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The most useful piece of advice I have ever received was a two-word aphorism. Question
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everything. Do not take received wisdom for granted. Do not give in to easy intuitive
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answers. Ask if the world really works the way people say it does. If there are first
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principles that you consider non-negotiable, apply those first principles to everything.
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If people say X is a problem, re-examine X and see if it is really a problem. If people
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say Y is the best solution to X, re-examine Y. Maybe you will find that a proposed solution
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makes a problem worse. Re-examine everything. Question everything.
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Welcome to The Seen and the Unseen, our weekly podcast on economics, politics and behavioral
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science. Please welcome your host, Amit Bhatma. Welcome to The Seen and the Unseen. Before
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we get into today's episode, a quick word from our sponsor for this week. If you are
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Colors with an OU. And now, on with the show. The subject for today's episode is defending
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the indefensible. It is a nod to a book with the title by Walter Block in which Block argues
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against the received wisdom of the day. I have actually handled some of the same subjects
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that he does on this show. For example, I had an episode with Manasa Venkatraman on
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why prostitution should be legalized. Block has a chapter on that. Block was a libertarian
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and my guest on the show today is the first libertarian I met in my life, Yazad Jal. Yazad
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helped run the Center for Civil Society back in the late 1990s and a few years later came
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to Bombay to be the CEO of Praja, an NGO that tries to increase the accountability and transparency
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of local governments. He then went off to the US to do an MBA at Yale and he since worked
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as a consultant for McKinsey and IBM. He lives in New Jersey, but he happens to be on an
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extended visit to Bombay. So I took the chance to drag him into my studio. Now, I first met
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Yazad a decade and a half ago and in some ways discovered the libertarian in myself
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through Yazad. I'd say I was vaguely left liberal all through my 20s and it was only
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when I started questioning conventional wisdom, looking beyond intentions and towards outcomes,
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looking beyond the seen and into the unseen as it were that I changed. I look at the world
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through a prism of individual rights and the most important word in my lexicon is consent.
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But that's a subject for another day. For now, I'd like to take you on a journey with
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my friend Yazad Jal as we have another fascinating conversation about indefensible ideas. Yazad,
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welcome to the seen and the unseen. Hi, Ahmed. Thank you so much for having me on this show.
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Yazad, today we're going to talk about five indefensible ideas. That is the concepts we're
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going to discuss are concepts which no matter from which part of the spectrum you are, the
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left or the right, you would react the same way. But when you examine these ideas a little
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deeper, you will find that that intuitive response is not quite all there is to it.
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So what shall we start with? Let's start with inequality. Right. Now, inequality is a huge
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problem these days, right? Because there are so many disparities between the rich and the
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poor. How can that not be a problem? I mean, it's a classic, I mean, there's so much conflict
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brimming, especially in a country like India, where the rich are so very rich and the poor
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are, you know, even worse than you and me. So I think the real problem out here is the
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poor or poverty. And very often when we say inequality is a problem, what we're also saying,
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without necessarily saying it, the unseen part is we should redistribute income, take some
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money from the rich and give it to the poor in the form of taxes and so on and so forth.
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The real problem, however, is not doing that, or that's not the solution. The problem is
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that why are people poor? And they're poor because their opportunities are being blocked.
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They are not getting the right kind of opportunities to do what they want to do because there is
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some kind of government block. There is some kind of rule regulation. You take it from
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the very simple ones. If you see people selling fruit and vegetables in the street and the
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police are coming and, you know, harassing them, taking their carts away. So that's one
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example. But as you go forward, the reason why people are poor in India is there is a
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lack of economic freedom. There's a lack of ways for them to climb that ladder. So it's
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not there is a gap and we should focus on closing the gap by redistributing money from
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one side to the other. We should focus really on closing the gap by making sure that the
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poor are not encumbered as they are and allow them to use their opportunities, to use their
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natural talents and further themselves.
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So just to play devil's advocate, there are people who would say that, look, after the
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91 liberalization, you actually had the economy opening up more free markets and so on. But
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what happened was inequalities increased.
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Once again, I wouldn't really focus on inequality, even if it increases. What if you have a very
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unequal society where there is nobody that's poor? Everybody is middle class, but then
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there is that 1% that are all billionaires. Now, that could be a very unequal society
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as well, but you don't have poverty out there. Would you see that as a problem? Or is it
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just, you know, we don't like seeing people do much better than us and then this is this
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envy kind of reaction that we have. And I think that plays some sort of psychological
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So I don't look at inequality as this great gap that needs to be closed. Even if the gap
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is there, it's fine. I look at the people at one end of it and I want to see, I want
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to make sure that they do well in life and they get up in life. So helping them and the
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best way to help them is to get out of the way.
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So let me let me kind of try and paraphrase that and tell me if I'm doing it accurately.
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What you're saying is that inequality and poverty are two very different things. And
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while it may appear that where there's great inequality, there is naturally poverty because
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here there's a disparity. What you're actually saying is that you might have a situation
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where the inequality is a lot, but poverty might be much greater in say another country
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or area where inequality is less, but more people are simply poor. And what you're essentially
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therefore saying is that, and a point of view that I kind of agree with is that in 91 the
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liberalization only liberalized certain sectors of our economy. Agriculture, for example,
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wasn't liberalized at all. And that is where we have so many of the major problems today.
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And it's still not liberalized. It's still not liberalized at all. There are no markets
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in agriculture. It's something we've, you know, we've discussed on the show and if listeners
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want to listen to it, they can look at past episodes at www.seenunseen.in. And therefore
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what the liberalization really did was that the areas in which we liberalized, we did
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really well and the areas in which we didn't, we continued lagging behind. And if anything
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there is that inequality of opportunity which has left a large part of the country behind
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and yes, this country has a major problem, but that problem is poverty per se in an absolute
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sense and inequality is not really a measure of it and not something to worry about either.
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I agree. And people typically when they talk of inequality, they say that hey, as you pointed
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out at the start, that the best way to sort this out is to redistribute from the rich
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to the poor, that this is the size of the pie. Let's redistribute from the rich to the
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poor and we'll be fine. Everybody will be middle class or whatever. There'll be more
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social justice. What's wrong with that way of thinking?
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The first thing that's wrong with that is that you're assuming the pie is static. I
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would rather look at making a larger pie than look at redistributing it. The second thing
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that happens is when you have really high tax rates, you stifle innovation, you stifle
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people simply would rather not do anything. There was a time in India where the marginal
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tax rate was I think 97.5%. So if you were in that tax slab, you only got to keep 2.5%
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of your income. In which case, why work that much more to get that income level? You might
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as well enjoy some leisure. In a way, innovators would simply say, this isn't a real great
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place for me to be in. That was also a time when a lot of Indians went abroad and you
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saw the brain drain. That is something which only again applies
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to the upper tier, the people who are already rich or well off enough to go abroad. It doesn't
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apply to most of our poor masses who don't have those options.
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True, but not necessarily true. There were lots of people from poor areas in Punjab and
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Gujarat who had some family member in the US and who managed to kind of emigrate.
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Everybody wanted to go, so what you're saying is it was a vote with the feet. Not everyone
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could actually get their feet across the border, but if you had given that option, everybody
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would have gone basically. A lot of those problems are sort of endemic and we still
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see them because our labor laws don't allow manufacturing to grow at the kind of scale
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at which it would produce a lot of jobs. Agriculturalists are enslaved in agriculture because you can't
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sell agricultural land for other purposes. In fact, you see sort of all the recent mass
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uprisings you've had in India, as a former guest of mine pointed out on the show, Vivek
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Kaul. Vivek pointed out that all the mass uprisings we've had recently are essentially
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by the Jats in Haryana, the Patidas in Gujarat, the Marathas here recently. All of them are
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by landowning costs. We found that with each generation, their share of the land gets smaller
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and smaller until it's unsustainable. There's no exit route because they can't sell it for
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non-agricultural purposes. Therefore, for practical purposes, they can't get a good
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price for it. It's almost like debt capital. Therefore, they agitate for more reservations
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You actually bring up a very good point, the point of debt capital. You see it also in
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the cities where you see people who are living in slums who have squatted originally on what
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was largely government land or land that should be for all the people. They've kind of homesteaded
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in a way out there. The capital that they've got in those places is also debt capital.
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One of the ways we can help the poor is by giving them titles to their small plots that
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they have, creating some way to remove the deadness of the capital, giving them something
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of value. It's been done in countries like Peru where it has been a huge success. Instead
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of having these large slum redevelopment schemes, maybe all we require to do is to give title
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of the land to the people who are already currently staying there and then let them
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decide what they want to do with that.
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I mean they can take a mortgage on the house and start a business and so on and so forth.
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Our mutual friend Barun Mitra told me a very poignant story once. He had done this agitation
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in Gujarat for tribals getting land rights and so on which had succeeded. After a struggle
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that lasted many years, a bunch of them got land rights. Guess what's the first thing
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they did? The very first thing they did was they built toilets for their homes. Previously
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they had never built toilets in their homes because they weren't sure of their homes.
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They were constantly getting kicked off it and they would have to come back and they
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were treated like squatters. When they got the rights and when it was actually their
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property on paper, the first thing they did was build toilets. So you see how the incentives
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change and how that influences behavior, culture, all of that.
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Correct. They are bettering themselves. You have various side effects. One of them out
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here was better health. Instead of pumping money into the healthcare system, simply giving
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poor people more opportunities helps them. That's a great story, I know.
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Before we move on from this point, I'll just kind of sum it up again. Your point is that
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number one, inequality and poverty are separate things. Number two, the kind of policy interventions
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that you need to target them are very different. Inequality is not your enemy. Poverty is your
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enemy and if bringing people out of poverty causes inequality to go up, that's perfectly
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fine. We should not be looking at that metric. In fact, one rhetorical question I often ask
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people when I try to illustrate the difference between poverty and inequality is in which
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country would you rather be poor, the USA or Bangladesh? Everybody would say USA, but
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the truth is that Bangladesh has less inequality.
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In the US, if you're poor, you most probably have a TV. If you're living in a slum in the
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US, it's most probably two bedrooms. I think I read statistics that are now 15 years old,
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but 97% of people who are considered poor in the US have a TV, have heating or air conditioning
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in their homes. Yes, relatively, they are pretty poor compared to Warren Buffett or
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Bill Gates, but compared to somebody in India, they're well off.
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Exactly. Inequality to me is and should be the obsession of the first world. They can
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afford to worry about inequality. We can't. We've got to tackle poverty first and often
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the solutions take you in completely opposite directions. If you believe in inequality,
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go to Bangladesh. Let's move on to our next scandalous subject. What is this, Yazad?
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Child labor. Child labor. On one thing you and I both
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agreed as I think all reasonable people have agreed that it's horrible when children have
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to work in fields and work in factories and it's just a crime on humanity. Children should
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just have a carefree life, grow up at home, get a great education, blah, blah, all of
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that. However, the solution to this isn't necessarily banning child labor. A ban on
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child labor can often be counterproductive. Can you explain to me why that is?
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Very often when you ban child labor, what you do is you are closing off an important
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revenue stream for that family. The family most probably needs the child to work and
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without that they might starve. So what do you think is a better outcome? Having a child
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working or having a family starve? In fact, I have some statistics to back it
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up. Many years ago, Oxfam reported on a situation in Bangladesh where international outrage
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forced companies to lay off 30,000 child workers. Now you would think that's a great thing.
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Outrage forcing 30,000 child workers to be rescued from child labor. But many of those
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kids starved to death and many became prostitutes. In fact, a 1995 UNICEF study, and there have
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been many more similar studies since, showed how an international boycott of carpets made
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in Nepal using child labor led to between 5,000 and 7,000 Nepali girls turning to prostitution
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because a better option was now denied to them. So you know, I think a lot of bleeding
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hearts often make the assumption that if we just ban child labor, everything will be hunky
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dory, kids will go to school, they'll have a happy life. But the point is, if they're
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working in factories or fields, that's probably because that's the best option open to them
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because which parent would really want their kid to work. And if we ban that option, they're
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probably getting into a worse fate. Yes, that's quite true. And once again, we
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find that the problem out here is poverty. And if there are better opportunities, the
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parents would take them. And we find that also in study after study, that instead of
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having one study that was done recently by Professor Mushfik Mubarak, who is a Bangladeshi,
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said that one simple way of getting people out of poverty and having families then depend
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on the main earner was to give the male of the family a certain amount of bus money so
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he could go from the village in Bangladesh to Dhaka and maybe even work as a rickshaw
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puller. But that would send back enough money and prevent his children from working.
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In fact, there's a 1997 paper which backs this up. It's a paper called The Economics
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of Child Labor by Kaushik Basu and Pham Hong Wan, apologies if I don't pronounce that
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name properly, where they showed that, quote, child labor as a mass phenomenon occurs not
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because of parental selfishness, but because of the parents' concern for the household
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survival, end quote. And Basu and Wan in this paper coined something which they call the
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luxury axiom, which essentially says, quote, a family will send the children to the labor
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market only if the family's income from non-child labor sources drops very low. They continue,
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the children of the non-poor seldomly work even in very poor countries. In other words,
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children's leisure or more precisely non-work is a luxury good in the household's consumption
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in the sense that a poor household cannot afford to consume this good, but does so as
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soon as the household income rises sufficiently, end quote.
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Very true. We've seen studies where people in the carpet industry in Uttar Pradesh would
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take their children home once the main breadwinner got a better job. So these were circumstances
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for the families where they were forced to send the child to do work outside, and without
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that the family would starve. And you've seen this is done study after study after study.
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So we agree that child labor is not something that we should, is a good thing. But one of
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the things that we need to do as, you know, as policy advisors is not to advise in a policy
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that has a terrible, terrible, just stop one second. I want you to remember that word.
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Intentions, outcomes? No, unintended consequences. So one of the things that we don't see are
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unintended consequences. And the unintended consequence of banning child labor is increased
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starvation, and you said, you know, prostitution. So those are worse outcomes. And not just
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for the children, often the mother. I think the thing to remember here is that very few
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parents would want their children to work in a factory. If they're taking that option,
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it's just because imagine how hard life must be for them otherwise. And imagine what the
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options to data. And we often imagine that, look, banning something is a solution. Child
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labor is bad. We all agree that any any reasonable person would agree with that. But is banning
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it the solution if it leads to a worse outcome? No, it's not. So when we live in a free society,
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sometimes we have to accept certain things that might not be ideal or something that,
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you know, what I call our icky. And child labor is one of those. Prostitution is another
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thing. But I don't think those should be banned. Those are things that if that need to be allowed
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at one level, and you have to accept that the parent is the person who should be making
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decisions for the child, not an outsider, not the state, not the government. So let
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me then I mean, I'm in agreement with you on this. Obviously, I've written a column
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about this, which will be linked at the bottom of my podcast page if you go there. But one
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question that I genuinely don't have an answer to is that if you agreed that child labor
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is bad, and in some places, it happens almost on an industrial scale, and that banning it
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is sometimes counterproductive, then what are the options? I mean, just saying that
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the answer is that, hey, let's have economic freedom and people will eventually come out
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of poverty and that will solve the problem isn't really a satisfactory answer anymore
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at two levels. One, it takes time and B, we are not going to have economic freedom anytime
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soon given the state of the political economy. So what is the answer then? Should we in no
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condition at all ban child labor? What is the answer to this? So what we should ban
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is anything that is forced. So if the child is taken away from the family and forced to
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work in whatever way, that should be banned because that is a violation of freedom. But
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beyond that, I think we think that making a law or banning something is doing something
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for the sake of doing something. And the best kind of government is one that does the least.
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So getting out of the way and helping people out of poverty by getting out of the way is
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the best thing that can be done. It's true that in the short term, it might not seem
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effective. We might not see results immediately. But in the long term, we see that economic
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freedom helps. I mean, one example of a country is South Korea. South Korea in the fifties
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and sixties was as poor and actually was poorer than India. Today, it's a first world country.
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So it was within one, one and a half generations. It's moved from being a country that was poorer
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than India. It was the Bangladesh of its time. And today it's a first world country.
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So marvelous. I mean, I imagine listeners of the show would all automatically support
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economic freedom. I mean, that's not in question. It sees issues at the margins, which we kind
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of discuss and debate, which makes it sort of a good time for moving on to our next subject,
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which is a little less of a social hot button. Insider trading. What are your views on insider
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trading? Should it be banned? No, I think insider trading is basically information giving
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out to the market. Now, when you have a market and stocks working well, any kind of information
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will be taken in by traders and will be used by traders to kind of either buy or sell or
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hold that relevant stock. We think that insider trading is bad because the person, you know,
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who is an insider is maybe it's a CEO or an executive of the company. Has an unfair advantage.
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Has an unfair advantage. But that advantage lasts for a very short period of time. And
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even then, you know, once the news goes out, what the person is doing is helping the market
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learn about that news earlier than the market would have in other circumstances. So in that
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sense, a good thing. The only time when insider trading is not good is when there's a fiduciary
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relationship. So if, for example, you know certain details and you are the auditor of
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that company, in that case, if you trade insider, but even then, I don't think it should be
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criminal. It should be a civil case. I would fire the auditor. So why is it that you, you
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know, if say there is company Yazad and the auditor of company Yazad does insider trading
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as opposed to the CEO of company Yazad, which of course is you yourself Yazad, then why
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is the auditor wrong and why are you not wrong? Because the auditor has a fiduciary responsibility.
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The auditor is responsible. He has promised to audit and keep, you know, the contracts
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as a contractual. It's a contractual thing. So companies can contractually state that
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their employees should not stay trading the stock. And if the employee does straighten
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the stock, fire the employee. So that's perfectly legal. It's a private company having a private
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agreement with an individual. We're talking about not criminalizing this. So, you know,
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Rajat Gupta, for example, in the United States getting to hear about those things, what he
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did telling his friend about what was going to happen at Goldman Sachs, what he did was
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very cheap and, you know, degrading. But I don't think he should have gone to jail for
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that. He should have been fired from the board and most probably not hired in any other boards
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of companies. So I'll try to summarize your case. Tell me if I'm summarizing it correctly.
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Markets basically function on information, you know, that determines supply and demand,
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that determines the price of a particular stock or whatever. So what you're saying is
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that insider trading actually helps in the smooth flow of information because the information
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gets out there faster in the form of increased buys or increased sell or whatever and the
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market adjusts much sooner. So it actually reduces the asymmetrical information problem
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and therefore it's better to just let it happen because the market is going to account for
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it anyway. And if you actually kept it legal, then the information would get out there faster
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and markets would adjust faster. That's what you're saying.
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Right. Let's move on from there to our next subject, which is hoarding. We don't mean
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the noun hoarding, the advertising hoardings that you see outside, much as they defile
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a beautiful city landscape such as Bombay has. But the verb hoarding, which is for example,
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I remember when I was a very young man, when I was in college, the Latur earthquake happened.
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So a bunch of us wanted to help out, but we weren't sure how to donate our money or whatever.
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So we bought a bunch of supplies and there were a group of doctors going in this mobile
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ambulance whose plan was also just to drive around the affected areas and give treatment
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as in where they wanted and not go to any central location. So we went along with them
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and it was very interesting. And I remember we were at one point at a village where almost
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every building had kind of collapsed, but there was a row of shops was open and the
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villagers were complaining because the prices at those shops had just shot up massively.
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Now how can this be ethical? I mean, all the houses have fallen down, nobody has food to
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eat and these people are taking their prices up.
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It's supply and demand. Now when people want more of something, the prices generally do
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go up. So you have a choice at that point of time. You can either buy the good or not
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buy it at all. So that choice always lies with the consumer. Otherwise what you are
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doing is you are setting prices or restricting the the hoarder from selling what he wants
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to at whatever price they want to sell it. And it actually works out in the market. One
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example of this recently was also surge pricing in Uber. So when Uber surges the prices, what
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happens is that other people, other taxi operators who might not want to operate might see the
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increased price and come into the market. Because without that what will happen is you
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won't get a taxi ride. The same way when prices go up, it's not just the hoarders, it's other
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merchants might decide to enter the market so that you would have more grain and more
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supplies but you would have a higher price for those. And this is also very often a temporary
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phenomenon. The prices will then go back down after some time. So we make a lot of noise
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about a temporary phenomenon and a phenomenon that actually helps people. People will get
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the supplies they want. The other option is people will simply not get the supplies they
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want. The hoarder might just close shop. Yeah and that's the option that people never look
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at. So for example let's say there's that one ration ki dukan which is still stranding
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everything else to shut down. Now the demand has shot up so much that if he sold things
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at their normal price, like if he sold bread at whatever the normal price was, 10 rupees,
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20 rupees, whatever it is, there would be shortages. It would be first come first serve.
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If he has 20 loaves of bread, the first 20 families would get those 20 loaves of bread
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and maybe they'd ration it over 4-5 days. But there might be another family who is starving,
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who has nothing to eat, they have an ill infant or whatever and they need the food desperately
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and they would be willing to pay much more for it. But they can't because it's simply
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gone. And what setting the higher prices means is that people who wanted that much more who
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are desperate for it will then pay the higher price for it. And again you took the example
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of Uber. We had an episode on this in the past as well. My listeners can browse it at
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seenunseenladai. And the point here is that like when Delhi banned search pricing in Uber,
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what happened? There were shortages immediately. People were stranded for hours at the airport
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because they couldn't get a cab. It was first come first serve at the regular prices. So
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if somebody wanted to catch a flight at the airport and was willing to pay more or God
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forbid if somebody was ill and he had to go to the hospital urgently, too bad they're
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stuck unless they're lucky enough to be among the first few customers, they don't get it.
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But governments often imagine that if you set the price for something magically everything
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will work smoothly after that. Yeah. So the unseen part of it is people moving out of
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the market. That suppliers move out of the market. You see that all the prices fix and
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nobody is going to be able to gouge me. But those people aren't gouging. What they're
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doing is responding to a market situation and the response to the market situation gets
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more supplies into the market. The other option is simply won't be those supplies. We don't
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see people moving out of the market. We only see the price setting or we only see the gouging.
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It's important to look behind and see what's happening behind. And when we do that, we
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find that there are people moving out of the market that people are simply OK. We don't
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want to be in it. Whether it be taxicab drivers, whether it be suppliers of basic goods, you
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would find a shortage when you fix prices. This is true of Venezuela today. This was
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true of Britain after the Second World War when they did rationing. This was even true
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in India when we had ration shops all the time. So rationing per se increases and causes
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shortages while letting the market deal with it would lead to supplies reaching where the
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demand is the greatest. So let me try to explain what you just said with reference to the original
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hypothetical case that I brought up. I'm not really hypothetical since this happened. The
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village where the prices suddenly went up. Now imagine that there's one shop standing
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in a village where because the demand has got up so much, the price of bread has gone
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up from say 20 rupees to 300 rupees. I'm using arbitrary figures here. 20 rupees to 300 rupees.
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What this does is that because price carries information, people from neighboring villages
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who might have a surplus of bread suddenly feel attracted to come here because the price
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has gone up and they know that even if they don't get 300, they'll get much more than
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20. They then rush to this village to make up for the supply shortfall and therefore
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a lot of the people who were without bread, they now get served. Now had you fixed the
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price at 20 rupees by government dictat, what would have happened is that a few families
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first come first serve would have got those. The rest of them would not have got any bread
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and no one from the neighboring villages would have been incentivized to bring their surplus
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bread here. So the important thing to remember is that price in a free market carries information
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and the moment you don't allow it to function in response to supply and demand, that information
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vanishes. A very good example of this in the context of Uber would be that because of Uber's
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surge pricing, drivers who are inactive decide to come on the road because they can make
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more and therefore there are less people who go without cars and so on and this informational
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function quite apart from the fact that if you fix prices you'll get scarcity, but this
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informational function is the unseen effect of fixing prices. That's right and very often
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what also happens is when you have a lot of other suppliers come in the market, the price
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starts to fall and the price in your example may not fall of the price of bread, may not
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fall all the way down to 20, but it might well fall from 300 to say 100 rupees. So you'd
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see the addition of suppliers helping the consumer. So you're right, the information
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that price carries is very important and when we try and throttle that or close that off,
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we lose a lot more than we gain. And you heard both the suppliers and the consumers as in
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the case of Uber where the few taxi riders will get a ride at a price much less than
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what people would value the ride for and a lot of people will be stranded. So on the
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first four subjects that we've discussed so far, you and I have been in complete agreement.
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On the fifth subject though, I tend to disagree with you. So let's get to that right now and
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those are libel laws. I believe libel laws should exist. I'm a free speech absolutist,
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but nevertheless, if someone say Yazad, if someone was to write about you, say I edit
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a magazine called Prakriti, if we carried an article, which I mean, we don't do that
#
kind of stuff, but if we were to carry something slanderous about you, which led to you losing
#
your job and not getting any more jobs, and it was a lie, it was just a slanderous lie,
#
a malicious one, then you should have some recourse to some kind of civil action against
#
us, some kind of thought. And libel laws allow you to do that, that if someone hurts you
#
like that, you have recourse to something. But your argument is that libel law should
#
simply not exist. I give you an opportunity. Convince me otherwise.
#
Okay. Let's start by simply saying that we're going to use the word libel as a catch all
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for all kinds of defamation, unless you have a nitpicky person who says that this is slander
#
and that's libel and so on.
#
Let's use it, let's say defamation.
#
So now in this case, why do you think you should have recourse to it? Because you think
#
that your reputation hasn't somewhere been harmed and you want to kind of repair the
#
bad that has happened to your reputation. Let's wait a while and think about what your
#
reputation actually is. Your reputation is what other people think of you. So when you
#
are trying to regulate your reputation, you are trying actually to regulate other people's
#
thoughts. You have a right to your property. You do not have a right to other people's
#
property and that includes their thoughts. So at a philosophical level, that's the reason
#
why libel, you know, tries to regulate other people's thoughts and that's why I'm against
#
But even on a practical level, there are many problems with libel. Now you have countries
#
that either have strong or weak libel laws. Now countries in strong libel laws, the libel
#
laws are massively misused.
#
Like England, for example.
#
Or even India. The recent case where I think the Adanis filed a defamation suit against
#
the wire.in is an example. That suit was filed to harass the wire. That suit was filed to
#
throttle news. It was filed to silence somebody else. So you see a lot more of that happening
#
where you're using the libel laws to shut somebody up, to make sure that the press cannot
#
be free. So in that way, libel laws are massively misused. In places with weaker libel laws,
#
what happens is that people have a lower trust in whatever gets printed. You're assuming
#
just because Prakriti prints something about me, that could be malicious. People reading
#
it are going to believe that. They most probably might not. In a world with libel laws, what
#
happens is that people may tend to be more believing of a large newspaper. In a world
#
without libel laws, people will simply want to double check and triple check. And whatever
#
harm that somebody's reputation gets is most probably going to happen anyway. The newspaper
#
doesn't have to maliciously print a lie about you. They can print something milder and try
#
and, you know, print rumors or, you know, indirectly allude to certain things that could
#
also harm your reputation. So beyond the point, it's very difficult to kind of say, oh, my
#
reputation is going to be intact because they're libel laws. You know, that's the fantasy world
#
So let me respond to all of your points and let me go backwards, starting with the latest
#
point about countries with weak libel laws. Now, Prakriti, of course, has an impeccable
#
reputation and credibility. Anything we print about you will be believed, so just watch
#
out. But having said that, I grant your point that if a magazine publishes falsehoods on
#
a regular basis, its credibility gets affected. And in a sense that marketplace with credibility
#
has some currency is in itself a corrective measure. Fine, I'll grant that. As far as
#
your comment on countries with strong libel laws is concerned, I'd simply say that every
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law can be misused, but that's not really an argument against the laws per se, right?
#
A rape law can be misused. Somebody can file a strong case. That doesn't mean that you
#
don't have rape laws. You need those laws. And for people who misuse those laws, you
#
should have commensurate punishment. But leaving that aside, I want to tackle the philosophical
#
question because what you said about repetition is absolutely true. You can't control what
#
other people think of you. You can't control their thoughts. However, my objection to defamation
#
isn't that it hurts your reputation. My objection is that it can actually cause harm to your
#
property. For example, let's say I work somewhere. Let's say I'm a doctor and a newspaper publishes
#
a false report about how I'm a bad doctor and I've killed people by giving them bad
#
medicine. And then everybody stops coming to me. And I could be earning three lakhs
#
a month from my medicine and suddenly that drops to zero. It's literally a loss of property
#
for me. It's causing real harm to me. There should then be some recourse to me to get
#
compensation from that, from the party which caused that damage by printing the fake news.
#
Which is why I'd say libel laws are, and by your point about repetition being what other
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people think of you, but here the issue is not what someone is thinking of me. The issue
#
is my income, my property. I might have to mortgage my house, not be able to send my
#
kids to school, though I don't have kids and God forbid I ever do. But it will cause an
#
actual harm to me. So what's your answer to that?
#
My answer to that is I think this is a narrow example. And very often one newspaper writing
#
something about you isn't really going to cause that much of damage to the doctor. The
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doctor has other recourse. You can actually take an ad out in another newspaper. You can
#
Oh, but come on. I mean, you can't take an ad out. I mean, if you're a regular general
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GP, you can't take an ad out.
#
You might be spending much more on legal fees trying to fight the newspaper off. So you
#
have recourse to a variety of different things out here. The first thing to think about is
#
on a practical level that it's going to be difficult fighting a large newspaper if you're
#
a small person. The second thing to think about is that there are many other avenues
#
where you can enhance your reputation. And in today's world, there is no one avenue that
#
is going to be so dominant that it's going to cause you to lose all your income. I mean,
#
you have Yelp reviews, for example. Just because you get a one-star Yelp review doesn't mean
#
that the business closes down. There could be a lot of other four and five...
#
It doesn't. But for example, if Times of India does publish something about a doctor whose
#
patients have lost their lives because of his packery, while he otherwise actually might
#
be a perfectly respectable GP doing a great job, and he loses all his patients, everything
#
else is an hypothetical. What he has lost is gone. It's actual real damage. Shouldn't
#
someone be responsible for that?
#
Do you really think that the Times of India is that powerful anymore?
#
But I'm giving you a hypothetical case.
#
My problem with this hypothetical is that it's too narrow. But yeah, it might affect
#
some amount of his business. But then, one, the Times is not the only newspaper that's
#
read in the country. Two, the Times is fluff, really. So not many people take it seriously
#
I write a column for them, and weekly limericks. Shame on you. You're calling them fluff.
#
The limericks are great fun.
#
I'm not going to buy you coffee after this. You're buying me coffee.
#
There are a few columns in the Times that are worth reading that includes yours. But
#
just because something is in the newspaper, just because it causes some damage, does not
#
mean that you have to have a law against that. There are many other things that could damage
#
that doctor's reputation. Another doctor might come out in the same area who might be offering
#
his services for half the price.
#
Of course, but that's all legitimate. And in fact, if the newspaper is right in what
#
it says about the doctor, that's also legitimate. But if it maliciously says that people have
#
died because he's a quack, and that causes him to... Let me put it like this. Let's say
#
I could take an iron rod and go to a doctor's clinic and destroy it completely and cause
#
him material damage of X amount. And he could have that same material damage of X amount
#
because somebody spread lies about him using whatever medium. So why in the first instance,
#
he would be perfectly within his rights to file a case against me because I've damaged
#
his property. So why not in the second instance?
#
Because in the first instance, there's an act of aggression. In the second instance,
#
you're assuming that just because somebody has said a lie, it's an act of aggression.
#
Unfortunately, when you have a country with free speech, even lies are free speech. And
#
therefore, that malicious lie, I do not consider to be an act of aggression. Because I don't
#
consider it to be an act of aggression, I don't think there should be a criminal case
#
against it or a civil case against it. You can fight it in a variety of different ways.
#
It's very difficult to fight off somebody who's taking an iron rod and smashing, I think.
#
That person has actually, you know, is harming you physically in an aggressive way. The person
#
writing a malicious lie about you is doing what they can do, is exercising their right
#
to free speech. And I believe the right to free speech has no or very little if any encumbrances.
#
And of course, India doesn't have free speech as we like to think about it. It's highly
#
restricted. But coming back, if we believe in a strong right to free speech, we should
#
also believe that people have the right to lie. I won't go into the, you know, the intent
#
part of it, whether it's a malicious lie or not. Because a newspaper question is going
#
to say, oh, no, no, we have sources, blah, blah, blah. And you know, no newspaper is
#
going to say, oh, that's a malicious lie about that doctor. And if a newspaper is going to
#
do that, their reputation is going to be harmed in the long run. Yes, the doctor's reputation
#
will also be harmed. But the doctor has many things that they can do. And today, with a
#
variety of information sources, there is no one dominant information source. And people
#
get their news. It's like a massive Yelp market, if you must think about it that way. So yeah,
#
you could have a one star on that Yelp, but you could also have lots of four and five
#
stars. And it's the average number of stars that define your reputation in a way.
#
Well, I mean, we live in the age of fake news anyway. Everything is false. And people believe
#
everything to be true. So I won't get into an argument. We'll agree to disagree on this.
#
But meanwhile, let me sum up the five things we discussed today. On inequality, we are
#
both agreed that inequality and poverty are very different things, which require different
#
kinds of treatments. And a poor country like us should focus on tackling poverty first.
#
That is our moral imperative. On child labor, both of us agreed that child labor is a terrible
#
thing. It is monstrous for children to be deprived of the best years of their lives.
#
But banning child labor may make actually things worse for the children than better.
#
And we should consider the consequences, unintended or unseen. On insider trading, we are both
#
agreed that insider trading should be legal because it reduces information asymmetry in
#
the market. It helps information get out there earlier in the market adjust to it. On hoarding,
#
both of us agreed that price controls are bad. Price carry is useful. I mean, A, it
#
creates shortages in the short run and price controls. And B, in the long run, they prevent
#
information from getting out in prices, are the bearers of information and perform the
#
vital role in any society, I would say. On libel, we tend to disagree. You feel that
#
libel laws do not need to exist, that lies are a part of free speech. You are a free
#
speech absolutist, as I also claim to be, but clearly I am not as much as you. And you
#
feel that your reputation is really what someone thinks of you and you can't control what's
#
in somebody's mind. And you've pointed to the case of libel laws being misused in a
#
country like India where libel laws are so strong. And your argument is that let there
#
be no libel laws. What will happen is that companies, publications, people will automatically
#
get to a certain level of credibility by their actions and their words. And let that be
#
enough. You can't control somebody's speech. I kind of disagree with you in the sense that
#
I think if speech causes you actual harm to your property, you should have some recourse.
#
But let's not let that solitary note of disagreement come between us and you're buying us coffee
#
after this because you don't want coffee from Times of India money. So thank you so much
#
for coming on the show, Yazad. Thank you so much. It was a pleasure being on the show.
#
If you enjoyed listening to the show, you can follow Yazad on Twitter at Yazad Jal.
#
You can follow me at Amit Verma, A-M-I-T-V-A-R-M-A. You can browse past episodes of The Scene
#
and the Unseen on sceneunseen.in. Thank you for listening.
#
The Scene and the Unseen is co-produced by Indus Vox Media Podcasts and you can check
#
out other IVM Podcast shows on their app or website, especially a new one called Akansha
#
Against Harassment. Hosted by Akansha Srivastava, this show discusses cybercrimes and how to
#
make the internet a safe place. For one, you can stop browsing and start listening. Episodes
#
He bends down to test the warm water for his bath. He comes here to quench his thirst for
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a hot shower and some podcasts. You can witness how he enjoys having other people talk about
#
cool stuff in his bathroom. Indeed, it helps him with his loneliness. You can find more
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of his pieces on ivmpodcast.com, your one stop destination where you can check out the
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coolest Indian podcasts. Happy listening.
