The contest for Indo-Pacific

Visiting the twitter handle of Rory Medcalf, I came to know of an extract from his recent book, ‘The Contest for the Indo-Pacific’. It is a long one running into seven pages. Worth a read. Found myself nodding my head several times.

A paragraph on mental maps:

Mental maps matter. Maps are about power. How leaders define regions can affect their allocation of resources and attention; the ranking of friends and foes; who is invited and who is overlooked at the top tables of diplomacy; what gets talked about, what gets done, and what gets forgotten. A sense of shared geography or “regionalism” can shape international co-operation and institutions, privileging some nations and diminishing others. The late 20th century notions of the Asia-Pacific and an East Asian hemisphere excluded India at the very time Asia’s second most populous country was opening up and looking east. This was not just unfair; it was untenable. The Indo-Pacific fixes that, although it is important to correct the assumption that this way of seeing the world is all about India: it is principally about recognizing and responding to China’s widening strategic horizons.

Does this explain China’s recent belligerence?

For China, in particular, there is a troubling thread between the domestic and the international. For Xi and the Communist Party to maintain their grip on total power, they have found it necessary to raise the Chinese people’s expectations that their nation will be great abroad, and will successfully handle resistance. Yet China’s expansive policies mean that its problems overseas are accumulating, and the chances of a major misstep are thus increasing. In turn, this puts Xi and the Communist Party at particular risk, because China alone among the great powers has staked much of the legitimacy of its political system on success abroad. When things go wrong, the Chinese system could suffer grievously — especially if crises of security, politics and economics intersect in ways hard to predict and impossible to manage.

This is intuitively correct and also accords with what one should expect after a pandemic and with the United States and Europe entering their ‘Fourth Turning’ (that is a subject of another post):

Contrary to turn-of-the-century dreams of globalization, economic interdependence is no longer just about breaking down borders and letting all states rise together: it has become a tool of power and influence, captured in the newly popular catch-all term, “geo-economics.”

This reminds me of pages 313-316 of Samuel Huntington’s ‘Clash of Civilisations’:

China and the US have entered a state of comprehensive struggle, amounting to full-spectrum rivalry. The situation could deteriorate further, through miscalculation or coercion. There have long been four well-known flashpoints in East Asia: Taiwan, the South China Sea, the East China Sea and the Korean Peninsula. But beyond these, there are now signs that conflict is increasingly conceivable in the wider Indo-Pacific. The US is only one of China’s potential adversaries: China-India and China-Japan relations will remain fraught and fragile. The flashpoints may not even be geographic, but could involve interventions in the information realm, such as cyber intrusions or disputes over freedom of expression. A conflict that begins in East Asia could escalate across the region, for instance, through distant naval blockades, cyberattacks and economic sabotage.

Reminds me of my point (3) in my previous blog post:

… given China’s great strategic weight and temptations toward hegemony, the Indo-Pacific idea is empowering for other countries, encouraging them to build new and defensive partnerships across outdated geographic boundaries…..

…..Whatever happens, nations need to build their resilience and harness all elements of their power for a long phase of contestation.

The notion of a ‘Middle Kingdom’ is untenable:

This is consonant with the ancient Asian concept of the mandala, originating from Hindu cosmology, which with many variations defined the universe according to circles and a central point. In the mandala model, as opposed to the “middle kingdom” worldview of China, centrality does not bestow superiority. Rather, the model recognizes a world of many places, many islands. In modern parlance, this equates to multipolarity, equal sovereignty and mutual respect — many belts and many roads.

The book may be worth buying.

Wheels of history never stop turning

From John Gray’s review of Alexander Lee’s book on Machiavelli

Machiavelli’s unpardonable sin was to reveal that, if they are genuinely practised and not just hypocritically professed, Christian humility, loving kindness and trust bring ruin to any state that honours them. In contrast, what Machiavelli called virtù – a pagan resolve “to do whatever may be necessary for the attainment of civic glory and greatness” – enables the state to achieve republican self-government, which he considered the supreme political good….

…If Machiavelli’s life and thought unfolded in any particular direction, it was known to him only in retrospect, if at all. He had no more foresight than anyone else. …

…His objection to Christian morality was that, taken seriously, it was incompatible with the necessities of power….

…He dismisses the very idea of perfection in ethics and politics. The two moralities he distinguishes are incomparable, and one is not better or worse than the other. Choose between them as you please, he tells us, and pay the price….

… The Christian gospel of universal salvation extended moral concern to sections of humankind the pagan world ignored. But this had a dark side, for it meant Christian values were binding on everyone. The early 19th-century Italian poet and philosopher Giacomo Leopardi believed this universalism produced what he regarded as the peculiar barbarism of Christianity, for it licensed the Church to destroy classical civilisation. Liberals claim a similar licence when they look forward to a universal civilisation ruled by personal autonomy and human rights. Here as elsewhere, liberal humanist values are Christian values in secular clothing.

Yet the greater danger at the present time is not that liberalism will destroy other ways of life. Rather, a hyperbolic liberal ideology is unravelling the liberal way of life itself. A generation of alt-liberals believes the liberal West is the epicentre of evil, injustice and oppression. In their moral frenzy they are not unlike the early Christians who destroyed the classical world. The irony is that the liberal world these neo-Christian zealots are bent on demolishing was itself a Christian creation.

As Machiavelli knew too well, the wheel of history never stops turning.

The business of fear

Few days ago, I wrote this post titled, ‘What is the agenda?’ dealing with the issue of why some feel it is appropriate to keep whipping up fears on the virus, when all objective evidence, notwithstanding some concerns, point to low incidence and lower fatality in people below 65, not obese and not having pre-existing vulnerabilities. This tendency to keep up the paranoia seems particularly acute in the technology industry. Mr. Bill Gates is leading by example.

Manu Joseph has an interesting explanation:

What is behind a successful fear is the same as what is behind all kinds of success—chance, which is our vague word for a complex set of numerous anonymous events. But there are some broad knowable factors at work in the success of fears, as in the case of GMOs or Aadhaar. For instance, the support of influential people who have an ideological interest in the transmission of a fear…..

…..American tech billionaires came next. Many of these billionaires have two qualities that are good conductors of fear—they seem more afraid of death than others, and they appear to constantly anticipate their own destruction in the rise of sentient machines or diseases. Also, they have deep respect for China, which manufactures their goods. Some of them, especially those who did not make physical goods, called for the US to imitate China and lock itself down. They transmitted their panic to a few influential journalists who were wondering what their own opinions were on the matter when leaders such as US President Donald Trump and British Prime Minister Boris Johnson expressed contempt for the idea of a lockdown. This set in motion a powerful Western humanitarian reaction in favour of a lockdown. [Link]

Earlier in March, in another column, Manu Joseph served up this hypothesis for the over-reaction of technology billionaires:

Usually, tech billionaires overreact to danger. There is a reason why they speak so much about artificial intelligence and machines taking over the world. Human beings tend to have an inherent need to be oppressed, to a reasonable extent. Resisting this oppression then becomes the primary preoccupation of life. But tech billionaires are not oppressed by anything human, so they see their oppressors in intelligent machines. And, of course, in lethal viruses and death. [Link]

Two years ago, in March 2018, in another piece Manu Joseph wrote about GMO crops. He wrote about the Greenpeace activist Mark Lynas who was against genetically modified crops and was the face of anti-GMO. Lynas confessed to using ignorant ideals and deceit successfully to defame GMO. He wrote the book, ‘Seeds of Science’ which released two years ago.

Manu Joseph had again briefly touched upon the book, ‘Seeds of Science’ in his column dated 26th April 2020, linked above. Two years ago, he had taken a deeper dive and it is a delight.

There are many quotable quotes:

… activists stayed with the fear because they are in the business of fear….

… Across the world, the educated middle class is generally against GMOs. The fear is primarily a belief that pretends to have a scientific explanation……………..

…..The success of prose today lies in confirming the biases of people, not in changing them.

Scientists get caught in facts and concepts, and they should learn an important lesson from the cesspool of activism—never try to tell a popular story without first creating a villain. [Link]

Manu Joseph is dead right that activists are in the business of fear and billionaires-turned-activists are no exception.

Two, we all need villains to set up and tell the story. I am glad Manu Joseph confirms it. Samuel Huntington mentions it in ‘The Clash of Civilisations’. Humans need the ‘other’ to hate, to define themselves.

At a less dramatic level, it is also easier to see now as to why it is far more impactful to be anti-something (anti-capitalism, anti-reforms, anti-establishment) than to be pro-something (pro-enlightened capitalism, pro-reforms and pro-liberalisation and pro-establishment). It just isn’t that impactful or exciting.

It is far more heroic, thrilling, exciting and seems more meaningful (and, these days, gets more ‘likes’) to be anti- than to be pro-.

A rant, a blistering critique and a withering criticism make for arresting reading than a purposeful critique replete with meaningful suggestions.

That is why reforms are hard-sell and revolutions are easy-sell.

Social problems have no solutions

Ed Balls, former official in the UK Chancellor’s office and one-time FT Journalist, reviews the latest book, ‘Deaths of despir and the future of capitalism’ by Anne Case and Angus Deaton. What struck me in the review is this:

The final policy section feels muddled — the authors slip into corporation, bank and politico-bashing with rather a Trumpian tone but little analysis or policy to back it up….Yet the authors are also at pains to stress that capitalism remains the answer and that inequality is a byproduct of economic incentives — “the problem is not that we live in an unequal society but that we live in an unfair society”. …As a result, the gap between their rhetoric and policy prescriptions feels achingly wide. …

…. Not only do their calls for a “modest” rise in the minimum wage and weaker patent protection seem insufficient, none of the policy discussion even tries to address the cultural arguments about community cohesion and pride upon which the authors pin so much earlier in the book. [Link]

Again, I am not surprised. Just recently, Raghuram Rajan had written a review of Thomas Piketty’s book which he praised as a scholarly work with no real solutions. I did a blog post on his review. In fact, some might say that his work, ‘The Third Pillar’ suffers from a similar problem, if not to the same degree.

Now, Ed Balls is disappointed with the solutions on offer from Angus Deaton and Anne Case. Honestly, short of a revolutionary change in the affairs of the economy and in the social order, there would not be an answer to the current problems. Second, such a revolution would throw up its own problems and, third, would soon begin to spawn similar problems as today’s revolutionaries become tomorrow’s elites and power-centres.

Remember the point that Morgan Housel made in this excellent blog post:

There’s a long history of power swinging between labor and capital. Each cycle is driven by policies designed to help the losing side eventually going too far, because no social group benefiting from policies will say, “OK, that’s enough, we don’t need any more help.” A new imbalance emerges enriching the old losers. Then the new losers say, “This isn’t fair, it’s time for new policies,” and the cycle repeats. It doesn’t matter whether you think this is good or bad. It’s just what’s happened. And it’ll keep happening, meaning we’ll never solve the wealth inequality issue.

More than the specific point he makes, as above, the real point is that there are no easy answers for social problems. Or, for that matter, for economic problems. May be, somewhat better.

But, few experts are honest enough to admit it. They will be out of work and out of lucrative speaking and writing contracts.

On the scholarly review of a scholarly work

Several friends have forwarded Raghuram Rajan’s review of Thomas Piketty’s latest, ‘Capital and ideology’. The FT’s subtitle of the review is that it is a scholarly work devoid of solutions. Well, most scholarly works would not escape such criticism. Humans are good at creating problems and/or at diagnosing problems but not very good at coming up with solutions. They emerge with luck and/or serendipity which usually follow sustained effort and doing and fine-tuning. Arm-chair solutions are rarely neat, pragmatic, workable and wrinkle-free.

So, altough it is a good review overall, it can also be faulted. What Piketty means by ideology could be political economy. Technology of production and prevailing ideology combined with political power balance must have contributed to trends in inequality.

Rajan writes this:

So why, then, in ostensibly democratic societies do voters not do more to curb high and increasing levels of inequality? The Marxist explanation was “false consciousness” — essentially, the working masses did not understand where their true interests lie. Piketty does not address this question directly but hints at a more prosaic answer: they merely lack the data.

I remember reading in Tirthankar Roy’s work, ‘The Economic History of India (1857-1947)’ that democracies actually may not be the best form of government to address inequality. To be clear, Roy does not state this. I am interpreting him. He writes:

…. Ethnic diversity tends to weaken the impetus to spend on public goods, such as education. In one model, developed in the context of a democratic setup, this outcome follows from assuming that the utility derived by one group from public goods depends negatively upon the utility that others derive….

The reference he cites is by Alberto Alesina, William Easterly and Reza Baqir: ‘Public goods and ethnic divisions’ published in 1999. So, democracy may neither be a necessary nor a sufficient condition to address inequality.

There is a useful reference to the work of his colleague:

As my colleague Eric Zwick and his co-authors show in a paper published by the National Bureau for Economic Research, businesspeople moved towards corporate structures such as partnerships, where what was earlier shown as wage income was now misleadingly shown as profits or income to capital. Correcting for this, they find that most top earners in the US today are the self-made “working rich”, such as lawyers, doctors and car dealers, deriving their income from their skills rather than their physical or financial capital.

Lawyers, doctors and car dealers… h…mmm

Dr. Rajan must read, if he has not done so, ‘The Captured Economy’ by Brink Lindsey and Steve Teles [Link]. One is a libertarian and one is a liberal (as understood in America). So, they provide a ‘liberaltarian’ framework. They find that regulatory or legislative capture by professions and occupations is one of the ways that others are kept out and inequality is perpetuated. The professions they cover include dentists, lawyers, doctors and even hairdressers and beauticians. It is all about how occupational licensing is used to stop competition and keep ‘rents’ to themselves.

It is not entirely true, therefore, that they derive their income from their skills rather than from physical or financial capital. Perhaps, that is true. But, they do derive rents from their ‘regulatory capital’. In other words, even if profits or returns to capital are correctly reckoned to be income, those ‘incomes’ include rents which can be deemed to be the equivalent of returns to (uninvested) capital. It is worse, in that sense.

The point that Dr. Rajan makes about rampant tax evasion meant that the world never really ran the ‘high progressive taxes’ experiment in the Seventies is well made. In any case, it would be too much of an over-reach that high progressive income taxes was responsible for economic growth post-WW II. That would be an elementary mistake – the worst form of partial differential analysis one could make. Post-WW II reconstruction meant that economic growth was a low-hanging fruit. If Piketty made that claim – as Dr. Rajan’s review suggests – then we have to wonder…

In all, it is a scholarly review of a scholarly book, I must say. I have not read Piketty’s book, let me clarify.

In conclusion, I shoud say that the book, ‘Captured Economy’ is an important read for all those who wish to tackle inequality seriously rather than advance ideologically motivated but impracticable solutions. In the last chapter, the authors do their best to offer specific solutions as to how the Governments (Federal and States) in the United States could actually make the economy less captured. That cannot be said of many authors.

An inspiration to begin the new decade

MSS_Manohar

Plagued by arthritic pain and diabetic complications, MS would often complain bitterly to Sadasivam about her cruel fate. Sadasivam would then quietly tell her to think about Mahema and Manohar—and MS would quickly fall silent, and prayerful.

That was in recollection of a 1972 lorry-car collision that left Mahema, at thirty-three, paralyzed below the neck. In the hospital, as Manohar wrote in a book on their love affair, ‘her head was shaven, her scalp slit at two places above her ear lobes, and two holes drilled in her skull to suspend a traction weight’. She lost control over all bodily functions, faced the constant threat of infection and spasms, needed twenty-four-hour attention: somebody had to hold the glass to her lips when she wanted a drink of water.

Progressively, Manohar’s ability to help disappeared as he fought a prolonged battle of his own against retinitis pigmentosa, a degenerative condition that leads eventually to total blindness. When I met him in early 2002, he could not see me. He could not make out the front and back of a book, so he inscribed his book to me on the back flyleaf upside down. In the midst of such appalling tragedy, this couple sustained a cheerfulness and optimism and zest for life that astonished those who met them.

Dr S. S. Badrinath of Shankara Netralaya, Madras, gave Manohar a pair of specially made Australian glasses. They allowed him a narrow, if rather dim, beam of sight over a tiny dot of space if the paper was held close to his eyes. But he had to remove the glasses every other minute to let the moisture from the eyes evaporate. Putting on and taking off the glasses hundreds of times, taking the paper right up to his eyes for every stroke of the pen, seeing only three or four square millimetres at a time, he accomplished this portrait of his ‘MS Amma’ (see above). The labour of love was one more reason to be joyful about life. This man and his wife deserve every award there is for grit and courage.

Source: George, T. J. S.. M. S. Subbulakshmi: The Definitive Biography. Aleph Book Company. Kindle Edition.

STCMA – 24th November 2019 edition

CNN has a long article on the travails of the pension system in The Netherlands in a world of zero to negative interest rates [Link]

Indonesia supposedly has an advantage in a world where fashions are disappearing fast (or changing fast?). I am not sure I understand this world, however:

The journey of an Adidas or Nike garment produced by Tuntex in Indonesia, for instance, can begin almost 4,000 km away in the company’s textile plant in Taiwan. The fabrics can take nearly a week to reach the sewing factories. The model worked well enough when retail stores dictated trends and operated in clearly delineated seasons. But when clothing retailers need to react to a sudden trend driven by Instagram, it creates a daunting barrier. [Link]

Simon Kuper lists eight things we could learn from beautiful minds. I like the list [Link]. Good read.

Brilliant article in ‘The Guardian’ (ht: my former student Arjun) on what home delivery mean to the world and what ‘last mile’ really means:

Progress today consists of having our food and materials wing their way to each of us individually; it is indexed to our immobility. ….

Implicit in this fixation with time is the thesis that the opportunity cost of regular shopping is too high – that the hours spent driving to the better bookstore in the next town can be spent doing something more valuable. …..

Of course, the principle of opportunity cost assumes that we will earn the value of that fee back in some way in those 12 minutes – whereas the truth is that we are most likely to squander them on Instagram. The internet promises us time, then takes it right back….

…. Online, each of us functions as a one-dimensional identity: as consumer or vendor, to consume or sell in our own bubbles, unaware of the other except as a clump of anonymised data. Even with free shipping, that is the transaction cost. …

The final triumph of home delivery will be when we forget that anything is being delivered at all. [Link]

This is similar to an article in New York Times that I had blogged on earlier, I think. The NYT article appeared in October. The story in ‘The Guardian’ appeared few days ago. My feeling is that the piece in ‘The Guardian’ is more effective. It forces reflection.

Good article in New York Times on whether reducing travel via airplanes does good things for the environment or not. I love such articles because they point out the flaws of lazy activism partly also based on ‘holier than thou’ attitudes. Remember Melisa Kwasny’s beautiful piece blogged here.

The relationship between the Czech Republic and China – good to see the changes happening. [Link]

Some very interesting recommendations for reading here.