Tuesday, February 28, 2017

Gandhiji's speech at IISc, Bangalore. July 12, 1927.

Gandhiji's speech at IISc, Bangalore. July 12, 1927.

"I was wondering where do I come in? There is no place here for a rustic like me who was to stand speechless in awe and wonderment. I am not in a mood to say much. All I can say is, that all these h
uge laboratories and electrical apparatus you see here are due to the labour, unwilling and forced, of millions. For Tata’s thirty lakhs did not come from outside, nor does the Mysore contribution come from anywhere else but this begar-1 world. If we are to meet the villages and to explain to them, how we are utilizing their money on buildings and plants which will never benefit them, but might perhaps benefit their posterity, they will not understand it. They will turn a cold shoulder. But we never take them into our confidence, we take it as a matter of right, and forget, that the rule of ‘no taxation without representation’, applies to them too. If you will really apply it to them, and realize your responsibility to render them an account, you will see that there is another side to all these appointments. You will then find not a little but a big corner in your hearts for them, and if you will keep it in a good nice condition, you will utilize your knowledge for the benefit of the millions on whose labour your education depends. I shall utilize the purse you have given me for Daridranarayan. The real Daridranarayan even I have not seen, but know only through my imagination. Even the spinners who will get this money are not the real Daridranarayan who live in remote corners of distant villages which have yet to be explored. I was told by your professor, that the properties of some of the chemicals will take years of experiments to explore. But who will try to explore villages? Just as some of the experiment in your laboratories go on for all the twenty-four hours, let the big corner in your heart remain perpetually warm for the benefit of the poor millions.

I expect far more from you than from the ordinary man in the street. Don’t be satisfied with having given the little you have done, and say “We have done what we could, let us now play tennis and billards.” I tell you, in the billiard room and on the tennis court think of the big debt that is being piled against you from day to day. But beggars cannot be choosers. I thank you for what you have given me. Think of the prayer I have made and translate it into action. Don’t be afraid of wearing the cloth the poor women make for you, don’t be afraid of your employers showing you the door if you wear Khadi. I would like you to be men, and stand up before the world firm in your convictions. Let your zeal for the dumb millions be not stifled in the search for wealth. I tell you, you can devise a far greater wireless instrument, which does not require external research, but internal,-and all research will be useless if it is not allied to internal research,-which can link your hearts with those of the millions. Unless all the discoveries that you make have the welfare of the poor as the end in view, all your workshops will be really no better than Satan’s workshops, as Rajagopalachari said in joke. Well, I have given you enough food for thought, if you are in a reflective mood, as all research students ought to be."

Via Aparna Krishnan in https://www.facebook.com/rahul.banerjee.146?fref=pb&hc_location=friends_tab&pnref=friends.all
The speech can be found here around page 244 http://www.mkgandhi.org/ebks/voice_of_truth.pdf

Sunday, February 26, 2017


 A new book Guge:Ages of gold https://youtu.be/MXprFk95taM
A review of David Schulman Submerged in the cosmic kingdom. Excerpt:
"Duality is our ingrained habit, antimonies and polarities the foundation of thought itself. From its earliest beginnings, Buddhism has had an empirical and skeptical streak; the Buddha is said to have told his disciples, “Don’t take my words on faith; experiment on yourselves.” But our default awareness is hardly luminous with insight; if you’re like me, you live mostly in an encompassing fog. So whaT are we to do? Will we ever taste the truth?......

So if you are wondering what it might feel like to turn yourself into Vairocana, a dense yet empty mass of light and sound, also defined as insight, that is the stuff of all reality as well as our only means of hearing and seeing what is real—you could start by opening this book."
But the book is expensive, about 60 American dollars.

Friday, February 24, 2017

Stories of some passengers in Indian Railways

"The Unreserved is an inquiry into the lives of passengers who use the Unreserved Compartment, the cheapest way to travel across India on the Indian Railways system. The film portrays the passengers’ aspirations, efforts and opinions through conversations and personal stories. "

Thursday, February 23, 2017

Kenneth Arrow RIP

not many tributes are coming from main stream ecomists, perhaps due to the dubious status of general equilibrium theory, of which he is one of the contributors and won Nobel Prize for it.
Here is one in a series of four The greatest living economist has passed away:Notes on Kenneth Arrow Part1This part is about 'Srroe's Impossibilty Theorem' and the author says "The conditions I gave above for Arrow’s Theorem are actually different from the 5 conditions in the original 1950 paper. The reason is that Arrow’s original proof is actually incorrect, as shown by Julian Blau in a 1957 Econometrica. The basic insight of the proof is of course salvageable."
Another by Bill Black in Naked Capitalism Kenneth Arrow's ( Ignored) Impossibilty Theorem is about General equilibrium theory, and elaborates on a quote of an obituary in NYTimes:
"[Arrow] made clear, his powerful conclusions about the workings of competitive markets held true only under ideal — that is to say, unrealistic — assumptions.
His assumptions, for example, ruled out the existence of third-party effects: The sale of a product by Harry to Joe was assumed not to affect the well-being of Sally — an assumption routinely violated in the real world by, for example, the sale of products that harm the environment."  And goes on to say 
"Arrow was brilliant and well meaning. We celebrate his life and mourn his passing. The opportunity cost to our field is how much he could have accomplished had his research not been so distorted by neoclassical dogma."
From an interview last year "Arrow himself has embraced many of the criticisms made against the general equilibrium theory, calling it “empirically falsified.” Over the years he has made further contributions to the theory, incorporating into it such elements as uncertainty and allocation of risk for the first time." https://promarket.org/there-is-regulatory-capture-but-it-is-by-no-means-complete/
P.S. More on general equilibrium theory https://afinetheorem.wordpress.com/2017/02/27/kenneth-arrow-part-ii-the-theory-of-general-equilibrium/
"But it does mean that individual rationality as the sole paradigm of economic analysis is dead: it is mathematically proven that postulates of individual rationality will not allow us to say anything of consequence about economic aggregates or game theoretic outcomes in the frequent scenarios where we do not have a unique equilibria with a well-defined way to get there (via learning in games, or a tatonnament process in GE, or something of a similar nature).  Arrow himself(1986, J. Business) accepts this: “In the aggregate, the hypothesis of rational behavior has in general no implications.” This is an opportunity for economists, not a burden, and we still await the next Arrow who can guide us on how to proceed."

Michael Hudson

posted this before. Posting again from Naked Capitaliam for the discussion Michael Hudson: Why Failing to Solve Personal Debt and Polarization Will Usher in a New Dark Age

Wednesday, February 22, 2017

Global and local citizens

"But what happens when the welfare of local residents comes into conflict with the wellbeing of foreigners – as it often does? Isn’t disregard of their compatriots in such situations precisely what gives so-called cosmopolitan elites their bad name?"
Says Dani Rodrik in recent article.
People like me have benefited from globalisation, travel to different counties for jobs and conferences, and now do not like Brexit or Trump. Our mobility will be affected, finding opportunities for our children from jobs to husbands or wives with a green card and such, and some of us are now suspicious of this democracy, the rule of the mobs. This is what I constantly find from various academics in Ind whose salaries have gone up many more times than the coolies working in the gated institutes they work. Those outside are similar. A progressive writer I know has finally manage an Indian-American husband for her daughter. Apparently dowry was some thing like a hundred crore rupees before dementization but she managed without any discussion of dowry since she is a well-known writer with lots of caste connections in America. Now there are celebrations with guests from various countries arriving in India in fancy dresses. Sort of assertive mating I guess. And do on.
How are the local elites doing? They are either committed Marxists or Amdkarites  or neo-liberals in guise of academics or some name which is popular somewhere in the USA like libertarian. An Ambdkarite wrote, a teacher in a college in Andhra, wrote recently
  "ఒకప్పుడు గొప్ప గొప్ప ఉద్యమాలు టిచెర్లే నిర్మించారు."
meaning that " Once upon a time, all great movements were constructed  by teachers". We are not given any names or numbers or times when this happened. The idea seems to be that if one is an Ambedkarite, one is supposed to react in some way to the local news which was about teaching in local languages in this case I think. Similarly a Marxist of a particular denomination reacts as they assume they are supposed to. No references, no data, no time periods are given. At one time communists were guided by either Moscow or Peking, check for example this article on the communist split A.G. Noorani . Now that there is no guidance, they go by what they are supposed to say.They think they are justified because they are not writing for their benefit but for the benefit of the oppressed.
And so on. Ambedkarites do not have a similar background and many of them seem lost in polemics. There are rare exceptions like D.R.Nagaraj, but none of the current Ambedkarites even mention him.
Now I see local elites of Indian origin Melbourne worrying about how many functions to organise for the marriages of their children and in which countries, the guest lists and so on. Some have money for vacations abroad. Some do not. And they do not mind giving false invoices to get extra commissions. All the time there is talk of corruption in a India and how they are glad to escape the corruption.

Sometimes, I feel that we are all corrupt and there is no hope for this species. We may end with a bang or whimper but many of us will go by either bombs or poverty, and then there may be some regeneration.

Paul Collier on

How to save capitalism from itself via Gulzar Natarajan who highlights some of the points Paul Collier on the future of capitalism-social maternalism grounded on pragmatism?
"Paul Collier  channels Jonathan Tepperman's recipe for successful national transformations from his book The Fix which chronicles ten case studies of national leaders,
eschew ideology; focus on pragmatic solutions to core problems, adjust as you go, but be as tough as is necessary.
The article is good in general, as Collier seeks to chart out a course of capitalism. He identifies "pragmatism" as the new ideology. He advocates the use of tax policies to generate growth - moving away from income-specific to context-specific taxes, that discriminates based on source of income (rents as against innovation), regulatory arbitraging (real economy versus sharing economy), resource misallocation (financial markets versus real economy), geographical privileges (cities as against suburbs and rural areas), etc. "

A poem by Vahar Sonowane

When young a whore
when old a witch
so people say.
People -
people say anything.

A thing, such that
on the road, in the valley
stop her where you find her
embrace her if you wish
leave her if you've had your fill
No call for help, no outcry

The new sari, in it the new daughter-in-law,
falls at the feet of the father-in-law,
grows old and tattered
alongside her sari
and then -
patch on tattered patch
for a lifetime!
Via A revolutionary bard

Tuesday, February 21, 2017

Himanshu Rai

The story of his two wives and Australian descendants
"The story begins, as many good stories do, in an attic. That’s where 30-something Australian Peter Dietze discovered a black-and-white photograph of a handsome young Indian man. He asked his mother about the picture and was told it was of Himanshu Rai, pioneering founder of Bombay Talkies, legend of the early years of Hindi cinema. And also, Peter’s grandfather."

Robin Hanson on Peter Turchin

Cycles of war&empire
It seems to me that there may be slight misrepresentation. Anyway, I would replace inequality by 'extreme inequality' using some thing like Palma index. 
One of the comments is more to my liking, by 'akarlin' 
"(1) Rising inequality as something associated with fragility was a feature of Malthusian-era economies, but not because of inequality *per se*, but because said inequality was usually the result of Malthusian stresses (and the banal consequences of Ricardo's Law of Rent). Once populations bumped up against the land's carrying capacity, surpluses were very low to non-existent, so shocks such as droughts, a succession crisis, a nomadic incursion, etc. that could have been (and were) weathered easily in the earlier days of the cycle could now instead translate into cascading collapses.
(2) The post-industrial system is a very different ball game and little of the patterns of Malthusian cliodynamics apply to it (for now, anyway... heh)." 
The second part is not clear to me. The crucial problem seems to be that surpluses become low and share of the surpluses to the extent when a large proportion are at the subsistence level .

Monday, February 20, 2017

A site for free books

Accidentally, I came across "The loves of Krishna in Indian paintings and poetry" by W.G. Archer in a list of free books http://www.fullbooks.com/The-Loves-of-Krishna-in-Indian-Painting-and2.html  ( the link to the free books is at the top of the page. Lot of them are old and some obscure and it seems a bit difficult to search the list for any specific book). At one point, it says:
"During the next two hundred years, from the tenth to the twelfth century,
the Krishna story completely alters. It is not that the facts as given in
the _Bhagavata Purana_ are disputed. It is rather that the emphasis and
view-point are changed. Krishna the prince and his consort Rukmini are
relegated to the background and Krishna the cowherd lover brought sharply to the fore. Krishna is no longer regarded as having been born solely to
kill a tyrant and rid the world of demons. His chief function now is to
vindicate passion as the symbol of final union with God. "

Cosma Shalizi on Ernest Gellner's view of nationalism

"Even if Gellner was talking utter rubbish, Nations and Nationalism would be worth reading simply for his style, a trademark Bertrand-Russell-meets-Grucho-Marx combination of powerful logic working from very general premises and laugh-out-loud (literally) wit. Unfortunately for those of us notenamoured of nationalism, he wasn't talking rubbish at all." from 
Nations and Nationalism
More Er est Gellner, 1925--1995

Sunday, February 19, 2017

Democracy and debt

From http://democracyjournal.org/author/jgalbraith/
"A beauty of MacDonald’s idea is that it can be tested against

situations he doesn’t discuss. Thus the democratic decolonization of

India fits: It occurred after India had become a large war-time

creditor of Britain. And the struggle for democracy in Latin America is

complicated by foreign debt, easily analyzed as an external electorate

of enormous power–one in obvious economic conflict with the voters who,

at best, only hold the internal debt. The communists of China and Cuba

maintain their insular systems because they are financially autarkic.

Meanwhile, in democratic Venezuela, the rise and survival of Hugo

Chávez owes everything to the singular financial autonomy conveyed by

Finally, MacDonald’s financial perspective helps explain the

relationship between democracy and economic development. The most

democratic states are not only powerful; they are rich. They are richer

than the monarchies they succeeded and also than the communist states

with whom for much of the twentieth century they competed. Why? Surely

the simplest answer lies in their ability and willingness to mobilize

public debt for development as well as for war. Democracies yield

higher incomes not because of vulgar redistribution, which cannot

distinguish them from communism, but because they alone can master the

great Keynesian financial tools required for the achievement of full

employment and national construction on the grand scale.
Given the simplicity and power of this argument, one reads the

epilogue of this great book with surprise and sorrow. In MacDonald’s

view, it’s all over. In the nuclear age, deficits and bond drives on

the world-war scale are history, and the American citizenry has lost

its pride of place as creditor of the American state. Today, financial

intermediaries hold about 37 percent of U.S. public debt; Japan and

China, along with other countries, now hold about 30 percent. The

proportion of U.S. debt owned directly by Americans has fallen to below

10 percent; in 1945 (when the debt was more than twice as large in

relation to GDP as now) citizen-creditors just about held it all. He

concludes that the link is broken and “for all practical purposes, the

venerable marriage between public credit and democratic government, so

vital a factor in the history of the world, has been dissolved.”
But there is another possible way to interpret this fact. If

MacDonald’s thesis is right, the disappearance of the citizen-creditor

forces a question. Can democracy survive when its financial roots have

been cut? The scale of public debt is not the issue, but its ownership

is. Can a country–whether the United States or any other–be truly

democratic if it is in hock to banks and foreigners? And this is only

the obverse of questions raised by our pathetic voter turnout, by the

vote suppression that regularly poisons our elections, by the judicial

coup d’état of December 2000, and by our regression toward a tax system

from which the state’s main creditors are exempt, leaving the burden to

fall heavily on all who do not or cannot vote–exactly those who

comprise our passive and disregarded lower classes.To put it bluntly, are we still a democracy? And, if not, what would it take to bring democracy back?"

Lal Shahbaz Qalandar

Shrine of Lal Shahbaz Qalandar

The shrine attracts Hindu devotees,[15] while one of the shrine's two sajjada nasheens, or hereditary guardian-families, is a Hindu family.[16] Hindus still perform the mehndi ritual at the opening of the shrine's annual urs, or fair.[17] Until the 19th century, Hindus as well as Muslims believed that the flow of the nearby Indus River waxed and waned according to the whim of the Lal Shahbaz Qalandar.[18] The name of the Sindhi Hindu variant of the God of water, Jhulelal, is displayed prominently in the shrine."

Saturday, February 18, 2017

A recent post of Rahul Banerjee

About two friends helping in a school in Kakrana More on philonthrophy in Kakrana
There are a few earlier posts about him and also the book he wrote about his experiences.
55 mins
I have been following Rahul Banerjee's work for about ten years now and recently visited Kakrana and toured Alirajpur district with him for five days. He worked in the area for about thirty years I think, took part in various agitations for the welfare of advasis, jailed a few times and lots of the time it must have been frustrating. Over time he helped built various organisations in the area, built trust with the local people, helped them organise themselves as well as providing legal advice, various government schemes useful to them, helping with sewage, solar power and other hands-on projects. His work over so many years has now made it possible for others to easily enter some phases of these organisations and do what seems meaningful to them whatever their past careers have been. I met both the gentleman. One of them a gentle retired scientist trying to do some meaningful work after retirement. Other I could not stand. But both seemed to have settled Dow to some good work. People like Rahul offer some hope in these dismal times.

Game on

East vs West again by Andrew Cockburn Via Naked Capitalism. An excerpt:
"In any event, the vision of Augustine and his peers that an enlarged NATO could be a fruitful market has become a reality. By 2014, the twelve new members had purchased close to $17 billion worth of American weapons, while this past October Romania celebrated the arrival of Eastern Europe’s first $134 million Lockheed Martin Aegis Ashore missile-defense system."

Friday, February 17, 2017

Banality of evil.

" In our age of complex bureaucracies, so much cruelty is simply the result of normal, everyday, “real” people doing what they think is most pragmatic. As the philosopher Bernard Williams said, “the modern world…has made evil, like other things, a collective enterprise.” Eichmann was not the personification of hatred. His motives were banal. Evil is often the result of small, procedural things. It is people doing their jobs and remaining loyal to their parties, regardless of evidence, arguments, or troubling historical parallels." From https://qz.com/906101/modern-philosophy-shows-that-most-atrocities-are-committed-by-normal-people-not-evil-ones/? , an idea discussed in https://en.m.wikipedia.org/wiki/Eichmann_in_Jerusalem
This seems more plausible than the invisible hand attributed to Adam Smith. Perhaps self interest acts more as a centrifugal force increasing inequality.

You are not in control

You are not in control by Dmitry Orlov 

"It is often argued that a car is a necessity, although the facts tell a different story. Worldwide, there are 1.2 billion vehicles on the road. The population of the planet is over 7 billion. Therefore, there are at least 5.8 billion people alive in the world who don’t own a car. How can something be considered a necessity if 82% of us don’t seem to need it? In fact, owning a car becomes necessary only in a certain specific set of circumstances. Here are some of the key ingredients: a landscape that is impassable except by motor vehicle, single-use zoning that segregates land by residential, commercial, agricultural and industrial uses, a lifestyle that requires a daily commute, and a deficit of public transportation. In turn, widespread private car ownership is what enables these key ingredients: without it, situations.......
It turns out that the fact that so many people are forced to own a car has nothing to do with transportation and everything to do with petroleum chemistry. About half of what can be usefully extracted from a barrel of crude oil is in the form of gasoline. It is possible to boost the fraction of other, more useful products, such as kerosene, diesel fuel, jet fuel and heating oil, but not by much and at a cost of reduced net energy. But gasoline is not very useful at all. It is volatile (quite a lot of it evaporates, especially in the summer); it is chemically unstable and doesn’t keep for long; it is toxic and carcinogenic. It has a rather low flash point, limiting the compression ratio that can be achieved by gasoline-fueled engines, making them thermodynamically less efficient. It is useless for large engines, and is basically a small-engine fuel. Gasoline-powered engines don’t last very long because gasoline-air mixture is detonated (using an electric spark) rather than burned, and the shock waves from the detonations cause components to wear out quickly. They have few industrial uses; all of the serious transportation infrastructure, including locomotives, ships, jet aircraft, tractor-trailers, construction equipment and electrical generators run on petroleum distillates such as kerosene, jet fuel, diesel oil and bunker fuel."

The Economic Vision for Precocious, Cleavaged India

More on the great divergence

Why the Middle East fell behind By Jared Rubin "This post is not going to cover all of the reasons why the Middle East fell behind. There are a lot of reasons for the reversal of fortunes between (northwestern) Europe and the Middle East, most of which complement each other. I will discuss what I believe to be the two most important reasons: what I will call Timur Kuran’s “demand side” argument and my “supply side” argument (it is my post after all … of course I think the argument in my book is right!). I will also dismiss one argument which simply cannot account for the main historical facts: what I will call the “weak colonization” argument (as opposed to the “strong colonization” argument; I will define both terms below). I will refrain from discussing many alternative hypotheses which I do think shed some light on the divergence between northwestern Europe and the Middle East. For example, the relative political fractionalizationand frequent interstate warfare that embroiled Europe for most of the medieval and early modern periods may have set it up to have greater fiscal capacity than the Middle East (or China). This makes sense to me, and it seems to be part of the explanation. Likewise, differences in family structures (nuclear vs. clan) may have encouraged different types of institutional formation in Europe and the Middle East (or China), with the more individualistic Europeans forming institutions more conducive to inter-group commerce than the more “collective” Middle Easterners. This too makes sense to me, and it was likely an important aspect of the divergence. The point here is that such a large scale event like the divergence between two sets of economies over centuries is almost certainly multi-causal. It is true that these causes all interacted with each other – sometimes as substitutes and other times as complements – and pinning down the direction of these interactions is an important part of the story. But that is indeed another story."
Another via Brad DeLong :
"We argue that forms of executive constraint that emerged under feudal institutions in Western Europe were associated with increased political stability and find empirical support for this argument. While feudal institutions served as the basis for military recruitment by European monarchs, Muslim sultans relied on mamlukism—or the use of military slaves imported from non-Muslim lands. Dependence on mamluk armies limited the bargaining strength of local notables vis-a`-vis the sultan, hindering the development of a productively adversarial relationship between ruler and local elites. 
We argue that Muslim societies’ reliance on mamluks, rather than local elites, as the basis for military leadership, may explain why the Glorious Revolution occurred in England, not Egypt."
"'Roads to Xanadu' explores why the full potential of scientific discovery and invention, now regarded as a source of weath and power, is not often realized in its country of origin. The reason, paradoxically, lies not in failure but in success- in the tendency of cultures and civilizations to ossify around those economic institutions and ideologies that, at some stage, provided maximum stability and wealth. These institutional structures are often retained by bureaucracies and the power elites who are their beneficiaries long after they have become redundant. Economic growth and cultural development do not stem merely from technological innovation but from social and political change. However, the motivation for such a change rarely comes from within. Often, it has been the competetive threat from outside that has forced societies to come up with new and innovative social, economic and political structures."

Thursday, February 16, 2017

A short appreciation of Grothendieck

From Quora : "Alexander Grothendieck was (is) a genius of the first order, and a truly amazing spirit. Freeman Dyson once categorized mathematicians as being of roughly two types: birds and frogs. The latter group studies the fine details of the terrain; the former group soars high above and surveys the landscape. Grothendieck was the highest-soaring bird — to Grothendieck, a problem was not truly solved until it was viewed from the "right" general perspective, from which it could be solved effortlessly, from which it became in a sense obvious, from which it fit naturally into a larger conceptual framework. " and more.

El Cóndor Pasa

Wednesday, February 15, 2017

Simple narratives

A price is a signal wrapped up in incentive  says AlexTabarrok linking rise in oil prices to the emergengence of Karuturi Global at one time the biggest exporter of roses. But Karuturi who also figures in Panama Papers seems to have indulged in various dubious practices and has been liquidated

More details about the liquidation http://www.ipsos.co.ke/NEWBASE_EXPORTS/Banking/160502_Business%20Daily_12,13_b3768.pdf
A write up 'The role of narratives in economics

Tuesday, February 14, 2017

Michael Hudson on Trump's infrastructure plan

Trump's Infrastructure Plane=Developer Welfare 
"So I think Mr. Trump wants to turn the U.S. economy into the kind of real estate development that has made him so rich in New York. It will make his fellow developers rich, and it will make the banks that finance this infrastructure rich, but the people are going to have to pay for it in a much higher cost for transportation, much higher cost for all the infrastructure that he’s proposing.
So I think you could call Trump’s plan “public investment to create private profit”. That’s really his plan in a summary, it looks to me."

Michael Hudson on debt cancellation in ancient days

The Land Belongs to God
One excerpt "What do you do if you’re a ruler and people can’t pay? One reason they would cancel debts is that most debts were owed to the palace or to the temples, which were under the control of the palace. So you’re canceling debts that are owed to yourself.
Rulers had a good reason for doing this. If they didn’t cancel the debts, then people who owed money would become bondservants to the tax collector or the wealthy creditors, or whoever they owed money to. If they were bondservants, they couldn’t serve in the army. They couldn’t provide the corvée labor duties – the kind of tax that people had to pay in the form of labor. Or they would defect. If you wanted to win a war you had to have a citizenry that had its own land, its own means of support."

Saturday, February 11, 2017

Economic impact of violence

The Economic Value of Peace: e.g. ‘The total economic impact of violence to the world economy in 2015 was estimated to be $13.6 trillion and is expressed in purchasing power parity (PPP) terms. This is equivalent to 13.3 per cent of world GDP or $1,876 PPP per annum, per person.’ From 

Inequality and violence

“It is almost universally true that violence has been necessary to ensure the redistribution of wealth at any point in time,” said Scheidel, summarizing the thesis of The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, his newly published book.
On Europe's rich from 1300 
"In the seven centuries recent research covers, across all the territories for which we have data, we find only two phases of significant inequality decline. Both were triggered by catastrophic events:
  • The Black Death, the most terrible epidemic in human history, affected Europe in 1347-51. Afterwards the richest 10% lost their grip on between 15% and 20% of overall wealth. This was a long-lasting decline in inequality. The richest 10% recovered their pre-Black Death quota only in the second half of the 17th century). This decline in the share of the top rich, as well as in overall inequality, was probably the consequence of two main factors. On one side of the distribution there was an increase in real wages of skilled and unskilled workers. We have evidence for this in many areas of Europe, as described in Pamuk (2007). This helped a larger proportion of the population to gain access to property. On the other side, large patrimonies fragmented due to a mortality crisis which was occurring in the presence of an unmitigated partible inheritance system (Alfani 2010 and 2015).
  • Shocks occurred between 1915 and 1945 related to the two World Wars, as argued by Piketty 2014, pp. 368-370). The share of wealth owned by the top rich has been growing again since around 1950, and reached 64% in 2010, but it is still far from the peak of 90% reached in 1910. The share of the richest 10% today is about the same as that in Europe (or at least, Italy) immediately before the Black Death."

More on Palma index

The concenusus seems to be that extreme inequality is bad. Palma index is one measure of it. Here are some thoughts by Joseph Stieglitz on it: Measuring Inequality: Comments on "Do nations get the inequality they deserve? The 'Palma Raio' reexamined' by Jose Gabriel Palma https://www8.gsb.columbia.edu/faculty/jstiglitz/sites/jstiglitz/files/MeasuringIncomeInequality.pdf
Branko Milanovic is not too enthusiastic about Palma index

Recent trends on the tension between the government and civil society

"Evidence from the last decade, however, suggests that the global trend may be a shrinking civic space (figure 8.10). Many governments are changing the institutional environment in which citizens engage, establishing legal barriers to restrict the functioning of media and civic society organizations, and reducing their autonomy from the state. For example, in the case of media, governments may award broadcast frequencies on the basis of political motivations, withdraw financial support of media organizations and activities, or enforce complex registration requirements that raise barriers to entry into a government-controlled media market. In the case of nongovernmental organizations (NGOs), governments might resort to legal measures to restrict public and private financing or pass stricter laws that restrain associational rights ..." From http://conversableeconomist.blogspot.com.au/2017/02/the-middle-income-trap-and-governance.html

The Middle Income Trap and Governance Issues by Tim Taylor

Thursday, February 09, 2017

Ernest Gellner on civil society

in the past few months, I came across a few articles that I want to revisit. Here is one of the from 1990 called 'The civil and the sacred' by Ernest Gellner
A quote
"A basic political centralization is inherent, it would seem, in advanced industrial society: order must be maintained, and it is difficult to imagine industrial production being maintained under conditions of genuine pluralism of mutually independent coercive agencies. In exceptional circumstances, something like this does happen when multiple criminal and/or political mafias govern a large city (Belfast, Algiers during the final stages of the French presence, or highly criminalized sections of inner cities in one or two advanced industrial nations) but in general, industrial society presupposes that productive citizens can go to and from work without either protecting themselves or needing to duck while rival mafias or police forces shoot it out. It is assumed, in contrast  to segmentary society where the unit of habitation and production is also the unit of self-government, of ritual and defense, that citizens can rely for their protection on a specialized and uniqueagency or group of agencies. Citizens know whom to obey and do not need to form or choose alliances so as to ensure their own security. The job of keeping peace is performed, and it is clear precisely who does it. It is not a civic activity, but precondition of other, legitimate civic activities.
 If this argument is correct, then modern society cannot find its pluralism in the political or governmental sphere (if by that we mean the order-enforcing agencies). The peacekeeping institution may perhaps take its orders from plural and severally independent bodies (say assemblies, institutions, pressure groups), but it cannot itself consist of genuinely independent bodies, liable to use their instruments of violence on each other. That is the way of segmentary or feudal societies but is simply not feasible in a society with a sophisticated and growing technology, an enormously complex division of labor, and mutual interdependence of highly developed specialisms. Segmentary and similar politically plural societies cannot give us what we want namely, civil society. All this being so, such pluralism as we need must have its base in either the economic or the ideological sphere, or both. It is precisely because the modern state does indeed have the monopoly of legitimate coercion (and, in fact, the monopoly of coercion sans phrases when it is not undermined and is functioning properly), that pluralism, or the breaching of monopoly, must occur in one of the other two realms: and, when full-blooded and passionately embraced Marxism prevails, it is not allowed to emerge in them. Nor does it arise anywhere else either. Full-blooded Marxism monopolizes faith and the state while claiming that the latter is to be dismantled and that the former monopoly arises spontaneously. It also, thanks to its central tenet of the denial of private ownership of the means of production, monopolizes the economy. It thereby makes civil society impossible."