Cause & Effect

In December 2014, Howard Marks sent out a memo to Oaktree clients titled 'The Lessons of Oil'. While discussing the impact of the recent oil price fall, he remarks :

...the current situation with oil also illustrates how difficult it is to understand the full range of potential ramifications. Most people easily grasp the immediate impact of developments, but few understand the "second-order" consequences...as well as the third and the fourth...

He then goes on to illustrate some of the direct consequences and their ramifications. It is mesmerising to see some of those come to life. For instance :

(an oil price decline implies)..investment in oil drilling declines, causing the earnings of oil service companies to shrink, along with employment in the industry.. 

by causing demand for oil services to decline, reduced drilling leads the service companies to bid lower for business. This improves the economics of drilling and thus helps the oil companies

On 21 April 2015, Wipro came out with its Q4 results. The company was hit by the decline in oil price. According to this article, Wipro's oil and gas business (i.e.: services to oil and gas companies) accounts for ~16% of the company's total revenues. The CEO said in an interview following the announcement - "In oil and gas, $1 trillion worth of capital expenditure has been stopped midstream." The article further states that - 'the management continues to see “pricing pressure” in commodity deals, as reflected in the operating margin narrowing to 22.2% from 22.6% at the end of March last year.'

When commoners like me, think of a decline in the oil price, the horizon is limited to the cost of petrol. How cheap is fuel going to be for my car? It doesn't extend to the full range of potential ramifications. The outlook is limited.

It is  fascinating to see how two seemingly unrelated events can serve as cause and effect. I believe, a similar concept is that of the butterfly effect, wherein a small change can lead to totally unexpected consequences.

Just wanted to share some more examples :

i) Weather in Indian Politics

A recent article in Mint postulates that some of India's political movements have been guided by the weather and not just ideology. It talks of the events of 1965, 1973, 1989 & 2002. The idea is that bad weather/monsoon leads to bad harvest, which in turn leads to disgruntled farmers and rising food inflation, which leads to an unhappy populous**. The article goes on to say - "These examples suggest that weather politics in India has two patterns. The first is a quiet crisis that leads to the exit of a government and the victory of the main opposition party by default: 2002, and to a more limited extent, the crisis of 1966-69, are examples of this trend. 1973 and 1989 represent the other pattern, where the crises presented an opportunity and (JP) Narayan and (VP) Singh made the most of them." So not only does one need a solid ideology, a touch of bad weather would help too.

**A decent monsoon is not only crucial for the farmer but also for the whole nation. Bad monsoon, implies food inflation, implies lesser disposable income for non-essentials. It also means irritable moods due to the prolonged heat and summer. Higher inflation and poor rural demand (due to lower farmer incomes) is bad for consumer companies and companies that focus on agricultural products. It might also be bad for banks for farmers would fail to repay loans. This might force the government to step in and waive off these loans. To fund this, taxes might have to be increased and that would further impact disposable incomes of citizens. Thus, there is good reason why one should hope/pray for a decent monsoon in a country like India.

ii) Right to Die as a Fundamental Right

In 1994, a bench of two judges of the Supreme Court in P.Rathinam v. Union Of India held that attempt to suicide as an offence was unconstitutional as it was violative of the right to life (which according to the Learned Judges included the right to die). This is a popular view and many of us advocate for the inclusion of the right to die as a fundamental right. In 1996, a petition was decided in the Supreme Court (Smt. Gian Kaur v. The State Of Punjab), where the issue was a consequence of the 1994 judgement. If the right to die was a fundamental right, then abetment to suicide could no longer be an offence; as anyone helping someone die would be helping the fulfilment of his fundamental rights. Surely, assisting someone fulfil their fundamental rights could not be called an offence. 

In Gian Kaur's case, the Hon'ble Court declared the former case to be incorrect and held that while attempt to suicide was an undesirable offence, it could not be declared as a component of the right to life and hence abetment to suicide would still remain an offence. Thus, even though declaring right to die as a fundamental right seems intuitive, it might have serious ramifications in law and hence caution needs to be exercised before making such claims.

iii) Child Marriages - Void?

Another example is that of child marriages. Under Hindu Marriage Act, certain marriages have been declared as void (like second marriages) and certain marriages have been declared as voidable (such as a marriage with inadequate consent). Child marriages have not been declared as either. Section 16 of the Act grants legitimacy to the children of void and voidable marriages (as described in the Act).

In a matter (Pinninti Venkataramana v. State) that came up before the Andhra Pradesh High Court, the issue was whether child marriages are void or voidable or valid. Interpreting the various provisions of the Act, the Court held that the Act did not explicitly declare child marriages as void. Since, only marriages as described in the Act have the benefit of Sec 16; if the Court were to interpret child marriages as void, the same benefit would not be available to such marriages. Thus, the children born of innocent unions (child marriages) would become illegitimate/bastards. To protect their interest, the Court could not suo moto declare such marriages as void. 

Further, the brides in these marriages must be protected. Given the social strata in which such marriages happen, if marriages were allowed to be broken so simply, then minor brides might be deserted without any protection/maintenance. The minor brides might not be accepted in their parental homes either. Given his, the legislature is right in providing them protection under the law by holding such marriages as valid. 

Thus, popular opinion might be that the institution of child marriage must be discouraged and declaring them void is a step in that direction, but there are ramifications to such declaration. (On a side note, child marriages are punishable under Hindu Marriage Act and voidable at the option of the minor party under The Prohibition of Child Marriage Act. Children of such unions are also granted legitimacy under the latter Act.)

I am going to end with two quotes, the second being a little misplaced :

"By becoming interested in the cause, we are less likely to dislike the effect."

-Dale Carnegie

"The world is full of magic things, patiently waiting for our senses to grow sharper"

-W.B. Yeats 

Similar Sounding Tunes

I saw the new Sanpdeal commercial on TV today. The background music seemed too familiar. It wasn't one of those generic tunes. It was distinct in construction but familiar in sound. I went through one of those unsettling moments when a tune is stuck in your head and you search the depths of your memory jar for its name.

After much struggle, I remembered that the tune was from the soundtrack of "Little Miss Sunshine". It is no surprise that I remembered the music from that movie. Not only is the movie truly delightful, the music is absolutely brilliant. If you have not seen the movie, I strongly recommend it.

Anyway, here are the two clips. Let me know if you also think that the two are similar :

i) Snapdeal Advertisement :

ii) "The Winner Is" from Little Miss Sunshine :

A law school is not a checklist

I joined the Faculty of Law, University of Delhi (hereinafter called 'Faculty') in July 2014 for my Bachelors in Law. Shortly after, the Bar Council of India (BCI) announced that the Faculty was no longer recognised by them. As a result, graduates from the University can no longer enrol with the Bar and hence cannot practice as lawyers (though there is some 'provisional' or 'temporary' enrolment that is still possible).

The reason for the withdrawal of recognition was the non-compliance of the BCI norms. The BCI regulates the legal profession and legal education in the country. This is the report that was filed by the Council based on its inspection of the Faculty of Law premises. I have not read the report, but this article states that there are various concerns with respect to infrastructure, classroom facilities, the nature of employment of teachers etc.

Previously, I had written to a Committee regarding the Functioning of the Delhi University and had been fairly critical of the Faculty. But I do not think that I ever suggested the removal of recognition or the 'shutting down' of colleges/schools.

I do not want to get into the tussle between the Dean of the Faculty and the BCI and who did what. Apparently, the Faculty did not apply for renewal of the recognition for a set of consecutive years and the Dean should be blamed for that. However, the BCI's attitude is equally puzzling, especially its remarks on 'shutting down'. Here is why :

1. This country is going through a crisis of education. We don't have enough universities. The demand for seats is ever increasing, especially since the implementation of reservations. Now, in that backdrop you want to shut down or remove affiliation to an institution that gives education to four thousand students? Such a remark, even obiter in a report by the BCI is extremely ill-suited
2. I do not believe that we have enough law schools or lawyers in this country. If we do, then the BCI should not have approved 400+ colleges in the last two years. And even if there is a surplus, there is an even greater surplus of students demanding this area of study. Should we deny them education because we have too many existing professionals? Communist much?
3. The Faculty's infrastructure is abysmal. The teaching is also just about okay. These are factors that affect education. Yet, we find that lawyers from this Faculty do fairly well in the Courts of Law. Even if that is not the case, there is no trend to suggest that graduates from this Faculty are bad lawyers. If the purpose of infrastructure and 'good teaching' is 'good' lawyers and we are able to achieve that without those pre-conditions; then certainly there is no need to be coercive with regard to these pre-conditions. I am not saying that there is no need to change status quo. I am saying there is no need for the 'you better listen to me or I will discredit you' tone
4. The BCI needs to acknowledge that there can be different ways of teaching law and that the way they prescribe isn't going to be 'the only way'. Just like creating toilets doesn't make people use them, similarly installing projectors will not be of use if the bulk of the class doesn't have money for laptops. How many students from Hindi medium backgrounds enter the National Law Schools? My hunch is that it is very little. There are many in this Faculty. If you shut this place, where will they go? Leave aside the fact that there are few places that offer a 3 year law degree. When the RTE came into force, small private schools faced closure because they weren't affiliated. The quality of education provided by them was of no concern. They lacked affiliation and hence were shut. Many NGOs that ran schools were forced to close and reasonably decent education was snatched away from the children. The BCI's behaviour is reminiscent in this regard
5. The 'reasonable man' is an argument that is oft quoted in judgements. Yet, we find that the committee's 17 recommendations fail that test. The committee suggested that unless these 17 conditions were met, affiliation will not be extended (for 2015-16 onwards). These recommendations included hiring regular teachers, implementing wifi, increasing computers, limiting the access of the college only to law students, access to latest legal software, change in college timings (which meant discontinuation of the evening batch), construction of a moot court hall, internship for students, well equipped common rooms, improved toilet and classroom facilities, improved seminar rooms and auditoriums, 'impressive' meeting rooms and electronic gadgets in classrooms etc. I am no expert at implementation but I do believe that the above recommendations will take more than a year to implement. It must be kept in mind that you are looking at a Faculty that might need approval from the University for large expenses. It is not a completely autonomous unit like the National Law Schools. How could it even be possible for the Faculty to implement these by July 2015, when the college classrooms are empty only in June and July? Regarding infrastructure, I have heard that there is a new building in construction. If that is to be held, then all the recommendations with respect to the physical infrastructure are useless because they will be inoperative when the new building commences operations
6. I believe that the BCI has made an incorrect comparison. The Faculty is not a National Law School. Yet, it has been examined by those standards. The Faculty never had the advantage of setting up a plush new enormous campus (50-70km away from the heart of the city). It was limited to the campus it had. The starting point and the means of these two institutions are very different. The fee structure is enormously different. Leave aside, the large gap in the number of students that receive education in them (~500 vs ~ 4000). It is like comparing Singapore and India
7. I also think the BCI erred in its behaviour. If the Faculty had not applied for re-affiliation, then it owed a duty to take care towards the prospective students of the Faculty. It knew that the Faculty had no affiliation, that it had no good basis to admit candidates - yet it allowed that to happen to the detriment of the students. It did not caution students regarding the lack of affiliation. The UGC had done the same when it came to the affiliation of IIPM. I think, that the offer of the BCI to extend affiliation to students of the Faculty till the 2014-15 batch stems from their own negligence and not from their infinite compassion towards the plight of the students 

No doubt, that the Faculty is also at fault for not applying for affiliation. I mean what sort of Dean would let this happen. And his handling of the situation isn't great either. However, all this is not about the BCI or the Dean. This is about the students - existing and prospective. What will they do? And where will they go? If not Faculty of Delhi, then where? Will 1500 students not get law admissions in 2015? ~750 are reserved seats - where will those students go? Strangely, neither the BCI nor the Dean nor the MHRD has anything to say about them. We are left to the fate and egos of these institutions. No wonder then, that education in this country is in the state that it is today.

I understand that sometimes change needs to pushed down people's throats. And withdrawing recognition can be one such tactic. However, change needs to be holistic. The policy makers at the top cannot lay down rules without any idea of the realities at the bottom. In this case, the BCI has set norms that are obviously unachievable by the Faculty; not to forget completely detrimental to the students. The BCI and the Faculty ought to reach an understanding on this (sooner rather than later). Unless they want writ petitions, candle light vigils and strikes by alumni lawyers. This is not a threat. It is reasonably foreseeable that all of this will happen.

After all, a law school is not a checklist of 17 items.

Image : http://navbharattimes.indiatimes.com/thumb/msid-18543007,width-400,resizemode-4/kanoon-and-rajni.jpg