Wednesday, October 28, 2009
The "Williamson- Dawkins" synthesis- the opposite mental shifts that evolutionary biology and economics had to make
- Economy: More free market capitalism with an emphasis on wage goods, as compared to planned State directed economy
- Foreign policy: Less "internationalist" and more pragmatic & militarist
- Social fabric: Continued to be secular, with social welfarist measures targeting disadvantaged groups
- Governance structure: More unitary system- with no linguistic states
- Political system: A weak and faltering democracy
Sunday, August 23, 2009
"The counterintuitive economics of Marwari weddings"- or “ The social distortions caused by lack of organized finance”
Two of my friends got married recently- one a Marwari and the other a South Indian Brahmin. Both are roughly of similar economic status- but the contrast between their weddings was striking- my Marwari friend had an ostentatious wedding with exorbitant ‘gifts’ from the bride’s family, while my other friend’s wedding was a much more simple affair, with no garish display of wealth or expectation of dowry of any kind.
As I thought about it, this seems fairly typical- most business families have ostentatious weddings and the practice of dowry is highly prevalent, while with most service-class families, the weddings are much more low key and dowry is practically non-existent.
To explain this I have a theory (as usual!). Ostentatious weddings are actually a low cost strategy! And dowry is in the interest of the woman!
Both of these phenomena can be explained as necessary evils in the absence of well-functioning organized sources of finance.
Consider the first question: Why do business communities have ostentatious weddings? On the face of it, it seems like an unnecessary expense- a large cost incurred with no obvious benefit- something which does not make ‘economic sense’
In economics, very often, if there is a significant cost incurred with no apparent direct benefit, the explanation is ‘signalling’
In a system, where organized sources of finance (like banks) did not exist, most finance for business was sourced from other members of the community. An ostentatious wedding is a low cost way for a businessman to signal his credit-worthiness (or more broadly to signal the overall reputation of his business). The purpose of signaling is to reach a ‘separating equilibrium’ (as in a strategy that cannot be copied easily and hence helps in distinguishing or separating the pretenders from the rest). Choosing a wedding as the means to achieve the separating equilibrium is actually lower cost for the truly credit worthy- since it is a one-time expense where several people of the community can be signaled to simultaneously
This incurring of a seemingly unnecessary cost to act as an ostentatious signal is also found in nature, most vividly with the showy peacocks. The vivid colors of a peacock are a ‘waste’ of genetic resources (which could have been ploughed more productively into more food or genetic material) and it also increases its risk of being spotted and hunted down by predators. But it is precisely that which makes it a powerful signal!- the peacock is signaling to its potential mate- that it is so superior genetically, that it can afford to waste genetic resources on ostentatious displays of beauty, which not only do not add to its survival chances (the peacock’s tail does not have any direct utility for survival), but actually reduces them (with the risk of being preyed upon). The right amount of signaling is of course one that maximizes the net benefit(too much signaling is costly and could lead to the death of the peacock by being hunted by predators , too little could lead to it not being able to attract a peahen which means it cannot pass on its genes)
A showy wedding is the human equivalent of a peacock’s tail.
Now to the second question- on why business families have a practice of dowry- my theory is that it was actually in the interest of the women!
It has been argued by several others- that dowry was actually an efficient means of wealth transfer to daughters. This makes sense, it would be better to transfer wealth to the daughter at the time of her wedding, when she is to leave her father’s house, rather than will it to her, since it would only cause disputes between her and her brothers, without the benefit of resolution by the father.
While this explains why dowry may have existed, it does not explain why it is much more prevalent in business as opposed to service-oriented families.
To that, my hypothesis is that dowry is a way to secure the future of the sub-unit (of the daughter and son-in-law) in the larger construct of the joint family.
To understand this, consider the trajectory of a typical family business’s expansion- a member of the family expands the business by opening ‘his’ unit (e.g. if the family runs jewelery shops, one of the sons would open a new shop- which he would operate)
Starting these units requires upfront capital investment, and it makes sense for money to be transferred at the time of the wedding, so that the son-in-law has enough money to strike out on his own, thus securing his stature and importance within the joint family.
Both of these social phenomena would not exist had there been access to organized sources of finance- credit worthiness would then be solved for by screening (as in the use of more sophisticated criteria by a bank to assess credit worthiness) rather than by signaling alone (Note: Signaling and screening are the 2 solutions to the classic problem of asymmetric information in economics)
Similarly, a businessman would have relied upon a bank, VC or PE fund for project finance for his new venture, and would not have required dowry as a source for the upfront capital investment.
I find this particularly interesting, since in my last project I came across several sub-optimal economic choices when access to finance was denied- its fascinating to see social evils also owe their origin to the same reason.
Thursday, July 16, 2009
She stood there next to the doorway on the tube, a stylish Gucci bag slung casually over her shoulder, her formal suit & briefcase indicating that she was employed in a high profile corporate job. “Must be an investment banker”, I mused; as she self-assuredly communicated succinct instructions to some underling on her sleek mobile phone. I watched her, fascinated, impressed by her confidence and poise.
As she spoke, she momentarily removed the cooling glasses obscuring her eyes. I was startled to see a visible ugly gash near her eye marring the otherwise flawless face. A purple wound- still capturing the violence with which she was struck-it was obvious that she had been brutally hit (“by an abusive boyfriend or husband?” I thought to myself). “How can a girl, so obviously accomplished and confident, allow herself to be subject to such callous brutality”, I thought. Her eyes wandered briefly in my direction, and she realized that I had noticed it.
Her face colored, as she felt exposed; her humiliation revealed to a total stranger, privy to her worst demons by nothing more than a passing glance. Her expression was a confused mixture of annoyance & defiance; annoyance at my inadvertent violation- as if by just realizing her predicament, I had transgressed some unspoken boundary between strangers; a facade of defiance- by pursing her lips; the show of emotional strength belied by the pain in her eyes.
She melted, as she realized from my expression by own embarrassment. My silent empathy was wordlessly acknowledged by her, a shared experience of an intensely personal nature, amidst the chaos of a noisy train.
I was confused as to how to react. My hand half-outstretched, unsure whether to offer comfort; and confused if that presumptuous act would break the tenuous bond that we had built. Would I embarrass her by indiscreetly acknowledging the intimacy of our brief encounter? My confusion led inexorably to inaction, as I got down at the next station- the deep & ineffable interaction likely to leave a lasting impression despite its ephemeral nature.
The creaking doors shut slowly, our gazes locked with each other, as she evanesced along with the train, her eyes still mirroring her pain & gratitude.
I never saw her again after that day.
Depressed mood leads (as always) to Urdu poetry. Here are snippets of this poignant poem by Faiz Ahmed Faiz, soulfully rendered by Abida Parveen (I've included only the first and last verse which best describe my state of mind!)
Nahin nigaah mein manzil to justujoo hi sahi,
Nahin visaal mayassar to arzoo hi sahi.
If the destination eludes sight, let the search be;
If union defies attainment, let the longing be.
Dayaar-e-ghayr mein mehram agar nahin koi,
To Faiz zikr-e-watan apne ru-ba-ru hi sahi.
In this abode of strangers, if no confidant exists,
Then Faiz! Let the invocation of homeland, with yourself be.
Tuesday, July 7, 2009
Practically everyone thinks their mother is the best cook in the world. Let me assert that all of them are wrong, because my mother is clearly the best!
The distinctive feature of my mother’s cooking is her inventiveness. She can literally concoct new dishes with a dizzying array of ingredients across different cuisines. Succulent Indian vegetables & spices would add just the right amount of tanginess to a continental dish; a mélange of Mexican ingredients would find themselves in the midst of Indian roti-curry. And these disparate ingredients would all somehow come together to make culinary magic!
Truly good cooking then is not so much about knowing a wide array of recipes; it is really about knowing how ingredients work together. It is an art of being able to work with rules or ‘good moves’. This article (http://www.slate.com/id/2219243/pagenum/all) I read recently also talks about the same- master chefs are not storehouses of a zillion recipes, they are artists who can compose something new by creative application of heuristics that they pick up over the course of time. Cooking is hence, a pattern-recognition and not a data-crunching problem.
I remember reading an article about chess players that pointed to a similar thinking process. Grandmasters and professional chess players are expert pattern recognizers, not people with either elephantine memories or faster computational ability.
2-3 observations indicated this: Chess pros were no better than laymen or amateurs in rearranging chess pieces on a board that they were shown, if the pieces were randomly arranged (making it an ‘illegal’ position in chess). This showed that superior memory is not the cause for the difference in chess ability.
Similarly, self-reporting by chess pros showed that they had not evaluated more moves than amateurs before deciding their move. So it wasn’t even faster data crunching that explained the difference.
The true difference was in the pattern recognition- chess pros evaluated less ‘bad’ moves than amateurs. It is almost as if they had developed (or were born with) a filter that left out bad moves, just as amateurs would not evaluate illegal moves.
It is this knowledge of heuristics that distinguishes good chess players- they probably would be thinking stuff like “never sacrifice a pawn after castling if you’ve lost a knight”, “use a rook to check, with a knight threatening the opponent’s queen” and so on, just as a great cook must be thinking “Use cardamom with sautéed vegetables only if either tofu or mushroom is part of the salad” etc.
In fact, this would likely be the case with all art- it is the application of a wide range of ‘rules’ in varied permutations. We probably would not be able to identify all the rules, neither would a true artist be able to articulate them. But subconsciously, they are working with patterns, and therein lies their wizardry
My time in
In the tradition of ‘Freakonomics’, my latest musing is a wacky hypothesis on the reason for south Indian women being more socially empowered than those from the north.
Marxist methodology always seeks to explain social behavior and phenomena (the ‘superstructure’) in terms of underlying ownership of economic resources (the ‘base’)
With that thought- here’s the wacky hypothesis: South Indian women are more empowered since the South is (predominantly) rice growing, while the North is largely wheat growing.
The cultivation and harvesting of rice is something that women can (and do) participate in, since it requires deft work to remove the paddy from the fields, unlike wheat, whose harvesting requires heavy labor.
Women are thus part of the wealth-generating, productive employment in the south, which would lead to greater power and say even on social issues.
Secondly, the consumption of rice as compared to wheat also favors greater female empowerment.
Cooking rice has huge economies of scale (in terms of time invested) - cooking for 8-10 people (the typical size of a joint family) does not take much more effort than cooking for 2-3 people. It is possible for a woman to cook the rice and have her meal with the rest of the family
With wheat (as in roti, chapatti etc.) however, the cooking process does not have any economies of scale. Cooking 20 chapattis requires nearly 20 times the effort of cooking a single one. This coupled with the fact that Indians like to have their food hot, means that women have to spend their time slaving away cooking one roti after another for the family, and will end up having their own food only after everyone else is done.
The effect of this on a male child in the house too, is that he sees his mother as subservient to the male members of the family, hence retarding the rate of change & female empowerment
It will be interesting to see if women are noticeably more empowered in other rice-growing countries in the world (