The problem with Indian agriculture, and government

The problem with the Indian agriculture sector is that the government takes a very “cash view” of the sector while what is required is a “derivative view”. 

So Congress VP Rahul Gandhi railed on in a rally about how the current Narendra Modi government is anti-farmer, and pointed out at the land acquisition amendment bill and the lack of raising of “minimum support price” as key points of failure. Gandhi was joined at the rally by a large number of farmers, who reports say were primarily very pissed off about the failure of their rabi crops thanks to unseasonal rains in the last month and a bit.

If the government were to take Gandhi’s criticism seriously, what are they expected to do? Not amend the land acquisition act, or amend it in a different way? Perhaps, and we will not address that in this post, since it is “out of syllabus”. Increase the Minimum Support Price (MSP)? They might do that, but it will do nothing to solve the problem.

As I had pointed out in this post written after a field trip to a farm, what policymakers need understand is that farming is fundamentally a business, and like any other business, there is risk. In fact, given the number of sources of uncertainty that exist, it can be argued that farming is a much riskier business than a lot of other “conventional” businesses.

So there is the risk of high prices of inputs, there is risk of bad weather, there is risk of a glut in supply that leads to low prices, there is a risk that the crop wasn’t harvested at the right time, there is a risk that elephants trampled the field, or there is a risk that there might be a new strain of bugs that might destroy the crops. And so forth. And given that most farmers in India are “small”, with limited land holdings, it needs to be kept in mind that they don’t have diversification as a (otherwise rather straightforward) tool to mitigate their risks.

And when the farmers face so many risks, what does the government do? Help them mitigate at max one or two of it. One of them is the “minimum support price” which is basically a put option written by the government, for free, in favour of the farmers. All it entails is that the farmer  is assured of a minimum price for his wares if market prices are too low at the time of harvest. In other words, it helps the farmer hedge against price risk.

What other interventions do Indian governments do in farming? There are straightforward subsidies, all of the input variety. So farmers get subsidised seeds, subsidised fertilisers, subsidised (or in several cases, free) electricity, occasional subsidies in irrigation, subsidised loans (“priority sector lending” rules), and occasionally, when shit hits the fan, a loan waiver.

Barring the last one, it is easy to see that the rest are all essentially input subsidies, making it cheaper for the farmer to produce his produce (I’m proud of that figure of speech here, and I don’t know what it’s called in English). Even loan waivers, while they happen when market conditions are really bad, are usually arbitrary political decisions, and never targeted, meaning that there are always significant errors, of both omission and commission.

So if you ask the question of whether the government, through all these interventions, make the business of farming easier, it should be clear that an answer is no, for while it makes inputs cheaper and helps farmers hedge against price risk, it doesn’t help at all in mitigation of any other risks. Instead, what the government is essentially doing is by paying the farmers a premium (subsidised inputs, free options) and expecting them to take care of the risks by themselves. In other words, small “poor” farmers, who are least capable of handling and managing risk, are the ones who are handling the risk, and at best the government is just providing them a premium!

The current government has done well so far in terms of recognising risk management as a tool for overall wellbeing. For example, the Jan Dhan Yojana accounts (low-cost bank accounts for the hitherto unbanked) come inbuilt with a (albeit small) life insurance cover. In his budget speech earlier this year, the Finance Minister mentioned a plan to introduce universal insurance against accidental death. Now it is time the government recognises the merits of this policy, and extends it to other sectors, notably agriculture.

What we need is a move away from “one delta” cash subsidies and a move towards better risk management. The current agricultural policies of successive governments basically ensure that the farmer makes more when times are good (lower inputs costs, free put options (MSP) with high strike price), and makes nothing when times are bad. Rudimentary utility theory teaches us that the value of a rupee when times are good is much lower than the value of a rupee when times are bad. And for the government, it doesn’t really matter as to when it spends this money, since its economic cycle is largely uncorrelated with farmers’ economic cycles. So why waste money by spending it at a time of low marginal utility as opposed to spending it at a time of high marginal utility?

In other words, the government should move towards an institutionalised system of comprehensive crop insurance. Given the small landholdings, transaction costs of such insurance is going to be high, and the government should help develop this market by providing subsidies. And this subsidy can be easily funded – remember that the government is already paying some sort of a premium to farmers so that they manage their own risk, and part of this can go towards helping farmers manage their risk better.

It is not going to be politically simple, for the opposition (like Rahul Gandhi) will rail that the government is taking money away from farmers. But with the right kind of messaging, and subsidies for insurance, it can be done.

Gerrymandering in Bangalore

So a couple of years back, just before the Karnataka Assembly elections, I had taken a look at Gerrymandering within the constituencies of Bangalore. This picture shows the boundaries of the parliamentary constituencies in the city, and you can see that it is bizarre. For example, parts of the Bangalore North parliamentary constituency (black) lie to the south of all of Bangalore South constituency (green)!

Now, the word “gerrymander” was invented in the 1800s, when one Mr. Gerry, who was the governor of Massachusetts, redrew the districts (constituencies) in the state in order to maximise the chances of his further election victory, and the redrawn districts looked like some kind of a mythical creature, which was given the name “gerrymander”.

Now, while the Bangalore figure above looks bizarre, no doubt, it doesn’t really resemble any animal, mythical or otherwise. However, with the proposed BBMP Restructuring, Bangalore’s wards are in the news again. And I was just looking at the population densities in different wards, and happened to take a look at Padmanabhanagar, which is my current assembly constituency. And this is what it looks like (different components are the different wards within the constituency, and intensity of colouring indicates population density within these wards).

padmanabhanagarYes, really, that is the shape of the Padmanabhanagar assembly constituency. If you have any doubts, get the data from http://openbangalore.org and check out for yourself (that’s where I got the mapping data from; density data came from the BBMP Restructuring site  – there’s a link there with excel file on areas and populations).

Anyway, so what do you think Padmanabhanagar looks like? To me, this looks like a hen that is running. To Thejaswi Udupa, with whom I shared this picture, it looks like a “hen doing ballet”.

Whatever it is, such gerrymandering leads to atrocious policy and implementation. My house, for example, is very close to the beak of the hen described above. In other words, it’s in one extreme corner of the constituency. Actually, if you look at the portion forming the hen’s head, that’s Yediyur ward, and my house is at one extreme of Yediyur ward, too.

The road outside was dug up a year and half back and hasn’t yet been asphalted. Stone slabs covering storm water drains were removed four months back for desilting and are yet to be placed back. And because we are at one extreme edge of both assembly and BBMP constituencies, neither MLA (R Ashok) nor corporator (NR Ramesh) bothers.

If there were no gerrymandering, there wouldn’t be any “extreme corners” like this one. And that would mean less chance for elected representatives to ignore certain parts. And that would lead to better governance!

Update:

This is what all the constituencies of Bangalore look like (click for a full size image)

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Let your imagination run wild!

The Box: A review

So over the weekend I started and finished reading “The Box: How the shipping container made the world smaller and the world economy bigger” by Mark Levinson. It’s a fascinating book, and one that I had been intending to read for a very long time. Somehow it always kept slipping my mind whenever I wondered what book to buy next, and I’d pushed buying it for a long time now.

Finally, a few days back, when “unknown twitter celebrity” Krish Ashok asked his followers to send him reading recommendations, and when he published the list, and I saw this book on the list, and I saw that the book was available on Kindle for Rs. 175, I just bought it. This is the first book in a very long time that I’ve bought “straight” off the Kindle Store, not bothering with a sample.

It’s a fascinating book, as it takes us through the 50-odd years of history of the shipping box. And on the way, it gives us insights into the development of the world economy through the 50s and 60s, and factors that led to the logistic revolution ushered in by the box.

We think of post world war America as this capitalist haven, where markets were free, and you could get jailed for communist leanings. We tend to think about this time as one of innovation and freedom of business, leading to high economic growth.

This wasn’t the case, though. While the US was nominally capitalist and markets were supposedly free, this was a time of heavy regulations, and the presence of cartels. International shipping rates, for example, till the mid-1970s, were set by “conferences” (basically cartels), after which the cartels broke down. It was not possible for a carrier to quote an integrated source-to-destination rate, and rates had to be quoted by leg. Someone who wanted to start a new train route had to prove to the regulators that it would not harm existing players!

And then there were the unions. Levinson devotes an entire chapter to how the unions were managed. Basically containerisation meant greater mechanisation and a reduction in demand for labour. And this was obviously not acceptable to the dockworker unions, and led to protracted battles which needed to be resolved before containerisation could take off. The most interesting story came from the UK, where unions in most established ports (primarily London and Liverpool) blocked containerisation, and went on strike in the specially developed container port at Tilbury. Felixstowe, which had hitherto been too obscure a port to attract unions’ attention, now unencumbered by unions, jumped on to the container business and is now by far the UK’s biggest port.

Levinson also pays much attention to how the container shaped economies in general. Prior to containerisation, the cost of changing mode of transport was very high, since individual items needed to be unloaded from one means of transport and loaded to another. Industries were usually located based on access to port, and ports came up to service nearby industries. Containerisation changed all that. Now that it was easy to transport using a series of different means of transport, the location advantage of being close to port was lost. And this had massive effects on the economy of regions.

Massive effects on economies also happened due to the scale factor that containerisation brought in. Small ports didn’t make any sense any more, since the transaction cost of berthing was too high. And so small ports started dying, with business being soncolidated into a few larger ports. The game changed into a winner take all mechanism.

In the 1950s and 60s, before the coming of the container, shipping was a low-capex high-opex (operational expenditure) business. Most ships were old and cheap, but costs in terms of labour and other things was high. With the coming of the containership, the cost structure inverted, with the capital expenditure now being extremely high, but opex being quite low. This led to “revenue management”, and a drop in prices, and ultimately the breaking of the cartels.

The book is full of insights, and chapters are organised by subject rather than in chronological order. It gets a little repetitive at times, but is mostly crisp (I read it in a weekend), and the insights mentioned above are only a sample. And it tells us not only the story of the box (which it does) but also the story of the world economy, and regulation, and competition, and unionisation and economies of scale. Highly recommended.

 

Brainstorming

I was never a big fan of “brainstorming”. I’m referring to those meetings where everyone gets together and thinks aloud, in order to converge to a solution. In the past, when I’ve been involved in such exercises, they’ve mostly come to nothing, and mostly ended with a list of to-dos which got never done (this was mostly in a corporate context). As a consequence, I started hating large meetings also (either most people wouldn’t add value or it would end up like a group discussion with everyone shouting), and have been trying to avoid them.

This time, though, it was different. The context was not corporate. The agenda did not involve an item of day to day work. None of us had a firm stand on the topic at the beginning of the meeting, with each of us having our own apprehensions of either stand (when people come with preconceived ideas and biases, there usually is nothing to storm our brains about).

And so we got together. And we talked. There were times when no one spoke. There were times when it actually turned out to be like a group discussion (I actually said, “ok I have ten points which I haven’t been able to make in the last one hour. I’ve written them down and let me shoot now”). But the situation never got out of hand. Mutual respect meant that cross-talk quickly died out, and we listened to each other. And it was extremely civil.

And then things started crystallising. Soon, some of us had an opinion. Later, others did. Some were ultimately not convinced, but had an opinion anyway. In a period of about twenty minutes somewhere in the third hour of the session, we all seemed to have an “aha moment” (apologies for that consultantspeak). But such moments occurred at different times for each of us.

And then we did the usual thing of “going round the table” for each of us to express our opinions. And then we did. And as each of us expressed our opinions, we discussed it further. Things crystallised better. And we ended the meeting asking everyone who was there to blog about it.

This is what I wrote:

given that these two internets are independent, the total value is a^2 + b^2. Now, if we were to tear down the walls, and combine the two internets into one, what will be the total value? Now that we have one network of (a+b) users, the value of the network is (a+b)^2 or a^2 + 2 ab + b^2 . So what is the additional benefit that we can get by imposing net neutrality, which means that we will have one internet? 2 ab, of course!

This is what Nitin wrote:

If the government opens up the telecom service market to greater competition, perhaps by issuing unlimited licenses, then there is a case to allow them the freedom to discriminate among customers. As the state-owned carrier, BSNL can provide a neutral internet. However, if the government does not open the sector to further competition, therefore shielding the telecom service providers from more competition, then mandating net neutrality provides a reasonable approach to promoting the public interest.

Varun wrote this:

the regulator’s two major tasks are to enhance social welfare by protecting the consumer interest and to create an environment that is conducive for business — that will further enhance social welfare. A neutral internet will definitely benefit the consumers interest; but since the regulatory framework is not conducive for business, it appears that net-neutrality is in conflict with business interests. The situation can change if the regulatory framework is eased and the markets are opened up.

And Pranay wrote this:

net neutrality as a principle must be upheld. This is because communication network providers should not have the unfair advantage of being able to price internet content differently. Once the communication networks are setup, costs do not change with consumers accessing different content. In any case, the communication service providers are free to have fair internet usage policies to prevent induced demand effects

Gautam went down approximately the same path as me, and wrote this:

This is exactly why I oppose Zero Rating as well, whether paid or unpaid – it tends towards creating pockets of disconnected users per telecom company and while this is valuable for the telecom company and the applications and sites that are zero-rated, it reduces the total utility of the public internet, as a whole.

Devika deviated a bit from the crowd. This is what she said:

That said, it does not mean that ISPs should be restricted from entering into contracts with content providers. If Flipkart wants to undertake a joint marketing initiative with Bharti Airtel, it should be allowed to so. For example, Flipkart can give benefits to Airtel from sharing their customer base. To be extremely clear, such collaborations should not hinder access to any other internet sites. This will maintain a level playing field for all content providers.

Anupam, too, differed, and argued that customers need to be given choice:

If a person runs his business solely based on international VoIP calls and doesn’t mind paying extra for ensuring reliability and speed, he should be able to access that privilege. Or, for that matter, a Facebook or Twitter addict who wants these apps to be quick such that they can post real time selfies, should be able to choose these apps over say, apps which give real time updates on political happening in Nicaragua. Thus, people can be given a choice as to which data packets have to be prioritized within their limited bandwidth

And Pavan argued that competition is alone not sufficient:

However, if  the internet is a public good – will competition ever be sufficient to ensure the vibrancy of the network? Will competition be sufficient to improve the effective network size? I would argue that it might fall short of the mark. Thus, regulations that enforce net neutrality may be necessary to prevent ‘walled gardens’ from springing up.

As you can see, our opinions at the end of the meetings all differ. But you can also see that the posts are all well-argued, implying that at the end of the meeting we all had a reasonable degree of clarity. And that is what made it a brilliant brainstorming session.

Now if only all other brainstorming sessions were to be as good! Oh, and it’s a long post already but here are some #learnings on what makes for a successful brainstorming session:

  • Open minds on behalf of participants
  • Mutual respect, and giving everyone a chance to speak
  • No overbearing participants or moderators, leading to a freewheeling debate

As you can see, all these are similar to what makes a multiplayer gencu successful! But brainstorming has a specific agenda, so it’s not a gencu!

Getting counted

So I got counted yesterday. And my caste was also noted. This was part of the caste census that is being currently conducted by the state government. I had a few pertinent observations on the questions and procedure, so thought I should write them down here.

  • The survey team consisted of a man and a woman. I wonder if the gender combination of the surveyors was chosen deliberately, in order to avoid awkwardness in either direction depending upon who opens the doorbell.
  • Anyway, the man seemed to be the senior person and didn’t speak much. The woman had an extraordinarily large “exam pad” (of A2 size if I’m not wrong), with a sheaf of papers where she would note down the answers.
  • So after “normal details” such as names and address, the survey proceeded directly to the caste. “Do I have to answer that?”, I asked. They said I didn’t have a choice. I told them and the lady noted it down. Then I was asked about my subcaste. I again asked if I should answer. The woman said yes, but the man overruled and they moved on.
  • There were other demographic questions involved, which I don’t remember answering during the “general census” four years ago. Stuff like the age at which we got married and the age at which we joined school.

    Anyone who can get their hands on the raw data can have a field day looking at the correlations. Like – what is the distribution of age of marriage by caste? etc.

  • The questionnaire was a pretty long one. A cursory search indicates there are a total of 55 questions. I was also asked about household assets. “How many TVs?” “One” “How many computers?” “Hmm.. Five”. “Laptops?” “I already counted them among computers” and so on.
  • I got asked about my family income also. Now you can see that all this data along with caste can be used to form some interesting correlations.
  • And it doesn’t stop there. This is the first time in a census that I’ve been asked for an identity proof. “We want both voter ID card and Aadhaar”, the lady said. I showed our voter IDs, and she noted down the number. Remember that this is a “caste census”? You know where this might be going now. I told them I couldn’t find my Aadhaar, and they said it was okay.
  • As the lady ploughed through the multiple pages of the extra-large form, I couldn’t help wondering as to why the surveyors couldn’t have been given tablets instead – in terms of the repeated efforts of first filling up the forms and then having to enter the data into the database. Given the size of the form and difficulty of carrying, it would have done the surveyors a huge favour.
  • Finally, the form was filled with pencil. Ostensibly this was so that if they made any errors in entry, they could correct immediately. I’m assuming there are no “convenient alterations” made.

Thinking about it now (I didn’t think yesterday) I’ve perhaps given away more information than I should have (voter ID number, etc.), and might have compromised on my privacy. I hope, however, that I’m one of those people who gets access to the raw database once it’s compiled (obviously much much easier said than done), given the kind of data that has been collected and the insights that can be drawn from it.

If you are a politician who gets your hands on this data, and want to use that to build your election strategy, you should hire me. There is a wealth of information in this data!

Narendra Modi and the Correlation Term

In a speech in Canada last night, Prime Minister Narendra Modi said that the relationship between India and Canada is like the “2ab term” in the formula for expansion of (a+b)^2.

Unfortunately for him, this has been widely lampooned on twitter, with some people seemingly not getting the mathematical reference, and others making up some unintended consequences of it.

In my opinion, however, it is a masterstroke, and brings to notice something that people commonly ignore – what I call as the “correlation term”. When any kind of break up or disagreement happens – like someone quitting a job, or a couple breaking up, or a band disbanding, people are bound to ask the question of whose fault it was. The general assumption is that if two entities did not agree, it was because both of them sucked.

However, considering the frequency at which such events (breakups or disagreements ) happen, and that people who are generally “good” are involved in such events, the badness of one of the parties involve simply cannot explain them. So the question arises – if both parties were flawless why did the relationship go wrong? And this is where the correlation term comes in!

It is rather easy to explain using vector calculus. If you have two vectors A and B, the magnitude of the sum of the two vectors is given by \sqrt{|A|^2 + |B|^2 + 2 |A||B| cos \theta} where |A|,|B| are the magnitudes of the two vectors respectively and \theta is the angle between them. It is easy to see from the above formula that the magnitude of the sum of the vectors is dependent not only on the magnitudes of the individual vectors, but also on the angle between them.

To illustrate with some examples, if A and B are perfectly aligned (\theta = 0, cos \theta = 1), then the magnitude of their vector sum is the sum of their magnitudes. If they oppose each other, then the magnitude of their vector sum is the difference of their magnitudes. And if A and B are orthogonal, then cos \theta = 0 or the magnitude of their vector sum is \sqrt{|A|^2 + |B|^2}.

And if we move from vector algebra to statistics, then if A and B represent two datasets, the “cos \theta” is nothing but the correlation between A and B. And in the investing world, correlation is a fairly important and widely used concept!

So essentially, the concept that the Prime Minister alluded to in his lecture in Canada is rather important, and while it is commonly used in both science and finance, it is something people generally disregard in their daily lives. From this point of view, kudos to the Prime Minister for bringing up this concept of the correlation term! And here is my interpretation of it:

At first I was a bit upset with Modi because he only mentioned “2ab” and left out the correlation term (\theta). Thinking about it some more, I reasoned that the reason he left it out was to imply that it was equal to 1, or that the angle between the a and b in this case (i.e. India and Canada’s interests) is zero, or in other words, that India and Canada’s interests are perfectly aligned! There could have been no better way of putting it!

So thanks to the Prime Minister for bringing up this rather important concept of correlation to public notice, and I hope that people start appreciating the nuances of the concept rather than brainlessly lampooning him!

How 2ab explains net neutrality

I’ve temporarily resurrected my blog on the Indian National Interest, and this post is mirrored from there. This is a serious argument, btw. After a prolonged discussion at Takshashila this morning, I convinced myself that net neutrality is a good idea.

So Prime Minister Narendra Modi has set off this little storm on Twitter by talking about the relationship between India and Canada being similar to the “2ab term” in the expansion of (a+b)^2 .

Essentially, Modi was trying to communicate that the whole of the relationship between India and Canada is greater than the sum of parts, and it can be argued that the lack of a “cos \theta” term there implies that he thinks India and Canada’s interests are perfectly aligned (assuming a vector sum).

But that is for another day, for this post is about net neutrality. So how does 2ab explain net neutrality? The fundamental principle of the utility of the Internet is Metcalfe’s law which states that the value of a telecommunications network is proportional to the square of the number of entities in the network. In other words, if a network has n entities, the value of these n entities being connected is given by the formula k n^2 . We can choose the unit in which we express utility such that we can set k = 1, which means that the value of the network is n^2.

Now, the problem with not having net neutrality is that it can divide the internet into a set of “walled gardens”. If your internet service provider charges you differentially to access different sites, then you are likely to use more of the sites that are cheaper and less of the more expensive sites. Now, if different internet service providers will charge different websites and apps differently, then it is reasonable assume that the sites that customers of different internet services access are going to be different?

Let us take this to an extreme, and to the hypothetical case where there are two internet service providers, and they are not compatible with each other, in that the network that you can access through one of these providers is completely disjoint from the network that you can access through the other provider (this is a thought experiment and an extreme hypothetical case). Effectively, we can think of them as being two “separate internets” (since they don’t “talk to” each other at all).

Now, let us assume that there are a users on the first internet, and b users on the second (this is bad nomenclature according to mathematical convention, where a and b are not used for integer variables, but there is a specific purpose here, as we can see). What is the total value of the internet(s)?

Based on the formula described earlier in the post, given that these two internets are independent, the total value is a^2 + b^2. Now, if we were to tear down the walls, and combine the two internets into one, what will be the total value? Now that we have one network of (a+b) users, the value of the network is (a+b)^2 or a^2 + 2 ab + b^2 . So what is the additional benefit that we can get by imposing net neutrality, which means that we will have one internet? 2 ab, of course!

In other words, while allowing internet service providers to charge users based on specific services might lead to additional private benefits to both the providers (higher fees) and users (higher quality of service), it results in turning the internet into some kind of a walled garden, where the aggregate value of the internet itself is diminished, as explained above. Hence, while differential pricing (based on service) might be locally optimal (at the level of the individual user or internet service provider), it is suboptimal at the aggregate level, and has significant negative externalities.

#thatswhy we need net neutrality.

Gloomy weather

For most of today, the weather in Bangalore has been what most people would traditionally classify as “gloomy”. The sun has mostly been invisible, popping out only now after a fairly strong shower. There has been a rather thick cloud cover, with the said clouds being mostly dark. There has been the threat of rain all day, culminating in a rather powerful shower an hour back.

I haven’t minded the weather one bit, though, though it helps that I haven’t had to step out of home all day. I’ve been happy sitting by the window, sipping coffee and tea and green tea, and eating Communist peanuts, and working. In fact, I’ve grown up considering this kind of weather (cool, cloudy, with a hint of drizzle) as being the ideal romantic weather, and when the weather turns this way nowadays, I miss the wife a whole lot more! Till recently, I never understood why such weather was traditionally classified as “gloomy”. Until I went to Europe to visit the wife last month.

March in Europe is traditionally classified as “Spring” (summer doesn’t come until June there, which is hard for someone from Bangalore, where summer ends in May, to understand), but in most places I went to (I visited five different cities during my trip), the weather was basically shit. I had carried along my “winter jacket” (bought at a discount in Woodland at the end of last winter), and didn’t step out even once without it. It was occasionally accompanied by my woollen scarf and earmuffs, with hands thrust into pockets.

For days together the sun refused to come out. In fact, our entire trip to Vienna was a washout because of the weather. Thick dark clouds and no sun might be romantic in tropical Bangalore, but in Vienna, where it is accompanied by chilling winds and occasionally maddening rain (and once snow), it can be devastating. It can cause insane NED – you might argue that if weather was so bad in Vienna we could have used it as an excuse to stay inside museums and see things, but the gloom the weather causes is real, as we frittered and wasted hours in an offhand way, hanging around in coffee shops doing nothing, and just touring the city in trams, again doing nothing (we had got a three-day pass).

The one time the sun peeped out (after a heavy shower like this afternoon’s in Bangalore), we went ecstatic, but our joy was shortlived as it was quickly followed by another downpour which killed our enthu for the rest of the day.

The bad weather followed us all though our 10-day trip across Prague, Vienna and Budapest. The first and last being former Soviet cities didn’t help, as the (really beautiful from inside) apartment we stayed in Prague was in a rather dreary area, with the weather making the locality even more depressing. As a consequence, we hardly hung around in the locality, taking away dinner on each of the three days we were there. Our Budapest apartment was in a more vibrant part of town (most of our meals were within 500m of our apartment) but the general dreariness and chill meant that we didn’t explore as much as we would have otherwise done, perhaps.

We were back in Barcelona (which too had been rather dreary in March) last Saturday night, and when there was bright sunshine on Easter Sunday morning as we went to the nearby bakery for breakfast, we were absolutely ecstatic. We spent time just sitting on the parkbench, soaking in the sunshine. I made a mental note that if I’m going those parts next spring, I should go there AFTER Easter and not before (like this year). I also made a mental note to never again question why weather that is traditionally called “gloomy” is called so.

What makes a Gencu successful?

Last evening I participated in a gencu with Cueballs and Zulu. First of all, let me explain what “gencu” is. It’s a term coined by the wife, and is short for “general catch up”. The reason she coined it was that for a while I was meeting so many people without any real agenda (I still do. Did four such meetings yesterday including the aforementioned) that she felt it deserves its own coinage.

So she would ask “what are you doing today?”. “Meeting this person”, I would respond. “Why?” would be the obvious next question. “No specific reason. Gen catch up”, I would respond.

I ended up saying “Gen catch up” so many times that she decided to shorten it to “gencu”, and we use the term fairly often now. This is the first attempt at publicising it, though. And no, unlike me, she still doesn’t do too many gencus.

So the thing with gencus is that you have no specific agenda, so if you don’t have anything to talk about, or don’t find each other particularly interesting, the meeting can quickly unravel. You can soon run out of things to talk about, and quickly you will start discussing who you are in touch with. So in that sense, gencus can have a high chance of failure (especially if you are meeting the counterparty for the first time or after a long time), and this is one of the reasons why the wife doesn’t do gencus.

One way of insuring against gencus going bad is to have more players. When you have three people, the chances of the gencu going bad are reduced (can’t be ruled out, but the probability decreases). In that sense, you get to meet two people at the same time with the insurance that you will not get bored. On the downside, if there is something specific that two of you want to talk about, you either have to shelve it or let the third person get bored.

While riding to another gencu after the one with Cueballs and Zulu (I must mention that none of the three of us felt the need for a third person to “insure” the gencu. Those two were planning a gencu openly on twitter and since I wanted to meet them both, I invited myself, that’s all!), I was thinking of what can make a multiparty (> 2) gencu successful. I was thinking of my recent multiparty gencus, and most of them had been pleasant and enjoyable, and never boring for any party.

The key to making a multiparty gencu successful, I realised, is mutual respect (ok I’m globing now, I admit). I’ve been through bad 3-way gencus too, and the problem with those has been that two of the three dominate, and don’t let the third person speak (a group discussion like atmosphere). Or two of three have a common interest or connection and speak too much about that, excluding the third person. Such meetings might be okay for one or two parties (among those that are dominating) but definitely uncomfortable for the third.

The above point had two people dominating the gencu at the cost of the third being a problem. Sometimes you don’t even need two people for that. One of the three people can simply hijack the whole thing by talking about themselves, or their pet topic, at the exclusion of the other two people (such people don’t really need counterparties for conversation, but still choose to attend multiparty gencus).

The network structure before the meeting is also important. In our case yesterday, we knew each other “pair-wise”, so it was a complete graph at the beginning of the meeting itself. Not all three-party gencus are like this, and it is possible for two people at one such gencu to not know each other before. This can occasionally be troublesome, since the law of transitivity doesn’t hold for people getting along with or liking people, so if A knows B and B knows C, there is no guarantee that A will get along with C. It can also happen that B will give more importance to talking to A than to talking to C (been affected by this from all three sides in the past). It might be hard to find stuff that everyone finds interesting, resulting in leaving out people. And so forth.

What about larger groups? Groups of five or bigger I’ve seen usually devolving into smaller groups (a notable exception was this one drinking session in late January, where we were 7 people and still had only one (excellent) conversation going), so they need not be analysed separately. Groups of 4 can work, but I prefer groups of 3 (maybe I’ll do a more rigorous analysis of this in a later post).

So what’s your experience with Gencus? What is the ideal number, and how do you go about it?

Why Google, Facebook, etc. are against Net Neutrality in India

I’ve been out of country for close to a month now, so haven’t really been following India news too closely (apart from via social media). But from my (biased 🙂 ) sources I understand that TRAI has put out a discussion paper in which they want to permit telecom companies to charge you based on the service that you use, thus violating Net Neutrality.

Now I’m yet to take a stand on this (this argument by Tim Harford against Net Neutrality is rather compelling, making me believe that well implemented competition regulations can mean we can make do without Net Neutrality, but I haven’t given it too much thought yet), but I have an idea as to why the likes of Google and Facebook, which in the past and in other geographies have come out strongly in favour of Net Neutrality, are okay with Net Neutrality violation in India.

The basic issue in India is with “over the top” services such as WhatsApp and Viber which the likes of Airtel and Vodafone see as a threat for it competes with their rather lucrative voice and SMS business. I’ve mentioned in the past that there’s a quality issue here which the telecom companies can differentiate on (packet switching doesn’t work that well for voice), but given costs it is hard to make a compelling case for using circuit switching for international calls.

So the likes of Airtel and Vodafone are threatened by such services and want to charge users more for using WhatsApp and Viber compared to other applications. Net Neutrality supporters, who argue that internet infrastructure should just be a set of neutral pipes (rather than a “two-sided platform”, as Harford argues), argue that this is unfair, and that Airtel and Vodafone are exploiting their positions as gatekeepers (literally) to defend their own related business.

Coming to the point of this post, entities such as Google and Facebook are coming out on the “wrong” side of the net neutrality debate here in India, arguing that internet companies should be looked at as two-sided platform markets rather than neutral pipes (resisted the urge to use the phrase “information superhighway” there!). Considering that they’re proponents of Net Neutrality elsewhere, why are they taking this stance in India?

Assuming that final regulations come out in favour of net neutrality (treating internet as infrastructure, and not a platform), how should the likes of Airtel and Vodafone react? Clearly their data business is cannibalising their voice business, so they should logically increase their prices for data plans (no brainer). Given that they will not be allowed (in this situation) to charge differential rates based on the service, they will have to uniformly jack up data rates.

This can be troublesome for Google and Facebook on two counts. Firstly, the telecom providers may not get their pricing right, and rather than having a ramp (charging heavy users heavily, since only such people will be using WhatsApp or Viber), they might increase data rates across the board. This will result in a drop in mobile internet penetration (one reason it’s so high now is that it’s cheap), and considering that Google and Facebook are services that pretty much every who uses the internet in India uses, it will result in loss of user base, traffic and revenue (possibly) for them.

The second problem is that even if telecom operators get their pricing right (maintain current pricing for basic plans, but jack up rates for high data usage) it spells trouble for Google and Facebook. One of Google’s widely used services is the video streaming application Youtube, and Youtube consumes high bandwidth. Facebook is getting into native video in a big way, and it is estimated that it might be more successful than Youtube in terms of advertising. And with correct internet pricing under net neutrality, demand for services such as Youtube and Facebook Video will go down significantly, which is not good for those services.

So the simple answer is that the reason Google and Facebook are coming out against Net Neutrality is that they are coming out on the right side of the new proposed (anti neutrality) regulations. Like WhatsApp and Viber, they too are high bandwidth applications, but unlike WhatsApp or Viber they don’t compete directly with the owners of the pipes. Thus, they want providers to have the ability to impose differential pricing, since that will mean that subscribers can access their content for cheaper, and this allows them to make more advertising revenues.

In my view (again note that I’m yet to take a stand on this net neutrality business), this move by Google and Facebook to support the anti-neutrality regulations is extremely short-sighted since it can hit them back at a later point in time. There is no guarantee that in the long term their services will not compete with that of telecom providers (Hangouts? Facebook voice calling?) and the regulations that they are currently supporting can come back to hit them at a later point in time.

It seems that Google and Facebook are working on an assumption that there will not be other high-bandwidth applications that will compete less with pipe-owners (telecom operators) than them (Google & Facebook). They are very likely to be in for a surprise, and end up as the cranes in this Panchatantra story.