The Milton Friedman Choir

Song and Music may be the antidote to jolt you awake. Here are Milton Friedman's words presented by the most surreal Milton Friedman Choir or more aptly, a requiem for your dreams.

M. Friedman is dead, it is perhaps time to rethink his ideas.

Chomsky on the Financial Crisis

Traveling around now a days so can't find much time to blog properly, but till I actively resume: Here's Noam writing in the Irish Times about the U.S Financial crisis and its anti-democratic nature.

Anti-democratic nature of US capitalism is being exposed

By Noam Chomsky

THE SIMULTANEOUS unfolding of the US presidential campaign and unraveling of the financial markets presents one of those occasions where the political and economic systems starkly reveal their nature.

Passion about the campaign may not be universally shared but almost everybody can feel the anxiety from the foreclosure of a million homes, and concerns about jobs, savings and healthcare at risk.

The initial Bush proposals to deal with the crisis so reeked of totalitarianism that they were quickly modified. Under intense lobbyist pressure, they were reshaped as "a clear win for the largest institutions in the system . . . a way of dumping assets without having to fail or close", as described by James Rickards, who negotiated the federal bailout for the hedge fund Long Term Capital Management in 1998, reminding us that we are treading familiar turf.

Mackerel Money

We are all aware that our currencies are legal tender. A Dollar bill, for example, is a note issued by the US Federal Reserve and clearly and coldly states: "This Note is Legal Tender for all Debts, Public and Private". It is signed by the Treasurer of the United States.

The Indian Rupee is a note issued by the Reserve Bank of India and guaranteed by the Central Government. It has a tone that reads more like a dramatic oath: "I Promise to pay the bearer the Sum of Five Rupees" (or whatever amount is boldly printed as the number on that note). It is signed by the Governor of the Reserve Bank of India so probably the "I" in the promise refers to the person holding Governor's office.

This piece of paper is accepted by those who believe in the stated promise as a legitimate form of exchange for goods or services. It also means that if I were to pay a visit to the Governor, with this legal tender in hand, he'd be bound to give me the "Sum" of five rupees. Traditionally that "Sum" is supposed to be in Gold. It is inherently understood that this piece of paper is worthless and behind every such piece of paper issued, the Government has enough Gold, Silver or some commodity of "Real Value" guaranteed, otherwise that banking system is counterfeit and can be sued for bankruptcy. This is known as the Gold Standard. The quantum of Gold actually available with the RBI or its subsidiaries is not revealed in India. It would be foolish to think that there is so much Gold inside the RBI except for a Bollywood film. In reality it is more like this: A rupee can be returned to the issuing bank in exchange for a rupee worth of the bank’s assets [link]. This shift from actual Gold to something of "Real Value" is enforced by an order (fiat) of the Government and hence the term Fiat Currency.

IT vs Roti

The chameleonic changes happening in India are capable of reviving surrealist non-sequiturs. How can Information Technology (IT) be pitted against bread (Roti)? Such improbable opponents can only emerge from either the laboratories of Victor Frankenstein or economic scientists at the World Trade Organization.

Incessant repetitions have convinced the world, including the dying polar bears and penguins at the poles, that there is an IT revolution going on in India. Believe me, walking the streets of India outside of Bangalore or Gurgaon, it feels like a facetious rumor.

There are a lot of back-office, low-end jobs percolating down to India essentially because of the low wages our accent-trained English speaking young are willing to accept. The real human beings behind the pseudonyms of Mary Janes and Joe Smiths are not unaware of their exploitation. Living in a shortsighted culture that promotes the present, in the moment, instant gratification as the highest value, it is their only option for individual independence. In the pursuit of their individualism they are unwilling to question the greed of their employers. When their Government prostrates to the power of Corporations and legal due process is a farce (remember Bhopal) they are smart enough to shut up and show up for work at the stroke of the midnight hour.

À la carte Écouter

From Reuters:

PATNA, India, Aug 18 (Reuters) - A state government in eastern India is encouraging people to eat rats in an effort to battle soaring food prices and save grain stocks.

Authorities in Bihar, one of India's poorest states, are asking rich and poor alike to switch to eating rats in a bid to reduce the dependence on rice. They even plan to offer rats on restaurant menus.

"Eating of rats will serve twin purposes -- it will save grains from being eaten away by rats and will simultaneously increase our grain stock," Vijay Prakash, an official from the state's welfare department, told Reuters.

Officials say almost 50 percent of India's food grains stocks are eaten away by rodents in fields or warehouses.

Jitan Ram Manjhi, Bihar's caste and tribe welfare minister, said rat meat was a healthy alternative to expensive rice or grains, and should be eaten by one and all.

"We are very serious to implement this project since the food crisis is turning serious day by day," Manjhi, who has eaten rats, told Reuters.

In Bihar, rat meat is already eaten by Mushars, a group of lower caste Hindus, as well as poorer sections of society.

Never to be reported in TOI. What's next Mr. Chidambaram?

Thanks to Raj Patel for the link.

Krishi Darshan: Stuffed and Starved

For those of you born in the nineties or later, unaware of the word "Krishi Darshan": it is a TV program started in 1966 on Doordarshan - the Indian State sponsored Television channel. It literally translates to "A look at Agriculture".

In the eighties, growing up as an urban kid, it was the most boring program one could imagine watching, but then there was nothing else to watch. The dullest anchors interviewed the dullest speakers on the nature of soil, various low and high productivity seeds and ways to improve crops using chemicals and fertilizers. The National Propaganda and our lie-infested school books harped about how successful the Green Revolution was.

The underlying theme of all propaganda was: hold your head and your cock high because socialist India is going great guns. Jai Jawan, Jai Kisan (Hail the Soldier, Hail the Farmer). And so the pseudo socialist spin went on till 1991 when we were informed by the then finance minister, Dr. Manmohan Singh, that India was about to go bankrupt!

Compared to today, some may remember that as a more innocent time. But that would be a romantic fallacy. Indira's India was as corrupt as today's India. The only difference being that there was a sense of shame in corruption (or maybe even that is my childhood imagination). Today, that shame, imagined or otherwise, has certainly gone away. Now we boldly proclaim our right to plunder and call it "Free Market". And of course a lot more have joined the orgy giving it a notion of democratic participation.

Robots screwing Robots

America seems to be the land of abstractions, where numbers have taken on an existence of their own in phrases like "57 Varieties," "the 5 and 10," or "7 Up" and "behind the 8-ball." It figures. Perhaps this is a kind of echo of an industrial culture that depends heavily on prices, charts, and figures. Take 36-24-36. Numbers cannot become more sensuously tactile than when mumbled as the magic formula for the female figure while the haptic* hand sweeps the air.

Understanding Media: The Extensions of Man.
Marshall McLuhan, 1964

* The Greeks referred to the faculty of touch as the "haptic" sense.

Quantitative analysis is the foundation on which logic, science and reason stand. So great is our dependency on quantitative analysis that when something doesn't make sense we refer to the numbers. Numbers are seen as the unbiased validation of truth. Our faith in numbers is the basis of testing intelligence, of calculating progress, of creating economic models. The Number can tell you if you are happy or not, it can detect if you are lying or telling the truth. It can even pronounce you mentally insane. We strengthen our arguments by backing it up with numbers because everyone trusts the number. We measure success by numbers. And if the numbers don't add up, we attribute that to human error. The Supremacy of the Number even allows us to predict and control chaos and the unknown. It enables us to see into the future.

The abstract power of the Number is felt most tangibly in Economics. Today, Chaos Math and Game Theory are commonly applied to predict the Stock Market, the World Economy, Inflation, Employment, the GDP and even Poker Games (which a lot of people take quite seriously). In fact, Game Theory originated as a model to predict results in a Poker Game.

The first political applications of Game Theory are traced back to the paranoia of the Cold War years. In the late fifties it was used, at the Rand Corporation, to play out different scenarios of nuclear war and how to avert it. Simple quantitative models of human nature were drawn, based on radars that monitored Soviet activity, fed into a computer and then used by strategists to predict Soviet behavior and decide US policy. It was the first step to believing that we could incorporate the enemy into our own thinking. We could harness the power of the Number and mathematically predict how we and our enemy would play on a set of known and unknown rules.

But underlying Game Theory was a dark vision of human beings. That we were driven only by self-interest and constantly distrustful of those around us. One mathematician at Rand, John Nash (who entered pop culture through the film A Beautiful Mind) set out to show that this dark vision was not just applicable to the Cold War but could be used to create stability in all of Human Society. To prove his thesis, he invented a series of cruel games, the most famous of which he called "Fuck You Buddy".

Taking offense to SEZs

Last week I caught a discussion on NDTV's new program "Uncommon Ground". The discussion was between Medha Patkar and Anand Mahindra. Since Medha Patkar is rarely interviewed on television, my interest was piqued. Having met both Medha Patkar and Anand Mahindra I also knew where they'd be coming from. The discussion was going to focus on land acquisition for Special Economic Zones.

The show was mediated by Rohini Nilekani who, I thought, looked inexperienced, clueless and a terrible head-bobbing anchor hosting a children's program. At least she doesn't suffer from the high-pitched yelling syndrome that seems to have infected most Indian TV presenters thanks to Barkha Dutt and Rajdeep Sardesai. But that's another story. Maybe Rohini will improve over time. She should check out Zeinab Badawi, Bill Moyers or even the bubbly Mishal Husain to get some ideas on anchoring such a program.

The guests, both Medha Patkar and Anand Mahindra came across as intelligent and did not resort to a yelling contest which was refreshing. I was quite impressed with Anand Mahindra. He was articulate, sincere and made a pledge on behalf of the Mahindra group, stating on record:

"...if there is any question where any farmer does not want to part with their land, I am telling you, Mahindra and Mahindra will not go [forward] with it [the acquisition of land]."