Post pandemic economic recovery

2020/03/26

1. The Problem – micro view

1.1. Theory

Let us explain very basic economic theory first. Below is Cost Volume Profit graph.

Pandemic1

Figure 1

Every business has cost, with 2 main components – fixed cost and variable cost. Fixed cost includes things like cost of machinery, premises, staff salary etc. Crucially, it also includes interest payment on loan – assuming all businesses have some debt which is loan taken from bank and/or investors to raise the capital. The variable cost is often proportional to revenue or sales.

Here we shall use the term sales and revenue interchangeably, to denote earning of the business.

If a business procures more number of product units, higher quantity raw material needs to be purchased – so this is how it linked with revenue. So this is the variable part of the cost.

The earning is shown by blue line. The expense is shown by red line the above graph.

We know the simple formula, Profit = Revenue – Cost

If profit is negative, then it becomes loss. This is same as saying, Savings = Income – Expense.

A business needs to pay tax on profit – so tax is also a cost. But for simplicity, we leave tax out of our discussion.

The point, where revenue becomes more than cost, is known as breakeven point. Until the business reaches this point, it is loss making. Once business is way past breakeven point on the right, it is profitable. In fact, all business tries to move as much right as possible for sustained growth and profit.

A business can borrow more (cost goes up as interest payment) to increase revenue (more sales), resulting in more profit. Now, how much a business needs to borrow in order to increase profit is a complex calculation which depends on type of industry, business strategy, market condition and many other factors.

At normal time, all businesses operate in an equilibrium. Business pays interest to bank, buys the raw materials from suppliers, manufacturers product in factory, pays salary to employees and sells products to customers who pay the price and so on. For a service based business, the theory is still the same. Here, instead of producing items in factory, the company sells intellectual expertise of their employees.

1.2. Recession

Let us see what happens in a recession. The pandemic has led to people being fearful and cities have been locked down to encourage social distancing. As a consequence, all sales have gone down (except very few like supermarket shopping where people are stockpiling for the Armageddon).

Due to very low (or nothing at all) sales, the revenue curve will flat out. However, the fixed cost component will remain mostly the same. This means, for a long time, the business will not make any profit.

Pandemic2

Figure 2

This is shown in above figure. Note that we are now showing time on horizontal axis.

While cost of the business also falls due to less sales, the revenue falls rapidly as people are scared away from purchasing. This will drive down the businesses into further loss.

How quickly a business comes to grinding halt, again depends on industry, geography, mitigation factors etc. For example, airline industry, which has a high fixed cost (as the cost of flying a plane with one passenger vs 300 passengers almost the same) are already near bankruptcy.

For a person, disaster does not strike as soon as he or she loses job (i.e. salary stops coming). This is because the person can still sail thru troubled times using own savings. Here savings is the money in bank saved during good time.

However, a person becomes bankrupt when his/her savings become zero and cannot pay for anything anymore.

Similarly, a business does not go bust just because it is making loss. A lot of businesses, especially those like start-ups, make losses during initial years. However, they carry on as long as investors pump out money to them. This is cash flow.

A business goes bust only when it runs out of cash.

In normal time, a business can increase their cash reserve by adding the profit to their cash reserve.  Every business has a finite amount of cash reserve. The amount again depends on industry, strategy, demand etc.

Also as the demand falls during recession, the supplies must also go down as more competitors now try to get a slice of same shrinking market. This further drives many businesses into downward spiral of lower sales thus more losses.

As businesses go into losses, they start laying off employees, which collectively reduces further demand on the market, leading to panic and mayhem.

2. The cause – macro view

2.1. Pre-pandemic

Here we shall take a step back and discuss how the world economy (mostly capitalism or market driven economic model) works.

Our economy is underpinned by the banks and the government. The depositors (i.e. common people) deposit money in the bank. Let us say a bank collected £1000 from depositors. The bank will pay a tiny interest to the savers. Bank will earn money by lending money to borrowers (for starting business, buying house etc.) at a higher interest. The different between interest earned and interest paid (from bank’s point of view) is the profit for the bank.

But the twist is fractional reserve. This is adopted almost universally worldwide. Under this model, if a bank has only £1000 deposit it can create more money out of thin air, while lending. So basically the banks are allowed to lend more than the actual money they have. In our example, a bank can lend £10000 to borrowers! This means, the bank has created 9 times more money (1000 + 9000) than the real deposit amount. This fictitious money is then lent to people and businesses. This fictitious money is the debt.

Our economy is debt driven economy.

In olden days, when gold was used as currency, fictitious money was not possible. Once the banks introduced fiat currency, by abandoning gold standard, banks got the freedom of create fictional money and debt.

The fiat currency is what our bank notes are. These have no intrinsic value (unlike gold etc.) but people use it as if it has purchasing power purely driven by trust as guaranteed by the government.

Creating this fictional money is not necessarily evil per se. Had the bank not created fictional money, it could have lent only £1000 (in our example) to people who wanted to buy houses or start businesses. However, by creating fictional money of £9000 more, bank is able to lend to more people, enabling more people to buy their dream houses or fund their own businesses. In theory, it actually elevates more people into better life. When we say better life, this is by more consumption of goods and services. With more transactions, nation’s GDP goes up.

As long as continuous growth is happening, everyone is happy in this model. This is why all politicians and big businesses love growth. It makes everyone feel good.

Thus, in a debt driven economy, more money is analogous to having better life.

2.2. Post pandemic

Things become dramatically different during and after pandemic!

As everyone borrows more and more, the debt burden increases. Remember, all debts are to be paid off someday! In normal time, people do not think much for paying of debt. The house price mostly goes up. So even if house owners default on mortgage, the bank can repossess the house and can sell at a higher value than outstanding mortgage amount. So even if individual business or people are bankrupt, the country level economy (known as macro economy) pulls thru as usual.

During pandemic time, the revenue of most businesses fall so low, that most business cannot make profit at all. The business will also default on their loan payments and soon become bankrupt. With millions of people becoming jobless it will be a national calamity.

The government, as in any recession, usually intervenes. This is done by financial stimulus like printing money (known as Quantitative Easing) and reduces interest rate to encourage business to borrow money and sail thru the cash flow issue.

The important part is, government will give further loans to businesses. These loans are meant to be paid back when situation improves.

This will lead to a situation depicted in the next graph.

Pandemic3Figure 3

The key message here is that with even more debt (on top of existing debt) most businesses will not be able to see profit for a very long time. So they are going to see cash flow problem again after some time, requiring another bail out. This will lead to even more debt – which will increase the fixed cost even more as interest payment will also go up and this cycle will continue for foreseeable future.

No business can run in loss forever (only exception is some nationalized public services). Unless the shareholders/investors see some return on their investment, they will not be interested in paying money to the business.

This is a deflationary economy, dreaded by all. Whereas deflation did happen in the past, this time, clubbed with the pandemic (i.e. loss of lives) the blow will be huge.

The philosophy of the capitalism is survival of the fittest. In capitalism, people with more money are considered better off. People with more money can have a better life. But a pandemic, affects rich and poor equally. Hence, if money does not improve people’s lives, people may not be willing to increase their earning more. Thus the fabrics of run after money philosophy fails!

Although, even during pandemic, the rich and powerful in somewhat privileged as they are able to get tested for COVID19 whereas normal people cannot unless they are serious ill and rich people can still buy essentials at an inflated price from black marketeers.

3. The solution

I admit that I do not know what the solution is. If I were that intelligent, I would have received Nobel prize by now. But still, we can make some attempt to find a solution that may work.

One option could be writing all the debt off for everyone. This means everyone can start with a clean slate. This will help majority of the people. But this will not go very well with the banks and the government. Why?

Because in debt driven economy, the control of economy in the hands of privileged few, namely the banks and the government. If debts are written off, their own flow of income will stop. They will also not be able to control the population saying work hard else you will die starving.

From historical times, society has mostly been unequal rather than equal. Even in Ancient Egypt, there were rich and almighty pharaohs and slaves who served the riches. As the folktales say, when Moses tried to free the slaves, the pharaoh refused. Among many other tricks, the God of slaves unleashed a plague which affected pharaohs’ family only and spared the slaves’ families.

The analogy here is illustrating that rich and powerful always controlled the masses – in olden days with fear of death and in modern days’ fear of (lack of) money!

Usually in recession the government often bails out (i.e. provide cash to big businesses as loan) but this seldom goes to employees. Big corporations claim these saves the jobs, but alternatively, government can help everyone by giving them money directly in the form of Universal Basic Income (also known as Unconditional Basic Income i.e. not means tested). The unconditional basic income is claimed to be easier to manage than means tested benefit system. If this scheme is adopted, the big corporations can simply fail if they cannot run their business efficiently.

The other path could be gift economy. It mode of exchange where valuables are not traded or sold, but rather given without an explicit agreement for immediate or future rewards. This is like catching fish to eat but not catching too much to make a big profit. This model already works in Open Source Software where people write software for others for free and users can donate if they wish. Couch Surfing as another such example where people stay in others’ homes during holidays without paying anything.

Designing an alternate economy model is extremely complex and beyond the scope of this article. My aim here is to drive the thought process of everyone so that collectively we may invent something more egalitarian than greed driven economy.

 

Why the Great Pyramids are still standing?

2019/06/24

The Great Pyramids at Giza, Egypt are 5000 years old. It is astounding that such old structures are still standing. This is why they are considered among the most notable ancient wonders of the world.

A common question asked by public is that how come such old structure is still standing today yet some modern structures have fallen apart.

Let us understand the engineering principle and philosophy behind these legendary structures.

The pyramids were built as tombs – the resting place of mighty pharaohs!

These pyramids are built of lime stones and granite. Effectively these are huge rocks weighing 2500 kg each on average.

From the engineering point of view, the pyramids are built using compression elements only. A modern concrete building consists of columns, beams and slabs. The columns only carry compression force. However, the beams and slabs carry both compression and tension forces.

If you take a beam, for example, which is subjected to a load on its top, the areas above the center line will experience compression where as the area below the center line will experience tension. Concrete is weak in tension so reinforced steel bars must be placed inside concrete the carry then tension force. Any bending force on any structural member will introduce both compression and tension forces.

Rocks cannot carry tension forces. They will be break if they are designed to carry tension. But, they are extremely good at carrying compression forces! The blocks in pyramids were designed to carry compression forces only. They do not experience any kind of bending force, hence no resultant tensile stress because of this.

Also, as pyramids housed the deads only (excuse the pun), there are no moving mechanisms inside them. A modern house has lots of moving parts like doors, windows (opening/closing), water flowing thru pipes etc. The act of people living inside houses causes some wear and tear.

The pyramids experienced no such wear and tear arising from its inhabitants – because they were dead anyway. However, we need to keep in mind that pyramids experienced great forces of nature in the form of erosion and vandalism by humans over thousands of years.

The other important aspect contributing their longevity is the arid weather in the desert. The lack of moisture in the atmosphere meant there were no water trapped between joints in the structure. The blocks were placed so that they kind of attached to each other like Lego. They did use some mortars though. In other parts of the world, some water would have invariably trapped inside those mortars and would have expanded causing cracks. But in arid weather, there was no such thing of water expansion – because there were no water in the first place.

So to phrase it differently, if the pyramids were built in tropical area, say inside Amazon rain forest, it would have been experienced a different kind of destructive forces like water ingress and roots from trees. In fact, this is how a more modern (comparatively) Ankor Wat temple complex got deteriorated over shorter span of time.

In spite of all these, there is no equivalent yet for the Great Pyramids.

Can phone camera photo quality is same as those from bigger cameras?

2018/05/02

With nearly everyone on the planet now shooting with phone cameras and standalone camera sales falling gradually, there is question everyone is asking whether proper camera takes better photos!

 

The, short answer(s)

In bright daylight and in outdoor, a good phone camera takes nearly as good photos as more expensive proper camera (with some caveats).

In low light (e.g. night) and some challenging situations (e.g. sports, wildlife etc.), a proper camera takes much better photos than phone cameras.

IQ

Now lets us delve into the details.

Phone cameras have tiny sensors. Sensors are analogous to films in flim cameras (if you can still remember them) which actually receive the light and capture the images. Thumb rule is that, bigger the sensor, better the light gathering capability and better the image quality. However, besides sensors, the lenses play a big role too. A better lens gathers better light without any distortion which makes images sharper. A larger lens with larger opening (known as aperture in photographic terms) will gather more light which would result in better photo – especially at low light.

 

Different cameras have different sensor sizes. This is shown in following table.

Sensor type Sensor area (sq. mm.)
Full frame/ 35-mm equivalent

High end DSLR/mirrorless cameras

Nikon FX, Canon D, Sony A7

860
APS-C (Advanced Photo System – Crop)
Most entry level DSLR cameras like Nikon DX, Canon EF, Fujifilm X, Sony A6
368
Micro Four Third (MFT or M43)

Panasonic Lumix, Olympus PEN/OM-D

225
1 inch

Sony RX, Panasonic FZ etc.

116
appx 1/2.5 inch
Many compact and phone cameras
incl. Apple iPhone, Samsung Galaxy etc.
25

Note: Often same manufacturers have cameras with different sensor sizes. So, always check the spec sheet before buying a camera.

 

As you can gather, a phone camera typically has sensor size (area) which is 10-15 times smaller than sensors in typical DSLR (APS-C) cameras! Thus, a phone camera will gather that much less light compared to an APS-C sensor size camera.

 

Now, considering larger cameras have bigger lenses, field of view i.e. how much you can capture in your frame, is also larger. With a phone camera you may find struggling to fit all of your friends in a group photo but with a proper camera and wide angle lens, you can easily push your friends back (optically – no physically) to get the shot. Phone cameras are useless for wild life (unless it is stuffed animal). Larger cameras with telephone lens can bring animals closer (optically) to you for the great shots. This is indicated by the crop factor in above table.

 

For normal travel photos, phone cameras are find in 80-90% of the cases. People usually visit famous landmarks in daylight where phone cameras do good enough jobs.

 

If you view your photos in iPad size screen, you may not see the difference between phone camera and proper camera photo quality. But if you view in large screen HD TV screen (e.g. 50 inch and above) you are likely to see the difference. Phone camera photos are likely to demonstrate visible grains.

 

Are prime lenses over hyped?

2018/05/01
In case you are not aware, a prime lens is a fixed focus lens i.e. not a zoom lens.
Your phone camera is a prime lens. If your phone has 2 lenses then each of those are prime lenses.
Many older film cameras and some modern digital cameras come with a fixed prime lens.
Photographic world is mad about prime lens and often you will be crucified if you speak against prime lens and in favour of zoom lens :o)
But in this post, I shall explain why prime lens is not for everyone.
The prime lens is adored by photographers because of its simplified optical construction (compared to a zoom lens) resuting in better image quality i.e. more sharpness etc.
That claim is true – prime lens does produce better image over most zoom lenses. They also have larger aperture like F/2.8 or even F/1.4 (but not always). Larger aperture allows you to take better shots in low light.
Purists also claim that a prime lens will make you a better photographer as you have to move around for best composition/framing.
Then everyone should only shoot using prime lenses – right?
Well, not always – especially if you are an amateur photographer and use your camera for shooting travel photography with family.
  • Loss of flexibility – A zoom lens provides flexibility. Most of the time zoom lens come with your camera (kit lens) and is good enough for general/travel photography. It allows you to successfully frame a wide architectureal shots and also a portrait when needed – without changing lense. Most kit zoom lenses are 18-55 (in APS-C cameras) or 27-70 (in full frame) which offers both wide and medium telephoto ends. A zoom lens is way more versatile.
  • Price – While some prime lenses are cheaper they often cost more than kit lenses. So buying a prime lens (unless you have specific use in mind) purely based on internet forum advice, is an unnecessary expense.
  • Image Quality – Yes, prime lenses take better shots than kit lenses. But not to that extent as purists in internet forums make you believe. If you view photos side by side (prime vs zoom) with 100% blown up in large computer/TV screen, you would most likely see some difference. But for most folks who views photo no larger than iPad or 50-60 inch TV screens or prints at most A4 sizes, such image quality improvement would be visible. Purists often compare by shooting charts and brick walls where defficiency of zoom lens is more visible. But in real life, such quality difference is hardly noticable – especially where what you shoot is more important than little bit of extra sharpness.
  • Confusion – With a zoom lens, on an instant you can choose your focal lenth by rotating lens dial. But with prime lens you will have following confusion:
    • Which focal length (of prime lens) to buy? Should it be 16 mm, 23 mm, 35 mm or 85 mm?
    • Purists will advise you to buy all of those for different situations.
    • You will end of spending a lot of money to buy all those.
    • You will carry lot of weight by lugging all those lenses on your shoulder bag during holidays.
    • You will end up missing scenes and getting dust in sensors while changing lenses in outdoors.
    • You will end up wasting time on internet forums to analzye whether sharpness is as it should be in your photos.
    • By doing all the above, you will shoot fewer photos and enjoy less during holidays (OK – not for everyone but for most).
  • Variation – If you shoot all your holiday photos with same focal length (assuming you carry only one lens) then your shots could become boring to look at. Now this is somewhat contentious. Many people do shoot amazing photos with their fixed lens smartphones. A good photographer can produce masterpieces with any camera. But an average photographer will do better with zoom lens. Also, often you can’t physically zoom with your feet (as purists often advice) due to structural constraints. Again, purists will argue to that this should force you to shoot creatively. But for most people, bringing back memories of family standing in front of whole Taj Mahal is propbably more important than shooting only one minerate (depending on your fixed focal length) with one kid outside the frame! You can simulate same creativity by locking your zoom lens into specific focal length and by behaving as if you are shooting with prime. If you get frustrated and feel the urge to rotate the zoom lens for desire focal length, then prime lens is not for your. Purists will mock you by saying lazy if you don’t move around for getting best angle, but I think there is nothing wrong in being lazy.
  • Fast lens can be counter productive – You can get some amazing background blur (bokeh) using large aperture like F/1.8 but it will also turn your depth of field very narrow! You can shoot candle light portrait using that aperture but to keep your kids as well as Eiffel Tower on background in focus, you need to shoot using smaller aperture (e.g. F/8 etc.) where prime lens has not much advantage over a zoom lens on same aperture.
I understand I shall be frowned upon by purists but this is my opinion based on experience.

Why film cameras are making a comeback?

2018/04/26
Film cameras at the moment covers only a niche corner in photography market. However, in recent years, their popularity has gone up for the first time after the mass consumption of digital photography.
The major disadvantages of film photography are:
  1. Not being able to view the photo immediately after shooting. So no corrective action is possible while being on the spot.
  2. Film speed (ISO) is fixed for the whole of shooting. In digital cameras, it is possible to change ISO for every photo depending on lighting condition.
  3. Limited photos that can be shot from each roll of film.
However, there are advantages of film photography:
  1. Due to limited photos available in each film, you will be forced to think about composition as not to waste film. This can, subjective though, can turn into a better photographer.
  2. 35-mm film cameras are cheaper than full frame digital cameras.
  3. 35-mm film cameras are often smaller than full frame (or even APS-C) digital cameras. This is because image processing happens outside film camera (during negative development) whereas in a digital camera, manufacturers need to put an image processing mechanism inside the camera. This makes digital cameras larger than film cameras.
  4. Flim photos last longer. Printed album is less susceptible to file corruption than digital forms.
  5. People are more likely to browse their printed photos compared to digital photos.
  6. Some people find hands-on film development more rewarding as hobby.
  7. Film cameras have nostalgic values to some people and they feel proud of that. Some shooters also feel film cameras can differentiate them from the digital camera mass crowd.
  8. Mechanical film cameras can operate without batteries.
  9. Longevity – digital cameras have typical life of 10 years whereas mechanical film camera can lasts over 50 years.

Happy shooting.

How to run Windows apps in Mac/Linux (and vice versa)?

2017/11/06

If you are running Linux and want to run Windows application, then you have following choices.

  1. Install Windows via virtualization software. Then install your Windows application on top of it.
    1. Pros
      1. No need for dual booting.
      2. You can switch from Linux apps to Windows.
      3. You can share files between Linux and Windows (some configuration required).
    2. Cons
      1. You need a valid copy of Windows.
      2. Virtualization is resource intensive. Unless you have high amount of RAM (16 GB or more) and fast hard disk (e.g. SSD) performance will be poor.
  2. Install Windows via dual boot partition.
    1. Pros
      1. No performance penalty.
    2. Cons
      1. You can either work in Linux or in Windows.
      2. Need to have a valid copy of Windows.
      3. You are effectively running a Windows PC under this route.
  3. Run Windows application natively on Linux.
    1. Pros
      1. No copy of Windows needed. This can be achieved by some Windows emulator software in Linux like WINE, Crossover etc. These software install a Window-like layer on top of Linux as a sandbox.
      2. You just need a valid copy of Windows application – which you will install via emulator in Linux.
      3. You can easily switch between Windows application and Linux in same session.
      4. If you have the Windows version of application software already, then usually no further cost associated with it (unless you choose a commercial version of an emulator)
    2. Cons
      1. This option could be buggy. Not all Windows application can be run in this way. Some manual trial and error with configuration settings is expected.
  4. Buy your OS specific version of the application.
    1. Pros
      1. Guaranteed to work. For example, Microsoft sells Office software for Mac OS too.
    2. Cons
      1. You are paying for the software again for different operating system.
      2. Some format compatibility issue may still come up if both software versions were not compiled using same code base.

So which option do you choose for your favorite application?

What is Keynesian economy?

2017/08/03
Keynesian economy is about the relationship among following 3 parameters
  • Unemployment
  • Growth (economic)
  • Inflation
It argues that you can control 2 parameters which would influence the 3rd parameter.
During  a good economic growth [case 1]
growth is high, causing unemployment is low,  which in turn causes inflation to become high
During an economic downturn [case 2]
growth is low, causing unemployment is high, which in turn causes inflation to become low (or could cause deflation)
In ideal scenario, growth should be high, unemployment should be low and inflation should be low too.
Keynesianism states that Central Bank should do the opposite of what public is doing.
Thus, in case 1 above, government should save money and try to control inflation (because if more money is flowing to economy, the inflation would rise).
Hence, in case 2 above, government should spend money by investing in infrastructure etc. which would drive economical growth leading to low unemployment
Keynesianism always gives priority to low unemployment over low inflation. Thus, it makes poor less poor and rich less rich (a reason why riches often dislike Keynesian economy).

Difference between Indian and Western music notation

2017/07/10

New musicians, especially who studied Indian swaralipi first and trying to study Western staff notation (and vice versa), often get very confused about how to align Indian swaralipi with western staff notation.

The key thing to understand here that in Western Music notation, each symbol represents an absolute note. For example, in a staff notation you always see whether it is C4 or C5.

However, in Indian swaralipi (= sa re ga ma pa dha ni) is made of relative notes!

The Sa can be C, D, E, F, G, A, B anything! In fact it can be C# or Ab too.

When you play a western staff music notation, you are expected to play exactly as it is written. That means, staff notation shows whether you will have to play C4 or G#3 etc.

However, when you play a Indian swaralipi, since only relative notes are shown, it is up to the player to choose which scale s/he wants to play in!

For example, here is Indian swarlipi notation for national anthem Jana Gana Mana (first line)

Sa Re Ga Ga | Ga – Ga Ga | Re Ga Ma – |

Now it is the player’s discretion whether s/he wants to start Sa in C or D or E or whatever.

Suppose, you have staff notation for this tune in C major. If you follow that notation, you have to play in C major. However, one can still play it in other scale like D major, F major etc. – by transposing it to a target scale (software like MuseScore can do it by flick of a menu).

In a way, the Indian notation is easier since it is entirely relative and you are free to play at any scale of your choice. Western staff notation is more rigid in this aspect (though you can re-write it by transposing – as mentioned earlier). However, staff notation is very rich and can convey timings, rhythm, chords etc. in much more details compared to swaralipi.

Any Indian tune or swaralipi can be always converted (manually) to staff notation. The reverse is also true, though you are likely to loose some complex information as there is no swaralipi equivalent of some concepts of staff notation.

There is a dearth of good quality written Indian tunes (compared to western music whether you can get notation of almost any popular tune). This is because Indian musicians predominantly play by ear where as western counterparts play by ear and/or sight as well.

If you are an Indian musician but unable to read staff notation, I strongly recommend that you learn it. It is not only versatile (in spite of steep initial learning curve) but universal too. People from anywhere can exchange music using this format.

Free software like MuseScore, make it very easy to compose music using staff notation.

PS: full scale example

Indian swaralipi and Equivalent Western notes (in C major)

Sa – C (C4 if mapping it with piano’s middle C key)
komal re – C# or Db
Re – D
komal ga – D# or Eb
Ga – E
Ma – F
kori ma – F# or Gb
Pa – G
komal dha – G# or Ab
Dha – A
komal ni – A# or Bb
Ni – B
Sa (next octave) – C

Indian swaralipi and Equivalent Western note (in D major)

Sa – D
komal re – D# or Eb
Re – E
komal ga – F
Ga – F#
Ma – G
kori ma – G# or Ab
Pa – A
komal dha – A# or Bb
Dha – B
komal ni – C
Ni – C# or Db

 

What constitues of Social Status?

2015/09/05

Social status is usually determined by many factors some of which are explicit e.g. perception about wealth, power while some others are implicit e.g. social mobility/background, education etc.

If everyone knew each other’s income/wealth, then it would have been very easy to determine everyone’s status because monetary wealth is still probably the most significant factor determining the social status.

However, as people often don’t know other people’s income, they often try to judge the number indirectly via other cues demonstrated by concerned persons.

We should note that social status is often subjective. It can differ widely accross countries, culture etc. Some yardsticks of measuring of social status can be highly controversial and illogical (e.g. status based on caste system etc.)

So what are the attributes that shape someone’s social status?

Property

This is one of the most important aspect of determination of status. More properties (or land) you own, more status you command (this can be somewhat diluted if property is your primary source of income). People try to guess (in some countries like UK property purchase price is in public domain) the price of property(s) you own and place you accordingly in social ladder.

Occupation

Some occupations automatically place people in the higher up because of the known average income level people earn in those professions. Thus, doctors, lawyers, accountants, property developers, managers, Management Consultants, CxOs etc. Blue collar jobs are often associated with low social status. Fore retired people, it the last occupation/role/grade they retired from.

Power and family background

This can manifest in several forms. It can be political power or be closely associated with someone in family/relative with such power. Can also be influencing power or popularity like well known actor, singer, social worker, author etc. This is also somewhat linked with Social Mobility. If someone starts life as poor but then becomes rich is usually considered of less status than someone coming from a rich family and maintain that heritage (even though the former should be given more credit). Power can also be popularity of someone within known friend circle. However, someone can be “likeable” but not necessarily considered “loaded / wealthy”.

Holiday

This is good indication of wealth and thus social status. The perceived cost of holidays is considered an indication of wealth. In India, having foreign holidays is considered much higher social status than in country vacations. This is somewhat true in developed countries as well (as mentioned in many UK newspaper articles)

Domestic Help

In Western countries, only the rich people can afford domestic help. If you are able to keep cook, nanny, cleaner on a regular basis in your house, that shows you are wealthy. In India, having couple of domestic maids do not signify any status however, if you have several servants, then it does indicate status symbol.

Appearance and attitude

Appropriate clothing can uplift one’s social ranking (even for a short time). Your apperarence and what you wear is what other people always see. A well groomed appearance with calm, composed mannerism indicates higher ranking (provided not everyone in the room are of same type – if so, then people try to downshift others’ if their appearance is below par). It should be noted that in some events (e.g. marriage ceremony) everyone is well dressed. During that event, it is difficult to judge anyone’s status. However, it is the repeated apperance in which indirectly create a perception of one’s status in known circle. The way someone communicates and convinces opinions as facts can also influence others’ perception and thus can uplift. E.g. speaking slowly in UK uplift one’s status (while it downshifts in India as people assume speaking slowly means one is not having grasp of the subject). Public figures (e.g. ministers, flim stars etc.) are very careful never to show their unkempt appearance in public.

Material possessions

These are often manifests by ownership of branded goods. Wearing jewelleries, branded clothes etc. indicate that someone is able to spend lavishly. However, this is somewhat weak indicator of status as in Western society, one can be cash poor yet buy expensive cars, phones, gadgets under “hire purchase” scheme.

Other factors which does contribue to social status (but not limited to)

  • Sending kids to private education
  • Expensive hobbies e.g. flying planes, keeping dogs
  • Expensive presentations in social events

Factors which do not usually uplift social ranking even though they have contributed

  • Having more free time (indicates more freedom)
  • DIY (Indians consider it deregatory as if you are trying to save money forgetting it can be someone’s hobby)
  • Academic qualifications (unless it manifests as more earning power in real world)
  • Prudent investment/ cash in the bank (because no one sees what wealth you have)

I understand this article can be subjective and not everyone will argue with everything mentioned.

Why oil price is falling?

2014/12/23

First of all, oil price did not fall suddenly. It is falling since last few months. Only recently it has become big news because compared against last few months, it has now fallen too much.

So how much it fell?

Compared to last year this time, crude oil price fell by ~50%. Current oil price is ~ $50 per barrel.

So what caused this fall in price?

Any price fall can be explained using simple economic theory of supply and demand.

However, the tricky question is what caused imbalance to supply demand theory.

In past few months, supply has gone up but demand has fallen.

Why demand has fallen?

  • Development of more fuel efficient machines, cars etc.
  • More usage of alternate energy sources like wind power, electricity (well it requires fuel to some extent but nevertheless)
  • Reduced economic activities in many countries around the world

Why supply has gone up?

  • USA is producing more oil especially via shale gas. This has caused reduced demand (from other countries exporting oil) from USA.
  • Fracking i.e. release of natural gas below surface has led to less demand on traditional oil.
  • Libya and Iraq continuing to produce oil in spite of experts expecting fall in production from there.
  • OPEC, which often controls oil price indirectly, has refrained from restricting production and let it follow a natural path. Now this is somewhat mystery why OPEC is not intervening. Some analysts say that Saudi Arabia (http://en.wikipedia.org/wiki/List_of_countries_by_oil_production ) has decided to carry on normal production as it thinks restricting supply, although may bump price up, will help Iran and Russia whom Saudis don’t have good relationship.

What is the effect of oil price fall?

It is difficult to predict, but in general it is believed that fall in price is good for overall world economy as it will lead to cheaper goods and thus can lead to more economic activities by consumers.

Russia has been affected negatively because it is generating less income via export but still need foreign currency for import. Some companies associated with oil industry have been affected by fall in profit obviously.