Cash Registers For Hearts?

“Doing charity is intrinsically difficult. Steve Jobs once said that he is not deeply engaged in philanthropy because there is no measurement system—-It is very hard to measure whether you have succeeded or not. But, according to the Bain and India philanthropy report, 80% of the individuals and 90% of the NGOs are satisfied with the efficacy of their philanthropic activities. Many economists think that this is because people often donate for the “feel-good” factor, and prefer to believe that their money goes into the right causes. “

“And, charity will never be sufficient. Economist Jagdish Bhagwati once said that an outright redistribution of wealth would only increase the food consumption of the poor by one chapatti a day. Some economists have estimated that sharing the total wealth in developing countries would leave its citizens with a few dollars a day. It is clear that charity will not solve the problem of world poverty.” 

Do read the whole article in the Business Standard:  Do Indian businessmen have cash registers for hearts?

Politics without Romance

James Buchanan

“When a Nigerian gifts us his estate over email, we tell him: “Thanks, but no thanks!” We know that there are no such easy solutions to our personal woes. But, when an ex-army truck driver claims that he has found the solution to a nation’s woes, even otherwise sane men think that they have found their Messiah. It feels so good because in politics and religion, people refuse to use their mind.”

“Feel-good policies fail partly because people often forget that politicians, bureaucrats and activists are people too. And people are wolves. Our representatives are also driven by self interest and power lust—at least as much as a businessman is, at least as much as the man on the street is. It is not “common good” or some such noble virtue that motivates them. This is the central theme of Buchanan’s work, and that of public choice literature. Buchanan was a realist.”

“One interesting conclusion of public choice research is that people are willing to be roasted in hell if their betters are to join them. Even when facts lie flatly against them, people hold on to their delusions. But, this is fine. As it is evident by now, Buchanan was a realist. But, even he wanted to believe that at least to an extent, a science exists for providing psychologically satisfying explanations for what happens around us.”

Read my tribute to the Late James Buchanan in Business Standard. 


The Revenge Of The Nerds

“There were times when brawn mattered more than brain. In the battle between nerds and jocks, jocks always had the last laugh. But the second half of the 20th century witnessed the rise of nerds. Bill Gates was consistently on top of the Forbes list of billionaires for long. The investing career of Warren Buffett is so successful that Fortune has had an expert on him since 1966. Jocks should be worried.”

Mr Buffett spends much of his time reading and thinking. He has been reading books on investing since the age of eight. He does not split his stock. When Mr Buffett was once asked when he would sell his Coca-Cola shares, he replied: “Never.” He rarely travels beyond Omaha. He does not venture beyond his area of expertise. For long, he refused to use an electronic computer. He is not swayed by the latest fads in the investment arena. He has a schedule free of meetings. Listening to stupid people gives him “blinding headaches”. He would not do business with people he dislikes.”

Mr Buffett loves his work. His unwillingness to compromise the integrity of his work enraged a Fortune editor, Daniel Seligman; at one point, Seligman wanted the magazine to not publish the great investor’s article. When he was 19, Harvard rejected Mr Buffett because he had the social skills of a 12-year-old. In other words, if the jocks in the pre-industrial age needed a punching bag, Mr Buffett would have been the most obvious candidate. But, as Ms Loomis points out, in the information age, few jocks can afford a stock of Berkshire Hathaway. Today, it sells at a hefty price of $134,490.”

Read my review of TAP DANCING TO WORK: Warren Buffett on Practically Everything, 1966-2012 in Business Standard.