Is neoclassical economics teaching making students unethical? Atleast some think so..

May 19, 2015

So far the economics academia has ignored all calls to make changes in the economics discipline. The mainstream thinking continues to create barriers and prevent the discipline to become more pluralistic.

But articles like these should make them sit up and note:

The spate of financial scandals that are rocking Chile have stirred a wholesome debate in the country on the importance of ethics in the teaching of economics. 

The Pontifical Catholic University of Chile’s economics and administration faculty has been under the spotlight since three of its former students, previously hailed as ‘star students’, were prosecuted and jailed for a week in March pending trial for tax fraud and other financial crimes.

In the past few years, other well-known Catholic University economics graduates were also charged for collusion, market manipulation and cheating on clients’ credit lines. The faculty of economics and administration at the Catholic University “rejects this sort of behaviour… that muddies the reputation of several thousands of economists”, stated José Miguel Sánchez, dean of that faculty, in a letter to the daily El Mercurio.

The deans of economics of five main universities interviewed by the financial daily Diario Financiero also condemned the wrong-doings and lay the blame on the persons under prosecution, not on the institutions.

The deans also have explained in a series of press reports how their faculties have reacted to the situation and reflected on whether the way economics is taught in Chile may have a bearing on the financial crimes under investigation. “Though we cannot be held responsible for the things our graduates do, we do have the responsibility to give them tools to sort out the good from the bad and to make ethical choices in their professional future,” Sánchez told University World News.  “Once they graduate they will make their own decisions but at least we should get them into the habit of asking themselves about the ethical implications of their actions, the sense and purpose of their decisions, who may be affected and how.”

Ethics to be made compulsory in economics teaching:

At the Catholic University, the faculty of economics offers elective courses on business ethics. A curriculum reform, now under way, will include an obligatory course on applied ethics. Teachers will be prompted to include ethical considerations in all the subjects they teach. In contrast, deans of other leading universities such as the University of Chile, Adolfo Ibáñez, Los Andes and Diego Portales, say that they do not need to make reforms, claiming that ethics in business permeates their economics curriculum.

Some think the neoclassical school is part of the reason:

Neo-classical economics, the prevailing economic theory in Chile and in most countries, is cited by some Chilean economists as a factor behind the financial crimes that have unleashed a political crisis in Chile. President of Chile Michelle Bachelet hopes to address the turbulence by taking stiff measures against conflicts of interest, influence peddling and corruption.

“All schools teach [the same] matrix, which centres on maximising profits and reducing costs. In this logic, tax avoidance through illegal means may be regarded by some as a valid tool,” Gonzalo Durán, an economist from the NGO Fundación SOL and a former Catholic University student, told the online news service El Dínamo.

Nicolás Grau, assistant professor of economics at the University of Chile, elaborates: “Telling students of economics that the aim of enterprises and individuals is to make money for themselves excludes cooperation and social wellbeing and has a bearing on what students may consider right or wrong.”

Gonzalo Polanco, director of the Tax Studies Centre of the University of Chile, adds that “the prevailing extremely competitive environment leads companies to hire professionals who are ready to reduce their tax burden or make money in any way, not those who shy away from ethically questionable practices”.

The unending series of financial scandals have worried students of economics. They are discussing them openly on their campuses while teachers are using them as examples of the need to reinforce professional and business ethics.

At the University of Chile, vocal groups are pressing for changes in the way economics is taught. Among other things, they are canvassing for more diverse perspectives and for more attention to be paid to the interaction between economics, society and politics.

What does one even say to all these developments? How far will all this go?

Do internship at Niti Aayog..

May 19, 2015

The website of Niti Aayog was launched yesterday.  How the Aayog evolves will be watched keenly over the years. It will also nbe interesting whether it will remain an institution whenever the govt changes. Anyways, that is it for laters.

Meanwhile interested students can apply for an internship at the Aayog. Deadline is 31st May 2015:

NITI (National Institution for Transforming India) has initiated the Internship Scheme from 2015. The NITI (erstwhile Planning Commission) Internship Scheme, seeks to engage Indian Nationals, as “Interns”, who are undergraduate/ Graduate /Post Graduate or Research Students enrolled in reputed University/ Institution within India or abroad. These “interns” shall be attached with various Divisions within NITI Aayog and would be expected to supplement the process of analysis within NITI through empirical collection and collation of in-house and other information. For the “Interns” the exposure to the functioning of the Indian Government may be an add-on in furthering their future interests and a valuable exposure to the Government functioning and Developmental Policy issues in Government of India.

The interested applicants may apply online till 31st May, 2015. The applicants may read the instructions before filling the online application.
Forms, guidelines are there on the website. Pass on the message to the interested. Those who get a chance to intern, please share your experiences with this blog..

How GDP metrics distort our view of the economy

May 18, 2015

Battle lines have been drawn between CSO and the rest ever since India’s new GDP data has been released. But come to think of it, why obsess over this one metric despite serious limitations of the metric.

Chris Casey has a piece on the same:

GDP purports to measure economic activity while largely divorcing itself from the quality, profitability, depth, breadth, improvement, advancement, and rationalization of goods and services provided.

For example, even if a ship — built at great expense — cruised without passengers, fished without success, or ferried without cargo; it nevertheless contributed to GDP. Profitable for investors or stranded in the sand; it added to GDP. Plying the seas or rusting into an orange honeycomb shell; the nation’s GDP grew.1

Stated alternatively, GDP fails to accurately assess the value of goods and services provided or estimate a society’s standard of living. It is a ruler with irregular hash marks and a clock with erratic ticks.

As proof, observe this absurdity: in 1990, Soviet GDP equaled half of US GDP, according to the 1991 CIA Factbook. No one visiting the Soviet Union in 1990 would believe their economy came close to 50 percent of the quality and quantity of the goods and services produced in America. GDP-defined production may have been strong, but laying roads to nowhere, smelting unusable steel, and baking barely edible breads stretches the definition of “production.” And this describes the goods which were actually produced. There is no accounting for the opportunity cost of forfeited essential goods and services.

How can this be? Why does GDP poorly reflect economic size and vitality? The blame largely resides with three fallacious concepts embedded within GDP “measurements”:

(1) intermediate goods (e.g., steel) must be eliminated to avoid “double counting”;
(2) government expenditures consist of viable economic activities; and
(3) imports should be netted against exports

Nice stuff and important reminder..

Explaining how economists explain…

May 18, 2015

Nice article on state of economics.

This time it is on how economists explain their ideas. Actually they don’t really explain.

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The $179 Million Picasso That Explains Global Inequality

May 18, 2015

Neil Irwin if NYT connects the dots:

We don’t yet know who agreed to pay $179.4 million for a Picasso in an auction Monday night — or where the money came from, or what motivated that person or persons to spend more than anyone has before for a single piece of art at auction.

But this much we do know: The astronomical rise in prices for the most-sought-after works of art over the last generation is in large part the story of rising global inequality. At its core, this is the simplest of economic math. The supply of Picasso paintings or Giacometti sculptures (one of which sold for $141 million in the same auction this week) is fixed. But the number of people with the will and the resources to buy top-end art is rising, thanks to the distribution of extreme wealth.

Nice bit..

Ushering payment revolutions in India by creating more competit..

May 18, 2015

This blog had earlier pointed how NCPI, a public sector organisation is shaping payments revolution in India.  The blog had also added that one should also be thinking whether private players would have done a better job.

Think it this way. Payments is like a utility and microeconomics tells you that natural monopoly does a better job in such cases. It is only after a certain scale as been reached can one break the monopoly and open it up to private players. This we have seen in electricity, telecom etc and experiences differ from country to country.

This article argues that we could be better off if NCPI gives way to more private competition:

The Indian economy is predominantly cash-driven with only 5 per cent of the country’s Personal Consumption Expenditure done electronically. This shows that there is a huge unexplored market for payment companies. It will require all players across the payments value chain to create much greater innovation in payment services. In other words, greater competition and collaboration will be beneficial for all segments like consumer, financial institutions, merchants as well as the government by creating innovative solutions that meet the needs of different segments of the society.

However, the current scenario does not provide conducive environment for innovation, given that over 90 per cent of the markets electronic flows (this includes ATM volumes, POS volumes and E-commerce) are controlled by one network National Payments Corporation of India (NPCI). If we create an open environment and allow technology and service companies to participate, it would make much greater payment service proliferation possible in the country with greater innovation.

The US is a classic example of how innovation and technology breakthroughs happen in an open competitive environment and how different business models emerge in a short period of time. By providing open environment and open system, you create a vibrant entrepreneurship class, to drive innovation. Once we create an open system for all technologies to compete, we will be able to create a much more vibrant economy.

Comparison with US is futile. People moved to cards and internet payments much earlier. So there was a scale for private players to come and play. We need comparisons with relevant countries.

The article goes on to point how Aadhar payment system should be opened up and examples drawn from Mastercard etc kind of companies.

Payments is an area of economics (if I can call it that) which is deemed as highly boring. Due to technology, the space has become highly spiced..


How gully cricket is pushing back against football and urbanisation

May 18, 2015

Superb article by Subhash Jayaraman in Cricket Monthly. It takes most of us to those amazing childhood times where we played gully cricket and invented our own rules to play the game.

Growing cult of football in India and shrinking space due to urbanisation, one would imagine gully cricket is being threatened. Not at all. Jayaraman goes across quite a few places and discovers gully cricket continues to thrive in India:

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Band, baaja, ghodi – Sanskritisation in marriages…

May 18, 2015

Late Prof MN Srinivas developed this famous idea of Sanskritization. It simply means as castes/people move up the social ladder they basically start to emulate the habits/customs of upper class. The idea is to resemble the upper caste and give up the customs of the lower ladder. It means things do not change much at the top of the ladder.

This is an interesting article on the same related to marriages:

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The puzzle of illiberal democracy…(Is India one such democracy?)

May 15, 2015

A superb article by Profs Dani Rodrik and Sharun Mukand.

They raise this issue of how most democracies are actually illiberal:

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Who makes a better Mutual Fund CEO in India?

May 15, 2015

Kayezad E. Adajania has a nice article in Mint asking this question.

Does a fund manager make a better CEO or someone from other management domains like marketing/sales etc.:

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How Indian family diets have changed over the years..

May 15, 2015

Nice article by Vignesh Radhakrishnan of Hindustan Times.

He looks at how Indians diet patterns have changed since 1960s:

In the last 50 years, India’s population has surged, its food policies have been revised multiple times and the influence of western products on our eating habits has increased significantly, but the primary diet of Indian families has remained mostly vegetarian.

While our calorie intake has increased over the years and the sources of our vegetarian foods have changed, the percentage of meat consumption has not gone up comparatively. According to National Geographic, next to Rwanda and Ethiopia, Indians have consumed less meat per person than any other country.

According to United Nations’ Food and Agriculture Organization, any diet can be divided into the following 6 groups – grain (rice, wheat, maize, other cereals), dairy and eggs (eggs, milk, animal fats), plant produce (vegetables, fruits, starchy roots), meat (beef, pork, poultry, seafood, other meat), sugar and fat (sugar and sweeteners, vegetable oils, oil crops, sugar crops), others (pulses, alcoholic beverages).

Let us look at how the diet of Indian families changed in the last 5 decades. In 1961, an average Indian family member consumed 2,010 calories in a day. It grew to 2,458 calories in 2011. According to the graphic, while our grain intake reduced from 63% to 57% (6 percentage points decrease) of the total intake in the past 5 decades, consumption of dairy, eggs and plant produce doubled. Our sugar and fat intake also increased by 3 percentage points.  However, our meat consumption remained the same – 1% of the total intake – in these 50 years.

It goes to show that as our economy gathered momentum, a part of our population started spending more on these products and spent less on grains.

Let us now compare India’s data with the world average.  In 1961, an average world family member consumed 2,184 calories in a day which grew to 2,874 calories in 2011. Though grain intake reduced by 4 percentage points and plant produce and dairy and eggs intake went down by 1 percentage point each, sugar and fat consumption went up by 4 percentage points. As per the graphic, the world meat intake increased from 6% in 1961 to 9% in 2011 – an increase of 3 percentage points.

Thus, as the economy grew in the past 50 years, families around the world reduced their consumption of grain, dairy, eggs, plant produce and started spending more on meat, sugar and fat intake.

At the same time, Indian families reduced only their grain intake and started spending more on dairy, eggs, plant produce, sugar and fats. And there was no change in our meat intake.

It has useful graphics to look at the changes as well..

What is wrong with Macroeconomics? Perhaps most things with hubris topping the list..

May 14, 2015

An interesting short paper by Robert Skidelsky.

He looks at state of economics and says how hubris has destroyed the profession:

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How Indian govt is getting some nudging right..

May 14, 2015

It is a pity that all we look for in a government’s role in economy is some big bang, bold reforms (without anyone defining what they mean). It is even a bigger pity that governments fail to mention few small things they have got right and are quite useful. After all, small changes don’t matter as they are irrelevant (covered beautifully by Prof Thaler in a recent article).

R Srinivasan points to one such small thing which the govt has got right.

The other day, I got a text message from my bank. It asked me to send an SMS from my registered mobile number to signify my assent to taking accident insurance cover under the Pradhan Mantri Bima Suraksha Yojana, along with my nominee’s name. All I had to do was type in PMBSY, followed by a ‘Y’ (for Yes), and my nominee’s name. That was it. The premium of ₹12 would be automatically deducted from my account, and I would be covered up to ₹2 lakh for a year, against accidents leading to loss of life, limb or livelihood. It was as simple as that.

The interesting thing about this little episode was not just the ease of the process, impressive though that alone was. The way the participating banks have rolled out the PMBSY, as well as the other major insurance-based social security scheme launched by this government — the Pradhan Mantri Jeevan Jyoti Bhima Yojana, which provides life cover of ₹2 lakh a year for a premium of less than one rupee a day — demonstrates what can be achieved by simply leveraging available technology, and using a customer-centric approach.

Of course, critics have carped that this was merely rebranding and repackaging schemes which already existed. True, but I am willing to bet a substantial chunk of my meagre earnings that this time around, a heck of a lot more people would actually realise some tangible benefit from the scheme, pre-existing or not. What’s even more impressive is that by removing red tape, by simplifying the process, by leveraging technology, and most importantly, by going to the beneficiary instead of making the beneficiary come to it, this government has done what its predecessors failed to do — treat citizens as customers deserving of service, not supplicants seeking largesse from the ‘mai baap sarkar’, who need to be made to jump through hoops in order enjoy that privilege.

But that’s not even the most impressive thing about this experience. To me, a middle-class Indian, the son of a middle-class bureaucrat, and the grandson of a schoolteacher, the most impressive aspect was that for the first time in my life, I had actually been at the receiving end of a government welfare measure (it would have been two, but I missed out on the ₹2 lakh life insurance because I am over 50!)

Hmm.. I don’t know really whether this has been applicable across the country. I dont recall getting any such message from my bank. But wherever it has seems like a good thing (without getting into economics of the scheme).

This is a good case of using a simple nudge – just frame the question properly and use simple defaults. The SMS just seems to have asked whether interested or not. If Yes, then it automatically withdraws Re 1 from your bank account. As simple as that. One could have easily complicated the whole thing as it happens in most govt schemes.

As the author says and this blog has been saying, one central purpose of public service/good is to see it is delivered with minimal headache. It is here behavioral knowhow/nudges can help. The skeptics might argue well no these have to still be designed by someone (read govt) who will be biased and get it wrong. Well, no harm in trying to get the nudge right. Instead of looking at all kinds of jazz to get public distribution right and wasting crore, simple nudges can do wonders..

Thinking about smart cities as charter cities..

May 14, 2015

terrific interview of Prof Paul Romer.

He discusses charter cities, urbanisation, Honduras experiment going awry, and also shares some views on India’s smart cities project.  First what is a charter city?

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Heavy rainfall can flood north Bengaluru..

May 13, 2015

As ME is back to Bangalore after a break, it is getting to read news around the continuous decline of city. As India debates smart cities, it has conveniently ignored the lessons from the once a smart city – Bangalore.

recent IISC study shows North Bangalore could be flooded given a strong rainfall:

There seems to be no let-up in the bad news about the city’s vanishing lakes and stormwater drains. A recent study by IISc has warned that north Bengaluru is certain to witness heavy water-logging and even flooding in case of a heavy storm or rainfall.

The reason: the fragile network of stormwater drain network in the 73 sqkm area between IISc campus and GKVK campus in Jakkur has rainwater runoff exceeding the drain capacity. The Reliability Assessment of Storm Water Drain Network by IISc as part of the International Conference on Water Resources, Coastal and Ocean Engineering 2015, identified three reasons why the network could fail. “If there is excess flow into the conduits, the water may overflow.

The second reason why conduits can fail is silt deposition owing to heavy flow of rainwater runoff weakening the conduits over time. The third failure model is that the velocity of heavy runoff can also damage the conduits, breaching them and flooding the areas,” said Prof VV Srinivas, who headed the IISc team of researchers. The study has suggested that changing conduit width, slope and roughness of material lining of the conduit could be explored by taking into account conduit erosion and deposition issues. He said this could be the situation in other parts of the city as well but their study focused on this belt only. “If there are downstream lakes and watersheds, the spillover or excess water can flow into these and save us from flooding,” he added.

Lakes have always known to be retainers in stormwater drain management systems as they can hold the water for longer durations. However, he said the study is yet to be complete and the team is working out methodologies to give a value to retainability of stormwater management. This would be useful to civic agencies for designing drains that can retain heavy flow of water during storms.

BTW, North Bangalore has been developed only recently. Thanks (or no thanks) to the airport, the region is finding political favors and property prices zooming ahead (that is the only thing which happens in Indian cities anyways). But as is the case, we have just gone ahead with nonsense planning and ignored all basics of urban development which were known to Harappans as well.

It is also ironical that the city faces a huge water crunch. And when Lords give the city water it has destroyed sources to retain this water. So water finds its place on the roads and potholes. I mean what does one say?

Why are we getting so disconnected from reality? When will city dwellers in India get basic facilities in a proper way? Why do we have to keep coming out with buzzwords and new programs and not really fix the old ones first?

On the Sunday that passed by, there was a medical exam in the state. Students had flocked the city from all parts of the country to give the exam. And guess what? Despite knowing this, we were least prepared to handle the sudden inflow. It was complete chaos with students/parents stranded on the railway station with no taxis  available. The taxi guys had a great time as they charged all possible fares given the shortage of supply.

I mean we are not even prepared for a known shock, leave an unknown one..

First victim of Maharashtra ban on beef..

May 13, 2015

The story is here:

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The recent surge in bond yields and the disconnect from fundamentals..

May 13, 2015

Despite easing policy stance, Indian govt bond yields jumped in India tracking MAT issue and global volatility. This led to certain corporates shelving plans to raise corporate bonds as well.

The rising yields have dampened the sentiment among investors. According to issue arrangers, Steel Authority of India (SAIL) and GIC Housing Finance are among companies that were planning to raise funds through private placement of bonds but have deferred the issuances after seeing the response. The yield on the 10-year benchmark government bond has hardened by 19 basis points in the last two weeks in line with global debt market yields, over concerns of rising oil prices. A weaker rupee and foreign fund outflows from the domestic share and debt markets have also been hurting.

“Due to the recent volatility of markets and upsurge in yields, companies are postponing their bond issuances. The appetite of investors has got impacted. GIC Housing Finance and SAIL postponed their issuances. Both were planning to raise three-year paper but they found the bid levels high for raising funds,” said Ajay Manglunia, senior vice-president (fixed income), Edelweiss Securities.

Similar trends are seen across some countries as well. Of all countries, Germnay has seen a jump in yields. The article says how stability breeds instability:

Central banks are getting a painful lesson in how their efforts to stabilize markets and boost their economies can, occasionally, do the opposite. The latest example is the brutal selloff in the German bond market. Yields on the 10-year German government bond, or “bund,” hit 0.67% Tuesday, up more than half a percentage point in just three weeks.

It’s hard to pinpoint a fundamental factor driving this. Yes, the European economy is doing better than expected, and Greece has, for now, avoided default or an exit from the euro as it wrangles further with its creditors over the terms of its bailout. Both factors have attenuated the “flight to safety” that made bunds so attractive.

But the main driving factor driving yields up is more technical than fundamental, and is in a strange way the result of central banks’ success in pushing yields down. Those efforts have led investors and traders to take on bigger positions, according to strategists atJ.P. Morgan. But when prices start to move against them, they respond by shrinking their positions, which can accelerate the movement in prices.

This is not the first time it’s happened. Last October, it was Treasurys, whose yields shot from 1.865% to 2.15% in a single day and eventually climbed to 2.4%. In the spring of 2013, something similar happened to Japanese government bonds.

What all three had in common, according to Nikolaos Panigirtzoglou and his colleagues at J.P. Morgan, is that all were driven by investors and traders using a risk management technique called “value at risk” (or VaR) that causes them to take on larger positions when volatility is low, because the steep price swings that inflict large losses are less likely.

Central banks have bought massive amounts of government bonds and used forward guidance to reassure investors that interest rates will remain near zero for a long time to come, a strategy aimed at lowering the cost of credit, encouraging investors and businesses to invest more, and raise inflation, which is now too low.

In the process, they have taken much of the guess work out of interest rates in recent years, causing bond market volatility to collapse. In that environment, VaR encourages traders to take on ever large positions. Markets are now heavily populated by VaR-sensitive investors: hedge funds, mutual fund managers, dealers and banks.When volatility ticks up, VaR also prods them to unwind those positions to avoid big losses, causing volatility to spike higher.

These movements are further exaggerated by the decline in bond market liquidity, i.e. the lack of dealers willing to take the other side of a client’s trade, due to a variety of structural and temporary factors. For example, dealers routinely “borrow” bonds from long-term holders such as insurance companies to facilitate their transactions. But German investors have become increasingly reluctant to lend out their precious bunds. Liquidity has been a particular problem for the futures contract on the 30-year bund, J.P. Morgan says.

“This volatility induced position cutting becomes self- reinforcing until yields reach a level that induces the participation of VaR-insensitive investors, such as pension funds, insurance companies or households,” Mr. Panigirtzoglou and his colleagues write. They refer to these episodes as “VaR shocks.”

VaR’s limitations are well known. By design it excludes or downplays rare episodes of extreme volatility. It is meant as a risk management tool, not a robotic buy or sell device. Yet VaR mimics the limitations of our own brains, which have trouble assuming circumstances that are at odds with those we have recently lived through.

Hmm.. Further:

Decades ago the late economist Hyman Minsky identified a similar phenomenon in the broader economy. A long period of steady growth with low inflation can persuade firms, workers and investors that recessions and crises are a thing of the past, and take on more risk as a result, for example by buying overvalued assets with debt.

“Stability is destabilizing,” Mr. Minsky said. He didn’t survive to see that prediction come true with a vengeance in 2008, an event Paul McCulley, then of Pimco, dubbed a “Minsky moment.”

Thus, in a larger sense, central banks’ efforts to hold down bond yields suffer from a similar shortcoming to their much bigger efforts to stabilize the economy, hold inflation low, and maximize employment. The more successful they are, the more they plant the seeds for a reversal of that success.

This is not a reason to abandon those efforts, because most of the time, they succeed (and are, in any event, better than the alternative, which is to do nothing). It is a reason to be aware of their limitations.

It also means central bankers need to be careful before assuming that market prices reflect fundamental developments. Many saw the big drop in German bond yields until mid-April as a ringing affirmation of the success of the European Central Bank’s bond-buying program. Similarly, some will see the recent selloff as evidence of failure. Neither sentiment is true.

Most of the time central banks only go wrong. The hubris they show over their control over economy only leads to huge failures later on. You keep going back to Austrians who have deplored all this rise of central banking and their interventions in economy..

Unintended consequences of ATM usage restriction..

May 12, 2015

Nice story from Hindu Biz Line.

With the Reserve Bank of India restricting free monthly ATM usage, banks have found a novel way to cash in.

“ATMs are loaded with only 100-rupee notes in the first 10 days of the month. If I withdraw ₹10,000 after getting my salary then I exhaust my limit at the start of the month as the ATM machine can dispense only 100 notes per transaction,” said Arun Prasad, a harried private sector bank customer. For every subsequent withdrawal there is a charge of ₹20 even for withdrawal of ₹500. No fair!

Is it happening across the cities?

How Bollywood and Dalal Street are increasingly getting disconnected from real India..

May 12, 2015

Food for thought piece by PB Mehta.

Starts with the famous French lines and then moves on to Bolly:

Some reactions to Salman Khan’s conviction have elements of a Marie Antoinette moment for India’s ruling classes.

When confronted with the fact that the poor were rioting because they had no bread, Marie Antoinette is alleged to have said, “Why can’t they eat cake?” Strictly speaking, this attribution is incorrect. In his Confessions, Rousseau attributes this howler to another princess. But when discontent rises, as it did during the French Revolution, the distinction of generations matters less than the follies of class.

Faced with the reality that someone was mauled to death while sleeping on the footpath, reactions from some stars have the same quality: the outrage is not over the drunk driving, the sympathy is not for the victims, the concern is not for the rule of law. Rather, what emerges is the stunning “why were they sleeping on the footpath?” The poor are to be held responsible for their own lack of options. They are a nuisance, standing in the way of drunk drivers in fancy cars who think footpaths are racing tracks. It would be easy to write this off as the reaction of a deluded few.

But it is hard to shake off the feeling that this moral obtuseness and lack of social imagination is now so much second nature to India’s ruling classes that there is no longer any shame even in espousing it. The evidence for this is Bollywood itself. Bollywood’s great success, when it was a genuine national institution, and not a cultural manifestation of the secessionist tendencies of India’s privileged, was this. It sublimated all eros into refined poetry. But it also sublimated the desire for justice into a popular art form. Bollywood provided an escape. But it was not escapist. The Bollywood of the early Raj Kapoor, of Sahir Ludhianvi and Shailendra, of the Progressive Writers’ Movement, Guru Dutt and Bimal Roy, the angry young Amitabh Bachchan or even Prakash Mehra and Manmohan Desai drew its resonance from a popular desire for justice, the hope that in movies, if not in real life, the underdog and the marginalised will get some redemption. Or even if they were not redeemed, their presence pricked the conscience of the privileged.

Then to Dalal Street:

Similarly, so much of the schizophrenia over land acquisition stems not from obtuseness over the possible long-term benefits that might necessitate short-term pain. It stems from the raw suspicion that this is not really for the benefit of farmers. There is no surrounding culture of identification or empathy, nothing in elite sensibilities or behaviour that could credibly convince anyone that this progress is really about the future of farmers. There might be objective reasons why giving up land might be a good idea. But those making the case are doing so with such a sense of entitlement to poor people’s property that you wonder. If you want the sociological equivalent to Bollywood’s obtuseness over Salman Khan’s case, just watch the Twitter handles of so many captains of industry, including in leading sectors like pharma: the open contempt for poor farmers will become apparent. Indian capital’s moral obtuseness makes it its own worst enemy.

We often decry politicians for bending over backwards to appear to be pro-poor. They may be hypocrites. They may use pro-poor arguments to underwrite bad policies. But at least they somewhere have to acknowledge a complex reality. If you thought Lutyen’s Delhi was out of touch, just wait till you see Dalal Street and Bollywood. Even more Marie Antionettesque.

Much of D-street owns and funds B-street. So it is but natural to show the disconnect on the big screen as well…

Lutyens Delhi – India’s vibrant smart city..

May 12, 2015

Rahul Jacob says how Lutyen Delhi is India’s only smart city so far.

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