Alex Tabarrok

Hedging FDA Risk?

by on April 19, 2017 at 6:09 am in Economics, Law, Medicine | Permalink

In the words of a recent article, the FDA’s rejection of a recent drug application was a stunning setback. Stunning setbacks are by definition unpredictable and unpredictable risks aren’t correlated with other risks which means that they can be easily priced and bought and sold. The all-star team of Adam Jørring, Andrew W. Lo, Tomas J. Philipson, Manita Singh and Richard T. Thakor propose just this in Sharing R&D Risk in Healthcare via FDA Hedges.

The idea is to create FDA Hedges that pay out a fixed fee if a drug fails to be approved and zero otherwise. Pharmaceutical firms could then buy some of these contracts and reduce their risk exposure which in turn would increase their incentive to invest in R&D.

The idea is clever but firms and even more so firm owners already have many ways to diversify and its not clear what the value of an additional source of diversification is, even one that is more closely tuned to the firm’s profits. It’s also not clear how much additional R&D would be driven by offloading these risks. Pharmaceutical R&D is valuable, however, so even small increases in R&D are welcome even if more fundamental changes would be better. Prices in these markets would also provide useful information.

I also worry that we are asking a lot of FDA reviewers and firm insiders to keep their inside information private. Information about FDA approval decisions is already very valuable and there have been a few cases where insiders trade on their information or leak it to make millions. FDA Hedges might make this problem worse which should be balanced against the possible gains.

Walking around Mumbai it’s common to see some lovely, older buildings (circa 1920s perhaps) that are rentcontrol1in a great state of disrepair. A well maintained building can last for hundreds of years so why are these buildings falling apart? The answer is rent control. Bombay passed a rent control act in 1947 that froze rents at 1940 levels.

More than fifty years later, rents remained frozen at 1940 levels. It wasn’t until 1999 that the Act was modified slightly to lift controls on some new construction and to allow rent increases of 4% per year. After a fifty two year freeze, however, a 4% increase was a pittance. Thus, even today there are thousands of flats where tenants are paying rents of 400-500 rupees a month (that’s $6 to $8 a month!)–far, far below market rates.

The rent control law meant that there was virtually no construction of rental housing (WP) for decades and a slowly dilapidating housing stock. (Ironically, the only free market in rental housing is in the rentcontrol4slums.)

The nominal landlords have neither the incentive nor the funds to maintain the buildings so every year during monsoon season some of the buildings collapse and people die. As the World Bank put it, the monsoons are Natural Hazards but the collapses are Unnatural Disasters:

Rent controls in Mumbai may have initially benefited tenants at the expense of landlords, but over time everyone suffers. Rent controls cause landlords to forgo maintenance and neglect their properties, and tenants not only live in dilapidated buildings but die when they collapse in heavy rains. Even if tenants are willing to either pay higher rents or to maintain the building, each tries to not pay his share of the expense (free riding), especially if appropriate retrofitting involves structural changes to the entire residential structure and not to individual apartments. Tenants also may lack the legal authority to make changes to their building’s structure.

Consider the photo at top, it’s an elegant building on a nice plot in a highly desirable part of town but take a closer look and you can see that it is falling apart (second photo). Several businesses and flats operate in the building. Now read the sign on the wall.

rentcontrol3I don’t doubt that the sign is largely accurate but it also illustrates another aspect of rent control. Rent control transforms a mutually profitable exchange into a zero-sum war of misery. As I discovered in my investigations, a remarkable and sometimes hilarious example is illustrated by this very building.

The tenant, called the “victim lady”, in the Bombay High Court case that she initiated alleges that her landlord has vexed her with many frivolous lawsuits and harassed her in various and sundry ways:

It is alleged that the Respondent, on the pretext of reading books and doing meditation, continues to sit near the window of the victim lady reading law books and passing unwanted remarks stating that he will become a better lawyer by reading law books and will teach the victim lady a lesson. The Respondent is also alleged to have killed the kitten to whom the victim lady regularly used to feed. He is also alleged to have called three men to remove coconuts from the coconut tree and in the process broke number of flower pots belonging to the victim lady and destroyed the garden maintained by her.

In addition, and the judges of the High Court find this especially distasteful, the landlord “has also cast aspersions on the judiciary by making certain statements” about the “inefficiency of the judicial system”. Indeed, in his affidavit-in-reply, the respondent doubled down arguing:

…”the judiciary is perceived as inefficient by most citizens of India” as a justification for what he had stated.

Where could the respondent have gotten such absurd ideas? How dare he claim to know what most citizens think!

The Respondent may be free to express his views about the judiciary, but obviously had no right to project his views as of “most citizens in India”. What survey or research has been made by the Respondent to ascertain the views of “most citizens in India”, has not been disclosed, and considering the number of the citizens in India it is impossible to believe that the Respondent has made any survey or research on these aspects, so as to be able to make an authoritative statement of what “most citizens” feel. The impropriety is so obvious that we do not wish to comment upon the same any further…[to which, of course, the judges then proceed to comment further, AT]

The landlord does come off as a troublesome fellow but dig a little deeper and it’s not hard to see the source of his frustration. The judges, to give credit where credit is due, careful sift through the history of the case and they learn that the landlord has not actually filed many lawsuits against the plaintiff. Instead of many lawsuits, it turns out that there is only one very, very lengthy lawsuit.

Now, coming to the details given in part-B of the petition classified as “facts of the case”, there is reference of the suit bearing RAE No.537/4434/63, but this suit has, admittedly, not been filed by the Respondent and apparently the same has been filed by the grandfather [emphasis added, AT] of the Respondent….It is clear from the averments in the petition itself that the legal proceedings are pending between the parties since the year 1963.

Since landlord junior “came in picture in the year 1998 only”, and was only filling in the shoes of landlord father, who was only filling in the shoes of landlord grandfather, junior can’t be said to have initiated many lawsuits against the tenant. Thus, despite the landlord’s clearly outrageous comments about the inefficiency of the judiciary and whatever else junior may have done to the kitten, the judges throw out the tenant’s petition. The lawsuit that began in 1963 moves forward!  Perhaps to be taken up by the next generation.

Addendum: I talk rent control in Mumbai with Amit Varma on his excellent podcast, The Seen and the Unseen.

The Spirit of the Law

by on April 16, 2017 at 12:50 am in Current Affairs, Economics, Law | Permalink

To get around the Indian Supreme Court’s ban on selling alcohol within 500 meters of a highway, a bar in Kerala added some distance. Here is one case where obeying the letter of the law is producing the spirit of the law. As an added bonus it will be easier to enter the bar than to exit.

bar

Hat tip: Anjan Rao.

Outside my apartment a cobbler has a sidewalk shop where he sits and fixes shoes. One of the things that interests me in this photo is the picture the cobbler hangs behind him, that’s BR Ambedkar. In the Cobblerindependence movement BR Ambedkar was the leader of the Dalit (untouchable) class and the guiding force in writing the Indian constitution, which in India makes him a combination of Martin Luther King and James Madison.

Ambedkar died in 1956 but he continues to be highly regarded, especially, but by no means solely, among the Dalits. Indeed, of the great triumvirate, Gandhi, Nehru, and Ambedkar, only Ambedkar seems to have grown in stature since his death. Gandhi is given lip service but his image no longer carries meaning. As Arundhati Roy put it, “Gandhi has become all things to all people…he is the Saint of the Status Quo.” The image of Ambedkar, however, still signals a demand for justice and an insistent claim that not all is yet right.

Today is Ambedkar’s birthday and at the stroke of midnight my neighborhood, which happens to be on Ambedkar Road, erupted in a party and parade that lasted until two in the morning.

Of the great triumvirate, I’ve always been partial to Ambedkar. He had a PhD in economics from Columbia where he worked under Edwin Seligman and later also graduated from the London School of Economics writing another dissertation under Edwin Cannan. Ambedkar was not a free market advocate and he didn’t write much in pure economics after the 1920s but he was an early supporter of monetary rules because he had a sophisticated understanding of the distributional consequences of monetary interventions and feared government manipulation.

A managed currency is to be altogether avoided when the management is in the hands of the government.

Ambedkar also wrote insightfully on the problem of India’s small farms, a problem that continues to plague India (although some of his solutions such as government ownership of land actually don’t fit the problem, lack of capital, that he emphasized).

So why does Ambedkar continue to resonate in modern India? Ambedkar never had Gandhi’s worship of the village and tradition. He understood that progress would come with cities, industrialization and education. Exactly the forces that are transforming India today. Ambedkar did not mince words:

The love of the intellectual Indian for the village community is pathetic. What is the village but a sink of localism, a den of ignorance, narrow mindedness, and communalism?

Most importantly, quoting Luce’s excellent In Spite of the Gods (still the best introduction to modern India):

Ambedkar gave India’s most marginalised human beings their first real hope of transcending their hereditary social condition. He saw the caste system as India’ greatest social evil, since it treated millions of people as sub-humans by the simple fact of their birth.

But even as the caste system declines in importance (in some ways), there remain those who are marginalized and downtrodden. Ambedkar, for example, resigned as law minister in post independence India when his bill to bring greater equality and property rights to women was rejected. Even today, Ambedkar’s vision is not complete. Ambedkar was a modernist, a rationalist, a believer in the principles of liberty, equality, and the rule of law for all, and for these reasons he remains relevant in modern India.

In 2014, Narenda Modi campaigned on the slogan “maximum governance, minimum government”. It was a brilliant slogan that neatly captured India’s dichotomous problem, too much government and not enough capacity to actually govern. Since then, however, Modi’s government has not done much to fulfill its promise. The latest absurdity is a plan to govern the size of meal portions that restaurants may serve–apparently an attempt to fulfill Modi’s musings on the subject as if they were commands from the Maharaja. Add to this the absurd paid leave maternity bill–something akin to having the US government mandate seatbelts on flying cars, not exactly wrong but not exactly dealing with a problem relevant to most people either. Top off with the Supreme Court’s ban on any liquor sales within 500 meters of a highway (Mumbai, by the way, will follow Rajasthan in recategorizing highways within the city as roads to get around the ban). Put it all together and it looks like we are back to the old India model of maximum government, minimum governance.

In an excellent piece, Rupa Subramanya asks exactly the right question:

…how exactly is intervening in food portion sizes, a matter which in any sensible country would be left to the market system to decide, an example of good governance?

As a first principle of good governance, the government must recognize the limitations of state capacity and prioritize in areas in which it wishes to intervene in the market economy, based on a cost benefit analysis and grounded in a market failure it’s trying to correct.

…Modi campaigned on good governance. It’s time for him to start delivering on that promise.

The Economist has two good pieces on India’s Aadhaar card. First, the bright side:

IT TAKES a little over 90 seconds. At the government-subsidised ration shop in Sargasan, a village in Gujarat, Chandana Prajapati places her thumb on a fingerprint scanner. A list of the staples she and her family are entitled to this month appears on the shopkeeper’s computer: 10kg of rice, 25kg of wheat, some cooking oil, salt and sugar. The 55-year-old housewife has no cash nor credit card, but no matter. By tapping in an identifying number and presenting her thumb one more time, Mrs Prajapati authorises a payment of 271 rupees ($4.20) straight from her bank account. It is technical wizardry worthy of Stockholm or New York; yet outside buffaloes graze, a pot of water is coming to the boil on a pile of firewood and children scamper between mud-brick houses.

Like most Indians, Mrs Prajapati would have struggled to identify herself to the authorities a few years ago, let alone to a faraway bank. But 99% of adults are now enrolled in Aadhaar, a scheme which has amassed the fingerprints and iris scans of over 1.1bn people since 2010. With her authorisation, any government body or private business can check whether her fingerprints or irises match those recorded against her unique 12-digit identifying number in its database. When it comes to identification, India has unexpectedly leapfrogged every country with the possible exception of Estonia, a tiddler with a penchant for innovation.

The Aadhaar system has cut corruption and cleaned the rolls of people with fake identities trying to scam fertilizer, food or some other subsidized good. But the government wants the mark of the beast Aadhaar system to be used for just about everything including paying taxes, getting school lunches, buying airline tickets or a cell phone and that makes some people worried:

In theory, the law on Aadhaar passed last year by Mr Modi’s government includes stringent protections against the sharing of information; its rules allowing exceptions on grounds of national security, although vaguely worded, appear well intended. Sweden has required all citizens to have a national ID number since 1947—the year of India’s birth—with little trouble. Most Swedes consider the scheme, which is linked to tax, school, medical and other records, an immense convenience.

But India is not a tidy Nordic kingdom. Mr Modi’s government, with its strident nationalism and occasional recklessness—such as last year’s abrupt voiding of most of the paper currency in circulation—does not always inspire confidence that it will respect citizens’ rights and legal niceties. By sneaking the linkage between Aadhaar and tax into a budget bill, it raises concerns about intent: will the government stalk tax evaders, or perhaps enemies of the state, using ostensibly “fire-walled” Aadhaar data? Many Indians will remember that, following sectarian riots in the past, ruling parties were accused of using voter rolls to target victims.

As the Economist wisely concludes:

…for Aadhaar to fulfil its potential, Indians must trust that it will not be misused. Adopting coercive regulations, ignoring the Supreme Court’s qualms and dismissing critics peremptorily will achieve the opposite.

The Hijra of India

by on April 11, 2017 at 7:31 am in Economics, Law, Religion, Travel | Permalink

Driving around Mumba one sometimes sees hijra begging at street intersections. The Indian term hijra is typically translated as eunuch but not all hijra are eunuchs or even want to be eunuchs so the term transgender is more accurate. In India, transgendered people are discriminated against, widely disliked, and feared. At the same time their blessings are sometimes sought after on important occasions.

hijraIt’s common for a transgendered person to be abandoned and thrown out of their home. Most then come to live in small communes of hijra headed by a guru and served by chelas (disciples/students).

We chelas must work hard, do the cooking inside the house, and most of the dancing outside. We have an obligation to look after our guru when she grows old, just like we would look after our own mother. In return, when we first become hijras our Chaman Guru teaches us chelas the way of the eunuchs.

(The quote is from William Dalrymple’s wonderful book, City of Djinns: A Year in Delhi. Dalrymple, however, draws too close a connection between hijra and the kind of eunuchs who were forcibly created to guard harems among the Mughals).

The communes of 5-15 hijras are like families but also like firms. The hijra make money by begging and by blessing weddings and births. The guru’s job is to learn the time and place of such celebrations for which she develop informants among midwives, musicians and caterers. A supra-community of hijra divide each city into exclusive territories. Each guru thus has a local monopoly and any hijra thrown out by her guru forfeits the right to work. A hijra thus has little choice but to work as a chela especially since other avenues of work are closed. Thus, the guru is both mother, father and boss.

The woman in the guru makes him feel motherly toward his chelas, but the man in him makes him authoritarian and dictatorial.

The blessings of the hijra are always double-edged. When are the blessed paying for the blessing and when are they are paying for the hijra not to curse them or just to go away? The hijra are not above embarrassing your wedding guests with bawdy and rude behavior.

Times have never been easy for the hijra but times are especially tough now because only the traditional occupations are open to them yet fewer people today believe in either their blessings or their curses. Many people consider them a nuisance. As a result, earnings are down.

Our main occupation is to perform badhai at weddings, or when a child is born. At such times we sing and dance to bless the newlyweds or the newborn. But can badhai alone fill our stomachs? Obviously not, and so we supplement our earnings by begging on city streets, and performing sex work, and dancing in bars and night clubs. Dancing comes naturally to us hijras.

…We are thus destitute. Estranged from family and ostracized by society, people couldn’t care less how we earn a livelihood, or where our next meal comes from. If a hijra commits a crime, the mob rushes to attack him while the police are only too glad to press charges against him. This is not to justify crime, but to reiterate that all crimes have a social dimension, and in the case of hijras this cannot be overlooked. Yet it is never taken into account.

A small trans and hijra empowerment movement works to bring greater acceptance to allow hijra to move into other occupations. On Sunday, I attended a hijra festival. The hijra were sweet and welcoming when I talked with them but it was not well attended.

The movement has found success among India’s liberal “internationalized” elite. India’s Supreme Court, for example, recognized a third gender in 2014, so Indian passports, driver’s licenses and other official documents now include M, F and an Other category. Gay sex, however, is still against the law (although prosecutions are rare to nonexistent). It’s notable that Bangladesh and Pakistan, two other countries not known for their liberalism, also recognize a third gender. The seeming contradiction is in part because sexual categories are different than in the West so, for example, sex between men and the third gender (hijra) isn’t considered sex between two men. As is true everywhere, all these issues are complicated and contested.

Ardhanari 2Intellectuals can also find support for the third gender in Hindu culture. The Vedas, for example, refer to Tritiya prakrti, people of the third sex, and the major Hindu texts treat homosexuality as normal, or at most give it mild admonishments. Hindu gods will often be reincarnated in different genders or even as hermaphrodites (the sculpture at Elephanta island near Mumbai shown at left depicts a hermaphrodite reincarnation of Shiva). The famous erotic carvings at the Khajuraho temples and elsewhere include depictions of homosexual sex.

The relative tolerance of the Hindu classics leads some people to blame Islamic and British influences on Indian society for it’s intolerance but discrimination against the Hijra is widespread. Although intellectuals may find support for tolerance in Hindu classics, the folk do not. Indians by and large are embarrassed about Khajuraho’s depiction of heterosexual sex, let alone anything more challenging.

The willingness of trans and hijra, both in India and the West, to live with discrimination and abandonment is testament to the great drive to live as one feels one is. I wish the hijra good fortune.

Hat tip: Kshitij Batra for discussion.

Hijra festival 2

Today is a good day to remember the great Julian Simon. Here’s a piece on just one of his many accomplishments.

Julian Simon helped revolutionize the airline industry by popularizing the idea that carriers should stop randomly removing passengers from overbooked flights and instead auction off the right to be bumped by offering vouchers that go up in value until all the necessary seats have been reassigned. Simon came up with the idea for these auctions in the 1960s, but he wasn’t able to get regulators interested in allowing it until the 1970s. Up until that time, Litan writes, “airlines deliberately did not fill their planes and thus flew with less capacity than they do now, a circumstance that made customers more comfortable, but reduced profits for airlines.” And this, of course, meant they had to charge passengers more to compensate.

By auctioning off overbooked seats, economist James Heins estimates that $100 billion has been saved by the airline industry and its customers in the 30-plus years since the practice was introduced.

The amazing story of Lal Bihari, founder of the Uttar Pradesh Association of Dead People, illustrates many of the issues I wrote about in my post on the chaos of land records in India.

When Lal Bihari first heard about his death, he thought it was a joke. He smiled at the lekhpal, the village officer responsible for land records. But there was no smile in return. “Lal Bihari died last year,” the lekhpal repeated. “I don’t know who you are.” That was when the 22-year-old from Amilo in Azamgarh, Uttar Pradesh (UP), realised something was amiss. He had come to his birthplace Khalilabad for residence, income and caste certificates. He needed them to get a bank loan for his handloom business.

“But I am here before you,” he said, puzzled. “You know me. I have met you before.” The lekhpal showed him the land record, a piece of paper, and read it out. It said that the previous year, 30 July 1976, after the death of Lal Bihari, his one bigha (one-fifth of an acre) of land had devolved to his cousins. He was officially dead.

Lal’s cousins had bribed a local official and declared him dead in order to take his land. One would think it a fairly easy procedure to prove that you aren’t dead but even in the United States this can take months. In India, it took 17 years.

“The price of my death was Rs 300,” says Lal Bihari. After he discovered he had ‘died’, Lal Bihari went to a lawyer, who said, “A dead man has come to me,” and laughed. Neighbours would mock him—“Look, there goes the ghost.” He felt humiliated. Since a court case could take decades, he visited various government departments. He beseeched and quarreled with officials. He filed complaints. In vain. “The enquiry would be conducted by the very officials who had listed me as dead,” he says.

Finding no help from officials, Lal began to engage in more and more desperate measures:

In 1985, he tried to get himself arrested. He kidnapped his cousin, a boy named Baburam in the fifth standard, whose family had shown him dead. But once he picked up Baburam from school, he didn’t know what to do. “I took him to a movie every day,” he says.
After five days, when the family did not file a police complaint, he decided to soak Baburam’s shirt in goat’s blood and send it over. “I thought it would scare them into going to the police,” he says. But the butcher he knew didn’t help and told him to go to the poultry seller. “The blood from a chicken was never going to be enough,” says Lal Bihari. He dropped the idea. The plan flopped, though Baburam got a new shirt.

…He bribed a policeman Rs 500 to get a case registered against him and his cousin for rioting. The policeman returned the money when he discovered the motive. He applied for widow’s pension for his wife, Karami. “They would refuse because I was alive. This would be a record for me,” he says. But the government’s refusal made no mention of him.

Next, Lal Bihari sold his property to contest the 1988 Lok Sabha election from Allahabad against former Prime Minister VP Singh. Surprising even himself, he got about 1,600 votes.

Lal’s bizarre case began to get newspaper attention and finally in 1994 he was once again declared alive and his property restored. The story, however, doesn’t end there. In his adventures, Lal had befriended many dead people and so he founded the UP Mritak Sangh, the Uttar Pradesh Association of Dead People. The association organizes marches of the walking dead. In 2003 Lal Bihari won the IgNobel peace prize.

Lal Bihari continues to be very much alive.

Hat tip: Amit Varma.

The Indian Supreme Court has just banned sales of alcohol within 500 meters of a national highway. The ban affects not just liquor stores but tens of thousands of restaurants and hotels. In response, the Rajasthan Public Works Department announced that they would now recategorize highways in urban areas as roads! Other states may follow suit. (David Keohane at the FT has further background on the India ban.)

Lost in the shenanigans is that even if the ban were implemented perfectly it’s not at all obvious that it would reduce traffic accidents. Alcohol can be easily stored and if you are thirsty driving 500 meters doesn’t seem like very far to go to buy alcohol.

Entire counties in the United States have banned alcohol but that doesn’t seem to have reduced traffic fatalities. It may even have increased fatalities because residents of dry counties drive to a wet county to find a bar and then they drive drunk for longer distances as they head home.

In India you will often see signs asserting Ownership and Possession on buildings and lots that are Meena1unoccupied or under construction. The reason is not to stop squatters but rather to avoid the double selling problem. In the United States, it’s fairly easy to find out who owns a piece of land or even an expensive asset like a car. The land registry and titling system in India, however, is expensive and not always easy to check. As Gulzar Natarajan writes:

For something so valuable, land records in most developing countries are archaic. No register, which reliably confirms title, exists anywhere in India. Small experiments in some states to build such register have not been successful. Existing registers suffer from problems arising from lack of updation, fragmentation of lands, informal family partitions, unregistered power of attorney transactions, and numerous boundary and ownership disputes. The magnitude of these problems gets amplified manifold in urban areas.

It’s possible, for example, for a family member to sell family land without anyone else knowing about it. In Muslim customary law, gifts made on the deathbed can override a will which (surprise!) tends to benefit late-stage caregivers. Verbal deals in general are not uncommon.

land ownershipIndeed, without proper land registration it’s possible for an entirely unconnected person to sell land that he doesn’t own. Even if the real owners have some type of title, the ensuing court process between the real owners and those who thought or claimed they were the real owners will be time and wealth consuming. Forged documents are common. A large majority of all legal cases in India’s clogged court system are property disputes. The best thing is to occupy the land but if you can’t do that you want to signpost the land to make it as clear as possible who owns it so if someone is offered the land for sale they know who to call to verify.

Signposting is an old device for avoiding the double spending/selling problem by making ownership claims public and verifiable. The blockchain ledger is a modern version. A land registry system on the blockchain could work and systems are being tested in Sweden, Georgia and Cook County. Implementing such systems, however, first requires that land be mapped and parceled–and in many states in India the last land surveys were done by the British before independence. Surveys are becoming easier with drones and automatic surveying but India’s land surveying, registering and titling system still has a long way to go.

The Chinese government have set up a special economic zone for medical tourism.

Hainan Boao Lecheng international medical tourism pilot zone, the first of its kind in the country, was approved by the State Council in 2013. It enjoys nine preferential polices, including special permission for medical talent, technology, devices and drugs, and an allowance for entrance of foreign capital and international communications.

The pilot zone also has permission to carry out leading-edge medical technology research, such as stem cell clinical research.

The zone, for example, offers a way to skirt the slow Chinese FDA (and presumably the slow US FDA as well).

Established in 2013, the Hainan program will open up new treatments–including Keytruda–to affluent Chinese residents who can afford the travel and medical costs, while other patients will have to wait for regulators to approve them. In recent years, mainland Chinese patients have increasingly traveled to Hong Kong or elsewhere in the face of lagging drug approvals by the China FDA and high treatment costs.

The zone is too small to have a significant impact on worldwide R&D but China’s original SEZs soon expanded. The SEZ could also encourage some interesting experiments. Keep an eye out for billionaires who travel to the island for a holiday and emerging looking younger and healthier.

Abuse of power isn’t new to India but the latest scandal is taking a different turn.

Outraged at not getting premium seating, a member of parliament belonging to the Shiv Sena, a regional party in Prime Minister Narendra Modi’s ruling coalition, on Thursday refused to deplane after his flight landed in New Delhi.

After repeated entreaties to disembark, the MP allegedly beat an Air India employee and tried to throw him down the landing stairs.

With a sandal, Ravindra Gaikwad repeatedly hit a shift manager who was sent to calm him down, while threatening to throw the man off the aircraft, flag carrier Air India Ltd said in a statement the same day. Video of the incident showed him pushing the airline employee toward the door.

Air India said it had informed the MP’s staff in advance that the aircraft didn’t have a business class. The passenger was accommodated in the first row of the all-economy plane because he wanted to take that particular flight, the carrier said.

The MP later bragged that of course he had beaten up the Air India employee because he’s a Shiv Sena MP who doesn’t put up with disrespect.

“Yes. I hit him.  I wanted to throw him out of the plane,” the Shiv Sena MP told TIMES NOW. “Is he really an officer. He is not even a buffalo cart driver. He doesn’t know how to deal with customers,”

[By the way, shabash! to the air India hostess who stops Gaikwad from pushing the other employee down the stairs and then gives Gaikwad a piece of her mind, “you’re a role model, no?” she says defiantly.]

air india scandalGaikwad is no stranger to abuse of power:

Gaikwad has seven cases registered against him, including that of culpable homicide not amounting to murder and charges of stopping a public servant from performing his duty, his 2014 election affidavit showed. He was also involved in the infamous incident at the Maharashtra Sadan in New Delhi when he was among 11 Sena MPs who forced a Muslim worker to break his Ramzan fast [i.e. force fed him, AT]…The MPs were complaining of poor quality ‘chapati.’

Air India and its employee have registered a complaint with the Delhi police who have opened an investigation, it will be interesting to see what they do. Civil society, however, is making its views very clear. The Indian media are raking Gaikwad over the coals. The hashtag #GoonGaikwad is popular.

Even more important, Air India, the government owned airline, has refused to fly Gaikwad. Air India and its political masters have long engaged in a mutually profitable relationship of backscratching, featherbedding and kickbacking so for them to put their foot down even against this kind of outrage is remarkable. Moreover, in a show of solidarity, all of the private airlines have followed suit so Gaikwad has been reduced to trying to book flights under various aliases. He’s been stopped every time, however, and in the end he had to drive from Mumbai to Delhi (a nearly 900 mile trip).

This kind of pushback by civil society against the abuse of power is in many ways unprecedented in recent times. It’s an interesting marker of change in India.

Iron Fist, the latest Marvel-Netflix, superhero show, is by far the weakest. [Mild spoilers] The show has been accused of cultural appropriation because it casts a white actor rather than an Asian as a kung-fu superhero (Iron Fist is also white in the comic book but those were unenlightened times). I could live with that if the white actor actually fit the role. Unfortunately, lead actor Finn Jones, whatever his other talents, doesn’t look imposing or powerful. Bruce Lee wasn’t a big guy but he was ripped and you could see at once that despite his charm you didn’t want to mess with this guy. In contrast, Danny Rand, as portrayed by Finn, is a sniveling, crying, whining child who can’t get over the death of his mommy. Despite having supposedly been subjected to beatings, deprivation, and fifteen years of intense martial-arts training, Rand shows none of the hardness that surviving, let alone thriving, in such an environment produces. His fist may be iron but nothing else is.

The fight scenes with Jones are, with one exception, lackluster. The exception is a fight between the Iron and Drunken fist. Drunken Fist (Zhou Cheng) portrayed by Lewis Tan steals the scene. Not only does he clearly give Iron Fist a beat down (despite the nominal outcome) he does so with humor, intelligence and charisma. Watching this scene you cannot help but think, heh, they should have made Lewis Tan the Iron Fist. In fact, Tan was considered for the role! Ironically, after meeting Danny Rand, many characters ask, “Why did this guy get chosen to be the Iron Fist?” It’s a very good question.

The politics of Iron Fist are also annoying. Danny Rand inherits a powerful firm and in one of his first acts as owner he forces it, over the objections of the board, to sell its new drug at cost. What a sweet guy. Blech! The show does give some pretty good arguments for why this is a bad idea–namely it will reduce R&D and because of subsidies from charities and governments the drug will in any case go to everyone who needs its–so you could give Iron Fist a Straussian reading but I don’t give the writers that much credit.

The most serious failing of Iron Fist is that it breaks the cardinal rule: superheroes need supervillains. Outstanding performances by Vincent D’Onofrio as Kingpin and David Tennant as Kilgrave made for riveting conflict in Daredevil and Jessica Jones respectively.  Luke Cage disappointed for its lack of a supervillain. Iron Fist is even worse as it jumps from villain to villain to villain, none of whom are especially super and some of whom are not even all that villainous.

The “hand” are supposed to be the supervillains but they come in (of course) right and left versions. The “left” hand are drug dealers and assassins. But the motives, actions, and consequences of the right hand are difficult to see. Although it’s not clear how the hand operates, their leader makes a case that their actions improve society. The Iron Fist almost joins the hand until he discovers that they have a bunch of computers and surveillance equipment. Then he and sidekick Colleen Wing go on an all out killing spree. What??? I’m no fan of the NSA but surveillance isn’t necessarily evil, Batman also had his sources of information. Iron Fist, however, has difficulty controlling his anger. He acts rashly and with little thought. He sees the world in childish ways. His actions often have unintended consequences and that is why in any battle between the Iron Fist and the invisible Hand, I will take the invisible Hand.

Pragati: India has tremendous advantages as a producer of tourism, but its tourism sector is far too small. India is underperforming and in the process giving up tens of billions of dollars in foreign exchange revenue that could lift millions out of poverty.

IndiaTourists

Nearly nine million tourists visited India in 2016 generating foreign exchange revenues of about $23 billion USD annually. At first glance, the figures are impressive. Tourism is one of India’s largest export sectors, beating out such leading sectors as apparel ($17.4 billion, 2014) and medicinals and pharmaceuticals ($13.9 billion, 2014). A more careful examination, however, reveals that India’s tourism sector is small compared to its potential.

The table below shows the top ten countries by international visitors. France leads the list with 84.5 million visitors a year, about ten times the number of visitors to India. The European countries, France, Spain, Italy, Germany and the UK benefit by being close to one another which generates significant mutual tourism. Mexico, Russia and Turkey, however, all have approximately three to five times as many tourists as does India. China has more than six times as many tourists as does India.

Although India underperforms on the number of visitors it does very well on earnings per visitor…Remarkably, India earns more per visitor than does China and almost as much as does the United States, a whopping $2,610. In fact, despite the small number of tourists, India’s revenues per tourist make it 9th in the world for total tourism revenues, just above Mexico. Visitors to India spend a lot of money which makes it all the more remarkable that India has so few visitors.

That’s me writing in Pragati, an Indian journal of ideas. India could increase its earnings from tourism by tens of billions of dollars with just a few simple reforms–see how at the link and some additional ideas for increasing tourism are in a podcast that I did with Amit Varma.

And, of course, even without reforms on the supply side there should still be more tourists in India as there are a great number of things to see!

Temple at Chittorgarh Fort.

Chittorgarh Temple
Udaipur (Sahelion Ki Bari) with early 18th century fountains that work entirely by gravity.
Udaipur Alex
Ajanta caves.
Ajanta1