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The Seen and the Unseen - hosted by Amit Varma
Ep 402: Ajay Shah Brings the Dreams of the 20th Century
Oct 14, 2024
10:26:59
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Quick takeaways
- Ajay Shah's childhood experiences shaped by struggle, courage, and intellectual passion.
- Venture into difficult endeavors and embrace madness to achieve success.
- Starting a business at age 50 increases success probability due to wisdom.
- Lifetime dedication to learning essential for personal growth and success.
- Value of interdisciplinary interests in shaping intellectual development and lifelong learning.
- Efficient resource allocation post-1991 reforms led by key individuals like C.B. Bhave.
Deep dives
Childhood Experiences Shaping Dedication and Resilience
The account delves into the remarkable childhood experiences of the protagonist's father, born in the 1920s, detailing a life of struggle, courage, and intellectual passion. Despite humble beginnings in Hyderabad, Sindh, the narrative accentuates his progression into scholarly pursuits, emphasizing his insatiable thirst for knowledge, instigated by crucial encounters with books that altered his trajectory. These experiences, from eloping to establishing CMIE, paved the way for a dynamic entrepreneurial journey, underscoring the fusion of principles and practicality in creating a meaningful impact.
Legacy of Intellectual Curiosity and Purpose-Driven Ventures
The description reveals a legacy of intellectual curiosity and purpose-driven ventures, echoing a time when access to knowledge was scarce yet transformative. Themes of risk-taking, service-oriented endeavors, and the blend of business acumen with societal impact shine through the protagonist's upbringing in an environment rich with intellectual discourse and profound convictions. Reflecting on familial narratives and historical milestones, the narrative illustrates a lineage marked by resilience, optimism, and an unwavering commitment to intellectual pursuits.
Encouraging Bold Aspirations and Unconventional Paths
The portrayal expounds on promoting bold aspirations and venturing onto unconventional paths, challenging the normative constraints of contemporary living. Inspiring a spirit of audacity, the narrative urges individuals to embrace madness, dream vividly, and pursue courageous endeavors akin to the trials and triumphs witnessed by earlier generations. Despite the evolving landscape and varied pathways available today, the message underscores the enduring value of optimism, openness, and the willingness to embark on extraordinary journeys of self-discovery and purpose.
Encouragement to Take Risks and Try New Things
Roll the dice, try crazy things, venture into difficult endeavors. The venture capitalist mindset of throwing 10 darts to find success is highlighted, emphasizing the need to stay positive, keep trying, and be ready for failures.
Starting Entrepreneurship at an Older Age
The podcast compares entrepreneurship at age 50 to starting young, mentioning the higher success probability for firms started by individuals at age 50. The speaker shares personal experiences of launching ventures later in life, highlighting the advantages of wisdom, calm, and established human relationships.
Emphasis on Experiential Learning and Continuous Self-Improvement
The speaker advocates for a lifetime dedication to learning, citing personal experiences of pursuing math courses alongside a PhD. The importance of challenging oneself, avoiding complacency, and maintaining open-mindedness to new ideas and perspectives is underscored.
Exploring Various Topics and Interpersonal Growth
The podcast discusses a diverse range of subjects, from intellectual pursuits to personal growth and readings spanning economics, mathematics, nature, and literature. The speaker reflects on shifts in mindset, learning from conversations, and evolving viewpoints through engaging with different perspectives.
Cultivating Intellectual Curiosity and Broad Knowledge Base
Growing up in an environment filled with adult conversations and exposure to various fields like mathematics, literature, and science shaped the speaker's intellectual development. Emphasizing the importance of lifelong learning, the speaker discusses the impact of interdisciplinary interests and pursuing continuous self-improvement.
Influence of Early Conversations on Intellectual Development
The podcast highlights the significance of engaging in conversations and exposure to diverse topics during childhood for fostering intellectual curiosity. It emphasizes the invaluable role of early exposure to deep discussions and complex ideas in shaping critical thinking and broader understanding.
Transitioning from Arrogance to Open-Mindedness
Reflecting on personal growth, the speaker discusses moving from initial intellectual arrogance to a more receptive and humble approach to learning. The importance of engaging in open discussions, challenging oneself, and adopting a Bayesian attitude towards evolving viewpoints are highlighted.
Encouragement of Quantitative and Qualitative Learning
The speaker shares experiences of balancing quantitative learning in math alongside qualitative pursuits like reading literature and engaging with diverse subjects. Stressing the value of a well-rounded intellectual education, the podcast touches on the significance of broadening knowledge horizons and avoiding intellectual complacency.
Cultivating a Mindset of Lifelong Learning and Intellectual Exploration
The discussion delves into the podcast speaker's commitment to continuous learning, exemplified by pursuing math courses while pursuing a PhD. Emphasizing the importance of intellectual curiosity, open-mindedness, and active engagement with various subjects, the speaker advocates for a mindset of ongoing intellectual exploration and growth.
Early Exposure to Diverse Subjects and the Joy of Learning
Growing up immersed in a wide range of books and materials, the speaker delves into eclectic subjects like politics, philosophy, and science at a young age. From exploring nuclear submarines to devouring history books, the speaker's intellectual curiosity and deep dive into various fields lay the foundation for a lifelong passion for learning.
Serendipitous Book Discoveries and Academic Pursuits
Fascination with knowledge and the joy of discovery lead the speaker to serendipitous encounters with books, such as finding deeply discounted remainders at Strand Bookstall. The speaker's transitions from a fascination with physics to in-depth explorations of probability, statistics, microeconomics, and macroeconomics in pursuit of a PhD reflect a deep-seated passion for learning and intellectual growth.
Impacts of Deep Learning Experiences and Engagements with Research Organizations
Engaging in intense learning experiences, including mountaineering, physics, and academic pursuits, profoundly shapes the speaker's analytical mindset and perspective on the world. Transitioning from a physics enthusiast to an economist with a keen interest in the historical and theoretical underpinnings of economics, the speaker's journey through diverse learning paths underscores a deep appreciation for intellectual exploration and acquiring a profound understanding of complex subjects.
Importance of Finance in an Economy
In an economy, the financial sector plays a crucial role in resource allocation between different industries and firms. Traditionally, central planning was used to decide on investments and industry priorities. However, post-1991 reforms in India, the financial sector gained importance as it shifted the focus from central planning to market-driven decisions. The financial system provides critical functions like capital allocation, risk management, and facilitating investments that drive economic growth and development.
Critical Role of Leading Figures in Institutional Building
The success of the Indian financial system and reforms can be attributed to key individuals like C.B. Bhave, R.H. Patil, and Ravinarayan. These leaders played instrumental roles in the construction of entities like SEBI, NSE, and the depository, which revolutionized the Indian financial markets. Through their strategic insights, institutional building, and visionary leadership, they navigated tough challenges and established the foundation for a modern and efficient financial marketplace.
Creating a Market-Driven Economic Environment
The shift towards market-oriented decisions in finance post-1991 reforms enabled efficient resource allocation and investment decisions in the non-financial sector. Market signals like price-to-book ratios guided investment choices and encouraged businesses to adapt to changing market demands. By fostering a dynamic financial ecosystem, these reforms facilitated wealth creation, innovation, and competitiveness in the Indian economy.
Designing a Modern Pension System: The New Pension System (NPS)
The design of the New Pension System (NPS) was initiated through Project Oasis, where the need for a low-cost, frictionless fund mechanism was identified. The goal was to provide the benefits of equity investments and long-term performance without high transactions costs. This innovative system aimed to offer a new way of pension fund management focusing on low-cost and efficient processes.
Addressing Issues with the Traditional Pension Scheme
The traditional pension scheme, exclusive to civil servants, was deemed unsustainable as it accounted for a large percentage of GDP despite covering only a small fraction of the workforce. The unsustainable burden of promised pensions and guarantees led to the necessity of developing a new pension system that could cater to broader demographics and replace existing unsustainable structures. The NPS was envisioned to provide a more secure and scalable pension solution.
Community Efforts and Capacity Building for Pensions: NPS Implementation
Efforts to establish the NPS involved collaborative initiatives under Project Oasis, driven by the need for broader community participation and intellectual engagement. The project aimed to create a pension system that could serve the unorganized sector, reform the Employee Provident Fund Organization, and offer sustainable solutions beyond civil service pensions. The NPS implementation required a multi-faceted approach, including intellectual capacity building, testing systems, and stakeholder involvement, emphasizing modern pension principles and innovative fund management practices.
Building a Human Community at IJIDR with a Cat and Young Adults
In the podcast episode, the speaker recalls a period at IJIDR where a cat adopted his mother, leading to a transformative experience for the speaker and his wife. They lived with the cat throughout its entire life and were surrounded by a supportive community of young adults, including PhD students and individuals like Renuka Sane, Viral Shah, Vikram Agarwal, and Suja Thomas.
Challenges and Intensity of Work at IJIDR
During the speaker's time at IJIDR, there was a focus on hard work and limited resources, with only one computer shared between the speaker and his wife due to financial constraints. They dedicated long hours to writing code themselves, facing challenges with early platform limitations. Despite the intensity of work, there was a sense of fulfillment and simplicity in their lives.
Lessons on Mentoring and Kindness from Older Mentors
The speaker reflects on the impact of older mentors and individuals who showed kindness and support, sharing experiences of being mentored by figures like Bhave, Dave, and Kirat Parekh. The importance of fostering relationships with individuals of different age groups, both older and younger, is emphasized, highlighting the significance of mentorship and kindness in personal growth and support networks.
Merger between Forward Markets Commission and SEBI: A Political Drama
There was a political conflict surrounding the merger of the Forward Markets Commission and SEBI, with shifts in decisions leading to eventual implementation after a crisis erupted. However, in hindsight, the merger was considered ineffective due to a decline in capabilities. The podcast highlighted the twists and turns of this political saga and the challenges faced in achieving the intended outcomes.
Implementation Challenges in Government Initiatives
The podcast discussed the complexities of implementing initiatives like the National Pension System (NPS) across various governmental organizations. From amassing data on pension contributions to addressing delays and coordination issues, the implementation process was portrayed as a formidable task requiring meticulous attention to detail and substantial effort. It emphasized the importance of understanding organizational structures and challenges in driving effective implementation.
Insights on Lawmaking and State Capability Building
The episode delved into the intricate nature of lawmaking and its influence on state capabilities in India. It underscored the significance of laws as codes that shape societal behavior and institutional frameworks. Additionally, it highlighted the need for laws that uphold constitutional principles, promote freedom, and establish effective checks and balances to mitigate public choice problems. The discussion emphasized the critical role of legal determinism and the impact of well-crafted laws in fostering a conducive environment for societal progress.
Understanding the Value of Strategic Thinking in Public Policy
In recognizing the key insights gained from various fields such as finance, public policy, and law, the speaker emphasizes the importance of a strategic view of finance. By delving into the underlying principles and frameworks of finance, including the recognition of market failures and understanding of government interventions, a comprehensive approach to addressing financial challenges is developed.
Navigating Market Failures and Government Intervention
The speaker highlights the existence of market failures in finance and the necessity to pinpoint and comprehend these failures precisely. Emphasizing the need for government agencies to address market failures, a critical lens of public choice theory is advocated to ensure thoughtful and efficient interventions that consider self-interested actors.
Establishing Checks and Balances in Financial Regulation
With a focus on curbing executive discretion within financial regulatory bodies, the discussion underscores the significance of implementing checks and balances to regulate the behavior of officials. Recommendations include fostering transparency in decision-making processes and incorporating procedural rules to ensure accountability and integrity in financial governance.
Importance of Financial Agency Architecture
The financial agency architecture and regulatory framework play a crucial role in the smooth operation of financial institutions. Questions around central banking, financial regulation, and agency landscapes challenge the effectiveness of regulatory bodies. Understanding the diverse roles of agencies like central banks, prudential agencies, and consumer protection agencies is essential for a well-functioning financial system.
Challenges in Indian Financial System
Indian finance, despite reforms in the past, still operates under a centralized planning system. The intervention of financial agencies in minute details of firms' operations, a feature reminiscent of central planning, poses significant challenges. The dispersion of financial reforms post-2017 has left the country grappling to establish a sustainable financial landscape.
Need for Intellectual Leadership in Nation Building
Fostering intellectual leadership and sustained efforts in building various fields is crucial for long-term nation-building. The dispersion of specialized communities, like in finance and pensions, highlights the significance of developing institutional knowledge and promoting a community-driven approach to sustain progress and avoid dependence on individual leaders for long-term growth.
The Importance of Legal System Improvement
Improving the legal system in India is crucial due to the normalization of malfunctioning and lack of separation between administrative functions and judicial functions. Creating a structure like the proposed Financial Sector Appellate Tribunal and focusing on process improvements are essential to enhance the effectiveness of the legal system.
Collaboration for Court System Improvement
Collaborative efforts, such as the initiative led by Agami, aim to enhance the functioning of courts in India. By assembling organizations like Samagra and e-Governments Foundation, progress is made in setting up clean logical systems and improving the efficiency of courts. Such collaborations represent a significant step towards addressing the challenges faced by the legal system.
Focus on Data and Research for Legal Systems
Efforts towards building high-quality datasets and applying empirical research methodologies to understand the Indian legal system are crucial. Initiatives like creating original datasets for cities in Karnataka contribute to building a comprehensive understanding of legal processes and system improvements. These endeavors mark a positive shift towards evidence-based decision-making and policy formulation.
He's a polymath who cares deeply about the world, tries to understand it, and straddles many fields. He's played a key role over the last few decades in India's journey towards development. Ajay Shah joins Amit Varma in episode 402 of The Seen and the Unseen to talk about his life and times. (FOR FULL LINKED SHOW NOTES, GO TO SEENUNSEEN.IN.) Also check out: 1. Ajay Shah on Twitter and Substack. 2. Everything is Everything -- Ajay Shah's YouTube show with Amit Varma. 3. Life Lessons -- A course taught by Ajay Shah and Amit Varma. 4. In Service of the Republic: The Art and Science of Economic Policy — Vijay Kelkar and Ajay Shah. 5. XKDR Forum. 6. The LEAP blog. 7. Previous episodes of The Seen and the Unseen with Ajay Shah: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13. 8. The Surface Area of Serendipity -- Episode 39 of Everything is Everything. 9. The Economic Lives of the Poor -- Abhijit Banerjee and Esther Duflo. 10. The Universe of Chuck Gopal — Episode 258 of The Seen and the Unseen. 11. The Hiking Episode -- Episode 35 of Everything is Everything. 12. Declutter -- Episode 30 of Everything is Everything. 13. The Life and Times of Mrinal Pande — Episode 263 of The Seen and the Unseen. 14. Pushpesh Pant Feasts on the Buffet of Life — Episode 326 of The Seen and the Unseen. 15. The Life and Times of Ira Pande -- Episode 369 of The Seen and the Unseen. 16. A Meditation on Form -- Amit Varma. 17. A Passion for Cycling -- Episode 53 of Everything is Everything. 18. Il Lombardia: Tadej Pogačar delivers historical fourth consecutive victory. 19. Centre for Monitoring Indian Economy. 20. Seven Stories That Should Be Films -- Episode 23 of Everything is Everything (including Ajay's retelling, 'The Fat Frogs of Tatsinskaya'). 21. India’s Greatest Civil Servant — Episode 167 of The Seen and the Unseen (w Narayani Basu, on VP Menon). 22. VP Menon: The Unsung Architect of Modern India — Narayani Basu. 23. Five Epic Stories That Must Be Films -- Episode 29 of Everything is Everything (including Amit's retelling of VP Menon's story). 24. Postwar: A History of Europe Since 1945 — Tony Judt. 25. The God That Failed -- Edited by Richard Crossman. 26. One Day in the Life of Ivan Denisovich -- Aleksandr Solzhenitsyn. 27. Free to Choose -- Milton Friedman and Rose Friedman. 28. Both Sides Now -- Joni Mitchell. 29. How to Write a Paper -- Episode 62 of Everything is Everything. 30. Jim Corbett on Wikipedia and Amazon. 31. Trek The Sahyadris -- Harish Kapadia. 32. Inflation Targeting Rocks! -- Episode 68 of The Seen and the Unseen. 33. The Heckman Equation. 34. A Deep Dive Into Education -- Episode 54 of Everything is Everything. 35. The Two Cultures -- CP Snow. 36. Shivaji and His Times -- Jadunath Sarkar. 37. Suyash Rai Embraces India’s Complexity — Episode 307 of The Seen and the Unseen. 38. Seeing Like a State — James C Scott. 39. The Tyranny of Experts — William Easterly. 40. Are You Just One Version of Yourself? -- Episode 3 of Everything is Everything. 41. Episodes of The Seen and the Unseen with Ramachandra Guha: 1, 2, 3, 4, 5, 6. 42. The Life and Times of KP Krishnan — Episode 355 of The Seen and the Unseen. 43. Our Population Is Our Greatest Asset -- Episode 20 of Everything if Everything. 44. Population Is Not a Problem, but Our Greatest Strength -- Amit Varma. 45. Plato (or Why Philosophy Matters) — Episode 109 of The Seen and the Unseen (w Rebecca Goldstein). 46. How to Do Development -- Episode 57 of Everything is Everything. 47. Lant Pritchett Is on Team Prosperity — Episode 379 of The Seen and the Unseen. 48. The Life and Times of Chess -- Episode 52 of Everything is Everything. 49. Fixing the Knowledge Society -- Episode 24 of Everything is Everything. 50. The Importance of the 1991 Reforms — Episode 237 of The Seen and the Unseen (w Shruti Rajagopalan and Ajay Shah). 51. The Reformers -- Episode 28 of Everything is Everything. 52. The Beauty of Finance -- Episode 21 of Everything is Everything. 53. What's Wrong With Indian Agriculture? -- Episode 18 of Everything is Everything. 54. The Life and Times of Montek Singh Ahluwalia — Episode 285 of The Seen and the Unseen. 55. The Importance of Finance — Episode 125 of The Seen and the Unseen (w Ajay Shah). 56. India in Transition: Freeing the Economy -- Jagdish Bhagwati. 57. The UNIX Episode -- Episode 32 of Everything is Everything. 58. Don't Mess With the Price System -- Episode 66 of Everything is Everything. 59. Four Papers That Changed the World -- Episode 41 of Everything is Everything. 60. The Ghost and the Darkness -- Stephen Hopkins. 61. India’s Massive Pensions Crisis — Episode 347 of The Seen and the Unseen (w Ajay Shah & Renuka Sane). 62. Understanding India's Pensions Disaster -- Episode 65 of Everything is Everything. 63. What Bruce Springsteen Means to Us -- Episode 13 of Everything is Everything. 64. Distance From Delhi -- The Takshashila Institution. 65. Beyond A Boundary -- CLR James. 66. Letters for a Nation: From Jawaharlal Nehru to His Chief Ministers 1947-1963 -- Jawaharlal Nehru. 67. Yes Minister and Yes Prime Minister — Jonathan Lynn and Antony Jay. 68. The Long Road to Change -- Episode 36 of Everything is Everything. 69. The Tragedy of Our Farm Bills — Episode 211 of The Seen and the Unseen (w Ajay Shah). 70. Government's End: Why Washington Stopped Working -- Jonathan Rauch. 71. Understanding deviations from the fiscal responsibility law in India -- Pratik Datta, Radhika Pandey, Ila Patnaik and Ajay Shah. 72. Who Lends to the Indian State? -- Aneesha Chitgupi, Ajay Shah, Manish Singh, Susan Thomas and Harsh Vardhan. 73. The Percy Mistry report. 74. Bare Acts. 75. Subhashish Bhadra on Our Dysfunctional State — Episode 333 of The Seen and the Unseen. 76. Shruti Rajagopalan on our constitutional amendments. 77. The First Assault on Our Constitution — Episode 194 of The Seen and the Unseen (w Tripurdaman Singh). 78. Sixteen Stormy Days — Tripurdaman Singh. 79. Caged Tiger: How Too Much Government Is Holding Indians Back — Subhashish Bhadra. 80. Subhashish Bhadra on Our Dysfunctional State — Episode 333 of The Seen and the Unseen. 81. The Matrix -- Lana Wachowski & Lilly Wachowski. 82. How Family Firms Evolve -- Episode 34 of Everything is Everything. 83. From Imperial to Adaptive Firms -- Episode 37 of Everything is Everything. 84. Graduating to Globalisation -- Episode 48 of Everything is Everything. 85. Jeff Bezos on The Lex Fridman Podcast. 86. Born to Run -- Bruce Springsteen. 87. Go to the root cause (2007) -- Ajay Shah. 88. Bhargavi Zaveri-Shah Will Not Wear a Blue Tie to Work — Episode 389 of The Seen and the Unseen. 89. Understanding the State -- Episode 25 of Everything is Everything. 90. Every Act of Government Is an Act of Violence -- Amit Varma. 91. When Should the State Act? -- Episode 26 of Everything is Everything. 92. Public Choice Theory Explains SO MUCH -- Episode 33 of Everything is Everything. 93. Public Choice – A Primer -- Eamonn Butler. 94. The Journey of Indian Finance -- Ajay Shah. 95. Amrita Agarwal Wants to Solve Healthcare -- Episode 393 of The Seen and the Unseen. 96. Fortress and Frontier in American Health Care -- Robert Graboyes. 97. We Love Vaccines! We Love Freedom! -- Episode 27 of Everything is Everything. 98. The Art and Science of Economic Policy — Episode 154 of The Seen and the Unseen (w Vijay Kelkar & Ajay Shah). 99. Pranay Kotasthane on Amazon. 100. A blog post is a very long and complex search query to find fascinating people and make them route interesting stuff to your inbox -- Henrik Karlsson. 101. For Whom the Bell Tolls -- Ernest Hemingway. 102. Essays in Persuasion -- John Maynard Keynes. 103. The Ascent Of Man -- Jacob Bronowski. 104. How to Modernise the Working of Courts and Tribunals in India -- Many authors including Ajay Shah. 105. How to Modernise the Working of Courts and Tribunals in India -- Ajay Shah. 106. The lowest hanging fruit on the coconut tree — Akshay Jaitly and Ajay Shah. 107. Climate Change and Our Power Sector — Episode 278 of The Seen and the Unseen (w Akshay Jaitley and Ajay Shah). 108. The Brave New Future of Electricity -- Episode 40 of Everything is Everything. 109. False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet -- Bjorn Lomborg. 110. Stay Away From Luxury Beliefs -- Episode 46 of Everything is Everything. 111. Nuclear Power Can Save the World -- Joshua S Goldstein, Staffan A Qvist & Steven Pinker. 112. But Clouds Got In My Way -- Ayush Patnaik, Ajay Shah, Anshul Tayal and Susan Thomas. 113. Everybody Lies — Seth Stephens-Davidowitz. 114. The Truth About Ourselves — Amit Varma. 115. Capitalism and Freedom -- Milton Friedman. 116. Against the Grain -- James C Scott. 117. The Beatles, Dire Straits, Pink Floyd, Led Zeppelin and Bruce Springsteen on Spotify. Amit Varma and Ajay Shah have launched a new course called Life Lessons, which aims to be a launchpad towards learning essential life skills all of you need. For more details, and to sign up, click here. Amit and Ajay also bring out a weekly YouTube show, Everything is Everything. Have you watched it yet? You must! And have you read Amit’s newsletter? Subscribe right away to The India Uncut Newsletter! It’s free! Also check out Amit’s online course, The Art of Clear Writing. Episode art: ‘Dreaming’ by Simahina.
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