6 AM Pacific

Indians and Unpredictability

A notice at a neighbourhood Postal Annex. Truly, a picture is worth a thousand words. The proprietor is, you guessed it, Desi.

The notice is a microcosm of Indianness. If you get past the English (hey, its a foreign tongue, so stop being so fussy) it really is a reflection of our relationship with predictability.

There are three kinds of Indians:

- Those that are unpredictable and don’t care.
- Those that are unpredictable, but would like you to expect, and perhaps accept, their unpredictability. The store owner who put this notice up belongs to this set.
- The predictable kind. Within India, this is a very small set.

Indians are not brought up to be predictable in their behavior. The environment (Bangalore traffic for instance) doesn’t allow us to be. But this is certainly a phenotype issue not a genotype one. Because somehow, when Indians leave India they leave their unpredictability behind.

The great achievement of the IT Services industry has been to extract predictable outcomes for clients out of this morass of unpredictability. They erect these boundary walls around the company. Within these figurative walls there are no power cuts and meetings start on time. Defects are measured and deadlines are met. Because that’s what clients in the developed world expect. It’s gotten easier and easier over time, but in the early days the pioneers did the equivalent of moulding square pegs to fit into round holes.

Hinduism and Evolution

Today the Texas Board of Education voted on how American history will be taught in Texas schools. It is a version of history that fits the conservative world view. From the New York Times

The conservative members maintain that they are trying to correct what they see as a liberal bias among the teachers who proposed the curriculum. To that end, they made dozens of minor changes aimed at calling into question, among other things, concepts like the separation of church and state and the secular nature of the American Revolution.

Texas textbooks are important not just because Texas is a big state, but also because many small states just go with the Texas version of the textbooks because it costs less than commissioning their own versions.

Around this time last year the Texas Board voted to change science text books. Evolution, which is always in the spotlight when such matters are discussed, was saved by the skin of its teeth from being relegated to “one of many alternate theories”. However,

Failing to overhaul the curriculum broadly, conservatives instead attached a series of measures specific to subjects like biology, where teachers would be newly required to “analyze and evaluate the sufficiency or insufficiency of natural selection to explain the complexity of the cell.”

More »

IPL on YouTube

From the FT today

Mr Walk said a recent Indian Premier League cricket series had notched up 55m views on YouTube – more in the US than in India – and it found a market for Bollywood in Estonia by offering Striker, a Bollywood film, either on a pay-per-stream basis or free with advertising support outside India.

I watched the IPL on Willow.tv for $60 for all matches. That sounds like a high hurdle for ad supported YouTube, but it isn’t. To pay $60 for Willow.tv is actually foolish. I paid $60 for the T20 World Cup and watched 15 minutes of cricket (the India-Australia match, if you must know). Granted IPL will be different because you won’t be that wedded to any team that you won’t watch the other matches. But even so, there is the matter of the quality of the video, which is consistent but average.

YouTube being free will attract an audience that could be 100 times larger. The asking average revenue from each viewer therefore is much, much lower. The opportunity for advertising is greatly underleveraged. There were banner ads around the video frame this time from some money transfer service but I’ll bet the inventory was sold super cheap, since those were the only ads I saw. But what about the interleaved ads between overs and during drinks? Why do folks in the US have to see an Indian cellphone ad? All this can add up to much more than what Willow.tv is taking in.

My guess is that IPL will be free next year on YouTube.

Markets Last Week

James Surowiecki sums up last week’s momentary free fall in the stock market:

But what does seem clear is that the plunge was exacerbated by the markets’ heavy reliance on computerized trades—both explicit “stop market” sell orders (that is, orders to sell a stock once it hit a certain price) and algorithmic trades that dictate buying and selling depending on different market factors.

and

I don’t think yesterday’s crash is evidence the market is irrational. It’s more that it’s a-rational: the computers aren’t panicking or herding. They’re just following simple rules. I think this is bad for the collective intelligence of the market, which really depends on diversity of thought and independence of action. But what happened yesterday isn’t, I think, quite the same as the crash of 1929 or the stock-market bubble of the late nineteen-nineties. It’s an example of the dangers of a-rationality (to coin a word) rather than irrationality.

Felix Salmon thinks this is an opportunity for a financial transaction tax

There’s a very sensible idea going around that a simple way to deal with nearly all of these problems, at a single stroke, would be to implement a tiny tax on financial transactions. Historically, people have complained that such a tax harms liquidity, which is true. But the fact is that it harms the bad kind of liquidity — the liquidity which dries up to zero just when you need it most. Liquidity, if it’s spread across multiple electronic exchanges and can disappear in a microsecond, does very little actual good, and in fact does harm during tail events like this. Let’s tax it, and raise some money for the public fisc at the same time as slowing down markets and making them think before doing a trade.

I think a financial transaction tax is a good idea. It is politically more doable at this time than any other time in the future. India already has one and it seems to do no harm to liquidity.

If you think about it, sales tax is a transaction tax. Why is it that there is no demur to a transaction tax on sales of goods (except on online commerce, which again is inexplicable), but financial transactions being taxed will bring about the end of capitalism?