Etc: Links for 12th July, 2019

  1. “Often failure is simply failure, and a setback is exactly what it seems. But sometimes the obstacle that has been placed in our path might provoke us to look around, and perhaps to discover that a better route was there all along.”
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    Tim Harford on the Doris Day effect
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  2. “If I have to be curt, they’re famous for being famous. Another way of understanding how a family (+ dogs+friends+assistants) has risen to unprecedented levels of fame and fortune is by the Principle of Cumulative Advantage. This principle is also known as the Matthew Effect, and refers to the phenomenon of those who already have an advantage acquiring more of it. This concept is applicable to both financial and social capital.”
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    …and since the previous article mentioned it, Reshu Natani in Think Pragati on the Matthew Effect.
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  3. “The last time I saw Bourdain was a few months ago, at a party in New York, for one of the books released by his imprint at the publishing house Ecco—of his many projects, his late-career role as a media rainmaker was one he assumed with an almost boyish delight. At the bar, where I’d just picked up my drink, he came up and clapped me on the shoulder. “Remember when you asked me if I was a feminist, and I was afraid to say yes?” he said, in that growling, companionable voice. “Write this down: I’m a fuckin’ feminist.”
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    A lovely essay on the late Anthony Bourdain. Just in case you haven’t, do read this – the article that started it all.
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  4. “5-MeO-DMT is produced in large amounts by Bufo alvarius, a rare species of toad commonly known as the Colorado river toad or the Sonoran desert toad. When preyed upon, the toad secretes a venom that repels predators by causing them to, in scientific terms, trip balls. Psychonauts discovered that you can milk the toads’ venom, dry it out, and smoke it. The substance’s close relative, DMT, is an active ingredient in the traditional shamanic brew known as ayahuasca, but what they say about smoking the toad is that it’s like riding a rocket to the same place of total ego death that ayahuasca takes you to by riverboat.”
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    That, the excerpt above, is not what this article is about. It is about Mike Tyson. He, as the title says, smokes the toad.
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  5. “There are many ways to achieve success and fulfillment that do not involve attending an elite college. Instead of encouraging people to pursue options well-matched to their abilities, however, we tell young people that their self-worth hinges entirely on the brand name on their college diploma. This creates a perverse incentive to do whatever it takes to get into their dream school, to amass tens of thousands of dollars in student loans, and to select a major based not on the professional opportunities it will open to them but on the ease of the program’s academic requirements. Small wonder we now have a generation drowning in debt and struggling to meet the traditional benchmarks of adulthood.”
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    A long, but very reasoned rant about education in America, and about how it isn’t quite as good as it is made out to be. Also, that rare article that distinguishes between education (teaching) and research.
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Tech: Links for 9th July, 2019

  1. “In it, astronaut Sally Jansen has been working to come to grips with a Mars mission that went disastrously wrong, and NASA ended its crewed missions into space. But while she’s trying to move on, scientists detect an object designated 2I/2044 D1 entering our solar system, and when it begins to slow down, they realize that it’s an alien artifact. Jansen is called in to try and intercept the object and figure out what is behind it before it reaches Earth.”
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    Science Fiction is a great way to learn a lot and have a lot of fun while doing so, and for that reason, I thoroughly enjoyed learning about the premise of this book. In similar vein, I recently (and finally) finished The Three Body Problem, and can heartily recommend it.
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  2. “The camera was loaded with machine vision algorithms trained by Hamm himself. They identified whether Metric was coming or going and whether he had prey in his mouth. If the answer was “yes,” the cat flap would lock for 15 minutes and Hamm would get a text. (In a nice flourish, the system also sends a donation, or “blood money” as Hamm calls it, to the National Audubon Society, which protects the birds cats love to kill.)”
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    There are many people who bandy about the word AI these days, but this very short read (and within it, a very entertaining video) helps you understand how it could by applied in myriad ways.
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  3. “LightSail 2 is more ambitious and will actually try to maneuver through space, and even boost itself into different orbits using sunlight. The new mission’s mission control website will let people around the world follow along, including the 23,331 people who contributed to the project’s Kickstarter campaign, which raised $1,241,615 for the spacecraft.”
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    A third link from the same website (either The Verge is on fire, or I am being lazy today), but the best of the lot, in my opinion. It is now possible to crowdfund a satellite launch that contains a sail – and you can now watch your investment in space as it flies above your head. What a time to be alive.
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  4. “But while Tufte’s concerns are not limited to charts, he has spent a lifetime thinking through what he called the “perennial” problem of how to represent a multidimensional world in the two dimensions of the page or screen. At the end of the day, he pulled out a first edition of Galileo Galilei to show how the great minds of the past had grappled with the same issues. He rhapsodized over Galileo’s tiny, in-line sketches of Saturn, which clearly inspired his own advocacy of “sparklines” (tiny charts embedded in text at the same size as the text), as well as some beautifully precise illustrations of sunspots.”
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    Data visualization, medical visits, Galileo and sparklines. As they say, self-recommending.
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  5. “And with 92 percent of future jobs globally requiring digital skills, there’s a focus on helping students develop skills for careers that don’t yet exist. Last year, Sweden declared coding a core subject to be taught from the first year of primary school. And there is an appetite for these skills among students, too, with 85 percent of Brazilians from 16-23 indicating that they want to work in the technology sector. ”
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    Well, there’s a thought – I refer to Sweden’s decision. One, complements, not substitutes. Two, the links are worth following in this link – this is a subject very close to my heart.

ROW: Links for 12th June, 2019

  1. “Readers will by now be familiar with the list of industries impacted by the US China trade war. These include soyabeans, cars, steel, and semiconductors.But one commodity is increasingly important to how the tensions play out: students. The Chinese state media is now saying the government will issue a warning on the risk of studying in the US”
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    The FT reports on how Chinese students will now be discouraged from going to American Universities – in a sense, an expected move, but you would be surprised at just how dependent universities in America today are on foreign students. Interesting times.
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  2. “To summarize, based on the above I doubt that actual Chinese growth is more than 1% below the reported figures, at least up through 2018. Of course it’s possible that things have changed in 2019; if so I expect that to show up in upcoming airline travel data for China.”
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    Scott Sumner patiently reminds us that we should look at the data before making a claim, and having looked at the airline data, he rejects the notion that there is a dramatic slowdown in China. The truth, as usual, lies somewhere in the middle.
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  3. “Vietnam, like China really doesn’t import very many manufactures from the United States. That’s partially a function of the fact that the value added in Vietnam is often low, and thus Vietnam cannot afford a lot of top of the line U.S. capital goods (yet). But it is also a function of the fact that many of the global value chains that generate large (often offshore) profits for U.S. firms don’t give rise to that much U.S. production these days. There just isn’t much sign that the Asian value chains stretch back to include U.S. factories and workers. Fabless semiconductor firms that design chips likely export their designs to a low tax jurisdiction before they license their designs to an Asian contract manufacturer. The rise in Vietnam’s exports hasn’t been associated with a commensurate rise in exports from the United States to Vietnam.”
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    Brad Setser takes a look at whether Vietnam is the new China, and concludes that it kind of is, and kind of isn’t.
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  4. “It is not surprising that the CPC has worked so hard to extirpate the Tiananmen Square massacre from public memory. History – including the horrors of Mao Zedong’s rule – is too volatile a substance for the Chinese dictatorship. China’s leaders hold up their system of government as a model for other countries. But how can a regime be confident in the sustainability of its values and methods if it is afraid of its own past?”
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    Chris Patten (who knows a thing or two about this issue) reviews the Tiananmen square massacre, and ponders on what it means for China and Hong Kong today.
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  5. “Despite a small increase in young and female lawmakers—like Ms Suematsu, who is in her forties—local politics is still dominated by old men. “In these municipalities, candidates are so old they have a hard time putting up election posters,” says Shigeki Uno of the Nippon Institute for Research Advancement, another think-tank. Indeed, three-quarters of town and village assembly members are over 60. The oldest, aged 91, holds a seat on a city assembly in Shizuoka, in central Japan.Young people are loth to stand because local politics is not a financially rewarding profession. The law bans assembly members from holding other jobs concurrently. Their pay averages around ¥300,000 ($2,740) a month, hardly enough to support young families. “It’s basically a job for the retired,” sniffs Mr Uno. And for little pay, the workload is onerous.”
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    The Economist reports on Japan, and it’s ageing population – and what that means for democracy on the ground, at local elections.

India: Links for 10th June, 2019

  1. How does the Reserve Bank of India aim to spread awareness about key topics to as many people as possible across the entire country. It uses a concept called Financial Literacy Week, among other things. Posters and leaflets will be circulated to rural banks, and a mass media campaign will be carried out throughout June (on Doordarshan and All India Radio) – this time, with a specific target in mind: farmers. (Via Mostly Economics)
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  2. “In the circumstances, measures that can minimise wastage and increase the local holding capacity of farmers so as to stagger supply release can be an area of engagement to increase farm incomes. In many respects, this may perhaps be the most promising medium-term intervention to increase farm incomes.”
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    Gulzar Natarajan asks how farm incomes can be increased. He suggests a way to increase storage capacity and improve it over time. Completely agreed – but I’ll reiterate (and I think he’ll agree), the best way to have farm incomes go up is to have lesser people be engaged in agriculture.
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  3. Anantha Nageswaran comes up with a thoroughly delectable set of links about “advice” for the new government in India. Each of the links is well worth reading. In fact, I would recommend that an hour going through these links is well worth your time.
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  4. “Agriculture is a like any other business—the farmer needs the freedom to enter into contracts, use it to raise credit, tie up insurance, seek advisory and inputs to get a fair return on his land. The instrument for this is contract farming—whether individually or in a group backed by a regulatory mechanism. Paracetamol policies like loan waivers have detained the modernisation of agriculture, resulting in poor output from a large mass of precious land and half the workforce. ”
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    This actually is one of the links in 3. above, but it is too good to not share in it’s own right. As Prof. Nageswaran says, full marks!
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  5. “The GLP was initiated in August 2018 through a partnership between Pratham and the Uttar Pradesh Basic Education Department and sought to target all primary school children in UP. There were three aims: (i) significantly improve their learning levels in basic reading and arithmetic, (ii) introduce and sustain innovative teaching-learning practices in schools, and (iii) build monitoring, mentoring, and academic support capacity at block and district levels. After some delays, by January 2019, the programme reached classrooms across all 75 districts.”
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    Read, and hope. The most encouraging thing I have read in 2019.

Links for 1st May, 2019

  1. “As McKinsey points out, governments, businesses and individuals will all have to embrace change and figure out the best ways to move towards digitisation — including on such basics as land records and business transparency (which could improve access to bank credit). There are also many aspects of this wave of digitisation that are not to the good—including the impact of toxic social media, the loss of privacy, and so on. The rules for this new world will have to be framed carefully to prevent business capture as well as political misuse, and to protect citizens from predatory action. What is required is to minimise the costs as much as to maximise the benefits. Still, the over-riding message is clear: The prospects of digitisation are so overwhelmingly advantageous, if not also inevitable, that those who become laggards in adapting to the new reality are the ones that will be left behind.”
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    T N Ninan (author of the excellent The Turn of the Tortoise) writes about the potential of “digital” India while reviewing a McKinsey report about the same topic. The scope, details and aspects of such a topic simply cannot be dealt with in a single post – but with that in mind, this is worth reading.
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  2. “The Right to Education Act in 2009 guaranteed access to free primary education for all children in India ages 6-14. This paper investigates whether national trends in educational data changed around the time of this law using household surveys and administrative data. We document four trends: (1) School-going increases after the passage of RTE, (2) Test scores decline dramatically after 2010, (3) School infrastructure appears to be improving both before and after RTE, and (4) The number of students who have to repeat a grade falls precipitously after RTE is enacted, in line with the official provisions of the law.”
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    That is the abstract of this paper. Also, have you read this book? Also, have you listened to this podcast? Also, keep an eye out for this Sunday’s video.
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  3. “China’s TFP surged in the 1980s following the agricultural and ownership reforms, in the 1990s following the state enterprise reforms and the creation of a modern housing market, and in the 2000s as China prepared for and was then able to exploit WTO membership.The key takeaway is that China’s one-party system deservedly has won plaudits when it has been most ambitious with regard to economic reforms and experimentation with market mechanisms. But this is not the case, for example, before the 1980s and again since 2012, when reforms were suppressed or stifled and inputs were boosted, but without any improvements.”
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    An interview that remains interesting throughout if you are a student of economics, or China and especially the intersection set. Troubling times ahead for the Chinese economy, it would seem – and on account of a variety of short term reasons, and one very important long term one – TFP.
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  4. “That was when he saw the light. Two small, black, rectangular boxes were stacked next to an outlet on the far side of the guest room, both facing the bed. From afar, they looked like phone chargers. But when Vest got closer, he realized they were cameras, and they were recording.”
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    Airbnb, technology, privacy and customer relations. A great way to learn that There Is No Such Thing As A Free Lunch.
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  5. “In 1960, 13.4% of the population age 20-74 was obese (as measured by having a Body Mass Index above 30). In 2016, 40% of the population was obese.
    In 1970, 37.1% of those age 18 and older were cigarette smokers. By 2017, this has fallen to 14.1%.”
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    Just two out of many, many interesting tidbits about America today, and America back then.

Links for 26th March, 2019

  1. “The rising cost of textbooks, then, is a sign of one of the greatest paradoxes of higher education: As everything from tuition to housing to books gets more expensive, the people who are tasked with making sure students receive a good education are being forced to do more work for less money. The result is a world where students and professors alike struggle to get by.”
    Full of interesting snippets, this article helps you understand how expensive education can be abroad. Not just the cost of tuition though, which is large enough as it is – but the cost of textbooks. Just buying your textbooks for the academic year can set you back by around INR 40,000/-.
  2. “What is the traditional lecture? It is a model of learning in which a teacher possesses the knowledge on a given topic and disseminates it to students. This model dates to the beginning of education, when it was the only way of sharing information. In fact, you occasionally still see the person presenting the lecture called a reader, because way back before the internet and even the printing press, a teacher would literally read from a book so students could copy it all down.”
    Classroom lectures are unbelievably boring. There exist a million alternatives that can do a better job, and this article lays out some of them. But at the end of the second decade of the twenty-first century, the idea that we can teach the same way we did throughout the twentieth is just wrong.
  3. “Whichever way one looks at it, the very public unravelling of the enterprise is reminiscent of the past, the saga of Air India and Kingfisher Airlines. There is no denying poor governance –particularly in a business with high cash flows. Equally, the sequels illustrate how vegetating policy and misplaced notions of what constitutes strategic interest left the sector episodically chasing its tail. Consider this: Passenger traffic rose from 68.4 million in 2009-09 to 103.7 million in 2013-14, and to 183.9 million in 2017-18. Clearly there is no dearth of demand and of growth in traffic. Yet three airlines have crashed into the red in the period.Can India afford three Mayday calls in less than a decade in a critical sector?”
    A breezy read about an extremely serious topic. The excerpt above is a sobering read: passenger traffic in India has about tripled over the last ten years. The last ten years have also seen three airlines go under. Something, somewhere, is really and truly wrong.
  4. “Incuriosity is not merely ignorance. Ignorance is a universal trait, people just differ in what they are ignorant about. But Americans are unique in not caring to learn from other countries even when those countries do things better. American liberals spent the second Bush administration talking about how health care worked better in most other developed countries, but displayed no interest in how they could implement universal health care so that the US could have what everyone else had, even when some of these countries, namely France and Israel, had only enacted reforms recently and had a population of mostly privately-insured workers. In contrast, they reinvented the wheel domestically, coming up with the basic details of Obamacare relying on the work on domestic thinktanks alone. The same indifference to global best practices occurs in education, housing policy, and other matters even among wonks who believe the US to be behind.”
    Word for the day: incuriosity. A state of the world in not only do you not know, but do not wish to know. But that apart, the entire post – although a little long – is worth reading to learn more about the specifics of what ails subway construction in the USA.
  5. “Structurally, it is impossible because Kim Jong-un has a very detailed network of surveilling the leaders around him. If you are of high rank, then all the high-ranking officials have to live in the same apartment. They can’t choose where to live. They have to live collectively. You are not allowed to have private time with your friends around you, so the control system of North Korean society is really unimaginable.”
    An interview with a North Korean defector who now lives in South Korea about Kim Jong Un. It is difficult for any of us to understand the extraordinary life of ordinary South Koreans

Links for 27th February, 2019

  1. “The time for masking such equity-type investments as loans has passed. Real estate in India is facing a glut, with $110 billion worth of unsold homes across the top eight markets, including Mumbai. That’s almost four years of sales, according to property analytics firm Liases Foras. Back in 2009, when apartment inventory was equal to about one year of sales, only 25 percent of construction funding came from shadow financiers. Banks controlled 75 percent.The tables have now turned: Housing-finance firms and other nonbank lenders, more adventurous than conventional banks, account for 55 percent of advances to builders. Lenders pocketing 2 percent to 3 percent of the loan value as upfront fees in exchange for not collecting on the principal for years has allowed a buildup of poor-quality debt. Moratoriums have delayed builder bankruptcies, and prevented timely detection of the problem.”
    This is a problem just waiting to become a full blown crisis in India – not the real estate sector per se, but the financing of the real estate sector in India. Read this article to find out how and why it has become as big a problem as it has.
  2. “Like all great work, it was the foundation for other huge contributions – work by other great economists such as Oliver Hart, Bengt Holmstrom, Paul Milgrom and many others can easily be traced to this paper. The paper’s starting point – that coordination within firms is not accomplished ‘by fiat’ (Demsetz famously remarks “This is delusion”), and that one should instead examine how incentive structures within firms create efficiencies relative to other forms of organisation – became the starting point for nearly the entire field of the economics of organisation ever since.”
    I have linked to this piece earlier, I think in January. But since I am currently teaching a course in Industrial Organization at Gokhale Institute, I found myself reading this piece all over again. Demsetz really was a giant in this field – and his analysis of why firms exist, and how they coordinate and incentivize activity within the firm is truly illuminating.
  3. “So, the UN forecasting model inputs three things: fertility rates, migration rates, and death rates. It doesn’t take into account the expansion of education for females or the speed of urbanization (which are in some ways linked). The UN says they’re already baked into the numbers. But when I went and interviewed [the demographer] Wolfgang Lutz in Vienna, which was one of the first things we did, he walked me through his projections, and I walked out of the room gobsmacked. All he was doing was adding one new variable to the forecast: the level of improvement in female education. And he comes up with a much lower number for global population in 2100, somewhere between 8 billion and 9 billion.”
    Population “crises” are over-rated in any case (people are a resource!) – but even the forecasts for how many people there will be on the planet in the next thirty to eighty years are likely to be wrong. The world is changing right in front of our eyes. The problem of the (near) future isn’t one of too many people – it’s one of too few.
  4. “Instead, the signatories objected to the election of a student union president of Tibetan descent, who “was found to hold the political belief that Tibet should be free”.”
    Based on what you have read above, which country are we talking about? Not only might the answer surprise you, but it will also help you think about geopolitics, international finance and the benefits of diversification.
  5. “Most developed countries of today addressed many of their basic plumbing challenges largely through public production. China is clearly an example of the latter. It appears to have perfected the use of industrial policy to co-ordinate private enterprise even into some of the most difficult areas for private engagement. This is the case of industrial policy to both address a critical plumbing issue as well as catalysing a market. And this is what makes its achievement exceptional.”
    Law, innovation, state led industrial policy and judicial pendency, all in one lovely article by Gulzar Natarajan. Gokhale Institute recently released a report on judicial pendency in India – China has an interesting way of tackling this problem.