Your Daily Tao

The political excuse for inaction on land reform is subtle and pernicious. It suggests countries cannot control their own developmental destinies. However, while it may be difficult – and far more land reform attempts around the world have failed than have succeeded – they can. Meiji Japan instituted a first land reform without any external political direction or funding. In India, the state governments of Kerala and West Bengal pushed through land reforms in the 1960s and 1970s despite the rest of the nation’s failure to do so. Developing countries are not just little ships blown about on the developmental ocean by the winds of rich states. In agriculture they have a greater capacity to chart their own course than in any other sector of the economy because land policy is entirely a domestic affair. In this respect, land policy is the acid test of the government of a poor country. It measures the extent to which leaders are in touch with the bulk of their population – farmers – and the extent to which they are willing to shake up society to produce positive developmental outcomes. In short, land policy tells you how much the leaders know and care about their populations. On both counts, north-east Asian leaders scored far better than south-east Asian ones, and this goes a long way to explaining why their countries are richer.

In this passage, Studwell asserts that countries whom were able to commit towards land reforms, and increase their agriculture output effectively were the ones that had the most effective leaders. This is one of the key reasons that separate the North Asians countries, from those in South East Asia who tend to be more economically behind.

Fifty-five per cent of Taiwanese were illiterate at the end of the Second World War; the figure was still 45 per cent in 1960. Literacy in South Korea in 1950 was lower than in contemporary Ethiopia. It may be that, more than education leading to economic progress, economic progress leads families to educate their children, which in turn makes more economic progress possible.

Switching up the format to show a book cover whenever starting a new series of passages from a book. Since we’re much more like to memorize visuals, a book cover might help users better link some of these insights to a book.

This short passage is from How Asia Works, which i’ll be sharing some passages of how certain areas in Asia have succeeded economically, and how others have not. What economists have gotten right about in this region, and how others have not.

What teens may not realize is that if they resist drugs or alcohol, they will make it easier for others to resist, too. An act of courage can bolster the resolve of others. One executive gave us an example of how he acts on this insight in his business. “When we have meetings, I typically have a ‘plant’ in the audience and give them a tough question to ask,” he said. “It’s always a question we know people are asking and talking about but afraid to actually bring to leadership. I do this to ‘pop the cork’ and show that it’s safe.” He’s right to be concerned about people staying silent: One study found that 85% of workers felt “unable to raise an issue or concern to their bosses even though they felt the issue was important.” His solution—the confederate with the tough question—is well supported by evidence. There’s a classic study, conducted by Charlan Nemeth and Cynthia Chiles, demonstrating that one act of courage supports another. Let’s say you are a participant in the study. You are matched with three other people, and a researcher shows your group a series of 20 slides. After each one is presented, the researcher pauses to ask each of you what color the slide is. It’s an easy task: All the slides are blue, and all four of you say “blue” all 20 times you’re asked. Then, that group breaks up and you are put into a new group of four. Same task. This time, though, the first slide is red. Oddly, all three of your group-mates call it “orange.” What will you call it? It certainly looks red, but could you be wrong? This happens 19 more times—your group-mates always call the slides “orange” and, each time, everyone looks at you to hear your answer. If you think you would stay strong in this situation, you might be right, but you’d be in the minority. Most people in the study caved. On average, they called 14 of the 20 red slides “orange,” conforming to the majority’s incorrect view. (The three people in the group who claimed all the red slides were “orange” were, as you might have guessed, confederates of the researchers.) Another set of participants were ushered through the sequence above but with one crucial difference: This time, the researchers also added a confederate to the first group (the one viewing blue slides). He was instructed to call all the blue sides “green.” Let’s call him the Brave but Wrong Guy. The other three (normal) participants were probably puzzled by his seeming color-blindness, but they easily stuck to their guns, calling all the blue slides “blue.” The striking change came in the second group. The participants were shown the red slides, and as described above, the three confederates continually called them “orange.” This time, though, the participants stayed strong! They defied the majority, labeling 17 out of 20 slides (on average) as red. Note that they were brave even though they hadn’t practiced courage themselves. They’d only witnessed it. Brave but Wrong Guy was willing to speak up for himself—even though he was mistaken about the color. That act of dissent bolstered the other participants’ resolve. As the researchers wrote, “exposure to a dissenting minority view, even when that view is in error, contributes to independence.” The bad news here is that our natural instinct is to cave to the majority opinion. If everyone says the red card is orange, we think we must be wrong, and we call it orange, too. The good news is that if even one person is brave enough to defy the majority, we are emboldened. We’re not alone anymore. We’re not crazy. And we feel we can call red “red.” In short, courage is contagious. From historic protests to everyday acts, from the civil rights movement to an employee asking a tough question, this is the lesson we’ve learned: It is hard to be courageous, but it’s easier when you’ve practiced, and when you stand up, others will join you. Think of it: Your moment of courage might be a defining moment for someone else—a signal to them that red is red, that wrong is wrong, and that it can be righted if we stand, together, against it.

We tend to follow the majority as our default mode. But “courage is contagious”. Whenever you feel like you are the only one in the room with your particular opinion, speak up! There might be many others that just need that push from you, and would be afraid to speak up otherwise.

The psychologist Peter Gollwitzer has studied the way this preloading affects our behavior. His research shows that when people make advance mental commitments—if X happens, then I will do Y—they are substantially more likely to act in support of their goals than people who lack those mental plans. Someone who has committed to drink less alcohol, for instance, might resolve, “Whenever a waiter asks if I want a second drink, I’ll ask for sparkling water.” And that person is far more likely to turn down the drink than someone else who shares the same goal but has no preloaded plan. Gollwitzer calls these plans “implementation intentions,” and often the trigger for the plan is as simple as a time and place: When I leave work today, I’m going to drive straight to the gym. The success rate is striking. Setting implementation intentions more than doubled the number of students who turned in a certain assignment on time; doubled the number of women who performed breast self-exams in a certain month; and cut by half the recovery time required by patients who had received hip or knee replacement (among many other examples). There is power in preloading a response. This preloading is what’s often missing in organizational situations that require courage. A colleague or client belittles someone, or makes an off-color remark, or suggests something unethical, and we’re so taken aback that we do nothing. Ten minutes later, we curse ourselves for not acting. We missed our chance. These missed opportunities made Mary Gentile reconsider the way we teach ethics in schools. Gentile, a a professor at the University of Virginia Darden School of Business, realized that ethics education was dominated by the question, “What is the right thing to do?” But people often know what the right thing to do is. The hard part is acting on that judgment. “We can all generate a list of what makes this hard to do,” Gentile said. “We feel alone; we wonder if we’re being naïve; we wonder if we’re misinformed (or we want to believe that perhaps we are); we wonder if our boss will be receptive; we anticipate that we will encounter ‘push back’ if we raise the issue and we don’t know what we’ll say when that happens; we worry about being ostracized or worse if we appear not to be a ‘team player.’ ” She became convinced that ethics education should focus not on WHAT is the right thing to do? but rather on HOW can I get the right thing done? She created a curriculum called Giving Voice to Values, which has been used in more than 1,000 schools and organizations. The heart of her strategy is practice. You identify situations where an ethical issue might arise. You anticipate the rationalizations you’ll hear for the behavior. Then you literally script out your possible response or action. And finally you practice that response with peers. Leaders who want to instill an ethical business culture—and not just mouth the words of a toothless “statement of values”—will take inspiration from Gentile and make practice a priority. Because the situations that lead to unethical behavior are predictable: A relentless pressure for results, coupled with avert-the-eyes management, will lead to cut corners or outright fraud (think banking scandals). Blurry lines of accountability, plus get-things-done urgency, will lead to accidents (think cataclysmic oil spills). A leader’s bias or bigotry or sexism, taking root in a permissive environment, will inevitably lead to abuse. These are not anomalies. They are probabilities. They can be foreseen and fought.

Preloading. It also explains why most people will put with things that go badly in an organization. Thats why scenario training, no matter how needless they might seem on the surface, can actually help in preparing people to actively confront and handle things that might go wrong (such as harassment, offensive remarks etc).

Acting on this insight, he developed a methodology called Community-Led Total Sanitation (CLTS), which has since been used in more than 60 countries around the world. But don’t let the boring acronym fool you: This is a shocking process. Here’s a stylized description of a typical intervention: A CLTS facilitator arrives in a village and introduces himself. “I’m studying the sanitation profiles of different villages in the area,” he says. “Mind if I look around and ask some questions?” Once he has hung around long enough to attract a small crowd, he conducts a “transect walk,” leading the crowd from one side of the village to the other. “Where do people shit?” he asks, and the villagers direct him to the common areas of defecation. They are embarrassed, eager to move on, but he lingers. He points: “Whose shit is this?” He asks them, “Did anyone shit here today?” A few hands go up. The stench is overpowering. People are covering their noses with their clothes. The facilitator keeps asking disgusting questions: “Why is this shit yellow? Why is this one brown?” The facilitator draws attention to the flies flitting between piles. “Are there often flies here?” Nods all around. He sees a chicken pecking at the shit. “Do you eat this kind of chicken?” More reluctant nods. All his questions are studiously neutral. The facilitator has been trained only to ask questions, not to offer advice or opinions. The group completes the transect walk and stops in a large public space. The crowd has grown larger, curious about what’s happening. The facilitator asks them to draw a rough map of the village in the dirt. Quickly, the villagers map out the boundaries of the village, along with important landmarks—a school, a church, a stream. Then the facilitator asks them to use stones or leaves to mark where their individual homes are. Once the map has been filled in, he points to a bag of yellow chalk he has brought and asks them to sprinkle some on the places where people shit. He says, “Where there’s more shit, use more chalk.” There is nervous laughter. The kids enjoy sprinkling the chalk on the open defecation areas. Now the facilitator asks, “Where do you shit in an emergency—say if there’s a rainstorm, or if you have diarrhea?” More laughter as new heaps of yellow chalk are scattered around. Often it circles people’s homes—in those emergency situations, people can’t make it to the common areas. It is hard to miss, at this point, that the entire village is covered in yellow. There is a turbulent energy in the crowd: anxious, disgusted, angry, and embarrassed. They aren’t sure what it all means. The facilitator asks for a glass of water. Someone provides the water, and he asks a woman if she would feel comfortable drinking it, and she says yes. He asks others and they agree. He pulls a hair from his head. “What’s in my hand?” A hair. “Can you see it clearly?” No, not really. He walks over to a pile of shit near the meeting area and dips his hair into it. Then he plunges the dirty hair into the glass of water and swirls it around. He hands the glass to a villager and asks him to take a drink. The man refuses. He passes it along, but they all refuse. “Why do you refuse?” Because it has shit in it! The facilitator looks puzzled. He asks, “How many legs does a fly have?” Six. “Right, and they’re all serrated. Do you think flies pick up more or less shit than my hair?” More. “Do you ever see flies on your food?” Yes. “Then do you throw out the food?” No. “Then what are you eating?” The tension is unbearable now. This is what Kamal Kar calls the “ignition moment.” The truth is inescapable: They have been eating each other’s shit. For years. Often at this point, the discussion spirals out of the facilitator’s control. People are agitated. They start challenging each other: We can’t continue this! This is madness! How can we stop this? They often ask the facilitator what they should do. But he declines to answer. “You know your village better than I do. You’re free to choose anything you want, including continuing to defecate in public.” But the villagers are determined now. It feels intolerable to live with the status quo another day. Kar, the inventor of CLTS, knows it is an emotionally wrenching process. “Disgust is the number one trigger,” he said. “And shame. ‘What the hell are we doing? Are we human beings? Eating each other’s shit!’ ” CLTS is brutal, and it is effective. Thousands of communities worldwide have declared themselves open-defecation-free (ODF) as a result of the intervention, and in Bangladesh, where CLTS became a cornerstone of national sanitation work, the rate of open defecation has declined from 34% to 1%.

This is good shit, literally. A fascinating anecdote about “how dramatic examples can shake people out of their apathy.” For good reading.

We have a natural hunger for these landmarks in time. Take the prevalence of New Year’s resolutions. The Wharton professor Katherine Milkman said she found it striking that “at the start of a new year, we feel like we have a clean slate. It’s the ‘fresh start effect’ . . . all of my past failures are from last year and I can think, ‘Those are not me. That’s old me. That’s not new me. New me isn’t going to make these mistakes.’ ” In other words, New Year’s resolutions are not really about the resolutions. After all, for most people, the resolutions haven’t changed. Most people wanted to lose weight and save money on December 31, too. What we’re doing on New Year’s Day is more like a mental accounting trick. Our past failures are left on the ledger of Old Me. New Me starts today. New Year’s resolutions should really be called New Year’s absolutions. Milkman realized that if her “fresh start” theory was right, then the slate-cleaning effect shouldn’t be confined to New Year’s Day. It should also be true for other landmark dates that would give us an excuse to reset our record, such as the start of a new month or even a new week. Milkman and her colleague Hengchen Dai tracked down attendance data for a university fitness center, and they found strong proof of their “fresh start” hypothesis. The probability that students visited the gym increased at the beginning of each new week (by 33%), new month (by 14%), and new semester (by 47%). So “fresh starts” happen not only on New Year’s Day, but also on any other landmark date. If you’re struggling to make a transition, create a defining moment that draws a dividing line between Old You and New You.

What we can do is to take advantage of these “mental accounting tricks” and set moments where we can have a fresh start. This allows us to do things that we know are important but have been neglecting (exercise?). Sometime, just knowing how to frame our situation in a different way can yield vastly better results.

When in doubt about how to behave in an ambiguous situation, people may think back to narratives and adopt a role they have heard of, as if they are acting in a play they have seen before. We can debate whether such behavior is rational. In one sense it is rational to copy the behavior of apparently successful people, even if one does not see any logic in the behavior. Those being copied might have mysterious or unobserved reasons for such behavior, and their success suggests they have at least stumbled onto an advantageous behavior. But traditional economic theory does not model this kind of rationality. It sees the following of others’ behavior as more reflexive, not as a thoughtful application of the principle “When in doubt, imitate.” This reflexivity does not generally follow the typical economic assumption that people attempt to maximize their utility based on all available information. On the contrary, following scripts set by others often looks like quite stupid behavior.

Blindly copying the behaviour and actions of successful people might actually make logical sense, even if we can’t understand or see why. However, that does work with typical economic assumption.

That might also explain why people tend to copy the idiosyncracies or behaviors of wildly rich people.

People often buy Bitcoin because they want to be part of something exciting and new, and they want to learn from the experience. This motivation is particularly strong because of the underlying story, the narrative that computers are poised to replace many of our jobs. But computers can’t replace all of our jobs. Somebody has to control those computers, and there is a narrative today that the people in charge of the new technology will be the winners. Very few people feel secure that they will be on the winning end of this curve. Even taking a degree in computer science doesn’t seem to be a sure path to success today, because it may lead to a humdrum job as a low-level programmer, or even to no job at all. A desire to be on the finance side of the tech business, where Bitcoin sits, is popular because there are so many stories illustrating that financiers take control of things. Bitcoin enthusiasts may think that experimenting with Bitcoin will put them in touch with the people who are going to be winners in the new world, will give them insight about how to stay in (or gain) control. It is easy to jump-start one’s connection to this new reality by buying some Bitcoin. Best of all, one doesn’t have to understand Bitcoin to buy it. Vending machines at convenience stores now sell Bitcoins and other cryptocurrencies. This “Be a part of the future” narrative, enhanced by regular news of exciting fluctuations in the price of Bitcoins, gives them value. It generates fluctuations in Bitcoin prices in terms of national currencies, and these fluctuations thrive on and produce contagious narratives.

Understanding narratives and how they spread is key to being able to explain the many seeming erratic economics changes we see in the world today. In this book, Robert Shiller studies how word of mouth ideas and stories as well as people’s efforts to make these stories more contagious can have a huge impact on economic events.

One example is the how the attractive and contagious story of Bitcoin, or cryptocurrency in general, appeals to people and drives even more contagion in terms new narratives. To Shiller, the way economic narratives spread is akin to how a virus (like what we have now) spreads in an epidemic or pandemic.

Where the typical conservative argument on poverty falls short is that it often stops right there: Character matters . . . and that’s it. There’s not much society can do until poor people shape up and somehow develop better character. In the meantime, the rest of us are off the hook. We can lecture poor people, and we can punish them if they don’t behave the way we tell them to, but that’s where our responsibility ends. But in fact, this science suggests a very different reality. It says that the character strengths that matter so much to young people’s success are not innate; they don’t appear in us magically, as a result of good luck or good genes. And they are not simply a choice. They are rooted in brain chemistry, and they are molded, in measurable and predictable ways, by the environment in which children grow up. That means the rest of us—society as a whole—can do an enormous amount to influence their development in children. We now know a great deal about what kind of interventions will help children develop those strengths and skills, starting at birth and going all the way through college. Parents are an excellent vehicle for those interventions, but they are not the only vehicle. Transformative help also comes regularly from social workers, teachers, clergy members, pediatricians, and neighbors. We can argue about whether those interventions should be provided by the government or nonprofit organizations or religious institutions or a combination of the three. But what we can’t argue anymore is that there’s nothing we can do.

The biggest point of contention whenever we see arguments between conservatives and liberals on poverty and responsibility. To me, the key is to accept that while people should be incentivized towards the right direction, we should also be mindful of how character and grit are traits that are largely developed by exogenous factors, especially when young.