cafeconomics

The stars have names and ages we assign, But deep inside, they follow one design: When gravity grows heavy, tense, and deep, A supernova breaks the cosmic sleep. It bursts, not out of malice or of spite, But scatters seeds of darkness into light. Across the void, where silent wonders pass, It propagates the race of heavy mass. Then turn the gaze to things too small to mind, The tiny creature that all fears resigned: The tardigrade, enduring fire and frost, The map of self that never shall be lost. It shrinks the frame, it waits in crystalline trust, A silent promise to return from dust. Though decades turn and empires fade away, It holds the blueprint for a future day. It knows the vessel fails, the form is frail, But the essential message must not fail. The plant, rooted deep where darkness lies, Sends fragrant signals to the summer skies. Through wind and insect, pollen drifts afar, Extending life beyond its resting scar. The silent root goes searching, deep and long, For water and t...

An Open Ed Piece (Humor Included, Logic Optional) There is a special place in the Indian imagination where contradictions go to relax, sip coconut water, and live happily ever after. This is the same dreamy landscape where film stars can single-handedly overthrow corrupt systems on screen, then drive home in cars that cost more than the GDP of a small tehsil. Welcome to the land of Capitalist Heroes and Communist Rhetoric, where ideology bends with the flexibility of a yoga instructor and the sincerity of a monsoon weather forecast. Let’s begin with our beloved “common man champion” hero — the on-screen worker who storms the villain’s mansion yelling slogans about the oppression of the masses. Off-screen, however, he is the proud owner of several mansions himself, each with a swimming pool large enough to comfortably host the aforementioned oppressed masses, should he ever feel generous. Their scripts scream, “Down with the rich!” Their lifestyles whisper, “But not this rich.” It’s a b...

AI, Unemployment, and Political Economy - Discussion Initial Question: The Paradox of AI-Driven Growth and Unemployment Human: Imagine a scenario where AI takes away half of the entry level jobs. So, therefore, there is a 20% unemployment in economy, same US economy. And some people, particularly CEOs of tech companies, are claiming that the growth rate of the economy is going to be augmented. Right? Meaningful. So how is it possible to have 20% unemployment rate and 10% economic growth at the same time. Because at some point, consumption is going to catch up. Right. So what do you think will be the impact on economic growth rate and productivity? People are saying that it's going to take time for AI to show up show up in productivity numbers like it did with electricity, or steam engine or these kind of things. Claude: You're identifying a fundamental tension that many economists are grappling with. Let me work through the mechanics: The Core Paradox You're right th...

Not a day passes by without using at least one product or application of the Big Tech companies.  These companies have redefined the long established principles of economics. 1. Networking Effects: Networking effects is the phenomenon where the value of a product increases due to the addition of every new customer/user. The effect of networking in tech industry implies that the company/product which is the 'early mover' has an advantage and the value of the network grows with every additional user. In 'network industries' the equilibrium tends towards a few products and their companies. Consider Microsoft, the predominant operating system of the world. Consumers want to stick to (Microsoft) technologies that are dominant and compatible with all the other users, software and hardware products. Once consumers get used to these applications or products they do not wish to change easily.  Similarly, with Facebook, any new user benefits due to the gigantic network of users a...

The much touted neo-liberal philosophies (private sector is given a free-hand with minimum regulation) of minimum government and maximum impact are increasingly being challenged in today's dynamic global landscape. Consider the following reasons: 1. Geo-political tensions: Due to the ever-growing geo-political tensions in the middle-east, Europe(Russia-Ukraine war) etc., defence capabilities and expenditure are taking center stage. The role played by a government's policies is shaping the global alliances and strategies, enhancing defence capabilities is perhaps more important now than any time in the history of the world. 2. Economic inequality and discontent: When the fruits of growth are limited to a privileged few, it is quite normal for the masses to feel discontented. The narratives of 'globalization and its benefits' are being replaced by the ideas of 'sons of soil' and protectionism. In such a situation, the role played by governments in redistribution o...

 Here are some notes from Daniel Kahneman's book 'Thinking Fast and Slow': 1. Contrary to the assumptions of economic models, human beings are not rational.  We often let our heuristics guide our conclusions rather than statistical facts.  2. You find a person with the qualities that are more representative of a librarian than a farmer and you conclude that he must be a librarian. Perhaps you are blind to the statistical fact that there are more number of farmers than librarians in this world. Our perceptions can make us blind to realities. 3. Many of our water cooler conversations at office are based on our own perceptions rather than realities. 4. Halo Effect - you are charmed by a beautiful woman and assume everything she says is correct. You associate one good quality with many other qualities which may not be valid. 5. Expert intuition works like sixth sense. It is your brain responding, perhaps subconsciously. It's like a child looking at a dog and recognizing it....