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Do you care about public policy?
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Your answer to that is probably going to be, no, man, policy is boring.
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Who wants to be a wonk?
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What difference does it even make?
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So let me ask you another question.
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Are you a concerned citizen who cares about society and your own well-being?
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If your answer is yes, then you should care about public policy.
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Public policy is the things that a government does that impacts your life in a million unseen
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Indeed, my contention is that we would have been a richer country, a better country with
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a more humane society if only we had gotten our public policy right from day one.
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Now, when we look around us and see all that is wrong, what options do we have?
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The majority will make the rational choice of just being silent, getting on with their
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lives, not sweating what they cannot control.
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Some of us will make a noise, will dissent, will raise our voice against injustice.
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But that often amounts to contributing a millionth of a decibel in a discourse full of noise.
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And some of the some of us, a small minority, will say, I want to actually find a way of
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And often that way will lie through studying and understanding and influencing public policy.
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Welcome to The Seen and the Unseen, our weekly podcast on economics, politics and behavioral
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Please welcome your host, Amit Verma.
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Welcome to The Seen and the Unseen.
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My guest today is Pranay Kotassane, one of the finest thinkers on public policy in this
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Pranay works at the Takshashila Institution in Bengaluru, for whom I used to edit the
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policy magazine, Pragati.
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And he has often been a guest on the show.
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Most of the times that he has come, we spoke about foreign policy.
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Now, there are a number of things I admire about Pranay.
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One is intellectual humility and his willingness to always learn.
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Two, the fact that he's built deep, nuanced frameworks to look at the world, mostly by
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reading a lot and talking to smart people.
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Three, he's constantly trying to engage with the world and get his ideas to a wider audience.
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He does this with his Hindi podcast, Pulya Baazi, co-hosted with Saurabh Chandra.
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He also writes a fantastic newsletter called Anticipating the Unintended at publicpolicy.substack.com.
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He co-writes this with R.S.J. or Raghu Sanjay Lal Jaitley, who was also on the Scene on
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the Unseen in a memorable episode a few weeks ago.
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Now, while Pranay has been on the show before, most of his appearances came in a time when
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the format was different and I didn't spend too much time talking about my guest's personal
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So today's episode is a great opportunity for me and for you to get to know and understand
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Pranay a little better.
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So this is going to be a wide-ranging conversation on Pranay's intellectual journey, the private
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beach in his college, his failed career as a cricketing superstar, his theory of socialism
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and finally, his love for public policy and why it matters.
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This is also a good time for me to recommend that if you're interested in learning about
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public policy, you should head on over to takshashila.org.in where admissions are now
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open for the 12-week graduate certificate program in Public Policy, Defense and Foreign
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Affairs, Technology and Policy and Health and Life Sciences.
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They have a cohort starting this September and 28th August is the last date to apply.
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Pranay himself is an alumni of this course and is now one of the outstanding faculty.
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I can't recommend this more highly and maybe after this conversation, you might feel tempted
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to check it out as well.
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Maybe it is your duty as a citizen to do so.
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Let's take a quick commercial break now and then we start talking.
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Do you want to read more?
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I've put in a lot of work in recent years in building a reading habit.
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This means that I read more books, but I also read more long-form articles and essays.
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There's a world of knowledge available through the internet, but the problem we all face
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is how do we navigate this knowledge?
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How do we know what to read?
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How do we put the right incentives in place?
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Well, I discovered one way.
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A couple of friends of mine run this awesome company called CTQ Compounds at CTQCompounds.com
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which aims to help people up-level themselves by reading more.
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A few months ago, I signed up for one of their programs called the Daily Reader.
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Every day for six months, they sent me a long-form article to read.
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The subjects covered went from machine learning to mythology to mental models and marmalade.
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This helped me build a habit of reading.
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At the end of every day, I understood the world a little better than I did before.
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So if you want to build your reading habit, head on over to CTQCompounds and check out
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New batches start every month.
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Future Stack batches start every Saturday.
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Also, check out their Social Capital Compound, which helps you master social media.
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What's more, you get a discount of a whopping 2,500 rupees, 2,500 if you use the discount
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So head on over to CTQCompounds at CTQCompounds.com and use the code unseen.
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Pranay, welcome back to The Scene in the Unseen.
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You know, I got to tell the listeners that the last time I was in Bangalore, I was trying
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to hook up a recording with Rahul Dravid.
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And then at the last moment, the recording kind of got canceled.
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And this has been going on for two, three years.
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Whenever I go to Bangalore, I write to him and he says, yeah, let's do it.
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And then something on the other happens, genuinely happens.
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But had we recorded, we were going to record in the in-house studio that the Takshashila
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And Pranay had made me promise him that he will be the sound engineer for that episode.
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So Pranay, normally I begin by asking people about their personal journeys and all of that,
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which indeed I will because we haven't in past episodes really spoken about that so
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But first, tell me what are your qualifications to be a sound engineer?
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See, Amit, I record Pulya Bazi, as you know, and you've been a guest on Pulya Bazi.
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And I have done audacity sound recordings many times and I have done editing.
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So I am very qualified to be there wherever Rahul Dravid is.
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But you know, if something goes wrong, I can imagine Rahul telling me that, boss, you got
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Rahul Dravid as a guest, you should have got the Rahul Dravid of sound engineers.
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But instead you got the, OK, I don't want to take anyone's name.
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So before we kind of go back into your distant past, let's talk about the immediate past.
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Like the last few months.
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I mean, the last time we spoke and recorded was remotely right after COVID started because
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in February we'd done an episode on foreign policy, but it hadn't released.
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So when COVID started, I said, let's do a half an hour recording to sort of give an
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You and Manoj were the guests and that was a great episode.
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But how's life been with you from that point?
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How do you get your work done?
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Is it hard to work from home?
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And so on and so forth.
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I do see that there's a poster on the wall behind you, it says where the mind is without
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fear and knowing you, I'm sure that's been your sort of attitude throughout.
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Yeah, it's been quite a different experience, I would say, because we had two lifestyle
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So basically, both my wife and I became parents just before the pandemic.
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So that was one life change.
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And after that COVID hit, so I have been unable to disaggregate the two effects that what
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has caused what, but I can surely say life has changed a lot.
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And it's just been very different as well as learning parenting as well.
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It's been a very different experience.
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Just to think of there's a mental bandwidth, which the kid always occupies earlier when
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you're working or you can just switch everything off, or at least pretend to switch everything
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off and concentrate on work and do tweeting instead.
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But now it's completely different.
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You need to always have one channel in that bandwidth, which is occupied by what's happening
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So that's been a big change.
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I would say it's like a kid is both an amplifier and a frequency changer, which means that
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the highs are very high and the lows are very low.
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And they come very soon, one after the other, unlike earlier, you know, that life was more
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DC current or AC with a small frequency, but now it is amplified.
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And so that's one big change.
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And of course, COVID has hit.
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So in a way, we've been working at home itself, as you know, Amit, all our courses are online.
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So that's not been a big change as such.
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We could work right out of the box like we were earlier.
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But other than that, yeah, just been worried over the last few months.
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But now with people getting vaccinated, with parents having been vaccinated and also the
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sort of mental stress is a bit less.
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But other than that, I just say to people, I have a habit of living like this.
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So congratulations, son or daughter, son.
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And he's going to be really pissed off when at whatever point in time you allow him to
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listen to adult content like this, when he listens to this and he hears phrases like this
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aggregate and AC current and he's like, is that how you talk about a baby?
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I presume you've become an expert diaper changer as well.
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And do you approach that the same way you approach public policy in the sense work out
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first principles and have easy heuristics that first this versus where was it like if
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there's somebody who embodies the word where was it in my mind?
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It's definitely you because you're so systematic about your thinking.
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I mean, I have not absorbed you living your life as it were.
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But in your thinking, is that how you approach parenting in general as well?
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Not so much, Amit, actually.
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And that's what I'm learning and trying to improve myself.
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Earlier it was like, you know, work is something different and you put in a lot of effort,
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but you didn't put that in your personal life, right?
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So I we did read a lot of books before the kid came along, but still still building that
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first principles base, you know, so have subscribed to a bunch of newsletters, reading them, trying
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But it's it's still the heuristics are so very weak, you know, so it's still improving
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But yeah, I have gathered a few things like I told you about this mental load idea that
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And yeah, that's so it's just the beginning, I would say, but not being so vested as I
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would have liked to be.
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So let's now move back to the distant past.
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Maybe 10 years later, if you're on an episode, I'll ask you about parenting and you'll have
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a whole system of thought worked out.
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But for now, take me back to your childhood, because much as we have had much many spent
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many delightful hours discussing public policy and economics and foreign policy and your
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sound engineering skills, I don't really know anything else about you.
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So take me back to your past, take me back to your childhood.
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OK, so my surname, as you would have seen, is quite a bit weird, you wouldn't have heard
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So in fact, wait a minute, wait a minute, wait a minute, because on Twitter, I had just
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put up a tweet before the recording saying, does anyone have any questions for you?
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And one of those questions is, at Bharatan RD asked, what does the word Kottasthane mean?
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Yeah, so even I don't know.
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So Kottasthane actually, it must be something related to court the fort.
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So maybe whatever protector of the fortress or something, some military title or that.
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But beyond that, even I don't know, just pure guesswork.
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But yeah, so I come from a Marathi family, but from Madhya Pradesh, Indore.
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So first seven years of my life were in Indore and after that, we moved to Goa.
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So all my life has been in Goa and that has shaped me a lot, given that in Indore we were
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a lot with people like us, right.
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And the mix, the intercultural mix was slightly narrower.
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But once you went to Goa, you had people from all over India.
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I was in a Navy school, so just met so many people from all over India.
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So that was like, it shaped me a lot in terms of how I think in terms of just this idea
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of being with people who are not like you in many respects.
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So that was a really important thing for me about childhood.
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Actually, one thing which I think differentiates me from many of the guests on seen and unseen
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is that I didn't read a lot.
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So I'm not proud of it, but I didn't read a lot.
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So I used to devour textbooks.
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I was one of those people who used to read before the teacher will teach and all the
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other people used to hate me.
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So reading has sort of always correlated with learning for me.
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This idea of reading for entertainment was not familiar to me.
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So I read very little, I played a lot and because I was in Goa, we had an excellent
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The Indian football team used to come and practice there.
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So I had the privilege of seeing Bhai Chung Bhutia, I am Vijayan and all that there.
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So that was like super fun.
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And unfortunately, we used to play cricket on the football ground.
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So that is also there and used to really enjoy doing that.
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So I used to love cricket a lot.
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And we had a big veranda, big garden actually in the place that I lived in.
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So there was this coaxial cable that we drove from the edge of our sort of the sloping roof.
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And it is tied to another Ashoka tree and suspended is a leather ball in a sock.
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And that is what I used to do the entire day.
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So that sound constantly coming out.
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So everyone in the colony knew that Pranay is here because that sound used to just keep
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My father wasn't in the Navy, he was working in a fertilizer factory.
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So like many of your guests earlier, who have either been born in that colony type of atmosphere
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or in a government quarter.
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So I was in the earlier category.
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So in a private company, my father was working and we used to live in this colony, very isolated.
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The beach was just two kilometers away.
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So yeah, it was great fun.
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Quite the life and the Bradman apparently also used to do that where he'd hang a single
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ball and he played against I forget the exact dynamics, whether he had a bat or he just
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used a stump and that was the making of Bradman.
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So crickets losses, public policy is gained clearly.
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And yeah, I mean, who today remembers, you know, names like Vijayan and Bhutia and all
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of that legendary names, even though I never actually saw them play in the flesh and he
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never went to a ground and so any of them play, but one knows those names.
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So it's very interesting that you speak about reading for learning, because one of the things
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that I have in fact remarked upon something that you do and something that you do way
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better than me and I need to actually sit down with you and pick your brain on that
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is read a book so thoroughly while taking notes, like it's something incredible the
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way you get into a book and I take pretty exhaustive notes myself, but you are at a
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I've actually seen you making mind maps of, you know, things from books and all of that.
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So we'll take a digression and go back to your past later, go back to your past later
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and tell me a little bit about this.
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I think one of the things that we realize as we go through life and especially I realize
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now in my middle age is that our brain doesn't absorb information so well.
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So you have to find systematic ways of trying to absorb information as well as you can manage.
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And obviously technology is a great tool there.
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There's an entrepreneur called Tiago Forte who does a course called building a second
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brain, which costs a few thousand dollars or something.
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Tell me a little bit about this then that what are your knowledge management methods?
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So I have been experimenting with these knowledge management methods a lot and tried all these
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tools which are there, you know, the ever notes and then you had notion and now currently
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So trying a bunch of things.
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So there's not a fixed method there, but one thing I try to whenever I have a book, I generally
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have a goal in mind, like what do I want to get out of it?
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Sometimes I'll just read the first and last chapter and then go a deep dive into it.
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But I don't take a lot of notes.
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I will underline like I read mostly on a Kindle.
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So I will always do a lot of highlighting and then export those highlights and I'll
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go over the highlights after I have read the book and then try to come up with my own summary.
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So that is the process which actually takes away because finally from a book you can hardly
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take away four or five sentences that you will actually remember after a year or so.
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So I want to get that main idea rather than the entire story, you know, because I find
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a lot of books are just historical retellings of some things which you would have come across
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in other books as well.
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So finally, you want to get to the crux, so I'm looking for that key idea, which the aha
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moment which made me think, oh, this book, I had never thought of it that way.
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So I'm always trying to pick those kinds of insights and visual map making or something
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So even now, the books that sort of have impacted me a lot, I have always created some mind
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map or some visual aid, because once I put that in the mind map, you know, that just
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I'm able to retain that for longer for some reason, the other, you know, and then even
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after a year or so, I at least know where in the mind map will be that idea which I
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Whereas if I do that in nodes where I type that that somehow doesn't happen.
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So maybe visually that connect works better.
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And what do you use to make these mind maps?
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So I use a bunch of online software available.
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Currently, I'm using Coggle, C-O-G-G-L-E, it's freely available, so just I use that
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And if you have an example of such a mind map, can I link it for my listeners or I mean,
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I can even post an image of such a mind map.
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Yeah, I made one for the lessons of history by Will Durant.
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So that will be linked from the show notes in some way or form.
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So getting back to your childhood, you've grown up in Goa.
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And at this moment, as we are piecing together bits of your life and trying to forensically
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figure out what happens next, it seems likely that you are going to end up in some form
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as Rahul Dravid's teammate, or perhaps when he's about to retire and you're coming in
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and he hands over the baton or the bat as it were.
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But that's not what happens next.
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So tell me a little bit about sort of how your journey proceeds from there.
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Yeah, so I mean, yeah, I used to love cricket, but I was never good at it.
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So I used to be one of those kids, I mean, you see on the streets, we'll do this bowling
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action and then batting action and then fielding also oblivious to all the people around them.
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So I was that kind of a person, but never really good at it.
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So 99% hard work, 1% talent, that kind of person.
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So yeah, so I did play some cricket, but was more interested in studies and all that.
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So reading wise, yeah, a lot of it was generally reading.
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In the earlier lives, it was Stinkle and a lot of Sportstar.
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I used to like Sportstar magazine.
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And I remember this child craft encyclopedia from the past somehow that those were the
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books that I used to like enjoy reading, you know, something new I hadn't known.
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Back then, again, there was no internet, right?
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So and we didn't have a great library like our school had a really small library and
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distances in Goa were huge.
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So no concept of a library around my house, at least for seven, eight kilometers.
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So there was one small library of our sort of the entire factory residing people.
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So used to just pick up some books there.
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But I remember one thing earlier as to read this, when I was to go to Indore for the summer
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holidays, we used to always read these Raj comics books.
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Those are all not great reading.
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I wouldn't recommend to anyone, but I spent a lot of time reading those.
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So there was this weird mix of a grocery store and a library in many North Indian cities,
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So people buying sugar and also books lying down and you can pick them up for fifty paisa
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for a day and give them back and things like that.
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So these were comic books, right in Hindi.
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So I used to read a lot of like that really junk reading, but that was like in the summer
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holidays in our home, we used to get Hindi newspaper daily.
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So we read a lot of Hindi newspaper in the evenings, morning newspapers to reach in at
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four p.m. in the evening, so used to read that.
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So that was pretty much my like reading diet and a lot of it was studying, etc., did 10th
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in Goa, did reasonably well.
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I think I was the first in the state or something like that and then went to 11th, 12th, I was
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fascinated by engineering, wanted to learn what that is.
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So took up the whatever science stream, 12th and etc.
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Then got into, yeah, by the way, I should also talk a lot about the failures.
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So like all people who wanted to do engineering, I started my IIT preparations at home itself.
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There were no concept of tuitions, I've never been to a tuition.
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So used to just read what a brilliant tutorials, many people will relate to it.
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So bought those books, was never, it wasn't good enough for that.
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So didn't get through that.
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But I got to a really nice college, which is NIT Suratkal, it's in Karnataka.
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And luckily, it has a beach of its own.
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So that was like some connect.
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And yeah, so spent four years there doing electronics engineering, again, something
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that really fascinated me.
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So I was really enjoying learning that.
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So that was about my engineering days.
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Yeah, one thing, why semiconductors and things that sort of fascinated me was just because
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I even then I believe that, you know, the entire world that we see the change that we
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see is because of these chips, right, like the way they have given us a new life, a lot
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of what we do are because of the advancements in semiconductors and chip making, right.
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So just like people say how every inkjet printer today will have more computing power than,
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you know, NASA had its disposal for taking people to the moon.
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That's so fascinating, right, like, which other technology has advanced by that way.
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So there are lots of like Moore's law and all, it's just a heuristic.
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All those things sort of were fascinating.
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So did that work for a while?
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And yeah, that was my engineering days and then sort of wanted to continue in that field
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But one thing I knew, I didn't want to go out of India, like, somehow I had, I still
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have this feeling that I want to do something here in this country for some weird reason.
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But anyway, so I again took this GATE exam, which is there for people who want to do masters
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in Indian colleges and all, again, I failed at that, so couldn't get through that.
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But I got a really good job, which was in one of the best semiconductor companies in
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So I sort of took that job up in Bangalore, worked for six, seven years, enjoyed that.
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But then I thought six, seven years is a lot to be doing the same thing.
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In between in 2008, nine, I also thought, okay, let me try UPSC.
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But governance, government interested me.
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So I thought, while I'm working, let me try it.
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So I tried that also, and I failed there also.
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So basically, competitive exams are not my forte.
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But I continued working there.
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In between continued playing cricket.
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So captained my school team, then college team, I didn't captain, but company team,
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So that was sort of one thing that I enjoyed.
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And after that, so the reason I mentioned cricket is because there is a connect to public
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So while I was playing cricket, one of the interns who was there in our team, he told
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me something that there is something called public policy.
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And there is something called a course at Takshashila that people do.
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And by that time, I had not heard about this word at all.
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I have not heard about public policy.
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I have read blogs and all of Nitin and others, your blog, et cetera, I had read that.
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But nothing beyond that.
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I said, OK, maybe I didn't get into the government.
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But there is something now to learn about the government without being in the government.
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So isn't that fascinating?
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So I took up the course, which is GCPP, graduate certificate in public policy course, while
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I was working in a semiconductor company.
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And I quite enjoyed what I learned, sort of opened a completely new way of thinking for
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It gave me a framework to see the world and see the news in a new way.
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So I was quite inspired by that.
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And then I thought, OK, I have done seven years in a particular field.
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Seven years is too long to be doing the same thing.
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Why not try something else?
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And that's when a lot of people in our company was like, what the hell?
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You can't even explain what you're going to do, and you're going to do that, leaving
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They said, see, this is the salary you might earn, and this is the opportunity cost of
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They didn't use that word.
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But yeah, opportunity cost of losing it, do you really want to do it?
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So I said, I will try it.
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Let me try something for a year, which I want to, just because I'm really interested in
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If I work out, probably I will come back.
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So that was my attitude.
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And yeah, that was 2013.
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So now seven years, I've been doing various things related to public policy.
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And it's been really great fun.
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So that's how it's been.
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So a lot of failures, some luck, some privilege.
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Not that you mentioned that you've done seven years and I'm wondering, scary and also exciting,
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because who knows, maybe, you know, like your colleague, Manoj failed to do, you might get
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into Bollywood and become a star or whatever, one never knows.
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The fact that you couldn't get into government, so you decided to learn about government from
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It reminds me of this great quote by Lyndon Johnson, when Lyndon Johnson had met J. Edgar
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Hoover, the FBI director, and he was asked that, hey, come on, the guy is a scumbag,
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you know, he's a scumbag.
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Why have you hired him?
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And Johnson said, quote, it's probably better to have him inside the tent pissing out than
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outside the tent pissing in, stop quote.
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So had the IAS people knew that you were going to be outside the tent pissing in, they might
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well have made you an IAS officer.
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Let's move on to our next question from the Twitter feed.
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And I really should not be reading Twitter during a recording.
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This is absolutely a first, but it's justified.
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And this is from Sambit Das, who asked, how were his Suratkal days?
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Suratkal was great fun.
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I think the entire idea is a college or a place like that is made by the connections
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that you make by the people who are around you rather than the teaching or the learning
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that you get from teachers, per se.
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And that again was really fascinating at Suratkal, just because you met people from all over
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I mean, it was the first year when it became an NIT.
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What it essentially meant was that you had people from all over India.
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So unlike IITs, in NITs there are state quotas.
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So every NIT will have one seat, probably one seat, at least from most states in India.
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So you had a kind of variety that you will not have even in an IIT.
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So probably every state of India had a representation.
#
So that was really fun.
#
So just meeting people from so many different places was really mind opening.
#
So I learned so much from that experience itself.
#
So I'm not going to distract myself with any more Twitter.
#
We'll go to the questions towards the end of this episode.
#
I'm just going to focus on the things that I'm curious about.
#
And the next thing I'm curious about is your engineering training in the sense that there
#
is a term that I often use pejoratively, the engineering mindset.
#
And the engineering mindset is that kind of mindset where because you're so used to doing
#
intricate designs of things, whether it's machines or whatever, you imagine that that
#
same mindset can be transplanted onto public policy or economics or running a country or
#
governance or whatever.
#
And obviously we know that that's not the way the world works, that you cannot control
#
or design anything that is too large from the top down, whether it is society or language
#
or markets or whatever.
#
And it requires a great deal of humility for someone to accept that when they have been
#
trained their entire career, that they have the skills and they have the intellect to
#
design something in a perfect way, that if they cannot do that, it's only a question
#
of figuring out why and learning how to do it, but it can be done.
#
Now one of the qualities I really like about you is this constant intellectual humility
#
and curiosity where one, you know the limits of your knowledge.
#
You also understand spontaneous order really well and at, you know, I also want to spend
#
a bit of time later in this episode discussing state, market, society, all of that with you
#
where we'll discuss these questions in detail.
#
But first this question about sort of the engineering mindset in the sense that was
#
this something that you were plagued with?
#
I mean, were there aspects of the training which you felt shaped you in positive ways
#
and were there aspects which you had to thrust aside or fight?
#
Yeah, yeah, that's a really good question.
#
But I think engineering actually held me in good stead while coming into public policy.
#
The reason being think engineering is essentially about concerned with getting things done,
#
Finally, it's about a problem solving mindset, you know, so you have to solve a problem.
#
I think that is really the core of public policy as well.
#
There is a goal, you need some policy to be made towards achieving that goal and it will
#
have its imperfections, it will have its trade-offs, but you need to get that thing done, you know.
#
So that's where I think academia and very good training in, say, a non-engineering discipline
#
will get you into, you know, understanding that problem really well.
#
But when you have to confront the trade-offs, when you have to make that cost-benefit trade-off,
#
right, for that, I think an engineering training helps.
#
So that really helped me, right, because when we are, say, talking or proposing solutions
#
to the government or just we want to solve a particular issue or the way we see it, we
#
have to confront those trade-offs and we can't say things are complex, the world is complex,
#
even this can happen, that can happen and you can't leave it there.
#
Finally, you have to bite the bullet, you have to take that stance.
#
So I think engineering helps in that, you know.
#
And like you become comfortable with imperfections, you become comfortable with imperfect solutions
#
and yet you want to make the world slightly better off from where you started with, right.
#
So that sort of helped me from the engineering mindset and we often tease this in our courses
#
as well that public policy like engineering is an applied discipline, you know.
#
So think of biology as the science and medicine as an applied discipline or physics as a science
#
and engineering as a discipline.
#
Similarly, you know, economic reasoning is the science and public policy is the applied
#
So in that way, public policy is quite similar to engineering.
#
It's about getting things done, about solving issues, being comfortable with imperfections.
#
You will always realize that you have insufficient data, insufficient time, and yet you want
#
to propose a way that might make things better off than they are now, right.
#
So that engineering training helps.
#
Yeah, where it doesn't help, like you said, right, you might have this tendency that,
#
you know, a technocratic mindset that just do these few things and you can control all
#
variables and the system will respond as you want to, right.
#
But you know, even their engineering has a lot to teach.
#
It's not as if even in engineering, you have leakage currents.
#
You want to do some things, but you will end up the circuit won't work the way you'd want
#
it to because of some weird thing you hadn't thought about.
#
So you try to relate those things as well and try to understand that perfect solutions
#
You try to make things work.
#
But I totally agree that that mindset is there and I try to keep away from it that, one,
#
So that is always something to begin with.
#
And the idea that you need to know so many more disciplines to even understand a tiny
#
bit of society, right, infinitely complex system than a circuit, right, human society.
#
There are so many variables for any issue.
#
Everything is multi causal, so you can't attribute to a particular issue very easily.
#
So that though all those problems exist and I think that humility comes for anyone who's
#
just looking at the world as it is, you know, once you look at the world as it is, you will
#
just be dumbfounded by its complexity.
#
So you will try to maybe model it somewhere.
#
You will maybe have a system loop to try and explain, okay, maybe this causes this and
#
that causes so, but then once you try putting that system up very soon, it gets so complex
#
that you realize that, you know, it's not a system which can be managed like a circuit
#
can be, you know, and that black box, which society is itself is so complex that modeling
#
its output is not very easy.
#
So I guess, yeah, there are benefits and you also realize your limitations pretty soon
#
I love the analogies you draw of theory and practice in the sense that, you know, physics
#
is a theory and engineering is a practical application, economic reasoning is a theory
#
and public policy is a practical application, but there is a sort of a difference in these
#
practical applications vis-a-vis each other and I'm reminded of this quote, like we have
#
a WhatsApp group for the writing class that I run, all the writing students of the past.
#
So one of them, Sahil Khanwala of the Indian Dream podcast, by the way, a podcast that
#
I once appeared on as a guest and the first line of the show notes was something to the
#
effect of we will now speak to India's most famous podcaster.
#
And I said, what is this that they've got Narendra Modi on, but no, it wasn't the brains
#
But anyway, so Sahil Khanwala of the Indian Dream podcast said in this message that he
#
So it was in a different context, but it fits this very well.
#
And what he said was, quote, a friend of mine once said, you know what the problem is with
#
being an economist, everyone has an opinion about the economy.
#
No one goes up to a geologist and says igneous rocks are fucking bullshit, stop quote.
#
And you know, igneous rocks, you cannot argue with igneous rocks, they are there.
#
But all these things that economists talk about seem so counterintuitive.
#
Everyone has an opinion, everyone argues on the basis of whatever and in the social sciences,
#
it becomes hard to actually prove things in a way that is convincing for everyone.
#
So all these ideologies can flourish.
#
So tell me a little bit about, you know, while learning public policy, what are the sort
#
of mental shifts that you made while learning about economics and public policy?
#
Because I remember when I kind of grew up as a kid in the 80s and even hate adulthood
#
in the 90s, such as it is, I mean, I don't know if anyone is ever fully an adult at a
#
certain point in your middle age, you realize everyone is winging it.
#
But as I gradually got older, initially, you had this vague leftist kind of mindset that,
#
hey, the state will solve everything and things can be planned and you don't really understand
#
how market works and they seem exploitative because you're looking at the world in zero
#
And then gradually, at some point, a light bulb goes off, hopefully, and you begin to
#
understand how that works.
#
And for me, the two big light bulbs in my mind was understanding how society slash markets
#
work in terms of positive, some spontaneous order, all of those things, which changed
#
the way I look at the world.
#
And the other big one was just learning about natural selection.
#
What it was that human beings were, you know, once you understand natural selection and
#
the role of evolution and shaping us, you get so much closer to understanding human
#
nature and sort of also closer to rejecting false narratives like religion and so on.
#
So those were my kind of two light bulb moments as it were.
#
Were there any light bulb moments for you that you can kind of identify that suddenly,
#
you know, once a switch comes on, everything kind of looks different?
#
Yeah, I think so many concepts in basic economics, microeconomics are like that, you know, just
#
like you said, positive, some thing, right.
#
So voluntary exchange being positive for both sides who are taking part in it is such a
#
mind blowing concept, right.
#
And yet, a lot of us will still not appreciate it.
#
It will always think one side is exploited and one side is the exploiter.
#
One person, I mean, very in a conference that I did, I don't know the name is so apologies
#
They use this word that they said, don't use the phrase haves versus have nots, but use
#
haves versus want to haves, right.
#
It's not haves and want to haves.
#
So it was so fascinating, right.
#
Haves versus have nots always puts you in this mindset of there is a confrontation.
#
There's never a competition or a cooperation.
#
It's always one against the other.
#
But the reality is you have everyone wants the same thing, whether it's the haves or
#
It's just that some people already are ahead, some people are not.
#
And you know, it opens up the possibility of cooperation, exchange, even competition.
#
So I think that was really something which I still think of.
#
The other thing is just the simple concept of opportunity cost is so mind blowing.
#
And it has so many implications on public policy as well, especially when a state like
#
ours, which is doing so many things with so less resources for that, this idea of opportunity
#
cost becomes so important, right.
#
So there's a really nice paper, Amit and I am saying this because I know you talk about
#
this and discuss this a lot about how people think very differently when they are talking
#
about what should be done with their own money versus what should be done with government
#
And the essential idea behind that is that people intuitively don't get opportunity
#
So there is opportunity cost neglect is far more common when it comes to public policy
#
rather than when it is when it comes to personal decision.
#
So this is empirically proven, there's a paper we can link like people did an experiment
#
asked people about their decisions and they found that when they were talking about their
#
own decisions, they were always conscious of their own time, their own money.
#
How is it being utilized?
#
It won't be utilized for something else if I put into this cause.
#
But when they were talking about government and public health, that was a topic they picked
#
They were just not thinking of opportunity because their belief was that the government
#
The government has infinite resources and the government should do this.
#
So why can't the government just make things a utopian world come alive?
#
Why can't the government do that?
#
So that is the mindset which a lot of us start with even I started with.
#
But once you learn opportunity cost, you just know, you know, that no, that's not possible.
#
You have to lose something to get something, right?
#
So there is some you do some things and the government will not have time money for other
#
So why not concentrate your efforts on the things that governments are supposed to do
#
rather than what you wish them to do?
#
So that was one really important idea that and then several other ideas, you know, just
#
generally about public policy.
#
I would also begin by saying that economic reasoning is the science behind public policy,
#
but it's not the only science as such.
#
So it is forms the core, but you also need because it's an applied discipline, public
#
policy will also need knowledge from say social psychology, knowledge from a whole bunch of
#
other disciplines, sociology and history, so many other things you need to know in order
#
to make sense of the real world, which will be infinitely more complex and what even economic
#
reasoning can tell us, you know, so that that that is also to be added.
#
Yeah, just learning about I had written this about what people should unlearn before learning
#
You know, so I just wanted to tell those things because they were what hit me when I started
#
We'll come to that next.
#
You'd made a video on it also eight things which we'll link from the show notes.
#
And in fact, we can come to it right now.
#
But before that, you know, just a couple of sides.
#
One is, as you point out, and I had mentioned earlier that, you know, people don't go out
#
and express their views on geology or say how to design a rocket to experts.
#
But they do that in economics because it just seems that, you know, everyone can have a
#
theory that can fit in different opposite theories appear to fit.
#
And one reason for that is that in the social sciences, it's very hard to get at the truth
#
because it is so multifactorial, like a great illustration of this, which our mutual friend
#
Shruti Raj Gopalan had once given me, is that, you know, imagine you want to find out if
#
dropping a coin in water raises the level of the water, right?
#
And obviously it does because, you know, the coin is part of it.
#
Now, it's very easy to do this in a lab because you can take two beakers with the same amount
#
of water and put a coin in one and you can measure and everything is controlled.
#
But imagine trying to do this in a swimming pool that you drop a coin in a swimming pool
#
where people are splashing around all over the place and you're trying to measure the
#
And it is simply not useful because there are so many other factors that you can't
#
prove it one way or the other and you'll have all kinds of differing theories on it.
#
And then it just becomes an ideological battle.
#
So this is one way in which economics, which is a study of human behavior, is kind of different
#
from, say, the study of metals or whatever, because human behavior is so complex and so
#
many other things go into it, especially when you kind of zoom out of what one individual
#
may be thinking or doing and look at a different level.
#
As far as positive sum-ness is concerned, my favorite metaphor for that is what John
#
Stossel called the double thank you moment.
#
And you know, old listeners of the show will perhaps find that I'm repeating myself.
#
But I love this as a metaphor where Stossel invokes someone who goes in to buy a coffee
#
And, I mean, he didn't say Starbucks, I'm saying Starbucks, but goes in to buy coffee
#
at a Starbucks and he pays for the coffee.
#
And as the person hands him the coffee, he says thank you and the person handing him
#
the coffee says thank you.
#
So it's a double thank you.
#
And what happened here is that he values the coffee more than the money he paid for it.
#
And the Starbucks values the money more than the coffee they're giving out.
#
It's a positive sum game.
#
And through such voluntary exchanges is how we all get better off.
#
So it's not a zero sum game.
#
It's not that to get richer, the poor must get poorer, which would be terrible and exploitative
#
But that's actually not how the world works.
#
And you also mentioned this paper, which of course I'll link from the show notes.
#
But it reminds me of, you know, Friedman had this beautiful two by two matrix of spending
#
He pointed out that, you know, if you spend your own money on yourself, you economize
#
and you seek the highest value.
#
Whereas if you spend your own money on someone else, you economize, but you don't care so
#
much about the value because you're not the beneficiary.
#
If you spend someone else's money on yourself, you don't economize because it's not your
#
money, but you seek the highest value because you're benefiting.
#
And if you spend someone else's money on someone else, you don't economize and you don't seek
#
You behave as if money falls from the sky and whatever, whatever.
#
And that's basically government spending, right?
#
I want to ask you about these eight things to unlearn before you learn about public policy.
#
But before we go there, let's talk a little bit more about economic reasoning.
#
Like when I heard the phrase for the first time, I can't remember what I thought, obviously,
#
where were you when so and so died or where were you when India won the World Cup?
#
Where were you when you first heard the phrase economic reasoning?
#
I don't remember, but economic reasoning must have seemed to me very dull and boring as
#
if it is something to do with numbers and charts and tables and all of that.
#
But economic reasoning, I find is fundamental to how we make every decision we make in our
#
At least it's a good lens to look at all of that and to, in fact, make better decision
#
and live one's life better or look back on one's mistakes.
#
So tell me a little bit more about what you understand by the term economic reasoning
#
and how your process of learning it and teaching it was.
#
Yeah, so just adding to what you just mentioned before, Amit, about the comparison of throwing
#
a coin in a lake and seeing the water, the difference is that the respondents on of anything
#
that the government does have agency of their own.
#
So and the way they work, their motivations will be so vastly different that even economic
#
reasoning by itself cannot capture all those.
#
So there's a great book by Tyler Coven, discovering your inner economist.
#
And he also writes about, you know, economists also often make a caricature of themselves
#
by saying that, you know, just, you know, how incentives work and then you can say how
#
You know, even incentives are so complex, the cultural context varies, the incentive
#
of a person in India might be very different from the incentive of a similarly placed person
#
So understanding that cultural context, understanding why people think the way they do is so important
#
to understanding, even making some sense of the world.
#
So that's why along with economic reasoning, you would need so many other disciplines to
#
just make some sense of these motivations.
#
Now, when we think of economic reasoning itself, one really powerful insight that economic
#
reasoning sort of gives me is it helps you to anticipate the unintended.
#
So one great thing that I had learned, and this was by a lecture by Pratabhanu Mehta
#
itself, and he mentioned in a class that not everything that is unintended is unanticipated.
#
So you generally when people have this conception of something going wrong by the government,
#
we often say that was unintended effects.
#
There were demonetization happened, but yeah, unintended effects.
#
But how can the government have predicted what can happen?
#
But the key insight is that no, that's not the way it is.
#
You can anticipate some things which are unintended even before a policy is done.
#
So you don't need to actually experiment on millions of citizens and then figure out that
#
when you put a price cap, that item will just stop selling or quality will degrade.
#
You absolutely don't need to do that and learn, but we still do that.
#
The government will still price stents and then figure out, oh, stents have disappeared.
#
Why have that happened?
#
So economic reasoning is what gives you that lens, right?
#
You are able to a key component of anticipating the unintended if you know basic economic
#
So if you know what will happen when you put a price floor, if you know what happens when
#
price cap is put, when a tax is put, there will be deadweight losses, you know, so such
#
things, if you have in mind, you are really able to make better public policies.
#
So that's why even in our teaching, we always tell people, however uncomfortable you are
#
with this word economics, there's no way around it when you are in public policy, irrespective
#
of the discipline that you are, you know, you might be doing things in environment policy
#
or climate change policy or even local governments related policy.
#
You will still need economic reasoning, which is many times people don't start with that
#
They think like economics is just one subject, which you have to learn, you have to get credits
#
for, but it's not that way, you know, it is a discipline that runs across all domains
#
So being armed with certain tools from that particular discipline is really key and it
#
will help you anticipate the unintended and stop and it won't allow you to make stupid
#
You will be able to at least say that, yeah, this is my sounds great.
#
There is a great policy, but then you will be able to say, okay, there are things that
#
might go wrong if you apply the economic reasoning.
#
So that is like one big idea that economic reasoning helps in.
#
The second thing is about just this idea of marginal cost and marginal benefit.
#
So economic reasoning is very consequentialist in its approach, right?
#
So it is always thinking of consequences, not intentions and things like that.
#
So in policy that matters a lot, right?
#
You have interested people to do something, you are electing them, there is a huge amount
#
of money that is at their disposal, force at their disposal.
#
So you want them to be judged by consequences, right?
#
So that's why what happens is having marginal cost and marginal benefit and comparing whether
#
a policy should be done based on benefits, exceeding costs is important.
#
Often you will notice Amit, people will justify a policy based on just the good that it can
#
So we'll just say, oh, CSR policy is so great, corporate social responsibility, because I
#
saw a lake near my house, which is so well done.
#
And that's why CSR policy should be implemented.
#
So you're just looking at a small benefit of that policy.
#
But what were the costs of that?
#
What could that money have been better utilized by the company itself instead of you having
#
it to submit to the government or your government forcing you to do that particular thing, right?
#
So those costs need to be kept in mind.
#
And that is a key idea, I think economic reasoning again can teach.
#
The next like really mind blowing insight is just market failures, right?
#
That codification of four or five kinds of market failures gives you such a real, really
#
important lens to look at the world, right?
#
So when you see pollution happens, you try to think of, okay, what is the market failure?
#
Then once you think of, okay, once this is the particular type of market failure, then
#
you can map a government solution to that particular market failure.
#
So I think you had Ajay Shah on the podcast a couple of times and his book does this really
#
well, but I'll still repeat it just for people who might be interested that the fact that
#
we know there are four or five market failures, right?
#
So you have in negative externalities, positive externalities, market power, information asymmetry
#
So once you are able to classify a failure, let's look at vaccines, right?
#
So first question you ask is, okay, what should government do about vaccines?
#
So then you ask, what is the market failure, right?
#
So is it a public good, is it a negative externality, positive externality, whatever, right?
#
And a lot of people would think vaccines are public goods, which they are not, right?
#
So they are private goods with positive externalities, right?
#
So you taking a vaccine benefits me, even though I'm not involved in that transaction.
#
So that is what a positive externalities.
#
So now once you know what a market failure is, you can map which government action should
#
is best suited for that kind of market failure, right?
#
So, and in the Shah and Kelkar book, they had these three ideas, right?
#
Produce, finance, regulate.
#
And you know that once you have something, which is positive externalities, that's a
#
The best government intervention would be to finance the recipients, right?
#
So in this case, it would be you give vaccines for free, right, or you subsidize it or whatever.
#
So it gives you a solution just by thinking in a structured way, right?
#
Think of the market failure, think of what are the possible solutions, but instead people
#
might often think that, oh, vaccines are public goods, so government should even produce it.
#
And then you enter into a whole different idea of governments trying to build its capacity
#
to make vaccines, to produce vaccines, and we know how that would work out, right?
#
So just this idea of having market failures and thinking that, you know, if there's a
#
positive externality, financing may be a best solution.
#
If it's a public good market failure, then maybe government production is justified to
#
And if there are the other market failures, negative externalities, market power or information
#
asymmetry, best ways for regulation.
#
One way or the other, governments come in to stop the excesses of people who are deviating
#
And this is such an important framework, right?
#
If we just learn this, maybe we'll demand better policies and understand when governments
#
take other routes, right?
#
So yeah, this was like the main ideas that I think are really core from economic reasoning.
#
And we should learn making better policies and even making sense of the news.
#
Forget about whether you want to be in the government or not.
#
But just if you want to parse the news, these ideas can help.
#
And I'll kind of add to that by talking a little bit more about economic reasoning in
#
the sense that even though it's called economic reasoning, it's really reasoning.
#
You know, economics is after all the study of human behavior.
#
So when I teach my writing course, for example, and over 1200 students have suffered through
#
it over the last 15 months, when I teach my writing course, I often talk about, you know,
#
I bring up economic reasoning without calling it that.
#
So it doesn't seem so intimidating.
#
For example, one of the points I want to I make right at the start of the course is that
#
we have to keep the reader at the forefront of our consideration.
#
You know, too often, when people sit down to write, they imagine that the act of writing
#
is something that is happening between them and their laptop.
#
Like I have thoughts in my head, I put it out on the laptop or write it on a piece of
#
paper and the writing is done.
#
But the writing only becomes meaningful when it has an intended effect on the intended
#
So you have to keep the reader at the heart of it.
#
And the way I kind of try to get this through is talking about opportunity cost is that
#
what could you be doing instead of attending this webinar?
#
As it were, you know, you could be reading a book, you could be watching Netflix, you
#
could be watching YouTube, you could be sleeping.
#
All those are opportunity cost.
#
So whenever someone reads anything by you, they are paying a huge price in terms of time
#
They are paying time and money and also attention and energy, which are separate points, reading
#
something you have written.
#
So it is such an enormous privilege and you should feel so grateful that someone is reading
#
And instead, so many writers seem to feel entitled to readers, they take it for granted.
#
And we actually need to work hard and which is why I say that, you know, bad writing is
#
equal to bad behavior, because bad writing, I define as writing that wastes the readers
#
And it's absolutely bad behavior.
#
And you can use the economic lens to look at other aspects of writing.
#
For example, you know, there are situations in which you don't want to write long sentences
#
and there are situations in which you do because you're building that kind of longer rhythm.
#
So you'll often face what an economist would call a trade off that, you know, longer sentences
#
are harder to process, which is a negative side of the trade off.
#
But the positive side of the trade off is that maybe they are creating an immersive
#
effect and a slow rhythm that you want to for that particular essay or story you might
#
So writers face choices at every moment, when they are writing, every choice involves trade
#
offs because there are no definitive answers of this is good and this is bad.
#
So economic reasoning can help.
#
Maybe you can add even transaction costs to this, right?
#
Just the fact that you if you use complicated words, if you are trying to show off your
#
literary flair, then you're actually increasing transaction costs of a person who's reading
#
So you want to minimize harder for them to process.
#
This is what I keep saying that, you know, don't say when you can say stop.
#
Why would you use a phrase like put an end to all those words where one is enough?
#
You're just being rude to the reader, which is not to say you dumb it down.
#
You what you want to say is what you want to say.
#
You never dumb it down, but find the most efficient way of saying it that is courteous
#
to the reader and respects the time.
#
And you sort of mentioned stance and you know, when that decision happened, and basically
#
for listeners who may not be aware, I think three or four years ago, this government put
#
a price cap on strengths and they said, oh, people can't afford strengths, so we'll put
#
a price cap and all that.
#
And I remember tweeting at that time, or maybe I wrote in an article, I don't remember.
#
But I remember putting it out there in the public that this will lead to shortages.
#
Price gaps always lead to shortages period.
#
This is economics 101 economic reasoning.
#
And that's exactly what happened.
#
And I don't even remember you and I might even have discussed it on one of my Bangalore
#
trips, but it was just so obvious that this is going to happen.
#
And that's also a profound point you made about how something that is unintended can
#
nevertheless be anticipated.
#
And an example of that, if I might do a humble brag is both the demon and GST, like demon
#
from day one, I started writing columns and did episodes on why it would be a disaster.
#
And it was, and before GST was announced, I did an episode with the one should the breaking
#
down why, even though it was well-intentioned, all the different things that would go wrong.
#
We were kind of completely spot on there.
#
And the interesting thing is one core fallacy is in fact, the first one you talk about when
#
you want people to unlearn certain things, you know, before you think about public policy,
#
the first of those was that good intentions matter, that if something is well-intentioned,
#
And the example of the price cap on Stents shows that no, the intentions were the best,
#
the outcome was the worst.
#
And similarly, we see a lot of our discourse is so shallow in terms of interpreting policy
#
in terms of intentions, like for example, last year when the labor laws were sort of,
#
you know, there were changes in the labor laws and people kept defending these labor
#
laws as if they were a good thing.
#
Now, these labor laws say good things and they were made with good intentions, but they
#
had disastrous outcomes, which pretty much all economists have been in agreement about
#
But just because an absolutely wild government, in this case, the UP government, said that
#
we'll abolish the labor laws, everybody was up in arms and said, oh, look, the labor laws
#
are protecting workers and all, whereas actually, no, they were harming workers.
#
You know, you can't go by intention, you have to go by outcome.
#
And the outcome is completely foreseeable.
#
This was the first of your points that don't go by good intentions.
#
Is this something that you'd like to elaborate upon?
#
Is it something that is a slightly difficult point to get across to your students?
#
Because it is a little counterintuitive.
#
This is, I think, the toughest point to get across.
#
And I mean, we all fall to this, right.
#
Because we all think of intentions when we think of governments, you know, he had good
#
intentions or she had good intentions at heart near the cheat.
#
So that once you start from that mindset, it's difficult to process that or a how can
#
something which was started so well go wrong?
#
And even if it goes wrong, then you will say, oh, it was unintended.
#
So it may be some effects will be there.
#
So but that's where the idea is, right.
#
Because you are managing such a complex system, just good intentions are no guarantee of getting
#
And in fact, it is very important for us to understand how human motivations work, what
#
are the kinds of things that might go wrong, and then you make your policy based on it.
#
So the example that I give is of prohibition.
#
So when prohibition started, yeah, good intentions, right.
#
At least that is the stated intent.
#
So you say, OK, what's the best way to do this?
#
You stop people from having alcohol itself.
#
And once you had that prohibition in fifties and sixties in Bombay, it was there and you
#
had those really long run consequences, you know, so you because of prohibition, you had
#
an underworld which started doing, of course, you know, suddenly people will not stop drinking
#
alcohol because one good intention CMS said, right, it is an inelastic demand, right.
#
So people would still want it just means that your demand will certainly not drop because
#
So you people want that demand to be served, it got served through other means.
#
And the people who are supplying these were the people who are obviously outside the law.
#
So they basically gained material wealth, they gained social wealth, they basically
#
became richer and they gained a lot of standing higher standing in the society as well.
#
So those were also the people who eventually became use that money for smuggling and whole
#
lot of other things, you know, so such a small action that you will just think a born out
#
of such noble intentions actually had such disastrous consequences.
#
You had a whole lot of underworld mafia and so many things which are related.
#
Now we can't say what percentage of it was due to this.
#
That would be difficult.
#
But there is a causal chain which maps to it, you know, so it's really important.
#
Another example that I give for this is just this idea of MSP and connection with the Delhi
#
It's such a profound connection.
#
So when I think we'll just trace it just for the fun of it.
#
What is the biggest reason people say it's the crop residue?
#
So first question we ask is, okay, if it is crop residue, then why can't we stop it?
#
So one thing would be, okay, why don't you stagger it?
#
The whole reason is happening.
#
It's happening is because most people are burning that crop at the same particular point
#
It's really short window.
#
So the idea is why can't you stagger it?
#
So staggering should resolve the problem, but that staggering is not possible because
#
I think before July 15th, you can't grow a Kharif crop because the government has put
#
a restriction on the some Punjab subsoil act 2009 that you can't grow a paddy before that.
#
So what happens is most people end up delaying their crop and hence they have very little
#
time before the next Rabi season starts.
#
So what they do is in that short period, the only way to get rid is all of them burning
#
their crop residues together.
#
So now the question you ask is why did the government put this law in place?
#
The reason is that during that time, Punjab and those regions have severe water shortage
#
So they don't want water to be used for growing paddy.
#
So the government has put this restriction.
#
Now you go again, one step back, right?
#
Why are people growing paddy in the first place and there's no water?
#
And then you realize that it is because you have distorted the incentives by saying that
#
we will give you money for growing this particular crop.
#
And that's what is the MSP, which government gives.
#
So you see the entire chain of MSP actually leading to the disastrous consequences.
#
No person could have imagined it back then.
#
That, you know, suddenly this might happen, Delhi smog might happen.
#
Probably they wouldn't have imagined way back in the sixties.
#
No, I want to add to this because there's a lot else and all of them have good intentions.
#
Like you said, this MSP is a good intention that he will support the farmers and we'll
#
give this price and they'll grow paddy.
#
But the other thing is that despite this, because this rice is a water intensive crop,
#
they would not have grown rice had it not been for free electricity.
#
Again, free electricity to farmers is given with the best intentions.
#
But what they did with it is they built a lot of new bells or whatever it is with which
#
you get water out of the surface, which allowed them to actually grow rice, which they otherwise
#
So you have a combination of the MSP, the free electricity to the farmers, the absolutely
#
the best intentions and you have this perverse situation where people in Delhi can't breathe
#
and every day is like smoking 30, 40 cigarettes or something of the sort.
#
And these are unintended consequences.
#
And the point is, are they unforeseeable?
#
Well, to the specific degree that back when MSP was set, you could not have said, you
#
could not have said that, but you could have very easily said that markets are going to
#
And you know, down the road, this will hurt the people that you're trying to help.
#
And throughout India, we've kind of seen those sort of distortions happening.
#
And you mentioned prohibition.
#
So I also want to sort of give another beautiful phrase, one of my favorite phrases, which
#
when I was learning about economics, which I learned, and it's a phrase coined by the
#
regulatory economist Bruce Yandel, and it's called Baptists and bootleggers.
#
So the funda here is that when prohibition happens first, why does prohibition happens?
#
Because people he describes as Baptists will come up and say it is evil to have alcohol
#
and husbands are beating wives and all of this.
#
And they'll make a moral issue out of it that alcohol should be banned.
#
So Baptists get alcohol banned.
#
Baptists I'm using in a loose sense, not in a literal sense here, but basically people
#
preaching in a virtuous way about the evils of alcohol will get it banned.
#
It's good for bootleggers because the moment you ban something like that, the underground
#
market will spring up and you know, bootleggers then come into the picture and you know, make
#
And what this illustrates, this phrase illustrates is that Baptists and bootleggers are actually
#
perfect allies, which people don't understand.
#
And the amusing subtext to that is that for a very brief while, I think three or four
#
years ago, the editor of Huffington Post at the time, Huffington Post India, he was a
#
He saw something I wrote about a film on Facebook and he said, why don't you write film reviews
#
So I reviewed one film, which I think was Aamir Khan's Dangal, where I had a throwaway
#
line about how of the superstars, he's the only one who can act a little bit, something
#
And Shah Rukh Khan read that and got offended and called up Huffpo and said, who is this
#
Amit Verma and why is he sniping at me?
#
So anyway, so that moment passed.
#
I wrote another review and then two weeks after that, Raees and some terrible Hrithik
#
Roshan film, I don't remember, they released simultaneously.
#
And I reviewed Raees, which I completely slammed because it's a terrible film.
#
See, actually everybody acts very well in that except for one person.
#
And I slammed the film.
#
But one of the reasons I slammed the film was this Baptist and bootlegger thing that
#
his character plays a bootlegger in that.
#
And when a politician demanding prohibition is passing through the city, they build it
#
And I am like, this doesn't make sense.
#
These are allies that they are working together.
#
He should be delighted that a politician wants to make alcohol illegal because that is his
#
And by the way, after this fourth review, the editor sheepishly called me up and he
#
said that, you know, we've decided no more reviews from you will just handle it internally.
#
So I didn't delve further into what happened.
#
But I remembered this in the context of, you know, the recent scandal earlier this week,
#
a useless controversy about Tapsi Pannu getting pissed off at Shubhra Gupta's review in Indian
#
And Shubhra hadn't even said anything personal.
#
It was one throwaway line and the full strisand effect came into being because Tapsi Pannu
#
threw a hissy fit about the review and all of that.
#
And it was a fairly good review.
#
And I actually liked Tapsi Pannu, so I'm not taking sides, but no reason to throw a hissy
#
Massive aside, but who would have thunk, by the way, the Huffpost archives got taken off
#
Like, I would have linked it from the show notes, but I don't think that review is on
#
But what I'll do is I'll look in my email and from the archives, just I'll probably
#
put it on India Uncut, backdate it to whatever the date was and put it up so people can read
#
it and see if there was anything to get offended by.
#
So the opportunity cost of having Amit Verma was to lose Shah Rukh Khan.
#
Well, to lose Shah Rukh Khan, how to lose me?
#
I mean, for them, that was the trade off.
#
So they chose what they had to.
#
Yeah, they made a rational choice, by the way.
#
I mean, I would not make that choice as an editor, but I can imagine why they did losing
#
access and all of that.
#
And why do you want to piss off a superstar of that kind?
#
So I kind of find it found it funny.
#
So yeah, so that is the first of the things we have to unlearn.
#
Good intentions is equal to good policy.
#
Good intentions is, you know, you can begin with it.
#
But very often a policy based on good intentions alone will backfire massively.
#
And we have seven more to go through and then lots more to go through.
#
I also want to talk about your path breaking concept of socialism, which was first expressed
#
in an essay that you wrote for Prakriti when I was editor of Prakriti.
#
So I almost feel this sort of paternal sense towards that essay of yours.
#
But we'll take a quick commercial break.
#
And then on the other side, we shall resume this conversation.
#
Long before I was a podcaster, I was a writer.
#
In fact, chances are that many of you first heard of me because of my blog India Uncut,
#
which was active between 2003 and 2009 and became somewhat popular at the time.
#
I love the freedom the form gave me and I feel I was shaped by it in many ways.
#
I exercise my writing muscle every day and was forced to think about many different things
#
because I wrote about many different things.
#
Well, that phase in my life ended for various reasons.
#
And now it is time to revive it.
#
Only now I'm doing it through a newsletter.
#
I have started the India Uncut newsletter at indiancut.substack.com, where I will write
#
regularly about whatever catches my fancy.
#
I'll write about some of the themes I cover in this podcast and about much else.
#
So please do head on over to indiancut.substack.com and subscribe.
#
Once you sign up, each new installment that I write will land up in your email inbox.
#
You don't need to go anywhere.
#
So subscribe now for free.
#
The India Uncut newsletter at indiancut.substack.com.
#
Welcome back to The Scene In The Unseen.
#
I'm chatting with Pranay Kutasane, public policy scholar, extraordinary about public
#
policy, about his own life, about kind of the world around us, because what we build
#
in our time learning economics and economic reasoning is a prism through which we can
#
see the world and understand it better as it were.
#
Now we were going through the eight misconceptions about public policy per se.
#
And the first of them, which he elaborated upon before the break is that good intentions
#
don't necessarily make for good policy.
#
So the second one is sort of an extension of the first one.
#
And I'm sure you would have heard this a lot about how we often say that our problem is
#
that our policies are great on paper, just that implementation may get but otherwise
#
policy was everything was good in it.
#
That is again a fallacy because a policy is explicitly meant to take implementation into
#
Otherwise you can at best say it was a good idea.
#
I mean, all of us have great ideas about getting the world, making our world a better place.
#
But those are just ideas, right?
#
When you go into the nitty gritties, when you try to see how people will actually interpret
#
this, how human motivations will play out, those are the things that a policy is precisely
#
So when we, for example, teach a systematic way of making public policies on a problem,
#
we expect people to have gone through a step of anticipating the unintended, projecting
#
the outcomes, looking at the stakeholders, how would they interpret it?
#
That is what implementation is essentially meant to capture.
#
So if your policy is not doing that, it can't be a good policy.
#
Basically, we've not thought through enough.
#
You've just put a Dictat on something which you thought will work great because it sounds
#
like a great idea in my mind.
#
So that is a big fallacy.
#
So there's nothing like a bad implementation, good policy.
#
If your implementation is failing, your policy is also bad.
#
So that is something we should keep in mind.
#
Yeah, you know, this is something I agree with so much because for example, when it
#
came to GST, you know, there were again people who said, the previous government also wanted
#
it, but implementation was bad.
#
But no, the point is the design of the policy was bad, which made it inevitable that everything
#
would go wrong when the policy came into play.
#
For example, the way the GST was originally conceived was that you have one rate or at
#
the most a couple of rates, you simplify everything.
#
You know, they had actually, even though it's a goods and services tax, they had hyped
#
it up as a good and simple tax, which is what it should have been.
#
But instead, it was a bad and complex tax, which is even the title of one of my episodes
#
And it was completely foreseeable.
#
And I will say that before GST was actually passed on this show, The Seed and the Unseen,
#
Devanshu Dutta and I actually spoke about all the things that would go wrong because
#
of the design of the policy.
#
And all of them did eventually go wrong.
#
The problem with having multiple rates, the problem with making it so difficult for people
#
to have to file monthly returns and all the kind of nonsense like my life is like way,
#
way more complicated because of GST than it was before the impact that it had on small
#
and medium sized industries.
#
It was all foreseeable.
#
So that's a fantastic point that sometimes, you know, the implementation can also be foreseen.
#
If you just look at the design of the policy and in a sense, this is a larger question
#
that I have saved for later, which we'll talk about when we talk about the Indian state
#
because in a sense, you can look at the constitution as a policy document that was written badly,
#
which has led to a state which is a predatory parasitic state.
#
And people can say, no, our constitution is good, implementation is wrong.
#
It was an example of bad design, but we'll come back to that.
#
What's the third thing that people should unlearn?
#
The third point I would say is this notion that politics is disgusting, you know, and
#
again, you know, a few years back, we had this sense that apathy was the dominant notion
#
when we thought of government, right?
#
Like why even bother ourselves with it, right?
#
And because people think that politics is disgusting, only evil people do it and we
#
So we'll not do politics, right?
#
But we all know, you know, politics starts when three people are in a room, you know,
#
so there is politics going on even now, right?
#
Between you, I and listeners, right?
#
Politics is so essential, not just to human beings, you know, even primates engage in
#
So to think of politics as disgusting is a very problematic because as Sir Humphrey Appleby
#
says, do you know, Bernard, what happens when good people don't get power?
#
The bad people get it, right?
#
So that's why politics is important and there's no way around it.
#
We have to engage in it if we want to make our country a better place, right?
#
So getting around this idea that politics is disgusting and that's why I will keep away
#
and somehow things will be great for me is sort of a fallacy.
#
And would it then follow from this and the reason why this is important in practical
#
terms is when people are working in public policy like ourselves, where you are coming
#
out with suggestions to governments and interacting with government and trying to get things through.
#
The reason this is important is that if you just aim for a certain kind of purity without
#
considering what are the incentives of politicians or bureaucrats, whatever, then no one will
#
You won't even be part of the conversation.
#
And what you instead have to do is you have to tailor your proposals and sell them, keeping
#
in mind that politicians have these incentives and these constraints and similar with bureaucrats
#
and similar with other stakeholders along the way.
#
So by that, you can kind of get something workable through, you know, and not let the
#
perfect be the enemy of the good as the cliche goes.
#
So is that why this is so important in real world terms for people who work within policy
#
Yeah, yeah, absolutely.
#
And a more fundamental reason is that when we think of people who are at the margin think
#
of politics as disgusting, the only people who will be in politics are the partisans.
#
So then you are only in politics because you are playing the Congress versus BJP versus
#
And then if you are already in that mode, then policies don't matter.
#
Then your party and what the party is doing, what the leader is doing defines what will
#
be the implications, how you will interpret policies.
#
The consequences be damned, right?
#
That will be how it is.
#
So in order for us who are not on either side to just aim for making things better than
#
the way they are, you need to keep this notion aside, right?
#
And you will encounter it in any policy space that you go, right?
#
There's no policy space where you will not have to look at the cognitive maps of all
#
the people, what their goals are, what they imagine causality is, how they think, and
#
what they think the others think.
#
All those things you need to map in order to do just good stakeholder management and
#
get a policy change actually happen.
#
I'll give you an example of this amid this pension reform which happened in 2004.
#
I think I would count it as an example of one policy which did manage to do this really
#
So the thing was basically until then the civil service pension, the way it worked was
#
you got the pension, it was a defined benefit pension, right?
#
You always got that pension in respect of government's finances.
#
It's a promise that the government has made to you.
#
And they wanted to transition it to a contribution scheme, right?
#
So you contribute, the government also contribute, and from that corpus you get that money later.
#
Now if you look at it, the first reaction you would think to this is there will be massive
#
Like why will anyone agree to it?
#
That to someone in the government who's used to all this.
#
But this policy change happened so smoothly that we haven't even heard of it.
#
It's not in our public imagination at all, right?
#
Because there was a really neat solution to that, the way the people did this is one,
#
it didn't apply to people who were already in the government back then.
#
So it was not backdated.
#
It started for people who were not in the government at that point of time.
#
So it was a front-ended scheme, right?
#
So you removed the opposition that might have come in an organized manner from say unions
#
The second thing that you did was you also promised a higher out go to people who are
#
coming in because government was contributing an additional, whatever 10% from their kitty
#
and the people who are going to join in, they are going to contribute 10%.
#
So there is an added incentive for people who are joining in as well, right?
#
A small one, but nevertheless an important one.
#
So when this change happened, so basically you have managed even the concentrated loss
#
that my people would have imagined very nicely, right?
#
You didn't have those protests.
#
So once we think of what are the various interests, what are the way people might react and then
#
try to get a policy around that, then, you know, it is possible.
#
So we need to take that into account.
#
I think something similar could also have been done with Air India long back, right?
#
You could have just, you know, that there will be people who will oppose it, who are
#
So maybe you take care of them in some way or the other, but you don't need to run an
#
airlines just to pay people their salaries.
#
So that's why I think understanding politics, understanding interest groups is important.
#
There's no way around it.
#
Otherwise a great policy solution might not work.
#
So that's why what we say is always think of whatever policy solution you have, imagine
#
the outcome that you want the world as it would be if your policy were to be implemented.
#
Imagine that world and imagine the world now, then the gap which exists between them.
#
How do you transition from this to that is an important learning to imagine.
#
Then when you try to project these outcomes at that point of time, you will notice there
#
will be politics, there will be alliances, there will be opposition.
#
And how do you get around that is then the key challenge.
#
So I have a further question following up on this point before we go to the next learning
#
we need to make, which is that one, I completely agree with you about how people's political
#
affiliations can sometimes distort the way that they look at a policy.
#
For example, you know, the recent farm bills, which were actually, you know, almost 20 years
#
in the making by different experts and incorporated things that everybody across the aisle had
#
at one time agreed that these were necessary reforms.
#
And I don't like all nuances of the particular bill, there are some things which can go,
#
but on the whole, they're a step in the right direction.
#
But our politics is so polarized that there was never any chance that something like this
#
would not find protest.
#
And this is something both the economics and the politics of it is something that I discussed
#
in detail with Ajay Shah in an episode we did on the farm bills, where we went into
#
a fair bit of detail and both of us felt that the bill was great, but the politics around
#
it that the Modi government mishandled it completely and their approach to the protesters,
#
which is completely wrong and out of whack, and also the the anti-democratic way this
#
And another example of that is the repealing of the labor laws by the UP government last
#
And, you know, maybe the repealing could have been done slightly differently, but there
#
is no doubt that the labor laws were a blot that they hurt workers far more than they
#
They were in fact one of the many causes for the continuing poverty across many parts of
#
And yet, because of which politician happened to announce it, you know, it became a polarized
#
Now, my thing is that in times where politics has become so deeply polarized, perhaps exacerbated
#
by social media, does that make the art of getting policy through even more difficult?
#
Because then the question that comes up is like, no matter what you do, you are going
#
to have mad opposition, you're going to have mad organized opposition to it.
#
No matter what you do, you know, even if you happen to do something good, because even
#
a broken clock is right twice a day, you know, even a bad government can get one random policy
#
So now you have, of course, been through this for seven in public policy for seven years,
#
almost as long as Modiji himself.
#
So do you feel that that changing landscape makes a difference or do you feel that besides
#
these kind of big bang reforms, which get in get in the news, the scope for doing a
#
lot of small, small things at a local level and all of that, which do make a positive
#
Yeah, I think not just local level, you know, it is possible to see still changes are happening,
#
They are not happening in the direction that you or I want them to go.
#
But changes are happening quick and fast, right?
#
Lots of policy changes do get made.
#
So the idea is that anyways, politics is the art of the possible, right?
#
So there will be people who will get through.
#
They know how to manage the interests of a lot of people, politicians know it much, much
#
better than you and I do.
#
So the idea is can the policy wonk at least propose solutions which they can reasonably
#
go and present to their constituents, you know, so that is the idea and the responsibility
#
of the policy wonk that they have thought through the solutions, thought through the
#
implementation, proposed a transition path, right?
#
I think your example of the farm bills is similar to what you said about the GST bill,
#
In the sense that again, yeah, both are great on paper, but implementation went bad, right?
#
So you could have thought of, you know, see there, you know that there will be people
#
who will oppose this, right?
#
The government has literally paid people to grow a crop for 30, 40 years and today, tomorrow
#
it is saying that maybe we won't do that in one way or the other, right?
#
So you know that upfront, how do you propose a solution which would have sort of taken
#
into account this fear, right?
#
That is, I think, something could have been anticipated, right?
#
So that's why I would say, again, it is the same fallacy, good policy and bad implementation.
#
It was not implemented well, so it is not a good policy, it should have thought through
#
that these are the people who are losing out, okay, so if they are losing out, how do we
#
make things better for them, how do we take them along, which wasn't done, right?
#
So that's where I would put it.
#
I think this was not so much though the false dichotomy of policy and implementation.
#
This was more about the often real dichotomy of economics and politics, that sometimes
#
good economics can be bad politics, you know, or sometimes, you know, the way a politician
#
might sell an idea can lead you in the wrong direction.
#
Either it's, you know, there might be a good policy which is sold badly, or there might
#
be a bad policy which is sold well, you know, like a lot of paternalistic policies will
#
be because often the popular or the populist understanding of economics will contain a
#
lot of things that we know are fallacies, for example, the zero-sum-ness of everything,
#
the fact that the notion that government spending has no opportunity cost, which is why, you
#
know, the most popular thing you can offer farmers before an election is a farm loan
#
waiver and sometimes the farmers are in such dire straits that it is actually justified
#
anesthesia, but it is only an immediate painkiller while there is a deeper cancer that has to
#
be sorted and which is not there in the popular imagination and there's no demand for it.
#
But yeah, that's a kind of a complex problem.
#
Let's go on to the fourth thing that we need to unlearn about public policy.
#
The fourth one thing we've discussed it already, just the idea that you judge a policy by the
#
So that is again a fallacy as we discussed, you need to take into account both costs and
#
So the thing is public policy is what government or any of the three organs of the government
#
And the fact that there is so much money going into it and it is the government, the state
#
as an institution has forced behind it, it can impact all citizens, right?
#
Even citizens, even people who are not in India.
#
So with that power behind you, obviously, even the worst public policy will generate
#
some benefits, you know, it's so just to justify a public policy because you have counted some
#
small benefits is again a fallacy, right?
#
So you need to take into account costs and benefits on both sides and then say whether
#
this policy should be implemented or not.
#
And this is not again what happens, right?
#
So you will say, yeah, demonetization, but maybe reduce some underground financing in
#
one part of the country or something like that and say that, you know, see, there were
#
Yeah, of course, there will be benefit.
#
I can say that there's no public policy which has no benefits, you know, there even the
#
worst of things, for example, even covid had benefits, right?
#
So yeah, even lockdown had benefits.
#
People will say they could see the Shivaliks from Uttar Pradesh or something.
#
Yeah, so that doesn't mean that covid 19 is a great thing to have happened.
#
So similarly, judging a policy by benefits alone is a fallacy that we need to be aware
#
of before learning public policy.
#
And a couple of nuances, I'll add to this, not only do you should you calculate costs
#
and benefits, but it's also important to see, you know, who incurs the costs and who gets
#
Like, you know, in the first episode I did on demonetization with Suyash Rai back when
#
the show was not four hours, but four minutes or something like that.
#
One of the things Suyash pointed out is that the issue with demon is that, I mean, both
#
of us were clear that there'll be no benefits despite what they were touting.
#
But both of us were clear that even their calculation takes into account that one group
#
of people will bear substantial costs and another group of people down the line will
#
And is that ethical is another question to ask.
#
I mean, one of the issues I have with consequentialism or utilitarianism or whatever, which, you
#
know, tries to look at the value of an action according to its consequences and basically
#
looking at costs and benefits is a calculation problem that society is so complex that you
#
can't possibly figure out the impact of any action.
#
And when you claim to do so, you are basically doing wishful thinking based on your biases.
#
And therefore, beyond that whole cost benefit analysis or a consequentialist kind of worldview,
#
beyond that, there have to be some moral underpinnings that are not open to question.
#
And I would say like human rights, individual rights, individual freedom, those are some
#
of those sort of aspects of which, you know, we should hold sacred and consider very strongly.
#
And in the case of something like demon, we didn't, it was the largest assault on property
#
rights in human history, as I keep saying, it's almost become a cliche on the show.
#
But it was, so just at that deontological level, just at a moral level, it was wrong
#
And to me, the cost benefit calculation didn't even matter, though obviously the costs were
#
far greater than the benefits, if at all there were any.
#
But the point is to me, it didn't matter because the damage, the suffering that you're causing,
#
what can possibly justify that?
#
Of course, I don't intend to shit upon the whole concept of costs and benefits.
#
Of course, you have to take it into account because there are trade-offs in any action.
#
And because when you propose a public policy, there is a certain state of affairs in the
#
world which you are trying to change.
#
And if it, you know, makes things better, then that's great, except that we need to
#
consider all angles of it, do some probabilistic thinking and so on and so forth.
#
And I would add to it, even in cost benefits, yes, you will look at concentrated benefits
#
versus dispersed costs and all that, right?
#
So it's not just about cost to the government, right?
#
It's cost to the society as a whole.
#
So you will take into account these things.
#
And yeah, I mean, our preference would be that, you know, you don't want to just incur
#
huge dispersed costs on a large number of people just to achieve some concentrated benefits.
#
In fact, there's a nice Wilson's interest group matrix that probably we can link to
#
where it says that client politics is the easiest to do.
#
Client politics is when you have concentrated benefits, but dispersed costs, right?
#
And that's the easiest thing.
#
But exactly the opposite thing is the toughest type of politics to do, right?
#
And I think he calls it entrepreneurial politics, but where actually the benefits are dispersed
#
and the costs are concentrated.
#
So that is the difficult thing to do.
#
But I mean, again, as I said, politics is the art of possible.
#
So people can, at least we should push the government towards achieving that.
#
And I know you've discussed this before, but I would put petrol prices also in this category.
#
It's the same thing you are incurring so much dispersed costs to a large number of people.
#
And that doesn't make sense.
#
It has a lot of attendant costs down the line also.
#
But just why would you incur that to so many people for achieving whatever you want to
#
do with the government?
#
You know, one way of thinking about this is that let us say that I make a public policy
#
proposal that every year Pranay Kotasane will get a subsidy from the government of more
#
than a hundred crores, right?
#
Now the benefit of this is, of course, to Mr. Kotasane who gets a hundred crores a year.
#
What is the cost of it?
#
It's one rupee for every citizen, a little less than that, depending on what our population
#
It's less than a rupee for every citizen.
#
Now, this is what is known as concentrated benefit and dispersed costs.
#
And because these costs are dispersed, most people won't even know that they're losing
#
And even if they know that they are losing one rupee, they won't really care enough about
#
it because that one rupee is not worth the cost of protesting and so on and so forth.
#
And it'll probably be unseen anyway.
#
And where this corrupts a system is that Pranay out of that hundred crores can now give, it's
#
perfectly rational for him to give 50 crores in bribes to MPs and legislators and ministers
#
and all of that and say that keep the policy going, bhaiya, tumhara bhi faida, hamara bhi
#
faida, positive sum game between the two of them, society loses, you know, and of course,
#
this interest groups problem is interest groups and lobbying, this problem is far worse in
#
And here, I think Jonathan Rauch had a great book on it called Government's End, which
#
I'll link from the show notes, which really goes deeply into the problem.
#
But this becomes a problem structurally because all politics then comes down to interest groups
#
lobbying for whoever they are representing to get a benefit.
#
Another example of this is, for example, both the Ahmadmi Party and the BJP at one point
#
in time, I think the BJP kind of changed his mind eventually, but at one point in time,
#
they were on the same page when it came to FDI in retail, where they were against it.
#
And the reason is simple to understand that all the small retailers could easily get together
#
and form an interest group and lobby and pay off whatever politicians they had to give
#
and fill the party coffers or whatever party they were supporting or just form a significant
#
vote bank as they do in Delhi and say no, you know, ban FDI.
#
And who lost through this?
#
Consumers lost through this because consumers would have got everything cheaper, cheaper
#
or better or both had FDI in retail been allowed.
#
And in the long run, all the money they would have saved would have gone back into the economy
#
and generated jobs and society would have been much better off.
#
But those benefits were diffused.
#
And in this specific case, invisible because, you know, you can't put a number to it.
#
It's a scene in the unseen.
#
And that powerful interest group with, you know, concentrated benefits kind of gets away
#
and so much of politics is like this that I am sometimes I sometimes wonder if there
#
can be any politics outside of this.
#
No, I just gave you an example of policy where they were able to overcome exactly this kind
#
So, I mean, imagine you tell a government person that you won't get pension the way
#
What protest would have been there?
#
There are other examples also computerization of banks.
#
There was same fears, right, that no computerization will take away our jobs.
#
But that did happen, right.
#
So there are many examples which we don't appreciate because just the way it was done
#
The way these effects were overcome, the way interest groups were mollified or taken on
#
So we that's why I think we need a better understanding of policy successes.
#
We look at policy failures and we can pontificate a lot.
#
You and I know that these are the failures, but we need to document our success as well
#
And that will probably tell us and give us clues as to how do you overcome some of these
#
And at least I can say there are these two examples which say it is possible.
#
No, and that's a profound point in the sense that if you're pushing a policy, the way to
#
push it is not to go to the people in charge and say that, listen, here are the benefits
#
You also have to consider that who are the people this will hurt?
#
How do we get past that?
#
How do we find compromises?
#
Like you said, politics being the art of the possible, which is all so fascinating to me.
#
Let's move on to the fifth thing now, the fifth thing that one should unlearn.
#
So I think this is more of a personal sort of thing, but just the fact that you need
#
to always defend your model of the world is one, again, a fallacy because yeah, public
#
policy is different from physics in that sense, right?
#
I mean, you will not come with really strong, you know, you won't come to blows.
#
At least you and I probably won't, maybe physicists do, but we won't come to blows on some of
#
the things about quantum mechanics.
#
But you will come to blows on how the world works or whether government should have capital
#
punishment or not, or things like that, you know?
#
So the idea is that it is actually, we are not learning if we think that we know how
#
the world functions, right?
#
And the whole idea is like how Ambedkar had written about is that consistency is the virtue
#
of an ass and I'm not one of them, right, like he quoted someone to this effect.
#
That's the idea, right?
#
So why would you think that the model that you have has all the answers?
#
So the more we are open to the fact that, you know, there are complex human motivations
#
if the way we learn and our models and our priors can change, then we start off on the
#
right foot while learning public policy.
#
Otherwise, we just go away reinforcing the priors with which we began, and that doesn't
#
No, and it's a profound point because like another of the people who did my writing course,
#
Nishan Jain, who is called Sneaky Art on Twitter, really good artist, does situational street
#
If he's sitting near you, he's probably drawing you, so beware of him.
#
He shared a quote with him, which I just love, and the quote is quote, every model is wrong,
#
some models are useful, stop quote.
#
And that's useful to remember that you might have a model of how the world works, that
#
the state must do everything or that markets will solve everything or whatever the model
#
But the point is that you can't get wedded to a model as if it is a religious idea.
#
You have to always, as John Maynard Keynes said, that when the facts change, I change
#
In response to somebody saying that you said that 10 years ago, now you are saying this.
#
And the point is that the real world is so deeply complex that even if you have a mental
#
model, which is incredibly useful, you always have to be open to, you know, rethinking aspects
#
of it or just looking or even going against your model when reality means that your model
#
in a pure form can't actually be carried out.
#
So yeah, that's a profound point, just calling for intellectual humility.
#
Yeah, sixth is something we've already discussed in the sense how economics is capitalism versus
#
socialism, that's again a fallacy.
#
And because it is economics, capitalism versus socialism, I don't need it.
#
And a lot of people will start with this assumption, you know, that's why economics is useless.
#
It's about Adam Smith versus Karl Marx and why should I bother?
#
But like we've already discussed, economic reasoning is so fundamental to making good
#
public policies or better public policies that we need to get out of this mindset, right?
#
Obviously it's nothing to do with capitalism or socialism.
#
It's just at least microeconomics is just about understanding human behavior.
#
It's a science of scarcity.
#
How do you allocate resources when you have scarcity?
#
That is precisely what public policy will try to address, right?
#
So that's why just getting out of this mindset is important before you dive in in this domain.
#
Yeah, and how do people respond to incentives?
#
Earlier during our conversation at some point, I wrote Behave on my page and that was not
#
an exhortation either to you or to me.
#
But it's because I meant to plug a book which I forgot to plug, which is Behave by Robert
#
Robert Sapolsky is a great biologist.
#
He also has these incredible lectures on YouTube, which I'll link from the show notes.
#
I wonder that, you know, such people can share their insights and everyone in the world can
#
listen to it theoretically.
#
But what the book is about is it looks at the origins of behavior at several different
#
Like if I do something now, right, like if you say something and I lose my temper, it
#
will first examine the most proximate cause, what you said and why I lost my temper.
#
But then it'll go a little further back.
#
What is the neurochemistry of my brain?
#
What is, you know, did I wake up late and not have breakfast or did I have some disease
#
a week ago for which I had some medication which changed my imbalance?
#
So it'll look at that layer of causation.
#
And like that, it keeps peeling the layers back all the way till you get to prehistoric
#
times and evolution shaped, you know, the way our brain works and the way we react to
#
everything and all of that.
#
And it makes you kind of realize that there are so many layers of causation behind every
#
little thing that we do.
#
And sometimes we may not even be kind of aware of what those things are, you know, which
#
means that it's always important to think of humans as containing these multitudes,
#
as being complex and all these different factors.
#
So even there, there are limits to, I mean, that fundamental thing that humans respond
#
to incentives are true, but those incentives aren't just proximate incentives.
#
There's a lot of other shit going on and there's a lot of, you know, what is important is not
#
just defining incentives, but defining humans.
#
And humans are, you know, a mix of so many different things.
#
But I think economic reasoning certainly helps in increasing your chance of, you know, understanding
#
But, you know, my little mini lecture apart, let's move on to point number seven.
#
Point number seven is again, this idea of experience versus theory, you know, often
#
will again come across this idea that what works for me works for everyone else.
#
Or I stayed in a village.
#
I know how people work there or how they respond to policy incentives.
#
So that's why it will work all across the world, right?
#
But like it really ties in nicely to what you mentioned that, you know, we have our
#
own limitations of perception and memory, both the way we interpret lead to cognitive
#
And there are hundreds of cognitive biases now, documented ones.
#
And those cognitive biases just say that, you know, just because you saw one thing,
#
the way it worked or a one policy, maybe NREGS work great in your village and people actually
#
But does that make sense at a national level?
#
You have to go down further, right?
#
You have to ask the cost, you have to ask what were the unintended effects and things
#
It can't be just because you were in a village and there were great things happened there
#
that you justify that entire policy.
#
So that idea is again, just something to keep in mind because you'll always see experience
#
alone masquerading as good policy knowledge.
#
And that is something to keep in mind.
#
And I also had a good episode on this with Shruti Rajgopalan and Alex Tabirock.
#
And the technical term they used is isomorphic mimicry, where just because, you know, one
#
policy has worked in one place, you try it in another place and assume that it will work.
#
You know, and that goes well with this Indian tendency of trying to have an answer to everything
#
where there's this old joke about how you go on the street of any Indian city and you
#
ask a passerby, even if you name a fictional place, they will give you directions.
#
Dine in, then go left, then go straight, after 200 meters, you can ask the paan vendor.
#
Possibly I'm sort of caricaturing it as an Indian trait, where it might be a universal
#
trait and we've only noticed it in India.
#
But nowadays, of course, we have Google Maps.
#
So thankfully, we don't have to ask so many people, technology kind of really helping
#
So what's the eighth thing that we have to undone?
#
The eighth thing is, again, it ties into what we were saying about one rupee of government
#
spending being the same as one rupee of social spending, you know, and that's again a fallacy
#
because, you know, there's something called a marginal cost of public finance.
#
The idea being that the government, when it raises resources, there is some friction because
#
of which money is lost, right?
#
So the idea is you can't justify that government say spending 5000 crore in the on a project.
#
The cost to society is actually much larger, right?
#
And I think, again, Shah and Kelkar in their book say that it is three X, right?
#
So it might be the cost to society is probably 15000 crores for a 5000 crore rupee that government
#
has raised and intends to spend for the perfect of causes.
#
So the way you would go about this is you need to ask the question, what is the government
#
Is the benefit of that more than 15000 crores, not 5000 crores, right?
#
That would be a comparison point.
#
And that is another important thing to learn because that way we will think of governments
#
raising money in a different manner, right?
#
And we will think of governments doing the big things that it is supposed to do.
#
So when governments spend on public goods or any of the market failures, then we can
#
justify that the benefits probably would be more than three X the cost that government
#
has imposed on society.
#
But otherwise, it doesn't make sense, you know, so that to me is another learning that
#
we need to keep in mind.
#
And this is really hard to get through to people because in India, it's almost I keep
#
saying our biggest religion is not even Hinduism, it's a religion of government where anything
#
You want to fix anything in society.
#
You say, government karegi as if money falls from the skies.
#
But the point is money has a cost.
#
So if you're saying that, oh, for national pride, we need to, you know, have a giant
#
Siddharth Patel statue, or we need to fund a space program or whatever it is.
#
And we say that, no, all this, you know, this is a money that should be spent.
#
We assume that it has no cost, but the cost it has is actually much more than what is
#
Like you pointed out, if it's 5000 crores, you know, the cost to society is 15000 crores.
#
Shah and Kelkar have a great explanation of this in their book and in their episode with
#
me, both of which I'll link from the show notes.
#
The other thing to remember is something that's probably summed up by an old column of mine
#
where the headline was every act of government is an act of violence.
#
And we don't realize that, you know, what does a government need to exist?
#
Those taxes are taken essentially through this threat of coercion.
#
If taxes were not compulsory, if we were not going to get arrested, nobody would pay taxes.
#
Now it is not to say that there should be no taxes.
#
It is just to say that we should therefore be careful that not only is there an actual
#
monetary cost to our spending where five rupees is equal to 15 rupees or whatever, not only
#
is there that there's also a moral cost.
#
It involves coercion and everyone in India pays taxes.
#
Income tax may be a small percentage, but even someone begging on the street who is
#
later buying salt or buying soap or whatever, they are effectively paying taxes because
#
Therefore the point is you are committing violence on the poorest of the poor also for
#
every act of government spending.
#
So it's important that whenever there is government spending, you need to be able to justify it
#
and talk about whether it is actually worth it or whether this is not something that we
#
And moving on from that, because I wanted to talk about the Indian state next and this
#
One thing that I think both of us would agree on is that there's no easy answer in terms
#
of the government is either spending too little or too much because I think both of us would
#
agree that in areas where the government has a legitimate function, like the rule of law,
#
like certain public goods or whatever, it does not do enough.
#
It is basically absent.
#
But in areas where it has no business interfering, it has a massive superstructure, which is
#
a massive waste of money and also constrains society in various different ways.
#
How should we think about the state?
#
Like, before we get interested in these subjects of political philosophy and economics and
#
all that, we think of the state, especially in India, as, oh, my bab hai, you know, their
#
job is to look after us and we will vote once in five years and then my bab will take care
#
But conceptually, how did you begin to sort of fashion your thinking about the state?
#
And also, how did you arrive at socialism, which is going to ask you about that next,
#
because when I was editing Prakriti, the policy magazine, you'd written a famous, almost iconic,
#
even seminal essay for me called A Case for Societism, which argued that when it comes
#
to the state markets and society, we spend too much time thinking about the state and
#
markets and actually society can solve many of our problems.
#
So I'm going to ask you to elaborate on that.
#
But I guess before we elaborate on that, it's useful to talk about how do we conceive of
#
a state, how do we conceive of its relationship with society?
#
And in contrast with whatever that ideal conception would be, what are things in India actually
#
So let's begin with India itself, right?
#
Because there are lots of theories about the state and a lot of people have written books
#
But let's begin with the Indian state itself.
#
And I would ask you a question, why do you think that's the case?
#
Like if you think that we rely on the state a lot, what are your sort of speculation about
#
I think one reason is that we need to think about where our conception of the state came
#
Like through the independence struggle, the notion really was that it is a British who
#
It is colonialism, which is evil.
#
And we didn't drill one layer down.
#
I would have drilled a layer down and said, okay, the British are evil, colonialism is
#
Let's go a little further.
#
And the core answer to me lies in coercion, lies in not respecting individual rights,
#
lies in a top down vision of society.
#
Like what was a state in the conception of the British?
#
It was something to keep the natives under control.
#
That's basically what it was.
#
The entire IPC, the Indian penal code, most of which we still have on our books, came
#
We still have many of those laws against free speech, for example, 295A, 153A, all of those
#
are still with us because what happened at independence was that there was this massive
#
sense of relief that the British are gone.
#
And partly it wasn't even that our freedom struggle really succeeded.
#
They were just bankrupt after the war and exhausted and whatever.
#
And when they left, we took over the same state apparatus.
#
Even when we sat down to design the constitution, you know, there was a comment in the constituent
#
assembly when someone said that, hey, you know, we are designing the state from the
#
point of view of a policeman.
#
And that's exactly what we did.
#
We kept the colonial apparatus.
#
We kept the Indian penal code and we kept the mindset.
#
You know, the British had that extremely racist mindset that, oh, these natives know nothing.
#
We have to civilize them and we have to teach some of them English so they can be our local
#
officers and all that, the whole Macaulay way of thinking.
#
And somehow we kept that entire apparatus and we brought that thinking when we became
#
And also power corrupts, right?
#
So whatever ideals these people might have when out of power, when in power, they kind
#
of continued, you know, all the mechanics of subjugating the people remained.
#
And a classic illustration of this is actually comes in an episode I did with Tripur Duman
#
Singh, who wrote a great book on the First Amendment.
#
And what happened there was that one of these laws in the IPC, the Sedition Law, was actually
#
taken before the courts in 1950, where the argument before the courts was that this is
#
against Article 19, which guarantees us free speech, and the court struck it down.
#
So the Sedition Law was struck down in 1950 and then Nehru brought it back with the First
#
Amendment because he wanted to use it against political enemies of his and people who were
#
criticizing him, right?
#
And of course, Nehru did, I won't say everything is Nehru's fault, he did a lot of great things,
#
but he was also very anti-liberal in certain ways.
#
In fact, the person who argued against this First Amendment and against the law of sedition
#
being brought back was Shyama Prasad Mukherjee.
#
So people contain multitudes and it's, you can't look at them in simplistic ways.
#
But what we basically did was we took that Maibab mindset and, you know, even when designing
#
the constitution, I have an episode with the historian Gyan Prakash, where Gyan Prakash
#
wrote a book on the emergency and his whole point was the emergency was not an aberration.
#
It was not the case of a truly venal and vile mother and son pair and Indira Gandhi and
#
Sanjay Gandhi gone mad.
#
It was designed within the constitution because the constitution centralized power and made
#
it possible for Indira to do what she did.
#
And why did they centralize power?
#
Because at the time the constitution was being debated and written, there were riots all
#
There was no certainty that the center would hold as it were.
#
There was no certainty that the map of India would look anything like it does now.
#
So that urge to centralize power is understandable.
#
But what we ended up with was power that is too centralized and power always corrupts
#
and this mindset then went to the people.
#
Now again, to continue the other sort of aspect, which you have also written about and commented
#
upon is that the other aspect was that all of these great freedom fighters recognized
#
that there were many social ills that had to be sorted out.
#
And people like Gandhi and to a large extent, Ambedkar said that these can come out of that
#
society can solve these problems.
#
But there was also a strain of top down thinking that said that, no, let's design a constitution
#
which makes sure that the state solves these social problems or transformative constitution
#
And Gautam Bhatia's words, he's written a book on it and many people support this mission.
#
I think it was a very flawed mission because you cannot solve these problems from the top
#
In that one sense, Gandhi and Ambedkar were right.
#
In fact, Ambedkar said that the constitution was just like a top soil and therefore implying
#
that it is extremely superficial, that society is not like that.
#
And this leads to another problem that the constitution, while I find that it is not
#
liberal enough for me in terms of protecting individual rights and so on, was probably
#
way too liberal for a society itself, which isn't illiberal and was imposed on that society.
#
And what we are seeing in the current time was actually inevitable.
#
It just took a few decades to get here, but society has caught up and everyone who cared
#
for those values failed in that essential mission of propagating them through society.
#
So that's my kind of long answer.
#
Half of what I said about the state and whatever is not even relevant to what you asked, but
#
the first half of why we are in the state is that it goes down to the design of the
#
Indian state at the time of independence.
#
And then that percolates through the culture, because then if all the power is concentrated
#
in the state and markets aren't allowed to function as they weren't for decades and in
#
some areas still aren't like in agriculture, then what are you going to do if you want
#
You will want to be part of the state.
#
You will want to be part of the rent seeking apparatus instead of focusing your energies
#
onto making a profit the good way, which is to make other people's lives better off.
#
And the dependence on the state grows, the mindset kind of gets worse and worse.
#
And that's that's my broad take on it.
#
So I'll come at it from a slightly different angle, because one thing it doesn't explain
#
is that if British state was so extractive, it should have inspired a complete distrust
#
When we were sort of moving on from that, we should have hated that state.
#
So viscerally that we would have wanted an anti-state, right.
#
Something like what Gandhi was probably advocating for.
#
But yet that didn't happen.
#
So why is that the case?
#
And I'm completely speculating here.
#
I have no data on this book.
#
The way I think of this is think of the three institutions, state, market and society, either
#
of all three of these can cause some change, bring good things, bring bad things, whatever,
#
all have complementary strengths, all have complementary and weaknesses as well.
#
So at that point of time, when we are talking about the fact that India is independent and
#
all that, at that point of time, markets were discredited because you had this idea of markets
#
being very closely linked with British colonialism and exploitation.
#
So the fact that markets can bring things for us, can make our lives better was completely
#
discredited and still continuing to be discredited.
#
So we still want to overcome some of those things.
#
So if you think of these three elements, one element sort of got discredited.
#
Now think of the second change maker, which could have probably been the society as well.
#
The Indian society has always been, the communities have been strong, the ties have been strong.
#
The state has always played a small role until that point of time, until this welfare state
#
becomes a popular ideology across the world.
#
But there again, this idea came about of the social revolution and what you already mentioned.
#
And the social revolution sort of says that the constitution is not just meant to bring
#
a political and an economic revolution, it will also transform society.
#
And that was a very big challenge that the state took on to itself.
#
Now I think that trade-off was very well made and I would disagree with you that that trade-off
#
was not worth it because we've seen a lot of benefits that have happened because of
#
Just this idea of, at least at that point of time, the caste inequities that were there,
#
the gender inequities were there, we are definitely way better than we were at that point of time.
#
And so that trade-off did have a lot of benefits, but one sort of unintended effect of that
#
was, yes, that people thought that state is the ultimate arbiter of all these things.
#
Society can never cause this change.
#
It is the state whose responsibility to bring all these changes.
#
So the idea again is, and you will see all this in our popular imagination as well, that
#
Now it's the job of the government to do X, Y, Z, right?
#
Why the hell am I paying them taxes?
#
But that's not how any society does it.
#
You actually don't want the state to do some of the things.
#
And you want probably the markets or societies to resolve some things on themselves.
#
So I think that's sort of the way I look at it, that because of one, markets getting discredited
#
and second, the idea of social revolution, meaning that state should solve things and
#
society can't, we are left with only one player in the game, and that is the state.
#
And one direct consequence of this is what you said, and I call it the omni-absent state.
#
So the idea is that it is present where you don't want it to be, and absent where absolutely
#
So there's a paradox which comes because of this.
#
There's a paradox between ambition and competence.
#
So ambition of the state is to move the world, change the world, but it does not have competence
#
on many of these grounds, right?
#
And in fact, competence of the state has reduced over time, right?
#
Remember earlier there were Navaratnas, right?
#
The best in the world wanted to be in the state.
#
Even after independence, when the state was the only player in that town, the best people
#
But as economy liberalized, people had better options.
#
So the competency of the state decreased.
#
So paradoxically, with economic growth, you had this governance gap increasing, right?
#
So you had the government still being in the 19th century and society and markets moving
#
So you have a state which has very little competence, but you also have a state which
#
has ambition to do a lot of things.
#
And that ambition has popular legitimacy.
#
A lot of us think that the state should do this, markets are not good, society is not
#
And that is, I think, the reason why we perceive the state the way we do.
#
So a couple of observations.
#
One is, I love that phrase you omni absent state and I completely agree with you on the
#
Indian state being absent everywhere where it should be present and vice versa.
#
What I'd say what I've seen over the last two decades is that Indian society has by
#
and large in a jugaru way solved its own problems.
#
So most of the progress that has actually happened within society is society just solving
#
its own problems despite of the state.
#
The fact is, there is no rule of law in most of the country, there's an illusion of it.
#
You have police stations and policemen and uniforms, but there is no rule of law.
#
But society has kind of gotten along.
#
Similarly, I'd say that whatever little progress and I would say it's too little, whatever
#
little progress we've made on issues like gender and caste has again come from within
#
The job of the state really was to protect the rights of every individual, regardless
#
And it has firstly not managed to do that at all.
#
Secondly, there is a lot of progress yet to be made.
#
Thirdly, you know, one could argue that the way the state approached it has actually solidified
#
a lot of the toxic identity politics that goes on across the country and that Indian
#
politics has been plagued with, you know, and in a sense, of course, a lot of those
#
identities have started getting subsumed within the larger identity of Hindutva at the BJP
#
But even there, all the considerations of, say, Amit Shah while planning the 2014 elections
#
were on the basis of caste, where he said that, okay, you know, people say we won't
#
get the OBC vote in UP, but actually it's the Yadavs we won't get.
#
We'll go after the non-Yadav OBCs who resent the Yadavs.
#
We'll go after the non-Jatav Dalits who resent the Jatavs.
#
And Maharashtra, the non-Maratha OBCs, very much premised on caste.
#
And I would argue that a lot of those problems we haven't solved and to the extent that it
#
is better, it is really better because of social attitudes and tendencies like urbanisation,
#
which is not to say that caste is not a problem in the cities, it's a problem everywhere
#
in India, but it's less in the cities because wider economic networks and self-interest
#
and all those things come into play, nothing to sort of do with the state.
#
Now before we kind of move on, and I, by the way, did some interesting episodes with Ashwin
#
Mahesh also, and I think in the first of them he spoke about how the problem in the early
#
decades of India was that the balance between the state and society was too much on the
#
side of the state and we needed to bring it more to the social side.
#
But I'm at a definitional level going to argue with the conventional view that, you know,
#
you have stated, Aguram Rajan has stated, of there being these three prongs, which are
#
the state, society and markets.
#
And to me, if we look at markets as say marketplaces where goods and services are exchanged, yeah,
#
you can look at it as something separate.
#
But I think of markets really as a web of voluntary action, you know, involving members
#
of society and therefore a mechanism through which society expresses itself.
#
And often the state tries to control this mechanism, to subvert this mechanism, to use
#
its power to, you know, do cronyism and all of that.
#
But I look at it as sort of this web of voluntary action.
#
And therefore I would say that even you and I, right, no money has exchanged hands between
#
you and I being on this podcast together now, but we are doing it for mutual benefit of
#
So goodwill between us and, you know, I'm sure we'll both enjoy this conversation and
#
blah, blah, blah, variety of reasons.
#
And I view that as a market transaction, even though there's no money shifting hands.
#
So in a sense, rather than pigeonhole markets into one particular category, ki market place
#
mein stall hai, mai paisa dera ho, shawl dera ho, that is a market, no, I think I'd include
#
it as one form of voluntary interaction and where it is not voluntary, I wouldn't call
#
it a market in sort of the true sense, therefore.
#
So clearly you don't agree and you think that it's a separate prong, which is a conventional
#
So I realized that I'm saying something that might seem that is a very different way of
#
So what's kind of your response?
#
Yeah, a couple of things.
#
One, for example, and I've heard your episodes before where you were differentiating with
#
state, the defining criteria of state being that it is a coercive entity, right?
#
And the markets aren't.
#
But look at it from another way that state alone isn't coercive.
#
You know, like, for example, societies can also be coercive, you know, and markets probably
#
aren't if they are working in a voluntary manner.
#
So for example, to clarify that, I think what I would have meant is that the state has a
#
Now, other people can be violent, but I'm only willing to accept that the coercion of
#
the state is justified because, you know, that's a liberal paradox that to protect our rights,
#
you need the state to exist and the existence of the state means some rights are gone.
#
But in general, I would say that coercion everywhere else, whether in markets or society,
#
coercion is bad period, you know, and even within the state, I would say you need to
#
accept that coercion is bad, but you need to accept that some coercion is necessary
#
because you need some coercion for there to be policemen and for there to be the rule
#
So here we enter a paradox, like you were mentioning in the beginning that society should
#
have sorted out things for itself and the state shouldn't get into a lot of things.
#
But how does society sort out things?
#
Society will use coercion as one of the instruments, right?
#
And that will be there.
#
It might actually be beneficial also in some way, you know, maybe it will align people's
#
interests to a particular goal, otherwise everyone will be dispersed, etc.
#
So I think there is, even if society would be the way you wanted it, it would have used
#
coercion as one of the means, probably for good benefits, mostly for outcomes that we
#
don't want, but there will be this element which exists.
#
So that is sort of my one point.
#
The second point, I think there is an alternative criteria to look at it just because thinking
#
in terms of what are states, markets, society good at and there is a difference in all three
#
You know, so if you look at, you place individual at the center and you look at these three
#
ends of a triangle, what does the state provide to the individual?
#
Yeah, I mean, human rights, which you said, human rights can't exist without a state,
#
Yeah, we have human rights, but who will enforce them in the state of nature?
#
What are our human rights, right?
#
So you need a state which enforces the human rights that I have, right?
#
So that is the goal of the state to provide security, justice, etc.
#
The market to the individual will provide an outlet for creativity and the most important
#
That is really fundamental and that is what it provides.
#
But there is one more thing that you would need, right, we've discussed about how individuals
#
are essentially tribal by nature for both bad reasons, both, right?
#
But that is the way we are constructed.
#
So in a sense, we need this third element, which provides a sense of identity, values,
#
And that I think is what the third element provides, which is society.
#
So, you can think of markets and societies on a continuum and I agree, you know, most
#
people who say markets and society is different, they also agree that it is on a continuum.
#
But the way this operates is different, right?
#
In markets, you benefit precisely because you are in a web of these relationships and
#
you don't care about knowing who supplied this microphone to you, right?
#
We all benefit because there's a web of sort of transactions which are formed and all of
#
You don't get any sense of belonging, identity with that person who's selling this to you,
#
You only know that, yes, all of us gain with it.
#
But when you look at the society, probably it is at the other end of the spectrum where
#
you have this sense, you build a relationship with people, you try to think of what are
#
the values that are there, what are the norms that are there and things like that, right?
#
So those are at the other end of the same continuum of market and society.
#
So I would say that there is a difference between market and society in this way.
#
One more thing, I talked about how functionally they are different.
#
Even the way they fail and they succeed are different, you know, markets, societies and
#
So for example, when we talk about market failures, what is a market failure?
#
Essentially, we are saying when an efficient allocation of scarce resource doesn't happen,
#
that's when you say markets have failed, right?
#
So that is an example of a market failure.
#
Similarly, you know what government failures are.
#
But where would you put, for example, caste discrimination, right?
#
It's probably not so much the mistake of the government also, they have tried various things
#
that they could, not a market failure also, but I think it's a social failure, right?
#
We as a society itself have not been able to overcome it the way we would have wanted
#
Similarly, religious majoritarianism, is it a market failure?
#
Is it a government failure?
#
Probably I would say it's a third category.
#
The way our values, norms have emerged have led us on this path.
#
So that's why I would classify it as a third kind of category, which is society.
#
Yeah, no, very wise words.
#
And I guess one way, and I'm just thinking a lot of thinking about this is of society
#
as a kind of superstructure and you have these webs of voluntary actions and a certain class
#
But you also need order in the society for which at some point you need a state and then
#
a state emerges and that is a state.
#
And of course, then the state just takes over and power corrupts and all of that and the
#
state starts interfering in markets also and all of that happens.
#
And the term you've used for society kind of solving its own problems is societism.
#
So I want to sort of look at this in a couple of contexts, which you've also spoken about.
#
You gave a great talk at Manthan, which is run by my friend Ajay Gandhi.
#
So I'll link to that as well on YouTube.
#
And let's look at a couple of these contexts, the context which you bring up, for example,
#
is that smaller languages are dying out because everybody for rational reasons is drawn to
#
bigger languages like English or like Hindi or whatever.
#
And that's hurting language diversity.
#
You know, last week I did an episode with Peggy Mohan on language is fantastic episode.
#
And I mean, in the sense that I'm not praising my own show, I'm just saying that she's written
#
an incredible book and was so insightful.
#
And she points to this also.
#
And I brought up the question of, say, the Cavendish banana, which the great food writer
#
Vikram doctor had once told me about that, yeah, which just held it up.
#
I'll take a screenshot.
#
Yeah, so screenshot of Cavendish banana and the thing with the Cavendish banana is that
#
I think we exported it to begin with and then it became popular in America and then economies
#
of scale happened and it became the dominant banana as it were.
#
And then it came back to India and the economies of scale continued along with something Peggy
#
pointed out that it lasts better than other bananas.
#
And now all our hundreds of varieties of indigenous bananas are dying out and Cavendish is taking
#
over because everybody is making voluntary and rational choices.
#
Now we can all agree diversity is good, but as an individual, you know, you just went
#
out and bought the Cavendish banana and we are both speaking in English.
#
So what are we talking about?
#
And you know, how do we solve this?
#
A similar problem is big tech, like I constantly feel that when we talk about the polarization
#
that happens online and so on and so forth, I think it is horrible.
#
So much of social media is just made our discourse toxic, but I don't want the state to step
#
in because of the state steps in and hey, power corrupts depending on the person who
#
It'll just lead to free speech, dying, dissent, dying.
#
I don't want the state to have too much power here.
#
I've always said it's a social problem.
#
We got to figure out how to sort it out.
#
Other problems that you point out is the context of, for example, ghettoization in cities where
#
Hindu landlords will say we won't give our apartments on rent to meat eaters and therefore
#
Basically from the rational choices of individuals, which as individuals they have a right to
#
make, you have this ghettoization where Muslims live in certain areas, Hindus live in other
#
areas and the social outcome is terrible.
#
But at an individual level, everyone is making a choice that they have a right to make.
#
I mean, if somebody says it's my house, I'll give it to whoever I want.
#
You want to protect his individual rights also, but what do you do about the larger
#
Now, the way I think about all these social problems is that, hey, these are problems
#
that a society has to solve.
#
The state cannot solve everything.
#
The state can step in when individual rights are abrogated.
#
So when there is something like Sati and a woman is being killed, the state has to step
#
That's the job of the state.
#
When people are enslaved in different ways or a khaap panchayat says that honor killing
#
karo, the state has to step in because individual rights are hurt by that.
#
But in all of these cases that a kid says that I don't want my child to learn avadi,
#
which is what I speak, I want my child to get ahead in the world.
#
And there's an opportunity cost for learning avadi, which is that they won't know English
#
So I want them to get ahead in the world.
#
And this is a rational choice.
#
You can't argue with this.
#
So through the frame of socialism, what insight can you give on these problems?
#
Yeah, I think my priors are similar to yours, Amit, that I would say because there are opportunity
#
costs to state action, you would want the state to do things which are in the range
#
of market failures, address them and things like that.
#
So you wouldn't want the government to do all these things, even though both of us agree
#
that they are not desirable and they should be overcome.
#
But the idea is whose job is it?
#
The default action, because we discussed about our part dependence, a lot of people will
#
say it's the state's job.
#
And a small minority will say probably you should solve it by doing property rights and
#
solving it through markets.
#
But the idea is that even I don't think both of them can solve this particular issue and
#
maybe you will need a third element.
#
And that's what my essay was about, that we often think of society as this patient on
#
which two people are operating, the state and the market.
#
And this society is just lying there being operated on.
#
But think of it in another way, society itself is a partner, you know, society can bring
#
about a lot of changes, it can self-correct, it has self-corrected.
#
So that's why think of it as all these three being partners and not as one being a patient
#
being operated on the other.
#
So that's where sort of I begin.
#
And I said that, for example, all three have their own comparative strengths and weaknesses.
#
And I'll give three examples where societies can actually self-correct it.
#
And I'll start with Eleanor Ostrom's work, right, I mean, governing the commons, very
#
fundamental book that I think a lot of people should read.
#
And she addressed the same question.
#
She looked at there was this idea of tragedy of the commons, right, the idea that common
#
resources will get over exploited.
#
And the only way to overcome that is either through state restricting what people have
#
So basically, you have private property rights being defined, you have fences, you have clear
#
demarcation of who owns what and things like that.
#
Now, she says there is another way to look at this.
#
And they have documented studies of common resources, I think, close to 600, 700 or more
#
studies where people manage this neither by the state solution or by the market solution,
#
And that was where sort of civil societies came in.
#
So they found out that one, the context was very important, the solution couldn't be
#
It didn't work in one country, it didn't work in just another part of the country.
#
But broadly, they tried to derive some lessons.
#
And there were three or four principles that the study concludes, whenever there is graduated
#
sanctions, whenever there is a higher level of trust, whenever there was a lot of communication
#
between the entire societal mass, they were able to forge out solutions.
#
Some of them were coercive, right.
#
Market sanctions are coercive, and yet they were able to prevent this so-called tragedy
#
So what it says is there is a third way out.
#
In fact, what it says is market failures can be prevented not just by the state but by
#
society as well, you know, often even in the most liberal tradition, we think that government
#
should come in when there is a market failure, I would say a more liberal proposition that
#
even when there is a market failure, maybe wait, you know, maybe the society can solve
#
And then even if society can't, then the state should come in, you know.
#
So that is one way to think of it.
#
So this is one example, right.
#
So there are examples of common resources which can be managed by local communities.
#
So a lot of work needs to be done.
#
But things like maybe what engenders trust, we need to understand, right.
#
What builds social capital?
#
What builds bridging capital more than bonding capital, right.
#
Those are questions that we need to investigate.
#
But we don't because we think society is a useless thing which has all its problems,
#
which the great state or markets can solve.
#
That's one kind of thing, right.
#
Second one is just philanthropy.
#
I would also classify as one way that civil society sort of corrects problems in societies,
#
And that is very important in a state like India for these initiatives, because our state
#
for the foreseeable future will never have the resources to do all the things that we
#
And the example I always talk about is public libraries, for example, we want them, we all
#
desire that we should have them.
#
But can you think of a state which is having so many challenges, developmental challenges
#
to invest in, say, art or culture or libraries the way you want it, it won't, right.
#
It's in fact immoral of us to expect of the state to do it because it needs to do more
#
So who will solve it, right.
#
So maybe I would again look at it as some things that civil society can solve for it.
#
But we've again had this major problem where civil society initiatives end up substituting
#
the state rather than complementing it, right.
#
So the example that I gave is an example of complementing.
#
The state does what it can, all the other things, maybe the society solves for it.
#
But when you have things like corporate social responsibility or the state saying that, you
#
know, you should do the schools because we have problems constructing schools, so now
#
That's where the state is using coercion to paper over its own failures.
#
And it is getting the society to do its dirty work, right, the things that it should have
#
So it brings in this civil society and channels all its resources to fix the failures of the
#
And that's what I call when I say substituting the state.
#
And you don't want it, right.
#
So again, you want state to focus on things it does and you get the civil society to pitch
#
in in things which the state won't do for a foreseeable future.
#
The third example is just about social movements, right.
#
We have seen how civil society initiatives by individuals, by communities have made the
#
world better off, right.
#
So we know of examples where people come together to solve problems for themselves.
#
So I mean, there are many examples, won't go into great detail, but these are just three
#
illustrative cases where we can see civil society coming together to solve its own problems.
#
And that's why I say that we need to investigate why this happens, in which conditions this
#
Can we do something so that social capital is built instead of thinking only in state
#
Yeah, four points I want to make here, as you see while you're speaking, because I don't
#
like to interrupt, I take copious notes.
#
So therefore four points, I cannot come up with one is just for my listeners that people
#
keep saying market failure, market failure.
#
The first thing that you know, reading public choice theory teaches you and I had an episode
#
on that where I was in fact, interviewed by a former colleague Pawan Srinath on public
#
I'll link that from the show notes.
#
And the first thing it teaches you is that government failure is ubiquitous.
#
Everybody says that, oh, there has been that market failure, which is an outlier to begin
#
And then they'll say government will step in and they're comparing the ideal government
#
action with the actual thing that went wrong in the outlier example from the marketplace.
#
Well, actually you should compare actual versus actual and government failure is ubiquitous
#
because the incentives are wrong, because you're spending somebody else's money on
#
somebody else, unlike in a marketplace where you're driven by better incentives and despite
#
that market failures may happen in, but we have to sort of think about it in this context
#
My second point is that if I just wanted to add to this.
#
In fact, when we teach this failures, we teach three types of failures, not even two.
#
So just like how markets can fail, governments can fail.
#
And we give a lot of examples for that in ways in which governments can fail.
#
So a lot of rent seeking, rent capture, all those are examples of government failures.
#
And the third failure is social failures.
#
And that's where I told you about just the fact that if you have a society where there
#
is much of bonding capital and no bridging capital is an example where society has failed.
#
So there are three failures, you know, it's not just that markets fail, we think of markets
#
failing and then that's why government should pitch in, but all three can fail.
#
All three can fail and all three can fail together in India as sometimes happens.
#
The second point I wanted to make was about what you say about, you know, social actions,
#
you know, complementing state action.
#
That's something that Ashwin Mahesh has spoken about at length with on the episodes I've
#
So I'll link them because he is someone who is in many ways a sort of a social reformer
#
in terms of just doing so much work to work with government and saying that, hey, you
#
just can't leave everything to the state and rant against the state on Twitter.
#
You got to also move your own butt and as a citizen, work with the state to make things
#
And I've had arguments with that as well.
#
But those are fascinating episodes and he's got a very interesting point of view.
#
My third point was about, you know, what you pointed out that sometimes, you know, like
#
CSR, the state will say, okay, I failed.
#
They'll put the onus on the state.
#
There's something worse than that, which is where the state will say, okay, I'm failing,
#
And a classic example of this is education, where, you know, running a for-profit school
#
It has been illegal for decades.
#
And you know, there have been studies over the last couple of decades which have shown
#
that the poorest of poor parents would rather send their kid to a budget private school,
#
which is really a low-cost private school, rather than a free government school, because
#
the free government schools are just so bad.
#
And no one is saying shut down government schools or the government shouldn't do education,
#
but it doesn't even want choice to be available to parents so that they can choose.
#
And in this way, they're not only not solving a problem of education, they're not even letting
#
You know, and it's not an either or, it's not that the government should stop completely.
#
People like me would always say that, you know, education is important, let the government
#
do whatever it's doing, but allow private people to actually function, which it doesn't.
#
I've had great episodes on this with Amit Chandra and Kartik Mudli Dharana, link those
#
from the show notes as well.
#
And this is also true of vaccines.
#
It's a point Ajay Shah made, that not only did the government not procure any vaccines,
#
it didn't even allow private parties to enter into arrangements to do so.
#
When Pfizer wanted to enter India in the later months of last year, it told them to get lost,
#
you know, and then you have this, and that's basically murder.
#
At that point in time for the government to tell Pfizer to get lost is equal to murder.
#
You know, and again, something we've discussed at length in the episode on vaccination.
#
So that's, you know, so it's not even that the state doesn't do it.
#
And then it passes that responsibility on.
#
Sometimes it doesn't do it and it won't let you do it, which is even worse.
#
And what is the fourth point I was going to make?
#
Okay, my fourth point is a scribble.
#
I can't read my own handwriting.
#
If it strikes me later, I'll kind of come back to it.
#
But do you want to sort of respond to any of these and then we'll move ahead?
#
No, yeah, I agree with your point on just that sometimes the state will even prevent
#
a solution from emerging.
#
And we've seen many examples of that.
#
Yeah, my fourth point is this.
#
My fourth point is saying that society will solve its own problems is assuming that it
#
is inevitable that there will be moral progress as we define it, right?
#
That there is an arc of history and it is going towards freedom or justice or whatever.
#
And that arc of history makes it inevitable that social action will move in that direction.
#
But what if that arc of history isn't inevitable?
#
And what if social action moves in the other direction?
#
So liberals like you and I will say that Kha Panchayats are a problem, that coercive action
#
by them should be banned and so on and so forth.
#
But social action may go in the opposite direction because you and I are firmly in the minority.
#
You know, English speaking elites influenced by the ideas of the Enlightenment and so on.
#
So that's another key problem with socialism that you assume that things will move in a
#
But what if they don't?
#
What if people get lynched because somebody was seen with a cow?
#
That is also social action and it's horrendous.
#
So that's why that is an example of social failures, right?
#
That's why all three can fail, right?
#
So the idea is you need to guard against that failure and that's a really tough challenge,
#
So you would want society to actually solve some things and again not be where you don't
#
And that is challenging and no doubt.
#
But that's why you have a balance, right?
#
You would want state to assert itself whenever any human right violation happens or whenever
#
the principles of the republic aren't followed, right?
#
And that's why you need a strong state on those counts.
#
You don't want a weak state on those counts, right?
#
And similarly, you need markets.
#
Society will coerce you into saying that we all should be similar and that's why you don't
#
do something which is different from us.
#
But you need market to expressly have choice.
#
You need people to do crazy things and try their luck in various things.
#
So that's why there's a balance which I talk about.
#
It's not about one being a problem and the other being a solution.
#
All three are problems.
#
All three are solutions.
#
So let's move on to the questions now.
#
And there are some 480 questions on Twitter.
#
Well, not so many, but I mean, I haven't counted, but we'll go through a few of the questions
#
and then I'll ask you about the course that you guys are doing at Takshashila and why
#
everyone should sign up or at least apply for it because I'm sure you have limited seats
#
And the first question I want to ask since we're talking about Societism is from Akshay
#
And Akshay has a number of questions, but the first of them is how is Societism different
#
Yeah, I have had debates with Akshay on this.
#
Yeah, Conservatism, again, the idea behind Conservatism, as I understand it, would be
#
yes that society can solve some problems on its own, right?
#
So in that sense, they are similar and that sort of maps.
#
But when I am talking about Societism, I am also trying to explore what are the things
#
that markets are good at?
#
What are the things governments are good at?
#
And then trying to see where that balance, right?
#
So I'm not saying that society is the only solution or society is a better solution compared
#
I'm just trying to look at where are the strengths of each of these.
#
So I think that is the nuance, which is slightly different from what Conservatism would say,
#
That yes, society is the leading actor and it determines.
#
So for example, that is why I would still say that the social revolution experiment
#
was one that we should have had.
#
Whereas a conservative idea would say, I mean, the state shouldn't have gotten to this and
#
society would have solved it for itself, which was the Gandhian view as well.
#
But I would say that it is, you need the state to have said that, you know, some things are
#
They are violations of human rights and human dignity.
#
And that's why we won't allow it, even though there is broad acceptance in every quarter
#
So that's where I think Conservatism and Societism differs.
#
I guess, you know, arrive at a similar solution through very different frameworks.
#
So that's kind of one way of looking at it.
#
I had an episode on Indian Conservatism, by the way, with Jerry Rao, who had written a
#
So people who are interested could look that up.
#
Akshay also asks three other questions, but all are to do with foreign policy and defense.
#
And by the way, Pranay and I decided we won't talk about foreign policy and defense today,
#
even though he's one of our foremost foreign policy experts, simply because we spent a
#
whole episode last year talking about that.
#
So kindly go and listen to that.
#
I'll link it from the show notes and no doubt he will be on at a future date to talk about
#
But today I thought we'll focus on public policy and some of his broader meta thinking
#
than what might now be happening in Afghanistan or Kashmir or the theater command Imbroglio
#
as Akshay puts it, which, you know, I don't know what that is.
#
I'll have to Google it to find out after this.
#
Question from Sudhir Sarnobhat, where he says his Hindi is very good.
#
Where did he learn that?
#
Is he from Nagpur or North somewhere?
#
You already answered this, I guess.
#
Yeah, so I'm not from the North.
#
Yeah, I spent seven years for seven years.
#
And I speak Marathi and now just Hindi at home.
#
But I would say that Hindi newspaper reading improved my Hindi a lot.
#
That's the simple answer to it.
#
And I've always thought in Hindi.
#
I don't think in English even today.
#
That's the language which comes to my mind is Hindi, even though it's not my mother tongue.
#
So I mean, yeah, somehow it's happened.
#
I guess it's because of the reading, you know, once you start getting ideas in a particular
#
medium, probably you start thinking.
#
In fact, in class 10 and class 12, I got more marks in Hindi than in English.
#
Marks are no indicator.
#
I mean, it tells you how flawed our education system is in terms of metrics.
#
And my trick was there what a lot of people do in English, which is I just learned a whole
#
bunch of Shudhindi big words and put them together randomly.
#
And it kind of worked for me.
#
But otherwise, I have unfortunately lost lost touch with the languages.
#
I can read and write Bengali.
#
So I grew up speaking Bengali at home and Marathi now I can understand after all these
#
years in Pune and then Bombay for 20 plus years.
#
But it's not as good as I would like it to be.
#
And I would I want to, you know, get it back working properly at some point.
#
And at some point later this year, I want to do things on YouTube and try out different
#
things and all of that.
#
So maybe you can join me and we can do something in Hindi.
#
Yeah, that would be fun, because that's one of my passions.
#
This this idea that there's so much great content in English, right?
#
We have the best in the world.
#
But what about the other languages?
#
I mean, do we talk about opportunity costs in Hindi?
#
Have you ever heard an engaging conversation in Hindi on this?
#
I haven't listened to a lot of Hindi content.
#
You will either have this really should the Hindi, which no one will understand, or it
#
will be you won't discuss these at all.
#
So you'll only discuss who won the elections or what is happening on in cricket or, you
#
know, that ABCD of Indian marketing, right?
#
Astrology, Bollywood, cricket and devotion.
#
So these were the topics that you discussed.
#
But who discusses economic reasoning, public policy, maybe some do, but not I haven't heard
#
No, I think everybody everywhere has a great hunger and desire to understand the world.
#
And the thing is, we assume that we live in a lucky age where everything is on the internet.
#
So all knowledge is available to us.
#
But if you think about it, that's the privilege of being English language speakers, that we
#
have that available to us.
#
People in Hindi who, you know, may not know English that well or be comfortable in it,
#
but don't have that world open to them entirely.
#
And you know, people like you and me who keep talking about how, you know, elites designed
#
the constitution and it was nothing like society and Gandhi said society should be changed
#
Well, you know, we got to practice what we preach and actually speak the language of
#
society in whatever little way we can.
#
And otherwise, we're just speaking to fellow elites.
#
So I completely buy that.
#
There's another question on your language where Muralal asks, quote, Can you ask him
#
about his accent, please, and where it comes from?
#
I'm a linguist and I've always fought against accentism, but somehow poor Pranay Kutasane's
#
accent defeated me, sorry.
#
I didn't understand the question.
#
Where does your accent come from?
#
I think you've given enough of an answer of indoor and I think heavily influenced by Marathi.
#
And first he was in indoor and then he was in Goa where he was outdoor.
#
So that's my dad joke out of the way.
#
Gurman Bhatia says big fan have been trying to sing where I play Puliyabazi while driving
#
with parents and we pause, discuss the issue at different points.
#
It's been hard to bring such discourse to them earlier, but they love it.
#
Thanks for creating an accessible and intellectually sound podcast.
#
And yes, for all of my listeners who might not have noticed Pranay co-hosts this brilliant
#
podcast called Puliyabazi in Hindi.
#
So do kindly check it out.
#
And she didn't ask a question.
#
I thought there'll be a question at the end of it.
#
Atish has a question on semiconductor politics and about something called GANFAB.
#
I'll ignore these specific questions and just speak to broader ones.
#
Sarsij Narayan asks, how would stagflation in Indian economy look and feel like for a
#
And he's also, he says he's trying to figure out how far we are from a straggflation.
#
Yeah, that's more a macroeconomic thing, right?
#
I mean, this idea that inflation is inherently something which is bad is again a fallacy,
#
Inflation, any growing economy will have inflation.
#
Why inflation happens is just because demand is greater than the supply for a particular
#
Why is the demand greater?
#
Because people's purchasing power has increased.
#
So a society where there is no inflation means a society is getting stagnated in terms of
#
its demand and the fact that people are having lesser purchasing power.
#
So it will be a sad state of affairs when that happens.
#
We already see that in some countries where there is a stagnated economy.
#
I don't think we have a good answer to this.
#
So we don't have a good answer to this.
#
Randhir asks, Randhir Borkar asks, too late, but please ask how he is smart in so many
#
areas and working habits.
#
We've spoken about your working habits.
#
Smart in so many areas, yes.
#
So broader question, which I had listed down, but I thought we don't have time.
#
But now it has come up.
#
Do you have mental models which you have thought about explicitly through which you kind of
#
look at the world or you apply them to different subjects and all of that to learn about them
#
I think I'll say this in three ways.
#
So one thing, I am not a specialist in anything.
#
And actually, like, I don't like the word expert as well, because I'm definitely not
#
But in general, it's difficult to be expert in anything related to human humanities, right?
#
We are always learning.
#
So the way I approach it is think of it in a very general overview.
#
So what I always advise people who want to start in public policy also, that don't go
#
into one narrow domain at a very early stage.
#
Lot of people will start with, health excites me, so I just want to do public health.
#
But I would say go the opposite way.
#
So think of it as two axes.
#
One is domains and one is disciplines.
#
So domains are things like health, defense, environment, climate change, whatever.
#
So these are domains of public policy.
#
And on the other axis is disciplines, which are things like economic reasoning, psychology,
#
social psychology, sociology, public finance, etc.
#
So the idea is, don't dive into just one domain, but think of, can you arm yourself with certain
#
key ideas or toolkits from these disciplines as well?
#
And then, so learn all these, public finance, economic reasoning, and then you can apply
#
them to one or two domains.
#
So you get bored with doing just one thing.
#
So why would you just do one domain?
#
So for example, I would love to do things on foreign policy.
#
When I'm bored of it, I would love to do things in public finance or something else.
#
So just pick two or three domains and arm yourself with all these disciplines so that
#
you can apply that frame to a variety of domains.
#
Another additional thing that happens is, a lot of knowledge generation happens at the
#
intersection of one domain and one discipline.
#
So for example, a lot of people will think of Pakistan in a very foreign policy sense.
#
So yeah, there are things which they do to India and you wouldn't want them to do.
#
So the analysis is very political.
#
But maybe if you are armed with the principles of public finance, if you are able to read
#
the budget that Pakistan makes, maybe you will come up with an economic way to coerce
#
an adversary that you wouldn't have thought of.
#
So new knowledge generation will always happen at this intersection.
#
So why be bothered about an academic department sort of mindset?
#
So that is one sort of main idea that I think of.
#
The second one is, and I think Amit, you know it best, write to learn instead of reading
#
So the more we try to write and learn, we develop mental frames to look at a variety
#
And we think of things that we ourselves wouldn't have imagined a few years back.
#
So that writing experience opens up those windows.
#
The third thing, and this is not mine, but Hal Varian has a very good idea about this.
#
He has written a nice paper on how to build an economic model in your spare time.
#
And that has three really nice insights which I think apply here.
#
First idea is, where do you get your ideas from?
#
And a lot of people would say read journal papers and you will get ideas.
#
He says that's not the way to get good ideas.
#
Maybe the way you get good ideas is by reading bad arguments.
#
So that's why you should be on Twitter, right?
#
So you will basically get, there's nothing which inspires you to write about something
#
or investigate than a bad idea, right?
#
So you will get these really flawed references in your mind.
#
When you get those, it inspires you to, you know, okay, that's not the way to think.
#
And that's why I'll write it.
#
So getting ideas through TV or through, you know, forums or Twitter is a great way to
#
You know, it will inspire you to see a frame which you absolutely disagree with.
#
So that's one first point.
#
The second one is postpone your literature review.
#
And this is also something quite counterintuitive.
#
Once you think of an idea, people will directly dive into what has been done in this field.
#
And the problem with that is you will eventually come to thinking the way others have already
#
done and you won't come up with anything new.
#
So the way he says is postpone literature review, actually think of what you would imagine
#
Can you have your own framework?
#
Can you imagine the way forward?
#
And once you've done that, then look at literature review.
#
You will be able to poke holes in your own solution better as well.
#
So that was the second one.
#
And the third thing is just giving a seminar, you know, I mean, just basically discussing
#
And I always say like public policy is anyways a team sport.
#
One person cannot transform India, even 1000 people cannot transform governance in India.
#
You need lots and lots of ideas, debates, discussions.
#
So discussing your ideas, however, unformed they might be is valuable.
#
You know, you get a lot of feedback and then you are able to improve upon it.
#
So I think these three things are really nice, not mine.
#
But I think a lot of people will benefit from this paper.
#
Yeah, you know, we link it from the show notes and these are really fascinating.
#
I mean, I did an episode with Krish Shok the end of last year and he spoke about some pyramid
#
of learning and which are the most intense ways of learning about something, you know,
#
at the bottom is you just read something on, you know, slightly higher might be when you
#
when someone tells you and you're listening.
#
But the highest is you teach something because when you teach it, you have to teach it in
#
So you're forced to learn it better yourself.
#
And in fact, one of the things I love about Takshashila is so many incredibly smart people
#
always iterating with each other and trying to teach each other and learning from that.
#
And obviously, you know, writing is also a great way to clarify your thinking on a subject
#
like Joan Didion once said, quote, I don't know what I think until I write it down, stop
#
And just writing can often sharpen your thinking because if you want to write something in
#
clear language, devoid of obfuscatory jargon or vague abstract terms, then you're forced
#
to get really concrete.
#
And that whole intersection of subjects is also really interesting.
#
Like I had got a man on my show, the biologist, and he was talking about how it was so fascinating
#
for him to go deep into both biology and physics and how much insight there is at the intersection
#
of those two, which is just wonderful.
#
Let's quickly move on to Twitter questions.
#
I'll just add one thing, Amit, on teaching, right?
#
But teaching is when you teach interested students.
#
If you're teaching for a class, which probably are hoping for a degree or credit, then teaching
#
doesn't challenge you the way you would want to.
#
So what if you have a bunch of self-selected students who really want to know because they
#
are interested in it and it's not because they'll get some job or they'll get credit,
#
then teaching is the most powerful way, right?
#
They challenge you and you will then be dumbfounded.
#
Then you will go back, learn, be a better teacher.
#
So yeah, I would just add that.
#
Myopic Astronomer wants to know, is currency devaluation a credible option for India or
#
would that be Demo 2.0?
#
Do you have any views on this?
#
Yeah, I became a macro economist.
#
But there is a very interesting idea about devaluation written about it.
#
Generally, you know, there was this frame that one rupee should be equal to one dollar.
#
You know, I've seen WhatsApp messages and all that.
#
And I was looking at the history of it, right?
#
And this was obviously earlier, it was intentionally you had the Britishers sort of overvaluing
#
And when you have an overvalued currency, it benefited the system where you exported
#
raw materials and you had a lot of British goods, clothes, etc., coming into India.
#
So overvaluation actually harmed us.
#
It was one of the ways in which the colonial economy worked, one of the principal ways
#
But there is this notion that still we should have this one rupee equal to one dollar.
#
And it is completely flawed.
#
And in fact, Manmohan Singh had a really great speech about this.
#
You know, this idea was being discussed in parliament, etc.
#
And Manmohan Singh very eloquently talks about why this shouldn't be the case.
#
You know, there is nothing which is prestigious about an overvalued currency or an undervalued.
#
So I think we can link to that.
#
Manmohan Singh will explain this much better than I can.
#
Manmohan Singh will explain this.
#
And for fans of the current regime who are smoking at the mention of Manmohan Singh,
#
let's point out that when Manmohan Singh was PM, the rupee was far closer to being one
#
dollar than it is today.
#
And I agree that there's not necessarily any one right level for it.
#
But that's a macroeconomic discussion.
#
I think I'd asked Ila Patnaik this also in my episode with her.
#
But anyway, that's a different subject.
#
Shantanu wants to know, quote, I wish to know whether his favorite foreign policy philosophy,
#
Matsyana, really can answer happenings across the globe.
#
Stop quote and apologies for mispronunciations.
#
Yeah, Matsya Nyaya, right.
#
So it is law of the fishes.
#
Yeah, that basically is realism at play, right.
#
So the fact that big fish eat small fish and Matsya Nyaya is a Kautilyan Arthashastra concept.
#
But so thinking of whether it applies to the real world.
#
You know, we can explain a lot of things that happen in international relations through
#
There are three traditions in foreign policy broadly, which is realism, there is liberalism
#
and there is constructivism.
#
And we've discussed this in our last episode.
#
So I'm not going into more detail.
#
But yes, Matsya Nyaya and realism explain a lot of what happens in the international
#
sphere, just like how, see what US could do in Iraq and Afghanistan, right.
#
Who could question it, right.
#
That was also an example of the fact that because they had the power, they could exert
#
There is, yes, something called UNSC and United Nations.
#
You see that playing even now, right.
#
Is the fact that you are not even able to investigate where did the coronavirus pandemic
#
And this just illustrates that power has a big role to play in international relations.
#
The one point I would add is, sadly, people apply Matsya Nyaya to domestic sphere as well.
#
And they think everything is Matsya Nyaya and it is justified.
#
That's exactly not the case, right.
#
When we talk about Matsya Nyaya, we are talking about international relations, a different
#
But in a domestic realm, I mean, we should not want Matsya Nyaya to prevail, right.
#
We would want a republic which ensures our rights irrespective of the power that we have.
#
And that is why you have the state in the first place.
#
So the existence of Matsya Nyaya in domestic relations would mean that the state has failed.
#
I guess Matsya Nyaya Nyaya, whatever you call it, is a good descriptive frame to look at
#
international affairs, which can often be zero sum, but would be a terrible prescriptive
#
frame to look at domestic affairs where we want to protect everyone's rights and avoid
#
coercion as far as possible.
#
Big fish eat little fish instead.
#
Anirudh Menon has two questions.
#
The first of them is about semiconductors.
#
And the second one is what fiction are you reading?
#
So actually, as I said, I don't read a lot of fiction.
#
So first, one of the first tasks that was assigned to me when I joined Takshashila was
#
to read all Harry Potter books.
#
And that was like a new learning for me.
#
But and that's why I learned the defense of the dark arts and all that.
#
So but yeah, I don't read a lot of fiction.
#
I really love the nonfiction segment itself, just the way the fact is more fun than fiction.
#
I would say not even the fact that fact is more stranger than fiction.
#
I don't know how strange fiction is, but I like the fun element of it.
#
So I read a lot of travelogue kind of thing, city biographies.
#
That is a genre I like, but not so much fiction.
#
Have you read the Power Broker by Robert Caro?
#
Recommendation to you and all my listeners and old timer listeners who have heard it
#
The Power Broker by Robert Caro is this masterpiece.
#
It must be a million words or half one and a half million or whatever massive book on
#
It's actually around 800,000.
#
Now I remember and I'll tell you why I remember.
#
It is actually three books in one in a sense.
#
At one level, it is a biography of this guy called Robert Moses, who designed most of
#
the modern New York and all of that.
#
At another level, it's a biography of New York, the city over several decades.
#
And at a third level, it is a study of power, of how power shapes the world and the reason
#
I remember to say 800,000 was it was originally a million and he had to cut it down to 800,000
#
and out of the 200,000 or so words that he cut out was a book length potion on Jane Jacobs.
#
And Jane Jacobs, of course, is one of my heroes.
#
She wrote the great book, The Death and Life of American cities.
#
And she was constantly in opposition to Moses because Moses was this top down central planner
#
kind of person, the city should be like this.
#
And Jane Jacobs was much more about how are the people actually living?
#
What is organically emerging from there?
#
You got to respect that remarkable figure, Jacobs.
#
And these are both these books are masterpieces.
#
But you mentioned biographies of cities and the Power Broker is just kind of on top of
#
I think that kind of books I like, but fiction, no.
#
And I would just say that, you know, nobody should ever pass value judgment on someone
#
who reads only nonfiction and not fiction or vice versa.
#
Because the point is that opportunity cost life, you know, time is limited.
#
So while we are alive, you want to read things you enjoy reading.
#
You don't want to force yourself to read because no, there should be diversity in reading.
#
Or so and so friend has said this is a great book.
#
It's part of the canon.
#
Read what you enjoy reading and feel no guilt whatsoever.
#
Like I keep saying any reading is good.
#
You read Chandamama also old copies.
#
But a lot of people have told me, Amit, that you must read fiction because it opens you
#
to newer ways of thinking.
#
I'm probably missing out on that.
#
So yeah, I think great fiction is a very good way of zooming in like a lot of my writing
#
I'll find that they'll zoom out very well where they discuss things at a broader level,
#
you know, but is a zooming in which makes fiction special because, you know, we only
#
live one life, but when we read fiction, we can live the lives of others if the fiction
#
is good enough and you can only do that, you know, through fiction really.
#
And that is valuable, but I still would not pass a value judgment because life is limited
#
and if as long as people are reading, I won't pass judgment on what they are reading because
#
most people are not reading and that's a problem.
#
Moving on Bhuvanesh Selvaraj has questions about foreign service, space diplomacy, South
#
Some other episode we'll talk about all these things, but no foreign policy today.
#
Sai Krishna is NITK alum.
#
He wants to know about your life at NITK and our private beach.
#
So you've spoken about your life at NITK, but what is this private beach?
#
No, the college had a beach.
#
Nothing happened there.
#
You didn't go streaking through the beach one night after having seven old monks.
#
The good thing is that that was the USP of the college, right?
#
So you had a lovely old sort of a temple and it was on sort of a cliff and on the other
#
side of the temple, like you pass through the temple, another door opens and you sit
#
on the cliff and you can see the sunset, right?
#
So that entire experience made a lot of us go to temple.
#
So you can imagine the only reason people would go is because you get this beautiful
#
Marvelous, Moli at Abhinav Moli asked an interesting question, quote, let's get an economist to
#
answer Reddit's favorite AMA question.
#
Would it be better to fight one horse sized duck or a hundred duck sized horses?
#
Yeah, I have, I'm just thinking about this.
#
What lens would you apply to this comparative advantage?
#
Okay, I'll give my answer and then you can give yours.
#
The first time I've seen this question, it's a lovely question.
#
One horse sized duck or a hundred duck sized horses.
#
I would rather fight one horse sized duck for the simple reason that I would assume
#
that these creatures have me overpowered anyway.
#
But the only way I can get away is if one, you know, if my opponent makes a mental mistake
#
or if I can outthink the opponent and it is more likely for me to outthink one opponent
#
than to outthink a hundred opponents.
#
So I would opt to fight the one horse sized duck rather than a hundred duck sized horses.
#
Assuming they are all equally hostile to me, which I don't see why it would be the case
#
because I have a very convivial relationship with both ducks and horses in the past and
#
have not tried to ride either.
#
Do you have any kind of answer now?
#
No, I mean, the after you put it this way, maybe it's similar, but it depends.
#
We need to know what are the assumptions made.
#
So the hundred things might actually fight amongst themselves.
#
So they might not be concentrated on you as an adversary.
#
So there are so many other variables that you need to take into account.
#
So, yeah, good question for both of us to think about.
#
Thal asked the question about Matsyana, we've already done that.
#
Bharathan asked, what does Kotasana mean?
#
Kautilya Subramaniam asked, what are his main sources for IR news?
#
What does he read on a daily basis, religiously, if any?
#
So one thing I realized, I think one is just creating good Twitter lists helps.
#
So I have lists for my subject area.
#
So more than the feed, I just go to tweet deck and look at the list.
#
The second thing is just using the good old RSS reader.
#
So subscribe to a lot of things on that and just go and read that.
#
So maybe you will have Foreign Affairs, that magazine, Economist, Economist is really great
#
for someone who's interested in a bunch of things.
#
So I have like, yeah, around 600, 700 sources in that OPML file.
#
And just follow that is my idea.
#
Because otherwise, you end up reading so broadly that you might miss out the important things.
#
So just using the RSS reader helps me focus on the things that I want to.
#
Reading broadly and in a dispersed way, you know, I found your answer very curious and
#
I'll ask a follow up question.
#
Because not curious, I don't mean that in, I mean, I found it interesting.
#
I am curious about learning more, because it strikes me that a lot of my reading is
#
too broad and too dispersed.
#
And I wish I could, you know, build some kind of system, which it seems to me that you have
#
So apart from having the system where you have sort of curated lists or feeds or whatever,
#
are there also specific times of the day you give to reading?
#
And I have to change this habit where I'll just be on Twitter or I'll be wherever and
#
I'll just hit links at random and I'll forget about them a minute later and I'll have 800
#
tabs open and until my computer just gives up.
#
So do you have a system of reading and taking in knowledge?
#
So I, to be frank, I don't have a great system either.
#
But what I do is, for example, if there's a PDF, I will always read it not on the browser,
#
but I will download it on a software like Mendeley and use that to read.
#
So all my PDFs will be in one place that I read later.
#
Yeah, other articles I'll just read the way you do, but just the idea that instead of
#
reading in the tabs you read on your RSS reader makes you go towards the things you really
#
And I keep changing those RSS feeds.
#
So sometimes if I'm interested in say semiconductors, I will just put some Google alerts in that
#
So I read news, but through the RSS feeds, which will help me focus on a particular area.
#
Instead of going to news.google.co.in where you might read about Taapsee Pannu's review
#
of a particular movie, I will then read about semiconductor.
#
So that sort of helps sometimes.
#
I don't have a definite time of the day for reading.
#
I have a definite time of the day for writing.
#
So that helps me in sort of trying to collect.
#
So newsletters, for example, I always write on Saturday nights.
#
So it's 8, 8.30 PM to whatever 1 PM, 1 AM, 2 AM, whatever time it may take.
#
So through the week, I'm trying to collate thoughts.
#
I have made a list of topics that I come across when I read the newspaper or on Twitter or
#
And I'm constantly jotting them down, thinking through them through the week and noting them
#
So taking notes whenever they strike and then do focused writing during the weekend.
#
Otherwise, if it is op-eds, etc., then it is again in the evenings generally, just the
#
same time after dinner and don't sleep until you've finished.
#
And I love your newsletter, and of course, I've also done an episode with Raghu Sanjaylal
#
Jaitley, your co-writer, who calls himself RLJ these days and keeps reminding me of the
#
Rock Street Journal, which used to be this indie music magazine in India in the 1990s.
#
I am, by the way, the only person in the world who has had his byline in both Rock Street
#
Journal and Wall Street Journal.
#
So no one else has that unique honor.
#
So how is it like writing with him?
#
Like one thing I've noticed is that always the first piece in the newsletter will be
#
So is this out of modesty that like, do you put it together and you just put his on top
#
because you're such a nice guy or what's the deal?
#
And do you play off each other?
#
Do you sometimes during the week, do you discuss that I'm writing about this?
#
What are you writing about?
#
Okay, I have met RLJ only once in my life, okay.
#
So it's always been communication through either WhatsApp or on the phone very rarely.
#
So both of us work very independently on this.
#
So he writes his stuff and I write on topics that I want to.
#
Sometimes there have been editions where I had a comment or a rebuttal to what he wrote
#
So that's the way it is.
#
And the reason why his writing goes upfront is because he finishes always before than
#
So I am always the person who's sending the things towards the end.
#
So that's why it was and RLJ is a much better writer than I am.
#
So I always put his writing upfront so that maybe people would then read mine as well.
#
That's incredibly modest.
#
I don't know what to say because I love both of your writings and you both write in different
#
But you are two of my favorite thinkers.
#
So honestly, just seeing you writing one newsletter is like mind blowing.
#
And if anybody hasn't subscribed to Anticipating the Unintended, right?
#
Anticipating the Unintended, please do so, it's at publicpolicy.substack.com will also
#
be linked from the show notes, obviously, two of our finest thinkers and also most modest
#
thinkers like what is this even?
#
Okay, so let us move on to next Twitter question, Devashish Patel, Aditya Vajha and someone called
#
Naren who just put a plus one to Aditya's question all have the same question about
#
how do you move into a public policy career from an IT career?
#
Yeah, I think that was the transition I also made so I can relate to it.
#
But the idea is now the options are much, much more than they were back then, you know,
#
like public policy is literally a course that is there in a department which is in so many
#
universities in India now.
#
So my way of thinking about this was, again, minimize opportunity cost rate.
#
So idea was, I am working in a particular area, I have I know nothing about public policy.
#
So can I take a course while I'm working?
#
And that's the great thing that Takshashila offers, right, the GCP because it is meant
#
for working professionals, people who don't know about this topic, but want to explore
#
So it's like the sachet course for someone wanting to know.
#
So that's how I started and I will also probably recommend it to people who want to get into
#
this area that try it out first, you will know something.
#
And if it really, you know, it lights a bulb in your head and you want to actually explore
#
this further, then there are various opportunities.
#
You know, now companies have public policy departments, they recruit people.
#
And there are, of course, governments also have opened up, you know, on contract positions
#
So there are many, many more avenues now.
#
So maybe start small first.
#
And then if you are interested, either do a master's, PhD or directly jump into public
#
What I will say is people looking to recruit in this area need two or three things, one
#
So they'll always focus on really good writing skills.
#
They can do my writing course for that and the rest they can learn from Takshashila.
#
And second one is economic reasoning.
#
So if these two are really sort of fundamentals that you've built on, then you can directly
#
jump into a career, try a few things and explore it.
#
So what I would say is there are lots of options and this is a career where we need a lot of
#
people from different disciplines to come and contribute.
#
And our public discourse will be richer and better if that happens.
#
So please do if you are in an IT career, consider thinking.
#
Public policy is fascinating.
#
So before we move on with the questions, tell me more about this upcoming Takshashila course
#
and you know, why people study public policy, what kind of things do you teach, what they
#
Tell me a little bit more about that because I, you know, I've for your postgraduate course,
#
I taught this thing on how to write an op-ed for a brief file, which was where I first
#
two, three years ago, got the idea for the writing course I do now.
#
So I'm very grateful for that.
#
And I was given access to the, all the other lectures.
#
So while I haven't done the course, I have a fair idea of the content and it is mind
#
Like I wish I had sort of done this course when I was in my twenties because it would
#
just have made the way I look at the world so much clearer and so much better.
#
And just an incredible bunch of teachers also, you know, people like you and Nitin and Manoj
#
So tell me a little bit, tell us, tell my listeners a little bit more about this course.
#
Why should they learn and how will you go about it?
#
So I'll start with the why and then come over to the course earlier.
#
So the idea is again, it's about thinking of the demand side and the supply side, right?
#
So we are trying to address the demand side here.
#
The idea is that if our discourse is better, if we are asking the right things of the government
#
and the right questions, maybe we might get the right answers, right?
#
So it's trying to address that demand side of the question.
#
And that's why there are a lot of think tanks, you know, think tanks in US are much older
#
than the Indian Republic itself, you know, Brookings completed 100 years in 2016.
#
So think tanks do exist, but the idea is a lot of think tanks are either in capitals
#
thinking about changing policy with the policymakers, right?
#
But our thinking was that you need the other side as well, right?
#
Address the demand side as well, improve the level of public discourse, then change will
#
happen regardless of who is at the helm.
#
So that's why this course exists and it is trying to address the demand side.
#
Now what we are seeing is it also probably addresses the supply side, you know, because
#
in one sense, we also found out gaps like the fact that most of the technology companies
#
which now exist are often operating in gray areas, right?
#
Not because they are shady, but the fact that our government laws are such, right?
#
You need laws which are old style.
#
And then for example, I'll just give you an example.
#
One of our alumni operates this scooter rental startup and the idea was there was no law
#
for that, you know, and the law prohibited many things that they wanted to do.
#
So you need public policy to come in and work with the government, tell them that why certain
#
things are better, why it will help the ecosystem as a whole.
#
It's not just lobbying for your company, but it's about explaining why certain things
#
when banned can result in certain other consequences.
#
And when you allow it, what are the economic benefits you can unlock, right?
#
So it's a really interesting thing to look at.
#
The second thing from the supply side also is, for example, people within the government
#
also maybe armed forces officers or others might be looking at a thing from the lens
#
that they are used to, right?
#
So for example, armed forces officials will know everything about the tactical side of
#
But how does that relate to India's economic goals?
#
How does, you know, India not having good relations with the U.S. impact India's defense,
#
Or China, for that matter, these things, the bigger connections, the courses able to make,
#
you know, and that is useful for people who are within the government as well.
#
The third one, yeah, a lot of people are aspirants of UPSC, etc.
#
They are also the type of people who join the course.
#
And what we tell them is this course will not help you crack the UPSC.
#
That's a clear thing, which we say upfront, but it might help you once you get into the
#
government, the way you will think about price caps, the way you will think about incentives,
#
the way you think about government itself as a complex of principles and agents will
#
be definitely different, you know?
#
So that is how I would say why public policy sort of learning it is important.
#
It is important even if you just want to be a more engaged citizen.
#
And it is also important if you want to actually go into the government.
#
Now coming to the course.
#
So the course is called GCPP and it started way back in 2012, Nitin and the co-founders
#
of Takshashila got that together.
#
And the background of this was actually the citizens against corruption, that entire movement
#
And a lot of people asked that, you know, if that's not the right way to go.
#
And I think Nitin had written a column on why that's not the right way to go.
#
So the idea was what is the way out then if protests were not the way to go.
#
And that was the reason why the course started that, you know, we actually didn't have good
#
answers, if people have this question.
#
And the idea was that then can we get smart people together and at least discuss some
#
It's not so much teaching, but just bringing people from different disciplines together
#
and exposing them to certain ideas that they wouldn't have come across.
#
So that's the origin of the GCPP.
#
And it's sort of in its 30th cohort, it's a 12 week course and it is meant for people
#
And keep opportunity costs low, people who want to learn about this start learning it
#
even while you're working.
#
And there are three main streams.
#
One is the fundamentals of public policy, where we discuss these ideas, which we talked
#
The second one is economic reasoning, really getting people to know the fundamentals of
#
And the third one is about public communication.
#
So we talk a lot about writing, the importance of narratives, the importance of stakeholder
#
So these are the three components.
#
And by the end of the course, people are equipped enough to write a policy proposal by themselves.
#
So think through an entire policy question in a systematic manner and write a proposal
#
And that sort of is really path breaking for a lot of people.
#
It was for me definitely when I did this in 2013, because it gave me the confidence that
#
I can systematically think of a problem and bring out a solution, even though I've never
#
worked in the government, right?
#
So just that act sort of gives in a lot of confidence.
#
And what it did to me personally was it changed the way I parse news, just add a completely
#
new frame of reference to look at the happenings in the world.
#
Otherwise, it's very easy to get dejected by what happens in the world and just think
#
that everything's going wrong.
#
But that helped me put some frame of reference to why things happen the way they do.
#
And that was like a big learning point for me.
#
You know, I note for my listeners, one thing I sometimes do is at the end of every year,
#
I kind of like to look back and say that how has this year changed me?
#
How have I grown in this year?
#
What have I done in this year?
#
And the answer is usually disappointing.
#
And I could have done so much more.
#
And you know, Jan one, I am lying there, depressing shit, I wasted another year.
#
But I would say that one, it's a good practice and two discourses like 12 weeks, like it's
#
Basically, Saturdays, you spend a few hours, you know, just do it if you have any interest
#
in this subject, which I assume you do because you've heard more than three hours of Pranay
#
chatting with me about just these subjects.
#
So you know, why not could be could be life changing.
#
And even if it isn't life changing, at least you have another frame, you have a more refined
#
frame perhaps to look at the world.
#
And that's a good thing.
#
Let's get back to our Twitter questions that we asked questions.
#
I would add to the summit, by the way, the course is not for the faint hearted in the
#
sense that beyond the Saturdays, there are assignments and all to do.
#
But what I can guarantee is you will enjoy it.
#
It's we have a lot of games, etc.
#
And the idea is it's it's a lot of fun.
#
You don't want to have a course which people are taking out of their own volition to be
#
That's one thing we are very conscious about.
#
And making it more fun is the whole aim, but it is rigorous.
#
So a lot of people need to put in at least I would say eight to 10 hours a week for this
#
So that will give you the results that you want.
#
Meanwhile, we better get back to Twitter naito loke pagla jaayenge ki humne sawal pucha
#
Asad wants to know, how does he fight procrastination in daily life?
#
And then stuff about your economic student journey, which you've covered, but how do
#
you fight procrastination?
#
That's a good question.
#
I think just having those habits help, you know, so I used to procrastinate a lot on
#
again writing as well as a bunch of things that I have to write, but they never translate
#
into so that idea is there, but it's never you don't write it.
#
But things like having a newsletter, et cetera, helped me a lot because I know that you have
#
to get something out by that time, you know, so there's no room for procrastination after
#
If you have promised your reader that you're going to get something out, you have to do
#
So I think that is what you put yourself in these situations.
#
Otherwise, Amit, for example, if you have a column, it helps, right?
#
You wouldn't have that issue if you have a column because you know you have a deadline,
#
but I haven't had a column.
#
So it's used to write an op-ed, then the editors will sit for it for two weeks.
#
By that time, you will anyways be dejected about that topic, right?
#
So that didn't give me that sense of writing regularly.
#
But when you have something like say a newsletter or you have promised yourself that I'm going
#
to get something out a particular week or a particular date, then I think things fall
#
So it's promising yourself rather than anything else.
#
Yeah, this is I think what psychologists call a commitment device.
#
And I started a newsletter for the same reason.
#
But then a lot of shit happened, personal shit happened in April and I just got swamped
#
and I didn't write it for the longest time.
#
So I need to revive one of these days because I thought I'll do two or three a week and
#
I'm just I haven't done it for months, but I'm going to get back to it.
#
And commitment devices are useful, like, you know, I would like thank God my power, you
#
know, the scene in The Unseen is a weekly podcast and because now it has a listenership
#
that it does that I have to come out with it no matter what happens, like recent weeks
#
have felt very burnt out, things haven't always been going well.
#
But I have to come out with it every week because there are just too many people who
#
listen to it and will be disappointed if I don't.
#
And maybe the newsletter had just started, so it hadn't reached that sort of cultic level
#
where I have to worry about those things.
#
So commitment devices are useful.
#
Do set them for yourself.
#
Be like Pranay, don't be like me when it comes to things like newsletters.
#
But Amit, I would just add, I'm so amazed that you've done this podcast alone for week
#
on week, two hundred and what, thirty odd times.
#
One commitment device that works for me is always work with someone else.
#
Most of the things I do.
#
And it also comes from this frame that public policy in general is a team sport.
#
You will be wrong, so it's better to have someone else so that you can refine your ideas.
#
So I try to work with people and that helps, you know, then both people can inspire each
#
And sometimes when you are not in a mood to write, you see RSJ has already written his
#
edition, then you will be under pressure and you will say, OK, now I have to write.
#
There's no way that I can ditch what someone else has already written.
#
Especially with Puliyabazi, because Saurabh is there, I am inspired to keep doing things
#
So I guess that also helps.
#
So I'm really amazed how you've done this alone over two thirty two weeks.
#
I have somehow done it.
#
I mean, I've somehow done it.
#
So I mean, it is what it is.
#
But by the way, for my listeners, I've appeared on Puliyabazi where I've done an episode where
#
I've spoken about Hayek in Hindi for one hour, which is quite an achievement.
#
I myself don't know how I managed.
#
There are fascinating comments on it, Amit.
#
You should read on Castbox and others and you will realize why we need to do more such
#
I'm shifting house this month and I'm going to set up a YouTube studio in my new house.
#
So we shall do something.
#
We will also come to the field.
#
OK, now our next question is from Durga Ravindran.
#
I think I better revert back to English because Durga will be like WTF dude.
#
So Durga asks, why is it so difficult to bridge theoretical knowledge and policy implementation
#
Why do we fail to see the unintended?
#
What would a road map to fix this look like?
#
Yeah, I think the road to this is just understanding things better.
#
And that's why being equipped with public policy knowledge from wherever you get it,
#
you do a course or you read up things by yourself is really important.
#
Because again, like public policy, we already come up with so much baggage to it that we
#
already have solutions, right?
#
And Land Pritchett has a great video, again, we can share it about selling solutions versus
#
So even people who think they are rational will actually frame a policy problem as a
#
lack of their favorite solution.
#
So they will say, OK, what's the problem with education?
#
There are not enough teachers.
#
So the only solution to that is have more teachers, right?
#
So you've already thought of a solution and you're framing a problem as an absence of
#
So it's a solution masquerading as a problem.
#
But the idea would be, can you think, so the hack that he gives us, a problem is not a
#
problem until and unless you can have three mutually exclusive solutions for solving that
#
So if you look at it from that frame of reference, maybe you will be able to define problems
#
better before even coming to solutions, right?
#
So such things are needed.
#
And the second thing is, again, just being open to the fact that you don't know the world,
#
use of knowledge in society, the essay that Hayek wrote, those kinds of things illustrate
#
that we don't know enough.
#
So if we are open to our priors being updated through public policy, then we'll be able
#
to anticipate the unintended.
#
Most of the times, I often feel that people will already have solutions.
#
They have already figured out that this is the way it works.
#
Then there is no learning to be had.
#
Then there's no point of reading or taking a course just to reaffirm your existing biases.
#
So that's why I think we fall into this idea that we already know things.
#
So public policy, what do we need to learn about it?
#
What's there to be learned from economic reasoning?
#
But if we go back a step and try to think of these disciplines in a systematic manner,
#
then maybe we'll be able to anticipate the unintended much better.
#
Durga also asks another good question.
#
Has he faced any skill set gap in his career without a master's in policy economics?
#
How did he deal with it?
#
So I don't think I have faced that as such in terms of I don't think I needed degree
#
or certificate in order to sort of learn about that.
#
So that's the way I see it.
#
And it's great that Takshashila has given me that opportunity, even though I don't have
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So the idea is if you are curious and if you are learning things on your own, also discussing
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learning from others, then a degree as such is not something which is a must.
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Having said that, the thing is public policy discipline is a very new discipline in India.
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So it has not ossified to the extent that other disciplines have.
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So for example, if you are probably applying as an economist, people will tell you that
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you need to have a PhD in economics.
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But that's not the case in public policy.
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So we've had many people who after doing GCPP have gone on to work in governments or taken
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up journalism jobs or taken up jobs with other companies in public policy departments.
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So it's not that you need a master's tag or anything.
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It's more about the learning and the skill set that you develop, not the degree that
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So if you can write well, if you can reason well, if you have a broad understanding of
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many disciplines, then a lot of people I see are willing to hire people in this area.
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It's not so much about an MPA or an MPP.
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Well, like you said, I guess the newness of the discipline helps.
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But as a general question, not about public policy per se, would it be fair to say that
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there is a trade-off between formal education and self-taught?
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And the trade-off is that the danger of a formal education is that, like you said, you
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get ossified in certain ways of thinking and can't think beyond that and might even get
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tied to an ideology or, you know, be incentivized to follow whatever is the academic fashion
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of the day, which is a negative side.
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But the positive side is that you get a systematic exposure to different frames of thinking,
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that you become a part of a community of peers who are also experts in that subject and you
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learn and grow from that.
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But at the same time, I would guess that being self-taught means that you are going to have
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a little more dynamism because self-taught after all means that you were driven to teach
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yourself that and that makes a difference.
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So is that like a fair summation of the trade-offs as it were?
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Yeah, I would say the systematic learning is absolutely necessary in public policy especially
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because you need a network of people to correct you because, as we said, we'll have biases,
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we'll never learn from them.
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And having a systematic way of thinking is absolutely necessary.
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I would just say it's not necessary that you have a particular degree which says that you
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So, yeah, maybe you take a bachelor's course, a level course in a college which is teaching
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you this or you might just take an elective in a college which teaches this.
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But I was just referring to the question that you need a master's in a particular thing.
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But I definitely think more than systematic thinking, it's just being with other people,
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other smart people, learning from them, learning their frames of reference to see where you
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are going wrong is really important in public policy, I would say.
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So what I'm going to do is I've taken almost four hours of your time, I won't take too
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So we'll take it like Coffee with Karan, which I presume is your favorite talk show, right?
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They have this rapid fire at the end.
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So I will ask the rest of the questions as a rapid fire and I want rapid answer also.
#
And apologies to someone who's asked something really detailed and I'm going to ignore questions
#
We'll do a special episode on semiconductors at a later point in time.
#
I didn't know there was something like semiconductor Twitter, but it seems that there is.
#
So anyway, fastest, not fastest, I was about to say fastest finger first, no rapid fire.
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Manash Sharma asks, how does he do such a good impression of a minister?
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See, like ministers, you're denying it also.
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Niharika Yadav asks experience with teaching versus doing public policy in India.
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I guess this requires a longer answer, but you've already actually gone over a lot of
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I would just say, yeah, both are important and teaching really gives a new lens if you
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are teaching it to a bunch of self-selected people who are interested.
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So yeah, teaching is important.
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So I would say both give you a really well-rounded base in public policy and yeah, just doing
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one of them will not complete the picture.
#
And I guess both make you better at doing the other.
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Next question is from Abhishek, where he asks, why did you remove the Mandarin version of
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the name on your profile?
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Yeah, because I stopped learning it.
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So I felt bad about it.
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No grand geopolitical reasons and all of that.
#
Pranjal Dubey asks, ask him to give examples of his favorite quote, change happens at
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Yeah, the great example is about the economic growth, right?
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This idea in 1991, whatever changed, the change happened at the margin.
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Now you can argue that people who were the most disadvantaged in India didn't face any
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There is still poverty, et cetera.
#
But at the margin, people who had say some benefit of education before or had some skill
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before benefited immensely from whatever has happened since 1991, right?
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So that is what it means that change happens at the margin.
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Change might not always happen to the most disadvantaged section, but that doesn't mean
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that that government should focus only on the most disadvantaged section, right?
#
If it can make changes at the margin, a lot of good things happen.
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A lot of good things happen to the most disadvantaged also.
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I think you'll agree with me about Mahatma Gandhi's metric for public policy.
#
He didn't use these exact words, but his metric was that for every action, the one thing I
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ask myself is what will be the impact of this on the poorest of the poor?
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And I think for all of us in India, this is a good metric to have.
#
And all my arguments for more individual freedom, respecting individual autonomy, economic freedom
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especially, all come down from this, that the impact on the poor is the only thing that
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I look at and that is why I support all of these things in.
#
But there's a nuance here, Amit, like for example, if you have limited resources and
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you want to bring change, which will be in the case of the government, where would the
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government put its money on, right?
#
So for example, you want to bring out economic growth, you want to make everyone prosperous.
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Maybe the effort that you would require to do this in a far flung village will require
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more effort, more resources, whereas maybe you can impact a lot more number of people
#
who are at the margin and require some barriers that government has artificially put to be
#
So the ideas, both are important, but it shouldn't happen that the government says, I will stop.
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I will only do things when I can influence the poorest of the poor.
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That never happens and that will just lead to us expending humongous amount of resources
#
on bringing a change, which could have had a much better impact in another way.
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Yashovardhan Singh says, thought you have discontinued the podcast, sir.
#
I don't know whether that is addressed to you or me.
#
Have you discontinued Pulyabazi?
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No, no, it's still going on.
#
We have not discontinued anything.
#
We will go on till we drop.
#
Saurabh says reforms in IAS.
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It's not even a question.
#
It's just a three words.
#
Anushka Jain says, who is RLJ?
#
My reply to her, by the way, I replied to her was Raghu Sanjay Lal Jaitley, which has
#
not amused her, I think.
#
So neither will you answer that nor will I answer.
#
I can only say I am not RLJ.
#
Yeah, that's obvious because RLJ has come on my show and he talks very differently from
#
Clearly, you are not RLJ and I will only say that while Pranay said he has met RLJ once,
#
So it will have to, I'm afraid, remain a mystery.
#
Now I had a whole bunch of new notifications.
#
I'm just going to refresh this and see if there are any other questions that I have.
#
Another semiconductor question, kya ho gaya hai?
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A doubting doc says he has an intelligent man crush on you.
#
Which intelligent man doesn't have an intelligent man crush on Pranay, especially after this
#
episode is what I want to know.
#
And I'm just scrolling down.
#
Okay, we have covered most of it.
#
I guess I didn't give enough notice to these guys.
#
But I'll end with a kind of a final question and I already know one of your answers to
#
this, but I'm sure you have other answers also.
#
And this is basically about, okay, where at the end of the episode, people are not satisfied.
#
My listeners are voracious for knowledge.
#
So recommend some books for them to read, not just on public policy, perhaps, but what
#
you think are foundational books to the way that you think about the world.
#
And I know one of the books you'll recommend, of course, is what Manoj also recommended.
#
I think Policy Paradox by Deborah Stone, right?
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Policy Paradox of History is one that really influenced me a lot in terms of just thinking
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what lessons can we derive in a variety of spheres from biology to foreign affairs.
#
So I would recommend that really short book, but what do you call insights per square inch
#
are the highest in that book, I would say.
#
Second, I really like the Gandhi Tagore Debates, I think that's one book which actually I became
#
emotional after reading it just because I couldn't imagine two people could disagree
#
so nicely, you know, so in a way that is seems so foreign now, you know, opposite of Twitter.
#
Yeah, but just like scene unseen, I would have loved to have Gandhi and Tagore on scene
#
Yeah, but we should have fought then.
#
I mean, we should disagree fundamentally, I think we agree on a lot of points.
#
We disagree on a few things, you know, like one of them is on whether we disagree or not,
#
which immediately makes a person who says we don't disagree wrong, because we have clearly
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Maybe 100 years later, we'll be the Tagore and Gandhi for a new generation.
#
So I would surely recommend that people who want to understand Indian polity, there are
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And both of them have relevance in today's age.
#
So recommend that a book that I would another book I would recommend is Factfulness.
#
I think that was so important that again, we think of the world in often that everything
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is going in the dumps and this book will set the right context as to what are the more
#
important problem and where have we come ahead in terms of progress on a lot of things.
#
So that Humankind, the Hopeful History recently by Rajab Raghman was a good book for me, at
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least challenged me in a lot of ways that I think.
#
Now that you mentioned it, I have one more book to read.
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I have such a backlog, but I will read it.
#
And in terms of public policy in service of the Republic from an Indian context, I would
#
recommend and Eugene Bardock has a very good book called A Practical Guide for Policy Analysis.
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We often use that in our course, I'd recommend that.
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And finally, Essence of Decision, it will tell you how decision making inside governments
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A last one, I'll cheat and add a last one, it's called Banishing Bureaucracy.
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It will tell you how to reform the government within itself, you know, just this fundamental
#
insight that the solution to everything is not necessarily privatization or nationalization
#
There are ways to reform government from within itself, government organizations.
#
And I thought that was a really nice insight.
#
I like the fact that it alliterates.
#
So banishing bureaucracy, murdering mandarins, bludgeoning babus, you know, we can do a lot
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with this alliteration, praying to policy wonks.
#
So Pranay, thank you so much for your time and insights.
#
This was just such a fantastic conversation and I hope soon we can, you know, meet physically
#
and perhaps record again at the Takshashila office, which, you know, is such a wonderful
#
place with wonderful people.
#
So listeners do sign up for the course.
#
It's only 12 weeks, 8 to 10 hours a week, change your life now, please.
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Did you enjoy this episode of The Scene and the Unseen?
#
If so, would you like to support the production of the show?
#
You can go over to sceneunseen.in slash support and contribute any amount you like to keep
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