#200 The Stories We Choose to Believe
Conspiracy Theories about Hindenburg-Adani, Five Imperatives for the Future, and Four Trends in High-Tech Geopolitics
We turn 200 editions old today. It has been fun. Thank you for giving us your time. You can do without another self-congratulatory mail in your inbox. So, let’s get moving on with a nod to this classic line of Majrooh.
मैं अकेला ही चला था जानिब-ए-मंज़िल मगर
लोग साथ आते गए और कारवाँ बनता गया
I had set out on this journey all by myself
Others joined, and it turned into a caravan
India Policy Watch #1: Decoding Our Maladies
Insights on burning policy issues in India
— RSJ
Tell me the conspiracy theories a society is willing to believe in, and I will tell you about its maladies.
Truth is a contested notion in today’s world. Maybe it has always been. But there’s something clarifying about a conspiracy theory that no truth can match. It is not the conspiracy itself. That often crumbles under the lightest of burden of logic applied to it. The real deal is what prompts the need for the conspiracy. It stems from the irreconcilability of an often irrational belief that many hold with the reality of the world around them. The greater the chasm between the two, the weirder the conspiracy theory. And it is this chasm, this flight from reality, that a conspiracy theory is born to serve. By denying the facts that are around you and leaning on your own right to have an opinion, conspiracy theorists make it easier for you to dismiss inconvenient facts as mere opinions. Once you have painted facts as fabrications of another mind, you get the permission to have your own facts. That’s how conspiracy theory works.
So, why am I going on about conspiracy theories now? Well, here’s Mint:
In an article quoted by Hindi Daily, Amar Ujala, the RSS mouthpiece said that a group of Indians has created a negative narrative against Adani. The article pinned blame on an ‘Indian lobby which includes the country’s famous propaganda websites associated with leftist ideology'.
Harping on an ideological and political warfare, the article further stated that this attack is very similar to how ‘anti-India’ George Soros ruined the Bank of England and the Bank of Thailand.
He claimed that this controversy did not start on January 25 after the Hinderburg report, but it already began in 2016-17 in Australia.
According to the RSS mouthpiece, an Australian NGO called Bob Brown Foundation (BBF) manages an exclusive website only to defame Indian Industrialist Gautam Adani.
Marking out NGOs and websites in India, the Amar Ujala article singled out an alleged contribution of Azim Premji's NGO to the Independent and Public-Spirited Media Foundation. The article alleged that left-minded media houses and NGOs were behind the sudden turmoil of the Adani Group.”
So there you have it. I suspect this thing isn’t going to die away soon. This is a useful pot to keep stirring. A few leaks about CBI or ED investigations every few months will give enough ammunition for future reports or allegations about the Adani group. Once you have brought in left-minded NGOs into the picture, there’s open season for all sorts of conspiracy theories to pop up in future. The speed of response to any future report will improve from here on. Soros is at it again with our leftists will be the first cry. I often wonder what a busy life that man must be leading.
Let us first get the theory out of the way. The short-seller interest in the Adani group of companies wasn’t because a five-member research group could dig out already existing information about it that could raise questions about stock manipulation and governance. No. It was because, and mark my words carefully now, a leftist cabal of anti-India forces led by a foundation run by India’s greatest philanthropist who happens to be Muslim. Their intention was to stop the apparently unstoppable rise of India by knocking the Adani group off their perch because, after all, the two are now inseparable.
When the stocks went up all these years, there was no conspiracy to suggest why they went up. It was all market. But not when they crashed. Also, what a convoluted and low-probability way to go about such an agenda. All these conspirators, after putting their minds together to find the best way to spread chaos in the financial system, came up with the bright idea that we must get Hindenburg to write a report. What are the odds that someone could predict the sequence of events after the report? That all of this was intended. Pretty low if you use your judgment.
This brings me to the earliest, and still the most cogent, criticism of conspiracy theories by my favourite thinker, Karl Popper. He coined a term to collectively describe this phenomenon: “The Conspiracy Theory of Society”. His point was simple. It comforts many people to believe that history is a product of intended actions by individuals or groups driven by certain beliefs or ideologies (or conspiracy theories). In my words, people believe in conspiracy theories because they aren’t Bayesian.
Anyway, he wrote:
“The conspiracy theory of society is just a version of… theism, of a belief in gods whose whims and wills rule everything…. The conspiracy theorists will believe that institutions can be understood completely as the result of conscious design; and as to collectives, he usually ascribes to them a kind of group-personality, treating them as conspiring agents, just as if they were individual men.”
So, there is a leftist cabal running across the world who are all working in tandem with such precision and impact that you wonder why they are not using such superpowers to actually rule the world. Why are they the underdogs? Popper had a counterintuitive answer for this too. The grand theories of this kind become real when the people who believe in them gain power. Because then any failing which is natural (or otherwise) during governance can be ascribed to a conspiracy. The mythical realm of the conspirators and their powers grows because those in power stoke them.
As Popper wrote:
"The conspiracy theory of society is very widespread, and has very little truth in it. Only when conspiracy theoreticians come into power does it become something like a theory that accounts for things which actually happen (a case of what I have called the ‘Oedipus Effect’). For example, when Hitler came into power, believing in the conspiracy myth of the Learned Elders of Zion, he tried to outdo their conspiracy with his own counter-conspiracy."
The problem with ascribing such wide-ranging power to a super-effective cabal is the old human problem of screwing up. Humans make mistakes, and they don’t anticipate the unintended. If the state with all its powers can fail in this, why shouldn’t a mysterious, underground group of conspirators? For Popper, if every event is due to intentional successful planning by conspirators, where does it account for human stupidity and their history of not translating intents to actions? Most of the consequences of our actions are not in our control, and the best-laid plans of men and mice often go awry, as the bard said. This is the strongest argument against any ‘conspiracy theory of society’. As he wrote:
“It is one of the striking things about social life that nothing ever comes off as intended. Things always turn out a little bit differently. We hardly ever produce in social life precisely the effect that we wish to produce, and we usually get things that we do not want into the bargain."
Anyway, that possibly explains why such theories are usually bunkum. Coming back to the point that I started out with - what does it tell us about our society when we have such conspiracy theories being spread around by mainstream and social media platforms? I have three opinions to offer here.
First, despite evidence of the past, we love personality cults. We believe in the idea of a man of destiny who will change our fortunes. So, it is easy for anyone to lead us on to the line that a charge against the Adani group is a charge against PM Modi, which is, therefore, a conspiracy to destabilise India. The logical improbability of this sequence comes up short against the irrational belief in the cult.
Second, there was always an underlying natural scepticism in Indian society about the wealthy and their ways. The usual lament that captured this was that line often used in Hindi films - “sab saale chor hain.” Like any strain of scepticism, it was both wrong and occasionally healthy for a society to harbour. What we have now is the willingness to abandon this sense of scepticism in favour of vishwaas. It would have been a welcome change had it been an abandoning of scepticism about the markets as against a particular group. But, alas, no one is cooking conspiracy theories to support freedom and markets.
Lastly, the ease with which the conspiracy theory could bring in a Muslim entrepreneur with an impeccable track record in business and possibly, one of India’s greatest philanthropists, tells you where the conspiracy theorists want you to be led. There’s not much to explain here. It is sad.
Like I said earlier, this is a pot that will keep getting stirred because it is a pot that will keep giving. You might ask how do you know that the conspiracy theorists aren’t right. Well, I don’t know, but it is good to retain scepticism on both views. I’m sure Popper would have had something to say here. In fact, he does:
“It is a great step forward to learn to be self-critical; to learn to think that the other fellow may be right - more right than ourselves. But there is a great danger involved in this… for it is more likely that both, we ourselves and the other fellow, are wrong.”
A free society is, by definition, a sceptical society.
India Policy Watch #2: Five Imperatives for the Future of Indian Public Policy
Insights on burning policy issues in India
— Pranay Kotasthane
In analysing emergent public policy developments every week, there’s a risk of losing sight of the big picture. So for our two-hundredth edition, I want to step back and reflect on what I feel are imperatives for Indian public policy going ahead. These, to me, are five goalposts we should not lose sight of.
One, The imperative of "societism" - We must restore the balance between the state, market, and society.
We are at a juncture where the weaknesses of all three agents of change are apparent. Society is increasingly majoritarian, the State’s internal balancing mechanisms are flailing, and market concentration across sectors is rising.
The Indian Republic was meant to be the primary vehicle of a social revolution. Seventy-five years later, its primacy has only been cemented. So much so that a large section of Indian society wants to deploy the same State apparatus for another social revolution — one whose goals are quite different.
The crucial point is that solutions to today’s social failures, such as affective polarisation and majoritarianism, must come from society. These aren’t market failures that the State can rectify or government failures that better bureaucratic design can fix.
We need to understand how to build social capital in the Information Age, where political leanings tend to predetermine social interactions. We must invest in new ways to build “bridging social capital” that brings people from different walks of life together. Just as Hindutva is a social movement, its response must also be many social movements.
Two, getting the Indian State to do fewer things and doing them well.
The paradox of the Indian State—as we have discussed many times in this newsletter—is that it’s too big and too small simultaneously. It’s omni-absent. It is big in terms of its ambition but small in terms of its competence.
The developmental departments of the governments are quite small and understaffed. The State’s performance on its core responsibilities—public services, law and order, primary health, or education—is consistently pathetic. So much so that most people have begun to think of the State as a means for other ends, such as pride, or for honouring their religious and linguistic asmita (identity).
We must go back to holding the State accountable for its core functions.
Three, the imperative of strengthening the Indian Republic
Far too often, we have allowed the Indian Republic to be sacrificed on the altar of democracy. It is the Indian Republic that prevents a majority from using its coercive power against individuals or groups with lesser power.
The Indian Republic prohibits the majority from running roughshod based on its numerical strength. In a Republic like India, the Constitution limits the power of governments and groups to protect an individual’s rights. It is the Republic that grants fundamental rights to individuals to live, work and even protest. Strengthening it is our only chance.
Four, the imperative of economic growth
Many of our problems will become less burdensome if we become richer. We must not forget that a GDP per capita of merely $2500 is our biggest national weakness. We cannot redistribute our way out of such a poor country — there just aren’t enough rich persons to redistribute from.
Global inequality is overwhelmingly between countries, not within countries. Inequality reduction is overwhelmingly a national task. And you cannot do redistribution if your income levels are low, as the size of the economic pie is too small to create a difference meaningfully. Rich country governments spend up to 40% of GDP precisely because they can collect higher revenues from a more affluent population, even at low tax rates.
Without economic growth, there can be no well-being, happiness, or sustainability.
Five: The Imperative of Hope
In today’s times, uncertainty engenders anxiety. Anxiety engenders distrust. And distrust engenders defeatism. And hence, we need hope to place us in the right frame of mind while confronting new challenges. We need to document government, society, and market successes. We must recognise that Indians have overcome seemingly insurmountable challenges several times in the past.
Matsyanyaaya: High-tech Geopolitics in the Post-pandemic World
Big fish eating small fish = Foreign Policy in action
— Pranay Kotasthane
Here are four significant trends in high-tech geopolitics from my recent Takshashila Working Paper.
One, trade wars are likely to be tech wars at their core. Nuclear weapons make large-scale conventional conflict unlikely. Similarly, globalisation has made any large-scale economic decoupling unfeasible. But the backstops in the high-technology domain are not understood well enough. Moreover, the emphasis on the importance of high-technology to national power means that governments are willing to incur the costs of high-technology decoupling. This decoupling might happen at the level of materials, machines, humans, and ideas. The precise pathway will be technology-specific.
Two, aggressive national competition over high-technology might produce some non-linear breakthroughs this decade. The literature on national innovation suggests that a nation-state’s net negative balance of security concerns (termed ‘creative insecurity’) helps explain why only some nation-states choose to focus on innovation. Given that leading powers increasingly feel ‘creatively insecure’, national policies will focus on innovation more than before, sometimes at the expense of consumers and other policy priorities. Regardless, this situation sets the stage for some key breakthroughs. This is not unlike the Sputnik moment when a beachball-sized artificial satellite led to a drastic change in science and innovation policies in the US.
Three, there will be higher alignment between private high-technology players and their national governments. The position of Intel in China illustrates this change. Until as late as November 2021, Intel was deeply interested in China. A WSJ report showed that Intel is among the active investors in a Chinese Electronic Design Automation (EDA) firm. Another Bloomberg report pointed out that Intel wanted to build a fab in Chengdu. Both these stages of the semiconductor value chain are precisely where the US had planned to restrict Chinese access. But after the CHIPS Act was announced, Intel dropped its plans to start a new fab in China. Instead, it now plans to invest more in the US, even though making chips there is much costlier. These flips are likely to become more commonplace.
Four, we will likely encounter selective international cooperation on high-technology subject to geopolitical considerations. High-technology ecosystems are transnational; they rely on comparative advantages to accelerate innovation. To get ahead of each other, high-technology powers such as the US and China are likely to transfer technologies to their respective partners, provided these strengths are complementary. Such cooperation was recently seen in the AUKUS deal and then in the iCET announcement on GE jet engines.
HomeWork
Reading and listening recommendations on public policy matters
[Podcast] Over at Puliyabaazi, Pranay Lal gives a riveting account of India’s natural history
[Paper] A useful conceptual framework of defence innovation
Brilliant newsletter. Bought the book. Eagerly waiting to read