups will be found within larger organizations. The returns to “person A meeting person B” arguably are underrated, and perhaps more philanthropy should be aimed toward this end.

Small groups (potentially) have the speed and power to learn from members and to iterate quickly and improve their ideas and base all of those processes upon trust. These groups also have low overhead and low communications overhead. Small groups also insulate their members sufficiently from a possibly stifling mainstream consensus, while the multiplicity of group members simultaneously boosts the chances of drawing in potential ideas and corrections from the broader social milieu.

https://marginalrevolution.com/marginalrevolution/2018/06/best-analyses-small-innovative-productive-groups.html

If you are going to run an online course, or are going to be a student enrolled in an online course, the most important thing you can do is think long and hard about forming groups.

If you are the person running the course, you need to make the process of forming a group as friction-less as you possibly can. Without these groups, not only are drop-outs more likely, but the groups themselves are perhaps the bigger point!

Here’s Tyler Cowen again, in a separate post:

Remember Lancastrian methods of education from 19th century England? Part of the idea was to keep small group size, and economize on labor, by having the students teach each other, typically with the older students instructing the younger.

https://marginalrevolution.com/marginalrevolution/2020/05/my-weird-lancastrian-method-for-reopening-higher-education.html

The post I quoted from is about how college might reinvent itself in the era of the pandemic, but the larger point he is making – or at any rate, the point I choose to take away – is about how learning in small groups is better than classrooms.

And on a related note, the third person whose thoughts on online education I choose to take very seriously, Seth Godin:

Great guy. Chip and I went to business school together. He was the third youngest person in the class and I was the second youngest person in the class. He got five of us together and every Tuesday night, we met in the Anthropology Department for four hours. We brainstormed more than 5,000 business ideas over the course of the first year of business school. It was magnificent. It wasn’t official, it wasn’t sanctioned. It was just Chip said let’s do this, and we did. And he picked the Anthropology Department because he knew someone there and could get the conference room.

https://tim.blog/wp-content/uploads/2018/09/138-seth-godin.pdf

That is from an episode from Tim Ferriss’ podcast, in which he interviewed Seth (the whole episode is well worth your time), but the point that I remembered was about small groups.

Anybody who is going to try and do education online is going to have to get small groups going. Without it – in my opinion – it simply will not work.

But how do you form these groups?

I’m still thinking about the how, and the more I think about it, the more it seems as if there is never going to be a perfect answer. Forming groups is hard, and I think we need to make peace with the fact that groups may not always work out.

People won’t get along, people will drop out, quarrels will take place even among groups that develop close bonds – there are many, many things that can go wrong. But it doesn’t matter how long it takes and how many times groups have to be formed and re-formed – it is unlikely that you’ll get an education worth the name without the formation of a group, or community.

And what do these groups do?

… will be the topic of tomorrow’s essay, for I was part of an experiment that tried to answer this question – and I really liked the answer!

Notes on being Aatmanirbhar in Agriculture

The full title of the article is “Aatmanirbhar in agriculture will require incentives for export of high-value agri-produce” and it has been written by Ashok Gulati.

One may ask: What does Aatma Nirbhar Bharat mean? Is it self-reliance or self-sufficiency in all essential items?

https://indianexpress.com/article/opinion/columns/atma-nirbhar-bharat-scheme-agriculture-narendra-modi-govt-covid-19-6491672/

If you are confused about the difference between self-reliance and self-sufficiency, here is Swaminathan Aiyar in ET:

Self-reliance means making your own economy strong and strong does not mean giving it crutches like protectionism. That is the wrong way. Self-reliance means we say, look I am uncompetitive because I have relatively high cost of land or labour, high interest rates, high electricity rates and high freight rates. If I get all these down, I become more competitive. So if you are going in that direction, India will become strong and competitive. It will be able to trade in the world and we will not have a trade deficit problem. So the correct self-sufficiency means you strengthen your economy by making it more productive and more low cost. It does not mean you make it high cost by putting up tariffs. Therefore, protecting your least productive industry is the wrong direction.

https://economictimes.indiatimes.com/markets/expert-view/govt-needs-to-understand-the-difference-between-self-sufficiency-and-self-reliance-swaminathan-aiyar/articleshow/76710928.cms?from=mdr

The consensus among economists seems to be that we should be targeting self-reliance rather than self-sufficiency, but I would say that it is one thing to debate which to aim for without being explicit and crystal clear about what each of these terms mean.

You might want to read this Wikipedia article about the issue. Also, a request: if any of you have articles about the distinction, and any clear articulation about India’s policy stance in this regard, I would love to read it.

It is presumed that for a large country like India, with a population of 1.37 billion, much of the food has to be produced at home. We don’t want to be in a “ship to mouth” situation, as we were in the mid-1960s.

https://indianexpress.com/article/opinion/columns/atma-nirbhar-bharat-scheme-agriculture-narendra-modi-govt-covid-19-6491672/

You might want to read about the following if you are unfamiliar with our “ship to mouth” situation: the sorry saga of the PL480 scheme and India (two separate links)

In the mid-1960s, if India had spent all its foreign currency reserves — the country had about $400 million — just on wheat imports, it could have imported about seven million tonnes (mt) of wheat. Today, India has foreign exchange reserves of more than $500 billion.

ibid

A question that is rarely asked – or at least, not asked as often as I would like it to be asked – is how did we get to a stage where we have more than $500 billion in reserves? We must have earned it, we obviously can’t print dollars. Which begs the question, how did we earn it? Two things: we depreciated our exchange rate, and we exported a helluva lot more post 1991. Self-sufficiency, in other words, tends to not work well!

Chart from the IE article

Agri-exports have been subdued for the last six years or so, and we have yet to recover the peak of the ear 2013-2014. As Ashok Gulati mentions in his article, that year’s performance has not been bettered since.

What do our exports look like currently?

Marine products with $6.7 billion exports top the list, followed by rice at $6.4 billion (basmati at $4.6 billion and common rice at $2.0 billion), spices at $3.6 billion, buffalo meat at $3.2 billion, sugar at $2.0 billion, tea and coffee at $1.5 billion, fresh fruits and vegetables at $1.4 billion, and cotton at $1 billion.

ibid

Of which, Prof. Gulati picks rice and sugar for analysis – $8.4 billion worth of exports in total. Now, here is where all of what you may have learnt in microeconomics starts to make sense.

Think of a farm producing rice. The production function will tell you that you produce rice by combining inputs to produce output. What inputs? Labor, land – but also water and fertilisers. And the problem with fertilisers and water is that it is heavily, heavily subsidised in India.

Again, microecon 101: whatever isn’t priced tends to be overused, and that too indiscriminately. So what happens when you export more rice and more sugar every year? Well, to export more you have to produce more, and to produce more you have to use more inputs, and when you use inputs inefficiently, you end up exporting that input in larger quantities than is optimal.

Or, the simple version: we are exporting a lot of our water when we export sugar and rice. We’re also polluting our rivers and our soil, but that’s a story for another day.

But more importantly, it is leading to the virtual export of water as one kg of rice requires 3,500-5,000 litres of water for irrigation, and one kg of sugar consumes about 2,000 litres of water. So, in a sense, the two crops are leading to a faster depletion of groundwater in states such as Punjab, Haryana (due to rice) and Maharashtra (due to sugar). Thus, quite a bit of the “revealed comparative advantage” in rice and sugar is hidden in input subsidies. This leads to increased pressure on scarce water and a highly inefficient use of fertilisers.

ibid

What about the other side of the story – which is the big ticket item when it comes to imports of agricultural goods?

On the agri-imports front, the biggest item is edible oils — worth about $10 billion (more than 15 mt). This is where there is a need to create “aatma nirbharta”, not by levying high import duties, but by creating a competitive advantage through augmenting productivity and increasing the recovery ratio of oil from oilseeds and in case of palm oil, from fresh fruit bunches.

ibid

And within oils, Prof. Gulati recommends increasing our productivity in oil palm:

This is the only plant that can give about four tonnes of oil on a per hectare basis. India has about 2 million hectares that are suitable for oil palm cultivation — this can yield 8 mt of palm oil. But it needs a long term vision and strategy. If the Modi government wants “aatma nirbharta” in agriculture, oil palm is a crop to work on.

ibid

And on a related note, you may want to read this article from Scroll, an excerpt from which is below:

It is now clear that, in the face of rising demand, domestic production will remain way under 10% in the years to come. That essentially means that India will continue to import palm oil in various forms. However, the dynamics of imports is not just dictated by demand but also geopolitics. For instance, diplomatic tensions with Malaysia led the Indian government to discourage imports of refined palm oil from the Southeast Asian nation, resulting in a precipitous fall in recent months.
Domestic palm oil processors, such as millers and refiners, also routinely demand restrictions on imports so they can protect their margins. The Solvent Extractors’ Association of India recently presented the government with a list of demands that would favour local processors. This puts further price pressures in Malaysia and Indonesia, making it more difficult to green the palm oil supply chain.

https://scroll.in/article/967186/as-worlds-largest-importer-of-palm-oil-india-has-a-duty-to-push-for-ethical-production-practices

Video for 19th July 2020

Tweets for 18th July 2020

Links for Friday, 17th July, 2020

  1. David Perell writes a mid-year review. It is worth reading in full, and there were multiple excerpts that I wanted to include here.

Writing is nature’s way of showing you how sloppy your thinking usually is. My mind tends to skip between topics, and the quarantine has made it worse because my Twitter usage has increased. At its worst, I develop BuzzFeed Brain where I find myself skimming instead of reading, secretly hoping my next intellectual breakthrough is just a thumb-scroll away. Long-form writing, however, re-activates my focus muscle and that’s why I do it.

https://www.perell.com/blog/mid-year-review

2. Scroll on what Mumbai’s coastal road will look like. Next week’s episode on urbanization with Binoy will have this as a primary focus – keep an eye out for that one! The pictures are worth going through – full screen on a laptop/desktop recommended.

But the proposal reflects one of the many flaws that urban planners have found with the Mumbai coastal road project: it is expensive, beyond the city’s means and capacity and is likely to congest the city even further.
A group of architects and urban planners in Mumbai have attempted to highlight these problems through visual representations of the planned coastal road. Since 2016, the group – named the Bandra Collective – has created several animated GIFs that superimpose artists’ impressions of the coastal road on actual photographs of Mumbai’s landmark coastline.

https://amp.scroll.in/article/876929/what-will-mumbais-coastal-road-actually-look-like-an-eyesore-say-these-architectural-projections

3. Varun Grover raises some interesting questions in an article about caste in the Indian Express:

There are two main arguments against reservations — one, they bypass merit and two, they should be given on the basis of economic status alone because otherwise “rich Dalits are taking undue advantage of the policy”.
The broad logical observation here is that one can’t offer both these arguments together. If we are okay with poverty-based reservations then merit is not a genuine concern. That means we hate its bypassing only when a ‘lower-caste’ person gets ahead and not when a poor from our own caste does. That’s casteism 101.

https://indianexpress.com/article/opinion/columns/reservation-vinod-kambli-dalits-varun-grover-6501257/lite/

4. If you have kids at home, this is worth it – I and my daughter are working through it, and it is genuinely fun, and educational!

Welcome to Camp Google. Two engaging weeks of interactive activities and assignments which will make this extended summer memorable for kids at home.
Starting 1st July, 2020, we will share exciting and innovative assignments with your kids to help them explore skills such as painting, writing, storytelling, arts & crafts, coding and cooking. These assignments will also include internet safety tips which will teach you how to be responsible digital citizens while being safe online.

https://events.withgoogle.com/summercamp2020/#content

5. I haven’t read this just yet (I’m writing this on the 15th of July), but it was recommended by Grant Sanderson – and that’s good enough for me!

But Gödel’s shocking incompleteness theorems, published when he was just 25, crushed that dream. He proved that any set of axioms you could posit as a possible foundation for math will inevitably be incomplete; there will always be true facts about numbers that cannot be proved by those axioms. He also showed that no candidate set of axioms can ever prove its own consistency.

https://www.quantamagazine.org/how-godels-incompleteness-theorems-work-20200714