Archive for November 1st, 2017

The 500th anniversary of Martin Luther’s Protestant Reformation: What it tells us about history, memory and economics!

November 1, 2017

It was on 31st Oct 1517 that Martin Luther went to the door of the town’s Castle Church and nailed to it a sheet containing 95 Theses. This was the basis of Protestantism which broke away from the teaching of Catholicism.

In this piece, Prof. Peter Marshall of  University of Warwick says history hardly panned out the way we are made to believe:


Gabbar Singh teaches us about Moral Hazard, Banking crisis and NPAs

November 1, 2017

Avinash Tripathi (@qfint)is quickly becoming one of the key guys to read/follow regarding economics (and movies).

His recent piece is on what Gabbar Singh teaches us about moral hazard, banking crisis and NPAs. He is hardly new to this genre and has written earlier pieces linking game theory to Sholay, RGV’s Company and now Sholay’s Gabbar to moral hazard.

Though, this time Avinash even quotes from Hebrew Bible:


Zimbabwe’s financial system is living on borrowed time – and borrowed money

November 1, 2017

Prof Roger Southall of  University of the Witwatersrand in South Africa has a piece on Zimbabwean economy.

Much of it is known but still worth repeating as so called leaders do not just learn lessons from monetary history:


How economic prosperity spared witches from being victims of all criticism…

November 1, 2017

Given the Halloween season (it is amazing how the western world has managed to sell Halloween across the world), one is getting to read articles on witches and their craft. For instance, Sri Lankan cricket captain Dinesh Chandimal recently seem to have said: Witchcraft Helped Us Win Test Series vs Pakistan!

In another piece , Chelsea Follett of Cato Institute writes on how economic prosperity implied people stopped blaming witches for all the ills:

Famously, America had its own smaller scale witch panic at the end of the 17th century, when its average income was roughly $900 by the same measure.

It seems that even in America, poverty was partly to blame for the killings. The majority of the charges in Salem were leveled by economically desperate farmers against more prosperous merchant families, according to the authors of Salem Possessed: the Social Origins of Witchcraft.

Unsurprisingly, the Salem madness was preceded by a series of unusually cold winters causing crop failures. Cold weather and subsequent deteriorating economic conditions also correlated with more witch killings in Europe, just as crop-ruining rainfall levels often precede witch hunts in Tanzania.

Poverty and ignorance do not always lead to witch hunts, but they seem to make violence more likely. For one 14th century site excavated in South Dakota, an astonishing 60% of the population died in conflict. Many of the bodies show not only signs of violent death but also extensive nutritional deficiencies, suggesting starvation-level poverty preceded deadly violence.

One reason for violence’s decline that Harvard University’s Steven Pinker identifies is capitalist peace theory: When it’s easier to buy things than steal, people don’t steal. Hence trade and commerce between countries reduce the exploitative incentives of military conquest.

Of course, trade doesn’t guarantee peace. Europe enjoyed abundant trade before World War I. But in general, as people move from subsistence to exchange and from poverty to prosperity, they become less desperate and violent. As prosperity enables education to spread, belief in witchcraft fades. After a poor harvest, instead of witch hunts energy is poured into innovative ways to ensure better crop yields next year.

If you see any witches this Halloween, take a moment to contemplate the incredible strides that humanity has made against poverty and violence. While progress can be uneven and there are still places where “witch” is a deadly accusation, declining poverty helps to end witch hunts and makes the world less violent.


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