Cultural reflections

My latest for the Hindustan Times, "Can capitalism and morality be friends?"

2012-02-03T22:01:00.002-05:00

http://www.hindustantimes.com/News-Feed/ColumnsOthers/Can-capitalism-and-morality-be-friends/Article1-806331.aspx

A video with highlights of the Caravan Conversation on FDI is now live on India Ink's webpage!

2012-01-13T03:36:00.000-05:00

http://india.blogs.nytimes.com/2012/01/13/the-retail-market-assessing-the-governments-plan/

I'll be part of a panel discussion on FDI in retail in India on Bombay, this coming January 2nd. Please see the poster (URL below) for details.

2011-12-29T02:00:00.002-05:00

http://twitpic.com/8030bj

My latest for the NYT's India Ink, "Four reasons why Shashi Tharoor is wrong" that India should move to a presidential system.

2011-12-20T02:16:00.002-05:00

http://india.blogs.nytimes.com/2011/12/20/four-reasons-why-shashi-tharoor-is-wrong/

My latest piece, for Business Standard, on "why good economics is bad politics."

2011-12-16T22:25:00.000-05:00

http://www.business-standard.com/india/news/vivek-dehejia-when-good-politics-is-bad-economics/458769/

My latest piece, in the Hindustan Times, "The world's not so flat."

2011-12-08T12:15:00.002-05:00

http://www.hindustantimes.com/ViewsSectionPage/ColumnsOthers/The-world-s-not-so-flat/Article1-779690.aspx

Vikas Bajaj in the NYT's India Ink cites my FT article on the "original sin" of 1991 and how it relates to the failure to accomplish economic reform in India.

2011-12-06T04:30:00.002-05:00

http://india.blogs.nytimes.com/2011/12/06/fdi-in-retail-another-reform-by-stealth-failure/

Ben Arnoldy of the Christian Science Monitor talks to me about corruption.

2011-12-02T09:01:00.001-05:00

http://www.csmonitor.com/World/Asia-South-Central/2011/1201/How-corrupt-is-India-It-s-getting-worse-index-says

My conversation with economist Pravin Krishna on the relationship between trade liberalization and inequality in India [video].

2011-11-25T20:49:00.001-05:00

http://vimeo.com/32691156

My very personal reflection on the third anniversary of 26/11, in FT

2011-11-25T10:18:00.000-05:00

http://www.ft.com/intl/cms/s/0/c41ed6c6-1735-11e1-b00e-00144feabdc0.html#axzz1ejKv0bpO

My take on the growth vs. redistribution debate, in today's Hindustan Times.

2011-11-17T23:37:00.002-05:00

http://www.hindustantimes.com/News-Feed/ColumnsOthers/Growing-slow-but-steady/Article1-770686.aspx

My latest piece for India Ink, on whether India's environmental regulations have been effective, and on the changing global perception of the problem of climate change

2011-11-09T01:37:00.002-05:00

http://india.blogs.nytimes.com/2011/11/09/the-developing-world-leading-on-climate-change/

My latest for India Ink, "Has Globalization Helped India's Poor?"

2011-10-07T08:03:00.001-04:00

http://india.blogs.nytimes.com/2011/10/07/has-globalization-helped-indias-poor/

My first contribution to the New York Times' new India Ink, dissecting the India growth story.

2011-09-13T08:24:00.001-04:00

http://india.blogs.nytimes.com/2011/09/13/the-india-growth-story-glass-half-full-or-half-empty/

A very small selection of books on India and globalization, intended for students and others who may be interested.

2011-09-12T13:48:00.000-04:00

Of the literally scores of recent books on India in a globalized world, here's a very small selection to give you some background. Note: this list is intended for the student or reader without extensive prior knowledge of India, not for the expert who is looking for specialized readings.

Two important books by academic economists on India's economic reforms:

Jagdish Bhagwati, India in Transition: Freeing the Economy.

Arvind Panagariya, India: The Emerging Giant.

A couple of books from a few years ago for the general reader giving a flavour of India's economic reforms and the impact of globalization on India:

Gurcharan Das, India Unbound.

Pavan K. Varma, Being Indian.

An important recent book on India's foreign policy, which touches on globalization and economic issues as well:

David M. Malone, Does the Elephant Dance?: Contemporary Indian Foreign Policy.

Some more recent books on India in a globalized world, all well worth looking at:

Edward Luce, In Spite of the Gods: The Rise of Modern India. By the former Financial Times correspondent in India, this book has been widely hailed.

Shashi Tharoor, From Midnight to Millennium and The Elephant, The Tiger, and the Cellphone. These two books by a prominent former UN official and current Indian politician make great reading.

A superb recent book on India intended for the general reader, which gives great background. A special feature is the original and important analysis of dynastic politics in India's parliamentary democracy.

Patrick French, India: A Portrait.

Two other recent books which give a great snapshot of contemporary India:

Anand Giridharadas, India Calling: An Intimate Portrait of a Nation's Remaking.

Siddhartha Deb, The Beautiful and the Damned: A Portrait of the New India.

The New York Times launches "India Ink," its first-ever country-specific blog today. I'm one of the writers!

2011-09-09T11:59:00.000-04:00

http://india.blogs.nytimes.com/

Ben Arnoldy in the Christian Science Monitor speaks to me on corruption in India.

2011-09-08T10:42:00.002-04:00

http://www.csmonitor.com/World/Asia-South-Central/2011/0908/Indians-rally-against-a-boom-in-corruption

A globalization reading list, compiled and annotated by my colleague and co-author, James Dean, slightly updated and amended.

2011-09-06T17:49:00.000-04:00

Books on globalization

Four pre-meltdown classics:

Joseph Stiglitz, Globalization and Its Discontents, New York and London: W.W. Norton & Company, 2002.

Jagdish Bhagwati, In Defense of Globalization, New York: Oxford University Press, 2004.

Martin Wolf, Why Globalization Works, New Haven: Yale University Press, 2004.

Thomas Friedman, The World is Flat, 2005 and/or his earlier book, The Lexus and the Olive Tree.

All four are “pro-globalization”, although Stiglitz has many nuanced warnings. His book was important because in 2002 he had just got the Nobel Prize and that added credibility to his critique. He was perhaps the first highly respected mainstream economist to express doubts about the unambiguous benefits from all aspects of globalization.

Wolf is not an academic economist but he is perhaps the world’s top economic journalist. He writes for the Financial Times.

Friedman, who writes for the New York Times, is an equally well-respected journalist but not as sophisticated about economics as is Wolf.

A sample of post-meltdown books:

The books below are a small sample of the plethora of books related to globalization that have been written since the global financial meltdown of 2007 – 09.

Nouriel Roubini and Stephen Mihm, Crisis Economics: A Crash Course in the Future of Finance. Roubini is an NYU economics professor who came closer to predicting the crash than anyone else and is now a media celebrity.

Daniel Altman, Outrageous Fortunes.

Gordon Brown (ex-PM of Britain), Beyond the Crash.

John Cassidy (economics columnist for The New Yorker) How Markets Fail.

Bruce Greenwald and Judd Kahn, Globalization.

Paul Krugman, The Return of Depression Economics. Krugman wrote this book before the meltdown and partially predicted it. Read the revised edition, revised after the meltdown. Krugman is a Nobel prize winner, Professor of Economics at Princeton, and columnist for the New York Times.

Simon Johnson and James Kwak, 13 Bankers.

Carmen Reinhart and Kenneth Rogoff, This Time is Different. This is the definitive empirical study of financial crises, drawing from decades of meltdowns and using state-of-the-art econometrics.

Vietra Rivoli, The Travels of a T-Shirt in the Global Economy. Light-hearted but very instructive.

Joseph Quinlan, The Last Economic Superpower. If you are interested in the broad political and economic implications of 21^st century globalization for the US, read this.

Stephen Roach, The Next Asia. By one of Wall Street’s gurus.

Robert Schiller, Irrational Exuberance. This book became a best seller because it predicted the US housing crash that triggered the global financial crisis in 2007. Schiller is Professor of Economics at Yale and best known for his work on “behavioral” economics, that draws heavily from psychology.

Joseph Stiglitz, Freefall. This is an excellent and readable analysis about what brought down global financial markets in 2007 -09, grounded in the economics of imperfect information that got Stiglitz the Nobel Prize.

Michael Lewis, The Big Short. Short’s book is hilarious. It traces the collapse of Wall Street’s mortgage-backed-securities market, that spread globally, by focusing on half a dozen major players. It is not only very funny and readable, it is the best non-technical explanation of the financial derivatives markets I’ve ever read.

Another recent book by Michael Lewis is a collection of short essays about financial crises:

Michael Lewis, Panic.

And from a noted academic critic of globalization, a recent book:

Dani Rodrik, The Globalization Paradox.

An important book by a former IMF chief economist on the financial crisis and aftermath:

Raghuram Rajan, Fault Lines.

Finally, a book that is not exclusively about globalization or financial meltdown, nor is it written by an economist. But it makes a powerful economic argument for optimism about human progress and prosperity: gains from trade, especially international trade.

Matt Ridley, The Rational Optimist. Ridley wrote the best selling book, Genome. He writes brilliantly about human evolution and genetics – and now, economics.

Jagdish Bhagwati writes an open letter to President Obama to "step up" on trade and bring the Doha round to a conclusion. I'm one of the signatories.

2011-09-03T09:17:00.001-04:00

http://www.fox4kc.com/news/politics/sns-rt-us-trade-dohatre7814so-20110902,0,907139.story

My essay on novelist Dashiell Hammett in today's Sunday Guardian (Delhi & London).

2011-08-14T00:42:00.002-04:00

http://www.sunday-guardian.com/bookbeat/the-unchallenged-doyen-of-noir-a-detective-fiction

My take on the Schadenfreude in the Indian reaction to the London Riots.

2011-08-12T05:09:00.001-04:00

http://www.theindiasite.com/when-a-city-goes-up-in-flames/

My latest, "Is India heading into a middle income trap?", for FT's Economists' Forum

2011-08-04T04:04:00.001-04:00

http://blogs.ft.com/economistsforum/2011/08/is-india-heading-into-a-middle-income-trap/#axzz1TxyaqFLL

My IHT piece on "the robber barons" is quoted in Bloomberg Views.

2011-08-04T00:34:00.001-04:00

http://www.bloomberg.com/news/2011-08-03/india-s-frustration-with-corruption-boils-over-world-view.html

Bloomberg picks up my piece in FT on Indian reforms

2011-07-28T01:37:00.001-04:00

http://www.bloomberg.com/news/2011-07-26/20-years-later-india-s-transformation-is-incomplete-world-view.html

I'm cited in the BBC's South Asia Blog - recent FT piece

2011-07-26T23:48:00.001-04:00

http://www.bbc.co.uk/news/world-south-asia-14300534

Quoted in the UK's Independent newspaper on news reports that Amazon will be setting up in India

2011-07-26T22:09:00.000-04:00

http://www.independent.co.uk/news/business/news/ecommerce-boom-tempts-amazon-to-test-indian-market-2326442.html

My piece on Bombay/Mumbai, in the Express Tribune (Pakistan)

2011-07-25T13:11:00.002-04:00

http://tribune.com.pk/story/217052/bombay-to-mumbai-the-death-pangs-of-a-great-city/

My new piece for the Financial Times: "Don't blame 'neoliberal' reforms for corruption"

2011-07-25T03:39:00.000-04:00

http://www.ft.com/intl/cms/s/0/e4660ef4-b68c-11e0-ae1f-00144feabdc0.html#axzz1T6DCqbJy

My interview with CBC's "As It Happens" on the Mumbai terror blasts. Archived in audio. Click on "Part 2" to listen.

2011-07-14T23:01:00.002-04:00

http://www.cbc.ca/asithappens/episode/2011/07/14/thursday-july-14th-2011/

My new piece in the Hindustan Times on "why no reforms in India", using the median voter theorem approach

2011-07-07T13:10:00.000-04:00

http://www.hindustantimes.com/editorial-views-on/columnsothers/Why-no-reforms/Article1-718537.aspx

My new piece in India's Financial Express newspaper, "Is the PM really an economic reformer?"

2011-07-07T03:59:00.000-04:00

http://www.financialexpress.com/news/is-the-pm-really-an-economic-reformer/813789/0

My new piece in India's Business Standard newspaper - where did economic reforms run aground in India? No intellectual foundation.

2011-06-25T10:22:00.001-04:00

http://www.business-standard.com/india/news/vivek-h-dehejia-triumphopportunism-over-principle-/440405/

My take on civil society, the NAC, and an "unelected" PM in India's Firstpost.com

2011-06-15T10:08:00.001-04:00

http://www.firstpost.com/politics/to-gain-legitimacy-nacs-members-need-public-vetting-26247.html

My piece on "Bombay to Mumbai" at Patrick French's India Site!

2011-06-13T23:47:00.002-04:00

http://www.theindiasite.com/from-bombay-to-mumbai-the-death-pangs-of-a-great-city/

My piece in today's Indian Express, on "Politics as showbiz"!

2011-06-02T19:08:00.001-04:00

http://www.indianexpress.com/news/politics-as-showbiz/798751/

My new piece in The Atlantic on India's uncertain future!

2011-06-02T07:05:00.000-04:00

http://www.theatlantic.com/international/archive/2011/06/uncertain-future-for-rapidly-growing-india/239781/

My next piece exploring corruption, inequality, and growth, in today's FT's Economists' Forum!

2011-05-09T08:32:00.001-04:00

http://blogs.ft.com/economistsforum/2011/05/what-next-after-the-robber-barons/

I'm quoted in Australia's leading daily!

2011-04-13T22:12:00.001-04:00

http://www.theaustralian.com.au/business/brics-to-push-for-positions-on-imf-and-world-bank/story-e6frg8zx-1226038728375

My op-ed in the International Herald Tribune

2011-04-13T09:13:00.000-04:00

My op-ed in the International Herald Tribune (on the web today, April 13, in print tomorrow worldwide), "After the Robber Barons":

http://www.nytimes.com/2011/04/14/opinion/14iht-eddehejia14.html

My new piece "How relevant are Gandhi and Jinnah today?" for Pakistan's Express Tribune

2011-04-05T14:11:00.002-04:00

http://tribune.com.pk/story/143489/how-relevant-are-gandhi-and-jinnah-today/

Here's the HTML version of my latest piece!

2011-03-07T22:27:00.001-05:00

http://pragati.nationalinterest.in/2011/03/reforms-win-elections/

My latest for Pragati!

2011-03-07T08:55:00.000-05:00

http://pragati.nationalinterest.in/wp-content/uploads/2011/03/pragati-issue48-mar2011-communityed.pdf

Scroll down to find my piece!

My piece in today's Financial Times (FT.com) on inequality, corruption, and development

2011-02-25T06:29:00.000-05:00

http://www.ft.com/cms/s/0/7a0ebf68-40af-11e0-9a37-00144feabdc0.html#axzz1ExqoWCDT

Video of my interview with Mani Shankar Aiyar

2011-01-24T22:22:00.000-05:00

http://vimeo.com/19155434

IIC seminar video now available!

2011-01-24T22:09:00.001-05:00

http://vimeo.com/19135366

My new piece for INI, on inflation vs. relative price

2011-01-17T08:09:00.000-05:00

http://broadmind.nationalinterest.in/2011/01/on-inflation-vs-relative-price/

Event announcement!

2011-01-14T01:48:00.002-05:00

For those of you in the National Capital Region in India, come and take part in an interactive roundtable seminar on globalization. Our themes include: India in the global economy, the rise of the BRICs, and economic reforms in India.

When: 20th January 2011, 5.30 - 7.00 pm

Where: India International Centre, New Delhi, Conference Room I (above the library).

Speakers: We have an eminent panel including Shri Nitin Pai of the Takshashila Institution, Chennai; Professor Ashutosh Varshney, Brown University, USA; Shri Paranjoy Guha Thakurta, journalist and documentary filmmaker, New Delhi. Shri Mani Shankar Aiyar, M.P. (Rajya Sabha), former Union Cabinet Minister, is also invited. I shall moderate.

For those unable to be there, the event will be videotaped, and posted to my Vimeo page in due course.

For further updates, please follow me on Twitter @vdehejia.

My latest for Pragati, on the right's ideas deficit

2011-01-07T08:30:00.001-05:00

http://pragati.nationalinterest.in/2011/01/the-rights-idea-deficit/

My latest for INI on the use and abuse of language

2011-01-05T05:56:00.000-05:00

http://broadmind.nationalinterest.in/2011/01/the-use-and-abuse-of-language/

Everyday Economics: Why agree on a fixed taxi fare when they have meters?

2011-01-05T05:03:00.002-05:00

Having spent this past week in Bangalore, India, I've been getting around by auto-rickshaw -- you've seen them, right? The three-wheeled contraptions that are ubiquitous in Asia as a convenient mode of transport and substitute for a taxi. Small and nimble, they work their way through chaotic traffic and get you to your destination faster than your Porsche (if you have one -- I don't), which would be mired in traffic from the moment you left home.

Now, the Bangalore variety of these autos have meters, snazzy new ones in fact. Fact is, most drivers and most passengers prefer to negotiate a fare in advance rather than go by the meter. I asked myself why. Several possibilities presented themselves. Let me know what you think and if there are others you could add.

1. Eliminate nuisance and minimize transaction costs. At flag drop, the meter starts at 17 rupees. A short ride will cost you 17, or 21, if it the meter has "clicked" once. Most people don't carry small change -- in fact coins are being phased out in India, and even a one rupee coin is hard to come by. So for short fares you generally just settle on twenty rupees.

2. For longer fares, I can think of a couple of explanations. The first is that, assuming a well-informed passenger as well as driver, you know roughly what the fare will come to for a trip you take often. For instance, from where I'm staying to the snazzy new Mantri Mall (I go there purely for sociological research, if you're interested), I know from past experience taking metered rides that it costs anywhere from ninety to 110 rupees. So the driver and I normally settle on a nice round figure in between, one hundred. This eliminates the driver's incentive to, say, take a circuitous route, or deliberately busy streets, to try to ring up the metered fare.

3. Another possibility: For longer fares, agreeing on a fare in advance eliminates uncertainty which is bad for both driver and passenger. For instance, a fare which on average is a hundred rupees, might be ninety if traffic is unusually light or 110 if unusually heavy. By agreeing on a hundred in advance, assuming both driver and passenger are risk-averse, both come out ahead.

So why would anyone go by the meter? If you don't know your way around the city, you might prefer a meter, but then you run the risk of being fleeced by the driver. Of course, he could also fleece you by asking for an excessively high fixed fare in advance. Not sure about this one. Any thoughts?

Vivek H. Dehejia, economist and writer, comments on the politics of economics in India. You may follow him on Twitter @vdehejia.

My latest at INI Broad Mind, on Jairam Ramesh's environmental activism

2011-01-03T23:43:00.001-05:00

http://broadmind.nationalinterest.in/2011/01/jairamomics/

My latest for INI on why Manmohan Singh is a good economist but a bad politician

2010-12-29T06:35:00.001-05:00

http://broadmind.nationalinterest.in/2010/12/manmohanomics/

My new post at INI on the 2G telecom scam in India using some simple economics

2010-12-28T06:04:00.001-05:00

http://broadmind.nationalinterest.in/2010/12/rajanomics/

My new post at INI on "onionomics" in India

2010-12-21T11:42:00.000-05:00

http://broadmind.nationalinterest.in/2010/12/onionomics/

My new post at INI on why the Indian government hasn't fallen

2010-12-12T23:19:00.001-05:00

http://broadmind.nationalinterest.in/2010/12/why-hasnt-the-government-fallen/

My take at INI on Jairam's Cancun tango

2010-12-09T23:53:00.001-05:00

It may be found here:

http://broadmind.nationalinterest.in/2010/12/jairams-cancun-tango/

My new piece at INI blog

2010-12-09T13:39:00.001-05:00

My new piece on the current political situation in India:

http://broadmind.nationalinterest.in/2010/12/who-will-win-this-game-of-poker/

My new piece on the unfinished reform agenda

2010-12-06T04:44:00.002-05:00

In the December issue of Pragati, a foreign policy magazine in India, I have a new piece on the unfinished economic reform agenda in India. Here's a link to the HTML version:

http://pragati.nationalinterest.in/2010/12/where-are-the-second-generation-reforms/

My reaction to Seoul: the missing link in the global economic system

2010-11-13T15:10:00.001-05:00

http://www.periscopepost.com/2010/11/the-missing-link-in-the-global-economic-system/

Globalization after the Crisis: Vivek Dehejia in Conversation with James Dean

2010-11-09T13:49:00.001-05:00

http://vimeo.com/16665147

My latest, check it out!

2010-11-08T06:10:00.000-05:00

http://www.periscopepost.com/2010/11/where-you-stand-depends-on-where-you-sit-the-curious-case-of-indian-economic-reforms/

My analysis of the unfinished foreign policy agenda

2010-11-06T08:21:00.000-04:00

http://www.periscopepost.com/2010/11/unfinished-business-resetting-indias-foreign-policy/

Setting Tom Friedman straight on India's economic reforms

2010-11-04T12:25:00.001-04:00

http://www.periscopepost.com/2010/11/tom-friedman-on-indias-economic-reforms-setting-the-record-straight/

My latest for Periscope Post, on India's unfinished reform agenda

2010-11-01T08:06:00.001-04:00

http://www.periscopepost.com/2010/10/indias-economic-reforms-a-case-of-unfinished-business/

My latest for PP, on the rise of the BRICs!

2010-10-26T08:21:00.001-04:00

http://www.periscopepost.com/2010/10/the-rise-of-the-brics-and-the-future-of-globalization/

Some new stuff

2010-10-24T09:30:00.001-04:00

My latest for PP, "The Fallacy of the 'Free Market'":

http://www.periscopepost.com/2010/10/the-fallacy-of-the-free-market/

My latest for NRI, "Multicultural Mayhem":

http://www.the-nri.com/index.php/2010/10/comparison-of-multiculturalism-between-india-and-west/

In the news again!!

2010-10-11T09:33:00.000-04:00

http://www.outlookindia.com/article.aspx?267400

I'm quoted in Outlook magazine in India - check it out!!

2010-10-02T18:35:00.000-04:00

http://www.outlookindia.com/article.aspx?267316

My take on Ayodhya verdict in the PP -- check it out

2010-09-30T17:39:00.001-04:00

http://www.periscopepost.com/2010/09/a-victory-for-secular-india/

My latest blog on India - now available in the Periscope Post!

2010-09-27T15:49:00.000-04:00

http://www.periscopepost.com/2010/09/a-tale-of-two-indias/

Check out my latest for NRI!!

2010-09-26T09:52:00.001-04:00

http://www.the-nri.com/index.php/2010/09/international-brands-marketed-as-luxury-in-india/

Attacking the MDGs

2010-09-22T08:10:00.001-04:00

Check out Rupa's latest article for the Wall Street Journal, attacking the MDGs:

http://blogs.wsj.com/indiarealtime/2010/09/22/india-journal-achtung-bono-economics-beats-goals/

My latest for NRI!

2010-09-21T07:35:00.002-04:00

This is my latest for NRI, "The Commonwealth Con":

http://www.the-nri.com/index.php/2010/09/how-will-cwg-help-delhi-or-india/

My latest for NRI - check it out!

2010-09-18T07:44:00.001-04:00

http://www.the-nri.com/index.php/2010/09/indian-culture-among-nris-more-traditional-than-india/

Back to School Blues

2010-09-09T22:16:00.002-04:00

It's that time of year again: thousands of university students getting ready to go back to school. A summer's gone by, and now it's time to hit the books again. Let's be honest: most students look forward to the start of classes about as much as they would to a root canal. It's just tough to get back into the routine after a summer of fun, frolic, and travel, especially when the weather's still nice and you're cooped up in a classroom listening to someone drone one about something you don't really care about anyway except the course is a requirement of your program.

To any of you freshmen out there reading this, jumping in for the first time, or any of you upper classmen returning for more, here's a little secret: your professors dread the start of classes just as much as you do, if not more.

We've also enjoyed our summer, and have been frankly thrilled not having to deal with your complaining emails, quibbles about your grades, and your ever-fancier excuses for not being able to take exams -- which are especially annoying if they involve being someone warm or exotic while we're battling it out back at the ranch.

I know some of you are nervous about meeting your professors for the first time. Here's another secret: we're as nervous as you, if not more. I've been in this game for fifteen years, and worked as a teaching assistant while a grad student, so I've been doing this pretty much for my whole adult life. Even then, when I face a new class and a new group of students, large or small, I've got a case of nerves as large as that keg you've hidden in your dorm room's closet. (A sip or two from that keg will help calm the nerves, but then you already you knew that.) Small classes are easier, since you can at least see everyone you're talking to, and everyone has to pretend that they're listening, at least for a while.

The large classes are much tougher. For some reason, perhaps the early onset of insanity, I volunteer to teach a section of our first year introduction to economics course, and so confront about three hundred freshmen, just out of high school, usually in a large lecture theatre where I'm standing at the bottom and looking up at rows upon rows, so much so that I can't even see to the back of the room. I have to be wired up to a microphone as well, since, unlike some of my colleagues, I don't have stentorian lungs and don't much enjoy shouting to be heard.

They tell me that I'm teaching this class because I have a Ph.D. and it's important to indoctrinate these young minds early, before they gravitate to other fields and bring down our enrolment statistics. Now, it's true I have a Ph.D., but to be honest I wish I had a background in stand-up instead. Because that's what it takes to keep three hundred eighteen-year olds engaged for an hour and a half at a time, when they'd rather be chilling with their friends or trying to chat up that cute new barista at the coffee place in the library. Spoiler alert: like real stand-ups, I hone my one-liners and my bits, and use them on successive classes, making them appear as spontaneous when they're actually rehearsed. The biggest thrill I get is when my first year class laughs at my jokes: it means somehow I'm connecting with kids who inhabit a totally different mental world from me, who are old enough to be my kids if I had any, and who've never known life without the internet, cellphones, or music downloads.

The other thing I've figured out the hard way is to keep things short and sweet. I know I'm allotted just under ninety minutes per class, but I try to wrap things up in an hour. (I hope my department chair isn't reading this.) Psychologists say that that the average person's attention span is about forty-five or fifty minutes, maximum. For a university freshman, it's probably closer to fifteen minutes. In a culture of the sound byte, in which wisdom has to be distilled down to 140 characters or less, brevity is most certainly the soul of wit.

The last and maybe most important thing I've learned is that, not only is it OK, it's absolutely necessary, to deviate from the script. If you can do without one, even better. In our technological age, a class in which the professor just wades through the textbook on PowerPoint slides he got from the publisher, seems a total waste of time, yet that is more often the case than not. The truth is, despite all our complaints about being underpaid and overworked, we've got a pretty good life as university professors. The least we can do is add some intellectual value when we're teaching. In economics, it can be as simple as connecting a concept from the textbook to something that's just been reported in the news. And when I sense that the kids have gotten that connection, when I can feel the jolt caused by two facts intersecting and sparking an idea in their still-impressionable minds, I feel I've earned my pay packet for the day. Now, if only it were a little fatter ....

2010-09-07T08:33:00.002-04:00

Check out my latest!!

http://www.the-nri.com/index.php/2010/09/differences-between-indians-living-in-usa-and-canada/

A provocative look comparing Indo-Americans and Indo-Canadians -- check it out!!

A new piece, on another blog site

2010-09-01T10:24:00.001-04:00

Hi folks

Speculation about my demise is premature! I'm back! I have a piece on an exciting new NRI blog site, with fabulous content. My piece just came up today. Check it out!

http://www.the-nri.com/index.php/2010/09/mining-dispute-vedanta-resources-tribal-people-orissa/

Cheers

Back from the dead

Back from vacation, and quoted by Macleans

2009-09-03T06:32:00.002-04:00

Well, folks, I'm back from a month-long vacation in Italy. More on that later, as well as sundry and scintillating politico-economic and sociological comments on the Old World vs. the New. In the meantime, I'm cited extensively in an article in this week's Macleans, Canada's premiere weekly news magazine. (Actually, it's the only one, so a fortiori it's the premiere one.) The interesting thing is that it's as a music critic, not an economist. Did I miss my calling? Here's the link:

http://www2.macleans.ca/2009/09/02/more-cried-the-conductor-more/

Oh, yes, there will be more economics later.

"The score contains everything but the essential"

2009-06-30T18:02:00.002-04:00

A while back, I wrote an essay comparing two performances of the Mahler Fourth Symphony, for the National Arts Centre's new "musicbox", which archives some of the NAC Orchestra's finest performances as captured by the microphones of the CBC. Here is a link to the article in English:

http://tinyurl.com/mu7c7x

And here's a link to the article in French:

http://tinyurl.com/l5zdd8

Bons baisers de Montreal

2009-06-22T16:05:00.003-04:00

If you've been following me on Twitter, you know I'm back from Montreal. It has been my primary source of urban oxygen for the past year, when, for a variety of reasons I don't want to bore you with, visiting New York City, where I lived as a graduate student and subsequently visited frequently, wasn't possible. Now, a couple of disclaimers. It doesn't make sense to compare New York, a city of, what, fifteen million people, with Montreal, that has two, or perhaps three, if you include the metropolitan area. If you wanted to compare by population size and rough geographical area, Boston, Barcelona, or Munich would be better comparators. In the same way, you wouldn't compare Vancouver to Los Angeles, you'd compare it to Seattle. Having said all of that, I'd argue that, for my money, if a weekend of urban pleasures is what you have in mind, Montreal is hard to beat, and hits the sweet spot in terms of the trade-off between urban density and depth on the one hand and liveability and manageability on the other (the same might be true for a choice of where to live, but I'll leave that bigger question aside).

Like New York, Montreal is eminently walkable, and it has an excellent metro system, and easy to hail cabs. Dining and shopping, as you would expect, are excellent, and, even with the Canadian dollar moving back towards par with the US dollar, still a good deal cheaper. Ditto for hotel rooms. Of course, it also has the unique appeal of being the world's most important French-speaking metropolis outside Paris, and has a distinctly un-Anglo-Saxon character, a refreshing change from Ottawa (where I live) or Toronto (which I have never really taken a fancy to, despite its many attractions).

Also, like New York, and like all great cities indeed, Montreal is a city of neighbourhoods, cheek by jowl, but yet each distinct, offering its own particular brand of urban interest. Downtown is the area that most tourists know, and stick to. The old port area by the river has also become rather touristy as of late. But for me the real interest lies in the area where "+" marks the spot, the intersection of Sherbrooke, the main east-west drag, and St. Laurent, the main north-south one, that, in fact, divided the city into the traditionally English-speaking and French-speaking zones, west and east of St. Laurent, respectively. While this is more myth than reality nowadays, with Anglophones and Francophones living on both sides of the putative divide, it's not entirely wrong. Look at the election map: the constituency just west of St. Laurent votes Liberal, and just east Bloc Quebecois (in fact, it's the seat of the party's leader). From this intersection, you can walk up St. Laurent, or the "Main" in Montreal slang, the old Jewish main street of the city (made most famous by Mordechai Richler). Most of the old establishments are gone, replaced by hip and trendy restaurants and nightspots. My favourite, Buonanotte, entices you in with a gaggle of waitresses who look and dress like runway models (I'm not complaining, by the way), but backs it up with superb food and a deep wine list. More like Europe than Anglo-America, it's both a fine dining establishment in the early evening and then happening nightspot into the wee hours. (If you're there after midnight, by the way, and have a large enough group, go for the bottle service in the VIP lounge area. $200 for a fifth bottle of Grey Goose, split five or six ways, works out much cheaper than individual drinks.) If you go further up the street, into the former Little Italy, you can try Casa Napoletana, or Bottega, for authentic wood-burning-oven pizza.

Go further east, to St. Denis, and walk across Mont-Royal, and you're in the heart of the Plateau, the traditional centre for French-speaking intellecual life in the city. It's where most of the Francophone writers, filmmakers, artists, and so forth live. It has a laid back, bohemian character, a little bit like the Village in New York, that's in marked contrast to the glitz and glamour of the Main. Connecting these two neighbourhoods are interesting cross-streets, such as Prince Arthur, a pedestrian-only thoroughfare with some interesting cafes. The most interesting new arrival is Marche 27, on Prince Arthur, just west of St. Laurent. Step in here, and you feel like you're dining in the Village, or maybe Nolita. Head south down St. Denis, as the street slopes steeply down towards the river, and you get into the Latin Quarter, another packed with restaurants and bars, many catering to the university students at UQAM nearby. And all of this is just scratching the surface of potentially interesting neighbourhoods to visit, walk around in, and dine and shop in.

All of this ... just two hours' drive from Ottawa, the civil servants' town that fun forgot? It feels more like jumping into a transporter a la "Star Trek" and winding up on an alien planet!

Back from the Big Apple

2009-06-09T13:45:00.003-04:00

If you've been following my tweets you will gather that I was in New York City for a while, and am just back. You'll find some pictures on Twitpic - links from my profile on Twitter - and in due course, after some further ruminations, a post here will follow. In the interim, some random (and, hopefully, sufficiently impertinent) observations:

(1) New York City is more like Bombay or Bangkok than it is like Boston or Toronto, i.e., more a Third World City than a First World City. Piece of evidence (1): the ubiquitous Korean grocer. Piece of evidence (2): restaurant washrooms. If you know NYC, 'nuff said.

(2) The New York yellow cab is one of America's great contributions to world civilization. Second only to ice machines on every floor in hotels. Actually, now that you can swipe your credit card and go (without signing), I'd say in first place by a hair.

(3) Dining on the Upper West Side is marginally worse than dining in Ottawa, and marginally better than the average Glebe restaurant. Dining in Nolita is better than dining anywhere in North America, except Montreal, which has even honours.

(4) The lobby lounge of the Mandarin Oriental Hotel on Columbus Circle is a reminder of how breathtaking beautiful New York is, when seen from the correct altitude. Also, a reminder that you should bring your American Express Platinum card.

That's about it for now, folks. Agree? Disagree? Don't care? Post a comment either way. (Now, that's a subtle reference to NPR's "Car Talk". If you get that one, you're very, very good.)

A microcosm of America in despair

2009-05-19T13:18:00.003-04:00

As you've gathered from my last post, I was just in Lake Placid, New York over the Canadian long weekend. Having recently only visited major cities on the two coasts, it was eye-opening to be back in small town America, and the contrast with Canada quite startling. Now, I realize it's not legitimate to compare Ottawa, a government town, known as fat city even in Canada, with Lake Placid, a faded resort town that has seen better days, but still the juxtaposition, and contrast, are interesting. In Ottawa, there is very little visible sign of a recession in progress. Restaurants, bars, and shops are always packed, the patios full on warm evenings, lots of traffic everywhere, and a general sense of bustle and activity. In Lake Placid, the once-charming Main Street is now almost a ghost town, the formerly elegant boutiques replaced by tacky souvenir stores that do very little business, even when times are good. There are four liquor stores on the small stretch of downtown Main Street, lots of fast food joints, several realtors, but not a single grocery store, health food store, or anywhere to get something moderately nutritious that isn't junk food. Lots of shuttered businesses, buildings for sale, others looking derelict or abandoned.

Now that's downtown Lake Placid. A few miles away, is the ultra high end, luxurious, and posh Lake Placid Lodge, a discreet and opulent haven that attracts well-heeled travellers from around the world and the occasional New York investment banker or celebrity who wants to get away from it all for a few days. The food is fabulous, nutritious, and tasty, the wine list extensive, the service impeccable, and the prices ... well, rather high. These are the two faces of America. A society in which the American dream has become, for many, a myth, and in which income inequality is on the rise while proleterian wages stagnate. The dream, such as it is, in tatters, is fed and fuelled by a culture of celebrity that seems increasingly disconnected from the reality of most peoples' lives. As a cash clerk at a local convenience store told us, she's making minimum wage, while a box of cereal now costs $5 at the one and only grocery store in town. Meanwhile, back at the Lodge, the chef is preparing a special tasting menu and suggested wine pairs for his bon vivant patrons the same evening. Two worlds, that seem to be diverging.

Smart border, forsooth!

2009-05-19T11:19:00.003-04:00

I'm just back from the Canadian long weekend, named in honour of the Queen who gave Canada its independence. I was in Lake Placid, New York, and got there by crossing into the United States at the Seaway International Bridge, which crosses the St. Lawrence River between Cornwall, Ontario, and Massena, New York. This got me to experience a land crossing between the two countries for the first time in a while. All of this talk of the need for a smart border between the United States and Canada needs to confront the hard reality that the border infrastructure as it exists today is far from smart. It's pretty dumb, and really antiquated, and can't handle the large volume of people and commerce that cross everyday. The world's biggest trading relationship needs something better. At Seaway, for example, the bridge itself is in terrible shape, and the pavement all dug up, so that cars and trucks are bottlenecked into a few lanes in each direction. When I crossed, it wasn't particularly busy, but it was already getting backed up. I can only imagine how bad it was for someone who crossed at the very end of the long weekend, last night. The truth is, successive governments in both countries have taken the border for granted, and even 9/11 and its aftermath haven't led to much in the way of the new investment in the necessary infrastructure improvements that would be needed to make the land border crossings halfway decent. I'm not even of talking of a truly smart border, such as exists in Europe in the Schengen area, with a common perimeter around members, allowing for nuisance-free travel with no border inspections, allowing one to cross seamlessly from country to country. Now imagining such a border for the United States and Canada seems so remote as to be only a pipe dream. That's why I say, smart border, forsooth!

Digesting the Indian election results

2009-05-19T09:59:00.002-04:00

It's worth remembering a few factoids about Indian electoral politics, to help interpret the results. (1) Participation rates are high, by any standard. (2) Participation rates are higher, other things equal, the poorer you are. This is the opposite of just about every Western democracy. (3) If you're a politician, you're less likely to win, other things equal, being the incumbent. This "anti-incumbency bias" is also at variance with most Western countries. (4) Regional issues matter. (5) This, coupled with shifting alliances between the national and regional parties, mean that national trends don't predict constituency by constituency election outcomes very well. (6) As India follows the Westminister first-past-the-post (called "winner take all" in US parlance) system, rather than proportional representation, small differences in popular vote amongst parties will have magnified effects on the distribution of seats.

In light of these, the Congress' victory, strengthening the mandate that they earned in 2004, is striking and surprising, and indeed impressive. It is true that the principal opposition party, the BJP, has suffered its share of infighting, and has been in something of a state of disarray in its leadership. But what seems to have resonated most with voters, based on people I've spoken to on the scene, is that the Congress was seen as a safe choice in difficult times. As India deals with the aftermath of the horrific terrorist attack in Mumbai last year, the possible spillover into India of the unfolding events in neighbouring Pakistan, and the aftermath of the global financial crisis, returning the Congress to power was a vote for the status quo. Voters also evidently gave the Congress high marks for finalizing the Indo-US nuclear cooperation deal, and pushing it through the Lok Sabha, despite opposition from the Left parties (who had their worst electoral results in years and will be a non-factor in the new scheme of things).

In terms of individual winners and losers, the election victory validates the alliance of Sonia Gandhi, the head of the Congress Party, and Manmohan Singh, the Prime Minister. They have a clear division of labour: Mrs. Gandhi runs the party, and Dr. Singh runs the government, largely keeping out of the political fray, and maintaining a squeaky clean image. Another clear winner is Jairam Ramesh, who had quit the Union Council of Ministers to run the election campaign as the party's chief strategist. It will be a major suprise if he doesn't receive a major Cabinet post. A new star on the scene is Shashi Tharoor, the former Under-Secretary General of the United Nations. Bitterly disappointed at being passed over for the top job, he has now catapulted himself into Indian politics in a major way, with a landslide victory in his constituency in Kerala. (In India, all numbers are large, and a landslide is a winning margin of about 100,000 votes!) Watch for him, too, to have an important portfolio in the new Cabinet.

In the midst of this overall good news for the Congress, several key ministers in the previous government went down to defeat. Most noteworthy is Mani Shankar Aiyar. Long the conscience of his caste (Aiyar was the only Brahmin from Tamil Nadu in the Lok Sabha), party, and the country, preserving its Gandhian and socialist traditions, an unrepetant secularist and critic of all fundamentalisms, a sharp and keen wit, and without a doubt the most brilliant political orator in India or just about anywhere (that, too, in three languages -- English, Hindi, and his native Tamil), he will be very much missed by his many admirers. Perhaps, taking a cue from Tharoor, Aiyar might now enter the fray of a major international organization? Let us hope so.

Mini-vacation

2009-04-16T11:54:00.002-04:00

For any regular readers, I'm on a mini and enforced vacation from blogging for a while, while I work on grading for the next few weeks. I'll be back at the beginning of May. Hope spring time is wonderful for you, wherever you are.

Micro-blog: The crisis in economics, and in the global economy: A trio of readings

2009-04-06T08:48:00.005-04:00

Here are a clutch of worthwhile readings. The first is a news story in the Boston Globe, discussing the current crisis in the economics profession, wrought by the crisis in the economy. The article is titled "Paradigm Lost". Now there's someone smart, punning on Milton and Thomas Kuhn in a two word phrase. Here is a link:

http://www.boston.com/bostonglobe/ideas/articles/2008/12/21/paradigm_lost/?page=full

The next is an article in a similar vein, but focussed on the interesting question of whether economists are fixated excessively on the question of prediction. Here's the link:

http://www.weeklystandard.com/Content/Public/Articles/000/000/016/366vrllo.asp

The last is a weighty and sombre piece by the brilliant economist, philosopher, Nobel laureate, and generally wise personage, Amartya Sen, giving us his analysis of the current crisis in capitalism, going back to the history of the thing (which is always Adam Smith for us economists) and prognosticating broadly, all to good effect. Here's the link:

http://www.nybooks.com/articles/22490

More on the above, when I've had a change to read and digest it. Alas, a stack of term papers beckons in the interim.

Micro-blog: The aid debate, with a new twist

2009-04-05T14:26:00.002-04:00

One of the many topics I taught my graduate and senior undergraduate students this past academic year was the great "aid debate": is official development assistance (ODA), commonly known as "foreign aid", good or bad for the development process? The chief protagonist, pro, is Jeffrey Sachs, and, con, is William Easterly. Now there's a new player on the scene, echoing Easterly's message that aid does more harm than good and we should get rid of it. Here is a link to an interview:

http://www.guernicamag.com/interviews/954/moyo/index.php

So what's the difference? The new player on the scene is Dambisa Moyo. The name should give it away. For once, there's an important. provocative, and challenging new book an old subject, actually written by someone from the continent where debates about aid have been fiercest and where it is still most important, whether for good or ill. Zambian born and American and British educated (at Harvard and Oxford, no less), and a former member of the global macroeconomics research team at Goldman Sachs, Moyo is also easy on the eye and cuts a glamorous figure, if I can judge by her press photos. Not wanting to judge a book by its cover, so to speak, I've ordered it from Amazon, and will report back to you in this space after Ive had a chance to read and digest it. Stay tuned.

A new world order?

2009-04-03T12:19:00.001-04:00

Well, the G20 summit in London is now in the books. Some are heralding the beginning of a new world order. Others saw it as yet another schmoozefest. I'm still trying to make up my mind. But for now, the BBC has a good summary of what happened, what was agreed to, and makes at least a credible case for the new world order thesis.

http://news.bbc.co.uk/2/hi/business/7979918.stm

The New York times is more equivocal. Here's their coverage:

http://www.nytimes.com/2009/04/03/world/europe/03summit.html?_r=1

More from me, when I've figured out what I think is behind the headlines. In the meantime, please let me know what you think: new world order, or old wine in a new bottle?

Micro-blog: The market and the state: Recrimination at the G20 summit

2009-03-31T10:52:00.002-04:00

Well, recriminations have already started at the G20 summit. Lots of news organizations are covering it, but here's a good one, the BBC's take:

http://news.bbc.co.uk/2/hi/business/7974190.stm

France is first out of the blocks, threatening a walk-out, if stricter financial regulations aren't introduced into the global economy. Already, a schism seems to be developing between the US, Britain, and Canada, on the one hand, and the European economies, on the other. The Anglo-Saxons want to pursue Keynesian-style stimulus, by pumping billions more into the economy, whereas the Continentals think that stimulus will be unhelpful or positively counter-productive unless much-needed reforms to the financial system are undertaken first.

These are two different takes on diagnosing the current mess, and starting on a corrective course. The Anglo-Saxons seem to be saying, basically, that the current balance between market and state, as exemplified in the regulatory regime that governs banks and the financial system, is working OK, and that our problem right now is a classic (note, I did not say "classical" -- sorry, inside economics joke!) case of unemployment due to deficient aggregate demand, and that we should dust off our copies of Keynes' General Theory and take it from there. The Continentals are suggesting that there are fundamental flaws in what is being called pejoratively Anglo-Saxon economics. Read, Thatcher and Reagan style deregulated capitalism as practiced in the UK, US, Canada (to a lesser extent) and other Anglo-inspired countries. It's interesting that the French President, when he was running for office, extolled the virtues of Anglo-American economic reforms for France, especialy its sclerotic labour market. Evidently, he's changed his mind on those.

So the battle lines are drawn. Stay tuned for more updates from the front lines, and from here in the trenches.

Micro-blog: The market and the state: On bailing out the US and Canadian auto industries

2009-03-31T08:43:00.002-04:00

Just about everyone seems unhappy with the putative bailouts for the US (and Canadian) auto industries. One brand of critics complain either that the the aid is too little or too much. Let's leave that sort of carping aside. More significantly, quite a few economists are complaining that the aid is a bad idea. Let the auto industry die, and something else replace it. The jobs and capital would be more productively used in another part of the economy. We can import the cars we need. That's what free trade and the the "free market" (scare quotes necessary, recalling an earlier admonition against this term) would suggest. The government simply shouldn't get involved.

Now, as a matter of economic theory, this criticism is valid, unless a case can be made that the auto industry generates a positive externality (or, perhaps, plural positive externalities) that are not captured by the market. This is textbook economics from a first year principles course. One such externality might be an employment-related one. If we are indeed in a Keynesian-type situation with below full employment, preserving existing jobs may confer benefits on society greater than the private marginal product of the last person hired would suggest. As it happens, this is one of the oldest quasi-legitimate arguments for protection in the book, going back to the work of Gottried von Haberler in the early part of the last century. I say quasi-legitimate, because the "targetting" principle of Bhagwati and Ramaswami suggests that the best intervention would be directly in the labour market, not using tariffs or trade barriers as a proxy to preserve employment.

But frankly all of this misses the point entirely. When economistic critics say that the US administration is stupid to be bailing out the auto industry. they are revealing their own stupidity. Economic policy is not made by economists, it is made by politicians. Politicians who like to get re-elected. In other words, there is a political economy of the putative auto industry bailout, that is at least as important as the pure economics of it. If you were the government of the US or Canada, would you let thousands of people in pivotal electoral states (and provinces) such as Michigan, Ohio, and Ontario lose their jobs and vote against you in the next election? Now, doing that would be truly stupid for any politician. Good politics, of course, doesn't always make for good economics, but that's a tale for another time.

Micro-blog: The market and the state, a few further reflections

2009-03-26T14:47:00.003-04:00

Earlier today I showed my freshmen economics students the second half of episode 1 of the PBS series, Commanding Heights. Here's a link:

http://www.pbs.org/wgbh/commandingheights/

Episode 1, "The battle of ideas", treats the pendulum swing between the market and the state, over the course of the 20th century, that I've written about at length in previous entries. What struck me on rewatching it on this occasion was how sanguine everyone (except one disgruntled British coal miner) appeared at the end of the episode (filmed in 2002) about how the battle of ideas had been won, and there had been a decisive turn towards the market and away from the government, summing up the conventional wisdom on the triumph of deregulation and "supply side" economics, some twenty years or so after the onset of the Reagan Revolution. Gordon Brown and Larry Summers were agreeing that recent experience had shown that it was the market that best harnessed entrepreneurial forces, and that old debates on which is a better way to govern the economy, the market or the state, were passe. It's interesting that those old debates, that were thought to be dead and buried, are back, alive and kicking, and insisting on a re-airing, and re-thinking, as we come to grips with the aftermath of the financial crisis. "All of this has happened before, and all of this will happen again," as the Cylons like to say.

Micro-blog: CBC Mini-series on India, continued

2009-03-26T14:45:00.000-04:00

I've posted previously on the new CBC miniseries

http://www.cbc.ca/documentaries/indiareborn/index.shtml

The last two (of four) episodes aired last Sunday. All told, like the first two, they were pretty good --well balanced, and a good introduction to someone unfamiliar with the complexities of India. Worth checking out through the CBC website.

The market and the state: Capitalism caught between libertarianism and populism

2009-03-22T15:55:00.005-04:00

One of the recurring themes in these blog entries is reflecting on the age old discussion about defining the respective roles of the state and the market in ensuring the efficient and equitable functioning of a modern economy. Today's entry will be yet another footnote to that ongoing conversation. I heard an interesting new way of framing this debate today from Eliot Spitzer, the disgraced former Governor of New York, who became famous in his earlier incarnation as Attorney General in pursuing crooked dealings on Wall Street, including a prosecution of AIG, which makes anything he has to say on the subject timely. Plus, he's a smart and thoughtful guy. Perhaps his prescience in predicting the sort of trouble that Wall Street (and for that matter, the nation, and the world) is going through now, and the fact that he actually tried to do something about it, will help revive his political career, laid low after the prostitution scandal that brought him down as Governor last year. We'll see.

But back to the point at hand. Spitzer was on Fareed Zakaria's excellent new CNN program, GPS, earlier today, commenting on the current controvery over AIG's executive bonuses, amongst other things, and legal avenues that the US government might pursue in recovering those monies for the American taxpayer. The whole interview is well worth watching, and, if you're reading this today, Sunday, March 22, you can catch it again at 5 pm Eastern time this afternoon. In due course, it will no doubt be archived on the show's website. Here is the link:

http://www.cnn.com/CNN/Programs/fareed.zakaria.gps/

Interesting and topical stuff, but much the most interesting part of his discussion was on the very subject of the market and the state, on which I've been opining recently. Spitzer framed the debate in an interesting way, by saying (and here I paraphrase) that we had during the last twenty years was libertarianism masquerading as capitalism, and, if we're not careful, what we're likely to get in the next twenty is rank populism instead, that, if not nipped in the bud, will threaten the system of capitalism itself. This is a more provocative and pungent way of saying what I'd put more prosaically, that we might be about to witness another pendulum swing, from the balance tipping from the market back to the state. Or, to be more precise, this would involve a putative move from an insufficiently regulated market to an over-regulated one. On this fundamental point, I believe that Spitzer's framing of it is accurate, and, alas, his predictions may once again prove to be prescient.

Mini-blog: Twitter as a microcosm of globalization?

2009-03-19T16:34:00.002-04:00

If you've looked at the box just below the upper right hand corner of this page (below my non-existent list of followers), then you've realized I've recently joined a class of people, known dubiously as the twitterati. If you'd like to become one, you need only visit the following page and sign up:

http://twitter.com/home

Now, for those of you who are into social networking websites, you know that the flavour of the month, for the last many months (the last year or so at least), has been Facebook. So successful has it been, in fact, that it displaced the industry pioneer and front-runner for many years, MySpace, that has been relegated to second spot. Now, if you're a FB user, you know that it's great utility is not only in being a non-intrusive way to keep in touch with friends and family, but also a great way to reconnect with old friends one has lost touch with. I, myself, have used it to reconnect with old friends from high school that I'd lost touch with years. In fact, I had my first "Facebook reunion" (yes, that's what they're called) with a friend from seventh grade, last fall in Toronto. So, to summarize, FB is great for sharing information with current friends, and finding old ones again. FB also encourages this localization by encouraging you to sign up for alumni and regional networks, in other words, schools and universities you've studied at, and the place you're living (it lets you join only one at a time). Warm, reassuring, and friendly -- like a cold hug on a warm day.

Twitter is different. Edgier, for one thing. A pared down, no nonsense home page. Posts are limited to 140 words maximum. Concision is at a premium. Bios on the profile page are also short. There is only one one small thumbnail pic. No multimedia, unlike FB and MS. So a different look. But different substance? Yes. The main difference, from my point of view, is that Twitter is fundamentally democratic. Unless someone makes their status private (and, in my experience, very few people choose this option), anyone can track anyone else's status messages. Anyone can send an "@" reply to anyone else in Twitter-space. To send a direct message to someone, they must be following you (not the reverse). But following is not symmetric (unlike in FB, where "friending" is; that is, both parties to a putative friendship must agree before it is consummated). Clever. There are all kinds of software applications, as well as applications for mobile devices, that make Twitter easy to use from a computer or a mobile phone, smart or otherwise. Which is also why it's being used for things like political polling in real time, for example, during the recent US and Canadian election campaigns. Also, in emergency situations, where, for example, a firefighter can notify affected people in real time, with something as simple as a text message on a cell phone, where to avoid in the path of an oncoming blaze. For the same reason, it wouldn't be terribly useful to terrorist or criminal groups, unless, of course, they have established an elaborate system of codewords, replies, counter-replies, etc. (I hope I haven't just inadvertently given anyone any ideas.)

Twitter, also being new, has acquired celebrity cachet. Barack Obama, while a candidate, posted regular updates. Now, in the past few days, his Teleprompter has begun blogging, and posting Twitter updates of his own. Don't believe me? Check out this link:

http://twitter.com/BOTeleprompter

But the best feature, in my opinion, is what is called the "public timeline". This is a way of tracking, in real time, everything going in in Twitter-space, that is, all recent posts (usually that means, within the past minute or so). Here is where you can find it:

http://twitter.com/public_timeline

What is cool about this is that at any one moment, you might have, to take a random sample: a undergrad student sending a post from his dorm room in Iowa; a software engineer in Bangalore, India sending a message on mobile internet from his smartphone; an art student in London sending a message from her iPhone at the Apple shop on Regent Street; a celebrity updating her status at their favourite nightclub in Los Angeles; a university professor updating friends and family on how his teaching and research on a particular day went. (I'll leave it to you to guess which one in that preceding list describes me.) All in real time. Unadultered, uncensored (not necessarily always good!), real time raw data from the world out there. And every one of these people is seeing everyone else's status updates, in real time. Can you think of a better metaphor for globalization itself? I'll let you ponder that, as I update my Twitter status. Catch you later.

Mini-blog: Keynes has not left the building

2009-03-19T15:58:00.000-04:00

I realize I've commented on this one before, but I'm struck anew by the continuing impact of Keynes on the contemporary teaching of macroeconomics. I'm just in the midst of teaching a chapter on how government policy, both fiscal and monetary policy, can be used to affect aggregate demand, and, a fortiori, help to stabilize the economy when prices are sticky and hence the aggregate supply curve isn't vertical at its long run, potential level. The two key concepts in the chapter, thus far, are liquidity preference, and the multiplier. Pure, unadeltered Keynes. More on this, after I've taught the remainder of the chapter.

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And I'm back! The remainder of the chapter hasn't done much to change the picture. Keynes rules. The discussion of automatic stabilizers and the Friedman "insulation" argument for the flexible exchange rate also seem holdovers from older editions, and strangely irrelevant to the current macroeconomic crisis. Perhaps we're going to have to rewrite the textbooks now. One think is for sure, though: I expect that Keynes is likely to contine to figure prominently.

Mini-blog: New CBC TV series on India

2009-03-16T09:19:00.005-04:00

Well, better late than never. The BBC, CNN, and other news channels were talking about the rise of India and China about five years ago. The CBC (Canada's state-owned broadcaster, our version of the BBC, not quite like NPR) did a series on China a while back. Finally, they've figured out than a documentary on a country that houses a billion people, give or take, or about a sixth of the world's population, is worth doing, if for no other reason than to educate "average Canadians" (read: old stock Angl0-Celtic and "pure wool" French-Canadian) on the Indo-Canadians in their midst, their strange smelling (but tasty) curries, their weird and wonderful costumes, their funny accents, and their elaborate weddding ceremonies, ripped from the latest Bollywood blockbuster.

Oh, before I forget. If you missed it (the first two episodes aired last night, the next two next Sunday night), here's a link to the CBC's website for the series:

http://www.cbc.ca/documentaries/indiareborn/index.shtml

For the most part, there wasn't a great deal that was novel or revelatory for anyone who knows India. But, for those who don't, the series, or at any rate the first two episodes, present a generally balanced view of the paradoxes and puzzles of contemporary India. The usual suspects, such as the ills of the caste system, poverty, deprivation, and so forth show up. As well as the scourge of Hindu fundametalism. An interesting lacuna is no discussion of Islamic fundamentalism, nor of the 26/11 Mumai terrorist attacks. I suspect the film was made beforehand. Also, in my judgement, insufficient attention to the colonial history, and how a knowledge of this is essential to frame the current situation. Let's not forget that the flames of Hindu-Muslim enmity were fanned by the British Raj, in a successful bid (well, for two hundred years or so) to keep the country from uniting and kicking out the colonizers. And as a parting gift they tore the country in two when they left. (Well, they had help from Nehru, Jinnah, and Gandhi -- but that's a tale for another time.) Churchill famously predicted that India would descent into chaos when the British left. I'm glad to report that he lived long enough to see his gleeful prophecy fail, although I doubt he would ever have admitted it.

Anyway, despite my cribbing, a series that for the most part is sensible and pens a cautiously optimistic epistle of the world's largest democracy. I'll stay tuned. Especially to see what Vijay Mallya's Goa mansion looks like from the inside (I've only seen the outside gates).

Mini-blog: Moises Naim seems confused on whether he's optimistic or pessimistic about the future of globalization!

2009-03-14T15:43:00.005-04:00

The current issue of the magazine Foreign Policy has an opinion piece by the editor, Moises Naim, on globalization. Here is a link to the article on the magazine's website:

http://www.foreignpolicy.com/story/cms.php?story_id=4678

While tendentious and not particularly novel or interesting, it is gratifying that Naim repeats some of the cliches that I was trying to debunk in a previous post on globalization, at the very least to show that I wasn't criticizing a straw man. Here is his bottom line on the future of globalization: "Globalization is such a diverse, broad-based, and potent force that not even today's massive economic crash will dramatically slow it down or permanently reverse it. Love it or hate it, globalization is here to stay." Now, Naim, at least in part, wants to act as a cheerleader for globalization, and, in so doing, I believe downplays the serious dangers that it faces. Indeed, in a later section of the piece, he admits that the fact that people are wrongly blaming globalization for the current financial crisis, does indeed pose serious risks for the whole enterprise. He writes: "... the gap between the need for collective action [to reinforce trends towards globalization] at the global level and the ability of the international community to satisfy that need is the most dangerous deficit facing humanity." That sounds pretty serious to me, and seems to difficult to reconcile with his earlier, uber-optimistic epistle. Perhaps the earlier statement represents wishful thinking and the latter his more measured and sober judgement on the very real challenges facing the future of our globalized world? Just a mini-thought, and a mini-question, to end this mini-blog, on a mini-spring-like day in Ottawa.

The perils of first year principles of economics and some possible lessons for our current mess

2009-03-13T16:55:00.009-04:00

It's very timely that I've just been teaching my freshmen first year principles of economics students about aggregate demand and aggregate supply and the received textbook theory of business cycles, just as we're heading into (0r rather, already are) in a downturn, at a time when everyone is once again talking about John Maynard Keynes, invoking him in one way or another, to justifty the stimulus packages in the United States, Canada, and elsewhere. The basic textbook model argues that governments can step in when there's a drop in aggregate demand for goods and services, by filling the gap through government spending, a cut in taxes, or monetary easing. This, in theory, should get us back to, and maintain, full employment, and keep output at what economists call its "natural" or "potential" level (that is, where it would be, if the economy behaved as if it were in a long run situation in which all nominal wages and prices were flexible). All of this sounds fine. But the basic textbook model, at its first presentation, might make it appear that stabilizing the economy is a fairly easy matter, and thus puzzle my freshmen as to why it's taking so long to figure out just what to do in our current situation, and why there's so much disagreement, for instance, on whether the stimulus is too large, too small, just right, or just totally irrelevant.

The textbook AD/AS model, in its most stripped down form, suggests that stabilization policy is easy, indeed trivially so. All the government has to do is to keep track of the positions of the economy's AD and AS curves in the short run, and, when something goes out of whack, step in with the necessary corrective measures. A recession should last all of ten minutes, or maybe half a day, while the government does this. Very quickly, then, we warn our students that the model omits several important features of the real world, that make stabilizing the economy more difficult than might at first blush appear. To start off with, the textbook assumes that we all know the model, and the model is correct. In the real world, no one knows what model "truly" describes the economy (if one can take this sort of Platonic leap), and, even if we can guess at, we don't know the parameters that describe it. Everyone, including central banks, government ministries of finance, private sector banks, consultancies, and all the rest, has their own model, and the models don't necessarily coincide. As a second difficulty, and this is a big one, policy acts with a lag on the economy, both fiscal policy and monetary policy. Unfortunately, no one is exactly quite sure how long this lag is, and this again requires an educated guess (based on models) by policymakers. All of this creates the possibility, for instance, that by the time a stimulus package does kick in, a year or two down the road, it will be redundant, or, worse still, counterproductive, if the economy has already started to turn around. Government intervention, thus, can, despite the best of intentions, inadvertently make matters worse. You would think that this more nuanced picture would emerge when the relevant models are taught at higher levels. But, strangely, this isn't often the case. The current default model of choice for macroeconomists, known as the "SDGE" (that stands for stochastic dynamic general equilibrium, if you must know) model, in its various incarnations, also usually assumes that government policy can act instantaneously, or with a predictable lag, and that everyone shares the same information about the model. This makes government stabilization policy, if not trivially, then pretty easy, and leaves many of our students, armed with newly minted PhDs in economics, convinced of the truth of this proposition.

Now, I'm not meaning to reopen the big debate about the correct balance between the market and the state in our modern society. I tacked, or tried to, parts of that big debate in a previous entry. Nor do I want anyone to think that by questioning received Keynesian or neo-Keynesian doctrine I am thereby expressing some sort of knee jerk, libertarian antipathy to government involvement in the economy. No, the contours of the big debate have been mapped out by many, and most of us agree that any sensible society, one would that we care to live in, has to have some sort of balance between the market and the state, some level of government involvement in the economy, although the edges of each's appropriate sphere may be a bit fuzzy. One of those fuzzy edges, I'd like to suggest, is the debate between those who suggest that activist government policy (fiscal and/or monetary) can cure recessions, or, more generally, attenuate, if not eliminate, the vicissitudes of the business cycle, and those who are more than a bit sceptical of this possibility. If we purge the writings, musings, and pontifications of libertarian sages such as Mises, Hayek, and Friedman of their excessive ideological fervour, and nihilism about government's efficacy and role, that borders, at times, on the view tha the government doesn't have any important role in the economy (and we agree, or I hope we do, from my previous entry, that this is illogical and impossible), what remains is a healthy, and, in my judgement, essentially valid scepticism about the government's ability to fine tune imperfections in the market. Human beings are prone to failty and failure, and so, pari passu, are markets, and governments. This basic lesson of Hayek, Friedman, and the other libertarians, has been entirely swept away in the zeal to find a Keynesian fix for our current economic woes.

My freshmen often ask whether they think the stimulus package (in the US or Canada or for that matter) is too big or too small, and why there's such disagreement amongst economists about this point. I point out that economists who claim that a $1 trillion dollar fiscal stimulus is too small, eminest economists such as the Nobel laureate Paul Krugman, are on the "liberal" end of the political spectrum in the US, whereas those who claim it's too big, such as the Harvard historian Niall Fergusson, or the Canadian-born US Republican strategist David Frum, tend to be on the "conservative" end. In other words, the pundits' prognostications on the package align with their received ideology. I make no further inference, but leave it to my students to do so, if they wish. When I'm pressed, I say that I have no idea whether the stimulus is too large, or too small. All I can say is that $1 trillion is a lot of money, the current recession seems deep, so if we're going to try something it should be of sufficient magnitude. But, at the back of my mind, I have lingering doubts whether we're intervening because we think this is what will fix our economic travails, or whether it's simply politically impossible to do nothing. I'll leave that heretical thought with you, as I enjoy the setting sun on a glorious early spring evening here in Ottawa.

Democracy and Development, Redux.

2009-03-11T14:12:00.005-04:00

Just when you thought that old chesnut, the debate about what's the connection (if any) between democracy and development, was finally laid to rest, it's back. Check out the current issue of Foreign Affairs, and you'll find an article entitled "How Development Leads to Democracy". Here is the link. Even if you aren't a subscriber, you can read a snippet and get the general idea:

http://www.foreignaffairs.org/20090301faessay88204/ronald-inglehart-christian-welzel/how-development-leads-to-democracy.html

Now, as it happens, I wrote a paper on the same subject when I was on sabbatical in India last year, but gave it the more equivocal title, "Democracy and Development: Friends or Foes"? (Mine wasn't published in Foreign Affairs, more's the pity.) Now mine you can read for free. It's a Carleton working paper. Here's the link:

http://www.carleton.ca/economics/cep/cep07-11.pdf

Now, there's general consensus that one can find a partial correlation relationship between the level of economic development (measured, say, by per capita national income) and the level of democractization (that's a trickier one to measure, but there are several indices, based on things like free and fair regular elections, free press, independent judiciary, etc.). By "partial correlation", I mean, holding other relevant factors constant, more developed economies tend also to be (more) democratic. This begs the question, is there a causal relationship underlying this correlation, or is the finding purely spurious? There are a variety of theories arguing each direction of a putative causal link. Some theories say thay that being democratic is good for development: people are more likely, say, to be entrepreneurial and take risks, thereby leading to more rapid development, if there's living in a free society. Other theories say that democracy is a "normal" good (in the economist's sense, that we demand more of it as we get richer), so that, the more developed a country is, the more likely it is that people are going to demand democracy. The latter is a rough and ready version of the classical political science argument, articulated by Seymour Lispett, amongst others, that economic development leads to the growth of a middle class, who in turn demand democratic reform (assuming that the development took place in an autocratic society).

There is another version of this argument, that I like, put forward by libertarian economists such as Friederich von Hayek, Milton Friedman, and Lord (Ralph) Harris. This argues that, in the long run, you cannot have a "free economy" without also having a "free society" (bearing in mind all of my previous caveats about the use and misuse of the word "free"). The two are inextricably linked, the argument goes. Try to have economic development, without democracy, and eventually pressures and contradictions will build up within the society that will lead to democratization (hopefully peacefully, but perhaps through violent revolution).

Now there are several exemplary cases of a transition from autocracy to democracy, mediated by economic development. South Korea and Taiwan come to mind in East Asia, as do several countries in Latin America, most notably, of course, Chile. Chile went through liberal or "neoliberal" (a term I don't like, but it's widely used in political science and development circles - why the neo?) economic reforms under the brutal Pinochet dictatorship. But it did eventually democratize, and is now, most observers would agree, the most stable and successful democracies in Latin America. It is fair to ask whether the process by which Chile got to where it is, and the egregious human rights violations that took place under Pinochet and his regime tarnish in an important way the current success of that country. To many observers, on the left in particular, Chile paid too high a price, while others, notably on the right, are more sanguine (especially as none of them had to suffer or die at the hands of Pinochet's goons). Without wanting to get into the ethical debate (that's for another time, perhaps), I just note that the prediction (development leads to democracy) worked in this case, as, indeed, Friedman predicted at the time.

What is also clear from recent experience is that democracy, imposed at the barrel of a gun (ironic and preposterous as that proposition is), does not work. Afghanistan and Iraq attest to that. End of story. Unless democracy arises organically, from within a society, it's not going to take root, and may be a democracy in form but not in spirit or substance (i.e., elections take place, but the same guy always wins). Russia's backsliding from democracy into autocracy, under Tsar Vladimir, attests to this latter point.

The elephant in the room, of course, is China. So far, China's managed to buck the trend, and develop very rapidly, under a tightly controlled autocratic system, in which the Chinese Communist Party has refused to yield its monopoly in power, its opponents are jailed, and human rights violations are egregious and ubiquitous. The trillion dollar question is: Will China manage a peaceful transition to a more democratic system, or will the country implode as the party tries tooth and nail to keep its iron grip on power, and simmering protests from below eventually overwhelm the power of the state and lead to anarchy and chaos. Doomsayers about China, including me, have predicted this for a while, and we've been proved wrong so far. But now, with the global economy in a tailspin, Chinese exports plummeting, and Chinese growth decelerating, there's less "stuff" around that the Communists can use to bribe its populace with, and less to dangle in front of political opponents who need to be co-opted and brought into the system. So my prediction again is that change is on the horizon for China. I hope it's peaceful, but it may not be.

The crisis of globalization: Looking in the wrong place

2009-03-11T13:34:00.000-04:00

A spectre is haunting the world. No, it's not a socialist revolution, but something that may have as cataclysmic an effect on the global political economy. It is a crisis of globalization. I, and many other bloggers, pundits, and putatively wise people generally have commented on the roots of the crisis, so I won't rehash that material here. What concerns me at present is the implications for the project of globalization. What is of greatest concern is that blame will be attached to globalization per se for the mess that we're in, whereas the primary faults lay in the failure of domestic regulatory regimes (especially as they pertain to banking and finance). So, while it might be fair to say that globalization has been poorly managed by national economies, it would be erroneous, in my opinion, to lay the blame at the doorstep of globalization itself. The reasoned response to our current mess is most certainly not going to lie in turning inward, whether through raising trade barriers, or creating regulatory systems for international finance so onerous that capital stops flowing across borders and nurtures purely its domestic garden. Yet there are early warning signs that such an unreasoned, knee jerk reaction may be exactly what is on the horizon.

One of the main lessons that I learned from my great teacher at Columbia, Jagdish Bhagwati, is what has come to be known to economists as the "targetting principle", a key idea in formulating sound economic policies. Basically it says, find the market where the underlying problem exists, and fix that. Fixing something else, that was indirectly affected, but is not the root of the problem, may or may not fix things, and, quite possibly, will make things worse overall. Sounds sensible, doesn't it? Medical diagnosis and treatment works in the same way, and would be the recommendation of what Jeffrey Sachs, another Columbia economist, calls "clinical economics". How does it apply to the current situation?

In our current mess, the root of the problem is a failure in domestic regulation, as I (and many others) have already mentioned. Banks were allowed to behave recklessly because they were insufficiently supervised and regulated. Some of that lending, of course, took place in foreign markets, and so there is an important global dimension to the fallout from the meltdown of the misbehaving banks and their toxic debts. British banks are collapsing and being nationalized, for example, not because of something inherently wrong in the British market, but because they imprudently bought too many derivatives, known as asset-backed commercial paper, based on risky and unsound sub-prime mortgages in the United States. Is this the fault of globalization? No. The fault lies in the failure of prudential and sensible bank regulation in each national economy. Globalization, by allowing this toxic debt to be spread around the world, has exacerbated the problem (although, arguably, made it less bad in the US, where the problem originated), but is not its proximate cause.

The wisdom of the targetting principle teaches us that where national governments should be looking to fix the problem, and prevent it from happening again, is is reregulating the banks and domestic financial systems in their national economies. That, of course, is starting to happen. But what is also happening, erroneously in my judgement, is that some analysts are pointing a finger of blame at globalization itself, suggesting that looking inward may be part of the necessary corrective to the excesses of the past decade. This is clearly wrongheaded. Now, openly protectionist language is rarely used, but there is always the Orwellian newspeak, that says, for example, that what we need now is not "free trade" but "free and fair trade". Why the qualification? If "free" trade is not "fair", then perhaps the the thinking underlying that proposition should be explained, rather than by confusing issues and lumping "free" and "fair" together. ("Free" anything is, in itself, of course, a potentially misleading concept, as my last couple of entries suggested, in the context of the term "free markets".)

One could take things back a step, and make a more sophisticated, second-order, argument, suggesting that globalization in some way induced risky behaviour by banks, or created pressure on domestic regulators to relax regulations excessively, because they wanted their national champions to succeed in a more competitive global environment. This is a species of what is often called the "race to the bottom" argument. This is a more difficult one to deal with, since no government is going to admit that it allowed regulations to become laxer because they wanted to compete more aggressively in global markets. (Unless you're Luxembourg, perhaps.) So the causal connection, while it may exist in theory, is difficult to confirm or confute in practice.

There might perhaps be some truth to this argument, when it comes to very small, highly open economies that hooked themselves on foreign capital. The problems in Iceland, or Ireland, or in several Eastern European emerging market economies might reflect a deliberate degradation of domestic banking norms and regulations in the hope of enticing foreign investors to their shores. But the correct response, surely, is not to throw the baby out with the bath water, and start deglobalizing as a response, but to repair the poor domestic regulatory framework that induced the problem in the first place.

This argument, in my judement, carries little weight, when applied to the United States and the United Kingdom, the chief culprits in the current global crisis. It was the deregulatory zeal of Ronald Reagan in the US and Margaret Thatcher in the UK that swept away a host of regulations, many bad, but, some, as we know now, not only good, but essential for the sound functioning of a modern global economy. The apparent (and in some ways, very real) success of deregulation in these two countries, along with the collapse of the Soviet system and the disappearance of a viable socialist alternative, is what acted as the driver for liberalizing and globalizing reforms in the transition and emerging countries, the "BRICs" (Brazil, Russia, India, and China) in particular.

Now, these four economies are amongst the most globalized amongst any major developing or emerging market economies, and they potentially stand the greatest to lose, if globalization goes into reverse gear, or even if stalls. Thinking through the attitudes and potential policy responses in these major emerging economies is an important challenge, both for policymakers there and for those of living in the West. That, though, is the subject of my next post ... so, as ever, watch this space!