The Case for Shamima Begum

 

Is the Indian Judiciary Helpless?

 

A Level Economics 61: State Provision and Regulation

State Provision:

State provision refers to the direct involvement of the government in supplying goods and services that the private market fails to produce efficiently due to market failures or the presence of public goods. This intervention ensures essential services are available to all citizens, regardless of their ability to pay. Examples of state provision include public education, healthcare, public transportation, and defense.

1. Public Education:

• Definition: Public education is a government-provided service that offers free or subsidized education to all citizens.
• Market Failure: Education generates positive externalities, benefiting society as a whole by creating a skilled and educated workforce. Private markets may under-provide education, leading to an underinvestment in human capital.
• State Provision: Governments provide public schools and ensure access to education for all, promoting social mobility and economic growth.

2. Healthcare:

• Definition: State provision of healthcare involves government-funded healthcare services accessible to all citizens.
• Market Failure: Healthcare generates positive externalities by reducing infectious diseases and improving overall public health. Private markets may not provide healthcare efficiently, especially for low-income individuals.
• State Provision: Governments fund public hospitals and clinics, ensuring access to essential healthcare services for all citizens.

Regulation:

Regulation involves government rules and oversight to correct market failures, protect consumers, and ensure fair competition. Regulatory measures aim to create a level playing field, prevent abuse of market power, and promote a socially optimal allocation of resources.

1. Environmental Regulations:

• Definition: Environmental regulations set standards and restrictions to address negative externalities like pollution and climate change.
• Market Failure: Private firms may overproduce goods, causing pollution and harming the environment, as they do not bear the full cost of these negative externalities.
• Regulation: Governments impose emission standards, carbon taxes, and pollution permits to internalize environmental costs and incentivize firms to adopt cleaner technologies.

2. Consumer Protection Laws:

• Definition: Consumer protection laws safeguard consumers from unfair practices and ensure product safety and quality.
• Market Failure: Imperfect information can lead to adverse selection and moral hazard, disadvantaging consumers in the market.
• Regulation: Governments enforce consumer protection laws to ensure truthful labeling, fair pricing, and product safety, mitigating information asymmetry and protecting consumer interests.

3. Antitrust Regulation:

• Definition: Antitrust regulation aims to prevent anti-competitive behavior and restrain the abuse of market power by monopolies or dominant firms.
• Market Failure: Monopolies can reduce competition, leading to higher prices and reduced consumer choice.
• Regulation: Governments enforce antitrust laws, reviewing mergers and acquisitions and regulating pricing practices, to maintain competition and protect consumer welfare.

4. Financial Regulations:

• Definition: Financial regulations govern the financial sector to ensure stability, transparency, and protect consumers from fraud and malpractice.
• Market Failure: Imperfect information and asymmetric knowledge can lead to financial crises and fraud in the financial industry.
• Regulation: Governments implement financial regulations, such as capital requirements for banks and consumer protection laws, to maintain financial stability and protect investors and consumers.

In conclusion, state provision and regulation play a vital role in correcting market failures and promoting the overall welfare of society. By directly providing public goods and essential services and implementing regulations to address externalities, information asymmetry, and anti-competitive behavior, governments can ensure a more efficient and equitable allocation of resources.

Why are Vietnam’s schools so good? Government Intervention or Free Markets

 

It understands the value of education and manages its teachers well from The Economist

 

Ho chi minh, the founding father of Vietnam, was clear about the route to development. “For the sake of ten years’ benefit, we must plant trees. For the sake of a hundred years’ benefit, we must cultivate the people,” was a bromide he liked to trot out. Yet despite years of rapid economic growth, the country’s gdp per person is still only $3,760, lower than in its regional peers, Malaysia and Thailand, and barely enough to make the average Vietnamese feel well-nurtured. Still, Ho Chi Minh was alluding to a Chinese proverb extolling the benefits of education, and on that front Vietnam’s people can have few complaints.

Their children go through one of the best schooling systems in the world, a status reflected in outstanding performances in international assessments of reading, maths and science. The latest data from the World Bank show that, on aggregate learning scores, Vietnamese students outperform not only their counterparts in Malaysia and Thailand but also those in Britain and Canada, countries more than six times richer. Even in Vietnam itself, student scores do not exhibit the scale of inequality so common elsewhere between the genders and different regions.

A child’s propensity to learn is the result of several factors—many of which begin at home with parents and the environment they grow up in. But that is not enough to explain Vietnam’s stellar performance. Its distinctive secret lies in the classroom: its children learn more at school, especially in the early years.

In a study in 2020, Abhijeet Singh of the Stockholm School of Economics gauged the greater productivity of Vietnam’s schools by examining data from identical tests taken by students in Ethiopia, India, Peru and Vietnam. He showed that between the ages of five and eight Vietnamese children race ahead. One more year of education in Vietnam increases the probability that a child can solve a simple multiplication problem by 21 percentage points; in India the uplift is six points.

Vietnamese schools, unlike those in other poor countries, have improved over time. A study published in 2022 by researchers at the Centre for Global Development, a think-tank based in Washington, dc, found that in 56 of 87 developing countries the quality of education had deteriorated since the 1960s (see chart). Vietnam is one of a small minority of countries where schools have consistently bucked this trend.

The biggest reason is the calibre of its teachers. Not that they are necessarily better qualified; they are simply more effective at teaching. One study comparing Indian with Vietnamese students attributes much of the difference in scores in mathematical tests to a gulf in teaching quality.

Vietnam’s teachers do their job well because they are well-managed. They receive frequent training and are given the freedom to make classes more engaging. To tackle regional inequality, those posted to remote areas are paid more. Most important, teacher assessment is based on the performance of their students. Those whose pupils do well are rewarded through presitigious “teacher excellence” titles.

Besides such carrots, a big stick is the threat of running foul of the ruling Communist Party. The party apparatus is obsessed with education. This percolates down to school level, where many head teachers are party members.

The obsession has other useful effects. Provinces are required to spend 20% of their budgets on education, which has helped regional equity. That the party pays such close and relentless attention also ensures that policies are adjusted to update curriculums and teaching standards. Society at large shares the fixation. Vietnam’s families are committed to education because of its ingrained Confucianism, suggests Ngo Quang Vinh, a social-sector officer at the Asian Development Bank. He says that even poorer parents fork out for extra private tutoring. In cities, many seek schools where teachers have won “excellence in teaching” titles.

All this has reaped rich rewards. As schools have improved, so has Vietnam’s economy. But growth is testing the education system, suggests Phung Duc Tung, the director of the Mekong Development Research Institute, a think-tank in the capital, Hanoi. Firms increasingly want workers with more sophisticated skills, such as team-management, that Vietnamese students are not trained for. Growth has also pulled in migrants to cities, overburdening urban schools. More and more teachers are forsaking education for higher-paying jobs in the private sector. To ensure Vietnam remains best-in- class, the government will have to tackle these trends. As Ho Chi Minh liked to remind people, cultivation requires constant attention. ■

What elite American universities can learn from Oxbridge

Simon Kuper in The FT  

Both the US and UK preselect their adult elites early, by admitting a few 18-year-olds into brand-name universities. Everyone else in each age cohort is essentially told, “Sorry kid, probably not in this lifetime.”  

The happy few come disproportionately from rich families. Many Ivy League colleges take more students from the top 1 per cent of household incomes than the bottom 60 per cent. Both countries have long agonised about how to diversify the student intake. Lots of American liberals worry that ancestral privilege will be further cemented at some point this month, when the Supreme Court is expected to outlaw race-conscious affirmative action in university admissions. 

Whatever the court decides, US colleges have ways to make themselves more meritocratic. They could learn from Britain’s elite universities, which, in just the past few years, have become much more diverse in class and ethnicity. It’s doable, but only if you want to do it — which the US probably doesn’t. 

Pressure from the government helped embarrass Oxford and Cambridge into overhauling admissions. (And yes, we have to fixate on Oxbridge because it’s the main gateway to the adult elite.) On recent visits to both universities, I was awestruck by the range of accents, and the scale of change. Oxbridge colleges now aim for “contextual admissions”, including the use of algorithms to gauge how much disadvantage candidates have surmounted to reach their academic level. For instance: was your school private or state? What proportion of pupils got free school meals? Did your parents go to university?  

Admissions tutors compare candidates’ performance in GCSEs — British exams taken aged 16 — to that of their schoolmates. Getting seven As at a school where the average is four counts for more than getting seven at a school that averages 10. The brightest kid at an underprivileged school is probably smarter than the 50th-best Etonian. 

Oxbridge has made admissions interviews less terrifying for underprivileged students, who often suffer from imposter syndrome. If a bright working-class kid freezes at interview, one Oxford tutor told me he thinks: “I will not let you talk yourself out of a place here.” And to counter the interview coaching that private-school pupils receive, Oxford increasingly hands candidates texts they haven’t seen before. 

Oxbridge hosts endless summer schools and open days for underprivileged children. The head of one Oxford college says that it had at least one school visit every day of term. The pupils are shown around by students from similar backgrounds. The message to the kids is: “You belong here.” 

It’s working. State schools last year provided a record 72.5 per cent of Cambridge’s British undergraduate admissions. From 2018 to 2022, more than one in seven UK-domiciled Oxford undergraduates came from “socio-economically disadvantaged areas”. Twenty-eight per cent of Oxford students identified as “black and minority ethnic”; slightly more undergraduates now are women than men. Academics told me that less privileged students are more likely to experience social or mental-health problems, but usually get good degrees. These universities haven’t relaxed their standards. On the contrary, by widening the talent pool, they are finding more talent. 

Elite US colleges could do that even without affirmative action. First, they would have to abolish affirmative action for white applicants. A study led by Peter Arcidiacono of Duke University found that more than 43 per cent of white undergraduates admitted to Harvard from 2009 to 2014 were recruited athletes, children of alumni, “on the dean’s interest list” (typically relatives of donors) or “children of faculty and staff”. Three-quarters wouldn’t have got in otherwise. This form of corruption doesn’t exist in Britain. One long-time Oxford admissions tutor told me that someone in his job could go decades without even being offered a donation as bait for admitting a student. Nor do British alumni expect preferential treatment for their children. 

The solutions to many American societal problems are obvious if politically unfeasible: ban guns, negotiate drug prices with pharmaceutical companies. Similarly, elite US universities could become less oligarchical simply by agreeing to live with more modest donations — albeit still the world’s biggest. Harvard’s endowment of $50.9bn is more than six times that of the most elite British universities. 

But US colleges probably won’t change, says Martin Carnoy of Stanford’s School of Education. Their business model depends on funding from rich people, who expect something in return. He adds: “It’s the same with the electoral system. Once you let private money into a public good, it becomes unfair.” 

Both countries have long been fake meritocracies. The US intends to remain one.

Prospects for Pakistan in 2023

 

Rishi Sunak’s first job? Clearing up his own mess

 A clever man, with a penchant for bad ideas writes The Economist

Oct 25th 2022

Rishi sunak entered Downing Street clutching an invisible dustpan and broom. “Mistakes were made,” declared the new prime minister on October 25th, all but rolling up his sleeves. “I have been elected as leader of my party…to fix them.” The voice was passive but the identity of the culprit was clear—Liz Truss, Mr Sunak’s hapless predecessor, who managed just 49 days in the job. It is the morning after the night before in the Conservative Party. The grown-ups have returned to find the house has been trashed. Now Mr Sunak must start the clean-up.

There is just one problem with this narrative. Mr Sunak is a cause of the problem as well as the solution. The new prime minister is helping tidy up a mess that he helped create.

When the Conservative Party has erred in recent years, Mr Sunak has nearly always been in favour of the mistake rather than the fix. There were many reasons to support Britain leaving the eu. Mr Sunak, however, picked the worst one: he thought it was a cracking idea. Britain will be “freer, fairer and more prosperous outside,” wrote Mr Sunak in 2016. It was a pragmatic decision, not a romantic one. The fundamental problem at the heart of his own government will be a policy for which he long campaigned. Likewise, Mr Sunak was comfortable with a “no deal” Brexit so long as Britain actually left the eu. Mr Sunak has pledged a more constructive relationship with the bloc. Better not to have broken it at all.

After the referendum triggered three years of political deadlock, Mr Sunak supported an extraordinary solution to the mess: Boris Johnson. That decision can be put down to cynicism. Mr Johnson was likely to win regardless of whether he was endorsed by Mr Sunak, at the time a junior minister in the department for local government. But intellectual contortions were required to join the bandwagon. Theresa May was competent and diligent yet also a total failure, ran Mr Sunak’s logic, so it did not matter that Mr Johnson was neither competent nor diligent. In July Mr Sunak resigned from his position as chancellor of the exchequer, prompting a cascade of ministerial departures that ended Mr Johnson’s reign. But why put him in Downing Street in the first place?

Mr Sunak embodies the tension between the Tories’ lust for low taxes and their habit of making big-state promises. Colossal spending programmes during the pandemic made Mr Sunak briefly the most popular politician in the country. Yet these were also the decisions he most resented; he tried to curtail schemes such as furlough prematurely in a bid to save cash. In the spring of this year, Mr Sunak similarly dragged his feet on offering support for ballooning energy bills. He is, at heart, a small-state Conservative, even if he has showed a commendable ability to overcome his natural instincts when urgent need arises.

If fiscal conservatism comes first for Mr Sunak, what comes after is much more erratic. As an ambitious backbencher Mr Sunak supported low-tax “freeports”, which shuffle economic activity around rather than generating it. As chancellor Mr Sunak championed the “Eat Out to Help Out” scheme, when the government in effect paid unvaccinated people to sit together during a pandemic and infect each other. Mr Sunak pushed the Royal Mint to issue a non-fungible token this summer, just as the market for these digital assets crashed. Support for quixotic policy is the norm for Mr Sunak rather than the exception.

In politics, however, luck sometimes masquerades as judgment. Losing the leadership contest to Ms Truss this summer was a big stroke of fortune. During that campaign Mr Sunak predicted that Ms Truss would be a disaster, and she was. He warned that reckless spending commitments would force mortgage rates higher; his campaign team even put together a calculator, pointing out the high bills that would hit households if rates hit even 5%. Yet mortgage rates were heading up regardless of Ms Truss’s rash budget. Her errors have obscured the fact that, had Mr Sunak won in the summer, rising interest rates would have left him with tricky questions to answer. Instead he can pin it all on Ms Truss.

During the summer campaign, and throughout his time on the front benches, Mr Sunak has taken a path long followed by the Conservative Party, which has governed in its narrow political interest rather than the national one. Pledges to curtail onshore wind and solar development please a few zealots but make it harder for Britain to reach its climate goals. Slashing fuel duty as chancellor provided a few days of positive headlines, but failed to put much money in people’s pockets and did not help the environment. There is little evidence that Mr Sunak will take on the vested interests, often in his own party, that hold back Britain’s economy.

Standing on the shoulders of dwarves

The prime minister is a cut above most of his peers. But this is as much a function of a Conservative civil war that killed off competent colleagues as Mr Sunak’s own talents. Elected only in 2015, Mr Sunak has not been doing the job very long. Inexperience, even with copious intelligence, is always a problem. Yet the Conservative Party had nowhere else to turn. It would be comforting to think of Mr Sunak as a clever cynic, a gambler who bet big on Brexit and Mr Johnson and (with a helping hand from Ms Truss) became the youngest prime minister in two centuries. A more worrying analysis is that he is a bright and decent man with bad ideas.

On this reading Mr Sunak does not mark a change from the Tory policies that have left Britain in such a state. Rather he personifies them. The rot in the Conservative Party did not begin with Ms Truss. Britain’s departure from the eu, which Mr Sunak supported, is the thing that acts as a handbrake on the country’s economic prospects. Mr Johnson’s chaotic reign, which he also supported, caused even more ruin. It is the Conservative Party’s failure to take on its supporters that does so much damage to the country. Mr Sunak may be the only available man to fix the government’s errors. But he also helped make them.

Nupur Sharma Sacrificed by Modi Government

 

"India is not in a good place"

 

MSP as Legally Recognized Entitlement?

 

Capitalism is more important than Democracy

 

Marx's Flaws

 

Free markets must be protected through the pandemic

The Financial Times Editorial Board 

Short of a communist revolution, it is hard to imagine how governments could have intervened in private markets — for labour, for credit, for the exchange of goods and services — as quickly and deeply as in the past two months of lockdowns. Overnight, millions of private sector employees have been getting their pay cheques from public budgets and central banks have flooded financial markets with electronic money. 

One may be forgiven for worrying that the pandemic has brought socialism on its coat-tails. Yet the paradox is that today’s emergency measures are necessary to protect the long-term health of free markets and a capitalist economy. Those who, like this news organisation, value those institutions must welcome this unprecedented intervention. 

Liberal democratic capitalism, with free and open markets and secure private property rights, remains the best institutional framework to meet the aspiration of freedom and prosperity for all. But liberal democratic capitalism is not self-sufficient, and needs to be protected and maintained to be resilient. 

Catastrophic emergencies — wars, pandemics and natural disasters — bring risks that only governments can protect against. A purist libertarianism that denies people this protection cannot survive its first crisis.  

Capitalism can also undermine itself over time, if it is not tended by smart regulatory frameworks. The global financial crisis — caused in part by opacity, self-dealing and perverse incentives — showed that markets need good rules of the road to remain free, open and efficient. The accelerating disruptions from climate change prove a similar point. 

Like all social systems, free markets depend on political legitimacy. One of the greatest long-term threats to capitalism functioning well is the perception, let alone the reality, that markets which are supposed to be free are actually rigged in favour of the powerful.  

A creeping suspicion this might be the case had started to erode its popular support, especially after the financial crisis. The rising wave of young self-confessed socialists in the US and UK, homelands of economic liberalism, was clear proof of that. Mismanaged economies that leave many people behind give fuel to left-wing populists, who see state intervention as a replacement for capitalism, not just a corrective. But they also empower right-wing populists, who offer business a Faustian bargain of collaboration. 

Today’s situation resembles that of the 1930s. Back then, centrist liberals from US president Franklin Delano Roosevelt to British economist John Maynard Keynes saw that liberal democratic capitalism, in order to survive, had to be shown to work for everyone. The victory of their ideas set the stage for the success of western capitalism in the decades after the second world war. 

Now, like then, capitalism does not need replacement even if it may need repair. Free markets work best when all have access to them, which requires the state to provide smart, transparent and proportionate ground rules and offer social insurance in the last resort. The latter is exactly what governments have done in the necessary battle against Covid-19. Their many support measures, costly as they are, constitute an investment into a safe return of freer markets and a self-sustaining capitalism when the crisis abates.  

The task for friends of liberal capitalism is to determine how free-market values can be buttressed in the future. That is a task made easier, not harder, if the state does its job well today.

Dickens and Orwell — the choice for capitalism

When this is all over, there is likely to be a new social contract. Which way will we go?  asks JANAN GANESH in The FT

This year is the 70th anniversary of George Orwell’s death and the 150th of Charles Dickens’s. Never spellbound by either (“The man can’t write worth a damn,” said the young Martin Amis, after one page of 1984), I was inclined to sit out all the commemorative rereading. And I did. But then the crisis of the day took me back to what one man wrote about the other. 

More on that in a minute. First, you will notice the pandemic is putting large corporations through a sort of moral invigilation. Ones that rejig their factories to make hand sanitiser (LVMH) or donate their knowhow (IBM) are hailed. Ones that behave like skinflints (JD Wetherspoon, Britannia Hotels) are tarred and feathered. 

Companies have to weigh how much discretionary help to give without flunking their narrow duty to survive and profit. 

This is the stuff of Stakeholder Capitalism or Corporate Social Responsibility.The topic has been in the air all of my career. It has been given new urgency by events. It is the subject of much FT treatment. 

And Orwell, I suspect, would see through it like glass. 

In a 1940 essay (how spoilt we are for round-number anniversaries) he politely explodes the idea of Dickens as a radical, or even as a social reformer. His case is that, for Dickens, nothing is wrong with the world that cannot be fixed through individual conscience. 

If only Murdstone were kinder to David Copperfield. If only all bosses were as nice as Fezziwig. That no one should have such awesome power over others in the first place goes unsaid by Dickens, and presumably unthought. And so his worldview, says Orwell, is “almost exclusively moral”. 

Dickens wants a “change of spirit rather than a change of structure”. He has no sense that a free market is “wrong as a system”. The French Revolution could have been averted had the Second Estate just “turned over a new leaf, like Scrooge”. 

And so we have “that recurrent Dickens figure, the Good Rich Man”, whose arbitrary might is used to help out the odd grateful urchin or debtor. What we do not have is the Good Trade Unionist pushing for structural change. What we do not have is the Good Finance Minister redistributing wealth. There is something feudal about Dickens. The rich man in his castle should be nicer to the poor man at his gate, but each is in his rightful station. 

You need not share Orwell’s ascetic socialism (I write this next to a 2010 Meursault) to see his point. And to see that it applies just as much to today’s economy. 

Some companies are open to any and all options to serve the general good — except higher taxes and regulation. “I feel like I’m at a firefighters’ conference,” said the writer Rutger Bregman, at a Davos event about inequality that did not mention tax. “And no one is allowed to speak about water.” 

What Orwell would hate about Stakeholder Capitalism is not just that it might achieve patchier results than the universal state. It is not even that it accords the powerful yet more power — at times, as we are seeing, over life and death. Under-resourced governments counting on private whim for basic things: it is a spectacle that should both warm the heart and utterly chill it. 

No, what Orwell would resent, I think, is the unearned smugness. The halo of “conscience”, when more systemic answers are available via government. The halo that Dickens still wears. You can see it in the world of philanthropy summits and impact investment funds. 

The double-anniversary of England’s most famous writers since Shakespeare meant little to me until the virus broke. All of a sudden, they serve as a neat contrast of worldviews. Dickens would look at the crisis and shame the corporates who fail to tap into their inner Fezziwig. Orwell would wonder how on earth it is left to their caprice in the first place. 

The difference matters because, when all this is over, there is likely to be a new social contract. The mystery is whether it will be more Dickensian (in the best sense) or Orwellian (also in the best sense). That is, will it pressure the rich to give more to the commons or will it absolutely oblige them?

Ha Joon Chang speaks: Economics for the people

Lecture 1.1 - The Nature of Economics

Lecture 2 - What is wrong with Globalisation?

Lecture 1.2 - Why all economics is political

Lecture 7 - Inequality - What is it and why does it matter

Lecture 9 - The role of the state

Lecture 5 - Why are some countries rich and others poor?

Lecture 8 - Understanding Production

Lecture 10 - Finance and financial crises

Lecture 3 - Conceptualising the individual

Lecture 12 - Industrial policy

Lecture 4 - Can economics save the planet?

Lecture 6 - Will robots take your job?

Lecture 11 - Can economics save the planet?

Economic development