Freaks or Freakonomics (and Co-relating in the absence of reality)

Once upon a time, I was interested in the Freakonomics anecdotes. It all changed by the time I got to the end of the second chapter of the book. It reminded me of how “sales operations” guys come up with weird theories during sales reviews. Theories that don’t help you close deals or plan sales campaigns. Freakonomics has a very similar way of avoiding reality and the "big picture". I agree (like most others) that the authors are smart guys with a great talent for writing blogging. It's the lack of perspective in their content that worries me. They do have their fair share of critics. Some examples

• The Business Blog at Intuitive.com 
• The New Yorker

I have followed the freakonomics blog on the New York Times website and am convinced that their approach to economics is culturally biased. By the way, NYT has now stopped publishing any of my comments (even when I have something positive to say about the post). Update: I stand corrected. They published this last night.

Yesterday’s post- “Do jobs really cure insurgents?” got my attention.  The first half of the post read as follows-

"Does giving a man a job stop him from becoming a political insurgent? The generally accepted wisdom is that it does. In fact, the U.S. and other western powers have distributed millions of dollars of foreign aid in the hopes of reducing political violence and instability. But a new working paper from Eli Berman, Joseph Felter, and Jacob Shapiro may force policymakers to reevaluate this strategy. The researchers looked at unemployment and political violence against both the government and civilians in Iraq and the Philippines. They find that unemployment is actually negatively correlated with attacks against the government and statistically unrelated to insurgent attacks against civilians."

The working paper that Freakonomics was referring was published by National Bureau of Economic Research and based on a grant from (surprise, surprise!) The Department of Homeland Security.

Here is my two cents- 

• Cause: American invasion of Iraq Effect: More than 100,000 civilians in Iraq are DEAD.
  (Where do employment programmes fit in?)
• I would not be looking towards “insurgents” as the root problem. I would look at the fact that Iraq is an occupied country that was invaded illegally and without ‘just’ or any other cause. Operation “shock and awe” devastated the infrastructure of the country. 
• Disaster Capitalists lead by the likes of Halliburton and Black Water are “rebuilding” the country after bombing it flat. How? For e.g. - They are importing raw material after refusing use of local labor and factories to create raw material locally.
• To try and look at the insurgency problem through the lens of “employment” is, for the lack of a better word, STUPID. You have insurgents, not because they are employed or unemployed but because their country was bombed to smithereens by American troops. 
• You would not have to assess the functionality of development and employment programs if you had not blown up the country in the first place. 
• As far as economic research is concerned, this paper deserves nothing less than the ignoble. 
• I do not see any economic trends that deserves applause in the analysis. I would however hazard to suggest that the authors study the impact of development programs on insurgency while standing under US operated drones in NWFP in Pakistan. Maybe then, they will have better clarity on the co-relation between employment and insurgency.
• The paper and Freakonomics blogspost has a Friedmanesque stench to it. 

The richest Indian cabinet just got a little richer

Nandan Nilekani was given a cabinet rank yesterday. His portfolio - the National ID project.

Nandan Nilekani has increased the average/per-capita wealth of the cabinet. According to the National Election Watch, cabinet was already the richest cabinet in Indian history. They just got a little richer.

This cabinet is probably the most unrepresentative cabinet in Indian history. It has become a club of the wealthy. More than anything, it is representative of nepotism and the inequitable distribution of wealth in this country. We cannot any more afford to be in denial that we are a polyarchy.
You can read more about polyarchy here.

When there is no concept of Social Security in the country, why have a "social security number"? I have a PAN Card, Ration Card, Election Card, Driver's License and Passport. Why do I need to be identified any further? There are over 800 million people living on less than a dollar a day in India. I cannot see how the diversion of resources to this grand scheme is going to address real issues (food, water, education, healthcare etc) in any way. It will allow the government and private sector participants in the scheme to monitor a lot of what the common man does. It will also pave the way for rampant identity theft.

Nilekani's new role is an eerie reminder of Larry Ellison's grand scheme after 9/11 to pull in some revenue for Oracle through a National ID scheme in the US. This scheme, like many other, was riding on a wave of fear created in the American media about terrorists, terrorism, WMDs and Islamophobia.

The current government's flirtatious overtures to the corporate sector are ominous. It is apparent that we will get a CII budget and key sectors that affect the poor might be privatized in the next five years. Social Security - even if it is just a number, is the best excuse that the government will have to continue to adopt the privatization model.

While the Indian cabinet gets richer, 800 million Indians who subsist on below a dollar day will get poorer because they cannot be "identified". At the same time, the government will start tracking other citizens who have been “identified”.

On a related note, many people (like me) who condemn violence but believe that violence has roots in oppression and a lack of development will be labeled as "maoist sympathizers". I find it hard to believe that 1000s of people who have less food then what was available to their peers during the Bengal famine would be interested in the philosophy of Chairman Mao and his little red book. They are more likely to go to any extent to get food and a glass of water for their families. Unfortunately, this includes armed struggle. While these rotten egg realities hit the fan, we invite mining companies to these very same districts and call the poor “insurgents”. Leaders who do not hesitate to develop IT platforms for these companies get “cabinet rank”.