The Two Overton Windows

If you want to appear intelligent when discussing something about public policy, you could do worse than uttering the phrase “Overton Window”. The Overton Window, “invented” by one Joseph Overton, suggests that there is a “range of policies acceptable to political mainstream”.

And so you frequently have political commentators talking about the Overton Window “shifting” whenever a new political idea (or person) comes to the fore. This was bandied about much when Modi became Prime Minister of India, or when Trump became President of the US, or when Jeremy Corbyn became the Labour Party leader.

While “shifting Overton window” is something you come across rather often in policy discourse, my argument is that with the rise of subscription media, the Overton window is not shifting as much as it is “splitting”. In other words, we now have not one but two Overton Windows.

Without loss of generality, let us call them the “Jamie Overton Window” and the “Craig Overton Window”. Since both the twins are right arm fast bowlers, it doesn’t matter which brother is associated with which Overton Window.

So how did we get here, and what does it mean for us?

We started with the classic Overton Window. Let’s assume that all politics can be reduced to one axis (if we do a Principal Component Analysis of political views, the principal axis is certain to account for a large share of the variance, so this is not a bad assumption). So the Overton Window can be referred to by a line which the shifts.

As long as the world was “ruled by mainstream media”, this Overton Window kept moving back and forth, expanding and contracting, but it remained united. And then with the start of subscription ad-free media (maybe a decade or decade and half ago), the Overton Window started expanding.

The “left media” (that’s a convenient term isn’t it?) started admitting stuff that was left to the then Overton Window. The “right media” started admitting stuff that was to the right of the then Overton Window. And so over time, the Overton Window started expanding. And things can’t get into the media Overton Window unless they’re part of the mainstream political Overton Window.

The thing is that as the media became subscription-heavy and hence biased, political ideas that were once on the fringe now got a voice. And so the Overton Window got larger and larger.

Until a point when it got so unwieldy that it split, giving rise to Jamie and Craig. The image on the right is an approximate illustration of what happened.

And once the Overton Window split, there was no looking back. They started moving away from each other well-at-a-faster-rate. The Jamies could not come to terms with the policies of the Craigs, and vice versa. Political analysts and commentators started getting associated with the Jamie and Craig camps.

For a while, a few commentators continued to write for both sides, but the extreme fringes, which were getting more and more extreme, started overreacting. “How can we have someone who has written 10 articles for Craigs write for us”, the Jamies asked. “Most of our commentators are Craigs, so we might as well become a Craig newspaper”, the other side reasoned.

And that’s where mainstream media is going. The Overton Window has split down the middle. Crossing this gap is considered a crime worse than crossing the floor in Parliament.

Sadly, it is not just media that is getting Jamie and Craig. Mainstream politics reflects this as well, and so across countries we get political opponents who just cannot talk to each other, since everything one says is outside the Overton Window of the other.

Maybe the only way this can end is by going across axes, or inventing a new axis even. With the current spectrum politics, there is no hope of the two Overton Windows coming to meet.

 

The Crane-Mongoose Theory of Public Policy

I have several favourite stories from the Panchatantra (which perhaps explains my lack of appreciation of modern children’s fiction). One of them involves a crane and a mongoose. And I think it is a good lesson on when and where to call for regulation, and government or legal intervention.

So the story goes like this. A snake lives at the bottom of the tree where a crane has built its nest. Each time the crane lays eggs, the snake slithers up the tree and devours them. And the crane doesn’t know what to do. Ultimately it receives some “brilliant advice”.

There is a mongoose living somewhere nearby, and the crane lays out a Hansel-and-Gretel like path of fish from the mongoose’s house to the snake’s house. The mongoose duly follows the trail of fish and finishes off the snake. The next day, the mongoose is hungry again, and it climbs up the tree and devours the crane’s eggs.

It is common political discourse nowadays to call for the government’s or court’s intervention to solve what seems to be private problems. The governments and courts are of course happy to oblige – any new source for intervention and rent-seeking are good news for the people involved. And then you get a solution that temporarily solves the problem (slaughtering the snake). And then in the long term, what you get is a bigger problem (mongoose eating the crane’s eggs). The only difference is that in real life it is not just the crane that gets negatively affected – the regulations hurt everyone.

The examples that come to my mind at this point in time are all “local”. Some residents in Indiranagar in Bangalore weren’t happy about the noise from nearby pubs. They asked the government to “do something”. And the government “did something” – it banned the playing of live music in restaurants, killing off what was then a budding industry in Bangalore.

Some other residents somewhere else in Bangalore were unhappy that their neighbours had dogs that barked. They asked the government to do something. The government did something – coming up with an elaborate document to regulate dogs that people can own.

And there are more involved (and dangerous) examples of this as well.

Don’t be like the crane.

Correlation in defence purchases

Nitin Pai has a nice piece on defence procurement in Business Standard today. He writes:

Even if the planning process works as intended, it still means that the defence ministry merely adds up the individual requirements and goes about buying them. This is sub-optimal: consider a particular emerging threat that everyone agrees India needs to be prepared for. The army, navy and air force then prepare their own strategies and operational plans, for which they draw up a list of requirements. At the back of their minds, they know that the defence budget is more-or-less divided in a fixed ratio among them.

What he is saying, in other words, is that the defence ministry simply takes the arithmetic sum of demands from various components of the military, rather than taking correlation into account.

Let me explain using a toy example.

Let’s say that the Western wing of the Indian army (I’m making this up), the one that guards the border with Pakistan, wants 100 widgets that will come useful in case of a war. Let’s say that the Eastern wing of the Indian army, which guards the China border, wants 150 such widgets for the same purpose. The question is how many you should purchase.

According to Nitin, the defence ministry now doesn’t think. It simply adds up and buys 250. The question is if we actually need 250.

Let’s assume that these widgets are easily transportable, and let’s assume that the probability of a simultaneous conventional conflict with Pakistan and China is zero (given all three are nuclear states, this is a fair assumption). Do we still need 250 widgets? The answer is no, we only need 150, since we can quickly swing them over to where they are most required, and at the maximum, we need 150!

This is a case of negative correlation. There could be a case of positive correlation also – perhaps the chance of an India-China conventional conflict actually goes up when an India-Pakistan conventional conflict is on, and this might lead to more prolonged battles, meaning we might need more than 250 widgets! Or we have positive correlation.

The most famous example of ignoring correlation was the 2008 financial crisis, when ignored positive correlation led to mortgage backed securities and their derivatives blowing up. The Indian defence ministry can’t afford such a mistake.

In which I thulp the RBI

I’m still so pissed off with the Reserve Bank of India doing a Ramanamurthy that I’ve written a serious editorial in Pragati – the Indian National Interest Review (published by the Takshashila Institution). In this piece I take on measures by the RBI to limit ATM transactions and the thing on two factor authorization.

I claim that both these decisions are economically unsound and there is only possibly a farcical explanation for them:

There is perhaps only one idea (more a conspiracy theory) that possibly explains the above decisions from the RBI. Both these decisions, it might be noticed, help push up the usage of hard currency and decrease the levels of bank deposits. Less bank deposits means less money available for banks to lend out, which means that the cost of borrowing from a bank implicitly goes up. Could it be that the above regulations are a move by the RBI to curtail money supply without necessarily doing the politically tricky task of raising interest rates?

If it is (and it is a very remote possibility), we should commend the RBI for what will then amount to be a sneaky decision

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