FF Insights #594: State and society

February 21, 2022: No, Covid did not spare Africa; The importance of writing; The problem with telcos

Founding Fuel

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Good morning,

The debate on the role of the state in society surfaced with a fresh intensity during the pandemic. In Economics: The User's Guide, Ha-Joon Chang highlights an important point about how we think of government participation in the economy. Many resort to the share of government in the classical national income formula (which is a sum of public consumption, government expenses, investments and net exports). But Chang says it doesn’t give the full picture. He writes:

“In no area of human life can numbers fully capture the reality. There are always aspects that are difficult to quantify, and, moreover, all numbers are constructed on the bases of particular theories, which by definition focus on some aspects of the reality while ignoring others, including quantifiable ones (recall the exclusion of household work in the construction of GDP).

“But this problem is more serious in relation to the government because it is an actor that is uniquely endowed with the power to set rules that constrain and compel others. Regardless of the size of its budget or the number of SOEs it has, it can exert a strong influence on the rest of the economy if it sets a lot of rules and has the power to enforce them.

“This is not an esoteric theoretical quibble. Until the 1980s, many people believed that the ‘miracle’ economies of East Asia, such as Japan, Taiwan or Korea, were paragons of free-market policies on the grounds that they had small governments (measured by their budget). However, being small did not mean that these governments were following a laissez-faire approach. During the ‘miracle’ years, they exercised a huge influence on the evolution of their economies through economic planning, regulation and other directive measures. By looking at only the budgetary numbers, people had come to seriously misunderstand the true nature and significance of the government in these countries.”

He concludes, “Examples of successful state intervention do not, of course, mean that more government is always better. Real-life governments may not necessarily be the Leviathan of the libertarian discourse, but they are not the modern reincarnation of Plato’s Philosopher King either. There are many governments that have harmed the economy, sometimes even disastrously. But the fact remains that the state still remains the most powerful organizational technology that humankind has invented and thus big economic (and social) changes are very difficult to achieve without it.”

No, Covid did not spare Africa

For a long while, a theory that has been doing the rounds is that the coronavirus hasn’t been as brutal on the health of people living on the African continent as it was on people in other parts of the world. The paradox has been examined in much detail since last year. Even the more recent reports argue the negative impact of Covid on citizens of the continent are economic—but their health has stayed in place.

But Adam Taylor argues in The Washington Post that how the data is looked at matters much and the arguments are dubious. It reminded us of the times when India had claimed premature victory over the virus. It took a long while for the enormity to settle in and everyone to reconcile. It appears much the same thing has been happening in Africa, albeit for longer. 

“Most African nations do not collect the data needed to estimate excess mortality. But a small and innovative study released by the World Bank this week used an unusual method to estimate pandemic deaths in Kenya: a popular obituary website.

“By looking back at several years on the website—which was used because better data did not exist—the researchers were able to see how past trends compared to the pandemic years. Their conclusion was that since the start of the pandemic, there have been roughly 28,000 ‘excess deaths’ during the pandemic period, compared with just 5,520 recorded in official government figures.”

Taylor goes on to make the case that “Africa wasn’t miraculously spared from the pandemic, and there’s little reason to think it could not be hit far harder next time.”

Dig deeper

The importance of writing

In a recent essay, Paul Graham, a co-founder of Y-Combinator, points out that “writing about something, even something you know well, usually shows you that you didn't know it as well as you thought. Putting ideas into words is a severe test.”

He writes, “Putting ideas into words doesn't have to mean writing, of course. You can also do it the old way, by talking. But in my experience, writing is the stricter test. You have to commit to a single, optimal sequence of words. Less can go unsaid when you don't have tone of voice to carry meaning. And you can focus in a way that would seem excessive in conversation. I'll often spend 2 weeks on an essay and reread drafts 50 times. If you did that in conversation it would seem evidence of some kind of mental disorder. If you're lazy, of course, writing and talking are equally useless. But if you want to push yourself to get things right, writing is the steeper hill. 

“The reason I've spent so long establishing this rather obvious point is that it leads to another that many people will find shocking. If writing down your ideas always makes them more precise and more complete, then no one who hasn't written about a topic has fully formed ideas about it. And someone who never writes has no fully formed ideas about anything nontrivial.”

Dig deeper

The problem with telcos

(Via WhatsApp)

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Warm regards,

Team Founding Fuel

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Founding Fuel

Founding Fuel aims to create the new playbook of entrepreneurship. Think of us as a hub for entrepreneurs- the go-to place for ideas, insights, practices and wisdom essential to build the enterprise of tomorrow. It is co-founded by veteran journalists Indrajit Gupta and Charles Assisi, along with CS Swaminathan, the former president of Pearson's online learning venture.

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