#228 Goals and Self-goals

The TV News Channel Boycott Saga, Export Controls as Economic Statecraft, and the Shape-shifting Nature of PLIs.

Bharat Policy Watch #1: No, The Revolution Won’t be Televised

Insights on issues relevant to Bharat

— RSJ

The 28-party opposition alliance, INDIA, on Thursday released a list of 14 TV anchors who they will boycott from here on because of their “hate-filled” debates. I barely watch Indian TV news channels. If I am in the mood for mindless comedy that punches down instead of up, I’d rather watch reruns of Carry On films. The accents are easy on the ears, and the actors are better. However, I must admit a few recent clips that I have seen of these anchors they have more expressions per minute than Siddharth Malhotra or Kriti Sanon have mustered up in their entire careers so far. With a good director, they could go far. Pity that they are stuck with media cells and business houses directing them. But I realise I’m in a minority. If you go by the self-promotion most news channels do, it would seem like most of the country stays glued to their ‘debates’ every evening. I guess despite the many options available on OTT platforms, we Indians love a good old farce. But as I said earlier, the INDIA alliance has decided to call time on their participation in this. 

And they did it with the melodrama that we, as the paying public for this entertainment, deserve. Here’s the Congress media cell chairman on this decision:

“We have taken the decision with a heavy heart. We are not opposed to any of these anchors. We do not hate any of these anchors. But we love our country more… that is why we wanted to take all steps possible from our side to shut these shops of hatred… that is why the constituents of the INDIA alliance decided that we will not go to these markets of hatred as customers.”

The reactions from the anchors weren't surprising. Calling themselves martyrs for the cause of the nation, they are wearing the boycott as a badge of honour. Here’s Ashok Shrivastav, editor at DD News and one of the names on the list: 

“48 years ago, my father had raised his voice against Indira ji’s Emergency and then the Congress government issued a MISA warrant against my father. But my father did not get scared, nor did he apologise to Indira ji. Today, the Opposition wants to impose Emergency 2.0 on the country… even today we have to fight, not be scared." 

What a martyr.

Quite how the Opposition in 2023 be as powerful as Indira Gandhi in 1975 and impose Emergency 2.0 is somewhat beyond the realm of my logic. But then, what do I know?

There are two strands of discussion that could emerge from here. One is, what does this mean as we get into the thick of the Lok Sabha election cycle? What is the INDIA alliance looking to get out of this boycott? The other point is to reflect on the state of media (esp. TV news) in our democracy and what are citizens possibly losing out on because of it. 

So, what’s the INDIA alliance hoping to get out of this boycott? My sense is precious little, and they know it too. If you have seen even a bit of the shows of these anchors, you will know they aren’t thriving on high-quality debates with parries and thrusts from both sides of the political aisle. It isn’t a marketplace of ideas that they are running, which will lose its meaning if one set of participants exits it. The audience that watches these shows is presumably looking for their daily fix of blood sport where enemies of the nation are taken down by these anchors. If INDIA boycotts them, they will find cheap surrogates who will claim to speak on behalf of INDIA and then batter them into submission. In fact, now it will be open season because no representation means you vacate the space for anyone to speak for you and spread more misinformation. This will ensure the viewers will continue to get their daily dose of debates that frame the opposition against the nation (“Is Congress putting nation first?” is one debate I saw a month back) and the viewership ratings, whatever those numbers are, will continue like before. No channel owner will be in any hurry to get these anchors off prime time because of this. 

The anchors have already made a virtue of this boycott on their shows and social media handles. In a bizarre inversion of logic, they have positioned themselves as martyrs to the cause of free speech. Apparently, the opposition doesn’t want them to speak the truth and is gagging them. I don’t know how long back you have picked up an Orwell, but looking at this, you should not be missing them. I expect a tremendous amount of tamasha, the one other skill that binds these anchors, emerging from here on. Expect a symbolic empty chair representing the opposition in every debate to remind us that those who don’t want the nation to debate this topic (and that could mean anything, really) are hiding from us. Our journalism is so hard-hitting and in national interest that the opposition cannot face us. These are talented artists, and they will milk this thing for long. 

For the INDIA alliance, it is difficult to walk back on this boycott. Now or after elections, regardless of the results. How will you do so when the reason for the boycott will continue to exist? The only guarantee from here on is that more anchors will continue to get added to this list of 14. Formally or informally. Because any anchor who isn’t on the list now and continues to have the INDIA spokespersons in their shows will be subtle targets of those that are being boycotted. Expect digs at those shows that peddle anti-national agenda or ads that suggest our journalism is most pro-Bharat because we have the most ‘INDIA-boycotted’ journalists. This is a familiar slippery slope TV journalism has gone down in the past decade. And it will respond exactly as you would expect. By upping the ante. Those who aren’t on the boycott list will throw caution to the winds to get into the list. It sounds Orwellian again, but this is how the incentives are aligned.  

Beyond the immediate consequences of this boycott, it is a good time to reflect on the state of TV journalism and, more broadly, the mainstream media in India today. A free and fair media is essential in a democracy because those in places of power need to be held accountable. Because power corrupts. So, the media has to, as the cliché goes, speak truth to power. You would think it is easy to identify who is the ‘power’ at any time in society. Those who hold the reins of the all-powerful state, who influence capital and who shape public opinion. Those are the powerful. But not quite in India. In a subversion of logic that’s both insidious and breathtaking in its ability to distort reality, what we have in India is the creation of a myth of ‘power’ that’s some kind of a deep state with support from anti-India forces (George Soros is a prime example of one in this imagination). This is the real ‘power’ that’s entrenched in India: the tukde-tukde gang, urban naxals, Lutyens elite, liberals with colonial mentality or anyone of another stripe who might have a different view from what seems like the prevailing consensus.

It is remarkable that this inversion of who truly holds power, this strawman of the powerful, has been deeply embedded by the media in the minds of large sections of middle-class, educated Indians. Once you do that then all acts of media is speaking truth to ‘power’ while letting those holding real power get away easily. The problem with this model is that once established, it will be copied by others if and when the wheel of political fortunes turns (not any time soon, in my opinion). Because those who are at the receiving end of it today are no angels. Let’s not harbour that illusion. They will use the same copybook when it is their turn. In that sense, we are doomed to have this kind of media forever unless the mainstream media gets completely disrupted by the emerging alternatives.

The other reality of mainstream media, TV especially, is that it is left to respond to the agenda that’s already set by the media cells and social media influencers and bots during the day. Real reportage has been long dead on TV, barring a few exceptions. Most news channels run the same tired ‘breaking news’ throughout the day and then come alive in the evening prime time when they conduct what they call debates. Most of these debates are parodies that you could enjoy for their unintentional humour if you were not invested in India’s future. How long will people see this across every channel in the country is a point I have often wondered aloud. How long will you be in thrall of beating the already beaten? Surely, someday, you will be tired of the strawman. But the remarkable thing about social media is that it has democratised the ‘issue raking’ capability. This has meant there is more than one topic every day to rile against the mythical ‘power’ that’s stopping India. And so it continues. TV news is about hoovering the most absurd social media political issue and converting it into a two-hour-long rant with a dozen guests. It shouldn’t work when you look at it this way. But it does. One of the many wonders of India. 

Lastly, there’s often a point made that most of these anchors will jump sides the moment they see political winds changing direction in future. So, we should not overread this beyond a point. This is how they crawled during the Emergency too. And then they changed. So, they will grow a spine when things change. I think this is a mistaken notion. Both now and when thinking about how the media behaved during the Emergency. In both instances, to me, there was and there is a strong ideological strain that drives the behaviour more than perks of being close to power or the fear of it. Let that not be underestimated. For most of these anchors, ideological compatibility is as much a reason as the convenience of being closer to the power, for their slanted coverage of issues. This has always been the case. It takes a long time for this to come off. So, this isn’t going away anytime soon.

The losers now and in future will be the citizens of India. Once a successful template is set for undermining the media, it will be used and refined further by anyone who comes to power. Speaking truth to power is void if you can redefine power to be everyone except those in real power. That’s what has happened in India today. It is what will be continued in future. Whoever has engineered this, it is a stroke of genius. Of course, at the expense of the powerless.   

I have no idea how this will change. This is a business that needs significant capital upfront with licenses, rights and ad revenues, for which you have to depend on the State. It looks unlikely that the online model will upend this in a hurry, and even they may be brought under the thumb of the State soon.

The role of the real media should change to speaking for the powerless. As Chomsky put it (heavens, I’m quoting Chomsky now), “speaking truth to power makes no sense. There's no point in speaking truth to Henry Kissinger, he knows it already. Instead speak truth to the powerless. Or better, with the powerless. Then they'll act to dismantle illegitimate power.”

For once, and maybe the only time, I agree with him. 

---

Matsyanyaaya: Re-examining Chip Export Controls

Big fish eating small fish = Foreign Policy in action

— Pranay Kotasthane

Don’t think I imagined a day when the market release of a phone would have national security pundits, geopolitical analysts, and newspaper opinion editors splitting remaining hairs. But that’s exactly what happened last week.

Huawei launched its Mate 60 Pro phone (they should hire another marketing agency just for that name) without much song and dance in late August. The phone’s official webpage didn’t mention the processor's name or the manufacturing process. But then, TechInsights, a Canadian chip intelligence firm known for its phone “teardown” analysis, claimed that this phone had a 5G processor made by HiSilicon, Huawei’s design arm. Named Kirin9000s, this processor was reportedly manufactured at SMIC, China’s copy of TSMC. Further, the analysis claimed that despite the US export controls that should have made chip production at advanced nodes (<14nm) terribly difficult, SMIC managed to create this processor at the very respectable 7nm process node.

This revelation caused quite a flutter. Some analysts said that this news wasn’t as big as it was made out to be, as the yield (proportion of chips that actually work) of such chips would be too low to make it economically viable.

Others on the opposite side emphatically claimed that this phone was evidence that semiconductor export controls have failed and that the only way to make them effective is to make them more expansive, covering many more tools, software, and machines that are outside the controls regime.

For what it’s worth, here’s my take. The yield numbers are probably low, but the crucial political implication is that both sides will consider this a significant breakthrough.

I mean, when was the last time you saw the US National Security Advisor fielding questions on a phone’s specifications? There will be pressure on the US to reconsider its export controls strategy, which was based on the assumption that controls could prevent Chinese companies from producing advanced-edge chips while the business-as-usual approach would continue at the trailing-edge nodes. It is increasingly becoming clear that this distinction doesn't work in reality. Equipment used at the trailing-edge nodes is being repurposed for the higher nodes, albeit with lower efficiency. 

The US might be forced to increase controls in other areas, such as EDA software and manufacturing equipment, or adopt other methods, such as higher investment screening and restrictions on the movement of talent. 

As for China, this announcement would fuel more investment to decouple the entire value chain, a task that would make it incur immense monetary and opportunity costs. An atmanirbhar overdrive is likely. Expect some more tall announcements as the one-year anniversary date of the export controls approaches.

But what I felt lacking in this narrow technical judgment of export controls is the appreciation that they are primarily an instrument of politics and not of technology. To judge whether these controls have failed or succeeded based merely on the technical achievements of a Chinese company betrays a simplistic understanding of economic statecraft.

Perhaps such reactions have to do with the “chip war” framing, about which I have ranted in an earlier edition. In that framing, every advancement by Chinese companies (and there are bound to be many) in chip production will be portrayed as a “battle victory”.

The more appropriate lens would be to classify these export controls not as a battleground weapon but as a subset of economic sanctions meant to achieve political aims.

The pioneering work on the use of economic sanctions is by David A. Baldwin. His book Economic Statecraft argues against the conventional wisdom that sanctions are destined to “fail” and hence shouldn’t be used. His central claim was that the costs and benefits of economic techniques should be analysed in relation to other alternatives such as diplomacy, propaganda, and military statecraft.

His nine pithy analytical guidelines for evaluating economic statecraft are instructive for the debate on chip export controls.

1. Targets and goals are usually multiple. The single most important step in describing an actual or potential influence attempt is careful determination of who is trying to influence whom with respect to what. Oversimplified views of the structure of goals and targets is the most frequent cause of underestimation of the utility of economic statecraft.

2. Success is usually a matter of degree. Neither perfect success nor perfect failure is likely. Simple dichotomies categorizing the outcomes of influence attempts in terms of “success” or “failure” can be highly misleading.

3. Alternatives matter. Information about the likely utility of a given tool of statecraft acquires significance only by comparison with alternative policy instruments. Assertions that economic statecraft will not work should be accompanied by suggestions as to what policy option is likely to work better.

4. Some things are more difficult than others. A moderate degree of success in accomplishing a difficult task may seem less impressive than a high degree of success in accomplishing an easy task. In assessing statecraft, as in judging diving contests, scores should be adjusted for the level of difficulty. “Don’t bite off more than you can chew” is a recipe for seeming to be successful, but it is not necessarily a demonstration of superior chewing ability. In capability analysis the size of the bite is not a tactical matter; it is a given.

5. Images matter. The pursuit of symbolic foreign policy goals is not necessarily an indication of weakness, frivolity, or excessive emotionalism. Foreign policymakers usually behave as if others were watching—and rightly so!

6. The bases of power are many and varied. Economic policy instruments may work through noneconomic power bases. Foreign aid may successfully project a commitment to defend the recipient regardless of the economic effects of the aid, and trade restrictions may successfully convey a threat to invade even when their economic impact is nil. Economic sanctions need not bite in order to work.

7. Comparing our costs with theirs is not very helpful. The costs of the power wielder should be compared with the costs of his other policy options. Comparing the costs to the power wielder with the costs imposed on the target is likely to be quite misleading.

8. Imposing costs for noncompliance is a measure of success. To make the target of an influence attempt pay a price for noncompliance is to be at least partially successful. Thus, the relevant question is not merely whether compliance was forthcoming but also whether costs for noncompliance were imposed.

9. Costs have their uses. Other things being equal, it is always desirable to minimize costs; but other things are not always equal. The selection of a costly method of conveying a signal may add credibility to the signal. Thus, a statesman interested in demonstrating resolve may want to avoid the less expensive means of communication. When outcomes are the same, cheaper is better; but under some circumstances, the costliness of the medium enhances the credibility of the message. [Baldwin, David A., Economic Statecraft. Princeton: Princeton University Press, 2020. pages 387-389]

Read these points again. These guidelines can help resurrect the debate on chip export controls, which has turned quite stale.

Stopping China’s strides in using AI for the military is not the only purpose of these controls. As Baldwin’s first guideline indicates, deterring the suppliers and buyers of Chinese technologies is also a legitimate goal of current technology sanctions. The US has managed to convince others about hardware backdoors in all China-made chips despite flimsy evidence to back this claim. To the extent that these controls have made third countries accept the higher costs of avoiding the cheaper Chinese option, controls have achieved limited success.

Next, if we compare all the other options available to the US to confront China politically, tighter control over technology seems to be a pretty low level of escalation to me (point 3). As a political instrument, these controls are way down the escalatory ladder for the US.

The Trump-era economic sanctions and then the technology controls have quickly conveyed to the world that the positive-sum camaraderie between the US and China is over. This signal has made China’s job of winning capable partners far more difficult (point 6).

The costs incurred by the US might well be higher than those incurred by China. But that’s not the most relevant point here. The question before the US is: does it have other equally effective yet less costly alternatives? I do not know the answer to this question.

Through these controls, the US has made China pay for its non-compliance on intellectual property protection, trade, and other matters. To that extent, these controls are a partial success (point 8).

And finally, these controls have credibly conveyed to semiconductor companies worldwide that the US is willing to incur costs at the expense of industry interests. This signal is perhaps a more potent deterrent for preventing technology transfer into China than a continuously expanding list of controls (point 9).

This framing of chip export controls as a specific implementation of economic statecraft is underrated, while calling it a “war” leads to simplistic, inaccurate analysis.

---

PolicyWTF: The Shapeshifting Nature of PLIs

This section looks at egregious public policies. Policies that make you go: WTF, Did that really happen?

- Pranay Kotasthane

Shape-shifting is a common ploy deployed in fiction. Correction. Not just in fiction. It also applies to policymaking. No government likes killing a policy just because it doesn’t meet its objective. Instead, new goals are pulled out of thin air. Often enough, so many goals get drafted that the obfuscated policy defies all objective analysis.

Such is the case with India’s electronics Production-linked Incentive (PLI). What began as an attempt to make domestic production in India competitive has shape-shifted into an attempt to restrict imports from China and to mandate the adoption of “indigenous” technologies.

Read this development from a Business Standard report, for instance:

"After laptops, tablets, govt moots import licence for broadband gear… The Directorate General of Foreign Trade (DGFT) will mandate telcos to seek prior approval from the Centre for importing network gear .. such as Wi-Fi access points, ethernet switches, wireless radio links, and gigabit passive optical network (GPON) OLT/ONT systems... " if the proposal is okayed.

I mean, really? Are Wi-Fi access points strategic now? Do we really need to cut their imports?

While I was recovering from this report, I came across this one:

The Centre might make it mandatory for smartphone and auto manufacturers to support the Navigation with Indian Constellation (NavIC) tool in devices made for the domestic market. “It is very conceivable that something like this could be mandated if there is a second round of production-linked incentive (PLI) scheme for mobile phones”, MoS MeitY said.

Never mind that such changes will mean a higher cost of production, the PLI is also supposed to bear the burden of popularising NavIC. Also, it appears that the government might evergreen the mobile phone PLI.

I have no problems with the new objectives. But to impose these objectives on a single instrument is a blatant disregard of the Tinbergen Rule (n objectives, n policy instruments).

Moreover, these developments also indicate the problems with industrial policy in general. Instead of tackling a challenging objective, they soon peter out to serving a low-level equilibrium objective. Let the PLI only focus on making India’s exports competitive. Use other policy instruments to achieve other goals.

P.S.: In another phone-related saga, the government is also considering a move to mandate FM receivers on all smartphones. The saving grace was that TRAI also included some recommendations that might actually make people listen to FM, such as allowing news on FM channels and rationalising the licence regime.

---

HomeWork

Reading and listening recommendations on public policy matters

1. [Blog] For Engineer’s Day (September 15th), Nitin Pai had a post on the Engineering Mindset. Many of these points apply directly to public policy analysis.

2. [Podcast] Another excellent episode of the Ideas of India, this time on violence and order in India.

---