Coasian Economics

November 16, 2007

Namy Roy wrote in and asked me if I’d read Niranjan Rajadhyakhsa’s column on Bangalore and the Coase Theorem, and suggested I blog about it.

I had read the column on Wednesday itself, and thought of mentioning it in a post on kids in aeroplanes. Since I’m busy making the quiz, I won’t be writing that post for a while, but do read the column. It’s good.


Property, Transaction Costs, and Black Money

October 30, 2007

One last Indian Express link for today: Gautam Chikermane’s column on what India can learn from Hernando de Soto:

Take de Soto’s theory a little further and you’ll probably reach a conclusion that like the sub-head of his 2000 book The Mystery of Capital, capitalism may not be able to triumph in India. While the dreamer in me disagrees, my pragmatic side tells me that in some states the bridge towards that triumph is being built in the form of lower stamp duties.

Going forward, the Delhi government plans to reduce it further — the state cabinet has approved a fall to 6 per cent for men and 4 per cent for women — which is good news for all stakeholders: households, the real estate and construction industry and the government. By lowering rates, the incentive to dupe the exchequer of legitimate taxes falls. The average black or unaccounted cash component in Delhi, at between 40 and 60 per cent, remains high, but it’s early days. Marry this fall in stamp duty rates with the way the Central government is trying to plug every possible loophole on the spending side, and the future of unaccounted wealth moves from black to bleak. Scholars have argued that state governments could double their stamp duty receipts if properties were valued correctly.

But like a chicken-and-egg syndrome, I don’t think that’s likely to happen unless, ceteris paribus, stamp duties fall like they have in Delhi, West Bengal and Uttar Pradesh.

The emphasis in the last quoted paragraph is mine.

Read the whole thing

And this reminds me that I really should write followups to my post about allowing farmers to sell their land.


Saddam was Worth Thirty Civilians

October 30, 2007

At the Pentagon, Garlasco was chief of high value targeting at the start of the Iraq war. He said his team was authorised to kill a set number of civilians around high-value targets like Saddam Hussein and his leadership….

Asked if so much care is being taken, why so many civilians are getting killed, Garlasco said because the Taliban were violating international law and because the US just does not have enough troops on the ground. “You have the Taliban shielding in people’s homes. And you have this small number of troops on the ground. And sometimes the only thing they can do is drop bombs,” he said.

“I don’t think people really appreciate the gymnastics that the US military goes through in order to make sure that they’re not killing civilians,” Garlasco said.

(link)

Making a calculation about how many civilians you’re willing to kill sounds completely outrageous, but such an approach is still better than bombing indiscriminately.

This reminds me of first term at IIMB, when one of us had to make a presentation about acceptable defect levels for our communications course. He was questioned on why he thought it was acceptable to pass any defect on to the customer at all, which sounds similarly outrageous (without obviously being as outrageous as civilian deaths).

Unfortunately, the English language (and most other natural languages) make it difficult to get the statistical point across. The idea is not to calculate how many deaths or defects you can get away with, but to assign a cost to defects to ensure you feel the pain of making each one.

(Note 1: I haven’t been very clear. In the unlikely event I find time, I may go back, pull out my Levin and Rubinstein and explain more clearly.)

(Note 2: This of course, holds good in the context that you assume that the goal of the war and eliminating Saddam are justified in the first place. Which is a whole other argument. Please do not bring it up in this post.)


I Hope This Becomes a Trend

October 30, 2007

She calls herself Street Hero, says she is a former prostitute, knows martial arts and takes to the city’s underbelly to protect women who work the streets. Her uniform includes a black eye mask, a black bustier and black knee-high boots.  

Then there is Red Justice, a substitute teacher from Queens, who wears red boxer briefs over jeans, a red cape and a sock with eyeholes to mask his identity. He trolls the subways encouraging young people to give their seats to those who need them more.

These were just a couple of the 13 or so do-gooders who gathered near Times Square Sunday for what was billed as the first meeting of Superheroes Anonymous.

There were locals and out-of-towners. Most were in uniform and all said they were serious about helping make their communities cleaner, safer and kinder places.

“We’re not these crazy people,” said one man, Geist, who traveled from Minnesota. “We just have an unorthodox approach to doing good.”

(NYT story syndicated on Indian Express)

This is awesome. The disappointing thing here is that these are very Robin-ish or Huntress-ish superheroes, with no superpowers, but you’ve got to make a start somewhere. Hopefully, we will see technology enabled superheroes of the Batman/ Iron Man variety soon. I am pessimistic about real superpowered superheroes coming up any time soon, but one can always hope.

Meanwhile, where are Bangalore’s superheroes? We could do with a masked man who fills in potholes and destroys speedbreakers.


Mint on FM

October 29, 2007

Today’s Mint is carrying a report on the future of FM radio as a business, and how differentiation is finally happening under the pressure of competition. Do read it, and also my old post on where the opportunities for differentiation lie.


Jerry Rao

October 18, 2007

One of the disadvantages of being in South India is that you get the New Indian Express instead of the Indian Express. Missing Tavleen Singh and Jerry Rao’s columns is a gigantic opportunity loss. Especially when Jerry Rao writes columns like this one:

As writers, Rudyard Kipling and Salman Rushdie are far apart in time and style. And yet they share something in common. The underlying theme of their great novels Kim and The Moor’s Last Sigh is the same. The theme quite simply is India itself.

Whether he acknowledged it fully or not, Kipling was a child of India and his writings are literally drenched with India. Kim can be seen as the retelling of the Krishna legend.

The nice thing about Jerry Rao is that he manages to approach stuff from completely fresh perspectives. So even if you disagree with his conclusions, you’ve broadened your horizons a little bit. It’s like he adds new tools to your intellectual toolbox, instead of sharpening the ones already there.


शिव सेना की agency ले रखी

October 14, 2007

Kodhi sends forward not one, but two unmitigated links.

First, the evolution of M&Ms using artificial selection.

Second, an mp3 of a Goregaon-types woman talking to a Goregaon-types guy and contemplating breakup. Please note that it is Not Safe For Work, and it is also in Indhi.

(Some people will point out that the mp3 is about people from Kandivili and not Goregaon.  But a Goregaon-type is anyone from Maharashtra who is not from South Bombay.)


Who Decides What You Eat?

September 25, 2007

This Mint article on school lunches in Japan is rather alarming in its enthusiasm for the nanny state. It also gushes about the Japanese self-sufficiency movement, which actually dooms Japanese farmers to small farms and eats up money in food subsidies:

Chisan, chishou, the local term for ‘produce local, consume local’, is a major campaign in Japan and it is reflected in the school menu as well. The cabinet office directive says that ingredients for the meals have to be sourced from places no more than 30km away.

And also about government campaigns which set out what people should eat:

So, on 15 July 2005, a new law on syokuiku came into force. It lays down the basic philosophy for “dietary education” to eradicate all these problems at the root. Says Miho Kawano, assistant counsellor at the cabinet office on dietary education promotion department: “Syokuiku is based on the theory that every individual needs to acquire knowledge about how to choose food, be aware of healthy diet and food safety.” What is impressive is the scale and precision with which the movement has been launched all over the country and how every school, prefecture, municipal office, corporate, NGO and literally every citizen on the street has been drawn into the programme.

Which are expensive and intrusive:

According to Kawano, the programme has an annual budget of $98.31 million (Rs391.27 crore) and there are 190,000 volunteers involved. The goal is to get at least 20% more volunteers by 2010 who will spread awareness about nutrition and the link between diet and health all over Japan. And, in a brilliant masterstroke, health insurance societies, too, have been drawn into the programme. Hutami says that from April 2008, the government is planning to route special health checking and guidance facilities to every Japanese citizen through insurance societies. Successful societies will be given a reward, while unsuccessful ones will be penalized.

On a slightly less rational note, the praise given to The Shri Ram School annoys me:

Although it is not organized on military lines like the Japanese school lunches, The Shri Ram School lunch programme is constantly evolving. For instance, the menu, devised by the teachers, is circulated to parents and also vetted by dieticians.

Bah. Death to TSRS.

But the article is still very nicely written and has lots of interesting details. Do read it.


And Now, Some Geek Humour

September 20, 2007

From my Technorati inbound links, I discover that someone called Mohan KV has called me ‘Arrogant.Opinionated.Must Read.’  (Arrogant? Really?). The man is a must-read himself. The whole blog are strong, but this post about Mech Engineering endterms at IITM is sublime.

Especially power plant engineering:

Doing a simple energy balance, we (all of us) find the exit temperature of water be a slightly warm 35,000 degrees Celsius. Tungsten vaporizes at 5600 degrees Celsius. Hot.
Oh, and the Second Law of Thermodynamics ( 35,000 deg C > 6,000 deg C K, Temperature of the sun) is for sissies, we’re Mechanical Engineers now.

And once you’ve violated the Second Law, what’s the Theory of Relativity in comparison:

Question 6: An induced draft wet cooling tower [blah blah yada yada]. It receives 4,50,000 kgs of air per minute, and 68,000 kgs of water per minute. [Some arbit question requiring the use of a psychrometric chart.]
.
For any reasonable size of the cooling tower, the mass flow rates involved will cause the velocity of air to be comparable the speed of light in vacuum.

Relativistic Heat and Mass Transfer In Conventional Cooling Towers. Joy.

And let’s not forget question 11:

Now question 11 requires some perspective. Reasonable men would look at a power plant, and ask in moments of deep introspection: If I put in a kg of coal here, how much electrical energy am I going to get out of the other side? Reasonable men will go ahead, put many, many kgs of coal, and publish their findings as performance characterstics.

Agent Solar, on the other hand, waves away such efforts as mere child’s play. Real Men, he contends, find expressions for the input of a power plant as a function of its output.

All is well, till that function happens to be a cubic polynomial. With two real, positive roots and one negative root. What does that mean? It means you drop in a kg of coal, and pray. Pray hard, and the output tends to the larger of the three roots. Else, be warned, sinner ! Your power plant could end up drawing power, if the equation is to be believed !! Behold Divine Retribution !

But the absolute best vignette is this one about trying to mug a formula:

 Mojan: Mapullais, I know what you are doing wrong.
Makam: Oh, peace, you got it, eh? what ?
Mojan: You are not trying to understand concepts from a scientific perspective. The Spirit of Inquiry is what is missing.

This is profound, and has gigantic implications. The Spirit of Inquiry is essential, in all applications.


Smileys! Floyd! Margherita!

September 19, 2007

In the unlikely and shocking event that you read Sleisha Cuppax Fundaes (w)Only but not Within / Without, please follow this link and read this story immediately.

Neha Vish has written a story that brings together pizza, instant messaging, arranged marriage, and Pink Floyd. And she’s done it in less than eight hundred words. Respect!