EU – India FTA and Financial Liberalization

Even though India and the European Union (EU) are celebrating 60 years of bilateralism, it was only in 2007 during Prime Minister Manmohan Singh’s first tenure that a Strategic Partnership between the two parties was signed, which after six years of engagements broke down due to unresolved issues. This hiatus was finally broken in May 2021, when India and the EU decided to resume from where they had left off towards an ambitious, comprehensive and a win-win trade deal for both. They also reached an understanding to pursue market access issues, implement globalization and protect investments. The talks were formally resumed in June 2022 with the first round held in Delhi, the second round held in September 2022 in Brussels, and are to be followed by the third round in Delhi in November 2022. European Union as a region is India’s third largest trade partner after the US and China with trade volumes evaluating at $116.36 billion in 20210-22. In addition to protecting investments, both parties are keen to make a headway in accessibility in regards to digital commerce, agricultural products and geographical indicators (GI)(1). If the EU gets access to the vast and untapped Indian market, India in turn is hoping to enter a level-playing field on an equal footing with countries like Bangladesh and Vietnam that have received privileged status in the EU market.(2) The First Round covered 18 policy areas of FTA in addition to 7 sessions on investment protection and GIs. The Second Round focused on Indian responses to the EU’s proposals and India’s textual counterproposals.(3)  While understanding each party’s sensitivities on trade in goods and divergences on rules of origin was the highlight of Round 2, it is quite improbable to date the inking of the trade deal between the two with certainty due to EU’s 27-member countries’ complexities. 

There are up north of 6000 European companies present in India across various sectors, which are responsible for providing 1.7 million jobs, excluding 5 million that are indirectly provided. If tapping the markets is considered to be a rationale behind the trade talks, from EU’s point of view, the objectives are very many, viz. sound, transparent, open, non-discriminatory, and predictable regulatory and business environment for European companies trading with or investing in India. This is inclusive of protecting investments and intellectual property. The EU’s share in foreign investment stock in India reached €87.3 billion in 2020, up from €63.7 billion in 2017, making the EU a leading foreign investor in India. This is significant, but way below EU foreign investment stocks in China at €201.2 billion and Brazil at €263.4 billion. The reason for this lag is what the EU considers India’s restrictive trade regime and regulatory environment. For example, TBT (Technical Barriers to Trade)(4), which serve legitimate public policy objectives are often treated contentiously by Indian exporters, as any imposition of TBTs can lead to a significant relocation of resources from high-productivity to low-productivity firms. This coupled with limited administrative and technical capability potentially threatens the adoption of regulatory standards that have gained international currency. Then, you have the SPS (Sanitary and Phytosanitary Measures)(5), which is found to be ineffective in India’s case, primarily because SPS Measures provide a space for protectionist purposes under the guise of legitimate concerns. But, India is persevering to prove that its ease of doing business has improved, and in an age of deglobalization and economic decoupling, it wants to have a strategic partnership with the EU rather than merely focusing on an economic one, and an FTA in this regard would only help strengthen and forge newer ties and partnerships. 

Coming on the heels of India-UAE CEPA (Comprehensive Economic Partnership Agreement), which is broad in scope, but shallow at the same time, there is a sudden spurt in signing FTAs. It must be noted that in a number of India’s trade agreements, Indian trade deficits have increased after the signing of the FTAs as the demand for imported commodities increased with complete elimination of tariff and non-tariff barriers.(6)(7)  The “Early Harvest”(8) trade pact with Australia in April was interim and narrow in scope, but with the India-EU negotiations on, the scope of this FTA is supposed to be ambitious and broad with specific emphasis on trade and sustainable development. Importantly, the investment protection agreement was made distinct from FTA due to regulatory framework within the EU.(9)

India has long exercised caution against FTAs, either because of its over-indulging conclusions on the success/failure rates of FTA utilization, market penetration, or integration with regional and global networks, and crucially trade deficits. All of this is supposedly to change with its new found penchant for signing on to FTAs. 

Beginning in the 1990s, and on through the decade, economic liberalization helped India integrate into the global fold. There were divergences in academic scholarship between how such an integration would help India’s trade schemata in the short as well long run, when it comes to fully subscribing to the international market order. The skeptics(10) argued that any FTA India were to become part of in the wake of economic liberalization might not make sense in the short-term, but would definitely help the country in its strategic ends, if India were to become a hub for services’ exports. The not-so skeptics(11) argued that liberalization followed unilaterally should get its due acknowledgement in India’s integration with the World Market, especially in its Look East Policy. The Look East Policy has been upgraded to Act East Policy, and with it, the driver for a deep integration was liberalization(12), or more appropriately financial liberalization, until CoViD-19 hit and brakes were applied and course changed towards ‘protectionism’ by the Government’s ‘Atmanirbharta’. 

The process of financial liberalization directly influences the level of interest rates and indirectly, the structure of capital costs, marginal efficiency of investment and levels of aggregate savings, investments and employment. The three major objectives of financial liberalization are, 

– opens qualitative and quantitative financial flows

– liberalizes terms governing outflows of forex

– transforms financial structures

If we look at the financial landscape on either side of the Global Financial Crisis of 2008-09, India had done relatively better with its tight capital controls and small extent of its external linkages. This on the one hand had slowed down investment, while on the other locked in restrictions in most traditional industries. However, reforms were once again introduced during the current political dispensation of the BJP-led NDA regime when foreign investment permissions were relaxed. According to Arvind Panagariya(13), foreign invested enterprises may be wholly owned in some policy priority areas, including marketing food products, high-tech and capital-intensive activities in transportation, coffee, rubber, medical manufacturing, e-commerce, to name a few. Despite such reforms, the results on the ground are barely translatable, as India’s domestic financial development is still caught up in a lag, with the public sector banks accounting for a significant majority of the loans. In other words, India’s financial system remains in a hybrid mode with market forces permitted, but continuing state ownership and intervention geared towards priority sector requirements on the one hand, and in curbing the unleashing of market forces on the other constrict both of these. While the corporate bond market remains highly regulated and small in size, the equity markets are open and well regulated, it is the debt market with extensive capital controls(14) that govern the flows foreign funds. 

Financial liberalization involves developing equity markets. With banks entering this arena, any turbulence in equity markets could have ripple effects on the performance parameters of banks. Secondarily, FII (Foreign Institutional Investors) investments constitute a large share of equity capital of a financial entity. An FII pull-out, even if caused by developments outside the country can have rippling implications on the financial health. Thirdly, FII outflows can depreciate the currency, and in a special case (thankfully India hasn’t faced it yet) cause a currency crisis. 

Even if Financial Liberalization leads to growth, it can also force the state to adopt a deflationary position to appease financial interests, which are contrary to deficit-financing, as deficit financing can lead to a liquidity overhang(15) in the system further leading to inflationary pressures(16). This complex is a sign of interventionism on the part of the state and thus is contrary to the market dynamics. At the same time, curbing deficit contracts public expenditure, and this adversely impacts capital formation. This leads to declining growth and employment, and further contracts social sector expenditures. The moonshot of this declension is privatizing public assets. The cycle is vicious, as global finance seeks to delegitimize state and legitimize the market.

India’s FDI (Foreign Direct Investment) flows are heavily distorted by phantom capital flows, where special purpose entities and other conduits are used for tax optimization and to obscure the origin of capital, thus facilitating speculative forays in the market. It is essential to clean up these phantom flows. Mauritius, a tax haven followed by the EU and the US are the largest investors in India. UK is the 3rd largest non-tax haven investor with an inward FDI stock into India as large as the US and the EU. But, post-Brexit, the EU stands to lose almost half of its inward FDI stock to India. Looking at India’s outward investment, Mauritius and Singapore are the leading destinations whereas stocks in the EU fluctuate and remain relatively low. Another credo of financial liberalization that could be stamped is to exempt listed equities from long-term capital gains taxation regime, as this would facilitate investment in equities. Only short-term capital gains are taxable as of now. 

Modi’s Make in India to make manufacturing account for 25% of GDP decelerated due to a series of setbacks in the domestic credit market. By the end of the first term, it was clear that market-driven global integration had not delivered on the economic or strategic front leading to annulling a series of bilateral investment treaties. To add to the woes, the downward trend in customs duties since 1991 liberalization was reversed. Even India’s stepping out of RCEP that had simplified rules of origin and enough transition periods for Indian industry to adapt was deemed irrational. Atmanirbhar policy in the wake of CoViD-19 pandemic has been touted as a move away from market-driven liberalization to a more strategic approach with selective increases in industrial tariffs, liberalization of FDI in both goods and services, and PLIs (Performance-Linked Incentives) aimed at restoring key manufacturing processes. 

Post-1991, India signed a large number of Bilateral Investment Treaties (BITs), including 21 with the EU members, of which only with Latvia and Lithuania are still in force. Since 2015, India has annulled a high number of these BITs. The reason being a number of high-level investor state dispute settlement cases against India. In recent times, India has signed on FTAs, but have agreed in-prior principle to providing MFN status and national treatment to foreign investment, thus limiting the use of performance requirements and dispute settlement mechanisms. 

With this adumbrated look at India’s Financial Liberalization policies, let us briefly point out how would this impact the current and ongoing negotiations between India and the EU. EU Agreements are mostly two-dimensional – they have width and they have depth. In other words, they cover issues going beyond issues in liberalization of trade in goods and services and investments. Indian Agreements have shown an increasing inclination towards the dimension of width, but are a far cry from depth. In other words, EU Agreements are bounded by commitments, whereas Indian Agreements are at best, “best-endeavors”(17).

Advancing non-trade policy objectives is a core part of EU’s foreign policy. One of the cornerstones of EU’s Trade Agreements is Trade and Sustainable Development (the negotiating parameters) culminating into provisions related to environment and labor standards. An example of the EU-South Korea FTA(18) is apt here, for the agreement widens the scope to measures affecting trade-related aspects on environment and labor. If these standards are violated, the EU can legitimately ask the other party to comply with the standards, as had happened in case of South Korea which was asked to improve, rather than improvise on its standards in 2019. Such factors were then introduced in the text of the subsequently inked EU-Vietnam trade agreement. Contrast this with the example of India-Korea Trade Agreement, who in general agree on Sustainable Development, but the text of the deal misses any chapter on commitments.(19) 

Commitments needs to be complied with, and an ombudsman is essentially tasked with the responsibility. In case of FTAs that the EU signs on to, there are two such compliance mechanisms in place, viz. DAG (Domestic Advisory Group), and PoE (Panel of Experts). The former is an informal mechanism, while the latter is a formal one in nature. Domestic advisory groups should be advisory, consultative, institutionalized and competent to cover all provisions of FTAs. The EESC (European Economic and Social Committee) considers that the participation of civil society in all FTAs is an indispensable element in the strategic ambitions of the external policies of the EU. The DAG, which is more of an informal mechanism is represented from the two parties in a deal, while the Panel of Experts is constructed in accordance with the formal, third-party dispute settlement mechanism. In case of any dispute or non-compliance, the PoE is invoked and the decision of the same is binding and requiring the contracting parties to effectuate a change or changes to their domestic regulations. The case of EU-Korea mentioned above is related to precisely such an invocation of the PoE. The PoE admonished Korea to ratify three ILO (International Labor Organization) Conventions and also had to amend its trade union and labor relations.

How would these different takes pan out between the EU and India remains to be seen considering there are differences in multilateral and regulatory and domestic positions on these aspects. Multilaterally, two main conventions of the ILO, viz. C087 and C098 – Right to Convention and Right to Collective Bargaining are not ratified by India have not been ratified by India, and such a miss might become a point of contention to the inking of the treaty. Regulatory-wise, compliance is the responsibility of enterprises, and in India, where a large majority is informal sector, compliance costs could be onerous. If the trade deal is then said to go through, adherence to labor and environmental compliances could very well strike out a massive sector of the economy from getting integrated in the deal. 

If these are fiduciary challenges (in financial and trade terms), then there are challenges on an environmental front. Firstly, India’s environmental laws have gone through a series of notifications that critics believe are substantially diluted to foster India’s growth. Secondly, you have the EU’s Carbon Border Adjustment Mechanism (CBAM) to prevent carbon leakage within the geographical territories of the EU and by moving carbon-intensive production where standards are lax. India looks unfavorably at this schema for its protectionist, discriminatory and contrarian evaluations to international laws and agreements. 

Unless these challenges are consensually agreed to be addressed, any trade deal, with how much ever liberal economic policies in place will have serious impediments to clear. Maybe, this is one of the reasons why critics of FTA between India and the EU call the deal, which is yet to materialize as a deal of unequals. As of now, for the EU, India remains a partial hedge against the risks emanating from the trade architectures along the pacific rim. It remains to be seen if additional layers are added on to this hedge. 

Lastly, with India now chairing the G20 for a year, there is likely to be a political temptation to conclude an early harvest agreement with the EU, but it would be compromising on the principles of a comprehensive agreement that may take longer than is expected. 

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(1) A GI is generally a produced, agricultural or natural product that is specific to a geographical origin. In trade parlance, GIs carry a guarantee of quality and originality.  

(2) India is specifically anticipating growth in industries like leather, textiles, processed foods etc. to create a parity in exports, which Bangladesh and Vietnam enjoy. 

(3) The EU tabled a chapter on trade and sustainable development, anti-fraud and mutual administrative assistance, which the Indian side was supposed to provide detailed explanations and clarifications on. Such an exchange then, would provide grounds for the negotiators to enter into actual negotiations in Round 3. 

(4) A progressive decline in tariffs has brought non-tariff measures (NTMs) under greater scrutiny as one of the major barriers to trade flows between countries. The increase in NTMs has  been primarily driven by a surge in regulatory measures like technical barriers to trade (TBT) and sanitary and phytosanitary measures. Theoretically, the imposition of a TBT can affect a firm in various ways: first, it can directly raise production costs. In particular, TBTs can be associated with either an increase in variable costs (eg. labelling requirements) or fixed costs (eg. new production processes) of production or both. Second, the existence of different standards in different markets could entail individual fixed compliance costs for separate markets, which could severely limit exporters’ production capacity and the number of markets. Overall, by increasing the variable or fixed costs of production, TBTs are likely to affect aggregate exports, which in the Indian case is very true to the markets maintaining these measures. Chakraborty, P., & Singh, R. (2020). Technical Barriers to Trade and the Performance of Indian Exporters. ERIA Discussion Paper Series, No. 393, 1–30. Retrieved December 1, 2022, from https://www.eria.org/uploads/media/discussion-papers/FY21/Technical-Barriers-to-Trade-and-the-Performance-of-Indian-Exporters.pdf.   

(5) The Agreement on the Application of Sanitary and Phytosanitary Measures (SPSA) was negotiated with a view to setting in place an array of multilateral rules that would, on the one hand, recognize the legitimate right of WTO Members to adopt sanitary and phytosanitary measures necessary to protect human, animal, or plant life or health, and on the other, enshrine certain checks and balances to cope with the possibility of thee measures emerging as non-tariff barriers (NBTs). Das, K. (2008). Coping with SPS challenges in India: WTO and beyond. Journal of International Economic Law, 11(4), 971–1019. https://doi.org/10.1093/jiel/jgn033 

(6) The case of import of Malaysian Palm Oil is appropriate here. 

(7) In order to understand the mathematical and econometric frameworks to assess the impacts of FTAs on the commodity value-chain, see Ghosh, N., Konar, A., & Pathak , S. (2015, October). India’s FTAs with East and SE Asia – Impact of India-Malaysia CECA on the Edible Oil Value Chain. Observer Research Organization Occasional Paper. Retrieved December 5, 2022, from https://www.orfonline.org/wp-content/uploads/2015/12/Oc-Paper_73.pdf 

(8) An early harvest agreement is aimed at liberalizing tariffs on the trade of certain goods between two countries or trading blocs before a comprehensive agreement. It is primarily a confidence building measure. 

(9) While an FTA can be approved by the European Parliament, investment promotion pacts are to be ratified by parliaments of member countries. 

(10) Pal, P. P., & Dasgupta, M. (2008). Does a Free Trade Agreement with ASEAN Make Sense? Economic and Political Weekly, 43(46), 8–41.

(11) Asher, M. G., & Sen, R. (2008). India-East Asian Integration: A Win-Win for Asia. Economic and Political Weekly, 40(36), 3–9. 

(12) Liberalisation is a loosely used terminology often tailor-made to suit contexts. But, in general, it refers to the relief of state restrictions with areas of social, political, and economic policies. Liberalisation in economic policy focuses on the reduction of government laws and restrictions in place to encourage greater participation by private entities. In India, liberalization began with the 1991 economic reforms, and were primarily aimed at – annulling the then-existing license raj; lowering of interest rates and tariffs; stripping the public sector’s monopoly from various segments of the economy; and sanctioning of foreign investment in different industries. Trade liberalization, on the other hand is the removal or reduction of restrictions or barriers on the free exchange of goods between nations, These barriers include tariffs, such as duties and surcharges, and non-tariff barriers, such as licensing rules and quotas. For a in-depth treatment on Trade Liberalisation, see Wacziarg, R. (Ed.). (2018). Trade liberalization. 2 vol. set. Edward Elgar. 

(13) Panagariya, A. (2016, May 18). Two years of reform: Substantial progress has been made towards restoring economic momentum. Much remains to be done. The Indian Express. New Delhi. Retrieved December 5, 2022, from indianexpress. com/article/opinion/columns/pm-narendra-modi-2-years-of-modi- govt-bjp-two-year-anniversary-pradhan-mantri-krishi-sinchai- yojana-2804219/. 

(14) In a related concept, India during the heydays of unfolding its liberalization policies acted prudentially in liberalizing its capital account. A capital account deficit is showing that more money is flowing out of the economy along with increase in its ownership of foreign assets and vice versa in case of surplus. The Balance of Payments contains the current account (which provides a summary of the trade in goods and services) in addition to the capital account which records all capital transactions. 

(15) Excess liquidity in the system, and has the potential to send short-term interest rates crashing down. 

(16) Chandrashekhar, C. P., & Pal, P. P. (2006). Financial Liberalization in India: An Assessment of its Nature and Outcomes. Economic and Political Weekly, 41(11), 1–25. 

(17) Best Endeavours are an onerous obligation requiring a party to take “all those steps in their power which are capable of producing the desired results” although it is by no means an absolute obligation and the concept of reasonableness still applies. One expression of this is that “best endeavours” requires “all that reasonable persons reasonably could do in the circumstances”. In contrast to “Best Endeavors”, you also have Rational Endeavors, which are the obligations that depend upon the circumstances of the party subject to it and they would not be required to sacrifice their own commercial interests.

(18) European Union , Official Journal of the European Union (2011). Retrieved December 5, 2022, from https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22011A0514(01). 

(19) Ministry of Commerce, GoI, India – Korea CEPA (2009). Retrieved December 5, 2022, from https://commerce.gov.in/wp-content/uploads/2020/05/INDIA-KOREA-CEPA-2009.pdf. 

 

 

 

 

 

 

 

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Coal and India in it’s Union Budget 2020-21. Is India really serious about its Climate Change commitments?

Centre’s Expenditure (figures in crore)
	Revenue	Capital	Total
Actual 2018-19	708.34	0	708.34
Budget Estimate 2019-20	1159.05	0	1159.05
Revised Estimate 2019-20	933.60	0	933.60
Budget Estimate 2020-21	882.61	0	882.61

The breakup for this head is Rs. 819.98 crore for R&D, conservation, safety & infrastructure development in coal mines, and exploration of coal and lignite; Rs. 22.35 crore for coal mines pension scheme; and the remaining Rs. 40.28 crore is for the secretariat, statutory bodies and sub-ordinate bodies. The coal mines pension scheme allocation is the same as a social services developmental need and is covered under Labour, Employment and Skill Development. R&D’s main thrust area is promotion of clean coal technology and to identify coal blocks for coal to liquid projects. Conservation, safety and infrastructure’s emphasis is towards conservation of coal through protective works and safety improvement. The infrastructure component in coal field areas is development of road and rail network. Exploration of coal and lignite is to meet the demand for coal, including provisions for detailed drilling in n0n-Coal India Limited coal mining blocks (like the NTPC blocks) that would help the prospective investors in taking investment decisions regarding coal mining and reduction of time for preparing the mining plan. The allocation for the exploration of coal and lignite is Rs. 700 crore, which is to assess the coal availability to meet the sizable increase in the demand for coal. This scheme is to be implemented by the Central Mine Planning and Design Institute Limited (CMPDIL). Also, this step would help build promoting the private investment in the coal mining industry. 

The Government has eased restrictions on foreign investment in coal mining, in an effort to attract more capital from abroad. The allocation for the Coal Ministry has seen a 5.4% reduction to Rs. 882.61 crore for the FY 2020-21, a dip from the revised estimates for the FY 2019-20 of Rs. 933.60 crore. While the expenditure was Rs. 1159.05 crore for 2019-20, the actual was Rs. 708.32 crore for 2018-19. This year, however, the major increase in the allocation was towards the central sector schemes, that are entirely and directly funded and executed by the central government. However, there has been an increase in investment in public enterprises, including Coal India Limited in FY 2020-21 that stands at Rs. 18467 crore over the revised estimate of Rs. 18121 crore in FY 2109-20, which is a rise by 1.91%. What is really surprising is the mining of dirty fuel/coal by CIL which has got an overall capital outlay of Rs. 9500 crore this year. Juxtaposing this allocation with the Finance Minister’s focus on closing down thermal plants that violate carbon emissions is a paradox in itself. 

For the thermal power plants that are in violation of the National Clean Air Program (NCAP with an allocation of Rs. 4400 crore for FY 2020-21), the Finance Minister has announced a closure of such plants. These plants that are old and whose carbon emissions are higher than the preset limit would be advised to close down and the land will be put to alternative energy purposes. On the mitigation of polluted air, the International Solar Alliance will help in SDGs, climate change, disaster resilience and the NDCs under the Paris Accord. Earlier, a total of 47.95 GW of thermal capacity missed the December 31 deadline to install Flue Gas Desulphurization (FDG) units to minimize SO2 emissions level. According to the five-year National Clean Air Action Plan, the Government plans to reduce by 20-30% the concentration of particulate matter PM10 and PM2.5 by 2024, and according to the Finance Minister, the plan is India’s best effort basis and kicks off in 2021 on January 1. Interestingly, according to the Budget speech, the climate action targets under the 2015 Paris Accords were to be executed under the normal budgetary allocations. Also, according to the Paris Accords, India has committed to reduce by 2030 the emission intensity of its GDP by 33-35% over the 2005 levels. It has also pledged to generate 40% of India’s power capacity from non-fossil sources and create and additional carbon sink of 2.5-3 billion tonnes of carbon dioxide equivalent through afforestation by 2030. 

So, what the Budget does is provide a conflicting picture of furthering mining either by domestic players, or by inviting mine-cum-developers by way of FDI on the one hand and its commitment to mitigate pollution standards either by retiring old plants or switching to renewables on the other. These two avenues clash in principle and throws up a confused state of affairs in India’s contributions to Paris Accords of 2015. 

The Code of Capital or the Legal Structure of Finance – How the Law Creates Wealth and Inequality with Katharina Pistor

In The Code of Capital: How the Law Creates Wealth and Inequality, Katharina Pistoroffers an expansive analysis of the construction of capital, showing legal coding to be at the heart of this process. This is a welcome interdisciplinary contribution which attaches fresh dimensions to debates on the political economy of wealth and inequality and will be a valuable resource for anyone seeking to grapple with the formidable nature of global capital.

The economic and legal reforms coincided with the demise of the Iron Curtain and socialist governments, and were implemented in developing as well as emerging markets, and promised eventual benefits for everyone. But instead, contemporary levels of inequality are comparable to those that prevailed before the French Revolution. A standard response to such disparity is simply to hold ‘capitalism’ accountable. But Pistor argues that even to do just this, it is necessary to be cognisant of how capital is made. To do so is to resist simplifications in which capital is a thing, or a core feature of social relations between a proletariat and a bourgeoisie: ‘Against this background, one might even question whether it makes sense to bundle historical epochs that differ so fundamentally from one another under a single rubric of “capitalism”’.

 

Man Proposes OR Woman Proposes – “Matches” Happen Algorithmically and are Economically Walrasian Rather than Keynesian. Note Quote & Didactics.

Consider a set M of men and a set W of women. Each m ∈ M has a strict preference ordering over the elements of W and each w ∈ W has a strict preference ordering over men. Let us denote the preference ordering of an agent i by ≻_i and x ≻_i y will mean that agent i ranks x above y. Now a marriage or matching would be considered as an assignment of men to women such that each man is assigned to at most one woman and vice versa. But, what if the agent decides to remain single. This is possible by two ways, viz. if a man or a woman is matched with oneself, or for each man or woman, there is a dummy woman or man in the set W or M that corresponds to being single. If this were the construction, then, we could safely assume |M| = |W|. But, there is another impediment here, whereby a subversion of sorts is possible, in that a group of agents could simply opt out of the matching exercise. In such a scenario, it becomes mandatory to define a blocking set. As an implication of such subversiveness, a matching is called unstable if there are two men m, m’ and two women w, w’ such that

1. m is matched to w
2. m’ is matched to w’, and
3. w’ ≻_m w and m ≻_w’ m’

then, the pair (m, w’) is a blocking pair. Any matching without the blocking pair is called stable.

Now, given the preferences of men and women, is it always possible to find stable matchings? For the same, what is used is Gale and Shapley’s deferred acceptance algorithm.

So, after a brief detour, let us concentrate on the male-proposal version.

First, each man proposes to his top-ranked choice. Next, each woman who has received at least two proposals keeps (tentatively) her top-ranked proposal and rejects the rest. Then, each man who has been rejected proposes to his top-ranked choice among the women who have not rejected him. Again each woman who has at least two proposals (including ones from previous rounds) keeps her top-ranked proposal and rejects the rest. The process repeats until no man has a woman to propose to or each woman has at most one proposal. At this point the algorithm terminates and each man is assigned to a woman who has not rejected his proposal. No man is assigned to more than one woman. Since each woman is allowed to keep only one proposal at any stage, no woman is assigned to more than one man. Therefore the algorithm terminates in a matching.

Consider the matching {(m₁, w₁), (m₂, w₂), (m₃, w₃)}. This is an unstable matching since (m₁, w₂) is a blocking pair. The matching {(m₁, w₁), (m₃, w₂), (m₂, w₃)}, however, is stable. Now looking at the figure above, m₁ proposes to w₂, m₂ to w₁, and m₃ to w₁. At the end of this round, w₁ is the only woman to have received two proposals. One from m₃ and the other from m₂. Since she ranks m₃ above m₂, she keeps m₃ and rejects m₂. Since m₃ is the only man to have been rejected, he is the only one to propose again in the second round. This time he proposes to w₃. Now each woman has only one proposal and the algorithm terminates with the matching {(m₁, w₂), (m₂, w₃), (m₃, w₂)}.

The male propose algorithm terminates in a stable matching.

Suppose not. Then ∃ a blocking pair (m₁, w₁) with m₁ matched to w₂, say, and w₁ matched to m₂. Since (m₁, w₁) is blocking and w₁ ≻_m1 w₂, in the proposal algorithm, m₁ would have proposed to w₁ before w₂. Since m₁ was not matched with w₁ by the algorithm, it must be because w₁ received a proposal from a man that she ranked higher than m₁. Since the algorithm matches her to m₂ it follows that m₂ ≻_w1 m₁. This contradicts the fact that (m₁, w₁) is a blocking pair.

Even if where the women propose, the outcome would still be stable matching. The only difference is in kind as the stable matching would be different from the one generated when the men propose. This would also imply that even if stable matching is guaranteed to exist, there is more than one such matching. Then what is the point to prefer one to the other? Well, there is a reason:

Denote a matching by μ. The woman assigned to man m in the matching μ is denoted μ(m). Similarly, μ(w) is the man assigned to woman w. A matching μ is male-optimal if there is no stable matching ν such that ν(m) ≻_m μ(m) or ν(m) = μ(m) ∀ m with ν(j) ≻_j μ(j) for at least one j ∈ M. Similarly for the female-optimality.

The stable matching produced by the (male-proposal) Deferred Acceptance Algorithm is male-optimal.

Let μ be the matching returned by the male-propose algorithm. Suppose μ is not male optimal. Then, there is a stable matching ν such that ν(m) ≻_m μ(m) or ν(m) = μ(m) ∀ m with ν(j) ≻_j μ(j) for at least one j ∈ M. Therefore, in the application of the proposal algorithm, there must be an iteration where some man j proposes to ν(j) before μ(j) since ν(j) ≻_j μ(j) and is rejected by woman ν(j). Consider the first such iteration. Since woman ν(j) rejects j she must have received a proposal from a man i she prefers to man j. Since this is the first iteration at which a male is rejected by his partner under ν, it follows that man i ranks woman ν(j) higher than ν(i). Summarizing, i ≻_ν(j) j and ν(j) ≻_i ν(i) implying that ν is not stable, a contradiction.

Now, the obvious question is if this stable matching is optimal w.r.t. to both men and women? The answer this time around is NO. From above, it could easily be seen that there are two stable matchings, one of them is male-optimal and the other is female-optimal. At least, one female is strictly better-off under the female optimality than male optimality, and by this, no female is worse off. If the POV is men, a similar conclusion is drawn.  A stable marriage is immune to a pair of agents opting out of the matching. We could ask that no subset of agents should have an incentive to opt out of the matching. Formally, a matching μ′ dominates a matching μ if there is a set S ⊂ M ∪ W such that for all m, w ∈ S, both (i) μ′(m), μ′(w) ∈ S and (ii) μ′(m) ≻_m μ(m) and μ′(w) ≻_w μ(w). Stability is a special case of this dominance condition when we restrict attention to sets S consisting of a single couple. The set of undominated matchings is called the core of the matching game.

The direct mechanism associated with the male propose algorithm is strategy-proof for the males.

Suppose not. Then there is a profile of preferences π = (≻_m1 , ≻_m2 , . . . , ≻_mn) for the men, such that man m₁, say, can misreport his preferences and obtain a better match. To express this formally, let μ be the stable matching obtained by applying the male proposal algorithm to the profile π. Suppose that m₁ reports the preference ordering ≻_∗ instead. Let ν be the stable matching that results when the male-proposal algorithm is applied to the profile π¹ = (≻_∗, ≻_m2 , . . . , ≻_mn). For a contradiction, suppose ν(m₁) ≻_m1 μ(m₁). For notational convenience let a ≽_m b mean that a ≻_m b or a = b.

First we show that m₁ can achieve the same effect by choosing an ordering ≻̄ where woman ν(m₁) is ranked first. Let π² = (≻̄ , ≻_m2 , . . . , ≻_mn). Knowing that ν is stable w.r.t the profile π¹ we show that it is stable with respect to the profile π². Suppose not. Then under the profile π² there must be a pair (m, w) that blocks ν. Since ν assigns to m₁ its top choice with respect to π², m₁ cannot be part of this blocking pair. Now the preferences of all agents other than m₁ are the same in π¹ and π². Therefore, if (m, w) blocks ν w.r.t the profile π², it must block ν w.r.t the profile π¹, contradicting the fact that ν is a stable matching under π¹.

Let λ be the male propose stable matching for the profile π². ν is a stable matching w.r.t the profile π². As λ is male optimal w.r.t the profile π², it follows that λ(m₁) = ν(m₁).

Let’s assume that ν(m₁) is the top-ranked woman in the ordering ≻_∗. Now we show that the set B = {m_j : μ(m_j) ≻_mj ν(m_j)} is empty. This means that all men, not just m₁, are no worse off under ν compared to μ. Since ν is stable w.r.t the original profile, π this contradicts the male optimality of μ.

Suppose B ≠ ∅. Therefore, when the male proposal algorithm is applied to the profile π¹, each m_j ∈ B is rejected by their match under μ, i.e., μ(m_j). Consider the first iteration of the proposal algorithm where some m_j is rejected by μ(m_j). This means that woman μ(m_j) has a proposal from man m_k that she ranks higher, i.e., m_k ≻_μ(mj) m_j. Since m_k was not matched to μ(m_j) under μ it must be that μ(m_k) ≻_mk μ(m_j). Hence m_k ∈ B , otherwise μ(m_j) ≽ m_kν(m_k) ≽_mk μ(m_k) ≻_mk μ(m_j), which is a contradiction. Since m_k ∈ B and m_k has proposed to μ(m_j) at the time man m_j proposes, it means that m_k must have been rejected by μ(m_k) prior to m_j being rejected, contradicting our choice of m_j.

The mechanism associated with the male propose algorithm is not strategy-proof for the females. Let us see how this is the case by way of an example. The male propose algorithm returns the matching {(m₁, w₂), (m₂, w₃), (m₃, w₁)}. In the course of the algorithm the only woman who receives at least two proposals is w₁. She received proposals from m₂ and m₃. She rejects m₂ who goes on to propose to w₃ and the algorithm terminates. Notice that w₁ is matched with her second choice. Suppose now that she had rejected m₃ instead. Then m₃ would have gone on to proposes to w₂. Woman w₂ now has a choice between m₁ and m₃. She would keep m₃ and reject m₁, who would go on to propose to w₁. Woman w₁ would keep m₁ over m₂ and in the final matching be paired with a her first-rank choice.

Transposing this on to economic theory, this fits neatly into the Walrasian equilibrium. Walras’ law is an economic theory that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. Walras’ law asserts that an examined market must be in equilibrium if all other markets are in equilibrium, and this contrasts with Keynesianism, which by contrast, assumes that it is possible for just one market to be out of balance without a “matching” imbalance elsewhere. Moreover, Walrasian equilibria are the solutions of a fixed point problem. In the cases when they can be computed efficiently it is because the set of Walrasian equilibria can be described by a set of convex inequalities. The same can be said of stable matchings/marriages. The set of stable matchings is fixed points of a nondecreasing function defined on a lattice. 

China’s Belt and Road and India’s Infrastructural Ambitions – Where is the line to be drawn?

When in 2017, China organized the first-ever Forum on Belt and Road, almost 130 countries from all over the world, including the United States had sent in their representatives to witness and be part of the diplomatic showcase of China’s global ambitious project, which aims to create an interlocked trade, financial and cultural network stretching from East Asia to Europe and beyond. There was, however, one notable miss, India. India was always opposed to Chinese ambitions of erecting this vast infrastructural network and the primary reason was that it violated India’s state sovereignty. The showcase arm of the Chinese Belt and Road happens to be the China-Pakistan Economic Corridor, a $62 Billion pet project of Chinese President Xi Jinping and traversing the entire length and breadth of Pakistan with nodal points in Xinjiang province of China, and Pakistan’s port town of Gawdar. CPEC is marked by modern infrastructure of transportation networks, special economic zones, industrial clusters and energy hubs, and considered China’s main plank of Belt and Road Initiative aimed to underscore China’s economic might and dominance over the Asian-Pacific seas. That a segment of CPEC cuts through the disputed territory of Pakistan Occupied Kashmir has irked India no ends, which it considers a direct, uncalled-for and aggressive nature of China’s global ambitions at the cost of state sovereignty. Though, the CPEC is yet to be fully commissioned, some segments have started to function. This is turning out to be major bone of contention between the two Asian economic giants. But, relations have a gotten a bit murkier since 2017, and two major geopolitical events have confounded matters further. 

The first one is the Doklam Standoff between China and India. This tiny plateau nestled between China, India and Bhutan witnessed a three-month standoff between the two largest armies in the world over a road that the Chinese were building and which India apprehended would function more as a surveillance apparatus over the narrow path of land that connects the Indian mainland with the Northeastern states. Though the tension was eventually diffused, the state of affairs between China and India never really thawed as could have been anticipated. It was in 2017 that India and Pakistan became newly installed members of the Shanghai Cooperation Organization (SCO), having been elevated from observer states. China, anticipating an increasing amount of divisiveness within a regional economic and security organization by being accustomed to extreme comity and cooperative discussions was frustrated at India’s becoming a member state that Russia, another founder-member of SCO pushed for. Russia wanted to constrain China’s growing influence in the organization as it was concerned that post-Soviet SCO members were drifting too far into the Chinese geostrategic orbit. Moscow had long delayed implementing Chinese initiatives that would have enabled Beijing to reap greater benefits from regional trade. As China gained more clout in Central Asia, Moscow choice New Delhi’s inclusion to slow and oppose Beijing’s ambitions. It is under these circumstances that New Delhi would likely continue to criticize the CPEC in the context of the SCO because, as a full member, India now has the right to protest developments that do not serve the interests of all SCO members. The SCO also offers another public stage for India to constantly question the intent behind China’s exceptionally close ties to Pakistan.

The second is the recent escalation of hostilities between India and Pakistan, and how Pakistan felt betrayed over China’s so-called neutral stand by asking both countries to take recourse to meaning dialogue in resolving the contentious issue of Kashmir and Terror and cease all military adventures. It is to be noted that the second convention of the Belt and Road Forum is to take place in April this year, and China is all hopeful to get India’s positive support for its infrastructural might. India’s notable absence from the 2017 meet has hit Chinese plans, and the latter wants to reverse the course this time around. Even if India were to take part this year, or send in their dissent note via an official communique, it would reliably and reasonably highlight the contradiction between China’s stated anti-terrorism goals and the reality of its policy. Most notably, Beijing has consistently looked the other way as Pakistani Intelligence Services continue to support terrorist groups in Afghanistan and Pakistan. Moreover, because India is particularly close to the Afghan Government, it could seek to sponsor Afghanistan to move from observer status toward full SCO membership. This would give India even greater strength in the group and could bolster Russia’s position as well.  

Lingering border disputes and fierce geostrategic competition in South Asia between China and India is likely to temper any cooperation Beijing might hope to achieve with New Delhi in latter’s inclusion at the Forum. Mutual suspicions in the maritime domain persist as well, with the Indian government shoring its position in the strategically important Andaman and Nicobar island chain to counter the perceived Chinese “string of pearls” strategy – aimed at establishing access to naval ports throughout the Indian Ocean that could be militarily advantageous in a conflict. Such mutual suspicions will likely impact Forum’s deliberations and discussions in unpredictable ways. Although India may be an unwelcome addition and irritant, China’s economic and military strength makes it far more formidable on its own – a point that is only magnified as Russian influence simultaneously recedes, or rather more aptly fluctuates. Even when India rejected Beijing’s Belt and Road Initiative overture, China remains India’s top trading partner and a critical market for all Central and South Asian states, leaving them with few other appealing options. India’s entry into the Forum, however, could put Beijing in the awkward position of highlighting the value, while increasingly working around or outside of it. Outright failure of the Forum would be unacceptable for China because of its central role in establishing it in the first place. Regardless of the bickering between countries that may break out, Beijing can be expected to make yet another show of the importance, with all of the usual pomp and circumstance, at the upcoming summit in April, 2019.

What then is India’s infrastructural challenge to Belt and Road? India’s Prime Minister Narendra Modi instantiated the need for overhauling the infrastructure in a manner hitherto not conceived of by emphasizing that the Government would usher in a ‘Blue Revolution’ by developing India’s coastal regions and working for the welfare of fishing communities in a string of infrastructure projects. That such a declaration came in the pilgrim town of Somnath in Gujarat isn’t surprising, for the foundations of a smart city spread over an area of about 1400 acres was laid at Kandla, the port city. The figures he cited during his address were all the more staggering making one wonder about the source of resources. For instance, the smart city would provide employment to about 50000 people. The Blue Revolution would be initiated through the Government’s flagship Sagarmala Project attracting an investment to the tune of Rs. 8 lakh crore and creating industrial and tourism development along the coast line of the entire country. Not just content with such figures already, he also promised that 400 ports and fishing sites would be developed under the project. One would obviously wonder at how tall are these claims? Clearly Modi and his cohorts are no fan of Schumacher’s “Small is Beautiful” due to their obsession with “Bigger is Better”. What’s even more surprising is that these reckless followers of capitalism haven’t even understood what is meant by “Creative Destruction” both macro- or micro- economically. The process of Joseph Schumpeter’s creative destruction (restructuring) permeates major aspects of macroeconomic performance, not only long-run growth but also economic fluctuations, structural adjustment and the functioning of factor markets. At the microeconomic level, restructuring is characterized by countless decisions to create and destroy production arrangements. These decisions are often complex, involving multiple parties as well as strategic and technological considerations. The efficiency of those decisions not only depends on managerial talent but also hinges on the existence of sound institutions that provide a proper transactional framework. Failure along this dimension can have severe macroeconomic consequences once it interacts with the process of creative destruction. Quite unfortunately, India is heading towards an economic mess, if such policies are to slammed onto people under circumstances when neither the macroeconomic not the microeconomic apparatuses in the country are in shape to withstand cyclonic shocks. Moreover, these promotional doctrines come at a humungous price of gross violations of human and constitutional rights of the people lending credibility once again to the warnings of Schumacher’s Small is Beautiful: A Study of Economics as if People Mattered…

So, is there any comparison between Belt and Road and Blue Economy? Well, pundits could draw far-fetched comparisons between these infrastructural advances, but, for the Chinese, Belt and Road is geographically much vaster as compared to Indian Blue Economy, which is more confined to domestic consumptions but do have elements of exim and trade aspects to it. Apart from that, when it comes to fulfilling these ambitions, China with its economic might have much better resources at commissioning the initiative, whereas India, with its faltering banking industry and waning investor confidence is finding its increasingly difficult to map out routes of funding and financing. On a more geopolitical note, and especially in the wake of current events between India and Pakistan, china would do well to factor in the larger perspectives of its relations with South Asia. It’s well known that China has been using Pakistan as a foil against India since the 1960s, and with its CPEC has upped its commitment to Pakistan that includes the assurances of Pakistani well-being. But can China remain oblivious to Pakistan’s scorpion-like behavior of devouring itself? On the other hand, a stable India is providing opportunities for Chinese companies to expand themselves. The reset in Sino-Indian ties following the Wuhan Summit of 2018 has created conditions which can be of great benefit to Beijing in an era when it is facing a fundamental challenge from the United States. Who knows, New Delhi may even consider supporting the Belt & Road Initiative in some indirect fashion as the Japanese are doing?  

न्यूनतम समथर्न मूल्य: एक जन-केंद्रित परिप्रेक्ष्य (Minimum Support Price: A People-Centric Perspective)

न्यूनतम समर्थन मूल्य (MSP) एक वायदा है जो भारत सरकार द्वारा किसानों और कृषि श्रमिकों को किसी भी तरह की कृषि उत्पादक दामों में तीव्र गिरावट के दौरान सुरक्षा मुहिया कराता है| न्यूनतम समर्थन मूल्य सरकारी व्यवस्था में एक नीतिगत साधन है और इसे आमतौर पर फसलों की  बीजारोपण  के  शुरुआत में कृषि लागत और मूल्य आयोग (CACP) की सिफारिशों के आधार पर पेश किया जाता है। न्यूनतम समर्थन मूल्य का प्रमुख उद्देश्य  भरपूर  उत्पादन अवधि के दौरान किसानों को सुरक्षा देना, और उन्हें समर्थन करना तथा सार्वजनिक वितरण प्रणाली के लिए अनाज इकठ्ठा करना है.  वस्तुओं की खरीद और पारिश्रमिकरूप, ऐसे दो  माध्यम  है  जिससे एक प्रभावी न्यूनतम समर्थन मूल्य लागू किया जा सकता है. किसानो के लिए पारिश्रमिक की प्रकृति ही न्यूनतम समर्थन मूल्य और  प्राप्त कीमतों के बीच के अंतर की भरपाई कर सकता है |

बड़े पैमाने पर कृषि संकट  के चलते,  ऐसे नीतियों पर जोर देने की आवश्यकता है जो तत्काल प्रभाव से सकारात्मक परिणाम  सामने ला सकते हों। इन  परिणामों  को मूल्य और गैर-मूल्य कारक के घटकों के माध्यम से प्राप्त किया जा सकता है। गैर-मूल्य कारक दीर्घकालिक योजना से संबंधित हैं जो  बाजार  सुधार, संस्थागत सुधार और प्रौद्योगिक   क्षेत्र में नवीनीकरण पर  आश्रित  है,  जिससे  किसानो की स्थिति में सुधर हो सके   उनके  आय  में भी वृद्धि हो सके। मूल्य कारक अल्पकालिक योजना से संबंधित है जो कृषि उपज के लिए पारिश्रमिक कीमतों में तत्काल प्रभाव से वृद्धि करने पर जोर देता है | न्यूनतम समर्थन मूल्य, मूल्य के कारकों के दायरे में शामिल होता है| सरकार 23 वस्तुओं के लिए न्यूनतम समर्थन मूल्य और गन्ने के लिए FRP (उचित और पारिश्रमिक मूल्य) को अधिसूचित करती है। ये फसलें  एक कृषि अवधि में उपयोग होने वाले भूमि के  कुल क्षेत्रफल में से लगभग 84% हिस्से को सम्मिलित करता है |  लगभग 5% क्षेत्र चारा फसलों के अंतर्गत आता है  जिसे न्यूनतम समर्थन मूल्य के अंतर्गत शामिल नहीं किया जाता |  इस गणित के अनुसार, यदि न्यूनतम समर्थन मूल्य को पूरी तरह से लागू किया जाता है तो कीमतों में लाभ के लिए उत्पादकों के एक छोटे से भाग को छोड़कर कुल कृषि क्षेत्र के करीब 90% पर न्यूनतम समर्थन मूल्य लागू  होगा|  

तो, सवाल यह है कि, CACP कैसे न्यूनतम समर्थन मूल्य (MSP) का निर्धारण करता है? न्यूनतम समर्थन मूल्य का निर्धारण करते समय CACP निम्नलिखित कारकों को ध्यान में रखता है:

1. प्रति हेक्टेयर खेती की लागत और देश में विभिन्न क्षेत्रों में लागत की संरचना और उसमें हुए परिवर्तन।
2. देश के विभिन्न क्षेत्रों में प्रति क्विंटल उत्पादन की लागत और उसमें हुए परिवर्तन।
3. विभिन्न उत्पादक सामग्री की कीमतें और उसमें हुए परिवर्तन।
4. उत्पादों  के बाजार मूल्य और उसमें हुए परिवर्तन।
5. किसानों द्वारा बेची व खरीदी गयी वस्तुओं की कीमतें और उसमें हुए परिवर्तन।
6. आपूर्ति से संबंधित जानकारी जैसे क्षेत्र, उपज और उत्पादन, आयात, निर्यात और घरेलू उपलब्धता तथा सरकार / सार्वजनिक एजेंसियों या उपक्रमों के पास भंडार की उपलब्धता| 
7. मांग से संबंधित जानकारी, जिसमें कुल और प्रति व्यक्ति खपत, प्रोसेसिंग उद्योग की प्रवृत्ति और क्षमता शामिल है।
8. अंतरराष्ट्रीय बाजारों में कीमतें और उसमें हुए परिवर्तन।
9. कृषिउत्पाद  से ली गई  साधित वस्तुएं मसलन चीनी, गुड़, जूट, खाद्य और गैर-खाद्य तेलों, सूती धागा की कीमतें और उसमें हुए परिवर्तन।
10. कृषि उत्पादों की प्रोसेसिंग लागत और उसमें हुए परिवर्तन।
11. विपणन और सेवाओं की लागत, भंडारण, परिवहन, प्रोसेसिंग, करों / शुल्क, और बाजार के  कारक द्वारा बनाए गए लाभांश, और
12. व्यापक आर्थिक चर वस्तुएं जैसे की सामान्य स्तर की कीमतें, उपभोक्ता मूल्य सूचकांक और मौद्रिक व राज कोषी  करक | 

जैसा कि देखा जा सकता है, यह मापदंडों का एक व्यापक  समूह है जिसपर आयोग न्यूनतम समर्थन मूल्य (MSP) की गणना के लिए निर्भर करता है। परन्तु  सवाल यह है की : आयोग को इस डेटा   कहाँ से मिलती है? डेटा आमतौर पर कृषि वैज्ञानिकों, किसान नेताओं, सामाजिक कार्यकर्ताओं, केंद्रीय मंत्रालयों, भारतीय खाद्य निगम (FCI), नेशनल एग्रीकल्चरल कोऑपरेटिव मार्केटिंग फेडरेशन ऑफ इंडिया (NAFED), कॉटन कॉर्पोरेशन ऑफ इंडिया (CCI), जूट कॉर्पोरेशन ऑफ इंडिया तथा व्यापारियों के संगठन और अनुसंधान संस्थानों से एकत्र किए जाते हैं। आयोग फिर MSP की गणना करता है और इसेके अनुमोदन के लिए केंद्र सरकार को भेजता है, जो फिर राज्यों को उनके सुझावों के लिए भेजता है। एक बार जब राज्य अपनी मंजूरी दे देता है,  आर्थिक मामलों की मंत्रिमंडलीय समिति इन आंकड़ों पर सहमति प्रदान करता है, जिन्हें फिर CACP पोर्टल पर जारी किया जाता है।

2004 में, केंद्र में शासित UPA-1 सरकार ने अपने प्रथम वर्ष के दौरान, एम.एस स्वामीनाथन  की अध्यक्षता में  राष्ट्रीय किसान आयोग (NCF) का गठन किया ।आयोग का प्रमुख उद्देश्य कृषि वस्तुओं को लागत-प्रतिस्पर्धी और  लाभदायक बनाना था। इस  उद्देश्य को प्राप्त करने हेतु, खेती की लागत की गणना के लिए एक तीन-स्तरीय संरचना तैयार की गई , जो इस प्रकार  है, A2, FL और C2। A2 वास्तविक भुगतान की जाने वाली लागत है, जबकि A2 + FL वास्तविक भुगतान की जाने वाली लागत और परिवार के श्रम का प्रतिशोधित मूल्य के बराबर है, जहाँ  मानसब्बद्ध किसी चीज़ का मूल्य निर्धारण करने में उत्पाद या उसके प्रोसेसिंग जिसमे  उसका योगदान  के  अनुमान के  तहत  किसी वस्तु    का मूल्य  निर्धारित किया जाता है | C2  एक  विस्तृत  है, जिसमें स्वामित्व वाली भूमि और पूंजी पर लगा  किराया और ब्याज शामिल  है। यह स्पष्ट है कि C2> A2 + FL> A2 |

कृषि लागत और मूल्य आयोग (CACP)  कीमतों की सिफारिश करते हुए उत्पादन की लागत, इनपुट कीमतों में बदलाव, इनपुट/आउटपुट मूल्यों का अनुपात, बाजार के कीमतों में रुझान, अंतर फसल मूल्य का अनुपात, मांग और आपूर्ति की स्थिति, किसानों द्वारा देय कीमतों और प्राप्त कीमतों के बीच समता आदि महत्वपूर्ण कारकों को ध्यान में रखता है। समर्थन मूल्य तय करने में, CACP लागत की अवधारणा पर निर्भर करता है जो खेती में खर्च होने वाले सभी मदों को शामिल करता है, जिसमें किसानों के स्वामित्व वाले इनपुट्स का मूल्य भी शामिल होता है, जैसे कि स्वामित्व वाली भूमि का किराया मूल्य और निश्चित पूंजी पर ब्याज। कुछ महत्वपूर्ण लागत अवधारणाएं C2 और C3 हैं:

C3: किसान को प्रबंधकीय पारिश्रमिक के लिए C2 + C2 का 10%

स्वामीनाथन आयोग की रिपोर्ट में स्पष्ट रूप से कहा गया है कि किसानों को उनके उत्पादन की सम्पूर्ण लागत से 50% अधिक की न्यूनतम समर्थन मूल्य मिलना चाहिए। यह लागत + 50% का सूत्र स्वामीनाथन आयोग से आया  और जिसमे स्पष्ट रूप से कहा गया  कि उत्पादन  लागत उत्पादन की व्यापक लागत है, जो  C2 है,  ना कि A2 + FL । C2 में वास्तविक मालिक द्वारा उत्पादन में पट्टे की भूमि के लिए किया गया किराया भुगतान  + परिवार के श्रम का प्रतिधारित मूल्य + स्वामित्व वाली पूंजीगत संपत्ति के मूल्य पर ब्याज (भूमि को छोड़कर) + स्वामित्व भूमि के किराये का मूल्य (भूमि राजस्व का  कुल मूल्य)  जैसे वास्तविक खर्च, जिसका भुगतान नकदी  व् अन्य प्रकार से किया गया हो, शामिल हैं|  उत्पादन की लागत की गणना प्रति क्विंटल और प्रति हेक्टेयर के आधार पर की जाती है। चूंकि राज्यों में लागत भिन्नता बहुत ज्यादा होने के कारण CACP अनुग्रह करता है की  न्यूनतम समर्थन मूल्य को C2 के आधार पर माना जाना चाहिए। हालाँकि, धान और गेहूं के मामले में न्यूनतम समर्थन मूल्य में बढ़ोत्तरी इतनी ज्यादा है कि अधिकांश राज्यों मे न्यूनतम समर्थन मूल्य न केवल C2, बल्कि C3 से भी ऊपर है।

रबी सीजन, 2017- 18  की  अनुमानित लागत और सिफारिश की गयी न्यूनतम समर्थन मूल्य (रु प्रति क्विंटल में)

स्रोत: कृषि लागत और मूल्य  आयोग और कृषि मंत्रालय

यहीं पर न्यूनतम समर्थन मूल्य की राजनीतिक अर्थव्यवस्था असहाय किसानों की समस्या को जटिल बनाती है । हालाँकि 23 फसलों  का  न्यूनतम समर्थन मूल्य  अधिसूचित किया  जाता है, लेकिन वास्तव में 3 से अधिक को सुनिश्चित नहीं किया  जाता  हैं। भारतीय कृषि क्षेत्र  छोटे आकार के कृषि स्वामित्व के चलते निम्न  स्तर के उत्पादन से त्रस्त है, प्रचलित प्रणाली के अंतर्गत लागत पर मुनाफा  किसानो के लिए कम आय पैदा करना सुनिश्चित करता है ।  इन्ही  महत्वपूर्ण बिन्दुओं पर जोर देते हुए  किसान  न्यूनतम समर्थन मूल्य को  प्रभावी लागतों की तुलना में 50% अधिक बढ़ाकर, न्यूनतम समर्थन मूल्य के प्रभावी क्रियान्वान की मांग  कर रहें हैं। किसान और किसान संगठनों ने मांग की है कि न्यूनतम समर्थन मूल्य को उत्पादन की लागत + 50% तक बढ़ाया जाए,  चूँकि  उनके लिए उत्पादन की लागत का मतलब C2 है और A2 + FL नहीं । वर्तमान में, CACP, A2 और FL को जोड़कर न्यूनतम समर्थन मूल्य निर्धारित  करता है। सरकार फिर A2 और FL को जोड़कर प्राप्त किये गए मूल्य का 50% जोड़कर न्यूनतम समर्थन मूल्य तय करती है, और इस प्रकार C2 को अनदेखा कर दिया जाता है। किसान व किसानों के संगठन  मांग है कि न्यूनतम समर्थन मूल्य में C2 का 50%  जोड़ा  जाये, जो  सरकारी घोषणाओं के मुख्यरूप   से गायब है।  न्यूनतम समर्थन मूल्य के संदर्भ में किसानों  की मांग  व सरकार क्या  दे रही है, इनका अंतर ही तनाव का मुख्य कारण है | 

रमेश चंद, जो वर्तमान में निति आयोग  में  सेवारत  होने के बावजूद भी,  सरकार के द्वारा दिए जा रहे सहुलियातोँ के तार्किक विश्लेषण पर जोर देते हैं|   उनका यह भी सिफारिश है कि कार्यशील पूंजी पर ब्याज मौजूदा आधे सीजन के  बजाय  पूरे सीजन के लिए  दिया जाना चाहिए, और गाँव में प्रचलित वास्तविक किराये के मूल्य को किराए पर बिना किसी उच्चतम सीमा  के माना जाना चाहिए। इसके अलावा, कटाई के बाद की लागत, सफाई, ग्रेडिंग, सुखाने, पैकेजिंग, विपणन और परिवहन को शामिल किया जाना चाहिए।  जोखिम प्रीमियम और प्रबंधकीय शुल्कों को ध्यान में रखते हुए C2   को 10% तक बढ़ाया जाना चाहिए।

 रमेश चंद के अनुसार, न्यूनतम समर्थन मूल्य की सिफारिश करते समय  बाजार निकासी कीमत को ध्यान में रखना आवश्यक है। यह, मांग और आपूर्ति,  पक्षों को प्रतिबिंबित करेगा । जब मांग-पक्ष के कारकों के आधार पर न्यूनतम समर्थन मूल्य तय किया जाता है,  तब न्यूनतम समर्थन मूल्य को लागू करने के लिए सरकारी हस्तक्षेप की आवश्यकता केवल बाज़ार प्रतिस्पर्धा की गैर-मौजूदगी व् निजी व्यापार के शोषक रूप लेने तक ही सिमित हो जाता है  । हालाँकि, अगर कोई न्यूनतम मूल्य भुगतान तंत्र या फसलें हैं  जिनपर न्यूनतम समर्थन मूल्य  घोषित किया गया हैं, लेकिन खरीददारी ना होने पर  सरकार को न्यूनतम समर्थन मूल्य और बाज़ार के निचले मूल्य के अंतर के बीच के आधार पर किसानों को मुआवजा देना चाहिए। ऐसा ही एक तंत्र, भावान्तर भुगतान योजना के नाम से मध्य प्रदेश में लागू किया गया , जहाँ पर सरकार ने किसानों से सीधे खरीद में अपने पुराने ख़राब रिकॉर्ड को स्वीकार करने के  बजाय,  बाजार मूल्य न्यूनतम समर्थन मूल्य से  कम होने पर  किसानों को सीधे नकद हस्तांतरण के माध्यम से मुआवजा देने का व्यवस्था किया गया है . भुगतान में देरी और भारी लेनदेन लागतें  इस योजना  की   नकारात्मक पक्ष हैं। बाजार में कम गुणवत्ता वाले अनाज के आधिक्य आपूर्ति जो  पहले से ही कम फसल की कीमतों पर  दबाव बनाती है। जब तक, इनकी और एम.एस स्वामीनाथन की सिफारिशों को गंभीरता से नहीं लिया जाता है, कृषि संकट का समाधान पूंजीवादी तबाही में छिपा है। और कोई ऐसा क्यों कहता है?

मूल्य की कमी वाले तंत्र पर बातचीत करने और संकल्प की ओर बढ़ने के लिए, सरकार के पास को  खरीद के रूप में एक  विकल्प  बच जाता है। लेकिन, इसमें एक विरोधाभास है। जिन फसलों लिए न्यूनतम समर्थन मूल्य की घोषणा की गई है, जिसकी संख्या 20 है, उनके लिए सरकार के पास स्पष्ट रूप से पहले एक प्रणाली बनाने और फिर उन फसलों की खरीद का प्रबंधन करने का बैंडविड्थ (bandwidth) नहीं है। यदि यह  स्थिति गतिरोध तक पहुँच गयी है, तो सरकार की निजी बाजारों की ओर रुख करने की संभावना से इनकार नहीं किया जा सकता है।  यदि ऐसा होता है तोह  बाजार स्थानीय राजनेताओं की मनमानेपन और पसंद की चपेट में  आ जायेगा, जो आमतौर पर अपने क्रिया-कलाप में सत्ता के केन्द्रों को प्रभावित करते हहुये  सिस्टम को  अपने सुविधानुसार चलातें हैं ।

स्पष्ट रूप से कुछ ऐसे सवाल हैं जो  उत्तर की मांग करतें हैं  और ये सभी सवाल नीति बनाने के दायरे में आते हैं। उदाहरण के लिए, क्या बजट में न्यूनतम समर्थन मूल्य के दायरे में आने वालेसभी किसानों के  सीमा को बढ़ाने का प्रावधान है?  दूसरा, न्यूनतम समर्थन मूल्य की गणना में निजी लागत और लाभ शामिल होते हैं, और इस  प्रकार केवल  एक पक्ष प्रदर्शित   होताहै। संपूर्ण समझ के लिए, सामाजिक लागत और लाभों को भी शामिल किया जाना चाहिए। मुख्य रूप से निजी लागतों और लाभों पर ध्यान केंद्रित करने के साथ, सामाजिक रूप से बेकार उत्पादन और विशेषज्ञता को प्रोत्साहित किया जाता है, जैसे उत्तर भारत में धान के उत्पादन में होने वाले परिणाम जिसके  गवाह  हैं। क्या इस दोहरे बंधन को दूर किया जा सकता है, यह एक नीतिगत मामला है, और फिलहाल जो देखा जा रहा है यह एक नीतिगत पक्षाघात है और राजनीतिक इच्छा की कमी केवल वोट बैंक को बनाने के लिए की जाएगी। यह बेहद अफसोसजनक है! 

Albert Camus Reads Richard K. Morgan: Unsaid Existential Absurdism

Humanity has spread to the stars. We set out like ancient seafarers to explore the limitless ocean of space. But no matter how far we venture into the unknown, the worst monsters are those we bring with us. – Takeshi Kovacs

What I purport to do in this paper is pick up two sci-fi works of Richard Morgan, Altered Carbon (teaser to Netflix series), the first of Takeshi Kovacs trilogy and sometimes a grisly tale of switching bodies to gain immortality transhumanism, either by means of enhanced biology, technology, or biotechnology, and posthumanism. The second is Market Forces, a brutal journey into the heart of corporatized conflict investment by way of conscience elimination. Thereafter a conflation with Camus’ absurdity unravels the very paradoxical ambiguity underlying absurdism as a human condition. The paradoxical ambiguity is as a result of Camus’ ambivalence towards the neo-Platonist conception of the ultimate unifying principle, while accepting Plotinus’ principled pattern, but rejecting its culmination.

Richard Morgan’s is a parody, a commentary, or even en epic fantasy overcharged almost to the point of absurdity and bordering extropianism. If at all there is a semblance of optimism in the future as a result of Moore’s Law of dense hardware realizable through computational extravagance, it is spectacularly offset by complexities of software codes resulting in a disconnect that Morgan brilliantly transposes on to a society in a dystopian ethic. This offsetting disconnect between the physical and mental, between the tangible and the intangible is the existential angst writ large on the societal maneuvered by the powers that be.

Morgan’s Altered Carbon won’t be a deflection from William Gibson’s cyberpunk, or at places even Philip K Dick’s Do Androids Dream of Electric Sheep?, which has inspired the cult classic Ridley Scott’s Blade Runner, wherein the interface between man and machine is coalescing (sleeves as called in the novel), while the singularity pundits are making hay. But, what if the very technological exponent is used against the progenitors, a point that defines much of Artificial Intelligence ethics today? What if the human mind is now digitized, uploaded and downloaded as a mere file, and transferred across platforms (by way of needlecast transmitting DHF, individual digital human freight) rendering the hardware dis- posable, and at the same time the software as a data vulnerable to the vagaries of the networked age? These aren’t questions keeping the ethic at stake alone, but rather a reformatting of humanity off the leash. This forever changes the concept of morality and of death as we know it, for now anyone with adequate resources (note the excess of capitalism here) can technically extend their life for as long as they desire by reserving themselves into cloned organics or by taking a leaf off Orwell’s Government to archive citizen records in perpetual storage. Between the publication in 2002 and now, the fiction in science fiction as a genre has indeed gotten blurred, and what has been the Cartesian devil in mind-body duality leverages the technological metempsychosis of consciousness in bringing forth a new perception on morality.

Imagine, the needle of moral compass behaving most erratically, ranging from extreme apathy to moderate conscience in consideration of the economic of collateral damage, with the narrative wrenching through senses, thoughts and emotions before settling down into a dystopian plot dense with politics, societal disparity, corruption, abuse of wealth and power, and repressively conservative justice. If extreme violence is distasteful in Altered Carbon, the spectacle is countered by the fact that human bodies and memories are informational commodities as digitized freight and cortical stacks, busted and mangled physical shells already having access to a sleeve to reincarnate and rehabilitate on to, opening up new vistas of philosophical dispositions and artificially intelligent deliberation on the ethics of fast-disappearing human-machine interface.

If, Personal is Political, Altered Carbon results in a concussion of overloaded themes of cyberpunk tropes and is indicative of Morgan’s political takes, a conclusion only to be commissioned upon reading his later works. This detective melange heavily slithers through human condition both light and dark without succumbing to the derivatives of high-tech and low-life and keeping the potentials of speculative fiction to explorations. The suffusive metaphysics of longevity, multiplicity of souls and spiritual tentacles meeting its adversary in Catholicism paints a believable futuristic on the canvass of science-fiction spectra.

Market Forces, on the other hand is where cyberpunk-style sci-fi is suddenly replaced with corporatized economy of profit lines via the cogency of conflict investment. The world is in a state of dysphoria with diplomatic lines having given way to negotiations with violence, and contracts won on Ronin-esque car duels shifting the battlefield from the cyberspace of Altered Carbon to the more terrestrial grounds. Directly importing from Gordon Gekko’s “Greed is Good”, corporates enhance their share of GDP via legal funding of foreign wars. The limits of philosophy of liberal politics are stretched on analogizing the widening gap between the rich and the marginalized in the backdrop of crime-ravaged not-so futuristic London. Security is rarefied according to economic stratifications, and surveillance by the rich reach absurd levels of sophistication in the absence of sousveillance by the marginalized.

Enter Chris Faulkner, the protagonist defined by conscience that starts to wither away when confronted with taking hard and decisive actions for his firm, Shorn Associates, in the face of brutality of power dynamics. The intent is real-life testosterone absolutism maximizing the tenets of western capitalism in an ostentatious exhibition of masculinity and competition. The obvious collateral damage is fissuring of familial and societal values born as a result of conscience. Market Forces has certain parallels from the past, in the writings of Robert Sheckley, the American sci-fi author, who would take an element of society and extrapolate on its inherent violence to the extent of the absurd sliding into satire. It’s this sliding wherein lies the question of the beyond, the inevitability of an endowment of aggression defining, or rather questioning the purpose of the hitherto given legacy of societal ethic.

With no dearth of violence, the dystopian future stagnates into dysphoria characterized by law and apparatus at the mercy of corporations, which transcend the Government constitutionally along rapacious capitalism. A capitalism that is so rampant that it transforms the hero into an anti-hero in the unfolding tension between interest and sympathy, disgust and repulsion. The perfectly achievable Market Forces is a realization round the corner seeking birth between the hallucinogenic madness of speculations and hyperreality hinging on the philosophy of free-markets taken to its logical ends in the direction of an unpleasant future. The reductio ad absurdum of neoliberalism is an environment of feral brutality masked with the thinnest veneer of corporate civilization, and is the speculation that portrays the world where all power equates violence. This violence is manifested in aggression in a road rage death match against competitors every time there is a bid for a tender. What goes slightly over the board, and in a pretty colloquial usage of absurdity is why would any competition entail the best of staff on such idiotic suicide missions?

Camus’ absurdity is born in The Myth of Sisyphus, and continues well into the The Rebel, but is barely able to free itself from the clutches of triviality. This might appear to be a bold claim, but the efficacy is to be tested through Camus’ intellectual indebtedness to Plotinus, the Neo-Platonist thinker. Plotinus supplemented the One and Many idea of Plato with gradations of explanatory orders, for only then a coalescing of explanations with reality was conceivable. This coalescing converges into the absolute unity, the One, the necessarily metaphysical ground. Now, Camus accepts Plotinus in the steganographic, but strips the Absolute of its metaphysics. A major strand of absurdity for Camus stems from his dic- tum, “to understand is, above all, to unify”, and the absence of such unifying principle vindicates absurdity. Herein, one is confronted with the first of paradoxes, in that, if the Absolute is rejected, why then is there in Camus a nostalgia for unity? The reason is peculiarly caught between his version of empiricism and monism. His empiricism gives accord to comprehensibility of ordinary experiences by way of language and meaning, while anything transcending the same is meaninglessness and hinges on the Plotinus’ Absolute for comprehensibility, thus making him sound a monist. Add to this contradiction is the face of the Christian God to appear if the Absolute were not to be rejected, which would then have warranted a clash between good and evil in the face of the paradox of the existing of the latter when God was invested with qualities of the former. Invoking modernism’s core dictum, Camus then, questions spontaneity in the presence of Absolute by calling to attention scholastic perplexity.

Having rejected the Absolute, Camus takes the absurd condition as a fact. If one were to carefully tread The Myth of Sisyphus, it works thusly: If a man removes himself, he destroys the situation and hence the absurd condition. Since, the absurd condition is taken as a fact, one who destroys himself denies this fact. But he who denies this fact puts himself in opposition to what is, Truth. To oppose the Truth, recognizing it to be true, is to contradict oneself. Recognizing a truth, one ought to preserve it rather than deny it. Therefore, it follows that one ought not to commit metaphysical suicide in the face of the meaningless universe. This is a major paradox in his thought, where the evaluative absurdity is deemed to be preserved starting from the premise that man and the universe juxtaposed together is absurdity itself. So, what we have here is a logical cul-de-sac. But, what is of cardinal import is the retention of life in mediating between the man and universe as absurdity in polarities. If this were confronting the absurd in life, eschatology is another confrontation with the absurd, an absolute that needs to be opposed, a doctrine that becomes a further sense of the absurd, an ethic of the creation of the absolute rule in a drama of man as a struggle against death.

It is this conjecture that builds up in The Rebel, death as an antagonist subjected to rebellion. The absurdity of death lies across our desire for immortality, the inexplicability of it, and negating and denying the only meaningful existence known. Contradictorily, death would not be absurd if immortality were possible, and existence as is known isn’t the only meaningful existence that there is. Camus is prone to a meshwork logic here, for his thought fluctuates between viewing death as an absolute evil and also as a liberator, because of which it lends legitimacy to freedom. For, it isn’t the case that Camus is unaware of the double bind of his logic, and admittedly he ejects himself out of this quandary by deliberating on death not as a transcendental phenomenon, but as an ordinary lived-experience. If the Myth of Sisyphus holds murder and suicide in an absurdist position by denying the transcendent source of value, The Rebel revels in antagonisms with Nihilism, be it either in the sense of nothing is prohibited, or the absolutist nihilism of “permit all” with a fulcrum on the Absolute. The Rebel epitomizes the intellectual impotency of nihilism. But due credit for the logical progression of Camus is mandated here, for any utopia contains the seed of nihilism, in that, any acceptance of an Absolute other than life ultimately leads to tyranny. If this were to be one strand in the essay, the other is exposited in terms of an unrelenting and absolute opposition to death. Consequently, The Rebel, which is the embodiment of Camus’ ethic cannot kill. To avoid any danger of absolutism in the name of some positive good or value, the absolute value becomes oppositional to death, and hence the Rebel’s ethic is one of ceaseless rebellion, opposition and conflict.

Now, with a not very exhaustive treatment to Camus’ notion of absurdity as there is more than meets the eye in his corpus, let us turn to conflation with Richard Morgan and justify our thesis that we set out with. We shall bring this about by a series of observations.

If antagonism to death is the hallmark of rebellion, then Altered Carbon with its special hard-drives called “Stacks” installed in the brainstem immortalizes consciousness to be ported across humans across spacetimes. Needlecasting, the process by which human consciousness in the format of data gets teleported suffers disorientation across human hardwares, if it could even be called that. Interestingly, this disorientation aggrandizes the receiver conflict-ready, a theme that runs continuously in Market Forces as well as in Altered Carbon. The state of being conflict- and combat-ready is erecting armies to quash down rebellions. To prevent immortality from getting exploited in the hands of the privileged, these armies are trained to withstand torture, drudgery, while at the same time heightening their perception via steganography. But where the plot goes haywire for Camus’ rebel is Richard Morgan’s can neutralize and eliminate. Thats the first observation.

On to the second, which deals with transhumanism. A particular character, Kovac’s partner Kristen Ortega has a neo-Catholic family that’s split over God’s view of resurrecting a loved one. The split is as a result of choosing religious coding, a neo-Catholic semblance being the dead cannot be brought back to life. In these cases, Altered Carbon pushes past its Blade Runner fetish and reflexive cynicism to find something human. But, when the larger world is so thin, it’s hard to put something like neo-Catholicism in a larger context. Characters have had centuries to get used to the idea of stacks begging the larger question: why are many still blindsided by their existence? And why do so few people, including the sour Meths, seem to be doing anything interesting with technology? Now Camus’ man is confronted with his absurd and meaningless existence, which will be extinguished by death. There are two choices to consider here: either he can live inauthentically, implying hiding from truth, the fact that life is meaningless, and accepting the standards and values of the crowd, and in the process escaping the inner misery and despair that results from an honest appraisal of facts. Or, he can take the authentic choice and live heroically, implying facing the truth, life’s futility, and temporarily, submitting to despair which is a necessary consequence, but which, if it does not lead to suicide, will eventually purify him. Despair will drive him out of himself and away from trivialities, and by it he will be impelled to commit himself to a life of dramatic choices. This is ingrained in the intellectual idea of neo-Catholicism, with Camus’ allusion as only the use of the Will can cause a man truly to be. Both Takeshi Kovacs in Altered Carbon and Chris Faulkner in Market Forces amply epitomize this neo-Catholicism, albeit not directly, but rather, as an existential angst in the form of an intrusion.

Now for the third observation. The truth in Altered Carbon is an excavation of the self, more than searching data and tweaking it into information. It admonishes to keep going no matter whichever direction, a scalar over the vector territorialization in order to decrypt that which seems hidden, an exercise in futility. Allow me to quote Morgan in full,

You are still young and stupid. Human life has no value. Haven’t you learned that yet, Takeshi, with all you’ve seen? It has no value, intrinsic to itself. Machines cost money to build. Raw materials cost money to extract. But people? You can always get some more people. They reproduce like cancer cells, whether you want them or not. They are abundant, Takeshi. Why should they be valuable? Do you know that it costs us less to recruit and use up a real snuff whore that it does to set up and run virtual equivalent format. Real human flesh is cheaper than a machine. It’s the axiomatic truth of our times?

In full consciousness and setting aside the impropriety above, Morgan’s prejudicing the machine over human flesh extricates essentialism, mirroring Camusian take on the meaning of life as inessential, but for the burning problem of suicide. This is a direct import from Nietzsche, for who, illusion (the arts, Remember Wagner!) lends credibility to life and resolves despair to some extent, whereas for Camus, despair is only coming to terms with this absurd condition, by way of machination in the full knowhow of condition’s futility and pointlessness. This fact is most brilliantly corroborated in Morgan’s dictum about how constant repetition can even make the most obvious truths irritating enough to disagree with (Woken Furies).

To conclude: Imagine the real world extending into the fictive milieu, or its mirror image, the fictive world territorializing the real leaving it to portend such an intercourse consequent to an existential angst. Such an imagination now moves along the coordinates of hyperreality, where it collaterally damages meaning in a violent burst of EX/IM-plosion. This violent burst disturbs the idealized truth overridden by a hallucinogenic madness prompting iniquities calibrated for an unpleasant future. This invading dissonant realism slithers through the science fiction before culminating in the human characteristics of expediency. Such expediencies abhor fixation to being in the world built on deluded principles, where absurdity is not only a human condition, but an affliction of the transhuman and posthuman condition as well. Only the latter is not necessarily a peep into the future, which it might very well be, but rather a disturbing look into the present-day topographies, which for Camus was acquiescing to predicament, and for Richard Morgan a search for the culpable.

The Mathematics of Political Policies and Economic Decisions – Dictatorial (Extremists) Versus Democratic. Note Quote. Part 1 Didactics.

If a strategy-proof, onto rule does not pick x∗ when it is the median of peaks and y_m‘s, then a contradiction is reached using preferences with peaks at p_i^L and p_i^H.

Let us take a look at single-peaked preferences over one-dimensional policy spaces. This domain can be used to model political policies, economic decisions, location problems, or any allocation problem where a single point must be chosen in an interval. The key assumption is that agents’ preferences are assumed to have a single most-preferred point in the interval, and that preferences are “decreasing” as one moves away from that peak.

Formally, the allocation space (or policy space) is the unit interval A = [0, 1]. An outcome is a single point x ∈ A. Each agent i ∈ N has a preference ordering ≽_i, which is a weak order over the outcomes in [0, 1]. The preference relation ≽_i is single-peaked if ∃ a point p_i ∈ A (the peak of ≽_i) such that ∀ x ∈ A\{p_i} and all λ ∈ [0,1), (λx +(1−λ)p_i) ≻_i x. Let R denote the class of single-peaked preferences.

We denote the peaks of preference relations ≽_i, ≽′_i, ≽_j, etc., respectively by p_i, p_i′, p_j, etc. Denote a profile (n-tuple) of preferences as ≽ ∈ Rⁿ.

One can imagine this model as representing a political decision such as an income tax rate, another political issue with conservative/liberal extremes, the location of a public facility on a road, or even something as simple as a group of people deciding on the temperature setting for a shared office. Here, the agents have an ideal preferred policy in mind, and would prefer that a decision be made as close as possible to this “peak.”

A rule f : Rⁿ → A assigns an outcome f(≽) to any preference profile ≽. A rule is strategy-proof if it is a dominant strategy for each agent to report his preferences truthfully when the rule is being used to choose a point.

Our purpose then is to see that this class of problems admits a rich family of strategy-proof rules whose ranges include more than two alternatives. In fact, the family of such rules remains rich even when one restricts attention to rules that satisfy the following condition.

We say that a rule f is onto if ∀ x ∈ A ∃ ≽ ∈ Rⁿ such that f(≽) = x. An onto rule cannot preclude an outcome from being chosen ex ante. It is not without loss of generality to impose this condition. For instance, fix two points x, y ∈ [0, 1] and consider a rule that chooses whichever of the two points is preferred to the other by a majority of agents (and where x is chosen in case of a tie). Such a rule is strategy-proof, but not onto. Similar strategy-proof rules can even break ties between x and y by using preference information about other points x′, y′, . . ., in [0, 1], even though x′, etc., are not in the range of the rule.

The onto condition is even weaker than what is called unanimity, which requires that whenever all agents’ preferences have the same peak (p_i = p_j ∀ i, j), the rule must choose that location as the outcome. In turn, unanimity is weaker than Pareto-optimality: ∀ ≽ ∈ Rⁿ, ∃ no point x ∈ [0, 1] such that x ≽_i f(≽) ∀ i ∈ N.

As it turns out, these three requirements are all equivalent among strategy-proof rules. Suppose f is strategy-proof. Then f is onto iff it is unanimous iff it is Pareto-optimal.

It is clear that Pareto-optimality implies the other two conditions. Suppose f is strategy-proof and onto. Fix x ∈ [0, 1] and let ≽ ∈ Rⁿ be such that f(≽) = x. Consider any “unanimous” profile ≽′ ∈ Rⁿ such that p_i′ = x for each i ∈ N. By strategy-proofness, f (≽′₁, ≽₂, . . . , ≽_n) = x, otherwise agent 1 could manipulate f. Repeating this argument, f (≽′₁, ≽′₂, ≽₃, . . . , ≽_n) = x, . . . ,f(≽′) = x. That is, f is unanimous.

In order to derive a contradiction, suppose that f is not Pareto-optimal at some profile ≽ ∈ Rⁿ. This implies that either (i) f(≽) < p_i ∀ i ∈ N or (ii) f(≽) > p_i ∀ i ∈ N . Without loss of generality, assume (i) holds. Furthermore, assume that the agents are labeled so that p₁ ≤ p₂ ≤ ··· ≤ p_n.

If p₁ = p_n then unanimity is violated, completing the proof. Otherwise, let j ∈ N be such that p₁ = p_j < p_j+1; that is, j < n agents have the minimum peak. ∀ i > j, let ≽′_i be a preference relation such that both p_i′ = p₁ and f(≽)≽′_i p_i.

Let x_n = f(≽₁,…, ≽_n−1, ≽′_n). By strategy-proofness, x_n ∈ [f(≽), p_n], otherwise agent n (with preference ≽′_n) could manipulate f by reporting preference ≽_n. Similarly, x_n ∉ (f(≽), p_n], otherwise agent n (with preference ≽_n) could manipulate f by reporting preference ≽′_n. Therefore x_n = f(≽).

Repeating this argument as each i > j replaces ≽_i with ≽′_i, we have f(≽₁,…, ≽_j, ≽′_j+1,…, ≽′_n) = f(≽), which contradicts unanimity. Since a strategy-proof, onto rule must be unanimous, this is a contradiction.

The central strategy-proof rule on this domain is the simple median-voter rule. Suppose that the number of agents n is odd. Then the rule that picks the median of the agents’ peaks (p_i ’s) is a strategy-proof rule.

It is easy to see why this rule is strategy-proof : If an agent’s peak p_i lies below the median peak, then he can change the median only by reporting a preference relation whose peak lies above the true median. The effect of this misreport is for the rule to choose a point even further away from p_i, making the agent worse off. A symmetric argument handles the case in which the peak is above the median. Finally, an agent cannot profitably misreport his preferences if his peak is the median one to begin with.

More generally, for any number of agents n and any positive integer k ≤ n, the rule that picks the k^th highest peak is strategy-proof for precisely the same reasons. An agent can only move the k^th peak further from his own. The median happens to be the case where k = (n + 1)/2.

The strategy-proofness of such rules stands in contrast to the incentives properties of rules that choose average-type statistics. Consider the rule that chooses the average of the n agents’ peaks. Any agent with peak p_i ∈ (0, 1) that is not equal to the average can manipulate the rule by reporting preferences with a more extreme peak (closer to 0 or 1) than his true peak.

This would also hold for any weighted average of the agents’ peaks, with one exception. If a rule allocated all of the weight to one agent, then the resulting rule simply picks that agent’s peak always. Such a dictatorial rule is strategy-proof and onto.

In addition to favorable incentives properties, rules based on order statistics have the property that they require little information to be computed. Technically a rule requires agents to report an entire preference ordering over [0, 1]. There is a need to transcend the rules, which, only require agents to report their most preferred point, i.e., a single number. In fact, under the onto assumption, this informational property is a consequence of the strategy-proofness requirement; that is, all strategy-proof and onto rules have the property that they can be computed solely from information about the agents’ peaks.

Let us generalize the class of “k^th-statistic rules”. Consider a fixed set of points y₁, y₂, . . . , y_n−1 ∈ A. Consider the rule that, for any profile of preferences ≽, chooses the median of the 2n − 1 points consisting of the n agents’ peaks and the n − 1 points of y. This differs in that, for some choices of y and some profiles of preferences, the rule may choose a point that is not the peak of any agent’s preferences. Yet, such a rule is strategy-proof.

Such rules compose the entire class of strategy-proof and onto rules that treat agents symmetrically. To formalize this latter requirement, we call a rule anonymous if for any ≽ ∈ Rⁿ and any permutation ≽′ of ≽, f(≽′) = f (≽). This requirement captures the idea that the agents’ names play no role in the behavior of a rule. Dictatorial rules are examples of rules that are strategy-proofand onto, but not anonymous.

A rule f is strategy-proof, onto, and anonymous iff ∃ y₁, y₂,…, y_n−1 ∈ [0,1] such that ∀ ≽ ∈ Rⁿ,

f(≽) = med{p₁, p₂,…, p_n, y₁, y₂,…, y_n−1} —– (1)

Suppose f is strategy-proof, onto, and anonymous. We make extensive use of the two (extreme) preference relations that have peaks at 0 and 1 respectively. Since preferences relations are ordinal, there is only one preference relation with a peak at 0 and only one with a peak at 1. Denote these two preference relations by ≽⁰_i and ≽¹_i respectively.

For any 1 ≤ m ≤ n − 1, let y_m denote the outcome of f when m agents have preference relation ≽¹_i and the remainder have ≽⁰_i:

y_m = f(≽⁰₁,…, ≽⁰_n−m, ≽¹_n−m+1,…, ≽¹_n)

By anonymity, the order of the arguments of f is irrelevant; if precisely m agents have preference relation ≽¹_i and the rest have ≽⁰_i then the outcome is y_m.

With a profile of preferences ≽ ∈ Rⁿ with peaks p₁, . . ., p_n, and without loss of generality (by anonymity), once one assumes that p_i ≤ p_i+1 for each i ≤ n−1, then,

f(≽) = x∗ ≡ med{p₁,…, p_n, y₁,…, y_n−1}.

If the median is some y_m, then suppose x∗ = y_m for some m. By monotonicity of the peaks and y_m‘s, since x∗ is the median of 2n−1 points this implies p_n−m ≤ x∗ = y_m ≤ p_n−m+1. By assumption,

x∗ = y_m = f(≽⁰₁,…, ≽⁰_n−m, ≽¹_n−m+1,…, ≽¹_n) —– (2)

Let x₁ = f(≽₁, ≽⁰₂,…, ≽⁰_n−m, ≽¹_n−m+1,…, ≽¹_n). Strategy-proofness implies x₁ ≥ x∗, otherwise agent 1 with preference ≽⁰₁ could manipulate f. Similarly, since p₁ ≤ y_m, we cannot have x₁ > x∗, otherwise agent 1 with preference ≽₁ could manipulate f. Hence x₁ = x∗. Repeating this argument for all i ≤ n − m, x∗ = f(≽₁,…,≽_n−m, ≽¹_n−m+1,…, ≽¹_n). The symmetric argument for all i > n−m implies

f(≽₁,…, ≽_n) = x∗ —– (3)

If the median is an agent’s peak, then the remaining case is that y_m < x∗ < y_m+1 for some m. (The cases where x∗ < y₁ and x∗ > y_n−1 are similar, denoting y₀ = 0 and y_n = 1). In this case, since the agents’ peaks are in increasing order, we have x∗ = p_n−m. If

f(≽⁰₁,…, ≽⁰_n−m−1, ≽_n−m, ≽¹_n−m+1,…, ≽¹_n) = x∗ = p_n−m —– (4)

then, analogous to the way (2) implied (3), repeated applications of strategy-proofness (to the n−1 agents other than i = n−m) would imply f(≽₁,…, ≽_n) = x∗, and the proof would be finished.

Thus, the parameters (y_m‘s) can be thought of as the rule’s degree of compromise when agents have extremist preferences. If m agents prefer the highest possible outcome (1), while n − m prefer the lowest (0), then which point should be chosen? A true median rule would pick whichever extreme (0 or 1) contains the most peaks. On the other hand, the other rules may choose intermediate points (y_m) as a compromise. The degree of compromise (which y_m) can depend on the degree to which the agents’ opinions are divided (the size of m).

The anonymity requirement is a natural one in situations where agents are to be treated as equals. If one does not require this, however, the class of strategy-proof rules becomes even larger. Along the dictatorial rules, which always chooses a predetermined agent’s peak, there are less extreme violations of anonymity: The full class of strategy-proof, onto rules, allows agents to be treated with varying degrees of asymmetry.

Minimum Support Price (MSP) for Farmers – Ruminations for the Grassroots.

Minimum Support Price (MSP) is an insurance given by the Government of India to insure farmers and agricultural workers against any sharp fall in farm prices. MSP is a policy instrument at the disposal of the government and is introduced based on the recommendations of the Commission for Agricultural Costs and Prices (CACP) generally at the beginning of sowing season. The major objective of MSP is protecting and supporting farmers during bumper production periods by pouring food grains for public distribution. There are two ways in which an effective MSP can be implemented, viz. procurement of commodities and as remunerative. The remunerative nature for farmers compensates the difference between MSP and the prices received by them.

With the agrarian crisis looming large, the policies need to emphasize on measures that can bring forth immediate results. These results could be achieved through the components of price and non-price factors. Non-price factors are long-term oriented and rely on market reforms, institutional reforms and innovations in technology in order to bring in an upward drift growth and income brackets of the farmers. Price factors are short-term oriented that necessitate immediate upward drift in remunerative prices for farm produce. It is within the ambit of price factors that MSP stands. The government notifies MSP for 23 commodities and FRP (fair and remunerative price) for sugarcane. These crops cover about 84% of total area under cultivation in all the seasons of a year. About 5% area is under fodder crops which is not amenable for MSP intervention. According to this arithmetic, close to 90% of the total cultivated area is applicable to MSP intervention, leaving a small segment of producers amenable to price benefits, if the MSP were to be fully implemented.

So, how exactly does the CACP determine the Minimum Support Price (MSP)? CACP takes the following factors under consideration while determining the MSP:

1. Cost of cultivation per hectare and structure of costs across various regions in the country and the changes therein.
2. Cost of production per quintal across various regions of the country and the changes therein.
3. Prices of various inputs and the changes therein.
4. Market prices of products and the changes therein.
5. Prices of commodities sold by the farmers and of those purchased by them and the changes therein.
6. supply-related information like area, yield and production, imports, exports and domestic availability and stocks with the Government/Public agencies or industry.
7. Demand-related information, which includes the total and per capita consumption, trends and capacity of the processing industry.
8. Prices in the international markets and the changes therein.
9. Prices of the derivatives of the farm products such as sugar, jaggery, jute, edible and non-edible oils, cotton yarns and changes therein.
10. Cost of processing of agricultural products and the changes therein.
11. Cost of marketing and services, storage, transportation, processing, taxes/fees, and margins retained by market functionaries, and
12. Macroeconomic variables such as general level of prices, consumer price indices and those reflecting monetary and fiscal factors.

As can be seen, this is an extensive set of parameters that the Commission relies on for calculating the Minimum Support Price (MSP). But, then the question is: where does the Commission get access to this data set? The data is generally gathered from agricultural scientists, farmer leaders, social workers, central ministries, Food Corporation of India (FCI), National Agricultural Cooperative Marketing Federation of India (NAFED), Cotton Corporation of India (CCI), Jute Corporation of India, traders’ organizations and research institutes. The Commission then calculates the MSP and sends it to the Central Government for approval, which then sends it to the states for their suggestions. Once the states given their nods, the Cabinet Committee on Economic Affairs subscribes to these figures that are then released on CACP portals.

During the first year of UPA-1 Government in the centre in 2004, a National Commission on Farmers (NCF) was formed with M S Swaminathan (Research Foundation) as its Chairman. One of the major objectives of the Commission was to make farm commodities cost-competitive and profitable. To achieve this task, a three-tiered structure for calculating the farming cost was devised, viz. A2, FL and C2. A2 is the actual paid out costs, while, A2+FL is the actual paid-out cost plus imputed value of family labour, where imputing is assigning a value to something by inference from the value of the products or processes to which it contributes. C2 is the comprehensive cost including imputed rent and interest on owned land and capital. It is evident that C2 > A2+FL > A2

The Commission for Agricultural Costs and Prices (CACP) while recommending prices takes into account all important factors including costs of production, changes in input prices, input/output parity, trends in market prices, inter crop price parity, demand and supply situation, parity between prices paid and prices received by the farmers etc. In fixing the support prices, CACP relies on the cost concept which covers all items of expenses of cultivation including that of the imputed value of the inputs owned by the farmers such as rental value of owned land and interest on fixed capital. some of the important cost concepts are C2 and C3:

C3: C2 + 10% of C2 to account for managerial remuneration to the farmer.

Swaminathan Commission Report categorically states that farmers should get an MSP, which is 50% higher than the comprehensive cost of production. this cost + 50% formula came from the Swaminathan Commission and it had categorically stated that the cost of production is the comprehensive cost of production, which is C2 and not A2+FL. C2 includes all actual expenses in cash and kind incurred in the production by the actual owner + rent paid for leased land + imputed value of family labour + interest on the value of owned capital assets (excluding land) + rental value of the owned land (net of land revenue). Costs of production are calculated both on a per quintal and per hectare basis. Since cost variation are large over states, CACP recommends that MSP should be considered on the basis of C2. However, increases in MSP have been so substantial in case of paddy and wheat that in most of the states, MSPs are way above not only the C2, but even C3 as well.

This is where the political economy of MSP stares back at the hapless farmers. Though 23 crops are to be notified on MSP, not more than 3 are are actually ensured. The Indian farm sector is also plagued by low scale production restricted by small-sized holdings, which ensures that margin over cost within the prevailing system generates at best low income for the farmers. This is precisely the point of convergence of reasons why the farmers have been demanding effective implementation of MSP by keeping the MSP 50% higher than the costs incurred. Farmers and farmers’ organizations have demanded that the MSP be increased to cost of production + 50%, since for them, cost of production has meant C2 and not A2+FL. At present, the CACP adds A2 and FL to determine the MSP. The Government then adds 50% of the value obtained by adding A2 and FL only to fix the MSP, thus ignoring C2. What the farmers and farmers’ organizations have been demanding is an addition of 50% to C2 to fix the MSP, which is sadly missing the hole point of Governmental announcements. This difference between what the farmers want and what the government gives is a reason behind so much unrest as regards support prices to the farmers.

Ramesh Chand, who is currently serving in the NITI Aayog, is still a voice of reason over and above what the Government has been implementing by way of sops. Chand has also recommended that the interest on working capital should be given for the whole season against the existing half-season, and the actual rental value prevailing in the village should be considered without a ceiling on the rent. Moreover, post-harvest costs, cleaning, grading, drying, packaging, marketing and transportation should be included. C2 should be hiked by 10% to account for the risk premium and managerial charges.

According to Ramesh Chand of NITI Aayog, there is an urgent need to take into account the market clearance price in recommending the MSP. This would reflect both the demand and supply sides. When the MSP is fixed depending on the demand-side factors, then the need for government intervention to implement MSPs would be reduced only to the situation where the markets are not competitive or when the private trade turns exploitative. However, if there is a deficiency price payment mechanism or crops for which an MSP declared but the purchase doesn’t materialize, then the Government should compensate the farmers for the difference between the MSP and lower market price. such a mechanism has been implemented in Madhya Pradesh under the name of Bhavantar Bhugtan Yojana (BBY), where the Government, rather than accept its poor track record in procurement directly from the farmers has been compensating the farmers with direct cash transfers when the market prices fall below MSP. The scheme has had its downsides with long delays in payments and heavy transaction costs. There is also a glut in supply with the markets getting flooded with low-quality grains, which then depress the already low crop prices. Unless, his and MS Swaminathan’s recommendations are taken seriously, the solution to the agrarian crisis is hiding towards a capitalist catastrophe. And why does one say that?

In order to negotiate the price deficient mechanism towards resolution, the Government is left with another option in the form of procurement. But, here is a paradox. The Government clearly does not have the bandwidth to first create a system and then manage the procurement of crops for which the MSP has been announced, which now number 20. If there is a dead-end reached here, the likelihood of Government turning towards private markets cannot be ruled out. And once that turn is taken, thee markets would become vulnerable to whims and fancies of local politicians who would normally have influencing powers in their functioning, thus taking the system on their discretionary rides.

There obviously are certain questions that deem an answer and these fall within the ambit of policy making. For instance, is there a provision in the budget to increase the ambit of farmers who are covered by the MSP? Secondly, calculations of MSP involve private costs and benefits, and thus exhibit one side of the story. For an exhaustive understanding, social costs and benefits must also be incorporated. With a focus primarily on private costs and benefits, socially wasteful production and specialization is encouraged, like paddy production in north India with attendant consequences to which we have become grim witnesses. Would this double-bind ever be overcome is a policy matter, and at the moment what is being witnessed is a policy paralysis and lack of political will transforming only in embanking the vote bank. Thats a pity!

Equilibrium Market Prices are Unique – Convexity and Concavity Utility Functions on a Linear Case. Note Quote + Didactics.

Consider a market consisting of a set B of buyers and a set A of divisible goods. Assume |A| = n and |B| = n′. We are given for each buyer i the amount e_i of money she possesses and for each good j the amount b_j of this good. In addition, we are given the utility functions of the buyers. Our critical assumption is that these functions are linear. Let u_ij denote the utility derived by i on obtaining a unit amount of good j. Thus if the buyer i is given x_ij units of good j, for 1 ≤ j ≤ n, then the happiness she derives is

∑_j=1ⁿu_ijx_ij —— (1)

Prices p₁, . . . , p_n of the goods are said to be market clearing prices if, after each buyer is assigned an optimal basket of goods relative to these prices, there is no surplus or deficiency of any of the goods. So, is it possible to compute such prices in polynomial time?

First observe that without loss of generality, we may assume that each b_j is unit – by scaling the u_ij’s appropriately. The u_ij’s and e_i’s are in general rational; by scaling appropriately, they may be assumed to be integral. By making the mild assumption that each good has a potential buyer, i.e., a buyer who derives nonzero utility from this good. Under this assumption, market clearing prices do exist.

It turns out that equilibrium allocations for Fisher’s linear case are captured as optimal solutions to a remarkable convex program, the Eisenberg–Gale convex program.

A convex program whose optimal solution is an equilibrium allocation must have as constraints the packing constraints on the x_ij’s. Furthermore, its objective function, which attempts to maximize utilities derived, should satisfy the following:

1. If the utilities of any buyer are scaled by a constant, the optimal allocation remains unchanged.
2. If the money of a buyer b is split among two new buyers whose utility functions are the same as that of b then sum of the optimal allocations of the new buyers should be an optimal allocation for b.

The money weighted geometric mean of buyers’ utilities satisfies both these conditions:

max (∏_i∈Au_i^ei)^1/∑_ie_i —– (2)

then, the following objective function is equivalent:

max (∏_i∈Au_i^ei) —– (3)

Its log is used in the Eisenberg–Gale convex program:

maximize, ∑_i=1^n’e_ilogu_i

subject to

u_i = ∑_j=1ⁿu_ijx_ij ∀ i ∈ B

∑_i=1^n’ x_ij ≤ 1 ∀ j ∈ A

x_ij ≥ 0 ∀ i ∈ B, j ∈ A —– (4)

where x_ij is the amount of good j allocated to buyer i. Interpret Lagrangian variables, say p_j’s, corresponding to the second set of conditions as prices of goods. Optimal solutions to x_ij’s and p_j’s must satisfy the following:

1. 1. ∀ j ∈ A : p_j ≥ 0
   2. ∀ j ∈ A : p_j > 0 ⇒ ∑_i∈A x_ij = 1
   3. ∀ i ∈ B, j ∈ A : u_ij/p_j ≤ ∑_j∈Au_ijx_ij/e_i
   4. ∀ i ∈ B, j ∈ A : x_ij > 0 ⇒ u_ij/p_j = ∑_j∈Au_ijx_ij/e_i

From these conditions, one can derive that an optimal solution to convex program (4) must satisfy the market clearing conditions.

For the linear case of Fisher’s model:

1. If each good has a potential buyer, equilibrium exists.
2. The set of equilibrium allocations is convex.
3. Equilibrium utilities and prices are unique.
4. If all u_ij’s and e_i’s are rational, then equilibrium allocations and prices are also rational. Moreover, they can be written using polynomially many bits in the length of the instance.

Corresponding to good j there is a buyer i such that u_ij > 0. By the third condition as stated above,

p_j ≥ e_iu_ij/∑_ju_ijx_ij > 0

By the second condition, ∑_i∈A x_ij = 1, implying that prices of all goods are positive and all goods are fully sold. The third and fourth conditions imply that if buyer i gets good j then j must be among the goods that give buyer i maximum utility per unit money spent at current prices. Hence each buyer gets only a bundle consisting of her most desired goods, i.e., an optimal bundle.

The fourth condition is equivalent to

∀ i ∈ B, j ∈ A : e_iu_ijx_ij/∑_j∈Au_ijx_ij = p_jx_ij

Summing over all j

∀ i ∈ B : e_i∑_j u_ijx_ij/∑_j∈Au_ijx_ij = p_jx_ij

⇒ ∀ i ∈ B : e_i = ∑_jp_jx_ij

Hence the money of each buyer is fully spent completing the proof that market equilibrium exists. Since each equilibrium allocation is an optimal solution to the Eisenberg-Gale convex program, the set of equilibrium allocations must form a convex set. Since log is a strictly concave function, if there is more than one equilibrium, the utility derived by each buyer must be the same in all equilibria. This fact, together with the fourth condition, gives that the equilibrium prices are unique.