About Amit Varma

Amit Varma is a writer based in Mumbai. He worked in journalism for over a decade, and won the Bastiat Prize for Journalism in 2007. His bestselling novel, My Friend Sancho, was published in 2009. He is best known for his blog, India Uncut. His current project is a non-fiction book about the lack of personal and economic freedoms in post-Independence India.



My Friend Sancho

My first book, My Friend Sancho, was published in May 2009, and went on to become the biggest selling debut novel released that year in India. It is a contemporary love story set in Mumbai, and had earlier been longlisted for the Man Asian Literary Prize 2008. To learn more about the book, click here.


If you're interested, do join the Facebook group for My Friend Sancho


Click here for more about my publisher, Hachette India.


My posts on India Uncut about My Friend Sancho can be found here.




Bastiat Prize 2007 Winner




The India Uncut Blog

23 April, 2017

Red Lights and Loudspeakers

This is the 33rd installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

LAL SALAAM

One day Prime Minister Modi said,
“Red light culture should be put to bed.
No more beacon on car.”
I said, “This won’t go far.
VIPs have red lights on their head.”

SONU

I met a singer who seemed bereft.
He looked sleepy, and had no hair left.
He told me with a pout,
“I’m gonna carry out
The biggest ever loudspeaker theft.”

Posted at 11:57 AM by Amit Varma in India | Rhyme and Reason | Rhymes

16 April, 2017

Prawn + Wine

This is the 32nd installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

PRAWN

Once there was a Minister of Prawn,
Who got loosies and felt quite forlorn.
He chose to regulate
What went onto your plate.
What a great way to show off his brawn.

WINE

Once there was a judge who liked his wine.
When he drank it, he felt so divine.
One day he crashed his car
Into a highway bar,
And said, ‘The fault is the bar’s, not mine.’

Posted at 9:15 AM by Amit Varma in Freedom | India | Politics | Rhyme and Reason | Rhymes

09 April, 2017

The Winning Mantra for this IPL: Attack, Attack, Attack

This is the third installment of The Rationalist, my column for the Times of India.

When the Indian Premier League began a decade ago, my fellow cricket purists bemoaned what they called a tamasha version of the game. I was an enthusiast, though. I was baffled that so many people felt a three-hour game was too short to be taken seriously as a sport. Football lasts 90 minutes. Hockey is an hour. Tennis, badminton, basketball matches all tend to be shorter. None of them lack nuance or complexity or drama, and are rich in strategic and tactical options. So why should T20 cricket be any less than that?

I expected T20 cricket to have a number of positive effects, and it has delivered on all those counts. It has widened the pool of players who can make a healthy living by being professional players. It was broadened the audience for the game, as many more people are willing to spend three hours watching the game than than they would be to spend five days. And it has enriched the other forms of the game.

Cricketers are now fitter than ever before, and batsmen and bowlers alike have developed tools in their arsenal that were not necessary before. The shorter format demands greater urgency, and players have to approach the game differently. Intent leads to ability. A batsman who needs to play an aggressive stroke to every ball will develop a better repertoire of aggressive strokes. A fielder who is desperate to save every run he can will be fitter, and will have better technique. Bowlers, in turn, will have to adapt to more aggressive batsmen by pushing the limits of what they can do. (And indeed, contrary to early stereotypes, T20 cricket isn’t a bang-bang slog-fest, and bowlers remain matchwinners.)

This has percolated down to Test cricket. Nostalgia makes us overestimate the past, but in terms of pure skill, modern greats are a league above the legends of the past. This is not because they are inherently more talented or hard working. It is because, as an economist would say, the incentives are different. T20 cricket demands more from them, and they have adapted.

I consider T20 cricket to be a separate sport, all on its own, and in that light, the last ten years have been fascinating. We have seen a new sport evolve out of the framework of an old one, and every year has seen the game develop rapidly. The key strategic development has been in the structure of the game itself.

Teams initially came to T20 with an approach transplanted from one-day cricket. Every innings had three broad phases: pinch-hit, consolidate, slog. But this was a mistake. In ODIs, teams have around seven batting resources for 50 overs. In T20s, they have the same number of batting resources for 40% of the overs. The reduced overs mean that the opportunity cost of a dot ball goes up, and the opportunity cost of a wicket goes down. The risk-reward ratio changes, so batsmen should attack more.

In fact, they should frontload, as I like to say – they should begin with attack, and attack all the way through. A team that bats through 20 overs losing only three wickets has probably wasted resources, given the batsmen waiting in the pavilion. They should have attacked more; every over can be a slog over.

Some teams understood this, like West Indies in the last T20 World Cup, or Sunrisers Hyderabad last year. But many teams still don’t get it. I wrote before last year’s IPL that teams are underestimating par scores and not frontloading, so anyone into cricket betting should blindly bet on the team batting second, as the team batting first will score less than optimally. That’s exactly what happened. Out of the first 14 games, 13 were won by the side chasing in an average of 17.2 overs, with an average 6.6 wickets in hand. (Teams adjusted in the second half, so follow that advice this year only for teams that don’t frontload.)

The most important statistic for a batsman, thus, is his strike rate. We might consider a strike rate of 125 healthy by ODI standards, but it is pathetic for T20s. A team batting at that strike rate would make 150 runs, which is well below par. A batsman playing at that strike rate is, thus, a liability to his team – the more balls he faces, the more he is letting them down. (As there should be no consolidation or innings-building phase in T20s, there is no ameliorating factor over a season.)

So here’s one stat you should keep your eye on this season: a batsman’s season-long strike rate minus the overall par-score strike rate (for a par score of 180, that would be 150). Let’s call it the Varma Number. If it is negative, the batsman has failed.

Earlier pieces by me on this subject:

Opportunity, choice and the IPL (2008)
The Lesson From This IPL: Frontload Your Innings (2014)
Never Mind the Bullocks, Here’s the Lamborghini (2015)
The New Face of Cricket (2015)
What Cricket Can Learn From Economics (2016)
National Highway 420 (and the EV of Aggressive Batting) (2016)

Posted at 11:23 AM by Amit Varma in Essays and Op-Eds | Sport | The Rationalist

02 April, 2017

The Yogi and the Missus

This is the 31st installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

INCENTIVES

There is a Yogi who cares for cows.
He wants to protect them anyhow.
He doesn’t understand,
Because slaughter is banned,
There’ll be fewer cows in UP now.

DOMESTIC TRANSACTION

A man asked his wife, very nicely,
“Can you please give me some strong coffee?”
She demanded kisses,
And said, “I’m your missus.
Despite that, you must pay GST.”

Posted at 2:17 PM by Amit Varma in India | Politics | Rhyme and Reason | Rhymes

26 March, 2017

Adityanath’s rise marks the end of a 100-year-old battle

This is the second installment of The Rationalist, my column for the Times of India.

There comes a moment in some lives when a sudden, unexpected event makes you look at the world with greater clarity than before. It could be a happy moment: a childhood friend proposes to you, or you stumble into parenthood. It could be a sad one: you are diagnosed with cancer and told you have six months to live. It makes you look at the world differently, and some things seem so clear that you wonder why you did not notice them before.

In the life of our nation, the rise of Yogi Adityanath to the chief ministership of Uttar Pradesh might well be one such unexpected yet clarifying moment. I was stunned when it was announced; and yet, it makes so much sense that any counterfactual now seems absurd. It was, I have come to believe, a decisive and inevitable event in a conflict that has been simmering in India for at least a century.

The great battle that took place on our peninsula was not between the natives and our colonial overlords, but between a new way of thinking and an old way of existing. While the Enlightenment swept its way across Europe and the USA in the 18th century, its influence was felt in India only in the 19th. Liberalism, however one tries to spin it, was an import from the west, and it is ironic that many of our finest freedom fighters were influenced by British thinkers. The great early figures of our resistance – heroes of mine such as Naoroji, Ranade, Agarkar and Gokhale – were essentially British liberals.

Until Mahatma Gandhi, the freedom struggle was a battle between the British empire on one hand, and Indian elites inspired by Western ideas on the other. Gandhi did catalyse it into a mass movement, but his intellectual influences weren’t Indian either. He was more influenced by Ruskin and Tolstoy than any Indian thinker, and VS Naipaul once called him “the least Indian of Indian leaders.” By the time the British finally quit India, the liberalism of the Gokhale years had been replaced by the soft socialism that was then in vogue. Do note that both these strains, the early classical liberalism and the socialism that is so antithetical to it, were Western imports.

The constitution, intended as an operating manual for this new nation, reflected this. The commentator Nitin Pai, in an essay in Pragati, a magazine I edit, wrote: “On 26th January 1950, the Enlightenment […] was injected into the veins of Indian society in the form of a written statute. We are still dealing with the shock of that moment.”

‘Into the veins of Indian society.’ It is worth reflecting here that the state and society are two different beasts. This difference is a cornerstone of conservatism, which the Encyclopaedia Britannica defines as a “political doctrine that emphasizes the value of traditional institutions and practices.” Who were the Indian conservatives who would lead the fightback of society against the state?

The biggest manifestation of conservatism in India is what we call the Hindutva right. I used to be sceptical of it, as I consider ‘Hindutva’ to be an artificial construct, an insulting caricature of a great inclusive religion. But even if that is so, Hindutva is authentically conservative because it arises out of a nativism that is inherent in human nature – and consequently, rooted in our culture. (Culture can both mitigate and reinforce human nature, which is the whole struggle right there.)

Early Indian conservatives were more interested in social rather than political battles, which is why they didn’t play much of a role in the freedom movement. After Independence, the Nehruvian big state seemed to have subdued the Hindutva social project – but this was temporary. The journalist Rishi Majumder, who is writing a biography of the conservative leader Syama Prasad Mookerjee, describes in a forthcoming essay in Pragati how “the RSS, as well as other right-wing groups, organizations and movements, have thrived and grown through many years when the BJP was not in power.”

Much modern politics is the battle between these competing visions of the state. Should the state be a superstructure that imposes certain values, decided upon by elites, upon society? Or should it be a servant to society, protecting its traditions without judging them from the prism of other value systems?

Narendra Modi’s rise to power was fascinating because he embodied the hopes of people on both sides of that spectrum. Some classical liberals dismayed by Nehruvian socialism backed him because they saw the damage Nehru’s ideas had done to India, and wanted their values imposed from above. And the whole Hindutva movement, obviously, fell in behind Modi because his ascent was the culmination of their century-long struggle.

These two strands are incompatible. And now, with the rise of Yogi Adityanath, there is no more ambiguity.

Posted at 8:20 AM by Amit Varma in Essays and Op-Eds | Freedom | India | News | Politics | The Rationalist

20 March, 2017

The Seen and the Unseen: Episodes 6 to 10

I just realised that I haven’t been mirroring episodes of my weekly podcast, The Seen and the Unseen, on India Uncut. So here, at a go, are episodes 6 to 10, in reverse chronological order.

Episode 10: Digital India

Big Brother is watching you, and you have no protection. There has been much hype about how ‘Digital India’ will transform our lives, but there are unseen elements to it that should make you worry. Devangshu Datta joins Amit Varma to discuss why it is so alarming that there are no laws in India to protect privacy and defend against data theft.

Also read: A Billion Indians With Their Pants Off—Devangshu Datta.

Episode 9: The Profit Motive in Education

 

Jawaharlal Nehru once said that profit is a ‘dirty word’. He wasn’t alone in his distrust of the profit motive, which is effectively banned in education in India. Amit Varma chats with education reformer Parth Shah on why this thinking is misguided, and might be responsible for the pathetic state of education in India.

Episode 8: The Medical Council of India

 

Healthcare in India is in a dismal state, and so is the state of medical education. Pavan Srinath joins Amit Varma to discuss the role of the Medical Council of India in this mess. Is it a responsible industry watchdog helping keep standards high—or is it a part of the problem?

Episode 7: MRP

 

For any shopper in India, there is no acronym as comforting as MRP: Maximum Retail Price. When you see that on any packaged good, you feel assured that you won’t be ripped off. But is it really that simple? Prithwiraj Mukherjee joins Amit Varma to discuss the seen and unseen effects of MRP.

Episode 6: Surgical Strikes

 

On September 18, 2016, a group of terrorists attacked an Indian army brigade headquarters near the town of Uri in J&K. Nineteen people died, and there was immense pressure on the Indian government to retaliate. The prime minister, Narendra Modi, eventually launched what he described as ‘surgical strikes’, meant to be a show of strength and resolve. Defence analyst Pranay Kotasthane joins Amit Varma to discuss the Seen and Unseen effects of these surgical strikes.

Posted at 1:56 PM by Amit Varma in Economics | India | Podcast | Politics | The Seen and the Unseen

The Return of Pragati

A few days ago, the magazine Pragati relaunched under my editorship. This was the editorial I wrote to mark its return.

One of my babies on that space: a section called Brainstorm, which aims to “create a space where diverse minds can discuss big issues in a respectful way.” The first such discussion, on ‘The Future of the Indian Republic’, is underway. Here’s my intro post to kick that discussion off. You can read all the essays in that discussion here

Watch that space!.

Posted at 1:47 PM by Amit Varma in Economics | Freedom | India | Media | Personal | Politics

19 March, 2017

A Top Edge (and a Brain Fade)

This is the 30th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

SHERRY

Navjot Singh Sidhu was in a fix.
No party wanted him in the mix,
Till Congress took him on.
Good fortune came along.
His top edge went all the way for six.

CRICKET

One day, in my school, there was a raid.
A boy was caught cheating in tenth grade,
But he was remorseless.
He said, with great finesse,
“It was nothing more than a brain fade.”

Posted at 8:59 AM by Amit Varma in India | Politics | Rhyme and Reason | Rhymes | Sport

17 March, 2017

Embrace the Technology!

This is the 36th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

At the very moment you read this, there is a Test match going on and two batsmen consulting out in the middle about whether they should use the DRS.

“Was I really lbw? Should I refer? Do you think it was missing?”

“I don’t know. But whatever you do, don’t look at the pavilion. Control your neck. Control it. Hold it if you have to. Here, I’ll hold it for you. Control!”

Crack.

The big cricket story of last week, somehow, was not India’s excellent comeback in the Test series against Australia, but the DRS controversy. Batsmen are not supposed to look at the pavilion for advice when deciding whether or not to go for a decision review. Those are the rules, Steve Smith broke the rule, and it was fair enough that he was asked to leave the field of play. But the rules themselves are ridiculous.

I’ve been ranting about this for years, and still these people don’t learn. You would think no one reads me. Gah. Anyway, because I care about you, here, once again, are my thoughts on technology in cricket. And in life, which, by the way, is futile. (I don’t shy away from the big questions.)

First up, a question: why do umpires exist in cricket? After all, cricket is about batsmen batting, bowlers bowling and fielders fielding. No one goes to a ground to watch an umpire umpire. Well, umpires exist purely as a means to an end. They have to take decisions about whether a batsman is out or not, and lubricate the action in the game by communicating to scorers exactly what is going on. A secondary function is to step in if there is physical conflict, and to maintain decorum. Their job is not to be the action, but to keep the action flowing smoothly.

In other words, umpires are a technology.

Think of anything that is a means to an end as a technology. Umpires are a conventional technology for arriving at the right decisions on a cricket field. Now, the last couple of decades have seen rapid upgradations to pretty much every other technology there is. And so it is in the case of cricket. The decision-making mechanisms in cricket have been enhanced with new technologies meant to supplement (and not replace) the umpires.

The most significant of these is Hawk-Eye. Umpires, being human (as of now), are prone to all kinds of optical illusions, such as the parallax error, which impede their decision-making ability. Hawk-Eye, in every respect, makes better decisions than an umpire can. (And it makes them in real time – the time-consuming replays you see you on TV are only for the benefit of viewers.) But for the longest time, luddites fought the use of Hawkeye in decision-making, which led to the ridiculous situation that everyone watching a game had accurate information about whether a batsman was out or not – except the bloody umpire. It was ridiculous.

Cricket authorities have since become more open to the use of technology, but not enough. They almost seem to use it grudgingly. Consider DRS, for example. If the idea of the technology called umpires is to make correct decisions, and there is more technology that will lead to even better decisions, then why don’t we use it as much as possible? Why should DRS appeals be limited for a batting side? Why should every dismissal not be reviewed as a matter of course? Reviewing a dismissal would not take more time than a batsman walking back to the pavilion, so this should be a no-brainer.

Steve Smith wouldn’t be so embarrassed then, eh?

But really, the larger issue here is that the world is changing rapidly, and our minds are not adjusting fast enough. It’s not just cricket. As a species, we don’t have enough clarity about means and ends. For example, just as umpires are a technology for making correct decisions on a cricket field, consider that animals are a technology for growing food. And now that scientists have figured out a way to grow meat in labs without sentient animals being involved, they may soon be an outdated technology, at least for this use case. That might lead to goats going extinct. (Not puppies, though, because puppies can be hugged.)

Equally, hugs are a technology for oxytocin generation. Romance is a technology for the way it makes us feel and the chemicals it releases. If we could pop a pill and feel the same way, would we bother to fall in love, or hug or cuddle or caress, or even woo? Are we so arrogant enough to believe that the love we feel for anyone is truly transcendent, and not mere technology? And also, is humanity any loftier than just a carrier for the trillions of bacteria that inhabit us? What suckers we are, that we behave as if we’re the rulers of the universe?

Okay, excuse the digression, your life has meaning. Happy now? Get back to watching the cricket, but do think about how it makes you feel, and the purpose of it all.

Posted at 2:05 PM by Amit Varma in Essays and Op-Eds | India | Lighthouse | Science and Technology | Sport

05 March, 2017

It Is Anti-National To Be Against Free Speech

This piece was published (under a different headline) in the Sunday Times of India today. It marks the start of a column for them called The Rationalist.

The other day, an internet troll sent me a love letter. “Why have you blocked me on Twitter?” he demanded to know. “You claim to believe in the freedom of expression. You are a hypocrite.” After that he said a few colourful things about my family. I think he wanted me to copulate with them.

I am an absolutist when it comes to free speech, and this friendly troll was wrong. Indeed, I find that there is no concept as deeply misunderstood today as the right to free speech. These misunderstandings exist on all sides of the political spectrum. Thus, I find myself duty-bound to write this brief primer on the philosophical origins of free speech, to illustrate what I understand it to be.

The earliest conception of individual rights came from the 17th century Enlightenment philosopher, John Locke. Locke held that the most fundamental right of all, the one from which all others emerged, was the right to self-ownership. After all, it is practically self-evident and beyond argument that, right from birth, all of us own ourselves.

All individual rights arise out of this right to self-ownership. The right to life. The right to our thoughts, and thus to our speech. The right to our actions, which also results in the right to property. And so on. Freedom, another misunderstood term, means a condition in which these rights are not infringed.

All of our rights are contingent to our respecting the corresponding rights (and thus, freedom) of others. My fist stops where your nose begins, as that old saying goes. Libertarians also call this the non-aggression principle, where aggression is defined as infringing someone’s rights. You may do anything as long as there is no coercion involved.

By this reckoning, all voluntary interactions between consenting adults are kosher, as long as they do not infringe on anyone else’s rights. This holds true, as I often point out, whether those interactions happen in the marketplace or in the bedroom. Both the left and the right are thus incoherent when they support one kind of voluntary exchange but not the other.

In accordance with the non-aggression principle, the core question I ask myself in any situation is: Where is the coercion? Looked at this way, many of the questions that keep getting raised about free speech answer themselves. Am I infringing on the rights of the troll I block? No, because there is no coercion involved. He is still free to say whatever he wants, but he is not entitled to my time and attention. Is a college within its rights to withdraw an invitation to a speaker? Yes, it’s their property, and the speaker can still express himself elsewhere.

If people have a right to free speech, though, it doesn’t mean that all free speech is right. Virender Sehwag had a right to mock Gurmehar Kaur for her courageous video earlier this week, just as I have a right to find his mockery tasteless, and my friendly troll has a right to call me names for it. We all have a right to be wrong, including the trolls who try to have a chilling effect on free speech with their constant abuse. The truth is, only the government can shut down free speech, and even trolls have a right to abuse. (Do note that Twitter would also be within its rights to ban trolls, who are using their property after agreeing to certain terms of use.)

When it comes to our actions, there is much that we can do that can harm others. But it is very hard to breach the non-aggression principle with words alone. As that old adage goes, “Sticks and stones may break my bones, but words will never harm me.” Recognising this, the first amendment of the US constitution protects free speech in absolute terms. Obviously, words can be used to incite physical violence, and that is a reasonable limit of free speech. The US Supreme Court, in a famous case (Brandeburg vs Ohio, 1969) set the standard as “imminent lawless action.”

The Indian constitution, sadly, does not protect free speech. Article 19(2) lays out caveats such as “public order” and “decency and morality”, which are open to misinterpretation and, thus, misuse. This is a pity, but our democracy is a work in progress, and is made healthier by a free exchange of ideas.

For that reason, I was alarmed when I read Arun Jaitley’s quote last week about free speech being “subordinate to the needs of the sovereign state”. That is the wrong way around, and I would argue that a healthy nation needs an open exchange of ideas, for which free speech is indispensable. That is why, if I were asked to compare Arun Jaitley and Umar Khalid, I would say that it is Jaitley who is anti-national, and a threat to our great republic.

Posted at 6:59 AM by Amit Varma in Essays and Op-Eds | Freedom | India | Politics | The Rationalist

26 February, 2017

Unicorn vs ABVP vs Pappu

This is the 29th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

UNICORNS

The losses pile up, as do brickbats
For India’s e-commerce copycats.
They beg for protection,
But avoid reflection
On why they deserve their dismal stats.
 
EDUCATION

I asked some college kids, amid groans,
“What have you learnt, besides Game of Thrones?”
One replied, with a sigh
“Demand creates supply.
I have a degree in throwing stones!”

YOUNG GUN

“Pappu needs time, he is not mature,”
Sheilaji told me. I replied, “Sure,
He’s only forty-six,
Still learning all the tricks.
Till he grows up, you must all endure.”

Posted at 10:24 AM by Amit Varma in India | Politics | Rhyme and Reason | Rhymes

23 February, 2017

The Road to Redemption

image

Never, ever tell me that chess is a boring sport. On the last day of March in 2015, two players in Sochi reached the position in the picture above. White to play and win. This is not a problem or a study, because you’d imagine it’s so simple, right? These are two grandmasters playing each other, and 1. Qg7+ wins as black runs out of checks to give for a draw. But before dismissing it as a simple problem, see the context.

It’s the semi-final of the women’s World Championship. White is India’s Harika Dronavalli; black is Ukraine’s Mariya Muzychuk. This is a tie-breaker game being played with each player having 10 minutes + 10 seconds increment, and both players are under time pressure. If Harika wins, she’s pretty much through to the final. She just has to find 1. Qg7+.

With the clock ticking, though, she decides to avoid perpetual check by exchanging queens, and plays 1. Qe3. Muzychuk exchanges, takes the h pawn, and it’s a textbook draw. So near… but there’s still a game to go.

Perhaps rattled by this, Harika fades and falls in the next game, and Mariya is through to the final. She wins, and you can see the emotions in the pictures below: Harika’s desolation; Mariya’s cathartic relief as she is hugged by her sister Anna Muzychuk. Mariya then goes on to win the final, though she loses the title later in a match to Hou Yifan, far and away the best female player in the world.

image

So why do I remember this now? Because today Harika Dronavalli is once again in the semi-final of the Women’s World Championship, and I couldn’t help but remember her heartbreak of 2015 as I watched her match live.

She’s playing Tan Zhongyi of China. Mariya opted to skip the event, which is in Tehran, because the organisers enforced a compulsary hijab rule for the players. Nazi Paikidze, the US champion, was the first player to boycott the event, and Mariya joined the boycott. (Hou Yifan refrains from playing most of these women’s events anyway because of a) bad structures and b) she’d rather compete with the men in the open section.) But Mariya’s elder sister, Anna, is here, because according to Mariya, she really does want this championship badly. And Anna is playing the other semi-final against Alexandra Kosteniuk.

There’s heartbreak ahead for three of these women. And much, much drama. Are you watching?

Note: Player pics by Nastja Karlovich, taken from Chess.com.

Posted at 7:14 PM by Amit Varma in Sport

19 February, 2017

Assembly Proceedings

This is the 28th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

TAMIL NADU

My neighbourhood thugs were filled with awe.
The Chief Gunda explained, “I just saw
Assembly proceedings,
And now I’m conceding,
Compared to those pros, we are so raw!”

DISCOURSE

The speaker’s wife was extremely hurt.
When he got home, he was rather curt.
When she asked him why,
He said with a sigh,
Those ruffians tore my brand-new shirt!”

Posted at 10:52 AM by Amit Varma in India | Politics | Rhyme and Reason | Rhymes

17 February, 2017

The Baptist, the Bootlegger and the Dead Man Walking

This is the 35th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

Appearances can be deceptive. I saw two Bollywood films recently that evoked different reactions in me. One was supposed to be gritty, realistic and well-researched, but actually showed completely ignorance of the world it was set in. Another had a small story at the start of it that seemed outlandish, the product of an imagination gone wild, but was spot on. Sometimes the most obvious truth can be a falsehood; and the most surreal story can be true.

Let’s start with the believable story. Shah Rukh Khan plays a bootlegging gangster in Raees, a film directed by Rahul Dholakia, who had made the acclaimed Parzania ten years ago. Raees looks real, and some reviews called it well-researched, but this is a façade. The writers seem to have no actual knowledge of the criminal underworld and the political economy in Gujarat. While the film is full of implausible events, one particular arc gives it away.

You would imagine that a man who sells alcohol would be the enemy of the man who wants alcohol to be banned. So when a sanctimonious politician plans to carry out a Darubandi Yatra (pro-prohibition march) through Gujarat, Raees Alam, our hero bootlegger, warns him not to bring it through his area. He fears it will affect his business. This seems intuitive and natural. These men are working at cross-purposes, right?

Well, in the real world, these men are allies. Prohibition is the greatest boon to a bootlegger. It is the main reason he exists. And a politician who supports prohibition should be his greatest ally. He should support him to the point of funding him, and even share his profits with him. This is best illustrated, in economics, by the concept of Bootleggers and Baptists.

The regulatory economist Bruce Yandle first coined the phrase ‘Bootleggers and Baptists’. It describes how regulations evolve, and how the different interest groups that benefit from them become unlikely allies. For example, take a Baptist who preaches that alcohol is evil, and makes sure it is banned. Where there is demand, supply will spring up, so enter the Bootlegger.

Bootleggers and Baptists share a symbiotic relationship. In Yandle’s words, “Baptists flourish when their moral message forms a visible foundation for political action. […] Bootleggers, who expect to profit from the very regulatory restrictions desired by Baptists, grease the political machinery with some of their expected proceeds.” In other words, not only are their incentives aligned, they might sometimes be overtly hand-in-glove as well, with the Bootlegger funding the Baptist.

Look at the regulation around you, and you will see Bootleggers and Baptists everywhere. Every government regulation on free markets benefits a specific interest group at the expense of the common people. These interest groups then funnel some of their gains back into politics, in the form of donations to the very politicians who create, perpetuate and expand these regulations. It is a vicious cycle in which the common man gets shafted.

Let’s move on, now, to a better movie. Akshay Kumar’s entertaining Jolly LLB 2 gets a few details wrong about the legal system, but the most outrageous story in the film is actually true. Jolly LLB, played with impeccable comic timing by Kumar, takes on a case at the start of the film on behalf of a man who’s been declared dead by his family so that they can take his property. All government papers say he’s dead, and the judge refuses to believe that he is alive. He needs proof that he exists, and he eventually gets it by throwing a shoe at the judge. (This scene was censored, so you won’t actually see it, just the commotion afterwards.) The cops have to record his name as they arrest him, and boom, that becomes the proof that he’s looking for.

Surreal, eh? You haven’t heard the half of it. This story is actually all a true story – and if anything, understates it. Its inspiration is surely a gentleman named Lal Bihari, a farmer from Azamgarh in Uttar Pradesh. Lal Bihari was born in 1951 – and was told by a government officer in 1976 that he was dead, and that his land now belonged to his cousins. “But I am here before you,” he said, as reported in Open magazine. ““You know me. I have met you before.” But nothing doing, he had no proof that he was alive.

That’s only where the story begins. Lal Bihari renamed himself Lal Bihari Mritak (dead man), and went about proving himself alive. To do this, he organised his own funeral (Munnabhai style), applied for compensation for his ‘widow’, threw stones at a police station so that he would get arrested and his existence would be recorded, kidnapped his cousin, and finally, stood for election.

He took on VP Singh from Allahabad in 1988 and Rajiv Gandhi from Amethi in 1989, but dead men don’t win elections, and he didn’t either. By this time, he found that there were many others in the ranks of the walking dead, and founded the Uttar Pradesh Mritak Sangh, an association of legally dead people. At last count, they had 20,000 members, of whom four had managed to come back to life. One of them was Lal Bihari. From 1994 he was no longer Mritak, and when he really dies, I bet the authorities will be, like, been there done that.

You can’t make this shit up, right? Bollywood filmmakers should learn this lesson from Jolly LLB and Lal Bihari Mritak: real life has all the great stories you need. Just dig into that.

Posted at 2:38 PM by Amit Varma in Arts and entertainment | Economics | Essays and Op-Eds | India | Lighthouse | Politics

14 February, 2017

The Seen and the Unseen 5: This Is All Because Of Rupal Ben

This is the fifth episode of my weekly podcast, The Seen and the Unseen.

A few years ago, a photo studio in Ahmedabad offered its customers free passport photographs. There was no catch, no small print. It was a free lunch. Amit Varma is joined by Mohit Satyanand, as they explore how this free lunch transformed financial regulation in India. They also discuss how bad incentives can lead to corruption becoming a cultural phenomenon.

Posted at 5:38 AM by Amit Varma in Economics | India | Podcast | Politics | The Seen and the Unseen

13 February, 2017

The Landscape of Freedom in India

Here’s the video and transcript of a keynote speech I gave at the Asia Liberty Forum on January 11, 2017 in Mumbai.

Note: In this conference, the word ‘liberal’ was used in its classical, European sense, not in the American one. I’ve used it in the same sense in this speech, almost interchangable with ‘libertarian’, though I usually prefer not to use the word as it means so many things to so many people.

Before I start, I want to congratulate Parth Shah for 20 years of CCS. Parth, I’ve lost count of the number of young people I have met to whom you’ve been a teacher and a guide, and there is one thing common to all of them: not only do they respect you enormously, but they also love and adore you even more than they respect you. That’s remarkable. Thank you for existing!

I’ve started on a happy note, but I’m afraid that the rest of my speech will contain both sadness and anger, and maybe a little hope. The topic of my keynote speech today is “Freedom in India.” Now, I’m not going to talk about the history of what I call this ongoing freedom struggle in India: most of you know that story too well. Instead, I want to share my personal feelings about where we stand today.

I think the quest for freedom in India that all of us care about so much is at an important crossroads. We face challenges we did not face before. We have opportunities we did not have before. And to understand the road ahead, I think there are two things we have to do. One, we must come to terms with Narendra Modi.

Let me first lay the context for why Modi became such an attractive figure for many freedom-loving people before 2014. Eric Hoffer writes in his book The True Believer, which is a book about the rise of mass movements, that they are driven by frustration. Modi tapped into different kinds of frustrations during his rise to power. Among them were classical liberals who cared for freedom – both personal freedom and economic freedom – and were frustrated by nearly seven decades of state oppression that had kept hundreds of millions of people in poverty for much longer than they should have. The reforms of 1991, we must remember, were a product of circumstances, and were not driven by political will. They did lift millions of people out of poverty, but they were limited and half-hearted, and once the balance-of-payments crisis was over, they more or less stopped. We still remain largely an unfree country. In the 2016 Index of Economic Freedom, India was still at a miserable 128 – eight places lower than 2014, by the way. This is trivial – most of you know this.

Modi appeared, to many of my friends, as a beacon of hope. The Congress was – and is – feudal party ruled by a repugnant family that has harmed India immeasurably, and most regional parties were focussed on narrow identity politics. Modi is a master of optics, and as he built himself up as a national leader, he became a bit like a Rorschach Inkblot Test – you could see in him what you wanted to.

No wonder many classical liberals fell in behind him. They were willing to give him the benefit of the doubt for the Gujarat Riots of 2002, and put that down to incompetence rather than collusion. They were sick of the status quo, and he represented a hope for change. As my friend Rajesh Jain put it, he was “a lighter shade of gray.” At least he made the right noises – his slogan ‘Minimum Government, Maximum Governance’ was music to my ears.

Now, a party on the campaign trail is like a young man wooing a woman: he’s on his best behaviour, and he’ll tell her just what she wants to hear. But governance is like what happens after marriage: the girl find out the truth about the guy: he farts all the time, he snores like a hippopotamus getting dental surgery without anaesthetic, he surfs porn all night, he beats her up, indeed, he beats her up day after day after day – and very often, she rationalises this, because she made this choice, and there seems to be no alternative.

Let’s take a brief look at how the Modi government has performed. The first thing we learned about Modi is that he is no reformer. Under him, government has grown bigger and more authoritarian. The welfare schemes he once criticized have grown, and some of them have been renamed and he has pretended that they are his ideas. He has not carried out any of the reforms he promised to, including low-hanging fruit like privatising non-performing public sector units that no one would have fought for. Indeed, he has shown us that he is actually a true heir of the Congress party: he has the economic vision of Nehru, and the political instincts of Indira Gandhi. And I mean both of those as a criticism.

Like Nehru, Modi has a top-down, command-and-control vision of the economy. To him, society is a machine to be engineered: he considers himself a better engineer than his predecessors, but he is an engineer nonetheless. And like Indira, he uses power as a tool to oppress and harass his opponents, and to clamp down on dissent, and to reward his cronies.

For two years between 2014 and 2016, Modi carried out almost no reforms, despite making some noises in the right directions: remember, he is a master of optics. But then, in November last year, he showed his true colours as an authoritarian social engineer. There is a thought experiment that I sometimes throw to my friends: It’s the morning of November 8, 2016, and you are the prime minister of India for exactly one day. In that day, you have to enact exactly one policy which, without breaking the law or going against the constitution, harms the people of India the most. The maximum damage to the maximum people. What are you going to do?

Think about this and let me know if you come up with an answer better than what Narendra Modi actually did. Allow me to break down for you what Demonetisation actually did. Modi essentially took all 1000 and 500 rupee notes out of circulation. Now, a 1000 rupees is equal to around 15 dollars. It is not really a high-denomination note. Modi had perhaps not bought anything from a store in two decades, so he didn’t realise that these notes are not used mainly for as unit of storage, as high denomination notes are in some other countries, but as a medium of exchange. Common people use these notes. So much so that 86% of the currency in use consisted of these notes. 86%!

Let me share some more figures with you. Before November 8, 97% of the transactions in this country were cash transactions. Contrary to the blatant lies of the government, only 53% of all Indians had bank accounts. That’s 600 million people without bank accounts. How do you think they stored their money? Yes, you could notionally go to a bank anyway and exchange this money for new notes, but you need a government ID for this, and again, despite the lies spread by the government, 300 million people in India had no form of government ID at all. And even those who did have bank accounts could deposit their money after standing in a queue for hours, but had limits placed on withdrawals. Get this, they were not being allowed to withdraw their own money!

I wrote at the time that it was the largest assault on property rights in the history of mankind, a point that my friend Barun Mitra reiterated in his excellent speech yesterday. The opportunity costs were huge – people spent hours in queues begging for their own money, and could not use either their time or the money they had productively. Much of the economy is informal, because of structural failures of the state itself, and it came crashing down. Migrant workers across the country were laid off because there was no cash to pay them, and they went back home. Farmers could not sell their produce or buy seeds for the next harvest. Truckers lined up on roads with nowhere to go and nothing to carry. Thousands of businesses across the country shut down.

In all this, the rich got away. The government kept changing the goalposts for why they did this. First, they said it was to counter black money. But a finance ministry estimate, based on thousands of income tax raids in the past, shows that only 6% of black money is kept in the form of cash: the other 94% is in gold, real estate and foreign accounts. Even that 6% was laundered. You see a reflection of this in automobile sales. They have plummeted for two-wheelers and three-wheelers, but SUV sales are steady. The rich got away.

The government also said that Demonetisation would kill fake currency. Well, their own estimate showed that only one in 4000 notes was fake, a perfectly acceptable figure, and the usual way of tackling this, practised across the world, is to phase out old notes. The government also said that terrorist activity would be hurt by this, but cross-border attacks have actually gone up in this time. Yes, criminal activity has been affected, but that’s because ALL business has been affected. You do not cure a cold by cutting someone’s head off.

So there was no benefit, and the cost is incalculable. Some more figures: According to the All India Manufacturer’s Association, in a report released last month, employment is expected to fall 60% by March, and revenues will come down by 55%. And the IMF released a forecast that said that India’s GDP will grow by only 6.6% this year, a full percentage point lower than last year. Let me tell you what that number means. My friend Nitin Pai of the Takshashila Institution recently estimated that with every 1% rise in the GDP, 2 million people come out of poverty. Two million people. That is the opportunity cost of Demonetisation in just the short term: those two million people trapped below the poverty line because of one man named Narendra Modi. This is both a humanitarian disaster and a moral outrage.

Now, the question here is, all these classical liberals who supported Modi in 2014, have they seen the light now? This is a man who doesn’t give a damn about liberal principles, and is taking the country backwards. Friends of mine who are here tonight have invoked The Road to Serfdom to describe what is happening, and some talk of creeping fascism. But what do our classical liberals have to say?

My friend the economist Suyash Rai said an interesting thing to me a few days ago. He said, “Mujhe communist se dar nahin lagta, mujhe classical liberal se dar lagta hai.” (“I am not scared of communists, I am scared of classical liberals.”) There are too many people who pay lip service to freedom but support this oppressive regime. There are a number of reasons for this: Some of them invested too much emotionally in Modi, and will rationalise anything he does. Others have been co-opted into the establishment, with Padma awards or seats on the Niti Aayog or Prasar Bharti or the RBI Board of directors, and now that they are finally establishment intellectuals, they ain’t gonna give it up.

I met one of them the other day and said to him, “Isn’t modern technology wonderful?” He said, “Why?” I said, “Bro, this is the first time I’ve seen a man without a spine stand up straight.”

But leave aside the narrow compulsions of weak men without principles. What are the lessons I draw from all of this? Lesson number one: You can never depend on politicians to advance your principles. David Boaz once said, “There are only two political philosophies: liberty and power.” These are necessarily opposed to each other. Those who enter politics lust for power. If your ideas or your support seems useful to them, they will pretend to be on your side, but when they’ve gotten what they wanted, they will spit you out. Their incentives come firstly, from the special interests that fund them, and secondly from the people who elect them. And that brings me to lesson number two.

Lesson Number Two is that policy advocacy is mostly useless. If you want to make an impact on the political marketplace, you need to attack the demand side, not the supply side. You need to go to the people!

I said earlier in this talk that there are two things that people who care about freedom have to take into account today. One, we have to come to terms with Narendra Modi. Two, we have to understand this political marketplace. And the most important thing to understand about India is its changing demographics.

India is rapidly growing younger and younger. The average age in India today is 27, and 60% of the country is born after the liberalisation of 1991. This is both a problem and an opportunity.

Here’s the problem. These young people are growing up in an India that needs 1 million jobs every month – 12 million jobs a year – to accommodate this new workforce. These jobs aren’t there. One of the reasons Modi won in 2014 was that he promised to create these jobs. He hasn’t delivered; he can’t deliver The government can’t create jobs, it can only enable job creation. But the reforms that would make this happen – labour reforms, ease of doing business reforms – simply aren’t happening.

It’s no surprise then all the recent agitations in India have been centred around reservation in government jobs: The Jat agitation in Haryana, the Patidars under Hardik Patel in Gujarat, and so on. And this will get worse. Artificial intelligence will now decimate jobs in the service industry, where we’ve done relatively well recently. And automation will mean that the window for becoming a manufacturing superpower because of cheap labour will be closed to us forever. So there is a coming crisis.

Now, how are we to sell our ideas in times such as these. Classical liberal notions like spontaneous order and the positive-sumness of things are unintuitive and hard to sell in the best of times, but even more so in times of scarcity. I used to think that rising prosperity will end identity politics in India, but no, identity politics is on the rise, and we are becoming tribal again. No wonder populism is winning.

But there is also an opportunity here. These young people are not bound up in the dogmas of the past. They are not necessarily believers in the religion of government. If we manage to get out there in the marketplace of ideas, they will be more receptive than any generation before them. And that is the principle challenge before us. How can we get into the culture? How can our ideas be part of the discourse? Understand this: the prime minister of India in the year 2050 could be a 15-year-old girl who is sitting in a small town in India somewhere at this very moment, doing her boring homework. How can we reach her with our liberal ideas? Can we shape the way she thinks about the world? Can we package our ideas in an empathetic way that appeals to her emotions? Can we get her off Snapchat? Can we reach her on Snapchat?

In another two or three decades, this demographic tide will reverse itself, and we will become a rapidly ageing country. Will we still be poor or illiberal then, or will we be a beacon of freedom for the world? I can’t answer that – and I don’t even have any specific answers as to how we can get there from here, but I thought it important to highlight the challenges we face. Things are not rosy, freedom is not on the march. But we have to try, and I know this: just by the size of the battlefield alone, this battle for freedom in India will be the most significant freedom struggle in the history of humankind. And we can only win it on a full stomach. It’s time for dinner, guys, thank you for listening to me.

Posted at 11:08 AM by Amit Varma in Economics | Freedom | India | Personal | Politics

12 February, 2017

The One Good Thing You Did Not Know Trump Was Doing

This is a guest column published today in the Sunday Times of India edit page.

The first three weeks of Donald Trump’s presidency have been frightening. This is because he seems to be that one politician who actually intends to do what he promised on the campaign trail. He’s hitting out at immigrants, attacking free trade and it looks like he’ll build that wall, with his own tiny hands if he has to. But even an unhinged demagogue must get some things right, if only by accident. In the middle of this carnage, Trump’s appointment of Betsy DeVos as education secretary is a move in the right direction.

DeVos has been demonised by the Democrats, who tried to block her appointment, but their attacks were mostly personal ones that did not focus on the substance of what she proposes to do in office. For decades, DeVos has been a proponent of School Choice. This would transform education in America, and would show a way forward to other countries, including India. I’ve been writing in favour of School Choice in India for many years, so let me break down what it means in an Indian context.

Education in India, as we know, is in an abysmal state. The government devotes vast amounts of money to it, but outcomes are terrible. A recent Annual Status of Education Report (ASER), described by the government itself as “pretty depressing,” showed that 52% of students in Class V were unable to read a Class II textbook. As much as 58% of Class VIII students could not do simple division, and teacher absenteeism was rampant. Teachers are not the problem, though, but a symptom of it. The problem is incentives.

Government schools are guaranteed their funding, and their teachers, who are paid many times what teachers in budget private schools get, are more or less tenured. They have no reason to aim for excellence and try to provide quality education. How does one make them accountable, and make sure that our money is better spent? One answer is school vouchers.

Under a voucher system, the government, instead of giving money to government schools, gives vouchers to parents. Parents decide what is the best school for their children, and submit the voucher there. That school then gives the voucher to the government and gets the money.

This changes the incentives for government schools and their teachers. They have to perform now, and deliver quality education, or parents will take their kids elsewhere. Competition brings accountability. This also empowers parents with choice. They are the people who should decide what is best for their children, and not a distant, unaccountable government. In a nutshell, the state funds schooling, not schools.

Vouchers are only one piece of the puzzle, of course. They are pointless if there are harsh entry barriers for private players in education. For 70 years, we have had insane regulations in place that disallow or disincentivise private schools, especially for the poor. If a school provides budget education to children in a slum, why should it matter if its playground isn’t big enough? Let parents decide what they value.

As it happens, there is a vast informal economy of budget private schools, and poor parents vote with their feet. Organisations like the Centre for Civil Society have long documented how thousands of poor parents in slums and villages across India prefer to pay to send their kids to a budget private school rather than to a free government school. This speaks volumes.

Private schools are demonised, but contrast their incentives with those of government schools. In a marketplace with no entry barriers – which India is not – the profit motive is the best incentive. After all, you can only make a profit by delivering value to others. When I was growing up in the 1980s, telecom, airlines and education were all government monopolies, and delivered abysmal service. Today, two of them allow private players to compete freely, and because of competition and the profit motive, we the people are better off. But not education, which is so important for our nation’s growth.

When you fight against the system, of course, the system fights back. The status quo is always fiercely defended by the special interests that benefit from it. (Since they are beneficiaries of the status quo, they also have the money to spend on it.) In the US, for example, teachers’ unions are the biggest opponents of education reform, as the current system give them power and privilege without accountability. They happen to be prominent donors to the Democratic Party who, as a result, oppose School Choice.

As an illustration, consider that the sanctimonious Elizabeth Warren actually advocated school vouchers in a book she wrote in 2003. She changed her stance when she joined politics and realised who the most influential donors in the Democratic Party were. That’s the whole game of politics right there: special interest groups purchasing politicians to benefit at the expense of the common people. It’s ironic, then, that Trump should be on the right side of this issue.

Posted at 11:11 AM by Amit Varma in Economics | India | Politics

The Seen and the Unseen Episode 4: Immigration

This is the fourth episode of my weekly podcast, The Seen and the Unseen.

The history of humanity is the story of an Expanding Circle: one in which the world gradually gets more and more globalised, and the movement of goods and labour becomes more and more free. But recent years have seen the rise of populists who, among their many follies, are suspicious of immigration. America, a land built by immigrants, just elected a demagogue who prefers walls to bridges.

In Episode 4 of The Seen and the Unseen, Amit Varma discusses Immigration with Shikha Dalmia. Are the demagogues right about immigration being a bad thing? Do immigrants take jobs away from locals? Are they a strain on resources? Should we build yuge walls?

Also read: Dalmia’s piece for Reason, ‘An Argument For Opening America’s Borders’ (pdf link).

Posted at 11:02 AM by Amit Varma in Economics | Podcast | Politics | The Seen and the Unseen

05 February, 2017

Padmavati and Trump

This is the 27th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

PADMAVATI

In Rajasthan there was some friction,
Folks objecting to a depiction
Of a certain lady.
It was all quite shady,
Since she didn’t exist, and was fiction.

BUMP

One dark night, a man named Donald Trump
Flew off his bed, landing on his rump.
The reason for this strife
Was his immigrant wife,
Who had given him a mighty thump.

Posted at 7:53 AM by Amit Varma in India | Politics | Rhyme and Reason | Rhymes

31 January, 2017

The Seen and the Unseen Episode 3: GST

This is the third episode of my weekly podcast, The Seen and the Unseen.

There are two kinds of diversity in India, one good, and one not so good. Our greatest strength is our diversity of people and cultures and languages. But one of our great weaknesses is our diversity of taxes, across states and regions. We have so many different kinds of taxes that the cost of compliance is the most daunting cost for many businesses, and corruption is out of control. Also, taxes create friction in trade, and the costs are borne by consumers and businesses alike. It’s a negative-sum game.

The Goods and Services Tax (GST) was supposed to be the panacea that would get us out of this mess. While India has been one country since 1947, it hasn’t been one market, and the GST was expected to get us to that promised land. It has been many years in the making, though, and has become more and more convoluted in the process of political and bureaucratic negotiation. Thus, while the Seen Effects of a perfect GST would normally be excellent, the potential Unseen Effects of the GST in its evolving form could be quite messy.

In Episode 3 of The Seen and the Unseen, Devangshu Datta takes Amit Varma through the nuances of the GST and their possible implications.

Posted at 5:02 AM by Amit Varma in Economics | India | Podcast | Politics | The Seen and the Unseen

30 January, 2017

Black Buck Envy

Here’s a limerick to brighten up your Monday morning.

NOTEBANDI

Modi told Salman, “I am awestruck.
Is it your talent or pure dumb luck?
You killed that antelope.
I feel like such a dope.
I haven’t killed even one black buck.”

Posted at 12:57 PM by Amit Varma in India | Politics | Rhymes

29 January, 2017

Gladiators at the Ballet

This is the 26th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

STRAIGHT DRIVE

Rahul Dravid, when he played cricket,
Always put a price on his wicket.
Offered a PhD,
He said, “No, not for me.
I earn my way. Keep your free ticket.”

TIME MACHINE

When you switch on your TV today,
You’ll feel time begin to slip away.
Everything just a blur.
Nadal and Federer.
Two gladiators at the ballet.

Posted at 5:07 AM by Amit Varma in Rhyme and Reason | Rhymes | Sport

The Seen and the Unseen Episode Two: Demonetisation

This is the second episode of my weekly podcast, The Seen and the Unseen.

On November 8, 2016, India’s prime minister Narendra Modi announced that 500- and 100-rupee notes would cease to be legal tender from midnight that day. This removed 86% of the cash from circulation, an unprecedented event in human history. Demonetisation, as it was then called, or DeMon or Notebandi as it is also known, had humanitarian and economic effects that might take years to play out. In episode 2 of The Seen and the Unseen, Amit Varma is joined by Suyash Rai, an economic analyst from Delhi, as they examine whether demonetisation achieved any of its intended effects, and try to come to terms with some of its unintended (but foreseeable) consequences.

Both Varma and Rai have been early critics of this demonetization, and have written extensively on the subject. Some of their pieces:

Narendra Modi Takes A Great Leap Backwards—Amit Varma, The Times of India, November 20, 2016
The Humanitarian Cost Trumps Any Economic Argument—Amit Varma, India Uncut, November 24, 2016
The Rise and Fall of Emperor Modi—Amit Varma, Hindu Business Line, November 25, 2016
Three Reasons Why A Cashless Society Would Be A Disaster—Amit Varma, The Times of India, December 18, 2016
Narendra Modi Makes Some New Year Resolutions—Amit Varma, The Times of India, January 1, 2017

Tackling Black Money—Suyash Rai, NIPFP, November 17, 2016
A flawed policy: The real problem with demonetisation is not just in implementation—Suyash Rai, Scroll, November 22
The Demonetisation Decision: Event, Impact, Narrative and Meaning—Suyash Rai, The Wire, December 4, 2016

Follow them at their Twitter handles, @amitvarma and @suyashrai.

Posted at 5:01 AM by Amit Varma in Economics | India | Podcast | Politics | The Seen and the Unseen

22 January, 2017

Why Both Modi and Trump are Textbook Populists

This is a guest column published today in the Sunday Times of India edit page.

As Donald Trump raised his tiny paw and took the presidential oath this Friday, I had just finished reading an outstanding book that, I thought, explained Trump as well as many other leaders on the world stage today. In ‘What is Populism?’ Jan-Werner Müller, a Princeton professor, lays out all the ingredients from which you can cook up a populist movement. I was struck by how closely our own prime minister, Narendra Modi, matched Müller’s definition. Consider the following characteristics that characterise populists, as defined by Müller.

One, they claim that not only do they represent the people, but that whoever does not support them is, by definition, not part of ‘the people’. Müller says this is “the core claim of populism: only some of the people are really the people.” As Trump put it in May last year, “the only important thing is the unification of the people— because the other people don’t mean anything.” Think of how the BJP treats Muslims and Dalits as second-class citizens.

Two, populists are not just anti-pluralism, but they’re also anti-elite. Müller writes, “Populists pit the pure, innocent, always hardworking people against a corrupt elite who do not really work (…) and, in right-wing populism, also against the very bottom of society.” Think of Modi’s railings against the “Lutyens elite” as an example.

Three, they portray themselves as victims even when they are in power. As Müller puts it, “majorities act like mistreated minorities.” Modi still rants against the elite even though he is now their leader, and paid BPJ trolls still call journalists ‘presstitutes’ even though they control much of the media. Trump, who has been a crony capitalist insider all his life, is a classic example of a pig calling the pigsty dirty.

Four, populist parties tend to become monolithic, “with the rank-and-file clearly subordinated to a single leader.” Trump decimated the Republican Party on the way up, just as Modi is now the Supreme Leader within the BJP, which once had multiple leaders of stature.

Five, populists pride themselves on their “proximity to the people.” Modi being a ‘chaiwalla’ is a key part of his narrative, and as that famous photoshopped picture of him sweeping a floor shows, the common-man element is important to him. As it is, indeed, to other populists. Hungary’s Viktor Orbán and Venezuela’s Hugo Chávez both hosted shows similar to Modi’s Mann Ki Baat.

Six, populism is simplistic, so populists can only think in simplistic terms, which leads to “an oversimplification of policy challenges.” Modi’s Demonetisation is an example of this, as is Trump’s attribution of America’s job losses to immigration and outsourcing.

Seven, they populists tend to believe in conspiracy theories, which “are rooted in and emerge from the very logic of populism itself.” Indeed, the RSS’s view of history is itself a sort of giant conspiracy theory.

How do populists behave once in power? Müller outlines three things that they tend to do.

One, they “colonize or occupy the state”. They fill up all the institutions with their own people, co-opt those that are independent, and reshape the system to their will. Think of Modi’s appointment of incompetent cronies to the Censor Board and FTII, the replacement of the Planning Commission with Niti Aayog, and the recent virtual demotion of the RBI to an arm of the finance ministry.

Two, they “engage in mass clientelism: the exchange of material and immaterial favors by elites for mass political support.” Think of the sops Modi offered before the Bihar elections, or the ones expected in the next couple of budgets leading up to important elections.

Three, they shut down dissent in civil society, starting with NGOs. Müller writes, “rulers like Vladimir Putin in Russia, Viktor Orbán in Hungary, and PiS in Poland have gone out of their way to try to discredit NGOs as being controlled by outside powers (and declare them ‘foreign agents’).” Sounds familiar?

Modi fits Müller’s populist template so precisely that he seems like a bot generated by a populism machine, and not an actual person. It made me wonder: if a near-identical form of populism persists through vast stretches of time and geography, does it then reflect something innate in human nature?

I’ll leave you with a pleasant thought, though. Here’s why I think both Modi’s and Trump’s populism will ultimately fail. The narratives of populism, based on some of the people being all of the people, only work in broadly homogenous societies. The USA will be a minority-majority country by the middle of the century (ie, whites will be less than 50% of the population), and a Trump won’t be possible then. As for India, our diversity is our greatest defence against creeping fascism. Populism might work at the state level, but nationally, we are too diverse. That puts a ceiling on how much support Modi can get, which I believe already peaked in 2014, when he could be all things to all people. I think he already senses this. How will he respond?

Posted at 10:28 AM by Amit Varma in Essays and Op-Eds | Freedom | India | Politics

The Seen and the Unseen Episode One: Entry and Exit in Agriculture

This is the first episode of my weekly podcast, The Seen and the Unseen.

India has a panoply of laws that prevent corporations from getting into farming, and which prevent farmers from escaping agriculture, by virtue of not being able to sell their farm land for non-agricultural purposes. The Seen Effect of this is that they are protected from exploitation by rapacious capitalists. But are the Unseen Effects worse?

Amit Varma is joined by guests Pavan Srinath and Karthik Shashidhar, who explain that a key reason why Indian agriculture is in such a dreadful state today is the bad laws governing it set by different governments.

Posted at 10:20 AM by Amit Varma in Economics | India | Podcast | Politics | The Seen and the Unseen

The Seen and the Unseen: the lens that Bastiat made

Cross-posted from the blog of The Seen and the Unseen, my new weekly podcast.

In 1848, a French economist named Frédéric Bastiat, 47-years-old at the time, wrote a seminal essay titled ‘That Which is Seen, and That Which is Not Seen’. The essay began with these words:

In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

The essay went on to illustrate this with what is now known as the Parable of the Broken Window. Economists consider this one of the earliest—and certainly the clearest—explications of the concept of opportunity cost. More than that, though, it laid out a way of thinking about the world that went beyond economics. The great economics journalist Henry Hazlitt wrote his seminal text, Economics in One Lesson, based entirely upon Bastiat’s essay.

So why is a 19th century essay relevant today? Well, it wouldn’t be if its concepts had been internalized by everyone. But they haven’t been, and governments constantly make disastrous policies that could have been avoided if policy makers simply looked at the world through the lens of the Seen and the Unseen. That is exactly what I will attempt to do in this weekly podcast. Every week, I will get experts from different fields to lay bare the inner workings of their domains, and to show how policies framed with the best intentions often have the worst consequences.

A new episode of The Seen and the Unseen will be uploaded every Tuesday. I hope you enjoy it!

Posted at 10:08 AM by Amit Varma in Economics | Personal | Podcast | The Seen and the Unseen

08 January, 2017

Mahi and the Indian Man

This is the 25th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

MAHI

Mahendra Singh Dhoni made his name
With his skill for finishing a game.
The hardest thing to know
Is when to just let go.
His timing has been perfect again.

MARD

The Indian male is quite a beast.
One half devout, just like a priest,
But the half that prevails
Seems to treat all females
As mere dishes laid out at a feast.

Posted at 1:07 PM by Amit Varma in India | Rhyme and Reason | Rhymes | Sport

01 January, 2017

Narendra Modi Makes Some New Year Resolutions

This is a guest column published today in the Sunday Times of India edit page.

Every December, I like to meet the high and mighty of the world and ask them about their New Year Resolutions. Last year I met Donald Trump. “I’m going to control my foot in 2016,” he told me. “It keeps going into my mouth. It’s like my foot has a mind of its own. What to do?”

“You could try building a wall between your foot and your mouth,” I suggested. “A really yuge wall, like, I know you’ve seen a lot of walls, and this will be the best.”

He rubbed his minuscule hands together, deep in thought, and offered me an orange.

This year, I decided to go closer to home. I dropped in to meet my old friend Narendra Modi. “Wassup, Vallabhai?” I said. It’s an old joke between us.

Modiji gave me a warm hug. “It’s so good to see you after so long,” he said. “I mean, it’s good that it’s been so long since I last saw you. What brings you here?”

“An Uber,” I said. “Listen, I just dropped in to ask what your New Year Resolutions for 2017 are. What new things are you going to do?”

Modiji sat back, and a grim look came over his face. “I have made many resolutions,” he said. “First of all, I need to finish my war against black money. I thought demonetisation would do it, but my own damn IT department did a study that showed that only 6% of black money was kept in the form of cash. Even that was converted from old black money into new black money through new black markets. So phussss.”

“So what are you going to do then?”

“Well, I was told that a lot of black money is kept in the form of gold and real estate. So I will tackle them both. First, I will demonetise gold. I will declare that from now on, gold is aluminium. And boom, in one blow there will be no more gold in the country. Until I declare something else to be gold.”

“Er, this is not how it works,” I said. “You are not God. You can’t just pass a law and change the world like that.”

“You know nothing,” he said. “I am the Badshah of Jumla, and the Emperor of Spin. I am the King of Narrative, and I always win. Did you notice that I just rhymed? That’s what happens when you read Rhyme & Reason every week in the Times of India.”

“You can read?”

“No, a babu summarises it for me. Not Bajrangi. Anyway, so after gold, I will tackle real estate. I will demonetise real estate, Mitron, I mean, Amit. All land holdings of more than 100 square feet will no longer be legal. I will kill black money, I’m telling you.”

“No, you won’t, Modiji, you’ll devastate the poor people of this country all over again. How will you win elections like that?”

“I have a plan for that. All this land that will now belong to the government, I will redistribute it among the people of India. I will deposit one acre of land into every Jan Dhan account.”

“Modiji, oh my god, who has been advising you? You can’t deposit land into Jan Dhan bank accounts.”

“Yes, you can. Only, it won’t be actual physical land. It will be digital land. India needs to move beyond real estate into a landless economy. Everyone will be a homeowner.”

“But how will they withdraw this land?”

“We won’t let them withdraw it. Can you imagine the chaos if people start withdrawing land from Jan Dhan accounts? Amit, you also na, what all you say!”

I sighed, and offered him the orange I’d saved up for a year. “It is vegetarian, isn’t it?” he asked. “I mean, it’s not a steak or something?” To be fair it did look kind of weird.

“So what are your resolutions besides killing poor people, I mean, black money? Any plans of exercise, diet etc?”

“I have already started an exercise regime,” he said proudly. “Look!” He pointed outside the window, where three babus in safari suits were doing on-the-spot jogging. “I have delegated my exercising.”

“Er, ok,” I said. “And any plans to diet? You’re so full of yourself, you must surely be overweight.”

“I will go on a Vedic diet that made our ancients extremely healthy.”

“What do you mean, healthy?” I said. “They’re all dead.”

Modiji glared at me. “Amit,” he said, “your humour is terrible. I must save India from the likes of you. I am going to send all Amits to Pakistan.”

He threw the orange at me, and I lost consciousness. When I came to, I was on a flight to Islamabad. Amit Shah sat besides me, squirming in his middle seat.

“What the hell did you just do?” he barked at me. “Why couldn’t your name have been Arun, dammit?”

Posted at 9:54 AM by Amit Varma in India | News | Politics

23 December, 2016

Mirror mirror on the wall, who is the most macho of them all?

This is the 34th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

This is the script of a musical play starring Arnab Goswami and a few eminent world leaders. At the start of the play, Arnab is at the front of stage, while Donald Trump, Vladimir Putin and Narendra Modi stand behind. There’s also a chorus of 30 cows, spread out among the audience.

Arnab: Hello and welcome! I’m Arnab the magician. It’s time now for an awesome competition. The strong men of the world are here, all set to go. Who’s the most macho of them all, the nation wants to know.

30 cows: The nation wants to know! The nation wants to know!

Arnab: There will be all-out attack, and no surrender. Please welcome, from the US, our first contender.

Donald Trump strides out on the stage.

Trump: My name is Donald Trump, I name buildings for a living. If you troll me on Twitter, I’m most unforgiving. I love India, mitron, and cricket most of all – especially Rahul Dravid, because he’s such a wall. I eat Mexicans for breakfast, and Moslem Men for lunch. When it comes to immigrants, oh boy, I pack a punch. My ego is so yuge, the biggest in my class. Oh, before I forget, I’m gonna kick China’s ass.

Vladimir Putin now walks on.

Putin: My friend Donald, poor guy, he never understands that no macho man can ever have such tiny hands. While Donald’s been busy laying luxury resort foundations, I’ve been killing millions, and conquering nations. You must have seen that picture of me bareback on a horse. After the shoot was over, I ate it with no remorse. When my wife wanted a new purse, I wrestled a crocodile. In front of me, with good reason, Donald is servile. He’s a little man, with little hands, and a little something in his pants. I’ve been saying it all along, you can’t be macho with a little dong!

30 cows: A little dong! A little dong!

Trump: My hands are small, you see, only to compensate. It’s because the size of my dong is very very great. I have even appeared in a movie made by Playboy. I’ve always been the biggest bully with the biggest toy!

Arnab: Stop this nonsense, change the subject, I’m feeling nauseated. I’m a middle-aged Bong with a tiny dong, and my ego is deflated. That’s why I’m always so aggro, it’s a kind of compensation. But the TRPs are great, and hey, I do it for the nation. Anyway, Mr Putin, you cannot win this way. Is there perhaps something else that you would like to say?

Putin: I’m more macho than this fool Trump, that’s all I have to say. After all, for many years, the man’s been in my pay. I now rule two countries, I am such a stud. If you mess with me, my friend, I will drink your blood.

30 Cows: Drink your blood! Drink your blood!

Arnab: Mr Putin, I am impressed, you meet all the criteria. Now tell me something, did Netaji really die in Siberia? Or maybe, oh my goodness, could he still be alive? Anyway, you win the trophy, c’mon, gimme five.

Modi strides forward.

Modi: Wait a minute, Arnab, what’s the freakin’ hurry? I’ll give you a tight tamacha, your vision will be blurry. This Russian fool, he think he’s cool, well, here’s the truth that pinches: See my chest, it is the best, all of 56 inches!

30 cows: 56 inches! 56 inches!

Modi: Killing people, invading countries, all that’s so old school. (And oh, my friend, Donald, your hands are miniscule!) Massacres are child’s play, when you’re off your rocker. But can you reach into every pocket, and empty every locker? I’ve just pulled off a surgical strike against the poor of my nation. No more cash for them, unless they give the BJP a donation. We’re going cashless, I am matchless, Arnab, you silly clown: Give these men ghagra cholis, and give me the crown!

Arnab: Mr Modi, most impressive, but you’re still a pretender. Hold your horses, because you see, there is one more contender. Men, you see,  beneath their bluster, can be quite weak. But here comes a fine lady who never turns the other cheek.

Mamata Banerjee enters the stage, wearing a sash that says, ‘Most Macho Person.’

Mamata: Hello boys, I’m pleased to meet you, ridiculous wimps. You behave like such gorillas, but you’re really tiny chimps. You boast about how strong you are, and about your brains. You’d be bawling on the floor if you ever went through period pains. Mama’s here now, and she’s gonna whack your asses with her magic broom. So get up, get out, and when you get home, tidy up your room. Trump, Mr Macho, eat a nacho. Putin, so potent, you look like a rodent. Modi, have you realized that you will be demonetised. Mama’s here!

30 cows: Mama! Mama! Mama! Where is my Pajama? Mama Mama Mama!

*

Earlier: The Rise and Fall of Emperor Modi

Posted at 2:19 PM by Amit Varma in Essays and Op-Eds | India | Lighthouse | Politics

18 December, 2016

Three Reasons Why A Cashless Society Would Be A Disaster

This is a guest column published today in the Sunday Times of India edit page.

I am a great admirer of Mahatma Gandhi, but the man had some strange views. In Hind Swaraj, written shortly after he turned 40 in 1909, Gandhi tore into some of the symbols of the modern age. “Hospitals are institutions for propagating sin,” he wrote. “To study European medicine is to deepen our slavery.” He railed against the railways, saying “it is beyond dispute that they propagate evil.” He argued against lawyers, despite being one himself, saying they had “impoverished the country.” But here’s a thing to note: despite these personal views, he never once suggested that railways, hospitals and lawyers should be banned.

There is a notion being spread these days that is as absurd as the ideas above: it is the notion that there is something wrong with using cash, and that we should head towards being a cashless society.  This is nonsense. A cashless society would be a disaster for India. Here’s why.

One, a fully cashless society would mean the end of privacy. There would be a digital trail of every action you take through your purchases and transfers. If you buy AIDS medication or a porn magazine or book a hotel room for a romantic alliance, this information can be accessed by the government – or any hacker with the requisite skills – and used against you. India has no privacy laws, and data protection is also a big worry – every week we hear stories of some some big hacking or the other, from the Congress in India to the Democratic Party in the US.

Two, a fully cashless society could mean the end of dissent. The government can use any data it gathers against you. (Even if you commit no crime, there is much you may be embarrassed by.) What’s more, they could make any opponent a pauper with one keystroke, freezing your bank account while they investigate alleged misdeeds. Just the fact that they have this power could have a chilling effect on dissent. Those in government now may well salivate over this, but tables turn fast, and when they are in opposition, would they want their opponents to have such power over them?

Three, a fully cashless society endangers freedom. Cash is empowerment: ask the young wife who saves spare cash from her alcoholic husband; or the old mother who stuffs spare notes under her mattress for years because it gives her a sense of autonomy. Indeed, in a misogynist country like India, cashlessness would hit women the hardest.

It is a myth that an advanced society must necessarily be cashless. In Germany, a country which knows the perils of authoritarianism, more than 80% of transactions are in cash, as citizens safeguard their privacy and freedom. Even in the USA, 45% of transactions are in cash. Note that Germany and the USA actually have the banking and technological infrastructure to enable cashlessness. In India, 600 million people have no bank account, and less than 20% of all Indians have a smartphone. Internet penetration is iffy, as is power. (By ‘power’, I mean electricity, not the government’s control over you.) Trying to make India cashless is akin to putting a bullock cart in an F1 race, and whipping the driver because he’s too slow.

It is true that many technologies imperil our privacy, like any app we download on our phones, for example. But those actions are voluntary, and we can choose to avoid them. That is the crux of the matter. My objection here is not to cashlessness per se, but to the coercion implicit in the currency swap of November 8 and its aftermath. A cashless society would only be good if we evolve towards it, not if we are forced into it.

At the moment, the common Indian is wary, for good reason. Digital payments involve transaction costs, are unreliable because of infrastructure issues, and hey, who would trust an Indian bank after what the RBI just did? The beneficiaries of forced cashlessness are not consumers, but vested interests like banks and payment companies. Indeed, this might even be the largest redistribution of wealth from poor to rich in the history of humanity.

The BJP itself continues to take cash donations and shift goalposts. When the demonetisation was announced, they said it was meant to attack black money and counterfeit currency. Once it became apparent that those reasons were nonsense, the government tried to change the narrative into one about a cashless society. Within a fortnight of that, they are already backtracking and saying they meant ‘less cash’ when they said ‘cashless’. The truth is this: demonetisation was a humanitarian disaster that is crippling our economy, and no matter how many times Modi and gang try to rationalise it, it cannot be done. One day, these men will stop trying. When they cannot justify any more, they will distract.

Posted at 8:30 AM by Amit Varma in Economics | Essays and Op-Eds | Freedom | India | Politics | Science and Technology

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