Sridhar Vembu Profile picture
Aug 22, 2020 6 tweets 2 min read Read on X
1/ Prof Pettis discusses the growing rural pension crisis in China as the rural population ages rapidly due to both the one-child policy and the extensive rural to urban migration of youth. He proposes higher rural pensions as the solution.

What caught my eye was this video ...
2/ This unrelated video was embedded in the original story in the SCMP on the rural pension crisis in China.



What it shows is a Chinese software engineer moving to the country-side to start an organic farm and a commune.

That is a universal longing!
3/ To the extent that we need smartphones and Twitter - and we can agree they are very useful! - we need to build technology and broaden the know-how.

If people with know-how move to rural areas and spend their incomes there, we can raise the real income of rural workers and...
4/ ... we can also raise the skills and know-how among rural youth, raise their incomes and the old people benefit by not losing their sons and daughters to cities to never come back.

The state raising rural pensions is an unsustainable macro solution vs this micro solution.
5/ Which brings up a broader policy point: by the very nature governments tend to think of macro solutions to problems. Macro economics has an inherent statist bent.

Rural old age crisis may have a micro solution of creating jobs and incomes for rural youth than "more pensions".
6/ These micro solutions have to arise among us citizens and in the private sector. We cannot expect Delhi to solve all our problems.

The micro solution of high skilled work in rural areas retains the top soil of talent, encourages sustainable living and nourishes the soul. 🙏

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More from @svembu

May 13, 2023
1/ Very interesting thread on Colombia (pop. 52 million) wanting to restore basic industries and jobs and restore balance in their external trade.

Is it possible? Yes. There are some trade-offs (!) they would have to make but their goal is doable. Let's look at the trade-offs.
2/ The most critical trade off is this. Consider the iPhone, which I will use as code to represent "goods with the most sophisticated tech available". If Colombians want to buy a lot of iPhones, they may not have enough exports to pay for them and achieve trade balance.
3/ The trouble is no combination of basic industries (food, fertilizers, textiles etc) whose technology is easily and cheaply available will allow Colombia to export enough to achieve trade balance *while freely importing technologically advanced goods*. That is the problem.
Read 6 tweets
Mar 31, 2023
1/ I will summarize my concerns about AI. I won't focus on the technology itself but on the economic consequences.

First of all, if AI were to eliminate all jobs, it means AI is able to produce all the goods and services humans need and want without human labor.
2/ The air we breathe is free and we don't complain about it, so if a future magical AI were to produce all the goods and services free of human labor, it need not be bad for us. The real question is "how do we pay for those goods, because there are no jobs and hence no income".
3/ That question really comes down to "who owns the magical AI" - are there monopolies that extract rent? Indians get practically free digital payments because UPI is a common digital good. That analogy applies to AI well.

Public policy has to ensure that no one monopolizes AI.
Read 5 tweets
Mar 16, 2023
1/ The Credit Suisse crisis demonstrates yet again the extreme fragility of the global financial system, caused by decades of central bank madness, with endless QE distorting financial markets & the real economy beyond recognition, causing massive inequality & other social ills.
2/ This hyper-financialized regime of debt driven "growth" cannot be sustained. The problem today is that global policy makers, particularly central bankers in the developed world, know no other play book than yet more QE and curing extreme debt with yet more debt and bailouts.
3/ Inflation is the inevitable consequence, and as long as inflation was confined to asset markets (stocks, bonds, real estate) it all seemed to work. We have now reached a point where the real economic distortions of decades of ultra-easy money have led to loss of productivity.
Read 5 tweets
Mar 14, 2023
1/ With vicious personal attacks and slander on my character, it is time for me to respond.

This is a deeply painful personal thread. My personal life, in contrast to my business life, has been a long tragedy. Autism destroyed our lives and left me suicidally depressed.
2/ My wife Pramila and I were in this fight against autism for over 15 years. She is a super mom and her passionate cause is curing our son of autism. I worked hard along with her. To ensure his safety I also took some of his treatments so I could know what they did to him.
3/ As our son got older (24 today) I felt the endless treatments he was under were not helping much and he would be better off in rural India, closer to loving people and helping to lift up people. She felt I was giving up. Our marriage collapsed under that stress.
Read 12 tweets
Jan 14, 2023
1/ Rural Hindu society increasingly runs on the shoulders of overburdened women. Alcoholism among men and loan sharking are causing enormous suffering. Men feel trapped in these vices and all too often choose suicide in despair.

These problems have to be addressed holistically.
2/ As a first step, our media and elites should not promote a drinking culture.

I have emphasized to our employees that drinking may be their private choice but as a company we frown upon public displays. I frequently warn our people that public drunkenness will get them fired.
3/ We also must recognise the deep despair in rural areas arising from structural economic changes caused by agricultural hardship and the decline of rural craftsmen and artisans - weaving, pottery, vessels, local machinery, vehicles, all of those self employed have disappeared.
Read 6 tweets
Dec 28, 2022
1/ How can India produce globally competitive companies like Apple, Google, Pfizer, Samsung, Honda, Boeing, Siemens, TSMC or Huawei?

Why are these companies so important to their host nations?

Is India on a path to producing these companies?

I will explore these quesrions.
2/ First let me answer the "Why" question. These companies are extremely important to their host nations because they embody within themselves the advanced know-how and R & D capabilities essential for modern life and nationhood. Most critical R & D happens within such companies.
3/ These companies enjoy a disproportionate share of economic value added as well as profits (compared to their direct effect on employment) and also pay heavy taxes to their host nations both through their well-compensated employees and directly as corporations. That's the why.
Read 7 tweets

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