The Price of Time

Title: The Price of Time – The Real Story of Interest

Author: Edward Chancellor

Publisher: Allen Lane, 2022 (First)

ISBN: 9780241569160

Pages: 398

 

There are many customs which were widely followed in ancient societies but have turned morally abhorrent in modern ones. Slavery is one such thing. On the other hand, lending money at interest was repugnant to the ethics of ancient societies but has found acceptance in modern societies. What we have done is to bring in a demarcation between lending at exorbitant rates as usury and normal financial transactions at a fair rate of interest. In fact, interest is a justifiable reward for a mutual exchange of services. The lender provides the use of his capital for a period of time, and time has value. A trader borrowing money for commerce is morally bound to share a part of the profit he had earned from the use of capital provided by someone else. Even if the enterprise ended in a loss, it is of no fault of the lender and he has to be still compensated. This is in a nutshell the logic for continuing with the practice of charging interest for the use of others’ money. The word ‘interest’ derives from Latin ‘interesso’, which is a legal term for compensation paid by a defaulting debtor. As world economies grew to ever larger proportions, the rate of interest turned into a crucial parameter that has the potential to affect the health of the economy. Central banks were then instituted to continuously monitor the market movements and to tweak the interest rates to steer them in specified directions. Just as a high rate of interest is detrimental to the growth of the economy, too low an interest rate also have grave consequences attached to it which are explained in great detail in this book. ‘The pitfalls of a low interest rate’ should at least have been a subtitle of this book. Edward Chancellor is a graduate in history who had made his career in financial investment and asset allocation. In 2008, he received the George Polk Award for financial reporting and he is the author of ‘Devil Take the Hindmost: A History of Financial Speculation’ which was an NYT Notable Book of the Year.

 

The institution of taking a portion of money or commodities as fee for lending resources has an unbelievably early origin. The Mesopotamians charged interest on loans before they discovered how to put wheels on carts. The practice is much older than coined money which only originated in the eighth century BCE. Pre-historic people charged interest on loans of corn and livestock. However, popular ethics shunned interest. Religion followed suit and the church’s injunctions against usury and lending of interest were stringent. However, medieval bankers and merchants found countless ways to evade these – the original amount of loan may be overstated; loans in clipped coins had to be repaid in unclipped coins or loans stipulated for impossibly short periods and interest concealed in heavy penalties. Anyhow, with the growth of trade and commerce in the early-Renaissance period, the church’s attitude softened. The canonists then referred to borrowed money as borrowing something tangible such as a plough which has to be paid for. England put into effect a legislation in 1571 which made the taking of interest legal.

 

The author makes a prescient analysis of how early societies were ranged against taking interest and why modern societies take a much more tolerant attitude. Ancient cultures were agrarian in nature and villages were self-sufficient to a great extent. In such a system, a person approaches a lender for the sole purpose of financing something related to consumption such as on food or other family needs. The debtor was within the lender’s power to extract his money and tribal elders stepped in to prevent exorbitant rates of interest. This was thoroughly changed when trade and industry became widespread. The lender usually consisted of people who invested their savings in a bank and the debtor may be a business tycoon. The situation was reversed as the debtor became more prominent in stature than the creditor. In such a scenario, interest represented the lender’s stake in the success and profit of the borrower while usury was associated with the extortion of the needy. The rate of interest declined over time. This spawned extreme financial jugglery. Outbreaks of financial recklessness did not occur at random. They tended to appear at times when money was easy and interest low. The book explains the speculative bubbles in England and France in the seventeenth and eighteenth centuries as examples. Low interest rates fuel speculative manias, drive savers to make risky investments, encourage bad lending and weaken the financial system. Almost three-fourths of the book is dedicated to warn readers about the dangers of a very low interest rate approaching zero which was seen in many developed countries recently.

 

Chancellor cites the tragic instances of the 1929 and 2008 crises to drive home his argument on the disasters which follow a very low rate of interest. There is no detailed analysis of the crises which the author assumes the readers are familiar with. In the lead up to 1929, bank credit in the US more than doubled. Growth in industry could not match the growth of credit. So the rates came down and it changed track to finance stock loans, real estate mortgages and the purchase of foreign securities. Such a hefty arrival of cash lifted the share market to stratospheric levels from which there was only one way to go – towards the bottom. The shares tumbled very quickly and the Great Depression came into being. In a similar vein, in the years before 2008, ultra-low interest rates led to a housing bubble and the subsequent sub-prime mortgage crisis. However, the Federal Reserve kept the interest rates at rock bottom levels claiming that the meltdown was not a failure of economic science but of economic management in the form of regulations. The author fumes that instead of hounding them out of office, the Fed’s stand was credited with saving the world from another Great Depression.

 

The mechanism of how low interest rates vitiate national economic decisions is examined in detail. Central banks are tasked with ensuring price stability for which they target inflation to be within limits. When economy is healthy, inflation and interest rates will be lower. However, allocation targets of credit may change subtly and this may lead to bubbles. Lower interest rates lead to credit growth and larger accumulated debt on the economy. When the crash eventually comes, central banks intervene and usually lower the interest rates further. This starts a vicious cycle. However, this assertion is doubtful as mad speculation during the point of recovery from a crash does not seem plausible. Interest rate thus regulates the economy and weeds out inefficient entrepreneurs. At zero interest rate, heavily loss-making companies can still be in business on life support from bailout packages. The entire economy then progresses at the solemn pace of a funeral march. Over-investment in fancy profit schemes of unicorns is another feature of low interest rates. Monetary authorities often hope that companies would use their access to cheap debt to boost investment. Instead, they choose to buy back their shares with such leverage. Buying back own shares was illegal till 1982 as a form of stock manipulation, but was legalized to allow a company to employ easy credit. The financial sector hugely benefits from such an atmosphere at the detriment of core industrial output. Here, the author points out a major difference from the post-World War II era. Then also, the interest was kept low, but economy had had real growth because after 1945, Americans had robust savings, few debts, no financial bubbles and little financial engineering.

 

The book warns us about not getting too euphoric about the rate of recovery from a crash or during low interest rates and cautions against attributing them to the central banks’ policy of further cut in rates. When the cost of borrowing is low enough, even the most absurd investments can appear viable. The local government in the city of Shiyan in China ordered that local mountains be flattened to make space for new manufacturing plants nearby. This was at a time when China was going through low rates. Savings are needed for the accumulation of capital. Societies that don’t invest enough witness financial experts make money through debt manipulations which will tend to stagnation in the economy. A good deal of economic and jobs growth post-2008 crisis is false growth with little chance of sustainability. It is based on fake money conjured up by Fed to buy assets at fake prices.

 

The book talks about the clout exerted by the so called financial wizards which is disproportionate to the accuracy of their predictions. Chancellor narrates several instances when the opinions of even the greatest of experts – including John Maynard Keynes – going miserably awry. At any given time, it looks as if half of the experts will be predicting good times and the other half forecasting doom. So when a crash finally happens, half would claim victory and the other half would simply look the other way. The book concentrates only on the US and EU and a little bit on China. Most of the matter is relatable only to the US which severely restricts its appeal. As a developing economy which is soon poised to be No. 3 in the world, the author should have spared at least a few pages for India too. Rather than describing the custom of interest, the book attempts to showcase the ill effects of having a very low interest rate in the economy. As it is a book on interest, readers would expect a chapter on Islamic banking which is said to be conducting business in other ways as that religion still forbids taking or giving interest. Here also, the readers would get disappointed. The book is somewhat big for the content and readers would get a bit tired towards the end.

 

The book is recommended.

 

Rating: 3 Star

 

Hindus in Hindu Rashtra

Title: Hindus in Hindu Rashtra – Eighth Class Citizens and Victims of State-sanctioned Apartheid

Author: Anand Ranganathan

Publisher: BluOne Ink, 2023 (First)

ISBN: 9789392209475

Pages: 135

 

The Left-Islamist cabal in India is nowadays adamant on creating a narrative of the nation turning into a Hindu Rashtra where the religious minorities face extinction and democracy in danger. They ignore the inconsistency and illogicality between trumpeting in mass-media that democracy is in danger and the government doing nothing to stifle such content. No authoritarian state would permit such wild allegations to be made in public, but our propagandists hope that the public won’t notice the discrepancy. Putting that aside for a moment, if we examine whether India had really transformed into a Hindu Rashtra only because a Hindu-nationalist party was in power for a decade, what do we find? Have the Hindus mobbed all avenues of power and marginalized the minorities? Are the minorities trembling in fear of being forcibly converted to Hinduism? But wait a moment. Aren’t these the same people who opposed a bill in the previous Karnataka legislature that sought to ban religious conversions by surreptitious means? Why the minorities oppose a legislation that bans conversions if they really feel threatened? If you get confused at these contradictions and suspect that there is more to it than meets the eye, this book is right for you. On the other hand, if you are comfortable with the fiction that secularism was diligently practiced without discrimination in post-independent India till 2014, you better avoid this book. This book analyzes the position of Hindus in today’s India and how the cards are decked against them under the guise of secularism. Anand Ranganathan is a scientist and author. He is very active on social media and this is his first non-fiction book. Ranganthan discusses eight specific topics which are claimed to form a state-sanctioned apartheid against the majority community which in effect transformed them towards the lowest levels of reckoning – eighth class, as the author pityingly attests.

 

Ranganathan identifies that the stage had been set for discrimination against Hindus much before independence and pinpoints it to Gandhi’s taking control over the nation’s pulse in the 1910s. Minority appeasement then began on an unprecedented scale. Many of his appeals lacked any sense of reality and approached the level of being plain silly. He advocated the Hindus not to harbour anger against Muslims even if the latter wanted to destroy them and should ‘face death bravely’. On the Jewish question in Germany, he suggested the same idea to the victims of Nazi holocaust. But unfortunately, every single time the minorities were appeased, it had only emboldened their leaders and political fronts for further extortion and blackmail. Thus, the trait of discrimination was in the nation’s DNA when free India took birth in 1947. It is the discrimination or apartheid in our constitution, policies, legal framework, society and psyche that makes Hindus not only second class, but eighth class citizens. The author presents his evidence in the chapters following this assertion.

 

Ranganathan cites government control of Hindu temples as the first and foremost mark of discrimination. This seems to be absolutely true. Why should a country which takes pride in being secular keep on controlling the religious institutions of only one religion? Natural justice demands that either it should control all or none at all. The state control of temples invariably leads to political intervention. In Kerala, communist leaders who proudly proclaim themselves as atheists have no qualms in sitting in the administrative councils of temples just because they were born to Hindu parents. The resulting inefficiency leads to dismal realization of revenue from temple property. Hence the money which should have been spent on opening Veda pathsalas, schools, colleges, scholarships, orphanages and cultural centres go wasted whereas the other religions are free to use their own money in the way they choose. The author criticizes the government headed by Narendra Modi too in doing little to correct this injustice. He suggests that instead of spending Rs. 339 crores on grand corridor projects like Kashi, it should take steps to free temples. Ranganathan then suggests public listing of the temples as a company as an alternative to state control. This would be a company whose product has not changed in a millennium and never will. People should be able to buy shares in it and public trading is also advocated. He has no objection to the government taxing its wealth. But readers would find this proposal not a bright one. Apart from the moral dilemma of designating a spiritual abode as a commercial entity, the problem of how less profitable temples can survive is not addressed. Also, if the temple’s shares are traded in public, how can you prevent them going into the hands of hostile interests?

 

Some of the harsh remarks in the book are reserved for the Hindu genocide and ethnic cleansing in Kashmir in the 1990s. In a matter of a few months, the entire Kashmir Valley was swept clean of Kashmiri Pandits through arson, murder and rape. The sad fact is that this gruesome tale of bigotry and violence is not widely reported in the media and not discussed in society. 700,000 people were displaced from Kashmir of which only 500 were repatriated after taking away Kashmir’s special status in 2019. Of these five hundred, 25 have been killed already in targeted assassinations. Tourists are safe in Kashmir as the local people don’t want to scuttle their livelihood and economy. In this way, tourism is alleged to be paying for jihad. The author laments that Kashmiri Hindus are the Jews, but unfortunately, India is not Israel. The judiciary is also shirking from its duty to render justice to the victims citing the long time that has elapsed since. The author also accuses the judiciary of selective intervention in bringing about religious reforms. It is hell-bent on focusing on Hindu customs as it is the path of least resistance. A secular state which removes discriminatory practices from one religion turns a blind eye to egregious customs such as polygamy, dissolution of marriages at the whim of the husband and discrimination against women in parental property in another. The book concludes that such a nation is not a secular state, but rather a scared state (p.72).

 

This book’s discussion on the huge amounts of land designated as Waqf (Islamic religious property) and the overarching powers granted to its administrative body called the Waqf Board are both illuminating and horrifying. Once a property is marked as Waqf, it remains so ever after and the Board has powers to evict the actual inhabitants of that land even after the expiry of any amount of time. Waqf is the third largest landowner in India after Defence and Railways. 77% of Delhi is Waqf land as effected by the give-and-take between the British and Muslims. In March 2014, just two months before his demitting office, the then prime minister Manmohan Singh withdrew the government’s claim on 123 prime Central Delhi properties which in effect gifted them to the Waqf. If the Waqf Board claims a property as its own, the cost of surveying it must be borne by the state and its higher officials are given the power of a civil court by the Waqf Act of 1995. Moreover, the Supreme Court in 2019 ruled that a civil court has no jurisdiction in the matter of a dispute pertaining to Waqf property. Only a Waqf tribunal is entitled to examine the case. Section 28 of the act makes it mandatory for district magistrates to carry out the orders of Waqf Board. In short, if this Act is not amended considerably or revoked outright, it sets the stage for the eventual and complete takeover of the country once the percentage of Muslim population crosses a critical threshold. If this argument is factual, it forecasts a scary predicament for non-Muslims in this country.

 

In this vein, the author discusses eight issues on which the Hindus are discriminated against. Many of the subjects were earlier shared in Ranganathan’s social media forums where he argues his points with conviction and verve in a booming voice. He ridicules the Indian custom of honouring the invaders who killed and raped their ancestors. Bakhtiyarpur in Nalanda is named after the warrior who destroyed that ancient university. Many roads and places are named after Aurangzeb who is reported to have killed 4.6 million infidels. Similar is the case of Tipu Sultan in the south. Ranganathan then mockingly asks whether there will ever be a Hitler Road in Tel Aviv in Israel. The book is very informative and a must-read for all Indians. The text is sandwiched between an excellent foreword by J. Sai Deepak and a worthy afterword by Vikram Sampath. The author’s writing style is very evocative and in a manner which feels like the author is directly talking to the reader. The language is powerful throughout the narrative and appears more like that of a propaganda leaflet. The book also assigns on readers the moral responsibility of verifying the veracity of Ranganathan’s claims for themselves. If they find them to be true, they must ask themselves why nobody had told these hard truths before and why.

 

The book is highly recommended.

 

Rating: 4 Star

Beasts Before Us

Title: Beasts Before Us – The Untold Story of Mammal Origins and Evolution

Author: Elsa Panciroli

Publisher: Bloomsbury Sigma, 2023 (First)

ISBN: 9781472983985

Pages: 320

 

We are really awed by our planet’s collision with an asteroid at the end of Cretaceous period 65 million years ago when dinosaurs became extinct. The demise of this predator group prepared the ground for mammals to explore and conquer all possible niches on earth. As a result, mammals grew in size, became more and more diurnal and won the competition for scarce resources. Eventually, a bipedal ape which developed a large brain size took over the world and assumed nature’s role in making several species go extinct. This has been the accepted lore regarding the development of mammals – and by corollary, of humans too. This book presents a different view, one in which it is conclusively shown that mammals existed and to a certain extent were spread over the face of the earth much earlier than thought. What it paints is the picture of a see-saw. Mammals proliferated in the Permian but were seriously put back by the mass extinction at the end of the era. Reptiles, which include dinosaurs, took prominence in the Triassic period which followed it. Then came the asteroid at the end of Cretaceous and mammals again held sway which still continues. This interesting story is told by Elsa Panciroli, who is a Scottish paleontologist who studies the evolution and ecology of extinct animals. She is an experienced science communicator and has written for mass-media houses.

 

The author discusses on the so called ‘success’ of a species in biological parlance. In fact, this is not to be confused with the dominance of a species on others. The term ‘success’ generally means only that it could propagate itself over time in an uninterrupted lineage. In that sense, all species living today are successful up to now. Moreover, while there are only 5,500 species of mammals, there are 18,000 species of bird and 35,000 of fish. That’s just vertebrates. There are over one and a half million species of beetles. So, who is the most successful? This should be kept in mind while making tall claims such as this was the ‘age of mammals’. The only thing is that mammals include the largest vertebrates and we are disproportionately focused on size. However, they originated much earlier than the current consensus. Paleontology suggests that they arose 350 million years ago in the supercontinent of Pangaea. Around 300 million years ago, mammals parted ways with reptiles. Mammals did not evolve from reptiles; they only shared a common ancestor. The belief that mammals followed reptiles in dominance of the world became prevalent as most of the early fossil evidence found in Europe came from secondary rocks and belonged to reptiles. After a catastrophe, they were wiped out and mammals appeared in the tertiary age. The first fossil of a mammal ever found was the jaw of an opossum-like animal discovered in 1820 in secondary rocks. With more evidence coming from all over the world, the scientific world has now conceded that mammals existed and flourished much earlier than the age of reptiles.

 

The author narrates personal experiences of prospecting for fossils in her native Scotland, Russia and South Africa. Mongolian expeditions of the pioneer paleontologist Zofia Kielan-Jaworowska are given in some detail as she had obtained the largest collection of Cretaceous mammals. The fossils demonstrated that the age spanning 250 million years before the collapse of dinosaurs which was the first age of mammals was ignored by scholars for a long time. Early mammals like pelycosaurs looked like reptiles. We continue to see descriptions like mammal-like reptiles to describe them. From among the ranks of the pelycosaurs, a new group emerged which developed the key traits we associate with modern mammals including warmer blood and higher energy lifestyles. They also established – for the first time – an ecosystem which we still recognize today as based on large numbers of herbivores fed upon by a smaller cohort of carnivores. These cyanodonts are the ancestors of mammals which looked more like compact dogs with increasingly enlarged and complex jaw muscles. This change is linked to chewing with more complex teeth. At the same time in the Late Permian, 252 million years ago, reptiles and other tetrapods were also proliferating. Some of them had also evolved into giants. They would get their lebensraum when mammals were most hardly hit by the end-Permian extinction event.

 

The Permian extinction was a great cataclysm in the life of biota on our planet. Around 250 million years ago, volcanic activity peaked in the region which is now in Russia which threw up volcanic ash and greenhouse gases in huge quantities as to alter the global climate for millions of years. Three quarters of life were wiped out and the next age – the Triassic – began with a slate wiped clean. Reptiles and dinosaurs gained prominence and grew to large body sizes. But the mammals were not always at the receiving end however. We have found evidence of carnivorous mammals of this era that ate baby dinosaurs for food. In late-Triassic, little mammals the size of a mouse spread across the globe. These little creatures are thought to be the ancestors of us all. Warm-bloodedness helped early mammals to become nocturnal and escape the unwelcome attention of larger predators. The coldness of night is no barrier to an animal carrying its own heating system. Most of the mammals (except humans, of course) have only mediocre ability to distinguish vivid colours and their eyes are more attuned to see shapes in the dark. It is surmised that humans and primates re-acquired the ability to see colours through a mutation in the genes, but their ability is still a far cry from the glorious visual world of birds. Because they adapted as nocturnal animals, the sense of smell and sound greatly developed in mammals.

 

Whether intended or not, this book not only fails to discredit Lamarck’s use and disuse theory as the reason for causing genetic changes in organisms, but on at least two occasions, it lends a gentle support to it. In a footnote on page 31, the author claims that ‘the characteristics that were used would be passed on, and those that weren’t would atrophy which isn’t all that far off the mark’. This is indeed far off the mark. Lamarck’s theory stayed afloat in the pre-genetics era when the mechanism of inheriting a parent’s characteristic by the offspring was unknown. I’m sure the author is well aware of this and obliquely suggests natural selection as the mechanism that helped propagate features advantageous to survive in a particular habitat, but some readers may get confused here and think that Lamarck’s idea must have something in it. Another argument on the same line is the adaptation of herbivores to digest plant matter by incorporating helper bacteria colonies in their guts. Panciroli argues that microorganisms may have initially been ingested by early tetrapods when they ate some decomposing plant matter. Eventually, some of the plant-processing bacteria survived in the gut and a symbiotic relationship developed. This too is a broad statement enough to perplex a reader on how this new feature persisted in a new generation of the animal. This book introduces flowering of plants as a novel mechanism of species propagation developed around 120 million years ago that helped in mammal evolution. Earlier, pollination was limited through wind and water. Another interesting feature is the remark on ancient human bones. Analysis of the bones between the Neolithic and bronze ages (which is just yesterday by paleontological timescales covered elsewhere in the book) shows that the intense manual labour of early farming lifestyles made the average woman develop upper body strength comparable to a renowned modern athlete. Life was really hard back then..!

 

It is asserted that we are seeing a radical transformation in the study of paleontology and that is part of the reason for writing this book. Use of statistical methods to analyse big data and the routine CT scanning of fossils have opened up entirely new fields of research. In fact, Panciroli is very forceful – even to the brink of obsession – in boasting about the use of modern technology and mathematical tools used by her and her colleagues around the globe. This may be an attempt to enhance the stature of paleontology in the minds of young readers and to attract them to its study. It’d be a good exercise for the readers to look up the mentioned animals on Google as the included photographs and illustrations are totally unappealing. A real turnoff is the author’s punctilious political correctness that often leaps off the pages to sting you in the eye. She frequently flays white European bias towards discrimination of local knowledge regarding finding fossils. She credits nameless native inhabitants, than the person who described it to the world. This is mere showiness. She accuses the big names in her specialty of research of having harboured racist views on ethnicity and a misogynist perspective of history. As a successful woman typically considers herself a feminist by right, the author stresses on the contribution of earlier women in elevating paleontology to a widely respectable avenue of study. She accuses male bias in history and science and goes as far as claiming the same bias in museum specimens since we often see the peculiar features of the male displayed in such institutions! At the same time, she points out amusingly that the term ‘mammals’ applied to a wide group of animals, is not gender-neutral.

 

The book is recommended.

 

Rating: 3 Star