Seven Lessons of Middle Age

This is the 50th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

Don’t make your happiness dependent on other people, and all will be well.

When I look back on my younger self, the 24-year-old Amit from 20 years ago, I feel alarmed. There is just nothing he is doing right. His outlook to life, his ambitions, his work ethic, his food ethic, his attitude towards other people: they are all wrong. He is obnoxious, arrogant and delusional, and it seems certain to me that this cannot end well.

I cannot reach out across time and warn that kid, and he would not listen to me. This is a common lament of middle-aged people like me: Oh, if we only knew then what we know now. Still, I am lucky to get here and no longer be that guy. I know similarly aged people who have not lost their youthful delusions, and wake up every morning unhappy. I feel bad for them – but not too bad, for reasons that will be obvious by the time you finish reading this.

This is the 50th edition of Lighthouse, and my last column in this space, so in the spirit of a happy ending, I want to bow out with a list of learnings. Here are a few things I learned along the way from being that guy to this guy.

One: You are not special. You are one of over seven billion people on this planet, which is one of 100 billion planets in the Milky Way, which is one of 100 billion galaxies in the known universe. So forget what the self-help books tell you: you are not unique or different in any way. You are one accounting error of genetic composition away from a gorilla, and everything you are is a result of luck: the genes you happened to have, and the environment you were born and raised in. This is not a bad thing. In fact, it should be a relief.

Two: You are not entitled to anything. I am shocked sometimes to see how entitled some young millennials feel, till I remember that in my time, we felt as entitled. This is a quality of youth. (And the natural consequence of thinking you are special, which we are hardwired to do, for how else would we live?) But the world owes you nothing, and the more entitled you feel, the more you will be disappointed. If you feel entitled to nothing, on the other hand, everything good that comes your way will feel like a delightful bonus.

Three: Stop looking for validation. Our lives can be dominated by the need for the approval or admiration of others. This is foolish for one simple reason: others don’t give a shit, and are caught up in their own corresponding anxiety. They aren’t thinking of you all the time. You are only the center of your own universe. So stop caring about what others think of you. It doesn’t matter – unless you take it seriously, in which case you are doomed to unhappiness, as you will be sweating over what you cannot control.

Four: Focus only on what you can control. One sure route to be unhappy is to make your happiness dependent on things you cannot control. You will then feel helpless and exhausted as you are buffeted by the winds of chance. Instead, you should only feel good or bad about events in your immediate control. The rest is what it is. (If you take the route that there is no free will, you could even achieve a Buddhist sort of complete equanimity – or you could just panic. Leave that aside for now.)

Five: Focus on process, not outcome. This follows on from the last lesson: you cannot control the outcome, but you can control the process. The happiest writers are those who take joy in the writing, not in the awards or the money. If you are stressed about outcomes, you will spend your whole life stressed, because outcomes are never satisfactory, and when we do get what we want, we immediately revise our expectations. If you just take joy in the simple act of work, and leave aside the results, much of the stress in your life will just vanish.

Six: Focus on the positives. I know people consumed by negativity, who wake up every morning angry and bitter that the world has not given them their due. They are the sole cause of their unhappiness. The world is full of things that can make you either happy or unhappy. Focus on the positives. This creates a virtuous feedback loop: you feel better and work better when you do this, and that creates even more joy for yourself. Cut everything that is toxic and negative out of your life, including people who are always cribbing. Life is too short to spend it sunk in despair. (Some might argue that it is because life is short that we spend it sunk in despair – but you cannot control that.)

Seven: Happiness lies in small things. What makes you happy? If you make it dependent on the fulfillment of big dreams, or the actions of others, you will be chasing an elusive goal. The biggest lesson I have learnt is that happiness lies in small things: the rich taste of strong coffee on a rainy day; a few moments of laughter with friends or loved ones; getting lost in a book, or transported by a song, or giving in to the magic of a film. Look around you, and I’m sure you will find many things that make you feel blessed. What else do you need? Why?

A Few Thoughts on Match Poker (and the Match IPL)

A couple of weeks ago, I took part in the Match IPL, playing for Goa Kings. The IPL here stands for Indian Poker League, and it follows a similar franchisee model as cricket’s IPL. I don’t play poker these days, having retired a couple of years ago, but a good friend, who was the mentor of this team, asked me to join, and I thought it would be fun.

Also, one important reason I joined was because this was a new format of poker, and I wanted to set myself the intellectual challenge of understanding it and optimising for it. When I was active, I was mainly a live cash game player, with decent tournament results in the Asian circuit. But this format of poker was different in key ways from both cash games and tournament poker.

The Format

Match Poker is a format played by teams. It’s explained here, but I’ll sum it up briefly. Let’s say there are seven teams with seven players each. They play each other on seven tables, with one player from each team on every table. Also, there’s one player from each team on every seat. So if you are on seat 1 on table 1, all the other tables with have players from other teams on seat 1. So every team will have a player on every table and every seat.

The idea is that the same hand is then dealt across tables. So all teams play the same hand from every position. At the end of every hand, a team’s chips across positions are added. The team with the best chip count gets 7 points, the next team gets 6, and so on down to 1. The chip count is reset, and all teams start the next hand equal in chips. At the end of a certain number of hands – 200 in the case of Match IPL – the team with the highest points (not chips) wins.

The Question of Luck

According to the guys who thought this up, this format ensures that “the luck element in conventional poker via the ‘random draw of cards’ has been removed.” In fact, the Match Poker guys claim that because this removes the element of luck, that makes poker a true sport. They are using this rationale to get Match Poker into the Olympics.

This claim is both moot and false. It is moot because of two reasons, one small and one big. The small reason is that all sports do have an element of luck, and that’s doesn’t make them less of a sport. The big reason is that even though poker has a greater quantum of luck than other sports, it is still a game of skill in the long run. What happens in any one hand is largely luck, but given a large enough sample size, skill will make the difference.

Also, the format doesn’t eliminate luck entirely because there is still much variance in the game. Let’s say you are the best player in the best team. You hit a set, and maximise pot size to get your opponent with top pair all in. No other team manages this. But then your opponent hits a runner-runner full house, as he will 2% of the time. Your team played the best here – but you will come last, and the team will get just one point. This is luck, and it doesn’t matter in the long run because it all evens out. But you need a decent sample size of hands for the skill to show. 200 hands – or even 2000, or perhaps 20,000 – is not enough.

How Match Poker is Different from Poker

Although Match Poker is set up like a deep-stack cash game, it is different in two fundamental ways. One, the unit of measurement here is not chips, but hands won. Two, you are not playing against your table, but against all the other players sitting on your seat (and dealt the same hand) at the other tables.

Let’s start with point one: chips don’t matter. Teams are not ranked according to how many chips they win in a session, but how many hands they win. This is the opposite of regular poker. A study on online sites showed years ago that the players who win the most hands lose the most money. A good cash game player will lose more hands than he wins, but will win more when he wins than when he loses, and be overall profitable.

An illustration of this is set-mining. I will always play 44 preflop, if there is just one raise, and I will hit my set only one in eight times. Seven times I don’t hit the set – but the one time I do, I make enough money to compensate for the times I folded. But in Match Poker, that doesn’t matter. Point two explains why.

Point two: You are not playing against the table, but against other players on your seat. Let me illustrate this with the set-mining example. Let’s say you get 44. You fold preflop, while you know all the other players on your seat will call. Seven out of eight times, they will fold on the flop, and because you saved that preflop call, you are first on your seat. One time you are last. Assuming ceteris paribus (all other teams and players get equal results in other seats), your team gets seven points seven times and 1 point once, for a total of 50 points in eight hands. All other teams get 24.3, splitting the remaining points. Thus, while set-mining with small pairs is profitable in regular poker, folding them preflop is profitable in Match Poker. It is +EV in this format, or as I’d call it, +MPEV.

The same logic holds for speculative hands like suited connectors. If other teams are likely to play those hands, and they lose more than 50% of the time, your profitable move is to fold. Ditto for chasing flush draws on a flop. Remember, pot odds and chip EV don’t matter, because this is not traditional poker. So a lot of moves that +EV in regular poker are -MPEV.

Three Rules

With this thinking in mind, I formulated three thoughts that I wanted my teammates to think before every hand.

1. I am not playing this hand against the table. I am playing it against other players on this seat.

2. What are the players on this seat likely to do with this hand?

3. Will I win this 50% of the time?

If you have a speculative hand that your opponents (the players on your seat) are likely to call, and that hand will lose more than 50% of the time, then it is +MPEV to fold it right away.

The Strategy

So here’s what the points system means. Teams get from seven to one points for every hand. The average is four. It’s all zero-sum, so teams win what other teams lose, and the amount won is equal to the amount lost. You might have one team winning chips on a given hand and six teams losing, in which case the team that lost the least gets six valuable points. You might have one team losing and six winning. But generally, if you fold every hand, you should get around 4 points per hand. (Simulations validate this, FWIW, with the limited data I had from a previous event.) The team that won Match IPL won with 821 points from 200 hands, or 4.1 per hand. Three out of seven teams finished above the mean (800).

Now, obviously, folding every hand does not win you the whole thing. What I considered the optimal strategy was to fold all speculative hands and medium-strength hands, and push all value hands hard, but to define these value hands tightly. Also, profit in poker comes not just from value hands but value spots. Position matters, and there is much value to be had if you can outplay people in a button-vs-blinds dynamic. I’ll come back to this later: our initial strategy was based on not thinking too hard about spots and focussing on hands.

Instead of playing 20% of hands, as we otherwise might, we decided to play 5%, fold 95% and see how it goes. We would fold all speculative hands, all medium-strength hands (like KJs in early position) and we would also fold strong hands in multiway pots where our chances of winning are less than 50%. (Remember, in this format, pot odds don’t matter. 50% is the magic number.) We even made a hand-chart by position for our players to memorise. This was a new format and we were all beginners here, so that made sense.

We started the tournament disastrously. There were 8 sessions of 25 hands each, and in our first session, we were hit by variance. The problem was Seat 1. Our man in Seat 1 made a series of correct folds, (correct in terms of MPEV), and those hands kept hitting. Sets hit. Random hands hit trips. Connectors hit straights. Hands that would win one in eight or 15 or 25 times kept hitting. And other teams played those hands, and got points for them. We got on the wrong side of variance, which happens. But with just 175 hands left in the session, could we recover?

We remained in the bottom half of teams through that first of two days, though I was topping the individual charts at the end of day 1. In fact, I topped the individual charts at the end of 5 sessions out of the eight, but fell short of winning the MPV at the end of it. And this brings me to the problem of the individual leaderboard.

I assumed that the individual leaderboard would be calculated the same way as the team leaderboard: they’d see how you did against the players on your seat, and assign between 7 to 1 points for each hand. I assumed I led for so long because I was playing optimally. But I later found that this was actually being decided on total chip counts – ie, just like normal poker. (They were assigning differential points based on how you outplayed guys on your seat, but it was still looking at overall chips, not hands won.) Thus, doing well in the individual charts had no correlation to how well you played for your team. One was calculated as per chips, the other was as per hands won.

Value Spots

So given our strategy, how the hell was I leading for so long? Well, this brings me to the issue of value spots. You not only have to play value hands strongly, but also keep your eyes peeled for value spots. When everyone folds to you on the button, that could be a value spot if the blinds are passive. If you are in the small blind against a button open, that could be a value spot if you get him to fold. These are also high-variance spots, but spots you could win more than 50% of the time, so you have to use your judgement. (In this format, btw, I’d define a Value Spot as a spot where you can win the hand more than 50% of the time, regardless of the actual hand you have.)

I took the liberty of searching for such spots against the guy on my left, an excellent cash game reg who would attack my button from his small-blind. I couldn’t simply fold all my buttons, because players on my seat would probably win there a fair bit. So I had to play back at this guy. We had a 3b-4b dynamic going on, and in one hand I stacked him with Q7s against 96. (It went raise-3b-4b-flat, flop came Q96, with 7 on the river. Standard spot.) In another hand on the second day, in another 3b-4b spot, I took an all-in call on the river with A-high, in a spot where he would check-call all showdown hands because I was guaranteed to bluff. His range was polarised, as I thought, but he happened to be bluffing with bottom pair and I lost. The call was correct anyway, because once I have put in enough chips to ensure that I am last on my seat, there is nothing to be lost going all the way. (Ceretis Paribus, again.)

Again, the key rule with value spots is simply whether you’ll win more than 50% of the time, and what your opponents do doesn’t even matter here, because you’ll either get 7 points or 1. You beat the average by winning more than 50%.

So, the optimal strategy is to fold a lot, including all speculative and medium-strength hands, push all value hands hard (if you get coolered, so will everyone on your seat) and use your judgement for value spots. We started off unlucky, some panic set in, and we ended fifth. I slipped off first place in the individual leaderboard, ending 11th, but that was a chip-count thing. (If they calculated that the same way as team points, I’m sure I’d be higher.)

What was worse was that the winning team, after getting lucky on day 1, followed my strategy on day 2 and were thus uncatchable. One of them mentioned that they looked at my hand histories at the end of day 1 as I was leading the individual leaderboard, and their chief strategist is a close friend to whom I had boasted that I had cracked the optimal strategy. They didn’t necessarily get it from me, and this stuff isn’t rocket science to figure out. The fact that they shifted to my strategy on day 2 (one of them folded 24 out of 25 hands in one session, I heard) is intellectual validation that my ideas were correct – though I would have preferred monetary validation. SAD!

(No other team seemed to have figured out the strategy, by the way, with the team that came second playing a LAG style that is perfect for deep-stack cash games but sub-optimal for this format.)

For what it’s worth, I don’t intend to play this again, which is why I am being free with my thoughts here. I expect all the teams to read this, though, thus adding a metagame element, and making their subsequent search for value spots that much more fascinating.

The event was glitzy, with drone cams and so on, so watch it on MTV if you can. I haven’t seen it yet, and I am sure that if I do, I’ll be even more determined to resume my Keto diet.

Also read

The archives of Range Rover, my old poker column for the Economic Times.

The Five Commandments of Poker, an episode of the podcast Mera Kaam Poker that features me.

Shruti and DD at the Bastiat

I’m overjoyed that two good friends, Shruti Rajagopalan and Devangshu Datta have made the shortlist for the 2017 Bastiat Prize for Journalism. I won this in 2007 and 2015, and this is the first time two Indians have been shortlisted. I hope one of them can bring another Candlestick home.

What makes me especially proud is that they were nominated for pieces published in Pragati, the online magazine I relaunched as editor early this year. What better validation could there be that we are in the right direction?

Shruti wrote a magisterial eight-part essay series for us on The Right To Property that got her this nomination. Devangshu wrote three parts of a four-part series on victimless crimes. You will find them here. And here’s the editorial with which I relaunched Pragati.

The Bastiat Prize celebrates the same values that Pragati set out to enshrine, so this shortlist makes me especially happy. But these two were close friends before the magazine existed, and that’s the reason I’m so excited today.

A Few Thoughts on Limericks

The 50th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India, appeared today. I might be the only person in the world who gets paid for writing limericks, and the credit for this section has to go to Neelam Raaj, the editor at the Sunday ToI who saw me messing around with limericks on Twitter and asked me to write some for their columns page. I’ve never seen any other newspaper in the world run verse on their edit page, so this is a bold conception to begin with, and would never have occurred to me.

Until then, I’d been doing it for fun, but once you start getting paid for it, and published on a platform like that, you need to take it seriously. No guidelines existed, though: many folks—including Shakespeare—had tried the form, and a handful (like Ogden Nash) did some amazing work in it, but limericks have been more lighthearted bar-room amusement than a serious form. I would have to be my own guide. So, within a few weeks, I formulated the following set of three rules for myself.

1. The basic form of a the limerick must be sacrosanct. A limerick is not just a rhyme scheme of aabba, but also a syllable scheme of 99669. (One can do TT66T or 99559, but this pattern is important for the musicality that distinguishes limericks) I didn’t care about this when I would write them for Twitter, but decided that it was important to be disciplined about this.

2. The limerick should contain normal sentences with perfect grammar. They should not only be musical when read aloud, but also normal sentences that would not sound not out of place in conversation. As a nod to one poetic convention, I capitalise the beginning of each of the five lines. But the grammar otherwise is as it would be in prose. (This capitalisation is also necessary because it appears in a narrow column on the ToI page,and the longer lines sometimes get broken in two. The capitals indicate where each of the five limerick lines begin for someone who is reading it for the first time and may not be familiar with the form.)

3. The content of the limerick has to be worth putting out there even as prose. That is, the limerick needs to say something that would be worth saying even if it hadn’t been crafted into this form. A limerick should never have the sole purpose of saying, ‘Look Ma, I can rhyme!’ Indeed, guidelines 1 and 2 above are the easy part. So whether it’s a quip or satire or serious commentary, it should stand on its own, outside the form.

I’ve attempted to use this form not just for light-hearted quips, but also for serious commentary. Sometimes, I’ve blown it, especially with regards to 3, but at least I know what I don’t like about those. Equally, I’ve sometimes messed it up even after getting all three guidelines right because I chose a non-musical sentence construction, like the time I put three stresses one after another. (This is called a Molossus.) Iambic works best, and when one deviates, one should know why.

So yeah, a lot of effort goes into making it look easy. That said, writing verse is a de-stresser for me, and thus the opposite of any other writing I do. Rhyme & Reason is a work on progress, so I hope it keeps getting better. You can check out the archives here.

The Return of Pragati

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

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

Watch that space!.

The Landscape of Freedom in India

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Seen and the Unseen: the lens that Bastiat made

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

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

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

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

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

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

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

The Loneliness of the Long-Distance Libertarian

Exactly one year ago, on November 17 2015, I sat opposite Steve Bannon in his NYC office as he asked me if I’d be interested in starting Breitbart India. I had won the Bastiat Prize (for the second time) a few days before, and a lady who was one of the funders of Brietbart, and of certain leaders in the Republican Party, got in touch with the organisers to ask if she could meet me. (It’s not fair of me to name her because she’s not really a public figure.) She’d been impressed by my speech, and thus this meeting.

I didn’t know much about Breitbart, though I’d glanced at it. I did not know they were alt-right—I didn’t even know the term then. All I knew was that they were a conservative site, and that was enough for me to say no. I was a libertarian, I said, pro-immigration, pro-gay rights, and it didn’t fit. Furthermore, I advised them that there was no point in Breitbart setting up in India.

‘It’s incongruent,’ I said. ‘There is no analog of American conservatism in India. The Indian right is driven by bigotry and nativism, with no deeper guiding philosophy behind it. [Consider the irony of these words.] You will not find any Burkean conservatives here. Don’t come.’

‘Well, we think that Modi is India’s Reagan,’ said Bannon.

I laughed, and told them that Modi was no Reagan. I explained why he was a statist, top-down thinker, someone who would only expand the power of government over common citizens, more like the Leftist Indira Gandhi than Reagan. They nodded. The thrust of my decision to not consider the option they were offering me, though, was that I was libertarian, not conservative.

The lady did try her hardest to convince. ‘I’m actually a libertarian,’ she said, and then launched into a diatribe on gay marriage, saying, ‘I don’t understand why they ask for marriage. We gave them so much. What’s wrong with civil unions?’

A little later she said again, ‘I’m actually a libertarian.’ And then launched into a diatribe against immigrants in America, and how the cultural fabric of Europe was being torn apart by their immigrants. It was kind of funny, though at the time I was more flattered than amused. Still, I had to say no.

Bannon is now the right-hand man of someone who has really small hands and will be the most powerful man in the world starting January. Now that I know more about the alt-right, that thought is scary. I’m still glad that I didn’t explore their offer further. I could have been somewhat richer, maybe even influential, if I’d taken it up—but I sleep well at night now, and that’s what matters.

I must point out here that my meeting with them was very pleasant, and they were warm and courteous despite my not coming on board. Also, unlike many from across their aisle (whom I deplore quite as much), they were intellectually honest. They had their priors and their first principles, and everything they said and did stemmed from there. One may disagree with those ideas, even find them repulsive, but they’re not hypocrites.

In another context, I also believe that no matter what happens, I’ll always be anti-establishment. There have always been but two political philosophies, David Boaz once wrote, liberty and power. Everyone in politics fights for power; every libertarian must fight for individual freedom. Until Modi became PM, I was the fiercest critic of the Congress and their ruling family, who kept India poor for decades longer than they should have. When Modi took over, I expressed cautious optimism at first, but get threatened almost daily now for my vehement opposition to Modi. (He is right-wing on social issues, left-wing on economics, and thus an enemy of freedom in every respect.) Whoever is next, I know, with a sigh, that I shall be against them too.

Sometimes, this makes me feel crushingly alone. I often joke that there are only three true libertarians in India, a number I have modified to two because one of them is not unequivocally against the social engineering of Modi’s demonetisation. (My friend Barun Mitra is the other true libertarian, my fellow holder of the flame!) If I am to be true to myself, I will always remain on the outside, ridiculed by everyone else, condemned to the eternal vigilance that Jefferson spoke of, which will always be the cross of libertarians to bear.

Of course, I also have my other passion, writing fiction, to sustain my spirit. I hope you didn’t read my shitty first novel. I hope you will read the one I’m writing now.

Lament For Another World

Mike Klein of Chess.com, reporting on the US Chess Championships, went around asking the participants about Prince.

When I spoke with 12-year-old NM Carissa Yip before the round, she’d never heard of the pop star. I said, “He was big in the 80s and 90s, and one of those stars who went by only one name, like Madonna.”

Yip: “Who’s Madonna?”

This happens more and more to me when I talk to young people these days. They make me feel like I am living in a different age—not just with regard to music and films and books, but also politics and economics. It has been speculated that so many young people support Bernie Sanders in the US because they grew up after the breakup of the Soviet Union, and have no idea of the horrors of socialism. Similarly, in India, I find that many young people who were born in the 90s don’t have the same kind of visceral understanding of how Fabian Socialism crippled us because they were born too late for that. I was an 80s kid, of course—and it’s taken me decades to come to the terms with the fact that I’m not a kid any more.

My musical tastes happen to run older than my generation. Bob Dylan and Van Morrison are still banging on. They’re so clearly from another world that it might as well be fictional, and I might as well be schizophrenic.

Tolstoy’s Chicken and the Expanding Circle

This is the 24th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

I’m a devout carnivore, but a decade-and-a-half ago, I turned vegetarian for a year. My reasons were moral, and best illustrated by a story about the Russian novelist Leo Tolstoy. In his later years Tolstoy was a vegetarian, and one day he invited his aunt home for dinner. She said she’d come but insisted, ‘I must have chicken!’ Tolstoy paused at this condition, but then agreed to provide the bird. The lady duly came home, gup-shup happened, and then when they moved to the dining table, she found a live chicken on her chair, and a carving knife alongside.

‘We knew you wanted chicken,’ Tolstoy said, ‘but none of us would kill it.’

The story, as I know it, ends there—but I can’t imagine Tolstoy’s aunt ate Tolstoy’s chicken. She must have been rather exasperated, and Tolstoy was indeed a bit of a spiritual crackpot towards the end of his life. But the story of the chicken resonates with me. It demonstrates our denial when it comes to food. In our mind, there is a screen between the meat that we eat and the animals that are killed for that meat. We taste the flavour and enjoy the texture, but we behave as if the butchery never happened. We pretend that the chicken on the plate and the chicken on the chair are different creatures. But of course they are not. Tolstoy’s flapping, squawking chicken is Varma’s Chicken a la Kiev—and so, many years ago, I gave up meat.

Even if I later explained my subsequent regression by talking about recurring headaches and how my body was too used to meat to give it up, deep down I know that’s just a rationalisation. I didn’t have the strength of character to carry through on my resolve. I dreamed of luscious, succulent kababs, and ignored the screaming of the lambs.

The guilt and dissonance I still occasionally feel may soon be moot, though. Some fine scientists, much to be praised for their noble endeavours to better humankind, have recently found a way to grow meat in the labaratory, without a sentient creature being involved. Within a couple of decades, I predict, you will be able to eat a medium-rare steak that is, in every way, the same as any you would get today, except for the fact that no animal will be harmed in its making. The organ it will come from would have been manufactured a la carte, and would never have been part of a living creature. Tolstoy’s aunt’s grilled chicken leg would have nothing to do with Tolstoy’s actual chicken.

On that note, at the turn of this new year, let me tell you about a concept propounded by a gentleman named WEH Lecky way back in the 19th century: The Expanding Circle. Lecky posited that there is a circle of beings who qualify for our moral consideration as equals, and that this circle has tended to expand through human history. In prehistoric times, we might have regarded just our family or our tribe as being part of that circle, and everyone else would have been ‘the other’. Other tribes, then other nations, other races, and so on. But through time, that circle expanded. It began to include other communities and races, and eventually included all of humanity itself. It is this expanding circle that led to the end of slavery, to women being allowed to vote, to the great immigrant nations across the world, like the US of A. And this circle is still expanding.

The philosopher Peter Singer, in fact, argues that one day animals will be within this circle. He believes that one day we will be as aghast at meat-eating as we are today when we look back at slavery or women not being allowed to vote and so on. For a person in the 23rd century, looking back at the 21st, it will seem as astonishing that we once killed animals for food as it does to us that the great apostle of liberty, Thomas Jefferson, once kept slaves.

At this point, it is worth considering why the expanding circle expands. To my mind, and I say this with sadness, the reasons are instrumental. The circle expands because incentives change. The two main factors driving this are Trade and Technology.

Economics teaches us that every human being can provide value to this world (comparative advantage) and that voluntary trade always leaves both parties better off, leading to a positive-sum game. If ‘The Other’ is working hard to improve our lives, and it is in our interest to improve theirs, for that is how we profit, then the circle is bound to expand to include them. Immigration is great not just because of moral reasons, but because it helps societies and economies flourish. The larger our circles are, in whatever sense, the better we do.

Technology also plays its part. Until recently, half of humanity – the female half – was deeply constrained because that’s just how the comparative advantage game played itself out. Housework and raising large families took so much time that it made economic sense for family units to specialise, and for women to stay at home and for men to go out and be bread-earners. This got codified in social norms, and thus women got forced into subsidiary roles. That changed in the 20th century. Firstly, household technology freed up huge chunks of women’s time. Secondly, birth control gave them, well, more control over their bodies. There is much to be said for good intentions, but women’s empowerment really happened because of technology, and so hurray for technology.

And hurray for technology one more time, because if our circle expands to include animals, it will do so not because of the benevolence of meat eaters around the world, but because growing meat may no longer require the killing of animals. And here, consider the consequences of all animal products being manufactured without animals being involved. The incentives around rearing farm animals will change entirely. And so one day, cows and pigs and chickens and goats may go extinct not because we ate them, but because we stopped. The irony is delicious.