The choices we make

Lives matter

The above chart is from this reasonably well-written article in Bloomberg on why Britons seem to favour lockdown more than opening up. It has some interesting behavioural explanations. Not unreasonable.

The counterpoint to lives saved in lockdown is not about avoiding an economic recession. It is also about lives lost due to other causes. Now, sample this one from ‘The Economist’:

Lives matter too

An informed (no doubt, tough and tragic) debate and choice is between lives (saved by locking down) and lives (saved by resuming economic activity) and how best to balance both.

Such a reasoned debate and hence reasonable decisions have been precluded by the frenzy displayed by many media outlets around the world

We are all Japan now

By now, enough has been written about the shifting global supply chain dynamics that readers should not expect to take away anything new from this post. If they do, that would be as much due to their creativity as to the content of this post. I am putting this up here just to remember the origins of this discussion about two months ago, nearly.

Noah Smith wrote on March 24th that offshoring left the United States unprepared for the virus:

Economics predicts that businesses decide what to produce based on what makes a little bit more profit. The siren song of marginal profit drew the U.S. relentlessly away from mask production….

… If businesses will always make decisions on the margin, then it’s government’s job to insure the country against big shocks such as pandemics and wars….

The U.S. could have used trade barriers and government support to make sure that the entire supply chain for medical equipment stayed in the country….

… The coronavirus crisis should cause advocates of unrestricted free trade to rethink their blanket opposition to protectionism. [Link]

The Chief Economist of EBRD echoes Noah Smith here:

… almost three-quarters of blood thinners imported by Italy come from China. The same is true for 60 per cent of antibiotics imported by Japan and 40 per cent imported by Germany, Italy and France. …

… This means building in redundancy and perhaps even moving away from the practice of holding near-zero inventories. Costs will certainly rise but, in the post-Covid world, concerns about supply chain fragility will come right after those over cost. Firms will be expected to assess resilience of their second and third-tier suppliers, too. [Link]

This ‘Wall Street Journal’ article on supply-chain financing suggests that there is more to it than what meets the eye. It is not simply a question of borrowing from a bank to pay your supplier. These borrowings are securitised. Buyers – i.e., companies who borrow to pay suppliers – report them differently, etc. What a tangled web, we weave when we financialise things?! A slightly more detailed explanation of supply chain financing is here.

In the end, the accent on margins and wafer-thin inventory that put profitability ahead of safety depended on an inter-dependent and smoothly functioning world. Geopolitics was beginning to change that partly in response to rising domestic inequality and worker insecurity. Voters had to be heeded.

The virus, by putting lives on the line, has lent a huge dose of legitimacy to the moves to re-shore production. In the end, as this article puts it well, “we are all Japan”:

Japan has always consciously viewed its economy as the sum of its companies, their tangible assets and intellectual property, says a retired official from the Ministry of Economy, Trade and Industry. But it has tended, to the intense frustration of investors, to take a much broader view than other countries of which ones needed to be protected to keep that economy intact.

Japan, says the senior executive of one of the country’s largest companies, has long built its policy around the anxieties of an island: coronavirus is now requiring everyone else to do the same. [Link]

The journalist who wrote the above piece has anticipated well:

Manfred Weber, a senior German conservative and head of the centre-right EPP grouping in the EU Parliament, told Germany’s Welt am Sonntag newspaper that he was in favour of declaring a twelve-month ban for Chinese investors who want to buy European firms. [Link]

This time is different

Bloomberg has a fairly useful interview with the authors of ‘This time it is different’ – Rogoff and Reinhart.

Key messages:

China might average 1% real growth in the next few years.

This pandemic is a huge negative productivity shock.

Inflation can appear in few years.

Central banks are owned by governments and they are therefore subsidising the economy on behalf of the governments.

Financial markets are disconnected from economic reality.

The paradoxes of liberalism

I am devouring John Gray. It will be stating the obvious to say that I am impressed. He makes me think and he makes me re-think and learn. Not much else can be asked of a writer/thinker/scholar.

In a piece written in October 2018, he dissects the contradictions in ‘liberalism’, in the context of the fact that university graduates voted for Jeremy Corbyn while John Stuart Mill, whom many invoke today as the torchbearer of classical liberalism, actually wanted a higher weight for the votes of university graduates!

So, with that backdrop, read the extracts below from this article [emphasis mine]:

The ironies here are multiple. If Labour had won, it would have presided over an eclipse of liberal values. Equipped with the resources of British state, the alt-Left party Corbyn has created would have been in a position to condone antisemitic racism and endorse terrorist movements. At the same time, the erosion of freedom of expression in universities would intensify. The progressive consensus would become immovably entrenched. Soon the contestation of received truths Mill celebrated would be barely a memory.

 At this point, a fork in Mill’s liberalism becomes visible. If only one set of values can be grounded in science, why allow others to be promoted in centres of learning? There can be little reason for giving anyone who rejects scientifically established truth equal freedom to speak or shape collective decisions. In effect, this was the rationale of Mill’s proposal for plural voting. But if those who base their values in a science of society are given overriding weight and influence, the result will be intellectual uniformity of the kind Mill attacked in On Liberty….

…The very idea that humans share a common historical destination is a remnant of monotheism. Reframing the universal clams of western religion, Mill’s secular liberalism – like his science of society – was not the result of any process of rational inquiry but an expression of faith.

Viewed historically, the liberal era was a moment in the aftermath of post-Reformation Christianity. If Europe had not been Christianised, it would most likely have been shaped by the polytheistic and mystery cults of the ancient world. Today it might resemble India. A universalistic, evangelising impulse would be weak or absent. Whether it would have been better or worse – or both – the West would not have produced political faiths like liberalism, that aim to project their values throughout the world.

Core liberal values, such as freedom of belief and expression, are by-products of early modern struggles within Christian monotheism. This fact could be passed over as long as successive versions of liberal values were underwritten by Western power. In Mill’s day they rested on European colonialism, and following the collapse of communism on the supposed triumph of free-market capitalism. The illusion persisted that the rise of liberalism revealed a universal law of human development.

In the event, a liberal world order has lasted only as long as Western hegemony. Today, non-Western powers are pursuing different paths of development, while much of the West has become the site of a paralysing culture war between hyper-liberal ideology and the forces of populism.

The time has passed when the West could dictate the terms of human development. Yet the delusion persists that the growth of wealth will give liberal values another lease on life. The sub-Marxian mantra that expanding middle classes will demand liberal freedoms as societies become richer is repeated endlessly in business gatherings and academic seminars….

.… Never mind that that middle-class graduates are demanding that liberal freedoms be shut down in the institutions that once embodied them. Best not dwell on such facts, for they suggest that a liberal world order was an historical accident that cannot be repeated. [Brilliant!]

… Anyone who looks to classical liberal thinkers to deliver the West from its present difficulties is fixated on an irretrievable past.

It is possible to envision a stoical and realist liberalism that would accept that freedom and toleration must survive in a hostile or indifferent world. Liberalism would be recognised to be a particular form of life, like the others that humans have fashioned and then destroyed, but still worth defending as a civilised way in which humans can live together.

In practice a stance of this kind is hardly possible. Liberals cannot do without the faith that they form the vanguard of an advancing way of life. The appeal of John Stuart Mill is that he allows them to preserve this self-image, while the liberal world continues to evaporate around them.

This is a near-perfect companion piece on post-truth liberalism by John Gray, published a month earlier in September 2018.

History is cyclical and not accretive

John Gray invokes the Russian Civil war to show that the Covid-19 pandemic is only mildly apocalyptic.

In any case, apocalypse, as originally understood from the theistic world in which it originated, marks the end of time:

In the theistic religions from which the idea is derived, apocalypse means a final revelation that comes with the end of time. Elected during the Roman plague of 590 from which his predecessor Pelagius II had died, Pope Gregory the Great wrote: “The end of the world is no longer just predicted, but is revealing itself.”

But the world did not end; the four horsemen came and went, while history stumbled on. In the eschatological sense in which Gregory understood it, there is no such thing as apocalypse. But if it means the end of particular worlds that human beings have fashioned for themselves, apocalypse is a recurrent historical experience. [Link]

Indeed, it redounds to his credit that, in contrast to many pundits and conventional wisdom, he did not see the collapse of the Soviet Union in 1989 as something that heralded a new beginning but merely as a return to the old. In other words, he did not see history as proceeding in a secular or linear fashion. This is what he had written then:

What we are witnessing in the Soviet Union is not the end of history, but instead its resumption — and on decidedly traditional lines. All the evidence suggests that we are now moving back into an epoch that is classically historical…Ours is an era in which political ideology, liberal as much as Marxist, has a rapidly dwindling leverage on events, and more ancient, more primordial forces, nationalist and religious, fundamentalist and soon, perhaps, Malthusian, are contesting with each other…If the Soviet Union does indeed fall apart, that beneficent catastrophe will not inaugurate a new era of post-historical harmony, but a return to the classical terrain of history, a terrain of great-power rivalries, secret diplomacies and irredentist claims.

This is important:

That a reversion to history as usual should be unthinkable testifies to the mind-numbing power of secular faith. While progressive ideologies are often divided into reformist and revolutionary varieties, the difference is not fundamental. Both rest on the faith that history is an accretive process in which meaning and value are conserved and increased.

He is right. So-called progressive ideologies – liberal (Left) or revolutionary (ultra-left) see history as an accretive process – that is, linear or secular in which each new episode or event merely builds on the old. It never returns.

This view is false.

I am able to relate to John Gray much better partly because Eastern philosophies and my familiarity with them do not say so. I am a believer in cycles, mean reversions than in linear progression.

Even in the world of  finance, which I inhabited actively for more than two decades and now on and off, if values are always conserved and increased, bubbles can only get bigger and bigger over time. It also tells us that many investment strategists in investment banks and in stock broking institutions are linear in their thinking.

I am able to see this linearity as the dominant western thinking and hence their inability to cope with shocks of this nature like covid-19 pandemic. This is not accretive. It sets them back. That is not possible in their mental models.

As I read ‘Fourth Turning’, the problems with this linear thinking become more apparent.

This attitude is not so much about forgetting history but forgetting that historical cycles  play themselves out repeatedly. Regardless of whether we forget or remember, cycles are cycles. They come back. History is cyclical.

Indeed, John Gray is brilliant in this line:

Progress occurs in interludes when history is idling.

He concludes that the pandemic is apocalyptic as many other past ‘apocalyptic’ events have been but none has been yet apocalyptic in the religious sense of the word. He thinks that the pandemic is milder than most apocalyptic events.

It is a matter of detail and is not fitting with the discussion of how history plays itself out to talk about two specific cases here. Many dream that the pandemic would bring back cleaner air and water. But, to the extent that the pandemic has  created a fear of public transport, cars could stage a comeback and so will fossil fuels. Not good.

Second, technology may enable online education. But, the education of an individual is not about finishing a syllabus and passing an exam. It is a socio-cultural and interpersonal experience. If campuses become a relic of the past, then education as an endeavour will be seriously undermined. It is not good for human evolution.

But, as one of the commentators notes below the article on Pepys’ diary, all of these predictions might be unconsciously over-weighting the present situation and predicting that things would never be the same again. They may never be the same again in some areas or in some aspects but not for all things and in all places.

Samuel Pepys who maintained a diary (He kept the diary between 1660 and 1669) during the Great Plague of London in 1665-66, wrote this on 31st December 1665:

‘To our great joy, the town fills apace, and shops begin to be open again. Pray God continue the plague’s decrease! for that keeps the Court away from the place of business, and so all goes to rack as to public matters, they at this distance not thinking of it.’ [Link]

Then again, it depends on one’s attitude towards life, death and uncertainties. May be, even in the West, they believed in a more cyclical than secular view of the world and hence could bounce back. May be, we are made differently now or have become different now and hence may not bounce back. I don’t know.


Amidst this discussion on whether the covid-19 pandemic is an apocalyptic event or not,  the tiny bits of details on the Russian civil war are chilly:

Russian may be the only language that contains two words for cannibalism. One — trupoyedstvo — denotes the eating of corpses, the other — lyudoyedstvo — killing in order to consume the victim. According to some reports at the time, public markets for human flesh appeared in famine-struck areas in which body parts from cadavers in the latter category commanded higher prices on account of their freshness. [Link]

There is a bit more on the Russian civil war in the original piece. You can read it there.

A virus subverts global health

… data from India’s National Health Mission indicate that there was a 69% reduction in measles, mumps, and rubella vaccination in children, a 21% reduction in institutional deliveries, a 50% reduction in clinic attendance for acute cardiac events and, surprisingly, a 32% fall in inpatient care for pulmonary conditions in March, 2020, compared with March, 2019. Similar reports are emerging from other countries, including disruptions to insecticide-treated net campaigns, access to antimalarial medicines, and suspension of polio vaccination….

….there is barely any mention of the role of syndromic diagnosis (clinical diagnosis based on the constellation of symptoms and signs which are a hallmark of infection); the role of community health workers, primary care nurses, and doctors; and the role of community engagement. Constrained health-care systems already short of money, beds, equipment, and staff, are unlikely to be able to provide treatment for COVID-19 patients unless they reallocate scarce resources. And so, the combined effect of the reduced access to, and availability of, essential health care might lead to increases in deaths unrelated to COVID-19….

…Wearing masks at home for the ill person and caregiver, washing hands when possible, practising coughing etiquette, and physically distancing older people and those with comorbidities are a few of the non-intrusive interventions that are possible without disrupting the intrinsic fabric of society….

… The policies of widespread lockdowns and a focus on high-technology health care might unintentionally lead to even more sickness and death, disproportionately affecting the poor. And, if such policies are mandated by global consensus, then global financial institutions must write off outstanding debts from low-income countries and finance the needed resources to underwrite the economic recovery of these countries. [Link]

Extracts from an article in Lancet by Vikram Patel and Richard Cash (ht: Sekhar Bonu)

The world needs an anti-Sapien vaccine

I enjoyed writing my column for Mint, published online on 4th May and in the newspaper on the 5th May. The column header should have been “Vaccine or cleaner environment? You cannot have both.”

Most of us are now happy about the cleaner environment, cleaner air and clear skies that the world is experiencing, although it is coming at the cost of economic activity, the absence of which, unfortunately, hurts the poor and low income households more than the rich.

Of course, it is also true that a polluted environment too hurts the poor and the low-income earners more for they have little savings to deal with the adverse health outcomes that pollution creates.

Further, this story reminds us that even as carbon dioxide emissions are lower (2.6 billion metric tonnes not emitted), April was one of the warmest on record:

This past April equaled the warmest on record. Global temperatures were 0.7 degrees Celsius warmer than the average April between 1981 and 2010, according to Europe’s Copernicus Climate Change Service. [Link]

That is a reminder that our love for environment has to sustain for a long period involving actions on multiple fronts, to reverse global warming.

However, limited evidence of healing is here. Ms. Pilita Clark of the FT writes:

It was while I was on one of those lopes, down the local high street, that a more profound realisation dawned. Shop after shuttered shop existed to sell stuff for a rushed, commuting office life that I — and millions like me — may never lead again. [Link]

She also correctly recalled that modern culture is about spending

money we don’t have, on things we don’t need, to create impressions that won’t last, on people we don’t care about?

On reading these lines, I made a mental note to complete watching ‘The Century of the Self’ – a four-part documentary available on BBC here, here, here and here. I have watched the first two parts.

Daniel Humm, the owner of one of the world’s best restaurants, Eleven Madison Park (EMP), said he might not reopen and if he did, he would do the following:

If EMP were to reopen, Humm says, he will continue to use his restaurant to feed the homeless and hungry, along with the very fortunate. “The infrastructure to end hunger needs to come out of the restaurants. Any way that EMP reopens—and it’s like a blank canvas right now, we would need to redefine what luxury means—it will also be an opportunity to continue to feed people who don’t have anything. [Link]

One also sees plenty of creativity being unleashed in captivity. In the sphere of Carnatic Classical Music, see this, this, this, this and this. All this is making the tedium of the isolation bearable and, more importantly, point to a different way forward, if we could imagine it. But, will we?

Pilita Clark, who has tasted frugality, is not so sure herself:

The question is, now that people like me have had a taste of frugality, how long will it last once a semblance of normality returns? Will there be a pent-up splurge of excess?

She spoke to an artist by name Michael Landy, who catalogued and burnt everything he owned, in a public display in 2001. He said it had left him with two permanent behavioural changes:

“It changed me as a consumer, most definitely,” he said. “I have a lot less things than I had before.” He also became much more aware of what he was buying, he said, and prone to periodic clear-outs. [Link]

So, it does change some people for the better, for good! The question is whether enough people change by enough.

In the BBC article linked above on how the virus-induced lockdown has been good for the bees:

 …. like with all the other environmental changes we’re seeing now, any long-term benefits for bees would depend on these changes being carried forward as lockdowns lift. For some, like leaving verges wild, the change may not be so hard to maintain. For others, like keeping traffic volumes low, the changes would need to be more systemic.

One change that Perkins anticipates carrying forward, though, is people’s reconnection with nature. “They are beginning to realise how their mental health and wellbeing is supported by nature – particularly by bumblebees, which are so iconic and beautiful and buzzy,” she says. “I hope that remains after lockdown.”

Recall what Gillian Tett wrote on the 11th March this year in FT:

When I emerged from my brush with meningitis in Singapore, I felt so giddy to be alive that I declared I would try to feel grateful each day — and never “sweat the small stuff” again. Sadly, that pious resolution probably lasted about a month; humans are hard-wired to lose perspective amid the daily grind. [Link]

She deserves full marks for honesty. As she writes later in the same column, humans need periodic reminders to stay the ‘enlightened’ or ‘reformed’ course. But, equally, there are, perhaps, far more powerful reminders to go back to the easier and familiar ways and ‘sweat the small stuff’. That is the power of the world of illusion we live in.

That is why it is not just enough to appreciate the silence, the blue skies, the birds and bees, sitting in an apartment balcony that is part of one’s fast paced life that has temporarily slowed. When it all resumes, we may get out of the balcony, take the fast elevator down and the next flight out…

In a brilliant piece for ‘The Statesman’, John Gray assesses the likelihood of a return to a ‘better world’:

With all its talk of freedom and choice, liberalism was in practice the experiment of dissolving traditional sources of social cohesion and political legitimacy and replacing them with the promise of rising material living standards. This experiment has now run its course.

So, is there hope for an alternative path? Well, not quite:

This does not mean a shift to small-scale localism. Human numbers are too large for local self-sufficiency to be viable, and most of humankind is not willing to return to the small, closed communities of a more distant past.

John Gray channels John Stuart Mill here:

Mill recognised the danger of overpopulation. A world filled with human beings, he wrote, would be one without “flowery wastes” and wildlife. 

Again, a dose of reality:

In many ways this is an appealing vision, but it is also unreal. There is no world authority to enforce an end to growth, just as there is none to fight the virus. Contrary to the progressive mantra, ….., global problems do not always have global solutions. 

Does this give a glimpse into how we would behave once the vaccine is at hand?

The most harrowing of Ballard’s experiences as a child in 1940s Shanghai were not in the prison camp, where many inmates were steadfast and kindly in their treatment of others. A resourceful and venturesome boy, Ballard enjoyed much of his time there. It was when the camp collapsed as the war drew to a close, he told me, that he witnessed the worst examples of ruthless selfishness and motiveless cruelty. 

John Gray concludes and I concur:

Dealing with the virus requires a collective effort that will not be mobilised for the sake of universal humanity. 

I will paraphrase him:

Ushering in a better world requires a collective effort that will not be mobilised for the sake of universal humanity. 

The bailout to the airline industry in the United States and the terms on which it was secured, the policy measures that central banks around the world have unleashed, the pervasive fear of emerging out of lockdown and the insouciant (ht: Srinivas Thiruvadanthai) reaction in stock markets around the world all suggest that the collective effort will not be mobilised for the sake of universal humanity.

Many are dazzled by the possibility of a cleaner environment, cleaner air and water; some reflect on it but only a few will act on it, eventually.

If a vaccine is found, many would interpret it as a signal (from God) to continue with their old ways; the ‘few’ will become a trickle.

Uncertainty keeps humans grounded; the false promise of certainty has influenced them to telescope experiences of multiple generations into one or two. They will feel vindicated with a vaccine against the virus and stick to ‘business as usual’, per pre-Covid-19.

That is why all other living organisms and the elements of nature need a vaccine to protect themselves from Sapiens.