Beware the stories we tell ourselves

Some days ago, I was reading a post on Quora about emigrating to Canada. The person who had posted an answer was saying that she shifted to Canada a few months ago "in order to give a better life for her 2 year old son" and went on to describe the immigration procedures and protocols. 

What caught my attention is the underlying justification behind her decision, which formed the basis for effecting an irreversible change in her life and that of her son. 

Of course, it is quite possible that the author and her son were subject to oppression, persecution and unspeakable horrors from her family and society back in India, and emigration was the only option. But then, it is also quite unlikely that someone who has fled persecution would be writing so openly, and make no references to their trauma as part of their decision. 

The more plausible explanation is that, it was her choice and preference to emigrate to another country in search of a better life. But something was pricking within her mind, and to silence this voice, she has been repeating to herself that she is doing it for the benefit of her son. 

That is the fatal mistake most of us do. When conscience pricks, we prefer to renarrate our decisions and silence it, rather than listen to what it is saying and be led by it. 

The son in this story is too young to have consciously preferred Canada over India. And even if she genuinely believed that she is emigrating for the best interests of her son, there is no guarantee that this decision is in fact in his best interests. 

As the saying goes: the road to hell is paved with good intentions. 

How then do we realistically estimate what would be "good" for our children? Is it a nihilistic question and do we just take on a fatalistic belief that no matter what we do for them, they will always blame us; or no matter whether we care for them or not, they will be happy on their own? 

Of course, we cannot predict the future or others' preferences-- even if it is of our own kin. But we can provide them the necessary foundations that are reasonably stable, on top of which , they can build their lives. 

In order to understand these dimensions, we need to take a longish look into the future. Surely, Canada was a better place to live in (in terms of material wealth and comfort) than India, at the time of her writing. But will it still be the same, after 20 years, when her son is ready to go into the world on his own? Similarly, is a better material wealth able to compensate for questions like "Who am I?" "Why was I born? "What is the purpose of my life?" and so on, that her son might ask when he is able to think on his own? 

In dharmic philosophy, there are at least four dimensions that characterize the well being of a person's life. These are called the Purusharthas, and the four Purusharthas as dharma (sustainability), artha (wealth), kama (pleasure), and moksha (spiritual liberation).  

If we notice, these are pretty much what drives our decision-making throughout our lives. We may be driven by sustainability considerations, worrying about how we will survive over time. We may be lured to faraway lands by wealth and the promise of power. We may be lured by its promise of pleasure and living out our fantasies. Or finally we may make decisions to move away from our existing lives, out of a sense of disillusionment with material life and its shallow pursuits. 

It is important for us to be aware of what is driving our decisions. There is per se, nothing "wrong" in moving away to some other place in pursuit of wealth or pleasure. The only thing that would be better than this, would be to pursue wealth and pleasure not just for us as individuals, but for the larger system that we are part of, and for the entire world. But then, not everyone thinks of things bigger than themselves-- and that is perfectly fine too. 

But if we keep telling ourselves that our decision to uproot ourselves is a "sacrifice" we are doing for the sake of our children, we will end up bringing them up with a sense of guilt or burden-- as though, we have endured unavoidable hardships just so that they can get a better life. They will not even be able to ask what is so much better in this life as compared to where we were born. Disdain and contempt for their roots will become a part of their identity and deeply embedded into their sense of self. And this can cause deep rooted trauma in the children, that the parents may not even be aware of. 

The road to hell is indeed paved with good intentions-- or rather, with the comforting stories that we tell ourselves. 

Communities and Stability

It is common to see people lashing out against "communal" cultures, and at the same time swear by clubs, communities, farming collectives, open source, (un-)conferences, etc. Not realising, they are one and the same thing.

Indian society has predominantly been "communal" in nature. Not casteist. Caste is a feudal construct, and the Indian "caste system" that is considered characteristic of Indian culture is largely a European import.

Indian society had different kinds of communities that went with different names-- jati, mata, pangada, kula, gotra, varna, samuha, samaja, balaga, okkuta, sampradaya, etc. Of these, only kula and gotra pertained to blood lineage (dynasty and blood ancestry, respectively), while the rest were based on several other factors.

A community is different from a formal organization, or an amorphous crowd. An organization has formal, contractual association of its members to the collective, that comes with a legal binding. A crowd on the other extreme is completely disorganized and there need not be anything in common among all members of the crowd. Indeed, crowds are most effective, as in, they display the "wisdom of the crowd" when the members have very little in common. If not, they can reduce to herds or mobs or gangs, each of which are far less "wise" than crowds.

A community is neither an organization nor a crowd. It is a set of people who come together, driven by a sense of "kindred spirit". A community is a collection of people, who share some human condition across them. For instance, we can have a community of cancer survivors, a community of aviation enthusiasts, a community of data science enthusiasts, a community of sustainable farming enthusiasts, etc.

It is the common condition or common passion, that brings people together to form a community. A community does not have a collective goal like an organization. It need not offer any service or product to a "customer" outside of it. In fact, the beneficiaries of the community are the members of the community themselves.

A community also does not have formal, legally binding affiliations. If a member of a community decides no longer to be a part of the community, the community cannot legally force them to remain.

A community that has strict norms, memberships, ostracization, etc. is not a community-- it is a cult.

So if we can train our guns against feudalism or cultism-- it is fine.. But in this process, we should not throw away the importance of the community.

Communities are important elements that bring stability in a society. Over the past few centuries-- with the advent of factories and the industrial revolution, our societies have been slowly organized to become machines. Societies today are evaluated by its "productivity" rather than on life satisfaction and meaningfulness reported by its members. We are in a continuous loop of producing stuff, and tending to the health and social problems that it creates.

It is in this setup that communities become important. They bring together people that share specific conditions-- and help uphold the important social principle of kindred spirit. Communities help channelize one's passion and energies, as well as seek support from others facing similar challenges.

In a post covid world, if there is one thing that we should nurture, it is the idea of a community-- and help differentiate it from cults and feudatories. 

The problem with currency markets

Yesterday, in two different conversations, I got to speak of my misgivings about current day currency markets. In one of them I was asked, if I were able to change something, what would it be? And I responded by saying that I would abolish currency markets in their current form.

Currency, which is fundamentally supposed to be about trade, has today become a weapon of power. And at the centre of it is the current form of currency markets, which, rather than help facilitate global free trade, is actually exacerbating power dynamics across countries and civilisations.

The current form of inter-currency trade has an interesting history. We will not go into detail into this-- I've explained the history of inter-currency trade, in my 2006 book The Power Law of Information.

Currency today is predominantly tightly tied with nations and their sense of national sovereignty. There have been several exceptions to this, but with limited success.

Some countries use or accept currencies of other countries throughout their economy. Similarly, some countries (most notably, countries of the European Union) have come together, to form a common currency across them. None of these are without their complications. Nepal for instance, which used to accept Indian currency in addition to its own currency throughout the country, recently has started discouraging this practice, with its growing anti-India sentiment. Similarly, the Euro is often at the centre of the hurricane whenever there is an economic crisis in any of its member countries. Recently, it was told that the Euro was propped up solely by Germany, and it is in fact underwriting the economic costs of other countries like Greece, which were in crisis.

While currencies spanning across national borders has its problems, inter-currency trade has its own alternate set of issues.

Inter-currency trade is meant to establish a "fair" exchange rate between currency denominations. How do we know what is a good exchange rate between say the US Dollar and the Indian Rupee? The answer to this is to let the "market forces" decide.

So what are these market forces? These are the few hundreds of traders in the currency marketplace who bid to buy and sell currencies. This marketplace is hardly representative of the economy-- let alone "fair". It is largely run on trader sentiment, rather than any form of serious economic valuation of the currencies.

It is common to see the following pattern-- whenever there is a crisis in India, the Rupee falls against the Dollar; and whenever there is a crisis in the US, it is the Rupee again that falls against the Dollar. When I started learning to count as a kid, the exchange rate between the Rupee and the Dollar was about 4 Rupees to a Dollar. Since then, never once has the Rupee gained against the Dollar in a sustained or significant fashion. The latest is the Covid crisis which has hit the US more than India, and the Rupee has promptly fallen against the Dollar to almost reach 80 Rupees to a Dollar.

There is no mystery behind this. Currency markets run on sentiment. Indian traders are much more insecure and crave for the Dollar, than their US counterparts crave for the Rupee. So, whenever there is a crisis anywhere, the clamour for hoarding Dollars increases among Indian traders, while the other side has no such qualms about hoarding Rupees.

These emotional knee-jerk reactions, that are full of herding, groupthink and other fallacies, now becomes representative of the strength of the economy of 1.3 billion people!

There is an alternate notion of inter-currency valuations. This is called the Purchasing Power Parity (PPP). This model is based on a systematic study of prices for different commodities, and calibrating exchange rates based on this.

For instance, on an average, what we can buy for $1 in the US, we can buy for approximately Rs. 15 in India. So according to PPP, one Dollar should exchange to 15 Rupees. But whenever someone exchanges a Dollar, they get close to 80 Rupees! Hence for every Dollar that is exchanged, they receive about 65 Rupees extra!

This disparity between market and PPP exchange rates leads to an enormously skewed economy that has no bearing on economic fundamentals of demand and supply.

In the last century, this difference in exchange rates didn't matter much. Not many people inside the country cared for or were affected by the exchange rate with another currency. But with information technology, and its new line of businesses like IT, software and allied services, this disparity in exchange rates now touches every corner of the economy.

For a fresh graduate in India today, it is much more attractive to serve some other market and earn in Dollars, rather than understand and solve local problems to only earn in Rupees. The professional who has earned 1 Dollar, would have put in the same amount of expertise and labour as someone who has earned say 15 Rupees. But the former will have a much higher buying power within India than the latter.

This economic skew is not some academic curiosity. Its impact goes deep. It rips apart not just the economy, but also families and individual relationships. The 1987 movie "Wall Street" hits close to home for many of us in India, because we face the same kind of social and family strife that is seen in the movie.

With the current system of inter-currency trade, we now have just one definition of wealth, one definition of poverty, and one goal of life. Earlier, when economies were largely independent of each other, national and cultural sovereignty meant something. Cultures and nations had a lot of leeway in deciding what is important for them. But today, there is a homogeneity in wants and ambitions, that are orchestrated by a small set of multi-national corporations.

If I had my way then, I would abolish currency markets in their current form. Currency valuations would be computed year on year, based on PPP, and currency trade would be restricted to keep exchange rates within a maybe 20% error margin of the PPP exchange rate. Hence, if a Dollar exchanges for 15 Rupees, then currency marketplaces would not be allowed to exchange Dollar and Rupee only within the range of 12-18 Rupees to a Dollar.

Once we bring back exchange rates to relative purchasing power, currencies will start becoming meaningful as an economic instrument once again.