A response to ‘Trumpism: a new era in world politics’

I visited Andrew Batson’s blog after a long time and was browsing through his posts of several months. Read this one fully.

I read the original article in ‘Project Syndicate’ he is citing approvingly. It is not quite, ‘It is not the economy, stupid’, as Andrew Batson notes. In fact, it is very much ‘It is the economy, stupid’.

Seems like a summary of various thoughts that would help the author and the reader, eventually, to arrive at a sensible and cogent narrative of events. Perhaps. That is the optimistic conclusion. It is not a criticism.

It appears that the author leans towards the explanation offered by Joschka Fischer that it is the ‘white man’s angst’. A recent article in Wall Street Journal, part of its series on the ‘Great Unravelling’ (of the American economy and society) seems to agree with Fischer. It is an important read.

If it is the ‘white man’s rage’, then the author seems to think that the causes are socioeconomic and that simply defeating Trump or Le Pen would not suffice. See his sentence here:

“if the social and economic forces that led to their rise persist, an increasingly angry populace will simply look for a new tribune.”

Also, he seems to be sceptical of Bradford de Long’s optimism. He is not confident that the political systems would implement desirable socio-economic policies in the future since it has failed to do so in the past (last thirty years?).

So, if one wants to fix accountability for the rise of Le Pen, Trump and Geert Wilders, what would the author recommend?

He does not go there.

His conclusion seems to be one of resignation. I am inclined to agree with that. It would have to play out just as the indifference of the political, policy and educated elites to the ‘insecurities and inequalities of our hyper-globalised age’ played out for thirty-five years or so. There was mere lip service to the concerns of the losers even as politically correct pursuit of ‘gender parity, and the legal and social emancipation of sexual minorities’ searched for and reached new heights and methods. The pursuit shows no signs of abating. The pronouns at Vanderbilt University may not be its most recent nor the most egregious illustration but it qualifies as a good exhibit.

The author concludes that liberal democracy is at peril. May be, he is right and may be he is not. But, assuming that he is right, one reason it could be at peril is that, like many others he has cited in his article, he is in no hurry nor does he show any inclination to name and shame the real culprits responsible for imperilling liberal democracy.

Where there is no accountability, there will only be disenchantment, cynicism and bitterness of the mobs with their own brand of justice that would be dispensed.

Since the crime has been committed and no one seems inclined to affix or accept responsibility, the process of retribution will follow its own logic and momentum now.

There is not much purpose served in wringing hands nor blaming Trump, Le Pen and Geert Wilders. They are mere cogs in the wheel of evolution whose law is that where there is cause, there will be effect. Now, it is the turn of ‘effect’.

Just sit back and watch and survive, with luck and prayer.

Pre-suasion

Read an interesting article by Lucy Kellaway in FT on Professor Robert Cialdini’s forthcoming book, pre-suasion. Some of the things he describes defy imagination but they are real:

Another brilliant piece of pre-suasion was in a recent letter in which he addressed the ticklish matter of succession. Mr Buffett introduced the subject by saying: “I will tell you what I would say to my family today if they asked me about Berkshire’s future.” By gratuitously dragging his family into it, he ensures that every reader would take what followed as gospel.

Mr Cialdini’s favourite study was conducted on 18-month old infants who were variously shown images of a single person and pairs of people. After looking at the pictures, the infants were asked to pick up things that had been dropped on the floor. The babies who had been shown pictures of a single person were three times less likely to cooperate than those who had been shown pictures of groups. “I’m glad I was sitting down when I read that,” he says. “It proved that if we drew background attention to an idea it is more important to us.”

It is an open secret that he is helping the campaign of Ms. Clinton. The fact that the campaign team has hired him is proof itself that these things exist and work. Scott Adams of Dilbert cartoons fame calls him the ‘Godzilla’ and credits him with the idea of ‘dark’ being used as an epithet associated with Donald Trump. Scott Adams’ latest blog post on ‘Why Trump does not scare me?’. Those who want to follow the U.S. Presidential campaign using the frame of psychology and persuasion can do worse than follow his blog.

The funny thing about Lucy Kellaway’s article is the following:

People read these stuff, nod their heads and later, in a different setting, if we suggest that such tactics are adopted, their reactions are a combination of the following:

(1) They are dismissive
(2) They think they are exempt from it (how much more stupid can one get?)
(3) They think these are conspiracy theories
(4) They think that people do not deploy them.

This strange combination of ego and naivety is astounding!

Luck and asymmetry

Read this nice, short piece by one Mr. Robert Frank in ‘The Atlantic’ magazine on how he was lucky to be saved by the unlikely presence of an ambulance in the neighbourhood, after a sudden cardiac arrest on a Tennis Court. He is a professor of economics at Cornell University.

The piece goes on to argue that humans seldom give credit to ‘luck’ for their successes while ‘bad luck’ is somewhat easily blamed for failures. He is right. But, many other behavioural scientists have made this point repeatedly in recent years. That is why it is often said that success has many parents while failure is an orphan. Our eagerness to associate ourselves with success is driven by ego which is also needed to sustain self-belief, which is a positive thing. But, as with everything else, it is important not to confuse between pride and delusion.

What struck me in his piece was his reference to this asymmetry in human behaviour:

When you’re running or bicycling into the wind, you’re very aware of it. You just can’t wait till the course turns around and you’ve got the wind at your back. When that happens, you feel great. But then you forget about it very quickly—you’re just not aware of the wind at your back. And that’s just a fundamental feature of how our minds, and how the world, works. We’re just going to be more aware of those barriers than of the things that boost us along.

The asymmetry again: headwind is blamed for failure to make progress but tailwind is ignored or forgotten. Life is full of asymmetries and our  response to most things is asymmetric.

That is why I found fault with economists who were trying to look for a symmetrical relationship between interest rates and inflation. It is becoming clear now to many that, due to the behavioural messaging of pessimism embedded in ultra-low (zero or negative) interest rates, it induces excess saving and hence, disinflationary or deflationary tendencies. Quite the opposite of what the policy intends to achieve.

However, that does not mean that higher interest rates would induce inflation. That is what some economists like John Cochrane are trying to establish theoretically. That strikes me as somewhat silly for it fails to acknowledge the essential asymmetry that is all pervasive in human lives.

I had referred to this in my column in MINT  recently.

(Of course, on a different note, religious scholars could and would have something to say on why and how ‘luck’ finds some and does not find some others)

 

Wolfgang Streeck on the seduction of power

The Régulation Review. Capitalism, Institutions, Power is an international, peer-reviewed, JEL-refereed, econlit-listed journal.

That is what I found from its website. It published an interview with Wolfgang Streeck in July. You can find the interview here.

Some of his interesting remarks:

All of this came relatively late, due to a peculiar “habit” of mine, which is that I can appropriate theory only with a concrete empirical problem before my eyes, or confronting a puzzling image of the real world. I am hungry for facts, not for concepts; concepts I access through facts and through the questions they raise, including the need to organize them into a coherent picture.

I could see myself in that answer.

In a very crude way, one could say: a socioeconomic formation that combined high manufacturing performance with relatively high social egalitarianism has given way to a configuration that combines high manufacturing performance in a shrinking manufacturing sector with rapidly increasing inequality.

That is a good summary of how the global economy has evolved in recent decades.

In fact, what TTIP and similar arrangements are about is replacing public, political and at least potentially democratic institutions with private, commercial, contractual ones, or one could also say: replacing sovereign authority with liberal markets, or state power with market power. After all that is what liberalization is all about.

Behavioral economics means laboratory experiments designed to test assumed general, ahistorical, essentially biologically anchored human dispositions to act. Behind it is a stimulus response model of action that is so general that it can be discovered by testing no more than twenty or thirty graduate students who are paid euros for their participation. To me this kind of research may fit other animals but it certainly does not fit humans – who are, according to Darwin (!), moral animals that can and must distinguish between good and bad, right and wrong. At the human level, differences matter. Also, I detest the biologistic rehabilitation of rational choice that is behind most of behavioral economics: people are “shown” to act “non-rationally”, which for behavioral economists is the same as “altruistically”, but it is assumed that this is genetically programmed, which means that it must functional for the survival of the species and the selection of the fittest, and therefore is rational after all. This is so primitive that one need not comment about it.

What matters at the level of human action, of human society and of human history is precisely the vastly different ways in which our common biological endowment, whatever it may be and highly plastic as it is, is shaped and expressed in different historical cultures and social contexts. Nelson Mandela and Heinrich Himmler both were humans and had the same genetic endowment; but this is obviously much less important than what they and their environment made out of it and what their social context enabled, allowed and encouraged them to do or failed to prevent them from doing.

I think he is being too harsh on behavioural economics. I am not sure that behavioural economics tries to deny the role of the interaction of humans with their society and how the history of the societal evolution and the current context shape them. I do not think that behavioural economics contradicts that.

As far as I have understood behavioural scientists like Dan Ariely or Daniel Kahneman, they are not trying to ‘rationalise’ human behaviour as much as they point out the fallacies of the assumptions of the neo-classical economic growth model. But, the danger in going too far with it is that if people do not know what their preferences are, let somebody else (the government) choose them for the people! That would overlook the fact that those making the preferences for others are also humans! The whole thing gets circular and I am not sure if the answer is anarchy or something close to that. Or, perhaps, is that what we have today?

There is, as I said, no way around telling a good story, like a good historian but with the ambition of uncovering a “logic” underlying what you believe you are seeing, whatever it may be. In some ways this is similar to how an evolutionary biologist would tell the natural history of a habitat or of a species: you assemble all the facts you can find, bring to bear on them what you have learned from similar cases, help yourself from the toolkit of “ideal types” assembled during the history of your discipline, apply the general principles you believe are pertinent, and then do what scientists do: identify a pattern that gives meaning to what you see at the surface.

Pattern recognition is a matter of intelligence, intuition, and experience. Can you ever be sure the pattern you find is really there and is the “relevant” one? Never. But if and when you are sufficiently confident that what you have found can stand, at least for a while, you can release it for others to inspect it and wait what they have to say and, more importantly, if it helps them get ahead in their efforts. Scientific progress is a collective product, not an individual one, and it depends on people taking a risk with their work treating it as an investment in their own reputation and in collective cognitive progress at the same time.

Science has an entrepreneurial element to it: I throw something into the open and hope that it will make a splash. If not, try again. Intuition, responsible and enlightened guesswork, well nuanced verbal interpretation, and not least personal risk-taking are at the heart of the scientific enterprise; tacit skills and experience and “character” top methodological sophistication – social science is a human activity, not a truth-producing machine.

That is one of the best responses I have seen on how knowledge in a society evolves and progresses. He turns the notions of argument and  debate on their heads by calling scientific progress a collective product, an entrepreneurial  venture. Brilliant.

Fundamentally, I believe that a social scientist or economist who is asked by the elected government of his or her country to help with the making of policy should not on principle refuse. If what is expected appears ethically and politically supportable one may even have a duty not to say no. Of course, if emerging results turn out to be incompatible with your convictions you must step back or let yourself be fired.

Power is of course always seductive for someone who is, or was, a homo politicus; but one should give in to the seduction only if there is a real possibility to get something worthwhile done. Today, of course, nobody would ask someone like me to get involved, for the very reasons you mention.

There is much to discuss and think about his answer here. He says it is ok to succumb to the seduction of power if one could get something worthwhile done. That is almost ‘Nishkaamya Karma’. Does it stop there or can it?

Harari’s free will

Historian Yuval Harari has been given space in FT to pen a teaser-article on how Big Data would take away the remnants of free will. As a teaser article, it serves the purpose. It whets the appetite for the book’s conclusions. But, big data is not the first threat to free will. The notion of free will can be and has been debated ad nauseam.

The absence of free-will had been noted by spiritual teachers. More recently, behavioural scientists have noted the absence of free will. Just a day earlier, I read this article. It was published three months ago. It records that there is no free will.

Consumer marketing is already a repudiation of the so-called free will. At the basic level, framing of a sentence or question can change the way we respond. Most of us know that. Dan Ariely’s famous TED talk, ‘Are we in control of our own decisions?’ demonstrated rather well that free will is an illusion. In other words, science is validating spiritual truths.

More often, we end up justifying or rationalising our decisions, after the fact. So, big data, to the extent it succeeds, will be an extension of these trends. It may also spell their end because humans push everything beyond their logical relevance or SELL BY date – whether it is quantitative easing or political correctness.

Therefore, big data might end up achieving the opposite, eventually: giving humans back a semblance of control rather than wresting from them whatever little humans think they have of it.

As one of my bosses told me some twenty-two years ago – he was young then nor is he too old now  – life is nothing but a series of accidents. I understand it far better now. Big data cannot really change that.

The book should be an interesting read regardless of the conclusions that Prof. Harari might want us to take away from it.

The ‘Blood Telegram’ – a review

The book, ‘Blood Telegram’ by Gary Bass came out in 2013. Three years later, I began reading it towards the end of my summer break in the US and finished it on the return flight to Chennai. It was, no doubt, an interesting book. Of course, one could not escape the thought that had the author dropped the swear words used by Henry Kissinger and his President Richard Nixon on India, Indians and to Mrs Indira Gandhi, the book’s size would have considerably shrunk. The pair had nothing but contempt for India, its people and the Prime Minister. After a meeting with Mrs. Indira Gandhi in the White House, President Nixon told Henry Kissinger that they ‘really slobbered over the old witch’.

Archer Blood was the Consul General of the United States Government in Dacca and the telegram in which he labelled the killings in Bangladesh genocide made him famous and infamous. In one of those bizarre coincidences, the cables from the Consulate-General’s office would be drafted by Scott Butcher, approved by Killgore and signed by Blood.

When Nelson Rockefeller asked Mrs. Indira Gandhi as to why she was putting all her eggs in the ‘Soviet Union’ basket, she said that she would not if there was another basket. That much comes through very clearly in the book. Shankkar Aiyar, in his book, ‘The Accidental India’ had referred to how Mrs. Indira Gandhi slammed the phone after one of her phone calls to Lyndon Johnson to ‘beg’ him literally not to keep the PL-480 shipment on a ‘hand-to-mouth’ basis for India. That was humiliating. She found the phone call so humiliating that she swore, ‘Never again’ and so was born the Green Revolution. If that is a bit dramatic, well, it played no small role, no doubt.

The NSA (Kissinger) and the President had, for some strange reason, total admiration and love for Yahya Khan. Well, not so strange. They used him as a conduit to begin their relationship with China. Hence, he was too important to them. But, Americans, over the years, have always had a reason to prefer to keep Pakistan warm. Sometimes, one wonders if the reasons were merely ‘after-the-fact’ explanations for their inexplicable love for Pakistan. Over the years, in my conversation with many ex-diplomats, none of them felt that they had found an ‘Aha’ explanation for it.

What was incredible was that Kissinger made a trip to India and the Indians thought that they had extracted a promise that America would support India if China turned aggressive against India. Despite his promise, he went back to Washington, D.C and was urging China to get aggressive with India!

That America was unwilling to lift a finger and use its leverage with Pakistan to stop the genocide in East Pakistan must go down as one of the biggest failure of the Nixon-Kissinger leadership. Yet, Peter Kann, who apparently won a Pulitzer Prize for his coverage of the Indo-Pakistan war for the Wall Street Journal, and was Chairman of Dow Jones & Co., until 2007, thinks that Kissinger and Nixon ‘behaved like leaders of a great power’. Read his review of the book here.

The book repeatedly mentions that the Pakistani Army systematically targeted Hindus in East Bengal. The Blood telegrams to the State Department made that quite clear. Mr. Kann, in his review, takes no note of the ethnic cleansing and genocide engaged in by the Pakistan Army and that America did not try even moral suasion on its ally.

Of course, it appears that Henry Kissinger was nothing, if not consistent. Apparently, some recently declassified documents show that he was as supportive of the Argentine military junta as he was of Pakistan.

While it would be easy for Indians reading the book to form an instinctive anti-American view, based on the behaviour of the Nixon-Kissinger duo at that time, should also remember the rousing welcome that Edward Kennedy got in India, at the height of the refugee crisis.

Today, so much is being written about the ‘magnanimity’ shown by Mrs. Angela Merkel of Germany towards refugees from Arabia. In fact, a friend of mine wondered why she did not think that something was amiss when all these young men swam and ran and made their way into Europe, leaving behind their wives, sisters, mothers and children. Mrs. Merkel is not popular in her own country for what she is doing. Clearly, instance of misbehaviour and dangerous behaviour in Germany by the refugees are proliferating.

Yet, forty-five years ago, India accepted ten to twelve times more refugees than Germany had done. Forty five years ago, India was too poor and yet, had to bear the brunt of the inflow of millions of refugees from East Bengal.

However, Gary Bass does not come across as someone sympathetic to India’s cause and situation. He seems to go out of his way to appear to be even-handed by not sparing India from the blame for how the situation evolved.

Kenneth Keating, the American Ambassador to India was solidly behind India and Joseph Farland, the Ambassador in Pakistan was solidly behind his host nation. Kissinger was furious that all Ambassadors who end up in India went local! But, it escaped them that Joseph Farland was doing the same too. He had famously told Nixon that Hindus worshipped the cow and that Muslims ate it. It was as simple as that.

The book describes Zulfikar Ali Bhutto well. Despite (or, because of?) his education in Berkeley, he was very anti-American. Nixon did not like him. But, Kissinger thought that he was’ violently anti-Indian and pro-Chinese’. Blood simply called him ‘malevolent’.

Like with many (why ‘only’ many? – all, in fact) things in life, had there not been a devastating cyclone in East Bengal, things might have turned out different. Who knows? The cyclone, the devastation and the failure (ineptness) of the Pakistani administration to in providing rescue, relief and rehabilitation fomented and cemented the disaffection of the people of East Pakistan for the rulers in Islamabad. That is why when the elections happened, they voted overwhelmingly against the Pakistani ruling party and backed the Awami League. That is when the troubles started. West Pakistan did not accept the result and kept blocking the formation of the government precipitating the civil war.

The lack of trust meant that no compromise solution such as devolution – two Prime Ministers – one for East Pakistan and one for the West with a common President – would work. The people of East Pakistan wanted a ‘Bangla-desh’.

So, it was not human but it was a divine intervention in the form of the cyclone that set the ball rolling on the events that culminated in the vivisection of Pakistan into two nations. Nixon, with all his bluster and anti-India venom, could not prevent that from happening. For all their vanity and hubris, the hand of destiny uses humans to move things along a path that it has chosen for them!

Archer Blood died in 2004, at the age of 81.

Shekhar’s silver

Shekhar Gupta (former editor at ‘Indian Express’) now writes a weekly column for ‘Business Standard’. He has written a good one (behind paywall) on the Indian hand-wringing over the absence of medals in the Rio Olympics. He deserves at least a silver medal for the article. He could have easily won the gold but for the (mischievous?) reference to Gujarat. He could have used any other State for comparison. But, that is too minor to quibble about.

Besides incomes, training (depends on incomes too), diet and nutrition (latter is an outcome of diet), the hot and humid climate too disadvantages athletes from the developing world. Diet and heat do affect stamina, endurance and strength quite a bit.

His article provides a very good perspective. India is making progress in the international sporting arena.