Monthly Archives: October 2012

Weightlessness revisited

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Somebody reminded me recently that a review of my very first book, [amazon_link id=”1900961113″ target=”_blank” ]The Weightless World [/amazon_link](pdf) (1997) had accused me of committing some faults of techno-utopian naivety in proposing how governments and all the rest of us might respond to the structural changes being driven by information technology and globalisation. It prompted me to be self-indulgent and have a look at the book for the first time in ages. (Here is a free pdf file if you want to look for yourself.)

[amazon_image id=”1900961113″ link=”true” target=”_blank” size=”medium” ]The Weightless World: Thriving in the Age of Insecurity[/amazon_image]

My verdict? That over-optimism on some issues is a fair charge. Like many other economists, I underestimated or ignored the changing character of the financial and corporate sector, the breakdown among the corporate elite of the social norms that sustain capitalism, and the increasing rent-seeking activity as the rich elite stacked regulations and tax systems ever more in their own favour.

On the other hand, I think it was pretty good going in 1996-97 to identify the way the technological changes would dramatically affect business, value chains and the demand for labour, and to say both the structure or delivery of government and the specific policies of governments needed to change in order to equip citizens for the new kinds of risk and uncertainty. I also think I was the first person to coin the description of ‘weightlessness’, inspired (if that’s the right word) by an Alan Greenspan speech.

Me in 1996, writing The Weightless World

Innovation – in English

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Yesterday I posted about an excellent book, Katherine Boo’s [amazon_link id=”1846274494″ target=”_blank” ]Behind The Beautiful Forevers[/amazon_link]. I found two new English words there, I think specifically Indian innovations. One was ‘overcity’ – the Mumbai where the rich and powerful live, in contrast to the slum where the book is set. The other ‘by-hearting’, the learning by rote of school work.

It reminded me of another magnificent word, ‘pre-poning’. This is the opposite of postpone. Instead of putting something off until later, you bring it forward. It was used by the Indian telecoms regulator in announcing that the deadline for submitting bids for a spectrum auction was going to be far earlier than most potential bidders had previously thought.

[amazon_image id=”1846274494″ link=”true” target=”_blank” size=”medium” ]Behind the Beautiful Forevers: Life, Death and Hope in a Mumbai Slum[/amazon_image]

Time to go and pre-pone my lunch….

No limit to markets in the slum

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Katherine Boo’s [amazon_link id=”1846274494″ target=”_blank” ]Behind the Beautiful Forevers: Life, Death and Hope in a Mumbai Slum[/amazon_link] is a wonderful read. It recounts a series of  dramatic events that occur in Annawadi, a slum next to Mumbai Airport, where she spent months meeting residents and observing their lives. Like all good reportage, it gives the reader a vivid impression of place, and Boo has a novelist’s ability to convey character. In fact, my one complaint about the book is that she uses the novelistic device of voicing the characters’ inner thoughts – for me, this undermined the authenticity of the detailed reporting of the physical conditions, the work, the danger, the smell and dirt and noise, and so forth. On the other hand, the focus on character makes it a very enjoyable book.

[amazon_image id=”1846274494″ link=”true” target=”_blank” size=”medium” ]Behind the Beautiful Forevers: Life, Death and Hope in a Mumbai Slum[/amazon_image]

The business at the centre of the tale is recycling rubbish, which also featured in the episode of Welcome to India I watched last week. I won’t spoil it by giving away the ‘plot’. However, I was particularly struck by the absolutely central role monetary transactions play in everyday life. It is a commonplace to say corruption helps trap countries like India in poverty. I suddenly realised that there is a vicious circle, because poverty also traps people in corruption. The sort of favours and kindnesses that people in my society wouldn’t dream of demanding payment for all require handing over cash in the slum. Money is so short that nobody will do something for nothing. Besides, there is a chain of transactions to sustain. Policemen are paid so little that they demand bribes, a slum entrepreneur needing to pay the bribe to keep the police from closing her business as it lacks a permit therefore has to ask for cash to help out a neighbour, and so on.

Anyway, it was thought-provoking to realise how monetised all these relationships were in the light of having read recently Michael Sandel’s [amazon_link id=”184614471X” target=”_blank” ]What Money Can’t Buy: The Moral Limits of Markets[/amazon_link]. Behind the Beautiful Forevers makes it brutally clear that these moral limits are income-contingent: a very poor community has far less scope for scruples than a wealthy western one with a social safety net.I think Sandel’s widely cited example of the immorality of paying people to hold your place in a queue would be met with simple bemusement in Annawadi.

Worth reading alongside this book: Sukhetu Mehta’s [amazon_link id=”0747259690″ target=”_blank” ]Maximum City: Bombay Lost and Found[/amazon_link]; [amazon_link id=”0199794642″ target=”_blank” ]Working Hard, Working Poor[/amazon_link] by Gary Fields; and [amazon_link id=”0691148198″ target=”_blank” ]Portfolios of the Poor[/amazon_link], which uses diaries to record how people with almost no money use what they have. There are some good background features on Katherine Boo like this one in The Daily Telegraph and this New Yorker video.

Annawadi

Where I work

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As a follow-up to the recent post, how I read, here is where I work – a couple of people have asked.

Writing station

 

Reading station

The book I have on the go is Katherine Boo’s [amazon_link id=”1846274494″ target=”_blank” ]Behind the Beautiful Forevers[/amazon_link], reportage from a Mumbai slum – completely brilliant so far. A review will follow.

[amazon_image id=”1846274494″ link=”true” target=”_blank” size=”medium” ]Behind the Beautiful Forevers: Life, Death and Hope in a Mumbai Slum[/amazon_image]

Are ideas catching?

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This interesting paper, Germs, Social Networks and Growth, uses a network model to explore the diffusion of technologies – ideas – in different kinds of society: an open, individualist one compared to a collectivist one with fewer external contacts. The authors, Alessandra Fogli and Laura Veldkamp, sum it up thus:

“Our theory for why some societies have growth-inhibiting social structures revolves around the idea that communicable diseases and technologies spread in similar ways – through human contact. We explore an evolutionary model, where some people favor local “collectivist” social networks and others do not. People who form collectives are friends with each others’ friends. The collective has fewer links with the rest of the community. This limited connectivity reduces the risk of an infection entering the collective, allowing the participants to live longer. But it also restricts the group’s exposure to new technologies. An individualist social network with fewer mutual friendships speeds the arrival of new technologies, which increases one’s expected economic success and favors reproductive success.”

What’s more, the type of society is endogenous:

“In countries where communicable diseases are inherently more prevalent,the high risk of infection for individualists makes the individualist trait die out. A collectivist social structure that inhibits the spread of disease and technology will emerge. In countries where communicable diseases are less prevalent, the collectivist types will be less economically and reproductively successful. Greater reproductive success of individualists causes the network to become fully individualist.”

They test the model using historical data on technology diffusion and epidemics, and find a strong link between individualism and productivity growth driven by technology adoption.

This work touches on a number of economic literatures: on technology diffusion; on social capital; on the effects of culture on growth; and on the role of institutions in development.  It’s a very interesting paper, and reminded me of two wonderful books. One is obviously Jard Diamond’s [amazon_link id=”0099302780″ target=”_blank” ]Guns, Germs and Steel[/amazon_link], although the argument is obviously a twist on Diamond’s case that European explorers took diseases into previously isolated populations. The other – for the metaphor of viral ideas – is Neal Stephenson’s brilliant novel [amazon_link id=”0241953189″ target=”_blank” ]Snow Crash[/amazon_link].

[amazon_image id=”0099302780″ link=”true” target=”_blank” size=”medium” ]Guns, Germs and Steel: A short history of everybody for the last 13,000 years[/amazon_image]

[amazon_image id=”0241953189″ link=”true” target=”_blank” size=”medium” ]Snow Crash[/amazon_image]