Monday, November 7, 2016

How to beat a two party system at its own game?

It is almost the last day of US election cycle and Nov 8, 2016 is upon us. A bitter election cycle is getting close to over. Yet the horror is upon us. We have in front of us two of the most unpopular candidates for presidency. A whole lot of people are complaining that they don't really have good choices but a choice between lesser of the two evils. There is a disillusionment because it forces people to vote not because they like a candidate, but because they hate the other one and disillusionment has caused people to question two party system.

Even though I have my opinion, I will not delve into arguing whether this grim assessment during this election cycle is meaningful or not. After all Presidential election is all about shaping public opinion of candidates involved. And when an absolute majority of people who are voting will feel disillusioned no matter what the result, something must have gone terribly wrong and we need to ask how we reached there and how to avoid it.

In all seriousness, US political process is not exactly two party system. However there is no strong third party. But it may not be all that bad. Those who have seen parliamentary democracy with multiple parties, know that multi-party system is no panacea. It creates chaos and confusion when none of he political parties have a clear majority that leads to horse-trading and unstable alliances with ridiculous leaders.

Two party system is kind of a clever idea. Once people associate their identities in partisan ways, they become reliably committed to party rather than issues and easy to manipulate by political elite. However two party system doesn't mean that we are restricted to the choice between two candidates. Each of the political parties hold their primaries to select their presidential hopeful who are not required to be political veterans. Without further delay, here is a way to beat two party system at its own game:
1. Say you typically lean towards party A values. During primaries, see if you have a favorite candidate in party A. If YES, vote for him/her.
2. Say party A has an incumbent or you don't see that much difference between its various candidates. Check if there is someone in party B you may agree with (more or less) or hate. If yes, register for party B membership. Vote to make the one you hate lose or one you like win.
3. Next wait for general election the way you do today!

It is the step (2) above that makes it different from what we are used to doing today. Typically parties are a closed system but by registering for a party based on candidates provides a way to influence it. Key is to have fluid loyalty towards any political party. This will keep party accountable to its members rather than taking them for granted.

I understand this could not always work. Democrats who wanted Bernie to win and lunatics such as Trump in Republican party to lose, could not have it both ways simultaneously. But if so called Republicans who didn't care about the results in their party would have engaged in Democratic party primary process, we could have probably seen a different outcome from Democratic primary process.

Let us say Hillary Clinton wins 2016 election. Liberals can have a way to keep her accountable. In 2020, as an incumbent, they can move and shape the presidential candidate they will select to stand against her. It also will help tone down extreme right rhetoric of Republican nominees and they will gravitate towards the center.

This has similar effect as having a ranking system for electoral polls. I am quite certain that if a million plus people in both parties do this, it will change the dialogue in this country deadlocked between two extremes! Also party platforms will become softer rather than appealing to extreme elements of each party! It can't be such a bad deal I guess!!

Wednesday, February 4, 2009

My contribution to the world: I'm … Still Spending!

My contribution to the world: O boy… Still Spending!

I took a year and a half off to live the life of a respectable bum! (Please refer to the first post). As I had predicted, I have been removed unfortunately from my respectable place in the world and have been forced to work to sustain myself.

For a year and a half that I did not work, I thought I was not contributing to the society, to the GDP. There was an awareness of my uselessness, though in defiance, I decided to contribute only to my GHP (Gross Happiness Product). But then something magical happened! The economy took a nose dive and headed towards the gutter, a march that can only be rivaled by Nazi’s march to Paris. All those “smart” whiz kids of finance, who thought they were “generating wealth” by creating complicated yet worthless financial instruments backing each other (and ultimately backed by worthless mortgages that were supposed to be paid by people who didn’t have any money to begin with!), are now either looking for jobs or are getting paid by taxpayers’ money. While the blame game for this economic debacle is still on, with bankers on Wall Street getting most of the heat, economists are still walking both the Main and Wall Street with clean sheet in their hands.

After all economists only analyze hard facts and based on either their theory, or someone else’s, prescribe what can be done. While none of them ever analyzed and predicted this impending crisis (but for the ones who took heed of the age-old wisdom: after every rise there is a fall!), we still read with interest on what the economists have to say even if do not believe it! Part of the reason is they sit on both (or rather multiple) sides of fence. When one side goes wrong, we don’t listen to it and listen to the other. And that is exactly what every administration does. Now that economic recovery is on discussion table, from the ashes of falling banks, and from his own grave, John Maynard Keynes is re-emerging. One can read more about Keynes here. In articles such as these, they would claim that Keynesian theory was considered dead since 1980s or 1970s. But the fact is that when it comes to tax rebates, shadows of Keynes has always been there (Read my last boring post for analysis if you are suffering from insomnia!). The fact is that Keynes indirectly did something, which every economist, no matter which side of fence he sits on, believes in: the merits of spending!

The fact is that after 50 years of brainwashing, almost every American believes in merits of spending and now even Chinese have started believing in it. Japanese Government (after 1990 crash) tried spending, but Japanese people have adamantly refused to spend, bringing the wrath of American economists who blame them for Japan’s problem and even their own! “World has become a global saving glut”, cried Bernanke, who now heads Fed. Keynes advocated Government to spend during the time of crisis. It may not be exactly what he intended for a common person, but then hey, a common person values money more than Government and is likely to spend it more wisely (atleast true on subjective basis). So the great word is out. People are being advocated to spend. Conspicuous consumption is being celebrated. (You can read a dumb post here). If people do not spend, then Government is going to give them money to spend or will spend itself. Sweet deal! Lord Buddha should be ashamed. He thought he got enlightenment when he advocated the life of moderation to others! His lordship might be in danger of being revoked. After all wasn't Keynes English? :)

Wait a minute! What does all this and the burp in the economy has to with the magical thing happening in my life? It seems like my post-bum self can’t really be removed from my past life, and so I digressed, musing on tangential topics. Really I wanted to get to this mantra: “spending”! Who said I was useless all this while?! I was contributing to the economy, because I was still spending. My capacity to spend only increased in my bum days as I had less time to work and more time to spend. Economists measure economic growth by GDP and my spending is part of the GDP! I feel so relieved. My life for that year and a half was not a waste! Yet Obama administration has no rescue plan for me where I can keep spending and yet increase my GHP!

By now those of you who are still with me know where I am heading to. I outright declare, my crusade here is against the economists, who seem to have easily washed their hands off every crisis. It may seem too presumptuous to be countering these Ivy League PhDs but then hey many of those bankers were also Ivy League graduates. While the economists can justify the failure of their theories for the lack of controlled experiments, it seems somewhat stupid to measure GDP in dollar value, which has a value depending on the perception of those trading with those dollar bills, a tender that American Government is liable to pay only in dollar bills! While markets do assign it a value, they are susceptible to perceptions. And in times of boom and bust, it is mostly perception which determines the value. How perception of the value of dollar leads to its value is evident from the fact that it led Chinese and Sheikhs to keep their wealth in dollars, invest in dollars and lose in dollars, a gamble played on the hard work of Chinese workers and Sheikh’s oil reserves. It is true that human right groups can blame China for not spending the money instead on its own people, on infrastructure and other development needs, and criticize Chinese Government’s investment as gambling; but economists blaming the people of these countries for saving sound preposterous! While some others went far to draw conclusions like these: it is the demand (read conspicuous consumption) of west which led to 10+% growth in China. Well this intelligent deduction beats my common sense: if most Chinese people standard of living didn’t increase, then how was it a growth for its people? A large chunk of that 10+% growth in Chinese GDP helped the conspicuous consumption of west, all because of a perception enforced by history! Chinese bosses, to ward the blame off their shoulders, instead have accused the west and its bankers of greed. But then it is their trust in the value of dollar and letting those bankers gamble on their behalf that led to mad house in Wall Street. Who respects free money anyway!?

Economics 101 will tell you that GDP is the value of total goods and services. But even some services can be a waste. I can not resist to quote the following from a post in NY times:

If you hire your neighbor for $100 to dig a hole in your backyard and then fill it up, and he hires you to do the same in his yard, the government statisticians report that things are improving. The economy has created two jobs, and the G.D.P. rises by $200. But it is unlikely that, having wasted all that time digging and filling, either of you is better off.

So it is true that GDP is not easy to measure. And we have taken an easy route out, by measuring it against the dollar value, fudging it here and there by some factors. There are no tests to measure its real worth. There is not even an effort to quantify growth in some more non-relativist term! Till now time has roughly been on Keynes side. The spending has increased demand which led to the supply increase because of the development in science and technology. But until how long? When our thoughtless "spending" has completely trashed the planet?

Obama’s plan is another of those plans whose effects are more psychological than real. If the economy is inherently healthy, it will stabilize after transients of collapse. How big and long these transients are, is always a big question and that is where Government role comes in! The fear I have is of those who are thinking of it as a Keynesian experiment. Because for economists, one successful experiment means a rule! (We engineers don’t have that privilege!) As much as I wish Obama to be successful as a reformer President (I admire that guy!), and as much as I wish my job and jobs of my friends and family to be safe and secure, I fear that a quick economic recovery will only bring wrath on this planet as the world would then be governed by unquestionable mantra: “what would Jesus do? SPEND!

Sunday, June 8, 2008

$600 Rebate Check: 2008 Economic Stimulus

$600 Rebate Check: Time for some retail therapy!

- (amateur) Economics and History behind the tax rebates

Hopefully by now everybody has received their rebate check. Bush’s popularity as a President may be down (I don’t understand why it was up to begin with!), but certainly he gets Brownie points for this generosity. Now who does not love a freebie? There are few who did not make it because they made more than 75K! They have a reason to complain. But we don’t see them complaining because those who write financial columns most likely don’t make 75K when they file IRS taxes: Not because they evade taxes (ofcourse they make a hell lot of money!), but because they do “tax planning”! Inspite of the so called tax planning, if they have to pay taxes, they hate taxes in general and think Government robs them of their money and by returning $300/600/1200, there is no favor being done anyway. Infact “tax rate” relief and not “tax rebate” is the key to a stronger economy: a view that certainly helps those who pay lot of taxes, but targeted for the same reason at many other places such as:

So when I searched the web for articles that can impartially look at the prospects of this tax rebate and its proposed merits, I found none that could challenge the belief on why it should work in the first place? There was a lot of debate in happy 2001 days, but by 2008, the situation is desperate and every mouth is open for any morsel that falls. So all articles I saw just assumed there is a merit, but how much requires number cranking and you can find most of the statistics at Moody’s ( On the other hand, there are articles on what an average Joe on the street thinks about the merits of this tax cuts. Ofcourse they are not happy because ultimately we have two kinds of Joes: ones who do not want Government to tax at all because it does not know how to use the money wisely; and the others who having lost their money in real estate frenzy or other stupid investments, and instead of taking responsibility for their own actions, now want the same Government to do more! Convenient, huh?!

Let us get back to the original more serious question: the proposed merit of a tax rebate; which is to stimulate a sluggish economy. Let us trace back its history and the origin of the popular myth before we discuss the relevance of such a cut in current economic conditions. We do not need to go too far back in human history. Modern economics rose from the ashes of Great Depression. After the turmoil of Great Depression and World War II, most western economies, and US in particular, were having great run offs in most of the 50’s. However the cold war policies led US Government to have its tentacles spread at more places than what it could handle and with Cuban Missile Crisis, the Government was in deficit and economy was growing sluggishly. It was 1962 and JFK was the President. Further at that time, after having analyzed Great Depression, various economic theories had propped up and were competing against each other. However, with Walter Heller as the chairman of Council of Economic Advisors, Keynesian approach to stimulate the economy got a chance for trial, an approach in which it was thought that Government policies could be used to create demand. Heller decided to do so by proposing tax cut. It was a revolutionary idea because the Government was in deficit. A nation’s economy was still governed by the model of household finance: you have to balance your budget and make ends meet. Nevertheless, Kennedy endorsed it and proposed $10 billion tax cut and L. Johnson signed the tax cut into law called “Revenue Act of 1964”. Miraculously by 1965, the economy was back on track and what was revolutionary became conventional wisdom!

Tax cuts/rebates known as stimulus bills have since been enacted in 1971 (Nixon), 1975 (Ford), 1981 (Reagan) and 2001 (Bush) (which was rather a surplus bill). Well not all of them have been successful in what they promised to achieve. Nixon’s Revenue Act of 1971 was a complete failure possibly because it was accompanied with other ridiculous policy decisions such as price and wage control. Ford’s 1975 tax cut returned the magic of 1964 while Regan’s 1981 tax cut does not seem to have achieved anything if it did not create a disaster. It was ultimately followed by tax rate increase to cut the deficit.

So what does history teach us? A wise man would say that the evidence is inconclusive, while the statistician would add that even the data is insufficient. It is a gamble. Yet politicians love it and how can one blame them. When has life been that easy... you are loved for a popular move that can actually help! Keynesian theory has since been rejected by many, but this aspect of the Keynesian theory is hard to give up! Excuses have been given when the tax cuts did not work. One excuse that was popular in 2008 decision was that many tax cuts were not swiftly enacted. Only a timely action helps. Strangely, in an effort to cover up the lost cause of Regan’s tax cuts, no one from Bush administration said that it did not achieve its promise possibly because it was not accompanied by spending cut as Regan had promised. Bush, on the other hand, can not even promise a spending cut.

Still it is an interesting question to consider why the tax cut worked the first and the third time? There are supply side arguments that seem most plausible. Generally when the economy is having a good run off, as it was happening to US economy in most of the second half of twentieth century, production increases to satisfy the ever-surging demand. However, information dissemination can be slow or inaccurate, and the mismatch between demand and supply can lead to inventories build up faster than the increase in demand. This leads to decrease in manufacturing output, create temporary unemployment as the plants close down, thereby creating minor recessions in the economy. The problem is very similar to age old problem of farmers. When the price of a certain commodity rise, next season every farmer shifts to the cultivation of that produce, thereby bringing the price of that produce low, but soars the price of stuff that is now scarce, bringing starvation to farmers in return! It is the world of traders! Tax rebate in such a situation just gets people to spending spree and they help remove the build up inventories out of the shelves.

So far so good! This is a rosy picture. One can wish that every situation is similar to the one described above. If the problem is created due to inaccurate information dissemination, how can one be sure that the problem is due to hiccups created by inventories build up? Economists are smart people and no matter what their arguments are, they are nervous of their own proposals and that is the reason for many consumer indices. The argument is that if the consumer is healthy, economy is inherently healthy. How do you know that consumers are healthy (well same as wealthy!!)? This is an age old cause and effect problem. If you measure it by their discomforts such as unemployment ratio, then it may be the effect of the problem and not the cause of the problem. Tax rebate is a bait to go out and spend if it is just a temporary discomfort and show that they are actually well off and will party given an excuse!

Unfortunately, it seems when economics meet politics, even the best of the economists, no matter how well trained in Econometrics 101, seem to fall into the pitfall of cause and effect, when they are promoting policy decisions. Typically Catch-22 is a beautiful situation for endless arguments as you can turn around facts to promote what you believe in. And when you give this tool to politicians, what you have is a disaster. Kennedy himself was not immune to it, rather a big victim of it. In the analysis by Prof Miller published at, it is shown that the Revenue Act of 1964 was aimed at demand and not the supply. Kennedy actually believed that deficit is good and the demand expansion is good. This has inadvertently meant consumption is good as summarized in following words of Kennedy: “When consumers purchase more goods, plants use more of their capacity, men are hired instead of laid off, investment increases and profits are high”. The legacy and temporary success of Heller’s tax proposal is that it goes far beyond the merit of tax cuts. It has led to the most popular economic myths and brought this planet to the verge of ruin. Blindly it is assumed that American economy recovers because of endless and meaningless consumption. In a typical cause and effect blunders, demand aspect is taken to be the cause of economy’s health rather than realizing that an increased demand reflects economic health. As much as ancients have celebrated austerity and self-restraint, in modern America, consumption is celebrated, and the rest of the world wants to emulate it. Heller, in his later years, himself was concerned by the recurrent misuse of his economic policy.

Coming back to tax rebate, we see that the purpose of tax cuts hardly targeted the supply side inventory build up (though it coincided in rare cases). Further using tax cut as a bait to see if the consumers are healthy in an economy is down right stupid because it is based on the assumption that people are wise and know how they want to spend the excess money they get. The utility maximization theories are good on paper. On the other hand, in Bush’s 2008 stimulus proposal, consumer’s health is hardly a question because we all know it is bad if not really bad. But, as misguided as it has always been, tax cuts have always been justified based on the fact that it increases demand, creates consumption and consumption is good. Now statistics on can show how much the GDP increase would be and how much employment it would create. There are bars, charts and figures. It all looks intimidating to an untrained eye such as mine. But it is the same trap as pointed by Henry Hazlitt in “Economics in One Lesson” some 50 years ago. Those who have read the book can see the “broken window fallacy”. GDP increase most likely will be contributed by inflation and deficit. As far as increase in employment is concerned, it could have happened if the same money would have been invested wisely by someone who would be accountable for it.

Now if I have made anyone who read this article angry at me for saying they did not deserve the $600 they received, then please forgive me. I am a bum, and I love free money. If nothing else, there is some welfare aspect to this rebate. It just balances the wealth among the people. Those who had nothing will get $600. Those who had something will see that the inflation reduce the value of their saving by a bigger fraction than the $600 they received :)

Saturday, April 19, 2008

World Food Crisis: 2008… a beginning?

I had been scavenging through the news sections littered all over the web for the new crisis that is slowly folding across the world. The food crisis, as it is called, has been affecting millions across the developing world. It is leading to hunger, pushing people deeper into poverty, and worst of it all, leading to riots that leads to instability, as people with nothing to lose, take law into their hands. Even in the developed world, the prices have gone up, but the food plays such a small fraction of their spending, that it has practically gone unnoticed, till now! Is the cheap food a thing of the past,… already! Errr… Am I hearing it right?! I thought struggle for food was thing of the past! Damn, when can man forget worrying about the food and indulge in high forms of arts and entertainment!

Well, well, I will leave the sarcasm apart. The media is full of statistics if anybody is interested in it. We in US are still complacent, yet to feel the pain the rest of the world feels. (The words are coming from a bum who is still being able to feed himself!) Not for too long though! In any case, within a year, rice is gone up 74%, soya by 87% and wheat by 135%. This statistics is going to change faster than we speak and in the near future is only going to be worse because of the global shortage. The Governments, not just people, had become complacent over the years. And it has been only 20-30 years since the last major global food crisis. So, when the crops failed, inventories were used under the assumption that in case of emergency, the food could be imported! But nature tests us and now we have host of explanations for such a crisis. The four main factors that are talked about everywhere are: 0) world population (ofcourse! Duh!), 1) rising oil prices, 2) climatic changes leading to crop failures in many places including food exporting countries such as Australia, 3) the conversion of food crops to bio-fuels and 4) changing diet of the food in developing countries such as China and India.

What can we do about the rising oil prices? Really nothing, but to make pleas to Oil producing countries! Though it might be an excuse big enough for those who want to drill a hole through Alaska for more oil. Climate change… well Bush finally made some random statements on cutting the emission of CO2 by introducing few more ridiculous policy decisions. The idea is to provide some tax incentives to those who don’t need it so that they can reduce greenhouse gas emissions in America! The mockery insults the intelligence of even a primary class student. Well I wasted my time reading the news articles that talk about Bush’s proposal. Every Bush's policy proposal is a new business and investment opportunity though! It is like a suction pipe that snatches meager resources from poor in the world for ruthlessly driven entrepreneurs. Of course “What would have Jesus done?” In short: Trashed the planet!

The reasons 3) and 4) are my favorites. Dire search for causes lead analysts and economists to quickly come up with some rough estimates on how these causes might be affecting the current crisis! The Times magazine published a beautiful article describing the cost of converting crops to oil in article posted “The Clean Energy Scam”. To make its point, the article spent most of its time in Amazon, where the destructive biofuel dynamic is on vivid display. The message was unambiguous “the basic problem with most biofuels is amazingly simple, given that researchers have ignored it until now: using land to grow fuel leads to the destruction of forests, wetlands and grasslands that store enormous amounts of carbon.”… “It was as if the science world assumed biofuels would be grown in parking lots.”… “More deforestation results from a chain reaction so vast it's subtle: (Given the subsidies) U.S. farmers are selling one-fifth of their corn to ethanol production, so U.S. soybean farmers are switching to corn, so Brazilian soybean farmers are expanding into cattle pastures, so Brazilian cattlemen are displaced to the Amazon. It's the remorseless economics of commodities markets.” And the conclusion even simple: “The biofuels boom, in short, is one that could haunt the planet for generations--and it's only getting started.”

Of course as soon the cry for hunger became loud, people started capitalizing on these causes. Oil producing countries loved the fact that everybody is blaming on biofuels, so they joined the bandwagon criticizing it. Why would an oil rich state not love this statement: “Strange as it sounds, we're better off growing food and drilling for oil. Sure, we should conserve fuel and buy efficient cars, but we should keep filling them with gas if the alternatives are dirtier.”

No wonder, as soon as world leaders, including the ones from World Bank started criticizing biofuels, the Bush administration, true to its spirit, disregarded the claims by saying that reasons are unclear just like it did couple of years in relation to the climate change. I don’t watch Fox, but I am sure the news channel would have echoed the same sentiment for millions of Americans who love their dumb President and don’t want to believe otherwise. Also, it made the senators from Iowa unhappy who wondered if there is any world leader who would eat the remains of corn. Well I can’t really blame him. Iowa is the silicon valley of biofuels. They didn’t read Times magazine article or any other that explains chain reaction. Of course, if I was one of them, I would not even want to read it even if the article was in front of my eyes (Trust me after Bush’s stupid proposal on converting corn into ethanol; I was searching for ways to invest money in some corn field in Iowa). The biggest impassioned defense, however, came from Brazil’s President Lula. In his response to the U.N. report that biofuels are a “crime against humanity”, he rightly said it was easy for someone sitting in Switzerland to preach to Brazil. Ofcourse, as everybody is Brazil says: why an average Brazilian does not have the right to an American dream? “"Biofuels aren't the villain that threatens food security,” he said, “On the contrary... they can pull countries out of energy dependency without affecting foods.” So who are the villains that threaten food security? Food prices were going up, he said, because people in developing countries like China, India and Brazil itself were simply eating more as their economic conditions improved.

This brings me to the reason 4. The statistics show the Chinese meat consumption has gone up from 20 kg/capita to 50 kg/capita. Now 800 calories of grain and ten times more water is needed to produce 100 calories of beef. No body really shows what the consumption of meat in US is, so that Chinese could know what they are catching upto while the rest of the world can point fingers at China and do not talk about changing their consumption habits. Ofcourse if they do, they would make enemies of “meat industry” in America, which has successfully brain washed an American mind to believe that meat is healthier than grain, while it has been grain that had filled the stomach of people for thousands of years!

So here we are। As the appeal against biofuels gets politicized by those who make money on oil, it gives a good reason for those in favor of biofuel to reject the plea against biofuel and blame it on the developing world for eating more. Ofcourse the developing world can point fingers back at developed world. Thankfully there is one solution that some are talking about which no one really minds. In short-term: give those who are suffering some food aid. In long term: A farming revolution. Now how and when this farming revolution for a greener revolution is materialized, is a big if! But till then, three cheers to those who are trashing the planet even further!

For those who want to read further, I found a beautiful report from TIME again on food crisis in 1974:,9171,911503,00.html. The problem is same, just that the cold war realities made the world somewhat different. It seems like we are again working to avoid the nightmare of Parson Thomas Malthus, the English economist who predicted nearly two centuries ago that population would outrun man's capacity to produce food.

Saturday, December 29, 2007

Book Review: The Great Indian Middle Class: by Pavan K Verma

The Great Indian Middle Class

- Pavan K Varma

: A book Review/Report

When I picked this book, I did not know what to expect. It was recommended to me by a friend, whose recommendation I would value. But at the same time, the title was dull! Since the opening of Indian economy in 1991, there has been a special interest to learn about the consumption appetite of Indian middle class. The multinationals eager to find a market other than booming Chinese market saw prospects in India. There have been articles everywhere including Economist and BBC on India Awakening, which is nothing beyond how the newly rich from Indian middle class like to spend and flaunt and how big or small its size is. But such statistics, even though serving a purpose for multinationals and for Indians taking pride in India’s “growth”, are still not worthy enough to merit the space of a book meant for a general reader.

As I started reading it, the book immediately absorbed me. Certainly it was not about the figures and numbers that everybody loves to give when talking about India (a billion plus population can throw numbers that can dazzle a reader for a few moments!). It was about the evolution of Indian middle since pre Independence time. It was so apt to my own realities while I was growing up back home in India. I am the product of the same class. The book brings back the grave realities of the Indian society, hammering heads on some of the myths that we, collectively as a middle class, just delude ourselves with, while denying what is obviously distasteful to us.

The message of the author can be summed up in a few sentences. It is the critique of this class and not its glorification. Essentially he is pointing to the moral bankruptcy of the middle class which is guided solely by its self-interest, and has become incapable of seeing anything beyond it. The message is more than relevant in a country like India, which houses worlds richest and yet the percentage poverty is worse than that in sub-Saharan Africa. The author does conclude therefore, even though he spends only a few words on it: That such a divide which is only widening every day is unrealistic. Unless the middle class wakes up from its revelry, and looks beyond its self-interest, its prosperity itself is in danger as the widening economic gap can only bring turmoil and political instability.

If I read the summary above, I will nod to it and then ignore it. Of course, we all know about it! It has been said before and so what does the book add on to what we already know?! The beauty of the book lies in Pavan Verma’s perceptive analysis and thorough research. He persistently traces the origin of the current syndrome to the origin of Indian middle class during pre-Independence era. The current elite in the middle class certainly trace their roots to British colonialism, which in an effort to rule the gigantic country, created an English-educated administrative class, that was “Indian in color and blood, but English in taste and opinions”. The genesis of Indian National Movement is within this class, which inspite of its name lacked a popular appeal before the appearance of Gandhi because it only served the interest of this class. British finally left India, but it was this class which had its first taste of power in independent India. Here Pavan Verma makes his first critical observation. In a country whose culture and civilization was thousands of years old, the institutions that emerged had little or no resemblance to the past. The change, even if for better and modern, was not from within, but from outside. Infact, English which became the lingua franca of the state because of the bias of this initial English educated class, became the language for exclusion. The English-educated middle class person, so far removed from the understandings of its own country, hardly represented the cause of an average Indian. The malaise of pursuing vested interest infested this class from the very beginning. But still, as the author notices, in pre-independence era, the intension was noble. The influence of Gandhi, champion of the poor, was still strong. The privileged still felt a moral obligation to the betterment of the poor, though their actions were far removed from it, partly because the lives of initial representatives of the people were far removed from those of the vast majority of their own country. Even Nehru, the first prime minister of India, found himself in that precarious situation. Still, in early years, the Gandhi-Nehru legacy was strong. There was a general consensus that nation building exercise was for the betterment of all in which educated middle class had an important role to play. The gulf between precept and practice existed, but ideological framework was still alive.

Relating it with personal front, I knew it was these formative years my father was making way into this educated middle class. Gandhi-Nehru ideologies with which he grew up with became a baggage for him to prosper (materially!) in post-Nehru era. It is the post Nehru era, when all shackles of morals and obligations to the society was thrown. As the state failed on its promises and politicians became unscrupulously corrupt; the middle class was left in a moral vacuum. For it, there were little reasons left for pretence of idealism. Here comes in the perceptive critique of Pavan Verma, where he debunks some of the myths the middle class of modern India lives in. It has been the typical tendency of the middle class to consider itself the victim of the failure of the state, and in middle class the state finds a vociferous critic of the policies not conducive to its interests. However, while wallowing in self-proclaimed misery, Verma is quick to point some of the hypocrisies. While the middle class vociferously criticized corruption, it had its hands completely immersed in it. While the middle class was quick to accuse state of not providing amenities like water and electricity, it was the first one to do anything to steal it. Verma emphasizes that middle class always found poor responsible for the theft of electricity, while its share infact was the largest. While the middle class finds slums inhabited by urban poor responsible for the filthy conditions in cities, Verma provides an example to the contrary. The newly growing rich in middle class build colonies of expensive homes, almost like castles; however they are surrounded by unpaved roads and mounting filth. It is not the lack of money for appalling civic conditions, but a complete apathy towards it. The sense of public responsibility is non-existent. Verma is also quick to point another irony. While vociferous on appeal for lower and simpler taxation, the middle class, including the well-to-do and rich businesses, have done everything to evade taxes. Getting away with taxation by bribing is so widespread among this class that India has one of the lowest tax-to-GDP ratios in the world. But when it comes to public responsibility, the middle class, on its part, blames the state for appalling civic conditions in public spaces. Infact when it comes to its self-interest, this class has shown very little commitment to democracy and even lesser commitment towards secularism. The malaise is even more prominent among new entrants to this class, small scale businessmen in small cities, who made into this class when Gandhi-Nehru legacy was already dead, and any moral scruples almost extinct.

Verma diagnoses plethora of such ironies and hypocrisies in his first three chapters to make his point. The fact is that I can’t disagree to even a word of what he had to say, having seen it with my own eyes, just never putting together while growing up as a kid. It was his fouth chapter “The Inner Landscape” where I had trouble staying with him. Verma tries to explain the psyche of the class with his immense knowledge and understanding of Hindu mythology. However, I think even knowledge can sometimes lead to intellectual suicide, where subjective reasoning can help provide causes that seem plausible, and yet the merit of such reasoning can never be validated. They can equally be turned around to prove otherwise. Similarly, in his fourth chapter, India’s economic liberalization just cannot be viewed from one aspect: that it is making the middle class more vulgar in its pretence, display and conspicuous consumption. Countering him is not my intent. But there are lessons to be learnt from world history. The industrial revolution that shook the western world long ago brought great economic disparity there as well. When old order gives way to new, and existing social fabric is ripped apart, vested self-interest seems to grip humans, irrespective of them being Christians or Muslims or any other religious identity or ethnicity. I am not justifying the existing lack of moral fabric in Indian middle class, but just like other developed part of the world, India has to search and find its own balance, from within, not from outside. Otherwise, the warning with which Verma leaves us, has a historical basis as well. Europe suffered the chaos of communism and militancy, largely become of extreme economic disparity the industrial revolution brought with it. Bringing the masses into a common umbrella of middle class was ultimately the solution and achievement of the developed world. Verma himself acknowledged that middle class in India has expanded over last 50 years. How to bring the vast majority of India’s poor to be a part of this class is a perplexing question, though certainly any effort in this direction will be dwarfed by the extreme self-centeredness of Indian society.

There is another small folly in this book. Which middle class is the author referring to? It starts with the English-educated middle class in pre-Independence era. But as the time progresses, many small businessmen and small time land owners enter into this class by their sheer purchasing power. They in many parts of India are hardly English speaking or educated with university degrees and their perception and thinking is very different from the traditional educated middle class. Nevertheless, as far as Verma’s critique of moral degeneracy goes, it applies to this class with even more vehemence than anywhere else.

This book was written during 50th year of Indian Independence (1997-98). It was the same time I left my home country to come to a country, which has long been regarded as one governed by the engines of greed. But ten years have since passed by and it seems the warning made by Pavan Verma still hold for the country of my birth. On the other hand, I have to agree with another observer who noticed that it must be the irony of our times that one has to travel to west to find spiritual satisfaction and some relief from the obsession with superficial materialism!

Tuesday, October 16, 2007

What all this bumming is about!

It took me almost a year since I started bumming to make this start: blogging on art of bumming! Now I understand it is an irony in itself. A bum by definition (ref. online webster dictionary) is one who sponges off others and avoids work. So blogging is just against the very spirit of bumming. However after seeing millions of blogs that are spread around this planet, I feel they are bums in one way or the other. We as humans can not sit idle, so bums in true sense of word, just avoid any mundane work, called chores, that require us to comply and be a tiny tiny cog in the giant economic wheel. But their creative spirit is still alive and thriving and looking for ways to express itself. They just groan at the modern barbaric system which has replaced the word master with superior. They want to find respectable bum life engaging only in activities they truly admire.

Technically the definition still applies to modern bums that this (self-proclaimed) blog represents. But my efforts in the direction to be a true respectable (aka. off street : my due apologies to those bums who live on street but still surf internet) bum has somewhat failed. After all we all need to make a living! I thought I have a girl friend who will be my sugar mama during the time I bum around. But she was smart. She quited her work and is bumming as well! Now we are bumming together! Then there are these advisory books by likes of Robert Kiyosaki who sold millions of copies of his now famous book "Rich Dad, Poor Dad". The unsuspecting individuals who bought this book wanted to live comfortable life as rich bums. Passive Income is celebrated by the book which certainly the bum in us will like to have. I don't know how many of the common bums were able to generate the passive income the way the book advocates. Ofcourse rich influential bums do it. They are the scavengers of the society. But a common bum?! Probably they did so in the booms of the stock and housing market, but in the bust? I am sure many must be back to where they belonged: the dungeon room of a big corporation being whipped to pay off the debts accumulated. And I am sure, Robert Kiyosaki, true to his Hawaiian spirit, would be now bumming on the beaches of Hawaii from the royalty generated by his book. He truly did what he believes in: the generation of a passive income. Certainly like other bums, I also believe in it. But unfortunately, I realize all this ultimately rely on theory of greatest economic fool ( After some dabbling in investment, I strongly suspect that the theory probably points to me by encouraging others to make money off me! So passive income is still a distant reality for me.

O boy! did I digress?! Well I told you that I am ultimately a bum and the way of the bum is to muse on any topic, however tangential, when the opportunity presents itself. That ultimately is the essence of this blog. To continue my story, my third effort should have been directly what the definition points to: "sponge off others!" But as I already emphasized, since the greatest fool theory points to me, I didn't expect much success in that direction. Further, my bum existence seems to have an inductive effect on all my friends. They are leaning in that direction as well craving to be bum themselves or are half way there. Or should I say it is just meeting of like minds. The others who haven't yet reached that stage, certainly crave for it. So now there are a bunch of us and in one of the lazy "intellectual" exchanges that refused to stop till 3:00 in the morning, the idea of having a bum blog first came up.

So what is this blog for? It is there to celebrate the renaissance of modern bumming life. It is about bums who find recluse from the horrors of corporate existence to muse on life, universe and everything. Of course the answer is 42, but still! As for me, it is my time off to rediscover myself and blog what I find interesting.

I must confess none of us are true bums.
We are hibernating before we return to the work dungeons. But during this hibernation, while the spirits rejuvenate, we just let our minds run around unchallenged. And as the wealth depreciates, on positive side, we add less to global warming and inconspicuous consumption that is the hall mark of modern existence. Of course we are not contributing to gross domestic product but right now I am adding to gross happiness product!