Ideas We Believe

It's often perplexing to note how violent human existence has been. Until the end of world wars, it was common for armies to be raised and sent to die. Only when institutions like trading, finance and learning, which do not occur optimally in turmoil, spread worldwide, there was an incentive to keep peace. This leaves us with a question as to why peace wasn't pursued over the early years of human civilisation. The answer to that would be science or, to be more specific, maths. Before maths, most languages were subjective and interpretive rather than definite and logical. With that power of subjectivity, it was easy to evade having to answer. How big is the earth, you ask? While under maths, you will have to put units, and then under physics, estimate and verify it; in any other language, you can just have a word for it. Subjectivity gives an illusion of an answer, preventing one from digging further and, in this case, striving to learn more. That leaves us with a vacuum, which ...

Standard & Poor's (better called the S&P), Fitch and Moody are the three prominent players in the world of credit rating. Their words have such a significant impact on the speculative markets all over the world that one can safely call them the ventriloquists of the modern era. But reputation is a goose laying golden eggs; it must be well-fed and well-kept. Therefore, it's surprising that when Fitch's holding CreditSights reported that the Adani enterprises were deeply debt leveraged, the regulating authorities should have batted their eyelids. A lousy bureaucracy is no excuse for a country aspiring to be in the top 5 of the world's stock markets. In fact, a BBB- is a stern warning that we are looking at the humble origins of the 2008 subprime crisis.  A bigger and yet more straightforward question is what drove the Adani stocks so much? And quite a bit of the answer comes from the defence Adani group put out to the Hindenberg research - a rising nationalist sen...

The battle between push and pull is familiar to supply chains. For ages now, industries have produced goods they thought were relevant for the customer and then used networks of distributors and retailers to push these to the consumers. The apparent outcome of this is the massive scale of advertising that uses tactics to lure a customer base for the product.  The shift to a pull-based supply chain seems more rational. One is where the production takes in the customer's demand before the show. Not only does that minimize the risk of product failure, but it also captures the market sentiment with greater accuracy. In other words, it caters to an existing demand rather than creating one for itself. This process is lean and profitable, except for a shortcoming; Production takes time. During the early 90s, when the internet spread like wildfire, people almost immediately expected the internet business to take off. However, it was only after a decade and a massive dot com bubble that tod...

The world today is 281 trillion in debt to itself. There is no science more mysterious than that of money. What drives my enthusiasm for finance is its underlying devotion to mathematics, just like most of the pure sciences. This pride in being extremely logical and putting rationality before empirical bias is what makes it worthy of a Nobel (though not the original one). But its influence on daily life is enormous, a genuinely distinct feat in pure sciences. So let's delve into the unapparent philosophical side of the currency. 281 trillion is a significant amount. If everyone called on their cards, we would have a lost game of poker. In fact, we have such a bluff on the table that we can't risk calling it. It is horrifying that this accounting deficit makes no difference to the world. Has there ever been a scam this benign? Or do we need a piece of the puzzle? The latter seems rational. The reason for this debt is simple, sovereigns have printed more and more money over the y...

One way to put a banner on the course of human civilization is to call it an escape from uncertainty ( most of which would have led us to death). Why do we live in societies? To save ourselves from the uncertainty of getting attacked... Why do we build houses? To mitigate the uncertainty of getting our food washed away in the rain... Why do we rear children? So that we don't fast ourselves to death in old age. So in all these cases, the sheer uncertainty in the future has made us make expensive investments in the present. And those who didn't give in to these fears took a risk.  The pay-off of that risk is, however, independent of the past. In some cases, the risk turned out to be a golden gamble. Just like a flood washing away houses of people...the ones who hadn't built their houses were a little less sad. Risk can give an unexpected reward, but the higher the risk, the greater the return.  But at times, the risk is otherwise. Instead of choice for the individual, it beco...

Yeah, money. Wealth is a reflection of specialisation in society. As the roles get complex, its often required for a common and standardised means of exchange; that correctly values the services given, and rewards to be received in return. For a long time in the history of humans, the unit of wealth was something valuable, collected farm produce, or special pottery or maybe even rare metals. Even our mythos, often speak of the horses and cows being used as a unit of wealth. All of these related to something that was physical, useful and limited. But the potential of wealth goes beyond the basics of security and exchange, relating to the abstract concept of power and dominance. Over time this soft control that comes along with wealth has gained more and more importance. And with power comes, the insatiable lust to remain powerful. Governments and kingdoms attempting to accumulate the methods of wealth generation, keeping it, out of reach for the public. And social hierarchies came in...

A powerful line from the character, Ra's al Ghul, in the Batman Begins; " With Gotham, we tried weapon of a new kind - Economics". The prowess of the tool called economics is perhaps unknown to most, even the best the field. Sometimes the Nobel memorial prize has been given to two directly conflicting theories, just to remind you how well we can measure the success of economics as a science.  So today, I would love to describe how is this tool being employed in modern warfare. Of the most significant consequence of globalisation, is the emergence of multi-national agglomerates and institutions. Since the barriers to trade and money flow (both technological and ideological) are being lifted off by the day, businesses have expanded beyond frontiers and developed a new sense of world identity. Although nationalism, is at its peak, there is a clear sense of transfer of control to businesses all over the world, as they have a say over one of the powerful resources of the ...