Countries that can be run by idiots

TT Ram Mohan has an article in ET wherein he recommends regulations that place limits on the size of banks. The idea behind it-

A large, integrated financial institution today has hundreds of subsidiaries… it is impossible for any individual to understand what all the parts of such an organisation are doing…. Enterprise-wide risk management would seem to be an impossibility in such cases. … in the future, a financial firm that is too big or too interconnected to fail must be too big to exist.

[…]

Kay quotes a terrific aphorism from the legendary investor Warren Buffett: invest only in businesses that an idiot can run because sooner or later an idiot will. We need banks that can be run by idiots — and that means imposing a cap on the size of banks.

Surely the same logic also applies to countries. Hence it stands to reason that Obama’s powers should be limited to that enjoyed by a manager at Wal Mart, and Singh’s to that of the chief gardener at 10 Janpath.

Much has been written and said about SRK’s “detention,” and India’s “VIP culture” and “following laws” over the last week. I am with SRK on this one. There is a difference between a law and a diktat. If the US regime decides tomorrow that everyone flying into the country will have to sport dog collars, that is not a law based on reason, but some idiot’s whim. And US action in this case was nothing but an action based on a whim—the national security humbug. As if to prove that the US security apparatus is egalitarian in nature, everyone is pointing to the cases of Bob Dylan, and Ted Kennedy. But what is wrong is wrong regardless of the nature of the person at the receiving end. The problem is deeper than SRK being harangued. It is that people have become too deferential to authority. We live in the age of “the uniform is always right.” Rights and wrongs don’t seem to matter anymore.

If US security cannot recognize Dylan, or Kennedy, or Khan within a few minutes, they and their systems are either too dumb, or too sinister.

John Elliott writes about M.F.Husain’s self-imposed exile from the country. Between H, and Jaswant Singh, and Taslima Nasreen, the philistinism, and intolerance, and hypocrisy, that is part and parcel of Indian society have claimed a fresh batch of illustrious victims over the last couple of years. Husain and Nasreen have been driven away by the nationalist and “secular” forces respectively, and Singh’s book has already been banned by India’s favorite chief minister. As far as the BJP is concerned, Vajpayee was the last person in the party who had an IQ that exceeded 100. Now that he’s retired, the sooner the party self destructs, the better.

I really don’t see the point of embracing martyrdom when it comes to art, or literature, or even politics. If the only language the people of a country speak is that of the stick, it is better to stop speaking to them. In this matter, Husain is wise. Elliott writes-

He would no doubt like to return to India, but not with the risk of attacks and criticisms on his work. “At this age, I’m happy and I’m working. What I plan to do is not possible in India….If I was 40, I’d have fought, but at my age I have an urge to create, so let them do what they like.”

To paraphrase Rand, anyone who is proud of a society that tolerates all this, deserves it.

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  • you12  On August 21, 2009 at 1:45 am

    Kay quotes a terrific aphorism….. “invest only in businesses that an idiot can run because sooner or later an idiot will. We need banks that can be run by idiots — and that means imposing a cap on the size of banks”.

    I pretty much laughed my ass off. he wants the biggest idiots to control the small idiots. Its amazing how a national level reporter has no sense of irony. A far more compelling case would be that small brains like the reporter shouldn’t exist or at least refrain themselves from speaking publicly.

    . We live in the age of “the uniform is always right.” Rights and wrongs don’t seem to matter anymore.

    As if they ever did. Sometimes I wonder whether it is too much to ask for an ethical human existence. And whats really stopping humanity to not take its own sh*t.

    I really don’t see the point of embracing martyrdom when it comes to art, or literature, or even politics.

    The need to be revered from a bunch of no good strangers. The ones that die for political causes are the scums of the earth. The vilest.

    If the only language the people of a country speak is that of the stick, it is better to stop speaking to them. In this matter, Husain is wise.

    Hussain has the privilege of that option. We don’t. this

    • Aristotle The Geek  On August 21, 2009 at 2:07 pm

      # “Its amazing how a national level reporter has no sense of irony…”
      He’s a professor at IIM-A. But then such views are not surprising, are they. They are along the same lines as those of Krugman, Stiglitz and Rodrik.

      # “As if they ever did…”
      I would like to think it did. But I don’t believe it ever did except in terms of degree.

      # “The need to be revered from a bunch of no good strangers.”
      There are some who do it as a matter of principle. I don’t consider them to be “vile,” only their actions to be inconsequential in the whole scheme of things. For thousands of years you have had philosophers and politicians and writers and scientists living and dying for their cause, and you still end up with idiots running countries populated by hundreds of millions of still more educated idiots of every persuasion—religious idiots, nationalist idiots, socialist idiots.

      Its as useful as Sisyphus rolling his bloody boulder.

      # “We don’t…”
      I agree with Kling’s definition of freedom in the context of states. The “absence of monopoly.”

      The exercise of voice, including the right to vote, is not the ultimate expression of freedom. Rather, it is the last refuge of those who suffer under a monopoly. If we take it as given that the political jurisdiction where I reside is a monopoly, then perhaps I will have more influence over that monopoly if I have a right to vote and a right to organize opposition than if I do not. However, as my forthcoming Unchecked and Unbalanced argues, the reality is that the amount of influence I have is shrinking while the scope of the monopolist is growing.

      …If you lived in North Korea, which would you rather have–the right to vote or the right to leave?

  • you12  On August 21, 2009 at 8:51 pm


    There are some who do it as a matter of principle. I don’t consider them to be “vile,” only their actions to be inconsequential in the whole scheme of things.

    As you originally said, ’embracing’. People who EMBRACE martyrdom are the vilest or just quitters. Dying as a side-consequence for an ethical fight is understandable if dying wasn’t the intended purpose but just an unavoidable consequence. Although some people are just victims like Galeleo. But to actually seek out death like suicide bombers,political goons and soldiers. That is vile.

    Its as useful as Sisyphus rolling his bloody boulder.

    Only existence can have a meaning not dying.


    I would like to think it did. But I don’t believe it ever did except in terms of degree.

    What do you mean by a degree. Right or wrong doesn’t have a degree. Some events are right such as the US revolution and some are wrong such as WW II. History can be interpreted, but I don’t know how much truth we can obtain by studying history books since morality changes with time. Akbar is considered in high regard
    because he repealed jizya for five years. Thats nothing to celebrate about,lesser evil is still evil. Not doing evil doesn’t make you good.

    He’s a professor at IIM-A.

    Sent him a mail. Lets see what happens.

  • yet_another_hindu_infidel  On August 22, 2009 at 8:33 pm

    regarding the SRK episode… the US has a right to form it’s security formalities the way it wants. right now the biggest threat it faces is from the middle-east aka muslims so it takes that extra precaution to keep itself safe and so far it has kept another 9/11 from happening so there on to something i guess – even if there wrong. if it was some country in the rich peaceful part of europe who was being extra cautious towards muslims then it might be wrong because i don’t think there’s any threat to them. let us secure our lives first and then we’ll make a move for freedom. let’s try that.

    • Aristotle The Geek  On August 22, 2009 at 11:32 pm

      The US has as much a right to decide on its security, at least the kind of decisions it does take, as Burma has to arrest Suu Kyi every time she attempts to sneeze. The increase in surveillance and mindless policing that we see around the world, especially after 9/11, has more to do with paranoia and pigheadedness than with any real desire to maintain security. If a country really were interested in security, it would stop wasting time detaining and questioning the same people a thousand times and only concentrate on cases where the suspicion is legitimate. Otherwise its a case of pure harassment, and that, has never kept anyone safe.

  • yet_another_hindu_infidel  On August 23, 2009 at 1:28 am

    leave aside the usual shabana azmi type americans and the hippies one gets to see on TV and you get the real america. and these americans have a saying, “the nicer an immigrant, the sh1tter his country”. most indians will only get to meet the OG america once they land in the US.

    the US can make up whatever law it wants in there own country. the world can question the degree to which muslims are frisked and questioned on american soil but it wouldn’t matter. love it or leave it they say.

    • Aristotle The Geek  On August 25, 2009 at 12:16 am

      # “the nicer an immigrant, the sh1tter his country”
      The earth didn’t open up and spew out ready-made Americans you know; the country was built by immigrants. The day a country shuts itself up completely to outsiders, its signed its own death warrant. So, the immigrant’s native country, howsoever “shitty” it may be, should be of no consequence whatsoever. But this isn’t about immigrants, is it? Its a question of law and order—security (unfortunately, the Americans aren’t the only ones who are paranoid.)

      The question is – does a particular measure do anything to improve the security scenario? I remember a discussion on CNN in August (I think) 2006 when there was a bomb scare in Britain and all transatlantic flights were delayed/ canceled over fears of liquid explosives. The British security was checking every single passenger and an expert—I agreed with him—said this was nonsense. What are the chances that an eighty year old grandmother would be carrying an explosive on board a plane? And that one should concentrate on a small selection of passengers, ones with heightened risk profiles, if one has to get somewhere. If this seems like “racism” or “discrimination,” so be it.

      The problem does not lie in questioning people. It lies in the criteria used for such questioning. If the US criteria is such that the size of their “list” goes on increasing, sooner or later, everyone will be stopped and questions asked of them. That this approaches the definition of a police state—complete “security” through complete lack of privacy—is a different matter altogether.

      # “the US can…”
      If “can” implies “power,” yes it presently does have the power to do whatever it wants. If “can” implies an unchallenged “right,” no it doesn’t. No country which runs roughshod over the rights of its citizens has the right to claim any unchallenged “rights,” territorial or otherwise.

      # “love it or leave it they say.”
      All empires seem to have a sunset clause built into their dna; they never learn history’s lessons. When the sun sets, people will leave. Literally.

  • you12  On August 25, 2009 at 2:39 am

    I am posting TT Ram Mohan’s reply. Haven’t really thought about his replies as of yet.

    _________________

    No question of satire- in my article, you may have seen the quote from the BIS on this subject. My responses to your points are given below.

    -TTR

    you12 wrote:

    Dear Mr. TT Ram Mohan,

    In an recent ET article that I rad of yours(link below),you suggested downsizing banks. I originally thought it was a satire and put it down, but because the writer was you, a professor at a well respected institution, I am giving you the benefit of the doubt and I would like you to answer these questions of mine.

    -> Firstly, your whole argument could be turned on its head. It is possible nay certain that just like the banks , the regulatory overseers itself will become too big to be efficient. And a regulatory regime will still not solve the human error and limitations problem that you hint to. Do you seriously believe that a regulatory overseer will be more efficient than a bunch of big banks. And what about the central bank system? The current crisis is basically a result of Federal reserve’s policy of oversupplying currency leading to excessive borrowing, bad investments and then collapse.

    TT R M: The regulator becoming big does not impose financial costs on the system.

    -> A series of small banks could fail easily just like one big bank or banks. The number of banks failing might be higher, lower but impact will be the same. In fact it would create more chaos, since consumers and investors must have invested in various banks and initially they wouldn’t know which one failed and which didn’t and which is about to. Such a situation will lead to panic in financial markets. So it makes no sense to regulate the size of banks. Anything can fail,regardless of size. A 100 small banks failing would create the same impact as the failure of 10 big banks.

    TT R M: Of course, a number of small banks can fail together. But, the chances of this happening are lower than a large bank failing are more because of the difficulties involved in managing size.

    -> Every big thing is certainly hard to manage, should I then take your proposal and suggest that all big countries should be divided into smaller countries as it will be easier to manage.

    TT R M: Well, that’s part of the reason why the states of Europe remain separate within the European union.That is also the case for greater federalism in India and for breaking up states like UP and Bihar.

    -> Lastly, and more importantly, Don’t you think it is unethical that a government institution should dictate private matters in form of regulation or bailouts.

    TT R M: Where the government provides implicit support to banks, it has an obligation to regulate.

    _________________

    • Aristotle The Geek  On August 26, 2009 at 9:53 pm

      I wrote of TTRM’s ideas-

      They are along the same lines as those of Krugman, Stiglitz and Rodrik.

      Its because of this.
      Nothing will convince someone who believes in the idea of “systemic risk,” and that such a “system” can be controlled efficiently by a bureaucrat.

      He didn’t answer the “countries question” properly. The EU states were and have always been separate countries. They are simply part of a “union.” At the other end, when we break up UP and Bihar, the new states are still within India. Nothing changes as far as national boundaries are concerned. My point is, existing countries should be broken up according to a maximum population size. Say, no country should have a population of more than one million. That would leave us with about 60 new countries in the UK, 300 in the US and 1200 in India.

      What this suggests is, there is a nationalist within every socialist. But you know that already.

  • blr_p  On August 26, 2009 at 10:53 pm

    Husain and Nasreen have been driven away by the nationalist and “secular” forces respectively, and Singh’s book has already been banned by India’s favorite chief minister. As far as the BJP is concerned, Vajpayee was the last person in the party who had an IQ that exceeded 100. Now that he’s retired, the sooner the party self destructs, the better.

    Funnily enough no ban here in BLR, a BJP state. Guess they have less to fear from his book, which i must say i am enjoying currently. The only state to ban in my knowledge is Gujarat and somehow ppl think thats worse that it actually is. The Gujju’s have not had legal alcohol since 1961, i think the enterprising ones will find a copy if they put their minds & wallets to it.

    My initial thought was not good to get a history lesson from a politican. Implication being that he will just be talking shop.

    But there seems to be an astounding amount of care put into this book which I believe is more a personal crusade, a burning desire to understand the WHY of it all, rather than idealogy. I cannot comprehend how a mere politican could conceive, let alone complete such a project. Then again, family split between the two countries must have been a sufficent itch to scratch.

    Jinnah, Patel, Gandhi, Nehru. Amongst these if you raise one you take away from the others as its a zero sum game. Nehru was right in going for a strong centrre as Patel over Jinnah’s looser federation.

    I can’t say more until i get though the remainder of his book.

    • Aristotle The Geek  On August 27, 2009 at 10:36 pm

      Needless to say, Patel was a Gujarati. That’s why Modi’s reaction. Over-reaction really. Akbar really nails it

      On April 21, 1947 Nehru said openly that those “who demanded Pakistan could have it”. He entered a caveat: provided they did not coerce others to join such a Pakistan, or indeed to set up separate Stans. Jinnah did his best to partition India further. Nehru and Patel saved India from anarchy by isolating a wound that would have infected the whole of India if it had not been cauterized and sutured. For this they deserve our deepest gratitude. By early May, Nehru was able, in private conversations with Mountbatten in Shimla, to defuse what he saw as nothing short of Balkanization of the subcontinent, the details of which are in my biography of Nehru.

      The anarchy that is Pakistan today would have visited India six decades ago. What ironic stupidity that a self-styled admirer of Patel should ban a book that describes how Patel and Nehru overcame, groping through complex imponderables and unimaginable horror, the greatest challenge in modern Indian history.

      # “Nehru was right in going for a strong centrre as Patel over Jinnah’s looser federation.”
      It depends on which angle you look at it from. We could have had a US style “union.” A strong center only allowed Nehru to implement bad ideas pilfered from the Soviet Union. As for the partition, its ancient history, and was almost certainly unavoidable.

  • blr_p  On August 26, 2009 at 11:31 pm

    He’s a professor at IIM-A. But then such views are not surprising, are they. They are along the same lines as those of Krugman, Stiglitz and Rodrik.

    Wonder what you think of Niall Ferguson then..he’s got a catfight going with Krugman :)

    http://business.timesonline.co.uk/tol/business/economics/article6806419.ece

    • Aristotle The Geek  On August 27, 2009 at 9:42 pm

      I haven’t followed him all that much (a few mentions on Cynicus Economicus’ blog) but he’s right about hyperinflation worries. The socialists—the three I named above, plus DeLong—are bad economists because they are socialists.

  • blr_p  On August 28, 2009 at 12:53 am

    It depends on which angle you look at it from. We could have had a US style “union.” A strong center only allowed Nehru to implement bad ideas pilfered from the Soviet Union.

    Looking at it from a presidential vs a parliamentary system pov. The former was adopted by our neighbour and only managed civilian rule for 12 out of 62 years.

    Yes a strong center at the time allowed bad ideas to spread throughout but it kept the place intact and preserved civilan rule in a vastly diverse country.

    One hopes the ideas nowadays are better compared to before so the same system should permit the opposite as well.

    • Aristotle The Geek  On August 28, 2009 at 11:29 pm

      We followed similar systems, Pakistan and India. The problem has always been leadership. Nehru lived for a long time, Jinnah died early, that seems to be the major difference between the two countries apart from the “depth” that Indian politics enjoyed.

      Given the crazy state of affairs in India (things are “better” than Pakistan, big deal) I don’t think our system and so called “unity” deserve much praise.

  • you12  On August 28, 2009 at 11:54 pm

    Given the crazy state of affairs in India (things are “better” than Pakistan, big deal) I don’t think our system and so called “unity” deserve much praise.

    Don’t think we are much better off than PAK. They have only recently started facing the problems of separatists. We’ve had them for almost infinity.

    Of course we are much better off but that is mainly in private lives and because of Private individuals. The political concept of India has had no positive influence. Call it my dark secret desire but I don’t think this concept is going to survive. Our linguistic differences are a bit too much.

    • Aristotle The Geek  On August 29, 2009 at 1:58 pm

      What is your opinion on what is generally referred to as “civilization,” a concept that subsumes politics, culture, language, religion, society, everything? And Indian civilization in particular? The answer to this debate lies there.

  • blr_p  On August 29, 2009 at 2:34 pm

    We followed similar systems, Pakistan and India.
    No, theirs is a semi-presidential system. The point i’m trying to make with ours wrt to stability is whenever a major difference occurs here that there is a tangible risk of a no confidence vote bringing down the govt, instantly.

    It does not happen there except at much lower levels even tho their system permits it. The most common way to change their govt. is for the military to move in.

    The problem has always been leadership. Nehru lived for a long time, Jinnah died early, that seems to be the major difference between the two countries apart from the “depth” that Indian politics enjoyed.

    Upto a point i can agree but what after that leader goes. The system has to contine functioning with others. Why is it only they having problems electing leaders that can help the country instead of loot it ?.. You can’t kick a president out until his term expires or the military moves in.

    Gandhi never intended for the INC to continue after independance, for him it was just a means to an end and was to be disbanded after. Nehru otoh had other ideas.

    This is not to say our sytem is perfect but it at leas t has survived. Which i’m asserting is due to the key decison taken to go with a strong centre instead of a federation. Personalities help here but can’t be the sole factor.

    Don’t think we are much better off than PAK. They have only recently started facing the problems of separatists. We’ve had them for almost infinity.

    A federation has helped them here. More autonomy in the provinces. So why their problems in the centre then, with making it all work ?

    All of our seperatist problems have been with states with external borders, Kashmir, Punjab & the 7 sisters, very difficult to stop infiltrations and pursue the perps. Mostly foreign instigated to exacerbate internal problems.

    I’ll admit however the naxalite issue tho strictly speaking, not seperatist is internal, one we need to address.

    Call it my dark secret desire but I don’t think this concept is going to survive. Our linguistic differences are a bit too much.

    We faced that hurdle in the 50s with the southern states. So they created the state boundaries on lingusitic lines. This was the key decison that held it together.

    How many states in the south want to secede now ?

  • you12  On September 1, 2009 at 9:31 pm

    What is your opinion on what is generally referred to as “civilization,” a concept that subsumes politics, culture, language, religion, society, everything? And Indian civilization in particular? The answer to this debate lies there.

    Indian culture and Indian politics are separate entities. Indian culture exists and has existed without the politics while the politics exists solely on its own and for its own purpose. the India that we talk about now is not even 100 yrs old.

    Society when you talk about it, we have similarities and large differences which can’t be held together unless we have a common language, and thats not gonna happen. Mother tongue is something that you listen to when you are an infant, that is a pretty big bond. I might rationalize away that bond for a hope of a better future but not if it doesn’t look promising, or when I have to choose between mother tongue and some other alien language I briefly learned in school.

    That brings us to the idea of nation. Surely you would agree that a primary purpose of a nation is to create a positive environment for its people and not to ask sacrifices for its own existence. What if one day the well offs gets tired of the country’s less than perfect environment? And the not so rich finally got tired of the broken promises and lost generations.
    Indian civilization has been existing for years, it will continue I have no doubt. But the new concept of
    a politically united India is facing some serious challenges. India and the ‘The Republic Of India’ are not the same. India consists of many things its plural, but ROI is singular, it tries to bind a lot of things together but it doesn’t promise a bright future for them. Alt least not according to the present conditions.

    We have hope but that hope is running out.

    blr_p,

    Living on life support is not really a proud existence. Sure we have existed and have been existing but have we justified it when majority of our people are unhappy with the concept? No one wants to secede now and those who do face the blunt instrument that is our military. But if we do hold up than it will purely be an exception.

    • Aristotle The Geek  On September 3, 2009 at 2:44 am

      # “we have similarities and large differences which can’t be held together unless we have a common language, and thats not gonna happen.”
      I don’t think that is necessary—a common language. Rand has a thesis about how languages influence society and culture. I don’t remember the exact details, but she too thought that countries like Belgium and Canada are somewhat worse off than, say, the US. The problem is not that of lack of a common language, but the imposition of a language, a “national” language, on others. What is important is the belief in a common, basic idea. If that exists, nothing else matters.

      Bijapurkar had an article in ET about it early this year, and Varshney this Sunday. I agree with their view on respecting diversity, when it is worthy of respect.

      # “That brings us to the idea of nation.”
      The Varshney piece I refer to above has this interesting part-

      In retrospect, it is clear that before the Congress party’s Gandhian plunge into mass politics, India, like Europe, was a civilization. It was not a nation. A civilization is a cultural construct; a nation means bringing the political and cultural boundaries together. During the British capture of Bengal in 1757, or even a century later, during the 1857 rebellion, there were no India-wide protests. India’s political sensibilities as a nation were simply yet to be born.

      However, India’s nation-building process differed markedly from the classic 19th-century European model. European nations flattened diversities. We now know that at the time of the French Revolution, only 10-12 % of France spoke French. Over the next 100 years, public schools and conscription armies turned “peasants into Frenchmen”. France simply did not allow diversities to flourish. Everyone came to speak French.

      Under Gandhi, India consciously embraced diversities. Even though Gandhi thought that Hindustani — a combination of Hindi and Urdu — might become India’s lingua franca, the idea that India would be a multilingual nation soon took control of his political thinking. And the notion of embracing diversities was quickly extended to religions and castes.

      Simply put, a “nation” is a dangerous idea. Invariably, it leads to a “nation State,” and the craziness of Bismarck, Hitler and other boundary-hungry, uniformity-loving tyrants. We should draw the line at society.

      Indian society however (and most other societies for that matter) is hardly built on any particular common premise. The only premise that is common is the color of the skin (ethnicity). The civilization does not have an underlying idea, a philosophy. Language, food, culture etc are mere side shows.

      No wonder riots keep breaking out all the time.

  • blr_p  On September 2, 2009 at 9:36 pm

    We have hope but that hope is running out.

    According to you…

    5 years from now will be better off than now ? (Y/N)

    ..in terms of general outlook.

    You will of course ask for whom to which my only reply is the vague term “the middle class” :)

    The rich never needed to care either way, but the poor benefitted indirectly if not more.

    would be good to know where in India you post from, i’m in bangalore

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