Glob: Library

Last read: Catch-22 by Joseph Heller

Why India is an overdeveloped country

Quoting Shashi Tharoor from one of his columns in Sunday Times from about a year ago. "Underdevelopment used to be the condition erroneously ascribed to India by economic theoreticians, who looked at some of our labour-intensive agricultural techniques and promptly concluded that we were primitive. In fact, everything in India is overdeveloped, particularly the social structure, the bureaucracy, the political process, the monetary system, the university network, the industrial base and (as Galbraith tactlessly observed) the women. Given its economic and imperial history in a number of previous Golden Ages under Ashoka, Vikramaditya and Akbar, India is not underdeveloped at all; it is, as I argued in The Great Indian Novel, a highly developed country in an advanced state of decay." Read the novel with this one idea and satisfaction is guaranteed.

Tharoor takes the mythological Indian epic whose early texts date as early as 8th Century B.C. while later ones date as late as 4th Century A.D. and juxtaposes the multi-generation story upon the recent history of India's independence dating early 20th Century A.D. The result is a phenomenal convergence of wit, liberalism, history and satire. Tharoor's grasp of characters from both stories is quite deep, and it shows in every page where his pearls of wisdom and genius are leniently scattered. I would not ruin the surprise by mapping the key characters for you, but discovering that is compelling enough to pick up the book. Like every good book, this has several layers of depth and the better your understanding of the Mahabharata and modern Indian history, more the gratification. If you can forgive the occasional incoherency and chronological flaws that come with the premise of the book, you will find a convincing illustration of India's "advance state of decay".

From Heaven Lake by Vikram Seth

Economics demystified (for the developed world only)

Harford is a mecro-economist, a bridge between macro and micro economics. Harford explains macro-economic phenomena such as retail pricing, stock market behavior, taxation, health-care, environment, and licensing air-waves; by one-by-one getting inside the heads of each stake-holder on that poker table and dissecting their behavior in accordance with the first principles of economics: scarcity and choice. However, the insights only go as far as the developed world does. In the last 3 chapters where Harford tries to similarly explain the woes of the poor and developing worlds with examples of Cameroon, Belgium and China; his views quickly appear shallow and cliche, lacking the same wisdom as the rest of the book. 70% of the book is therefore a 5-star, and the rest is a 2-star.

With the Undercover Economist, Tim Harford de-mystifies the wiggling jelly of economics (where you cannot kill farm-destroying birds without suffering population explosion of farm-destroying insects and so on). What sound like conundrums are actually logical explanations of common-sense causal chains. For example, he explains that "more rational the behavior of stock market investors, the more erratic the behavior of the stock market becomes." I try to summarize: rational investors would buy shares today if it was obvious that they would go up tomorrow, but then everyone would buy today driving the price high enough so that it cannot go higher tomorrow. Rationality would obviously and consistently second-guess rationality, implying rationality cannot lead to predictable behaviour. The only thing left then is unpredictable news, which is a random event. This means that shares would behave like random walks. But if this was absolutely true, it would be a paradox, since rational investors would not invest in shares and only invest in predictable alternatives. The balancing point then lies somewhere in between. Harford then goes on to draw parallels with supermarket queues and how everyone tries to predict the fastest one, and a game of poker with players analyzing the outcome based on fundamentals yet betting based on their understanding of what the other players are thinking.

Discovery of India (independence onward)

If Nehru were to pick his choice of a historian to chronicle Indian history starting where he left off with his Discovery of India letters to Indira from 1942-46; he would probably have lived a decade longer in his excitement after finding Ramachandra Guha. Never before has a historian (or any human being for that matter) undergone the momentous task of uncovering and articulating the history of the world's largest democracy the way Guha has with India After Gandhi. Leave opinion, judgment, agenda, and agency aside; it is little doubt that Guha is the most aware Indian alive.

I had the good fortune of spending hours listening to Ram in person earlier this year, and was amazed at the wisdom-per-second spewing out from head-to-mouth impromptu. It is one thing to collect, select and organize information in chronological order; and it is another to hold that infinity in the back of your mind and retrieve, synthesize and present it on demand. It reflects passion, experience, genius, and wisdom. The series of talks were a follow-on to his controversial article in The Outlook about seven reasons why India will not be a Superpower, and why that is a meaningless goal to aspire towards.

Fooled by Probabilities

The ideas in this book have created more controversy than they deserve, and it might have something to do with the title of the book. Given the number of people who equate "random" with "equiprobable", "Fooled by Probabilities" would have been a more appropriate title for the book, though not as provocative as "Fooled by Randomness". There is a finite chance that there is a black cat in every dark room, but when you switch the light on, there is no black cat in the room. Both are correct statements - mathematically and practically. This book must be read in the same light.

It seems to me that the transition from an average to good investor (probabilistically speaking) happens as soon as you internalize the concept of expected values and invest by it. My favorite story from the book is where Taleb is asked which way the market is expected to go next week, and he says slightly up with a high probability (70%). Then someone intervened that Taleb had just made a big bet on the S&P going down next week, and he said that indeed he did. The one lesson this book teaches is that the two statements are not inconsistent with each other. 70% chance of a +1% change and 30% chance of a -10% change sums upto -2.3, a strongly negative expected value. Good investors always shadow the expected value (trend and magnitude), although market sentiments are always driven by either the expected trend of upward or downward movement, or expected magnitude of upward and downward movement.

Inventing Money by Nicholas Dunbar

The Illusion of Incomprehension

Amartya Sen's ideas and opinions in this book are eminently agreeable. However, this book comes across as either a hard-selling rebuttal to the nay-sayers to Sen's theories about identity, or repetitive professing to a reader who doesn't get it.

If I eat a peanut every time Sen criticizes Samuel Huntington and the Civilization theory, I will weigh a thousand pounds. With this book and the repeated attempts to nullify Civilization theory, Sen makes it much more important than it will or should be.

Amartya Sen continues to educate and continues to make smart and rational arguments that question conventional conservative wisdom. If this is your first Amartya Sen book, you will definitely get the party line in the signature format. However, if you are looking for more insights than what you have already received from the author, this book may not be the right one to spend time on.

The only thing worse than anarchy is government

Review of the book Seducing Pain by Sumit Mullick (Image not available)

Sumit Mullick and George Orwell have many things in common, both were born in Bengal, both have fatalistic views of the establishment of their times, both served in the administrative and civil services before discovering themselves as writer. Orwell started his writing career as a reviewer, and his 1940 essay of Charles Dickens reflects his own personality within the review. "When one reads any strongly individual piece of writing, one has the impression of seeing a face somewhere behind the page. It is not necessarily the actual face of the writer." He goes on to say "...He is laughing, with a touch of anger in his laughter, but no triumph, no malignity. It is the face of a man who is always fighting against something, but who fights in the open and is not frightened, the face of a man who is generously angry — in other words, of a nineteenth-century liberal, a free intelligence, a type hated with equal hatred by all  the smelly little orthodoxies which are now contending for our souls." I cannot use better words to describe Sumit Mullick and therefore I plagiarize, with some discretion.

Short Tale of the Long Tail

Wired magazine packs some of the best technology writers and new economy experts in the world, and with this book Chris Andersen asserts his position as the leader of the pack. This book has the right mix of the essential ingredients of a good business book: enough rigor for business theory but not so much as to make it dry; enough anecdotes to bring the point home but not so much as to make it repetitive; enough opinions and wit to make the reader question but not so much as to make it biased and shallow.

Like all mainstream business books, this one does not resist the temptation to encapsulate all business and socio-cultural phenomena around one simple theory. However, Anderson maintains the humility to admit discovery than claim invention. Expect this concept to become as widespread and oft-quoted (if not more) in understanding the digital consumer economy, than Geoffrey Moore's Chasm was/is in understanding the evolution of hi-tech products.