Why ethnic favouritism is a global phenomenon

July 26, 2016

A group of researchers dispel the myth that ethnic favouritism is not just an African (even Asian) thing. It is pretty much a global phenomenon.

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Learning Indian economic history from EPIC TV channel – case of Chapparbands the coin forgers

July 26, 2016

If people have not yet seen this TV channel – EPIC, please do. It is perhaps the best thing to have come on Indian TV for a long long time. It takes you back to those olden days of Doordarshan when TV meant even some knowledge and information as well. Now most TV channels including the news ones are just plain idiotic. Most would agree our news channels are just entertainment actually.

Here is where likes of EPIC come with a breath of fresh air. Most of the shows on EPIC TV are of excellent content and quality. The centre theme here is indology. I have learnt quite a bit about Indian economic history especially on the currency and monetary matters.It has these short clippings (called epified) on different currency systems run in different kingdoms in India. Epified also has these short clippings on how various commodities came into being in India and began to be traded. Then there are shows on Indian food (which tells you quite a bit about eco too), Indian philosophy (usually good Devdutt Pattnaik atthe helm), Interpreting Indian classics like Mahabharata (in a show called Dharmakshetra) and so on.

In a recent show called Lootere (robbers), one got to know about this community called Chapparbands which were expert coin forgers. They gave the British a run for money literally and figuratively. The seem to have learnt these coin making tricks with their ancestors serving the Mughal empire Treasury.  This knowhow was transmitted through generations before they got into forging British coins. It was thrilling to learn about this bit of Indian monetary history which is not covered anywhere.

I found this bit on Chapparbands on one of the sites:

The Chapparbands are manufacturers of spurious coin, who hail from the Bombay Presidency, and are watched for by the police. It is noted, in the Police Report, 1904, that good work was done in Ganjam in tracing certain gangs of these coiners, and bringing them to conviction. For the following note I am indebted to a report by Mr. H. N. Alexander of the Bombay Police Department. The name Chapparband refers to their calling, chapa meaning an impression or stamp. “Among themselves they are known as Bhadoos, but in Hindustan, and among Thugs and cheats generally, they are known as Khoolsurrya, i.e., false coiners. While in their villages, they cultivate the fields, rear poultry and breed sheep, while the women make quilts, which the men sell while on their tours. But the real business of this class is to make and pass off false coin. Laying aside their ordinary Muhammadan dress, they assume the dress and appearance of fakirs of the Muddar section, Muddar being their Pir, and, unaccompanied by their women, wander from village to village. Marathi is their language, and, in addition, they have a peculiar slang of their own. Like all people of this class, they are superstitious, and will not proceed on an expedition unless a favourable omen is obtained. The following account is given, showing how the false coin is manufactured. A mould serves only once, a new one being required for every rupee or other coin.

It is made of unslaked lime and a kind of yellow earth called shedoo, finely powdered and sifted, and patiently kneaded with water to about the consistency of putty. One of the coins to be imitated is then pressed with some of the preparation, and covered over, and, being cut all round, is placed in some embers. After becoming hardened, it is carefully laid open with a knife, and, the coin being taken out, its impression remains. The upper and lower pieces are then joined together with a kind of gum, and, a small hole being made on one side, molten tin is poured in, and thus an imitation of the coin is obtained, and it only remains to rub it over with dirt to give it the appearance of old money. The tin is purchased in any bazaar, and the false money is prepared on the road as the gang travels along. Chapparbands adopt several ways of getting rid of their false coin. They enter shops and make purchases, showing true rupees in the first instance, and substituting false ones at the time of payment. They change false rupees for copper money, and also in exchange for good rupees of other currencies. Naturally, they look out for women and simple people, though the manner of passing off the base coin is clever, being done by sleight of hand. The false money is kept in pockets formed within the folds of their langutis (loin-cloths), and also hidden in the private parts.”

The following additional information concerning Chapparbands is contained in the Illustrated Criminal Investigation and Law Digest13:—“They travel generally in small gangs, and their women never follow them. They consult omens before leaving their villages. They [18]do not leave their villages dressed as fakirs. They generally visit some place far away from their residence, and there disguise themselves as Madari fakirs, adding Shah to their names. They also add the title Sahib, and imitate the Sawals, a sing-song begging tone of their class. Their leader, Khagda, is implicitly obeyed. He is the treasurer of the gangs, and keeps with him the instruments used in coining, and the necessary metal pieces. But the leader rarely keeps the coins with him. The duty of passing the false coins belongs to the Bhondars. A boy generally accompanies a gang. He is called Handiwal. He acts as a handy chokra (youngster), and also as a watch over the camp when the false coins are being prepared. They generally camp on high ground in close vicinity to water, which serves to receive the false coins and implements, should danger be apprehended.

Superb stuff..

There is much more on EPIC channel. Quite a bit on economic history as well. It gets all these scholars to talk on the show which just enriches the overall discussion.

Kudos to the team..

A ‘secret’ underground passage in Mumbai between CST and Indian central bank…

July 25, 2016

Well, well, well. This is an interesting bit of history:

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Human Face of Banking – slowly getting killed..

July 25, 2016

Adfer Rashid Shah of New Delhi has sent a comment to EPW. It is likely to be ignored by most but is worthy of a discussion.

He ponders over how banking is just becoming faceless:

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Continuous hype over upcoming fears is fostering crises (why having less economists talk will help here..)

July 25, 2016

Thomas Fricke says there is this continuous sense of fear and insecurity blown by media and experts.

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Our disastrous monetary system: A new must-read book

July 25, 2016

I was just reading this interview of Nathan Bond, a budding entrepreneur. He wonders why Austrian School is not even mentioned in economics textbooks:

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Why services inflation matters and is much higher than official figures..

July 25, 2016

The Indian Government and central bank have been patting their back over lower inflation in last few years. The financial markets too joined in the celebration as all they care for is reported inflation. No credit is given to the positive oil shock which just pushed inflation lower not needing any policy really.

But what about people who would laugh off such pats. Infact there are some concerns that inflation has again started rising. It was reported as 5.77% in June 2016, the highest in 22 months (the previous month number was 5.76% which was reported as 21 month high!). For most of us commoners, even this figure is much lower. The average inflation is 10-15% easily across most things we buy. I mean the disconnect between official figures and actual ones is amazingly wide. There is always talk of overestimating GDP but little on underestimating inflation.

Part of the problem is poor coverage of service inflation in our price index. Rajalakshmi Nirmal has a piece on services inflation which has been zipping at the rate of 10-15% for most services and even higher for others:

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The rising culture of Indian CEOs as superheroes which is not such a good trend..

July 22, 2016

What was essentially a western fad has caught up big in India as well. It is all about being superstars and superheroes in whatever you do. The trend has particularly caught up in economic policymaking and business circles. The India media has started to love superstar policymakers and CEOs and hypes it with no holes barred. And then when it realises the follies of projecting an individual over an organisation, the blame is put on the individual!

Sundeep Khanna in this article points to this rising trend in India. We need CEOs as company faces but not overblown superstar images:

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SEBI’s role in shaping capital markets since 1991: progress, cooperation with finance ministry and humility….

July 22, 2016

In the 25 anniversary celebrations of 1991, we are seeing quite a bit of activity. It has given a continuous fodder for this blog as well.  There are all kinds of articles (this one is a good summary) with each of the key actors trying to assess how things happened and their roles in the same. Some like Dr MM Singh call it a team work whereas others like Montek point to how their document was the brainchild. This is truly the finest hour for the lost legacy of the then PM PV Narasimha Rao who has a mixed record with success in economics but not politics. This was interesting in itself as he had no understanding of economics and was always a politician. But then I guess things are being carried too far away pointing to all kinds of characteristics which were behind the reform. We tend to overdo all such things and not just accept that somehow certain things happen.

Anyways, there is plenty of learning happening.

So far the discussion has been around the Prime Ministers, Finance Ministers, Central bank people and Planning Commission members. Most of these interviews were but expected. Most of them have been superstars of financial media in their own way.

This one article looks at a silent player – SEBI – which changed the capital market game in a big way. This is one area where our progress has been huge but it is barely discussed. The person here is DR Mehta whose seven year tenure changed quite a few things at SEBI. Unlike others, he just calls it a job. He also adds there was never a conflict with any of the Finance Ministers:

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Controversy over installation of Thiruvalluvar’s statue in Hardwar…

July 22, 2016

Thiruvalluvar, a Tamil poet was often referred in budget speeches of former Finance Minister P Chidambaram’s budget speeches.

The poet’s statue is finding it difficult in getting installed in Hardwar. On 18 July, Hindu reported:

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Moving Indian banking beyond BBB to an ‘A PLUS’ …

July 22, 2016

Prof. Gurbachan Singh of Indian Statistical Institute says the more we try and change things with Public sector banks the more they remain the same. Appointing a BBB is a positive step but will not change things much. We need to move from BBB to A plus banking.

What is A plus? It is an acronym :-):

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How industrial cluster policy leads to inter-firm transaction networks

July 22, 2016

Three Japanese researchers (Toshihiro Okubo, Tetsuji Okazaki and Eiichi Tomiura) point to this interesting research.

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Is Greed Ruining Private Equity Firms?

July 21, 2016

It always looked like but no one cared. Gordon Gekko argued along ago greed is good and has remained a dictum for the financial sector.

Now a new research by Profs Victoria Ivashina and Josh Lerner of HBS shows greed rules Private Equity firms. Here is a discussion of the same:

In a first-ever look at the internal economics driving private equity partnerships, Harvard Business School researchers have found that many of these funds can be torn apart by greed among founding partners who take home a much bigger share of profits than other senior partners, even when their performance doesn’t merit higher rewards.

This creates a ripple effect, where other senior partners become resentful, disenchanted, and leave their jobs, causing instability that spooks potential investors and could lead to a firm’s collapse. This pattern of unequal pay was much more extensive than anticipated among the 717 private equity partnerships studied by HBS finance professor Victoria Ivashina and Josh Lerner, the Jacob H. Schiff Professor of Investment Banking.

These rifts, far from being uncommon, are the average experience in PE partnerships, Ivashina says.

In their working paper released in March, Pay Now or Pay Later? The Economics within the Private Equity Partnership, she and Lerner found that a partner’s pay was often tied more to the person’s status than to performance. Previous success as an investor seemed to have little bearing on how much the partner earned. Founders in particular gobbled up a much bigger piece of the pie.

Senior partners who believe they aren’t compensated fairly are significantly more likely to leave a firm. These departures can give limited partners the impression that a private equity firm is unstable. That perception creates a wariness to invest, which means a PE firm often struggles in its attempts to raise the next fund.

So in essence, founding partners are damaging their own firms, in some cases beyond repair, by being greedy.

One still needs research to prove the obvious..

How national cuisines depict economic strength…

July 21, 2016

Gulzar has a wonderful post on the topic. He points to this article which tries to understand how certain cuisines are perceived in US?

Atlantic has an interesting article that charts the “hierarchy of tastes” or social acceptance trajectories of different national cuisines in the United States. In particular, why does the French and Japanese cuisine get admitted to high-ed, white-tablecloth establishments while the Chinese and Indian recipes are relegated to lower-status eateries as “ethnic” food?
Consider the cases of steak frites and carne asada. They both involve cooking a fairly high-quality cut of meat over high heat, and they’re both dishes whose origins are foreign to America. But they’re often listed on American menus at vastly different prices. Why? “The shortest answer would be cultural prestige, some notion of an evaluation of another culture’s reputation,” says Krishnendu Ray, an associate professor of food studies at New York University. In a book published earlier this year, The Ethnic Restaurateur, Ray expands on this idea, sketching the tiers of what he calls a “global hierarchy of taste.” This hierarchy, which privileges paninis over tortas, is almost completely shaped by a simple rule: The more capital or military power a nation wields and the richer its emigrants are, the more likely its cuisine will command high menu prices.


India is pretty much bottom of the list and falling in the hierarchy of taste since 1986.. Further from the article:

In 1985, the earliest year for which Zagat data is available, Japanese food had the sixth-highest average check price in New York. Last year, it ranked first. During that time, Greek and Korean have also seen their lots improve, while Chinese has remained at the lower end of the check-price spectrum, along with Thai, Indian, and Mexican.

The theory Ray outlines in The Ethnic Restaurateur is more complicated than just loosely extrapolating from a country’s financial and military might. Some more-granular data does support that approach—many cuisines’ Zagat check averages correlate closely with the per-capita income of the corresponding cultural group—but Ray believes that other variables must matter a lot too, considering that nearly all the cuisines with the highest check prices are ones generally associated with whiteness.


Similarly, it is who the American mainstream considers foreign—and when—that can go a long way in explaining why the prestige of a cuisine surges or plunges over time; perhaps the most important variable in determining “foreign-ness” is how large an immigrant group is, and their socioeconomic status upon arrival. “Most of the Japanese we are familiar with are business folks, are executives,” Ray recently told the podcast The Sporkful. “But right now, most Americans associate Chinese food with relatively impoverished Chinese immigrants.” (A cuisine need not even be foreign to experience such bad luck: Poverty probably plays a role in why Native American food, which has all the trappings of a trendy cuisine, has failed to accrue cultural capital.)

The cuisines of France and Italy, Ray argues, have had very different histories in the U.S. precisely because those two countries have sent different volumes of people, of varying levels of wealth, to American shores. The fact that large numbers of poor French immigrants never settled in large portions of the U.S., along with the country’s reputation for sophistication (and fussiness), helped propel French food to becoming the standard against which other cuisines were measured.

The history of Italian food in America, meanwhile, offers a wonderful case study of how a cuisine’s status is dictated by immigration patterns. As Ray details in The Ethnic Restaurateur, Italian food was first popularized in the U.S. in the 19th century. Thomas Jefferson had a high opinion of macaroni (and pasta in general), which at the time was not associated with cardboard boxes and bright orange powder, but rather with more refined cuisines, such as France’s.

“Italian food would be dislodged,” Ray writes in his book, “by the entry of new southern Italian immigrants between 1880 and 1924 who were numerous and mostly poor, hence derided by the taste-making elite.” Italians were scorned as “garlic eaters,” and by 1955, the status of their country’s cuisine had fallen so far that the legendary cookbook author and food columnist James Beard wrote, “My opinion of Italian cookery was not too high.” Technically speaking, Beard did, like those in Jefferson’s time, compare it to French food, but unlike 19th-century gourmands, he compared it (unfavorably, no less) to the food the French servedon trains.

It was only after the descendants of these relatively poor Italian immigrants began rising in American society that the nation’s cuisine started accumulating prestige. “When American Italians climbed out of the ghetto and into sports arenas, corporate offices, governor’s mansions, city halls, and movie studios, Italian food was re-assessed in the American imagination,” Ray writes.

Superb reading.. Never thought on those lines.

One should do a similar experiment in India as well which has so many within India cuisines as well.

What after all is meant by One Belt, One Road? Will it reshape global trade?

July 21, 2016

A good discussion at McKinsey over the One Belt One road or OBOR plan by China.

The first q is what exactly is One Belt, One Road?

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25 years of 1991: Is India now just a proud outpost of global finance?

July 21, 2016

Aseem Shrivastava, a Delhi based economist who earlier wrote a critical review of India growth story, writes on the 25 years of 1991. This is an alternative view (most would call it leftist) which goes against the usually accepted positive spin of the 1991 agenda.

The crux of the argument is despite stellar growth records, jobs have barely grown:

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India’s capital market regulator plans to crawl social media on a 24/7 basis..

July 21, 2016

As most of stock investment advisory business shifts on the virtual world, the regulator has no choice but to move there as well.

This BS article informs that SEBI is planning to move aggressively into the space. It has invited companies specialised in Web Crawling, Data extraction and Information Management Services for helping in its cause:

As the regulator of Indian securities market, SEBI proposes to improve monitoring of the news or messages that are appearing ‘about SEBI’ in the social media, so that SEBI is well aware about the general perception of the market on the various issues pertaining to SEBI and can act on those thenceforth. Accordingly, it has been decided to engage an outside agency who can track public information on SEBI and securities market, published and publically accessible in the World Wide Web as well as the information in electronic and print media, and provide it to SEBI, in a manner that is relevant to the various departments of SEBI. Additionally, the agency is also required to carry out social media management activities on behalf of SEBI. 

This is interesting stuff. SEBI should set up a research department as well to report on the emerging trends, ideas and so on as well. No point just having a crawler who does things secretively.

Why money multiplier remains low in US – the micrcoeconomics of banking..

July 20, 2016

Julien Noizet of Spontaneous Finance has a piece on he topic.

The money multiplier has been really low in US for sometime now. Most imagined that with the Fed pumping so much money multiplier will jump significantly and we would have hyperinflation etc. But none of this happened. Why? In most such monetary thinking, we just ignore the functioning of the banking sector. Just like all sectors, banking too has its microeconomics and rigidities:

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Using twitter to get monsoon updates…

July 20, 2016

Anand Mahindra is using his social network to get monsoon updates:

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Was the 1991 agenda home grown or west imposed? (also the role of mysterious M document)

July 20, 2016

The recent EPW edition ( Vol. 51, Issue No. 29, 16 Jul, 2016) has a series of articles on the 25 year anniversary of 1991.

This one by Montek S Ahluwalia is a great read. It narrates this historical thought process behind 1991. He says it was hardly a case of imposition by western agencies like IMF and World Bank. Infact the thinking started much before 1991 as well. One can always argue whether the process was domestic driven or external driven but the historical process is something worth knowing:

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