Loafin around

Peeps..Apologize for the abrupt stoppage of blogs..I was traveling around and had no net access. I ll start the yada yada again over Sunday. In the meanwhile, as I am approaching a century of posts I want some feedback. Yagna has composed one for me and he goeth..

Since BN deftly evaded my angry retorts, some flame dumping on his blog in a lighter vein. :-). Please try answering the following:

1. Is BN's blog:
a) artificial, b) bourgeois, c) namedropping d) all the above and more. e)none
2. Is BN's blog:
a) a Simple bookmarking site, b) has more original, interesting content, c) more of a showoff than any orig content, d) simply echoes what many of us think. e) none.
3) Is BN's blog an evidence of:
a) his split personality - elitist at work, 'cheri payyan' in real, b)his vocab showoff/self flattering act, c) trying to emulate some veterans like rajesh jain etc.., d) mastery of a variety of things as in a budding successful person. e) none
4) Is BN's blog mainly:
a) for impressing his work friends, b) communicating with the larger desi reader base, c) a real effort to reach out to society, d) a simple effort to communicate with friends n others. e) none
5) Is BN's blog:
a) a humourous read, b) an occasionally interesting fare, c) pathetic, d) a work in progress. e) none.

Chunday

Sunday can very well be labeled as my 'China day' ( The Chinese might not like anything related to 'sun' though coz of their antagonism towards the 'Land of Rising Sun'). Other than the host of info about the history of China - the Civil war of 1949 where the commies backed by USSR defeated the US backed nationalists, the 1964 cultural revolution, Mao Zedong's Great Leap Forward, the current 4th generation of leadership etc. the ones that stood out were

1. The sleek Govt. website
2. Beijing Olympics
3. Three gorges project

Weekend special

I dug out an old email from Madhu that had a video clip on Barry Schwarz lecturing at Google. It is one for the ages, Watch this and you will thank me many times over

Medecins Sans Frontieres

I was wandering around in Chennai in 2005 when I got to meet soft spoken Ram through a common friend . He was doctoral student from Yale and was working with a HIV-AIDS treatment center in Chennai. We had a samosa, watched a movie and bid adieu. I generally have come to mistrust a lot of these Amru types coming to India for 'social work' from my experience with the tsunami rehab. Yeah they all come with a great heart, but they generally are snobbish and end up contributing very less.

After that I did not meet with Ram ( Ramnath Subbaraman) but heard very good things about that guy. May be I was wrong in stereotyping! Some months back, he wrote a piece about drug patenting issue that appeared in the centre page of the Hindu. And I said wow!

Last week he wrote this piece about medical tourism in 'Outlook' and I am saying wow wow!!

Greeny

I-Bankers in UK are getting greedy over green. Seems all prominent I-Banks are going to be in Carbon credits trading in a big way.

Vinodh Khosla has put a whale of money in lot of ‘green tech’ firms. VK has started his own VC in Khosla Ventures. Lot of gyan from there

Rent-a-car

The guest blogger of the day in Nayan Chakravarty. Nayan is a software engineer in Bhubaneswar and claims to be a regular reader of this blog :-). Madhu's post on the gym business aroused his curiosity and in the following piece wonders aloud about the rental car biz.

Anyone who has ever availed a car rental service in the United States, or elsewhere in the world, is requested to throw some light.

Once while driving an almost new, 1000mile driven GMC SUV on pacific highway #1 from SFO to LA, I was really curious regarding the profitability of the rental car business. Here I was driving this swanky vehicle, out of the stable hardly 2 months, a good $25K+ price tag - for just $50 a day. Assuming this vehicle would be out on rent 70% in a given calendar year which is 255 days, this would mean an inward cash flow of $12750. Two years to break even on the price of the car?? Plus additional expenses in maintaining the vehicle. I hear, after being driven for 2 years the car would typically be sold off as ppl don't prefer vehicles which have clocked long distances. May be this vehicle in question is sold off for say $12K. So, I actually make some money by selling off this vehicle after 2yrs. I would rather invest this money int he stock market. Any thoughts?

Note:- I am not considering the other associated cost of yard, staffing, other hauling expenses as I don't know if a large part of these and above mentioned expenses are covered by the additional insurance cover we pay for(or any other source of funding).

Media 2.0

The TIME magazine declared ‘you’ as the person of 2006. All the major news channels have stated some kind of ‘citizen journalist’ initiative. The new age media is getting more participatory with the citizens becoming both consumers and suppliers of information. The following picture (copyrighted to ‘We Media’) summarizes the paradigm shift in the game.

While that is on, Google is helping communities fight for the rights through it tools.

The power of the net to break the information arbitrage and consequently increasing the economic prosperity of the info-have-nots has been in the news. But I believe the true power lies in instances like the above where empowerment of societies takes place and oligopolistic set ups are razed. The world is flat!

Investing redux

There was too much in common to what Greenblatt says in his book to the following two articles.

Value research has something to say on the multitudes of mutual funds that are springing up and suggests ‘a minimalist approach to success’.

The very idea of a mutual fund makes sense only so that the individual investor does not have to figure out which companies to invest in. If the problem of choosing companies is to be replaced by that of figuring out whether a given bit of money should go into this exotic idea or that one, then nothing much has been achieved. This kind of investing doesn't help anyone except the salesman and the fund company. A portfolio of even twenty funds, each based on a different idea, is impossible to track and organise and in any case has no connection with what is needed to meet your own investment goals

A Gujju bhai is beating Warren Buffet in his own game! Mohnish Parbai has written a book titled ‘Dhando Investor’. He is also a ‘value investor’ inspired by Benjamin Graham (Let me see if I find it ‘serendipitously in my next visit to Landmark”)

There are two reasons the $116 million portfolio has done better than the competition in Omaha. One, says Pabrai, is that he doesn't try to emulate Berkshire's holdings in wholly owned subsidiaries. That has kept him out of property/casualty insurance, which accounts for a big part of Berkshire's revenue and had suffered some setbacks (such as claims from Sept. 11). The other is that he hews a little more closely to the kind of value investing espoused by Buffett's mentor, Benjamin Graham. Graham liked to buy companies for less than net current assets, meaning cash, inventory and receivables minus all obligations. Buffett has pushed the definition of intrinsic value in new directions. He is willing to pay for intangibles, like a consumer brand name or a newspaper monopoly, provided those assets throw off "owner's profits"--cash that can be extracted from a business after necessary capital outlays are paid for.

Life in DP shit

Dynamic programming (DP) is a class of multistage optimization problems. In each stage there will an input, a decision to make and an output that is passed on to the next stage. The objective (as defined by an objective function) is to come out with the best solution for the whole problem. A DP is solved is backwards, starting from the last stage finding the optimal solution for that stage, moving on to the next stage and solving the optimal solution for the two stages put together and so on. In that way you do not end up with series of optimal solutions for each stage but solve the problem holistically. Since it combines multiple stages such problems are called ‘combinatorial optimization problems’. E.g. of such a problem is the ‘knapsack problem’ which is widely used in the investment industry. The beauty of the solution scheme is that the whole problem need not be solved completely if the parameters modify slightly over the course since, each at stage multiple possibilities are analyzed.

You might have faced this self introspection of why you should work hard now. The answer would have been- “to be happy later”. Then there is this vexing question of – “why are you sacrificing your current happiness for future happiness?” If we can construct a dynamic program for life dividing it into multiple stages and coming to holistically optimal solutions (at each stage with the next stages combined together) there might be lasting happiness (agreed that the definition of the objective function as a lot to do with ur state of happiness or distress). There might be stage wise suboptimal solutions (i.e. u might have to freak out less and work a bit more) but the overall problem (maximizing happiness life) will have an optimal solution (everlasting happiness). And to top it all, the beauty of the DP is that it need not be solved completely again if the parameters are changed (there is the catch!!!!)! I guess civilization has someway got ‘dynamic programmed’. We all agree to work now for future happiness

Rambling on, the Zen thought dismisses the whole argument as rubbish (like many of the readers might already have :-)). It says the objective is to hit maximum happiness every moment. That is a bit too much. But I guess the luckiest people are the ones who have optimal happiness in each stage and all through the life

PS: Please don’t quit reading my blog! :-)

Prince

Niccolo Machievelli's 'Prince' is available for free download here. Though I would not recommend it for detailed reading u can glance up for some delightful quotes. The following is a sample

As men judge generally more by the eye than by the hand, because it belongs to everybody to see you, to few to come in touch with you. Every one sees what you appear to be, few really know what you are, and those few dare not oppose themselves to the opinion of the many, who have the majesty of the state to defend them;

God is not willing to do everything, and thus take away our free will and that share of glory which belongs to us.

And it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, then to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. Thus it happens that whenever those who are hostile have the opportunity to attack they do it like partisans, whilst the others defend lukewarmly, in such wise that the prince is endangered along with them.

That beats the market

Last week I read "The little book that beats the market". The title might look very cheesy but it was a very worthwhile read. Joel Greenblatt talks about a 'magic formula' for long term investing where instead of using traditional indicators for stock evaluations like expected ROA, P/E etc. he used 'EBIT/ (total working capital + total working assets)' to see if the company is good and 'EBIT/(total debt + total equity)' to see if the company is available at bargain price and beat the market by a fair margin.

The inspiration to buy the book was after reading Anand Sridharan's blog post (very good review with very good comments) several months ago and by serendipitous discovery of the book during my last 'Landmark visit'

So over the weekend I tried to pore over some data of Indian stocks. It just proved too cumbersome. I believe you have to be in the arena by the way of investing in mutual funds or sth to follow the market for at least an year so that you can internalize lot of learnings. Greenblatt advises us to go the mutual fund way though he feels that mutual funds invest in too many stocks and makes it difficult for the fund manger to be up to date with the research on all the firms. The trade off for time vs money where u loose some money by investing in mutual funds for want of having a peaceful life is something we have to make a decision on.

And I looked at my bank account, smiled and procrastinated my worry :-).

Amanpour

Christiane Amanpour- you would have seen her a thousand times without recognizing her. Standing in war-zones, amidst humanitarian crises and interviewing the reclusive leaders ,she had defied odds to bring news that otherwise would have been unheard of to the world. She was awarded the CBE last week. Look at her resume.Our own Barkha Dutt has to go some more distance isn't it?

Damsel in distress

The guest blogger of the day is Rasika. Rasika is a biotechnologist that masquerades as a consultant. And it so happens that she is my fiancé. The pretty girl is asking all of you folks for some advice (since she found it foolhardy to ask me :-) )

Be it a good practice or a not so good one, from my personal experience, I have found that many a times it is a lot more difficult to unlearn or undo an old habit than to acquire a new one.

Such is my habit of “early to bed and early to rise.” My mom always told me that I’d thank her one day when she would wake me up at five every morning, reading my thought bubble as I’d curse her with sealed lips and semi-sealed eyes. I would later think, that someday I even might, but as I hit my quarter-life crisis now and grapple to find my intellectual identity, that seems a distant possibility.

I see all my peers going to sleep late, catching up on a lot of reading and movies, and thanks to my oh-so-drilled-in-habit, I seem to miss out on a lot of it. All I do is go work, gym and yoga, and as much as I would like to give up one of those (Work is an obvious no-no) to squeeze in more time for other things, I just end up at a dead end. And I am unable to give up on yoga OR gymming either, due to my system’s great affinity for flab!

I often wonder how some people manage to have time to do everything and still get enough sleep and look fresh too. Stating the obvious, “time-management” is the buzz word here, but when I ask people how they manage it, they brush it off as a trivial question and ask me, “So, have you watched this movie, blah-blah-blah???” =(

My fiancé was sweet enough to put this rambling of mine up on his blog space, so I thought I’d use it to seek answers to this puzzling question of mine – “How do you guys do it all???” I would love to read your answers to this. Thanks!

Mistakes & Habits & Goals

The Guest blogger of the day is Krishna. Krishna is an IITian and runs his own non-profit consultancy in Chennai

As person who has made mistakes , who has repeated those mistakes and who has observed how this phenomenon evolves, wanted share the experiential knowledge with the rest of the world. I wrote this as i came out of one of the biggest depression/confusions in life!

Mistakes are mistakes and you can't keep worrying about them. One can think thousand times to avoid a mistake. But never dwell repenting on mistakes.Never ever go into loops of depression or disappointment. Immediately ask yourself "what can I do right now to alleviate the situation ". That is the most important thing when you are in deep shit. Keep repeating this question.

Repeated mistakes can become bad habits, which is very difficult to avoid worrying about. Worrying can never be the solution. Act at the face of the temptation to commit the mistake again. Remember that making a mistake for the 2nd time is the most difficult(because u know it now). After that it is increasingly easy to make the mistake/increasingly difficult to avoid it.

Habit: Always be careful what habits you are forming. Good and bad depends on the goal you have in life and it is only relative. Generally we are forced by community and media to think in a certain way, but believe me if you analyze thoroughly it invariably depends only on your goal in life.

For my goal good habits are good;because they help you not to worry about trivial things in life but about better things; of course its all the choices we make on what to worry about. Again, good habits are better for your goal i.e. that is what u want in life. So it becomes imperative to find that out!

Note:When u know it in your heart that its a mistake, increase your awareness- and that will make u more knowledgeable. Don't try to force and u will find yourself slowly becoming better if not perfect

Be Mine!

Rasika points me to this beautiful poem

BE MINE

Run with me in my perpetual haste
Meander with me in my devious course
Wander with me in my desperate search
Slalom with me through my discordant vacillation
Wade with me through my hopeless misery
Sink with me in my unrequited love
Spin with me in my eddying emotion
Cruise with me through my youthful fantasy
Flow with me in my surging spontaneity
Swim with me in my divine euphony
Float with me in my phantasmal heaven
Whirl with me in my fragile bubble
Fly with me as I escape reality

Guest blogger:Gyms & Cell fones

I welcome the guest blogger of the day, Madhu Krishnan. Madhu has a masters degree in engineering and works as a consultant in New Jeresy. Here he goes..

I was at Can-do fitness center earlier today, another lame (hopefully not!) attempt to improve my fitness!

My excitement over the olympic size swimming pool got me there, but i was completely fascinated by the intro. Can-do offers absolutely clean facilities, state of the art equipment, round the clock access, corporate rates (this is not a sale pitch - i don't work for can-do!) etc. but here's their USP:

Better than usual

- Olympic size swimming pool

- Swimming classes

- Yoga classes

- Martial arts classes

- Pilates

- Personal trainer

- Sports training (in case you want to strengthen quickness for tennis or endurance for running etc. )

- Special areas for stretching

- Koi spa.massage therapy etc.

Innovations

- Hair cut salon

- Laundry

- Day care center

- Cafe (Food and Drinks/Shakes)

- Shop with T-shirts/Gym gear/Nutritional items

- Lounges with a Flat screen TV and internet access

- Possibly a doctor on call

- Starbucks coffee!

- Birthday events

Guys, either I'm too naive abt the gym business or this is outrageous and rather analogous to the cell phone these days, what started out as a cell, now includes features such as internet access, text messaging, camera and video camera, credit card and wallet features! We all know that Barry Schwartz thinks utility vs # choices is a concave function, about too much choice, but this bundling into one strategy is startling!

Their advertising techniques are ok (corporate clients - ZS, BMS, others on college road etc.), although I did like their novel idea of arranging a dinner for all "singles" who signed up! I did ask them to put up a banner in Super fresh, cause I'm sure a # people live in Plainsboro, but don't necessarily work on College road/Princeton.

Population in Plainsboro is approx 20,000 and with NYSC and other gyms in residential facilities, I am not sure how many customers they'll be able to lure (but 3-4K shouldn't be that hard i guess - although that could very well be 30-40% of the adults in the area!).

I don't quite understand the economics, all the features are available for $100/month. They have 3 other gyms in NJ with an average demand of 3000 people/gym.

So that's approximately $3.6M per year/gym. If you include the initial enrollment fee of $300, that's another 900,000, for a total of $4.5M per year (this number will be a little less because they give corporate clients a break, and give $25 to referrals). I guess they'll make some money of the food/snacks as well.

The capacity is approx 76,000 sq feet (so at an avg cost of $400/sq-ft) this comes to an investment of approx $30M. Salary alone is approx $1.92M ($20/hour for 50 employees = $1.92M), add to this maintenance cost (pool, equipment etc.), advertising, when will these guys break-even? Am I missing something here? How is this a viable business opportunity?

As always your thoughts are more than welcome.

Thank you,

Madhu

Various

In Africa mobile phone minutes are used as currency

Does capitalism lead to democracy?

Riseth Manufacturing!

Be my guest!

Hey folks,
I crossed 75 blog posts yesterday and it is a pretty interesting milestone to cross( I guess :-) ). To celebrate that, I call up on all of you guys to be my guest blogger. Since my blog roll is not theme based you can offer to write on any darn thing. Though I would not talk about quality standards all I would like to say if u want to use the space is - "Try to keep the post interesting".

This offer would make a lot of sense for folks who don't want to maintain a blog-space of their own but would be keen to write something once in a while. Please email me with your post at banu.nagarajan@gmail.com

The spirit of the blog (I repeat) is well captured by the following quote Dr. Gawande's quote

...The main idea is that by writing something you are putting a small observation out into the world, an idea perhaps. Not just writing it for yourself, but trying to put it in front of at least a few people you make yourself a member of that larger community. You open yourself to think through what you are saying and hear what others have to say about it. That is really fundamentally important....

I got the idea in response to a blog reader passing me on this fantastic article from Knowledge@Wharton that echoed on my earlier post( Connecting the dots). Thanks Madhu!

Cricket coaches and Corporate consultants

Haha! The clowns in BCCI ended up with feet in the mouths after Graham Ford mooned them away! It was the height of unprofessionalism and misplaced arrogance. Let us not get into that denigrating story.

Ian Chappell had something interesting to say , in his own inimitable tongue in cheek style that the Indians must kidding themselves if they thought they are going to rock the world if they hired a good coach. He dissects the organizational issues in a cricket team and points to the fact that - if u r looking for leadership it should come from the captain.

The coach and the support staff are just ' consultants' (both 'supposedly' have enviable pay packets. :-)). The team is the company, the captain -the CEO, the board -the BCCI, the stupid public- the customers (that are reeling under monopoly). The coach's job is to find out the gaps in the organization and the performance and advise solutions. Like the corporate consultants that look the various aspects of a company, he can look at skills gap (HR), the way the game is played (Ops), overall game-plan (strategy), use of technology (IT) etc. At the end of the day it the company's job to execute and take care of the bottom line; so it is for the cricket team. Blaming the coach for losses would be plain stupid then.

The problem arises when the above arrangement is disturbed and the 'consultant' tries to be the CEO e.g Greg Chappell. It undermines the captain's authority and distorts individual roles and goals. Have you seen John Buchanan trying to usurp Ponting? Also good consultants shut up after the job is done. Client information is kept confidential. On the contrary,Greg C is a loud mouth that leaked news to the press

A firm hires consultants based on the problems they face; based on the kind of advise they need. Verizon does not hire Mckinsey to fix their IT systems; neither does American Express hire TCS for determining their pricing strategy. (Even within at TCS or Infosys, Mckinsey or Deloitte decisions are there). The core competencies should be respected. So it is foolhardy for BCCI to have even approached John Buchanan after Greg C left! The best coach for the current Indian team would be some 'hard core techie with sound operational and good communication skills and (not to the press) with a sense of humor'( John Wright types). That would be a good ex cricketer who says more than ' the boys should enjoy the game' ( Kapil Dev). Whatmore, Moody, Shastri would be my top three choices. (Sunny G and Greg C are ex-CEOs who cant be mere consultants.)

Another fact is that consultants are hired to give fresh perspectives on things; it is not that the firm that hires is full of feather brained nincompoops ( though young consultants feel so :-) ). That is amply vindicated if u read how US baseball coach Mike Young caused mini revolutions with his observations on fielding techniques with the Aussie team.

In conclusion the suggestions for BCCI would be pick horses for the courses and quit being egomaniacs that end up puking on themselves ( Well well, we are asking donkeys who should no be there in the first places to pick horses!! Let us wish ourselves some luck. )

Indiscipline

Crib time! I am at the peak of indiscipline these days. I am not sure where my after-the-office hours go. Apart from 7 hours of sleep, 10 hours at work ( including the prep etc), 1 hour in misc stuff, 1 hr of catching up with friends, I am really not sure where my hours are going. One thing is that I don't waste time ( like lying down, taking rest etc.). I do read a lot from a variety of stuff but if I look back at the last month it is all a blur.

I think I have to do one of the following for the short term

1. Quit reading and start doing something
   
2. Get some focus into the reading.
   
3. Do some good extra curricular activity
   

I think the first thing to start with is focus on consciously hitting the sack at 12:00 and getting up at 7:00 and shut down the computer at the first opportunity. Let me see how these go. Wish me luck!

Cricinfo

ESPN buying Cricinfo is yet another piece of consolidation in the media world sprawling across multiple spectrum. The cricinfo team seemed to be a bunch of cool cricket freaks who loved their jobs. Look at this.

JK on Freedom

I typed a really long email to my buddies on making the choice of getting married. I thought of copy-pasting it but for some reason decided against it. In the email I had to refer to JK on freedom. That got me searching for the exact quote.

Freedom is not a reaction; freedom is not a choice. It is man's pretense that because he has choice he is free. Freedom is pure observation without direction, without fear of punishment and reward. Freedom is without motive; freedom is not at the end of the evolution of man but lies in the first step of his existence. In observation one begins to discover the lack of freedom. Freedom is found in the choiceless awareness of our daily existence and activity. Thought is time. Thought is born of experience and knowledge which are inseparable from time and the past. Time is the psychological enemy of man. Our action is based on knowledge and therefore time, so man is always a slave to the past. Thought is ever-limited and so we live in constant conflict and struggle. There is no psychological evolution.

When man becomes aware of the movement of his own thoughts he will see the division between the thinker and thought, the observer and the observed, the experiencer and the experience. He will discover that this division is an illusion. Then only is there pure observation which is insight without any shadow of the past or of time. This timeless insight brings about a deep radical mutation in the mind.

Total negation is the essence of the positive. When there is negation of all those things that thought has brought about psychologically, only then is there love, which is compassion and intelligence.

Farm biz

Agri business excites me very much. And fortunately it is predicted to be BIG in the coming years. It has every ramifications in many things and will excite folks with any of the following interests- agriculture, business, supply chain mgmt, macroeconomics, pro-poor, politics and too many, I am sure, which are not on top of my head. Throw in ICT4D and micro-finance u get a heady mix!

The following three gives excellent perspectives

1. Value culture for agriculture (subscription required, free though)
   
2. Sustainable Food Lab
3. MS Swaminathan interview

Thus spake Bill

Bill Gates spoke at Harvard commencement. (Hat tip: Madhu). Some gems...

But humanity's greatest advances are not in its discoveries - but in how those discoveries are applied to reduce inequity.

"From those to whom much is given, much is expected."

Don’t let complexity stop you. Be activists. Take on the big inequities. It will be one of the great experiences of your lives"

I hope you will judge yourselves not on your professional accomplishments alone, but also on how well you have addressed the world's deepest inequities ... on how well you treated people a world away who have nothing in common with you but their humanity.

Connecting the dots

--I was reading a bit of Charlie Munger's speeches(go to the bottom) between watching Justine Henin's inspiring victory at the French Open. It was a delight to read stuff of somebody that is erudite and at the same time talks with robust commonsense. He emphasizes on being multi faceted and learning from myriad fields ( art, psychology, biology, physics etc) to be successful. (After all we made those differentiations in the knowledge!)

--I read this awesome presentation that calls up on the 'left brain' traits (analytical, logical, linear etc. and 'right brain' traits ( emotional, intuitive etc.) coming together for a successful brand.
--'Fast Company' had the new age "Brand You" that I read sometime ago.

--There is an Indian obsession with being good in mathematics. Being good in any other thing than being a good bean counter is always relegated to the lower echelons. Any Tam mom will emphasize how u need to get 'centum in max'. And the US President is echoing the tam mom sentiment in his programs to improve American kids in math and science

--Also consider what Taleb had to say in the following

Whenever you hear a snotty European presenting his stereotypes about Americans, he will often describe them as "unintellectual," "uneducated," and "poor in math," because, unlike European schooling, American education is not based on equation drills and memorization.

Yet the person making these statements will likely be addicted to his i-Pod, wearing a T-shirt and blue jeans, and using Microsoft Word to jot down his "cultural" statements on his Intel-based PC, with some Google searches on the Internet here and there interrupting his composition. If old enough, he might also be using Viagra.

Connecting all the dots, I believe that the leaders ( branded people) of the future are going to have to use 'all of their' brains - have a good dose IQ and EQ in the' lattice work'. In HBS there already classes about Arts, Meditation etc. aimed at making holistic thinkers of their students

It is going to be a while before Indians are going to appreciate somebody that is multi-faceted rather than being focussed on one thing. And 'art' and creative stuff will get its due as we become more prosperous (as it was in the days of kings!)

Soul stirring

When Rahman croons soulfully to Javed Akthar's

मिट्टी की हैं जो खुशबू, तू कैसे भूलाएगा
तू चाहे कही जाए, तू लौट के आएगा
नई नई राहोंमें, दबी दबी आहोंमें
खोए खोए दिल से तेरे, कोई ये कहेगा
ये जो देस हैं तेरा, स्वदेस हैं तेरा,तुझे हैं पुकारा

it stirs you, isn't it; especially if u are/were an expat?

Shameful? Shameless? Both??

Shameful! Thats how the media has put the Gujjar violence. Shameless! That is how I would call it. At the core of it is a community wanting to degrade itself and want it to be classified as ST so as to enjoy the associated goodies like easy education seats, easy jobs etc. etc.

Before I start off let me say that I am 'pro-reservation' given that the process is done in the right way. I morally stand by the folks rendered unprivileged due to our complex past and strongly believe that concessions should be given to make the society egalitarian. But I am of the opinion that the reservation and the ensuing benefits should be tracked not only to remove the communities from the 'protected list' on a periodic basis based on the 'improvements'( and move towards to full blown meritocracy) but also to study the success of the policy as an instrument of change(Tamil Nadu acts as case point). For that to happen the reservation decisions should be made based on the latest data (not based on census of 1931 as some claim) and the parameters other than caste based on which reservations are made should be explored. The sole aim should to empower the underprivileged. Reservation is huge issue and I do not want to go-on on that more than giving a background for the issue that I am going to deliberate.

Also, I believe that there exists a a tacit moral compact that the communities would endeavor to take advantage of the concessions move up the ladder, agree to the spirit of the reservations and get out of the list in due course of time (either volunteer for that or accept the Govt.'s dictum). In the 'affirmative action' policies in the US, that pro-reservationists often refer to, such a compact it seems is agreed in spirit. ( The beauty about it is the positive spin that is put on reservations. Diversity is the buzzword and the organizations and people from other communities also welcome it understanding the benefits of the learning from diverse backgrounds). When the University of Michigan issue came for arguments there were African-American leaders who came out against policies that were supposed to give significant advantages to the African-American kids!

Why the fuck is it not happening in India? Are we moral lepers? Why would somebody want to remain undignified in the pits? Why do communities not think about reservations as a short term vaccinations rather than as permanent free lunches? Why would not there be a sense of patriotism among the community leaders that should see some one else losing because they are given the advantage? Who are to blame - the stupid policy makers, the community leaders, the politicians or the easy one, the history?

Is education of the community on these issue the panacea(don't tell me thats what u r trying to do by giving reservations)? Would not the leaders(esp the bastard politician that plays the caste card) know the above? Or will avarice still hold men (politicians and community leaders) and divide the country and promote violence like the one happening right now?

I know the solution to such a problem will be tough. May be as we grow and supply side constraints are removed , there will be abundance of jobs and education seats. When that happens may be sanity will be restored, may be! This once again shows that economics will not operate(The Tourism industry lost Rs70 crores;Rs. 700 crores of public property damaged! To put it in perspective the JNNURM program allocates approximately that much money per city!) in social vacuum and vice versa(no growth, no jobs, more violence). While I advise the readers to have faith in the country(at least in the economy!), I would empathize if u are super pissed off as I am right now as you see proud Gujjar youth brandishing guns before the media!

User charges revisited

I read the following in ET. Very relevant to my past post on 'user charges'. I am reproducing the whole text


It pays to deliver water
Economic Times, MAY 24

The ongoing comparisons between rapidly developing China and India are usually focused on themes like comparative political systems, GDP growth rates, infrastructure development, etc. One of the lesser-discussed areas of concern, however, is that of rural development. Increasing the rural poor’s access to safe drinking water is one of the main pillars of the rural development strategy of both China and India, but there is a significant difference in the two countries’ approach in terms of how to achieve this objective.

In India, despite recent sector reforms, rural water supply (RWS) is almost totally subsidised, whether delivered through state government agencies or gram panchayats. Since public resources are limited at central, state and local levels, financing of RWS schemes becomes a problem. In China, on the other hand, the emphasis is on financial self-sustainability of RWS, with negligible central and provincial subsidies to the sector.

The end-users, typically low-income rural households, are encouraged to pay for the water they consume.

The rural utility model in China works well for the delivery of piped water supply. Essentially, this model adopts the same approach as that of an urban water utility: it charges for services delivered in its network area. Typically, a small rural water utility (known as a water plant in China) will supply piped water to rural households in anywhere from 6 to 12 villages. Household connections are metered and each family has to pay a monthly water fee depending on the amount of water consumed. The tariff calculation is comprehensive and includes the cost of electricity, salaries, water source fee, depreciation, interest on debt, overheads and tax.

The number of water plant staff is kept to a minimum, with a typical unit having one manager and five or six other employees. While the plant manager is usually seconded from a local government department, the other workers are usually hired on a contract basis with their salaries linked to performance. For example, if the bill collectors do not fully recover the monthly water dues from their respective zones, they get a cut in salary. The same principle applies to the plant manager, who is rewarded or punished depending on his performance. All the staff members, therefore, have a strong incentive to perform.

One key question which arises, from a consumer’s point of view, concerns the water tariff. How affordable is it for the low income farmer? Typically, individual households pay about 2 yuan (1 yuan is about Rs 6) per cubic meter and consume on average three cubic metres a month, so a household ends up paying about 6 yuan (Rs 36) per month. This works out to roughly 3% to 5% of their annual income. It is generally accepted that spending of up to 5% of annual income for drinking water is affordable, even for low income families. It should be noted that, in addition to paying water fees, which finances the operation and maintenance of the water plant, the users also contribute labour for the construction of the water supply scheme and usually also pay a fee for taking a house connection.

Oversight of the functioning of the water plant is done by the local government, at the township or county level. The local government is accountable to the provincial government through the municipal administration for the performance of all the water plants in its jurisdiction. The local government is also responsible for repaying any loan made to it for constructing the water supply scheme from the provincial government, which in turn may have borrowed funds through the central government from external support agencies like the World Bank.

If loan repayments are delayed at the county level, the provincial government can cut other funds sent down to the counties. Similarly, if the provincial government defaults on repayments to the central government, it could get a corresponding cut in funds from the centre. This tight system of monitoring and enforcing repayments from bottom to top ensures a “cascade of accountability” all the way from the centre to province to the local level.

One drawback of the rural utility model is that there is limited user involvement or community empowerment in the water supply schemes. In many new generation RWS projects in other developing countries, including India, the user communities or gram panchayats play a significant role in planning, implementation and operation of the RWS schemes. In the Chinese RWS programme, where the users are financing a significant proportion of the capital cost as well as the full operating cost, it is somewhat anomalous that they have relatively little say in the planning, implementation and operation of the schemes.

It has to be admitted, however, that the Chinese model successfully addresses a major issue we are grappling with in India: mustering political will to charge for basic services like drinking water. Research around the world has shown that users, even low income ones, are willing to pay for safe water but policy makers are unwilling to charge for it, usually for political reasons. So how are the Chinese successful at charging rural households for water supply?

There are three possible explanations: (i) Chinese politicians and policy makers genuinely believe that water is an economic good and are “willing to charge” for piped water supply; (ii) Chinese politicians are not required to seek a direct, popular vote and it is, therefore, easier to take “unpopular” decisions like charging for water in rural areas; and (iii) unlike countries like India, China has historically not heavily subsidised rural water supply, so having never been “spoiled” by subsidies in the past, rural communities are willing to pay for safe water. The answer probably lies in a combination of these three explanations.

What do these lessons mean for India? A large proportion of India’s villages could probably be served with piped water using the Chinese model. Local governments at Zila and Taluka level could set up rural utilities and oversee and regulate the functioning of water plants. On the issue of rural households paying water tariffs, studies have shown that rural households are already paying significant “coping costs” for drinking water, either through the opportunity cost of fetching it from long distances or buying water from tankers.

With increasing incomes, most rural households will probably prefer to pay an affordable price for a reliable supply of piped water. Indian policy makers, who have made it a priority to rapidly expand drinking water coverage in rural areas, could learn some useful lessons from the Chinese model.

Parameswaran Iyer
(The author is a civil servant. Views are personal)

Reality interface - machines and men

It delighted all of the ICT enthusiasts when IHT published an article some months ago, which spoke about how with the use of GPS and cell phone one can point a historical monument and one can get info about it instantly. Reality interface is the holy grail in ICT these days. Well such a technology can take a bit of time to become pervasive I am wondering if we are using the current technology-reality link with human interface to its maximum potential. By human interface what I mean is, u type sth in Google it returns back with info. The technology is Google and u r the human, though ur dad may have second thoughts on that. For example assume u r traveling in the bus 12B in Chennai from Vadapazhani to Mylapore. ( I give a damn if u miss it my a minute and get Simran instead of Jothika :-)). There can be an ad display board or even a TV to display ads relevant to each place the bus passes through. e.g there might be a 'Mambalam Mosquitoes' game in the area, a theology seminar in Mylapore, special lunch offer in GRT, Trisha appearing to open a gym in RA Puram etc. ( I already know ur choice :-))..The conductor can act as the interface by pressing the remote button. (The Preity Zinta - BSNL ad shd go..Dude, she might me hot but she cant be every damn where)

Alrite how about we-the people? How is our own reality interface? Are you able to relate the macro stuff, that u read in the economics text books, in engineering classes, in news paper artciles with what you see in reality? Does the cell phone help the farmer in Koovathur? Do the WTO rules affect the fishermen in Kovalam? I think lot of of our economists (esp the self proclaimed god-children of Milton Freidman) sadly do not have the interconnect; the reality interface is blurred. The empirical and experiential knowledge is put to the back burner. They rely on half-baked text book knowledge of 'efficiency' which they can define well but is misdirected. (I once spoke with a bizzare guy who said we can bomb the most populous places in the country, so that you can redistribute wealth among a fewer people and thereby abolish poverty. Efficient, isn't it?). To finish the piece on a better note I remember the times of my internships in my engineering days where I was scared of the machines. You always had the bad feeling that u might be wrong about these strange things. That I guess is because the reality-interface was missing in me and my bookish knowledge( how deep is that is an unacceptable question :-)).

Teach macroeconomics in the farmland and engineering in the factory!

Era of sophistication

I was revising my Operations Research last weekend keeping it at the saner plane without getting into the 'bit complexity of the simplex method'.( Oh boy those days! This guy used walk into the class room with a piece of chalk and hold us in awe though we understood only a bit). There are the straight forward LPs, transportation problems, resource allocation problems, critical path problems...I can go on. I wondered why the heck are we not hearing more of these in decision making in organizations? Especially in strategy consulting where the client is billed to provide advise on 'an objective function' , taking into account the 'constraints'.

Strategy consulting is driven by fundas like - smart people, fresh perspectives, holistic thinking etc. The clients these days are asking for 'models' which have been executed before. This I guess in the first step towards moving into the more sophisticated world of using optimization techniques in solving client's problems. Also this would move the consulting business up the value chain and assuage doubts on the utility of consultants especially in the corporate world. (No where am I getting into the cliched man vs machine argument, saying that these techniques are going to replace human thought. These can be used to aid them, removing certain biases in decision making that humans might be prone to)

Also with the increasing pervasiveness of communication technology and the need for making sensible business decisions, not just in the Fortune 500, there is going to be a 'democratization of high fundas' ( wow! :-) ). More firms might demand scientific and objective solutions to problems. There will be a premium (how much will that become?) to be paid for high level thinking ( and knowledge of techniques) in the midst of the information over load. The consulting bosses would continue telling their new recruits -"You are getting paid for ur insights (urs and ur LPs') not for data! "

தமிழ் ராக்ஸ்

வசந்தங்கள் வாழ்தும்பொழுது உனது கிளையில் பூவானேன்
இலையுதிர் காலம் முழுதும் மகி்ழிந்து உனக்கு வேர் ஆனேன்

Thats for my fiance! :-)

Introspection

When you read stuff like this, you really wonder whether you make-do the best with what you have. More than talk it is time for some honest introspection.

Connecting rod

The crank and piston always get the cake. Damn always! There is always less to talk about the connecting rod, unless u r doing the 'acceleration diagram' of the damn thing which usually appears in the first few chapters of the 'Theory of machines". ( Also further in this super arbit piece, I am going to refer the hallowed rod, I mean the connecting rod, as C-Rod. And C-Rod is certainly not the second brother of New York Yankees' home run hitting sob, A-Rod ..he he )

Anyways, I feel that other than transferring motion of one kind to another ( in the engine it is the translation motion of the piston to the rotary motion of the crank; and vice-versa in other not so famous engineering applications) the C-Rod always had some mystique about it. Technically speaking every bit of the C-Rod is going through both the rotary motion and the translational motion, which if looked at a philosophical point of view are two entirely different kinds of existense in motion. And it totally remains relevant to the system! In fact so relevant that the two different kinds of motions are given their identities and utility through the connecting rod though it own motion does not technically have its own definition. It traverses the realm of mystery. Though it an engineering application its other manifestations lie in the artsy and philosophical world which is beyond science! Ufff!! See what I am getting into?

And C-Rod does not do it at no cost. It is one heck of piece of metal that u hafta design. Though I was not very successful in Machine Design, I had it is me to understand the difficulty of designing it-taking into the consideration the weird motion it goes through and the stresses and strains that come with those.

Anyways what am getting into is, whether we are/we can be the C-Rod kind of personalities? Can we have our philosophies and value systems that are a kind of a blend between entirely different schools of thought and still be relevant? Can you be a communist-capitalist, christian-zen Buddhist, emotional-rational, yin-yang, (whatever that is :-) ) etc.?
The answer is yes. We can be those and we can be relevant too. That will be a tough ask like desiging a connecting-rod is tough! (In 'The Argumentative Indian' Amartya Sen says that there are multiple identities in us. Though he refers to identities in differnt domains like e.g. Indian-Jew-Tamil Speaking-junkie-animal lover etc.)

And these personalities that are able to assimilate conflicting schools of thoughts, are able to build consensus and are able to add considerable value to the society (motion system) and keep it going ( like the engine) are going to be the leaders of the 21st century!Say Amen?!

Of power strutures: past, present and future

At some point in time when man was a hunter gatherer he realized the need for congregation and the seeds of origins of 'society' were thus shown. For the perceived benefits, the men agreed to a common code of conduct espousing some traits and giving up some. Then the enforcers of conduct and administrators slowly evolved. Over the course of history this kind of centralization kept building up into a tree like structure, giving rise to the 'governments' at different levels. With the discovery of new lands and new 'societies' in new lands boundaries of all sorts were created. Finally the current structure came to being where there are nation states and the 'tree of government' branches out from the Central Govt, State Govt, Local Bodies etc. Even now the centralization is not complete since there is no 'world body' of Government.

As the process of centralization continued, a few of the 'enforcers of conducts' got to enact new laws that affected the whole of population under that Government's domain. Beneficial or not questions arose about the legitimacy of such laws where enforcer had little knowledge on areas and and on the people in the far flung areas falling under the purview of the Govt. Basically somebody questioned the whole process of centralization. It should be noted that during the process the Governments at the lower levels did not disappear. They continued to exist under a 'federal' structure

In the Indian context such a wisdom was given a legal stamp by the 74th amendment to the constitution calling for more devolution of powers to the local bodies, basically reversing the evolution of governing structures that seemed to move northwards. Also in the modern times the individual feels too constrained by the common codes of conduct and questions the cost-benefit equation.

So the question is are we at a point of inflection? Is the process of centralization reversed for over going downwards to local bodies, communities and individuals or is in the era of globalization we are going to see a 'world Government'? How would be the power structures?

In my opinion the keywords would be 'Individualism' and 'Globalization' and the inter play between them. As globalization grows into full bloom and becomes complete with the free movement of labor across the current nation states, the individual who is free to travel wherever he chooses to, will lose his identity as somebody belonging to a certain nation, state, area etc. ( We can already see signs of it like Indians in the US, Tamils in Mumbai etc.. at a lower level) and will feel as a individual in his own right.( Much to the chagrin of one of my blog readers, Arundhati Roy once declared herself as a republic with no flag and no land). So globalization will promote individualism. As it happens and man traverses the globe the common issues ( like Global warming etc.) would necessitate the forming of an universal 'code enforcer' in the form of a 'world Government'( UN might be the front runner).

So how will be the power structure with the world body and a billions of individuals? It might be more like how privatization is handled now. Devolve powers to the lower rungs and regulate!

PS1:Optimal size: As I finished writing the above, I wondered if it will come the levels of individuals or will there be an 'optimal batch sized' society

PS2:There might not be a Kashmir issue then! Yippe!!

PS3: I have waved my hand very wildly and numerous epoch making events at the micro and macro levels have not been considered. Even I feel the thoughts might be a bit too arbit. :-)

Shameless

I chanced to visit Scott Adam's blog after seeing " Dilbert of the Day". He has something to say on peer reviews.
Assuming scientists are human beings, it seems to me that most peer reviewers would fall into one of these categories:

1. Asshole
2. Biased egomaniac
3. Nice person who doesn’t want to make people feel bad
4. Too busy to put any quality thought into it
5. Person with low self-esteem who doesn’t want others to succeed in his or her field
6. Coward who doesn’t want to rock the boat

Full post

User charges

I swear to God I did not read any news today. This post is inspired by a conversation with a colleague last night. I am not sure how much his 'take away' was from the conversation ( he looked very upset after that, though I curbed my instincts to throw up a coupla foul words :-)) it certainly made me think. This is one of the greatest advantages of being surrounded by people with diversified backgrounds. ( When a organizational restructuring plan for was being discussed yesterday in my MBA filled firm, with all the HR metrics etc, I suggested work place redesign so as to pool resources and avoid more hiring. I am sure the organization benefits with diversity)

Ok, coming to the topic of levying user charges to services, the discussion meandered to irrigation systems. In irrigation systems the Govt builds the necessary infrastructure. The capital costs are taken care of. User charges are levied for covering the operation costs . In the best case scenario the community takes charge of the task by creating Water User Associations (WUA), collecting the user charges and maintaining or even improving the system. God's in Heaven and all 's well with the world.

The problem arises when the some farmers in the community find it hard to pay the user charges but needs the water badly or else he might sit in penury (or even degenerate). The questions are should you help the poor farmer if yes what are the possible ways.

Before that let me give a quick intro to the problems of Govt. intervention in the form of subsidies. Statism is the curse of India in the years after Independence. The common man looks up to the Govt. for every thing. It kills incentives for individual and community interventions to the problems that they face directly (e.g the village looks to the Govt. to de-silt a pond, instead of getting it done themselves)

Keeping the above things in mind, let us find answers to the problem. The options are

1. Uniform user charges: A uniform water tax should be levied so as to maintain the system. If the poor farmer cant pay-too bad. The Govt intervention in the form of subsidies will kill the system. The farmer has to 'do sth else'. You cannot create a Pareto optimal solution and there will always be losers
2. Variable taxation: There are tax slabs like what we have for income tax. The rich farmer pays more, the poor pays less. The whole community pays what it can, gets the benefit and is happy. Well the 'is happy' will be part in question. The poor farmer will be discriminated for 'enjoying benefits w/o paying'. Sooner or later the question of money will hang over the heads. And wars are fought between nations for money!
   
3. Govt subsidies: The Govt's job is to take care of the poor in a true egalitarian sense. The Govt pays for the maintenance. The whole project will run on Govt. money and the community involvement is out of the window.There are many problems here. The Govt. can't selectively subsidise. Also this is also a problem similar to point 2. cos it is somebody else's money. The tax payer whose money is being used will be incensed at his money being used to subsidise rich farmers also! ( The folks who pays the bulk of the tax has all reasons to be miffed and evade taxes)

Innovations under the three could be thought of to improve the solution. Before I move into that, what is the best of the three? One lets people die ( Economists will unabashedly vote for one. I hate economists for this single reason that they give a damn about the people and look at improving efficiency thereby forgetting the basic tenets of developmental economics and ethics. Also the proponents of free markets will say 'let the farmer do something else' without any basic understanding of his capabilities) and three lets the system decay. They are out of the window. Solution two, despite having its ills, might be the best option in my opinion. Consensus have to be built. The sustainability of the system should be given a thought ( for example after a while the benefited farmer could come under the tax bucket) and the cons of the other two options should be explained.

What are the innovations? Let the system run with option one. But give the guy resources of some other kind so as to empower him to participate in the process. Micro-finance and having a separate social security net( hat tip: my friend) are the ones on top of my mind. What do u readers think?