My review on a series of books Offence on world religions, the right to free speech, and the right to be offended in Mint today.

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I was 15 when Bajrang Dal goons tried to smear saffron paint over M.F. Husain’s art. Free speech, censorship, tolerance and secularism were big words I didn’t fully understand then, but even I knew the Bajrang Dal was wrong and Husain had rights. By the time the Danish cartoons were banned, I was a vocal defender of free speech, but I found myself walking on eggshells in an attempt to be culturally sensitive. My reactions to the two are not separated only by age: I could openly support Husain against the Bajrang Dal, but when it came to the Danish cartoons, my reaction was muted by my own cultural identity and the need to tolerate; after all, I was Hindu.

So, the question arises, does the Bajrang Dal have a right to be offended? Does Husain have the right to free speech? Do I have a right to comment on them irrespective of my cultural identity? Questions such as these are taken up in a collection of six books published by Seagull Books in collaboration with the Index on Censorship. Each book is a long-form essay discussing offence from the perspective of the offender, the “victim”, and the religious context of Muslims, Jews, Hindus and Christians.

Casper Melville in Taking Offence gives an overall perspective of the growing “culture of complaint and oversensitivity”, identifying offence and silence across religions and regions in the post-9/11 world. In particular, he charts out a five-point plan for the media on how to handle offensive material using good judgement without compromising on freedom.

The most entertaining book in the series, Giving Offence is by writer and cartoonist Martin Rowson, written from the perspective of the offending party. Interspersed with cartoons, the book discusses the role of those in the business of challenging and offending powerful interest groups, and concludes that historically, the powerful control the minds of thinking individuals and the role of those in the business of challenging and offending powerful interest groups.

In Offence—The Christian Case, Irena Maryniak chronicles the sacred and the blasphemous in the post-Soviet world and the role of the Church in perpetuating silence. Brian Klug discusses how free speech is off-limits when it comes to Israel and how censorship is used to bolster a nation state riding on Judaism in Offence—The Jewish Case.

The most relevant and interesting to the Indian audience are two books in the series by Salil Tripathi and Kamila Shamsie. Shamsie’s Offence—The Muslim Case dispels the popular notion that offence is encountered in the Muslim world only when it clashes with the West. It goes on to explain that offence is a more political intra-religious agenda, where Islam is invoked against women and ethnic minorities, often without any reference to the West. This stands in clear contrast to Tripathi’s Offence—The Hindu Case where offence is presented as an inter-religious game, one where Hindu nationalists have distorted a broad and liberal religion to compete with other religious groups for attention and the limelight.

Tripathi’s book, skilfully detailed yet eminently readable, is courageous in the current political context in India. He redefines and clarifies the basis of Hindutva and compels the reader to see the perverse and distorted version peddled by local politicians. He also relates how the very “depictions” found to be obscene have been part and parcel of Hinduism for centuries, and the vandalism and protests have little to do with Hinduism.

Offence does many things. It gives a voice and a sense of identity to the offended class while attempting to silence and shame the offenders. The question then arises: Does one have a right to be offended? And if so, how is that right enforced? A discussion sorely neglected in the entire series is the constitutional and judicial framework within which these religious rights and civil liberties are balanced. While individuals feel offended, it is typically the state that legislates and enforces bans; and the role of the state is a part of the puzzle that is not subject to discussion in the series.

The post-9/11 world has clouded many judgements, not only because the notion of multiculturalism, secularism and political correctness has changed, but because we are more scared than ever before to offend. But the culture of oversensitivity and complaint is not just a shadow of the towers of the World Trade Center. We all remember images of The Satanic Verses being burnt because it “offended Islam”. However, the fatwa on Rushdie was not about Islam, it was about politics, and Iranian leader Khomeini’s search for a domestic agenda by calling on all good Muslims to kill Rushdie and his publishers. Shamsie describes how the culture of intolerance was one fostered in search of a nation’s political identity in Pakistan. Tripathi chronicles the Hindu backlash, which started when the Muslims came into the spotlight with the Shah Bano case and the Rushdie fatwa. Like petulant children, Hindus, too, resorted to being oversensitive, offended and destructive to get a share of the attention; never mind that it came at the cost of speech, life and property.

Instead of the historic tyranny of the majority, we now have the tyranny of special interest groups over the rest of the world; groups which profit abundantly from the business of getting offended. Local and national elections are won and international limelight and loyal followers are gained with just a single instance. The mere suggestion of burning a book or protesting against an artwork, or even the threat of intimidation and violence, gets attention and silences the offenders. And in the market for ideas and identity, any business that is profitable gets more investment. While these benefits are concentrated on the special interest groups feeling offended, the cost is dispersed.

The cost of this profitable business of offence is not borne by the offended profiteers, but by the whole world. We pay for it with blank spaces—on our walls, in our bookshelves, in our newspapers, and our school books; and missing minutes of songs, plays and films. The future generation will pay for it with a gag order and blanks in their minds.

My op-ed on toxic assets and the bailout appears in Mint today. You can read it here. The full text is also reproduced below.

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The financial crisis is largely a result of toxic assets held by banks. However, bailouts, originally designed to buy these toxic assets, are now trying to eliminate the liquidity crisis —but that’s only a symptom. The real problem is solvency.

Now in English.

Imagine that the string of monthly loan instalments one has to pay for a mortgage—the security for the loan—is akin to a string of pearls.

Banks dismantle entire necklaces, the pearls mixed up, repackaged into beautifully designed earrings or bracelets and sold to other banks. Let’s call them securitized mortgages. These new designs ensure high prices for pearl jewellery, often more than the value of the original pearl necklaces.

But some people offer fake pearl necklaces as a loan’s security. When the necklaces are dismantled, the fake pearls are mixed up with the real pearls and distributed across new pearl jewellery. Initially, no one knows that only part of their jewellery is real, but soon there are complaints regarding fake and missing pearls. Consequently, all the new pearl jewellery becomes suspect. Let’s call these toxic assets. Soon there is panic.

Since no one trusts the mixed- up pearls any more, the “fake pearl scandal” leads banks to stop lending money for home loans. Further, since banks raised cash by selling pearls, the banks have no money to pay people because the pearls have plummeted in value and banks are facing losses. This is our liquidity crisis.

In response, the government announces it will buy the fake pearls and will give banks money in return to continue their usual business. This is a bailout, or a substantial injection of capital.

Under the Term Asset-Backed Securities Loan Facility (Talf), the US government’s idea was to buy toxic assets from the banks with some private investors and sit on these suspect jewels for as long as it took for them to recover some value.

This is where the glitch began. The crisis was caused because banks could not assess the value of the pearl jewellery. The government faces the same problem: It has no idea how much it should pay for these toxic assets. Since the banks and the government don’t agree on prices, the government directly infuses capital into banks.

But more importantly, what makes these assets toxic? It is the prices at which pearls are currently trading—they are low enough to leave gaping holes in banks’ balance sheets.

This price reflects many things: if the pearl is fake, the level of risk and uncertainty in the pearl market, or other information.

So, are these “toxic asset prices” a good thing? Nobel Prize-winning economist F.A. Hayek would certainly think so. According to Hayek, the “most significant fact about this (price) system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action… Therefore, in abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned.”The price of the pearls is more than just what is on the sticker. Prices give away millions of small bundles of information to millions of individuals. If these prices are manipulated, or fixed by the government, they will distort the knowledge given by the prices.

Currently, banks want the fake pearls to be expensive: They want these assets to be priced higher in the bailout so that others believe them to be valuable and they receive more money. The government, even more wishful in its thinking, believes that buying fake pearls for enormous sums of money will give the banks the money required to trade in pearls again.

On the one hand, the government wants to take the toxic assets off bank balance sheets in exchange for money to be used to keep the bank afloat. But on the other hand, it tells the banks to trade with other banks with questionable solvency caused by the very same toxic assets. More importantly, banks have no ability to distinguish good assets from toxic ones, which merely means that the presence of liquidity does not solve the banks’ problem regarding lack of solvency, which can only be solved by the market.

What would happen if the government did not intervene? In this case the toxic assets would be valued in the market, leading to insolvency of many banks. On the one hand, the nature and cause of the insolvency will be exposed and the banks that are not facing the greatest threat will come to the forefront. This kind of information can only be gained in the market once the toxic assets and the banks’ balance sheets are correctly valued. The bailout, on the other hand, overvalues these assets in the hope that if they believe it is highly valued long enough, it will come true.

Therefore, the bailout money is a complete waste. It doesn’t get the toxic assets off the balance sheets. It involves the government directly running the banks. It does not tell banks anything about the nature, risk or uncertainty of the assets they hold. Nor does it solve the problem of solvency caused by the very same toxic assets. It only takes money from taxpayers and uses it for directly running banks, which then have a greater incentive to declare more assets toxic to get more taxpayer money.

…..but will it win the war?

While I haven’t picked sides in the Tamil-SriLankan politics , I think this time I can confidently say that the Rajapaksha is being extremely short sighted. And it is in the interest of the next generation of  Sinhalese citizens to ceasefire and offer humantarian support. 

Rajapaksha may successfully exterminate the current LTTE stronghold of a few hundred; but by allowing 200,000 Tamil civillians to be caught in the crossfire and refusing to offer them humanitaian support; the government is not winning any friends, quite the contrary. It is preparing a fertile ground for the children caught as refugees to have deep wounds and a Tamil cause tomorrow.

I think they may have given birth to many Prabhakaran’s during this war. Which is scary, because it has taken them 26 years to corner one Prabhakaran.

……posed by Anurag kashyap. He discusses censorship of his films due to their political nature vis-a-vis the free speech enjoyed by politicians, especially given the current political mudslinging. 

“Politicians can go up on stage and say anything without fear; why is it that we have to live in fear? Why is it that I can’t say anything? Why is it that Narendra Modi can abuse Sonia Gandhi and Manmohan Singh and question them; why can’t I question them?”

Full post here.

Jhalak Dikhla Jaa

 Jhalak producers defend themselves and the celebrities are caught with their pants down again. I love how Karan is shown cuddling with his choreographer first with background  music and effects and then without music and effects. The immense bitchiness of it all

While I used to think that BJP was the lesser of many evils in Indian politics, I think I have changed my mind since I started reading that previously moderate members like Shourie and Jaitley have started projecting Modi as future PM because of his “developmental work” in Gujarat.

I would much sooner die than vote for a party where Modi could become PM.

(There is a similar discussion on genocide and efficiency in the liberty v efficiency debate video below.)

Last week the GMU Econ Society organised a debate where Caplan argued in favour of Liberty and Hanson in favour of efficiency. 

I missed it (midterms!), and was waiting to catch it online. Watch the video, it’s fantastic.

Caplan v Hanson

HT: Dan Smith

A condensed version of all the manifesto’s can be read here.  

Analysis of the manifestos can be summed up in one line.

All proposed policies by all parties = Rentseeking

As always there are also some WTF quotable gems here.

1. Congress’s Food Agriculture and Land Policy-”A new Land Acquisition Act to protect landowners.” (emphasis added)
2. CPI’s Defence and Foreign Policy-”No strategic policy with the US.” 
3. BJP’s Gender Policy-”Eliminate gender discrimination in wages.”
4. RJD’s Terrorism and Internal Security Policy-”Extend anti terror laws to include communalism.”

I love this headline.

It is as if the Left has accepted that they were never really fit to run the government. And that they are better at opposing any policy, irrespective of the government.

And now, since they have been an ineffective opposition (since the nuclear deal went through), they are doing the world a favour by deigning to consider joining the next government.

My favourite picture from today’s polling is of a ninety year old woman being carried to the polling booth.

Some people think their vote counts……

clearly they are not the ones who have been hanging out at GMU.