Insights - 2: Weaving a Bharatiya approach to academics

Manju (name changed) is a high school student in a small village in a remote corner of Karnataka. I knew him from when he was just a 4 year old kid. 

A couple of years ago, I and my family members met him again after several years, and were amazed at what he has become. He is in high school now, and was showing us a toy tractor he had built from cardboard boxes and bottle caps. What was amazing was not just the structure of the toy that resembled a real tractor. It was also powered by two motors-- one for the wheels, and another stepper motor for controlling the plough. He had also created a small control panel with which we could control the movement of the tractor, as well as the plough behind! 

We were seriously impressed with his engineering skills and strongly encouraged his parents (who were low income farmers with very little schooling themselves), to get him to study and go to college. 

Fast forward a couple of years. Manju no longer lives with his parents after having had a showdown with them regarding his low marks in school and not having performed up to expectations in school making his prospects of entering college, dim. He has run away to his grand-parents place and cannot face his father. 

I was aghast when I heard this. And even more aghast (with a sense of deja vu) when the dad said that Manju was not all that bright a kid, unlike his elder brother who is so enterprising and dashing. 

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The above episode is in a nutshell, the epitome of the serious pathology that afflicts our formal education today. Formal education in India today is a nightmare for anyone who have their own creative potential and can think independently. The system systematically dispirits individuals to make them into insecure automatons with certificates, who can then be exploited employed in some form of compliant service. 

We keep talking about our "demographic dividend" and keep lamenting why Indians are not innovative or creative, and ask how do Indians excel abroad when they struggle in India itself? 

But hardly anyone seems to be interested in systematically analysing the pathologies that afflict our formal education system and do something about it. 

The formal education system in India, is an efficient system of deracination. Through relentless conditioning and pontification, it makes us dissociate the knowledge that we learn, from our sense of individual personhood based on lived experience and original thought. With several years of schooling, where students are measured on narrow metrics that have little or no relevance to the world around them, they end up learning to live almost completely within their minds with no sense of ownership or belongingness to the reality around them. 

Which is the reason why, in many of our "elite" and "premier" institutions, it feels like we are in a different country altogether. Some of these elite institutions have existed for several decades now, where they impart advanced training and conceptual insights to their students. Yet, outside the campus, the city would have remained as backwards as it were when these institutions started. Very few of the "elite" students engage with the city council or the municipality or the community around them. One would imagine that the entry of an elite academic institution, will change the social ecosystem around it too. Yet, (with some exceptions in recent years), it has hardly been the case. 

Knowledge systems in our formal education today is a direct import from the West. Right in kindergarten, we learnt about summer vacations where people go on picnics to "soak up the sun" and eat plum cakes. Never mind that we had never seen a plum cake before-- and I'm not sure I have seen one even now, and "soaking up the sun" in our summers would be a really bad idea! (Nowadays it is a bad idea even in Europe!) And all the way into higher education several decades later, we learnt about "market basket analysis" without having seen a single supermarket store (at that time), and at work where I remember having written a device driver for a CD changer device just from a textual description of what is a CD changer, and without even having seen such a device! 

Even as researchers, we find today that our work is valued only so much as some major community in the US or Europe values it. No amount of logical arguments or evidence or proofs would serve to convey the importance of any original idea we have developed. All argumentation about originality will be seen as lame excuses, with the only evidence of research quality is to be recognised by some "worldwide" community that is directed by institutions in Europe or US. When we do manage to convey the importance of our original idea, in order to be granted our degrees, we are then expected to work it out to the minutest detail, including implementation and deployment-- a process that would have taken decades even in the Western world. 

(In one of my courses, I include John Nash's seminal paper about the existence of Nash equilibria in finite non-cooperative games, that lead him to eventually win the Nobel prize in economics. I make it a point to note that the first version of this paper had no equations at all in it! It just provided an idea that a result in algebraic topology can be directly applied here. Fat chance in India today that we can ever publish an idea at this preliminary stage and expect to be taken seriously!). 

And whenever I have argued for a need for a Bharatiya approach to academics and research, I usually get a pushback saying that the age old wisdom of Vedas and Upanishads are not relevant today, and that "science is universal" and there is no such thing called "Bharatiya approach" to science. 

I refute both these arguments as follows: 

• By Bharatiya approach, I am not necessarily advocating returning to our education system from thousands of years ago (although it is a good idea in itself, to study our ancient knowledge systematically from today's hindsight-- without the contemptuous interpretations accorded to them by colonial interpreters). I only mean that we need to stop blindly copying either Europe or US or China or Japan or whatever else, and address our challenges with original thought and implement solutions that address our challenges directly (rather than implementing a solution for some other country first and let it "trickle down" decades later).
• Second, the outcome of science may be universal knowledge, but the path to science is highly rooted in socio-cultural-political landscape of the population practising it. To quote Heisenberg, "What we observe is not nature itself-- but nature exposed to our method of inquiry." And there is definitely an original Bharatiya approach to the method of inquiry. When we change the method of inquiry, the universality of our discoveries will not change. Only what we end up discovering will change, and the outcomes of such discoveries will be more directly relevant to our lived experience.

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So what would such a Bharatiya approach be like? I hesitate to offer specific structures and processes, because one, Bharat is way too complex to be described by one specific structure or process; and two, given the way we operate today, whatever specific structure or process we bring in, the system will quickly overfit to the metrics rendering the whole exercise meaningless. 

Instead, I am going to propose the following dimensions that we need to think through, for bringing about effective change: 

Resilience: One of the most important changes we need to bring about is make the education system more resilient. Today, a student's entire future is dependent on "cracking" one exam with stratospheric marks, that pretty much mean nothing in terms of what skills or insights they actually have. Our teenagers cannot afford to fall ill, or get tired, or pursue some creative activity, or take a break. If they do any of these, their future is gone-- not just in terms of jobs or money, but also in terms of basic dignity of existence. Our system is that brittle. 

In my own case, for the crime of having been interested in science as an end in itself during my high school (and having my own science lab at home, and having built my own ham radio, etc.) and not focusing on my exams instead, I am still paying the price in terms of greatly attenuated opportunities and having to receive a lot of contempt and derision. We are way too brittle, and if we wish to really address our mental health crisis, we need to start building resilience into the system, rather than removing ceiling fans from student hostels so that students cannot hang themselves! 

Capability: The second dimension that we need to work on is a holistic sense of "capability" (to use the term in the sense of Amartya Sen's "capability" approach). Capability is an abstract term that refers to how easy is it for someone to build the lives they want, and act meaningfully. Capability includes, but is not limited to the technical and scientific knowledge we learn in college. It has several more dimensions like managing health, wealth, culture, people, uncertainty, risk, etc. 

We often say that college education should be "job oriented" and we reduce it even further, to focus just on what companies coming for placement are looking for. However, in a more fundamental sense, what we are all insecure about is not "job" per se, but "livelihood". For most of the country, jobs are still hard to come by. And even for the "elite" ones today, thanks to disruptions caused by AI, a "job" is no longer a guarantee for "livelihood". 

When we address livelihood instead of jobs, we see that we will need to impart many more skills to our students. Most importantly, jobs require our students to compete for a small number of positions, while livelihood requires them to collaborate and promote teamwork to improve our chances of earning. Livelihood training requires us to teach how to identify problems, how to find what the market needs, how to manage costs, how to manage uncertainty, how to build networks, etc. A job oriented approach to education makes us more competitive and insecure, while a livelihood oriented approach makes us more capable as well as resilient. 

Creative agency: The real outcome of education is how we are ourselves transformed as a result of our learning journey. To promote this, we need to encourage originality of thought and action-- or our creative agency. In most of our curriculum, we only teach from books and get students to understand what knowledge others have built. We hardly ever get students to create their own knowledge. 

Knowledge creation is a very hard process. It is not as easy as it sounds. We easily form opinions-- but an opinion is not knowledge. The most important skill to learn for knowledge creation, is objectivity-- or separating the creation from the creator. Whatever we create will be subject to a lot of failures and criticism, and it is very important for us to learn how to direct the criticism to the idea (even if the critic aims it at us), and improve our creation, rather than respond to it as an assault. 

Sovereignty: Finally, if we really need to bring about Viksit Bharat, protecting and upholding sovereignty in all its dimensions is of utmost importance. Today, we are increasingly becoming dependent on technologies that are developed and even controlled from outside India (GPS, AI, Semiconductors, social media, mobile phones, etc.) And for a large part, it is our own former students who have been instrumental in developing these technologies, that are sold back to us at a premium, and which can be turned off by some external party, anytime. 

In recent times, there are some very encouraging efforts to move development of key technologies to within the country. But without ground level changes in our education and research ecosystem, it is very hard to really bring traction to these initiatives within the country-- and, like in the case of automobiles or mobile phones, we may just end up as another assembly line unit for technologies that are conceived, designed and developed outside the country. 

The above would be what I would call the foundations of a Bharatiya approach to our formal education. Indian Knowledge Systems (IKS) are definitely very important and should be introduced as a subject or even as an entire discipline of study in our formal education. But our indigenous approach to education should be based on original thought rooted in today's reality. 

Insights - 1: The social value of academic research

This is the first in a series of posts on my lessons learnt from being in an academic environment that promotes a research mindset, and also as an administrator having tried my hand at nurturing and strengthening such an environment. 

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Conventionally, the term "research" was associated with universities and academia, while "industry" was all about production, manufacturing, construction, and business. This is because, research is the process of creating new knowledge, and up until the mid 20th century, knowledge was seen as the exclusive forte of academia and universities. 

But this stereotype started changing by the mid 20th century. For example, many foundational concepts that make up a textbook in Computer Science today-- like automata theory and finite state machines, have their roots in industrial research labs like Bell labs, Xerox PARC, etc. 

Ever since the end of the second world war, industries have steadily acquired more and more knowledge processing capabilities. Today, even the conventional industries invest more in knowledge processing than in the actual mechanics of construction or manufacturing. An EV car manufacturer for example, need not learn about internal combustion engines at all, but needs to learn about software engineering for safety critical systems. 

The role of knowledge processing in industries have become so much, that some people even argue that universities are not needed anymore, and that (especially with the onset of AI) universities are broken, and not relevant anymore. 

There are also several corporate entities starting their own universities stressing on the "industry focused" nature of their syllabus and research activities. 

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In this post, I would like to characterise the social value of what we conventionally know as academic research-- knowledge building activities involving more of books and thinking and debating, and less of programming, GPUs and AI. 

Firstly, let me address the misconception that academic research is "theoretical" in nature, while industry research is "applied". I think this framing is incorrect. Several theoretical results have come out of industrial research, and a lot of academic research address practical issues. 

Yet another misconception is that academic research is somehow "blue sky" in nature-- in that, these are knowledge pursuits as an end in itself, pursued just for the aesthetic beauty of the underlying mathematics. Maybe so, but I find this argument too often being used to evade accountability. "Just give us money and leave us alone" is what this argument seems to say, which after being an administrator, I find it hard to digest. 

This post is hence, about the social value of academic research. If society is to support industry or academia, there needs to be a value proposition that we offer to society. As academics, we have to now ask that if knowledge generation is greatly facilitated by the better levels of wealth and resources available in the industry, does academic research have any social value at all? 

Similarly, when we say that AI can replace education altogether, and industry can offer more resources than an academic environment ever could, does conventional universities hold any social value at all? 

At least in the current way we are interpreting the role of universities-- as institutions providing skilled personnel to the industry-- our answer may well be that universities will be obsolete soon, and the society will not miss anything. 

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I would however, like to argue just the opposite. Knowledge processing may have entered the forte of industry and business in a big way in the 21st century, but there is a characteristic difference between how knowledge is processed in the industry and in the university (and no-- it is not applied versus theory). 

Here is my understanding about research in the industry and research in academia: 

Industrial research builds social capability, while academic research (needs to) builds social resilience. 

Industrial research often starts with engineering or business challenges, builds new technologies to address these challenges and sometimes goes further to build a new science that lays the conceptual foundations for the technology. The end result of this is that some form of social capability is enhanced. As a result of industrial research, we typically end up doing something better, faster, at a larger scale, with lesser time and resources, etc. Sometimes the capability advances are so huge, that it ends up "disrupting" the existing way of doing things and bringing in qualitative changes in the way we did things. For instance, the Internet made information flow so fast and so much more capable, that it did not just create faster telephones and telegraphs, or better radios-- it entirely reinvented the way we process information and organise societies. 

This kind of research includes both applied and theoretical elements. Many of these could also lead to "blue sky" endeavours that are pursued just for the beauty inherent in these research questions. But all of these primarily are driven by the zest to enhance capabilities. 

Academic research on the other hand, had served and will continue to serve, a very different purpose. Academic research is not (should not be) based on what we produce-- but on what we become as a result of the research journey. Academia is fundamentally about building people-- not building knowledge or technology. The outcome of an academic research journey is (should be) greater wisdom, greater awareness, greater philosophical depth in people's everyday conduct. 

This could eventually result in better technologies and greater capability, when these people come together and build industries. 

Academia builds new knowledge not as an end in itself-- but as a means to build and empower people. It is the way that the people transform when they build new knowledge, which is the key outcome of academia rather than the knowledge itself. The collective outcome from such an endeavour is social resilience.

Social resilience is the ability of a society to absorb shocks and disruptions, and reinvent itself to bounce back stronger. Every increase in capability eventually leads to a critical juncture that results in a paradigmatic change in the way society operates. In such cases, it is our resilience that keeps us from falling into chaos and emerging stronger from the disruption. 

Today, AI is disrupting the workforce like never before. There are very real possibilities of large-scale job losses and threats to individual privacy as well as national sovereignty by AI. But advancements in AI continue nevertheless. Will this disruption lead to widespread chaos and strife in our society, or will we as a society absorb this shock and reinvent ourselves, will be a function of how resilient our education has made us.

Social resilience is possible when the individuals operating in it are resilient themselves, and have the depth and capability to reimagine their lives and to reorganise their activities every so often. This comes from the philosophical depth from which they operate. If their ability to generate new knowledge is contingent upon them having access to huge resources and latest technology, they may be capable of specific things, but not exactly resilient as individuals. 

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Let me explain further with an example. 

With great advances in AI, there is now a big concern about AI Ethics and Responsible AI. But the way this topic is being discussed today, has two broad categories. 

The first line of thought directly looks at the way AI is built and used today, and builds relevant structures around it to make it safer and act ethically. These could involve building guardrails, RLHF, hard (constitutional) constraints, sandboxing, etc. 

The other approach is to address the question philosophically, asking what do we mean by ethics itself? Is it doing something that conforms to expected norms (deontology)? Or is ethics about acting for the greater good (utilitarianism)? Or acting in a way that is mindful of consequences (consequentialism)? Or upholding some desirable characteristic (virtue)? This line of inquiry also asks whether acting ethically is necessarily in conflict with acting rationally to maximise self interest? Is ethics subjective or can there be an objective definition of AI ethics? Can one person's ethical AI be an evil nemesis when seen from another person's perspective? Can a machine be truly ethical or does it only reflect the ethical considerations inherent in its training? 

The two approaches are characteristically different. The former approach is addressing an immediate question. It is addressing the question of AI ethics primarily with a motivation to avoid getting hit by lawsuits. And any solution that can deflect the blame away from the AI is good enough for the business. The latter however, tries to understand the concept of ethics analytically and asks architectural questions about AI and tries to understand the meaning of a term like "ethics" that was once reserved for human conduct, to be now applied to machines. 

I remember some time ago in a research presentation, a member of the audience expressed concerns about the seriously intrusive nature of the technology being presented and its potential to be misused. For this, the speaker had only responded by saying that these experiments have passed IRB review (ethics board) and hence, it is legitimate. What struck me in this response was that the response did not address any of the specific concerns of future misuse of this technology being developed. It just responded to protect the current activity from scrutiny. The IRB only clears the current, proposed activity, and does not usually delve into its future implications. This episode in my opinion, is a clear marker that distinguishes industrial research (that wants a solution or a patch shipped out fast) versus an academic research pursuit (that wants to understand the deeper, underlying implications). 

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Worldwide, we are failing to understand this subtlety, and are increasingly bringing the industrial research framing to evaluate academic research. 

I have seen several cases across many institutions, where some highly motivated PhD students would be juggling their research, job, and family all at once. But many of them burn out or drop out in between, even after working very hard and after paying significant tuition, simply because their PhD has an unwritten rule that it requires an "A*" paper to get them to graduate! 

What I see is not a failed PhD student or even low quality research. What I see is an individual who was resilient and motivated, but whose spirit was broken because the system failed to recognise the resilience and focused only on the output. As I see it, if this person understood the importance of setting aside time and effort for creating knowledge despite their daily grind and demands from work and family, then even a small success in this process helps them to reinforce their resilience, which would contribute constructively to society in important ways. 

But by not recognising this, and by framing research quality through a fairly narrow, and mostly meaningless lens, we are systematically tearing apart the only institution in society where resilience is built. 

PhD needs a reset

World over, the PhD program is in a crisis, and there are ample amount of articles written about why we need to rethink our PhD programs. For example: 

• The Paradox of Doctoral Training - the Node
• The Reimagined PhD: Navigating 21st Century Education
• PhD Crisis: Oversupply or Mismanagement of Talent?
• PhD Education: 2025 Expectations and Transformation

This is yet another post about this topic-- but one that is hopefully, in a very different direction. There are major issues that are debated about PhD education today-- including funding and the industry relevance of the research carried out. 

But very few observers, if any, are addressing the fundamental reason why a PhD study exists in the first place. 

A PhD is a degree in philosophy-- not in technology or science or engineering. One does not think in terms of a Computer Science PhD, Data Science PhD, Mathematics PhD, etc. It is just a PhD-- a thesis communicating the results of a philosophical inquiry. 

A philosophical inquiry into the nature of reality is by definition, interdisciplinary. There is nothing that is "out of syllabus" for a philosophical inquiry. 

And in my opinion, this disconnect with the core reason behind a PhD journey, is the biggest crisis we are facing today. At a time when there is an acute need for people with philosophy skills, not only are we discounting this important skill, but we also actively mock and lampoon philosophers with stereotypes of being impractical figureheads living in their own ivory towers. 

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Philosophy is a term that is greatly misunderstood today. I remember some years ago, when a former colleague came to meet me and I was mentioning that I was mentoring a "philosophy club" among our students. After this, we went to the cafeteria and we both ranted about the troubles we are facing in our respective lives, talked about politics, history and anything that caught our fancy. And then, just before we said goodbye, the former colleague said, "There, I guess this was one more session of your philosophy club?" 

I just smiled and nodded, not having the heart to tell him that what we just had was a ranting session-- not a session in serious philosophical inquiry. 

Similarly, several ideological schools-- that make up the different -isms are called philosophies, and the respective ideologues of each school are called philosophers. Philosophy is not a specific ideology. Someone who embodies a ideological structure and lives it and advocates it, is an ideologue-- not a philosopher. 

There is an episode in Big Bang Theory where two physicists who are PhD holders are having a philosophical debate about Quantum loop gravity, and String theory. And their disagreement ends up breaking the personal relationship they have been having. That is not a philosophical disagreement-- that is an ideological disagreement. The PhD holders there were not philosophers-- they were ideologues, pushing their respective ideologies. 

A number of such so-called philosophical debates are just ideological debates. From the viewpoint of philosophy, they are all ill-posed philosophical problems. 

Take for instance, the debate between skepticism and faith. A scientific mindset is supposed to be characterised by skepticism, and a religious mind is supposedly characterised by faith. But it is not hard to see that one who staunchly advocates skepticism is actually practising "faith in skepticism" and one who staunchly advocates faith, is actually practising skepticism about anything else other than their object of faith! 

Or for example, the debate between "evolution" and "intelligent design". The philosopher only asks the evolutionary theorist "Was the process of evolution designed-- or did it evolve from a meta-evolutionary system?" (Arguing that it was the product of a random chance does not cut it because we can still ask the question whether the mathematical properties of that randomly chosen mutation that lead to evolution of life-- was that a product of design?) Similarly, the philosopher asks the "intelligent design" ideologue "Who designed the designer?" 

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In the name of Science, today we only have different hermeneutic ideologies, each in a territorial battle with others for occupying mind space and bringing new converts into its fold. 

Each hermeneutic ideology is blindly pursuing its interests pushing away anything that comes in its path. Be it AI or Mars colonisation, or genetic engineering, or whatever else, each hermeneutic universe wants to be at the centre of what is termed as Science. 

In my professional life, I often get very hostile vibes from others when I criticise the way the term "agents" are used in current day Agentic AI. Almost as if, I have committed a religious blasphemy of some sort. The idea of agency has been studied for thousands of years, and in computing itself, it has been studied for at least 40 years now. And what is called an agent in an Agentic LLM today is just a very sophisticated service that can break down an instruction written in a very high-level language (natural language) and converts it into actionable elements. Pretty much a sophisticated compiler. An agent on the other hand, has to display some kind of subjective self-interest and free-willed intentions. 

The research ecosystem today resembles an ecosystem of different ideological schools with many "believers" affiliated to each school, and each of which, are vying for market share and mind share. 

What we don't have today, are genuinely disinterested philosophers who are characterised by vairagya and samadarshana, who are not aligned with any ideology, and who are not incentivised by any kind of prestige or recognition, and are solely driven by philosophia ($φιλοσοφία$), or the "love of wisdom."

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Recently, I was arguing that the goal of philosophy is not to find a solution to a problem, but to find an epistemological grounding that leads to the dissolution of the problem. 

At its core, philosophy is about questioning the "obvious" to uncover the underlying structures of reality, knowledge, and value. Rather than providing a fixed set of answers within a hermeneutic framework, philosophy questions how the existing state of affairs came about in the first place. It needs to ask how we can justify our beliefs, what constitutes a meaningful life, and how can we navigate the complexities of human existence. 

A PhD in that sense, is not about outputs (or what it produces), but about outcomes (how it transforms the people who go through this process). 

A good thesis may provide an answer to a long-standing open problem-- but a great thesis is one that opens up new ways of thinking and new possibilities, by questioning the fundamentals of what we have taken for granted. 

If there is any time in history where we desperately need strong philosophers, it is today. World over, we are in a bizarre state of affairs in just about every sphere of human activity-- be it in geopolitics, technology, climate, society, business, etc. Much of what we had taken for granted until the end of the 20th century are getting ripped apart by current developments. 

We can't even start to imagine a society where everyone is constantly under surveillance by law, where weapons are autonomous killing machines, where we depend on AI to run our lives, and where climate is getting increasingly intense. Yet, we are entering into this reality at a fast pace. 

We need philosophers who can ask deep questions and reach a mental state that lies beyond what is causing our current day problems, and get a sound understanding of where we are going. We need guidance from those who have seen the dissolution of these problems in their minds. 

And yet, the only questions we are asking our PhDs are about Nobel prizes, citations, awards, prestige, etc. 

We are literally facing an existential crisis, and we are only using simplistic carrot-and-stick approaches to drive our PhD programs! 

PhD needs a reset-- and we need to bring the Ph back into the PhD!  

Currency markets and national sovereignty

In my job, I get to interact with bright minds of the next generation and I am often in awe about how much sharper and well informed each new generation is, compared to the previous ones. 

Yet, despite growing intelligence and awareness at an individual level, some core structural pathologies continue to ruin our lives, and most of us are blissfully unaware of this happening. And those who do have some idea of these pathologies, either cynically exploit this pathology for individual benefit, or have no recourse but to watch helplessly seeing their deepest long-term fears come true over a period of 10-20 years. 

The thing with structural changes is that they happen gradually, over a long period of time, leading to the parable of the boiled frog where we incrementally adapt every time circumstances change slightly, until it is no longer possible to adapt, and then, there is nowhere else to go. 

This post is a short primer about how structural elements of international currency markets affect the destiny of nations, and in turn, over its people. I have been studying and writing about this for more than 25 years now. 

One of the primary changes that the new century brought in is that it connected the world like never before-- using Internet, mobile and IoT technologies. A direct result of this is the many fold increase in cross-border transactions as compared to earlier-- a phenomenon called as "globalization". 

At that time, globalization was seen as a major, virtuous force that was argued, will break down local hierarchies and create a decentralized world of equals. Terms like "world citizen" were thrown about as a flex. 

But fast forward a couple of decades, and we see today, the very places that advocated globalization are now wanting to go back to their conservative past, and put all kinds of restrictions on immigration, and sanctions and tariffs on the rest of the world. 

So what exactly is happening? Is it just a pipe-dream to think of a truly global society where the world becomes one, large, happy family? Vasudha eva kutumbakam, and all that? 

Globalization has multiple dimensions-- cultural, financial, national, environmental, etc. At an individual level, people largely project the cultural dimension as their rationale for making their choices, but make decisions based mostly on the financial dimension. For instance, one would say that they that they are relocating to a new country in order to "open their minds" and "become a cultural ambassador" or some such corny line, while the primary decision that moves their needle is the amount of money they can make for the same or lesser effort. 

But why would someone make more money abroad, than they can in India? Is it because these countries are "developed"? Well maybe (whatever "development" means), but that is just part of the story. 

The main structural element that drives international trade today is not so much of demand and supply, but of currency arbitrage. This comes by the disparity between market exchange rates and the exchange rates due to purchasing power parity (PPP) between currencies. 

Market exchange rate is the exchange rate determined by the currency exchange markets, based on demand for one currency over another. On the other hand, PPP is the exchange rate based on what a unit of currency can buy in one country over another. 

Here is the market and PPP exchange rates between the Indian Rupee and some major world currencies: 

Currency	Symbol	Market Rate (INR)	PPP Rate (INR)
US Dollar	USD	92.80	20.34
Euro	EUR	110.32	33.90
British Pound	GBP	126.83	30.36
Chinese Yuan	CNY	13.67	6.18
Japanese Yen	JPY	0.60	0.22
UAE Dirham	AED	25.45	8.96
Swiss Franc	CHF	119.67	22.11

What this means is, on an average what one can buy for $1 in the US, one can buy for Rs. 20 in India. Similarly, what one can buy for 1 Euro in Europe, one can buy for Rs. 33 in India. 

However, when we exchange $1 in the currency markets, we get Rs 92, and when we exchange one Euro, we get Rs. 110, more than 300% higher than PPP! 

And this is what makes India very cheap whenever someone visits from the US or Europe. The Internet is full of reels that talk about the cheap and affordable healthcare in India, where a blood test costs less than $3, as one YouTube influencer once remarked. Well, the blood test costed Rs. 250, which is not exactly cheap for an average Indian who is living and earning in India. 

The following table shows what a salary of INR 1 lakh would translate to different currencies, when compared with PPP and market exchange rates: 

Currency	Symbol	Market Rate Salary (What you get)	PPP Equivalent Salary (Lifestyle Match)
US Dollar	USD	$1,077.59	$4,916.42
Euro	EUR	€906.45	€2,949.85
British Pound	GBP	£788.46	£3,293.81
Chinese Yuan	CNY	¥7,315.29	¥16,181.23
Japanese Yen	JPY	¥166,666.67	¥454,545.45
UAE Dirham	AED	3,929.27 AED	11,160.71 AED
Swiss Franc	CHF	835.63 CHF	4,522.84 CHF

For instance, if someone from India were earning Rs. 1 lakhs salary per month, their lifestyle would be comparable to someone earning approximately $5000 in the US. But if the Indian were to visit US, taking their hard-earned savings of INR 1 lakh, they would get approximately about $1000 in exchange, and would be able to afford much lesser than their counterparts earning $5000. Same thing for Europe-- earning in Europe gives 300% more wealth in rupee terms than having to transact with them directly from India. 

So where is this extra money coming from, whenever someone exchanges a foreign currency in India? Literally nowhere! 

Most money systems today are what are called "fiat" currencies, where money is printed based on the demand for the currency. So more money actually gets minted based on how much demand is there for the currency. So then does this not mean, that we should all be encouraged to live abroad and send more foreign currency back to India, so that the "demand" for Rupee grows? 

Not exactly. 

For an economy to be healthy, the amount of currency in an economic system need to correspond to the overall "capability" in the system-- which is an abstract term for the ability for value addition, or meeting demand with supply. Economic strength comes from building capability-- capability to conduct business, capability to manufacture, capability to build, capability to learn, capability to serve, etc. 

When we have too little money supply compared to the capability in the system, the economy undergoes a deflation, where despite existing capabilities, economic transactions cannot happen due to a dearth of currency. This is also called an "economic hole"-- a condition where capability exists, but money doesn't exist. 

On the other hand, if the money supply is more than the available capability of the system, we encounter a "hyperinflation" where the available money cannot get converted into value. 

I'm reminded of a movie where a group of soldiers who are lost in Amazonian jungles come across a crashed airplane that has was transporting a couple of million dollars. They are all very excited to find this huge stash of money and each one grabs whatever they can. But then, in that small "economy" that they have, they are unable to exchange it for any value. As a result, when one of the soldiers who has cigarettes with him, "sells" it to the others at $1000 a piece! The other one who has a matchbox sells each matchstick for $2000 since he knows that everyone who bought a cigarette will need a matchstick! 

Just blindly bringing in more foreign currency into the system will eventually result in an economy that has gone bonkers! 

(Our economy has already gone bonkers to quite an extent. Just look at the state of basic things like public infrastructure in a city like Bangalore that boasts of being the world's third biggest tech cluster. I remember when the roads in front of our house were left dug up for more than 2 years, and we used to get Whatsapp forwards to "feel proud" because India is now building high-speed trains for Australia or some such! We think we have the capability-- but we don't. We just build technology that has already been conceptualized and designed by others. When we are asked to dream big and create startups-- we only think in terms of food delivery apps, ice cream stores, etc.). 

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So why then is the market exchange rate so different from PPP? 

The answer is not economics, but geopolitics. 

Fiat currencies today are ideally supposed to print currency based on the available capability of their economy. But they print currency based on the demand for the currency. Both are not the same. 

Today, a large part of currency demand comes from the geopolitics of which currency is used by countries to trade among themselves. Most petroleum trade for example, needs to happen in US dollars. Hence, if country A has petroleum deposits, and country B has money to pay for it-- country B will first need to buy US dollars from their money, and then buy the oil from country A. 

And how is this enforced? Through sanctions, trade, diplomatic manipulations, and even military action! In that sense, whenever we pay Rs 94 for a dollar when its purchasing power parity is at Rs. 20, we are paying Rs 74 for the geopolitics of sanctions and military actions. 

If a country becomes largely dependent on foreign currency inflows for running its economy, it has basically compromised its sovereignty to external forces. This video about the sovereign debt of the US, and the sovereign debt of other countries dependent on the US dollar provides a lot of clarity: 

So at an individual level, what can we do to ensure that we are not contributing to this slow game that creates dependencies between nations? 

The principles are simple, really. Go abroad if you must, to obtain skills, knowledge and exposure. But come back when time is still on your side, and contribute to the economy by just living in the country (put your skin in the game). Work honestly and smartly in whatever you are good at, to add value. Invest smartly and strategically in the country. Participate by voting in elections, and by contributing your expertise where needed. Innovate to help reduce dependency of the country on external resources. Exercise vigilance to keep at least your surroundings safe.