Change This and 'Manifestos'

"..Sometimes it seems as though our disagreements—over everything from politics to business to the designated hitter rule—are more serious and more divisive than ever before.
People are making emotional, knee-jerk decisions, then standing by them, sometimes fighting to the death to defend their position.
And yet, we’re optimists...
The problem lies in the media.
..Television demands a sound bite. A one hundred word letter to the editor is a long one. Radio has become a jingoistic wasteland, a series of thoughtless mantras, repeated over and over and designed to fit into a typical commute."

That's part of the 'manifesto' at CHANGE THIS - a new kind of media built in the summer of 2004 by Amit Gupta, Catherine Hickey, Noah Weiss, Phoebe Espiritu and Michelle Sriwongtong. The original idea behind Change This comes from Seth Godin.

For starters, a 'manifesto' is nothing but a PDF file - an argument, a reasoned, rational call to action, supported by logic and facts. Published manifestos can be read, downloaded and shared widely. New proposals for 'manifestos' can be submitted HERE and submitted PROPOSALS can be read and endorsed to be written.

Manifestos by Tom Peters and Seth Godin are 'must' reads among other brilliant ones!

Privatisation of Public Services - I

'Private and Public Interests in Water and Energy' by David Hall and Emanuele Lobina (both associated with PSIRU @ Univ of Greenwich) is based on empirical evidence from developed, transition and developing countries. It looks at how privatisation of water supply/sanitation and energy sectors may conflict with public interests in socio-economic, environmental and political dimensions. Presenting case studies from across these countries, the authors see a permanent possibility of conflict between the private and public interests as these privatised services are too vital both socially and economically, and hence too risky to rely on corporate self-regulation in a scenario where these countries lack effective capacity to regulate these corporations. The authors conclude that policy development in these countries should focus on building strong public sector institutions to provide these services rather than depending on corporate activity that is too risky.

Other research reports (in the areas of privatisation, public services and globalisation) from the PSIRU can be obtained here.

The Democracy Center has a compilation of the award-winning articles by Jim Schultz written from inside Bolivia during the country's now famous WATER REVOLT.

Books:

"The Ecology of Commerce: A Declaration of Sustainability" by Paul Hawken

"No Logo" by Naomi Klein

A Letter to Jairam Ramesh and his Reply

Jairam Ramesh is a prominent figure in the Congress Party in India in which he has held several key positions in the past. He has also served in the Planning Commission, Ministry of Industry and other economic departments of the central government in various capacities. He is the architect of the National Common Minimum Program of the present government and was a key player in developing India's 1991 economic reforms. He graduated with a degree in Mechanical Engineering @ IIT-Bombay and later studied public management @ CMU and technology policy, economics, engineering and management for a year @ MIT.

My mail/request to Mr. Jairam Ramesh

"Mr. Ramesh,

I have admired you for a long time and more after I saw the "Commanding Heights" documentary that aired on PBS. However, I feel bad in a way that an American free media had to introduce us to the people behind the reforms in India. The men behind the whole documentary were economists and people profiled are from across the spectrum - politicians, economists, policy makers, etc. I would believe you have the knowledge and the connections to reach out to the people who have shaped India since its Independence.

It would be wonderful if you could take the initiative to work on a documentary to profile the whole economic/public policy process of India from the days of Independence to what it is now without any political affiliation of any sort. Although the PBS segment on India itself was very little compared to the length of the documentary, the segment dealt with the period after the reforms in 1990 and economic changes that followed - free markets, globalization, etc. Not many people in India (students mostly and I confidently would say MOST politicians) know about the first five year plan, the core economists that shaped the first economy after Independence, changes in the intermediate period, development and contributions of economists (Sen, Bhagwati, Manmohan Singh, K.N.Raj, Bimal Jalan, Rangarajan, etc.) in the 'unbundling' of India. I am sure there are so many budding economists in India and abroad who would be more than happy to devote their time and energy for this cause (including me although I am just an engineer with a strong interest in public policy and economics!!).

If this is a task that cannot be implemented soon, you must ATLEAST attempt to maintain a blog of some sort to share with us the operation of the government on a daily basis. There is absolutely no way for us (young people) to interact with politicians or policy makers of any sort and I would appreciate if people like you would take a more pro-active step to keep us 'informed'. "

Mr. Ramesh's prompt reply,

"many thanks for the nice words. your idea is a good one. it exists in bits and pieces but not in a consolidated manner (if interested read v.n. balasubrahmanyam's "conversations with indian economists")
do stay in touch. "

Let me reinforce the book in bold again -
"Conversations With Indian Economists" by V. N. Balasubramanyam.

India has a whole bunch of people with a wealth of knowledge and experience (retired RBI governors, former advisors to the central government, prominent reformers, etc) who remain a valuable source of reliable information of the past and present economic system. I think a concerned effort must be made to engage them in a dialogue in understanding the real problems faced rather than pointing fingers at politicians and policy makers!!

A complete netcast of the six hour Commanding Heights storyline that aired in three parts in PBS is available here. Also included are some essays in the same website.

Clarification from Prof Sendhil Mullainathan

In one of my earlier post, I had quoted a very interesting study on discrimination in the US labor market.

I mailed one of the authors of the paper, Prof Mullainathan, for a clarification and the question I had was..

"By applying to 1300 REAL jobs posted in newspapers and adding 5000 NON-EXISTENT resumes to the job seekers pool during the period of study, do you think the study would have changed the hiring process of atleast a few jobs and thus affected the actual outcome/dynamics of those jobs for a few REAL applicants?'"

Prof Mullainathan replied,

"One of the things we did was to check with several HR managers before the study. We were worried that by giving one of our people an interview, we'd be crowding out a real interview. But they told us that there is actually a non-trivial percent of people who they try and call for an interview but cannot reach to schedule one. In these cases, they simply interview a few more people. As such, when they call one of our fake applicants and can't reach them, the next best candidate would simply get their chance at an interview. I think the distortions moreover are far more severe at the interview stage. At that stage, there is the potential for actually crowding out one real applicant, but we never send anyone in for a real interview."

I would like to THANK Prof Mullainathan for the clarification. More of his working papers can be obtained here.

Some good reads include..
"The Market for News" (with Andrew Shleifer), 2004
"Behavioral Economics" (with Richard Thaler), 2000

Neuroeconomics

An article in The Economist published early this year is a good start.

Oft-quoted (in the blogosphere) blog maintained by Dr. Kevin McCabe, Professor of Economics and Law and Director of the Center for the Study of Neuroeconomics @ George Mason University.

Dr. Daniel Kahneman - 2002 Nobel Memorial Prize winning economist, Professor of Business Economics @ Caltech and pioneer and theorist of behavioral finance - and his primer on neuroeconomics.

Update on more reads to follow..

Why I am Not a Conservative - F.A.Hayek

'Why I am Not a Conservative' is an excerpt from the book "In The Constitution of Liberty (1960)" by F. A. Hayek.

'Confessions of a Right-Wing Liberal' by Murray Rothbard is a good read too..

Pioneers of Education in India - A Tribute

I found a very interesting link in UNESCO's Internation Bureau of Education website which had profiles on 100 famous educators-philosophers, statesmen, politicians, journalists, psychologists, poets, men of religion-drawn from many parts of the world. From this list, I picked NINE thinkers who I thought impacted education in India for good. These thinkers are listed below with a link to their profile on the IBE website.

MALCOM ADISESHIAH (1910-94) *reminded me of how my granddad used to narrate his association with Malcolm Adiseshiah back in his days*

RABINDRANATH TAGORE (1861-1941)

SWAMI VIVEKANANDA (1863-1902) *profile in French*

JIDDU KRISHNAMURTHI (1895-1986) *courtesy my granddad again*

J. P. NAIK (1907-1981)

SRI AUROBINDO (1872-1950)

MOHANDAS KARAMCHAND GANDHI (1869-1948) *not many people in India are familiar with Gandhiji's contribution to education*

MARIA MONTESSORI (1870-1952) *although many would wonder her name in this list, I believe she had a great impact on education in India - partly evident in the number of Montessori schools*

FLORENCE NIGHTINGALE (1820-1910) *not born in India but she had a considerable impact on education in India too*

With all respect, I believe that there are other people in the list (and otherwise) who have had a direct or indirect impact on the education system in India.

Wage Insurance Program

There are many instances when I have wondered what happens to workers who are displaced from their jobs by the effects of modern economic systems - globalization, free-trade, outsourcing, offshoring, innovation - while the economy gains overall. Although it is superficially mentioned in the media and elsewhere that the government takes responsibility in trying to compensate, re-train and re-employ the displaced workers, I have never understood the specifics.

Brookings Intitution's draft titled 'A Fairer Deal for America's Workers in a New Era of Outsourcing' (Lael Brainard, Robert E. Litan and Nicolas Warren) proposes a wage insurane program for workers displaced from their work permanently (in a market where offshoring accelerates the pace at which workers' investments in job-specific skills lose value). The authors feel that this scheme would aid in rapid reemployment and insure wages, and not just unemployment, in the present scenario. They also propose the program should be publicly mandated rather than being managed by private provisions.

From what I understood..

What is wage insurance?
Since the Great Depression, America has recognized the need for collective responsibility to help those who, through no fault of their own, may be thrown out of a job. Hence was formed the federally mandated unemployment insurance (UI), which replaces the displaced workers' previous wage for 26 weeks. Since 1962, the social contract has included special protections for those displaced by trade, including extended unemployment insurance and retraining benefits under the name of Trade Adjustment Assistance (TAA).

Problems with wage insurance programs?
Although both these are reformed on a regular basis, number of displaced workers who have really benefitted has been low primarily because of two factors:
a. problems with eligibility requirements for coverage,
b. effectiveness of the training program.

Performance in practice of different existing programs?
1. Earned Income Tax Credit program
++ higher labor participation among low-income workers
++ movement of several million households out of poverty
2. Targeted Jobs Tax Credit program
-- low participation rates among skilled labor due to stigma and reluctance to self-identify as member of targeted population
-- burdensome certifications and eligibility requirements
3. New Jobs Tax Credit program
4. Work Oppurtunity Tax Credit program
5. Welfare to Work Tax Credit program

A few notes..
- surge in public anxiety due to offshoring and loss of white-collar jobs
- America is going through a period where job creation is relatively low compared to job destruction
- there is a decline in the proportion of national income going to compensation of employees
- process of 'creative destruction': change should not just be tolerated but nurtured and firms should at some point pass the market shrink test (going out of business and destroying livelihoods of employees and owners)

Brookings Trade Forum 2005 is a good place to find papers on current research on the offshoring subject.

Scientism in Economics

'One of the things that economics lost when it became a mathematical discipline was the ability to meet its own standards as a science.' - Alan Ebenstein (?!)

This is a quote that lingers in my head every time I read an economics paper that draws conclusions from mathematical analysis (although I love math and like to see the tabulated results personally!).

I first heard about the 'Post-Autistic Economics Movement' from my girlfriend who was presented with a copy of an article relating to it in her Econ class. The paper mentioned why economics students in three countries (France, UK, USA) are putting their professors on the defensive. The institutes referred to in the article are considered pillars of education in their respective countries and produce their future leaders. Some universities mentioned in the article where the PAE has a presence among the student body include Ecole Normale Superieure (France), Cambridge University, Oxford University (UK), Harvard University (USA) and Sydney University (Australia). It also refers to a slogan of the PAE movement in a Madrid campus that goes..'La economica es de gente, no de curves' - 'Economics is about people, not curves'.
One of the first papers I read that really highlighted the PAE movement and its growing influence was this one written in the Journal of Australian Political Economy by Edward Fullbrook.

Post-Autistic Economics (PAE) is a new, revisionist school of thought in economics that attempts to overcome the deficits in classical economics theory and teaching. Mainstream economics is branded 'autistic' due to
a. an oversimplistic world view
b. an excessive reliance on mathematics
c. a refusal to integrate with other discplines

The International Economy

The International Economy is a quarterly magazine of international financial policy, economic trends and international trade. The articles are edited and read by people from a wide variety of professions (government, business, academia) across the globe, although I would prefer a few other experts in the Masthead list. Even though most articles are not accessible for free online, a few of them from the present and recent past issues are available.

Some of my favorite reads include..
'Is Continued Globalization of the World Economy Inevitable?' - A symposium of views from thirteen experts. Among my all-time favorite articles!
'India Rocks!'
'Fixing Wall Street'
'In Defense of Globalization'
'Japan’s Dying Market Economy'
'Think Tanks: Who's Hot'
'End of the World Scenario'
'The Great Friedman-Huntington Debate'
'How China is Eating Mexico's Lunch'
'Courting International Business'
'The Euro Three: Who'll Come out on Top?'
'Iraq's Currency Solution'
'Why Sanctions (Almost) Never Work'
'The Case for Globalization'
'Are the Emerging Markets Finally Decoupling from the United States?'
'The New US-European Detente'
'The Mexican Comeback'