Saturday, 30 September 2017

Eighteen wheels and gears

This - Finn Murphy on Truck Driving - is an incredible essay, an excerpt from a book written by Finn Murphy, a high-end truck driver in the USA. The general public is interested in autobiographies or stories of kings,presidents, movie stars, crooks, psychopath, artists, athletes, business magnates, monks, philanthropists and sometimes even scientists; but rarely in the stories or expertise or knowledge of ordinary people who are not famous. We are even less interested in people in the working classes, where a lot of physical labour is involved. Their stories are only told by other professional writers or journalists, and sometimes by their children, if they become famous.

I found this narrative riveting, for several reasons. First, someday I hope to write a book on driving, and since I have only driven cars and bicycles, accounts of driving special vehicles interests me. Alistair Maclean's Way to Dusty Death was the first story I read about driving, when I was sixteen, and it was far better when I read it again in my thirties, after having watched a lot of Formula-1 races. I found the movie Rush, about Niki Lauda, quite gripping, especially his philosophy of driving.

The United States is a land of large vehicles, by global standards. I have once driven a U-Haul truck to move my belongings from Seattle to Cupertino. But it’s just a larger version of a car. When Murphy talks about an eighteen gear system, keeping an eye on the tachometer, wariness about jack-knifing, a great awareness of dangers of mountain driving, and specialised instruments like the Jacob brake,  he is talking as a driver whose full concentration is on his vehicle, the road and others. The US has highly structured traffic, drivers have rigorous licensing requirements, as do vehicles, and so on. Most highway driving is quite safe, unlike India, where a moment’s lapse can end in terrible disaster.

Second, Murphy is also an excellent narrator. His passage describing the truck going downhill are almost as dramatic as Alastair Maclean’s passages of an F-1 driver handling a truck on mountain roads. He quotes Moby Dick and Farenheit 451. I was reminded of this New York taxi driver's blog.

We will in the next few decades see similar essays, perhaps books in Indian languages, but currently the reading public is not interested in them (or most manual labour), barring a few rare stories and the odd question in Quora

Third, reading Marc Levinson’s The Box,  about containers and container shipping, helped me understand how profound and widespread an impact they have had, but how unaware we are of this impact. I once spent an hour after breakfast, watching a container ship slowly gliding out of Seattle harbour, from my apartment window, overlooking Puget Sound. It was sublime and meditative, in a way that can only be experienced, not explained. And perhaps one needs an appreciation for engineering to feel as I did. The TED video on Maersk  was also quite enlightening. But there are all kinds of other specialised vehicles on roads, and Murphy describes several of them. He also breaks a few stereotypes.
Ferry in Puget Sound, Seattle
Third, the caste system among truck drivers that he talks about. In his book on screenwriters in Hollywood, Adventures in the Screentrade, William Goldman discusses the several caste systems that exist in Hollywood; one among screenwriters, with variations by payscale; a second between professions, with star actors and directors on top, and a whole bunch of technical and artistic professions filling up the lower rungs. Murphy explains a similar system among American truckers, based on the kinds of trucks they drive. They have even developed a vocabulary of insults, and Murphy has often been at the receiving end. Oddly, while movers like Murphy are low on the caste system, they are quite well paid – an old phenomenon in India, where ostensibly high caste brahmins have usually been very poor through history; and hundreds of other former low castes have thrown up several millionaires and billionaires thanks to the Industrial Revolution; and in England where thousands of English “nabobs” who made money in the colonies moved up the ranks of the prevalent aristocracy.

As Murphy notes, “A specialist truck driver makes a quarter million dollars a year
I guess that’s worth being insulted in the mountains by my brethren.” One of the reasons for the high pay, is that his customers are very very rich people, moving all their belongings from one mansion to another. Antiques (granite Qing dynasty gravestones!), art treasures, luxury items etc are part of the set of goods moved. Damaging these can severely impact their moving fees. Movers like Murphy not only have to be expert truck drivers, but efficient packers. The pride with which he explains his packing techniques, can only come from a first hand account. The professionalism of American workers, whether in construction, transport, entertainment, finance, has to be seen and experienced to be believed. I don’t belittle Indian workers, several million of whom do phenomenal jobs with far less equipment at a fraction of the cost. But if they were more professional and efficient, and less superstitious or open to change, they would be far more productive and make far more money. Indians don’t use tarpaulins in construction and leave a thorough mess of paint, sawdust, cement dust and brickpowder behind, which then a lower paid set of workers clean up. There are severe health repercussions to both groups. Pits are left open, badly covered, with zero concern for the public. Electricians and plumbers leave exposed wires, pipes, rusting equipment, overheating junction boxes, bad manhole covers and a hundred other nuisances that make India that ugly sight it is (you will rarely see these in gated communities or corporate campuses, where the managements crack whips). Safety consciousness is non-existent in India and utterly unenforceable by law or social custom.The greatest fortune of Indian working class is that they always have family or caste to fall back on. And they can survive months or years unemployed.

“Books are disappearing,” notes Murphy; he has to pack fewer cartons, obviously.

To those of my more recent regular readers, who are wondering why I am writing about a truck driver, this essay may help.

Other essays on driving

Friday, 22 September 2017

Gurumurthy on Demonetization

S Gurumurthy, Editor Thuglaq, lectured on Demonetization at Chennai International Center, Madras school of Economics, today, September 22, 2017. Here are my notes from that lecture, in his voice.

Jagdish Bhagwati on being asked what he thought of my opinions, quipped, If Gurumurthy is an economist, I am a Bharatha Natyam dancer.

I'm not here to defend the government. I'm here to explain the necessity for demonetization. This cannot be done without explain the history and context of global economics and its changes.
Fundamentally, the world had a single economic model, "one size fits all", after the Second World War. They changed this in 2005, saying one size does not fit all, and each country should develop its own model. Nobody in India discussed this at all.

The world has dramatically changed after the 2008 financial crisis. Most have given up globalization and are adopting economic nationalism, except India, which is still enamored of Globalization.

The USA has eleven trillion dollars of trade deficit. Any other country would be insolvent with this deficit, but USA runs not on economics but on physics. Why physics? Scientists say there is something called dark matter, which holds the universe together, which they cant explain. The dark matter of the USA economy is its military power, its administration, the dollar as the currency of the world, etc.

India has run trade deficits in every year since independence, except 77,78,2002,2004. Deficits didn't use to  matter because of the small size of the Indian economy. But since 1991 the economy has grown significantly.

India had 515 billion dollars of oil imports between 2004-2014, but our capital goods imports was 585 billion dollars in the same period. It's not expensive oil, but this massive trade deficit that was a huge problem. Indian trade deficit with China alone in one of these years was five times Indias defence budget and three times China's defence budget.

Also India became a favorite destination of foreign capital. But big chunks of this was not for products or services, but for financial chicanery. Indian economy grew on average 8%  during those years, but gold and stock markets jumped 300% and real estate between 200% and 2100%. This was mostly phantom growth in the value of these assets because of massive printing of high denomination currency bills. We needed high denomination bills to deal with the explosively growing economy, but the percentage of these bills was nightmarish. It went from 38% to 88% of all currency notes  in the period under the UPA government. Then RBI governor YV Reddy warned against the massive influx of capital inflows, but he was ignored. 

1999 was the highest job growth year in Indian history, we added sixty million jobs that year. But since then, especially under UPA, India has had mostly jobless growth. Even real estate became an asset inflation game, with bulk of buyers being not homeowners but people who bought and sold houses for profit. How can it be otherwise, when most of growth happens not in products or services,  but in phantom asset inflation. Demonetization was required to primarily stop this insanity. No economist would have implemented demonetization. Economists caused this problem. Only a bold non economist, in this case Narendra Modi, would have implemented it.

Income disclosure and demonetization should have been done simultaneously, but this didn't happen. Income disclosure should have been announced first. This was a major problem.

But look at the atmosphere demonetization created. The media, the intellectuals and even the Supreme Court wanted riots. But the Indian people did not riot. This is astounding, a marvelous facet of our civilization. Only the rich were really upset, because of queues, they said. Most Indians stand in queues all the time. The whole debate was framed as about black money alone, while several issues were involved.

Modi can take bold and unpopular decisions. GST is extremely unpopular. Kirana stores and small businesses are suffering. But it was an essential step for the economy. No government is foolish enough to continue long with a highly unpopular move that could cost it the next election, so some of this may change soon.

The poorest of the poor pay 350 to 480 percent interest per annum. No one in government or banks or economists care about them. Or even think about relieving their burden. My washarman came to me lamenting about debt at 360%, and I gave him a few lakhs to get out of his debt hole. The chattering classes have not even bothered about the lack of banking for such people.

Politicians can fix this system, if they muster the will. But civil service and stop anything brought in by parliament or legislatures. Civil service has no inward looking perspective, their education and outlook is entirely foreign.

Inspite of this India still is quite robust. I have traveled to so many cities as part of my job, and understood so many aspects of the Indian economy. The listed corporates of india only contribute 5% to economy of India. It's local businesses that are the bulk of Indian economy, jobs, and  growth. 

Bank managers are just bureaucrats. They know nothing of local economy, which is why Non Performing Assets are such a huge problem. One day a bank officer is transferres from Patna to Vilupuram. He knows or bothers to learn nothing about either community, but uses text book metrics to evaluate anything. Some people now say privatization of banks is the only solution. It's not at all a solution. The managers and staff will be the same people, how will privatization change anything?

RBI and several banks have colluded to convert money for people. Vans have gone from RBI to individuals. Our system is very bad in this aspect. Demonetization has been implemented, now its up to the tax authorities to catch and take action against culprits.

Added note Saturday 23 September, 1pm: Compare and contrast my essay above with the report in the Hindu this morning. In my understanding, the crux of Gurumurthy's speech was that in spite of flaws in the rollout, Demonetization was absolutely necessary. The Hindu's report is that demonetization is a blow to the economy, a gas chamber. Akbar josiyam.

Related Essays
1. தடை கேளு தடை கேளு
2. Renminbi as International currency reserve
3. A lack of economic knowledge
4. Video (in Tamil) - Book review of False Economy
5. Audio (in English) - Book review of False Economy