mint – Page 2 – Pertinent Observations

Time for bragging

So the Karnataka polls are done and dusted. The Congress will form the next government here and hopefully they won’t mess up. This post, however, is not about that. This is to stake claim on some personal bragging rights.

1. Back in March, after the results of the Urban Local Body polls came out, I had predicted a victory for the Congress in the assembly elections.

2. Then, a couple of weeks back, I used the logic that people like to vote for the winner, and this winner-chasing will result in a self-fulfilling prophecy that will lead to a comfortable Congress victory.

These two predictions were on the “Resident Quant” blog that I run for the Takshashila Institution. It was a classic prediction strategy – put out your predictions in a slightly obscure place, so that you can quickly bury it in case it doesn’t turn out to be right, but showcase it in case you are indeed correct! After that, however, things went slightly wrong (or right?). Looking at my election coverage Mint asked me to start writing for them.

As it happened I didn’t venture to make further predictions till the elections, apart from building a DIY model where people could input swings in favour of or against parties, and get a seat projection. Watching the exit polls on Sunday, however, compelled me to plug in the exit poll numbers into my DIY model, and come up with my own prediction. I quickly wrote up a short piece.

3. As it happened, Mint decided to publish my predictions on its front page, and now I had nowhere to hide. I had taken a more extreme position compared to most other pollsters. While they had taken care to include some numbers that didn’t mean an absolute majority in the range the predicted for the Congress (so as to shield themselves in that eventuality), I found my model compelling enough to predict an outright victory for the Congress. “A comfortable majority of at least 125 seats”, I wrote.

I had a fairly stressful day today, as the counting took place. Initial times were good, as the early leads went according to my predictions. Even when the BJP had more leads than the Congress, I knew those were in seats that I had anyway tipped them to win, so I felt smug. Things started going bad, however, when the wins of the independents started coming out. The model I had used was unable to take care of them, so I had completely left them out of my analysis. And now I was staring at the possibility that the Congress may not even hit the magic figure of 113 (for an absolute majority), let alone reach my prediction of 125. I prepared myself to eat the humble pie.

Things started turning then, however. It turned out that counting had begun late in the hyderabad karnataka seats – a region that the Congress virtually swept. As I left my seat to get myself some lunch, the Congress number tipped past 113. And soon it was at 119. And then five minutes again back at 113. And so it continued to see-saw for a while, as I sat at the edge of my office chair which I had transplanted to in front of my television.

And then it ticked up again, and stayed at 119 for a while. And soon it was ticking past 120. All results have now been declared, with the Congress clocking up 121 seats. It falls short of the majority I had predicted, but it is a comfortable majority nevertheless. I know I got the BJP number horribly wrong, but so did most other pollsters, for nobody expected them to get only 20% of the popular vote. I also admit to have missed the surge in Independents and “Others”.

Nevertheless, I think I’ve consistently got the results of the elections broadly right, and so I can stake claim to some bragging rights. Do you think I’m being unreasonable?

Corruption and Communism

In an article arguing why Kolkata is best placed to be India’s “best city” in another 20 years, Aakar Patel (I’ve started looking forward to his columns in Mint Lounge) mentions that there isn’t much corruption in the governments in Bengal (at both the center and city level). I don’t know the reasoning for this, but I wonder if this is primarily responsible for the long run that the Communists had at the helm in that state.

I had argued in a not-so-recent piece in Pragati that big governments tend to be bad governments . I had argued that big government means more ways in which government employees can seek rents, and hence one way of reducing corruption is by reducing the size of the government. Now, assume that for some magical reason, a certain section of the population is sincere and incorruptible. In that case, big government need not be bad government. In other words, people don’t really resent the presence of government everywhere since they don’t see any rent seeking by the government officers. And since they are not unhappy with the size of the government, they don’t mind voting in every time the communists, who will keep the big government!

So I wonder if it is the incorruptibility of the Bengali (for whatever reason; I’m drawing this inference from Patel’s article) that has led to the long communist rule there. Incidentally, the one time the government was seen to be corrupt (in discretionary land allotments in favour of the Tatas, Salim Group, etc.) it wasn’t voted back to power!

On Learning At Home

Recently, India has enacted this Right To Education Law, one of whose provisions dictates that schools must reserve at least 25% of seats for kids from economically backward communities. This post will be tangential and will not be trying to examine the merits and demerits of the law.

So earlier this week, the Wall Street Journal published a long (and pretty good) analysis of the impact of the law (it was published in India in Mint). While I might discuss the rest of the article in another post, the paragraph that caught my eye was this one:

Sumit’s father and many of the poorer parents are troubled by the fact that their own limited literacy prevents them from helping. Some wealthy parents, meanwhile, chafe at the slowed pace of learning. They have suggested segregating the poor kids.

Made me wonder how much primary learning actually happens in school, and how much happens at home. Looking back at my own childhood, I learnt most of my “concepts” at home, and before any subject was taught in school I was well prepared for it. In fact, I would be so ahead of my class that I’d frequently get bored, and would think that my classmates were dumb because they weren’t able to keep pace with me.

My parents were no “tiger parents“. And I wasn’t a particularly industrious child. Of course, there would be times when my parents would make me recite tables of two-digit numbers as I traveled wedged between them on our Bajaj Priya, but never forced me to study (until maybe till there were a few months left for the IIT-JEE). And still, somehow, they managed to teach me everything at home. And that proved to be a massive advantage over kids that were encountering the concepts for the first time in school.

Of course, as I went to advanced classes, there was only so much they could teach me at home (since we were going beyond the basic fundamentals here, and there was only so much they could remember), but the head start that I got in primary school was, I think, really useful in my being a topper for most of my schooling, with there being a significant positive feedback.

So what do you think? How much do you think parents actually contribute to their kids’ learning in early age? Is there a positive correlation of kids doing well in school with whether their parents are well-informed, have time for kids and can teach well? If there does exist significant correlation, what are the policy implications of it? Does it defeat the purpose of reservations in school?

Budget Analysis

So I finally finished going through today’s Mint and noticed that most of it was filled with analysis of the budget. I tried reading most of them, and didn’t manage to finish any of them (save Anil Padmanabhan’s I think). Most of them were full of globe, each had an idea that could have been expressed in a few tweets, rather than a full column.

Thinking about it, I guess I was expecting too much. After all, if you are calling captains of the industry and sundry bankers and consultants to write about the budget, I don’t think you can expect them to come out with much honest analysis. Think about their incentives.

As for corporate guys, you will expect them to make the usual noises and perhaps be partisan in their judgment. You can expect them to crib about those parts of the budget that shortchanged their company or industry or sector or whatever. But you don’t need them in an op-ed to tell you that – it is obvious to you if you read the highlights, or some rudimentary analysis that the paper anyway provides.

However, these guys won’t want to rub the ruling party the wrong way, so they fill up the rest of their essays with some globe about how it is a “progressive” budget or a “pro-poor” budget or some such shyte. So far so good.

The think tank guys are probably better. At least they don’t have any constituency to pander to, and they can give a good critical analysis. However, as academics (and most likely, not being bloggers) what they write is usually not very easy to read, and so what they say (which might actually contain something useful) can be lost to the reader.

The worst of all are the fat-cat consultants and bankers. The reason they write is primarily to gain visibility for themselves and for their firm, and given how lucrative government business is for these guys (look at the ridiculously low fees these guys charge for government IPOs, and you’ll know) they have absolutely no incentive to tell something useful, or honest. Again these guys aren’t used to writing for a general audience. So you can expect more globe.

All that I needed to learn about the budget I learnt by way of a brief unopinionated summary sent in an internal email at work yesterday (it took me 2 mins to read it on my blackberry). And also Anil Padmanabhan’s cover page article in today’s Mint.

update:

I must mention I wrote this post after I’d read the main segment of today’s Mint. Starting to read the “opinion” supplement now, and it looks more promising

Orators and Writers

Yesterday I was reading an op-ed in Mint when it struck me was that this particular columnist never argues – in the sense that he never constructs an argument using inductive or deductive logic. His method or argument is to say the same thing over and over again – in different ways, using different metaphors. He hopes to make his point by way of reinforcement, and considering his popularity and his ubiquity across the media, I’m sure it works for a lot of people (though not for me).

Then I started thinking about people who are known to be “great orators”, mostly from the Indian political space. I started thinking about Vajpayee, about Chandrashekhar and several other similar people. I discovered the same thing about them. That they seldom construct an argument using deductive or inductive logic. Their way of getting the point across is the same as the Mint columnist’s – to say the same thing forcefully and in several different ways.

And thinking about it, it seems quite logical. When you are addressing a large audience, you will need to take everyone along. You will need to ensure that everyone is clued in on what you are speaking on. And when you speak, there is no way for the listener to take a step or two back if he/she misses something you said. Unlike text, the speech has to be interpreted in one parse. So if you are to be a great orator, you need to make sure that you take the audience along; that you construct your speech in such a way that even if someone gets distracted for a few words they can join back and appreciate the rest of the speech. Hence you are better off indulging in rhetoric rather than argument.

A writer, on the other hand, has no such compulsions. It is easy for his reader to go back and forth and parse the essay in whatever order he deems fit. As long as he keeps the language simple, the reader is likely to go along with him. On the other hand, if the writer indulges in rhetoric, the reader is likely to get bored and that could be counterproductive. Hence, writers are more into argument than into rhetoric.

Which brings me back to the Mint columnist I was reading yesterday who, as far as I know, has been a prolific writer but not as much as an orator (or maybe he is but I wouldn’t know since he lives abroad). And I’m puzzled that he has settled on a rhetorical style rather than an argumentative style. I’ve happened to meet him and even then he was mostly using rhetoric rather than reasoning in his arguments.

So yeah, the essence is that there are two ways in which you can construct arguments – by logical reasoning which is mostly preferred by writers and by rhetoric which is preferred by orators. I’m not sure how successful you can be if you interchange styles.

Why MBAs do finance – a studs and fighters perspective

I don’t have sources here but enough people have cribbed that nowadays too many MBAs are going into finance, and banking, and not too many of them get into “real management” jobs, which is what the country/the world desires them to get into. I clearly remmeber a Mint column on this topic by Govind Sankaranarayanan. And that is surely not the exception. And I remember reading this article very recently (don’t know where) which says that the reason MBAs were taken into banking was to provide a business perspective to banking, and not to be hardcore finance people themselves.

Management roles can be broadly classified into two – functional management and coordination management (the latter is also known as “general” management). Functional management is more like “captaincy” – you essentially do similar work to what your team does, and you guide and direct them, and help them, and boss over them, and get paid a lot more for it. The best part of functional management is that you can outsource all the chutiya kaam to some underling. And there is enough “functional” interaction for you with your team in order to keep your mind fresh.

Coordination management, on the other hand is mostly about getting things done. You don’t necessarily need to have experrtise in what your team does, though some degree of comfort does help. Most of your work is in coordinating various things, talking to people, both inside the team and outside, both inside the company and outside, and making sure that things are done. No special studness is generally required for it – all it requires is to be able to follow standard operating procedures, and also to be able to get work done out of people.

Historically, functional managers have been “grown” from within the team. it is typically someone who was doing similar work at a lower level who gets promoted and hence takes on a leadership role. So in an engineering job, the functional manager is also an engineer. The sales manager is also typically a salesman. And so on.

Historically, MBAs have been generally staffed in “coordination management” roles. Typically these are multifunctional multiskilled areas for which it is not easy to pick someone from one of the existing departments, and hence MBAs are recruited. Historically, when people have talked about “management”, they have referred to this kind of a role.

So through my description above, and through your own observations in several places, you would have figured out that coordination management/general management is typically a fairly fighter process. It is about getting things done, about following processes, about delivering, etc.

This applies only to India – but there is a reasonably high “stud cutoff” that is required in order to get into the better B-schools in the country. This is because the dominant MBA entrance exam – CAT – is an uberstud exam (I would argue that it is even more stud than the JEE – which requires some preparation at least, and hence puts a reasonable fighter cutoff). So you have all these studs getting into IIMs, and then discovering that the typical general management job is too fighter and too less stud for them, and then looking for an escape route.

Finance provides that escape route. Finance provides that escape valve to all those MBAs who figure out that they may not do well in case they get into general management. Finance as it was in the last 5-10 years was reasonably stud. And thus attracted MBAs in reasonably large numbers.

The simple fact is that a large number of people who get into MBA won’t be able to fit into a general management kind of job. Hence there is no use of commentators cribbing about this fact.

If the IIMs decide that they would rather produce general managers rather than functional managers, they would do well to change admission requirements. To make admission less stud and more fighter. ISB, in that sense, seems to be doing a decent job – by having significantly lower stud cutoffs and putting more emphasis on work experience and other fighterly aspects. Hence, you are more likely to find an ISB alum going into general managementt as opposed to IIM alum.