From Posets to Categories. Part 1

A poset (partially ordered set) is a pair (P, ≤), where

P is a set,

≤ is a binary relation on P satisfying the three axioms of partial order:

(i) Reflexive: ∀x ∈ P, x ≤ x

(ii) Antisymmetric: ∀x ,y ∈ P, x ≤ y & y ≤ x ⇒ x = y

(iii) Transitive: ∀x, y, z ∈ P, x ≤ y & y ≤ z ⇒ x ≤ z.

And what does this have to do with category theory?

“x ≤ y” ⇐⇒ “ x → y” “x = y” ⇐⇒ “ x ↔ y”

Given x, y ∈ P,

we say that u ∈ P is a least upper bound of x, y ∈ P if we have x → u & y → u, and for all z ∈ P satisfying x → z & y → z we must have u → z. It is more convenient to express this definition with a picture. We say that u ∈ P is a least upper bound of x, y if for all z ∈ P the following picture holds:

Dually, we say that l ∈ P is a greatest lower bound of x, y if for all z ∈ P the following picture holds:

Now suppose that u₁, u₂ ∈ P are two least upper bounds for x, y. Applying the defininition in both directions gives

u₁ → u₂ and u₂ → u₁,

and then from antisymmetry it follows that u₁ = u₂, which just means that u₁ and u₂ are indistinguishable within the structure of P. For this reason we can speak of the least upper bound (or “join”) of x, y. If it exists, we denote it by

x ∨ y

Dually, if it exists, we denote the greatest lower bound (or “meet”) by

x ∧ y

The definitions of meet and join are called “universal properties”. Whenever an object defined by a universal property exists, it is automatically unique in a certain canonical sense. However, since the object might not exist, maybe it is better to refer to a universal property as a “characterization,” or a “prescription,” rather than a “definition.”

Let P be a poset. We say that t ∈ P is a top element

if for all z ∈ P the following picture holds:

z —> t

Dually, we say that b ∈ P is a bottom element if for all z ∈ P the following picture holds:

b —> z

For any subset of elements of a poset S ⊆ P we say that the element ⋁ S ∈ P is its join if for all z ∈ P the following diagram is satisfied:

Dually, we say that ⋀ S ∈ P is the meet of S if for all z ∈ P the following diagram is satisfied:

If the objects ⋁ S and ⋀ S exist then they are uniquely characterized by their universal properties.

The universal properties in these diagrams will be called the “limit” and “colimit” properties when we move from posets to categories. Note that a limit/colimit diagram looks like a “cone over S”. This is one example of the link between category theory and topology.

Note that all definitions so far are included in this single (pair of) definition(s):

⋁ {x, y} = x∨ y & ⋀ {x, y} = x ∧ y

⋁∅ = 0 & ⋀ ∅ = 1.

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Monitoring Policy/Legislation: A Case of IFIs and Legislative Oversight in the Indian Laboratory – My Upcoming Talk in Trivandrum, Kerala

Legislative oversight “is the obvious follow-on activity linked to lawmaking. After participating in law-making, the legislature’s main role is to see whether laws are effectively implemented and whether, in fact, they address and correct the problems as intended by their drafters.” — National Democratic Institute, “Strengthening Legislative Capacity in Legislative-Executive Relations”, Legislative Research Series, Paper #6, Washington, DC, 2000, p. 19.

Parliaments are indispensable institutions of democratic governance with a common goal to represent people and ensure public policy as informed by the people whose lives they impact. This fact is to be underlined across the spectrum, even if country-specific rules have molded Parliaments to uniqueness. For a true representation, citizens must have access to information about parliamentary proceedings, legislation, and policy, and be able to engage in continual dialogue with the parliamentarians. Lets call this engagement vertical for the sake of brevity. Horizontal, or lateral is when parliamentarians engage with one another as defined by stipulations of the institution in order to keep track of government’s dealings both internally or externally, and keep apace of regulatory changes, policy shifts, or governance frameworks. Complexity, undoubtedly is built into the very architecture of this institution, but in no way should act as a deterrent to control ex ante(1) engagement. If such deterrence exists, it becomes one of the common challenges facing any Parliament. In other words, such deterrence creates opacity about functioning of the Parliament, not just vertically, but even horizontally(2). Before getting cornered by allegations of a fallacy, or the above premise (or sets thereof) as begging the question, lets take a detour into analysis of why such a claim holds on tight.

1. Public influence over the Parliamentary deliberations, even if improving, has a lot of catching up to do. It is true that opacity is getting traded (in some quarters at least), but, not by transparency, rather by translucency. Instruments disclosing information, mechanisms of public consultations, even if only of administrative nature are progressive attempts at making representation ‘truly’ representative. But, enter deterrence in the form of likelihood of growing influence as exacerbative of expectations, and curbs follow suit. This is vertical as well as horizontal.
2. Parliamentarians are obligated to account for their functions more publicly. This appears a derivative of the earlier point, but crucially calls upon timely and routine accountability. A legitimate sense of ownership is enhanced here, by a tenor of codified conduct. But, enter deterrence in the form of compartmentalized nature of work at one end, and growing complexity of institutionalization at the other of the spectrum. This is consequential vertically, but touches aspects horizontally, more so in an implicated manner.

Though, the likelihood of other reasons strengthening the above analysis cannot be ruled out, the terrain is far from the context of this study, in that it primarily highlights gaps and then recommends solutions. As recommendations are to be kept at bay, it does not necessarily rule out resolution, which is principally to address premises and/or hypothesis for the study. Switching gears here from generic to specific, but still open to fluctuating for argument’s sake.

Parliamentary Oversight or variously called Legislative Oversight is an instrument of transparency, accountability, and responsible governance in a parliamentary-rooted democratic polity, when such a polity engages with International Financial Institutions, be they multilateral like the World Bank/International Monetary Fund/Asian Development Bank/European Investment Bank, or bilateral like JBIC/Chinese Development Bank/Exim banks.

This still is skeletal, and hence the imperative to add flesh to the bones. Continuing with engagements, these could be variegated ranging from decisions wrought by these institutions in order to effectuate policy-wide changes in democracies covering large swathes of economy like advocating neoliberal policies in line with what these institutions promulgate, bailing out countries in times of economic distress by imposing stern austerity measures as in the case of Greece(3) in EU at the moment, or Argentina(4) in South America a decade and a half back, or even India in 1981 or in 1991 (these need an elaborate treatment and will be dealt with beginning next paragraph), or pumping in capital under different garbs to erect projects with the intentional poverty alleviation programmes that ironically further neoliberal agenda, and as a result often times lead to tearing of the social fabric, economic slump and imprudent governance. The malaise is precipitated by lack of awareness and literacy, extreme levels of corruption, submission of population to oppression by either wide-scale displacement, forced evictions accompanied by unleashing law and order atrocities in collusion with those having myopic considerations for the vulnerable; severing economic means of livelihood, and subjecting vast populations to financial woes, and generally tearing down life where human rights are majorly realized only in terms of violations. Undoubtedly, these are some of the reasons very dear to sociologists, but an important reason that goes missing here and is not talked about often is the very system of democratically elected government invested with protecting and safeguarding its own people on the one hand and receptive to participatory forms in that form of government. In a nutshell, participatory form is always compromised in such engagements, and this is seen to occur not just the level of those who exercise their suffrage to elect the government, but also at the tier of those very elected representatives supposedly safeguarding their mass base(5). It is at this tier the need for parliamentary oversight is most strongly desirable. Well, this graft is in all likelihood an alleged screed or a harangue despite efforts to stay clear, and therefore, channeling it off course becomes imperative for the moment.

Back in 1981, the largest loan being concluded in the IMF’s history, the SDR(6) 5 billion that took many months in materializing, and thrashed by several informal meetings and negotiations was mired in extreme secrecy by the Fund and Government of India. But, how much ever hard it was to keep the deal clandestine it wasn’t much of a success either. “On the whole it is fortunate for journalism, scholarship and for the general right to know but unfortunate (at times mortifying) for the participants,” quipped N Ram(7), then based at Washington DC for The Hindu Group, and the prime archaeologist/excavator of this deal!! The record Extended Fund Facility (EFF) loan to India has, obviously, its precursors. But its size, scope and terms, the rising controversy over it, the unsubtle pressure exerted on the IMF management to tighten the screws on the “structural adjustment” loan do not appear to signal a new and toughened phase in the Fund’s relations with developing countries, big and small. But who can show that a multi-billion “medium-term” loan to a government in economic difficulty from a highly conscious institution (specializing in the business of shaping national monetary, fiscal and economic policies) does not tend to introduce powerful pressures and external modes of consultation, guidance and decision-making into a national economy?(8) N. Ram nails it perfectly here, for here arises the whole equation of national policies of such a magnitude getting decided internationally, and that too even without the Parliament aware of it. What of the people then, who are represented in the Parliament? It is anybody’s guess. This case obviously goes down as a golden moment in the annals of investigative journalism in the country, and in the records of the Fund, “because of the sensitivity of the information and the delicacy of the negotiations, [the IMF] management regarded this leak as ‘quite possibly the most serious and damaging…in the history of the Fund.’”(9)

Fast-forward by a decade and the IMF’s involvement takes a turn. Before getting to that, a little backgrounder is deemed essential. In 1985, India had already started to experience problems with its Balance of Payments (BOP), and by the end of 1990, it had inflated to a full-blown economic crisis, with the Government coming close to default and the Central Bank of the country refusing any further credit, sinking the foreign exchange reserves to a point where the country could finance barely three weeks of imports. This led India to airlift gold reserves as pledge with the International Monetary Fund for a loan. The main worries and causes were currency devaluation, current account deficit (CAD), and depreciating investor confidence in the country. During the Gulf crisis, India’s oil imports swelled and exports shrunk. By the middle of 1991, the exchange rate was subjected to a severe adjustment. This event began with a slide in the value of the Indian Rupee. Authorities at the Reserve Bank of India acted by defending the currency by expending international reserves, thus slowing the decline in value. But, with foreign reserves on the verge of depletion, the Government permitted a sharp depreciation on the 1^st and 3^rd of July 1991 against the major currencies. Within weeks from defaulting, India had to airlift 47 tonnes of gold to the Bank of England and 20 tonnes to the Union Bank of Switzerland to raise US $600 million in a move that outraged the national sentiments. When PV Narasimhan Rao was sworn in as the Prime Minister during the 10^th Lok Sabha, he sent a clear signal to the nation as well as the IMF that the country faced no “soft options” and must open the doors to foreign investment, reduce red tape that often crippled the initiative and streamline the industrial policy. Subsequently, in a report by the World Bank titled “India 1991 Country Economic Memorandum”(10), the development powerhouse credited the Government on impressive steps taken to set in motion fundamental structural changes, and advised on major policy reforms that required to be implemented. These,

1. Reduce public expenditures and increase their returns to the economy,
2. Reform the tax system with a view to reducing its dependence on trade taxes,
3. Liberalize the trade regime, which at the moment was the single biggest obstacle to international competitiveness and higher growth in India,
4. Complete the process of industrial deregulation begun in July 1991,
5. Increase the efficiency of the financial sector,
6. Restructure public enterprises with a view to increasing their efficiency, and
7. Reduce dependency on NRI deposits and rely on other instruments with longer maturities and predictable servicing profiles

were largely adhered to.(11) 1991 heralded the liberalization era in India, and was aptly captured by Manmohan Singh’s Budget Speech of 1991-92 on the 24^th of July 1991, when he quoted Victor Hugo,

‘“No power on earth can stop an idea whose time has come.” I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide-awake. We shall prevail. We shall overcome.’ 

Reference(12)

Question/Point:

Yashwant Sinha: Madame Deputy Chairman, the issue which I want to raise in this House is a matter, I think, of great concern for the functioning of democracy of this country, for the functioning of the Parliament. Madame, today, the Indian Express has carried a report stating that the draft of the Eight Five Year Plan has been shared with the World Bank without this draft being shared with the Parliament of this country. The WB has now sent its comments to the Government of India on the draft Plan. From the comments, which have been received, it appears that the WB has severely criticized the draft prepared by the Planning Commission and approved by the Council of Ministers of the Cabinet. I would like to draw your attention to one portion of this report in regard to the Industrial Policy:

“…the World Bank has accused the Plan document of a continued allegiance to ‘past policy shibboleths’ by encouraging regional dispersion of industries through growth centers in backward areas and encouraging R&D for assimilation, adaption and improvement of imported technology…”

Now, the point is these are cherished goals of our economic policy….I am sure members sitting on that side will also agree that these are cherished goals, which are being described as ‘past policy shibboleths’ by the WB. Are we here in this Parliament to bear this insult from that organization? What has the Government of India come to? Have we really got into a state of the banana republic? Everyone in the world knows that this country has enough experts as far as planning is concerned. Our planning experts go abroad to advise other countries about how they should formulate their plans. This is what we are reduced to today that the WB will tell us what our policy directives should be, what our policy priorities should be? I want the government to respond here and now as to what exactly is the state of affairs in this regard? And, if it is true then I am not wincing my words. I will say this is a complete surrender of our sovereignty, of all our initiatives as an independent nation.

Why is this oversight needed? It is noticeable that questions of circumventing the Parliament, surrender of sovereignty and succumbing to extreme pressure are some of the reasons why Parliamentary Oversight becomes an imperative. Further, staying on with the specifics still, extensive research and studies conducted over the years have unearthed a democratic deficit between these financial institutions and countries engaging with those. What might sound a bit ironic is that even the WB/IMF have brought to notice that there is a lack of effective involvement of parliaments and/or formal mechanisms in such engagements, and wherever it is present is present on meager scales to be really effective. Parliamentary Oversight has the potential to become the bedrock of good governance, since there cannot conceivably be a true ownership of the terms and conditions attached to loans, policy framework makeovers, or debt/relief bailout without it.(13) So, unless the Parliament reiterates its sovereignty in dealings with these financial institutions in bringing to light their agenda, ownership rights would never trickle down to the most important pillar of democracies, the People themselves. Unless the Parliament decides that its voice should hold value and weight over the voice of a coterie(14) that in many a cases clandestinely strike a deal or co-opt one with these bodies(15), people who are represented in the highest office of a country would cease moving mainstream from the margins. Finally, by way of edging closer to a recommendation, unless the Parliament moves in to bring this oversight into effect, any talks of a mature and nurturing democracy would be largely vapid, and therefore it is with such intentions that a strikethrough of undemocratic processes, civil unrest and legacies upon legacies of economic failures can be achieved. The Parliament or generally the elected representatives need to work in close cooperation with civil society, for it is only with such cooperation, levels of awareness could be raised amongst the people who are often in the dark regarding massive implications a country can bring on them in its engagements with International financial Institutions (IFIs). Only when this aim is reached, could there be alleviation in the fragility of polity that mushrooms in the face of irreparable damage. Hence, the need for Parliamentary Oversight becomes all the more justified. In order to strengthen the Parliamentary Oversight, with the goal of providing enhanced government accountability and transparency, and as part of the governance programme, the Poverty Reduction and Economic Reform Division of the World Bank Institute has taken up the responsibility. The objective is two fold: first, the oversight activity can actually contribute to improving the quality of policies/programmes initiated by the government; second, because as the government policies are ratified by the legislative branch, such policies acquire greater legitimacy(16). Even though, the Bretton Woods Institutions are gearing for legitimizing parliamentary interference in their engagements with countries, the real break-through came when these institutions called for oversight as a plank for good governance in addition to lending credibility to the whole concept of ownership rights. In February 2005, to mark the 60^th anniversary of the coming into existence of WB/IMF, the Parliamentary Network on the World Bank (PNoWB)(17), an international NGO spearheaded participation in Poverty Reduction Strategy Papers (PRSP)(18) by explicitly calling forth development strategies in low-income countries as “country owned”. Though, the governments are empowered to lead an active participation, many a times, it is seen that parliaments are regularly by-passed during the process of making economic policy decisions, so much so that parliamentarians and going down the vertical tier, the public are not even aware of the conditions that will have massive implications on their society. Consequently, national sovereignties are undermined or simply overridden by the involvements of these mega institutions. The polity, which is already fragile, gets to face the brunt of cracks further. If this sounds like a tirade, then make no mistake that even the World Bank and the IMF have echoed it. According to Operations Evaluation Department (WB)(19),

“The Bank management’s process for presenting PRSP to the Board undermines country ownership. Stakeholders perceive this practice as “Washington signing off” on a supposedly country-owned strategy…And the involvement of parliaments has been a particularly weak aspect of the process…”

Undoubtedly, parliamentary involvement becomes a condicio sine qua non for improving public access to decision-making processes. The real break-through talked a whole back was the culmination of this mobilization into a petition for democratic oversight of IMF and World Bank Policies, urging the governments to ensure that developing countries’ parliaments have the rights and the obligations to be fully involved in developing, scrutinizing and agreeing all policies related to IMF and WB to further the cause of transparency and accountability, and eventually resulting in reforming the boards and voting shares, and having a fair and transparent process for the heads of these institutions.

The Indian Laboratory

The title of this section is dual purpose. Laboratory? The reasons should be alluded to in the next paragraph. In the words of one Bank official(20),

“India has long been the Bank’s most important client. For nearly forty years, India was the jewel in the crown of the world Bank…the reputation of the World Bank tended to be measured in terms of what it could do for India.”

The statement was made almost a couple of decades back, but in the unfolding years, the country has become the largest borrower from the WBG. Indian economy stands close to US $2 trillion making it the second largest emerging economy in the world, and if one were to go by the predictions of World Bank and IMF of late, slated to become the largest by 2017 by overtaking China.(21) The journey from the Nehruvian socialist era to liberalization and ensconced today in liberalization, India also happens to be the largest borrower from the World Bank as well as the largest multilateral development financial institution in Asia, the Asian Development Bank. The quantum of funds that these multilateral development funders pump into the country makes it not just a haven for latter’s presence in the country, but also open up vulnerabilities where such finances lead to projects and policies getting haywire in that the repercussions of these massive investments on people purported to benefit are reckless to say the least and causing gross human rights violations to say the most. With such embedded relationships Parliamentary Oversight could help arrest the onslaught of corporations(22), calling for increased transparency and accountability at all levels and scrutinizing and monitoring such engagements becoming the buzzwords/catchwords. With newer forms and mechanisms of capital in the form of Development Policy Loans, Financial Intermediaries, Public Private Partnerships becoming the keywords, monitoring the international financial institutions has become indispensable. For the full fruits of democracy to be accrued, it is additionally required that openness is practiced within the Parliament as well, in that, appointments made to these lenders are done with full knowledge of people’s representatives, laws enacted become Acts with Parliamentary approval rather than merely promulgating ordinances to expedite the growth-led development agenda by removing the red tape, the presence of which ironically comes to the rescue of the marginalized. Only when people’s representatives are held accountable and when these representatives are themselves subject of transparency and accountability of engagements within the highest decision-making office in the country, could one say to have brought about perfect Oversight. When such an Oversight is in place, it is truly a step closer to participatory form of democratic system of governance.(23)

Marching on, it is appropriate to untie the lateral or horizontal nature of compromise associated with transparency and accountability a bit more. As is relatively obvious by now that Parliament should be trusted with the role of final arbiter of assistance from these International Financial Institutions (IFIs), since it has a democratically mandated power to scrutinize, debate, question, input, approve and monitor the transactions of the Government with these institutions, the reality is far from this ideal. At present, only the Department of Economic Affairs (DEA) under the Ministry of Finance and its bureaucrats are responsible for negotiating, facilitating, and approval of these loan projects having the final authority to sign the lending documents also, completely undermining the Constitutional authority, rights and privileges of our elected legislatures. These in turn need to be involved and be made responsible for reviewing the development effectiveness, negative impacts and long term impacts on critical sectors of the loans and grants of IFIs and WB, recommend ways to the decision making process of availing loans and grants from IFIs in a more democratic, transparent and accountable, manner thereby respecting the Constitutional Duties and Responsibilities provided to our elected representatives and also examine the circumstances in which huge commitment charges are paid to IFIs for the non-utilization of funds, and recommend steps to avoid it in future.

Getting oblique, or rather vertical once again, Parliamentarians need to review the impact of World Bank loan policies on the sovereignty of the country; the extent of the World Bank’s involvement in India’s policymaking and legislations; influence of the Bank on the government; and policies pushed by the Bank which eventually disempower the poor and the marginalized and benefit only a few, especially big private corporations. The lending and non-lending products of IFIs, including the WBG (World Bank Group is the umbrella-term for all the five arms: IBRD, IDA, IFC, MIGA and ICSID) and ADB, cause irreversible damage to people, society and ecology by influencing major policy changes in favour of private capital and withdrawal and bypassing of state support from access to essential services to the poor or safeguarding of fundamental rights. While ADB and other IFIs are obligated to comply, the design and implementation are often conducted in opaque and non-inclusive processes, making public participation meaningless, risk mitigation too weak, safeguards feeble, developmental impacts unknown and money flows highly secretive.

Collating the previous two paragraphs brackets the rationale behind Parliamentary Oversight in the Indian context, or what is being called the Indian Laboratory. Put differently, the overarching working premise of this study entails furthering a dialogue, discussion and debate in India leading to informed discursive practices by bringing democratic principles to have a bearing on development. The evidence of the last six decades suggests that in the absence of this, not only does irreversible damage and destruction result, but also a country loses significant elements of its sovereignty.

Here are some of these plausible mechanisms, which are more of reinforcement tools for efficacious sustainability of economic development:

1. A participatory, country-driven and owned contribution rises up from latency channeling citizenry into framing policies and assigning perceptive cooperation and eventual legitimacy.
2. Flattening the geographic divide in line with political spread, sector-wide diversity towards a more coherent viewpoint driven by motivation to positive contribution.
3. Decisional prerogatives mapping into policies, projects, constitutional entitlements towards enacting laws.
4. Temporal perspectives in either short-term or long-term, partisan or non-partisan towards a multi-partisan inclusivity.

________________________

(1) This is attributed to Italian political scientist Roberta Maffio, who talks about instruments on oversight (more on that to follow) on a 2-dimensional basis. If legislative oversight (just a note for the time being, before an exhaustive treatment starts) is performed before the government enacts a specific policy or becomes engaged in a specific activity, then the oversight tools are “instruments of control ex ante”. Hearings in committees, hearings in the plenary session of the Parliament, along with request of documentation are all tools that can be used ex ante. Contrarily, if oversight happens after such an enactment has occurred, or such an engagement has been undertaken, the oversight tools are instruments of control ex post. Questions, interpellations, and creation of committees of inquiry are the tools that are used ex post. This is empirically visible, in the India context at least. The second dimension is the establishment of these tools either within or without the Parliament. Questions, question time, interpellations, public account committees belong to the former, whereas auditors and/or ombudsman belong to the latter. Relied largely on translation for this note, but Italian knowers can refer to Roberta Maffio, “Quis Custodiet Ispos Custodes? Il Controllo Parlamentare dell’Attivitá di Governo in Prospettiva Comparata”, Quaderni di Scienza Politica, .. pp. 333-383.

(2) It should be noted here ‘contextually’ that horizontal opacity breeds vertical opacity.

(3) Greece is the current cradle of anti-austerity. Well, that is political. In a nutshell, what is the Greece issue all about? On May 9, 2010, a joint mission of the IMF and the European Commission concluded negotiations on a loan package to be provided to the Greek Government. The amount of these loans as well as the volume of the adjustment effort that is to be delivered by Greece is staggering. In return for an (additional) 30 billion euro austerity program, Greece will receive 80 billion euros of European bilateral loans and 30 billion euros of IMF loans over the next three years. The only thing the rescue package really achieves is a major change in the ownership of debt. With Greek sovereign debt being transferred from the balance sheets of banks to the balance sheet of European governments, the real purpose of the entire operation is to save European banks by relieving them from holding debt titles upon which a potential default could be looming.

(4) Argentina transited from being a poster child of the IMF to bankruptcy. In 1999, Argentina fell into recession after its main export competitor Brazil had just devalued the real in response to the fallout of the Russian default of 1998 and the East Asian financial crisis of 1997. In late 2000, as it became clear that Argentina might go down the same road, the IMF disbursed its first bailout funds to the government of the new President, Fernando De la Rúa, so it could keep repaying its outstanding obligations to foreign creditors – mostly US-based institutional investors like mutual funds and large pension funds. The initial $14 billion lifeline evaporated in a matter of weeks as investors panicked and Argentina’s borrowing costs shot up.

(5) Note here the resemblance to vertical and horizontal.

(6) Special Drawing Rights (SDR) are supplementary foreign exchange reserves maintained by the IMF, and is based on a basket of key current international currencies viz. US $, UK £, Euro €, Japanese ¥, and Chinese Yuan. SDR is not a currency per se, but a representation of a claim to currency held by the IMF member countries for which they may be exchanged.

(7) N. Ram. “Secret India-IMF discussions over months”. From Washington. 15 October 1981. The Hindu edition: 16 October 1981.

(8) N. Ram. “World’s most powerful supranational Govt.” The Hindu 20 October 1981.

(9) William Dale. Deputy Managing Director, IMF. “Statement at EBM/81/133”. 21 October 1981. p. 3.

(10) The Public Disclosure Authorized Report of the World Bank could be read at http://goo.gl/s5do0C

(11) To take stock of numbers here: IMF approved credits of SDR $1366.08 million, of which $720.08 million were received by the Government of India after terms and conditions were negotiated and ensured. World Bank gave US $1404 million towards restoration of international confidence of NRIs and augmenting capital flows to maintain Balance of Payments. Project-tied loans worth US $417 million were released by the Asian Development Bank (ADB). Strikethrough numbers, and International Finance Corporation (IFC) began negotiations and discussions with the private companies regarding raising funds from the international capital market. IFC, always looking for opportunities to make equity investments was exploring the possibilities of encouraging FDI through these discussions.

(12) Not really questions, but nevertheless instrumental in instigating a healthy discussion with several MPs drawn into it. This occurred on 16 July 1992 in Rajya Sabha, under the title “Alleged Leakage of Draft Eight Five Year Plan Document to World Bank and IMF Officials”. 22 MPs participated in this debate, including the Deputy Chairman of the House. This won’t be reproduced in entirety, but an attempt to draw the gist of the discussion will not be compromised. The questions entered were in English and Hindi.

(13) This might sound a bit quixotic, but it really isn’t.

(14) This word ‘coterie’ might sound a bit harsh in this context, but is nevertheless painting the essence. For instance, appointments to these Multilateral Development Banks or even the World Trade Organization for that matter, are done by Appointments Committee of the Cabinet, which is generally composed of the Prime Minister (Chairperson), Minister of Home Affairs and Minister-in-charge of the concerned ministry. This Committee decides all higher-level appointments in the Cabinet Secretariat, Public enterprises, Banks and Financial Institutions. Clearly, the composition is indicative of the fact that Parliament is by-passed here in decision-making and any engagement with the Committee would occur only ex post. This has been a contentious issue in its own right, as it is always facing up to allegations of nepotism. This also incidentally happens to be one of the parameters of the present study undertaken.

(15) Recollecting the 1981 Indian case as mentioned, a brief rejoinder: The Letter of Intent (28 September 1981) from the Finance Minister, R. Venkataraman to the IMF’s Managing Director J De Larosiere, the attached 15-page memorandum titled “statement of economic policies”; the year-by-year progression of the three-year arrangement; the data provided to the Fund, a significant portion of which has been withheld from publication in India…(Point driven).

(16) West & eCooper. “Legislative Influence v. Presidential Dominance: Competing Models of bureaucratic Control.” Political Science Quarterly. 1989 Vol 104, pp 581-606.

(17) Founded in 2000, the Parliamentary Network is an independent, non-governmental organization that provides a platform for Parliamentarians from over 140 countries to advocate for increased accountability and transparency in development cooperation. Alain Destexhe is the current Chair of the Parliamentary Network. It provides a platform for MPs and civil society to hold to account their own governments, as well as International Financial Institutions (IFIs), for development outcomes. For more, visit http://www.parlnet.org

(18) The WB/IMF require countries to produce a Poverty Reduction Strategy Paper as a condition for debt relief through the Heavily Indebted Poor Countries initiative and other monetary aid. PRSPs are intended to help aid recipient countries meet the Millennium Development Goals (MDGs). They detail a country’s plan to promote growth and reduce poverty through implementation of specific economic, social and structural policies over a period of three years or longer. PRSPs give an assurance that aid-receiving countries will utilize aid to pursue development outcomes that have been elaborated in the PRSPs and approved by lenders.

(19) For a detailed read, visit Parliament and Poverty Reduction Strategies – PRS http://goo.gl/YhdWgE

(20) The Holiest River http://goo.gl/50KWQQ

(21) Though the formula for such a calculation depends on Purchasing Power Parity (PPP), this does not bestow absolute economic prowess.

(22) It very well could be even the non-corporate entities, and they are present there invariably, but the use of corporations is the signal the new mechanisms of financing, like the Private-Public Partnerships (not to be confused with Purchasing Power Parity, the other PPP), for instance.

(23) All of this might sound a bit repetitive, as well as jumping the gun, but be apprised that in research, methodologically, this process is called “Basin of Attraction”, where the agenda is quite apparently redundantly getting stamped on the run. Though, methodology would be discussed separately, it nonetheless is already making its mark felt, as a careful reading would make highly certain. The analogy is of course taken from ‘Wash Basin’, where the trickle or flow is most certainly towards the sink.

Could Complexity Rehabilitate Mo/PoMo Ethics?

A well known passage from Marie Fleming could be invoked here to acquit complexity from the charges and accusation pertaining to relativism. He says,

Anyone who argues against reason is necessarily caught up in a contradiction: she asserts at the locutionary level that reason does not exist, while demonstrating by way of her performance in argumentative processes that such reason does in fact exist.

Such an absolute statement about complexity would similarly be eaten along its way.

Taking the locutionary from the above quote, it could be used to adequately distinguish from performative, or logic versus rhetoric. Such a distinction gains credibility, if one is able to locate an Archimedean point to share discourse/s, which, from the point of view of complexity theory would be a space outside the autopoietic system, or, in other words, would be a meta-theoretical framework. Such a framework is skeptically looked upon/at by complexity, which has no qualms in exhibiting an acknowledgement towards performative tensions at work. Such tensions are generative of ethical choices and consequences, since any accessibility to the finality of knowledge is built upon the denial of critical perspective/s, thus shrouding the entire exercise in either a veil of ignorance, or a hubristic pride, or illusory at best.

Morality gains significance, since its formulations is often ruptured for want of secure, and certain knowledge, and both of which are not provided for by complexity theory and French theory, according to the accusations labeled against them. Even if, in making choices that are normative in nature, a clear formulation of the ethical is obligated. Lyotard’s underlining conditions of knowledge is often considered unethical, as he admits to the desire for justice to be shrouded in an unknown intellectual territory. Lyotard has Habermas in mind in dealing with this, since for the latter’s communication therapy, what is mandated is clearly consensual agreement on the part of the public to seek out these metaprescriptions as universally valid and as spanning all language games. Habermas is targeted here for deliberately ignoring the diversity inherent in the post-modern society. For Lyotard,

It is the monster formed by the interweaving of various networks of heteromorphous classes of utterances (denotative, prescriptive, performative, technical, evaluative, etc.). there is no reason to think that it could be possible to determine metaprescriptive common to all of these language games or like the revisable consensus like the one in force at a given moment in the scientific community could embrace the totality of metaprescriptions regulating the totality of statements circulating in the social collectivity. As a matter of fact, the contemporary decline of narratives of legitimization – be they traditional or ‘modern’ (the emancipation of humanity, the realization of the idea) – is tied to the abandonment of this belief.

The fight over consensus, if it could be achieved at all, is contentious between Lyotard and Habermas. Obviously, it could be attained, but only locally and should not even vie for universal validity. Lyotard scores a point over Habermas here, because of his emphasis on the permeability of discursive practices dressed with paralogy. Justice, as a subset of ethics in the post-modern society, in order to overcome its status as a problematic, must recognize the heteromorphous nature of language games or phase regimens on the one hand, and consensus as reached must have a local space-time valuation contingently subject to refutation or nullification on the other. Such a diagnosis goes against the crux of modernism’s idea of ethics as founded upon foundational and universal set of rules, and maybe imperatives. Modernism’s idea of ethics is no different, at least in the formative structure from the rule-based analysis, since both demand a strict adherence to the dictates of rules and guidelines. A liberation comes in the form of post-modernism. Bauman sees the post-modern society as not only setting us free, but also pushing us towards a paradoxical situation, where agents have the fullness of moral choice and responsibility, while simultaneously depriving them of the comfort of the universal guidance as promised by modernism. Moral responsibility comes with the loneliness of moral choice. Such paradoxical events or situations facing man in the post-modern society only reinvests faith in agonistics of the network. At the same time, such an aporetic position is too paradoxical to satisfy many. Taking cues from the field of jurisprudence, the works of Druscilla Cornell could help clear the muddy waters here to an extent of a satisfactory resolution. Cornell aims to establish the relationship of the philosophy of the limit, or what she calls the post-structural theory of Derrida in principle, to questions of ethics, law and justice. Cornell shows no inhibitions towards accepting the complexity of relationships governing humans, and in the process accepts Hegel as the vantage point. Hegel criticizes Kant for his abstract idealism, and admits to our constitution within a social structure, which is teleologically headed for perfection. In short, the dialectical process is convergent for Hegel, since it is operative within a social/historical system aiming towards organization. Adorno differs here, since, for him dialectics is always divergent, with stress laid upon differences that characterize between humans as always irreducible to a totalizing organized system. This position of Adorno with its sympathy for difference is much closer to complexity, that at first would seem. Cornell carries further on from there and introduces the work of Luhmann, who is a towering figure in sociology, when it comes to bringing in autopoiesis within the fold. Humans are never allowed to stand outside the system that Luhmann thinks is not only complex, but autopoietic as well. Therefore, on an individual level, the choice element has no role to play, except, accepting the system that would undergo an organization to best suit its survival through a process of evolution, and not transformation. Luhmann’s understanding still prioritizes the present, and has no place for the past or the uncertain future. Cornell considers this a drawback, and makes past as an ingredient in understanding the meaning of an event, on the one hand, and following Derrida, wants to take up responsibility for the future, even if it is unknown. With a structure like this in place, it is possible to evade the rigidity of modernist claims on ethics on the one hand, and fluidity of evasive tendencies towards responsibility on the other. Instead, what Cornell calls for is an acceptance of the present ethical principles in all seriousness. That is to be resistant to change, and awareness of applications of the principles is what is called for. Ethics involves calculation in a responsible manner. In a similar vein, complexity entails irreducibility to calculation, in the sense of coming out with novelistic tendencies involving creativity that is not simply a flight of fancy, but an imagination laden with responsibility. Only, in this regard, could ethics mean not subjecting to any normativity. And, one of the ways to achieve this to obviously shy away from intellectual arrogance.

What’s an Asset Reconstruction Company, and why does it even matter to NPAs?

As is suggestive of the name, ARCs are required to repackage assets to make them more saleable. But, in the context of bad loans, or non-performing assets, such companies often falter to garner enough firepower to root out the surging menace of NPAs. The Indian context is caused primarily by a systemic rot involving faulty practices of project finance and subsequent difficulties in recoveries on loans. ARCs are constituted to precisely address such hurdles. With their status as centralised agencies, these are programmed to buy up stressed/distressed and non-performing assets and repackage them to sell them to prospective promoters/buyers. ARCs are programmed to buy NPAs at a discounted price, which in turn help the banks and lenders to clean up their sticky balance sheets. ARCs can either be public, private or jointly owned, and are also armed to float bonds to recover dues from borrowers. Even if on paper the concept of an ARC looks robust with scalability to concoct a bad asset with a performing one in order to increase its saleability, in reality, ARCs are prone to failures for lack of buyers for their packages and limited by capital concerns. But, there are challenges galore for ARCs viz. debt aggregation is a far cry, and unless this is done, resolution will always be expeditious; hunt for fresh financial support; and discrepancy between banks and ARCs in pricing of assets, unless reached a commonality would continue to remain a contentious issue.

The whole concept of Asset Reconstruction Companies (ARCs) is closely modelled on the US model of Asset Management Companies (AMCs), and is thus a large industry in itself as far as buying and selling off of debts are concerned. It resembles a time to strike as the ducks are now lined, and the opportunities galore in private equities as ARCs get a chance to own the entire capital structure and reinstall management echelons, all thanks to Budgetary recommendations with a 100% FDI welcomed. But, it still is going a bit too far, and hence let us examine the evolution first.

The real trigger for ARCs to flourish came with Raghuram Rajan’s exhortation to banks to clean up its mess. A switch of trajectory happened sometime in 2013, when ever greening bad loans was put on to back burner and let ARCs face up. This is where banks were obligated to turnaround loans until then considered unredeemable. Adding to that trigger point is another one banking on Bankruptcy Code, which promises discount to buying off bad debts or distressed assets at a discount pitting them more profitable a venture compared with greenfield projects of similar magnitude.

ARCs are born out of SARFAESI Act, 2002, (The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) and enable the banks to acquire the securities which had been pledged. all of this was achievable without any interference from the jurisdiction of the civil courts thus lending authoritarian power to banks to cope up with NPAs. But regulatory directives prevented the smooth functioning of transactions involving bad debts, thanks to the decrepit system for enforcing securities. Sale of loans to ARCs is however the last resort banks undertake as statutory hurdles and deposed promoters speed break.

Basically, road to recovery is a step by step process involving, Bank selling a bad loan to ARC; ARCs paying 15% upfront, and issuing the remaining 85% as securities in the form of Security Receipts (SRs), which primarily deals with 5% upfront payment as was the case a year back; ARCs initiating the turnaround and in the process earning 1.5% management fee; recovery proceeds thus accrued get shared by the banks and the ARCs; and if the ARCs fail to recover the bad loans for eight years, the investments get written-off. Now, this can be seen as a clear shift from ever greening, or even liberal funding by the government year-on-year, and aptly reminds internal recapitalization as indispensable. Budgetary infusion or capital infusion or recapitalisation is putting capital for the purpose of helping the ailing public sector banks. The very understanding of PSBs would imply such an infusion required from time to time, but the problem lies in its ritualistic nature. On the contrary, if banks were to internally raise funds for recapitalisation, it would indicate a healthy practice. One reason the government does infusion is to meet Basel III norms, as reliance upon internal fund recapitalisation would not let that be accomplished. But, there is a caveat here to be always kept in mind. Written-off doesn’t necessarily mean that defaults and defaulters are not chased. They are undoubtedly sought after, with the only difference being the clean-up of balance sheets for the year such defaults happen for the banks. And, if they don’t write-offs, or alternatively called charge-offs effectuate helping banks not only erase the mess off their balance sheet, but saving them enormous tax liabilities. The real tussle is between charging-off loans and becoming industrious in selling them off. The winner takes it all, which in this case is hedging equivalent to selling off bad debts, and which is promulgated by the RBI and the government in jettisoning this messy baggage.

Arsenic-Tolerant GFAJ-1

The bacterium — strain GFAJ-1 of the Halomonadaceae family of Gammaproteobacteria, not only grows but also incorporates arsenic molecules into its DNA, in place of phosphorus. NASA has aliens…

What about arsenic, in the form of the arsenate ion, subbing for phosphate ions inside the cell? After all, arsenic is the downstairs neighbor to phosphorus on the periodic table of the elements, and phosphate and arsenate are chemical cousins. That similarity contributes to arsenic’s toxicity, arsenate masquerades as the nutrient phosphate and thus gains access to the body’s metabolic system. Just why the bacterium has a penchant for arsenic is not yet clear. Perhaps some life-forms evolved in an arsenic-rich environment and later migrated to a more typical region of Earth, where phosphorus is far more abundant.

Hyman Minsky, Karl Polanyi, Deleterious Markets and if there is any Alt-Right to them? Apparently No.

Karl Polanyi has often highlighted on the insight about the predicaments of the market. these perils realize that when the markets are left to their own devices, they are enough o cause attrition to the social relations and fabric. However, the social consequences of financial instability can be understood only by employing a Polanyian perspective on how processes of commodification and market expansion jeopardize social institutions. For someone like Hyman Minsky, equilibrium and stability are elusive conditions in markets with debt contracts. His financial instability hypothesis suggests that capitalist economies lead, through their own dynamics, to “the development over historical time of liability structures that cannot be validated by market-determined cash flows or asset values”. According to Minsky, a stable period generates optimistic expectations. Increased confidence and positive expectations of future income streams cause economic actors to decrease margins of safety in their investment decisions. This feeds a surge in economic activity and profits, which turns into a boom as investments are financed by higher degrees of indebtedness. As the economic boom matures, an increasing number of financial intermediaries and firms switch from hedge finance to speculative and Ponzi finance. Minsky argued that economists, misreading Keynes, downplay the role of financial institutions. In particular, he argued that financial innovation can create economic euphoria for a while before destabilizing the economy and hurling it into crises rivaling the Great Depression. Minsky’s insights are evident in the effects of innovations in mortgages and mortgage securities. Actors using speculative and Ponzi finance are vulnerable to macroeconomic volatility and interest rate fluctuations. A boom ends when movements in short-term and long-term interest rates render the liability structures of speculative and Ponzi finance unsustainable. The likelihood of a financial crisis (as opposed to a business cycle) depends on the preponderance of speculative and Ponzi finance in the economy under question.

Minsky regularly criticized economists for failing to grasp Keynes’s ideas. In his book Stabilizing an Unstable Economy Minsky argued that while economists assimilated some of Keynes’s insights into standard economic theory, they failed to grasp the connection between the financial and real sectors. Specifically, he argued that finance is missing from macroeconomic theory, with its focus on capital structure, asset-liability management, agency theory, and contracts. He wrote:

Keynes’s theory revolves around bankers and businessmen making deals on Wall Street … One of the peculiarities of the neoclassical theory that preceded Keynes and the neoclassical synthesis that now predominates economic theory is that neither allows the activities that take place on Wall Street to have any significant impact upon the coordination or lack of coordination of the economy…

Minsky’s work on financial crises builds on Keynes’s insights, using terms such as “euphoric economy”, and “unrealistic euphoric expectations with respect to costs, markets, and their development over time”. Yet Minsky considered the issues of rational prices and market efficiency as only the tip of an iceberg. His broad framework addresses issues related to the lending practices by financial institutions, central bank policy, fiscal policy, the efficacy of financial market regulation, employment policy, and income distribution. Financial institutions, such as banks, become increasingly innovative in their use of financial products when the business cycle expands, boosting their leverage and funding projects with ever increasing risk. Minsky’s words on financial innovation are striking, as if foretelling the recent crisis.

Over an expansion, new financial instruments and new ways of financing activity develop. Typically, defects of the new ways and the new institutions are revealed when the crunch comes.

Commercial banks sponsored conduits to finance long-term assets through special purpose entities such as structured investment vehicles (SIVs), something similar to the Indian version of Special Purpose Vehicles (SPVs). These were off balance sheet entities, subjecting them to lower regulatory capital requirements. Special purpose entities used commercial paper to raise funds they then used to buy mortgages and mortgage securities. In effect, banks relied on Minsky-type speculative and Ponzi financing, borrowing short-term and using these borrowed funds to buy long-term assets. Wrote Minsky,

The standard analysis of banking has led to a game that is played by central banks, henceforth to be called the authorities, and profit-seeking banks. In this game, the authorities impose interest rates and reserve regulations and operate in money markets to get what they consider to be the right amount of money, and the banks invent and innovate in order to circumvent the authorities. The authorities may constrain the rate of growth of the reserve base, but the banking and financial structure determines the efficacy of reserves…This is an unfair game. The entrepreneurs of the banking community have much more at stake than the bureaucrats of the central banks. In the postwar period, the initiative has been with the banking community, and the authorities have been “surprised” by changes in the way financial markets operate. The profit-seeking bankers almost always win their game with the authorities, but, in winning, the banking community destabilizes the economy; the true losers are those who are hurt by unemployment and inflation.

Combining Hyman Minsky’s insights on financial fragility with a Polanyian focus on commodification offers a distinct perspective on the causes and consequences of the foreclosure crisis. First, following Polanyi, we should expect to find commodity fiction applied to arenas of social life previously isolated from markets to be at the heart of the recent financial crisis. Second, following Minsky, the transformations caused by novel uses of commodity fiction should be among the primary causes of financial fragility. Finally, in line with a Polanyian focus on the effects of supply-demand-price mechanism, the price fluctuations caused by financial fragility should disrupt existing social relations and institutions in a significant manner. So, how does this all peter down to alt-right? Right-wing libertarianism is basically impossible. The “free” market as we know it today needs the state to be implemented – without reading Polanyi, you just know for example that without the force of the state, you just can’t have private property or all the legal arrangements that underpin property, labour and money. So it wouldn’t work anyway. Polanyi’s point is that if we want democracy to survive, we need to beware of financial overlords and their ideological allies peddling free-market utopias. And if democracy even stinks of stability, then stability is destabilizing as Minsky would have had it, thus corroborating the cross-purposes between the two thinkers in question, at least to the point of a beginning.

Drake Equation and Astrobiology

The Drake equation is one of those rare mathematical beasts that has leaked into the public consciousness. It estimates the number of extraterrestrial civilisations that we might be able to detect today or in the near future. Frank Drake attempted to quantify the number by asking what fraction of stars have planets, what fraction of these might be habitable, then the fraction of these on which life actually evolves and the fraction of these on which life becomes intelligent and so on. Many of these numbers are little more than wild guesses. For example, the number of ET civilisations we can detect now is hugely sensitive to the fraction that destroy themselves with their own technology, through nuclear war for example. Obviously we have no way of knowing this figure. Of the many uncertainties in the Drake equation, one term is traditionally thought of as relatively reliable. That is the probability of life emerging on a planet in a habitable zone. On Earth, life arose about 3.8 billion years ago, just a few million years after the planet had cooled sufficiently to allow it. Astrobiologists naturally argue that because life arose so quickly here, it must be pretty likely to emerge in other places where conditions allow.

Labour and Delhi-Mumbai Industrial Corridor. Queries.

Stepping out briefly of nomenclature excesses that the DMIC funding mechanisms deliberated upon, I briefly bring to attention the labour issues that deserve a discussion, albeit in much lower profile. Considering the gigantic proportions of the project and similar corridors on their way, the very definition, constitution and framework of labour is challenging, be it under the rubric of organized, unorganized, skilled, unskilled, semi-skilled, migrant and/or contractual and within manufacturing, service or knowledge economy. Laws and Acts are applicable to labour more due to a lack of this particular enframing of labour, since the former are twisted to be more accommodating for the law-makers and law-interpreters. So the preliminary question is, where to fit in multifarious conceptions of labour in equally multifarious lines of projects? How to envisage Laws and Acts in existence with the ones-to-come?

On a more downside and at first seemingly unrelated note, assuming (and I mean assuming) that such corridors (I prefer calling them verandahs, since it could help me to jump off the corridor!!!) become the engines of growth, where the labour somehow transforms from brute labour into consumers themselves, transforming the economy from investment/manufacturing-led to services/knowldege-led, from export orientation to import consumer-based orientation, then what can rule out the point of labour scarcity getting realized. I see three consequences of such a transformation:

1) Attaining a “Lewis Turning Point”, an inevitable developmental phase when wages surge sharply, squeezing industrial profits along the way and consequently resulting in a dip of investment.

2) A workerist struggle demands higher wages and broader social reforms implying a further shortage of labour output with a correspondingly higher cost of maintaining labour in production and meeting its social costs leading to further shrinking of profits.

3) Capital innovates and reterritorializes itself for a better profitable ground, thus deepening the crisis of accumulation in the real economy.

Such a position is serious because bringing in foreign technology and (cheap labour + capital) eventually risks running short on cheap labour, and the focus shifts to adding more capital without paying any heed to simultaneous diminishing returns. Growth engine starts losing its steam. The reason for this part of the post is to locate the importance of labour (cheap labour is a very derogatorily used here and apologies for the same. But, unless used this way, gravity would refuse to sink in) in forcing capital to take flight on the one hand, and become more socially-democratically aware on the other.

Bataille and Solar Anus Economy/Capitalism: Note Quote

Focusing on Bataille as a pivotal point, his take on Solar Economy is a bit weird to begin with, but, then I do see its relevance to accelerationism. The take on political economy is driven by excess, rather than scarcity, a plethora of energy (like that from the sun) that would not just facilitate growth, but would be vulnerable to expenditure in a purely apathetic manner as well. That is how he differentiates the general from the restricted economy. I am keen to note how accelerationism, if guarded by the normative (I understand the term to carry a baggage of strictures) dromos (dromocracy), would shift the balance of the economic towards the general rather than the restricted. I think, if capitalism gets overridden by the belief in this economic, a probable fracture within it could be affected. Bataille, then would make his presence felt even more crucially for the ultimate eschatology of capitalism.

Bataille provides a premonitory text relating the energy of the sun, the sexual movements and excitements of the cosmos and of terrestrial life, and the anus of an eighteen-year-old girl. Operating at the intersection between his sexually explicit literary works – think here especially of Madame Edwarda, whose eponymous hero demonstrates that her labia are the copula of God: “Madame Edwarda’s old rag and ruin leered at me, hairy and pink, just as full of life as some loathsome squid. […] “You can see for yourself,” she said, “I am GOD.” – and his later development of a theory of a general economy of expenditure in La part maudite, “The Solar Anus” provides a rich but conceptually underdeveloped reading of the cosmic and terrestrial with regard to their potency, fertility, and fundamental antagonism.  Bataille writes,

Disasters, revolutions, and volcanoes do not make love with the stars. The erotic revolutionary and volcanic deflagrations antagonize the heavens. As in the case of violent love, they take place beyond fecundity. In opposition to celestial fertility there are terrestrial disasters, the image of terrestrial love without condition, erection without escape and without rule, scandal, and terror. […] The Sun exclusively loves the Night and directs its luminous violence, its ignoble shaft, toward the earth, but it finds itself incapable of reaching the gaze or the night, even though the nocturnal terrestrial expanses head continuously toward the indecency of the solar ray.

In La part maudite, Bataille goes on to develop his argument against scarcity, which contends that, from the point of view of a general economy, the key problem on the tellurian surface is not the conservation of energy, but its expenditure [depenser].  Bataille offers the following reversal of the political economy of scarcity:

I will begin with a basic fact: The living organism, in a situation determined by the play of energy on the surface of the globe, ordinarily receives more energy than is necessary for maintaining life; the excess energy (wealth) can be used for the growth of a system (e.g., an organism); if the system can no longer grow, or if the excess cannot be lost without profit; it must be spent, willingly or not, gloriously or catastrophically. (The Accursed Share)

The “curse” of the accursed share is disturbingly simple: the earth is bombarded with so much energy from the sun that it simply cannot spend it all without disaster. Over the course of millions of years of solar bombardment, the creatures enslaved to this “celestial fertility” by way of photosynthetic-reliant metabolic systems are forced to become increasingly burdensome forms of life. By the end of the Ediacaran period, we find the emergence of animals with bones, teeth, and claws, and eventually even more flamboyant expenditures like tigers and peacocks, and later still, tall buildings. Or, as Bataille suggests in his short text “Architecture,” for the surrealist Critical Dictionary: “Man would seem to represent merely an intermediate stage within the morphological development between monkey and building.” With this morphology of expenditure in mind, let us now return to the anal image of thought.

What the theory of expenditure calls into question in its most precise philosophical reading is the division between useful and wasteful (flamboyant) practices; this is because in order for any theory of use value to be coherent, it must first restrict the economy, or field of operations, within which it is operating. The restriction of this field of energy exchange is a moral action inasmuch as it sets up the conditions for any action in the field to be read as either productive or wasteful. For Bataille, the general economy permits us to evaluate the terms of restriction as a means to call into question the cultural values and forms of social organization they engender. Because of this, the “anus of her body at eighteen years old” must be intact: as a potential for pure loss, pure expenditure of energy without reserve and without reproduction, Bataille is transfixed by the analogy of glorious or catastrophic expenditure in relation to the energy of the sun and the potential for escaping this curse as much as the curse of the intact anus.

 

Simulations of Representations: Rational Calculus versus Empirical Weights

While modeling a complex system, it should never be taken for granted that these models somehow simplify the systems, for that would only strip the models of the capability to account for encoding, decoding, and retaining information that are sine qua non for the environment they plan to model, and the environment that these models find themselves embedded in. Now, that the traditional problems of representation are fraught with loopholes, there needs to be a way to jump out of this quandary, if modeling complex systems are not to be impacted by the traces of these very traditional notions of representation. The employment of post-structuralist theories are sure indicative of getting rid of the symptoms, since they score over the analytical tradition, where, representation is only an analogue of the thing represented, whereas, simulation with its affinity to French theory is conducive to a distributed and a holistic analogy. Any argument against representation is not to be taken as meaning anti-scientific, since it is merely an argument against a particular scientific methodology and/or strategy that assumes complexity to be reducible, and therefore implementable or representable in a machine. The argument takes force only as an appreciation for the nature of complexity, something that could perhaps be repeated in a machine, should the machine itself be complex enough to cope with the distributed character of complexity. Representation is a state that stands-in for some other state, and hence is nothing short of “essentially” about meaning. The language, thought that is incorporated in understanding the world we are embedded in is efficacious only if representation relates to the world, and therefore “relationship” is another pillar of representation. Unless a relationship relates the two, one gets only an abstracted version of the so-called identities in themselves with no explanatory discourse. In the world of complexity, such identity based abstractions lose their essence, for modeling takes over the onus of explanations, and therefore, it is without doubt, the establishment of these relations that bring together states of representations as taking high priority. Representation holds a central value in both formal systems and in neural networks or connectionism, where the former is characterized by a rational calculus, and the latter by patterns that operate over the network lending it a more empirical weight.

Let logic programming be the starting point for deliberations here. The idea behind this is using mathematical logic to successfully apply to computer programming. When logic is used as such, it is used as a declarative representational language; declarative because, logic of computation is expressed without accounting for the flow of control. In other words, within this language, the question is centered around what-ness, rather than how-ness. Declarative representation has a counterpart in procedural representation, where the onus is on procedures, functions, routines and methods. Procedural representation is more algorithmic in nature, as it depends upon following steps to carry out computation. In other words, the question is centered around how-ness. But logic programming as it is commonly understood cannot do without both of them becoming a part of programming language at the same time. Since both of them are required, propositional logic that deals primarily with declarative representational languages would not suffice all alone, and hence, what is required is a logic that would touch upon predicates as well. This is made possible by first-order predicate logic that distinguishes itself from propositional logic by its use of quantifiers(1). The predicate logic thus finds its applications suited for deductive apparatus of formal systems, where axioms and rules of inferences are instrumental in deriving theorems that guide these systems. This setup is too formal in character and thus calls for a connectionist approach, since the latter is simply not keen to have predicate logic operate over deductive apparatus of a formal system at its party.

If brain and language (natural language and not computer languages, which are more rule-based and hence strict) as complex systems could be shown to have circumvented representationism via modeling techniques, the classical issues inherent in representation would be gotten rid of in the sense of a problematic. Functionalism as the prevalent theory in philosophy of mind that parallels computational model is the target here. In the words of Putnam,

I may have been the first philosopher to advance the thesis that the computer is the right model for mind. I gave my form of this doctrine the name ‘functionalism’, and under this name, it has become the dominant view – some say the orthodoxy – in contemporary philosophy of mind.

The computer metaphor with mind is clearly visible here, with the former having an hardware apparatus that is operated upon by the software programs, while the latter shares the same relation with brain (hardware) and mind (software). So far, so good, but there is a hitch. Like the computer side of metaphor, which can have a software loaded on to different hardwares, provided there is enough computational capability possessed by the hardware, the mind-brain relationship should meet the same criteria as well. If one goes by what Sterelny has hinted for functionalism as a certain physical state of the machine realizing a certain functional state, then a couple of descriptions, mutually exclusive of one another result, viz, a description on the physical level, and a description on the mental level. The consequences of such descriptions are bizarre to the extent that mind as a software can also find its implementation on any other hardware, provided the conditions for hardware’s capability to run the software are met successfully. One could hardly argue against these consequences that follow logically enough from the premisses, but a couple of blocks are not to be ignored at the same time, viz, the adequacy of the physical systems to implement the functional states, and what defines the relationships between these two mutually exclusive descriptions under the context of the same physical system. Sterelny comes up with a couple of criteria for adequate physical systems, designed, and teleological. Rather than provide any support for what he means by the systems as designed, he comes up with evolutionary tendencies, thus vouching for an external designer. The second one gets disturbing, if there is no description made, and this is precisely what Sterelny never offers. His citation of a bucket of water not having a telos in the sense of brain having one, only makes matters slide into metaphysics. Even otherwise, functionalism as a nature of mental states is metaphysical and ontological in import. This claim gets all the more highlighted, if one believes following Brentano that intentionality is the mark of the mental, then any theory of intentionality can be converted into a theory of of the ontological nature of psychological states. Getting back to the second description of Sterelny, functional states attain meaning, if they stand for something else, hence functionalism gets representational. And as Paul Cilliers says it cogently, grammatical structure of the language represents semantical content, and the neurological states of the brain represent certain mental states, thus proving without doubt, the responsibility on representation on establishing a link between the states of the system and conceptual meaning. This is again echoed in Sterelny,

There can be no informational sensitivity without representation. There can be no flexible and adaptive response to the world without representation. To learn about the world, and to use what we learn to act in new ways, we must be able to represent the world, our goals and options. Furthermore we must make appropriate inferences from these representations.

As representation is essentially about meaning, two levels are to be related with one another for any meaning to be possible. In the formal systems, or the rule-based approach, these relations are provided by creating a nexus between “symbol” and what it “symbolizes”. This fundamental linkage is offered by Fodor in his 1975 book, The Language of Thought. The main thesis of the book is about cognition and cognitive processes as remotely plausible, when computationally expressed in terms of representational systems. The language in possession of its own syntactic and semantic structures, and also independent of any medium, exhibits a causal effect on mental representations. Such a language is termed by him “mentalese”, which is implemented in the neural structure (a case in point for internal representation(2)), and following permutations allows for complex thoughts getting built up through simpler versions. The underlying hypothesis states that such a language applies to thoughts having propositional content, implying thoughts as having syntaxes. In order for complex thoughts to be generated, simple concepts are attached with the most basic linguistic token that combine following rules of logic (combinatorial rules). The language thus enriched is not only productive, with regard to length of the sentence getting longer (potentially so) without altering the meaning (concatenation), but also structured, in that rules of grammar that allow us to make inferences about linguistic elements previously unrelated. Once this task is accomplished, the representational theory of thought steps in to explicate on the essence of tokens and how they behave and relate. The representational theory of thought validates mental representations, that stand in uniquely for a subject of representation having a specific content to itself, to allow for causally generated complex thought. Sterelny echoes this when he says,

Internal representation helps us visualize our movements in the world and our embeddedness in the world. Internal representation takes it for granted that organisms inherently have such an attribute to have any cognition whatsoever. The plus point as in the work of Fodor is the absence of any other theory that successfully negotiates or challenges the very inherent-ness of internal representation.

For this model, and based on it, require an agent to represent the world as it is and as it might be, and to draw appropriate inferences from that representation. Fodor argues that the agent must have a language-like symbol system, for she can represent indefinitely many and indefinitely complex actual and possible states of her environment. She could not have this capacity without an appropriate means of representation, a language of thought. Mentalese thus is too rationalist in its approach, and hence in opposition to neural networks or connectionism. As there can be no possible cognitive processes without mental representations, the theory has many takers(3). One line of thought that supports this approach is the plausibility of psychological models that represent cognitive processes as representational thereby inviting computational thought to compute.

(1) Quantifier is an operator that binds a variable over a domain of discourse. The domain of discourse in turn specifies the range of these relevant variables.

(2) Internal representation helps us visualize our movements in the world and our embeddedness in the world. Internal representation takes it for granted that organisms inherently have such an attribute to have any cognition whatsoever. The plus point as in the work of Fodor is the absence of any other theory that successfully negotiates or challenges the very inherent-ness of internal representation.

(3) Tim Crane is a notable figure here. Crane explains Fodor’s Mentalese Hypothesis as desiring one thing and something else. Crane returns to the question of why we should believe the vehicle of mental representation is a language. Crane states that while he agrees with Fodor, his method of reaching it is very different. Crane goes on to say that reason: our ability as humans to decide a rational decision from the information giving is his argument for this question. Association of ideas lead to other ideas which only have a connection for the thinker. Fodor agrees that free association goes on but he says that is in a systemic, rational way that can be shown to work with the Language of Thought theory. Fodor states you must look at in a computational manner and that this allows it to be seen in a different light than normally and that free association follows a certain manner that can be broken down and explained with Language of Thought. Language of Thought.