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

17 July, 2015

The Great Redistribution

This is the 19th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

India is a poor country. We were poor when we became Independent in 1947, and while other countries have lifted themselves to wealth in that much time, we’re still poor. And government policies are the reason for our continuing poverty. For the last 68 years, since a group of white-skinned rulers handed over power to a bunch of brown-skinned rulers, all the governments that have run India have done one thing incredibly effectively: they have redistributed wealth from the poor to the rich.

Yes, you read that right: I’m not talking about redistribution from the rich to the poor, which itself would be an ineffective way of fighting poverty, but from the poor to the rich. They have taken money from the poor in our country and given it to the rich, and, as if to troll us, they have done this in the name of fighting poverty. For that reason, while there are some very rich people in our country, on average, as our GDP-per-capita indicates, we’re still a third-world country.

Let me take a recent event to illustrate what I mean. A few weeks ago, the central government announced that it would not allow foreign direct investment in retail e-commerce. Business Standard reported: ‘Minister of State for Commerce and Industry Nirmala Sitharaman last month met executives of Flipkart and Snapdeal and representatives from the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (Ficci) to assess the impact of FDI on Indian e-commerce companies.’ The government then decided that it needed to protect the local players, and therefore did not allow FDI.

Do you see what happened here? Who benefits from competition? The consumers do. The greater the competition, the more value for money the common consumer gets. This is axiomatic. Our local retailers—all the people consulted by the ministers—were scared that their bottomline would be affected by this competition, so they successfully petitioned the government to block it. The result: the consumers will get less value than they otherwise would; the local retailers will make more money than if competition was allowed. In effect, it is a transfer of wealth from a large, dispersed group of consumers to a small, relatively wealthy interest group.

All tariffs have exactly this effect. Let’s say I like to buy widgets. Local manufacturers sell me widgets for Rs 100 each. Foreign manufacturers, for a variety of reasons from technology to labour, can sell me widgets for Rs 80. But the local manufacturers petition the government to put a tariff on imports, and the government puts a Rs. 30-per-widget tariff on the foreigners, so they don’t bother coming over. The net result: each of us loses a notional Rs 20. Who gets that money? The local manufacturers. What just happened? The government redistributed wealth from the relatively poor masses to a specific relatively rich interest group.

Governments that impose or continue tariffs will do so in the name of protecting the domestic industry. But at whose cost? The French economist Frédéric Bastiat once wrote a great essay called ‘What is Seen and What is Not Seen’, which speaks of the hidden effects of such actions. What is seen here is the good done to one specific group of people (with money usurped from a poorer group, which by itself is surely morally wrong). What is not seen is what the consumers would have done with that money. They would have spent it or invested it, and it would have gone back into the economy, creating growth and employment. But the potential beneficiaries of that are not even aware of what didn’t happen.

Subsidies are also redistribution of the reverse-Robin Hood kind, if in a more obvious way. The wealth taken from the poor is not in terms of marketplace prices or value for money, but is taken directly from your taxes. And while the poor may not file income tax returns, they pay taxes too. Every time your maidservant buys a bag of salt or the beggar at the nearby traffic signal buys soap, they are contributing to the Rich Interest Group Benefit Fund. This is not just poor economics –  it is morally wrong.

Here’s the upshot: All interventions in free markets amount to a redistribution of wealth from the poor to the rich. Anything that reduces competition or artificially raises costs for the consumers amounts to just this. Restrictions on FDI, tariffs, licensing processes or regulations that make it harder to open a business or to run it, subsidies; and so on. The interest groups to benefit may differ in each case, and will often include rent-seeking forces within the government, but always, without exception, the wealth will flow, in relative terms, from the poor to the rich.

So why don’t we protest, you ask, given that we are a democracy? Well, think about the winners and the losers here. The costs of such redistribution are dispersed among more than a billion of us, and the benefits are concentrated to a few. If Rs 2 from the taxes you paid last year went as a subsidy to the widget industry, you won’t even know or care. The widget industry, making millions from the accumulated Rs 2s, will care, and will lobby aggressively, contribute to party coffers, buy off politicians and bureaucrats – whatever it takes. That is why government policy is not dictated by the people at large, but by the aggressive lobbying of hundreds of interest groups, out to make a killing at the expense of the poor. That is why government grows and grows, and so many constraints are placed on the only force that can make us wealthy: economic freedom.

Posted at 2:55 PM by Amit Varma in Economics | Essays and Op-Eds | Freedom | India | Lighthouse | Politics

03 July, 2015

The Price is Right

This is the 18th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

A few days ago, I got ready for a meeting, switched on my Uber app, saw that there were no taxis available in my area, and remembered an earthquake.

More than two decades ago, when I was in college in Pune, an earthquake ravaged the region of Latur. I got together with some friends to collect money for relief efforts. We decided that we would go to the affected areas ourselves to figure out the most efficient way of using the money. We hitched a ride on an ambulance of paramedics headed there with medical supplies. While in the affected district, we stopped at a village where around half the houses had been destroyed, and only one grocery store was still standing. “They are the only place one can buy groceries from,” a resident complained to us bitterly, “and they have tripled their prices.” That made me very angry. “Exploitative bastards,” I thought to myself, “feeding off the misery of others.”

Today, I know that my reaction was misplaced – just like the complaints of everyone who’s taken issue with Uber’s dynamic pricing. In case you missed the controversy, cabs and autos in Mumbai recently went on strike to protest against the competition they got from the likes of Uber and Ola. Since people had to get to work, the ironic short-term beneficiaries of this were the very parties they were protesting against. So when demand for a particular product or service goes up and supply can’t keep pace, what happens? That’s right, the prices go up, and Uber uses a mechanism called dynamic pricing which is an incredibly efficient way of arriving at an appropriate price for their service based on demand and supply. So commuters who switched on their Uber apps in the morning were informed that the base price had gone up by as much as 5x. Naturally there was much outrage and shouts of ‘exploitation’ and ‘predatory pricing’, and Uber, rattled by the bad press, announced that they would suspend dynamic pricing for the duration of the strike, and operate at their usual base fare. They put this into effect, and I woke up the next day, switched on my app, and found that no Uber cab was available.

Do you see what happened here? When demand goes up relative to supply, two things can happen. The price can go up to reflect the growth in demand; or, if the price is fixed, there is inevitably a shortage of the product or service in question. In Uber’s case, with their dynamic pricing disabled, all their cars quickly got booked, and whichever customers switched on their apps after that found that there were no cars available. Their need could have been urgent: they may have needed to rush to the airport to catch a flight they couldn’t afford to miss; or take an aging relative to hospital; or head to town for a make-or-break meeting. But even if they were willing to pay more, too bad.

The most efficient way of allocating resources is to let things find their own equilibrium, their own prices. Price controls are foolish and never work. And the demand for them is based on a sort of a fantasy. Fixing the price of a product at a base price below what the market would pay does not mean that everyone gets it at this price—it just means that a lucky few get it and the others don’t. The fundamental truth about the universe is this: everything is scarce. You can’t wish this scarcity away by agitating or legislating against it.


*  *  *

Speaking of prices, another company that disrupted an industry, Amazon, has announced that it will pay authors on its Kindle direct publishing program according to pages read, not units moved. This is an opt-in program, applying only to self-published authors on their DP platform, but authors on my Facebook timeline have already reacted with horror. Their instinctive aversion to the idea is understandable: commoditization of art and all that. As in the movies, they can imagine a publishing executive in a suit telling them to clip their novel by 30% and have only one 8-letter-word-per-100,000 because more than that diminishes page-turning rate. The horror! But those fears are overblown. I think this development, like almost everything Amazon has done with regard to books, is visionary and good for authors.

Look, there isn’t, and shouldn’t be, a central politburo that decides how much authors get paid according to some high-falutin notions of literary merit. Authors get paid, quite simply, based on copies sold, and how many people want to read them. Literary authors accept that they will not make remotely as much as those who write airport potboilers. That’s just fine, because if they’re good at what they do, they’ll find an audience that appreciates their work anyway.

Amazon’s new system achieves the same end—paying writers according to the demand for their writing—with greater granularity. Good literary writers will still make money – I devour every word Alice Munro or Anne Tyler write—because their work is compelling. But if I get bored with a writer after reading ten pages of his work, I don’t see why he deserves any more of my money than those ten pages represent.

It’s somewhat silly for an author to have a sense of entitlement, and believe that other people should pay him money even if he can’t produce work they want to read. As silly, indeed, as for an Uber user to feel entitled to the service at a lower price than others are willing to pay, at the expense, therefore, of the service provider. Such arrogance is priceless.

Posted at 4:20 PM by Amit Varma in Economics | Essays and Op-Eds | Freedom | India | Lighthouse

13 June, 2015

O Cabbie! My Cabbie!

If Walt Whitman was born in Delhi he’d write something like this:

O CABBIE! MY CABBIE!
by Walt Bhainchod Whitman

O Cabbie! my Cabbie! our fearful trip is done,
The taxi’s conquered every pothole, Gurgaon has been won,
Home is near, what’s this I hear? My cellphone madly ringing.
I pick it up, it’s my better half, and lo, she starts singing:
‘O heart! heart! heart!
So long you’ve been away!
Take a little longer, love
Pick up the groceries on the way!’

Posted at 6:18 PM by Amit Varma in Miscellaneous

29 May, 2015

Letter From a Cow

This is the 17th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

Dear Amit

Thank you for the recent love song, She Mooooves Me, which you wrote and dedicated to ‘all the cows on Planet Earth’. Me and my friends here in England have it on loop on CowTube. There are few humans we like—you lot enslave us, molest us for milk every morning, and kill us and sell our meat after that. So we’re not very fond of your species. But you, Amit, we have always liked you, because you understand us, you’re a good listener, and you’re so so cute! But this is not mere fanmail. I am unwell right now, hugely under the weather, and I need to rant. And like I said, you’re a good listener. So here goes.

I won’t go into the details of my illness with you, except to say it’s not just a mere cold. Serious shit is going down, and I’m in a lot of pain everyday. And how am I being treated? With sugar pills. Sugar fuckin’ pills. Oh yes, you may pick your jaw up from the floor now, you don’t want a snail entering while you’re all astonished. (Happened to Lucy once.) This is for real, so let me quote from a report last month in the London Telegraph.

The report says: “British organic farmers are being forced to treat their livestock with homeopathic remedies under European Commission rules branded ‘scientifically illiterate’ by vets. Although homeopathy has been branded as ‘rubbish’ by the government’s Chief Medical Officer Dame Sally Davies, organic farmers have been told they must try it first under an EU directive which came into force last year.”

Yes, that’s right. There are serious issues with my liver, I need antibiotics badly, the pain is excruciating, and my owners are being forced to treat me with bloody sugar pills! You’re a rationalist, Amit, I know you feel my pain right now. (Well, not literally, for that you’d need my liver, but you know what I mean.) That some humans believe in this nonsense is understandable, you’re a nonsense species, and by all means do whatever you want to yourselves. But why force it on us cows?

I first got to know homeopathy was bunkum thanks to your writings. First, there’s the science behind it. The idea of homeopathy is that the substance that is to be used to treat the patient is so diluted that it is unlikely that there is a single molecule of the substance in the pills the patient ends up consuming. As Martin Gardner once said, it is “equivalent to taking one grain of rice, crushing it to a powder, dissolving it in a sphere of water the size of the solar system, with the sun at the centre and the orbit of Pluto at the outside, and then repeating that process 2 million times.” My mind boggles at imagining the scale of this: not the solar system, but the idiocy.

Naturally, homeopathy doesn’t work. The standard scientific way of testing medicines is via double-blind placebo-controlled tests, and homeopathy has repeatedly failed those. I have read accounts of this in two great books you recommended, Ben Goldacre’s Bad Science and Trick or Treatment by Simon Singh and Edzard Ernst. I no longer have copies of those books – let’s just say that they’ve been chewed and digested – but I recommend them to all those who wish to argue with me on the subject.

My friend Lucy is not into books, though – that’s why her brain is full of grass. And she said to me the other day, “Well, I had indigestion from accidentally swallowing a snail, and I was given homeopathy, and now I’m fine. So surely it works.” I get this all the time, which proves that some cows can be as thick as some humans. So I explained to Lucy the fallacies in such thinking.

First, I told her about the placebo effect. Sometimes, even if you’ve been given a pill containing no medicine at all, if you think you’ve been given proper medicine, you start responding to it. In Bad Science Goldacre wrote about an American anaesthetist during World War 2, Henry Beecher, who had to perform an operation on a soldier with “horrific injuries”. Morphine wasn’t available so he used salt water. And it worked! The placebo effect is an incredibly powerful and well documented effect, which is why when new medicines are tested, they are tested against placebos. Only if they do better than placebos are they considered effective. Homeopathic medicines always fail these tests, because hey, they’re just sugar pills as well.

Another phenomenon I explained to Lucy is regression to the mean. Many ailments work in a natural cycle, where you get worse and then get better, quite on your own. This is true for colds, backaches, migraines, and also Lucy’s indigestion. But if you are inclined to believe that a particular treatment works, you will take the medicine, get better on your own, and ascribe it to the medicine. This is the Confirmation Bias at work, and also that other one, I forget the name, you write about it often, which mistakes correlation for causation.

Anyway, so I patiently explained all this to Lucy, and you know what she did? She said ‘Whatever.’ Then she swished her tail, turned around and stepped into a pile of her own dung. I’d do a facepalm if I could.

Anyway, enough ranting. I just want to thank you again for your song. If you’ve visiting England sometime, please come over to the farm and meet the girls, we’d be sooooo happy. We can’t offer much in terms of hospitality, but I’ll gladly share my sugar pills with you.

Yours forever

Dorothy (but you can call me Dotty, tee hee).

*  *  *

And from XKCD:

*

(Previous posts on cows: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31 , 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116.)

Posted at 4:38 PM by Amit Varma in Essays and Op-Eds | Lighthouse | Old memes | Cows | Science and Technology

28 May, 2015

She Mooooves Me!

My next installment of Lighthouse, ‘Letter From a Cow’, which will be published over the coming weekend, references the song below, written by me and dedicated to all the cows on Planet Earth.

SHE MOOOOVES ME

I wake up in the morning.
Girl besides me is snoring.
I quickly finish yawning:
Humans are so boring.
I head out to the farm.
The weather is divine.
The world is full of charm
And my true love is bovine.

I’m walkin’ with a cow,
And talkin’ with a cow,
Just rockin’ with a cow,
Cuz she mooooves me.
I’m singin’ with a cow,
And swingin’ with a cow,
Bells ringin’ with a cow,
Cuz she mooooves me.
Yeah she mooo-mooo-moooooves me!

I love the way she grazes
And how she chews that cud,
How she purposefully lazes
And walks gracefully on mud.
Her temperament is cool.
Just see her languid walk.
Even if you’re a fool,
She listens when you talk.

I’m walkin’ with a cow,
And talkin’ with a cow,
Just rockin’ with a cow,
Cuz she mooooves me.
I’m singin’ with a cow,
And swingin’ with a cow,
Bells ringin’ with a cow,
Cuz she mooooves me.
Yeah she mooo-mooo-moooooves me!


[Guitar solo, repeat verse 1, chorus, then fade to ambient farm sounds.]

(Previous posts on cows: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31 , 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115.)

Posted at 1:49 PM by Amit Varma in Old memes | Cows

21 May, 2015

Why I Loved and Left Poker

This is the 42nd and last installment of my fortnightly poker column in the Economic Times, Range Rover.

This is the 42nd and final installment of Range Rover, and I end this column at an appropriate time: after around five years of being a professional poker player, I have stopped playing fulltime, and am getting back to writing books. I am the first winning player i know to walk away from this game – but more than the money, I cherish the life lessons that poker has given me. As I sign off, let me share two of them: the first accounts, to some extent, for my love of the game; the second is the reason I am leaving it.

Poker is a game centred around the long term. The public image of poker is based around hands we see in movies or YouTube videos, and the beginner fantasizes about specific events, spectacular hands in which he pulls off a big bluff or deceives someone into stacking off to him. But once you go deeper into the game, you learn that short-term outcomes are largely determined by luck, and your skill only manifests itself in the long run. You learn to not be results-oriented but process-oriented, to just make the optimal move at every opportunity and ignore immediate outcomes. You learn, viscerally, for much money and pride is involved, the same lesson that the Bhagavad Gita teaches: Don’t worry about the fruits of your action, just do the right thing.

Needless to say, this applies to life as well. Luck plays a far bigger part in our lives than we realise: the very fact that you are literate enough to read this, presumably on a device you own, means you have already won the lottery of life. Much of what happens to us and around us is outside our control, and we would be foolish to ascribe meaning to these, or to let them affect us. Too many players I know let short-term wins and losses affect them, and become either arrogant or angry. This is folly. Equanimity is the key to being profitable in poker – and happy in life.

Why am I leaving a game that has given me so much? There are many reasons: Poker is all-consuming, and impacts one’s health and lifestyle; my real calling is to write, and I am pregnant with books that demand labour; but one key reason is that poker is a zero-sum game.

In life, you benefit when others do too. When two people transact a business deal, they do so because both gain value from it. When lovers kiss, the net happiness of both goes up. Life is a positive-sum game. But poker is not. You can only win if someone else loses, and the main skill in poker is exploiting the mistakes of others.

Now, all sport is zero-sum and consenting adults play this game, so this should not be a problem—except for the fact that poker lies on the intersection of sport and gambling. Gambling addiction destroys lives and families just as drug or alcohol addiction do, and i have seen this happen to people around me. I can sit at a poker table and calculate equities and figure out game-theoretically optimal ways of playing—but where is the nobility in this when my opponent is not doing likewise, but is a mindless slave to the dopamine rushes in his head? In the live games I played, I sometimes felt that there was no difference between me and a drug dealer: we were both exploiting someone else’s addiction.

When I write books, i have a shot at enriching myself by enriching others. This can never happen in poker. And so, my friends, goodbye.

*  *  *

Addendum: You can read all the archives of my column on the Range Rover homepage. Here, briefly, are some I enjoyed writing.

My first column, The Bookshop Romeo, talks about the importance of thinking in terms of ranges, and its applicability to life. The Numbers Game and The Answer is 42 are about the importance of mathematics in poker. Make no Mistake, Finding Your Edge, The Colors of Money, The Cigarette Case and The Importance of Profiling deal with some basics of exploitive poker, while The Balancing Act, Miller’s Pyramid and Imagine You’re a Computer  talk about game-theory optimal (GTO) poker. Om Namah Volume is about the importance of putting volume.

I had great fun writing this series of pieces of probability, randomness and the nature of luck in poker and in life: Unlikely is Inevitable; Black Cats at the Poker Table; Running Good. I fed into my interest in cognitive psychology and behavioural economics for those pieces, as I did for these: The Interpreter; Poker at Lake Wobegon; Keep Calm and Carry On; The Endowment Effect; Steve Jobs and his Black Turtleneck.

Beast vs Human and The Zen Master Speaks deal with temperamental aspects of poker. The Game Outside the Game is about the politics of access, and Raking Bad about the ill effects of excessive rake. Sweet Dopamine talks about poker as an addiction, and The Dark Game and The Second Game of Dice expand upon this subject using personal experience.

Posted at 7:32 AM by Amit Varma in Essays and Op-Eds | Personal | Poker | Range Rover | Sport

14 May, 2015

Steve Jobs and his Black Turtleneck

This is the 41st installment of my fortnightly poker column in the Economic Times, Range Rover.

The next time you are sitting at a poker table, faced with a big decision for a lot of money, take a few seconds off and think of Steve Jobs, naked after his morning shower, walking to his closet to pick out the clothes he will wear for the day. Does he tank over what to wear? No, he doesn’t. He just takes out a black turtleneck, a pair of jeans, and that’s his outfit for the day. Through the last years of his life, in fact, that was his outfit for every day.

Jobs wasn’t lazy or devoid of imagination. He had just cottoned on to a phenomenon called Decision Fatigue. Basically, neurologists have found that every decision you take tires you out a little bit, and robs you of energy. Through the day, Decision Fatigue accumulates, as you get more and more pooped. So if you want to use your energy optimally, the smart thing to do is to automate all trivial decisions, or get them over with quickly, so you can bring all your powers to bear on the big decisions that really matter. Basically, don’t sweat the small stuff.

Jobs did this by wearing the same outfit every day, as does Mark Zuckerberg, thus eliminating one early decision at the start of the day. You could do this by having the same breakfast every day (or letting someone else decide for you), parking in the first available spot instead of searching for the perfect one, and so on. One way to deal with Decision Fatigue is by Satisficing. When I shop, for example, I don’t look for the perfect item to buy, but pick the first adequate one. This is Satisficing: making quick and easy decisions instead of perfect ones. If I’m buying a TV or a T-shirt or a portable hard drive, I won’t agonise for hours over all the different models available, but just pick the first one that seems satisfactory. I’ll devote more scrutiny to big ticket items that really matter—like buying a house, for example.

Consider the implications of this for poker. Poker players typically play sessions that last for many hours, sometimes upwards of 15, which is tiring in itself. They have to stay focussed, observe the action even when they’re not in the hand, and in live games, where such things matter, interact with others for the sake of conviviality. Add to this Decision Fatigue. In any session, you will face dozens of decisions, some of them big ones, increasing the likelihood of your getting exhausted as the session goes on, and thus more prone to errors. So what is one to do?

The obvious answer is to automate. At a beginner level, if you have a starting hand chart for every position, at least those preflop decisions won’t consume energy. As you grow into the game, you can have default decisions for more and more situations. But there is one huge problem with playing like this: you run the risk of becoming predictable, and therefore, exploitable. As you rise up the stakes in poker, you need to start balancing your ranges. This involves a huge amount of work off the table, so that decisions are easy while actually playing. I think of it as akin to a batsman spending thousands of hours in the nets till it becomes reflexive for him, in a match, to lean into an elegant cover-drive against a half volley outside off. Test cricketers don’t actually make a decision on every ball when they are batting; they just follow their reflexes. They have to hone their second nature.

This is why online grinders, whether they are playing cash games or tourneys, multi-table with such ease. Most decisions are automated. Of course, since most of us are playing exploitive poker instead of GTO, we also have to be observant for mistakes to exploit—but even this becomes second nature with practice and hard work off the tables. So here’s my takeaway from this: to reduce decision fatigue at the tables, and to become a better player overall, you need to put in lots of work off the tables. If you do that, there’ll be many black turtlenecks and jeans ahead of you, and Steve Jobs won’t be naked no more.

Posted at 5:32 PM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

01 May, 2015

Never Mind the Bullocks, Here’s the Lamborghini

This is the 16th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

I saw the strangest thing the other day. Out on the road, there was a sleek Lamborghini with a man in a dhoti-kurta at the driver’s seat. His hands weren’t on the wheel. Instead, he held a whip in his right hand, which extended out of his window, and he was whipping a couple of bullocks tied to the front of the car. The engine was off; the bullocks were pulling the car.

Now, okay, this is perhaps a bit too weird even for India, and I confess that I didn’t see exactly this. But I did witness something very close. I was watching the IPL.

Twenty20 cricket is a relatively new form of the game which makes new demands on the teams that play it. Like a bullock cart driver who has just been given a Lamborghini, the men who run the teams and play for them haven’t quite come to terms with this. So they continue to whip the bullocks. When one-day cricket was born, teams played it much like they would a Test match—consider Sunil Gavaskar’s 36 not out in 1975 through 60 overs, and while that is an extreme example, consider the low par scores of those times. Eventually, players adapted. Even Gavaskar made a thrilling World Cup century before retiring, and par scores crept up until, as I wrote in my last installment of Lighthouse, they crossed 300 in the subcontinent, which was once an outlier score and not the norm.

Similarly, in T20 cricket, teams have basically adapted their ODI approach to this shorter format. So maybe they tonk in the powerplay at the start, then they consolidate and set a platform, then they tonk again towards the end. They often have freeflowing openers, but leave their hard-hitting maniacs, like Kieron Pollard of Mumbai Indians, to bat at the end. This is a flawed approach, because T20 is not just a modified version of ODIs, it’s a whole new format with its own imperatives.

First of all, consider that T20 cricket is played with the same number of players in each side as ODI cricket is: Eleven. This is not a banal point, but crucial to understanding how to approach the game. If T20 games were played 8-a-side, you would be justified in structuring your innings as you structure an ODI innings. But with 11 players, you have extra resources for the time given to you. Your task is to make sure these resources are not wasted, and are optimally used. If the hardest-hitting strokeplayer in the team routinely gets only four or five overs to bat, you are screwing up somewhere. So what should you do?

I’d written a piece after last year’s IPL for Cricinfo where I’d laid out what I felt was the biggest tactical advance of last year’s IPL: Frontloading. Basically, King’s XI Punjab decided to snort at the concept of building a platform, and just sent their hardest hitters upfront and treated every over as sides would usually treat overs 16-20. They attacked from the outset, with Glenn Maxwell, David Miller and George Bailey coming in at Nos. 3, 4 and 5, and sometimes if an early wicket fell, Wriddhiman Saha coming at 3, but also to tonk. Their frontloading ensured that batting resources were not wasted, and this approach got them off to an excellent start in the tournament. In contrast, Mumbai Indians consistently sent out their best hitter, Kieron Pollard, with just a handful of overs to go, and he had nowhere near the impact he could have had. Kolkata Knight Riders started poorly, but then adapted, dropped Jacques Kallis the accumulator, frontloaded the hitting, and things worked out. They also had a better bowling attack than Kings XI, and deservedly won the IPL.

This year has been bizarre. King’s XI, far from continuing to frontload, has reverted to traditional structures of building an innings, sending in Maxwell later than they did last year and even, at the time of writing this piece, dropping him from the side. Mumbai Indians haven’t learnt from their past mistakes, and continue to save Pollard for a dash at the end. They would be better served if Pollard and Corey Anderson batted 3 and 4, in whatever order, with Rohit Sharma opening. But no, they don’t use their elite V12 engine. The other day Mumbai Indians, with Pollard and Anderson mostly at the crease, added 81 runs between overs 16 to 20, but lost because the team scored too slowly in the first 15. What a waste. Imagine if they had scored those 81 runs between overs 6 to 10 instead. How nicely that would have set up the innings. Their chances of doing so between overs 6 to 10 were the same as between 16-20, but the upside of going for it early was far more and the downside the same. Keep the bullocks for later, if the engine fails.

The idea is not just to frontload resources but also to frontload intent. Every side doesn’t have a Maxwell or a Pollard. But whoever goes out there should attack, attack, attack. Sure, if a Starc or Malinga is on fire, play that one guy out. But otherwise go for it. Not only does it ensure you don’t waste batting resources, it also ensures that soft overs in between by lesser bowlers are not wasted. Batting strategies are so predictable that fielding captains can plan how to use their resources well, keeping their best restrictive bowlers, like Malinga, for the end of the innings. But what can they do if you’re going at them all the time?

The one team that has gotten frontloading right in this IPL so far is the Chennai Super Kings. Brendan McCullum and Dwayne Smith play every over like it’s the 18th of the innings, and Suresh Raina and MS Dhoni, two outstanding strokeplayers, follow at Nos. 3 and 4. This is exactly right, and good captaincy. Of course, Chennai also have an excellent bowling attack, which is why they’re among the favourites in the IPL year after year. All things being equal between teams, though, frontloading makes the difference. So when you have a Lamborghini, drive the damn thing.

Posted at 5:10 PM by Amit Varma in Essays and Op-Eds | Lighthouse | Sport

29 April, 2015

The Zen Master Speaks

This is the 40th installment of my fortnightly poker column in the Economic Times, Range Rover.

Once upon a time, a poker player went to a Zen master in the hills, Quiet River, and prostrated himself at his feet. ‘Sensei Quiet River,’ he said, ‘I have something I need to ask you. I am a poker player. But I am not as good as I can be, despite studying both the mathematical intricacies of the game and the psychological tendencies of others. Something is missing. I need you tell me what it is?’

Sensei Quiet River just looked into his eyes.

‘Here,’ said the poker player, whipping out his smartphone. ‘I have all my hand histories here. Let me play them for you. Please tell me my leaks.’ He switched on the hand replayer on his phone and held it up in front of the Sensei. But the Sensei ignored it and kept staring into the player’s eyes. Many seconds passed. Finally, the player understood.

‘I get it now,’ he says. ‘The problem is not in the math or the psychology. The problem is me.’

Sensei Quiet River smiled.

In the last installment of Range Rover I wrote, ‘We lose money in poker not because we think too little but because we feel too much.’ I promised to elaborate on it this week, so here goes.

Poker is a challenging game not because of mathematical complexity but because of human frailty. You can master it in a technical sense: you can understand equities, put people on ranges accurately, balance your own ranges, and so on. You will never be perfect at this, but you can easily be adequate for the games you play. But technique is half the story; temperament is the other half.

Even if you know all the right moves to make, you still need to have the discipline to detach yourself from the short-term outcomes of hands or sessions and play correctly. It’s hard to do this: we are all emotional creatures, casting a veneer of rationality on our reptile brains. We get tired, upset, elated, impatient; we give in to greed, sloth, arrogance, and, most of all, anger. Every poker player is familiar with a phenomenon called ‘Tilt’? What is tilt? The sports psychologist Jared Tendler, writer of a brilliant book called The Mental Game of Poker, describes it as “anger+bad play.” We get angry, so we play bad. And why do we get angry?

In his book, Tendler identifies different kinds of tilt. There’s Injustice Tilt, where you feel you are getting unluckier than others, and it’s just not fair. There’s Revenge Tilt, where you take things personally against certain other players at the table (maybe they gave you a bad beat, or they 3b you frequently). There’s Entitlement Tilt, where you feel you deserve to win more than you are, because you’re better dammit. And so on.

Our emotional condition at any point in time can cause us to play sub-optimally, even when we know what the optimal play is. This is most likely to happen at times of stress, and poker is an incredibly stressful activity, because there is always lots of money involved – not to mention ego. We often equate our sense of self and our well-being with the money we have – though we shouldn’t – and having it taken from us can destroy our emotional equalibrium. It isn’t easy, as that saying goes, to keep calm and carry on.

Let me now end this column with a tip. The next time you are at a poker table, facing a difficult decision, buffeted by emotions, here’s what I want you to do: Imagine that Sensei Quiet River is standing by your side. What would he do in your place? Do exactly that, and see him smile.

Posted at 8:02 AM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

09 April, 2015

Imagine You Are A Computer

This is the 39th installment of my fortnightly poker column in the Economic Times, Range Rover.

Being human sucks in many ways, but one of its great advantages is that little thing called the imagination. We can imagine away our frailties and pretend to rise above our cognitive limitations. We are all Walter Mitty and Mungerilal, so this following thought experiment should appeal to you. Imagine that you are not a human being, but a computer designed to play poker perfectly and take the money of puny humans. Now tell me: what would change in the way you play the game? (Pause and think about this before you go to the next para, please.)

If you were God, you would know what cards your opponents held and the rundowns of all future boards. But as a computer, you wouldn’t need that information. You would play game-theory optimal (GTO) poker, with a strategy guaranteed not to lose in the long run regardless of the hands others might have or what they might do with them. Most of us humans, on the other hand, play exploitive poker, for which the hands and tendencies of others do matter. Let me illustrate the difference.

You are heads up in a hand, and on the river make a pot-size bet. Your opponent is getting 2 to 1 to call, and needs to be right one in three times to break even. Now, the aim of GTO poker is to make your opponent indifferent to calling or folding. You will do this by having what is known as a ‘balanced’ range jn this spot. Because you are offering him 2 to 1, a balanced range here would have 1/3 bluffs and 2/3 value hands. (Note that the composition of a balanced range depends on bet sizing, or the odds you give the opponent. If you bet half-pot, giving him 3 to 1, a balanced range would have 75% value hands.) Being balanced in any spot means that your opponent has to play perfectly to break even—and if he calls too much or folds too much, you make money. Basically, you cannot lose, and are thus likely to win.

Unless you’re playing high stakes online cash games, you’re unlikely to ever actually need to play GTO. The cash-game poker I play is exploitive poker. I try to identify mistakes my opponents tend to make and exploit them. In the above example, if my opponent tends to give up too often on the river, I will increase the number of bluffs in my range. If he is a calling machine and never folds, I will have 100% value bets in my range. While this is exploitive, this is also exploitable. By deviating from GTO to exploit his mistakes, I offer him (or someone else) a chance to exploit me. If i start bluffing more because he folds too much, he, or another player, could increase their calling frequency against me.

A computer would aim to play GTO poker, and it would do this by building balanced ranges for every spot, starting from preflop, across streets and board textures. This is incredibly complicated, and humans can just come to an approximation of this. This is useful, for understanding balanced ranges help us understand our own mistakes, and those of others, even if we don’t actually intend to play GTO poker. But my question at the start of this piece was not supposed to turn into a lecture on game theory. Indeed, my own answer to that question has nothing to do with game theory or exploiting others.

In any game I play, I tend to assume, correctly so far, that I can acquire the technical knowledge to beat the game. My big leaks are temperamental ones. If i was a computer, I would not feel any emotion, and would thus avoid all the pitfalls of being human at a poker table. We lose money in poker not because we think too little but because we feel too much. I shall elaborate on this in my next column.

*

Also read:

The Balancing Act
Miller’s Pyramid

Posted at 11:09 AM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

03 April, 2015

The New Face of Cricket

This is the 15th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

One trend that never goes out of fashion is lamenting the present, claiming that things were better in the past. Logically, one would not expect this to be the case in sport. After all, most sports seem close to their zenith at any given point in time. Usain Bolt is way faster than Carl Lewis, Federer and Nadal would whoop McEnroe or Becker’s ass, Magnus Carlsen would probably beat Bobby Fischer. Better technology (including in training) and more accumulated knowledge about the past make this inevitable. The one sport that seems to defy this sort of analysis, though, is cricket.

We cricket romantics still speak of Don Bradman as the greatest batsman ever, of the West Indies pace quartet of the 70s and 80s as the best fast bowling attack, and we still sigh when we remember India’s famous spin quartet. Recently, a poll named Viv Richards, from the neolithic age of one-day cricket, as the greatest ODI player ever. And while batting records have been taken apart recently, including in this World Cup, cricket tragics ascribe this to a shift in the contest between bat and ball, the heavier bats which enable top edges to go for six, batsman-skewed field restrictions, and so on. This is a valid point, but it’s not the whole truth. My contention is that the game has evolved significantly in the last few years, and—please don’t burn me at the stake for saying this—Twenty20 cricket has been a hugely positive influence on the way cricket is played.

T20 cricket gets a lot of flak, and while much of the criticism about its commercial structure is justified, I don’t agree with any of the criticism about its cricketing value. Test cricket snobs complain that T20s are just a slogfest, but this is far from true. Bowlers have been hugely influential in the IPL, and every side that has won has done so because its bowlers stepped up and influences the game. Think Narine, Malinga, Ashwin, Warne. Just because bowlers go at 7 an over instead of 5, as in ODIs, doesn’t mean the fundamental nature of the game has changed. The goalposts have shifted, the parameters have changed, but the game is still a contest between bat and ball. If it wasn’t, the sides would just go out and have a slog-off against bowling machines, and teams would pick 11 specialist batsmen.

What has changed, though, is that batting has evolved to adapt to the challenges and constraints of a 20-over-a-side game. (And bowling has changed as a response to this.) When one-day cricket began in the 1970s, for example, games were 60-overs-a-side and batsmen approached their innings must as they approached Test matches. The traditional virtues of the game were still applicable, and a run-rate of 4 through an innings was acceptable. If a side scored 250, you’d say their batsmen did well, and not that the opposition’s side’s bowlers did a great job, as would be the case today.

One-day cricket underwent a change through the 90s, as sides began to exploit the field restrictions at the start of the innings. Opening batsmen before Sanath Jayasuriya had gone berserk, like Mark Greatbatch in the 1992 World Cup, but the Sri Lankans of 1996 were the first to treat it as a philosophy, not a tactic. The change in approach saw generally higher scores in ODIs, and a knock-off effect in Tests.

The T20 revolution, and specifically the IPL, turbo-charged the game.  Twenty20 did not deserve any of the disdain it was greeted with: if we don’t diss football games for lasting 90 minutes or tennis matches for getting over in an afternoon, then why mock a three-hour game of cricket? Cricket is a beautiful sport, and the T20 format offers all the drama and nuance that any other sport in the world possesses. And because of the constraints of time, the format demands more out of both batsmen and bowlers than cricket did earlier. In T20 cricket, you have to optimise. To understand the creature that emerges from this, consider the insanely talented Glenn Maxwell.

The most remarkable graphic I saw during this World Cup was one the broadcasters showed after a cameo by Maxwell in this World Cup. It showed where bowlers bowled to him and where he hit them. Most of the balls pitched on off or outside disappeared on the leg side; most of the balls pitched straight or on leg were whacked on the off side. This is not because he got randomly funky. There was a method to his madness.

In the past, batsmen would carry a mental map of where the field was, and adjust to the ball according to that. Now they adjust to the field before the ball is bowled, and dance around the crease and set themselves up accordingly. If point and third man are up and a spinner is bowling, Maxwell is very likely to set up a reverse sweep, which in his hands is an orthodox stroke, like a cover drive or pull, with a similar risk-reward ratio. It doesn’t matter if the ball pitches two inches outside leg; he’s already decided where it’s going to go. And he plays like this from ball one. In that graphic in question, the bowlers actually bowled to their field; and he batted to that field too.

Players like Maxwell and AB deVilliers, who is known as a ‘360°-batsman’ because he can hit the ball to any part of the ground and plays as if the stumps aren’t there, have transformed the game with their inventiveness (and enormous talent), playing strokes that Richards, or even the recent Tendulkar for that matter, couldn’t have conceived. And they are not alone. Every team is optimising, and we have seen the knock-on effect this has had on ODIs in this World Cup, where, I submit, batsmen not only scored more runs than before, but also batted better. You will see Test matches transformed by this as well. I predict more successful fourth-innings chases of 300-plus in the next ten years than in the last 30. Hold me to this.

Having said this, I would not argue with measures by administrators to tilt the balance more towards bowlers. One could mess around with field restrictions, and I certainly think the 10-over limit on how much a bowler can bowl should go: there aren’t corresponding limits on batsmen. But please, do not say that there is no longer a contest between bat and ball. The two main contenders for the man-of-the-series award in this World Cup were bowlers (Starc and Boult), and a bowling performance got MOTM in the finals (Faulkner). When Mitchell Starc spears in that yorker at 150kmph to Brendan McCullum, after setting him up with two fierce dot balls, you know the game is doing just fine.

Posted at 7:07 PM by Amit Varma in Essays and Op-Eds | Lighthouse | Sport

29 March, 2015

Why I Will Not Grow a Beard

A Telegraph report tells us about a study that reveals that more and more men are growing beards because they are “feeling under pressure from other men and are attempting to look aggressive by being more flamboyant with their whiskers.” There are evolutionary reasons for this; apparently, we are wired this way.

You will note, now, that there were more beards in the New Zealand team than in the Australian one in today’s World Cup final. Does this mean that one side was pretending to be macho and signalling aggressive intent, while the other side, um, didn’t need to?

Also, what about Sir?

*

While on beards, a friend of mine insists that beards make men more sexually attractive. If this is so, I shall certainly never grow a beard. I can hardly cope with the adulation I already receive, and more would be overkill.

Posted at 7:45 PM by Amit Varma in Miscellaneous | Sport

Free Speech Does Not Mean Disruptive Heckling

This comment of mine was published a couple of days ago on Scroll.

Imagine Jerry Seinfeld is performing in India. A packed house is in attendance, getting rapturous as Seinfeld gets into his flow. And then, a bunch of hecklers from the Bajrang Dal disrupt the show. Seinfeld takes the interruption gracefully, but the hecklers won’t let him finish, and he eventually makes one last joke and then leaves the stage. What would your reaction be to this incident?

I would be aghast, and very clear on who was in the wrong: the hecklers. If the Bajrang Dal chaps protested that Seinfeld’s content was offensive to them, I’d say, “Ok, leave the premises then. And protest elsewhere by all means.” If they argued that they were expressing their right to free speech, and that protesting at their heckling was akin to censorship, it would be mildly ridiculous. To me, there would only be one guilty party here, the Bajrang Dal, and three wronged parties: the organisers, whose property rights were infringed upon by the hecklers; Seinfeld, who was not allowed to finish; and the audience, which did not get their money’s worth.

If you agree with my argument above, you would also agree, I suppose, that the principles involved hold regardless of the parties involved. So if I was at a Baba Ramdev show, and he expressed views repugnant to me, such as an attack on homosexuality, I would be disgusted, and the appropriate response to that would be to walk out and express my disgust elsewhere. But I would not have the right to disrupt his speech, and the organisers of that show would not have an obligation to offer me their platform for my views. In terms of principles, my heckling Ramdev off the stage would be exactly as wrong as the Bajrang Dal forcing Seinfeld to stop performing.

I write this, as you’d have guessed, in the context of the comedian Abish Mathew being booed off stage while performing at a Delhi college, and the subsequent defence of the hecklers in some quarters. Mathew is not Seinfeld or Ramdev, but the same principles that applied to their hypothetical hecklers apply to his. The hecklers in question were not expressing their right to free speech by disrupting the show. Free speech applies to one’s own space and to public spaces: I cannot enter someone’s house, abuse him, and protest when I am being thrown out that he is infringing upon my right to free speech. He is not; on the contrary, I am infringing upon his property. (In fact, as I argue here, the right to free speech is a property right.)

The hecklers should have protested outside the venue, or after the performance. To disturb the performance was graceless. To use another example, if I am at a Kishori Amonkar concert and am getting bored, I will quietly walk out. It would be incredibly boorish if I heckled her and made her stop. To argue that Mathew is not Kishori Amonkar, or that Seinfeld is classy and Ramdev is a bigot, is missing the point. The same principles apply.

Posted at 6:13 PM by Amit Varma in Essays and Op-Eds | Freedom | India | News

26 March, 2015

The Answer is 42

This is the 38th installment of my fortnightly poker column in the Economic Times, Range Rover.

The answer to the Ultimate Question of Life, the Universe and Everything, according to The Hitchhiker’s Guide to the Galaxy, is 42. The computer that came up with this took 7.5 million years to calculate it, though the question for this answer wasn’t known. Well, I have a guess as to what it was.

My guess is that Douglas Adams was a keen connoisseur of Pot Limit Omaha, and he got into the following hand with his friend Richard Dawkins. Adams had T985ds, spades and diamonds, and the flop came K67, one spade and two diamonds, giving him a humongous wrap, a flush draw and a backdoor flush draw. Dawkins potted, Adams repotted, Dawkins jammed, Adams called. Dawkins had AAKKds, clubs and hearts, for top set. ‘Ha,’ he exclaimed, ‘I have the nuts. Take a hitchhike, my friend!’

‘Now, now, calm down,’ said Adams. ‘It is in your genes to be excitable, I know, but I must inform you that your top set is not the best hand here. Indeed, I am actually the favourite to win here.’

‘You’re kidding me,’ said Dawkins, as he looked at Adams’s cards in growing horror. ‘So what percent of the time do I win this hand?’

And that’s the question, dear reader, to which the answer is 42.

As it happens, the turn gave Adams a straight flush, at which point Dawkins became a militant atheist, as indeed am I, but that is not a matter on which I shall dwell today. Instead, I wish to bring up the role of numbers in poker. I have written before on how poker is a numbers game, and to master the game, you must master the math. In my last column, I wrote about the hard work involved in teaching yourself the game, much of which involved number-crunching. In response, my friend Rajat, a keen player with a recent live tournament win under his belt, tweeted: ‘I’m an old-school player, terrified of numbers. What advice for me?’ This is a reaction many people would have, so here’s what I have to say.

The mathematical laws that govern poker, and indeed, the universe, are not ‘new-school’ inventions. Just as an old-school physicist before the time of Newton was subject to the laws of gravity, so is poker subject to mathematical laws, rewarding those who master them. Indeed, ‘old-school’ players knew their math, as you will note from the vintage of David Sklansky’s The Theory of Poker (1983), and the musings of Doyle Brunson, a man who knew his fold equity, in Super System (1979). Since the internet boom in poker, the math behind the game has been far better understood, to the extent that a talented player who ignores the numbers is like a prodigious swimmer trying to cross an ocean but just refusing to get on a bloody boat.

All decisions in poker come down to the math of estimating pot equity and fold equity and making the best decision possible. You may use your ‘reads’ and psychological insights to get a better sense of your opponent’s range, and how likely he might be to act in a particular way, but all these merely help you come up with the right inputs. The answer, in the end, lies in the math. And here’s the thing: if you ignore the math, that doesn’t mean the math goes away. No, it’s working away in the background, like the laws of nature, ensuring the survival of the fittest – or those who adapt the best, as Dawkins would say.

If you have been winning at poker without caring too much about the math, it is either because you’re playing really soft games, or you’ve been lucky. The way the game is growing in India, both of these are bound to change. So here’s a thought for you: It is a truism in poker we must not be results-oriented, and should just focus on making the right decisions so that we show a profit in the long run. But how do we know what the right decisions are? The answer lies in asking the right questions – as Dawkins did to Adams.

Posted at 10:05 AM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

17 March, 2015

The Bastards Whose Sisters We Must Screw

While reading Tapan Raychaudhuri’s memoir, The World In Our Time, I came across this most excellent Bengali “local ballad” of Barisal from the 19th century. Basically, Raychaudhuri’s great-great-grandfather, Rajkumar Sen, had once been “poisoned by his Brahmin guru and a co-conspirator, one Mr Mahalanabish (no relation of the famous statistician and progenitor of Indian planning).” Here’s a translation of the ballad that sprung up in response, which Raychaudhuri tells us is “still current in that area”:

In the village of Kirtipasha lived a famous Babu,
Rajkumar by name.
What can I say of his noble deeds
Wonderful to recall.
His Diwan, Mahalanobish,
A black sheep born of decent parents
Conspired with the guru
And put poison in his sherbet.
Oh, the bastard, the bastard whose sister must be screwed!
As for the sun-dried rice-eating Brahmin?
Cut open his arse
And take out the sugar, butter and ghee
The scoundrel had eaten all these years
Oh the bastards, the bastards whose sisters we must screw.

I suppose it could be said that this is an illustration of rape being an instrument of power more than a crime of lust—but that’s hardly a revelation. Funky song, though, isn’t it? Mahalanobish the bastard indeed!

Posted at 1:07 PM by Amit Varma in Miscellaneous

13 March, 2015

Keynes’s Honeymoon

Things I learned today: Wittgenstein went on Keynes’s honeymoon.

Posted at 10:16 AM by Amit Varma in Things I learned today

12 March, 2015

Marching For Salt

March 12 is a special day in India’s history. On this day 85 years ago Mohandas Gandhi set off on a walk from Sabarmati Ashram near Ahmedabad. His destination was 390km away: Dandi,  a coastal village near Navsari in Gujarat, where he intended to produce salt from the sea, in defiance of the salt tax levied by the British empire in India. Both the man and the cause were extraordinary.

I am writing a book that examines, in part, India’s intellectual history from 1857 to today. And Gandhi causes severe cognitive dissonance. The prominent 19th century figures in India’s freedom movement were all influenced by British liberalism, their ideas were shaped by Mill, Bentham, Morley, even Adam Smith. One can draw a straight line from Dadabhai Naoroji through Mahadev Govind Ranade and Gopal Ganesh Agarkar to the great Gopal Krishna Gokhale, who called himself “an intellectual grandson of Dadabhai Naoroji.”  These were the famed Moderates of the Congress party, aiming at incrementalism when it came to policy, seeking not to fight the empire but to be equal subjects within it. The Moderates dominated the Congress until the mid-1910s, despite skirmishes with the Extremists within the party, men like Bal Gangadhar Tilak and Bipin Chandra Pal, whose preferred methods may have been different but whose aims weren’t all that different from that of the moderates. The Scottish statesman James Keir Hardie once described the Moderates as ‘extreme in moderation’ and the Extremists as ‘moderate in extremism’, and indeed, they weren’t really all that far apart.

Uptil this point, the narrative is coherent. Then comes Gandhi. It seems to me that Gandhi was a black swan event in the Indian independence movement: nothing that came before could explain his arrival; nothing that then existed seemed to demand his ascendance. Gandhi called Gokhale his political mentor, but ideologically the two men were poles apart.

Gandhi was not influenced by the British liberals who shaped Gokhale’s thinking, nor did his thinking have Indian antecedents. He arrived at non-violent non-cooperation through Tolstoy’s writings, later finding backup in Thoreau and the sermon on the mount. His luddite distrust of machinery and the idealisation of village life came from John Ruskin. He claimed the Bhagavad Gita as an influence, but some of this comes from finding post-facto validation of his prior beliefs in Indian texts. VS Naipaul once called him ‘the least Indian of Indian leaders’ – but his ideas weren’t part of the Western mainstream either. When a critic complained, in his South African years, that he was poorly read in modern philosophy, Gandhi responded, in the historian Ramachandra Guha’s words, that he “saw no reason to read more glosses of modern civilisation when he saw the thing itself unfold before his eyes.”

Shortly after Gandhi came back to India, his political patron Gokhale died, to be followed a few months later by another Moderate stalwart Pherozeshah Mehta. There was a tussle in the Congress between the Extremists, led by Tilak and Annie Besant, and the remaining moderates, men such as Motilal Nehru and Mohammad Ali Jinnah. Gandhi was a peripheral figure, considered somewhat eccentric by other Congress leaders, still on the margins and not yet a Mahatma. Indeed, in 1918 he spent some time trying to recruit soldiers to fight for the British in WW1, writing to the viceroy, Lord Chemsford, “I love the English nation, and I wish to evoke in every Indian the loyalty of the Englishman.” In this sentiment, he echoed the Moderates, and hardly presaged the uncompromising freedom fighter he would go on to become. A year later, as that decade came to an end, he shifted from the margins of the freedom struggle to its centre.

Gandhi’s first tactical masterstroke in domestic Indian politics was making common cause with the Khilafat movement. Muslim thinkers in India were often torn between loyalty to the qaum, the larger Muslim nation, and Indian nationalism. The Khilafat movement was an expression of the former, and was aimed at maintaining the supremacy of the caliph in Turkey in the aftermath of WW1, where Turkey was on the losing side and the British were the victors. Your enemy’s enemy must be your friend, and for Gandhi, this was as an opportunity in two ways: to reconcile the sometimes conflicting loyalties of the Muslims; and to widen the base of the somewhat elitist Congress.

Gandhi threw himself into the thick of things, turning the nominally transnational Khilafat movement into a nationalistic enterprise. “It is the duty of every non-Moslem Indian in every legitimate manner to assist his Mussulman brother, in his attempt to remove the religious calamity that has overtaken him,” he wrote in a resolution adapted by the Congress in a special session in Calcutta in 1920. His program of noncooperation was adopted by the Congress session later that year in Nagpur, from which Jinnah stormed out, never to return to the party he had expected to lead. “I part company with the Congress and Gandhi,” he said in an interview that year. “I do not believe in working up mass hysteria. Politics is a gentleman’s game.”

The coupling of Khilafat and Swaraj made no ideological sense – severe dissonance, again – but it was tactical genius. At a personal level, this support from a new constituency made Gandhi the undisputed leader of the Congress, and thus the Independence movement. At a national level, it helped make the Independence struggle a true mass movement. With the Congress under his sway, Gandhi launched a movement of noncooperation that animated the entire country. Satyagraha – the force of truth – was underway. The British had never seen anything like this in India – though Gandhi called it off in 1922 when protesters turned violent in the town of Chauri Chaura and killed 23 policemen, reportedly while shouting “Mahatma Gandhi ki jai!” He even went on a fast, as penance for the crimes committed in his name. 30,000 people had already been imprisoned in the course of the movement, and the Khilafat leaders as well as his Congress colleagues did not take kindly to Gandhi’s unilateral decision to call off the Satyagraha. Soon, Gandhi was also arrested and sentenced to six years of prison – though he served only two, and the Khilafat movement wound up because, well, the Caliphate did. Swaraj was on hold.

Gandhi was on a hiatus for the middle years of that decade. “I am biding my time,” he wrote in a letter in 1928, “and you will find me leading the country in the field of politics when the country is ready. […] I have a plan for the country’s freedom.” When the Congress was next convened, it gave a deadline of a year to the British to grant India dominion status – failing which it would declare Independence. The year ended, the British ignored the demands of the natives, and on January 26, 1930, the Congress declared India’s Independence. But this alone was not enough. Another noncooperation movement, another satyagraha was required. What would be the focal point of this one?

*

In Salt: A World History, Mark Kurlansky relates a French folktale in which a princess tells her father “I love you like salt,” and is promptly banished by her father for insufficient adoration. But later, when he is denied salt, he realises “the depth of his daughter’s love” and repents. Salt is essential to humanity. Our bodies contain about 250gms of salt, but too many essential bodily functions rely on salt. “From the beginning of civilisation until about 100 years ago,” Kurlansky writes, “salt was one of the most sought-after commodities in human history.”

The first war over salt was fought by Huangdi, the Yellow Emperor of China, around 2600 BC. Salt had geopolitical significance, and even gave impetus to empire building. The first of the great roads built by the Romans, the Via Salaria, was constructed for the express purpose of transporting salt. Mediaval trade routes were shaped by salt. Salt was even currency; Roman soldiers were sometimes paid in salt, and the worlds ‘salary’ and ‘soldier’ both evolved from sal, the Latin word for salt. Indeed, consider the origin of the phrase you must have heard in countless Hindi films, “Maine aapka namak khaaya hai.”

The first mention of a tax on salt dates back to the 20th century BC, in China. “During the Tang Dynasty, which lasted from 618 to 907,” Kurlansky tells us, “half the revenue of the Chinese state was derived from salt.” Salt taxes were a certain way for any state to raise revenue, for even the poorest could not do without it. Salt was taxed in India from as far back as the reign of Chandragupta Maurya (340-298 BC), and the Mughals even charged differential salt taxes depending on religion. (Muslims paid 2.5%, Hindus paid 5%.) The British, starting with Robert Clive, the governor-general in 1765, raised it to unprecedented levels. To further compound matters, they killed off the domestic industry, and built a monopoly to the benefit of British salt manufacturers in Cheshire. By the early 1800s, only the British government could legally manufacture salt in India. A rebellion around salt in 1817 was quickly crushed, and by 1858, 10% of the British government’s revenues came from salt.

Gandhi wasn’t the first nationalist leader to protest about the tax on salt. SA Swaminath Iyer protested against it in the inaugural session of the Congress in 1885, as did Gopal Krishna Gokhale in 1890, and Dadabhai Naoroji called it “the most cruel Revenue imposed in any civilised country” in the House of Commons in 1894. The issue festered; the British ignored Indian fulminations; the salt tax was, in fact, doubled in 1923.

And so, Mohandas Gandhi’s Satyagraha hammer found a suitable nail in the salt tax.

*

Before the Satyagraha, Gandhi wrote in a letter to the Indian viceroy, Lord Irwin: “I regard this tax [on salt] to be the most iniquitous of all from the poor man’s standpoint. As the Independence movement is essentially for the poorest in the land, the beginning will be made with this evil. The wonder is that we have submitted to the cruel monopoly for so long.”

What happened in the Salt Satyagraha is common knowledge. Gandhi marched for 24 days and reached the coast of Dandi on April 6. C Rajagopalachari went on a similar march in Tamil Nadu. Vallabhbhai Patel and Jawaharlal Nehru had been arrested by the British, as was Gandhi shortly after the satyagraha. The British government made some minor concessions, but the salt tax remained in place until 1946. Gandhi had said that he would not return to Sabarmati Ashram until the tax was repealed. After March 12, when he set off on his walk, he never saw the Ashram again.

But here’s a thought, 85 years after that famous march to Dandi. There is a point of view that in 1947, all we did was replace a set of colonial rulers with a set of local rulers. We continued to be ruled; and we continued to be exploited. We gained political independence and the right to vote, but other freedoms, both in the economic and personal spheres, continue to be denied to us, just as the British denied them. Many of the laws that the British framed to suppress us, in the form of the Indian Penal Code, remain in place. If our freedom fighters, men like Naoroji and Gokhale and Rajaji and Patel were alive today, would they feel fulfilled at the India they saw around them? Would Gandhi?

When he reached Dandi, Gandhi picked up a fistful of salt in his hand as Sarojini Naidu, carried away by the moment, shouted “Hail deliverer!” She was right – and she was wrong: India still awaits deliverance.

Posted at 12:47 PM by Amit Varma in Essays and Op-Eds | Freedom | India

Don’t Maro Ratta

This is the 37th installment of my fortnightly poker column in the Economic Times, Range Rover.

Imagine you’re seven years old and you’re sitting in a classroom where an old professor who scratches his ass constantly is teaching you poker. ‘Now children,’ he intones , as if a robotic app is speaking from inside his body and not an actual human, ‘Imagine you have 13 big blinds in the cutoff and the action folds to you. What is the bottom of your shoving range?’

Someone titters from the back benches. The teacher ignores him and continues: ‘I will tell you what your shoving range is. Now everybody write down what I am putting on the blackboard, and learn by heart for exams. Okay? Learn. By. Heart.’ He turns to the board and starts writing with his right hand and scratching his ass with his left. Someone throws a paper plane at him.

Wouldn’t you hate to learn poker like that? I bet it would kill your interest in the game forever. Maybe you could have been a recreational shark, emptying people’s bank balances in your spare time. But no, classroom happens to you, and you take up stamp collecting as a hobby instead, for the sheer adrenalin rush that gives you. What a shame.

Poker has never been taught in a classroom, of course. It is a recent science, and if anyone wants to learn poker, they have to put in the hard yards and learn it on their own. There’s no university course, no poker diploma you can get, no MOOCs on Coursera, and most instructional books are outdated. Friends may help you, you could even get some online coaching, but if you want to be really good, you’ll have to do most of the hard work yourself. And before you learn how to play poker, you’ll first have to learn how to learn.

One of the problems with Indian education is the emphasis it places on ratta maroing – or learning by heart. When I was a student, I would spend all night before an exam mugging up facts from a guidebook, only to forget them the day after the tests. I believe that every time I did this, a small part of my brain died. And I didn’t learn anything about the subject in question.

Why do I bring this up in the context of poker? It is because too many beginning players indulge in their old habits of ratta maaroing when it comes to learning this game. I know tournament players who will know their push-fold ranges quite precisely, but have never, ever, even once calculated the equity of a particular move. Indeed, some tournament coaches begin and end by teaching ranges for different spots, and while this is useful, it would make more sense to teach a beginner to figure out those ranges for himself. Get the calculator out, figure out fold equity against players left to act, pot equity against calling ranges, and so on.  It’s a lot of work, but at the end of it, such knowledge will be deeper than just mugged-up push-fold charts – and as the game evolves, you will have the tools to do so as well.

In cash games as well, where stacks are deeper, you need to work hard at understanding how to play in different spots. Poker is, ultimately, about nothing more than maximising EV. If you don’t spend lots of time fiddling around with tools like Odds Oracle by ProPokerTools, which helps you figure out equities against weighted ranges, and Flopzilla, which helps you understand how different ranges connect with different board textures, then you can’t improve beyond a certain point.

Let me sum it up: inside your brain there is an old teacher who scratches his ass and encourages you to take shortcuts and ratta maro. Expel him.

Posted at 9:14 AM by Amit Varma in Poker | Range Rover | Sport

07 March, 2015

Let Me Take You Far Away

This is the 14th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

Yesterday was Holi. Of all the festivals in India, this is the one that vexes me the most. What is the worst that can happen during Diwali? Some misbehaved children, odes to contraception each one, could be playing with firecrackers on the road. One of them could explode (firecracker, not child, or maybe both) under my feet as I absentmindedly saunter down the boulevard singing a merry tune, and my left leg could get blown off. Big deal. We must not be attached to material things, and a left leg is a material thing, so what is there?

Ganpati is not so bad either. It is true that festivals of that sort provide social sanction for hooliganism, but what is the worst that can happen to me? I could get caught in a terrible traffic jam, unable to do Vipassana meditation because of the monstrous noise, and I could get out of my car and shout at a man trying his best to separate himself from his limbs as a holy hymm by Sri Sri Honey Singh plays in the background, at a volume I can only describe as one decibel for each resident of Mumbai. This man could stop gyrating, notice that his limbs are still with him, and decide to shoot the messenger. He and his friend could put their Ganesha idol in my car, and drag me to the beach and immerse me instead. And there I go, back into the ocean from whence humankind emerged, and that really can’t be all that bad.

No, Diwali and Ganpati are quite alright. Holi, now, that’s another matter.

Some people don’t like Holi because it is ok on that day to violate other people’s personal space. The gangly teenage boy from Jhumritalayya whose life’s greatest ambition is to be a spotboy in a Sunny Leone film, and who has never gathered up the courage to speak to a girl—he practises speaking to his hand instead—leave alone actually touch them, gathers up the courage on Holi to go around molesting all the women in his colony, with a gang of other gangly boys, under the pretext of revelry. Or, if he considers himself to have too much class to stoop to this, he positions himself on the terrace of his building and chucks water balloons at passersby like my humble, previously dapper self. Indian Sniper. But this is all in a day’s work for me. I spent a few years commuting in Mumbai’s local trains, which change your perspectives of personal space forever. The freedom fighter who said ‘We are one country, we are one people’ was frightfully prescient, for he foresaw the development of the Mumbai local decades before it existed. In developed countries they keep their meat in freezers, but, ah well, every day is a festival on the Virar Fast.

No, what really bothers me about Holi is not the invasion of personal space, but the color. Not the application of color, mind you, for even when a gangly boy is applying it you can always close your eyes and pretend it’s a nubile nymphet teasing you a trifle roughly, and who can fault her passion, for you are terribly handsome. Closing your eyes also stops the color from getting in, and is a practice I urge you to master even on non-Holi days. I frequently close my eyes these days, and it’s most pleasurable.

No, it’s not color in its material manifestation that bothers me, but the concept of it—and the ideological battles that spring forth over that ultimate hot button. Like what happened yesterday. My friends invited me over to celebrate the festival, and despite my misgivings about the festival, I went, for they are pleasant company. Besides, no one invites me to anything or wants to spend time with me, possibly because they are intimidated by my intellect and good looks, so I thought, might as well be a bit social. I carried two pichhkaris with me, one filled with blue water and the other with black, because I thought that would give me an opportunity, after spraying my targets playfully, to joke that I had beaten them black and blue, haha. So I sprayed my host , and unleashed my wisecrack. Nobody laughed. Then the host said:

‘What black and blue? This is white and gold.’

At first I thought he was joking. ‘What white and gold? What do you mean?’

‘The colours you just sprayed on me. They’re white and gold. Why would anyone spray white water on Holi. You’re whitewashing a house or something?’

I refrained from commenting on his bulk and need to lose weight, astonished as I was by his comment. ‘What are you smoking?’ I asked. ‘Or have you overdosed on bhang? That’s not white and gold, it’s black and blue. Back me up, someone.’

My other friend Narendra, who considers himself fashionable and keeps saying ‘I’m so modish, I’m so modish’, and who was dressed in white pinstriped breeches with saffron paint all over them, spoke up on my behalf. ‘That is indeed black and blue,’ he said, ‘in keeping with our heritage. We have always been a black and blue country. We have had blue gods. And India invented the colour black.’

Rahul, my host’s cute four-year-old nephew who insists that everyone calls him ‘Rahul Jee’, now piped up. ‘That’s white and gold,’ he said. ‘If Narendra uncle is saying that’s blue and black it must be white and gold. But if he changes his mind later, so will I.’ He now resumed sucking his thumb, despite the country-sized blister on it.

My old classmate Arnab, meanwhile, was taking a cellphone video of the host. ‘The nation wants to know what the colour of this paint is,’ he intoned grandly. ‘Amit, what did you say it was?’

‘Well, I think it is…’

‘Shut up!’ He cut me off. ‘But you asked me…’ I protested. ‘I know exactly what I asked you Mr Varma,’ he said, ‘and let me tell you once and for all, it’s white and gold.’

At this point the cook, Arvind, entered the room with a tray full of mangoes. So we asked him what he thought the colours were. He sprayed some water from one of my pichkaris on Narendra. Then from the other. Then he threw a bucket full of red paint on him, and then a bucket full of yellow paint. And then he gave us the final word on the subject: ‘Sab mile hue hai.

Posted at 8:03 AM by Amit Varma in India | Lighthouse

26 February, 2015

We Are All Sharks

This is the 36th installment of my fortnightly poker column in the Economic Times, Range Rover.

A few days ago, I was shooting the breeze with a friend of mine when he told me about a couple of business ventures he was planning, and the investors he’d lined up for them. ‘You won’t believe how gullible they are,’ he said. ‘If there’s one thing I’ve learned from poker, it’s how to find fish and exploit them. And there are so many fish in the business world.’

It’s a good thing I was sipping lemonade at the time and not my usual hot Americano, or I’d have singed myself. Having recovered from the shock of his statement, I shook my head sadly. Poker is a beautiful game, and it can teach you a lot about life. But the lesson my friend had learned was entirely the wrong one.

Poker is a zero-sum game. (A negative-sum game, in fact, if you’re playing a raked game.) The only way you can win money is if someone else loses it. So it’s natural that the key skill in poker lies in exploiting the mistakes of others, sometimes after inducing those mistakes in the first place. It is a mathematical exercise that plays on the frailties of human nature. The game is played by consenting adults, and as your opponents are also trying to exploit you and take your money, they’re fair game. But the real world works differently.

Life is a positive-sum game. This is most eloquently illustrated by what the libertarian writer John Stossel once described, in an old column, as the Double Thank You Moment. When you buy a cup of coffee at a café, you say ‘thank you’ when you are handed the coffee, and the person behind the counter says ‘thank you’ on receiving your money. Both of you are better off. Indeed, the vast majority of human transaction, including all business transactions, are like this. Both people benefit – or they wouldn’t be transacting in the first place.

This amazing phenomenon, which we take for granted, is responsible for the remarkable economic and technological progress of the last three centuries. The economies of nations across the world have grown in consonance with the rise of free markets within them. Think about it: if every transaction leads to both parties benefiting, and a consequent increase of value in the world, then the more people are free to transact, in whatever form, the more we progress as an economy and a society. This is why libertarians such as myself consider it a crime to clamp down on any kind of freedom, be it economic or social.

The positive-sumness of things is unintuitive, and many people reflexively speak of the world in zero-sum terms. For example, socialists, with all their talk of ‘exploitation’, the rich getting richer at the expense of the poor and the need for redistribution. But that is not how the world works; it is not a game of poker. Just as in poker there is no possibility of a Double Thank You Moment, in life, we can all be sharks.

So much for learning the wrong lesson from poker. What does poker teach us about life that is useful to us? Well, the most important lesson I have learnt from poker is not to be results-oriented. Luck plays a huge role in the short term, you only get what you deserve in the long run, so just focus on doing the right thing and don’t worry about the fruits of your actions. The Bhagawad Gita teaches the exact same lesson. Lord Krishna would have crushed the games.

Posted at 10:31 AM by Amit Varma in Economics | Essays and Op-Eds | Poker | Range Rover | Sport

25 February, 2015

An Economic Message from God

The editors of Okonomos, the economics journal of the Hansraj College in Delhi, asked me to write a guest article for the current issue of their magazine. Here it is.

Imagine one day God comes down to Earth. He’s an old man with a beard, hanging out in the clouds, and he latches onto the wing of a plane and sits there, cross-legged, until the flight lands. A communist man who took a reclining-emergency-row window seat for the legroom has to be taken off the plane on a stretcher, for he faints after seeing 1), a gentleman who is obviously God on the wing of the plane, and 2), the T-shirt God is wearing, which says, in fluorescent pink letters, ‘Free Markets Rule.’

God is instantly met by waiting paparazzi, and an impromptu press conference is convened. ‘Oh God,’ says an overwhelmed young lady, who appears to be on the brink of orgasm, or something equally divine, ‘Oh God, please tell us: why that T-shirt?’

‘I was hoping someone would ask me that,’ says God. ‘Or rather, I made you ask me that. This is why I have come down here. You should know that I’m a bit of an efficiency buff.  I made the universe, and then the earth, and then amoeba and fish and monkeys and all you folk, but the thing is, I was not much into micro-management. The universe is full of tons of shit, and fine-tuning every small aspect of each creation would take eternity. And while I do have that much time, why sweat the small stuff, so I decided to just put systems in place and take a nap.

‘When I went to sleep, there was primordial ooze. I put natural selection in place, and as I slept, evolution happened. I knew that something like you humans would eventually evolve, though I must confess I couldn’t have anticipated Honey Singh or Kim Kardashian. Wtf , really? Anyway, I put systems in place for you folk too, so you could reach reach your optimum levels as a species, in the pursuit of happiness. But when I wake up I find, hey, what’s going on here, the most beautiful, elegant aspect of my creation, which was meant to help you reach fulfilment, is being maligned. I’m talkin’ about free markets. So here I am, to put the record straight, and to set you on the right track as a species. So listen up carefully, because I won’t be back to repeat this: I have to rush after this to North-West Andromeda, and I could take quite a while there, a black hole has been acting up, keeps spitting galaxies out, wtf?’

‘Oh God,’ says the young lady we have already met, on the verge of rapture. ‘Tell us everything. Oh God!’

‘Right,’ says God. ‘Listen up, here come some basic truths about economics that are really just common sense, but you may consider them divine revelation if you wish.

One: Life is a Positive Sum game. Every time two people make a trade, they do so because both of them benefit. One of my blessed children, John Stossel, illustrated this by coining a phrase, ‘Double Thank You Moment.’ You buy a cup of coffee, and as you pay for it and take the cup, you say to the guy behind the counter, ‘Thank you,’ and he says the same thing to you. Two Thank Yous! And indeed, in every single transaction that takes place across the world, both people benefit, or they wouldn’t have entered into that transaction. This is how productivity goes up, how the amount of value in the world rises, how societies grow prosperous. For my sake, think about how drastic progress has been since the 18th century, when free markets started becoming common. Look at the two Koreas, identical once upon a time, and now so different because of the different paths they chose. And listen up, listen up, to what I say next:

‘Since every trade leads to both parties benefiting and value being created in the world, anyone who comes in the way of free trade anywhere is sinning. Yes, you heard me, it is a sin to get in the way of free enterprise. Tariffs and duties are evil, and regulations and license rajs are man’s way of trying to play God. Don’t you dare!

Two: Business is better than charity. Given what I told you above, how does a human being make money? Only by increasing the value in the lives of other people. Put another way, you can only enrich yourself by enriching others. That is exactly what business is. You make money by giving people what they want. The more value you create for others, the more value you create for yourself. Thus, it’s nonsensical to speak of a system where the rich get richer and the poor get poorer. In a free market, that’s not possible. The rich can only get richer if the poor also get richer.

‘And this is why I consider businesses better than charities. Both aim to help others, but the survival of businesses depends on their ability to do so, and I like those incentives better.

Three: Money Trickles Up, Not Down. No respectable economist has ever spoken of trickle-down economics. There is no such thing. It is a straw man. (You are all like straw to me, but never mind that.) In a free market, money trickles up, not down. In a business, it is the suppliers and the workers who get paid first, and the consumers who get served, and only then, right at the end, do the owners make any money. They are at the end of the chain. Ask anyone you know who runs a business how it works.

Four: Capitalists are among the biggest enemies of capitalism. Raghuram Rajan, a man I created in my own image (aren’t I handsome?), once co-wrote a book titled ‘Saving Capitalism from the Capitalists.’ Note that sentiment. People often think that defenders of free markets are defending the actions of evil capitalists and big businesses gaming the system. Wrong. Established capitalists are the ones who have the most to fear from competition, and they are the ones who lobby governments to manipulate markets in their favour. To take an example, look at India. When India gained Independence, a group of its top businessmen came up with something called the Bombay Plan, which was their vision of what the economy should be like. They wanted an interventionist state, with plenty of regulation and many curbs placed on free enterprise. Historians have presented this in support of the argument that hey, even capitalists wanted unfree markets, so free markets can’t be all that great, right? But think about it: of course the entrenched businesses would want government to keep out competition. Like, duh!

‘So beware of crony capitalists and the governments they partner with. And every time a new regulation or tax or tariff is introduced, consider who it is likely to benefit.

Five: Government is a false God. If offends me when people have blind faith in entities other than me. Like government. Governments came into being to serve the people and protect their rights, but instead, have ended up ruling the people and infringing their rights. Think about it, if any individual or group of people forced you to pay a third of your income every year to them, which effectively meant you were enslaved to them till April every year, you’d be pissed, and would correctly call them thieves. If they regulated all your activities, curtailed your freedom even when you were causing no harm to others, and took a cut of all your purchases, you’d feel that a mafia was running your life. But when an entity called government does all this, and sanctimoniously tells you that this is for your own good, and it’s your duty to obey it, you somehow accept it. And furthermore, you expect it to be the solution to all your problems, even when the biggest problems around you are caused by government itself. What a con job!

‘The biggest force in human progress over the last few centuries has been free enterprise. And the biggest enemy of free enterprise – indeed, a sinner in my books – is government. And yet, you worship this false God, while forgetting all about me and the beautiful, natural system I put in place for you, tailored perfectly to human nature. So here’s a commandment for you: Embrace freedom – and question everything that your governments do.’

God stops here, and the young lady we mentioned earlier takes advantage of the lull to shoot a quick selfie with Him. As soon as she clicks the button on her cellphone, God, having delivered His message, disappears. The communist man of the reclining-emergency-row disappears with him. And far away, in North-West Andromeda, an alumnus of JNU is hurled into a black hole and is promptly hurled back out, for it is a universal truth that all transactions should be voluntary.

Posted at 2:09 PM by Amit Varma in Economics | Essays and Op-Eds | India | Politics

12 February, 2015

It’s All a Gamble

This is the 35th installment of my fortnightly poker column in the Economic Times, Range Rover.

Some people, when I tell them I play poker, look at me kind of strange. They may not say it, but inside their heads they’re saying, ‘OMG, he’s a gambler!’ And because I am skilled at getting inside people’s heads and listening to them think, inside my head I’m sayin’, ‘Yeah, and guess what, OMG OMG, you’re a gambler too!’

What is it that gamblers do? They weigh up the odds of a particular situation or event, the risk-to-reward ratio, and make a bet. This is not something that just happens inside casinos; this is the stuff of life.

You walk up to someone you fancy and ask them out for a date: you are gambling. You buy a stock: you’re betting on it to go up. You sell a stock: you’re betting on it to go down. You buy real estate: gamble. You buy a book because you like the blurb and the cover is amazing: ditto.

Little in life is certain, and everything is scarce, because time itself is scarce. You have one life, and the smallest decision you take today could change the course of your life. Maybe you have to choose between the PHD abroad or the comfortable job at home. Maybe you have to decide whether to say ‘yes’ to your boyfriend’s proposal when you know he’s not the dream guy, and you’re settling, and he hit you once when he was angry, but who knows if you’ll ever do better because you’re chubby, and you do love him sometimes. Maybe you get a puppy, betting that the love you get for a decade or so will be worth the pain you feel when it dies, as is inevitable. Everything you do, big or trivial, may be worth it, or it may be a mistake. And the thing with real life is, you’ll never know where the road not taken would have led. But you have to gamble; you have to choose.

Poker is slightly different. Poker is also gambling but it involves repeated small decisions with relatively little on the line on any particular occasion. And importantly, you get to put in volume. Even though luck plays a greater role in poker than in other sports or mindgames, it is not gambling gambling: if you’re skillful, you will eventually make a profit. Good poker players keep making, on average, profitable decisions, and though luck (or variance, as we grizzled vets call it) may hit them hard in the short run, in the long run they will end up winners. In life, on the other hand, as Keynes said, in the long run we’re dead.

A poker player can play a million hands or 20,000 tournaments, and those sample sizes are pretty good. You don’t get those in real life. How many times will you enter a romantic relationship? How often can you switch jobs? You get the drift.

There are different types of gambling. There are casino games like roulette, baccarat and craps in which, in the long run, you’re guaranteed to lose. I disapprove of playing those; it’s just giving money away. Then there’s life itself. You’re forced to gamble by circumstance, but it’s okay, life’s a positive-sum game; though one could argue that since we all die in the end, the final sum is zero. At least until then the odds aren’t weighed against you. And then there’s poker, in which, unlike in life, we can put in volume and bring the long run close. So, you, who do not play poker, don’t make fun of us and call us gamblers. All of us are born in a casino, and will die in one.

Posted at 12:47 PM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

06 February, 2015

The Kim Kardashian Liberals

This is the 13th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

You can hold a currency note up against the light, if you have been trained well, and detect whether it is real or fake. Is there a similar test that can help catch and expose a counterfeit liberal? Yes,  there is. It is the ‘but’ test. A counterfeit liberal is one who will espouse a liberal principle but then, immediately, before putting a full stop on the sentence, add the word ‘but’. And there’s always a universe after that ‘but’.

For example, a faux-liberal will say, “I believe in free speech, but…” Or “I believe in free markets, but…” That ‘but’ invalidates all that comes before it. Anyone who says he believes in free speech “but…” is not a liberal but a hypocrite. (And he doesn’t believe in free speech, obviously.) I have a term for these kinds of people, who abound in the Indian intellectual space. I call them Kim Kardashian Liberals. Too much But.

What is a true liberal then? I consider myself a classical liberal, and it disturbs me that the term is used so loosely these days. Our discourse has become muddy, and words like ‘rights’ and ‘freedom’ are used in such nebulous ways that conversations around these concepts often involve people talking past each other, with plenty of Buts swinging here and there. So, in a further effort to help you identify counterfeit liberals, beyond the simple but useful heuristic of keeping an eye out for Buts, let me elaborate upon what classical liberalism precisely means. Specifically: the first principles from which we arise at our support for freedom.

Many classical liberals arrive at their liberalism through natural rights. Are there any rights that we are born with? According to the Enlightenment philosopher John Locke, the most basic right of all is the right to self-ownership. “Every man has a property in his own person,” Locke wrote. “This no Body has any right to but himself.” This is, to borrow a term Thomas Jefferson used in the Declaration of Independence, self-evident. When we are born, we own ourselves – it doesn’t make any sense that anyone else does, or that everyone communally does. Our right to self-ownership, of course, is contingent upon our respecting the corresponding rights of others.

All other rights emerge from the right to self-ownership. Our right to life, to start with, is a direct corollary of the right to self-ownership. The right to free speech, for we own our thoughts and their expression. The right to the fruits of our labours – or, essentially, the right to property. The right to freely associate with anyone we wish to, whether that interaction is social or economic. And what does freedom mean? It means freedom from an infringement of these rights.

Talk of rights often gets muddy because a new class of counterfeit rights has come up in the last few decades (created by counterfeit liberals, as you’d expect.) These are not really rights, but entitlements. The philosopher Isaiah Berlin helpfully coined the terms negative and positive rights to demarcate the difference. Negative rights are all rights that emerge from the right to self-ownership – like the right to life, to property, to free speech, to free trade and suchlike. To respect these rights of yours, people simply have to not infringe them. So someone not killing you is respecting your right to life, a government not censoring you is respecting your rights to free speech, and so on. This why they’re called negative rights. Positive rights, on the other hand, are not rights at all, but entitlements disguised as rights. The right to food, the right to education, the right to broadband etc are all positive rights. To honor these rights, someone has to actively give something to you. And as money doesn’t fall from the sky – if it did, there would be inflation, and God would effectively be taxing you – the only way to honor a positive right is to infringe a negative right. You have to tax Peter to give Paul his free broadband.

To a classical liberal, negative rights, which arise from the right to self-ownership, are the only kind of legitimate rights. All these rights, in a manner of speaking, are property rights, as they arise from the fact that you own yourself to begin with. Thinking in this manner, from these first principles, can bring clarity on a host of issues. People who want to suppress free speech for the cliched reason that “you can’t shout fire in a crowded theatre” are using a flawed example: a person shouting fire in a crowded theatre, whether he be the owner defrauding his patrons or a patron creating a disturbance on someone else’s property, is infringing on the rights of someone or the other in any case. All our rights are contingent upon respecting the corresponding rights of others, which this particular miscreant is not doing. You do not need to limit free speech to punish this particular troublemaker. (As you’d have guessed by now, I’m a free speech absolutist. No Buts.)

Seen through a prism of first principles, most public intellectuals in India do not have a coherent worldview. For example, a few years ago, a prominent columnist wrote about how he supported free speech when it came to MF Husain, because he was an artist, but not when it came to the Danish cartoonists, because, according to him, they were out to provoke. (So what if they were?) This position makes no sense. What are the first principles of this person here? Don’t ask him – he might put those Buts to good use and twerk you.

The hypocrisy that really staggers me regards free speech and free markets. A classical liberal supports both. Those on the left support only the former. Those on the right do it the other way around. This is bewildering. Once you have decided that two consenting adults should be able to do whatever they want with each other as long as they are not infringing on anyone else’s rights, what does it matter whether they are fucking or trading? But no, our Kim Kardashian Liberals will find something to object to, and there will be no coherence to their arguments.

Many classical liberals arrive at their support for freedom from a utilitarian standpoint. Free markets lead to economic prosperity; freedom of expression results in cultural growth; so they support both, without reference to natural rights. This is also a coherent way of arriving at liberalism. Kim Kardashian Liberals don’t show this coherence, and are soon unclothed.

*  *  *

Recently I came across Jim’s Rule of Buts, a creation of the blogger Jim Henley. The rule goes: “In any charged conversation, find any statements containing the conjunction ‘but’ and reverse the clauses.” This usually changes the meaning of the sentence completely. One example Henley gives is “the classic apology:” ‘I’m sorry I yelled at you, but what you said made me really angry’ means a completely different thing from ‘What you said made me really angry, but I’m sorry I yelled at you.’ If our Kim Kardashian Liberals had to follow this rule, a statement like ‘I believe in free speech, but you should not offend anyone’ would transform itself to ‘You should not offend anyone, but I believe in free speech.’ Now that second But is most pleasing, and one I would gladly caress.

Posted at 1:21 PM by Amit Varma in Essays and Op-Eds | Freedom | India | Lighthouse | Media | Politics

29 January, 2015

Deep Thought

This is the 34th installment of my fortnightly poker column in the Economic Times, Range Rover.

I discovered poker as a grown adult approaching middle age, but I was a hustler in college as well. I was a decent chess player, and used to offer a prop bet to people with the following terms: ‘I will play 10 games with you, and will win all ten. If you even draw one, you win the bet.’ I never made this bet with anyone I’d seen on the circuit, thus guaranteeing that all my customers were patzers, and unlike in poker, the quantum of luck in chess is low enough that I won this bet every time I made it. One of my early victims, dazzled by my magisterial play, asked me what the difference between me and him was. ‘How many moves ahead do you think?’ he asked. ‘The same as you,’ I replied.

A famous study by Adriaan de Groot published in 1946 showed that, contrary to what you might expect, novices and expert players think more or less the same number of moves ahead. The difference in quality arises because the experts think the right moves ahead. Their candidate moves for analysis, in other words, are better moves to begin with. Their skill lies not in depth of analysis, but in understanding the nature of a position, which, in turn, comes from better pattern recognition. A grandmaster will look at a position not as a conglomeration of individual pieces, but in chunks of pieces that form recognisable patterns. He will understand the positional vulnerabilities of different kinds of patterns, and the tactical motifs that recur in these spots. In a spot where a novice thinks ‘If I threaten this piece, he’ll move it here to counter me,’ the grandmaster may think, ‘His pawn structure has weakened his dark squares, let me exploit that weakness and exchange off my weak white-squared bishop for his strong knight on c6.’ Guess who is more likely to win.

Why do I write about chess in a poker column? Well, there is exactly the same difference between beginning poker players and experienced ones. Beginners think in terms of what hand they have and how it connects with the board, and graduate to this from thinking about their opponent’s hand, and from there to considering what hand the opponent puts them on. But good players think not in terms of hands but ranges. They never ask, in any spot, ‘Am I ahead here?’ but ‘What is my equity here?’ and ‘How can I maximise my EV?’ They have a better sense of how specific ranges interact with different board textures, and can plan for future streets.

For example, let’s say you call with KJ on the button after a nit raises UTG, and the flop comes 876 two-tone. A beginner may give up when the nit c-bets, but a pro will usually continue in the hand and take down the pot with either immediate or future aggression, because the flop texture is terrible for the UTG’s range of big pairs and high cards, and most turns and rivers are bad for him. Indeed, this will be practically a reflexive decision for the pro, requiring no thinking at all. He would play this hand better than the novice not because his reads are better or he has a better poker face or suchlike, but because he understands the underlying math better.

Here’s one thing common to both chess and poker: the bad player does not know what he does not know. So here’s a tip on how to get better at both games: play a hell of a lot, and stay humble. The day you stop learning, you will be the fish at the table.

Posted at 11:26 AM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

15 January, 2015

Poker at Lake Wobegon

This is the 33rd installment of my fortnightly poker column in the Economic Times, Range Rover.

One of the ironies of poker is that at a nine-handed poker table, all nine players believe that they are profitable, if not the best player at the table. This obviously cannot be the case. Poker is a negative-sum game: the rake takes a percentage of each pot or tournament, and winners win less than what losers lose. Also, easily more than 90% of players are long-term losers, and most of the winners are just marginal winners. So what’s going on here?

I have two answers for you: 1. The nature of poker as a game. 2. Human nature itself. Let’s get the easy one out of the way.

Every game contains differing elements of luck, and although poker is unquestionably a game of skill, the quantum of luck in it is far higher than in other games. A winning player’s edge translates into a profit only in the long-term. Over a short span of time, it is difficult to tell from results who is the fish and who the shark. Losers win their fair share of pots and tournaments, which fosters the belief that they are better than they really are. But their flawed self-assessment is a consequence not just of the nature of poker, but of human nature itself.

A few decades ago, the writer Garrison Keillor created a fictional town named Lake Wobegon, where, he wrote, “all the women are strong, all the men are good looking, and all the children are above average.” This gave its name to the Lake Wobegon Effect, also known as Illusory Superiority, a tendency humans have of overestimating their abilities. This tendency crops ups across contexts: in studies, people have been known to overestimate their driving skills (everyone can’t be above average) and terminally ill cancer patients have also, poignantly, overestimated their chances of survival.

You will see the Lake Wobegon Effect in poker, as also its sister, the Dunning-Kruger Effect. Wikipedia defines the Dunning-Kruger Effect as ‘a cognitive bias wherein unskilled individuals suffer from illusory superiority, mistakenly rating their ability much higher than is accurate. This bias is attributed to a metacognitive inability of the unskilled to recognize their ineptitude.’

In the context of poker, a player may think he is better than he is because he lacks understanding of the game, or the intellectual tools to perceive his own weaknesses. I see this around me in many players. They don’t understand the long-term nature of the game, focus only on their own hand and don’t think in terms of ranges or equities, are results-oriented rather than process-oriented, and consider pots they win to be a validation of their skill while attributing their losses to bad luck. Some of these guys avoid putting in the hard work to get better, and rationalise this sloth; some of them are simply not capable of improving. This is not a defect in character any more than being human is.

How can you guard against the Lake Wobegon Effect and the Dunning-Kruger Effect in yourself? Here are two things you can do. One, always ask yourself what your edge is in any game you go to. If you can’t define this precisely in terms of how you are exploiting the specific weaknesses of others, you don’t have an edge. Two, keep track of all your scores, and see how much money you make over a decent sample size of sessions. Your brain might deceive you—but the numbers won’t lie.

Posted at 9:22 AM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Science and Technology | Sport

02 January, 2015

Some Achhe Din Resolutions

This is the 12th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

I am fascinated by New Year’s resolutions. Everybody makes them, no one keeps them, but they’re still great fun because they give you a chance to laugh at others. So every New Year I call up everyone on my phone’s speed-dial to find out what their resolutions are. (They never ask about mine, because everyone just loves talking about themselves.) This year, I started with our venerable PM, Narendra Modi.

‘Modiji,’ I said, in that deep baritone that women find irresistable, ‘Happy New Year. I’m calling to ask about your New Year resolution. Is saal kya plan hai?

‘Amitbhai,’ he said, ‘this year it’s proving to be a bit of a problem coming up with resolutions. See, last year my resolution was to become PM. Been there, done that, got the kurta. Now, after that happens, what else is there? Maybe I could try a medium-rare steak, as you keep urging me to do, but beyond that it’s getting hard to think of something.’

‘What about fulfilling some of your promises to the people of India? Like, all that achhe din aayenge stuff and all that.’

‘Sigh. Amitbhai, aap tho poker khelte ho, you know what a bluff is. See, when I said achhe din aayenge, I didn’t specify for whom. Everybody can’t have achhe din, that’s just not possible. I have lived up to my promise in the sense that these are achhe din for me. I became PM, I have travelled across the world, and I’m having an incredible amount of fun trolling the people. Like, I trolled the nation by making a dropout education minister. Hahaha. You are like my bahu, I told Smriti, lol. I let the RSS and those other Hindutva nutjobs make whatever noises they want, which people actually think could become government policy. You see how worried the lefties are becoming, I’ve seen cctv footage of Prakash Karat praying at a temple, finally made a believer out of him, haha. But I have the most fun trolling my chaiboy at the office.’

‘Why, what do you do?’

‘Oh, I force him to make tea 40 times a day, and keep pouring it down the sink and telling him, “There, this tea is over. Now make another cup. And don’t look so sad, you could be prime minister one day. Look at me!” Hahahahaha!’

‘Erm, interesting. Modiji, I gotta hang up, there’s a herd of wild cows trying to break down my door. See you later.’

‘Bye, Amitbhai. Do come home one of these evenings, achha dine karenge.’

I hung up, went outside, chased the cows away by throwing Amul cheeseballs at them, and then came back indoors. Who should I call next? Who else but Rahul Gandhi.

‘Hey Rahul, this is Amit,’ I said, in that deep baritone he loves so much. (So much, in fact, that some times he calls me in the middle of the night and begs, ‘Say something, Amit. Anything. Just talk. Sigh.’)

‘Hi Amit, bro, what’s up?’ he said. ‘You called at a great time, I’m practising for an interview. Ask me something, anything. Go ahead?’

‘Ok. What day of the week is it?’

‘Well, um, it’s, ah, it’s the day to empower women. That day has come. We must empower the women. And also the youth, so that they get the escape velocity of Jupiter.’

‘Rahul wtf man,’ I said. ‘Did I not tell you specifically last year: No. More. Interviews. I even used my baritone, ffs, I would have squeaked if I’d known you’d ignore me.’

‘No, no, you misunderstand,’ he said. ‘This is not a media interview I’m preparing for. No more media interviews for me. Media interviews are like poverty, anyway, they’re a state of mind. No, what I’m preparing for is an entrance exam interview. I’m planning to do a correspondence diploma course on how to run a family business.’

‘Hmm, interesting. Best of luck. Anyway, why I called was to ask you, what’s your New Year resolution this year?’

‘What new year? Oh. Um, I don’t know, I’ll have to ask Mummy. But there’s a slight problem with that.’

‘What?’

‘I’ve forgotten her phone number,’ he admitted sheepishly.

The next person I called was Arvind Kejriwal. He has become a good friend over the years, and helps me file my income tax returns. He refuses to take any compensation for it, though I do fly him down to Mumbai in business class.

‘Hi Amit, such a pleasure to hear from you,’ he said. ‘I heard the phone ring and thought, dee yamm, it’s Anna again. He keeps calling me and asking, “Which train are you on, Arvind, which train are you on? I’m on a fast!” WTF man, WTF, he’s trolling me.’

‘Er, are you sure it’s him?’ I asked. ‘Anyway, the reason I called was, I’m writing a column on the New Year’s resolutions of my friends. What’s yours?’

‘You’ll have to file an RTI application to find out. Haha, just kidding. My resolution this year is to look inwards, not outwards. The nation, I have realised, doesn’t give a damn about me, despite all my efforts to convince them that I speak for the common man. They’d rather listen to that bloody chaiwallah. So anyway, I am moving from the political to the spiritual, in an effort to cleanse myself.’

‘That’s wonderful!’ I said. ‘I’m so happy for you. So how are you starting?’

‘Well, first up, I will examine all the negative emotions inside me. Greed, jealousy,  bitterness, a sense of entitlement and superiority, all of those. Sab mile hue hai. They are corrupting my personality, and you know how I am against corruption. So one by one, I will take a stand against them and eliminate them.’

‘Fantastic. I’m so happy to hear that.’

‘In fact, I want to throw a party to celebrate this new awakening of mine. I’m going to call it the Aam Aadmi Party. You’re invited! It’s today evening, please do come, you know how the girls love your baritone.’

‘I’ll try and drop in,’ I said, and made a resolution to go for his party. But then I didn’t.

Posted at 2:24 PM by Amit Varma in Essays and Op-Eds | India | Lighthouse | Politics

01 January, 2015

The Myth of the Made Hand

This is the 32nd installment of my fortnightly poker column in the Economic Times, Range Rover.

There is no term in poker that is as dangerous for the novice player as ‘made hand.’ Newcomers to poker divide all hands into two categories: made hands and drawing hands. If they have hit a pair or better, they say they have a made hand. If they are drawing to a flush or a straight, they call it a drawing hand. This is a terrible way to think about poker, especially when it informs your decision-making. For example, some players I know find it hard to fold a made hand, and never raise with a drawing hand because they ‘haven’t gotten there yet.’ This is fundamentally flawed thinking.

To explain myself, let me present a couple of axioms to you.

One: Every Drawing Hand is a Made Hand: There is one term that should dominate your thinking all through the course of a hand: equity. On any street except the river, equity refers to your share of the pot if every possible combination of outcomes was accounted for. Beginners think of a made hand as one that is 100% there, and a drawing hand as one that isn’t there yet. But if you look at equities, most of the time a made hand just has a big share of the pot, and is sometimes even behind the drawing hand. Consider, for example, that on a board of A67 with the 67 being spades, 89ss will win a pot against AK 52.6% of the time. Which is the made hand, then? What does the term, ‘made hand’ even mean? How much equity does a hand need to qualify as a made hand?

If 89ss has more equity there than AK, is 89ss a made hand? If not, why is AK, which has less equity? Where do you draw the line? At AsTs, pair and flush draw (46% against AK)?  QJss, the bare flush draw (32%)? The gutty T8 (22%)? What about AQ (16%), an otherwise fine ‘made hand’ that is a ‘drawing hand’ against AK because there’s a better ‘made hand’ around. Consider, in fact, that AQ, which is 16% against AK, is 83% against AJ and 55% against a range of all sets, Ax hands, and plausible flush and straight draws. So how would you classify it?

Two: Every Made Hand is a Drawing Hand: Unless your opponent is drawing dead after you flop a royal flush or quads, every made hand is a drawing hand in the sense that it is drawing to bricks. Not just that, on the flop, against a drawing hand, it is drawing to runner-runner bricks. This is why AK is behind 89ss on that Ax6s7s flop. This is why, in PLO, a hand like AK45r is so shitty on a 367 two-tone board. You have flopped the nuts – the ultimate made hand, one would think –  but if you’re up against two guys, and one has a higher wrap-FD (T985ds) and the other has top set with backdoor FD, your equity in the hand is, sit down before you read this, 7.5%. That’s right, you flop the nuts, go all in joyfully, and win just 1 in 13 times because your runner-runner brick draw is just so unlikely. Your best made hand is actually the worst drawing hand here.

Made hands, drawing hands, these terms melt into one another and mean nothing anyway. When you play poker, you should think of nothing but equity. Whether you have 80% equity on the flop, or 49% or 23%, your aim is to have 100% by the time the hand ends. Sometimes you do this at showdown – but a lot of the time, you do this by making the other guy fold, so that his share of the pot becomes yours. To do this, you need to understand his range, your equity against his range, and your fold equity against him (ie, how likely he is to fold to your aggression). As James Hetfield famously said after a 22-hour cash-game session, nothing else matters.

Posted at 3:56 PM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

11 December, 2014

Turn it into a Bluff

This is the 31st installment of my fortnightly poker column in the Economic Times, Range Rover.

I played an interesting hand the other day that I would have played differently three years ago. The game was nine-handed, stacks were deep, and I had KTdd on the button. A loose player raised UTG +1, MP2 called, cutoff called, I called on the button and the blinds called. The flop came K72 with two spades and a club. (The king was a spade.) Original raiser checked, MP2 bet, cutoff folded, I called, small blind overcalled, the others folded. Both MP2 and SB are straightforward players, and MP2 check-calls flush draws in this spot, so he certainly had at least a King. Given position and his bet in a multiway pot, he probably a stronger king than mine. SB’s overcall disappointed me, because he is not the kind to mess around here with A7 or 99, and had either a king here or a flush draw. And if he had a king, it had to be stronger than mine.

The turn was the ace of spades. The flush got there, as did an overcard to the king. Both of them checked. At this point, the novice in me from three years ago would have checked back, thinking I had showdown value. But my read here was that my hand simply could not be good against both these guys, and I needed to turn it into a bluff to win the pot. I bet big, and they both folded, saying that they had KQ, and MP2 whined about how I always get lucky on the turn. So of course I showed him my hand, putting him on tilt, and he later stacked off to me. Yum yum.

Well, here’s one of the most useful lessons I learnt through my journey in poker: showdown value is overrated. Too often, we take a passive line with medium-strength hands thinking we have showdown value, so why inflate the pot? But there are two circumstances where it might be profitable to take a different approach. One, when we can bet those hands for thin value and get called by worse often enough for it to be profitable. Two, when we can turn it into a bluff and profitably make better hands fold, like in the above instance.

Often, on an early street, we adopt a particular mindset for a hand and don’t modify it as the hand progresses. For example, we get into pot-control or bluff-catcher mode on the flop, where that might indeed be justified, but fail to shift gears on a later street when it becomes profitable to do so. There are all kinds of situations where it makes sense to turn our made hand into a bluff. Maybe we 3b in position with JTs, the flop comes QJ3r, we call a donk bet, turn K, call again, river T and villain checks. Our two pair is often beat here, and better hands can fold given we are plausibly repping the ace, and depending on the opponent it is sometimes correct to check back and often correct to bomb river. Similarly, in PLO, we could bang the river when a flush completes to get a straight to fold, even though we have showdown value with a set that didn’t fill up.

That said, you should be clear about your reasons in turning a made hand into a bluff, and not do so just because raising makes you feel macho. In the live games I play, I often see players make testosterone-laden raises in spots where no better hand folds and no worse hand calls. Do not burn money in this manner. Remember, it is better to be rich than manly.

Posted at 9:08 AM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

06 December, 2014

The Evil of Family Planning

This is the 11th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

It’s wonderful to live in the 21st century. I bought a new Android Phone the other day, and was fiddling with its apps, marvelling at how the world has advanced so much and we can hold in the palm of our hand wonders that would have been inconcievable just a decade ago, when I came across a news item on the internet which reminded me that, despite all you can pack into a mobile phone, the real world outside is a lumbering beast that’s hard to change. And much of India still lives in an earlier century.

The news item in question was about a group of women who died after a sterilization camp in Chhattisgarh. According to a Guardian report, “more than 80 women underwent surgery for laparoscopic tubectomies at a free government-run camp,” after which around 60 of them fell ill and at least 11 died. The doctors were suspended, a criminal complaint made, and compensation packages announced. (Consider the obscenity of that term. ‘Compensation package.’ Really?) But what came as a shock to me was not that the government botched something up, but that in 2014, there was something such as a ‘sterilisation camp’ in existence. I had assumed sterilisations as a government-organised activity ceased after the Emergency of the 1970s, in which the evil Indira and Sanjay Gandhi had made it state policy to forcibly sterilize their ‘subjects’, as it were. Three-and-a-half decades after that, why on earth is the government conducting tubectomies?

“Such camps,” the Guardian report informed us, “are held regularly across India as part of a long-running effort to control the emerging economic power’s booming population.” Indeed, the government sets sterilisation targets for their health departments, and offers financial incentives to both doctors and the women who come forward. (Anywhere from Rs 1400 to “cars and electrical goods” for the women.) In 2013-14 alone, 4 million such operations were conducted. The report says, “Authorities in eastern India came under fire last year after a news channel unearthed footage showing scores of women dumped unconscious in a field following a mass sterilisation.”

There are three things terribly wrong with this: One, the government has no business interfering with the private choices of its citizens. Whether a particular individual wishes to have no children or ten is no business of the government. And to spend taxpayers money to manipulate these choices is absurd.

Two, It is women who are victims here. Poor women. Manipulated women. Always women. It is never the man who hops over and says, ‘Chal bhai, nasbandi karva le.’ It is always the woman, because women in this country have a status somewhere between object and person, possession and loved one. This makes me ashamed. It is not something that fills me with patriotism and nationalistic gusto.

Three, all of this is based on a flawed premise. Right from school, Indians are taught that people are a problem. Or, to put it the conventional way, that ‘overpopulation’ is a great danger to our nation, and that family planning is its essential antidote, and individuals must sacrifice their desires for the nation. ‘Hum do, humaare do,’ and so on. But this is flat out wrong, and terribly outdated thinking. India’s growing population is not a problem, but a blessing. And the term ‘overpopulation’ makes no sense. Every human being is precious and wonderful, and there can never be too many of us.

Worrying about the population started becoming fashionable in the late 18th century, with the publication of Robert Malthus’s An Essay on the Principle of Population. Malthus made the seemingly sensible observation that population tended to grow exponentially while resources, in particular food supply, grew arithmetically. Thus, to prevent a catastrophe, population control was essential. A latter-day Malthusian, Harrison Brown, worried about the population growing unchecked “until the earth is covered completely and to a considerable depth with a writhing mass of human beings, much as a dead cow is covered with a pulsating mass of maggots.”

Well, we’re not maggots, and that hasn’t happened. Human beings are resourceful and ingenious, and the more of them you have, the more resourcefulness there is floating around. The economist Julian Simon, in his book The Ultimate Resource, pointed out that through history, spurts in population and productivity coincided with each other. (The ultimate resource the book’s title refers to is people, of course.) Had Malthus been correct, you’d expect to see that the places with greatest population would density would have the highest resource crunches. But the opposite is true. As Nicholas Eberstadt pointed out a few years ago in a study titled Too Many People?, there is no link between population density and poverty. Monaco has a population density 40 times that of Bangladesh. It’s doing fine. Ditto Bermuda and Bahrain, which are more packed than India.

Indeed, the story of humanity is a story of urbanisation. Why is land in a city sometimes 100 times more expensive than in a rural area? Because of demand, because everyone wants to be in cities, because that is where the opportunities are. People migrate to cities because of the economic and social networks they contain – and the more people there are, the more desirable it is to be part of these networks. Cities would not be such desirable destinations if Malthus was right.

Malthusian thinking is completely discredited today, and the last couple of centuries have been testimony to the folly of his thinking. (Indeed, ‘Malthusian’ is a pejorative today.) And yet India, the first country to take up ‘family planning’ in 1952, is one of the last to continue to use government machinery to promote something that is wrong on so many levels. (Coercion, pseudoscience etc etc.) Given the top-down, central-planning-kind-of thinking of Nehru and his socialist minions, it must have seemed that people were a problem, for the more of them there were, the harder it became to control them and to feed them. This attitude is condescending, and the consequences can be criminal, as we saw in Chhattisgarh. For 67 years, we have been tied down, mentally, to the concept of a mai-baap sarkar, at whose mercy we exist. It is about time we re-orient our thinking. Our government’s sole purpose should be to serve us, not to rule us; to empower us, not to enslave us; to protect our rights, not to strip them away. Abolishing this family planning nonsense would be an essential step in that direction.

Posted at 8:28 AM by Amit Varma in Essays and Op-Eds | Freedom | India | Lighthouse | News | Politics

27 November, 2014

The Bird and the Elephant

This is the 30th installment of my fortnightly poker column in the Economic Times, Range Rover.

One of the most important skills for a professional poker player, it is often said, is knowing when to get up. When exactly should we quit a session? Should we have a stop loss? Should we get up as soon as we reach a pre-decided profit? Should we play X number of hours, no more, no less? What are the factors that determine how long we sit at a particular table?

The rational answer to this is clear. We should continue in a game as long as it is +ev to do so, and get up as soon as we feel we’re no longer profitable on the table. How much we are up and down should not matter. We need to think of all poker games we play as being essentially one lifelong session, and the score on any one day should not affect our decision. At any given point, all we need to ask ourselves is: Is my staying on this table a +ev decision? Whether you are stuck 3 buyins or up 4 should not be a factor in that decision.

In practice, this advice is not that easy to carry out. For example, I have a tilt problem, and shift from my A-game to my C-game if I’m losing a lot and fatigued, playing recklessly and trying to recover. Tilt has perfect timing and usually comes towards the end of sessions, when stacks are deep and mistakes are costly. I am obviously not +ev when I tilt – but tilt not only shatters my emotional equilbrium, it also affects my judgement. I rationalise continuing in the game, though I really should be getting up.

To prevent this, I have set a stop-loss for myself. When I hit that stop-loss, I quit the game, regardless of how calm I feel, because tilt could be just around the corner. This is not something I recommend to you if tilt is not a factor in your play, and you make decisions with as much clarity 15 hours into a game and 10 buyins down as you do at the start of the session. But how many of us can manage that? If you do have a tilt issue, and tend to magnify your losses by chasing them, a stop-loss might be a handy tool.

When I am winning, on the other hand, I usually sit till the end of the session. There was a time when, at a particular game, I would play for six hours every day and then leave, because I’d begin to get tired. As I’d mostly win, I got a bit of a reputation for hitting and running, though this was not my intent. So, as a point of principle, I started sitting till the end of every session, and realised that this made a lot of sense because stacks are deepest at the tail end of sessions, many other players are tired and tilted and more prone to errors, and that is when my edge can really turn a hefty profit. If fatigue affects your play, of course, you should factor that in and leave before your edge dissipates and you’re the fish on the table. But tilt and fatigue aside, there are no good reasons to quit a juicy game.

One big mistake I see some players make is win small and lose big. They become taala-chaabi and book their profit as soon as they’re one or two buyins up, but continue buying in when they’re down, trying desperately to recover, and lose far more than they win in a winning session. In his book, Elements of Poker, Tommy Angelo quoted a friend of his named Cowboy Bill as describing one such player, ‘He eats like a bird and shits like an elephant.’ Make sure you do it the other way around.

Posted at 1:54 PM by Amit Varma in Essays and Op-Eds | Poker | Range Rover | Sport

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