Saturday, December 29, 2007

Gossip, Conspiracies Tempered with a Sliver of Information

As hard as it seems to believe, the discourses of Socrates took place not within the sombre confines of an academic institution, but within the bustling, chaotic spaces of the agora, at once the central public space and market space of ancient Athens (not surprisingly, the Greek verb for "to buy" is agorazo). There stood O Socrates, surrounded by eager, intellectually yearning, admiring young men - debating, theorizing, contradicting, arguing and resolving - all the while surrounded by people hurrying on with the business of buying and selling, dispute resolution, etc.

The Ancient Agora of Athens is all but gone now, but there have been significant excavations in recent years (the Athenian Roman Forum has quite a few pillars standing). The Roman version of the agora, the Roman Forum in Rome is still better preserved and you can still imagine what it might have been thousands of years ago as the prime civic space for political discourses, legal proceedings, intellectual debates, buying jewellery (I imagine), and so on.

There is something rather romantic about this notion of a free flowing, chaotic, intellectually charged public space as a space of the exchange of ideas. It fired my imagination to think of a poet like Mir Taqi Mir, surrounded by his fawning admirers, almost carelessly versifying poetic gems while a scribe scrambled to write them down faster than he could utter them. Or Ghalib, who wrote with such anguish about the destruction of Delhi's bazaars in the anarchy of 1857.

Perhaps this is stretching the concept of the marketplace a bit(well the ghats of Kashi do house many vendors), but the idea of the public debate remained a cornerstone of different schools of Hindu religious discourses as well. Within the orthodox tradition, in cities like Kashi (Banaras/Varanasi take your pick) public dialectics between different schools of Hindu metaphysical thought was a common feature.

But then we had spiritual figures who refused to be typecast within any and every typecasting straitjacket and declared:

Kabira khada bazaar mein, sab ki maange khair Na kahoo se dosti, na kahoo se bair

Kabir, standing in the marketplace, wishes all well
To them, I'm neither friend nor foe

(It is incredible that so many of Kabir's sayings have been handed down to us through what was essentially an oral tradition. But then so have all the Vedas over thousands of years. In this they have a striking similarity with the Homeric works Iliad and Odyssey which for a many hundred years were a purely oral tradition)

This is as far as the intellectual exchange of the marketplace goes. There is another, fascinating aspect of the marketplace - the underbelly of public space where rumours, political gossip and conspiracy theories fly thick and fast, the fasted method of viral communication in medieval times. There would be endless speculation about the health of the king or sultan, his favourites, coups plotted by his sons, all forming the substance of the political gossip that kept the bazaars abuzz.

I've heard many refer to Delhi political circles as basically like medieval courts and bazaars - with kings (or queens) and courtiers, powerful harems, and a bazaar where gossip and political speculation circulates seamlessly and yet surprisingly almost never finds its way into the mass media (I think the Indian media has figured out quite smartly that information is power only as long as it's sort of private). However, it is a circuit where if you get connected to even a minor node in the system, you can access a substantial amount of political information and gossip.

In fact, in Delhi you can practically breathe political gossip by just being at the right place at the right time (and no, don't bother getting on the IIC waitlist - you'd have better luck scouting random panwallahs outside political party offices).

The coming of the internet has of course altered this playing field somewhat - how much I have no idea. Suddenly you have this cyber bazaar that provides a great avenue for gossip, speculation and conspiracy theories, while affording relative anonymity that emboldens you and makes you a little less vary of consequences.

This is essentially what the War for News website sort of was with respect to the world of Indian media - except there was very little information and gossip of consequence being transacted and just mostly a lot of speculation about the sexual lives of journalists (you'd have to wade through hundreds of comments about who's sleeping with whom before you'd get one comment about who's making deals with whom).

I really like to follow some of the more interesting and complex conspiracy theories that have been floating around in this cyber bazaar of ours. Two of them, which were sort of the impetus for this post were the ones related to the death of Benazir Bhutto. It's been fascinating to read comments in Pakistani politics and intelligence forums because they are thick with arguments and counterarguments about who and why. In contrast to the Western media (which turns to its old standby al Qaeda), the clear favourite of the Pakistani conspiracy theorists is either ze General and the intelligence types, or ze fundos among the intelligence types acting on their own.

Another interesting conspiracy theory discussion that has all the features of bazaar intrigue is the role of bankers, the financial industry and Federal Reserve in manipulating the American economy and influencing political decisions - including the Iraq war. Regardless of where I stand with respect to the role of big finance in the government, the most enlightening aspect of the entire exchange has been learning about the characteristics of the US Federal Reserve and how it differs from other central banks around the world.

Another discussion that's pretty big among those paranoid about loss of sovereignty is the buzz around the Amero, the so called single currency modeled on the Euro that is supposed to herald a supra-national American Union uniting the countries of North America. The American government has repeatedly clarified that no such currency has ever been planned or is anticipated in the future. But the conspiracy theorists point out that the European politicians had gone blue in the face denying the Euro before the discussions had made some headway. All this is fascinating stuff - if anything I doubt the Canadians would want to trade their dollars for this mythical Amero given how strong their currency is right now.

Tuesday, December 04, 2007

Risky Business

Ever done one of those neat little calculations of expected value of an event based on the probabilities and the payoffs associated with them? Let's take an example. Suppose you have invested in a project that has a 50 per cent chance of success and will pay you $200 if you succeed and nothing if you don't. Ignoring discounting of payoffs, we get an expected value of $100 for your investment. In real life though, you'd either make $200 if the investment succeeds, or nothing if it doesn't. Puts things into a whole different perspective, no?

Of course the explanation is that expectations are based on success and failure over very large number of trials. But in real life, there are only a small number of finite trials available to us, or scarier yet - only about 1-2 trials. In such a situation, your knowledge of probability has to be supplemented by a thorough understanding of the risks involved and your initiative to minimize risk, and an intuitive, perceptive understanding of decision-making.

Speaking of risk, it is interesting how people who would drastically overestimate risk in certain contexts would completely underestimate them in other areas of life. My mother for instance, thinks of all investing in stock as gambling with unacceptable risk and very uncertain payoffs. Given the institutional deficiencies of the Indian stock market, I don't blame her.

However, my mother thought it was the most natural course of things when a cousin of mine decided to agree to an arranged marriage with someone she had met just the day before.

TM: "Is that not a big risk to take? She doesn't have the slightest clue about him"

Ma: "What's there to know? He's from a well-established "good" family, went to the best universities, is now studying at a great university in the US. His academic record is brilliant. She'd be very happy"

TM: "So all it takes for a marriage to work is for the groom to have an impeccable academic record?"

Ma: "Uff!! Her parents know what they're doing."

The marriage imploded six months later because obviously neither the bride nor her parents knew what they were doing. You see, my mother's generation used to hedge their bets on a marriage's success on the fact that there are very steep penalties for the exit strategy, i.e., divorce. Turns out, they were working with historical information that has lost its relevance because the exit strategy costs have dramatically come down in the last decade or so.

My mother, smart cookie that she is, now no longer speaks of the chances of success of any marriage with such unqualified optimism.

Assumptions of risks associated with specific events should ideally evolve as new information is made available. However, usually there is a significant time lag between the appearance of new information and its incorporation into our world view model. Information is not cost-less, neither is adjustment to that information.

And herein lies the problem. Societies that evolved an extremely risk-averse model are often very slow to respond to the dramatic changes in risk estimates that new information and contemporary events have created.

Let's take Pakhtoon society as an example. The Pakhtoon tribal honour code and customs are examples of an extremely risk averse society(I didn't come up with this, I actually read this in an article whose reference I just cannot recall). You rigidly follow customs because they bring what you think is unfailing predictability in a climate of great uncertainty. However, what may have evolved as a response to political instability, change of rulers, frequent invasions, etc. has proved to be a not so successful strategy in dealing with 21st century realities.

I know I might get skewered for saying this, but I see an analogy to this in contemporary Bengali society as well. A combination of many factors (and those factors are another discussion altogether) have made us a very risk averse culture. We embrace the predictable, the anticipated, that which doesn't upset our world view that is at least a couple of decades out of sync with global realities.

This of course doesn't apply to a fairly substantial number of educated, cosmopolitan, globally mobile Bengalis who have excelled by being pioneers and risk-takers. However, make no mistake - these very visible Bengalis are essentially a visible minority. The vast majority of Bengali society is unable or unwilling to incorporate the updated information concerning India's changing economic and political paradigms into their world views.

I know that as individuals it is hard to seamlessly absorb information about an evolving world and update your perception of risk. Notice that I said hard, not impossible. In this case, I love to give the example of my great-grandfather. The man was quite a character - a very successful entrepreneur (unfortunately forgot to pass along his entrepreneurial genes), an Ayurved expert, an epicure (I think I can directly trace my love of food to him) and the most generous soul ever. However, like many men of his generation he believed that women had no business getting an education and should get married as soon as possible to ensure their financial security.

He stuck to these ideas in getting his daughter (my maternal grandmother) married off at a ridiculously young age, and marrying off my mother and my aunts very young as well. However, by the time my cousins and I came along, great-grandpa was taking notice of a very different world around him - a world he scarce recognized. I was 8 years old at the time, and we were visiting my great-grandparents on my summer vacation. My mother proudly announced to my great-grandpa that she had enrolled me in dance classes (don't ask).

Great-grandpa looked at her and suddenly his brow knitted into a look of irritation. In his booming voice he almost thundered:

"Well what's the point of teaching her how to dance. If you want to do something worthwhile make your daughter study to be a doctor"

(Err...a doctorate is good enough, no great-grandpa?)

I've seen the same sort of evolution of thought in the case of my grandparents as well. But it takes a long time in coming, and my fear is that the adjustment is not fast enough to thrive in this new global world.

Whatever happens at the individual level, societies as a whole absolutely cannot afford to ignore new realities or run on autopilot based on historical trends. If you try to do that on the trading floor you'd be wiped out in seconds. And face it the global economy and society is nothing less than a trading floor where if you don't seize the day, someone else definitely will.