Economists As Storytellers

Not just economists, of course. We’re all storytellers.

What else have we got?

“We are basically storytellers,” wrote Lucas, “creators of make-believe economic systems.”

I read Tim Harford’s excellent blog post on what amusement parks can teach us about central banks last night, and loved it for more than one reason. But before we get to amusement parks, let’s talk about photography first:

I often say in classes that economic models are like photographs taken by smartphone cameras. They are abstractions of reality. They can’t possibly capture all the nuances, hues, details and features of whatever it is that you are photographing. And looking at the photograph gives you an idea of what it might have been like to actually be there – but you cannot possibly ever experience it yourself.
Similarly, a model is an abstraction of reality. It cannot possibly capture all that you need to know about the real world. And using a model as a crutch to get to grips with reality is like seeing a photograph and imagining yourself there. As a thought experiment, it’s fun. As a way to reach policy decisions, it is fraught with risk.

A photograph is an abstraction of reality in much the same way that a story is. You could argue, in fact, that a photograph is, in some sense, a story. And whether it is Robert Lucas or I, we’re trying to get across the same point – that we try to grapple with reality by telling ourselves a story. We could do this with words, with visuals, or with equations. It doesn’t matter.

Some economists might tell you that equations is the best way to do it in all circumstances, but I’m not sure I agree. But that’s a story for another day.

But a model built using words, or visuals, or equations, or something else, is just that – a toy model of reality. Toy models are good, because they help us focus on that which we seek to understand, analyze and perhaps change for the better. They help us by removing that which doesn’t aid the analysis, and by focussing on those elements of reality which do aid the analysis.

A toy model of a race-track, for example, is an abstraction of reality. It doesn’t include the dirt and the grime on an actual race-track, it doesn’t replicate the wind, the sun and the rain, and the toy cars themselves are also simplifications of the real thing. But kids playing with a toy-model of a racetrack will agree that it is a good enough representation of reality for their purposes. We can understand that it is a racecourse, we can analyze ways by which victory can be achieved on this toy racecourse, and perhaps we can understand a little bit about how to deal with the key sections on an actual race-track by using the toy model as a reference.

Batting in the nets is a model of batting in an actual match. But as any commentator will tell you, batting in the nets is not at all like the real thing. You can conquer and master the model, sure – but never be under the impression that all your learnings from the model will guarantee a triumph out there in the real world.

In much the same way that even the most excellent of photographs can never substitute for actually being there, no amount of detail in a story can replicate actually seeing events unfold in real life. And that’s why the predictions of almost any economic model will never give you a perfect representation of what actually happens in real life. Any policy-maker will tell you this because they work in the real world, not in the ivory tower world of theory.

There’s nothing wrong with the ivory tower world of theory. It is a most interesting place, full of weird ideas, somewhat plausible hypotheses, and fascinating representations of reality.You can build a version of reality in which people have perfect foresight, for example. Or a world in which their biases trump their rationality. Or a world in which half the people have perfect foresight and the other half don’t. Or something else altogether. One is restricted by only one’s imagination, and allow me to assure you – there are some very impressive imaginations in the social sciences.

But a story, alas, can only take you so far. A story about amusement parks and central banks, for example, cannot at the end of the day be an acceptable substitute for reality:

The disadvantage with such stories, admitted Lucas, “is that we are not really interested in understanding and preventing depressions in hypothetical amusement parks . . . the analogy that one person finds persuasive, his neighbour may well find ridiculous.”
So then what to do? “Keep trying to tell better and better stories . . . it is fun and interesting and, really, there is no practical alternative.”

I have known two people to blog without a break, every single day, for about two decades now. A magnificent achievement, and one that is not celebrated enough, if you ask me. I try to emulate them every year, and I fail every year. But the point (I think) is to keep at it regardless, and so onwards we go.

Seth Godin is one of them. He tells a story about parsley in one of his blog posts:

Who eats the garnish? No one does. What a waste, right? But once it’s gone, you notice. You notice that there wasn’t a sprig of parsley or even a strawberry on the plate. It’s a vivid reminder that you were just ripped off.
All of us sell parsley. Sometimes, in the race to cut costs and increase speed and figure out how to fight off Wal-Mart, it’s easy to decide to leave off the parsley. No focus group ever asked for parsley!

It’s a very good story, if you ask me. A very good lesson in marketing, and one that I wish more people would adopt.

But it is, at the end of the day, a story. There might have been a dozen great things about the cafe that served Seth this meal, and there might have been ten dozen not so great things about it. Seth abstracted from his entire experience one specific point, and told us a story about it. But putting a sprig of parsley on an omelette by itself will not revolutionize your business. That’d be the wrong lesson to take away from this post. Or rather, it would be wrong on our part to assume that this is the only lesson we need.

It’s a great story, in other words, but it is, after all, only a story. And we should beware of simple stories, says the other person to have blogged everyday for twenty years:

My takeaway from my favorite bloggers is that stories help us build a version of reality, but beware of taking this, well, story too far!

I can’t tell you how excited I was to learn that Tyler was going to have a conversation with Seth. Do listen to the whole thing, or if you like, read the transcript. But once you’re done listening to the whole thing, run a search for the words “story” and “stories”. To use Seth’s phrasing, they danced with the word throughout the conversation, and that made (for me) a great conversation even better.

Tell more stories is an excellent piece of advice. Tell stories using equations, or words, or pictures, or music, or all of these and more. Revel in these stories, for they help you get a better grasp of reality. But never forget one last step: ask in what ways the story falls short of fully describing reality, and in what ways is reality more complex than the stories.

Three final points that didn’t fit anywhere else in this essay:

  1. Here is one of my all time favorite stories from economics.
  2. Is the Mahabharat the best story ever told? It is simple and complex, and it is messy and linear. It has complex characters, and the story reads well even when these characters are grossly oversimplified. It reads even better when they’re not, and is that not a point in its favor?
  3. My favorite line from Tim’s blogpost has nothing to do with economics or telling stories, but is entirely appropriate for the times we live in: “When the people are amusing themselves, they do not think about politics.

The End of the College Submission (Thank God)

This blog post is a riff on Seth’s post from the other day, titled “The End of the High School Essay“:

New York City schools are trying to ban GPT3 because it’s so good at writing superficial essays that it undermines the command structure of the essay as a sorting tool. An easy thing to assign (and a hard thing to grade) just became an easy task to hack.
High school essays had a huge range of problems, and banning the greatest essay device since Danny Dunn and his Homework Machine is not the answer. In fact, it’s a great opportunity to find a better way forward.
The first challenge of the essay was the asymmetrical difficulty in giving useful feedback. 30 essays, 5 minutes each, do the math. It doesn’t scale, and five minutes isn’t even close to enough time to honor the two hours you asked a student to put into the work.

Exams in almost all of the colleges and universities I have taught at don’t mean a thing. The students know this, the faculty knows this, the examination department knows this, but we all keep up the charade that Meaningful Work Is Being Done through the conduct of examinations.

Newsflash: there is no meaningful work being done. It is a complete farce.

Some universities choose to not pay faculty members for correcting papers at the end of the semester. Let’s assume a college is paying a visiting faculty member two thousand rupees per hour to teach a class. They might slip in a line towards the end: this also includes examination duties. In English, this means that if you teach a thirty hour course, you will be paid sixty thousand rupees for those thirty hours. So far, so good. But “also includes examination duties” means that for a batch of (say) a hundred and twenty students, you are also expected to design question papers (a set of two, usually) and correct a hundred and twenty answer sheets.

Even if you assume that one is able to correct paper after paper without taking a break, with five minutes being the time taken per paper, that still means that at least ten hours worth of work. Which means, of course, that you are not being paid two thousand rupees per hour, but rather fifteen hundred. Accounting is a subject that may well be taught at universities – that doesn’t necessarily mean that it is practised at universities.

Some other universities offer to pay forty rupees per answer sheet corrected. Which is better than zero, admittedly, but we then run into the problem of incentives. If you’re paid two thousand rupees to teach, and forty rupees per paper to correct answer sheets, how many answer sheets should you correct in an hour to “make” the same wage? And if fifty answer sheets being corrected in an hour is clearly far too many, how do you expect this incentive to work? Or do we teach our students that incentives matter, but ignore this point ourselves?

Students know the farcical nature of examinations all too well. The pandemic took away that last remaining fig leaf of dignity that surrounds examinations, and the ostrich-in-the-sand approach that most universities have adopted post-pandemic is that of closed-book, no-internet-access examinations. Quite how this pen-and-paper examination is supposed to prepare students for what they will do in the real world is a question nobody wants to raise, let alone answer.

And so students quite reasonably ask for “the pattern of the paper”, or the “important questions” or the “important topics” before an examination. They are, in other words, seeking to minimize efforts in order to maximize marks scored in an examination. The tragedy lies in the fact that academia is supposed to be about maximizing learning. But on and on we go, in our mad headlong rush to maximize NAAC scores, difficult and uncomfortable questions about examinations be damned.

But all that these pen-and-paper examinations do is to train students to produce mediocre output that AI can already produce – and of a much better quality than these scribbled answers in answer sheets will ever produce. That’s not a knock against students; it is praise for how good AI has already gotten.

Think about it, for this is a point that bears repetition. Our examination system is geared towards training students to do a worse job than AI, by definition. And for this, we take money from students and their families, and we call it “an education”. Pah.

Now, I’m well aware of the fact that this is not applicable in all cases. There are some subjects/courses in the social sciences where these kind of examinations are entirely justified. And medical and engineering fields is a whole separate story. But I’m not arguing for an extreme solution – I’m saying that the pendulum has swung far too much over into Luddite territory when it comes to examinations and submissions. We need to wake up and smell the AI, and adjust accordingly.

But how? Well, the easy thing to do is to say that’s a difficult answer to give in a blogpost, but here’s Seth Godin again:

The answer is simple but difficult: Switch to the Sal Khan model. Lectures at home, classes are for homework.

When we’re on our own, our job is to watch the best lecture on the topic, on YouTube or at Khan Academy. And in the magic of the live classroom, we do our homework together.

In a school that’s privileged enough to have decent class sizes and devices in the classroom, challenge the students to actually discuss what they’ve read or learned. In real-time, teach them to not only create arguments but to get confident enough to refute them. Not only can the teacher ask a student questions, but groups of students can ask each other questions. Sure, they can use GPT or other tools to formulate where they begin, but the actual work is in figuring out something better than that.
At first, this is harder work for the teacher, but in fact, it’s what teachers actually signed up to do when they become teachers.

This is far less cohesive and controllable than the industrial model of straight rows and boring lectures. It will be a difficult transition indeed. But it’s simple to think about: If we want to train people to take initiative, to question the arguments of others, to do the reading and to create, perhaps the best way to do that is to have them do that.

We’ll never again need to hire someone to write a pretty good press release, a pretty good medical report or a pretty good investor deck. Those are instant, free and the base level of mediocre. The opportunity going forward remains the same: Bringing insight and guts to interesting problems.

Kill our current mode of examinations, and help build a world in which we have passionate teachers who help students create. Not a world in which we minimize soul, and maximize those stupid, accursed “marks”.

But on and on we go. Pah.

Blogging Everyday

I try to blog everyday, and as some of my regular readers might know, I don’t always succeed.

Why do I try to blog everyday?

Many reasons, but here are the top three. First, it helps makes concepts clear in my mind. Second, it instils a sense of discipline. Call it rountine, and I might even accept that it has become an addiction, but in this case, I would say it is entirely worth it. And third, my blog has become my note-taking tool. Increasingly, I end up searching my own blogposts regarding concepts I’m sure I’ve come across before. If it was important to me, I am sure I must have written about it.

There are other advantages – I’ve gotten work as a consequence of writing here, I’ve made friends and I’ve met lots of very interesting people. To cut a long story short, there are many, many advantages and virtually no downsides. You don’t get to be as lazy as you’d like to be, it is true, but people tell me that’s a good thing. Who knows, they may well be right.

There are two people I look up to when it comes to blogging every single day, come rain or shine. The name of one of them is likely to be familiar to many of you – Tyler Cowen, of course.

The other is Seth Godin.

I don’t know for how long now, but Seth has been blogging for easily more than fifteen years at least. And when I say he has been blogging for fifteen years, I mean that he has been blogging every single day for those fifteen years (and probably more). I could look up the exact number, but the point in this case ins’t the statistic itself, it is admiration for being able to keep at it for so long. It’s a habit I admire and envy, and it is a habit I aspire to. And like Jessica Hagy the other day, so also with this post. It is a tribute of sorts, and also a way to introduce some of you to bloggers who I read without fail.

Seth has over the years introduced me to authors, introduced me to concepts, taught me fun ways of thinking about stuff, made me rethink simple math, and above all – and I’ll never be able to thank him enough for this – introduced me to good bread (and do read other posts he has written in honor of Poilane). There’s so much more on his blog that trying to create a list is pointless – as with Jessica’s blog, so also with Seth’s, but even more so. Dip in, and see what catches your fancy.

Above all, though, Seth has taught me three things. He has taught me that everything that I do is marketing. Every single thing. Now, I can tell you that this means I’m not a very good marketer, but the good news is that I have one more reason to try and be better at everything I do. But he also has taught me that marketing isn’t a fad, a gimmick or a thing to be sneered at. On the contrary, it is an indispensable skill.

Two, he has taught me to show up every single day. In fact, the phrase “show up” and the word “ship” I will forever associate with Seth. If you are confused about why a marketer is talking about ships, note that we’re talking about the verb, not the noun – and I’ll reiterate my invitation to dip into his blog. I ship a blogpost daily on this blog – or try to, at any rate, purely because I admire his (and Tyler’s) tenacity and gumption. Read what he had to say about this back in 2013, when he wrote his 5000th (yup, not a typo) post:

My biggest surprise? That more people aren’t doing this. Not just every college professor (particularly those in the humanities and business), but everyone hoping to shape opinions or spread ideas. Entrepreneurs. Senior VPs. People who work in non-profits. Frustrated poets and unknown musicians… Don’t do it because it’s your job, do it because you can.
The selfishness of the industrial age (scarcity being the thing we built demand upon, and the short-term exchange of value being the measurement) has led many people to question the value of giving away content, daily, for a decade or more. And yet… I’ve never once met a successful blogger who questioned the personal value of what she did.

(And as an economist, that second paragraph is so much food for thought!)

And finally, he’s taught me to think daily. This is related to the second point, but this is important enough to be a point all on its own. You see, writing daily becomes a habit if you do it long enough. But even more importantly, you realize very quickly that writing something daily also means having to think daily. And you’d be surprised at how good we all are at going though the day without thinking. If you don’t know what I mean, I invite you to try and write daily.

Thank you for leading by example, Seth, and for showing up everyday.

Showing Up For Work

I ended up not posting on these pages this past Wednesday.

I’m not proud of it, and I wished I had posted on that day, but let’s talk about showing up for work. The phrase isn’t mine, in the sense that I associate it with Seth Godin. And this practice, of trying to write here every weekday, and post links to interesting Twitter threads and videos over the weekend, is partly because of Seth’s practice of writing daily without fail. And also, of course, due to that other blog that has daily updates, come rain or shine.

And trust me, it is hard to do! I don’t feel quite so bad about not posting for long stretches over the past two years, because there were days where I simply didn’t feel like writing. And I was completely fine with that. But this past Wednesday, it was part laziness, part lots of other things to do, and part logistical issues.

But I should stop wussing around and ‘fess up. These are all excuses, and if I aim to post daily, then failure to post is I not prioritizing this task above all else. Generally speaking, I try to schedule posts a week ahead, and a good Friday is when I have posts lined up all through next Sunday.

But alas, this doesn’t always happen. And so you might see me hunched up over my laptop, a gently sympathetic cup of coffee next to me in a cafĂ©, typing away furiously to meet my self-imposed deadline of posting by ten am. A bad day is one on which I miss the deadline, and a horrible day is one on which I don’t post at all.

The reason I’m writing this post today, and the reason I’ve spoken at length about my failure this past Wednesday, is because I want to leave you with two messages:

  1. If you write (and preferably post publicly) regularly for long enough, you will reach a stage where it becomes an almost compulsive habit, and that is A Very Good Thing. As Seth himself says, there is no such thing as writer’s block. Just sit and write. Some days will be diamonds and some will be stones, but the point is to first write. Worry about quality later.
  2. If you feel as bad as I do about missing a day, that is An Even Better Thing! But keep at it, and show up for work the next day, and then the day after, and then the day after that. Each day is, as it were, a marginal revolution.

And while you are at it, wish me luck. For today is Friday, and I don’t yet have any posts scheduled for next week.

Ah well, onwards!

Scale, Countries and Organizations

Excerpt 1:

“The Rise and Decline of Nations” put forth Mancur Olson’s theory to explain macroeconomic growth. Why do some countries grow quickly and others slowly? Why do some countries grow quickly at some times and slow at others? Though he doesn’t claim that it is the only factor, he answers that a main reason for this effect is that over time, in stable countries with unchanged boundaries, distributional coalitions (interest groups, collusive organizations) start to form and grow. The longer the country is stable, the more distributional coalitions it will have. These groups influence politics to gain benefits for their group, thereby imposing economic inefficiencies on the country.

Excerpt 2:

If you compare a Starbucks of ten years ago to a current one, they’re virtually the same. Compare this to the originals in Seattle, and the difference is startling.
The same goes for the design of a typical McDonald’s.
Apple launched the Mac with about a dozen full-time people working on its development. Today, they have more than a thousand times as many engineers and they haven’t launched a groundbreaking product in a while.
The same goes for Google. And Slack.
It’s not just famous big brands. Just about every organization hits a point where the pace of innovation slows as scale increases.

On the face of it, these might not seem very (or even at all) similar, but if you ask me, the underlying commonality is that both excerpts are talking about why and how continuing to grow at the same rate once you’re talking about a large organization (or a country) is very difficult.

Seth lists out a number of possible reasons for why firms innovate less over time:

  • Technical debt (shortcuts taken to make sure things work for now, future complications be damned)
  • Handshake overhead (the article I’ve linked to refers back to Seth’s post, but also has an interesting application of the idea)
  • Customer commitments (existing customers would prefer that you stick with the tried and tested, rather than try new things)
  • Partner preferences (same point as above, but with folks/organisations you work with, not customers)
  • Wall street’s fear (don’t rock the boat, go with what works)
  • Managerial anxiety (when leadership is replaced with bureaucracy that much rather do the bare minimum rather than experiment and try risky things)

Seth goes on in his post to talk about potential solutions to this problem. He mentions two things:

  • Boring as a strategy: iterative improvements on a regular drip schedule, and nothing out of the ordinary, ever.
  • Structural bankruptcy: by which he means one should ‘spin off the cash cow’ and go do something new with a brand new team.

Can these ideas be applied to nations? That is, can these solutions work to arrest the decline of nations? The decline of nations is a hard thing to define, let alone measure, but I think I am safe in assuming that we ‘kind of know it when we see it’. That won’t pass muster in a classroom discussion, let alone an academic paper, but you’ll allow me this laxity in a blog post, I hope. Here’s a thread that might help explain what I’m trying to get at.

I don’t know if these ideas can be applied to nations, but it is certainly true that (some, but not all) nations have a problem that needs addressing:

Andreessen’s essay ends with a call for mentorship, social pressure, and a realignment of priorities. “Every step of the way, to everyone around us, we should be asking the question, what are you building?” He writes. “What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building? If the work you’re doing isn’t either leading to something being built or taking care of people directly, we’ve failed you.”
I don’t think that’ll be enough. So let me end with my answer to Andreessen’s question: What should we build? We should build institutions biased toward action and ambition, rather than inaction and incrementalism.

But the problem lies in that fact that ‘spinning off the cash cow and doing something new with a brand new team’ might be possible in a firm, but is all but impossible in a country with a democratically elected government, and that is (almost certainly) a good thing:

But that means doing the difficult work of reforming existing institutions that aren’t going anywhere. You can’t sidestep the existence of the government, as too many in Silicon Valley want to do. You have to engage with it. You have to muster the political power to rebuild parts of it. And then you need to use the government to make markets competitive again.

It makes me tired just thinking about what that paragraph means in practice, let alone trying to figure out how to come up with a plan for it… and definitely let alone trying to implement a plan like that. But it is oh-so-necessary, and not just for the United States of America.

The Rise and Decline of Nations, by Mancur Olson is a great book to read (but take your time over it, please). Read it, and reflect on how to use the ideas in that book to either arrest or prevent a decline in your own nation.

But also reflect on how that book has the power to help you explain why the organization you are working for may be in decline, and that, for me, makes this book a truly great one:

The persuasiveness of a theory depends not only on how many facts are
explained, but also on how diverse are the kinds of facts explained. Darwin’s
theory offers insights into the origin and evolution of creatures as diverse as
whales and bacteria, and this makes it more convincing than if it could explain
only mosquitoes, however many millions of mosquitoes might be satisfactorily
explained. If a theory explains facts of quite diverse kinds it has what William
Whewell, a nineteenth-century writer on scientific method, called
“consilience.” Whewell argued that “no example can be pointed out, in the
whole history of science, so far as I am aware, in which this consilience…has
given testimony in favor of an hypothesis later discovered to be false.

Olson, M. (2008). The rise and decline of nations. In The Rise and Decline of Nations. Yale University Press.

Certificates and College Degrees

A past student of mine (and now a good friend) Alankar Pednekar shared a video with me recently.

Alankar mentions how at around the 10:15 mark in this video, an article is cited which speaks about how a certificate like this could potentially disrupt the college degree.

He had some questions about the video, and about the article. I answer them below (please note that I have lightly edited his questions for clarity. Any confusions that remain are down to me!):

  1. Logically speaking this sounds true, but is it really possible? Do you see this happening sometime soon, maybe?

    It’s already happening, of course. I wrote about it earlier, and you might also want to take a look at Lambda School, or STOA School. In different ways, the idea of college is being challenged. And if you ask me, it is high time it was challenged! Higher education has remained far too hide-bound for far too long, and technology, resistance to outdated ways of teaching and weirdly, the pandemic have made all of us aware of what is possible, if only we kept our minds open.

  2. Will there be any scenario where – there won’t be any “Middle Men”- The colleges – in the education sector (As Professor Tyler and Professor Alex debate about in one of their “Duels”), and companies would prefer to educate (or should I say ‘Train’?) to people who are willing to learn and hire them directly?

    Part of the answer lies in we not being clear about what we’re buying when we pay money to a college for higher education.
    For some folks (in many places, at least in India, these folks are the majority), higher education is about a job, and that is it. Of course, it is impolite to admit this in public, but this is the stark truth: higher education is about a job. Contrast the enthusiasm with which placement talks are planned and attended with regular classes in your own college if you are a student, for example.
    For other people, higher education is about higher education – that is, about learning for its own sake. Until colleges, students, parents and firms acknowledge that this difference exists, we will have the confused system that we live in right now. This really deserves book length treatment, but I’ll stop here for now.
  3. Assuming this happens in reality, will that be an end of colleges and universities, or they will get replaced by training centers (which we already see in today’s markets). Will there be any existence for pure joy of learning and immense pleasure of understanding things around us (even though they might not directly help us in anything)?
    Training centres exist today to train people to write exams to get into colleges. And colleges are viewed as a way to get jobs. So why not have training centres to get people jobs?
    That then leaves us free to have colleges be about “the pure joy of learning”, as both David Perell and Alankar point out. The trick, if you ask me, lies in unbundling college. You should be able to purchase courses rather than degrees.
    The trouble is that a blogpost is easy to write, and to change a system that we are all so used to is all but impossible to do.
    But I’ve said it before, and I’ll say it again. College as it exists today solves efficiently neither the problem of training people well for jobs in the real world, nor the problem of delivering quality education for its own sake. And the growing discontent is palpable.
    Palpable to me, at any rate.


In my Utopian world, there would be a mandatory qualification to appear for job interviews in college.

You should have been writing at least thrice a week since you got into college. Minimum. This writing should be freely accessible online. Without this writing, you don’t get to sit for job interviews.

What, you might ask, should you be writing about?

Here’s one way to think about it: what are you most curious about? What broad subject, topic or concept do you wish to learn about the most? Write about that. Then write about the an aspect, a nuance, an offshoot that you thought about while writing that first post. Trust me, there is no way for you to write about something – anything – without having thought about something else to write about. I guarantee it.

And continue writing. As I said, at least thrice a week.

Writing often happens in bunches. By that I mean that it is possible that you will write three posts all in one day, and then not write for a week. That’s fine – in fact, that’s great. At the end of the month, you should have 12 posts up, at a minimum.

If you have questions about the length of the post, which blogging service to use, which template to use for your blog – and other questions of this nature, you are procrastinating. And that’s fine too. Nobody procrastinates better than me. But at some point of time you’ll have to acknowledge to yourself that you are procrastinating – and as Seth Godin puts it, you’ll have to start shipping.

Does it have to be in English, you ask? Dear god, no. Any language will do. It just has to be thrice a week.

Your first few posts will be horrible. They will be long drawn, rambling posts that show confused thinking, an unclear grasp of concepts and a hesitancy to call a spade a spade. That’s fine. It’s like the first few weeks at the gym. You can’t help but stare in wonder at the regulars and the effortless ease with which they get through their gym routine.

But just like in the case of going to the gym, stick at it long enough, and things will start to get better.

Your sentences will get shorter. Your grasp of concepts will become clearer. How could it not? Once you realize, through your writing, what you do not know, you can’t help but want to change the status quo.

And once you are sure footed in terms of a grasp on the concepts, you will begin to call a spade a spade too.

The bad news? All this doesn’t happen without showing up regularly.

The good news? Stick to it, and you have a body of work that allow you to sail through your interview.


Please, write.

Maximizing Soul

I wrote this essay yesterday, and spent all day on it. I didn’t get anything else done. And in terms of the week coming up, that was an expensive thing to do. But as will become clear after reading this essay, I do not regret it one little bit.

David Perell on The Microwave Economy

David Perell’s latest essay resonated with me, and for multiple reasons. The essay is centered around a point that I have been playing around with for a while: we live in a society that overrates efficiency.

He uses the metaphor of a microwave meal in this essay. Not the kind of microwave meal that Krish Ashok has in mind, but rather the kind of microwave meal that a large number of urban Indians are increasingly familiar with. Cut packet, dump in a bowl, nuke and eat. That kind of microwave meal.

This is a meal robbed of its soul. It is functional, yes. It is, in its own way, nutritious enough. One could argue that it is tasty enough. But there is no romance, originality or effort in it. As Robert Pirsig might have put it, it is bereft of quality.1

Perell’s essay extends this point about the microwave meal to the economy.2 Most of what we do in our lives today is centered around the same misunderstanding of convenience that gave birth to the idea of a microwave meal. The result, as Perell puts it, is “an economy that prizes function over form and calls human nature “irrational”—one that over-applies rationality and undervalues the needs of the soul.”

What if, for example, I and my family decided to drive down to Goa for a holiday? Which route should we take? We would do exactly what every right-thinking person in our place would do: look up Google Maps. Whatever route Google Maps suggests is the one we will take. 

Here’s a quote from Zen and the Art of Motorcycle Maintenance, the first of Pirsig’s two books:

“The best ones connect from nowhere to nowhere, and have an alternative that gets you there quicker.”

He wrote this line in the context of learning which roads in America were the best for motorcycle riding, and the next two to three pages are lessons on how to ignore Google Maps. Google Maps wasn’t even on the horizon when the book was written, of course. It is just that Google Maps is the modern day evolution of the idea that Pirsig was battling when it came to choosing roads to ride on. 

That idea being efficiency.

A long, rambling drive through quiet serene countryside might mean an extra day, sure, but isn’t that a price worth paying – at least  worth considering? Pirsig isn’t arguing for never getting there, wherever “there” may be. He is saying the same thing that the poet did, years and years ago. We have lost the desire to stand and stare. The monk said the same thing when he spoke about the journey being as important as the destination. Getting there is important, of course it is. But how you get there is equally important, and we live in a society that doesn’t care about the journey anymore. 3

Our society over-applies rationality and undervalues the need of the soul. Pirsig knew this, of course. It is why the last part of his sentence speaks about an alternative that gets you there quicker. He knew the coming of Google Maps was just a matter of time.

Perell’s essay is a lament for what might have been: a world that prioritized the soul and not the other way around. There is a lot of truth in it, and I have absolutely no quarrel with Perell’s solution. But his essay helped me concretize something that I have been playing around with in my mind for quite a while, and that is what this essay is about.

Minimization, not Maximization

“We’ve overwhelmingly used our wealth to make the world cheaper instead of more beautiful, more functional instead of more meaningful.” 

That sentence, to me, is the core focus of David Perell’s essay, and I couldn’t agree more. In fact his argument grows even stronger on reflection, because I think the word cheaper is applicable to more than just prices. 

We have also used our wealth, for example, to make the world cheaper in the case of time.

I read more today than I did about ten years ago, but the reading is infinitely more bite-sized in comparison. I much prefer essays to books, blog posts to essays, and tweets to blog posts. 4 And I suspect I am not the only one. I can make the same argument in the case of sports. We as a society have deliberately and consciously chosen ODI’s over test matches, T20’s over ODI’s, and now of course we have The Hundred. Another argument: of all the hours that you have spent staring at video content across all devices, how many hours were spent in watching movies – as opposed to TV series, documentaries, YouTube videos or TikTok? 

When David Perell says that we have made the world cheaper, what I think he is saying is that we have figured out ways to cheapen the effort that we are willing to put into the act of consuming something. That something could be a meal, but it could also be extended to reading, viewing, or listening as well – and more besides. 5

The world has also been made cheaper in terms of effort.

I base my buying decisions on the buying decisions that others have made. My PowerPoint templates are standardized ones that Microsoft offers me. My tables in Excel are formatted as per the default mode, or based on the templates made available within the software. What to eat tonight is a function of an algorithm, the title of which is “popular in your area”. Relying upon my own research, or on serendipity is either a lost art, or has become one that is looked down upon.

I teach economics for a living, and the best definition of the subject that I have found comes from a textbook written by Alex Tabarrok and Tyler Cowen:

Economics is the study of how to get the most out of life.

The word “most” in that sentence necessarily implies optimization. And optimization necessarily implies maximizing something, or minimizing something. Getting the most out of life can be thought of in two ways. It could mean living life to the fullest (however you might define this for your own sake). It could also mean getting the most out of life by minimizing time, effort and cost spent on any activity. 6

Consider an example from my life. I love eating good food. In fact, the point of life, if you ask me, is to have as many good meals as possible. How can we apply the points in the paragraph above to my life?

A good meal on a Sunday, for example, could mean spending all day researching the best version of a recipe for a dish I have in mind, then walking to the market to get the best, freshest ingredients possible, then lovingly preparing them, and then getting the whole dish together, so that friends and family can have a wonderful, relaxed meal together.

I’d call that living life to the fullest. It is all but a guarantee that I get nothing else done on that Sunday, but I have maximized contentment.

On the other hand, I could just order the dish from a restaurant whose version I really like. Or I could decide that this particular dish is too expensive, and just make myself a sandwich instead.

I’d call this getting the most out of life by minimizing time, effort and cost. I haven’t maximized contentment, of course, but I have saved time and effort.

And as you may have guessed, I end up doing the latter far more than the former.

And this for something I really and truly love: eating. We feed our passions, even, by minimizing time, cost and effort, instead of maximizing contentment. Our necessities don’t stand a chance.

That is what we have become: a microwave economy.

The Rajan Economy

Chef Rajan is the chef de cuisine at the JW Marriott in Pune. He has, over the years, become a really good friend. By rights, he ought to be best friends with my doctor. For Chef Rajan has ensured over the past seven years or so that there are far too many inches on my waist. But it is for that very reason, of course, that he and I are such good friends. The man loves to feed people, bless him. 

The Rajan economy is his fiefdom in the JW Marriott. This fiefdom is the 24-hour restaurant in the lobby, called Spice Kitchen. 7 Procurement, staffing, menu design, day-to-day operations and customer relationship management – Chef Rajan is involved in all of these in one way or the other.

I, my extended family and a lot of other people in Pune are frequent visitors to his restaurant for a variety of reasons. There’s the attention to detail, the friendly customer service, the frequently changing menu and much else besides. But there is one non-negotiable rule that I’ve never broken, and he won’t consider breaking.

There’s never been a question about a discount on the bill.

Chefs who used to be in charge of the restaurant before him have waived off the bill on a couple of occasions – maybe a birthday being celebrated there, maybe some other occasion. Not, let me be clear, because I asked for it. It was their way of deepening the relationship with a customer. And once offered, of course, I was going to take it. Why wouldn’t I?

But ever since Chef Rajan has been in charge of the kitchen (which, if memory serves me right, was in 2015), there has never once been the suggestion of a discount. Not once.

And that has left me even happier as a customer over these past few years.

Because the Rajan economy is not about cost minimization. It is, instead, about maximizing customer delight. 8 The Sunday brunches, or brunches on special occasions such as Christmas day, are expensive affairs. 9 But I doubt anybody can walk away from that spread thinking that they did not get their money’s worth. The extent of the spread, its presentation, the quality of the ingredients, the number of times that freshly prepared batches are brought out of the kitchen – all of these speak to the quality of the restaurant. 10

Chef Rajan’s philosophy at the Spice Kitchen isn’t about cost minimization, it is about maximizing customer delight. Never once have I sat down for a meal at the Spice Kitchen and not been sent a little something that is over and above whatever is on the menu that day. If it is a special occasion, the little something could be quite elaborate. On other days, not so much. But there will always be a little bit more than expected, or a little bit more than is part of the stated deal.

You will pay full price, in other words, but you will get more than you bargained for.

I signed on for an online course conducted by Amit Varma last year, called The Art of Clear Writing. 11 It was a wonderfully organized course, and was slated to last a couple of months or so. But it is still not over! There is a community that has been formed of present and past students. Talks about writing are organized and a newsletter is in the works. Regular writing prompts are handed out to those who wish to continue practice writing. This writing regularly receives community-based feedback. Again, the price of the course is non-negotiable, but you will get more than you bargained for.

There are two ways to live life and conduct business, when thought about from the framework we have been dancing around in this essay so far. Charge the bare minimum and provide the bare minimum is one of them.

There is an argument to be made to go the Rajan/Amit way instead.

Soul Satisfaction is the Opposite of Cost Minimization

One of my favorite books to read was Anti-Fragile, by Nicholas Nassim Taleb. The key point in the book for me was that there are certain things in the world that don’t do well when exposed to risk. These things we call fragile. There are other things that don’t do badly when exposed to risk. These we call robust. 

Antifragility isn’t about not doing badly when exposed to risk. It is about getting better because of exposure to that risk. Or as he puts it in the book, robustness isn’t the opposite of fragility – it is antifragility.

In a similar vein, I think we have prayed for far too long at the altar of cost efficiency. We have focussed so much on ridding ourselves of inefficiencies in our society that we have killed off the idea of satisfying the soul.

But there is a very good reason for this – our ability to measure everything, everywhere. It may have been a blessing at one point of time, but today, I would call it a curse.

There is this part in a conversation between Tim Ferriss and Seth Godin in which Tim asks Seth about meditation. After Seth’s answer, Tim has a follow-up question about the length of time that Seth spends in meditating, and if Seth has a preference regarding time of day. Seth’s answer is worth quoting in its entirety:

“No. I don’t quantify that stuff. I quantify almost nothing in my life”

Our ability to measure and therefore quantify every single aspect of our lives is increasingly becoming a problem.12 The reason it is a problem is because quantification gives us the satisfaction of having done something about the task ahead of us – whatever that task may be. We have quantified our effort, and analyzing said quantification allows us to become “better” over time.

Let’s use a concrete example: I can measure the amount of time I spend staring at my phone daily. Apps that allow one to do this are freely available on, or even baked right into, all popular mobile operating systems. The reason I want to do this is because I have a lot of work to do in this quarter, and I want to minimize wasted time.

After a week of logging in the data, I can then decide how to either allocate my time on the phone better (more Kindle app, less Facebook), or reduce the number of minutes I spend on the phone daily. 

I might even get good at this. Maybe, after a month, I now spend markedly less time on the phone, and what little time I spend on it, I spend on “good” apps. The problem, however, is that I now have one more thing to do – track, analyze and optimize how I spend my time on the phone. 

That is, because I could measure time spent, I optimized it. The point, however, was to do more work this quarter, not analyze how I am spending my time instead. The quality of the work – what I refer to in this essay as soul satisfaction – is inherently immeasurable. And so we optimize the measurable, and continue to ignore the immeasurable.

It is, unfortunately, the immeasurable that is important.

Now you could, of course, attempt to measure the immeasurable. Chef Rajan, or somebody else at the Marriott could conduct a survey to find out how satisfied the customers are. Amit Varma might circulate a Google Form to find out how satisfied his students are with the course. 13

But even if this was attempted, the wrong thing would be quantified. 14 The customer’s satisfaction would be (imperfectly) measured. 

What we really want to measure is how soul-satisfied are the creators with their work, and measuring this is pointless: the creator already knows.

In our rush to find something to measure in order to prove that we are efficient, we measure, analyze and perfect cost, time and effort minimization. And we therefore fail to do what we set out to in the first place: good, high-quality work.

If you will forgive a lengthy extract in an already lengthy essay, David Perell points this out in his essay as well:

As Mumford observed almost a century ago, the world loses its soul when we place too much weight on the ideal of total quantification. By doing so, we stop valuing what we know to be true, but can’t articulate. Rituals lose their significance, possessions lose their meaning, and things are valued only for their apparent utility. To resist the totalizing, but ultimately short-sighted fingers of quantification, many cultures invented words to describe things that exist but can’t be defined. Chinese architecture follows the philosophy of Feng Shui, which describes the invisible — but very real — forces that bind the earth, the universe, and humanity together. Taoist philosophy understands “the thing that cannot be grasped” as a concept that can be internalized only through the actual experience of living. Moving westward, the French novelist Antoine de Saint-Exupéry said: “It is only with the heart that one can see rightly; what is essential is invisible to the eye.” And in Zen and the Art of Motorcycle Maintenance, Robert Pirsig describes how quality can’t be defined empirically because it transcends the limits of language. He insists that quality can only be explained with analogies, summarizing his ideas as such: “When analytic thought, the knife, is applied to experience, something is always killed in the process.” All these examples use different words to capture the same idea.

But a headlong rush to measure, analyze and optimize the measurable has resulted in us losing sight of the big picture. We have become a society of optimization through minimization. We’ve become very good at extracting the very last bit of juice out of a lemon. So good, in fact, that we’ve forgotten all about growing more lemons. 15

The point was to be as content as possible. We’ve settled instead for being as content as we possibly can be after minimizing costs, time and effort.

Soul Satisfaction Maximization

It is a mouthful, I’ll be the first to admit. And if anybody reading this can coin a better phrase, I’m all for using that one instead. But call it what you will, it is the idea that I am focused on, not its name. We need to move away from minimizing that which we can measure, and try and move towards maximizing that which we can’t.

Cowen and Tabbarok’s definition remains perfectly valid. Economics is indeed about getting the most out of life. All of us are often unclear about what we are optimizing for in life. Is it a fulfilling family life, or is it income, or is it something else? Every economics professor will sooner and later ask her student: “what are you optimizing for?”

I’d suggest a follow-up question: how are you optimizing for it?

And by way of example, let us return to my favorite thing to think about: food.

If, on a Monday night, you are wondering what to cook, don’t think about which recipe can be made as quickly as possible. That would be time, effort and cost minimization.

Choose instead, the recipe you want to make, and cut out everything else in your life that stops you from making that recipe. And if this still doesn’t give you enough time, then try to see if you can eliminate certain steps in the recipe. See if certain steps can be done in advance. See if hacks can be used to accelerate certain processes.

In other words, what you want to maximize is non-negotiable. Don’t give up on your dream. But compromises in order to achieve that dream – well, that is inevitable. 

Let me put it another way. Consider these two statements:

  1. This is all I have to give. Under these circumstances, which dream is most attainable?
  2. This is my dream. Given my circumstances, what do I need to do to attain it?

I argue that we have, as a society, grown far too comfortable with the first idea, and we need to learn to do more of the second.

But whatever you do, don’t microwave a meal. 

  1. I am a huge, unabashed fan of Robert Pirsig, and so is David Perell. Pirsig will make numerous appearances in this essay: consider yourselves warned.[]
  2. I’d go a step further and say that it is equally applicable to society at large. But I’d rather not go down the rabbit hole of teasing apart the differences between an economy and society in this essay, so I’ll use society from here on in, unless I’m quoting from Perell’s essay.[]
  3. NH4 until Kolhapur and then turn right for Amboli is what we usually do, in case you were wondering.[]
  4. “Prefer” here is used in the context of what I end up actually consuming of each, as opposed to what I claim to prefer.[]
  5. Perell’s essay has a lovely section on the music bit, especially. Do read it.[]
  6. And it could, of course also mean both at the same time. But even in this scenario, which of the two one focuses on the most is going to get us back to the point of this essay.[]
  7. His role has changed over the years, of course, and is greatly expanded today. For the purpose of this essay, I will focus on just the one restaurant.[]
  8. Which, over the long run, ought to lead to true profit maximization. But this footnote is another essay in the making, so we will leave it at that.[]
  9. By Pune’s standards. They are cheap compared to what’s on offer in Bombay.[]
  10. Taste is a subjective thing, and so I’ve left it out of the discussion here.[]
  11. Any shortcomings in this essay are down to me, of course, not Amit![]
  12. I can measure my pulse rate, my O2 levels, my hours of sound sleep, the number of steps I have walked, the number of calories I have consumed, the number of minutes I have spent looking at my phone (and with drilldowns to boot) and a dozen other things with just a smartwatch and my phone. And then tabulate it, analyze it and improve upon it.[]
  13. Neither of them have done any such thing.[]
  14. And it would be imprecisely quantified, but that is a story for another day[]
  15. And if I may be permitted to squeeze every last bit out of this analogy: or growing mangoes instead.[]

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.

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.