Our Gilded Age (India version)

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James Crabtree’s The Billionaire Raj is a page turner – really informative and well written (as one would expect from the FT’s former Mumbai bureau chief), full of surprises, and above all a fascinating window on India’s super-wealthy. The theme of the book is corruption, and its co-evolution with the Indian economy as the ‘licence raj’ restrictions were progressively removed, and new sectors like telecoms grew dramatically. In this new world, the super-wealthy businessmen and the politicians found they needed each other: the deployment of legislation and contracts helped the former, the opportunity to take part in business helped the latter. As one of the interviewees puts it: “They [the politicians] are saying: ‘We don’t want briefcases full of cash and Swiss bank accounts and all that any more. We want to own businesses ourselves. We want equity stakes.”

The scandals covered in the book – from airlines to cricket – are extraordinary, as are the descriptions of wealth flaunted. It is somewhat cheering to know that some scandals resulted in at least disgrace and sometimes arrest. There are also some thoughtful reflections on whether the practices described are always entirely bad: might they in some phases of development ensure that infrastructure gets built? One example in the book is a half-built steel mill and power station complex, halted by the cancellation of coal mining licences  due to allegations of corruption. Crabtree writes: “Watching him [Naveen Jindal], I was struck by the stress of his position: the billions in loans, the half-finished projects and the thousands of workers who …expected him to find a way to fix them.” The downside of doing business by politica favours is the unpredictability of it all.

There is something of this flavour in David Pilling’s Lunch with the FT with Nigeria’s Aliko Dangote, who recounts how he got his big break:

‘“Obasanjo called me very early in the morning and said, ‘Can we meet today?’ ” says Dangote, recalling the presidential summons. He wanted to know why Nigeria couldn’t produce cement, instead importing it by the boatload. Dangote told him it was more profitable to trade than to produce. Only if imports were restricted would it be worthwhile. Obasanjo agreed. Dangote has never looked back.’

Crabtree also cites Katherine Boo’s book Behind the Beautiful Forevers, (reviewed on this blog), which describes corruption at the bottom of the income scale. Although this clearly acts as a tax on low incomes, she has sympathy for those who earn so little that they can’t afford not to demand bribes.

I ended up not sure whether to be optimistic about India’s dynamism and scale, seeing this Gilded Age as growing pains, or pessimistic because of the debt mountain involved, and the nationalist politics of the present government – the chapters on Narendra Modi do not leave the reader reassured. Either way, this book opens a window on an extraordinary period of change in India, a country too big and important for its future not to affect all of us.

Here is the author being interviewed about the book on NPR.

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Global Britain and national Britain

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It has taken me a while to finish David Edgerton’s new book, The Rise and Fall of the British Nation: A Twentieth Century History. This is because of the packaging rather than the contents – it’s a heavy volume I’ve had to read at home propped up with cushions. So although I’ve enjoyed the book, I have a rather impressionistic take on it.

The chief impression is that there isn’t a single piece of received wisdom about Britain in the 20th century the author doesn’t challenge. Edgerton has challenged the ‘declinism’ thesis in his previous books and does so again. But there are other myths to bust. The welfare state wasn’t distinctively new after 1945 – a lot of it had been established in the 1920s. The Labour Government of Harold Wilson wasn’t especially technology-friendly. It is nonsense to claim the Establishment consisted of anti-scientific art historians and classicists, there were loads of technologists and scientists in government. It is indeed refreshing to read such an upbeat take on the 1950s and 60s.

Above all, the book argues, the key phenomenon of the post-world war 2 decades was not welfarism or corporatism but  the creation of a distinctive British nation – until Mrs Thatcher started to turn the country back into an internationalist capitalist one, as it had been in the early 20th century. Edgerton’s British nation lasts only from 1945 to 1979.

This makes for a refreshing read, there’s nothing like a bit of lively contrarianism. In fact, you can see Edgerton’s compulsion to be contrary in his challenge to both industrial declinism and techno-boosterism simultaneously, which – while surely the correct stance – is also pretty argumentative.

But not every bit of his myth-busting is wholly persuasive. On the NHS, for instance, Edgerton argues that most of the provision was in place prior to 1945, and those with low incomes did not have to pay for treatment. He offers some facts on the extent of municipal provision, the role of GPs, and so on. This surely greatly underplays the uncertainty and anxiety of getting medical treatment before the NHS. Even if it is true that people ended up being able to access treatment and not having to pay, I remember from my 1960s childhood the deep, deep financial worry illness caused older people, not habituated to the idea that you could turn up at a surgery or hospital and nobody would ask about your means.

The book is at its best on technology and industry, which is hardly surprising given Edgerton’s wonderful previous books on technology – particularly The Shock of the Old but also Warfare State and Britain’s War Machine. It ends with New Labour, and the attempt to define a forward-looking, techno-optimistic Global Britishness. In fact, it ends with Mrs Thatcher’s state funeral – the first accorded to a PM since Churchill’s:

“There were no cranes left to be dipped in respect by dockers in the unprecedented honour the London proletariat gave Churchill in 1965. In the old and distressed pit villages of England, Scotland and Wales, forgotten former miners celebrated bitterly. Tony Blair meanwhile was making money working for some of the vilest torturers and dictators on earth. Only satirists, not historians, could do justice to this turn of events.”

And then it stops. Hmmm. There were of course loads of cranes on the London skyline, contstructing rather than unloading, and nobody chose to dip them for the funeral. Mrs Thatcher’s governments had indeed ravaged the country’s economy outside of south east England – this book does far better than many histories of Britain in not being a wholly London- and Westminster-centric one, given its focus on industry – and the real criticism of the decision to give her a state funeral would surely be her divisiveness. It’s an unsatisfactory (lack of) ending to a very interesting book.

An earlier chapter considers the emerging divisions in society but also within the main political parties from the 1970s on and it would have been more satisfying to see this rounded out somehow with reference to current debates about the utter mess of Westminster politics, a devolving Britain, the polarisation over Brexit, and in the middle of all this ideas about industrial policy and the technology frontier. Unfair to ask a historian for comment on the present – but the idea of the British nation is surely at the heart of it all today?

Anyway, as noted, these are impressions. It isn’t just the bulk: there is a flavour of one thing after another, as sections plunge into detail – albeit always fascinating. This is well worth a read nevertheless (although in paperback maybe?)

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Cognitive engineers, not choice architects

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Although I’ve been reading at least as much as ever, it’s been difficult to find time to post about the books, given the length of my To Do list and the depth of untackled emails. One book I finished a while ago and wanted to flag up was Cognitive Gadgets: the cultural evolution of thinking by Cecilia Heyes. This is outside my territory, but as she incorporates cognitive science and linguistics in her work, I’ll be bravely inter-disciplinary too.

The book’s argument – as the subtitle flags up –  is that humans’ distinctive cognitive abilities are due to cultural evolution rather than genetic. It considers the evidence for cognitive differences between human babies and newborn chimps, and concludes that are rather subtle although importantly including a greater human ability to learn, and to remember. Then as humans grow we acquire our far greater distinctive cognitive skills from the society around us – they are not encoded in our minds, they are not simply shaped by social learning, but rather mechanisms or ways of thinking that have been built by cultural evolution: “They are cognitive gadgets rather than cognitive instincts: pieces of mental technology that are not merely tuned but assembled in the course of childhood through social interaction.” Some parts of the gadgetry will of course be inherited genetically, but the assemblage is the result of natural selection operating on cultural variation.

The book argues that this approach overcomes one of the issues with the idea of memes, because the issue is what units are memes measured in? What does the force of natural selection actually operate on – tunes, ideas and other memes? This seems unlikely. Heyes suggests the memes are grist to the mill of cognitive mechanisms such as causal understanding, imitation, reading aloud, causal inference, language, and other ‘gadgets’. The best gadgets thrive in the cultural evolutionary process. When it comes to inheritance mechanisms, it is social and cultural learning. This can largely occur inside individuals’ minds, but can also involve social processes such as story-telling, learning to take turns, group dances, even teaching.

History suggests that these have been quite robust – here we are, after all, with all the warp and weft of modern life. However, the theory does suggest a certain vulnerability, as many of these mechanisms could fail to be passed on: “The cognitive instinct view implies that human nature is relatively invulnerable to catastrophe. In a decimated and isolated human population … the group would lose some of its knowledge and skills. However, with each birth there would be a new child equipped with Big Special cognitive instincts. … In contrast the cognitive gadgets view implies that both grist and mills would be lost.  … The capacity for cultural evolution, as well as the products of cultural evolution, could be lost.” We are already failing to pass on to many children some quite basic (you’d have thought) gadgets such as critical thinking. Heyes specifically suggests looking at how moral learning has evolved and continues to do so.

Anyway, amateur that I am, I found this a persuasive approach and a really interesting book to read. It suggests a different approach to thinking about decision-making – not for example as a matter of setting up choices in ways that nudge flawed humans to do the right thing (but then what makes the choice architects any wiser?). Instead the engineering challenge is devising better gadgets, which is surely difficult but then humanity has invented them before.

 

 

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The class window

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On one of the recent long flights, I read JD Vance’s Hillbilly Elegy. I’m late to this phenomenon, I know. Although it probably doesn’t bear the weight of analysis brought to bear on it in all the many column-inches (or digital equivalents) written about it, I thought it was a well-written insight into the knot of economic and cultural barriers facing many ‘left behind’ families. As the title indicates, it’s about the specifics of the white working class in a now economically depressed part of the US – including the catastrophic drink and drugs epidemic. However, there is here a more universal picture of the interplay between loss of economic opportunities, the poverty, and certain social norms (or if you prefer cultural habits) that matter less in good times and become dysfunctional in bad times. The resulting vicious circle is hard to break into. A few especially driven or lucky individuals – like the author – manage.

The later chapters on Vance’s time at Yale Law School rang especially true for me – the dawning realisation of how little you know about how the world of privilege works. I remember well arriving at Oxford as a 17 year old and being just as utterly baffled about the number of knives and forks set out at dinner. What on earth were you supposed to do with all of those? And as for artichokes??? Every working class kid arriving at an Ivy League School or Oxbridge has in some form a tremendous culture shock experience.

So I thought the book well worth a read. It doesn’t have Big Solutions, but then there aren’t any. It does give readers a window into a certain kind of life most of them will not have experienced directly, and that’s valuable.

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Intellectual property as theft

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I’ve been dipping into a new (and free to download but you can choose to support it by paying for a paperback or Kindle copy from Amaxon) book by Rufus Pollock, The Open Revolution. I’m not great at reading whole books online, hence the dipping. What I’ve read, though, I really like. It states: “This book is about making as much as possible of that information available to as many people as we can, since wealth, information and the opportunity to create them are now profoundly entwined”  – the information in question being private, digitally recorded and stored information, anything that could be patented or copyrighted.

The book starts by underlining that any property rights – and all economists agree well-defined property rights are fundamental to economic growth – are defined by politics and law and social norms. The argument that the intellectual property rights that currently prevail are problematic for the digital economy has been made before, and is forcefully made again here. The book argues for ‘open information’, that “can be universally
and freely used, built upon and shared.”

The book looks at patent and copyright protection, and draws the link to the accumulation of significant digital market (and political) power. It then jumps from the unquestioned powers such as Google and Facebook to a chapter on music streaming and Spotify – a marvellous service and one that can hardly be described as exercising undue power, especially when facing up against the recording industry titans. Pollock argues for replacing Spotify’s commercial model, which involves it in policing copyright protection, with a state-sponsored streaming model whereby governments collect a tax and allow citizens to access any streamed music:

“With no fee per track and no limitation on use, this all-you-can-eat buffet is a prototype for how one aspect of the Open world would operate. Money would of course have to be collected somehow to fund it, but instead of ten dollars a month to Spotify, this
could be a special fee incorporated in your taxes or added to your internet or mobile bill. This money would then be distributed according to usage, through remuneration rights fees.”

Subscription models are also of course all-you-can-eat ones and so similarly fit well the low or zero marginal cost economics of online. The difference between Spotify and this government-sponsored version of music streaming is scale: the more users pay, the lower the average fee. This is the rationale for public service broadcasting, so in effect we already have this model in the UK. My household pays an absolutely bargainiferous £2.89 per week to have access to a vast array of content for which the BBC has dealt with all the IP negotiations. I’m a huge fan of this model. But I don’t see why poor old Spotify – another marvellous service – should be prevented from asking for £10 a month for its streaming services.

So I’m with the book on the over-reach of IP laws in the digital age. I’d strongly argue for intense regulatory scrutiny of the advertising funded model of Google and Facebook, which might force them to an alternative business model – a flat fee, and utility regulation for some of their services perhaps. Some jurisdictions have started inquiries into the online ads market, almost a duopoly. But I’m not persuaded  public versus private ownership and control of the access services is the central issue. For sure, given that digital goods are essentially public goods and natural monopolies, there’s a free riding issue which argues for tax financing, but the first step must be to tackle the ridiculous IP laws.

There’s also a deeper question, I think, which is what one is paying for when it comes to fees to access digital content. The book argues: against “restrictions on which BBC programmes are freely accessible (having, of course, been paid for by the British public) and when, and where, to digital watermarks, paywalls around newspapers…”

Well, I happen to know something abuot restrictions on online acccess to BBC programmes, having chaired the original iPlayer approval process. One source of restriction is indeed a byzantine set of rights – different broadcast platforms in different countries may have specific rights to certain ‘windows’ or time periods. The licence fee payer in these cases has only paid for limited access rights, much as one might wish the limits to be less retrictive and the costs lower. Another source of restrictions was the desire on launching the BBC’s online services not to foreclose potential competing services, a worthy application of competition policy, and also not to cannibalise too quickly the BBC’s own linear services and commercial offer. These restrictions have been relaxed over time. The licence fee also buys not just the intangible asset of programmes – and I’m all for making the archive as freely available as possible – but also the continuing costs of investing in new content. The high initial fixed costs have to be covered. Similarly, I’m all in favour of newspaper paywalls – how else is new journalism going to get financed?

Anyway, this is as far as I’ve got. It is – as will be obvious – a stimulating read, although some of this will be familiar to those who have engaged with the ‘open’ argument before (eg James Boyle’s The Public Domain or Lawrence Lessig’s Free Culture). I’d be interested to hear other people’s reactions to these arguments. Although quibbling, I’m broadly very sympathetic to them. I’ll be buying a hard copy to read it properly….

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