A World of Unbounded Irrationality

Late Carnegie Mellon economist Herbert Simon once remarked that most people are only partly rational, and are in fact emotional/irrational in the remaining part of their actions. Prof. Simon continued that rational agents experience limits in formulating and solving complex problems and in processing (receiving, storing, retrieving, transmitting) information. This is the concept of Bounded Rationality in Behavioral Economics, which I consider as a subset of the larger, more important, Mechanism Design, for which 2007 Nobel Prize in Economics was awarded to Leo Hurwicz, Eric Maskin and Roger Myerson. In simple terms, to be considered rational , a human/agent must be able to differentiate 2 choices, and decide why one choice is better than the other. If one can decide over 2 choices, then by induction, one can decide over finitely many choices. In reality, we hardly come across situations with infinitely many choices, an embarrassment of riches !!! By aforementioned statements, I am steering away from circular ambiguities like Condorcet paradox in elections, http://en.wikipedia.org/wiki/Voting_paradox .

For instance, if one is trying to find an integer approximation to 103.13, he/she can enumerate infinitely many approximate values, such as 103,104,101,1001 etc. Each number is an approximation of 103.13. But we know that 103 is the best integer approximation to 103.13, as per the Euclidean metric on real line. Hence we have the notion of utility functions, that maps the set of choices to real valued line, and utility maximization, a notion that agents look for choices that maximizes their utility functions. Different people have different capabilities in coming up with the functional form of utility functions, which is important in the quest for optimal solution(s) for a given problem. Hence society coins words like idiot, stupid etc, for those whose utility functions are incompatible with the larger society.

This post is not about Bounded Rationality, but its complement Unbounded Irrationality, a term that most of us will agree exists to a great extent all over the world. But to understand Unbounded Irrationality, one has to understand what constitutes Bounded Rationality. I hope the above paragraphs are clear in that sense. If not, it is maybe because I belong to the collection of Unbounded Irrationality :-)

The reason for my sudden angst is http://news.bbc.co.uk/2/hi/south_asia/7165255.stm
OMG, I can't fathom how on earth Bilawal and a notoriously corrupt Asif Zardari can succeed Benazir in guiding a rogue nation, full of angry misguided mullahs and nefarious intelligence agencies/military, to sanity. It pains me to note that feudalism exists even in this information/knowledge driven century. To see feudalism in its ugly form, look no further than politics and Bollywood. In these 2 fields, one can come up with numerous instances where incompetent filthy people have consolidated their stranglehold for ages. It is this form of feudalism, that led me to this post. In late 1980s, when I started developing active interest in politics, netas including Rajiv Gandhi, VP Singh etc. consistently proclaimed that India will be a developed nation by 2010 or 2015. As we approach 2008, I view these feudal politicians with disgust for failing to walk the talk. All those talks of being a developed country and eradicating poverty is whole load of !@#$. The sad part is our netas continue to make fools out of us with new deadline to achieve the noble goals is 2050!!! Despite these filthy pigs, we have made some progress over the years, and credit for the last decade of modest successes should go to Manmohan Singh, P Chidambaram, Montek Singh Ahluwalia and Narasimha Rao, to some extent.

In cricket, a certain Rohan Gavaskar was not a regular in Team India despite being the son of an illustrious cricketer. He still had to fight his way through, and got chopped when found inadequate. Gone were the days when an incompetent Maharaja of Vizianagaram could be the skipper of a national team by default. A certain Srinivas Venkatraghavan had to clear exams to be selected for ICC elite panel of umpires, despite leading a national team and having a stellar sporting career. Similar exams are conducted to select referees and to receive coaching badges in soccer. When one is tested for competency in such mundane aspects of life, why on earth do we tolerate feudalism in politics? Lets forget an equally filthy Bollywood for now... Why not have an exam to select national leaders based on their IQ level? One doesn't have to be a Nobel laureate to be a national leader. One can be an illiterate and still be a leader as long as he has the IQ to ask the right questions, and galvanize the country by his/her vision. An example of an illiterate and great leader would be Kamaraj. An example of an illiterate and incompetent leader would be H.D. Deve Gowda. Not content with having screwed national politics, Deve Gowda is now screwing Karnataka with his son H.D. Kumaraswamy. As long as we don't have a well-defined set of guidelines to elect national leaders, we will be mired in this world of unbounded irrationality electing people like Sonia Gandhi, Rahul Gandhi, Bilawal Bhutto etc. The fact that these netas are educated in Harvard/Oxford is not going to fool me. Do you honestly believe that it is difficult for such people to get into Harvard or any other big school? Do they have the capacity to formulate a given problem?

The only dynastic leader who deserved to be a leader is the late Indira Gandhi. Despite her mishaps with emergency in mid 1970s, it is undeniable that she was a born leader, unlike the self-anointed netas of current politics. Even Benazir, whom the western media and world considers a martyr, is over-rated in my view. Yes, her loss of life is tragic. But is her death more tragic than many innocent lives that are being lost in many countries as I write this post? In my view, Benazir was as incompetent as any other politician of Pakistan. It was during her reign, militancy in Punjab reached its peak. It was during her reign, ethnic cleansing of Kashmiri Pandits started. It was with her blessings that militant camps were built to disintegrate India. Except for a few issues, she largely continued Islamization of Pakistan and Pakistan's military and intelligence agencies that were started by Zia-ul-Haq. During her 2nd term in power, Benazir played a significant role in the creation of Taliban. When Taliban assumed control of Afghanistan, Benazir's Pakistan was one of the 3 countries to recognize it in the spineless United Nations. Ironically, it is these people, whom Benazir cultivated, who are largely responsible for her death. The current state of Pakistan, menace of Taliban, Al Qaeda and other forms of Islamic fundamentalism, could be attributed to Zia-ul-Haq, Benazir Bhutto, Nawaz Sharif, Musharraf and other world leaders who have supported these incometent people over the years. It is important to note that Zia and Musharraf were not democratically elected, and yet were strong allies of western leaders !!!

I write with deep pain, that despite numerous instances of obvious failures, incompetency is richly rewarded in this world of unbounded irrationality. It is heartening to note that someone in Pakistan thinks along these lines, http://news.bbc.co.uk/2/hi/south_asia/7165619.stm

I salute this brilliant lady Aila Hameed who is as old as me. Sadly, her voice will never be heard. Strange are the ways Democracy works !!!