Author Archives: rjainny

A kilo of besan; an ounce of Bismuth

He died all alone.  Alone in his bed, alone in the house, he just passed away.  Over the ten odd years prior, my father and I had become increasingly distant.   While he was never very social or much of a family man, our relationship was okay for many years.  But he was becoming increasingly bitter, having a tough time dealing with his physical deterioration and his mortality. I found him increasingly difficult to talk to – and honestly, I did not try much to find a way to communicate. We just drifted apart with only short meetings while I was in India.

I always respected him for his incredible intelligence – even till his last couple of years, his mental acuity barely diminished. He was very resilient and never cried about the bad hand he was dealt. I later found out that when he returned to the US when he was almost 50, with no job and little money, he loaded fish and meat early in the mornings in the meatpacking district in New York just to earn enough to keep him going.

But I never really tried to understand him, never took the effort to truly sit and talk to him, and thus remained somewhat critical of him overall as someone who just could not make the right choices.

This was my loss.

After he died, I thought of him.  Looked at old pictures.  Looked at all his old perfectly preserved documents.  Talked to the storekeeper in the gully where he lived when he was young and for the first time wrote down his family tree, whatever was possible.

I slowly started to understand him better, something I could have done when he was alive by talking to him – but didn’t.  My irrecoverable loss that I will always regret.

His father was fairly old when he was born, in his second marriage to his mother.  When he was still a child, his father died.  His only father-like figure was his step brother, many years older than him.  His mother was not very literate and was left to bring him up along with the two other children of her husband.  She had little time for him and so he did not experience much maternal, and definitely no paternal, affection or love.  He was also very different from the peers in his community. It was the early 40’s in pre-independence India.  He was the only person in all of his family that was interested in studying and desirous of a college education. No one else around him understood this, they all were small local shopkeepers in the paper and cloth markets.  He did it all on his own, ending up at the most prestigious college in Delhi- from where he went on to get a Masters in Physics. I doubt there was one person around him that he could talk to about this – he did it all himself.  From here, once again all on his own, he ended up going to University of Chicago for his PhD, almost unheard of back then for a person from India. He specialized in materials science and using exotic materials to develop all sorts of sensors.

His nickname when he was a kid was “Anna” – I don’t know why.   I sat at the small brass shop at the corner of the alley way in Chandni Chowk where he grew up.  When the shopkeeper learned I was “Anna’s” son, he told me how in 1959 when my father came back from the US with his PhD, it was like a celebrity coming home – the entire “mohalla” showed up.  The shopkeeper was a teenager then and remembered how a large sheet was hung in the middle of the street and my father showed his home videos of America to everyone.

When I visited India, I would often find him still reading old science text books on chemistry and materials. He even came up with some new theories on how cooking in certain ways created complex molecules that were responsible for many ailments.   I don’t know if this is true, but he was always thinking and analyzing. Science and materials was his passion and is what defined him.

 He was always drawn to a more simple life, saying how he would like to open a store in Chandni Chowk selling grains or paper or cloth – probably reminiscent of his early childhood sitting in his father’s store. But scientific intellect was his gift and not achieving the success of his full potential haunted him.

They say many of us have a higher love in our lives.  Some find it in faith and God, some in family.  When I finally opened his old briefcase, there were no pictures or memorabilia of family, no articles of religion – just all his degrees and academic achievements kept neatly and safely.  There was also a small box – with small samples of rare metals and materials.  His higher love.


Key

Besan: chick pea flour

Chandni Chowk: an area in Old Delhi, famous for shopkeepers in particular silver merchants

Mohalla : an area of a town or village; a community

Bismuth: a chemical element; it is a metal with symbol Bi and atomic number 83

What is the value of my life?

In philosophy it is common to discuss the meaning of life or the purpose of life – but little discussion exists on the value of a life. Note that I am referring not to value of human life as a whole, but the value of an individual life – the value of my life right now.

Biological value

Is there value to my life as a living creature, the value of the biological organism of me as a human being?  The Abrahamic religions, in particular Christianity, do not particularly debate this by saying that we are all created by God in it’s image and that we are all God’s children – thus since God has value by definition, each of our lives as biological creatures have value.  This neatly resolves the issue of how to deal with other animals, despite many being not too dissimilar from a physical and emotional point of view, and in some cases arguably superior, to the biology of human beings.  This religious view then easily provided justification for us to consume other animals for food or materials or just for sport.

However, there is another perspective to accommodate atheists or those that believe in evolution and not divine creationism. In this argument, the human creature is so amazing, so sophisticated, so advanced that just by virtue of its complexity and abilities, it certainly has to have value as a biological entity, although this view does not separate the biological value from the value due to capabilities.

On a pure biological basis, we can be looked at as simply a collection of atoms combined with chemical and electrical processes that work in a synchronized way to form an amazingly complex machine.  And just like any complex machine, compromise of any one central component can render the entire machine useless.  Similarly, one little issue like a bad heart, collapsed lung even a small aneurysm an make the human machine not viable anymore.  Take this one step further – if there a human being that required some machine to keep it running, does that mass of atoms have value as a biological thing?

So, if you take away all my mental capabilities, all emotions and desires, all intelligence and experiences, then what is left – a machine made of flesh that consumes input, i.e. food, and creates energy and excretes the rest as waste. In fact, it is a machine with a pretty low efficiency ratio.

At this point, I see little value of me purely as a biological creature.

A small side note about euthanasia.  Furthering the above thought, I do believe voluntary euthanasia should be legalized. If a person is at that point in their life, where there is little more than just a badly functioning biological machine left, then there should be no reason to preserve it.  As well as it should be a person’s right to choose when the cost of continuing to live is too much and thus allow for medical assisted death.

Experiences and value

In his lectures on death, Shelly Kagan described a container theory of a human being, likening  the physical body to just an empty container, that is available to fill up.  We fill up our container body with experiences, which is what gives value.   The beauty of our life, and thus its value, comes the collection of amazing experiences, from the little mundane ones like taking a flight for the first time to the major ones like watching your child being born or achieving some difficult feat. Just like a glass is just a glass, but when filled with liquor, it gains value.  The human container has the capacity for almost seemingly infinite experiences limited only by our time in existence.

With a richness of experiences, gives one a sense of wisdom to share and impart.  Experiences and the variety of experiences gives value to us. Experiencing the natural world gives us a true appreciation of other creatures, experiences with other humans gives us empathy, and so on.

But if the amount of experiences we collect defines our value, this leaves us with the difficult problem of ascribing little value to very young children as they have not had the chance to gain experiences and ascribe very high value to older people, assuming they have accumulated a lot of experiences.   Note that it is possible that one just bides their time in existence in very limited and isolated conditions – thus amount of experience is not directly and linearly correlated with age.

This is where the potentiality of experiences comes in – the value of life depends on the potential to have experiences.  A child has a tremendous ability to gain experience given their whole life ahead of them.   One may not eventually gain all the experiences they had the potential for, but the potential did exist.

Meaning and purpose of life

Philosophers throughout the ages have tried to figure out the meaning of life which is often conflated, interchanged or confused with the purpose of life.  We come into this life with nothing and when we die, we leave with nothing.  In between is our existence, our physical life on earth.  During our existence we do things, collect things, earn money, interact with others, reproduce and most importantly, have experiences.   I look at the purpose of life closer to the things we do in life.  Usually, we have different purposes for some periods of time throughout our life – a student’s main purpose is to study and get an education, a young mother’s purpose centers around taking care of her children.  The purpose of life at any given time is necessary to live, but may or may not give meaning to life. A person can wake up each day, go to their labor, work all day, come home and then do it again the next day, over and over again. They have a purpose, to work and put food on their table, but this may not result in a meaningful life.  There are many things that add meaning to life, and I have written about this in a separate essay, “Exploring the T’s of life” However, I resist including the meaning of life explicitly in the value of my life as many of the activities that create meaning are part of experiences, impact and other facets of the value equation.

Economic value

A very controversial topic is whether a human being has a monetary value that can be ascribed to it.  To an economy, each individual has some value that they can or do contribute to the economy.  Similarly, an individual has earnings potential and thus has economic value to those around them.  In fact the US government actually says each US citizen has an economic value of about $5m.  I am sure In a country like India or China, where human capital is more than plentiful, thus number would be a lot lot less.  Thinking about monetary value can have some depressing results.  At my age, my earning potential and thus contribution to the economy or even to my family, is somewhat limited.  However, if I died today, my life insurance will probably be higher than that, implying I am worth more dead rather than alive!

The value of Impact

Another way I think about the value of my life is by asking “will anything change if I am not alive?” People die, loved ones are sad and say nice things at their funeral – but life is for the living and sure enough everyone moves on.   After you die, do you leave a tiny void in the world, by people missing you for something like your wisdom, or things you did or the smile you invoked.   If you leave an impact on this world and it’s people, then on your demise, that impact remains – whether it be something as simple as strong values you left behind for your children, or something you created that persists after your death – and thus your presence remains after your body is gone.  

Assessing impact is tough however. When a wealthy person writes a large check for a cause, their impact really is not that much more than someone who does something small within their means – regardless of whether society perceives it differently.  Thus, impact is a personal thing – it can be as small as doing little things to make the world a happier place for people around you or volunteering ones time or fighting for a cause.  For a musician it is the music left behind for others to enjoy, for a poet is the lasting beauty of a thoughtful poem.  There is no measure of impact, except on a personal level, one’s own honest assessment of whether it exists.

Value equation:

So, the value equation for my life now ends up looking something like this:

Value of my life = EG  +  PE  + I + PI  + EV

Where EG is the value of the Experiences Gained

PE is the potential for gaining more experiences and is usually a function of remaining life expectancy

I is the Impact on the world so far

PI is the potential for more impact, again usually a function of remaining life expectancy

EV is the Economic Value, which also diminishes with age.

Most of these are non-objective, but if you could somehow convert EG, PE, I and PI into a monetary value, the equation would give a value that could be compared against something – like the value of your life insurance.

But instead, we could create a score. Say we divide our life into 8 deciles, each of 10 years.

Each factor has a score between 0 and 1 for each 10 years.  

At birth, EG = 0, PE = 8 as you have the full potential for experiences.  Similarly, I = 0 and PI = 8.   EV =5 if you reach your full economic value of 5 decades of work.   So, the total value is 23. 

At any age, you estimate each variable and come up with a score, e.g.

At the age of 40: Have you actively been seeking out experiences or been just biding your time? Let’s say you think you have been mediocre, so you give yourself 0.5 for each year for a score of 2. But you decide that you will make a conscious effort to seek our more experiences and set PE = 4.   Similarly, Impact – if you have volunteered, helped people etc all your life, you may set I = 4 and PI = 4.  For EV, you have worked 2 decades and have contributed well to both the economy and yourself and you expect to continue to , so EV is the full 5.  Your overall score is 19 – which is great compared to the maximum of 23.

My value

This entire discussion is not to be taken as some kind of manifesto for justifying suicide. It is the opposite really. Ivan illitch in Tolstoy’s novel “The death of Ivan Iliych” suddenly found himself facing death and went through denial, anger, depression and finally resignation and acceptance – thus his death was far more painful and distraughtful to him and those around him than just the physical pain.  I do not want to be in such a situation.   By creating a framework for evaluating the value of my life from various angles, it give me the ability to assess where I am and in doing so, I am actually quote satisfied in knowing that my life did have value and thus if anything happened to me suddenly, I would go peacefully with no regrets about my life.

Exploring the “T’s” of life

What is the meaning of life?  I would dare not say I could answer this definitively, for sure not at the overarching level of the meaning of life for humankind as a whole, but even at the individual level, as there is no one answer, no playbook, no neat solution to an equation. Humans don’t have an obligation to define the meaning of life in universal terms, each of us will do it our way. Through this paper, I will attempt to provide some insight into how I look at the meaning of my life, i.e., my own personal significance and purpose in life.  In philosophy it is often said that you leave a course with more questions than answers, however in this case, through the various readings and lesson, I can say that I end with a little more clarity and a little more validation, which I hope to present there. The paper will briefly explore the thoughts of many authors and historical figures we read in class, as well as some we did not – each having a different level of attraction to me – thus in the conclusion I will be incorporating elements of several of them.

The focus will be largely the secular view.  Religion does offer a simple solution to the question, which, by requiring a brute force belief in an infinite entity, namely God, it offers us finite beings a way to stop looking at things with finiteness and derive our meaning from the association with God. I also usually offers us a story of a continued existence of our lives in an immaterial form, i.e., our souls. In a single sweep, this idea of life after death attacks all the classic problems of life’s meaning and with such an all-encompassing solution it is no surprise that the idea of life after death has been so uniformly embraced.  However, to attach life’s meaning to something that is entirely unprovable feels incomplete and is left for wanting.

The secular view I will use, in developing my conclusion, is that of only being concerned with our life as it is from birth to death and not considering the possibility of anything before or after.  It is the physicalist or ontological monism view of the human life also seen in the existentialist view, which, as explained by Jean-Paul Sartre1, has the basic principle that existence precedes essence. So, the focus is sharply on the issue of being then life then death – and that’s it.   The result of this should not be mutually exclusive to the theist view, in fact it could be supplementary.  In finding purpose by only considering the life as we know it, combined with the view of afterlife for meaning as well, the result could be finding meaning both during our material and immaterial life, thus the exercise has value for all personal stances.

The futility of life

French philosopher Camus2 believed that the story of Sisyphus had a symbolic message in that many of life’s specific tasks certainly feel futile, but what is more discouraging is that the sum of a person’s life efforts may seem pointless and thus utterly void of meaning. He calls life absurd as we go about continuously struggling and asking the universe about the meaning of our life, yet there is no answer to be had.  Thomas Nagel3 also says life is absurd, but from the point of view of the individual, in that there is a severe disconnect between our aspirations and reality. He says we take ourselves and lives too seriously with an elevated sense of self-importance to no end at all.  Schopenhauer4, in the Buddhist traditions, says life is nothing but suffering – caused by our continuous strivings, our longings which only result in temporary satisfaction and then suffering again as new wants take over – for him life is like a pendulum continuously swinging between pain and boredom.   

These writers and many others also express a dire picture of our cosmic insignificance, “To think of one’s place in the cosmos”, as Susan Wolf5 puts it “is to recognise the possibility of a perspective … from which one’s life is merely gratuitous.”  In a similar vein, the French philosopher Blaise Pascal6 wrote “When I consider the short duration of my life, swallowed up in an eternity before and after, the little space I fill engulfed in the infinite immensity of spaces whereof I know nothing, and which know nothing of me, I am terrified. The eternal silence of these infinite spaces frightens me.”

Sartre said that we pursue goals which, from a detached standpoint, we can see don’t really matter. But we continue to act as though they do. In the presence of other people, everyone insists on their own reality and thus other people tend to get in the way of our pursuit of our own goals. His famous line, “Hell is other people”7 means that people are always at odds with each other, yet they are always looking at each other for validation – thus another absurdity of life.

All this combined pessimism can easily lead to a severe feeling of existential angst – the overwhelming feeling of the contingency of everything around us and the shear and utter pointlessness of everything we do. All in all, at this point, we have a pretty bleak and dark view, presenting life as completely futile – from where it is difficult to see a path to meaningfulness. We will return to this and these authors a little later to explore such a path.

The beauty of life

We can all agree that life is beautiful and human life is rather amazing. Bertrand Russell8, who believes in the scientific approach, expresses a reverence for human capacity and the amazingness of our biology.  Ronald Dworkin9 argues that human beings have intrinsic value due to this awesomeness.  I will not debate whether human life has intrinsic value or not, rather the question here is, assuming it does have value, is this value a basis for life having meaning or personal significance? Shelly Kagan10 in discussing the value of a life, presupposes a neutral container theory of life as opposed to the valuable container theory – the latter which ascribes value to the life of the human being devoid of any content of experience, actions etc. I concur with Kagan in the view that meaning is derived only when there is something in the container. An analogy is a that of a mug – it is just something made of glass or clay and thus has intrinsic value as it is, but it derives meaning when it is filled with something and avails that to drink. None of this is to say that life itself has no value, but that the existence of life presents the potential for meaning, not meaning by itself.

The utility of life

G.E. Moore11 believes of life has usefulness insofar that it has had a net positive contribution to the intrinsic value of the universe. Metz12 uses this to discuss a utilitarian theory of meaningfulness.  While we will later explore our meaning as it relates to other people, to derive meaning solely based on some measure of increase in net value is not an attractive concept at all.  It also is worrisome in that the issue of commodification of human activity as highlighted by Marx, could be justified as a creator of meaningful lives. The utilitarian view also has underpinnings of an objective tallying to determine value or meaning, a generalized version of which is entirely impossible to create. Thus, I choose to reject this altogether. (Interestingly, the NBC philosophical comedy “The Good Place” mocks this with a point scoring method applied to a life at death, resulting in no soul going to the good place for over 500 years!)

The spirituality of life

There is a natural tendency to associate spirituality with religion.  However, here I use the term spirituality in a non-religious sense as to mean the essence of human beings that is beyond just our physical being. The Dalai Lama13 says “I believe that it is essential to appreciate our potential as human beings and recognize this importance of inner transformation…I call this the spiritual dimension in our life.”  The practice of spirituality, or mindfulness, has been written about extensively, not only by Buddhist philosophers but incorporated into modern western thought as well, as critical to creating happiness and thus meaning in our life. Wallace14 described a way of training your mind to be present in each moment – to not get lost in cacophonous, self-centered thoughts. The key to thinking, he said, is “being conscious and aware enough to choose what you pay attention to,” noticing what’s “hidden in plain sight all around us.”  Spirituality is also largely associated with detachment, which we see not only in the concept of moksa in the ancient Indian purushastras, as explained by Nath15 but also in contemporary writing such as Victor Frankl16, who says meaning can only be achieved by resisting temptations and attachment of lower pleasures of materialism and hedonism.  Al-Kindi17 describes how attachment creates sadness in our lives. There is a clear and important message in all this that living life with a sense of spirituality, mindfulness and detachment, will lead to a happier life, which definitely contributes to wellbeing.

The continuity of life

As indicated in the beginning of this paper, we are only concerned about our life as it is and not a personal afterlife. However, Scheffler18 introduces us to the concept of a collective afterlife – in the sense that human beings and the universe continues to exist after we personally cease to exist. Through a thought experiment, he demonstrates how deeply attached we are to the continued existence of humankind and the world around us that it profoundly impacts the way we life our live when we are alive – so much so that is has the effect of giving significant meaning and value to things we do in our live, in spite of knowing that these activities may be experienced by people we may never know.  This is an incredible variable in the equation of finding meaning and personal significance in our life.

The activity of life

We have now a picture of a) some value of life itself, but no meaning; b) the utter finiteness of life making it seem pointless; c) a transcendental concept of happiness and, d) a thought that the world after us still has importance to us.  The challenge now is:  do we have the ability to bring it altogether and create a meaningful life?

We need to first revisit the pessimists, as they surely cannot get off the hook this easy! Sure enough Camus offers a recommendation, urging us to live rebelliously and Nagel suggests to live with a sense of irony.   To restate in a different way – do not take life’s issues too seriously, thus tempering our sense of self-importance (Nagel) and try to rise above life’s issues, grabbing them by the horn (Camus) – both which seem like wise advice.

Secular existentialism assists us as well with its view that existence precedes essence, thus our existence is just that, but our real nature comes from our experiences during our existence. Sartre strongly defended existentialism as humanism and championed our own human nature, which condemns us to be free. On this view, our fundamental goal in life is to overcome our contingency and to become the foundation of our own being. In doing this he challenges us to live authentically and dismiss bad faith, the latter which results from living without taking freedom properly on board.  He says, “In choosing myself, I choose to be the type of being I want to be in the presence of others.”  From a pragmatic sense, complete authenticity is almost impossible to achieve, but by being mindful of it, we will be reminded to try to live with as much authenticity as possible.Sartre does assist us by providing some constraints, in that while exercising our freedom, we should not be permitted to make choices that impairs or inhibits the freedom of other – which is a fundamental tenet of living with respect for others around us. In a similar vein, Wallace advises us to not only look at the world from our own individual perspective, but from the perspective of others around us and let that guide how we behave.

So, far we have collected some good ideas on how to live our life as it pertains to our behavior, choices, attitude, and those around us, all of which is accretive to meaningfulness. But we still need to figure what do to in our lives to create meaning.

Before we go on to discussing actions, we need to think about resolving the question of cosmic insignificance, which can be a dreadful destroyer of meaningfulness of our actions. Paul Ricoeur19 offered a solution to this problem as he writes, “On a cosmic scale, our life is insignificant, yet this brief period when we appear in the world is the time in which all meaningful questions arise.”  The grandeur of the cosmos does make our life’s efforts seem irrelevant by comparison, but we nevertheless can find meaning by changing the perspective of our view.  Look at a tree through the wide-angle lens of a camera and you may see some small dark specs, switch to a zoom lens and you see those dark specs are beautiful birds, each unique and colorful and interesting. That is how our lives are – by zooming in and looking at our lives within the sphere our own experience and existence, we will be able to grasp and comprehend our own personal significance within the incomprehensible cosmic infiniteness.

This leads us to Robert Nozick20, one of the most influential contemporary philosophers on the meaning of life.  As finite beings, in order to find meaning, we attach ourselves to other finite things and beings. This leads to nothing in terms of finding meaning so we continue with this regress looking for a stopping point– which only can come from an infinite being, i.e., God.  This transcendence to the infinite is Nozick’s explanation for how religion offers up God as a way to give meaning to our lives. Nozick then uses this concept to propose a limited transcendence version for our lives which does not require God in the picture.  By reaching out in our lives to things, entities, activities that have intrinsic value we continuously add meaning to our lives. Each time we do this, it is a limited transcendence and by continually attaching ourselves to value as they appear on our radar of life, we increase the overall worth of our life. The limited transcendence is an iterative approach to continue to build meaning in life, we attach ourselves to something of value, then possibly stabilize our lives and then seek something of value again.  This concept very much fits in with our zoom lens view, in which, instead of focusing too wide, you focus on yourself in the center of a circle of value that you can connect to and transcend, then you do it again.  Nozick offers up many examples of such activities, while not being prescriptive, such as involvement in political, social, community causes; family and friends; learning and trying new things, attending a Philosophy class on Tuesday night etc. The elegance of this approach is that it keeps us grounded in reality as opposed to getting bogged down or depressed by the vastness of the universe. It is a very practical, rational approach to continuously adding worthiness to your life. Sonja Lyubomirsky, through empirical studies on happiness, also comes up with a parallel conclusion to Nozick, in which happiness is created by focusing on activities that are intentional as opposed to trying to change your life circumstances.  Thus, by continuously engaging in activities that broaden the experience of life, activities similar to those proposed by Nozick, there is an overall increase in life’s happiness and meaning. We see similar conclusions by Frankl, who says that the search for meaning is found in work and in relationships (love). I will also briefly mention the Indian purushastras22 which talks of 4 spheres of activity of life.  Artha describes activities for the well-being of life, which includes our work, careers and things we do to provide for life; Kama, represent activities to satisfy the sensory pleasures of life, such as art, music, sexual pleasure; Dharma represents righteousness and principles of life and finally Moksha, representing freedom. All these are important to keep in balance for a good, meaningful life. A contemporary interpretation of this is that we need to do things in life to keep busy, to prosper as well as do things for pleasure – but with the governance of righteousness, ethics and doing good for others around us. However, to remain free, we need to not get consumed or completely attached to these materialistic activities.

The recipe for life

We now have all the pieces to create our recipe – let’s call it the Apple Pie of Life.  Just like a recipe has ingredients and actions, we can now summarize a set of how’s and what’s.

How to live a meaningful lifeWhat to do to create meaning
Live with Intensity

Live with self-awareness and awareness of others

Live Authentically as much as possible with freedom of thought and choice

Live with tempered self-importance and with humor

Live with a sense of detachment

Live with respect for others

Live a righteousness life
Seek intrinsically valuable activity

Continuously learn new things

Engage in activity for well-being and success, work

Do not ignore sensory activities

Engage in activity with people – relationships

Do things that leave the world slightly better

Engage in activity that creates happiness flow

This is the recipe I would offer anyone seeking conversation on the meaning of life (note, I hesitate to call it advice or a playbook, as this is my take and each person’s could be different). My own daughter was recently suffering from severe existential angst and depression, and I used many of these concepts to be able to help her to not focus on the pointlessness, but to think authentically and look for activities that are of value, and not trite, to give her meaning.  I am happy to say that it helped her tremendously.

Objections?  Of course, no recipe for the meaning of life can be perfect and every construct will have objections.  One clear objection would be the lack for objectivity in determining the worth or value of the activities. My response to that is there should be no objective values, no prescription because of the fact that what is of value to one person may have completely different value to next due to different life starting points and conditions.  Each person should find value based on their own perspective and situation, however small or big that may be – it is not a competition, there are no medals.

Another objection would be the absence of some moral code because the inherent freedom message seems unchecked.  On the surface, this may seem valid, however inherent in the two sets in our recipe above is a humanistic moral code centered on the principles of respect and consideration for others around us. This is very similar to religious morality or concepts like the Golden Rule and categorical imperative, without the need of a dictum from religion – rather it is left for us to individually realize and follow them as our internal moral compass.

A third objection could be that this largely centers around activity to give meaning, but ultimately all activity is pointless as death is certain.  The response to this would be:  as it pertains to activity – we can choose no activity or to have activity.  No activity guarantees life to be meaningless. Thus, activity is the only way to create some meaning.  As Taylor23 elegantly states about doing “At the same time, the strange meaningfulness they possess is that of the inner compulsion to be doing just what we were put here to do, and to go on doing it forever. This is the nearest we may hope to get to heaven, but the redeeming side of that fact is that we do thereby avoid a genuine hell.”

Conclusion

In crisscrossing various philosophical thought from ancient to contemporary, from East to West, I have presented a construct of a meaning of life that personally speaks to me. Nietczche24 goads us to ask ourselves if we had to live our life all over again exactly as it was, would we be happy doing it?   With all due respect to Nietzsche, the binary nature of his question is incorrect – and I would rather ask myself:   During my life and near the end of my life – as I was eating or finishing my Apple Pie, would I bake it again?  Maybe tweak it a little here or there, a little less sugar, a little more cinnamon – but would I want to live my life again essentially as the same person with the opportunity to adjust as needed – if I followed the recipe, I would answer with a resounding affirmative and be happy that I have a meaningful life.

“The meaning of life is to give life meaning.” Viktor Frankl

Works Cited

1 Sartre, Jean-Paul, Existentialism Is a Humanism New Haven:Yale University Press, 2007.

2 Camus, Albert. The Myth of Sisyphus. Translated by Justin O’Brien, Penguin Classics, 2000.

3 Nagel, Thomas “The Absurd”, Journal of Philosophy, pp. 716–27, 1971

4  Schopenhauer, Arthur in  “On the Vanity of Existence” in Essays and Aphorisms, Penguin Classics, 1976

5 Wolf, Susan. Meaning in Life and Why It Matters. Princeton University Press, 2012.

6 Pascal, Blaise, Pascal’s Pensées. New York:E.P. Dutton, 1958.

7 Sartre, Jean-Paul No Exit, and Three Other Plays. New York: Vintage Books, 1955. Print.

8 Russell, Bertrand. A Free Man’s Worship: With a Special Preface, 1923. Print.

9  Dworkin, Ronald. What is Sacred? In Life’s Dominion: an Argument about Abortion, Euthanasia, and Individual Freedom. New York, Knopf, 1993.

10 Kagan, Shelly. Death, New Haven: Yale University Press, 2012

11 Moore, G.E. The Meaning of Life, ed. H. Moorhead, Chicago, 1988

12 Metz, T. Utilitarianism and the Meaning of Life, Unitas Vol 15 No. 1, 2003

13. Xiv, Dalai Lama, and Howard C. Cutler. The Art of Happiness. Hodder Paperback, 1999.

14 Wallace, David Foster. This Is Water. Commencement Speech at Kenyon College, 2005

15. Nath, Rajakishore  The Meaning of Life in Indian Philosophy: A Contemporary Reconstruction. Journal of the Indian Council of Philosophical Research 2018.

16 Frankl, Viktor E. Man’s Search for Meaning:an Introduction to Logotherapy. Boston, Beacon Press, 1962.

17. Jayyusi-Lehn, G.“The Epistle of Ya‘qub ibn Ishaq al-Kindi on the Device for Dispelling Sorrows,” British Journal of Middle Eastern Studies, 29: 121–135,2002

18 Scheffler, Samuel. Death and the Afterlife. Oup Usa. 2013

19 Ricoeur, Paul. “Narrated Time,” Philosophy Today, Vol. 29, 1985.

20 Nozick, Robert. Philosophical Explanations. Cambridge, Mass: Harvard University Press, 1981. Print.

21 Lyubomirsky, Sonja. The How of Happiness. Piatkus Books, 2010.

22 Malamoud, C. On the rhetoric and semantic of the purusartha, Contribution to Indian Sociology, 1981

23 Taylor, Richard. The Meaning of Life in The Meaning of Live, ed. Klemke, E.D., Oxford University Press, 2000.

24 Nietzsche, Friedrich. “Notes on the Eternal Recurrence”, 1881.

You are dead to me

A madman runs out onto the street screeching “I seek God! I seek God!” and then continues to yell ““God is dead! God remains dead! And we have killed him! How shall we console ourselves, the most murderous of all murderers…There was never a greater event – and on account of it, all who are born after us belong to a higher history than any history before this!”.   This is the Nietzsche most notable and controversial statement in his famous book The Gay Science,

Nietzsche was not stating that he believed in the existence of God, but he was using the metaphor to state that the view of God as described in pre-renaissance history has been rendered irrelevant and Is not needed given the enlightenment from scientific and rational thought.

The death of God does however imply the existence God and the existence does imply some form of presence of God.

I am not going to debate or engage in a discussion of the existence of God – this has been, and continues to be, debated for thousands of years and will continue to be despite the futility.

I am also not going to discuss, if one believes in some form of God, whether it is some physical being, some energy form, a white bearded old man up there somewhere or something else.

Just about all versions of God describe it as including most of or all the properties of being omnipresent, omniscient, omnipotent (all powerful) and omnibenevolent etc.   – this description befitting a superhero.

Imagine if you were a superhero with these powers, thus even more powerful and super than even Superman.   Then just like Superman, you would be able to see some crime or transgression happening somewhere and use your superpowers to intervene – to save the mortal beings that revere you.

So where was this superhero with such all-powerful capabilities when a gunman walked into a school in Uvalde, TX?  Where was this superhero when Lanza killed 20 children in Sandy Hook?  Where was this superhero when millions of innocents Jews were gassed to death?

Of course, we all know that it was absent, completely missing in action.

Does this mean that our almighty superhero God, does not exist, or is not a powerful as we make it to be, or it is not a caring God or is insensitive to our well-being?

God has it good.  When good things happen to us, we say it was God’s grace.  When bad things happen, it is either fate or human evil.  Religion neatly gave God a pass on evil by using the argument that God gave us free will so if we use this for evil, so be it.

Yet we continue to pray to such a God, asking for things, asking to be saved, asking for protection, asking for health, wealth and success.  There is no large God Microphone that is listening to these prayers and there is no response to these prayers, which are essentially transactional and there is nothing on the other side of the transaction.  Religion tells us to revere and worship God and obey its commands,  they tell us to worship and praise the lord and please him, religion tells us to sacrifice and bestow upon the gods in order to receive their grace, religion tells us we need to keep praying and chanting gods praises otherwise there are consequences.  It goes on and on.  People are told If they sacrifice an animal, or do acts of repentance or perform all sorts of rituals, they will get the favors of the gods.  Is this the image of a an all loving, all caring, empathetic god or one that is petty, egotistical and transactional?  Religion has made all this up to create a fear of god in order to gain control of our lives.

Back to the madman – he is right.  God is dead.  Not because it existed and then died somehow, but simply that there is no presence, direct involvement or saving us by God. No matter what form of God you believe in or not, the reality is that God does not directly intervene or get involved in our daily lives, whether it be at an individual personal level or even a catastrophic level like a disease or war.   I don’t necessarily say don’t pray or chant or whatever makes you feel good, but recognize that this is a way to invoke our internal strength as human beings – do not think it is a call to a superior being to save you or grant you something.

As Kevin O’Leary says on Shark Tank when a pitch is not relevant to him,”…you are dead to me..”  similarly, God is essentially dead to us.

Options Liquidation can be costly. How costly?

The options trading boom shows little sign of fizzling out. Average daily volumes of cleared options are more than double pre-pandemic levels, and continue to rise, according to data from the Options Clearing Corp.
When bets go sour, dealers are sometimes forced to liquidate options portfolios. This process can result in slippage and additional losses due to lack of liquidity. So, firms often hold a liquidity add-on component to the margin or capital requirement, which is meant to cover the risk of such losses.
Working out the add-on is hard enough for cash equity portfolios. It’s even harder for options.\

I proposed a new model for estimating the liquidation cost of options that uses open interest and volume data to account for the way that dealers adjust their quotes during periods of market stress

The article was published in Risk.Net in Feb 2023 and can be found here:

https://www.risk.net/comment/7956003/options-liquidation-can-be-costly-how-costly

However, if you don’t have access to Risk.net, you can view the article here

Cee Ek Sau Bathis

“cee ek sau bathis” is a transliteration of C132 – a house number in Sarvodaya Enclave, New Delhi.

Over 53 years ago my parents were given a small piece of land in Sarvodaya Enclave in lieu of a plot they owned on Ring Road as the government needed the latter for city expansion (a concept called eminent domain).  Sarvodaya Enclave was in the middle of nowhere at that time, the closest landmark being the IIT Delhi campus and all IIT’s were originally built outside the main city.  Back then I would hear my parents grumble how they were thrown out in the jungle.

Our family built our house in India in 1971 and we moved into it after relocating from the US in 1972.  There wasn’t much around at that time – the large stretch of land in front of us was literally “a jungle”, only half the colony had houses, there was a little village nearby from where you could catch a bus to go to Mehrauli or Green Park for any shopping.  The house was designed mostly by mummy and was unique, with a veranda with a fountain in the middle and a basement which was unheard of in Delhi. We planted many of the trees that you see in front of the house.  At the age of 10, moving from Lincoln, Nebraska to this house was a shock, but also an adventure – one that I soon embraced and made the most of. After the first year, I found myself in the school nearby – a completely different type of school called Mother’s International that was attached to the Aurobindo Ashram.  

For many years life in Sarvodaya Enclave and Mother’s school for me turned out to be one full of little adventures.   I remember jumping in mud piles in the “jungle” in the monsoons; going around in a big group of kids on Holi and being dunked in colored water tanks; playing cricket with other colony kids wherever we could find a patch; sneaking into the hostel area of the school at night to hang out with friends – a lot of “”fatru giri” as we would call it.  Delhi was a big city, but our area had a small town feel and thus was our own Tom Sawyer and Huckleberry Finn type adventures in it.  Things just seemed simpler, like the whole family going up on the roof to sleep in jute charpoy’s in summer nights – and I would sleep until the morning sun literally roasted me.

Each Diwali, mummy’s family would visit in the morning and in the evening Papa’s family would visit and we had one puja at home after which the highlight of firecrackers brought by Vinod-bhaiya.  Prior to Diwali was shopping in Chandni Chowk with my father for clay things and toys. Every festival like Rakhi, would mean family visiting and lots of mithai.  C-132 became an important destination for mummy’s side of the family such that eventually 3 other family members moved in to the same colony over the years.

I remember my first bicycle- an old black Hero bike in India – and how I would proudly ride it everywhere – many days riding back and forth in front of Snigdha’s house hoping she would notice me!  When Vinod bhaiya got their very first scooters (a big thing back then), he would come over and then eventually teach me how to ride and let me borrow it (unbeknownst to my mother!) for joy rides.  I travelled all over Delhi in the buses knowing all bus routes and loved jumping on number 503 and going to Chandni chowk.  The visits to Naniji in Rohtak Road meant being pampered with food and her letting me buy lots of comic books from the store near her. I got to know those living in the local village and to this day Rajinder is one of my best friends and I remember sitting on the ground in his village house eating paranthas and ghee.   There always seemed to be something going on between the house , the relatives, the school and friends that made life just magical and full of things to do – and trouble to get into.

I eventually moved into the basement and it became my “adda”  – with its own entrance, me and my friends would come and go as we pleased.  I had a full electronics lab down there and tinkered with all sorts of stuff – making me the coolest kid among my friends.  I managed to buy a 10-speed bike from some diplomat and rode all over on it – till this day people remember me riding around on that bike, like which they had never seen before.

I can go on and on as I have tons of stories from those 8-9 years before I went to IIT and many more over the pursuing four.  Between friends, family and all the things I did, it is a time of my life that is forever and deeply etched in my memory and my heart.

Fast forward a few decades and Sarvodaya Enclave has become an prime colony in South Delhi. The house was rebuilt or fixed up several times, mummy continued to live there and established deep roots for herself in Delhi.  As my life in the US evolved, the visits became more infrequent, but every visit brought back all the nostalgia, all the memory.   The house became like a museum of mummy’s passions for antiques and old furniture and Indian art.  I shared a bit of the same interest in old things myself over the years.   Papa moved back in 2009 after 25 or so years.  Mummy passed away in the house in 2017 and Papa passed away in 2018.

What was left was a house – bricks and mortar and full of things – but mostly full of memories and a lot of what represented and embodied my mother.  Her presence was still felt everywhere.

Of course, the house had to be taken down, of course it had to be rebuilt and converted to modern flats and doing so unlocked a ton of wealth.  But Cee ek sau bathis was the address for my family for over 50 years, it was the place that my mother and father both died, it represents the connection to the country of my origin, those from whom I came from and it is where all the vivid memories of my childhood live. 

Delhi will change, Sarvodaya Enclave will change, friends and family will pass, and in some years, it will be all be unrecognizable to me. The connections to the physical will start getting buried in the sands of time, leaving only fond memories in my heart and soul –  but until then Cee Ek Sau Bathis remains an important part of me.  

Kshama

(forgiveness)

We get old only once, and thus will never know how they feel.  We judge them, get irritated at them.  Maybe the guilt trip is their way of trying to reach out, maybe the erratic behavior is a reflection of their fear of mortality. I really don’t know and may not find out until I grow old. But in the meanwhile they pass on and are gone forever, leaving us looking back with regrets.


The pursed lip smiles
The determined gait
Her unbounded generosity
And endless energy
The way she called me “beta”
The tear in her eye
As I turned and left
I remember all this ever so well


The missed mothers day call
The poem I never read
The ceremony I did not attend
The birthday present never sent
The gratitude not expressed
The three words rarely said
The attitude I showed
And missing her last breath


It’s been five years
I still cannot hold back the tears
I would give five years of my life
For five minutes with her
To hold her, talk to her
And beg
for forgiveness.


Dec 11, 2022

Improved Liquidity Risk measurements

In the face of highly adverse moves, when risk managers are faced with the need to liquidate an equity  portfolio, they often face significant slippage and additional losses due to lack of liquidity.  Thus, it is common for firms to assess a liquidity addon component to the margin or capital requirement for a portfolio that holds large, concentration positions in illiquid securities. The common technique for this is to compare the size of a position in a security with the Average Daily Volume (ADV). In this paper I discuss the inadequacy of a simple ADV and propose a new method for calculating Liquidity addons.

The article was published in Risk.Net in Sept 2021 and can be found here:

https://www.risk.net/comment/7871521/a-new-metric-for-liquidity-add-ons-easy-as-adv-but-better [risk.net]

However, if you don’t have access to Risk.net, you can view the article here

Death

He spent his entire day lying in bed at the age of 88, suffering from multiple age related ailments, needing assistance with mobility, eating and for basic hygiene functions. Alone with just a male attendant for company, his estranged younger son lived upstairs with no time for him, he thought of his wife who had an untimely death a year ago.  His other children lived in faraway lands and despite visits, with little ability to communicate; he mostly just shed some tears.  While not a religious person, you could hear him cry, “Hai Ram1, please have mercy and let me go.”

Was death bad for him?  Thomas Nagel, the contemporary American philosopher would say definitely yes. In his chapter “Death”2, Nagel believes that all deaths are bad and he defends “…the natural view that death is an evil because it brings to an end all the goods that life contains…”

Death could be bad due to the separation of friends and family as well the process of death could be bad, but when discussing the badness of death, we want to talk about what is bad about death for you. Death is not intrinsically bad because when you are dead, there is no you for it to be bad for; death cannot be instrumentally bad as nothing else can happen after you are dead so it can only be comparatively bad, as Nagel says “If death is an evil at all, it cannot be because of its positive features, but only because of what it deprives us.”  He states that it is the loss of life, rather than the state of death that makes it bad.  This is the “deprivation account” view of death that Nagel holds in which death deprives a person of all the goods that life contains, and he states “..death, no matter how inevitable, is an abrupt cancellation of indefinitely extensive possible goods..”  Nagel does little in the way of discussing the value or quantity of deprivation as it pertains to the badness of death, and we will discuss this some more later.

The main objection to Nagel’s view comes from the thoughts of ancient philosopher Epicurus3 who says “So death, the most terrifying of ills, is nothing to us, since as long as we exist, death is not with us; but when death come, then we do not exist..”  Thus, Epicurus believes that death is not really bad and we should not worry about it.  Epicurus’ argument is rather simple and elegant: 1) There is an existence requirement for something to be bad for you, 2) when you are dead you don’t exist, 3) So death cannot be bad for you.  We see similar views about death not being bad in other ancient philosophies, such as Taoism4 which sees death as a part of the eternal force which all of us need to accept and live with peacefully and it encourages people to focus on life rather than death, as it is inevitable.

We now have a view of death being bad, regardless of the conditions, and we have a view that death cannot be bad.  How do we reconcile these and how do we thus think about death in our lives?  Most humans do think about death at some and often many times in their lives. Most of us have some level of worry, fear and at the minimum, concern about death, so it is very difficult for us to simply accept that death is not bad and ignore it. How should we think about death so that it influences the way we live our actual lives?  As Spinoza says, “Insofar as the mind understands all things are necessary, so far has it greater power over the effects, or suffers less from them.”5 An understanding of how to think about death, could avoid unnecessary anxiety and suffering caused during our life despite deaths inevitability.

Religion offers one solution, most of which maintain a dualistic stance, i.e. they believe in some form of soul and some form of an afterlife or continuation of something after the body dies. In this account, death is not an end, the soul will go to heaven or hell, the soul will reincarnate or transforms into some other life form.  There are multiple versions of these, but they tend to either create a further fear of death (in the heaven or hell version) or a complete resignation (in the reincarnation version}.  For a physicalist of course, there is no solution offered here.

If we have difficulty completely rejecting that death is not bad, to understand the badness of death, we need to return to the deprivation theory and look at it a little deeper.  Nagel says “There are elements which, if added to one’s experience, make life better; there are other elements which if added to one’s experience, make life worse. But what remains when these are set aside is not merely neutral: it is emphatically positive.”  Kagan, in his book “Death”6, helps to make sense of this in his explanation of the value of life and Nagel’s believes in the valuable container version which assigns value to being alive itself along with the contents.  Thus, following Nagel’s view, regardless of the contents of the container of life, since the container itself has value, death, no matter when it happens, deprives us of something. 

One criticism on Nagel’s approach is that he seems to view at the topics of life and death on the average, despite that fact that death is unpredictable, has a range of time of occurrence, has many forms it can take and has very different processes leading up to it. The average approach gives us little real insight into dealing with the topic of death on an individual level and thus I believe that we should also be concerned about the particular badness at death, i.e. based on individual conditions and circumstances.

To create a model of the value of life and relate it to death, we look at alternative deprivation theories. Kagan expresses support of the deprivation theory but believes in a neutral container model of life, in which just being alive does not have value in itself without the experiences to fill it. This leads to a fairly simplistic model of the value of life and thus the deprivation when death occurs, which decreases with age, the largest being just after birth. This model can be represented by a graph that could look similar to this:

On casual observation, this works quite well – the longer the life, the greater the loss due to death and thus greater the badness of death.   One major objection to this is the issue of transitivity at the time of birth.  The maximum value of life is just after one is born, with no value just before, thus leading to a discontinuity.  Several contemporary philosophers have weighed in on this and offered alternative models on the value of life and the badness of death, including Jeff McMahan, with his Life Comparative account7 and John Broome, with his Critical Level Utilitarianism model7.  A complete discussion of these are outside the scope of this paper, although incorporating some of their thoughts, I suggest by own model in which the value of life for the average person, who lives a normal 80-90 year old life would look something like this:

When death occurs, the right hand area of the graph from that point on, would represent the potential of goods and experience that the person was deprived of, thus represents the value of the badness of the death.  For a person that say has a terminal illness at the age of 40, the graph would descend very quickly from that point on and the deprivation value thereafter drops significantly.  Thus viewing the value of a life conditional on a life’s circumstances with a similar model provides a basis for the value of the deprivation in case of death.

The entire discussion so far has focused on the value of the goods and experience that is lost on death, which is the basis for the deprivation model. However it seems worth exploring the life one has lived in determining the badness of death.  Tolstoy’s Ivan Ilych8 is only about 45 years old and is suffering from an accident related life threatening ailment. He suffers mental anguish from his condition and asks “Why me?”, which can be interpreted as a lament about dying too young and thus the loss of life’s potential – i.e. the right hand part of his life graph.  But he also looks at the life he has lived and realizes it has been shallow and unfulfilling. Ivan’s death is not just bad from the deprivation of potential goods but is also bad because he has not experienced or lived a fulfilling life. Thus I would like to venture to add another variable to the value of a life relating to the live lived. 

If you are told you will die tomorrow – ask yourself – “have you had a life worth living – has your life been fulfilling?”  Then look are what you are being deprived of by death.  Given the latter being non-negligible, if the former is much more than the latter, then your death may not be bad for you and you can go in peace. If you are like Ivan and with a shallow, unlived live and the deprivation is also large – your death will be bad for you as you will not have the chance to live a fulfilled life. This may see counterintuitive, but it measures the badness of death not only on the deprivation, but also with the view that everyone deserves the opportunity to LIVE life.  This sentiment is also echoed by Kagan in his chapter on Living in the face of death. One objection to this account would be the implication that a life better lived is a less objectionable death.  This is actually untrue as the necessary condition is the difference between the live lived and the amount of potential deprivation.  This in no way encourages seeking death but gives a formula for confronting death. In the chapter on Suicide, Kagan’s rationality argument also follows a similar thought as it is possible somebody’s life would be so full of suffering, failure, with no serious prospect of recovery, that death would be better on balance.  Gillian Bennet9 in her note said, “I have had a husband beyond compare, and children and grandchildren who have outstripped me in most meaningful ways”, showing how she has had a fulfilling life, yet also says, “Dementia is taking its toll and I have nearly lost myself”, thus stating the forward value she will be deprived of was very little – so death to her was not bad and arguably good.

Thus I conclude that it not rational to describe death in the binary version of bad or non-bad, but rather death, while often bad, has a range of levels of badness that are conditional on the individual and in some cases can actually be good.

I return to my father who I opened this paper with.  He finally did die. He had lived a life as well as he could and given his condition there was no value in his continued living – so death was definitely not bad and as like Gillian, while it hurts me to say this, his death was good.

References

Tether the boats – reforming Capitalism in the U.S.

Capitalism definition and its success

Capitalism has won. It’s been almost 250 years since Adam Smith1 published “The Wealth of Nations”.  Smith is credited for offering the first theory of capitalism which he described as a system of natural liberty, in which individuals can be trusted with a market based system, without state intervention, which would lead to a highly productive and growing economy. 

Smith’s work is the most compelling guide to  prosperity because of its moral force as he says free markets are led by an invisible hand benefiting everyone, not just the individuals and companies motivated by their own profit.

The data justifying the sucees of capitalism is equally compelling.  The world has seen a dramatic rise in GBP and living standards in the past 200 years.  Researches point to several metrics including  reduction in global poverty, increase in life expectancy, increase in household income that are attributable to to capitalist economies2,3 . This engine of growth has been even more pronounced in the last several generations as countries like China and India have adopted free market reforms and seen explosive economic growth.

Lawson4 states that “The scientific evidence is simply overwhelming that countries that pursue more economic freedom enjoy better socio-economic outcomes in almost every dimension”.

Defining features of capitalism

A key feature of a capitalist economy is that it is organized around private ownership of the means of production, in which “private” stands for individuals and firms, not state. The owners predominantly gain income from their share of ownership and its growth, while labor mainly earn income from wages. Some of other the key features of a capitalist economy include:

Free market : property can be sold, bought and exchanged by citizens at a price agreed upon by free market forces of supply and demond and not dictated by the government.

Factors of Production:  In capitalism, private enterprise controls the factors of production, which include land, labor, and capital.

Accumulation of Capital: The centerpiece of a capitalist system is the accumulation of capital as the driving force behind economic activity is to make a profit.

Markets & Competition:  Competition is the other vital attribute as  businesses compete to provide consumers with goods and services that are better, faster and cheaper. Competition forces businesses to maximize efficiency and offer their products at the lowest prices the market will bear as well as it helps to spur innovation

In support of capitalism

Some of the strongest arguments supporting and justifying capitalism is that is the moral ideal that supports freedom and liberty and thus it’s association with liberalism. In The Road to Serfdom, Hayek5 argues that the abandonment of individualism and classical liberalism inevitably leads to a loss of freedom, the creation of an oppressive society, the tyranny of a dictator, and the serfdom of the individual.

Similarly Ayn Rand6 maintained that capitalism is the only morally socio-political system because it frees people to act in their rational self-interest, and asserted that no politico-economic system in history has ever proved its value so eloquently or has benefited mankind so greatly.

There are many additional arguments in support of capitalism

  • Economic freedom helps political freedom. If governments own the means of production  it invariably leads to a powerful state creating a large bureaucracy
  • Efficiency. Firms in a capitalist based society are incentivized to be efficient and produce goods which are in demand.
  • Innovation. Capitalism rewards innovation and sets a dynamic where entrepreneurs and firms are seeking to invest in, create and develop new products and services to avoid stagnation.
  • Human condition:  being built on the notion of incentives, everyone has an incentive to build, create, and serve others, which is in line with basic human conditions.
  • Belief in People:  The capitalist believes that people can make their own best decisions.  This is the basis of the free market with millions of people making individual choices. 

While some of these arguments downplay the negative effects of capitialism and some seem to claim eminent domain to the advantage, it is hard to deny that capitalism offers a lot.  I personally strongly value the individual freedom to create and innovate as an agent of growth as well as self emancipation, in particular in today’s fast moving technology society.

In a speech in 1963,  John F. Kennedy said “A rising tide lifts all boats”.  While he was not referring to capitalism specifically, since then this has often become the mantra of supporters of capitalism.  Has capitalism lived up to this and if so, should we just hand it the mantle and close the debate?   I don’t think we can reach that conclusion just yet.  For a moment lets seque and look at what stands in contrast to capitalism.

Socialism

Socialism stands in contrast to capitalism in which the means of production are popularly controlled. The focus is not on individualism but collectivism of the community at large. Socialism manifested itself in the form of communist and Marxist systems of government in which there was a command economy with central planning.  These found great popularity in the early 20th century, offering a vision of an equality based ideal in contrast to the ills of capitalism as described by Marx.  Dozens of countries around the world adopted Marxism, yet a majority failed and today there are only remants of communism in a handful of countries.  To understand their demise, it is interesting to look at the Soviet Union as it was the largest and most enduring.

The Soviet system was a huge success post second world war.  It was seen as a model economy with high growth, good wage growth and satisfaction of the worker. The state five year plans were successfully implemented for several decades.  However over time the progressive system of socialism completed eroded.  The ruling elite oriented the economy to military expansion7 with the arms race and space war with the U.S. The common people, the workers, were treated like serfs and slaves: they were given the necessities of food, shelter, clothing, transportation and medical care but little else. This ended up being a replication of feudalism in that there was an absence of personal freedom of the common people.  It was exactly what Hayek predicted would happen in his 1944 book “The Road to Serfdom”.   But it wasn’t the failure of the ideals of socialism as Marx envisioned, it was purely a failure of those in command of the economy that was meant to benefit the people.  The politburo forgot about the socialist manifesto and were consumed by greed, hunger for power and ego.   It is estimated that over 70% of the economic output was used for military of space related pursuits as opposed to using it for the benefit of the people.

Socialist ideas to correct capitalism

Across the world, capitalism is actually implemented in a variety  of hybrid foirms using various concepts of socialism to temper or correct some of the isues as mentioned above. Scandinavian countries have adopted a greater socialist leaning style while China started with a communist regime and slowly openened up to free markets and capitalism. For this paper, I will focus on the US style of capitalism which is welfare state capitalism.  The state plays the role of creating welfare mechanisms that are funded by way of taxation.  The welfare programs are aimed and trying to assist the least advantaged in society by providing services and support, which is the US style of redistribution.

The ugly side of U.S. capitalism

We’ve sung the praises of capitalism, so now it is time to look at the other side.

Piketty8 shows us how the rate of growth of capital has outpaced the rate of growth of the economy over time in capitalism. This has resulted in the owners of capital and the means of production to grow far wealthier than those that just work for it.  The ideals of liberalism and capitalism asked us to believe in the individual and the supporters of capitalism such as Brennan14 presuppose that people are altruistic.  The reality is that people are inherently greedy and selfish as pointed out by Cohen15 and humans are still in their predatory phase of development.  

Saez and Zucman9  provide concrete data on the real state of the US capitalism today, stating that the bottom 50% have an average pre-tax income that has stagnated at $18,500 per adult, out of this rising share goes to taxes & health thus impeding wealth accumulation. At the top is the opposite process, booming income and falling taxes has snowballing wealth accumulation effect. 

According the Federal Reserve data10, the wealthiest 1% possess 40% of the nations wealth and the bottom 80% own only 7%.   This trend has been continuing for decades since Reagan’s libertarian policies, with the wealth of the 400 richest Americans growing over 21 times since 1982.

Saez and Zucmanalso show how the tax policy in the US heavily favors the wealthy, as billionaires pay lower tax rates than the working-class; capital income is not or little taxed (with corporate retained earnings and reduced rates on dividends and capital gains); collapse of corporate taxation and  60% of the profits of US multinationals booked in tax havens.

The combination of capitalism with a taxation system that favors capital has resulted in massive wealth inequality.  Over the last 30 years the top 5% of the country have seen a significant rise in income and wealth while the bottom 20% has seen stagnation in their wages, thus in real terms, they are getting poorer.  US capitalism has been a huge of engine of economic growth but significant portion of the population is losing wealth.

Inequality has significant impact in society. It increasingly operates through education which is closely correlated with parental socio-economic status. With lower economic and educational expansion possibilities, income inequality increases and  upward mobility decreases. Mahbubhani11 says these inequalities will enable those better situated to exercise a larger influence over the development of legislation. In due time they are likely to acquire a preponderant weight in settling social questions, at least in regard to those matters upon which they normally agree, which is to say in regard to those things that support their favored circumstances. There has been a transfer of wealth and political power from the vast majority of America’s population to a privileged super minority. Thus America is turning into a Plutocracy moving away from its democrtatic roots.

There is serious worry about the instability that arises out of massive inequality. Piketty says “Every human society must justify its inequalities: unless reasons for them are found, the whole political and social edifice stands in danger of collapse.”

Even billionaires such as Ray Dalio are increasingly concerned about the increasing wealth gap, booming debt and tax inequality are pushing America to a tipping point as he writes in a recent article12. In a CBS interview in July 2019, he said “Capitalism needs to be reformed in order to work better” explaining that “the U.S. economy is not redistributing opportunity”. According to Dslio,  The current situation is not sustainable, and he says “We’re at a juncture. We can do it together, or we will do it in conflict, that there will be a conflict between the rich and the poor”

The tide continues to rise, but we only see the luxury yachts and cruise ships – while there are lots and lots little row boats not to be seen that are drowning, run aground or broken.  It’s a pretty picture but an ugly situation.

Redefining American capitalism

It is evident that  market forces alone cannot create a level playing field for all Americans. The welfare capitalism practiced in America expects the government must step in to redress major social and economic inequalities, however it has clearly failed to address the inequality.  This is largely due to the tax policies since Reagonomics being highly influenced by libertarian thought and by the wealthy, thus the welfare system that depends on tax revenues has been collecting less and less revenue from the wealthy and the highly profitable corporations.

How do we begin to redefine and redesign American capitalism? To present my views,  I would like to draw from from concepts from Physics.

Any complex system has multiple forces acting on it.  If the forces are acting in different direction and are unequal or changing often,  over time, the system will destabilize and will be broken apart.  For a stable system in the long run, the various forces needs to reach a state of equilibrium, mostly working in the same unified direction to create progression.  Societies are complex systems and for an enduring system, forces of stability and equilibrium need to be established.  Such a system would also meet the difference principle in Rawl’s principles of justice13, causing a improvement in the weakest forces by a shift in the system to maintain equilibrium.

Unfortunately American capitalism is proving to be an unstable system.  Like Soviet communism in which the forces of the politburo were in contention with the forces of the needs of the people and the system collapsed.  Is it now America’s turn to collapse as Dalio predicts due to the predatory nature of the elite working in contention with the needs of the population at large?

To design a stable system, we need to understand the factors that create contention.  Any system that contains points of contention and too many compromises, will always be just 1 or 2 election cycles away from demise.

American history is that of liberalism. First and foremost, any system must recognize that liberty and individual rights cannot be violated.  

Taxation is the next real sticky point – the word “tax” is always taken perjoratively.  It is a fine, a burden, akin to punitive and so on.  A stable system will need to find an alternative way to make capital flow to where it is needed.

Interests and efforts need to be aligned. Today the capitalists believe it is their job to just create wealth at any expense and protect it from the state; the state is always looking  for ways to get revenue to meet is social obligations and over half the population are just trying to find a way to make ends meet.

The government alone cannot be responsible to take care of the issues of inequality and the needs of the disadvantaged. As Amartya Sensaid, for societies to progress they need the “invisible hand” of the free market and the “visible hand” of good governance.

What about philanthropy

The capitalists, wealthy elite and corporations usually shout foul, saying they pay their fair share of taxes as well as point to how much they give away through philanthropy. The first part of this argument has already been debunked with numbers such a provided by Saez / Zucman. 
As for philanthropy, while there are many well meanging and impactful philanthropists in
America, the system overall is broken. When the CEO’s of charities get multi million dollar salaries, they are nothing but quasi capitalist organizations.  It is estimated that on the average less than 15% of all charitible donations actually go the the causes they seek to benefit. It is also worthwhile to note that most corporate giving is self serving – marketing value, support the issue of the day and absolution of guilt – as opposed to being done with a true sense of purpose and desire for impact.

Welfare and charity also do not have the value of wealth creation.  They also have a negative impact on human dignity with people only able to subsuist with the “begging bowl” out. This is yet another destabilizing force.  While there is a place for some welfare and meaningful philanthropy,  they cannot be the cornerstone of a stable, just system of equality.

The new design

My new design of American capitalism (or what I would like to see change over the next decade or so), is a follows:

The critical requirement and feature is the alignment of all, through a “buy-in” from capitalists. They should be convinced that the elevation of all and the decreasing of inequality is as much their business as any one elses, with a shift in the mindset that government taxes cannot be solely responsible for welfare. Instead of a flow of money into government and out to government programs, there should be direct involvement of corporations in social equity programs. Economic justice becomes part of the mission of capitalists and they are directly engaged in such activity.  This can can be done via strong public/private partnerships that utilize both the breadth, the reach and the regulatory power of the state aliong with the innovation, efficiency and growth focus of the capitalist.  It is a way to redirect a part of the engine driven by greed and selfishness into focusing on social impact and community involvement.  Harnessing the human conditions that drive capitailism, as Cohensays, into social benefit.

An example of such public/private parterships could be an organization responsible for ensuring all schools in the state have the same level of resources and facilities. This is funded as well as assisted directly by corporations in the state, by way of money or by actual participation in the fixing of the schools.

Another facet I would propose is the greaster ownership of the means of production by the workers.  While Anderson16 believes a “voice at the table” is required, I would go further to say that some level of ownership is required to  remove alienation.. Companies like Publix supermarket are about 25% employee owned through a stock grant program for all employees which aligns workers completely with the company growth.   Silicon Valley strongly believe in this and so should corporate America as a whole.

As for taxation, the obvious changes should be closing of the corporate tax haven loophole, treating income and capital gains equally and a more progressive tax system.  However since the welfare of the community will be directly influenced by capitalist, this de facto will be a progressive tax without the negative connotation of the word “tax”. Finally, there maybe need for some multi-year period of wealth tax after which only the increase in wealth would be taxed.

Challenges and rebuttal

The obvious challenge is that of the difficulty of achieving this and the difficulty in changing the mindset and consciousness of capitalists.  I see it differently as it is a matter of messaging. Corporations that directly benefit society get the benefit of goodwill from society, which help business in the long run. They get the benefit of less alienated and more engaged wiorkers. But more importantly they feel they have a say and some level of control and participation in social welfare programs as opposed to just being taxed and the government wasting it through inefficiency and beaurocracy.  This entire message will ring strong with them.

There are many examples already – Chobani Yogurt actively particaptes in social community building activity and redistribution of profits with it employees and the community at large and has become one of the most successful and respected wellness food companies in the process.

Conclusion

I have proposed a different type of capitalism which meets the needs of libertarian and modern American liberals alike, it defocuses taxation and a large welfare state, it aligns the power of capitalism to social good and to assist in the problem of inequality.  It is a stable system with the forces aligned. I don’t know what to call it, and although we don’t need another “ism” I will call it “social purpose capitalism”.

All the boats are now tethered together and they truly can all rise with a rising tide.   The ideal of capitalism can be realized.

References

1 Smith, Adam “The Wealth of Nations” 

2 Wilson, Sy “Capitalism and Economic Growth Across the World”. Jan 2016, SSRN Electronic Journal

Skarbek, Emily   “Capitalism and Economic Growth”, Independent Institute, April 2010

Lawson, Robert   “Capitalism is slowly winning around the world” SMU Cox School of Business

Hayek, Fredrich “The Road to Serfdom” , 1944 University of Chicago Press

6  Rand, Ayn “Capitalism: the unknown ideal” , 1966 New American Library

7 Watkins, Thaker “The Economic Collapse of the Soviet Union”, San José State University

Department of Economics

 8  Piketty, Thomas “Capital in the Twenty-First Century” , 2017 Harvard University Press

9 Saez, E. and Zucman, G.  “The Triumph of Injustice” W.W. Norton, 2019

10New Federal Reserve data shows how the rich have gotten richer”. vox.com. June 13, 2019.

11 Mahbubhani, Kishore “Democracy or Plutocracy?” Horizons, Autumn 2020, No. 17

12 Dalio, Ray “The Archetypical Cycle of Internal Order and Disorder”  LinkedIn, Dec1, 2020

13 Rawls, John “A Theory of Justice” Harvard University Press 1971

14 Brennan, Jason “Why Not Capitalism?” Routledge, 2014

15 Cohen, G.A. “Why Not Socialism?” Princeton University Press, 2009

16  Anderson, Elizabeth. “Private Government: How Employers Rule Our Lives” Princeton University Press, 2017