My Conversation with Raghuram Rajan

Here is the transcript and audio, we covered so much, here is the CWT summary:

How much has the U.S. actually fixed the financial system? Does India have the best food in the world? Why does China struggle to maintain a strong relationship with allies? Why are people trading close-knit communities for isolating cities? And what types of institutions are we missing in our social structure? Listen to Rajan’s thorough conversation with Tyler to dive into these questions and much more.

Here is one excerpt:

COWEN: A lot of observers have suggested to me that the notion of a kind of Anglo-American liberalism as ascendant in India is now a dead idea, that ideologically, India has somehow shifted, and the main currents of thought, including on the so-called right, are just really not liberalism anymore. Do you have a take on that view?

RAJAN: I’m not sure I would agree. I would say that we’ve had a government over the last five years which has elements of the majoritarian, Hindu nationalist group in it. But I would argue the country, as a whole, is still firmly secular, liberal in the Nehruvian idea, which is that we need a country which is open to different religions, to different ethnicities, to different beliefs if we are to stay together.

And democracy plays an important role here because it allows some of the pressures which build up in each community to essentially get expressed and therefore diffuses some of the pressure. So I think India’s ideal is still a polyglot coming together in this country.

COWEN: But someone like Ramachandra Guha — what he symbolizes intellectually — do you think that would be a growing part of India’s future? Or that will dwindle as colonial ties become smaller, the United States less important in global affairs?

RAJAN: I think that an open, liberal, tolerant country is really what we need for the next stage of growth. We are now reaching middle income. We could go a little faster. We should go a little faster there.

Once we reach middle income, to grow further, I think we need an intellectual openness, which only the kind of democracy we have — the open dialogue, a respectful dialogue — will generate the kinds of innovative forces that will take us more to the frontier.

So I keep saying, and I say this in the book, we’re very well positioned for the next stage of growth, from middle to high income. But we first have to reach middle income.


COWEN: Will current payments companies end up as competitors to banks or complements to the banking system? Or are they free riders on the banking system?

RAJAN: I think they’re trying to figure out their space. As of now, sometimes they’re substituting for . . . Certainly, my daughter uses her payment system completely separate from her bank account. But longer term, we’ll find ways of meshing these in and reduce the costs of making payments. Those costs are really too high at this point, and reducing those costs makes a lot of sense.

COWEN: Will banks ever be truly excellent at doing software?

RAJAN: I think we will have a combination of the guys who are truly good at software — the fintech companies — merging with banks who know how to do the financial side. They’ll bring each of their talents together. I’ve seen a lot of fintech people who have no clue as to what finance is really about. And I’ve seen a lot of banks who have no clue as to what tech is about. I think some merger will happen over time.

There is much more at the link.  And here is Raghu’s new book The Third Pillar: How Markets and the State Leave Community Behind.


"But I would argue the country, as a whole, is still firmly secular, liberal in the Nehruvian idea, which is that we need a country which is open to different religions, to different ethnicities, to different beliefs if we are to stay together."

Then why are Christian persecuted in India? Is that any moral difference between what Modi, Xi and the Saudi House do? Let us be blunt: we are talking about radicals that hate the West. It is time to apply the Ann Coulter plan: carpet bombing and mass conversion.

Then why are Christian persecuted in India?

They aren't.

Unless they are suspected of eating cow meat.

The truth about the Indian radical regime:

Christians reached India within three decades of Christ's death and have enjoyed an unbroken time in India since. It's the third largest religion after Hinduism and Islam with nearly 30 milion followers. In the meantime, India has been home to multiple faiths including Buddhism, Zoroastrianism, Jainism, Sikkhism, and Judaism. What more do you want? All to convert to Christianity? Well, the missionaries have tried this over two millennia. Isn't it time to give up and seek other pastures?

They are plotting the destruction of the West.

Pundit, you are conversing with someone who is either literally (not figuratively) mentally ill or the most committed troll in internet history. Best to troll him back or ignore.

Is it coincidence that the Soviet regime used to throw dissidents into mental hospitals?

So let me get this straight: Thiago says Christians are persecuted, provides evidence by way of a Christian proselytizing organization, and in light of this perceived religious intolerance, calls for mass slaughter and forced conversion (which, to be fair, is a Portuguese tradition in India:

I can't tell what's stronger, your stupidity or your evil.

"which, to be fair, is a Portuguese tradition in India:"
Because the Indian tyrants never engaged in eeligious persecution... Let us be blunt: Goa would be better under Brazilian rule that it is under Indian rule.

The West is fighting for survival against an enemy which sees as weakness our respect for life and civil rights. An enemy which hates us and tries to destroy us. We are in a clash of civilizations. We risk to be defeated and to see the world sinking into the abyss of a new Dark Age made more sinister, and perhaps more protracted, by the lights of perverted science. This is our generation's Dresden.

Hindu/Buddhist India was, especially by historical standards, extremely religiously tolerant, yes. Don't worry, there is a very small chance of India invading any Western country and imposing radical Hinduism.

"Don't worry, there is a very small chance of India invading any Western country and imposing radical Hinduism."

"This morning I had another talk with the German Chancellor, Herr Hitler, and here is the paper which bears his name upon it as well as mine. Some of you, perhaps, have already heard what it contains but I would just like to read it to you: '... We regard the agreement signed last night and the Anglo-German Naval Agreement as symbolic of the desire of our two peoples never to go to war with one another again.'" So that is it, peace for our time.

I'm not worried. Brazil will protect us all from India and China.

So that is it. Again, Brazil alone must stop the hordes.

Don't think you can handle it? I'm not surprised.

Yes, we can prevail.

So get on with it, we have every confidence in you. You should probably stop wasting time here talking and start doing though.

We are ready to act.

What are you waiting for?

We are playing the long game.

Just like the coward Chamberlain at Munich. I should have known.

No. While America arms the Easterns, Brazil is ready to act.

econimics on tylsää.
halu amme tietää enemmän
Tohtori Cowens Sister

'Will banks ever be truly excellent at doing software?'

What a fascinating question - when was the last time that the bank screwed up your account due to a software error? The best software is that you are utterly unaware of existing, even when it is actually the entire foundation of the banking system as it currently exists.

we met once
you said the book of genesis had no historical value
me oikeastaan kaivata te jotta
erottaa objekti muoto vähäinen
määrä enemmän jokseenkin "sisko "

Not me - I said that Book of Genesis not a particularly old literary work, being most likely written sometime around 500 BCE.

Genesis is not a history in any meaningful sense, but it obviously has immense historical value. Hope that the distinction is helpful.

Whereas the video about lions would relate to the Book of Daniel, as there is more than one way to avoid being attacked by a lion, obviously.

(Sadly, This Guy is apparently no longer around to repeat that I am a pathetic religious bigot to weaken my brand.)

... so Rajan favors democracy and economic growth -- very news worthy stuff

I'd be interested to know if Rajan hints at ever laundering money, for big Indian companies like Reliance. Heck I even laundered money in Europe (our own family money) and even now I am being audited by the IRS for incorrectly filling out one of their forms (IRS form 8938, which stupidly is redundant with FBAR's forms, how dumb can you be IRS?) I doubt anything will happen to me, but if you see a Greek being frog-marched to a jail for supposed money laundering, it might be me.

I bet Rajan's laundered trillions of rupees (1T rupees = $14B USD, not that much for a central banker).

Rich get richer, yea!

Re 'One Belt One Road' & China's 'Alliance' problem, I think it has a lot to do with A) China's government, policy and people are fundamentally Han centric and B) China cannot and will not forget the 'Century of Shame'. In all my analysis of the party's internal political dialogue there's a distinct 'chip on the shoulder' that always comes the world (and its neighbors) owe them something. Russia found this out the hard way in the 60's during their falling out with China.

If the choice is between China being a good global citizen and China having dominion and control regionally, they will choose having dominion and control regionally. I think the current affairs and facts back this up.

Can't we just give them Czechoslovakia? It always works.

No dummy, you mentioned my plan above. Just murder millions of Indian and Chinese men, women, and children with nuclear weapons. Problem solved! It is a war of civilizations and we must show no mercy.

Will the West have the courage it takes? Or will it be Munich again?!

You said Brazil would prevail above so no worries. Let me know when the murdering starts so I can watch on my phone.

For years, the deal was Brazil wouldn't build nuclear weapons and America would deal with the Eastern hordes. If America decides to play the coward, it is beeter it doesn't complainnwhen the shooting starts.

So that is it: the communists and cow-worshippers have nuclear weapons but Brazilians are too stupid to develop them. Such is life in Bolsonaro's Brazil.

And when does the shooting start? I won't complain then.

Brazil was ready to get nuclear times, but closed a deal with America, which was pretending to be against the spreading of nuclear weapons while armed Pakistan, India and Israel!!!!!!!!!!!

Free riders? Not really. More like skimmers. That's what much of what tech companies have become. No. I don't mean that don't offer value because they do; otherwise, why would people use them? I suppose more than anything what they offer is convenience, convenience and security. Whether they actually offer security is debatable but they do offer one more link in the chain of protection from detection (in a cashless economy especially). One can see the irony here: the more tech digitizes our world, the less secure we are in our privacy, so the more we rely on tech for maintaining security in our privacy.

"More like skimmers"

Kind of like lawyers, eh?

I suspect that the continued success of China is undermining the idea that a liberal democracy is required to be a First World country.

Also, they look at the US and the EU and think "why would want to copy that hot mess?"

Because India is so great...

So that's what Brazil has come to: sarcastically denigrating other BRICS to distract from its own development failures.

The point is, India is a disaster. Brazil is much more developed and under a much better leadership.

The food in India really is extraordinary good. But the best in the world? The range isn't wide enough for me. Probably I would stay with Italian (from Italy not the US version). But if I had to I would happily eat Indian food everyday.

Yeah, but saying Italian food is best doesn't allow you to signal just how sophisticated you are, because every American has grown up eating Italian food. You have to select a cuisine developed maximally distant from the US, and the fewer immigrants in North America, the better.

Why does it bother you that Cowen loves Indian food? Can't he just like it, without intending to signal anything?

He can, but I don't think that's how TC rolls.

If Cowen giving opinions on stuff bothers you as so much "signalling", why do you come here? Isn't that what his blog is for?


One can like something or someone and still find a few things to be critical of. My fiancee can explain how this works quite well.

Heh, fair enough. When I got married, I was given some good advice the day of: as a married man I would have a choice, I could choose to be right or I could choose to be happy. I choose happy every time.

Agree with Jeff R.

Indian here, and I think Chinese food is far more diverse than Indian food, and Korean and Japanese are at least far more sophisticated (don't have a good feel for their diversity).

Tyler's praise for Indian food/music is really just a gadget to give an illusion of balance by providing contrast to his mostly negative impressions of the country on topics where it really matters (in contrast to Alex who has a good mixture of praise and criticism on topics that matter, though I disagree on details and find him too fashion-conscious).

With every passing day, it is seeming increasingly likely that Raghuram Rajan has political ambitions; is this entirely unrelated to Tyler's decision to chat with him?

Rajan getting into the political arena, is there anything particularly wrong with him doing so?

That could be true, but even is so I would note sophistication and diversity are *really* easy to scale up, at least at the high end.

Pre-El Bulli and Noma, the Danish and Spanish tradition not very sophisticated / diverse. After them, probably on the world edge at that.

What India has that isn't as easy to scale up is a rich historically rooted set of recipes, iconic dishes and a distinctive approach to food on the world scale that will always represent brand India. At base, adjusting for wealth, I suspect India may be advantaged to China on this one.

Don't know enough to check your last assertions, but an excellent comment with a great idea to keep in mind.

Obviously a very smart and knowledgeable guy. But those were some of the most evasive answers I've seen in a "Conversation with Tyler."

I find this more of an indictment of Tyler as an interviewer more than the person being interviewed, he rarely seems to ask follow-up questions. Especially if there's some tension in the original question or response.

Questions about crop prices / farmer suicides and demonetization?

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