The Three Article Problem

I’ve been mulling over three separate columns/posts/interviews over the past few days. Today’s post was supposed to be me reflecting on my thoughts about all of them together, but as it turns out, I have more questions than I do thoughts.

Worse (or if you think like I do, better) I don’t even have a framework to go through these questions in my own head. That is to say, I do not have a mental model that helps me think about which questions to ask first, and which later, and why.

So this is not me copping out from writing today’s post. This is me asking all of you for help. What framework should I be using to think about these three pieces of content together?

All three posts revolve around technology, and two are about the Chinese tech crackdown. Two are about innovation in tech and America. And one of the three is, obviously, the intersection set.


The first is a write-up from Noah Smith’s Substack (which you should read, and if you can afford it, pay for. Note that I am well over my budget for subscribing to content for this year, so I don’t. But based on what I have read of his free posts, I have no hesitation in recommending it to you.)

In other words, the crackdown on China’s internet industry seems to be part of the country’s emerging national industrial policy. Instead of simply letting local governments throw resources at whatever they think will produce rapid growth (the strategy in the 90s and early 00s), China’s top leaders are now trying to direct the country’s industrial mix toward what they think will serve the nation as a whole.
And what do they think will serve the nation as a whole? My guess is: Power. Geopolitical and military power for the People’s Republic of China, relative to its rival nations.
If you’re going to fight a cold war or a hot war against the U.S. or Japan or India or whoever, you need a bunch of military hardware. That means you need materials, engines, fuel, engineering and design, and so on. You also need chips to run that hardware, because military tech is increasingly software-driven. And of course you need firmware as well. You’ll also need surveillance capability, for keeping an eye on your opponents, for any attempts you make to destabilize them, and for maintaining social control in case they try to destabilize you.

https://noahpinion.substack.com/p/why-is-china-smashing-its-tech-industry

As always, read the whole thing. But in particular, read his excerpts from Dan Wang’s letters from 2019 and 2020. It goes without saying that you should subscribe to Dan Wang’s annual letters (here are past EFE posts that mention Dan Wang). As Noah Smith says, China is optimizing for power, and is willing to pay for it by sacrificing, at least in part, the “consumer internet”.

That makes sense, in the sense that I understand the argument.


The second is an excellent column in the Economist, from its business section. Schumpeter is a column worth reading almost always, but this edition in particular was really thought-provoking. The column starts off by comparing how China and the United States of America are dealing with the influence of “big” technology firms.

As the column says, when it comes to the following:

  1. The speed with which China has dealt with the problem
  2. The scope of its tech crackdown
  3. The harshness of the punishments (fines is just one part of the Chinese government’s arsenal)

… China has America beat hollow. As Noah Smith argues, China is optimizing for power, and has done so for ages. As he mentions elsewhere in his essay, “in classic CCP fashion, it was time to smash”. Well, they have.

But the concluding paragraph of the Schumpeter column is worth savoring in full, and over multiple mugs of coffee:

But autarky carries its own risks. Already, Chinese tech darlings are cancelling plans to issue shares in America, derailing a gravy train that allowed Chinese firms listed there to reach a market value of nearly $2trn. The techlash also risks stifling the animal spirits that make China a hotbed of innovation. Ironically, at just the moment China is applying water torture to its tech giants, both it and America are seeing a flurry of digital competition, as incumbents invade each other’s turf and are taken on by new challengers. It is a time for encouragement, not crackdowns. Instead of tearing down the tech giants, American trustbusters should strengthen what has always served the country best: free markets, rule of law and due process. That is the one lesson America can teach China. It is the most important lesson of all.

https://www.economist.com/business/2021/07/24/china-offers-a-masterclass-in-how-to-humble-big-tech-right

This makes sense, in the sense that I understand the argument being made. Given what little I understand of economics and how the world works, I am in complete agreement with the idea being espoused.


The third is an interview of Mark Zuckerberg by Casey Newton of the Verge.

It is a difficult interview to read, and it is also a great argument for why we should all read more science fiction (note that the title of today’s post is a little bit meta, and that in more ways than one). Read books by Neal Stephenson. Listen to his conversation with Tyler Cowen. Read these essays by Matthew Ball.

Towards the end of the interview, Casey Newton asks Mark Zuckerberg about the role of the government, and the importance of public spaces, in the metaverse. Don’t worry right now if the concept of the metaverse seems a little abstract. Twenty years ago, driverless cars and small devices that could stream for you all of the world’s content (ever produced) also seemed a little abstract. Techno-optimism is great, I heavily recommend it to you.

Here is Mark Zuckerberg’s answer:

I certainly think that there should be public spaces. I think that’s important for having healthy communities and a healthy sphere. And I think that those spaces range from things that are government-built or administered, to nonprofits, which I guess are technically private, but are operating in the public interest without a profit goal. So you think about things like Wikipedia, which I think is really like a public good, even though it’s run by a nonprofit, not a government.
One of the things that I’ve been thinking about a lot is: there are a set of big technology problems today that, it’s almost like 50 years ago the government, I guess I’m talking about the US government here specifically, would have invested a ton in building out these things. But now in this country, that’s not quite how it’s working. Instead, you have a number of Big Tech companies or big companies that are investing in building out this infrastructure. And I don’t know, maybe that’s the right way for it to work. When 5G is rolled out, it’s tough for a startup to really go fund the tens of billions of dollars of infrastructure to go do that. So, you have Verizon and AT&T and T-Mobile do it, and that’s pretty good, I guess.
But there are a bunch of big technology problems, [like] defining augmented and virtual reality in this overall metaverse vision. I think that that’s going to be a problem that is going to require tens of billions of dollars of research, but should unlock hundreds of billions of dollars of value or more. I think that there are things like self-driving cars, which seems like it’s turning out to be pretty close to AI-complete; needing to almost solve a lot of different aspects of AI to really fully solve that. So that’s just a massive problem in terms of investment. And some of the aspects around space exploration. Disease research is still one that our government does a lot in.
But I do wonder, especially when we look at China, for example, which does invest a lot directly in these spaces, how that is kind of setting this up to go over time. But look, in the absence of that, yeah, I do think having public spaces is a healthy part of communities. And you’re going to have creators and developers with all different motivations, even on the mobile internet and internet today, you have a lot of people who are interested in doing public-good work. Even if they’re not directly funded by the government to do that. And I think that certainly, you’re going to have a lot of that here as well.
But yeah, I do think that there is this long-term question where, as a society, we should want a very large amount of capital and our most talented technical people working on these futuristic problems, to lead and innovate in these spaces. And I think that there probably is a little bit more of a balance of space, where some of this could come from government, but I think startups and the open-source community and the creator economy is going to fill in a huge amount of this as well.

https://www.theverge.com/22588022/mark-zuckerberg-facebook-ceo-metaverse-interview

I think he’s saying that the truth lies somewhere in the middle, and god knows I’m sympathetic to that argument. But who decides where in the middle? Who determines the breadth of this spectrum, governments or businesses? With what objective, over what time horizon, and with what opportunity costs?


At the moment, and that as a consequence of having written all of this out, this is where I find myself:

China is optimizing for power, and is willing to give up on innovation in the consumer internet space. America is optimizing for innovation in the consumer internet space, and is willing to cede power to big tech in terms of shaping up what society looks like in the near future.

Have I framed this correctly? If yes, what are the potential ramifications in China, the US and the rest of the world? What ought to be the follow-up questions? Why? Who else should I be following and reading to learn more about these issues?

I don’t have the answers to these questions, and would appreciate the help.

Thank you!

Agri-Exports in India in 2021

Ashok Gulati and Ritika Juneja had an excellent write-up in the Indian Express last week, and if you are a student of Indian agriculture, it is an absolute must read.

  1. “Agri-exports touched $41.8 billion in FY 2020-21, registering a growth of 18 per cent over the previous year.”
    ..
    ..
    Here’s a fun1 exercise. Figure out where the authors got the data from?
    There’s a very good reason I ask this question. We don’t (yet) have something like FRED available in India. When you read an article such as the one we’re going through today, it is one thing to take a look at the statistics and think about them – and quite another to try and dig out the data yourself. It is a skill that most of us pick up out of necessity when we start work – you’d do well to start practicing right now.
    You’ve won if you can see this on your screen:
Source: An Excel file NOT from DGCIS

2. We need to grow exports, and we need to increase agricultural production. These are, even at an introductory level, obvious statements2. But as the article points out, we therefore need to dig deeper into the data to be able to answer this question in its entirety. Which products can we export more of? Why? At what cost?
Think of it this way: in what ways can the Indian cricket team get better? That’s like asking which specific Indian players can get better, in a way. So if we say that the team will get better if Kohli bats better and Bumrah bats better, is that a correct answer or just lazy thinking? Because they’re already pretty good, no?3.

3. As the article points out, rice accounts for about 21% of the $41 billion. Note that the statistics split this out by basmati and non-basmati rice, we’re adding these up. After that it is marine products (14.46%), spices (9.66%), buffalo meat (7.69%) and sugar (6.77%). That is, the top five categories together account for about 60% of all our agricultural exports. (Get familiar with the power law, if you aren’t already)

4. The rest of the article focusses on rice and sugar, and points out that exporting these two crops is akin to exporting water – and it is not as if we have a lot of it to go around.

India is a water-stressed country with per capita water availability of 1,544 cubic metres in 2011, down from 5,178 cubic metres in 1951. This is likely to go down further to 1,140 cubic metres by 2050. It is well known that a kg of sugar has a virtual water intake of about 2,000 litres. In 2020-21, India exported 7.5 million tonnes of sugar, implying that at least 15 billion cubic metres of water was exported through sugar alone. Another water guzzler, rice, needs around 3,000 to 5,000 litres of water for irrigating a kg, depending upon topography. Taking an average of about 4,000 litres of water per kg of rice, and assuming that half of this gets recycled back to groundwater, exporting 17.7 million tonnes of rice means that India has virtually exported 35.4 billion cubic metres of water just through rice.

https://indianexpress.com/article/opinion/columns/how-green-are-indias-agri-exports-7368002/

5. Related to that last point, here is an old EFE link fest about water and India.

6. “Moreover, the export subsidy given by the government to clear excessive domestic stocks of sugar has led many other sugar-exporting countries like Australia, Brazil and Thailand to register a case against India at the WTO, which India may find difficult to defend.”
..
..
As a student, here are the questions you should be asking (in my opinion). Where can I find details about this case? How do these things work? They have a whole course about it, and you really should sign up for it. If you even think about asking if you get a certificate for this course, you end up killing a little kitten. Yes, really.

7. “Farming practices such as alternate wetting drying (AWD), direct-seeded rice (DSR) and micro-irrigation will have to be taken up on a war footing.”
..
..
What is AWD? What is DSR? What is micro-irrigation? Better questions: which countries do this extensively? To what effect? What stops India from doing this? What can be done about it? I haven’t hyperlinked to the last five questions, and that is deliberate. Try searching for the answers yourself, and tell us what you learnt! 🙂

8. “Closer evaluation of non-basmati exports exposes another interesting fact: These exports are actually sourced not only below-MSP but also below the average domestic mandi prices prevailing in the country after one adjusts for freight from mandi to port and loading charges at the port. How does that happen? One possibility is that a substantial part of supplies through the PDS and the PM Garib Kalyan Yojana are leaking out and swelling rice exports.”
..
..
This really takes us into the weeds of agricultural economics, but here’s an article to get you started.

9. And finally, the authors’ proposed solutions:

“It is high time that policymakers revisit the entire gamut of rice and sugar systems from their MSP/FRP to their production in an environmentally sustainable manner. We must ensure that we produce more from every drop of water. Also, at least in the case of rice, procurement will have to be limited to the needs of PDS, and within PDS, it is high time to introduce the option of direct cash transfers. All these will go a long way to promote better diversification of our agri-systems and better use of our scarce water supplies and lesser GHG emissions. We could save on the unproductive use of financial resources locked up in burgeoning grains stocks with the FCI. These savings can be used for doubling investments in agri R&D to improve productivity on a sustainable basis and improve farming practices for minimising carbon emissions. An export-led strategy also needs to minimise logistics costs by investing in better infrastructure and logistics. Only then one can ensure sharing the returns of these investments with farmers to give them a better deal in terms of higher and more stable incomes.”


I’ve been writing posts like these for a while now. Here’s one about fiscal policy in India, here’s one about footwear in India, here’s one about a Marques Brownlee interview, and if you dig through the archives, you’ll find plenty more. The reason I bring this up is that I think there is genuine value to taking notes as you read anything, and publishing these notes online. Plus, as a student, there is genuine merit in asking a simple question repeatedly: where did the authors get the data from? Especially in India, the answers often aren’t simple, and the exercise is therefore worth your time.

Another reason I bring this up is that if you do this long enough, you end up making a very helpful mental map of whatever it is that you’re studying. And trust me, over time, learning compounds.

So I hope that this helped you learn a little bit more about agriculture in India, but I also hope that you learnt how simple, and powerful, it is to take notes regularly. Please do! 🙂

  1. I use the term in a very, very loose sense[]
  2. ought to be, at any rate[]
  3. Yes, yes, I know. My point is to ask if we should be focusing on the star performers, generally speaking, or the relative laggards. And yes, I agree that both were not at peak performance in the WTC final[]