No limit to markets in the slum

Posted on by

Katherine Boo’s [amazon_link id=”1846274494″ target=”_blank” ]Behind the Beautiful Forevers: Life, Death and Hope in a Mumbai Slum[/amazon_link] is a wonderful read. It recounts a series of  dramatic events that occur in Annawadi, a slum next to Mumbai Airport, where she spent months meeting residents and observing their lives. Like all good reportage, it gives the reader a vivid impression of place, and Boo has a novelist’s ability to convey character. In fact, my one complaint about the book is that she uses the novelistic device of voicing the characters’ inner thoughts – for me, this undermined the authenticity of the detailed reporting of the physical conditions, the work, the danger, the smell and dirt and noise, and so forth. On the other hand, the focus on character makes it a very enjoyable book.

[amazon_image id=”1846274494″ link=”true” target=”_blank” size=”medium” ]Behind the Beautiful Forevers: Life, Death and Hope in a Mumbai Slum[/amazon_image]

The business at the centre of the tale is recycling rubbish, which also featured in the episode of Welcome to India I watched last week. I won’t spoil it by giving away the ‘plot’. However, I was particularly struck by the absolutely central role monetary transactions play in everyday life. It is a commonplace to say corruption helps trap countries like India in poverty. I suddenly realised that there is a vicious circle, because poverty also traps people in corruption. The sort of favours and kindnesses that people in my society wouldn’t dream of demanding payment for all require handing over cash in the slum. Money is so short that nobody will do something for nothing. Besides, there is a chain of transactions to sustain. Policemen are paid so little that they demand bribes, a slum entrepreneur needing to pay the bribe to keep the police from closing her business as it lacks a permit therefore has to ask for cash to help out a neighbour, and so on.

Anyway, it was thought-provoking to realise how monetised all these relationships were in the light of having read recently Michael Sandel’s [amazon_link id=”184614471X” target=”_blank” ]What Money Can’t Buy: The Moral Limits of Markets[/amazon_link]. Behind the Beautiful Forevers makes it brutally clear that these moral limits are income-contingent: a very poor community has far less scope for scruples than a wealthy western one with a social safety net.I think Sandel’s widely cited example of the immorality of paying people to hold your place in a queue would be met with simple bemusement in Annawadi.

Worth reading alongside this book: Sukhetu Mehta’s [amazon_link id=”0747259690″ target=”_blank” ]Maximum City: Bombay Lost and Found[/amazon_link]; [amazon_link id=”0199794642″ target=”_blank” ]Working Hard, Working Poor[/amazon_link] by Gary Fields; and [amazon_link id=”0691148198″ target=”_blank” ]Portfolios of the Poor[/amazon_link], which uses diaries to record how people with almost no money use what they have. There are some good background features on Katherine Boo like this one in The Daily Telegraph and this New Yorker video.

Annawadi

Where I work

Posted on by

As a follow-up to the recent post, how I read, here is where I work – a couple of people have asked.

Writing station

 

Reading station

The book I have on the go is Katherine Boo’s [amazon_link id=”1846274494″ target=”_blank” ]Behind the Beautiful Forevers[/amazon_link], reportage from a Mumbai slum – completely brilliant so far. A review will follow.

[amazon_image id=”1846274494″ link=”true” target=”_blank” size=”medium” ]Behind the Beautiful Forevers: Life, Death and Hope in a Mumbai Slum[/amazon_image]

Are ideas catching?

Posted on by

This interesting paper, Germs, Social Networks and Growth, uses a network model to explore the diffusion of technologies – ideas – in different kinds of society: an open, individualist one compared to a collectivist one with fewer external contacts. The authors, Alessandra Fogli and Laura Veldkamp, sum it up thus:

“Our theory for why some societies have growth-inhibiting social structures revolves around the idea that communicable diseases and technologies spread in similar ways – through human contact. We explore an evolutionary model, where some people favor local “collectivist” social networks and others do not. People who form collectives are friends with each others’ friends. The collective has fewer links with the rest of the community. This limited connectivity reduces the risk of an infection entering the collective, allowing the participants to live longer. But it also restricts the group’s exposure to new technologies. An individualist social network with fewer mutual friendships speeds the arrival of new technologies, which increases one’s expected economic success and favors reproductive success.”

What’s more, the type of society is endogenous:

“In countries where communicable diseases are inherently more prevalent,the high risk of infection for individualists makes the individualist trait die out. A collectivist social structure that inhibits the spread of disease and technology will emerge. In countries where communicable diseases are less prevalent, the collectivist types will be less economically and reproductively successful. Greater reproductive success of individualists causes the network to become fully individualist.”

They test the model using historical data on technology diffusion and epidemics, and find a strong link between individualism and productivity growth driven by technology adoption.

This work touches on a number of economic literatures: on technology diffusion; on social capital; on the effects of culture on growth; and on the role of institutions in development.  It’s a very interesting paper, and reminded me of two wonderful books. One is obviously Jard Diamond’s [amazon_link id=”0099302780″ target=”_blank” ]Guns, Germs and Steel[/amazon_link], although the argument is obviously a twist on Diamond’s case that European explorers took diseases into previously isolated populations. The other – for the metaphor of viral ideas – is Neal Stephenson’s brilliant novel [amazon_link id=”0241953189″ target=”_blank” ]Snow Crash[/amazon_link].

[amazon_image id=”0099302780″ link=”true” target=”_blank” size=”medium” ]Guns, Germs and Steel: A short history of everybody for the last 13,000 years[/amazon_image]

[amazon_image id=”0241953189″ link=”true” target=”_blank” size=”medium” ]Snow Crash[/amazon_image]

How I read

Posted on by

I’ve read, more or less, Erik Olin Wright’s [amazon_link id=”184467617X” target=”_blank” ]Envisioning Real Utopias[/amazon_link]. Hmmm. As I’ve agreed to write about it for a debate on another website in the New Year, here are my notes simply summarizing the book (this is how I work – notes on stickies, stuck into the book and assembled at the end).

Chapter by chapter

Here for greater clarity is my summary of the conclusions:

Do economists dream of electric people?

Posted on by

With apologies to [amazon_link id=”0575079932″ target=”_blank” ]Philip K Dick[/amazon_link], the title for this post is inspired by turning back to a book I read some years ago, Philip Mirowski’s [amazon_link id=”0521775264″ target=”_blank” ]Machine Dreams: Economics Becomes A Cyborg Science[/amazon_link]. This in turn was prompted by reading Mary Poovey’s [amazon_link id=”0226675335″ target=”_blank” ]Genres of the Credit Economy[/amazon_link]. She traces the turn to (excessive) abstraction and rationalism in economics to the marginal revolution of the late 19th century onward, much earlier than in Mirowski’s account. For he, by contrast, blames the development of computers and the Bourbaki mathematicians in the mid-20th century.

I remembered not liking Machine Dreams when I read it. It’s heavy-going, and for my tastes too conspiracy-theorist. Still, I semi-agreed with this point in the conclusion:

“As a historian I think it would be unconscionable not to point out that every single school of economics that has ever mustered even a sparse modicum of support and something beyond a tiny coterie of developers has done so by accessing direct inspiration from the natural sciences of their own era and, in particular, from machines. The challenge for those possessing the courage to face up to that fact is to understand the specific ways in which fastening on the computer instead of the steam engine or the mechanical clock or the telephone has reconfigured our options for the development of social theory.”

Semi-agreed because I don’t think the source of inspiration needs to be physics. Biology has been a strong inspiration for certain economists – notably Malthus and Marx – and is proving so again with the interest in epidemiology and network models. Biology returns the favour, too. Darwin was famously inspired in turn by Malthus, John Maynard Smith by game theory – and, as I wrote up here, an economic model of constrained optimisation would seem the ideal model for which neurons in our brains bring what perceptual signals to our conscious attention. In fact, the interest in behavioural psychology means there is a lot of exchange between the cognitive sciences and economics right now. As for Mirowski’s basic point, that economics will always be inspired by natural science, that for me is inherently true in the claim to be scientific, and the closer economics gets to all of the natural sciences, the stronger it will be.

[amazon_image id=”0521775264″ link=”true” target=”_blank” size=”medium” ]Machine Dreams: Economics Becomes a Cyborg Science[/amazon_image]