The Mad Hatter's Take

Demonetization and Other Stories

2016-11-11T22:55:00.001+05:30

It's hard to shock a country half expecting a declaration of war, but the PM achieved that with the "demonetization" of 500 and 1000 rupee notes. Technically, this isn't a demonetization, merely swapping one bunch of notes with another, but let's be loose with terminology like everyone else seems to be.

So, what's this all about? India's economy is estimated to be around 150 trillion Rupees in size (150 Lakh Crore Rupees, in Indian numbers). The amount of cash held by Indians is estimated to be around 12% of that, or around 18 trillion (lakh crore, if you will) Rupees. This is considerably larger as a fraction of GDP than other economies. By comparison, the $53 Trillion US Dollar US Economy runs on about $1.5 Trillion in cash.

What explains Indians' love for cash? For one, we do not trust financial institutions (for good reason, perhaps), and tend to hold more cash than is ideal. Also, our large stock of "black money" is commonly brought up as a reason for a large stock of cash. About 25% of the Indian economy is estimated to run on Black money, and hence has to run on cash. Politicians, industrialists, and other worthies are assumed to be swimming in ill-gotten wealth, which they (in the public imagination) store as bundles of cash that would give Manhattan's skyline some competition. In reality, much of this is converted into assets - mostly Real Estate, gold, diamonds etc., or sent abroad through Hawala channels and converted into Foreign Assets, whether financial or real. That, however, still leaves the cash circulating through the cash economy, still living a shadowy undercover existence, turning up in such unsavoury places a Real Estate transactions, Election and Political funding, criminal activity, and even, it is said, as daily allowances paid to stone throwers in Kashmir.

Leaving aside the Black Money issue, the cash economy is a problem in itself. Every Rupee held as cash is three Rupees not in a bank account, thanks to the fractional reserve banking system's multiplier effect. A country struggling to find money to lend can ill-afford to keep so much cash out of the banking system, it is said.

So, what does the "demonetization" of high-value notes do? Of the 18 Trillion Rupees or so that Indians hold in cash, about 85% is estimated to be in 500/1000 Rupee notes. In addition, an unspecified amount of "fake" currency circulates in the system, reportedly largely thanks to the efforts of our Friendly Neighbour to spread peace and love throughout the country. In one fell swoop, as it were, all of this has been reduced to "worthless paper", as the PM put it.

Well, not so fast. Since cash can be deposited in bank accounts, and withdrawn (though in smaller chunks for the foreseeable future), the possibility of various means of converting some "black" money into accounted money does exist. In a stunning exhibition of "jugaad", Indians have come up with various ingenious schemes to sanctify black money. Presumably, this will extend to only a fraction of the actual stock of such money, and not at all to fake currency.

The intended effects of this action are to:

Eliminate or drastically reduce the circulation of fake currency, which is used for unsavoury activities including the sponsorship of peaceful groups that are not at all involved in terrorism, cross their heart.
Reduce the stock of black money. For this, not only must current stock cancellation be done, future flows (rate of black money creation) must be reduced as well as future stock of currency. That means, printing much less that 18 Lakh Crores worth of notes, and unsubtly encouraging people to keep cash in their accounts using withdrawal limits.
Reduce the size of the cash economy, move more of the economy into the banked segment. Prior attempts at low-balance accounts are a precursor to this.
Increase the trust people have in financial assets, while simultaneously reducing their trust in cash. The implied threat of future demonetization (sorry, turn in those 2000 Rupee notes, pink wasn't a nice colour after all) would make people hoard cash less, or at least in theory.
Encourage cashless payments, electronic transfers and all lovely systems that can be easily tracked by Big Brother, er, your friendly Welfare State for tax compliance.

An interesting side-effect is a one-off reduction of budget deficit. How does that happen? Every currency note printed is a liability on the RBI's balance sheet. If, say, 50% of the currency stock does not get replaced by new notes, that's a large reduction in liabilities, which is counted as RBI's profit, and automatically transferred to the government. An analogy would be if you wrote a cheque, and knew that it expired unpresented (and ignoring any legal provision for the cheque to be reissued), you could now consider yourself richer by the amount on the cheque.

Since free lunches do not exist, there are risks and ill-effects to be considered as well

The sheer inconvenience and hassle this puts most people through. The upper and middle classes have the option to go largely cashless for months. The burden of dealing with the hassle falls disproportionately on the poor.
Confusion in the cash economy, which will spread to the overall economy as well. Expect a drop in growth for a quarter or two. If all goes well, that should recover quite sharply as the economy settles into a less cash-heavy mode coupled with an increase in bank credit.
A temporary lull in stone throwing in Kashmir. Not an ill-effect, you say? I'm sure there are a whole bunch of incensed intellectuals who'd agree with me on this. Hmph.

How is all of this going to turn out? It's hard to say, so let's paint a couple of scenarios to see how it goes

Optimistic:

The hassle of deposits and note replacements sorts itself out in a month or two.
Real estate prices and gold prices fall, which leads to a drop in overall inflation too.
Black money largely disappears from political/election funding.
The cash economy is drastically reduced in size, and has mostly migrated to the regular banked economy
Growth picks up hockey-stick-like in two quarters
The Budget for 2017-18 looks much healthier, and spending boosts growth as well as social outcomes
Corruption is a thing of the past. Wait, we're optimistic not delusional, so lets just say corruption exists, but in drastically reduced volumes.

Pessimistic:

The hassle causes serious issues, and is remembered by people, especially the poor for long
Black money comes back, slowly but surely, as in the past. Stock of new notes turns out to be similar to the old, and "black" stock is built up in a year through ingenious methods.
The cash economy remains similar in size
Growth doesn't pick up for a year or more after the initial confusion
Spending the notional profit on subsidies causes a spike in inflation
Corruption stays as is, and political funding/elections remain the same.

A realistic scenario is likely to be somewhere in between, cliched as that is. Exactly how far away from these extremes we end up needs to be seen.

In an interesting aside, the band called ABBA had a song called "Money" which I quite liked as a child.

Sweden is now largely cashless, thanks to the efforts of Björn Ulvaeus of ABBA.

IITs, Flipkart and Campus Placement

2016-06-04T13:49:00.000+05:30

If you think IITs are overreacting to Flipkart and other companies withdrawing offers, you should see some of the nasty letters companies write to placement offices when candidates do not turn up after accepting offers.
The Hatter knows of companies that "blacklisted" IITs in the '90s since too many candidates they picked ended up not joining. The shoe is on the other foot now, as it usually ends up.

The Hatter has happened to have seen most sides of the campus placement game, getting a job at campus placement at IIT-M, working with the placement cells, recruiting from IITs through placement cells, and sadly enough, having to rescind offers (though not at IITs) at a startup he worked with nearly a decade ago.

The goal of campus placement has been to optimally match candidates and employers, while maximizing the chances of every candidate to get at least one job, and reducing the chances of regret as well as candidates not accepting offers. One fundamental feature of most campus placement processes is that candidates are required to drop out of the process after accepting an offer. This improves the chances of everyone getting an offer, as well as the probability of an accepted offer leading to a candidate actually joining at a later date.

The solution for issues similar to the Flipkart case is to re-architect the campus placement game to match the new reality. It's way harder these days to make offers 6-10 months in advance as campus placements require.

Rather than blacklisting companies that rescind offers, an alternative idea is for them to be moved to an "open market" group in placements. Candidates may be allowed to attend as many interviews as they wish in this group, without the obligation to drop out of the process after they get picked by one company. This evens out the risk a bit. Companies that can provide a contractual guarantee of firm offers can, perhaps, be allowed to continue with the current process of requiring candidates to drop out of placements after they accept an offer. This will allow both parties to optimize for their preferred level of risk.

Loose Cannons

2016-06-04T13:24:00.001+05:30

Let's say you have a large group that believes things that the majority considers crazy (RSS did 26/11 or that Sonia killed Rajiv), and sympathize with a certain party. That party wants their votes and support, but can't publicly endorse their perceived craziness. And they don't want to end up alienating them either.
How would they go about keeping them engaged?

Enter the "Loose Cannon" solution - a leader who's given license to spout crazy stuff. The "loose cannon" leader keeps the "crazy" masses engaged, but is far enough from party leadership for deniability - "His personal opinions" .

Two examples - Digvijay Singh for the Congress (who I think must be the prototype), and now Subramaniam Swamy for the BJP.

So Digvijay says stuff like RSS did 26/11, Naxals are misunderstood, etc. and keeps the Congress's fringe support intact. That's what's happening with Swamy as well. I expect the BJP to distance themselves from his opinions, but not silence or discourage him.

Loose cannons may be irrational, but they're a very "rational" solution, in the rational choice theory sense, to a hard problem.

Addendum:
Under what circumstances could a loose cannon take over leadership?
Consider how a laser works. You need to pump in energy to create a "population inversion" - more electrons in a higher energy state than a lower one. You also need a reflecting chamber for emitted photons to bounce back and forth stimulating more emission and so on.
Given a population inversion between the fringe and the base, and a social media echo chamber where things are said and amplified, and bounced back, and further amplified, interesting things can happen.
Any resemblance to an election cycle anywhere in the First World is coincidental.

Ambedkar vs The Basic Structure Doctrine

2015-11-27T09:45:00.002+05:30

In his famous "Grammar of Anarchy" speech, Ambedkar lays down four dangerous paths that he recommends we (later generations) avoid:

Divisive politics
Hero-worship aka Bhakti
Non constitutional and agitational methods - strikes, bandhs, satyagrahas, protests
Social inequality

These have been more than adequately discussed, and it must be pointed out that we do not do well on any of these measures. Surprisingly enough, the most relative success we've had is on the fourth point - every other has only become worse since his day. This does not, of course, imply that we're ok on an absolute scale on the fourth point - we aren't.

A relatively less discussed part of this speech is where Ambedkar quotes Jefferson as saying:

“The idea that institutions established for the use of the nation cannot be touched or modified, even to make them answer their end, because of rights gratuitously supposed in those employed to manage them in the trust for the public, may perhaps be a salutary provision against the abuses of a monarch, but is most absurd against the nation itself. Yet our lawyers and priests generally inculcate this doctrine, and suppose that preceding generations held the earth more freely than we do; had a right to impose laws on us, unalterable by ourselves, and that we, in the like manner, can make laws and impose burdens on future generations, which they will have no right to alter;

Ambedkar sees the constitution not as a holy book, cast in stone for the ages, but one that embodies the will of each generation, one that each generation may modify to suit its own ideas and opinions. He considers the 2/3rd majority requirement for constitutional amendments as "facile". One wonders what he'd have said today, when simple legislation is hard to pass. Perhaps he'd have a different opinion today about the ease of the procedure, but the intent was clearly not to bind successive generations to the ideas of his.

Contrast this with the opinion of the Hon. Supreme Court in the Kesavanada Bharati case, evolved over several cases, which laid down what is referred to as the "Basic Structure" doctrine. Interestingly enough, the honourable justices in the case had differing opinions on what the inviolable "Basic Structure" of the constitution was.

AG Noorani traces the origins of the "Basic Structure" doctrine to a German scholar, Professor Dieter Conrad, whose opinion on this point were championed by M. K. Nambyar, one of India's leading constitutional lawyers. Noorani traces these ideas further back to the German constitution, which has explicit limitations on amending powers of the legislature, and defines its own basic structure, perhaps as a "never again" reaction to the emergence of Nazi dictatorship.

I have not seen the explicit contradiction between the "Basic Structure" doctrine and Jefferson's views on inter-generational equity as approved by Ambedkar sufficiently addressed. Prima facie, it would seem that there are insufficient grounds for importing this idea from a constitution that was not a direct ancestor of ours, and one that the constitutent assembly did not consider, especially given the explicit contradictory remarks made by Ambedkar.

The Perfect Response

2015-11-13T16:49:00.002+05:30

The Mad Hatter is a huge fan of the much maligned Macaulay. You can dislike him much as you wish, but he was responsible for mass education in India, and eventually the birth of Indian Liberal thought.

However, there's one little bit of his remarkable "Minute upon Indian Education", that jars. It's where he says

... a single shelf of a good European library was worth the whole native literature of India ..

Of course, he was mistaken, but to dwell on this little jarring bit would be incorrect.

Finally, someone has found the perfect and unstated response - bookends with Bhagavad Gita quotes as a gift to the British PM, presumably to adorn the ends of his bookshelves. Hat tip to the unknown genius in the PMO/MEA that thought of this.

The centerpiece of each of these bookends is a silver bell and tidings, which has a verse from the Bhagavad Gita. pic.twitter.com/hjIvvnQaOm
— PMO India (@PMOIndia) November 13, 2015

Ten Lessons I Wish Mr. Modi Takes Away from Bihar

2015-11-10T12:49:00.002+05:30

Rather than pontificating on what Modi should've done in Bihar, it's probably more productive to focus on what lessons the government he leads ought to learn from it. What lessons they do learn is for us to wait and watch, but these are what I'd like to see:

Promote state leaders. That's the way the current lot at the Centre came up, and while it's tempting to try to compensate for the weaknesses of state leaders, they need to win elections primarily on their own steam.
The foreign policy focus has been overdone a tad, get back to domestic focus until things get better.
Make it very clear publicly that the government's mission is not to rake up divisive issues. Loudmouths need to be chided publicly with a clear signal, rather than privately.Anything not directly relevant to the core mission must be avoided.
Get out the big artillery on governance. You can't blame the opposition for stalling, you have to make the choice between negotiation with them, and all out offense - using marshals, joint sessions, public shows of disapproval by mobilizing supporters, the works. Either way, something needs to be seen happening.
Reforms, real ones - lay them on the table so we can all see. Pick a few sectors and rid them of government control, let's find out what the market can do there, and what the lowest touch method of supplementing the market is. De-bureaucratize aggressively in a few other sectors.
Please stop with all those "special packages" for states already. The finance commission has decided, based on objective standards, how much assistance each state deserves from the Union, and that is what they must get. Gimmickry such as the "packages" for Kashmir and Bihar penalize both the taxpayer and other states.
The coalition that was built in 2014 included economic liberals traditionally not associated with your party, and they need to be seen in positions of influence in your government. Fix the monopoly of party faithfuls in government as well as electioneering.
Revive the network of professionals (Citizens for Accountable Governance, remember) that helped in the general elections, make them a bidirectional information/communication network that supplements what your party/government are telling you, and what you and the media are telling people. Override party reluctance on this - as you've seen, nothing much will happen just with the party faithful vote, and Mann Ki Baat is highly overrated as a means of communication.
Show some ongoing action on corruption - it got you votes, and too much squeamishness in prosecution of the corrupt for fear of being seen as vindictive does not reflect well. The public is in a vindictive mood.
Finally, find out what's preventing the private sector from investing. Really. And fix it - it might need some creative financing or debt recasting, which needs to be managed both from the communication (OMG! PUBLIC MONEY GOING TO CORPORATES) as well as moral hazard perspectives.

Engineer Joins Protest Against Rising Intolerance

2015-11-01T13:17:00.001+05:30

Bangalore based engineering student Sandeep Sehgal has joined the increasing chorus of voices protesting rising intolerance under the Modi government.

When Sehgal went to purchase electronic components for his lab project at SP Road, the hub of electronic trade in the city, he was in for a rude shock. His components sheet required parts of 15% tolerance, but shopkeepers at SP Road did not stock parts of tolerance greater than 10%. This, said Sehgal was yet another example of reduced tolerance under the Modi regime.

Shopkeeper Sushil Agarwal of SP Road, when contacted, said that such high-tolerance components had low market demand, and hence he stocked only those he could sell substantial quantities of. "Uska kya bigadta hai, jo manga hai, us se bhi accha maal de ra hoon", he continued.

This, claims Sehgal, is another example of the rising majoritarian trend. The Indian Constitution guarantees special status to all minorities, he continues, and not catering to minority demand of this sort was patently unconstitutional. He is in discussions with friends to file a Public Interest Litigation (PIL) in this regard in the High Court of the state.

Sehgal has been quite active on Social Media protesting this situation. He shared a speech by Raghuram Rajan calling for tolerance on his Facebook wall. However, one of his classmates, he says, commented that Rajan had actually recommended critically engaging with all claims and evaluating them on the basis of concrete data. He then asked Sehgal for data on his claims of rising intolerance. This, claims Sehgal, is an instance of Modi-bhakts abusing him for his views which are amply proven by intellectual celebrity endorsement. Though he has only read the paragraph on tolerance since the speech was too long, he is sure Rajan could not possibly have meant that claims about intolerance must also be subjected to the cold consideration of data and logic.

Such incidents, he says, prove that he is not even safe from harassment on social media. "How can they disregard my lived experience and ask for data?", he asks.

In protest, Sehgal plans to return his engineering degree. When contacted, office clerk Kattappa at the engineering college Sehgal studies at claimed Sehgal couldn't return his degree, as he had not been awarded one yet. Sehgal is yet to respond to our query on this.

When asked what he planned to do, Sehgal stated that he intends to enroll at the Film and Television Institute of India (FTII), the last bastion of liberal thought in India. He plans to complete the one year course in ten years, the fastest in recent history. After that, he plans to make a documentary on open defecation in India, get awarded for his work, and return the award in protest.

---

Disclaimer: Satire, of course. All names are fictional and any resemblance to real people or intellectuals, real or otherwise, is coincidental. Stock image used is for representational purposes only. (If you believe you own the copyright to the image and have not released it in the public domain, please leave a comment)

Say No to internet.org?

2015-10-10T17:04:00.001+05:30

Tim Berners-Lee wants us to say no to internet.org.

Dare we use this opportunity to plug the Hatter's disaggregation proposal as a via-media between net neutrality and letting ISPs do what they will?

Interesting Data on Farmer Suicides In India

2015-10-10T16:49:00.000+05:30

Dr. Shamika Ravi of Brookings has authored an interesting paper on farmer suicides.

Analysing NCRB (National Crime Records Bureau) data on suicides, she comes to some conclusions that run counter to the popular narrative on this issue.

NCRB data shows relatively rich MH/AP have far more farmer suicides than UP/Bihar. This holds for all professions, including private sector employees.

The Index of Indebtedness values in Bihar/UP/Maharashra are similar, indicating that indebtedness cannot be the primary cause of farmer suicides.

Only 5% of all suicides happen due to bankruptcy/economic reasons. 30% happen due to illness, including mental illness

Housewives are the largest suicide category in India. Farmers are now third, after private sector employees. Farmer suicides are dropping faster than other sectors

Drawing on research on behavioural pyschology, she concludes that the media spreads suicide contagion by hyping suicides and should exercise restraint in overly hyping this phenomenon.

Going by this data, a better designed policy response to suicides should deemphasize loan waivers, and emphasize health and mental health interventions across classes. The lack of disaggregation in NCRB data (as stated by Ravi) makes it difficult to assess whether farmers are more affected by health issues than other classes. However, the suicide contagion caused by hyperbolic media reporting is a real problem.

The undue focus on farmer suicides isn't helping anyone, especially them!

Thoughts on the "Draft National Encryption Policy"

2015-09-20T14:53:00.000+05:30

The Department of Electronics and Information Technology, known by the rather unfortunate acronym "DeiTY", has released their "Draft National Encryption Policy" for public comment. Public we are, and comment we shall.

Section 84A of the IT act 2000, as amended in 2008 states:

The Central Government may, for secure use of the electronic medium and for promotion of egovernance and e-commerce, prescribe the modes or methods for encryption

Good, so that's what the Draft Policy aims to do. What it ends up doing is, in the Hatter's humble opinion, hinder the secure communication and eCommerce.

While the government's right to control the technology used by citizens to communicate with it is unobjectionable, it is excessive for that control to be extended to communication between private citizens (C2C, as per the policy) between businesses and citizens (B2C & C2B, as the policy calls it).

On demand, the user shall be able to reproduce the same Plain text and encrypted text pairs using the software / hardware used to produce the encrypted text from the given plain text. Such plain text information shall be stored by the user/organisation/agency for 90 days from the date of transaction and made available to Law Enforcement Agencies as and when demanded in line with the provisions of the laws of the country.

The need to store encrypted and plaintext for 90 days for all communications looks excessive. Does this extend to all C2C and B2C communications? Do eCommerce vendors have to store my credit card data (and shudder, my PIN) in plaintext for 90 days? The language of the policy seems to require that. If that is the case, this would be quite a good "National Hacker Promotion Policy". Why bother to intercept communication when you can hack into the providers' storage and retrieve plaintext.

In case of communication with foreign entity, the primary responsibility of providing readable plaintext along with the corresponding Encrypted information shall rest on entity (B or C) located in India.

Woe unto us consumers! Not only do we have to store plaintext for all communication with entities outside India, we also have to store encrypted text. Remember to store encrypted text for all your whatsapp messages sent to your friends living outside the country. Now how would you do that, unless you're sophisticated enough to have a snooper running to log all your communication?

Service Providers located within and outside India, using Encryption technology for providing any type of services in India must enter into an agreement with the Government for providing such services in India

As drafted, every website that uses HTTPS must register with the government. So must every app vendor that uses a secure connection to their backend.

Algorithms and key sizes for Encryption as notified under the provisions in this Policy only will be used by all categories of users.

Therefore, any encrypted communications between private individuals must use algorithms prescribed by the government. After all, what could go wrong, right? Ahem, backdoor, ahem.

A saner alternative would have been to take the following approach

Prescribe technology to be used for G2C and C2G communications.
Recommend technology (algos and key length) to be used for secure B2C and C2B through a certification process.
Recommend technology for C2C communication, without proscription of alternatives.
Create a certification process rather than mandatory registration for encryption product vendors.

But that'd have been quite unlike a government agency, wouldn't it?

Disaggregating internet access

2015-07-13T17:43:00.003+05:30

The kerfuffle about net neutrality made the Hatter think about disaggregation. What, you ask? And why is the Hatter qualified to think of it? Well, gentle reader, please be informed that the Hatter refuses, a la Groucho Marx, to think about any subject he is qualified to. So there.

Moving on, what happens when you sign up for "internet access"? Assuming you've signed up for a DSL or a Fibre-to-home provider, two things happen. One, you're connected to something called (loosely), last-mile access, which performs the functions of getting packets to and from you to your ISP. Secondly, your packets are then connected to a network belonging to your ISP, which could range from a large national network ("Tier 1") to a small local "Tier 3" network.

Networking architecture (source: Wikipedia)

There is a complicated (but transparent to you) set of business relationships between ISPs that own networks of various sizes, which allows all of them to talk to each other. Smaller ISPs tend to pay bigger ones to connect (simplifying a bit), while ISPs of the same size tend to interconnect for free. Small networks can directly talk to each other through IXPs (Internet Exchange Points), allowing them to skip paying upstream networks.

The largest networks ("Tier 1") used to be connected to something called the "Internet Backbone", but they're now more like the backbone themselves, since the NSFNET backbone was shut down in the US. This of course, is US-centric, where the internet was born.

Now that the internet has been globalized, we have network architectures like these in most countries, which get interconnected together through dedicated links. For example, India is connected to the global internet through multiple undersea cables, landing at Mumbai, Chennai, and Kochi.

What if you're connected via 3G wireless instead, like most Indians are?

(Image courtesy Juniper.net)

Well, this is what things look like: Your phone connects to a cellular base-station, which connects to a Radio Network Controller (RNC), and through your cell provider's network gateway called GGSN (Gateway GPRS Support Node, but don't bother about the name). 4G (LTE) changes things a bit from the picture above, but from our perspective, it's got a bunch of thingies that connect your phone up, and then hand over to the internet through a gateway, though the details and names change.

Ok, having said all that, we get to the point. You buy "service" from your ISP or telcom provider, which gives you two things

connection from your home, or mobile device to the ISP
networking ability to the rest of the internet

Just so life isn't too complicated, you pay one consolidated fee for both services, for which your provider has to set up infrastructure to

connect you to their network (via air, or a cable of some sort)
route your packets to anywhere on the internet

The first part usually involves a license of some sort. For the majority of Indians on the net, their access is through 3G/2G wireless, which is provided on licensed spectrum, and hence becomes a government regulated limited monopoly.

It appears to the Hatter that many of the pro-neutrality arguments rest on aspect 1 - you need a regulated monopoly to connect you, and you can't trust it to be a fair gatekeeper, while most of the anti arguments rest on aspect 2 - charging for networking hasn't really been thought through or innovated enough, it costs a lot of money to build network bandwidth, etc. etc. For example, though this article talks about last mile, it's really about networking.

So, why not split internet access into two services?

Last mile access, which I buy from my ISP or telcom provider, which is regulated, licensed and neutral - I pay only per packet.
Network access, which I can buy from any provider, which my last mile provider has to connect me to. This will route my packets anywhere, and doesn't really involve monopolies, just large enough sums of money. I could buy network access from one provider and last mile access from multiple - for example, why does my home WiFi traffic and my 3G wireless traffic have to count as different traffic (barring last mile)? Why shouldn't I contract with the same networking provider to route them to wherever they need to go (through whatever transit/peering arrangement)? Here, one can experiment with various payment strategies, business models, etc. with much better confidence of the market operating well enough to pick the right winner.

This could make things a bit more difficult for people to understand, but does have the advantage of better flexibility. One could always allow for combos of 1. and 2. for people who can't be bothered to optimize, with disaggregation available for those who do want to, tech-literate folks with multiple connections, for example. The existence of disaggregation can be a powerful enough force for combo packages to be reasonably priced in the first place.

What say you, gentle reader?

A Tall Tale about Watchdogs

2015-06-30T10:56:00.001+05:30

Our roving reporter turned in this story. Since he's notoriously lazy, we don't believe a word of it, and think he made it all up. Therefore, we add this disclaimer: this is a work of fiction. Any resemblance to real people is coincidental, or a product of your imagination, whichever suits us better. Reader beware.

He looked mellower than I expected.

I'm glad you could talk to me, sir! How did you manage to get here incognito?

"I have my ways. Sometimes, they're just glad to not see me for a while. So, what do you want to talk about?"

Perhaps getting straight to the point was the way to go with him.

What do you think of the recent Lokayukta fracas in Karnataka?, I asked.

"What fracas?"

Well, there's this story about corruption inside the Lokayukta, with officials attempting to extort money from those whom they investigated.

"Bad. Very bad. Totally against principles. Must be properly investigated"

Yes sir, but doesn't this bear out what some critics of the whole Lokpal/Lokayukta idea said would happen? Who watches the guardians and all that? After all, we created the Vigilance department to watch over the government, and they allegedly went corrupt too. Now the Lokayukta, tomorrow the national Lokpal? Aren't we just opening more avenues for corruption and saddling the taxpayer with more layers of expensive bureaucracy?

He was silent, disturbingly so. After a while, he looked into my eyes, with that burning intensity one associates with the photograph of him setting fire to electricity bills. Were things going to get hot for me? Should I have softened him up with some casual conversation? But then, he relaxed, and a smile made a brief appearance at the sides of his mouth.

"We can always have another watchdog to watch the watchdog. That should do it"

But, sir, who'll watch that watchdog? We've moved corruption from the government, to vigilance, to the Lokayukta, and now we'll just move it one more step.

"Yes, then we'll have another watchdog to watch the watchdog that watches the watchdog of democracy, and so on"

But, how will all this ever end? How will we pay for this? How will investigation ever end if all these watchdogs have to approve each one?

"Let say, the watchdog that watches the Lokpal is called Lokpal 2, and the watchdog that watches it Lokpal 3 and so on."

Yes sir.

"How many employees does the Lokpal have?"

I don't know sir, a thousand?

"Let's say a thousand. Then Lokpal 2 will have half of that, and so will work twice as fast. And Lokpal 3 will have half as many employees as Lokpal 2 and work twice as fast as it, and so on. You see where I'm going with this?"

Not sure sir, will that not lead to an impossibly large number of people?

"Do you remember your class 11 maths, son? Infinite series?"

No sir.

"Think of the sum of the infinite series: 1 + 1/2 + 1/4 + 1/8 + .... which represents the total number of people (or time) Lokpal, Lokpal 2, Lokpal 3 and so on need"

He picked up a paper napkin and drew this:

"You can see from this picture, that that series of numbers adds up to 2! Therefore, my idea needs only finite time and people, only twice as much Lokpal needs."

Hmm, so at the cost of twice the employees of Lokpal, and twice the time it takes to work, we can create an infinite regress of investigation and investigation into investigation and investigation into investigation into investigation and so on. You're a genius.

"Yes, Ashu tells me so, only he calls me a genie instead"

Talking of genies, this reminded me of a Douglas Hofstadter story about genies/djinns and infinite regress. He talked about djinns having lamps to call on other djinns to answer questions they couldn't, and so on. Each level of djinns works twice as fast as the previous, etc. Do you know what he called it?

"No, what"

GOD.

"Why?"

God stands for God Over Djinn. A recursive acronym.

"Brilliant, ji, brilliant. We must have a name for my idea too".

May I suggest LOL sir? LOL over Lokpal would be the expansion.

"Not bad, we will have to consider this. This will actually work."

And thus was the eternal philosophical problem solved. So never ask "quis custodiet ipsos custodes?" again, because we know the answer.

Arun Shourie: Warning to be heeded, sour grapes, or both?

2015-05-02T15:42:00.001+05:30

You can see the petulance born from not being given a ministry in Shourie's interview to Karan Thapar, but that's something that can be overlooked, since it's Arun Shourie, a formidable intellect as always.

Leaving aside from the guarded praise for foreign policy and energy, let's look at the criticisms he makes.

Criticism of the finance ministry, mostly hidden barbs at Arun Jaitley. Have to agree 100%. The Finance Minister has underdelivered, and hasn't reined in his tax bureaucracy. This has hurt. My read is that Modi believes Jaitley is the best person to steer GST though, being pro-establishment and well connected, and has chosen to overlook his missteps. But he can't do that for long. Jaitley needs to get GST through, and then crack the whip on his bureaucrats.
Specific demand of a TARP style bailout of banks so they begin to pass interest rate cuts through and actually lend. That's something that does make a lot of sense. However, I think you ought to do better than TARP, and demand equity from banks in return. But how is this going to play out politically? It looks like a political non-starter. Read with point 5, looks like he underestimates the political difficulties involved. This is not Vajpayee's India anymore, and you must expect the opposition to make political capital out of this. One can clearly see how that's going to play out - "GIVING OUR TAX MONEY TO BANKS TO LEND TO CORPORATES - OMG!!!". Even in the US, the original TARP was politically difficult. In India, that's still left leaning (but wants corporate jobs), that's going to be tough to sell. I wouldn't be surprised if it was considered, but didn't make the cut in favour of the Land Acquisition Bill.
Criticism of overcentralization in the party: he may have a point, but I do not think the earlier BJP leadership distinguished themselves at all. Does Arun Jaitley merit a place in the troika? Is Modi merely keeping his biggest threat in the party close to him? One can only speculate here. In any case, Sushma Swaraj, LK Advani, Shatrughan Sinha, and the like are sulking, and understandably. It would be hard to argue that the troika is forcing things in states already having a credible leadership. If so, we haven't seen much evidence yet.
Minority apprehension - is the venerable Mr. Shourie not able to see through what's clearly media spin? Are we seeing some senility from the author of "Eminent Historians" who deconstructed the spin of historians? This is one point that can be dismissed, though with some sadness.
Handling of parliament: I think he doesn't get the point. The parliamentary logjam is due to sheer obstructionism, something the BJP has been guilty of too in the past (though their parliamentary leadership bent over backwards to allow horrendous bills like RTE and LAB through). One cannot compromise sufficiently enough to handle obstructionism, it just doesn't work. What seems to be strange here is why the heavy hammer of a joint session of parliament is not being used by forcing one house to reject some bills.

Shourie has been a "small government" advocate, but Modi isn't. What Modi refers to as "minimum government" is really more like "efficient government". Shourie would (correctly) ask for bureaucracy to be mercilessly trimmed, where Modi would look to staff key roles with efficient bureaucrats whom he could trust and delegate to, and use automation where possible. That has worked for him in Gujarat, but that may not be repeatable or may be limited in scope.

The problems with bureaucracy cannot be solved by getting better bureaucrats in. The problems are intrinsic, and can only be solved by cutting government departments, regulations and inspectors down to size. While the Hatter agrees with Shourie on this one, Modi is the one that won elections.

One can see why Mr. Shourie isn't in the cabinet. He doesn't have much of political capital with the powers that be in his party, has disagreements with Modi on fundamentals, and does seem to be losing his grip just that little bit.

Was Marx a Social Democrat?

2015-04-25T16:25:00.002+05:30

Dipankar Gupta thinks so, in his editorial page article in the Times of India today.

The Hatter will let the primary theme of the article pass, and offer no comment on the rather hideous Bengal-centricity of the piece beyond a point-and-snigger at the comrades of the Kerala CPI(M) who sustain the party financially. The point that he seems to raise about Marx being a social democrat at heart is something interesting.

If you do not believe this, take a look at the concluding section of Chapter 2 of the Manifesto. Here Marx pointedly advocates for universal education, for progressive income tax and for the eventual erasure of the town-country distinction.
Interestingly many social democrats, the world over, quickly walked away with these ideas. As Marx had left the door open, there was no need for them to even knock.

In the classic Critique of The Gotha Programme (1875), something that's familiar to every communist, and even to reactionary chaps like The Hatter, Marx had this to say about redistributive Socialism.

Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?

Social Democracy, as opposed to the revolutionary line pushed by Marx, originated in the ideas of Ferdinand Lassalle. What Marx thought about Lassalle's ideas can be easily seen from a few passages of the same Critique of The Gotha Programme

Lassalle knew the Communist Manifesto by heart, as his faithful followers know the gospels written by him. If, therefore, he has falsified it so grossly, this has occurred only to put a good color on his alliance with absolutist and feudal opponents against the bourgeoisie.

a while later, Marx quips

Lassalle, in opposition to the Communist Manifesto and to all earlier socialism, conceived the workers' movement from the narrowest national standpoint.

and later, this is what he thinks about Social Democrats' statist ideas

That the workers desire to establish the conditions for co-operative production on a social scale, and first of all on a national scale, in their own country, only means that they are working to revolutionize the present conditions of production, and it has nothing in common with the foundation of co-operative societies with state aid. But as far as the present co-operative societies are concerned, they are of value only insofar as they are the independent creations of the workers and not protégés either of the governments or of the bourgeois.

So, we see that Marx thinks that the idea of Social Democracy, as opposed to revolution is

Vulgar
Putting the cart (distribution) before the horse (socializing the means of production)
Betraying the class interests of the proletariat by allying with feudalists against the bourgeoisie
Narrowly national by nature, as opposed to international
Unreasonably dependent on capturing state power

Criticisms 2 and 3 are ones that hit home, even today.

The greatest problem of Socialism (aka Social Democracy), as Margaret Thatcher once quipped, is that you eventually run out of other people's money. That was precisely what Marx seems to have thought about it too. In Marx's view, there was absolutely no point talking about redistribution until you have control of the means of production!

Social Democrats even to this day ally (knowingly or otherwise) with feudal interests, working towards a tightly regulated economy where feudalists hold unfair advantages due to holding the cronyist upper ground. The bourgeoisie, on the other hand, have to compete in a free market to thrive. As Marx foresaw, targeting the bourgeoisie and the free market that gives birth and sustenance to them ends up playing into the hands of the feudals and their newer avatars as crony capitalists and rent seekers - the infamous 1%.

Criticism 5 hits directly to the heart of Social Democracy. Marx wished to see the state wither away, not function as the saviour of the working class. Much of the grief that modern day "Socialism" continues to wreak is based on this conception of state as savior. The continuing statist programme of the Indian centre-left that eats away at the struggling Indian economy is a case in point.

Marx, rest his soul, was no Social Democrat. One may think what one may of the practicality of his ideas of socializing the means of production, and of a state that withers away, but one cannot accuse him of being a Statist Socialist working narrowly against the bourgeoisie, and by extension for the interests of neo-feudals and rent-seekers.

Why Tim Harford Is Wrong on Net Neutrality

2015-04-08T13:21:00.001+05:30

I freely admit: it was David Hume's remark that first, many years ago, interrupted my dogmatic slumber and gave a completely different direction to my enquiries in the field of speculative philosophy. (Immanuel Kant)

Why do I think The Undercover Economist, Tim Harford is wrong on Net Neutrality? Read on.

The Undercover Economist was a book I loved, far more than others of the genre. Harford writes well, and has the knack of getting fundamental concepts of economics across through anecdotes and analogies without being either inaccurate or off-putting.

Therefore, I'd have expected Harford to "get" Net Neutrality, and tell us in his typically simple analogical language, why it is necessary and important.

He starts well enough, and lists several possible market abuses that Internet and Mobile Service Providers could indulge in in a non-Neutral Net.

Favoring deep pocketed companies over upstart rivals who may have better technology
Comcast preventing disruptive competitors like Netflix from stealing their customers
Double dipping - making two people at both ends pay for the same service
Providing deliberately poor service through "throttling", to extort higher prices

One would've thought all this would be enough to consider the case for the prosecution made, but then he goes off into a few analogies to claim that a non-Neutral Net may not be all that bad.

But imagine that a law was introduced stipulating “railway neutrality” – that all passengers must be treated equally. That might not mean a better deal for poorer passengers. We might hope that everyone would ride in comfort at third-class prices, and that is not impossible.

This is not really relevant, is it? Net Neutrality does not prevent your service provider from charging you more for higher speeds and more data, like they already do. Just like various classes on your train, you do have different speed grades and usage caps which you pay different rates for. Net Neutrality says the train charge must be per kilometer (or rough equivalent), and can be different for different classes, but must not depend on who you are, or where you want to go, beyond how far your destination is.

Analogy rating: Irrelevant

An online back-up service for big data sets might prefer a discount for a connection that will run only at quieter times of day. Stream the World Cup final and you’ll want to guarantee uninterrupted coverage; sell the highlights as a download and you might accept a cheaper, more volatile connection if it saves money.

The QoS argument, that different services have different requirements, and hence it makes sense to charge extra, or at least, different rates. Let's have a base channel that everyone subscribes to, and charge for extra services on top of it. What could go wrong?

As it turns out, quite a lot. As Harford himself points out, the base channel quality in such a scenario is going to be unusably and unreasonably poor, just as third class railway carriages were (and still are).

third-class railway carriages had no roofs, not to save money but to “prevent the passengers who can pay the second-class fare from travelling third class”. Throttling, 19th-century style.

There are an infinite potential classes of service that one might conceive of. Are service providers going to charge us extra for each? Why must we believe that we would be offered a usable "third class", when your service provider could charge for the roof, the seat, access to food, access to the toilet and anything that may strike their fancy?

Analogy rating: Unconvincing.

What about the idea that customers have already paid for their internet content, so cable companies shouldn’t be able to demand cash from content providers too? That is not how things work elsewhere. In a shopping mall, customers enter for free and retailers pay to be there. (They pay very different rents, too.) At an industry convention, both the delegates and the exhibitors will pay. There is nothing sacred about the idea that one side of the market pays nothing.

Oops, now we go into seriously misleading territory. The internet isn't a direct pipe from your mobile service provider to content providers like Google, or Facebook. How it works is

You pay your internet, or mobile service provider to connect to the internet backbone
Google, Facebook, Amazon and all other content providers pay their service providers to connect to the internet backbone. Yes, Facebook gets to pay for their half of the connectivity too.
The backbone routes connections between the two of you.

So, unfortunately, Harford misses the part that content providers do pay for getting to you. Just not to your service provider, who does only part of the job. To continue his analogy, Amazon pays their service providers to get connected (rent), while you pay your service provider to go there (taxi fare). So, your service provider asking Amazon to pay to connect you to them is not like rent, but like your taxi asking a store to pay equally to get you there.

Analogy Rating: Inaccurate.

Harford signs off with:

Fast lanes and slow lanes are a symptom of this market power but the underlying cause is much more important. The US needs more internet service providers, and the obvious way to get them is to force cable companies to unbundle the “last mile” and lease it to new entrants.

Competition will help, but there cannot be a truly free market in internet access, with most access happening through mobiles, and limited spectrum being an issue. This is a market that will be served by few providers, who must therefore be considered in theory to be colluding and maximally anti-consumer in intent (though that would be unfair to them in practice).

While Net Neutrality has issues (no solution is perfect), this is the best way to ensure the customer doesn't end up being unfairly treated.

Some Post-Election Musings

2014-05-20T21:10:00.000+05:30

First, an aside: When his son was born, the future Buddha is said to have quipped: rahulo jato, bandhanam jatam (Rahul is born, a fetter is born). Wonder if many in a certain political party quietly feel similarly now?

After Mitt Romney lost the US presidential elections, the Hatter had pointed out that the polarized Black vote that defeated him could be analogous to a similarly polarized Muslim vote in the Indian elections of 2014. Romney had lost because he could not counter-polarize White votes the way Obama polarized Black votes.

I had predicted that this would be dealt with in two ways - enhanced vote-bank politics by the Congress, and counter-polarization by the BJP.

On the other hand, the BJP would be wary of ending up with only a small majority of the Hindu vote, and end up with arithmetic similar to Romney. That would indicate that they might go with a strategy that polarizes the majority vote to the maximum.

So they did just that - with a shrewd combination of positive development messaging, raiding caste vote-banks using subtle pan-Hindu messaging, and basically playing on every bit of anger and insecurity that the electorate felt.

You have to give it to them. That was one Blazes of an election campaign. Compare it to LK Advani's disastrous 2009 campaign, and you begin to see why the strategy of promoting the seniormost claimant to any job happens to be the wrong one.

Modi's messaging has been rather good. Take his promises literally, and he's said all the right things - growth, smaller government, good governance, simplified process-driven government, digitization of processes for transparency, building cities, building roads and rail networks. One hopes he really meant it all, because the only Hope that has been seen in these parts since the UPA-2 took over are posters from an election on the other side of planet Earth.

After a campaign where he was deliberately built up as a Colossus, as a political and administrative genius with a hard decisive edge, something that got him votes, he ran the risk of losing an emotional connect with his voters. After all, who sympathizes with invulnerable superheroes?

No one. Unless the superhero in question, displaying a shrewd understanding of the human psyche, displayed emotional vulnerability to make them look more like their human admirers. Adding just the right touch of drama suited for Indians used to the tradition of the Family Drama could not hurt. Again, well played, sir. After the last PM who never said much, you had us at bhaiyon aur behenon. You didn't stop there, but signalled that you were going to communicate at more than one level.

Now go play the next sixty months as shrewdly and with the same intensity and subtlety as you've played the last six. We could do with some real change.

The Accidental Prime Minister: Book Review

2014-04-13T17:11:00.003+05:30

Sanjaya Baru (@barugaru - full marks for the twitter handle), former media adviser to the PM, has written a book that would've been obscure had it been published a couple of months later, such is the rapidly fading star of the protagonist. In it, he praises Manmohan Singh in ample measure, and buries him too. Not the kind judgment of history that Manmohan Singh expected, but not the excoriation that he gets dealt regularly either. I have a sneaky suspicion that Dr. Singh wasn't altogether displeased with the contents, and perhaps not even the timing of the release.

Baru tries to portray his former boss as a tragic hero in the Greek mould, a warrior who digs deep within himself to find reserves of strength to win a key victory before succumbing to eventual defeat. Perhaps that's the most sympathetic portrayal of the current PM that could be made with a straight face.

In Baru's portrayal, we see a Manmohan who has greatness (if one could call the PM's chair that) thrust upon him by an opportune but fundamentally insincere renunciation by his party president. We see a man nobly striving to do the 'right thing' in his judgement battling friends and foes alike. We see him work with a team that was never loyal to him in the most part, yet never really blame them for their incompetence or self-serving games. We see him willing to sacrifice his position, in the pursuit of an Indo-US nuclear deal and then even his life in the pursuit of an election victory for his party.

However, we also see a man who sees things he ought to control as not in his control: a celebrated economist who is remarkably unconcerned about the enormous economic impact of loose fiscal policy in his first term, an impact which should now be apparent to all. Unlike what we believed, at least one of those ideas are shown to be his, with the credit stolen and being given to someone else.

We see a man of remarkable personal integrity, but a very passive attitude to morality of those around him, with the dubious logic of him not being responsible for their appointments.

We see a man who would pursue his dream of a peace treaty with Pakistan, yet be unable to take the simple precautions of increased vigil against the inevitable terrorist backlash.

We see a man unwilling to assert himself in the aftermath of his greatest triumph, almost revel in being treated as a doormat, and in being assigned blame while credit is siphoned off for the scion of the first family. We see a timid leader, playing passive games due to his bureaucratic reluctance to take a stand even within his own team. Baru slyly accuses TKA Nair, the PM's principal secretary of this risk-averse failing explicitly, and then slowly shows us how his boss suffered from exactly the same.

We see a man slowly making his peace with the strings he finds attached to his arms and legs.

We see a rare thorough gentleman, a scholar and man of noble character. But we see an ineffective, or slightly more uncharitably, an incompetent prime minister.

(The Accidental Prime Minister: The Making and Unmaking of Manmohan Singh, by Sanjaya Baru)

The Aam Aadmi Party: A Conspiracy Theory

2014-03-19T19:34:00.002+05:30

The more I watch the Aam Aadmi Party and its antics, the more I am convinced it's a BJP conspiracy.

Have the Mad Hatter gone Madder, you ask? Mr. Kejriwal cannot stand the sight of Mr. Modi or the BJP, and has gone to bizarre lengths to pick fights with him. Isn't it downright crazy to conclude that they are somehow on the same team?

No, not if you think a bit.

While many in the Indian Electorate (if you believe opinion polls) seem to be reluctantly coming around to believing that Modi can deliver them from the misery of the last decade, there still exists a substantial group that will never, ever, ever, vote for him, for any reason. You know, the P word, Polarizing. So, strategists in the BJP/RSS camp would have worried about the consolidation of the anti-Modi vote, benefiting the Congress, or whichever other party is locally best placed to defeat the BJP.

India has a first-past-the-post system, where in a multi-cornered election, the candidate with the maximum votes wins, irrespective of whether (s)he secured an absolute majority of the votes cast. Therefore, votes against you are as important as votes for you.

Now, consider the possibility of a new party, with an all-India footprint, which is virulently anti-Modi enough to capture a good chunk of the anti-Modi vote, but unable to capture the loyal Congress vote or the loyal Samajwadi Party vote, or whatever. That party may not come close to winning too many seats, but would still help the BJP by splitting the effects of anti-Modi polarization across multiple contenders.

Yes, the Aam Aadmi Party.

I would hazard a guess that they'll be worth at least 20-30 seats for the BJP this way nationally, even assuming that they take around 4-5 seats off the BJP in Delhi.

Consider the following example of possible vote-shares in a hypothetical state - Unnamed Pradesh (UP for short) with around 80 seats, with and without the AAP. We assume that AAP eats only into committed anti-Modi votes for now. As you can see, the gap between the top two contenders increases from 6 points to 9 points with the entry of the AAP. With these post-AAP vote shares, and the highly non-linear votes-to-seats conversion in a multi-cornered contest, the BJP should end up with 10 extra seats in this hypothetical UP alone.

Of course, no strategy is without risk. The risk here is that not only do they end up splintering the anti-Modi vote, they end up splintering the anti-Corruption (anti-Congress) vote as well, hence reducing the vote share of the BJP, invalidating our assumption above. Strictly, as long as they take fewer percentage points off the BJP than each of their competitors, the logic still holds, but not if they take similar percentages off. That would be a serious risk if the AAP would campaign nationally on an anti-corruption, anti-Congress platform. One way to avoid this risk is if the association with anti-corruption label were to be somehow removed, and only a strong anti-Modi association were to remain in voters' minds. Somehow.

When was the last time Mr. Kejriwal spoke about corruption, or the Congress, again? Why did he switch from nominating people with grassroot level connects to NGO and fashionably leftist celebrities? What was the point of the drama in Gujarat? Just why is he so desperate to throw away any semblance of an expectation of good governance with all those theatrics?

The pattern seems to be (cough, cough) undeniable. Well played, whoever thought of this idea.

Or is the Hatter getting Madder with age? We shall see soon enough.

In Which I Experiment With An Unusual Diet: Blood Test Results

2014-01-25T16:56:00.001+05:30

The question that gets asked the most often about my low-carb diet is - "but, but, aren't you worried about eating so much fat?". So, I had a blood test done, and these are the results, compared to the most recent test results prior to going on this diet.

	Jan 2014	Jul 2013	Good Range
HDL-C	49.2	33	Greater than 40
LDL-C	128	100.1	Less Than 130
VLDL-C	16	22.4	Less than 40
Triglycerides	80	112	Less than 150
TC	194	156	Less than 200
TC/HDL ratio	3.9	4.7	Less than 5
Fasting Glucose	92	82	Less than 120

As the gentle reader will observe, most numbers have got better. The best indicator of cardiovascular health among these is the TC/HDL ratio, which has got substantially better. My HDL-C numbers which were below desirable range are now in the middle of the desirable range. Triglycerides and VLDL have gone down. LDL (and hence TC) have increased, but are still within normal range.

What does medical research say? Studies indicate low-carb diets do better at improving HDL over the long term, as well as equally well at reducing LDL over the long term. In the short term, people have reported increased LDL, which reduces over a year or so.

What is not measured here is LDL and HDL particle size, which has been shown to improve (larger the better) on low-carb.

So, it would seem that the low-carb proponents are right - a low-carb diet seems to actually improve cardiovascular health markers in the blood.

And in other news, the graph is still going southward. So far, so good.

And, since fat % is a better number to track than raw weight, here's a comparison chart for four different variables - Waist size and Total Wt (plotted against the Y axis on the left), and Fat % and Fat Wt (plotted against the Y axis on the right) . Apologies if this is hard to decode. I used the tape measure method to calculate fat percentage.

All these charts aside, the easiest way to check for fat loss is clothes fitting differently, especially around the waist. That is something that's hard to miss, and gives you a nice easy validation of what's going on. Two sizes down feels much better than something as abstract as 8 Kg off.

In Which I Experiment With An Unusual Diet - Update Two

2014-01-17T12:37:00.001+05:30

Background
Update 1

A couple of months into low-carb, things look good so far.

Eating hardly any carbs feels normal now, to the point where my systems "feel" a lot better without carbs. Ingesting carbs on the mandatory refeed day does feel partially good - keeps cravings away - and partially not-so-great. Why so? Because when you eat all those various carb sources regularly, you don't quite notice that some of them don't really agree with you in a minor, but noticable way. In my case, the only carbs I can handle without any trouble seem to be rice and potatoes.

I took a couple of weeks off the diet in the latter half of december, while I was travelling to meet family. It isn't the easiest thing to stick to an unusual diet while on the road, or visiting folks. As a good approximation, I tried to keep breakfast, and lunch wherever possible, low-carb so I could limit my carbs to later in the day.

This is how the weight chart looks.

Summary - about 8 Kilograms off so far, in about ten weeks (including the two weeks off-diet). The graph seems to be flattening, but is still going southwards. Good.

The "magic" 80Kg barrier has been tentatively explored, but not yet definitively breached.

(if the astute reader has noted the flat region in the curve towards the end of December, that's because I didn't bother to weigh myself everyday while on vacation)

On AAP's Stunning Electoral Debut

2013-12-10T14:36:00.001+05:30

Much water has flown through the Yamuna, such as it is, since the days of Anna Hazare's dramatic LokPal fast. We hear he's up to another one, but nobody seems to care. Because everyone wants to talk about Kejriwal, the AAP, and their electoral success.

Perhaps this is a good time to recollect an idea the Hatter had floated during the initial days of the agitation - that the middlegame for them would be to try to galvanize the middle-class as a voting bloc. Things haven't quite worked out exactly as envisioned - the movement has split, Hazare and Bedi are not with Kejriwal any more, but Kejriwal himself seems to have stuck to the playbook rather well.

The AAP's manifesto looks like it was written, as someone quipped on twitter, by an excited six year old, with policies ranging from naive to downright dangerous. That said, their electoral success has gone some way towards quelling a deep seated worry among educated India that politics had a fatal flaw, and that cleanly funded election victories cannot be imagined. Other AAPs can be imagined, ones with more sensible manifestoes coupled with equally honest and clean fundraising. Perhaps then the vicious cycle may be broken after all.

And, while we're plugging old posts of ours, while all and sundry claim inflation is what's doing the UPA in at the polls, this post from five years ago might be good to plug as well.

In Which I Experiment With An Unusual Diet - 6 Week Update

2013-12-10T14:06:00.000+05:30

You know the story: weight going up, dietician recommended diet not working, trying low-carb, yada yada yada.

So here's how it went. I spent two weeks on a "leptin reset" to get things primed for low-carb, and then went full steam ahead on low-carb, dropping to about 30g of carbs or less per day in about a week.

This is how the results went

About 5.5 kgs off in about 6 weeks of low-carb, with 4 cm off my waist. Not bad, only 7 more kilograms and 8 more cm to go to hit my goal of 15% body fat ...

This is what I eat, more or less:

Breakfast:

"Bulletproof" coffee (Black coffee, no sugar, 2 tablespoons whipped cream, 1 tablespoon coconut oil) OR
A 2 egg omlette cooked in butter (only on about 1 day a week)

Lunch

A nano size helping of rice, curry, about 200g of meat or fish, and as much of vegetables as I can eat, all cooked in generous amounts of coconut oil

Dinner

About 200g of meat (I eat all kinds), plus as much vegetables as I can eat, cooked in coconut oil, plus a bowl of yoghurt.
3 Almonds, or strawberries, or a bit of cheese, on days when I feel extra hungry.

I'm not fussy about the 200g quantities, I eat till I feel satisfied, which is quicker than you'd expect on a fat-rich diet. That's one thing to note, you tend to feel a lot fuller than you'd on a low-fat diet.

While eating out, I tend to favour the Indian buffet places (starters, soups, curries!) and steakhouses. Most places ought to be fine, if you skip the carbs and stick to the main courses only. Pizza and Italian are out, except on refeed days, when they make ideal meals.

Every two weeks, I do a "refeed" - that is to say, I spend a Sunday eating a "normal" (high carb) diet, to reset my leptin and serotonin levels. This is very important!

Exercise

3 days a week of weight training - high intensity, working up to higher weights
3 days a week of Yoga.

They say it usually takes about two weeks to adapt to a low-carb diet, and that your brain feels "fogged" until then as the body slowly kicks into fat burning mode. It took me much less than that, perhaps only 4 days or so, until I felt "normal" on the diet. Perhaps it's the rather high amount of coconut oil I consume that's responsible, thanks to it having high amounts of Medium Chain Triglycerides. Being from Kerala does have its advantages. I do notice some fogging on the day following a refeed, but perhaps I'm just being paranoid.

I've noticed that the sensation of hunger is much less pronounced now. What used to be something almost unbearable at mealtimes has become somewhat of a gentle "you might want to eat sometime now" message from the body. And, surprisingly (or not), the infamous 4 PM dip in mental clarity has reduced quite a lot, to the point of it being almost imperceptible on some days. I've tested this by playing chess at 4 and 5 PM without eating or drinking anything other than water, which is something I'd have a hard time doing a while back.

Not too bad so far, give it another month and a blood test, and we shall see how it goes.

In Which I Experiment With An Unusual Diet - Background

2013-11-04T14:47:00.001+05:30

Apologies for what is going to be a rather prosaic, and literal series of posts.

Skipping over early childhood etc., we come to early 2006, where the Hatter weighed in at 99 Kilograms, which for his height of 182 cm, is substantially overweight. Thus began the great weight-loss adventure. Some basic low-calorie dieting and simple exercise meant I was down to 92 Kg by mid 2006, and to 88 Kg by the next new year.

Cutting ahead to mid 2010, slow weight gain on a maintenance diet (again, low-calorie) brought me back to 92 Kg, where I decided something must be done.

So, I went back to some serious low-calorie low-fat dieting (1800 kcal a day), plus about an hour of exercise (50% cardio, 50% weights) about 6 times a week. That worked extremely well, and by August of 2011, I was down to 79 Kg. Mission (below 80Kg) accomplished, and back to a maintenance diet of around 2000 kcal on an average - 1800 kcal on most days and weekend refeeds of 2400-2600 kcal to avoid low metabolism. Per metabolic calculations, this should have left me in slow weight *loss*, so it would act at the very least as a maintenance diet. Exercise was down to 4 times a week, at the same levels of cardio. One thing I kick myself for is not going higher on my weight training.

In August 2013, I weighed 85.5 Kgs. About 6Kg gained in 2 years on a maintenance diet plus exercise.

On the advice of a dietician, I went on a 6 meals a day low-fat diet, keeping my calorie counts the same (average of 2000kcal per day, accounting for weekend refeeds). The result? 87.1 Kg on 1st October.

So that story of 6 meals a day helping to increase your metabolism doesn't work (sample size N=1).

What next? Since I seem to have reached the end of what I can do on a low-fat low-calorie diet, and am finding maintaining weight loss impossible on this, it's time for Something Entirely Different (TM).

Under the expert tutelage of the one man I know who seriously studies nutrition and fitness stuff, I have begun on the transition to a low-carb diet. This week, I am on a Leptin Reset, which means I follow a Leptin diet to attempt to reset my metabolism from its low-cal induced lows. Why? Remember, I'm gaining weight on an average of 2000 kcal a day, when I should be burning between 2500-2700 kcal a day per standard calculations. Evidently my metabolism needs a reset.

After that, I shall slowly transition to a low-carb diet, though a series of intermediate steps to be mentioned later, and we shall track my progress. Right here.

You might want to watch this video if you are curious about this

Why I Distrust Economists, Particularly These Days.

2013-08-23T12:02:00.001+05:30

Here're a bunch of facts:

Peter Higgs proposed the "Higgs Mechanism" (which implied the Higgs particle, aka the Higgs Boson), about 50 years ago
For decades it was practically the only explanation for what it explains - mass of fundamental particles.
Peter Higgs does not have a Nobel Prize
The Higgs particle was finally detected recently
Peter Higgs is now a Nobel Prize candidate, and a strong one at that.
If String Theory is a bunch of nonsense, which the Hatter thinks it is, the consequences in the real world are near-zero. The academic consequences to String Theorists would be rather high.

Here're a few more facts:

Economists get Nobel Prizes based on theoretical models.
There is no equivalent of the particle accelerator which tells us whether those models do indeed work or not
Few of these Nobel winning worthies saw the Great Recession coming.
Even with all these worthies around, the economies of most countries aren't in great health.
The average person pays for the mistakes f the Krugmans and Sens of the world. The consequences for the real world are much higher than academic consequences for them.

Perhaps in a different universe we would be happy appreciating the theoretical elegance of those models, but in this one, them being wrong messes up with everyone's finances. The Hatter hasn't done well on that front recently and he doubts that very many in these parts have.

So there.

Book Review: Antifragile

2013-06-21T22:14:00.003+05:30

Nassim Nicholas Taleb should be considered one of the most remarkably unique and provocative authors of the day.

In the past, Taleb has shown how we tend to see patterns in life, science, the markets, and wherever that are nothing but randomness ("Fooled By Randomness"), and that most of history has been dominated by exceptionally rare events with exceptional consequences ("The Black Swan"). He has particular dislike for the Gaussian ("bell curve") approximation of most things in what he calls the "Extremistan" domain - things outside the natural world. In "Extremistan", it's the rare event that dominates the entire distribution of events. Even in the natural world, a.k.a "Mediocristan", he argues that we tend to underestimate the probability and magnitude of rare events.

Part of Taleb's appeal is that he treads territory that's quite unfamiliar, and part of it is that he is a remarkably unrestrained writer - tending to display megalomania, refreshing frankness and a delightful disregard for politeness where he feels it isn't due.

Taleb's earlier arguments do well to prepare us for his latest work, "Antifragile", a more comprehensive compilation of unusual ideas and a refreshingly unconventional worldview centred around the principle of "antifragility", with consequences for almost all aspects of life.

It is the same Taleb one sees through the pages of this book, remarkably perceptive, remarkably unrestrained, and remarkably direct about people and ideas he considers harmful, the devil take the consequences.

This book must be read. There isn't any way I can do justice to it in a review. I will limit myself to presenting some of the important ideas he presents, and leave the gentle reader to let Taleb weave them into a consistent world-view in his book.

Antifragility is the idea that some things get better in a volatile environment. No, not that they can handle shocks well - that would be the robust category of things, but that there are things that actually like volatility and change. It is his thesis that most things found in the real world, that have survived the test of time, are antifragile, and it is in their antifragility that we must seek answers to why some things last, and some don't.

Developing a healthy habit of randomness, in diet, in experiences, in exposure to minor stressors (hormesis) is beneficial because we are evolved to thrive in an environment of randomness. Our "modern" lifestyles, on the other hand are evolving towards a denial of randomness.

Modern human tendency is to increase the perceived "order" in a system, to "optimize", to "control", all of which tend to increase the fragility of a system. One extreme shock ("black swan"), and you're done. Civil Servants, Soccer Moms, Strategic Planners, and if I may add, Corporate Efficiency Evangelists, tend to reduce the natural ability evolved systems like the economy, or the human body have to withstand random shocks with their well-intentioned by flawed methods of control.

But isn't the economy, and our techno-scientific edifice of modernity, all planned and created rationally? No, unlike what academicians will tell you, most of what we call technology was created through random tinkering by practitioners, and survived due to "natural" selection for efficiency. Theoreticians came in later, to tie up loose ends (in theory) and to tell a story which gave themselves pride of place. The Jet Engine and the Black-Scholes option pricing formula are two examples he provides.

What sort of strategies might one adopt that have the property of anti-fragility? Rather than optimizing for an "average case", Taleb suggests adopting a "bar-bell" strategy, one with bounded costs, but unbounded benefits in the rare case. Those with some stock-market experience will recognize the option as a classic barbell strategy. Taleb suggests looking around for fragility, and loading up on options that pay off in the case of fragility hitting something around you.

There is a good bit more in the book - the "via negativa" strategy, and Hammurabi-style risk management being two interestingly named ideas.

Bombast and outright rudeness towards large groups of people (bankers, economists, techies, doctors ...) make the book far from boring. Taleb's writing is quite irritating to read when you first encounter him, but it seems to settle into familiar and mildly amusing eccentricity over time, contrasting with the seriousness of his content.

In this age of predictable and boringly polarized opinion, that sort of eccentricity in form and content is what keeps boredom away.