Economizethis

Attention: Social Entrepreneurs Masquerade as Economists. Or is it the other way around?

2010-02-01T11:29:00.000-08:00

I live about an hour way from campus, which, aside from leading to many scenarios where I stumble into class a half hour late, also gives a good opportunity to do weekly readings whilst being stared at by people of various degrees of shadiness on the subway.

A week ago, I was leafing through my microeconomics textbook in the hopes that osmosis was not just a water-based process (and that, magically, the mysteries of monopolistic pricing would seep into my brain). Instead, I was struck by the following thought: Social enterprise, fundamentally, is neo-classical economics. At its most basic level, the social economy uses not only the processes of economic decision-making, but also ascribes to economics’ ultimate goal of social optimality. Of course, they are not exactly the same thing, but the similarities are uncanny and definitely worth discussing.

Let me try and prove it to you.

Essentially, economists look at social issues and ask, "Is this efficient?” or in economics-speak “Is this Pareto Efficient?” Pareto Efficiency is when every possible resource is distributed in such a way so that no person benefits at the expense of someone else. In simpler terms, everyone's as well off as they can be without crapping on someone else's parade. So, when a company raises its prices higher than they need to be to cover costs, they are cutting off people from access to goods that they value. The company’s profits are coming at the expense of consumers: this is not Pareto Efficient.

In fact, the general feeling that economics is all about profits is just plain wrong. Classic economics holds that profits are suboptimal, because most of the time, they occur at the expense of someone else's welfare.

In social enterprise, market activity is seen as a vehicle for social change—in essence, using markets as mechanisms that can be used to create socially equitable (read “optimal” according to Pareto Efficiency) situations.

Indeed, at its heart, some of social innovations most exciting creations have the same goals. For example, Muhammad Yunus’s Grameen Bank recognized a key cause of poverty: poor people had lack of access to credit. In economic terms, this is market inefficiency, since those that valued credit were unable to access it. When Yunus created a new mechanism so that the ultra-poor could participate in the market, social entrepreneurs found themselves nodding in tune with die-hard economists: for both groups, a socially optimal condition was reached.

Indeed, at their fundamental level, classical economics and social economics share the same imperative: to distribute the Earth’s resources in socially optimal ways. On top of this, both groups have remarkably similar ideas of what “socially optimal” is.

So why aren’t all social entrepreneurs believers in economic theory? Well, as I mentioned before, there are some key differences. The main difference is in Smith’s “invisible hand”, or the belief that socially optimal conditions come about simply by blindly following self-interest. Social enterprise is based on the conscious choice of changemakers to actively use the markets, not just for personal self-interest, but also (and more importantly) for social value creation. Social entrepreneurs are consciously choosing to chase the elusive dream of social optimality, with our eyes open to the difficulties. We realize that this goal won’t come about without active engagement.

I argue that there isn’t a big difference between how social entrepreneurs and economists view the. Additionally, we are losing out by not acknowledging the similarities. We need to critically look at the theory of economics, and use this thinking to deliver social value to the world. By extension, we need to perfect our understanding of markets. In some cases, we must rewrite the theory to inform the decisions of social enterprises. By doing so, social entrepreneurs can make huge gains by proactively tapping into a knowledge base that’s been around for centuries.

However, like many things surrounding social enterprise, we must do so with our eyes wide open to the difficulties.

Fan(,) you feel it?

2009-02-23T05:34:00.000-08:00

It's getting really hot. This must be what menopause feels like--I can actually feel my thoughts accelerating with the temperature. As with most things, I had a big plan on how to deal with the heat. Part of the plan was not to turn on the fan in my room until March (when apparently, it gets really hot...my family has bet that I will melt somewhere around mid-March), but today I finally caved. I dragged myself over to my bed and turned on the fan switch. If my life was a movie, this would be one of the scenes that merit a "flash forward" between Anshula pre-fan, and Anshula post-fan.

The problem with practicing restraint is that when you do finally give into whatever it was you were trying not to do, it feels so good that you wonder why you bothered to stop yourself to begin with. As I sat under my newly mobilized fan, feeling the air on my face, I wondered why on earth I hadn't turned the bloody thing on sooner. What difference does a week make? For that matter, what difference does any boundary make? I started to apply my new-found principle everywhere: Why stop at just one box of chocolates a month? Does it really make a difference if you have one box of chocolate plus one extra chocolate? And by that logic, why not just make it two boxes of chocolate?

In fact, under the aura of my fan, I started to solve all the world's problems. Forget all these territorial disputes, they're just arbitrary lines anyways. Would it really matter if I was a citizen of Canamerica as opposed to just plain Canada? No, not really (at this point, I imagined the look on Alim's face).

And just as I was getting worked up enough to deal with intergalactic space travel, the power cut out and I was plunged back into Pune's soupy heat.

Moral of the story: Heat induced menopause sucks. Fans are amazing. And, I'm entitled to an extra chocolate every month; that doesn't mean it will be there.

It's Raining Men. Hallelujah?

2009-01-23T04:30:00.000-08:00

Yesterday, I was waiting for my bus and made two observations.

Observation #1
Firstly, there are a lot of people in India. This may seem obvious since there are more than a billion people in the country, with a population density of 386 people per a square kilometre (compare this with Canada's 3.3 people per square kilometre), but the reality of these numbers only hit you when you're actually living in an Indian city. Sure, Toronto has its crowds: Bloor-Yonge station at 5PM, or Nathan Phillips Square on New Year's, but here it's Bloor-Yonge station multiplied by two all the time. Everywhere. In every building, on every bus, and on every street. People, cars, motorcycles, honking, pushing, shoving, bargaining, yelling (in ten different dialects), gesticulating (so they can understand each other), and/or rushing off to god-knows-where at least twenty minutes late (otherwise known as Indian Standard Time). It's truly amazing.

Observation #2
Secondly, there are men everywhere. At first I thought that this was a product of my overactive imagination, so on my way home yesterday I did a rough headcount of everyone on the bus. The results? 40 males and 16 females.

Now, you may ask "Why are there 56 people on a bus? Isn't that kind of unsafe?" And I would answer: It's India, okay?
Or, you may wonder, "Does Anshula really have nothing better to do?" and I would assume the answer is self evident (obviously not).

But, back to my census...40 males and 16 females...that's a 5:2 ratio of males to females! So, when I got home, I asked my aunt about it, and she told me that because of generational female infanticide the national ratio of males to females is 5:4! The disparity is even more evident because many woman are housewives, so you don't really see them out of the house.

Conclusion: It's raining men, all the way from Goa to Calcutta.

Yes, that was a bomb

2009-01-16T05:19:00.000-08:00

Guess what!? There's a whole bunch of crazy things going on in India right now. Here's a few: Satyam, one of the top three IT companies has confessed to 'cooking the books' for several years...media outlets are calling the debacle India's very own Enron (I've always wanted my own Enron). The government sacked the Satyam board of directors and had installed a new board in a matter of days--proof that government bureaucrats do, in fact, work (at some things). There's also federal elections coming up in March, which is exciting enough on its own. AND there's all these crazy security measures and military shows after the 26/11 attacks. There was a military expo at my university the other day, which I wasn't aware of until a few bombs went off in the distance (I resisted the urge to jump into the nearest pile of garbage--military material, I am not). Scary, but interesting to see.

Anyways, tomorrow I'm going to see my aunt's NGO called Swadhar. A couple of people from my exchange will be tagging along to see if we can volunteer with them.

The next four months are going to be really interesting.

Please inform Mr. Shubash that there's an increasingly irate Canadian standing outside his door...

2009-01-02T04:23:00.000-08:00

I've had my first brush with India's famously ineffectual bureaucracy in the form of Pune University's registrar's office. After arriving at the office at 11AM (because that's apparently when public offices open in India), I was told that I had been mistakenly registered for the economics faculty at the university. I would have to wait for a mand named Mr. Shubash to come and redo my admissions offer. Not to worry, the clerk assured me, Mr. Shubash would be arriving at the office in the next ten minutes. So I sat down and waited for a half hour. I bugged the clerk again, who said that it was a mere five to ten minutes wait, "Mr. Shubash is actually ill and at the clinic". To make a long story short, I waited another hour, after which the prodigal Mr. Shubash swept into the office (with surprising vigour for a sick man) with an entourage of five or six Europeans. He quickly disappeared into the backrooms of the office because he had to attend to his guests.

Predictably, the clerk told me it would be a mere five to ten minute wait.

A half hour passed, and I finally found what Jeremiah calls my "Torontonian anger". I stalked up to the counter and demanded that I speak to Mr. Shubash immediately. The clerk actually had the nerve to tell me it would only be two more minutes, but I was frustrated enough to do some menacing fingerpointing in the directions of the backrooms and push past the guy. After trying to tell me that it would only be another five minutes (Really? Do I look that dumb?) I lost all calm and imparted some choice words similar to the title of this post. The clerk disappeared into the backrooms; Mr. Shubash made a hasty entrance, crossed out the word "economics" on my admissions offer, and replaced it with "political science", signed the document and sent me back out to the front. My aunt, who had been patiently waiting with me, seemed somewhat amused by the whole thing, but I'd imagine waiting around for two hours isn't the best use of anyone's time.

Aside from that though, I'm actually loving Pune. It's constantly got a frenetic level of energy, which is invigorating. My aunt runs a dance school (aside from being a university lecturer and a psychiatrist...I think she has the ability to stop time) so I get to watch dance classes throughout the day...very cool. Also, I seem to have less allergies in India then I do in Canada. I don't really understand how that's possible, but I'd rather not question the logical of an illogically good thing. Other things:I think I might take up tabla lessons (tablas are these crazy-cool Indian drums), and I get to where flip-flops everywhere. In all, I'm enjoying myself thoroughly.

Tortellini

2008-12-28T02:37:00.000-08:00

Guess where I am? In the British Airways Executive lounge in London, which is actually a pretty neat spot. I've got free wireless, free food (which is key for me), showers, free booze (double bonus...okay, triple), and I've been bumped up to Business class for my flight to Mumbai. You may ask "how is this possible?" I don't know. I think BA made a mistake in my flight booking, but seeing as I missed my connecting flight due to their Toronto delays, I'm pretty pumped. I get to chill in the Exec lounge for nine and a half hours.
On top of this, BA served Tortellini with (again) complimentary alchohol on the flight from Toronto, and I got to watch Wanted (horrible) AND Wall-E (cute; reminded me of a certain friend in Ottawa). Life is good.

Preparing

2008-12-24T16:51:00.000-08:00

I've grown a little disheartened about my apparent inability to keep in touch with everyone. So I've decided to put up a blog where people can read about my travels, perhaps comment, and maybe send an e-mail when they have a minute. To start off, I've written a short blurb below on why I decided to make this trip.

The inception of the India trip took place during my Canada World Youth exchange. I was the "token ethnic Canadian", as everyone jokingly called me, but I was a poor specimen. My Bengali is, um.."accented", and I have never taken to the usual Indian cultural activities that second generation immigrants seem to flock to. Before my CWY exchange this didn't seem like a big deal; I think I actually preferred it. But during the trip I felt rootless; a point hammered home when my Project Supervisor (also known as "Jesus" because of his resemblance to the great man himself) played Ravi Shankar on a tape and asked me if I knew anything about him. My dad's a huge Indian classical music buff, and my own ignorance was horrifying. I decided that I would go back to India and connect with the culture on my own terms.

So, two years later I'm preparing for departure--a process that has had its own complications...I just got my student visa yesterday (a story all on its own), got my shots today, and my suitcase has nothing in it yet. I'm leaving on Saturday.

I'll keep everyone posted.