Life, Liberty & The Pursuit of Happiness

From Nudge To Shove

by Anurag Wadehra

As a pivotal year comes to a close, there is little doubt that the government power is on the rise in human affairs. Most people, certainly in popular media, are clamoring for it.

Over the summer, there was at least a discourse on the merits of softening the punch of government's intrusions. This was triggered by the book Nudge by Richard Thaler and Cass Sunstein of University of Chicago, wherein they mated two opposing species of ideas - liberty and paternal authority - to produce an offspring called libertarian paternalism. 

Question of the month

by Anurag Wadehra

I came across an insightful question at Marginal Revolution blog by Tyler Cowen. Richard Wagner of George Mason university who is an expert in public choice theory, wrote the following question for the 2005-2006 graduate political economy preliminary exam at George Mason.

Consider, for instance, a significant change that has occurred in the economic organization of debtor-creditor contracts. Not too long ago, lenders held their loans in their portfolios. They would lose if the borrower defaulted, which gave the lender a strong incentive to monitor the borrower, particularly for large loans. Now, lenders split their loans into numerous small pieces and disperse them throughout the economy. (For instance, many people who hold mutual funds and retirement accounts will find that they are holding small pieces of large loans made by commercial banks.) The burden of non-performing loans is thus dispersed throughout the economy rather than residing with the original lender. Does this development weaken the incentive of lenders to monitor borrowers and thereby weaken overall economic performance? That is, can market transactions generate institutional arrangements that impair the market economy? However you address this topic, do so clearly and cogently.

Check out the lively discussion of possible answers to this remarkable question.

 

Bubbles: Economics Meets Psychology

by Anurag Wadehra

Here is an excellent summary by Virginia Postrel in Atlantic Monthly on experimental economics and what it has to say about financial bubbles

“Bubbles,” the economists conclude, “are the funny and unpredictable phenomena that happen on the way to the ‘rational’ predicted equilibrium if the environment is held constant long enough.”

She draws two conclusions from her review of research:

There's always humor...

by Reena Kapoor

Really funny video with Robin Williams in a stand-up routine on the election & our favorite politicians.  Enjoy!

A Passionate Life

by Reena Kapoor

I point you to another inspiring videocast on the TED website about living a life of passion.  Give it a listen - it will be the best half hour you spend today.

More on guns...in India

by Reena Kapoor

Another interesting take on gun control in India.  I post it because this debate is relatively new to India and its people and it's interesting to see it being discussed now.  Gun laws for ordinary citizens are not being loosened in India anytime soon and as I pointed out below such a loosening would be fraught with problems; but that is no excuse to not revisit these unduly draconian laws for the cause of improved security through civilian resources e.g., registered security guards for hotels, malls, cinemas, etc.

Voices of Reason

by Reena Kapoor

I want to point you to an excellent letter in the WSJ today speaking about liberalism and Islam by a Rahfat Hussain of Minneapolis (I only point to the first letter in this link).  The letter also offers an oft-missed insight about the impact of the broader culture (whether it be Indian or Arabic) on the practice of religion.  Western thinkers ought to remember and take into account such nuance before they issue quick analyses on concepts such as the "culture of Islam". Also individual voices of reason can be anywhere - one just has to look a little more carefully.  This has always been true and will always be so.

Guns vs. Terror

by Reena Kapoor

Shikha Dalmia of Reason presents an interesting case in WSJ with her article Arming India against Terrorism where she talks about how and why Mumbai a city of 18 million was held hostage for nearly 60 hours by 10 gunmen in the recent attacks. She says that part of the reason terrorists ran free in Mumbai was that no one else was armed properly - not the police, not the private security of the establishments under attack and certainly not the citizenry - thanks to draconian anti-gun laws.  Putting aside for a moment the libertarian stance for gun ownership by all citizens, even anti-gun ideologues should be able to see that victims in this attack would have fared much better if at least private establishments (in this case hotels) had properly armed security guards.

India & Secularism

by Reena Kapoor

An excellent analysis India's Dangerous Divide by Ramachandra Guha in WSJ today outlining the history and current challenges faced by India as a secular nation espcially vis-a-vis its Muslim minorty; such a minority which is 150 millions strong presents unique challenges (because of the bloody history of partition of India into India and Pakistan in 1947 on the sole basis of religion, and the continued exploitation of communal loyalties by India's ugly politicians) and yet is an unprecedented opportunity for India to set an example for the world! Muslim and Hindu populations in India have been manipulated by the two major political parties (known as Congress and BJP) for votes; Congress has largely done this by appeasing the most radical elements among the Muslim minority and the latter by fanning fanatical elements among Hindus.  Both wrong and both bad for India -- and for the cause of peace everywhere. What will India choose?

Lesson from years past

by Reena Kapoor

Today is the day 75 years ago when Prohibition or the ban on alcohol was lifted.  The country celebrated this liberation as news stations reported with bated breath on how the lifting of this ban would help the economy, increase jobs etc. The problems created by Prohibition were predictable and include the creation of a very powerful Mafia funded by an extremely profitable business. Anybody who takes history seriously must wonder about the parallels to the current War on Drugs (I use CAPS on purpose) - a war we're losing and can expect to continue to lose;  a war that funds the mafia not just in the US but all over the world and now even funds terrorism (opium farming in Afghanistan) and has resulted in over-crowded jails and making criminals out of citizens who do not infringe on anyone else's liberties and rights. SO on this 75th anniversary, I ask, when will we learn?