Reverse Colonisation.

Looney in his comments on my post Salisbury Park, asked: “Has the policy changed? (I see a lot of resources flowing from India into my neighborhood!)”

Reverse colonisation has indeed taken place but not the way Looney has suggested.

Let me assure him that Indian resources have not gone off to the USA. The Resources that can survive tough competition and prosper to the same standard of living as that the USA has to offer, have stayed in India.

We are a nation of 1.4 billion people. If about 3 million of them decide to go to the USA, and every year more are going, that is not a drain of resources but an export of talent that brings in regular revenue in the form of remittances. In other words, American resources are being sent to India. I for one can understand the xenophobia there.

The point is however not that the reversal has taken place with focus on the USA. The impact on the UK, the original coloniser. can be seen here. Yes, the East India Company which started the process of colonising India has now changed hands and is now owned by an Indian.

That is not all. Indians own and operate many businesses in the UK now. Just take a look at this BBC report.

And take a deep breath in to see what Capitalism does now.

Between 2000 and 2015, the UK invested $22.2bn (£14.5bn) in India, accounting for around 9% of foreign direct investment in the country, according to a report by UK business group the CBI.
This makes the UK the largest foreign investor in India after Singapore and Mauritius.
The CBI study added that in total UK companies are estimated to employ 691,000 people in India. That is 5.5% of the organised private sector workforce.
Mr Heald says: “We estimate that there’s been a 300% increase in the number of British companies setting up there in the past 10 years… there’s been a huge acceleration.
“And the type of company is changing too – it’s more e-commerce, services, IT and education.”

Looney has to think about the USA’s colonial past too. If he does, he will enjoy the process of reverse colonisation as depicted by the following photoshopped photographs.

 

Marginal Utility.

It has been a couple or more decades since I had to deal with this old chestnut. It is difficult to remember constantly that Pravin is very much younger and is quite capable of challenging my memory with such ideas like coming up with this topic for this week’s LBC post.

Just to make it simple for my readers not exposed to such ideas in Economics, let me illustrate to understand the concept.  Please click on the image for a larger resolution.

Fairly simple. There is only one case where it does not work and that is in the case of addiction to alcohol, drugs etc. Which is a subject deserving a totally new blog post altogether.

While I eagerly look forward to what Pravin and the other LBC bloggers come up with, I just want to express a puzzle and leave my readers to come up with the answers.

If the concept of Marginal Utility is true, why do some societies have polygamy or polyandry? Does the theory not work there? I don’t know. I was a monogamist and now more or less a sanyasi. I am not personally acquainted with any polygamist or polyandrist and so cannot ask one.

And just as I was about to end this post, I came across this remarkable piece of news which stumps me even more on the aspect of marginal utility only for this polyamorous union.  Now, I have seen and heard enough.

You can see what the other writers of the LBC have to say in their respective blogs.  Maria, Pravin, Ashok and Shackman.

Consumerism.

1. Organised-efforts by individuals, groups, and governments to help protect consumers from policies and practices that infringe consumer rights to fair business practices.

Consumer protection in India is very strong for those who are willing to take the pains to fight for their rights. I know a number of cases where the consumers have won big settlements from large corporations here and I am sure that it must be the same overseas as well.


2. Doctrine that ever-increasing consumption of goods and services forms the basis of a sound economy.

and 3. Continual expansion of one’s wants and needs for goods and services.

This is something that has overtaken us human beings from the time of the Industrial Revolution which was speeded up from after the second world war when it was discovered that women could also come into the non agricultural workforce. Rather than expand on what has happened elsewhere in the world, let me concentrate on India where we got out of the Socialistic Pattern of Society in the 1990s of the last century and got royally involved in the rat race.

The one word mantra is Growth.  Everyone and his uncle obsesses about growth.  If the GDP growth gets below a certain percentage point, all hell breaks loose and the pundits start baying for the blood of the politicians. And such growth can only come from demand for goods and services constantly increasing to facilitate production of goods and services. So, businesses have come up with the brilliant strategy of advertising overt and covert to keep the demand pot simmering and producing goods and services highly subject to obsolescence so that replacement demand also takes place besides demand for new goods and services.

To facilitate that process, financial institutions get on the bandwagon and offer products, read loans, to make borrowing attractive so that people are perpetually in debt often just meeting interest payments without the original borrowed sum ever reducing at all. Another phenomenon that one can watch is that of the debt servicing going up for individuals as their incomes go up too! A self perpetuating cycle that leads to many of the modern ills.

I am glad to report that I do not contribute to the growth of our GDP. I am in the process of simplifying my life to the extent I can by becoming a minimalist. I refuse to be swayed by advertising for goods and services though I am sucker for advertising for movies and books. In the latter case however, I prefer buying a kindle version and buy hard copies only when I cannot get an electronic version. I however doubt that my splurging on these two items will seriously impact our GDP, the current growth of which is 7.3%, among the highest in the world!

I had suggested the topic for this week’s LBC Friday post. You can see what the other writers of the LBC have to say in their respective blogs.  Maria, Pravin and Shackman.

What Would You Do In The Long Term?

Die.

Yes, Pravin, you read me right. I would die in the long term.

I just could not resist the temptation to come up with that opening. Pravin who suggested this week’s LBC topic takes life and himself too seriously. This will shock him but eventually he will agree.

I have drawn my inspiration from the following famous quote.

“But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again.”
~ John Maynard Keynes.

It would only be fair to Pravin however, that I leave some analysis of the quote from Keynes.

You can see what the other writers of the LBC have to say in their respective blogs.  Maria, Pravin and Shackman.

India’s Demonetisation.

queue
India demonetised its high value currency notes on the stroke of midnight 8/9th November. I am in favour of this decision which will have long reaching impact despite short term inconveniences. I had gone out for a long drive on an errand this morning and did see long queues outside many banks. This phenomenon should cease in the next few days.

The grocer from who we buy almost everything needed for the home accepted high denomination notes on the morning of the 9th inst, and has been deducting our daily purchase costs from the credit that we made with those notes.

Ranjan went to our bank across the road to deposit all the high value currency notes that we had at home and had no problems whatsoever in depositing them into his account. The ATM machines unfortunately were empty and he will have to encash cheques for the next couple of days, which is really no big deal.

I am more or less a stay at home type and except to go to movies or to visit some friends or go with them out for a lunch, I rarely go out. I am however in touch with the aam aadmi.

Since our own 9/11,I have discovered that I don’t have to keep large sums of money at home towards the end of the month to pay our help at the end of each month.

This morning, when I was greeted by the Chaiwallah I asked him if he had a bank account and he confirmed that he had and that he has been saving money in it. I asked him whether he has been having any problems with the demonetisation and he confirmed that he had some small problems but he supported the demonetisation decision.

Our housemaid Mangal confirmed that she has an account with a bank and that it will be perfectly alright for us to arrange to deposit her wages directly into her account. she supported the demonetisation decision.

The same thing was conveyed to me by our gardener cum handyman Yakob.

The same thing was conveyed to me by the dog walker Somnath.

Our presswallah is currently away attending a wedding in his village, but I am sure that on his return he too will confirm that he has a bank account and he will have no problems getting his monthly payment directly into his bank account. And I am sure that he too would support the demonetisation.

Having roots as I do in rural India, I am sure that problems there would be minimal as the economy is by and large based on credit and barter. To confirm this, I rang up a cousin in rural India and was pleasantly surprised that the situation remains the same after all these years and also that there was overwhelming support for the demonetisation process in the village and surrounding areas.  A fellow alumnus Jayant also confirmed the same in a post on facebook.

My whatsapp groups and facebook friends with the odd naysayer,  support the decision and the overwhelming response has been glee at the discomfort of the cash hoarding types, particularly the political class and the bureaucracy with ill gotten lucre, read bribes.

 

Niche Marketing.

“A niche market is the subset of the market on which a specific product is focused. The market niche defines as the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also a small market segment.” ~ Wikipedia.

I live in a locality that is filled with Co-operative Housing Societies and a few Condominiums. All of these have many flats, apartments for my American readers, and are usually provided with round the clock watchmen services. These watchmen work in 12 hour shifts and the poor fellows who work the night shifts have to wait till they are relieved in the mornings by the day shift watchmen before they can have their morning tea!

Enter the ever opportunist entrepreneur of urban India. I have been seeing one intrepid soul very early in the mornings hawking hot tea from a bicycle with a stainless steel thermos urn tied securely to the luggage carrier in the back. I have been seeing this particular fellow for quite some time now but was able to get to chat to him only yesterday as both of us caught each other’s eye in the morning.

From him, I learnt that there are many like him all over Pune, and that the service starts at 0500 and goes on throughout the day focussing on watchmen only but also catering to others who may stop them on their rounds. To do this effectively, the urns have to be charged three times a day on average and such vendors do make a reasonably good living out of this vending.

niche-mktg

I had wanted to talk to this particular vendor because it was only a few days ago that I was able to see that he was conducting his entire business using only one hand and using the other only partly because the latter had been cut off below the elbow. Just imagine this spirited soul riding a bicycle with such a load, and dispensing tea one handed and collecting money etc all despite his handicap. I spent quite some time with him and found that he is an immigrant to our city from one of the most backward parts of India and there were others of his ilk in the same business here. He has his wife brewing the tea apart from her other household chores and from the earnings, he is putting his two daughters and a son through an English medium school education.

I salute this man and his fellow tea suppliers who are what C K Prahalad called Bottom Of The Pyramid Entrepreneurs. Unfortunately, such businesses do not feature in our GDP!