So I’ve just recorded and posted Ep2 of the podcast, and while I was in the gym, I couldn’t help but point out a little pet peeve on the Planet Money podcast. Before I go on, let me just say that I have been a big fan of Planet Money and the NPR podcast catalog in general. They provide a wide variety of content all produced extremely well, you should definitely check out some of their archive episodes if you have the chance.
Ok, so this particular episode explores India’s recent maneuver to remove their largest denominated notes from circulation in an attempt to rein in corruption and tax evasion, and particularly to meet with the man who was instrumental in developing and promoting the idea, Anil Bokhil. So the episode goes on to explain how Bokhil has had the idea for removing the 500 and 1000 rupee notes for a long time, and has even presented the topic over a thousand times (his own words). Eventually, he gets the opportunity to make a real impact on public policy with a presentation for Narendra Modi, who was then yet to be named India’s prime minister. The meeting goes well, Modi gets elected, and the rest, is history.
The part where I’m not comfortable with happens around the 20min mark in this episode. At this point, while Bokhil is explaining the benefits and mechanisms of his idea, the host, Stacey Vanek Smith cannot help but recall all the chaos and harm that ensured when the currency was pulled out from circulation. After all, in a country where 90% of transactions are done in cash, pulling out the biggest denominated notes are going to be disruptive, painful, inconvenient, and so on. In the wake of this disruption, Smith notes how some have died because they could not pay for a taxi to go to the hospital, or how some have had to close their business because they ran primarily on cash. Now, if you have listened to Ep2, I made a point about how environmental damage was a necessary evil to attaining economic growth, and that if you condemn developing nations for harming the environment, you are also saying that these nations do not deserve a chance to develop and secure more opportunities for their citizens. What Smith does at this point in the episode, is to narrow the narrative on the short term pain incurred through the implementation of Bokhil’s idea, perhaps by way of trying to guilt him, test his compassion, or to hold him responsible. However, Bokhil’s response could not have been more ideal; when asked if he was emotional about the pain and suffering caused as a result of his idea, Bokhil responds: “No, people are used to dying…we are not emotional, we are sensible”. Notice how Bokhil responds by expanding the narrative and considers the alternative to not implementing his idea. If we just focus on all the terrible things that could happen, and avoid any real attempt at change, then the benefits and any chance of progress is quashed. The heaving inefficiencies of the Indian economy will continue to breed corruption and tax evasion, and the very same people who are punished in the short run by Bokhil’s idea will continue to be punished in the long run. What Bokhil does by responding is to redirect the focus of the Smith’s narrative, to take into account all the pain and suffering and exclusion that the impoverished currently experience and will continue to experience if nothing is done, and to weigh that against a policy that, while does not guarantee a better system in the future, is at least an attempt at the right direction.
At this point I would like to mention that I have nothing personal against Smith or Planet Money. And perhaps it is just human nature to focus on individual pain and suffering, all the tangible short term stuff, especially when it was incurred for some idea whose benefits are yet to be realized. But this human nature is also what leads us forget about how bad it has been or will continue to be if nothing gets done. Progress is not free, development will require costs and consequences, and leaders should do well to keep the broader picture in mind so that their long term vision is achieved. I want to reiterate that I love their program and the content that they produce, in fact, I will list below some more of their excellent content, including an episode where they talk with the former FED chairman Ben Bernanke (chaired the FED through the 08/09 housing crisis), and a fascinating episode about the famed Brettonwoods convention, where the US dollar became the center of world trade. If you happen to read this, sorry Stacey, it really wasn’t personal.