Facts From Mexico's Census

I have just encountered this dated article from the Economist website discussing the results of the official census in Mexico. Starting with the obvious, it assessed Mexico's population at 122 million people and reveals not only interesting changes in the demographic profile but also about household property ownership. A curious fact in the author's mind is the revelation that 93% of Mexican households own televisions while 82% own refrigerators. I am unsure what the ideal is but the point being made by the author that television shows in poor quality seems not to find support from households. To my mind, the goods are probably not substitutes and ownership may be related to price or the size of each household.

No census would be complete without a journalist pulling out data to contrast the ownership of mobile versus terrestrial lines. It emerges that in Mexico, the ratio is 66% to 25% in favour of mobile telephones. I find this even more interesting because in many countries, mobile telephones tend to be perfect substitutes for landlines that have historically been unavailable to low income people. Illiteracy among the youth is at less than 2% while it climbs to as much as one third for those above 75 years shows that the country has done well with expanding the reach of social programmes. Kudos too to corporations and governments for the fact that electricity connections are almost at the universal level.

Image from Wikipedia Commons

Fifa at The Crossroads

In general, I support private institutions that choose to organiza sporting activity based on agreed rules even if they attempt to consolidate across national boundaries. However, I have also come to the view that when a decision that could be reached through a market mechanism is reached by an alternative means, then it is difficult to preclude biases and corruption. Soccer fans have come to the stark realization that FIFA's methods have not only exposed its delegates and officials to possibility of inducement to corruption but that it is almost certain that its leadership at the regional and international level is corrupt.

Revelations here and here put it beyond doubt that the conspiracy has been blown and the evidence that this institution overlooked corruption is undeniable. No doubt FIFA will buy high-powered public relations  but that is looking at it the wrong way. This organization should take the simple mechanism of auctioning the rights to hosting events as a cleaner and more transparent method for assigning hosting rights for future World Cup tournaments.  

Dilemma of Diversity at Exclusive Colleges

David Leonhardt discusses the admission in the most exclusive colleges in the U.S. through the career of the outgoing president of Amherst college, Anthony Marx. In it, he makes the observation that capable students who come from lower income households are unable to make it into elite universities in the U.S. despite the claim by some colleges that the admissions processes are blind to financial capability of students.

One cannot disagree with Anthony Marx's approach to try and ensure that the admissions processes at Amherst capture a more diverse set of students based on their family income and circumstances. However, I think that many universities are altogether unable and unwilling to seek a wider body of students from low income families for the reasons that are obvious. For a private institution that thrives on endowments, it is clear that many would choose borderline students, provided their parents are capable of paying or have a legacy of attendance than a student who is probably the first to attend college from the family.

As a libertarian, I understand fully that some universities may trade away the idea of having a student body representative of the U.S. for the prize of a stable student set. It should be perfectly left to colleges to define the exclusive ideas that will drive their admissions. that Amherst has chosen to interpret its quest for diversity in a different way is its "niche". In my view, that colleges are beginning to define themselves in this way is altogether admirable and Amherst is commended for it.      

Brazilian Nannies Understand Supply and Demand

One of the most difficult and least convincing argument to make to laypeople is how markets determine who earns what income. And this is because for all the formal analysis that we can conduct using the tools of piece theory, it is difficult to explain it more clearly than the fact that scarcity is one of the reasons why ill-educated sportsmen earn more than some people with graduate degrees. A common response that one hears is that how come those who perform important tasks such as teachers, farmers in Africa and child carers are often not paid well in comparison to other people who perform "less essential" tasks .

Having read this article in the NYT, it occurred to me that the market is truly an amoral force and one that has little prejudice. My conclusion is that the situation illustrates how some of the nannies in Brazil are beginning to command proper middle-class wages. And this upward creep in the wages of specific nannies is on account of the additional skills that they have built which make them not only a scarce resource, but creates confidence that makes them able to successfully withdraw their labor and thereby determine its price. And in spite of the fear by a few of their clients that the services of nannies are becoming less affordable, I think that the new wage will lead to an influx of individuals seeking that improved wage. The result is that there will be an increase in supply that will moderate that wage. In my view, it is unlikely that the wages for the nannies making increased investment in their skills will rise as much as the market will be segmented with lower wages for those with the more abundant skills. In all, this is a modest illustration of markets at work.           

From Casual Muse to Podcast and An Invention

During my limited travel around a few countries, I have cursorily noted that a comparatively smaller proportion of the population in Africa and south Asia wear reading glasses. In the attempt to understand why, I consciously avoided the ready answer that limited incomes hinders the purchase of these gadgets in societies with a large number of poor people. My view was maintained by the fact that there is no reason to think that the same proportion of the population in every country should have problems with eyesight and thereby create a demand for reading glasses.

A couple of weeks ago, the Freakonomics Radio featured a show in which an argument was made that the scores of school children could be substantially raised by provision of reading glasses to children with poor eyesight. Still, I did not see that connection but I appreciated the fact that school performance could be raised through what is a non conventional approach. I have had to take back my thinking cap upon reading here of the invention by Prof. Josh Silver. As stated in the Guardian here, he has invented a cheaper and self-adjusting set of reading glasses that would be suitable for correcting eyesight in low income countries.

The simplicity of the gadget is clear and proves once again that one could improve the employment prospects and learning outcomes through the non conventional devices. And I find a perfect connection to my musing, a podcast and an invention So its really true that reading glasses make kids smarter.
  

Amazon's New Milestone

I have just seen this piece in the Daily Telegraph reporting that Amazon's e-book sales on the Kindle have surpassed printed titles. It is important not to stretch the meaning of this because it has just happened but it surely marks a new milestone. More importantly, publishers must now confront the new economics of digital books and preparation of marketing and pricing models are bound to change.

One also sees that the initiative is passing from the control of the publishers towards the book stores on the one hand and the readers. I am uncertain about what this interesting fact means for distribution but I am still upset that certain book titles are not released worldwide. Often the problem is that publishers have not worked out a way for universal release. It is difficult to imagine that with e-readers gaining widespread use, the printed books will regain dominance but one can still state the cliche that the printed book will still be here.   

NYT Tries to Nudge Readers

I am a member of a book club that reads books from which insights for business may be extracted. having been an active member for a full year now, one of the fascinating ideas is the degree to which the ideas that are used to run businesses are untested and sometimes completely wrong. In my view, many people who run successful businesses are also out of touch with the new ideas that are in the public domain such as Nudges, data-based experimentation and ideas such as predictive algorithms.

That said, I have just encountered an instance in which the NYT has used the idea of a Nudge in its new subscriber model for the paper. For close to two months now, the NYT has allowed readers a maximum of twenty free articles with the option of taking a subscription in order to continue to read. As a former subscriber to the early Time Select service which also tried a subscription model without success, I have been reluctant to sign up.

However, having had my access run out and found a warning, I noted that the notice suggest that I could take up an initial subscription of unlimited access for US$ 0.99, which would be followed by a subscription of US3.99 per week. One sees immediately that initial subscription is incredibly cheap and the price rises fourfold after the first month. Why? Its clear that the designers understand "Choice architecture" and the inertia that makes it unlikely that the subscription would be cancelled after the first four weeks. I would not call that genius but it shows an alertness that I find laudable.  

Schools and Education

I read Greg Mortenson's Stones to Schools less than a year ago and was impressed by the simple idea that building schools in remote parts of the world was a far effective development tool than many acknowledge. On my part, the theory offered by Greg that building schools in Afghanistan was a far more effective weapon for female child emancipation and longer term peace than the full-scale war that was the alternative, seemed plausible. I thought that while one cannot educate everyone to pacifism, this theory had some merit relative to available alternatives.

Annie Lowrie of the Slate Magazine has put forward this very incisive argument against that theory and one that goes beyond attacking the author. the argument goes that physical construction of schools is not the equivalent of providing an education and therefore the obsession with building schools is itself wrong-headed. The essence of this critique is that while donations are easier to marshal in the name of putting up structures, it is often the provision of education that is a far bigger challenge. Informed by randomized evaluations, the alternative seems to urge that construction should be replaced with payment of superior teachers, de-worming of school children and separating learners into classes that take account of ability.  

  

Competing Through Public Relations

In the quest to understand the nature of competition in technology markets, I have been following keenly a number of corporations including Google, Facebook, Apple, Microsoft and a couple of others. I am not writing any apers on this but trying to see for myself how technology transform markets, which in turn transforms technology. My not very insightful hunch is that the mechanism for that transformation is through the instrument of competition. This is because while Google and Facebook started with a different view to the services they provided, there's been an unintended convergence on audiences and space that they are now rightly seen as one another's competitor.

Coming back to competition, I have to state that I have been completely unimpressed with the approach taken by Facebook as described by Josh Halliday in the Guardian. Its easy to sit back and say that competition does not need to take place in such ways but one cannot help but be concerned that even corporations run by very intelligent people cannot save their time and concentrate on what they do best. And I am thinking that the same PR firm being involved in this game shows something about the firm more than its clients. Unfettered competition is really a public good.

  

What Do Brand Value Lists Show?

I have recently developed suspicion about the idea of brand identity and how the marketing professionals claim that even individuals can be branded. Added to that is the tired idea of rendering phenomenon most into lists with the top people, item or ideas. In spite of that, I have just read through this article in the Guardian claiming that Apple has overtaken Google as the most valuable brand. I wonder whether a list such as this is really useful save as a mechanism for the research company producing it to troop its own colours by generating a list that is supposed to look as if it understands well enough what brands are about.

Putting aside both the methodology and value of that list, I am struck by the fact that in the top ten are 9 corporations from the US. The only exception is China Mobile which bears the distinction of the world's largest mobile phone company by subscription numbers. I am unsure that many people outside Asia would be able to recognize the trade marks of China Mobile if they saw it. In addition to that, it strikes me as noteworthy that the leading corporations in that list are corporations in the cutting edge of technology, software, fast food, sugared beverages and tobacco.     

Is US$ 25 Million Enough to Catch a Terrorist?

While it is demonstrably true that the significant prizes money often leads solutions for policy questions, it has never occurred to me to question whether that is also true for law enforcement action. And with my stated bias most recently stated here towards prizes as a form of outsourcing solutions to business and public policy problems, I begun to think about why this confessed terror boss was not apprehended sooner. Is it possible that a US$ 25 million prize was an insufficient incentive for someone to cooperate with the US state Department?

Writing in Slate Magazine here, Annie Lowrie argues with herself on the same issue too by asking whether the US State Department will be giving out that money for any person who may have provided some information that enabled the planning and execution of that daring raid. As she concludes, there is a dearth of data available for independent testing of the hypothesis and yet officials claim that offering a bounty for fugitives works. Absent some public data and analysis, I am unsure that the US$ 25 million was the right amount because perhaps a fraction or a multiple of that amount would have gotten the same effect much sooner. Maybe so, maybe not.  

Untouchable: An Indian Classic

I was in the Indian City of New Delhi sometime last week for a formal meeting and because I arrived before the conference commenced, I made my way round the book stores on Janpath Road. I entered into a very small book store which had what I considered far too many workers for the size. While browsing from one side of the very small store to the other, I asked one of the attendants to point me to books that would teach something about India.  With minimum hesitation, he turned around to the opposite side of the store and grabbed the book that forms the title of my review here. He handed to me Untouchable by Mulk Raj Anand and added with confidence, "This is an Indian classic".

To start with, I have known for a while that India has a very highly developed publishing industry and has one of the lowest costs for publications among developing countries. Still, the degree of knowledge about titles that the store assistant showed is rare because I would certainly have left that store none the wiser if my attention had not been directed towards that book.

The book addresses the social and economic construction of stratification in Indian society in pre-independent India. In reading the book, I see the duality in the fight that this society faced in designated classes of people as untouchable and unclean. Contact with the low caste people known as sweepers would make one contaminated and require ritual baths to restore cleanliness. This novel is based on the life of the youthful Bakha whose family have been sweepers for time immemorial and who are condemned to living apart from higher caste Indians. Their isolation is aggravated by the fact that they have an exploitative relationship which requires the sweepers to take care of cleaning up toilets.

One cannot miss the contradiction that comes from the fact that the caste system in India as in other places, created bogus distinctions  that endured. At the same time that the priestly and warrior classes enjoyed superior status and avoided the contamination of sweepers, they depended greatly on these oppressed to accept their inferior station and thereby provide cheap labour for performance of the most unpleasant tasks in that society.

Bakha wonders through the day and is human in the fact that he gets hungry and angered, playful and serious and somehow wonders why his family must forever accept their inferior classification. He has three encounters that could provide a solution from three different people and the most convincing one for me is the technology solution. tThe author integrates history in this work of fiction by exploring the role of the Christian church, Gandhian philosophy and suggestions from educated Indians.  In an interesting twist, Bakha returns home in the evening convinced that Gandhi's call for Hindu compassion is part of the solution and wondering whether a flush system would complete lower caste emancipation.

For a book written in the 1930s, it describes from the eyes of an Indian, how injustice can endure when it is justified through religion and culture on the one hand together with an unmentioned but real economic basis.  It also reveals the quest for status that makes other lower caste groups such as washers and leather workers to act with derision towards the sweepers.  I recommend this reading for any person with an interest in the evolution of societies and to Llibertarians with interest in booting cultures that justify subjugation. Putting myself in the shoes (rare among sweepers) of Bakha, it may be debatable which was the more evil system between colonialism or the caste system. Just wondering!

Book cover Image from Amazon.com

Academics and Despots II

In musing about the significance of the series of political events in the Middle east and North Africa over the last few weeks, I posted a piece on an article by Dani Rodrik. And as the post states, it seemed that Dani Rodrik was the only prominent scholar that I had read who addressed himself to the difficult issue of what posture intellectuals should adopt in interaction with despotic regimes. Dani talks about a follow up interview here.

An intellectual from Egypt has now added a different voice to that debate. Nawaz El Saadawi writes with contemptuous regard for Egypt's elite. In the author's view, the intellectuals among Egypt's elite seem to know on which side their bread is buttered. As a consequence, they deploy their ability to communicate to a wide audience by applauding the young revolutionaries while also tacitly trying to prevent full trial of Mubarak. As the article states, they are not driven by the need to stop vengeance "per se", but are merely defending a regime that they have applauded for decades.

On my part, the advise is the same. Keep away from regimes that have no respect for life or dignity at a minimum. Any association with despots rarely turns out well. And I mention this with full knowledge that despots are often very determined for acclamation and the refusal of one academic merely means that there are twenty more who would gladly take that position. 

Luck Comes in Threes for Irish Bettor

Niall Smyth, a part time poker player has shown a remarkably lucky streak by taking small bets successively to convert an initial bet  of €10  into € 550,000. Needless to mention, the odds of betting on a horse race, then taking the prize into a qualifying game for an elite tournament before beating the filed of 614 poker players is very slim. As reported in this article by the Irish Times, this represents an interesting mix of luck and capability on the part of the player that a statistician would claim should happen very rarely. 

Turkey: Another Emerging Economy?

Following a visit three years ago, I have maintained an interest in Turkey's economic growth and political development. I have wondered often whether in spite of all their acclamation, each of the BRICs will of necessity have more successful outcomes than Turkey. From my own assessment then , Turkey had very good prospects for economic expansion on account of its geographical position, diversified economy and secular constitutional order. it is clear hat turkey's political development today is not necessarily guaranteed to result in a more open and stable political foundation on account of the changes in the constitution and an emerging intolerance for diverse views among the prime minister and his party's main adherents.

That aside, one must reckon with the fact that for a populous country, economic growth rates together with consumer demand have been quite impressive. Landon Thomas Jr. of the NYT reports here that there are early signs of excessive issuance of credit may be showing in the economy. Increased consumption of luxury items may be consistent with a rising middle class generated by growth and yet the easy terms of advancing credit may generate massive losses that could stagger that economy. I applaud the innovative ways through which the decisions on credit are made but the central laws of banking and lending remain the same. Banks must guard against issuing unsecured credit to individuals as no economy is immune form dangers of imprudent lending and expenditures.       

Academics and Despots

Few people today would listen to a conversation in which a defence of Libya's leader, Muammar Gaddaffi was offered. Instead, a good number of scholars and leaders both in and outside the continent of Africa have suffered serious embarrassment for their associations with that regime. What is clear is that in  a moment of crisis, the extreme despotism of Muammar Gaddafi and the intolerance of his sons has come fully to the fore. In spite of his record of ruthlessness and intolerance for dissent.

With that in mind, I find Dani Rodrik's frontal confrontation of this delicate matter totally impressive and sincere. As he says, there are moral ambiguities related to interaction in person or through emissaries of despots and leaders who have no meaningful democratic credentials.  And in spite of my full appreciation of the desire to do good that may inform the choice to offer professional advise to despots, one must draw the line where the said leader has previously exhibited unabashed contempt for human life and dignity. As a result, any scholar worth his salt should realize that more often than not, these despots seek  amity with high profile academics in order to create a favourable name as a person who is curious about ideas. And any leader who does not appreciate the central idea of personal freedom probably cannot appreciate many other which flow from that essential one. 

Heritage Health Using Prizes to Cut Costs

I believe that in spite of imperfect human thinking, there are simple devices that can be utilized to achieve a variety of business or public policy solutions. One of those that i would like to see used more often is the use of cash prizes to generate new ideas and solutions to problems. Years ago, Netflix put out a prize of US$ 1 million to provide an incentive to teams to assist it to improve by at least 10%, the predictive power of the algorithm that it uses to recommend movies to clients. This blog argued here and here that this approach was superior in many respects provided it was well designed. 

Slate Magazine's Annie Lowrie records how Heritage Health of the US has gone a notch higher by announcing a US$ 3 million prize for a predictive algorithm on identifying the likelihood of patients to seek hospitalization. It has released its data to registered teams to assist it to identify such patients with the intention to utilize that information to reduce costs. It is laudable that a growing number of private sector initiatives have began to use public competitions to provide solutions to business challenges.

 The main gap remains n the reluctance of the public sector to use similar methods. Instead, public sector approaches its recognized problems by inviting high powered research teams working in secret to deliver a document for implementation. In my view, the secrecy that surrounds government operations and interactions with consultancy firms in many countries is also responsible for the wastage of public resources. One advantage of the public competition method is that it payment is made against real results as opposed to firms that take their money in advance and does not share the risks for proposing a bad idea. 

Irrational Fear of Nuclear Energy

While it is true that the human being is a supremely intelligent creature, it is also clear that we make systematic and very basic errors in reasoning. More recently, the errors that one could point come from the radioactive leakage at the Fukushima Nuclear Plant following  the massive earthquake in Japan weeks ago. In addition to the many deaths that this event precipitated, it also led to the failure of safety systems for Japan's nuclear power plants with a couple of reactors suffering structural damage and causing radiation levels to rise above levels that are considered safe.  

One could easily have anticipated the flurry of activity around countries with nuclear energy plants about the levels of safety. To my mind, the damage caused to the reactors were on account of the intensity of the earth quake. In spite of the clear lesson about the fact that overall, the structures were fine save that an earthquake of that severity is of low probability, calls for a halt on all nuclear energy production work were heard from all over.  It is gratifying however that while this has been going on and those who support commercial development of nuclear energy have been on the defensive, some rare support has come from George Monbiot of the Guardian. 

That article by a convert is worthy of reading because it splits apart the claims of the anti-nuclear lobby at a time when the nuclear industry needed friends in influential media. Lobbies tend to be poor listeners but here s some good advise from a convert.  

Language As Economic Infrastructure

I was recently witness to a debate about which language will dominate commerce and scientific publication in the next century. This discussion arose from the fact that Chinese and Indian economies have grown substantially and are possessed of a large population that could insist on using alternatives to English in commerce and scientific endeavour.

In the talk above, Patricia Ryan, a teacher of English in one of the nations in the Persian Gulf presents an interesting view about the need to accommodate a variety of languages in interactions. Stopping short of saying that the dominance of English imposes costs on growth of knowledge from diverse sources, she argues convincingly that the mass of publications in English stifles the ability of other alternatives from arising. It is true that to equate intelligence or capability with the knowledge of English is not proper.

In her eloquently delivered talk, she mentions that a language goes extinct every two weeks and with this trend, humanity may find that the diversity of languages shrink from 6000 to 600 in short order.  I am unaware of the accuracy of her estimates and the certainty of her figures but her assertion leads to an interesting question. It is clear that there is an enormous advantage to approaching problems of science and communication through diverse languages. What I find interesting is whether there may be an optimal number of languages in the world. I ask this because the distribution of speakers across the 6000 languages would probably show a Power Law, with English spoken by a disproportionate number and other smaller languages spoken by a few hundred at the most. For that reason alone, it is an onerous task to try to interpret every available publication into each language.

Microsoft Complains of Antitrust Violations by Google

It is worthy of repetition that while I am a libertarian, I maintain that regulatory policy is sensible in the area of competition because it is demonstrably possible that a firm could depress welfare through anti-competitive behaviour. At the same time, I am aware that as George Stigler argued, the market is such a tough and dynamic place that most anti trust policy achieves very little that is positive. more importantly, it is clear that calculating corporations may incite or instigate anti-trust investigations against a competitor to defeat with a view to using government muscle to ensure that a competitor is restrained in legitimate market activity.

And perhaps one firm in the modern times that faced a multiple of claims that its behavior as a dominant firm was distorting markets outcomes was none other than Microsoft. indeed some people have made the claim, unconvincing in my view, that the very rise of Google was made possible due to the temporary distraction that Microsoft faced over a decade since its tribulations with competition authorities commenced. so the irony of this came to me starkly when I learned from this piece by Mark Sweeney in the Guardian that Microsoft is suing Google for violation of competition rules.

I have not had a chance to review any official documents in order to make some comments but I still think that as stated in that piece, this is very interesting. And yet, it is clear, with the benefit of hindsight, that it was predictable.I would like to see what the "pattern of actions" that Microsoft has identified constitute violations by Google.