Professors Koyama and Rubin Explain How the World Became Rich

To be honest, you really should read the entire book. But then again, it is freakishly expensive by Indian standards, and the interview we’re about to discuss serves as a very good introduction to thinking and reading more about this subject, so let’s get started.

If you play the animation in that chart (and make sure you have tick-marked the “Relative change” box), you should be struck by two questions. Well, I am, at any rate.

  1. Why the hell did it take so long?
  2. What the hell happened about two hundred years ago?

And the interview is about precisely these questions, but before we get there, a slight digression.


My way of getting students interested in the topic of macroeconomics is by showing them Gapminder, and then asking them a seemingly simple question: why does the world look the way it does?. That is, why did the countries that are rich today (on a per capita basis) get that way?

Some students say it is because those countries have a smaller number of people, and I say that by logic China ought to be poorer than us. Some say it is because those countries were never colonialized, and I say that by that logic Singapore ought to be a very poor country, and so also South Korea. This goes on for a while, but I eventually get the discussion around to two central questions/conclusions.

First, is it likely that we will ever know for certain, and if so how? Or are we doomed to just faffing around for ever?

And second, if we do find out, can we apply some of those lessons in India’s case today? That is, if at all there is a recipe for growth, does it remain applicable across time and space?

And as Robert Lucas put it (in a different but very related context), it is very hard to stop thinking about these questions once you start thinking about them!


The book in question, How The World Became Rich, with its subtitle ‘The Historical Origins of Economic Growth’ aims to answer these very questions. And as anybody who has attempted to study a subject such as this know, this is A Very Hard Thing to do. Here is the description from the Amazon page:

Most humans are significantly richer than their ancestors. Humanity gained nearly all of its wealth in the last two centuries. How did this come to pass? How did the world become rich?
Mark Koyama and Jared Rubin dive into the many theories of why modern economic growth happened when and where it did. They discuss recently advanced theories rooted in geography, politics, culture, demography, and colonialism. Pieces of each of these theories help explain key events on the path to modern riches. Why did the Industrial Revolution begin in 18th-century Britain? Why did some European countries, the US, and Japan catch up in the 19th century? Why did it take until the late 20th and 21st centuries for other countries? Why have some still not caught up?
Koyama and Rubin show that the past can provide a guide for how countries can escape poverty. There are certain prerequisites that all successful economies seem to have. But there is also no panacea. A society’s past and its institutions and culture play a key role in shaping how it may – or may not – develop.

https://www.amazon.in/How-World-Became-Rich-Historical-ebook/dp/B09VNRJZ31

As the excerpt says, there are many, many theories about why some countries got a headstart on the others. And while we can’t ever be sure of what the exact mixture of theories is, and whether this mixture remains the same for all countries across all periods, we can be sure that any recipe must contain at least some of these ingredients. And that’s better than knowing nothing, eh?

But which ingredients? In the next section, my notes from having read the article


  1. The Fate of Rome, by Kyle Harper, is now added to the list.
  2. Life slowly got better across the centuries from the time of the Roman Empire until the Middle Ages, but many of these changes could be explained by major demographic changes (such as, say, the Black Death and the resultant decrease in the population.)
  3. Sustained economic progress necessarily needs sustained technological progress. And sustained technological progress needs to be high enough to be able to beat the inevitable downward pressure imposed by population growth. They also add property rights as an important component, but it is, in essence, enough technological progress to be able to beat the inevitable Malthusian Trap.
    “Ultimately (and this matters for the acceleration in growth we observe from the late 19th to the 20th centuries), it also helps if families limit the number of children they have. This does not necessarily contribute to innovation, but it does mean that innovation will more quickly translate into growth.”
    Of course, the next logical question to ask is why would families limit the number of children they have, and to me, the answer is that they will only do so if they are convinced that their children have a more than reasonable chance of surviving into adulthood. Health comes first, both for individuals, but also for economic growth.
  4. This is an article I will need to read carefully, on the debate between historians and economic historians. The topic? What role did slavery have to play in the economic development of Europe.
  5. Remember the ‘ingredients in the recipe’ analogy that I used in the previous section? Institutions (such as property rights, labor unions), the demographic transition and education are three things that Professors Koyama and Rubin completely agree upon.
  6. “I think one thing the history of technology has taught us is that as long as the incentives are there for innovators to innovate, we will continue to be surprised.”
    I think this to be a key sentence, and I wonder if we think hard and often enough about whether the world is incentivizing innovators enough.
  7. Capitalism without Capital is also added to the list. Sigh.

Catch ’em Young!

I spent the last week of 2021 teaching young kids economics, and what a time I had.


This academic year (2021-22) has been the best ever at the Gokhale Institute where placements at the Master’s level are concerned. More students have been placed than ever before, and at higher average CTC’s (Cost to the Company) than ever before. If you’re looking for quasi-anecdotal data about how tight this particular segment of the labour market is in India, I’ve got a story to tell you.

But this ought to worry us, as educators. If you believe that the physical, classroom-based education is indispensable when it comes to making people productive in workplaces, then we have a nice little natural experiment coming up. Folks who have graduated this past year, or will graduate this year, will join workplaces without having seen a physical classroom for the better part of the last two years.

If there is no noticeable dent in their productivity, ability to come up to speed, or in the pay they receive over time (relative to folks older by a couple of years or so) then, well, we have problems, no? The Emperor’s New Clothes saga in higher education is upon us, and interesting times lie ahead.

One of the implications of this evolution, I think, will be making explicit something that everybody in higher education has known for years, but have been loathe to admit in public. An MBA degree, or a Master’s degree in econ/stats is a stepping stone to either a job or to further studies. For the most part – not exclusively so – sure, and sure there are students and educators who don’t subscribe to the college-as-a-conveyor-belt philosophy. But they are a fast dwindling breed. The vast majority of higher education isn’t about learning.

And classes, examinations and results have therefore become a sham that we must all pretend to take part in. In private, students will happily tell you how aware they are that this is a sham, as will professors. But one is not supposed to say these things in public – or at least, one wasn’t supposed to say this in public until the pandemic hit.


One of the first things I taught these young kids was the concept of incentive compatibility. And if you think about it, the whole course was an example of this concept, because there were (praise be the lord) no examinations. No marks to be scored, no grades to be obtained, and therefore no comparisons to be made. They were there to learn, which worked out just fine, because I was there to teach.

And I taught ’em! Across the space of five exhausting but exhilarating days, I took them through the principles of economics, introduced to them the headache that is macroeconomics, told them about externalities and other causes of potential market failure, introduced to them the wonder that is the prisoner’s dilemma, and so much more. It was a whistle-stop tour through the kingdom of economic theory, and I had an absolute blast.

The students, if anything, seemed to enjoy the experience even more than I did. Our classes would begin at nine in the morning and get over by four in the afternoon, but the questions would continue beyond, and spill over onto dinner time. And as an econ-nerd who loves introducing new topics to people, I can’t tell you how it gladdened my heart so to be talking about the iron law of diminishing returns at eight in the evening, after a full day’s worth of classes.


Did the students “get” everything, one might quite reasonably ask. And I’ll be honest and say probably not. It was a lot to pack in to just five days, and not all will have been retained. And of what has been retained, not all will be fully understood.

But they left class every day wanting to learn more about the topics that they had learnt. They remained curious and inquisitive, they were willing to push back on topics and concepts they didn’t understand or instinctively disagreed with.

And the feedback session at the end of the fifth day was my favorite bit, for the consensus seemed to be that economics was such a fascinating subject precisely because there were no fixed, definite answers to many big picture problems. For better or for worse, this is exactly what makes the study of economics appealing to me, and that is why this assessment of the subject gladdened my heart so.


I have often wondered what a classroom bereft of both the carrot of marks and the stick of attendance might look like. I have suspected that the only incentive left, then, is the curiosity to learn more about the subject at hand. And my hunch, for a long time, has been that this will make teaching, and learning, a much more pleasant experience.

And while one five-day session is perhaps too little data on the basis of which to make sweeping generalizations, I will say this much: my thesis about learning isn’t quite as hypo as it was before those five days.


There are problems to be solved, of course. Scale was and remains a challenge, the logistics aren’t easy, this isn’t a cost effective way to teach, and the there is no guarantee that the learning will persist over time. And I’m sure you, the reader, can come up with a hundred other things that could be better.

But hey, I have learnt that is possible to teach economics to students between the ages of 13-16. Not just possible, but thoroughly enjoyable.

And I look forward to doing more of it, with many more kids, in the years to come!

Is Online Education Transitory?

Students are finally making their way back into colleges across the country. Omicron, and whatever variant follows next will make the road bumpy, and there remains a significant chance that there will be some U-turns along the way. But we’re finally limping back towards something approaching normalcy. Or so one hopes.

But the transition isn’t smooth, and cultural adjustments are going to be tricky. What sort of cultural adjustments? Here goes:

  • Lockdowns and restrictions have been in place long enough for a culture of online learning to have emerged. In the context of this blog post, I define the word culture to mean social behaviors and norms that have emerged among students during the past eighteen (or so) months. There is more to culture than that, I am well aware, but it is this specific aspect of the word that I am focusing on.
  • Students across India have gotten used to the following aspects of this culture:
    • Listening to a lecture that is being delivered need not be a community based event. You can listen to a lecture alone, anywhere, as opposed to along with your classmates in a classroom.
    • Listening to a lecture need not by a synchronous event. That is, you don’t need to listen when the professor is speaking. One can listen later, as per one’s own convenience.
    • Listening to a lecture need not be a 1x event. Amit Varma’s point about being able to listen to somebody else speaking at even 3x applies to lectures as much as it does to podcasts. Students who find a particular professor boring may even argue that the point applies with even greater force to lectures than it does to podcasts!
    • Students feel much more comfortable calling out online examinations for the farce that they are. And let me be clear about this: online examinations are a farce. If you are a part of any university’s administration in this country, I urge you to speak to students, their parents, and recruiters about this issue. I repeat, online examinations are a farce. This is important, and it needs to be called out. We’re very much in Emperor’s New Clothes territory in this regard, and that is where the cultural aspect comes in.
  • At the moment, most colleges (if not all) are not making classroom attendance mandatory, at least for the students. Students may be on campus, but not necessarily in the classroom. Most students I have spoken to (in a completely unscientific fashion, I should add, so this is strictly anecdotal) think this to be the best of all worlds. They are not at home, they are with friends, and they are not in a classroom. It doesn’t get better than this, as far as they are concerned.

So now, assuming you find yourself in even limited agreement with what I have written above, think about the scenario I am about to outline. Imagine that you are a university administrator with the power to mandate offline attendance in classrooms and offline examinations for your students. And at some date in the foreseeable future, you decree that this must happen.

And some students come along and ask an entirely reasonable (to them, at any rate) question: why?

Why are offline attendance and offline examinations better than what we have right now?

What would your answers be?

How to Escape Education’s Death Valley by the Great Sir Ken Robinson

I’m not one for celebrating “days”, but I’ll happily admit being thankful that this video is scheduled for the 5th of September!

Cory Doctrow on Byju’s

This Twitter thread, and its implications deserve deep reflection about Twitter, Cory Doctrow, India, and education in India. And not in that order.

A very short, but also a very painful post

Seth Godin wrote a post that was painful to read for me, and if you’ve been reading my posts recently you’ll know why. The title of the post was “What does it mean to do well in school?“:

Is it the same as “doing well on some tests”?
Because that’s what we report–that perhaps 240 times in a college career, you sat down for a test and did well on it.
That’s hardly the same as doing well in school.
Where do we look up insight on your resilience, enthusiasm, cooperation, curiosity, collaboration, honesty, generosity and leadership?
Because it seems like that’s far more important than whether or not you remembered something long enough to repeat it back on a test.

https://seths.blog/2021/02/what-does-it-mean-to-do-well-in-school/

Yes, so much yes. But of course, those of us involved in running academia excel at designing tests. The other things, not so much.

And then, to add injury to insult (not a typo), this Twitter thread:

Education as we know it is changing in front of our eyes, and for the better, but it is happening in spite of colleges, not because of them.

And nobody seems to care.

Where else could this be applicable?

A great question to ask as a student of economics – well, really, a student of anything – is “where else is this applicable?”

Because learning the definition is one thing, understanding its application is another. Understanding the applications, its costs and its benefits, and being able to transfer the idea over on to other domains and sectors – well, that is something else altogether.

Consider MPN, for example. That’s mobile number portability. Something that we take for granted these days. Although Indian readers might be interested to know that we are one of only two countries to use the donor-led system, rather than the recipient led system.

Now, students of microeconomics will (should) know that this encourages competition, because substitutability goes up. I don’t need to be locked up with one service provider for my entire life, in fear of having to update my number among my contacts every time I change service providers. It also therefore ensures that operators will provide better service, because customers have the ability to “vote with their feet”.

So far, so obvious.

But as I said up top, the real challenge as a student is to ask yourself, where else can I use this idea?

Can, say, education be made more competitive? Can and should students be allowed to switch colleges midway through acquiring a degree? Or can we have unbundling of colleges where you can buy courses from a variety of different colleges to make your own degree of choice?

Sucheta Dalal asks the same question in an excellent article on Moneylife – but with the focus being on account portability in banks.

What is the most effective solution to poor service, mis-selling and harassment by banks which are entrusted with your hard-earned savings? Simple. Bank account portability; or the ability to vote with your feet and switch to a better bank. The idea of bank account portability, which will truly force banks to compete for their customers, has been on the cards since 2012, when the Reserve Bank of India (RBI) initiated the process of creating unique customer identification code (UCIC). Since then, almost every hurdle to implementation—technology issues, high costs, absence of unique codes, etc—having been substantially addressed; but account portability is nowhere on the cards.

https://www.moneylife.in/article/bank-account-portability-what-is-preventing-this-game-changing-move-for-customers/62915.html

The rest of the article speaks about why it is an excellent idea (duh!), how most of the groundwork has already been done (awesome!) and how the incumbents think it is a really bad idea (double duh!).

Incumbents will always – always! – find reasons for why “it just can’t be done”. But anything that makes a sector more competitive, and more responsive to its consumers, is by definition A Good Thing.

Or so we teach in micro, at any rate.

Say’s Law and Education

Does the supply of education create a demand for that supply?

Now, I know that is not what Say’s Law says. I’m simply using the rather more popular version of the statement of Say’s Law (“supply creates its own demand”) and using it in the case of one specific sector, education.

So, with that disclaimer in place: does the supply of education create a demand for that supply?

In other words, is it enough to create awesome MOOC’s, prepare thoroughly well-prepared lecture notes, write fantastically well-thought out textbooks – or is there a role for mentorship in education?

The reason I ask the question because there is an abundance (some might even say far too much) of teaching material out there. YouTube alone has more lectures on any given topic than you can expect to watch in a semester, and that is ignoring everything else that is available on the internet. Add in good ol’ textbooks, journal articles and what-have-you’s, and well, there’s just too much supply.

A glut, if you will.

Has it, then, reached a stage where Barry Schwartz might want to take an interest in analyzing this problem?

So say, for example, I had to teach a course called Principles of Economics (as I hope to next semester). Should I teach this course as I would have otherwise? Take the concept of elasticity of demand. Should I draw the graphs, spell out the concept, write down the equations… or might it be better taught by asking four different groups to watch four different videos about the topic, and then discussing it all in class together?

Teaching in 2020 ought to have taught all of us that teaching in a class can no longer be a substitute for material that is already available on the internet. It must necessarily be a complement. And if it is to be a complement, playing the role of a Guide For Everything That Is Out There On The Internet is perhaps the best use of our time.

Filtering out the not-so-good videos (and maybe even speaking in class about why we think they’re not-so-good) ought to be one of our job descriptions from here on in. Having students speak about what they thought about a particular video – what they liked, what they didn’t, and why – ought to be another. Best of all, having students create their own material ought to be top of the list.

We’ve all heard that line about learning happening the most when we teach others. The ubiquity of electronic devices this past year should mean that learning need no longer be an act of passive listening. It can, instead, be an act of active content creation. Watch videos, read blogposts, listen to podcasts, discuss what you learnt, pinpoint what you didn’t like – and then go and make it better.

Honestly, what better way to learn?

We’ve been talking about flipped classrooms for years now. This past year may well be the impetus we needed to turn it into an everyday, mundane reality rather than a gimmicky line in our documentation.

A wish list for Google Classroom

Today’s essay isn’t for everybody – but if you are interested in tech/education, you may want to give it a read.

As the title suggests, it’s about the functionalities I would like to see in Google Classroom.

It’s available on Google Docs, and the link is here. Especially for folks working in the intersection of tech and education, please do share, and please do give me feedback. Much appreciated!

Also, a quick update – work’s been slightly crazy, so I’ll shift to an M/W/F posting schedule for a while.

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.