Archive for the ‘Discussion’ Category

How Trolls Overran the Public Square

December 10, 2019

Prof Brad De Long in Proj Syndicate column:

Since the invention of writing, human innovation has transformed how we formulate new ideas, organize our societies, and communicate with one another. But in an age of rapid-fire social media and nonstop algorithm-generated outrage, technology is no longer helping to expand or enrich the public sphere.

We should have seen this coming. A generation ago, when the “net” was limited to universities and research institutes, there was an annual “September” phenomenon. Each year, new arrivals to the institution would be given an email account and/or user profile, whereupon they would rapidly find their online communities. They would begin to talk, and someone, inevitably, would get annoyed. For the next month, whatever informational or discursive use the net might have had would be sidelined by continuous vitriolic exchanges.

Then things would calm down. People would remember to put on their asbestos underwear before logging on; they learned not to take the newbies so seriously. Trolls would find themselves banned from the forums they loved to disrupt. And, in any case, most who experimented with the troll lifestyle realized that it has little to recommend it. For the next 11 months, the net would serve its purpose, significantly extending each user’s cultural, conversational, and intellectual range, and adding to the collective stock of human intelligence.

But as the Internet began to spread to each household and then to each smartphone, fears about the danger of an “eternal September” have been confirmed. There is more money to be made by stoking outrage than by providing sound information and encouraging the social-learning process that once taught net newbies to calm down. And yet, today’s Internet does offer valuable information, so much so that few of us could imagine doing without it. To access that information, we have tacitly agreed to allow the architects at Facebook, Twitter, Google (especially YouTube), and elsewhere to shape the public sphere with their outrage- and clickbait-generating algorithms.

Meanwhile, others have found that there is a great deal of money and power to be gained by shaping public opinion online. If you want to get your views out there, it is easier to piggyback on the outrage machine than to develop a comprehensive rational argument – especially when those views are self-serving and deleterious to the public good.

For her part, Newitz ends her recent commentary on a hopeful note. “Public life has been irrevocably changed by social media; now it’s time for something else,” she writes. “We need to stop handing off responsibility for maintaining public space to corporations and algorithms – and give it back to human beings. We may need to slow down, but we’ve created democracies out of chaos before. We can do it again.”

Such hope may be necessary for journalists these days. Unfortunately, a rational evaluation of our situation suggests that it is unjustified. The eternal September of our discontent has arrived.

How most of humanity’s new big things of future eventually turn into disasters…

RIP Paul Volcker: Till there is macroeconomics, you will be remembered

December 10, 2019

My obituary to Paul Volcker. Rest in Peace Sir.

Volcker not just entered macroeconomics hall of fame but made a permanent place for himself. Former Fed chair Ben Bernanke paid tributes to Friedman on his 90th birthday saying: “I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”

On Volcker’s death, taking a cue from Bernanke’s words, all the central bankers in the world — past and present — can give a joint statement: “We would like to say to Paul, regarding cause of inflation, you’re right, we did it. We’re very sorry. But thanks to you, we will try our best not to do it again.”

From GDP 1.0 to GDP 2.0: Distribution to be as important as production

December 9, 2019

Kemal Dervis in this piece:

Building on work by the economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, the Center for Equitable Growth has proposed “GDP 2.0,” a metric that would complement existing aggregate GDP reports by disaggregating the income growth of different cross sections of the population (such as income quintiles). Providing this kind of distributional picture regularly would require increased coordination among government departments, as well as some conventions on, for example, how to use tax data to complement the usual national accounts. But conventions are also needed for existing national income accounting.

Provided that distributional data are routinely available, one could compute a growth rate based on the weighted average across each decile of the income distribution, with equal weighting for population, as in the example above. Individuals would still be weighed by their incomes within each group (which is why it would be preferable to use deciles rather than quintiles), but the final product would be much closer than current methods to the “democratic” ideal.

One of the main advantages of GDP growth is that it is expressed with a single number, whereas other performance indicators either are presented within dashboards comprising multiple metrics or aggregated in essentially arbitrary ways. The implicit use of income shares as aggregation weights is perfectly appropriate for macroeconomic analysis and is not arbitrary. The problem arises when GDP becomes a proxy for progress. What we can measure easily and communicate elegantly inevitably determines what we will focus on as a matter of policy. As the Stiglitz-Sen-Fitoussi report put it, “What we measure affects what we do.”

Publishing a democratic metric like the growth rate of GDP 2.0 is no pipedream. A GDP growth rate using equal weights for each decile of the population would also produce a single number to complement the usual growth rate. True, it still would not capture the substantial differences within the top decile in many countries where the top 1% have been gaining disproportionately compared to everyone else. And we still would need other metrics to measure performance in dimensions other than income. But as a single figure published alongside GDP growth, it could go a long way toward changing the dominant conversation about economic performance.

Popular Presidents versus the Press: Why they love Press but not journalism?

December 9, 2019

Interesting Proj Synd piece by Andrés Cañizález, a Venezuelan journalist.

Populist leaders love the mass media, which enable them to spread their own ideas. But they hate journalism, which asks challenging questions and aims to hold them accountable. That is precisely why we must defend it.


Venezuela is thus an object lesson in why attacks on media by Trump, Bolsonaro, and AMLO must be taken seriously. All media, both targeted and favored, should fight back, including by seeking injunctions in national and international courts. Journalists and others, such as academic associations, can pursue local-level initiatives aimed at defending the rights and freedoms of citizens and media.

NGOs can also help, not only by unequivocally expressing their opposition, but also by collecting and publicizing data on media freedom. Civil society should contribute its own full-throated defense of media, with citizens engaging in joint initiatives with media and their defenders.

An enemy of the free press is an enemy of democracy. We can’t say they didn’t warn us.

This explains much of the dilemma one had so far. These leaders become popular using the press/media and then go onto dislike it. Why? The answer is leaders like the press who spread their cult but not journalists who ask tough qs and hold them accountable..

A letter from Larry and Sergey

December 5, 2019

What a way to give up management of Alphabet, Google’s parent company:

With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it’s the natural time to simplify our management structure. We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President. Going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google, and managing Alphabet’s investment in our portfolio of Other Bets. We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as Board members, shareholders and co-founders. In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about! 

Sundar brings humility and a deep passion for technology to our users, partners and our employees every day. He’s worked closely with us for 15 years, through the formation of Alphabet, as CEO of Google, and a member of the Alphabet Board of Directors. He shares our confidence in the value of the Alphabet structure, and the ability it provides us to tackle big challenges through technology. There is no one that we have relied on more since Alphabet was founded, and no better person to lead Google and Alphabet into the future.

We are deeply humbled to have seen a small research project develop into a source of knowledge and empowerment for billions—a bet we made as two Stanford students that led to a multitude of other technology bets. We could not have imagined, back in 1998 when we moved our servers from a dorm room to a garage, the journey that would follow.


NSE’s RH Patil Memorial Lecture 2019: Prof Robert Engle

December 5, 2019

NSE organised the RH Patil Memorial lecture for 2019. This time Prof Engle delivers the lecture.

Last year it was Robert Merton..

Common Chiffchaff: The bird that makes the sound of money!

December 2, 2019

Given this blog focuses so much on things related to money and banking, this piece by Abhishek Gulshan in the Hindu is quite amazing:

Low temperatures in the city gives us bird watchers a cause for great celebration. Bird sightings go up as many winter migrants make their way into Delhi-NCR, keeping all of us on the lookout every day.

One bird to visit the city is the Common Chiffchaff or Phylloscopus collybita, as it’s known scientifically. Phylloscopus’ literally translates to leaf-seeker and ‘collybita’ has been derived from the latin word ‘collybista’, meaning the money-changer, from the sound it makes.

In its breeding time, the song of the bird resembles a two-note high-pitched sharp and rhythmic ‘chiff-chaff-chiff-chaff-chiff-chaff’. In areas where they migrate to, they generally utter a warbling ‘hweet’. The bird has onomatopoeic names in many other languages apart from English, reiterating the significance of its sound. ZilpzapinGerman, Tjiftjaf in Dutch, and siff- saff in Welsh.

Perhaps one of the hawk/dove/owl used to justify positions of central bankers should make space for Chiffchaff. How should a chiffchaff central banker be defined?

The onward march towards an old-style command economy..

November 26, 2019

V. Anantha Nageswaran in this piece points how shortselling is being banned in quite a few parts of the world:

Elizabeth Warren, Bernie Sanders and James Corbyn must be fancying their chances in the forthcoming elections in their respective countries. Never mind that former US President Barack Obama cautioned against the Democratic Party turning too far left. Even if they heed his advice, the world’s capitalists and regulators seem united in turning voters and candidates leftwards.

I just saw a story (Return Of Short-Selling Bans: Market Protection Or “War Against Truth”?, 19 November 2019) put out by Reuters that Turkey has banned short-selling. Korea might do so, and so could Europe if Brexit creates market turbulence. Europe had resorted to banning short-selling between 2008 and 2012 as it battled the fallout of the global crisis and then the Greek crisis. Global economies, advanced and developing, now ride on asset prices. As leverage ratios have risen relentlessly both in the public and private sectors, the only way governments can prevent the unravelling of balance sheets is to place all policy tools at the service of underpinning asset prices.

The logic is clear. However, the question is whether its costs would exceed the benefits, and whether it would postpone real price discovery to a later date—only for it to manifest itself more uncontrollably than now.

The more things change, the more they remain the same!

Proposal for writing a short history of International Economic Association (IEA)

November 26, 2019

The open call for writing the IEA history is here. (HT: Good friend Nitesh Ranjan)

The Patriot versus the President (politician)

November 26, 2019

Interesting piece by Ian Buruma and something worth pondering on:

Lt. Col. Alexander Vindman should be a Republican poster boy, given the party’s routine invocation of love of country and encomiums to military valor. But to the GOP and its supporters, Vindman’s recent testimony in the impeachment inquiry into President Donald Trump automatically makes him an enemy of the people.

In most parts of the world, politicians are raising and questioning patriotism of people who stand /speak against them. And these polticians position themselves as apostles of patriotism. But why is feeling of patriotism so important? Who is a true patriot?


Why should anyone be grateful for belonging to a particular nation? Pride, perhaps, but gratitude? In fact, patriotism based on gratitude might be the strongest form there is.

Grateful patriotism should not be confused with the chauvinistic zeal displayed by some people from national minorities or marginal border regions: Napoleon from Corsica, Hitler from the Austrian borderlands, Stalin from Georgia. Some of the most fanatical Nazis were from German-speaking areas outside the mother country, such as Czechoslovakia and South Tyrol. Such people are less motivated by gratitude than by a desire for acceptance by the majority.

To Vindman’s family, the US offered a refuge from an authoritarian regime. There cannot be a stronger bond of allegiance. Watching Vindman testify was to see the greatest hope for America. He still believes that in spite of threats and smears and the toxic atmosphere of Trump’s Washington, he “will be fine for telling the truth.”

The words engraved on a plaque in the pedestal of the Statue of Liberty are often quoted, but not always properly understood: “Give me your tired, your poor/your huddled masses yearning to breathe free.” Trump’s main adviser on immigration, Stephen Miller, himself from a family of Jewish immigrants, has disparaged these words. Immigrants have to speak English, he has said, and Emma Lazarus’s poem “The New Colossus” does not represent “American values.”

In fact, ideally, Lazarus’s famous poem is the apotheosis of American values. Those huddled masses yearning to be free are the true patriots. They have traditionally been America’s greatest strength, embodying the kind of loyalty that is hardest to break. If the approach to tired and poor refugees is to vilify them as thieves, murderers, and rapists; lock them up; and separate them from their children, steadfast loyalty will give way to hostility, violence, and even terrorism. As a result, the traditional strength of the US is being sapped a bit more every day, until nothing will be left for which to yearn.

Rediscovering Indian thought: How a scholar built a database of pre-Independence magazinesRediscovering Indian thought: How a scholar built a database of pre-Independence magazines

November 25, 2019

Prof Rahul Sagar of NYU Abu Dhabi has built this fantabuolus database: It indexes the contents pages of 255 English-language pre-Independence magazines from India.

In thus scroll article. Prof Sagar details his journey:

In the early nineteenth century the East India Company committed itself to imparting modern knowledge to the people of India. Soon thereafter Indians began flocking to newly created colleges and schools where they became avid readers of the celebrated British periodicals of the era such as Athenaeum, The Quarterly Review, The Contemporary Review, The Fortnightly Review, The National Review, and Nineteenth Century. Not unreasonably, they came to view these periodicals as exemplars of public debate and reasoned deliberation.

As the century progressed, these increasingly urbane Indians ached to discuss subjects closer to home. They answered this need by founding local counterparts to the British periodicals they admired so greatly. In a matter of decades there were hundreds of periodicals in circulation, brimming with essays on a wide range of topics. How to address inequalities of caste and gender? What to learn from rising powers like Japan and the United States? How to ensure economic development and advance self-government? How to reconcile traditional beliefs with modern science?

A vibrant public sphere now took shape as legions of newly minted graduates contributed and subscribed to these English-language periodicals. The most notable of the first wave included Bengal Magazine, Haris Chandra’s Magazine, Mookerjee’s Magazine, Allahabad Review, Madras Review, and The Quarterly Journal of the Poona Sarvajanik Sabha. At the end of the nineteenth century came that magnificent trio – The Hindustan Review, The Indian Review, and The Modern Review – that dominated public life for the next half a century. They were joined by dozens of smaller periodicals such as Welfare, The Aryan Path, and Modern World.

It is impossible to overestimate the importance of these periodicals. Transported around the country by newly built railway networks, they attracted and cultivated a wide readership. By compelling writers and readers to think more broadly, they midwifed modern India. This was not all. As these periodicals were typically published on a monthly basis, they devoted themselves not to reporting news, which would be stale by the time the periodical reached the subscriber, but to essays on the leading questions of the day.

He and his team have put all these together. Just amazing work. Applause!!

Bnk of Slovenia vs Slovenian government

November 22, 2019

Slovenian central bank has long been fighting a battle against its own government.

The government believes that the central bank should pay for the banking losses since 2013. The central bank has been fighting this belief for a while.

Recently, the government passed a law which pushes the losses on the central bank. The central bank has objected to the law. Here is the translation:

After voting again on the Law on the Procedure for the Judicial Protection of Former Holders of  Qualified Liabilities of Banks in the National Assembly of the Bank of Slovenia, we regret that the essential positions of the Bank of Slovenia and similar positions of other institutions  were not taken into account.

The adopted law is contrary to the Slovenian legislation and international law  governing the operation of the central bank. The law is controversial primarily in terms of the ban on monetary financing and financial independence.  

These are fundamental principles for the operation of central banks in the euro area.  The law places the Bank of Slovenia in an extremely subordinate position, which is a precedent for both Slovenia and the EU,  as the strict responsibility of a public institution for its operation is unique.

Namely, the draft law stipulates that the Bank of Slovenia is liable for a potentially objective decision,  with the burden of proof reversed. However, the Bank of Slovenia must pay a lump sum compensation to individuals,  irrespective of liability.

Heat is on..

Lessons from IBM in Nazi Germany (How top companies just kept doing business with Nazis..)

November 21, 2019

Prof Geoff Jones of HBS has recently written a case on role of IBM in Nazi Germany.

He discusses the case and its broad lessons in this superb interview:


30 years of Fall of Berlin Wall: Some links

November 8, 2019

It was on Nov 8 1989 that Berlin Wall fell, marking 2019 as 30 years of the event. Some links:

Lessons from fungi on markets, economics and inequality

October 31, 2019

Fascinating Ted talk by Toby Kiers, a microbiologist:


40th anniversary of Sukhamoy Chakravarty paper: Debates raised in the paper resonate today

October 30, 2019

The academia in west celebrates and reflects on anniversaries of famous research papers. For instance, Friedman’s 1968 paper on limits of monetary policy, Douglass North’s 1968 paper on shipping productivity and so on.

We in India first barely have a list of such papers and second there is hardly any reflection on their anniversaries.

In this aspect, it is really nice to read this Mint article by Niranjan Rajyadhaksha (who else) who reflects on 40th anniversary of a research paper by Sukhaomoy Chakravarty. The paper was titled as On the Question of Home Market and Prospects for Indian Growth and was published in EPW.

Niranajan writes:


Memoirs of Sir Thomas Roe: 400 years of Indian & England

October 25, 2019

Lubbaba Al Azmi in this Madras Courier piece narrates the fascinating history..

400 years ago, Sir Thomas Roe landed in the Mughal court. As a British Ambassador, he tried to engage with Jahangir, the Mughal emperor, and attempted to build a trade relationship. However, his diplomacy did not cut the ice; it ended up being a failure.

But Thomas Roe has meticulously documented his efforts in his memoirs which are, till today, available in the British Library, London. A research scholar  Lubaaba Al-Azmi revisits his memoirs and writes about what it’s like to peruse through them.

Doing Business Rankings: How the World Bank influences national regulatory policy..

October 25, 2019

India jumping to 63rd rank in Doing Business Rankings is talk of the town.

Beth Simmons (Wharton), Judith G. Kelley (Duke University) and Rush Doshi (Brookings Institution) in a paper discuss how these rankings influence policy.

In this K@W discussion, the authors discuss key ideas behind the paper:

Knowledge@Wharton: Do you know from the work that you did if these global performance indicators are really one of the determining factors in policy change, or are they part of a larger process that these countries are undertaking? 

Kelley: We have talked with folks inside the bank who are very passionate about what they do and believe that they are promoting a set of good policies. And we find that they report that they worked very closely with policymakers in these countries. What happens behind the scenes is really interesting. People within these bureaucracies that Beth just referred to established links to the agencies that are rating and ranking — in this case, the bank — and have backs-and-forth about advice, about how laws and regulations could be drafted differently so that they will move up the rankings, but also in a belief that this is a good thing.

On the ground, we won’t necessarily see a legislator going, “We’re now passing this particular thing because of the ranking.” I think it much more will be what happens behind the scenes — that is what this paper helps to uncover — but that is also what is really the powerfulness of it.

Knowledge@Wharton: Is there a possibility that the data can be molded to fit the narrative that a politician would like to achieve?

Simmons: Oh, that is very true. Sometimes these ratings and rankings are literally used to achieve policy objectives that particular government officials have in mind. That is one of the things we definitely noticed in the India case. But another thing I think is really important to stress is, what does it mean to be ranked and to be rated? To take every country from top to bottom, from the very best down to the very worst of something. That is really a lot of the theory behind why this indicator works. It’s not just that it’s the World Bank, although it’s important that it’s the World Bank. But it’s that the World Bank is using information in a very particular way.

We had a set of hypotheses about how ranking influences policymaking. One way is that when publics see the way their country has been ranked, this can be used as ammunition or as data for which to lobby, which to call for reforms. It’s like, “We can do better, we’re behind our major competitors on these important dimensions.”

In a survey we launched, we found that publics really do respond competitively to comparisons. When we told a set of respondents that their government was not performing as well as their major competitor — we were using China and India in this test — they were much more likely to say, “It’s crucial to respond to improving our ranks, and it’s crucial to improve our business climate.” Just varying that piece of information about how your competitor is doing itself can have a pretty strong effect.

There are several such rankings these days:

Knowledge@Wharton: What do you believe with this growth of global performance indicators? There are benefits, but there are also negatives. Where do you think the greatest influence lies?

Kelley: To go back to the ease of doing business index, you can find several accounts of countries that were concertedly gaming the system to try to move up in the rankings. Georgia comes to mind. To the extent to which countries can figure out how to move up in a way that is rather empty when it comes to policies on the ground, that is a negative consequence because it is just spending energy on stuff that is meaningless.

If you take something like the ease of doing business index, there are winners and losers from choosing a regulatory or deregulatory framework to implement. Many of these are ideological contestations. What is the most prominent ranking in the world? In some ways you could rank GDP, right? This is one way of measuring prosperity in the world. Then you’ve got other indicators that come out and say, “Well, it’s really about people’s well-being, it’s about happiness, or it’s about sustainable prosperity,” or whatever. There are ideological bents or philosophies to each one of these. In the case of the bank, deregulation could harm the environment, it could harm workers. So, there are winners and losers from each of these perspectives.

Eventually, everything loses its value. Humans soon realise the ways to game systems/ranking created by the humans.

Africa Needs Traditional Media (so does everybody!)

October 18, 2019

Adewunmi Emoruwa, an investor in African media startups in this Proj Synd piece:

While social-media platforms offer speed and accessibility, a credible free press – committed to finding the truth and informing the public – remains vital to support accountability in places where it is often hard to find. To fulfill their role, however, independent news organizations need sufficient funding.

What holds back female economists from making a career in central banking: the gender promotion gap

October 14, 2019

Luc Laeven and Ana Lamo of ECB in this article:

The underrepresentation of women in economics is perhaps nowhere as visible as in central banks. This Research Bulletin article uses anonymised personnel data to analyse the career progression of men and women at the European Central Bank (ECB). Women were less likely to be promoted up until 2010, when the ECB issued a statement supporting diversity and took measures to support gender balance. Following this change, the promotion gap disappeared. This masked a lower probability of women applying for promotion, which is partially explained by an aversion to competing, combined with a higher probability of being selected after having applied. Following promotion, women performed better in terms of salary progression, suggesting that the higher probability of being selected is based on merit, not positive discrimination. Thus, organisations such as the ECB should provide training and services that target the competition-related reasons that discourage women from applying for promotion.


%d bloggers like this: