A critique of “the story of stuff”

A couple of months ago, I received an email linking to this fascinating video titled The Story Of Stuff by Annie Leonard. The video had received front-page coverage in the New York Times on May 10, 2009 (view the NYT article online). It also has its own Wikipedia page (this is not a very big deal, but the fact that Wikipedia considered it notable is notable).

I found the video interesting but, unfortunately, poorly researched and misleading in many contexts. I’ll begin with a summary of the gripes I have with specific statements made in the video. I’m using Annie Leonard’s footnoted transcript (PDF).

Note: I am not the first one to critique The Story of Stuff. A blogger and video creator who claims to be a libertarian Republican has produced a four-part critique of the Story of Stuff. While some of my criticisms overlap with his, the bulk are different.

Generic problems

Poor sourcing

Leonard’s transcript is extensively footnoted, so at first sight, she seems to be providing sources for all her assertions. A closer examination, however, reveals these poblems:

• Leonard often links/cites friends and environmentalist groups that are not primary sources, or even published or reputed academic secondary sources, even in cases where perfectly good primary sources exist and could easily be linked to. For instance, footnote (4) on page (1) gives a link to a website called warresisters.org (specifically, this page). First, Annie Leonard’s own data doesn’t match up with what the website shows, for the simple reason that the website shows data for the current year while Annie’s footnote refers to data collected for her year. Second, warresisters.org is not a primary source for such information. Even if Annie learned about the information from warresisters.org, she could have spent a few extra minutes going to the reliable source linked to from warresisters.org and linked to that. (She could additionally have credited the warresisters.org website for highlighting this information to her). There are many similar examples, that I talk about at different points, where Annie only credits the source from where she got the information rather than taking the effort to go to a primary source and verify the information.
• Related to the previous problem is the problem of not separating fact from opinion in her footnotes. In other words, she makes no distinctions between facts she is citing from public data and numbers that others have pulled out based on their personal opinions. Moreover, numbers tentatively put out by others and treated by Annie as solid facts (many examples of this will be discussed).

Specific problems

To cross-check and verify everything I’m saying, please open the footnoted transcript (PDF). I will use page numbering and footnote numbers as given in the transcript.

Note also that there are many other minor areas where I disagree with Leonard’s formulation or consider it hyperbolic, but I have stuck here to cases that I consider problematic and where I can marshal clear arguments rather than just a sense of unease.

Military spending

The first page of Annie Leonard’s transcript is largely innocuous, though I do have some stylistic gripes. My main gripe is with the absence of a link to a primary source for the military spending figure (as discussed above). This isn’t, however, a serious concern, because the page she links to does provide links to primary sources.

Let me just make a couple of additional remarks here. First, concern about US military spending is something common to both the libertarian/free-market end of the viewpoint spectrum and to many of the environmentalist groups such as Greenpeace, for which she works/worked. Libertarian think-tanks such as the Cato Institute and Reason Foundation have advocated for reductions in military spending and opposed interventionist wars.

Second, the fraction of spending that goes to the military can be changed significantly based on what one counts as spending. Leonard and Warresisters.org talk about “federal tax money”, and hence get their “over 50%” figure, but a very different figure could be reached (as noted at warresisters.org) if one includes the many other taxes levied on people, notably social security taxes.

Government’s job

Quoting from the beginning of Page 2:

It’s the government’s job to watch out for us, to take care of us. Really, it’s their job.

This is again a (far from mainstream) opinion stated as if it is a well-established fact. The footnote that Leonard provides here quotes from the preamble of the US constitution, talking about people’s right to life, liberty and the pursuit of happiness, and that these rights are “unalienable”. But saying that the government has no right to take away people’s right to life, liberty, and the pursuit of their own happiness, is a far cry from saying that the government should “watch out for us” and “take care of us”, which could be interpreted as a call for government paternalism. There is a great difference in spirit between the libertarian ideal of the Founding Fathers, that often focused on limiting the powers of government through a system of checks and balances, and the paternalistic call made by Leonard.

Running out of resources

Under “Extraction”, Leonard says:

So here we are running up against our first limit. We are running out of resources.

This is an extraordinarily sweeping statement. Fortunately, she does provide a reference and a link, but this link again goes to an advocacy website. Well, fine, but this page doesn’t have the sentence she quoted (well, right, webpages get updated). But agreed, the data in the website support the sentence she quoted from it, which says that in 2003, the ecological footprint exceeded the biocapacity by 25%. However, this is a far cry from the alarmist statement that we are “running out of resources”, which is a much much broader statement than one about ecological footprints and biocapacity.

An analysis of long-term resource trends is extremely complicated, because of the very different kinds of resources. For instance, there are resources like oil and coal, that, once burned, are gone forever. We can “run out” of these, and if current consumption rates go on, we might very well run out of oil in the next 50-100 years. (Coal should last longer). But then again, there are other forms of oil (tar sands, shale oil) that are currently economically inefficient to use because petroleum is in abundant supply. When petroleum is short, these forms of oil might become more profitable. (Of course, it is possible that nuclear energy as well as solar, wind and geothermal energy may also meet an increasing fraction of energy needs, and renewable biofuels may also be discovered).

If you think about metals, it is again unclear that we are “running out” of metals. Of course, it may happen in the near or far future that there are no longer any mines for profitable extraction of some of the metals. But this is not going to happen all of a sudden — people can plan for it, designers will start shifting production away, recycling of that metal will take priority because the value of reused and recycled metal increases when the original metal is scarcer, etc.

Studies about commodity price trends over 5-10 year periods have been largely inconclusive. Naively, many of them appear to show that prices have been falling, but adjusting for the relative improvement in the quality of manufactured goods, there seems to be no clear trend. All I can say is that if a commodity seems to be getting over, miners and industries using that commodity are likely to become aware and start planning accordingly well in advance. (Yes, they care about running out of it at least as much as Ms. Leonard does, because after all they get their living from it).

Finally, the area where I think Leonard does have a point — land use. But even while her concern is valid, her figures are nonsense, which brings us to the next point.

4% of our original forest cover?

At the beginning of Page 3, Annie Leonard writes:

Where I live, in the United States, we have less than 4% of our original forests left.

However, the quote she herself gives here belies her statement:

“Ninety five to ninety eight percent of forests in the continental United States have been logged at least once since settlement by Europeans.”

Note the operative word here: logged at least once. but a forest that has been logged at least once is not destroyed, simply because the trees can be replanted. For instance, paper companies own paper forests that they regularly log and replant. These people are not interested in destroying the forest because the forest is their source of income. Further, because they own the forest, they have every incentive to replant as they reap the full benefits (this is actually a very important point that needs to be understood by people who advocate reducing paper use to “save trees” — reducing paper use does not save trees, at least in a direct sense, because paper use is what causes the paper companies to plant trees. Of course, one might argue that the energy used in producing paper from the trees can be eliminated if we reduce paper-based products, though such energy use should be compared against the energy that needs to be spent in recycling paper. But that is an entirely different question from “saving trees”.)

As the population grows, more forest land may need to be cleared for agricultural use, leading to a destruction of animal habitats and ecosystems. This is a very real concern, but in fact, as any juggling with data would show, the amount of agricultural land that needs to be cultivated to feed one person has dropped hugely in the last century. That is why today we are able to support a substantially larger population that any time earlier in history with only a small fractional increase in cropland. In his book The Improving State of the World, in Chapter 6 (Long-term environmental trends), Indur Gokhlany looks at the issue in detail. He refers to Angus Maddison’s page (follow the link “The World Economy: Historical Perspective”) which has a graphical simulation using OECD website data, for the population and affluence statistics, and to a US governmental website for land uses.

Gokhlany’s argument is that the substantially greater increase in agricultural productivity is due to a combination of improvements in science and technology, a greater use of capital inputs, and a substantial increase in water use (in other words, economization on land at the expense of water, perhaps due to subsidies for water use in the US). While agreeing that the increase in water use is troubling in its own right, Gokhlany is grateful that technological advances have allowed for a substantial expansion of human population without natural habitat destruction in the United States. He also discusses the situation for the rest of the world, where the picture, although not as good as in the US, still shows increases in agricultural productivity. Nonetheless, the fact that increases in productivity have not happened to the same extent (which may be owing to one or more of these factors: poor technology, poor market access, land cultivated by people with little stake in it (e.g., feudal/zamindari type systems), a heavy labor surplus that makes investment in capital-intensive technologies unproductive, poor infrastructure (such as lack of access to electricity)) has been responsible for the clearing of forests in many developing countries.

However, he is no wild-eyed optimist about continued increases in agricultural productivity to meet the needs of a population that is expected to grow until 2050. But Gokhlany makes a strong argument that some genetically modified foods may offer a way to offset, at least in part, the growing demand for additional cropland to feed this population. This, though, takes us into a different topic…

The point I’m trying to make is that the story of how resource endowments are changing is an extremely complicated one and does not benefit from generalizations like Leonard’s. To summarize, some of the sources of uncertainty are: the constant discovery of new resources or new, more profitable technologies to extract hitherto unreachable resources, the constant discovery of new technologies for better and more efficient utilization of existing resources, and the way market incentives, social pressure, and some regulatory action can combine to shift production and consumption patterns when the shortage of certain resources becomes acute.

If everybody consumed at U.S. rates

Leonard makes a plausible point when she says on Page 3:

If everybody consumed at U.S. rates, we would need 3 to 5 planets. And you know what? We’ve only got one.

Thomas Friedman, a columnist for the New York Times, has repeatedly made a similar point, as have many others. However, what Leonard ignores here (and what commentators like Friedman acknowledge as they discuss in detail) is that if everybody around the world today suddenly became affluent and wanted to consume as much as the U.S. did, prices would simply go up forcing the U.S. people to consume less. There would still be a net rise in consumption, but it would not be a proportionate rise.

But more tellingly, the way the real-world trajectory will (hopefully) move, by the time everybody in the world will be rich enough to consume the amount the U.S. does, technology may well have moved to the point where the same level of consumptive satisfaction can be achieved with substantially less resource use. Of course, this is by no means certain. But it is an important hole in the “if everybody did this …” argument.

Ultimately, “if everybody did this…” arguments are superfluous and misleading. For instance, if everybody traveled as much as the global warming awareness-generator Mr. Al Gore, carbon dioxide emissions (and hence, the global warming effect) might be several times as much as what it currently is. (I might be wrong about Mr. Gore, but I’m sure there are many similar arguments that are valid).

Fisheries

75% of global fisheries now are fished at or beyond capacity.

Fisheries is an excellent example where Leonard selectively quotes. The problem of overfishing of fisheries is related to what economists call the “commons” problem or “the tragedy of the commons” — when everybody can take freely from a commons, then even if it is in the collective interest to ensure the growth of the commons in order to ensure a good take in future years, each individual is being perfectly rational by overfishing, because if they don’t, somebody else wil ltake the catch. Economists often contrast fisheries with poultry farming — nobody can argue that we’re running out of chicken, because there are none of these incentive problems with the commons. Many have suggested privatizing fisheries. There are other proposed solutions, including taxes and quotas, with their respective merits and demerits, but the problem here is not a general problem of resource greed (which surely also applies to poultry farming) but a lack of clear ownership/property rights and/or lack of trust and cooperation among the many different actors.

No testing?

Leonard says (Page 4) that:

There are over 100,000 synthetic chemicals in commerce today. Only a handful of these have even been tested for human health impacts and NONE of them have been tested for synergistic health impacts, that means when they interact with all the other chemicals we’re exposed to every day.

This is again a valid concern, but again it is best put in perspective.

In many parts of the world even today, cooking is done in the home by burning fuels like wood and coal, producing soot and half-burned gases. Apart from the experience of cooking being claustrophobic, many of these particles have severe respiratory effects, causing lung problems and asthma, and some of them, such as soot, are carcinogenic. In addition, soot is also a contributor to global warming. Ever-so-occasional barbecues may be fun but cooking that way daily in an enclosed space is not.

Looking at it historically, coal was a significant improvement on wood in many respects, but the use of petroleum-based cooking fuels was the real leap. Today, gas stoves or electric stoves are the norm for affluent people.

Harmful synthetic materials are a threat. But harmful natural materials are a threat too. It is true that natural materials that were harmful have probably already been recognized and identified as such, while synthetic materials, being new, may have unexpected effects. But, all said and done, both market actors (the companies selling the synthetic materials) and governmental regulatory agencies have incentives to ensure a reasonable amount of testing before products are put out to market. Those who put out products that do damage suffer public ridicule and a loss of confidence for their remaining products, and also fines and possibly punitive damages. Despite all this, they will not test a product for all possible impacts before putting them out to market.

Why? Because not putting a product to market has its own costs. This is most obvious for drugs, where there is a cost to putting a drug with adverse side-effects on the market, but there is also a cost to severely delaying the introduction of a new drug. The latter cost is all the people who could have used the drug and didn’t because it was not available in the market. There is a certain amount of balancing that needs to be done. The real question is: who does this balancing? Is it the company? Is it a governmental regulatory agency? Is it Annie Leonard? If the company does the balancing, is it taking all the costs of its actions into account? If it isn’t, why not? Are fines and penalties for the introduction of dangerous products not high enough? Leonard may be right that companies are able to get away in some cases with consistently shoddy products that are not in the public interest, but this is far from obvious in any way, and any accounting must take into account the benefits of such products.

Erosion of local economies

On Page 6, Annie Leonard talks about the erosion of local economies — how governments often confiscate local land and resources forcing these people into menial jobs by depriving them of the resource system they’ve used for years. This is something where I almost agree with Ms. Leonard. Government expropriation of land and resources from people, claimed to be in the “public interest”, is a recipe for corruption. Some people get benefited and others lose, but if those who lose lack the legal rights to negotiate, then it may very well happen that the costs to these people far outweigh the benefits. In other words, the use of force as opposed to negotiation when taking land from one use to another could lead to outcomes that are both inefficient and unfair. (Note that it may still be the case that the benefits created from expropriation exceed the costs, but if this were the case, I think governments, or corporations operating via the government, should be able to achieve the same result by buying the land in the marketplace, because benefits exceeding costs implies they’ll still turn a profit). So, expropriation of land makes me deeply discomfited both on moral/philosophical and on practical grounds. And again, we find that many free-market proponents such as Milton Friedman have been very critical of government expropriation.

But Leonard makes a lot of mistakes, which may have been influenced by the selection of people she has talked to. If one goes to places that have suffered the most damage of dislocation, one gets a very one-sided picture. But my own impression is that people aren’t moving from villages to cities because the villages that always sustained them well have suddenly stopped working that well for them. Rather, people have been moving from villages to cities for a long time, at least in India. Some of the reasons for the move to cities include more opportunities in cities, less chances of dying of starvation because of more jobs and higher wages, and less discrimination. Yes, there are cramped urban conditions, but having enough food to eat may well be worth it.

If there is an increase in cityward migration, I suspect that (again, at least in the case of India) this has a lot more to do with the rapid expansion of opportunities in cities than with the decline of villages due to their natural resources being destroyed or depleted. However, this may vary from country to country and region to region, though I suspect a similar truth holds in a lot of other developing countries.

Dirty factories out

Larry Summers, a Harvard economist who is now part of the Obama administration, got a lot of flak for making a remark that moving dirty factories overseas is a good thing. Apparently, many were offended at the idea that the U.S. was cleaning its act by dirtying that of others.

But Summers was simply articulating a basic commonsense notion that many economists and analysts would agree with. A much more elaborate notion has been developed in Gokhlany’s book The Improving State of the World, mentioned above. Gokhlany outlines, and provides substantive evidence for, the environmental transition hypothesis. This says that societies initially try to grow, even at the expense of degrading the environment. When they become richer, they are able to shoulder the costs of cleaning up the environment, and do so, leading to a decline in the degree of pollution/degradation. The secular (long-term time-based) trend is thus that of an inverted U-shaped graph. (Gokhlany discusses a large number of caveats). With this view, we see that many developing countries, such as India and China, are still on the growth plus degradation side of the environmental transition. One might argue whether they will get to the other side of reducing degradation fast enough, but it is by no means obvious that they will not. China, and to a lesser extent India, have already started taking into account the environmental consequences of their actions and looking at how to minimize them.

Econ 101: Externalized costs

On Page 7, Annie Leonard talks about externalized costs. Also called “externalities”, these are costs of an activity that are not incurred by the people undertaking that activity. In other words, they are imposed on innocent bystanders. This is a classic concept of basic economics, with the textbook examples being waste disposal and pollution.

First, Annie Leonard misunderstands externalities. She thinks that underpayment of workers is an externalized cost. But it simply isn’t! Underpayment of workers may be a problem in some industries, where there is singificant market power for a small number of market actors who can dictate terms. But think about the average supermarket or restaurant in a city. What kind of scarcity power does it have? Almost none! At any rate, even if Leonard believes that workers are paid less than she’d like them to be paid, this is not an “externality”.

There are a lot of proposed solutions to externalities, two of which are: the creation of a rights market for that cost, and the imposition of Pigouvian taxes. For instance, the problem of air pollution can be done by vesting the right to the air with somebody (which could be a private individual, a nonprofit collective representing a community, the government). Then, anybody who wants to do anything with the air (like pollute it with gases, burst firecrackers) has to get permission from that somebody, and getting permission entails making a payment.

The Pigouvian tax is a tax levied to account for an externality. So, if it is computed that a unit of carbon dioxide released into the atmosphere costs a certain amount of money to society, the tax is set at that amount of money.

In any case, externalized costs are not the whole story. Any reasonable mention of externalized costs should mention the flip side of the coin: externalized benefits. People doing things that are good for others, even others they don’t know or care about. Classic textbook examples are getting vaccinations for contagious diseases (reducing the possibility of their spread), and mowing my lawn and painting my house (which improves the view for passers-by). Mentioning only externalized costs seems to imply that people working in their own self-interest harm society, but looking at both sides of the picture shows that it could work out either way.

Radio Shack: radio for $4.99

I was thinking about this the other day. I was walking to work and I wanted to listen to the news so I popped into this Radio Shack to buy a radio. I found this cute little green radio for 4 dollars and 99 cents. I was standing there in line to buy this radio and I wondering how $4.99 could possibly capture
the costs of making this radio and getting it to my hands. The metal was probably mined in South Africa, the petroleum was probably drilled in Iraq, the plastics were probably produced in China, and maybe the whole thing was assembled by some 15 year old in a maquiladora40 in Mexico. $4.99 wouldn’t even pay the rent for the shelf space it occupied until I came along, let alone part of the staff guy’s salary that helped me pick it out, or the multiple ocean cruises and truck rides pieces of this radio went on. That’s how I realized, I didn’t pay for the radio.

Not only is this completely speculative, but it completely misunderstands production and supply. Leonard looks at all the different people and resources that went into the making of a radio, and concludes (without any attempt at calculation) that $4.99 is way too small for a radio. Rather than being grateful for the beauties of the supply chain system that got her such a cheap radio, she wants to see a hidden hand of exploitation.

Her language is misleading for many reasons. First, she makes it sound like every step in the construction of that radio was exclusively devoted to creating the radio. Wrong. Nobody booked an ocean cruise exclusively for the radio. Probably thousands, may be even millions, of other items went in that same ocean cruise. Similarly, I can assure Ms. Leonard that no trucker drove around exclusively with her green little radio. No. The truck probably had thousands of other items as well. As for the metal mining, no, nobody said that they need to mine these many grams of metal for Ms. Leonard’s radio, so let’s set up the machines and stuff for it. No. All these activities were done on a large scale.

Now, I have no idea what the total of all this should be. But I’m assuming that, if Radio Shack is selling such radios regularly for $4.99, then they don’t cost more than $4.99. Of course, I may be wrong: it may so happen that Radio Shack is discounting the radios because they have excess inventory and nobody buys those radios at higher prices. Or, may be the radio is a loss leader. Still, the fact that, as Leonard will have no doubt admitting, Radio Shack is in it for the money, should make her doubtful of her own instinct that it should have cost a lot more.

Finally, Annie makes an unconvincing argument that people everywhere are subsidizing her radio by working for lower rates. But why would they work for lower rates if they can get higher rates elsewhere? People would generally work for the highest paying job relative to the working conditions. Unless she assumes that people in China, Iraq, South Africa, and Mexico are very interested in making sacrifices to help her, this makes no sense.

At the end of the day, her only point is this: lower wages in these countries relative to those in the US, at current exchange rates, make this radio cheaper than it would have been if wages were higher. This is true, but that would get one into the question of why such wage differentials exist in the first place. This is a fascinating question, but not one that Annie either states clearly or provides an answer to. Moreover, Annie confuses this even further by explaining the discrepnacy of already high explicit costs (which is her own creation) using externalized costs (betraying a complete lack of understanding of mathematics, logic, accounting, and economics).

Shop, please

Come to Page 9, Consumption. This is where Annie makes some of her most serious errors and misleading statements. Let’s quote:

That is why, after 9/11, when our country was in shock, President Bush could have suggested any number of appropriate things: to grieve, to pray, to hope. NO. He said to shop. TO SHOP?!

First, President Bush did ask Americans to “pray” for those who “grieve”.

Should President Bush have asked Americans to shop? I don’t know, but it doesn’t seem like bad advice. In fact, given my general opinion of the quality of Bush’s advice to the nation, this might qualify for some of the best advice he has given!

There is room for disagreement here, but at any rate I don’t see it as outrageous to tell people to go about their life as usual, not to tighten their belts or get scared as a result of 9/11. I think this is a lot better than the many things politicians (including possibly President Bush) do to make their people paranoid about “national security” and “terror” and use it to expand their own powers and curtail civil rights. Also, telling people to shop seems better to me than telling them to “pray” — I see it as no business of presidents to be donning the mantle of spiritual and moral guide and leader to a nation in distress (again, something that many politicians try to do, when they’re not dealing with scandals that reveal their own moral failings).

Nation of consumers

Page 9:

We have become a nation of consumers. Our primary identity has become that of consumer, not mothers, teachers, farmers, but consumers. The primary way that our value is measured and demonstrated is by how much we contribute to this arrow, how much we consume. And do we!

There may well be truth to this, but it overlooks the basic fact that the primary reason people consume things is because that consumption is an indirect route to happiness. More on this in a moment…

One per cent still in use after six months

Annie Leonard quotes from a book to argue that only one percent of goods bought are still in use after six months. I do not have full access to the book she quotes from, but the passage she quotes does not seem to be saying that it limits itself to durable goods. For a family whose main consumption is food and toiletries, obviously, most of what they buy will not be there after six months! These goods get eaten and rubbed/poured on the body (thus contributing to sewage and drain waste). At any rate, if the only thing a family consumes is food and toiletries, and they have 1% of what the consume less after six months, I don’t think that’s bad at all, even from Leonard’s viewpoint!

Second, as Annie clarifies in her own footnote to the transcript:

This statement is not saying that 99 percent of the stuff
we buy is trashed. Think beyond your household to the upstream
waste created in the extraction, production, packaging, transportation
and selling of all the stuff you bought. For example, the No Dirty
Gold campaign explains that there is nearly 2 million tons of mining
waste for every one ton of gold produced; that translates into about
20 tons of mine waste created to make one gold wedding ring.

Driving consumption

This is the most hilarious and depressingly misleading of Leonard’s pieces.

First, a decision to emphasize on consumer goods as the growth engine of the economy is not at all the bad thing that Annie Leonard makes it out to be. What are the alternatives? I can tell you some. An alternative would have been a focus on large scale industries, that largely just provide goods for each other and where consumers are completely out of the loop (The kind of thing we see in Soviet-style central planning, with huge amounts of production but consumers getting nothing). Given the criticisms made by Leonard, I’m sure she’ll find such a system even worse. Or, it could be an economy where the driving engine of demand is the military, where most production happens as inputs for the military. This is again something I’m sure Annie would detest. These are examples of production systems where more and more is produced without “consumers” being richer.

The choice of being a consumer-driven economy is thus a choice, ultimately, to be an economy giving people what they want (the flip side is that it sometimes involves making people want things they didn’t want, but this does not negate the point).

The second, and more grievous, mistake made by Annie is in this passage:

Not provide health care, or education, or safe transportation, or sustainability or justice? Consumer goods?

Actually, education is a consumer good, or rather, it comprises a lot of individual consumer goods (schooling, textbooks, educational videos (such as hers?), college education). Ditto for health care. One might argue that these are “services” rather than physical goods, but they do involve a lot of physical goods as intermediaries: first-aid kits, medicines, hospital equipment, and what not.

Transportation is also a consumer good, whether it is private automobile transit or mass transit. In the sense that individual consumers decide whether and how much of it to buy. Now, it may be the case that the government subsidizes many of these activities, but that doesn’t make them not consumer goods. An example of a good that isn’t a consumer good is a nuclear bomb.

Context of the depression

As an additional aside, this extraordinary focus on consumer demand might well have been influenced by the events of the Great Depression. At the time, Keynesian ideas of the Depression, which said that a decline in aggregate demand was the main cause of it, were still in vogue. After World War II, there was great concern about getting economic growth up on a solid ramp. There was paranoia about the Soviet Union and the Communist system. There were many vocal voices saying that the government had a role in stimulating Demand. A lot of these plans, silly as they may seem today, should be seen in that context.

Obsolescence

Here, at last, we see some good research by Annie! Yes, some industrial designers wanted to accelerate product usage to get people to buy more. Obsolescence is a way to achieve this.

But what industrial designers want and what they are able to achieve are not the same. There are a number of moderating forces, such as market competition, and people not being very stupid.

First, people would typically factor in how long something will last when they pay for it upfront. This means that a company that makes products that are “made to break” expects to sell its products for less. If, for instance, it makes the product break twice as fast, then it may expect to make half the money. Perhaps, due to future discounting, people’s short-term memory, or lack of complete information, it may actually be able to charge something like 75% of the cost for something that last half as much. Ripoff?

But if the production cost to the company were the same (i.e., it didn’t save any money with the “break” feature, which is what made-to-break is all about), then it is spending the same in production cost and making only 75% of the money. Even though it is doubling its sales (people buy the good twice the number of times) it is lowering the profit margin on each sale. It is conceivable that the company still benefits, but it is much more likely that the company does not benefit from the break feature. In fact, a company can profitably benefit from break features only if its production costs are very low compared to the price at which it is selling the good, so changes in the number of times they produce stuff have no impact. (Do the math for yourself to judge).

All this is assuming that the company does not have competition. But as soon as a competitor steps in, they can cut through this immediately. How? Simply offer something that lasts a year, and _advertise_ that it lasts longer, possibly offering warranties or money-back guarantees.

So, planned obsolescence may work in a handful of situations, but most of the times, it doesn’t. Moreover, a look at the durability of goods would probably find that goods have been becoming more durable over the years, which means either that planned obsolescence hasn’t been on the rise or that it has been dwarfed by technological innovations and greater competitions.

Next, we come to perceived obsolescence.

This is again a valid point made by Annie. Keeping up with the joneses and conspicuous consumption are valid reasons why people buy new stuff, and creating a perception of obsolescence is a powerful tool.

But I suspect that there factors are marginal or incremental. The main reason why new products are introduced, especially in the technology sector, is new technological innovation that has driven down cost. Her own example of flat-screen monitors illustrates the points. Flat-screen monitors are much more convenient to use and take less space than the big bulky monitor sets used in the past. There was good reason for introducing them. It is not merely a matter of “fashion”. I can guarantee Ms. Leonard that we will _not_ see the bulky curved-screen monitors become fashionable in the future.

Next, to the fashion industry. It is true that changing fashions is a strategy to get people to keep buying new stuff. But Annie exaggerates the consequences of such a strategy. Consider her simple example of thick-soled versus thin-soled high heels. If the fashion keeps oscillating between the two, women who want to keep up with the latest fashion simply have to buy pairs of both types (which is what a lot of women do) and wear the ones that are fashionable.

This does _not_ double the number of heels they buy, because the main reason to buy a new pair is not an old one getting out of fashion but rather an old pair having been used for a long time (do the math yourself). Yes, there is an increase, but it is not a doubling.

Our national happiness

Quoting from Page 12:

So, in the U.S. we have more stuff than ever before, but polls show that our national happiness is actually declining. Our national happiness peaked sometime in the 1950s, the same time as this
consumption mania exploded. Hmmm. Interesting coincidence. I think I know why. We have more stuff but we have less time for the things that really make us happy: family, friends, leisure time. We’re working harder than ever. Some analysts say that we have less leisure time now than in Feudal Society.

If one believes the assertion that the goal of progress is to make more people happier, then this is one of the most important passages. I was interested to know how she made the assertion, so I looked up the footnotes. I was very disappointed to see that, once again, she did not link to a primary source but rather to a book that in turn discusses some polls conducted by some other agency.

Measuring “national happiness” is extremely tricky. First, nations aren’t happy or sad, it’s people who are happy or sad. So the question might be: is the average person on the street happier than before? But then again, who is the average person on the street? How representative are these polls of average people? Since I do not have access to the details of the polls, I make a few conjectural remarks.

First, it was around the end of the 1950s that civil rights agitation began in good force. The major legal breakthrough was in 1964, but there were many other things happening at the time. The 60s were dubbed an era of hippies and rebellion. Since the polls were taken in the 1950s prior to civil rights agitation, do we conclude that civil rights agitation is responsible for a decline in national happiness?

In the 1950s, the American economy was largely a national economy, not integrated into the world. There were many big businesses and relatively less competition. There was the concept of the “organization man” (note the gender bias) who joined a job at a young age and rose through the ranks. This was a satisfying and secure time.

Civil rights, increases in women seeking jobs, and increasing integration with and competition from the world economy led to more competitive pressure. Organizations had to painfully restructure, people moved from one job to the other both because of more opportunities and more layoffs. Couples started divorcing more. There was an increase in crime rates around the 70s and 80s. The economy went through many boom and bust periods. So, one could make a case that civil rights legislation and improvement in the position of women were largely responsible for a decrease in happiness. (A position that might be similar to some segments of the conservative movement).

But this is only partially true, and even if so, is meaningless and could be exaggerated in polls. Why? An “organization man”, once settled into a job, when asked whether he is satisfied with his job, isn’t thinking about alternatives much. He’s already settled. So, he may report a high level of satisfaction simply because of that, not because the job provides great pay or great stimulation and satisfaction. Similarly, a woman asked whether she’s happy with her marriage may report higher happiness if the possibility of divorce just hasn’t occurred to her, because such things are looked down upon by society.

Finally, self-rating is notoriously difficult for this and other reasons. Asking people whether they are “dissatisfied, satisfied, or very satisfied” with their job does not give meaningful, measurable and comparable results. A person living in non-grinding poverty may feel “satisfied” with life in a third-world country where people around her starve every day. But this same person may be very eager to move to another place that offers a better standard of living. Another person enjoying the higher standard of living may report feeling “dissatisfied”. The real test of who is more satisfied comes by looking at who moves where. Do people from India migrate to the United States, or vice versa? Do people from rural India migrate to urban India, or vice versa?

Finally, Annie’s judgmentalism about what “really matters to us” strikes me as disgusting. What’s wrong with preferring to watch a movie (or a documentary such as Annie’s) all alone rather than spend the evening chatting with friends? What is wrong with a person choosing to slog day and night to become rich (or help society, or become famous, or simply for the stimulation) rather than choose to spend an evening relaxing and admiring nature? The best judge of what “really matters” may be how people voluntarily choose to do stuff, but Annie’s suggestion that for fifty years, people have voluntarily chosen to do stuff that doesn’t really matter to them is too radical to be made without substantial justification.

The one charity argument and the end of poverty

Heard of the one charity argument? Donate to only one charity. I first learned about this from Steven Landsburg’s book More sex is safer sex: the unconventional wisdom of economics. The chapter where he describes the argument is an adaptation of this Slate article. It’s an interesting argument that I’ve heard of in a few other contexts, so I’ll sketch some of its main features.

The first thing I want to make clear is what “charity” means here and what the best form of charity is. Charity involves giving one’s money, time and effort in a manner aimed to maximize benefit (including tangible and intangible benefits) to society on the whole, rather than focusing solely on maximizing personal benefits. The place where personal choice comes into charity is in the personal judgment of what constitutes value and how to compare benefits to different people.

For instance, if I consider the happiness of a chicken to be as important as the happiness of a human, then I might donate money to chicken welfare — somebody else, who places the happiness of chickens several notches below the happiness of humans, may consider chicken welfare a waste of money.

I repeat — charity is where benefits are measured to society as a whole, but the yardstick used to measure those benefits is personal.

The one charity argument in short

Suppose there are two big charities, and you have 20 units of money that you want to donate to one or both of the charities. They are both noble causes in your view, and the amount of money that you intend to donate is too small to make a direct and significant reduction to the challenges confronting either charity. What do you do? The one charity argument says: find the charity that creates the most value per unit money, and donate to that. Why?

Let’s say charity A is a tad more worthy of the money than charity B. When making this decision, you’re factoring in things like the nature and importance of the problems they’re confronting, the efficiency with which they use money, the value you place on the benefits they provide, and so on. So you decide to donate the first unit of money to charity A. Now, you’re looking at the second unit of money. Has anything changed in your calculations? Well, charity A is one unit of money richer, but this really does not make much difference to the relative comparison between the two charities because one unit of money is too small compared to the scope of problems facing either charity. So where you donated the first unit of money really doesn’t affect the relative comparison of the two charities. So the second unit of money goes to charity A too. And so on, until all the money is with charity A.

First objection: Won’t this magnify advantages for slightly better charities?

No. Because when you’re comparing two charities, you do take into account how much money they already have. If charity A does better work but they already have enough money, you may decide to donate to charity B instead. The point here is that what matters is the total amount each charity has.

Small charity exception

An exception to the above general rule is small charities, or small components of large charities. Here, the money that you give is large relative to the nature of the problem, so giving some money to one cause actually changes the relative worth of giving money to each cause. For instance, after you’ve fed one hungry child, you may decide to feed another hungry child instead of give the first one a dessert.

So it is conceivable that you may give money to a lot of small charities, and just one large charity — what does not make sense is to simultaneously give money to several large charities.

Exception: charity of time and effort

When spending time and effort rather than simply money, it may make sense to contirbute to multiple charities. This could be, for instance, because working at the same charity gets boring and monotonous and the quality of work goes down. However, the same justification doesn’t apply to money — money is fungible, and the “quality” of money doesn’t reduce if it is all spent on one charity.

Exception:New information

It may happen that you’ve decided to donate to charity A and then some new information pops up that makes you decide that charity B is better on balance. It may make sense to switch out from charity A to charity B on eoncountering new evidence. What doesn’t make sense is to simultaneously donate to several large charities.

The hypocrisy of charity

I think the above covers the general argument as well as the main exceptions. Now, there are a lot of counter-arguments that can be offered, and a lot of people may feel uneasy with what I’ve written. If you find this argument distasteful or simply misguided, I recommend that you think through your objections before reading further.

The first broad argument against donating to one charity goes something like this — I’m going to assume that I am some big aid agency deciding the fate of the world and how money should be allocated, then I’m going to determine the proportions in which I allocate money to different charities. Now, I’m going to allocate my much more limited money in the same proportions. The idea is that if everybody else allocated money the same way I do, the world would be a perfect place.

Okay, there are several problems with this. First, everybody else will not allocate money the same way you do, because different people have different value systems, and different people have different amounts of money they wish to give to charity. Moreover, there probably isn’t even a global right way to allocate things. And most importantly, you (most probably) do not have a large amount of money to donate. Okay, if you’re Bill Gates, you should probably not put all of your money in one charity. For most of us, that’s not the case!

A closely related argument to this is: I want to solve all world problems: poverty, hunger, disease. In order to solve all these problems, I should donate amounts, however small, to organizations that are aimed at fighting each of these. We cannot solve one problem without treating the other.

Get down from the pedestal! With your meager resources, you’re probably unlikely to solve all world problems anyway. Avoid delusions of grandeur, and instead concentrate on how to put your limited money to the best, most important use. Do research on which organizations use the money best, how the money can be spent, how to ensure accountability and good service.

If you really want to solve world problems by donating money, make more money!

Another related argument to this is: Hey, it makes me feel good to donate to so many charities, I get so many thank you letters, smileys, I can associate myself with so many organizations, decorate my living room, wear lots of T-shirts. Okay, fine! But that doesn’t fit in with the definition of charity.

And yet another related argument: Donating money to many causes makes people more aware of these causes and hence become better citizens. Possibly, though I don’t see why people couldn’t learn about multiple causes without donating to them. And besides, this yet again contradicts the aim of charity making it a selfish endeavor — donating so that one can become a “better person”, whatever that means. (While the argument just refuted makes little sense for monetary donations, it does make sense for donations of time and effort, where volunteering for different charities can make one understand better their mode of operation and the challenges they face. In fact, volunteering for many different charities can be a way of gathering information about charities that ultimately helps one decide which one to donate to.)

The end of poverty

Two and a half years ago, I stumbled across the book The End of Poverty by Jeffrey Sachs (Columbia University page). Sachs is a well-known development economist who is one of the forces behind the Millennium Development Goals (for which there’s the Millennium Project), something he talks about in his book. At the time I read his book, I had little prior knowledge of development economics, and his commitment and idealism seemed deeply touching.

About a year ago, I had a chance to read William Easterly’s book The Elusive Quest for Growth. In the book, Easterly took a pretty critical stance of a lot of Jeffrey Sachs’ work. In his later book, The White Man’s Burden, Easterly is even more critical of Sachs. While I am still far from knowledgeable about development economics and the myriad issues surrounding it, I see some interesting parallels between the criticism Easterly makes of the way developmental aid currently works, and the one charity argument.

According to Easterly, the problem with the approach taken by many aid agencies is to try to aim for ambitious goals determined top-down, viewing the resolution of poverty and disease as a “technical engineering” problem. Further, the aid agencies combine a multitude of goals, with each agency responsible for a large number of goals, rather than focus on a particular narrow goal. The argument usually given is that everything is complementary. However, Easterly says that this leads to a collective action problem.

Why is “doing everything” so appealing? Easterly argues that aid agencies and charitable organizations are usually less accountable to the poor people they serve and more accountable to the rich people who feed them the money, and this means they need to play to the dream and ambitions of these rich people. What is more attractive than saving the world, rescuing starving children, and ending world poverty, all in a single stroke?

Perhaps there is a connection between people finding the one charity argument repulsive and Easterly’s observation of the way aid agencies often try to confuse too many goals and end up not being able to achieve the simplest goals. To quote Easterly:

Popular books, movies, and television shows are full of plotlines that feature a hero, the chosen one, who saves the world. The Harry Potter series is a particularly successful variation on this plotline: an ordinary teenager who triumphs over evil with courage and compassion.

We all love the fantasy of being the chosen one. Is part of the explanation for the Big Plan’s Western popularity that it stars the rich West in the leading role, that of the chosen people to save the Rest?

Privileges versus incentives

I recently came across this seminal article by Peggy McIntosh on unacknowledged privilege. “Unacknowledged privilege” is today a not-uncommon term used to describe how people within a privileged group often fail to acknowledge that their success, or their being relatively well-off and not having to worry about various things, is a form of privilege. Two examples of unacknowledged privilege often found in the U.S. literature are “male privilege” and “white privilege” — men not acknowledging all the ways they benefit by being male, and whites not acknowledging all the benefits they enjoy by being white.

Privileges — the coarse end

When it comes to listing unacknowledged privileges, the privilege of being white or male seems to pale in comparison with the privilege of mere existence. How many of us acknowledge the privilege of simply existing, being alive — an event that in itself seems to be one of extremely low probability? Even if we take our (admittedly temporary) existence for granted, how many of us acknowledge the privilege of having enough food and water to be able to survive over a somewhat longer period of time?

Even if existence and survival are taken for granted, how many of us acknowledge the privilege of being born in an era where we have access to facilities such as electric lighting that didn’t exist two hundred years ago? For those of us who cherish the ability to read, how many of us acknowledge the privilege of being able to read?

The very word “privilege” is loaded, because it usually suggests a reference point, and it isn’t clear why we should pick one reference point instead of another. Why not pick the person who didn’t exist — the sperm that never met the egg, or the fetus that got aborted, to compare ourselves against? Why not pick the chicken that was slaughtered yesterday night as a reference point?

Privileges — the fine end

I don’t know how many people seriously believe that the playing field is level for everybody. I suspect that nobody seriously believes this. Everybody plays on a different field, and has a unique combination of circumstances that give that person some privileges and some liabilities. In addition to “white privilege” and “male privilege”, we may add the privilege of being born to a well-to-do family, not being beaten up or sexually harmed by abusive family members, not having had any disfiguring accidents in childhood, and many others. Or, we can talk about positive privileges such as having found good friends, having had inspiring teachers, having managed to get into college, having found a good job, and many others.

So why do people talk of a level playing field and equality of privileges? This is probably precisely to counter all those who argue that the playing field is not level — if somebody “accuses” me of having had unfair access to privileges, then I “defend” myself by arguing that no, actually, I had to struggle for them as well and didn’t have a cakewalk. But in more sanguine moments, I don’t feel any particular inclination to feel bad about the privileges I enjoy, or to particularly deny them. Yes, I’ve had some privileges, that were denied to people in my parents’ generation, that are denied to many among my peers, and these privileges have played a major role in shaping me. I feel lucky and grateful for it. What I refuse to feel is guilt, or the temptation to argue that no, this is all a level playing field.

Increasing privileges

The debate around unacknowledged privilege, as framed by McIntosh’s seminal article, seems largely to me to be a red herring. Since nobody seriously argues that whites are not privileged, McIntosh seems to be attacking a straw man here. A better explanation might be that McIntosh is simply trying to raise awareness of an issue that often slides under the radar, or trying to expose the hypocrisy of glib talkers who try to sweep the issue under the carpet.

Talk of privileges, however, can have unfortunate side-effects. When we talk of disadvantages, then the natural solution is to pull the disadvantaged up by providing more opportunities and privileges to them, reducing and removing prejudice, and other such things. Some of these tend to hurt the privileges of the privileged group, but many of them also benefit the privileged group. For instance, the end of apartheid laws in South Africa opened the doors for businesses to employ blacks, benefiting the businesses (a larger labor pool to choose from) and hurting some of the whites in the labor market.

But when we talk of privileges, it induces a squirmy guilt, leading to the question, “How can these privileges be abolished?” In some cases, the privileges in themselves are the problem — for instance, the privilege of a person the the advantaged group having the ability to be rude and dismissive of the person in the disadvantaged group. Here, the privilege itself is the problem. Rather than give people in the disadvantaged group an equivalent privilege, we want to abolish the privilege for both. But in most cases, the privilege is something that we would like to spread to the disadvantaged group rather than abolish, and often, spreading it to the disadvantaged group hurts only a very small fraction of people in the advantaged group (by driving up competition, for instance) rather than directly destroying their “privilege.”

Think incentives, not privileges

Privileges can be of two kinds: different headstarts and different incentives. People often confuse the two, or think only of headstarts when talking about privileges. My experience suggests that it is the differences in incentives that matter a lot more than the differences in headstarts.

To understand this, compare the middle-class family today with the middle-class family thirty years ago, in a country that has seen significant economic growth. It is possible that the living standards of the middle-class family today are substantially greater. however, it is also likely that the system of incentives that govern family members is largely similar. Which is why a middle-class family thirty years ago would still be closer to a middle-class family today than a poor family today that may be closer to it in terms of absolute wealth.

The real tragedy for disadvantaged groups isn’t merely that they start with a handicap, but that their incentives are screwed. Let me illustrate this with some stylized examples and experimental studies.

Consider, for instance, a boss (who, for the sake of illustration, we’ll assume to be male) who, when hiring male applicants for a clerical job, selects them on the basis of skill for the job, but when hiring female applicants, selects them on the basis of how “pretty” he considers them. (This is not beyond the scope of imagination). In fact, even if the boss doesn’t actually hire this way, all that matters is that potential employees get the impression he does. Then, males trying to get the job will work on honing their job-related skills, while women trying to get the job will either give up (if they think that beauty isn’t something that can be changed) or try to look more pretty, based on whatever criteria they figure the boss cares about. As a result, the women entering the job are unlikely to be as skilled, and moreover, even the women who do not get into that specific job end up being less skilled, and thus, less eligible to apply for other jobs (that may care more about skill than beauty) or use their skills in other ways.

Mining of social networking sites has revealed, for instance, that in many Western societies, richer men are more sought after and prettier women are more sought after. In fact, some studies have shown that intelligence for a woman correlates positively with dating success only up to a certain point, after which intelligence actually correlates negatively. Assuming that dating success is important both for men and women, this sets up an incentive for men to work hard to become rich, while it sets an incentive for women to be reasonably smart but not “overdo” it. I wouldn’t be surprised if this and many other incentive systems could explain why a large fraction of people, both in the high-money and high-intellect professions, are men.

A study by Mullainathan and Bertrand showed that white employees applying for the same job, and with equivalent qualifications, are a lot more likely than blacks to receive responses. This was bad enough. However, the more depressing side of the study, that often isn’t noted, was this: among white applicants, high-quality applicants were more likely to be called for interviews. But among black applicants, having extra skills and experience did not help their chances of being called for an interview. In other words, whites had the incentives to acquire extra skills and experience, because it made a difference to their call-back rates. Blacks, on the other hand, had substantially less incentive.

In his 2004 keynote speech, Barack Obama (at the time, a Senator from Illinois, now the president of the United States) highlighted the phrase “acting white”:

Go into any inner city neighborhood, and folks will tell you that government alone can’t teach our kids to learn — they know that parents have to teach, that children can’t achieve unless we raise their expectations and turn off the television sets and eradicate the slander that says a black youth with a book is acting white. They know those things.

Here, “acting white” refers to an incentive system whereby blacks in the United States who spend too much time studying are considered to be acting white — betraying the black community and mingling with the other community — the whites. At the time Obama had made his speech, there was little evidence of “acting white” as a phenomenon. In 2006, Roland Fryer published this research paper that showed that acting white was a real phenomenon. Now, that’s a genuine incentive problem!

(For a more detailed discussion of discrimination, from which I picked up many of these examples, refer Tim Harford’s book The Logic of Life, Chapter 6 (The dangers of rational racism).

Don’t headstarts matter too?

A clearer distinction between headstarts and incentives is important, because I think focusing on getting the incentives right is a lot more important. It also diverts attention from what I consider ultimately unproductive discussion of who has more “privileges” and what is more “fair”.

The problem of headstarts, or rather handicaps, isn’t as much of a problem if the incentives are working correctly. A severe handicap may, of course, itself alter incentives, and hence, steps like anti-discrimination legislation, affirmative action, and economic support and scholarship for poor students may be important. But if the incentives aren’t right, throwing money or laws at the problem will not solve it.

In his (by now bestselling) book Outliers, author Malcolm Gladwell highlighted recent research that indicates that the most essential ingredient to success is hardwork combined with a sense of connection between effort and reward. In other words, people work hard when they can see how the more they work, the more progress they make. Gladwell looks at occupations and cultures where such connections have been strong, particularly those involving a strong entrepreneurial element. He tells the story of Jews who worked in cloth factories in New York at the beginning of the nineteenth century, and whose children and grandchildren are now successful lawyers, doctors, and entrepreneurs. Gladwell points out that these Jews didn’t have a headstart and were often discriminated against, but what they had right were their incentives. I have little direct knowledge of the things Gladwell talks about, but it fits in well with the broad theme of incentives mattering a lot.

To sum it up, the language of privileges often reduces to a confused and guilt-ridden dialogue about fairness, equity, and morality, with different people claiming different moral high grounds. The language of incentives often tends to come closer to the root of the problem, and help us see clearly what is going on.

Some interesting points about affirmative action

“Affirmative action” refers to a set of policies to ensure that certain disadvantaged groups get equal access to certain kinds of opportunities. It is typically used in the context of lowering standards, in the sense of giving opportunity to people from disadvantaged groups whose credentials in other respects may be lower than those of people from other groups.

The system of reservations for Scheduled Castes (SC) and Scheduled Tribes (ST) in government jobs and college admissions practiced in India is an example of affirmative action at its most explicit. A fixed fraction of the available seats is reserved for the group that is considered to be at a disadvantage. Competition within this fraction of the seats, as well as in the “general category”, is through the same procedure. Thus, if a college selects students through an entrance examination, the same examination is administered to all candidates. The admission cut-off for general category students and for SC/ST students, however, is determined separately. Thus, an SC/ST student may get selected even though he/she scored lower on the admission test than a general category student who did not get selected.

In principle, it could happen that the cut-off in the SC/ST category is higher, or more stringent, than the cut-off in the general category. In such a situation, a separate cut-off is not implemented, and a common cut-off point is determined. I am not aware of any instance in which this has happened, indicating that the disadvantaged/backward status is far from redundant.

Recently, I had a chance to read Tim Harford’s book The Logic of Life, where Harford devotes a chapter to affirmative action and related issues. In the chapter, Harford talks of the work of Roland Fryer, an economist now at Harvard University (Fryer is also mentioned in passing in Freakonomics, the famous book on economics by Steven D. Levitt and Stephen J. Dubner). Curious to learn more, I visited Fryer’s faculty page. A quick link to his papers led me to discover a wealth of insights on affirmative action. This paper by Fryer and Glenn Loury on the myths surrounding affirmative action was particularly enlightening. I’ll take the liberty of highlighting some of the points I found particularly interesting and giving my own take on them.

Over-resentment?

A reservation or quota for people in a certain disadvantaged group can mean that certain other capable people in the non-disadvantaged group are deprived of opportunities. This is particularly true, for instance, for cases where there are strict entry limits and that are highly competitive.

However, if entry into a place is highly competitive and the number of positions is limited, then allocating a small fraction of that to a certain disadvantaged group deprives at most that small fraction of people of opportunities. For instance, a university that has an intake of 5000 students, and sets aside a quota for 1000 students, deprives at most 1000 people of potential positions in the university. Thus, the size of the set of people who resent the quotas should be limited to 1000. In practice, the degree of resentment far exceeds the number of people deprived.

Why? Fryer offers the “parking” analogy. Imagine a parking lot where one slot is reserved for parking for cars with people needing wheelchairs. Suppose all other slots are full. Every non-handicapped driver who arrives at the parking lot finds all slots except the wheelchair slot empty, and curses the “reservation” system that prevents him/her from taking the empty slot. In fact, if the slot had not been reserved, only one driver would have been able to park there. In other words, each driver ends up over-resenting because he/she assumes that he/she “just missed it”, rather than being more realistic.

Similarly, students applying for admission and employees seeking jobs may tend to believe that they “just missed getting in” and hence may believe that they are in the narrow window of people who have been adversely affected by the quota.

Dumb quotas versus blind affirmative action

Suppose a university has an affirmative action target. The university needs to get at least 20% of its intake from a specified disadvantaged group. There are two options the university can use: first, an explicit quota that simply ranks all disadvantaged people and all other people according to the same criteria but chooses different cut-off levels to meet the quota. This is the admission test scenario I described earlier.

Second, the university can try to tweak its admission criteria in order to ensure that a larger fraction of disadvantaged people get through. In fact, before determining its precise admission criteria, it can examine and data-mine the applicant pool and then determine a formula for weighting different factors to achieve the quota as best as possible.

The former is what Fryer calls “color-sighted” affirmative action, while the latter is what Fryer calls “color-blind” affirmative action, because it does not explicitly acknowledge any quota (Fryer discusses color-blind affirmative action in a separate paper with Glenn Loury). Fryer’s key insight, which is again one of the things that should be obvious after a little thought, is that color-blind affirmative action is always worse than its color-sighted counterpart.

The reason is that in the color-sighted case, choices within each group are made optimally. Thus, among the disadvantaged group, the correct criteria are used, and ditto for the non-disadvantaged group. However, tweaking the criteria too much can result in making bad choices in both groups. When the disadvantaged group is not too disadvantaged compared to the other group, then the problem is not so severe, since only a little tweaking is necessary.

It gets worse. If criteria are tweaked too much away from the criteria that determine what a good student or employee should know and be, then this alters the incentive systems, both for the disadvantaged and non-disadvantaged. For instance, a criterion that relative ranking within one’s school should be given undue weight so that people coming from poor schools have a fighting chance, may lead students across the board to get obsessed with beating their school fellows on tests, which is arguably not a good thing. Similarly, a criterion that favors certain extra-curricular activities for no good reason other than that people in the disadvantaged group are more likely to do those activities, may lead a lot of people to waste their own time doing such activities to bolster their admission chances.

I think there is one situation in which tweaking criteria in the light of affirmative action might be good. This is where the spirit of the affirmative action policy really requires an application of new criteria that change the meaning of the value or relative worth of a student. For instance, affirmative action for a disadvantaged group that has been historically poor may result in a realization that factoring in the family’s poverty against the student’s performance may result in better quality decisions even for general applicants.

Good people do not discriminate against others, or discrimination is not something that we do, so we should not be subject to affirmative action

A classroom experiment by Fryer, along with Goeree and Holt, discovered something eerie. In the experiment, there were two kinds of workers — “green” and “purple”, and a bunch of employers. The employers were given information about whether a worker was green or purple, and the worker’s score on a test. The test score was in turn determined by how much “education” the worker got (workers had to “pay” for education) along with some random factor. The more education a worker chose to purchase, the higher the likelihood of a good test score. The employer’s goal was to try to hire the “best” workers in the sense of those who had the most education — but the only thing the employer saw was the color and score.

It so happened that on the first round, the purple workers ot somewhat lower test scores. This made employers more reticent to hire purple workers. Employers started hiring more green workers. Even purple workers with high test scores started getting by-passed because employers found the color a stronger indicator of ability than the test score, which was partly random. After a few rounds, purple workers stopped bothering to purchase an education. By the end, purple workers were shouting at the employers that they weren’t being hired, and employers were shouting at the purple workers that they weren’t getting educated enough.

This discrimination arose spontaneously, from an equal beginning, with just a bit of randomness tipping people off.

Discrimination usually hurts employers — but it is in their best interests to do so

Gary Becker, a professor at the University of Chicago and also a Nobel Laureate in Economics, pioneered the economic analysis of discrimination, back in the 1950s, when such subjects were considered outside the domain of economics. Becker made a simple observation, backed by statistical analysis and arguments: discrimination against a certain group of workers usually improves the bargaining power of the workers competing with them, but hurts potential employers, because they have a smaller labor pool to draw from. For instance, laws that forbid blacks from mining in South Africa were good for white miners but bad for mining companies that were forced to pay higher rates because competition in the labor market was reduced. This led Gary Becker to make the bold prediction that the more free and competitive the market, the more the pressure to discriminate less.

The study of discrimination has advanced a lot since Becker’s original work on the subject. A new understanding of discrimination has surfaced, whereby in the short run, employers benefit from discriminating. Tim Harford calls this “rational discrimination”. Others have called it “statistical discrimination”.

The idea behind rational discrimination is that employers, faced with limited information about employees, and limited resources to collect more information, are likely to use demographic and other statistical factors that correlate well with effective employees. This does not merely apply to employers. It also applies, for instance, to insurance providers. Health insurance is cheaper for non-smokers, auto insurance is cheaper for women, even though certain men may be very careful drivers and certain non-smokers may be very callous about their health in other ways.

This creates a vicious cycle, because once people in the disadvantaged group feel that their application will not be given fair consideration, they become less inclined to work to acquire the credentials needed. This is precisely what happened in the classroom experiment. The classroom experiment described above in fact demonstrates how a small initial accident got perpetuated into something collectively destructive, even while each player was acting fully rationally.

The way to get out? One thing that can be done is to have true information about employee capabilities more easy for employers to access and verify. In fact, related ideas have been proposed in many other related areas. For instance, some recent work has suggested that if employers are allowed to have access to the criminal record of potential employees, they may be more inclined to hire people from the disadvantaged groups who do not have a criminal background. The precise criminal record makes “racial profiling” more redundant.

Nationalism?

A politician who runs in an election on a platform of racial segregation, religious segregation, or narrow regionalistic jingoism may well win the election, but such a politician is rarely hailed by the media or “educated elite” as an exemplar. Definitely, politics of this kind is rarely viewed in a positive light by people of other religions or races. And yet, nationalistic politics continues to be viewed, by many influential people, as something positive and, to a large extent, exemplary. More touchingly, such politics is often admired by people in other countries, even when it harms the interests of those other countries.

Take, for instance, the typical platforms of electoral candidates in the United States. Senator John McCain, a war veteran and Republican politician, had “national security” as one of his top themes, and one of his campaign slogans was “Country First”, while his opponent Barack Obama, who is now the President of the United States, showcased a policy of providing tax breaks for companies that “create jobs in America” rather than ship them overseas. Bashing foreign countries is a favorite pastime of U.S. politicians, and Obama and McCain are perhaps far from the extreme. Consider, for instance, George Bush’s “Axis of Evil” that comprised Iran, Iraq, and Syria (never mind the enmity between Iran and Iraq). Or John Kerry’s proposal to prevent poor U.S. workers from having their jobs stolen by people in Bangalore and Beijing, thus converting India and China from poor, populous countries to be pitied to greedy cheaters and thieves who need to be punished.

I used to believe that only (some) Indians harbor under the illusion that Indians are qualitatively different or superior compared to others (thanks to our “rich cultural heritage”, including, among other things, the zero). But such lines seem to be even more widespread among U.S. politicians, with Obama and McCain affirming in their presidential debates that the American worker is the most hardworking in the world (never mind the genetic/racial superiority arguments implicit here, and the total absence of supportive evidence).

Economic nationalism

Putting the “country first” in the economic sense rarely seems to raise eyebrows. Consider, for instance, that the United States, one of the world’s richest countries, has politicians who actually think they can get brownie points among the public by claiming that people in poorer countries such as India and China, are doing something immoral by “stealing jobs for American workers”. If these politicians stand by the doctrine that every human life is equally precious, then, of course, such statements make little sense. First, the fraction of such jobs that are “stolen” in the sense of being illegal is probably too low to make a difference. Second, the Indian or Chinese worker is winning simply because of certain comparative advantages (greater desperation and hence willingness to accept lower pay, a time lag that helps with certain kinds of work, and in some cases, better qualifications). Third, there are net gains here for a lot of people — including people in the U.S. and many other countries who can enjoy cheaper products.

The United States is not the only country that practices such nationalism. “Buy British” is a common theme in the United Kingdom, trying to tap in on people’s patriotism to make them buy national products. In India, which is considerably less regulated than the pre-1991 era, buying desi stuff still has positive connotations.

Shorn of its rhetoric, “country first” politics rests on some premises that are rarely put explicitly: first, that the people of one country are in some way intrinsically superior and their lives are more valuable than those of the people of another country. Second, that the people within the country are incapable of making their own decisions about how to live, work, and trade, and they need a government to help protect their interests from the people of other countries.

This seems, at least in principle, similar to racial and Hindu caste segregation: that the people of one caste are intrinsically superior to those of another caste, and an individual within a caste (even a “superior” one) is not allowed to breach the borders of caste. Thus, a high-caste person is forbidden from marrying a low-caste person, even when the two are passionately in love.

Put this way, it becomes clear that “country first” politics, while most obviously harmful to the people of other countries, are often very harmful to the people of that very country, and the people who’re actually helped are usually a very select few — politicians and people who control the political rules.

In fact, the benefits to them are often indirect. Consider, for instance, that dictators in countries, seeking to make their reign more powerful and terrifying, may often court sanctions by other powers, because cutting off of trade links and personal exchange only weakens the opposition within their country. Saddam Hussein, the now-deceased ex-president of Iraq, was probably in this category. While Saddam’s direct atrocities claimed many lives, the indirect deaths of innocent people due to sanctions with Iraq probably claimed a fair number of lives as well.

This is not to suggest that democracies and dictatorships are equally ruthless in their implementation of “country first” policies. Both face very different incentives. Democratic governments often use “country first” rhetoric but, if they have the sense, will not translate such rhetoric into action because they’re accountable for results. Dictators may or may not need to bother with “country first” rhetoric, and their main incentive in using such rhetoric is to protect themselves from the international integration that may challenge their reign.

Some recent history

Obama comes from an interestingly diverse background. In the 1980s, he worked as a community organizer in Chicago, putting him in direct contact with people whose lives and communities had been disrupted by the closing down of steel mills. Thus, he probably has natural empathy for people who go through economic hardship due to a contraction in demand or manufacturers shifting overseas. At the same time, Obama’s father hails from Kenya, and he spent his childhood in Indonesia living with his mother and stepfather. Obama also studied at Harvard Law School and taught at the University of Chicago Law School, and hence was exposed to very libertarian viewpoints.

Given this diverse background, I suspect that Obama may be a better candidate than many for considering a more global and less “nationalistic” perspective. Nonetheless, some of the recent policies of the administration include policies that specify that “stimulus money” be spent on creating American jobs and preference be given to American workers, seem suspicious to me. After all, people receiving a limited amount of stimulus money should have incentives to put it to the best possible use. If the administration believes this not to be the case, they should make it harder to get stimulus money by requiring greater stringency in meeting the specific requirements rather than adding their own general-purpose requirements. If this use involves hiring Americans, they’ll hire Americans. If it involves hiring people from other parts of the world, they’ll hire people from other parts of the world. The provision makes even less sense when applied to research grants for colleges, where a significant fraction of graduate students may be foreign students (such as me).

More disturbing than policy specifics is the general rhetoric tone that Obama the presidential candidate and Obama the president have taken: aiming to project this as an issue of “protecting American workers from foreigners out to steal their jobs”. That such rhetoric is deemed necessary in one of the richest countries is not a good indicator.

More nationalism

Nationalist rhetoric as a political tool to gain traction with voters is not what I’d call exemplary, but its harm is limited. What I think is even more harmful is the use of nationalist rhetoric to significantly expand the scope of government by telling people what they should do and what they shouldn’t do in order to protect them from the evil foreigners. Of course, the use of nationalist rhetoric to expand the scope of government does not require painting foreigners as evil, but the latter helps. Particularly in times of crisis, when people look to the government, it helps to blame the matter on foreigners and increase government control.

Not all governments may have malicious intentions, but hidden behind any attempt to take the reins of the country and prevent people from making their own decisions in the name of “nationalism” is either malice or hubris. Malice, if the goal is to cynically exploit the situation. Hubris, if the politicians genuinely think that, with the reins of the economy in their hands, they can save their people.

Military nationalism

Military nationalism is the even less benign cousin of economic nationalism, with governments using xenophobia as an excuse to conduct war and expand the scope of government. The Bush government has often been accused of unfairly exploiting the post-9/11 sentiment to conduct an ill-timed war in Iraq, and to use the wars as a cover to expand the powers of the executive and breach citizens of rights.

Just like economic nationalism, military nationalism could take two forms: one, where it is restricted largely to rhetoric without actually harming anybody, and two, where it actually leads to action, that is inevitably harmful. In the first category come activities such as political rhetoric that seeks to gain political mileage from existing military strength. In 1998, after India conducted nuclear blasts in Pokhran (something that scientists had been preparing for for quite some time) the then-in-power BJP and their extended family, the Sangh Parivar, used it as an occasion to celebrate the great achievements of India, the Hindu nation, and used it to extol the great virtues of their own leadership. This political exploitation of what was largely a scientific achievement that had little to do with the party in power had little direct damage, though it might have contributed to the rise of “Hindu nationalism” that arguably had a number of other negative effects.

Nonetheless, I’d argue that even the first form of military nationalism — the kind that doesn’t directly harm a lot of people, contributes to the kind of nationalism and jingoism that we could well do without.

Can nationalism be useful?

Is there a positive side to nationalism? I certainly think that having a national community is a useful concept, because it creates a natural “division of labor” and “place to focus on”. Each of us may feel somewhat more responsible for the upkeep and maintenance of our locality than for neighboring localities, and thus, can concentrate our limited efforts on a particular locality. Similarly, having a national community that we belong to and that can provide a framework for our efforts is useful.

However, nations typically claim to be a lot more than extended communities. People are expected to, even admired for, laying down their lives for their nations, but few people are admired for laying down their lives for the suburb in which they live. Nations also claim to have some sort of collective identity and voice, and each nation claims to have a different voice from the others. Thus, we ascribe beliefs and value systems to nations, and argue that different nations should not interfere with each other’s value systems, even when those value systems infringe on the rights of individuals that would be considered inalienable in other nations. This collective identity and collective voice seems, to me, to largely be a useful myth that enhances the power and influence of politicians.

Unfortunately, unlike racial and caste segregation which, though alive, are clearly acknowledged by many as evils to be tackled, nationalism is very far from being considered evil. Even the imposition of nationalism on people against their will is not considered evil.

On migration

I’ve recently been reading The Logic of Life by Tim Harford (personal website and see the page on the book on his website). Harford is an economist in the UK who currently works for the Financial Times. Chapter seven of this book goes into great detail on the question of cities and their economies.

Harford begins by observing that prices for basic goods (food, rent) are higher in cities than in rural areas, and even though wages are higher in cities, the difference in wages is less than the difference in prices. In other words, doing the same join in a city allows one to earn more, but the cost of living rises by even more. So why, asks Harford, do people migrate to cities?

Harford’s basic explanation is simple, and dates back to the time of Alfred Marshall, one of the founding fathers of modern economics. Marshall observed that the main value of cities is close contact with other people. When many people live in close proximity, they can work more efficiently with each other, leading to a better quality of life. But more importantly, cities are great for the creation of new knowledge, as people learn by observing each other.

Harford also blasts the myth of cities being “bad news” for the environment. According to Harford, while cities no doubt pollute more per unit area, they populate much less per person. Apart form the obvious efficiencies entailed by volume, such as mass transportation systems (of which the most efficient, according to Harford, is the elevator) there is efficiency due to higher prices.

In conclusion, Harford complains about the fact that despite cities being efficient and important, politicians in the United States and Europe often stunt the growth of cities by subsidizing and pandering to vote banks in rural areas. Thus, he argues, these subsidies often go to the relatively richer people in the rural areas rather than the urban poor.

Reading this chapter led me to reflect a bit on my (extremely limited) knowledge about rural-urban migration.

Why do people migrate?

There are some differences between underdeveloped countries like India and developed countries like the United States. In the United States, rural people are not in general substantially poorer than their urban counterparts. Farmers in the United States, for instance, are often fairly rich. In India, on the other hand, rural areas are substantially less developed, and the rural poor are substantially poorer.

Influx of people from rural to urban areas is fairly common in India. Construction workers in Chennai and Bangalore often come from rural Andhra Pradesh, Bihar, and Orissa. Barbers and other small-scale entrepreneurs from rural areas in Uttar Pradesh and Bihar often come to cities like Mumbai and Bangalore. Waiters in many city restaurants are people with families in the villages.

At the lower end of the economic scale, I suspect there are two broad reasons for people coming to the cities. The first is to exploit the wage differential. The same kind of job pays more in the cities. A single earner may come to the city, earn the higher wage, and send money back to his (or, more rarely, her) family back in the village, where costs are low. Sometimes, an entire family may move to the city in the hope of saving enough money to return to the village.

The other reason is to enter the city economy on a more permanent basis. Here, a person or family may enter the city and accept the higher cost of living in exchange for greater opportunities to rise up the economic ladder. This is particularly the case, I suspect, for people in families that are not just poor but come from castes and backgrounds that are systemically discriminated against in the villages. In a larger and more cosmopolitan city, where commerce often takes precedence over prejudice, these people have more of a chance to earn well from their skills.

This second reason is, in some sense, a rephrasing of Harford’s own explanation of why people migrate to cities. True, people at the low end of the educational and economic ladder, when migrating to cities, may not be thinking in terms of the externalities and knowledge spillovers that cities routinely provide. But such calculation may well be implicit. After all, it is the density of population in cities that provides more job opportunities, more scope for enterprise, more learning opportunities, and less blatant bigotry and prejudice.

The urban poor

Despite the existence of huge numbers of urban poor, migration is still generally from rural areas to urban areas. There are two reasons to this. First, whatever the conditions of the urban poor, the rural poor are often substantially worse off. Second, as I pointed out earlier, even those urban poor who have sacrificed a lot to come to the city hope to be compensated with a chance to rise up the economic ladder.

Given the strong attractions that cities have to offer, migration is natural. In the absence of rapidly expanding good-quality cheap housing, there will be slums and haphazard settlement. The squalid living conditions in slums may lead one to naively condemn urban life and the “inequalities” it creates. I suspect that much of this inequality existed earlier — people would not migrate to the cities if it made them worse off. The rapid influx of people into cities, even where it leads to the growth of slums, may well be seen as a vote by the people for the opportunities that cities have to offer, in as much as rising stock market prices as seen as a vote for the company’s performance.

Further, it’s important to remember that some people may choose the slum simply because it is cheaper, and given the huge demand for cities, constructing fresh housing will not, in the short run, remove the slum. I’ve heard anecdotal stories about how, when slum-dwellers were given cheap housing to replace the slums, many of them sold the cheap housing to other people and went back to the slums. Others, who moved to the cheap and legal housing, were quickly replaced by new migrants.

Pride and prejudice

In his doctoral thesis at the University of Chicago, Gary Becker (homepage and blog) studied the economics of discrimination. He later published his research in a book titled The Economics of Discrimination. Becker’s key idea was that markets reduce discrimination. Simply speaking, competitive forces make it harder for firms to be able to make economically unprofitable decisions due to prejudice. Becker also showed, using simple mathematical models, that the larger the proportion of the underprivileged group, the faster the discrimination is destroyed. He later argued, in BusinessWeek columns later republished in his book The Economics of Life, that South Africa’s apartheid regime was supported by white trade unions, and disliked by white employers, since it reduced the size of the labor market and forced them to pay higher wages. Since a large fraction of South Africa’s population was black, this constituted a significant competitive disadvantage, and employers were thus, by and larger, supportive of ending apartheid legislation.

That cities are, in general, less prejudiced than villages in the same country, seems to be at least pratly explainable by the greater strength of market forces. Suppose, to take a hypothetical (but not entirely implausible) example, there are a bunch of Hindu shopkeepers serving customers in an area, and they are generally averse to hiring Muslim assistants. If there are many Muslims willing to work, and none of the shopkeepers are hiring them, the Muslims would be willing to work for relatively lower wages. A shopkeeper may then decide that at this low wage, the benefits she gets from hiring the assistant are well worth the discomfort it brings her. So, she hires a Muslim assistant. Since her Muslim assistant is paid a lot less than the Hindu assistants in other shops, she has a competitive advantage. Other competitors then decide that they could fire their Hindu assistants and get Muslim assistants. As Muslim workers are more in demand, their wages go up, and the Hindu workers bid their wages down to stay abreast of the competition.

In villages, these things happen more rarely. Why? There are many possible reasons. First, in villages where the rule of law runs less than in villages, certain groups can use violence to “enforce” their prejudices. Thus, if a Hindu shopkeeper hires a Muslim assistant, other shopkeepers, rather than reacting to competitive pressures, may hire hooligans to beat up the shopkeeper and assistant. Of course, this happens in cities too. But the better the enforcement of law and order, the more it is imperative that people respond to competition by performing better rather than by suppressing their competitors.

For instance, religious competition is routinely suppressed in villages. In many parts of Orissa, certain activists who call themselves the “Hindu right” have attacked Christian missionaries whose goal was to convert people to Christianity, as well as the Hindus they converted (most of these Hindus are Dalits — people from oppressed castes). In the presence of a good rule of law in these areas, the “Hindu religion” would have to compete in the marketplace with Christianity by removing or at least reducing the oppression suffered by the Dalits.

Second, a typical village may not have a sufficiently large and diverse market for competitive forces to be powerful enough. With just one person in each trade, it is hard for competitive pressure to build up.

Third, distinct communities may live separate from each other, with efforts to minimize commerce and other interaction between them. Such separation may be enforced by recourse to real or made-up religious teaching, false stories told about the “other”, and violence or the threat of it. In such circumstances, people in one community may not have enough knowledge about the other community to locate people they might work with or have dealings with.

Cities in danger?

If cities help people escape prejudice, they can also foster new ones. Or at any rate, they can help concentrate prejudices that were earlier present but diluted across large areas. And given the density and mixed nature of the population of the cities, these can lead to violence. If Hindus in a Hindu village have very negative views of Muslims in a Muslim village, this is bad news, but given the limited opportnuities for them to interact, it is unlikely to lead to direct violence. In a densely populated shantytown with both Hindus and Muslims, such views create riot-prone conditions.

Unfortunately, politicians are not immune from using the vibrant economies of cities for their own political ends, and sometimes these ends conflict with the values of catholicism, harmony, and tolerance. Mumbai (formerly Bombay) is considered India’s business capital, as New York is to the United States. It is also the seat of Bollywood, India’s film industry. It is the prime example of a city that people often travel to in order to fulfill their dreams. It has migrants from all over India, and includes, in addition to Hindus and Muslims, many Christians, Jews, Sikhs, Parsis.

In 1992-93, around the time of the Babri Masjid demolition, the Shiv Sena, a political party claiming to represent the “Hindu right”, made a a number of provocative statements that led to Hindu-Muslim riots in Mumbai. These were certainly not the worst riots in India — but it was bad news in a city as cosmopolitan as Mumbai. Following that, there were serial bomb blasts in 1993, believed to have been sponsored by underworld (Muslim) dons based in Dubai, in “revenge” for the crimes inflicted on their co-religionists. Since then, Mumbai has been witness to many blasts and terror attacks, most notably the bomb blasts in July 2006 in local trains, and the November 26-29 infiltration from sea by terrorists who attacked six different parts of the city.

Now, it’s true that people of a city cannot vote out terrorists, but it is easy to vote out politicians who stoke fires of hatred. In fact, I’d personally say that while terrorism in cities is bad news for them, the use of inter-group prejudice by politicians is also very bad news. The Shiv Sena began as a party strongly against migrants from South India to Mumbai. When it failed to gain popular support with the anti-south vitriol, it switched tracks to attacking Muslims, or, more euphemistically, to emphasizing a “Hindu-first” approach.

Politicians in other areas have used their control over the political and economic machinery of cities to make their own points too. Even in cases where there are no riots against a community, this use, in my view, goes against the spirit of a diverse city. Notable among this is a one-day shutdown of the city of Chennai called by the then Tamil Nadu Chief Minister Karunanidhi (this was on 31st March 2007). This shutdown, coming on a Saturday, involved closing down all bus routes, all trains plying in the day time, all domestic flights, and all shops and restaurants (I didn’t go around the markets that day, but a friend told me that people in the pay of the ruling party were roaming around with sticks trying to ensure compliance — some shopkeepers managed to keep their shops open arguing that they sold medicines and hence should be open to serve the people in case of an emergency). The cause? Karunanidhi wanted to show his party’s solidarity for a legislation favoring quotas for certain groups (the legislation had, at the time, been challenged in court). It is unclear whether he felt that the strike would influence the court’s decision on whether to uphold the legislation. I suspect it more likely that he was trying to indicate his commitment to the cause to his vote banks. Since Karunanidhi didn’t have to pay for the economic cost of the shutdown from his own pocket, this was a fairly cheap way of indicating his commitment.

Positive moves

Politicians occasionally succumb to the temptation of exploiting the city to score political points, but in general they also recognize that the less they come in the way of the city’s growth, the better. The recent growth of the IT industry in cities like Bangalore (now Bengaluru), Mumbai, Chennai and Delhi, seems promising. Governments have also been partnering with private parties and individuals to improve infrastructure facilities in cities. True, privatization creates new opportunities for graft (particularly in the absence of open bidding and with exclusive contracts). Still, there has been general progress. Delhi now has a world-class local metro system, while other cities like Bangalore and Mumbai are in the process of building theirs.

With an improvement in infrastructure must come a basic realization that cities are by their very nature places that people from different parts move to, and a realization that people moving into cities will invariably mean that as long as there are rural poor, there will be urban poor. Assuming that all people, whether rural or urban, have equal rights, we should make no efforts to block people from entering cities. Arguments that try to protect certain people in cities at the expense of others (often cloaked in terms of regional, communal, or other sectarian terms) should be seen for what they are — politicians exploiting people’s tendency to look for self-interest in order to divide the electorate and reap gains. It is important to invest in providing basic opportunities and living facilities to all who choose to come to the cities and are willing to work, while realizing that this alone cannot remove urban poverty as long as there continue to be poor people in villages.

Blogging, writing and creativity

I recently came across this piece on the Internet by Clay Shirky. Clay Shirky is in the category of people popularly called “net evangelist”. Quoting from it:

And I’m willing to raise that to a general principle. It’s better to do something than to do nothing. Even lolcats, even cute pictures of kittens made even cuter with the addition of cute captions, hold out an invitation to participation. When you see a lolcat, one of the things it says to the viewer is, “If you have some sans-serif fonts on your computer, you can play this game, too.” And that’s message–I can do that, too–is a big change.

This is something that people in the media world don’t understand. Media in the 20th century was run as a single race–consumption. How much can we produce? How much can you consume? Can we produce more and you’ll consume more? And the answer to that question has generally been yes. But media is actually a triathlon, it ’s three different events. People like to consume, but they also like to produce, and they like to share.

Ah ahem… excuse me?

If one believed authors like Dr. Shirky, it would seem that giving creative tools to the majority automatically produces great results. This is part of a larger fallacy: that people love to create cool stuff, and therefore, if they’re given the tools to create great stuff, great stuff will be created. And that, somehow, indulging in an act of “creativity”, however silly or prosaic, is superior to indulging in an act of “consumption”.

But is that really true? I’ll discuss this question by looking at “blogging” in the context of good writing, which has been hailed by some as a new social phenomenon, a new way of unleashing the hitherto suppressed creativity of the masses, or, as Dr. Shirky so fondly says in his write-up, a new way of recording and utilizing the “cognitive surplus” of the masses.

Dr. Shirky isn’t alone, though. Other optimistic statements include:

The single most important difference between
the Internet circa 1999 and the Internet circa today is the explosion of user-generated
creativity—from blogs, to podcasts, to videocasts, to mashups, the
Internet today is a space of extraordinary creativity.

This one’s in the book Code, version 2 (Page 194), by Professor Lawrence Lessig, Stanford Law Professor and founder of Creative Commons.

What does it take to be a good writer?

What distinguishes good writing from bad writing? Lots of things, but a not-unimportant distinction is that good writing is meant to be read. A good piece of writing confers some advantage to those reading it — whether it is entertainment, information, or experience. A bad piece of writing, on the other hand, doesn’t need to cater to standards of readability.

This means that good writing should, by nature, be “reader-friendly”, it should allow the reader to enter the text, understand it, feel it, appreciate it. Of course, every piece of writing has its natural target audience. If you’re writing a to-be-bestselling novel, you’re targeting a very large potential audience, so you’ve got to create an engaging experience for a large number of people. If you’re writing a cooking guide, you’re catering to all the wannabe cooks in the world, so your words have to make sense to, and provide useful instructions to, those cooks. If you’re writing a self-help book, you’ve got to reach out to the emotional and other needs of the potential audience of the book.

So, a good writer needs to keep in mind what his or her readers really want, or seek, from the piece of writing. In this sense, good writing isn’t just about having something to say, and putting it down on paper. Rather, it involves a process of winnowing down what one has to say so as to give something (information, entertainment, or experience) to the people reading it. So to create a piece of good writing, one needs to step into the shoes (and minds) of the target audience.

This doesn’t necessarily mean that one cannot write good stuff for oneself — it is very much possible, but the writer still needs to view himself/herself both as a writer and as a reader. In other words, good writing, at the very least, necessitates something that goes beyond the need to simply write.

A closely related feature of good writing is, in general, its ability to transcend space, time and context. Of course, not every subject of writing lends itself to the possibility of transcending context — for instance, a text in category theory (a branch of mathematics) is naturally embedded within a certain cognitive context. But in so far as is possible, good writing allows “reuse”. So, a great book on category theory will transcend the specific context in which it was written (namely, a single person writing a book to help with a specific personal goal) and reach out to people seeking to learn category theory at different places, different times, with different degrees of prior knowledge, and with different goals.

What is blogging for?

Literally, “blog” is short for “weblog”, which is, loosely, a log of personal activity, that happens to reside on the web. It’s an online version of a personal diary. Not all blogs are in the form of personal diaries, but this still dominates the general purpose of blogging — getting on paper (or, in this case, the web) the events, experiences and reflections one wants to record. The key element here is the freedom to record things the way one wants, rather than having to conform to standards or ethics. So, for instance, I can blog about how I fought with my girlfriend, what happened in a lecture, or how my trip to the beach went. There’s a strong “I” element to blogging.

From this viewpoint, blogging is about writing things because one feels the need to write them; not so much for writing things that need to be read. Arguably, this remains true, even if the blog is open for anybody to read. In fact, most of the blogs that my friends and acquaintances keep, are largely designed either for their own use, or for a select group of people who may be close friends or within the same social circle. This blog and this blog are just some examples.

At the risk of over-simplification: while writing is hard because it forces a person to transcend his or her local context and produce something that can be read or understood, blogging is the very opposite: it allows a person to enforce and assume his or her local context. The structure of blogging, as essentially a time-based enterprise (somebody blogs, some people comment, then another post comes up), further reinforces this.

This isn’t to say that all local, time-based information is bad. But blogging tends to reinforce the local even at times when it isn’t necessary. Thus, we see bloggers often use acronyms, abbreviations and slang that are intelligible only to a small group of people (for whom the blog was intended) and valid only for short periods of time.

So does every blog qualify as a piece of creativity, a positive utilization of the “cognitive surplus” of the people? Let me take that to an extreme. Does every piece of chatter, gossip, every scribble or doodle, every remark, qualify as creativity? If yes, then blogging may be creativity, but it is by far a tiny drop in the ocean of creativity. And if every piece of chatter and gossip does not qualify for creativity, then, how is blogging really different?

A stark truth is that writing of any kind, which involves systematically recording events, opinions, biases, or what not, is a challenging task, and not many are cut out for it. Yes, I’m sure everybody has the inner talent, but not everybody is willing to or keen to take the effort. Blogging could, in principle, allow people to start out small, and then gradually improve the quality of their writing to produce stunning pieces. In practice, the culture of blogging does not exactly encourage people to move up the ladder of quality, usefulness and good writing.

The incentive system in blogging

People respond to incentives. This is a core principle that economists have unanimous agreement about, and it is a principle that pervades the thinking in any discipline or practice that involves dealing with people. So let’s apply it to blogging. What are the incentives in the blogging system?

Arguably, blogging is a noncommercial, or “sharing”-based activity. This means that people blog out of their natural instinct to share, do good, and feel part of a community. Let’s assume that a majority of bloggers come with such motives (though, of course, people who blog for money also have financial incentives). So what are the metrics that show how great a blog is? Wait, let’s think.

The first metric is comments. Blogs usually have this feature called comments, which allows anybody (yes, anybody, though in some cases, comments may be moderated by the blog-writer) to write just about anything as a comment on the blog. It’s not in general clear that the better blogs get more comments, but comments do tell the blog-writer (and others who chance upon the blog) that people have read the blog and chosen to respond. That’s positive feedback for somebody who wants to “share” and be part of a “community”.

So why do people comment on blogs, and does it reflect on the blog’s quality?

• People comment to see their name out there, under somebody else’s blog. In other words, comments allow one to have the pleasure of mileage on somebody else’s effort.
• People comment to get links back to their own website. This is the back-scratching theory all over again. True, search engines don’t follow links in comments, but people do.
• People comment when they find something outrageous in the blog, or they have a sharp point of disagreement with the blog.
• People comment out of a friendly reciprocity. This is particularly seen in the small blogs meant for friends; here, commenting is a lot like saying “Hi” or “How d’ya do” or “I read your post”. In the language of transactional analysis, it’s a “stroke”.
• People comment to thank the blog owner for a good and insightful post.

Apart from the last one (which is a very small fraction of the overall comments I’ve seen) none of the comments reflect on the quality of the post. It may even be said that a great post is a detraction to would-be commentators. That’s because commentators, like most blog-writers, are lazy, usually don’t have much to say, and seeing a blog post that actually has a lot to say can be a bit off-putting to somebody who wants to post a comment like “Hi; nice post. What you doing these days?”

Also, the problem of having too many blogs to read has to be solved by something, and that something, more often than not, is web search. In principle, the Internet, allows people to transcend local boundaries and find any blog, even if they don’t know the owner of the blog personally. In practice, web search, personal referrals, and links are the main tool for this. What implications does that have for what constitutes good blogging? Good blogging is all about getting the largest number of inward links to your site.

Finally, the economic model for blogging is singularly unrewarding to good content. I’m talking of the advertising model. This model says: don’t charge people for reading your blogs, instead, put Google Adsense (or some other advertising model) so that visitors clicking the links automatically make you money. Literally, this means that the way to make the most money is not by creating actively engaging content that sucks people in; rather, it is by allowing people to be sufficiently distracted to click ads. “Knowledge wants to be free [with Google ads]“, I think I heard somebody say.

Is this blog post anti-blogging?

Hardly. Sorry to give the impression. What I’m trying to point out here, is that blogging hasn’t unleashed any tremendous masses of new creativity. It hasn’t made people fundamentally more lazy or more creative. It has given opportunities for people to channel certain kinds of creativity, but its larger benefit is to just allow (creative and non-creative) people to record activities on the web that may otherwise have gone unrecorded. This might be helpful to them and their friends, and might prove a boon to historians, sociologists, and other people in search of data.

Good writing and solid creativity continue to remain the province of a few, and very few of these few are “made” by the Internet. Indeed, the best of bloggers are people who have achieved fame in other spheres, often through dint of hardwork, talent and slow and painful drudgery. Merely giving everybody the tools or the right to publish doesn’t make everybody a good writer, because good writing requires effort and personal commitment. Nor do people become more creative just by writing and not listening — which is what a large chunk of the blogosphere is about.

The other main idea I’d like readers to take home is that being “noncommercial” or “sharing” is not in itself a virtue, or something to be praised. Just because blogging is free, that doesn’t make it, in any sense, superior to newspaper articles or books. Again the best of blogs aren’t just free offerings; they’re usually written by people who also make money out of something very similar. For instance, a software professional may blog about trends in software, an economist may blog on recent trends in economics, and so on.

The best writers are great readers

If good writing is meant to be read, then to aspire to write well, one’s got to read well, and read a lot. If you want to produce great movies, then you’ve got to watch at least a few movies. And this is my core objection to Dr. Shirky’s paragraph: he seems to imply that creativity, however inane, is superior to consumption ,which is a passive activity.

Taking this logic to its extreme, kids would be better off creating stuff all the time, than watching television, reading books, or learning about the world from others. The idea, I guess, is that doing stuff oneself and being in control is more important. But just going around creating stuff doesn’t make one a great creator. Doubtless, the need and the urge to create, as well as constant attempts at creating something, are needed. But what’s also needed is the ability to consume stuff that exists, to critically examine it, to soak it till one is deeply familiar with it and knows at an intuitive level what is going on. It’s hard to imagine people who like to write their own stuff and abhor reading, transform themselves into great writers.

To be fair to Dr. Shirky, I don’t think this is the point he is making. And it is doubtless true that the opportunities presented by the Internet give people a chance to both create and consume. But his writings, and those of many other net evangelists, undervalue the importance and necessity of all the hardwork (a lot of which appears passiv eand boring) needed to create good stuff. And in so far as people somehow make believe that blogging is a short route to great writing without having to do all the hardwork, it will continue to be the case that the best bloggers are people who have established and gained their expertise through other ways.

Think!

It distresses me when people use a combination of “logical reasoning” and “emotional hype” to come to conclusions that would, in the ordinary course of things, require a lot more data, input, understanding, and a lot better “feel” of the situation. I see this all the time — people coming to conclusions about things saying “it’s just that simple” when those very same things have so many different facets and when such little information is available.

I remember how, a couple of years ago, there was huge anguish about a policy of “reservation” for the OBCs in post-secondary educational institutions in India. For those who don’t come from India and haven’t heard of reservation, it basically comprises marking off a certain fraction of the admissions in the educational institution for people from a certain community. In this case, the communities were certain backward castes in India, as per the oppressive and unjust caste system that evolved in Hinduism, a dominant religion in India.

For those familiar with affirmative action in the United States, reservation’s a bit like that — except that instead of having loose guidelines for universities to proactively seek students of color or students from backward communities, reservation imposes fixed percentages.

Till 2006, there was 22% nationwide reservation for people from the most deprived castes: the so-called Scheduled Castes (SCs) and Scheduled Tribes (STs). A government ruling in 2006 sought to provide an additional 27.5% reservation for Other Backward Classes (OBCs), who were oppressed, though not that much. This raised the total reserved fraction of seats to 49.5%. Not surprisingly, there were immediate nationwide protests, from students in these educational institutions, who argued that “equality” and “merit” were being compromised. Newspapers and TV channels caught on quickly by holding debates on “Caste versus merit”. Most notably, students made a protest outside AIIMS, India’s leading medical institute and an important hospital, and blocked the gates, forcing patients to climb walls to seek treatment. Adding to the confusion and chaos, I blogged about this.

Recently, while reviewing the contents of my mailbox, I came across this alarmist message that had been sent to me:

Subhash Srivastav an AIIMS
student died at 6:44 pm on 20/05/2006, because of hunger strike protesting
against reservation. Media is not allowed to cover it. Please pass this
to all and help not to let down his sacrifice.

WHEN WILL THE GOVERNMENT RISE TO THE SIMPLICITY OF THE PLAIN AND SELF
EVIDENT TRUTH AND NOT LET THE EVIL OF RESERVATION GOBBLE UP THE
FUTURE OF ACADEMICS IN INDIA …..

MAKING AN EARNEST PLEA TO THE NATION TO RISE AGAINST THIS MENACE OF
RESERVATION …..

MAKE THIS SACRIFICE WORTH ITS VALUE .

Now, let’s parse that. Somebody didn’t like reservations. Therefore that person went on a hunger strike. Nobody was forcing that person to go on a strike. The person went on a strike due to certain personal beliefs. Then, that person died. if a person goes on a hunger strike against something and then dies, that doesn’t mean that “something” is evil. This is false logic at its best.

The greater irony, though, was that nobody had died. This “Subhash Srivastava” was somebody’s fabrication, in an attempt to garner attention and gain support for the cause. Yet, the many forwards and circulations of this information (and I got them through multiple online sources) seemed oblivious to the burden of verifying the truth of the statement.

The larger point here isn’t whether reservations are justified or not (which is a deep and complex question, and certainly outside my area of specialization). My point here is about the tools that people use to spread their message about the harm of reservation. I got a lot of emails from people urging me to sign certain “Youth For Equality” petitions, and while not all of them were in capital letters, they focused on “simple premises”. Here’s an intelligible piece from the Youth For Equality website:

Current policy of reservation is unjust and dangerous
-Caste based reservations can only accentuate the already existing divisions in our society.
-Caste based reservation have failed the SCs and STs in past 60 years. They are unlikely to succeed in future.
-Such reservation are like providing crutches to those do not need them and often, to those who do not seek them.
-Most important, these reservation are actually a ploy to deviate attention from inability to provide quality primary education

This sounds like an excellent list, but note that none of these simple premises have any justification attached to them. It’s possible (and probable) that the author of this piece (Dr. Vishal Sharma, UCMS, Delhi) had some solid reasons and research behind his statements, but he didn’t choose to share those with readers. The general idea here seems to be that most of these points are incontrovertible.

But if you think about it a little more, there’s very little that principle, logic and reason can tell one about the impact of reservations on an educational system. For instance, a lot of great institutions manage to take in a small fraction of their students based on huge fees or because of their political connections — a “reservation” of sorts and a compromise on merit (this is true for some American institutions; for instance, Princeton has historically been a place for politicians to send their children, yet the quality of its research remains unquestioned). There has been a huge spectrum of results for the introduction of different kinds of schemes to give preferential treatment in admission policies for students from deprived backgrounds. I’ve heard people tell me that the quota system in Tamil Nadu has helped, to some extent, to reduce caste barriers, at least in the big cities (this is hearsay, and I don’t have a lot of first-hand experience). Then, there’s also the contention that once a few people from some backward communities make it to an educational institution, others will aspire harder to get there. While I again don’t have personal experience with this on a large scale, I do know that having one person from a place go somewhere or do something, increases the chances of other people doing that thing. (For instance, after I qualified the Indian National Mathematical Olympiad and went to the International Mathematical Olympiad, there was an interest in my school in the next 3-4 years regarding the Olympiads, and 2-3 more students from my school made it through the national Olympiad. And many of the people who came to my not very well-known undergraduate institution CMI told me that a crucial factor in their decision was the input of another person from their community, or village, who had also been to CMI.)

Social inequality too can take subtle and not-so-subtle forms as I described in an earlier blog post. So it’s possible for people living in cities, in high-status, high-caste families, to be largely oblivious to the “other side” of the picture.

This isn’t to offer arguments in favor of reservations per se, but rather to point out that the issue is extremely complicated, and “simple premises” need to be treaded on carefully.

Of course, people on the other side of this issue don’t seem to lack “simple premises” either. Here’s one favorite pro-reservation simple premise: “In a truly equal society, representation of different castes in society should be by their representation in the population. Thus, reservations just help make the society truly equal”.

I can go on about arguments resting on simple premises and drawing “simple” conclusions, but I’ll just give a list and leave it to interested people to look at the arguments:

1. A certain person said something positive about a , that person is evil and bad. Read this criticism of Larry Lessig, Creative Commons founder, and if you’re left utterly bewildered, you can check out this criticism of the criticism.
2. A lot of people are starving while a few people have huge houses — so the people with the money are the evil ones.
3. People with money are people who were smart and hardworking and earned it.
4. A certain country does something you don’t like so that country is against the values and goals of the world.
5. Theft is when you actually deprive somebody of something. When making digital copies, you’re not depriving anybody of anything, because they keep the original. So piracy isn’t theft.
6. Intellectual property = property, so piracy is stealing, so piracy should be punished as theft. Thus, any circumvention of DRM tools is illegal.
7. Any criticism of Wikipedia, the blogosphere, or modern culture is a criticism of “THE PEOPLE” so if you dare to criticize Wikipedia you’re an elitist and credentialist and you’ve got a big fat head.
8. Anybody who reads Wikipedia or blogs is a shallow person who cannot understand in-depth arguments.

There are many other examples, but one thing they all have in common is: they start out with some simple premises that are questionable, then make some leaps of logic that are questionable, then state a moot conclusion, and finally top it up by something that associates some kind of insult to people who don’t agree. I’ve heard arguments like “any sane person would …” for things where, in fact, people could be in a lot of disagreement.

So how do we tackle situations where people present these kind of arguments to us? How do separate fact from hype, and remove false logic from the scene?

The answer is simple: think! That doesn’t quite mean that every question can be resolved by thought and analysis — in fact, analytical thinking is severely limited in solving complex social problems. However, analytical thinking does usually reveal gaps in simple premise-logic, and makes you realize how little logic and reasoning and “principles” can guide one in a world of uncertainty.

Secondly, gather data. it never hurts to gather raw, boring information, rather than condensed opinions sans raw data. The Internet is a great source for condensed information, with Wikipedia leading the way and a number of bloggers keen to summarize and have the final word. But the Internet is also a great source of raw data. So if you are serious about understanding or forming an opinion about something, go through it in excruciating detail. For instance:

1. Read original, primary sources. Before forming an opinion about a book, read some pages of the book. View some videos by the author of the book. Before forming opinions about the reservation or caste system, go ahead and learn more about how the caste system came into play, what the original motivation and plan for reservations was, and how things have evolved.
2. Use diverse methods of reading secondary sources. Do not restrict attention to specific secondary sources. Use web search, library search, personal communication, attending lectures, and other tools to try to capture sources in all kinds of ways, so as better to be able to triangulate on the truth.
3. Be on the lookout for “simple premise” logic. While listening to it, make a note not to be unduly influenced by it.

More about why people present simplistic arguments

Why do people present simplistic arguments? First, it is an attention-grabbing device. The complexities of most of the issues we deal with are breathtaking, and frankly, if you’re already handling a lot of complexity in work and personal relationships, you don’t want to add to that the complexity of larger problems. So, a simplistic argument has a lot more appeal than a huge collection of raw facts, arguments and ideas.

Secondly, the nature of media and presentation strongly supports simplistic arguments. Newspapers and TV channels have been constrained by column width and time length respectively. Ironically, the Internet is in principle a complete solution: you can have very long articles and very long videos without taking up too much of people’s time (because they can watch or read a bit and shift out if they’re not interested). But, while the amount of in-depth material that can be accessed via the Internet has increased considerably, the majority of the Internet remains quick-see-quick-do. That means that if you want to make an impression, the same principles apply as they do to poster design or slogans: be simplistic.

Thirdly, simplistic arguments are in some cases cover-ups for other reasons or interests. This may happen in a subconscious or indirect way. In the politics-industry nexus, money from lobbyists could result in politicians making simplistic arguments in favor of the lobbying parties. People threatened by a certain change make simplistic arguments that paint that change as bad, the motivation partly coming from the very concrete threat they feel, rather than the abstract and simplistic argument they present.

Fourthly, it is a prisoners’ dilemma. If we force our leaders and people in positions of authority to present their views with intellectual integrity rather than relying on hype, and if we exact these standards from people seeking to appear in the news, then people seeking to present simplistic arguments will be at a loss. If, however, everybody else is keen on creating sound-bytes or offering easy quotes, then it doesn’t pay to be a lone voice offering a more complex, refined and balanced argument.

Do simplistic arguments mean there’s no substance?

No. Often, simplistic arguments are offered in situations where a more complete and balanced picture could be provided (for instance, I’m offering a simplistic argument here, while I could offer a more complete and balanced picture). But there are constraints of time and space, and user attention. Finally, there’s the fact that to spread something enough so that it reaches people who’ll actually appreciate your argument, you need to first get it across to lots of people who may not care too much about the details but like the sound and feel of the argument.

Simplistic arguments have a flip side, though: they alienate people who want to get the detailed picture. So my suggestion to people who’re trying to package their experience and thoughts into easy-follow stuff, is to give links, or references, to more in-depth explanations. For instance, Lessig’s videos, which have a style of simplicity that makes their key points well-imprinted, do offer a substantially more shallow and less balanced treatment of his ideas than his excellent books. (For instance, the videos about copyright and remix culture end up showcasing some particular remix videos. If you don’t like those videos (which I didn’t) then the speech seems to have been a tad lame). But since Lessig offers up his books for free, and since his videos do give some hints about the fact that he isn’t keen on being simplistic, I can then go ahead and read his books to get a deeper understanding of what he’s saying.

Doesn’t everything have a simple explanation? Why create unnecessary complications?

Probably, a lot of explanations can be packaged to sound simple. What gets left out, though, is a lot of the other explanations that sounded equally simple and equally plausible but were just plain false. A simple explanation has appeal but isn’t sufficiently self-referential: it doesn’t explain why it is right.

I’m not against the all-important need to simplify and abstract and provide easy bytes. I’m against the converse: just because somebody gave you an easy-sounding explanation of something, doesn’t mean it is necessarily right. Simple things are rarely arrived at “simply”, they’re usually a process of careful elimination, soaking oneself in the situation, and drawing on a lot of experience.

Apologies if this post was too simplistic — probably, it proves its own point .

Wikipedia: monopoly

When we usually think of monopolies, we think of for-profit corporate companies. For instance, Microsoft, at a certain point, had a near-monopoly on operating systems software (today, there is significant competition from Linux, Apple and many others). The monopoly didn’t materialize. In a similar manner, Wikipedia, the free encyclopedia, currently has a near monopoly on the encyclopedia business. Again, the monopoly isn’t likely to materialize, but it does give some very clear lessons on how to try monopolizing.

1. Create strong disincentives for competition: Wikipedia has done this in two ways. The first is that it’s free, easy to access, and ad-free. It’s run by a nonprofit organization. This means that competitors aren’t naturally excited about competing with it. I mean, how do you get cheaper than free? It’s a hard question and definitely not an attraction for budding competitors.

   More importantly, Wikipedia works by simply making competition seem silly, and that’s where its “anybody can edit” comes in. Ordinarily, when a big company starts off with a closed system that’s highly popular, other companies want to emulate that system, or provide a comparable system, to increase diversity. But Wikipedia literally made it appear as if people seeking diversity were party-poopers. Instead of trying to start something else, why don’t you go and edit on Wikipedia? Nice way of discouraging competition.

2. Keep costs low. Emphasize costs over quality. Outsource. And to top it all, appear virtuous about it: Wikipedia is built almost entirely on volunteer labor. Most of the labor goes unpaid. Most of our contributions to the Wikimedia Foundation don’t go to all the people who worked hard over all the articles. They go to just pay for the servers, and pay for a few people who are managing the project. Simply speaking, Wikipedia isn’t sustainable if it starts paying people for the tremendous work that goes into writing quality entries.

   But the genius of this has been to turn this apparent drawback: that Wikipedia can’t compensate people for their tremendous effort, into a virtue. Contribute to Wikipedia, the free encyclopedia, and achieve immortality as somebody who wanted to share knowledge for free. The moral boost is certainly better than working to write a book or journal article at a miserable rate of under $1 per hour. And it’s certainly great for people who’d otherwise never write anything at all.

   And when it comes to questions about whether anonymous editing is responsible for vandalism, Wikipedia’s clear about one thing: nothing should be done to raise the barrier to editing. Anonymous editing is a small price we pay for the tremendous amount of volunteer labor that can be tapped into. Like Walmart, keeping costs low is the top priority, no matter where the supplies come from. The human cost of editors getting disgusted with edit wars, or of people’s biographies getting disrupted by malice is small compared to the benefits of providing people with cheap, nay, free stuff.

3. Be there first, and bear the losses: Simple, and mind-blowing idea: build a free encyclopedia. Laughable? Still, doesn’t hurt to try. Wikipedia became this free encyclopedia even though Encyclopedia Britannica, after trying to have its encyclopedia entries online, had been unable to cope with the traffic loads. But Wikipedia persevered.
4. Choose a killer license: Licenses certainly help. Patents and restrictive copyright licenses are one way to go. But copyleft licensing is the other way to go. By adopting the GNU Free Documentation License, Wikipedia’s winning friends and shooting down enemies. First, Wikipedia wins all the people who’ve mouthed the words “free” and “open” as the new catch-words. We have Richard Stallman abandoning GNUPedia to whole-heartedly endorse Wikipedia. And then, aren’t our volunteers touched that their no-rewards effort will be under a license that’ll allow anybody to reproduce the stuff?

   Secondly, the killer license means that any competitor is, almost by force, chosen to adopt a similar license, if they want to attract the same kind of love and attention. But the great thing about the license is that you can copy back from them. So any competitor to Wikipedia can be absorbed by Wikipedia in a single swallow. Merger? No, you don’t even need to consult the competitor before absorbing them.

   Wikipedia’s recently been making bigger moves. With the advent of Creative Commons, the move forward for Wikipedia is clear. Convert Wikipedia’s GFDL into CC. True, this’ll require a bit of rewriting, but it means Wikipedia’s suddenly won over the support and endorsement of CC. Good for Wikipedia, because CC has around 50 million products under its licenses. Good for both parties, in fact, because this suddenly means an additional 10 million articles for CC, and makes Wikipedia part of the “share, remix and reuse” culture. Not surprisingly, Larry Lessig, the author of Code v 2 (a great book that everybody should read), dedicates the book to Wikipedia.

Hmmm. Reminded of Microsoft, Walmart, and Google? Money really isn’t the only route to power, apparently. It’s about fame and clicks, and winning over the hearts of people who have the right ideological mindset.

Now, this isn’t meant to be a criticism of Wikipedia (apologies if it appeared that way). And while I’m at it, let me mention a few things commonly attributed to Wikipedia’s success, that, in my opinion, have very little to do with its success.

1. An open and collaborative process: A large number of Wikipedia’s editors are anonymous users, and even the logged-in users rarely disclose their real names or affiliations, even in articles where a clear conflict of interest could develop. The process that goes into article creation and the many discussion points are rarely put forward in a palatable manner, that people who come to the article can read and understand. Very few people actually collaborate and discuss the many facets of article structuring. Rather, it’s just a sequence of one edit after another, which includes reverting past edits, unreverting them, putting up articles for deletion, flagging articles that violate NPOV, and so on. Not exactly the ideal collaborative process, and far from open. To top it all, whenever an article starts to feel the heat, administrators emerge and make arbitrary decisions about the fate of the article.
2. The wiki model: The wiki model is cool for collaboration, and certainly the best I’ve seen so far, and my admiration goes for Magnus Manske, Brion Vibber, Tim Starling, and the many others who have worked to make the software better over the years. However, the wiki model isn’t in itself responsible for magic. I think this is best seen in the fact that a lot of places have tried to adopt the wiki approach and it has failed. Most notably, some of Wikipedia’s sister sites, that include Wikibooks, Wikisource, Wikinews, and Wikiversity, are still growing at a remarkably slow rate.
3. A cohort of exceptionally minded and brilliantly talented people at the center who coordinate the efforts of volunteers in a great way to maintain an exceptional encyclopedia: Hardly. There are some administrators at the center of Wikipedia, and some of them are doing a good job (though by no means all). But there’s little evidence to suggest that the core body of administrators has worked to push through new and innovative initiatives, or to handle many of Wikipedia’s pressing problems, efficiently and creatively. Most of the administrators are people who have little by way of solid experience in the skills of organizing knowledge and ideas before they joined Wikipedia, and in fact many of them have very little “cool stuff” to boast of even re: their activities in Wikipedia (unless you count banning members, knowing the rulebook of NPOV and NN, and winning AfD debates as cool stuff).

What gives? Why do I think Wikipedia will be unable to sustain its monopoly? First, there’s the repeated scandals confronting the Wikimedia Foundation, many of which are summarized well at Wikipedia Watch and Wikitruth.info. But, whether or not you pay importance to these scandals, the key point is that in the recent past, Wikipedia has systematically failed to innovated. There have been innovations and improvements from the software side, but the community has failed to become more organized, and the encyclopedia continues to be edited in a reactionary and patched fashion rather than addressing core issues.

Secondly, it’s clear that the Wikimedia Foundation continues to steadfastly believe in the magic of wikis, with the growth of projects like Wikinews, Wikiquote, Wikibooks, and Wikiversity. Ironically, many of these have better design than Wikipedia, yet that lack the key elements that Wikipedia had: it was first in, and it stood brave. Had Encyclopedia Britannica been completely online and incorporated user feedback in an easy way, Wikipedia might never have taken off the way it did. As it stands, Wikinews is a singularly unattractive proposition when practically all the print and television news channels put up the bulk of their stuff for free over the Internet, and are complemented by the blogosphere. This doesn’t mean it can never grow. It probably will grow, if it’s fundamentals are in the right place. But it cannot acquire the monopoly that the Wikipedia did, juts because it is “free”.

Similarly, wikisource may be a cool place to locate the source for books in the public domain, but who’d bother when there’s Google Books and many other ways to get the books? Wikisource has to offer something new and something distinctive. And who’d want to go to Wikiversity when there are resources like MIT Open CourseWare and Connexions? In fact, the Wikimedia Foundation itself seems to have decided that promoting these other projects is a non-starter, so it’s living with their tortoise-pace growth as it continues to allow media attention to shower on Wikipedia.

More importantly, competition to Wikipedia has begun in real earnest now. Most of the initial competition to Wikipedia was reactionary: let’s monetize the model by using Wikipedia content with ads. Then came Scholarpedia and the Digital Universe. Though neither took off dramatically, they were at least somewhat well-planned. And finally, we have a serious contender to Wikipedia: the Citizendium. With 6000 articles compared to Wikipedia’s 2.7 million, the Citizendium doesn’t quite look formidable yet. However, they have a sense of community and a vision for the future, and they’re not blindly aping “what worked” for Wikipedia. Rather, careful thought is being given to redesigning fundamentals. It remains to be seen where the Citizendium goes.

Finally, there’s Google Knol. This is the Google idea of having “units of knowledge”. People write signed articles, that are the first thing anybody searching on the subject should read. Needless to say, Google’s search engine will help readers reach this first thing. My guess is that Google is finding the Knol fairly hard to implement, which is why we haven’t heard from from them since December 12, 2007, when they first officially announced it. But if they do manage to get the balance right, it could be an important alternative knowledge source for people.

In other words, you can become a monopoly in anything: provided the conditions are right. Profit, restrictive licensing, or closed code isn’t necessary to achieve monopolistic control. But maintaining a monopoly requires something more than just what is needed to create it. To maintain a monopoly, one needs to constantly innovate and provide solutions to the core weaknesses rather than be reactionary and do patch-fixing. This is something Wikipedia has failed to do, and it remains to be seen how long it is before they’re displaced from the top.

Web 2.0: The promise it has yet to fulfil

At the time I was in high school, the Internet, at least in India, had not taken off. I had Internet access at home on a slow dial-up connection. Going online was not impossible, but it was still an expensive business.

At that time, I had a number of ideas and dreams. I was fond of composing music (something that I did using a PC software that I managed to acquire through my aunt). I was fond of mathematics, and I was fortunate to receive guidance and information that helped me prepare for the Olympiads: something that helped shape my career in mathematics. But by and large, all the little dreams, ideas and aspirations that I had didn’t get to fruition, simply because tools like the Internet that enable easy access to information and the quick ability to publish, weren’t around.

What I hoped at the time was not just to have the ability to easily access information and share ideas and network, but also the ability to easily and effectively learn more skills, get more experience, and become better at more things.

In came the Internet. In my undergraduate college, 24-hour Internet access was a reality. By the time I finished college, 24-hour Internet access was a reality everywhere I went. Wikipedia, the online encyclopedia. Blogger and WordPress. Youtube and Flickr. Unlimited free email storage. Free text and voice chatting. The ability to find information, share ideas and publish for virtually no cost.

And yet, the Internet is yet to live up to its bigger promise to me: the ability to provide people who do not have the resources, skills or contacts for a job, with those resources, skills or contacts. The ability to easily facilitate the identification of truly skilled people among the myriad amateurs of the Internet. The ability to offer everybody the ability to improve and build their skills, to learn from their surroundings.

Publishing directly to the people

Publishing a book with a reputed publisher — what does that involve? First, publishers often have niches on what kind of stuff they’ll publish, and quotas for how much. So if you don’t fit the niche or quota, sorry. Secondly, since they have limited resources of how much they can devote editorial and marketing effort to, your stuff has to be “good” by their standards. Thirdly, even if you write a cool manuscript, they’re likely to subject it to intensive rounds of editing to conform to their idea of how a book should look to sell, before publishing it.

In other words, publishers need to make sure the stuff they publish is good, because there are limits on how much they can publish. “Good”, of course, is by their own standards, and the flipside of this is that it could be hard for new authors to write books on topics that the publishers aren’t convinced will sell, however good the book is.

On the other hand, it also means that the process of writing a book, and getting a published, could be a learning and challenging experience, where the author learns the intricacies and details of editing, and learns exactly what the publishers think will sell (and indirectly, what good writing looks like). The process of getting rejects, however disheartening, could still be a guide to authors that helps them improve and finetune their work. In other words, at the end of having a book published, the author is actually much further along the way in terms of skills and abilities, than he/she was at the time of starting to write. Moreover, the sheer fact that people will look at the book and decide whether to publish it, means that the author needs to tune these factors in at the start.

What does blogging and self-publishing offer, in contrast? Blogging means you can publish anything you write at any time you want. Great. Secondly, since you aren’t actually charging people for reading your blog, trying to write stuff that readers will consider “worth their money” doesn’t need to be your priority. On the one hand, this allows creative freedom to explore topics that one is not convinced will sell. On the other hand, it means greater indifference to the needs of readers and greater concern for whatever comes to one’s mind at the moment.

This doesn’t have to be the case with blogging. In other words, it is perfectly possible for bloggers to be just as careful about the quality of their writing, and just as sensitive to the needs of readers, as people writing in traditional media are. In fact, some of the best bloggers do exactly that. A classical example that comes to mind is Steve Pavlina, who runs a website on personal development. But as he makes amply clear in his posts, he’s not merely a blogger. Writing about personal development is his business. It’s just as important to him even if he has to edit and publish himself.

Ironically, though the blogosphere apparently levels the playing field for all to write, the best bloggers continue to be people who have acquired their skills for analytical writing and expression as well as their ideas, from other experience, be it in academia or industry. Some of these people have written published books, many have done Ph.D.s, many have worked in magazines and many have worked in professions that involve a lot of writing. I haven’t encountered many people who’ve just started blogging on day one and become greater bloggers by day hundred.

But why?

The reason is simple: the blogosphere provides tools that allow people to directly publish without going through the rigmarole and process of traditional publishing, yet it does not so readily provide tools that help people transcend from being direct publishers of off-the-cuff thoughts, to people who can refine and reformulate arguments, conduct solid research, coordinate different streams of thought, and come up with a cogent, well-established position. It’s not that these are very hard for bloggers to do. But the incentive system doesn’t encourage this. This means that blogging has allowed the amateurs (like me) to publish, but it has not empowered the amateurs, at least in a prominent way, to improve and polish their writing skills.

Youtube allows anybody to upload videos. But how easy and friendly is the world to people trying to learn how to create a video? It’s easy to put up songs for free. But how easy is it to create a song? Certainly the software and hardware needed for the creation, as well as books and resources that could help in making videos and music, are more easily available. Yet, this difference is in no way at the stage where amateurs can, in large numbers, dabble with creating videos and music and where they can progressively improve to the point where they could become professionals. I’m speaking specifically about people who do not have the right contacts or levels of money needed to access advanced and specialized resources.

There are interests and reasons behind this

The traditional publishing economy was based, at least in part on the premise: sell a few things, and sell them one. Select well, hone and sell. Two problems with this are: often, the publishers may not predict very well what the market really wants, or would love. Secondly, a whole range of medium-level stuff fails to reach the kind of wide audiences it needs.

With free online publishing, both these have changed. Good stuff can now come up even if certain people in authority do not consider it good. And middle-level stuff, that some people might find good, can still come up now. But there’s a flip side to the free online publishing model, and that’s its economics.

That’s the economics of advertising. Google is currently the market leader in advertising, and the typical premise of advertising is: more eyeballs, more clicks. This means that content creators who’re trying to earn money through writing, earn more money if they get more eyeballs and more clicks. Which is similar to selling more copies: but different in various ways. Firstly, it is not at all necessary for people to buy content to view it. This means that you don’t need your stuff to be “good” or “useful” for people to actually shill out money. On the other hand, your stuff should be prominently linked to, and easy to find. So the economics entails commenting on other people’s blogs, using pingbacks, and various search engine optimization techniques to come up high when people search on certain topics. If the traditional news media is encouraged to use hype to catch people’s attention, the blogging industry need not be completely different.

More importantly, giant companies like Google, frankly, aren’t bothered about bad content. They don’t mind good content, but more importantly than content being good or bad, they want lots of content, and lots of people to spend lots of time reading that content. More readers means more eyeballs and more clicks. This means that the dynamic is to get a lot of people to participate and to keep the barriers to publishing and creating stuff as low as possible. So, do tools that encourage people to seek the help of more experienced bloggers for feedback on blog style and content get attention in people constructing blogging platforms? Not to a large extent. In the big picture, it doesn’t matter. What counts is a huge and diverse blogosphere. Picking and honing good bloggers and helping them scale the ladder to writing more impactful and professional pieces isn’t value for money.

This isn’t limited to blogging. What current web-based companies are concentrating on is giving publishing tools to more people. Giving tools to edit and create better content, and to learn how to produce better content, aren’t on their priority list.

This isn’t to underestimate the number of such tools available. There are many writing groups, and many groups and mailing lists by people seeking to be professionals in an area. But they aren’t as ubiquitous or accessible as the good old “write, and click publish” sites.

Content publishers and distributors have the responsibility to educate

A video hosting service like Youtube or a torrent service that allows file exchange, has the responsibility to make it easier for people uploading and using videos to understand issues of copyright, reuse and piracy, and to mark their works clearly in this regard. This doesn’t mean they are liable for every misuse of their service for piracy or plagiarism. But they need to provide people the resources and incentives to understand the current structure and architecture of law.

Come to think of it, providing such information and services isn’t extraordinarily hard. Yet, the reaction of a number of modern-day web-based publishing companies to copyright and legal issues has been to ignore them till they are threatened with legal action, at which point they react by pulling off video content.

An encyclopedia like Wikipedia, that relies largely on the labor of volunteers, has the responsibility to explain to incoming volunteers exactly what they are in for, how people have worked on the encyclopedia, what they can do to help. The typical experience on Wikipedia is Wanna edit? Go ahead — at your own risk. Wikipedia administrators and bureaucracy literally shuts off dissidents and people who complain about article content — but when it comes to being threatened with legal action, Jimbo Wales eagerly complies by suddenly blocking the article and taking it offline.

Google Books has done a great good by scanning a number of books, making their contents searchable, but this was again done with the “shoot first, apologize later” attitude. Namely, scan the contents of books, and then, if an author wants the scan not to be publicly visible, the author must request. Google made it plain that contacting authors for permission wasn’t worth their effort. Not worth their effort? Currently Google has come up with a more balanced approach.

Critics of “Web 1.0″ are quick to point out how much Web 2.0 has empowered individuals as opposed to the big corporations. This is true in some senses — but the biggest potential has yet to be achieved. All it’s done is created a parallel production system. You can read an article on Wikipedia. Or you can spend $100 to buy a book written with years of labor on the subject (the third option, that you get a pirated edition of the book, is out of bounds). Web 2.0 has largely been a time of dichotomies, rather than what I hoped for: a way for people who do not have contacts or resources, to gradually build the knowledge and skills needed to produce quality content.

Creative Commons: How creative and how much of the commons?

One of the great movements that in my view shows the power that Web 2.0 can fulfil is that Creative Commons movement. Creative Commons offers a range of licenses that allow authors to specify redistribution rights with certain restrictions. For instance, I can specify that people can reuse my work and create derivative works, as long as they share alike and use a compatible license. More importantly, the Creative Commons is working towards creating a culture of sharing.

I hope the emphasis on both words: “creative” and “commons”, continues, and that the Creative Commons movement does not simply turn into a slogan for content distributors, but remains, at its heart, a movement of people creating and using content. The troubling thing is that many of the advocates of “free” stuff in general miss the point of creativity: it is somehow assumed that making stuff free of cost, and free to reuse, is a kind of magic cure. In fact, it is important to provide people the incentive systems needed to constantly work on improving content and ideas and to constantly innovate. Having a rich and vibrant commons (something that anybody can reuse without permission or payment) is a crucial part of this. But it’s only one part. On the one hand, there are systems like the Linux operating system that, by and large, have been great successes. On the other hand, there are things like Wikipedia that have been mixed successes. What scares me is that some advocates of a commons seem to view “commons” and “free” as magic words and are therefore blind to the glaring problems with an institution like Wikipedia.

Let us bring our virtual and real existence closer together

Rather than treat online life as a kind of escape mechanism from real life, and view it as a place where we can get away with low-quality, off-the-cuff stuff, we should view it as something that enriches and is, in turn, enriched by, real life. Using our real names and our real thoughts, and being frank and open in online interactions could be a first step. Rather than think of online phenomena like Wikipedia as distinct from the traditional published books, let us work more towards bringing the best ideals of quality, rework and constant refinement into the online world.

This is not to say that instant publishing is not important (after all this blog wouldn’t get published in any traditional medium). Rather, it is to say that there is a continuum of choices between instant publishing and the full rigmarole of traditional publishing. And in fact, the technologies of the Internet can mean that one can actually publish comparable high-quality material in much less time now, and one can network and find people who can edit and provide feedback on content and suggestions. So while the majority of bloggers who, after all, are just writing something like a diary entry, will continue to rely only on instant publishing, others who want to do more with their blog have the tools to grow.

Some recommended reading

An interesting essay by Larry Sanger on how the net changes knowledge