A better way of selecting the top brass – 2

Politicisation will limit politicisation

Two of the more thoughtful critiques of the Modi government’s decision to jettison the principle of seniority in appointing India’s next army chief appear in the Indian Express and Business Standard today. Sushant Singh and Ajai Shukla are among the most astute commentators on the subject so it is important to read their arguments with care.*

Sushant’s main argument is that the principle of seniority in choosing the chief must be replaced by an institutionalised due process, and not arbitrary selection by the political leadership. Ajai, though primarily concerned about the politicisation of the army, also criticises the rationale provided by the Modi government in the specific case of Gen Rawat.

A reasonable person will tend to agree with Sushant and Ajai, for after all, it is a good idea to ensure that the selection process is transparently objective. However, the reasonable view in this case might be both unsatisfactory and impractical. It might be a better to allow the political executive the complete discretion to pick from among the available pool of three star officers. If the Cabinet prefers non-military criteria like partisanship, ideology or ethnicity, so be it, as the Cabinet is accountable for outcomes. The lessons of 1962 are not lost on India’s politicians. As I wrote in my first post on this topic, if we can trust the prime minister with a nuclear button, we shouldn’t worry about a much lesser risk as the selection of army chief.

Won’t this politicise the army? Well, the trajectory is unlikely to be much different from what it is now. Moreover, even as Sushant, Ajai and I are concerned about the politicisation of the armed forces at politician-general level, we are also concerned about the politicisation within the army. As Ajai brings out in his article, factional politics among the branches of the army are intense and have ended up in the Supreme Court. It is naive to believe that this intramural politics has been untouched by the country’s partisan politics. I’ve covered this objection in my earlier post.

(*As the two are both friends and sparring partners, this blog refers to them by their first names, instead of formally by their honorifics and last names.)

Time for a stiff drink

Satyagraha, Neoliberalism, CIA…we’re running out of ideas

It is perhaps a good time for newspaper editors to stop publishing any more polemical opinion pieces on the great currency transfusion (‘demonetisation’). When someone argues that people standing in lines to deposit and withdraw their own money after being compelled to do so by the government, are actually engaged in “the first economic satyagraha [using] their wisdom to articulate opposition to neoliberalism”, it is time to get off the computer and go get a really stiff drink.

It is abominable and grossly insensitive to suggest that people trying to cope with the currency shock are somehow engaged in a satyagraha. A satyagraha is above all a voluntary exercise. There is absolutely nothing voluntary about people standing outside banks and ATMs.

The subtitle of the article proclaims that “the demonetisation drive aims to cleanse the ills of neoliberalism”. That needs a sharp intake of breath and another stiff drink. Or two. The reason why there is a shadow economy is because of the absence of liberalism, neo- or paleo-. Corruption exists because of regulation, because economic freedom and liberty are stifled. If the demonetisation drive can claim to cleanse anything, it is the ills of statism, bureaucratism and the still-extant licence-permit raj. Demonetisation is a bad way to cleanse that, but that’s a different argument.

Last week The Quint had a report blaming a US aid agency and the CIA for demonetisation. Now that neoliberalism has been ritually savaged, the debate is truly over. Head to the bar, folks! They take cards.

A better way of selecting the top brass

Nothing is lost by abandoning the principle of seniority, but the armed forces need restructuring

Yesterday, the Modi government decided to supersede two general officers and appoint Lt Gen Bipin Rawat as the next chief of army staff. In a system where seniority has risen from a criterion to the criterion, and where “lines of succession” are drawn in a manner to mirror royal succession in monarchies, the move has shocked many. After all, the last time such a thing happened was in 1981 when the Indira Gandhi government appointed Gen A S Vaidya over Gen S K Sinha’s head.

Here’s the thing: the Modi government has done well to break a norm that had so become an entitlement that it had begun damaging the incentive structures of the the military leadership. The sordid saga of Gen V K Singh five years ago revealed that the army’s leadership was spending undue energy on manipulating promotions and appointments to ensure desired lines of succession. Any organisation whose leadership is engaged in such machinations is likely to suffer loss of professionalism. By elevating seniority to a sacrosanct principle, we might well have depoliticised appointments at the level of the political leaders picking the military leadership. However, it does not mean we have depoliticised appointments within the military establishment. Because of secrecy and respect that the armed forces enjoy, the ‘politics’ within the armed forces is generally invisible to the public. That doesn’t mean it doesn’t exist. Just go back and look at the reports that emerged five years ago during the Gen V K Singh’s controversy.

If the Indian armed forces had the luxury of being a showpiece, where they did more ceremonial parades than combat, it might have been acceptable to go by seniority. But India’s armed forces have been fighting wars, proxy wars and insurgencies for ever, and the future presents ever greater risks. In such a context, it is downright absurd to argue the the senior-most officer should become the commander. Furthermore, it is downright absurd to accept that the service chiefs should be both excellent commanders and excellent staff officers: a great military leader need not necessarily be the best military manager. To roll the two roles into the same office is to get a little bit of both, and the best of neither. Jettisoning the primacy of seniority is the first step: the Modi government must use the opportunity to implement structural reforms to India’s military structure. (It’s clear what such reform should entail: see this article)

There are two important objections to non-seniority based appointments. First, that it would upset the army’s internal appointments and promotions structure. Second, that it would allow the political leadership to appoint military leaders based on partisan, ideological, religious, caste or other criteria unrelated to military merit. Let’s consider each of them in turn.

Yes, superseding officers will cause genuine heartburn, embarrassment and grievances among those adversely affected by the move. The retirement or resignation of those who have been passed over for promotion count as a loss to India’s military capital. That, however, is the price we must pay for a competitive military establishment. Much of this cost is one off, representing what behavioural economists call the “endowment effect”. Because officers expect to be promoted on the basis of seniority, they feel what is rightfully theirs has been taken away. If, from now on, officers no longer expect the seniority norm to hold, they will feel less cheated. That said, it is incumbent on the Ministry of Defence and the services headquarters to ensure that the superseded officers are treated with respect and decorum; and if they have years of service left, are re-employed in government positions commensurate with their seniority.

The second objection is more serious: what is to stop the political leadership from appointing military chiefs on dubious, non-military criteria? Well, for one, it is not as if lobbying on such grounds has not been taking place. However, the argument that the prime minister cannot be trusted to properly appoint a service chief sounds pretty unserious when the office of the prime minister has everything from the nuclear button to the validity of all legal tender in his hand. If the citizens of India vote in a government in a constitutional manner, and the ruling party constitutionally appoints the prime minister, who selects his cabinet, then that is that.

Now it is not as if the Cabinet can appoint an army chief without being bound by any constraints: they will be limited to a small number of officers to choose from, and any ideological, partisan or communal preference will be constrained by the fact that the armed forces are engaged in active duty. No Cabinet would want to lose battles or wars, or found wanting in the face of external threats. Parliament must do its job and keep the government in tether: so rather than defend the principle of seniority, concerned citizens must demand the amendment of the anti-defection law that has converted MPs into robots under the control of the party leaders.

The Modi government would do well to follow up its departure from orthodoxy with a sincere commitment to restructure the armed forces. Early in his tenure, PM Modi was reluctant to risk this reform. He should not shy away from it now. The K Subrahmanyam report was almost two decades ago; there have been a few subsequent initiatives to study the matter further. It’s well past decision time.

Tailpiece: My comments on an NDTV show on this subject in February 2012.

Update: Read the second post on this topic here.

How long will the Great Currency Swap be popular?

As long as schadenfreude exceeds inconvenience

Many of us at Takshashila have been struck by the seemingly paradoxical situation of the Prime Minister enjoying popular support for the Great Currency Swap (‘demonetisation’) even when everyone has been inconvenienced to various extents. In a recent post, I argued that this confirmed my cynical hypothesis of what kind of public policies enjoy public support, because “most citizens feel the cost they are incurring is a lot less than the cost others—those with unaccounted money—will incur. For the moment at least, intangible schadenfreude is outweighing tangible personal losses.”

In a discussion today, we attempted to project the two feelings — of schadenfreude and inconvenience — to see how public support might change over time. This is described in the following chart:

Update: This is an updated version of the chart.

 

The excess of schadenfreude over inconvenience constitutes the level of support for the the policy. The excess of inconvenience over schadenfreude constitutes resentment against the policy. As of 15th December 2016, people still feel that the inconvenience is a price worth paying to ensure that those with unaccounted incomes suffer relatively more.

Note that this is a schematic, and the shape of the curves in this chart is not a forecast: events can move them in time or change their shapes.

For instance, if inconvenience continues to grow as people and businesses run out of adequate cash, and if they come to believe that the holders of unaccounted money are getting away relatively unscathed, then we might head towards point B, where resentment builds up. Then, as the situation eases — with adequate cash being pumped back into circulation, and with people adapting to a less-cash lifestyle — the resentment will begin to taper down towards point C.

The chart assumes that schadenfreude will diminish over time, in which case at point C, support and resentment will cancel each other out. However, if schadenfreude does not diminish, the policy will continue to enjoy popular support.

The Modi government can prevent or mitigate the rise of resentment by reducing inconvenience and by feeding schadenfreude. The former, by supplying enough currency quickly, before point A is reached. The latter way is to persuade the public that wrongdoers are getting their just deserts. However, as people hear news of seizures of hoards of new currency, or of others circumventing the moves using clever methods, the schadenfreude is likely to fall sharply.

The greatest danger to the Modi government, and to Prime Minister Modi himself, is if inconvenience does not fall, or fall quickly enough, and it continues to rise beyond point B.

A conservative criticism of the Great Currency Transfusion

On making big bold moves in uncharted territory

Over the past few weeks, many people have asked me (just as they’ve asked each other) what I think of the Modi government’s currency reform (popularly known as ‘demonetisation’).

To this day, my response has been that PM Modi has taken a very risky bet, and it’s too early to tell how things will turn out. It is unclear what the fundamental purpose of the exercise was—there are at least half-dozen of them—and hence it’s hard to say whether it met the policymakers’ objectives. I am not persuaded by the initial defence that it is a good policy, terribly implemented, because a policy is only as good as its implementation. I am not persuaded by the current short-term pain, long-term gain rationalisation, because it’s important to know what exactly the intended long-term gain is, before we can answer how much short-term pain is worth suffering for it.

What we do know is that the most damaging unintended consequences can be minimised by a combination of rapid take-up of electronic transactions by those who can, and a rapid re-injection of currency notes into the economy for the rest. To the extent that electronic transactions are substitutes for cash transactions, the re-injected cash can reach more of the people who lack bank accounts, smartphones and identity documents. If you use less cash, then at the margin, you ease the difficulties of cash-dependent persons. Even so, we do not know how long it’ll take to reflate the tyres of our complex economy. In the meantime, the economy will suffer losses, and these can be quite painful to ordinary citizens.

We should now hope that the long-term benefits will be worth all this pain. But hope, as George Shultz famously said, is not a policy.

Therein lies my principal criticism of Mr Modi’s big currency reform initiative: as an advocate of conservative policymaking, I believe that it is unwise to introduce sudden, big, pervasive, irreversible changes to large, diverse, complex, perhaps semi-chaotic systems like national economies. (If I’ve used too many adjectives in the previous sentence, it is because they are necessary.) I use the word “conservative” in the sense that it means cautiousness, tentativeness, lack of certitude; like how medical practitioners use it to denote their approach to treatment. I do not use it in the big-“C” Conservative ideological sense.

Prudence suggests that the greater the number of people affected, the costs involved, the irreversibility or the complexity of the system, the better it is to be cautious, tentative and have the ability to tune up or tune down the policy dials. Because we cannot predict the consequences to any degree of accuracy before-hand, it’s better to follow a trial-and-error method. The Modi government’s currency reform, unfortunately, leaves its policymakers with few policy dials that they can tune up or down. It is a big bang reform.

This was also my criticism when the UPA government decided to extend the rural employment guarantee scheme nationwide without waiting to see how the pilot projects turned out. What benefited some people in some districts, hurt other people in other districts. A conservative approach would have extended the rural employment guarantee to districts where it was necessary, and not to areas where it worsened labour shortages, hurt agricultural productivity and raised prices. The currency reform project is similar in this respect, but touches almost every citizen and in a much smaller amount of time.

Whatever we might think about the effectiveness of such ‘bold’ policies, we should prefer a conservative approach to policymaking. No, this is not a recipe for status quoism. There are lot of areas where there is plenty of empirical evidence to implement big changes. For instance, we know that sectoral deregulation and liberalisation has yielded positive results since 1992, so we can do more, even a whole lot more, of the same.

The paradox of a cashless society

To be successful, the push for cashless society must accommodate the anonymity of cash

There is no doubt that moving towards a cashless society has immense benefits: from making transactions convenient and highly efficient to bringing most of the economy under accountability. From where India stands at 2016, a concerted push towards reducing the use of cash makes a lot of sense.

In an editorial last week, Mint enumerated some important steps to ease the path towards a cashless society: availability of telecom connectivity, investment in technology that improves security and simplicity, and government incentives that favour cashless transactions. In an earlier interview with the same newspaper, Nandan Nilekani argues that since much of the necessary infrastructure — Aadhaar, IndiaStack and Unified Payments Interface — is already in place, the Modi governments currency reform (‘demonetisation’) will act as a shot in the arm for India’s move towards a cashless economy. [Disclosure: Mr Nilekani is a donor to the Takshashila Institution.]

The Mint editorial, however, misses one crucial aspect. Apart from cash being a wireless technology with near-infinite battery life, and one that needs no telecom connectivity, it is its inherent anonymity that makes it a very valuable instrument. Yet, most advocates of a cashless society advocate it precisely because it gets rid of anonymity. Ergo, the extent of cashlessness might well be defined by the extent that people value anonymity and privacy. What this means in practice is that unless the demand for anonymous transactions is satisfied, India might not cross what the editorial correctly describes as “the threshold level after which the network effect will take over.” The question is whether the desire for anonymity prevent a forming a critical mass of Indians that rely on electronic payments. This, more than technical considerations, might dictate the pace at which cash is displaced from its throne.

It is understandable, not least at times of moral panic, that ordinary people will fall in line with the arguments of moral puritans and self-righteous advocates and assert that law-abiding citizens need not fear lack of anonymity. Such views ignore the the reality that families and societies are often held together by harmless lies. For instance, one family member will to put away some money from the rest, without any illegal purpose in mind. Some people like to give anonymously to charity, without any malice or illegality involved. These kinds of innocuous, quotidian acts are a glue that binds society.

Then there are perfectly legal acts that people wish to hide from their families, society or government in order not to attract criticism or punishment. Many people have food habits they’d rather not admit to their family, others might want their alcohol and cigarette purchases to remain hidden. People might give money to NGOs and political parties that are heterodox, dissenting or championing unpopular causes. Such acts characterise and sustain liberal societies. Indeed, even some illegal activities — say prostitution or consumption of certain narcotics — that take place regardless of the letter of the law might have a stabilising influence on our societies. The fact that puritans are disgusted and outraged by this is beside the point. Indeed the story of post-Enlightenment social change around the world is one of legitimising a number of acts previously considered immoral, after weighing them in the court of Reason.

For this reason, some jurisprudence has equated anonymity of cash with free speech. I usually avoid turning policy arguments into a question of rights, as it forestalls further discussion. In this case, though, I think it is justified. It would be hard to sustain free speech if there is an audit trail exposed to the market, society or government. The chilling effect this would have would impinge on the foundations of a liberal society.

Therefore, there are good reasons, both practical and of principle, to retain anonymity in financial transactions. To succeed, initiatives to promote a cashless society must, er, account and accommodate them. Good policy ought to be able to balance many valid considerations and arrive at an optimum approach. Allowing cashless transactions to be anonymous below a certain limit might offer a reasonable compromise. For instance, a stored-value “cash” card, available without requiring proof of identity, limited to payments of Rs 10,000 per month, with an six-month expiry date is one type of solution. This will achieve the transactional benefits of electronic payments, the anonymity of cash and limit the risk of use in large-scale criminality. Of course, even these cards can be abused, but I’d argue that the social benefits outweigh the costs.

If the government takes such a route, it will create enough room for innovation that can, paradoxically hasten the march towards the cashless society. Otherwise, we might take a very long time to cross the threshold that will unleash those network effects.

Tailpiece: It’s not as if a cashless society will lead to greater honesty. Dan Ariely’s experiments suggest otherwise.

“From all the research I have done over the years, the idea that worries me the most is that the more cashless our society becomes, the more our moral compass slips. If being just one step removed from money can increase cheating to such a degree, just imagine what can happen as we become an increasingly cashless society. Could it be that stealing a credit card number is much less difficult from a moral perspective than stealing cash from someone’s wallet? Of course, digital money (such as a debit or credit card) has many advantages, but it might also separate us from the reality of our actions to some degree. If being one step removed from money liberates people from their moral shackles, what will happen as more and more banking is done online? What will happen to our personal and social morality as financial products become more obscure and less recognizably related to money (think, for example, about stock options, derivatives, and credit default swaps)?” [Dan Ariely, The (Honest) Truth About Dishonesty: How We Lie to Everyone – Especially Ourselves.]

The pink rhinoceros at the party

How to win followers and influence people

There was a pink rhinoceros at the cocktail party. All the guests saw it but no one talked about it. They believed it would be rude to do so, for who knows what reasons the hosts might have had to let it into the room. Maybe it was a dear pet. Maybe it escaped from wherever it was kept and the hosts couldn’t put it back in time. The hosts, for their part, didn’t talk about it either. For they thought it rude to make comments on guest’s companion, human or animal.

So the pink rhinoceros walked about the room, sometimes nibbling on the canapés, sometimes bumping into the guests, but mostly standing around looking mildly confused.

Mr Grindle, as usual, was a great conversationist. He spoke at length and in great detail about the weather, history, sports, art, food, wine and the great events of the day. He was always at pain to be factually accurate. He went to great lengths to mention both sides of any debate, before stating his own position. He cited empirical evidence. His knowledge made him humble, and he readily acknowledged that there were limits to his own knowledge. He didn’t, however, even once mention the word rhinoceros, less acknowledge the pink animal that at the very moment, was trying to snatch grilled asparagus off his plate.

Mr Leroy’s idea of a good conversation was to listen to the sound of his own voice, which was usually in a state between a rant and a harangue. He usually spoke utter nonsense about the weather, history, sports, art, food, wine and the great events of the day. He was poorly informed, massively prejudiced and utterly illogical. His ignorance made him arrogant, and he would engage in sharp attacks on anyone who challenged his strongly held opinions. In his conversations, he not only mentioned the pink rhinoceros but said that such animals should not be allowed at cocktail parties. Moreover, he said, they bring bad luck to people who saw them, and the guests better be extra careful over the next few days.

As the guests went home, they were mostly of the view that Mr Leroy might have his faults, but is a far more credible man. After all, how could anyone believe in all the things Mr Grindle said, when he couldn’t even be trusted to mention the pink rhinoceros they could clearly see? Of course, Mr Leroy is the trustworthy one, because he talked about the animal and confirmed their fears that it would bring them bad luck.

Should liberals relax when populists are democratically elected?

Eternal nervousness might well be the price of democracy

Rohit Pradhan usually has interesting things to say and minces no words. Especially on Friday evenings. As he inaugurated last weekend, he decided to take liberals to the cleaners.

“But of course democracy is awesome till it elects people I don’t like. Then I want to rescind democracy & elect the government by the elite.”[@Retributions]

Let me deliberately take this statement out of its context, to try and escape the hangover of the politics of the previous week.

In conditions of “business as usual”, Rohit would be right. Supporters of liberal politicians and parties sometimes do engage in the dubious sport of blaming democracy for their electoral reverses. It would be appropriate to call out such behaviour as self-serving and hypocritical.

However, sometimes the sourness of the grapes is an early sign of bitter poisonousness. Communists, Fascists, Populists and authoritarians-sans-ideology can use democratic process to acquire power, and then systematically undermine the institutions and values that enabled them to do so. Like burning the ladder after you’ve climbed it, there are many instances in world history where this has occurred (even without invoking Godwin’s Law). The fear of “one man, one vote, one time” can be ignored at our peril. This is neither an argument for excessive, unwarranted fear nor for disenfranchisement based on political ideologies. Rather, it is a case for greater vigilance.

In the introductory chapter of a new book on populism, Jan-Werner Muller argues populism is “an exclusionary form of identity politics (that) tends to pose a danger to democracy. For democracy requires pluralism and the recognition that we need to find fair terms of living together as free, equal, but irreducibly diverse citizens.” Read his essay in the London Review of Books.

Mr Pradhan ought to be kinder on those are scared by what they happening around the world.

Trump is fantastic. Don’t worry.

Mr Trump’s telephone conversations with world leaders are indicative of his style, not substance.

Donald Trump’s phone calls with world leaders, screams a headline in the New York Times are “upsetting decades of diplomacy.” An already excited commentariat — around the world — is aghast at the fantastic manner in which the new US president-elect has been conducting the sublime act of statesmanship that is a telephone conversation. Just after some experts assessed that his fantastic phone call with the Pakistani prime minister might be unwelcome in India, their were jolted into assessing that Beijing would be upset (okay, make that apoplectic) after he announced that he spoke with the Taiwanese president. He even reportedly spoke to Rodrigo Duterte, the foul-mouthed president of the Philippines who had recently made a great show of insulting Barack Obama and kowtowing to Beijing. Oh yes, Mr Trump has violated the norms of the subtle, contrived and staid world of international diplomacy.

That is not a bad thing in itself. Nor is it much of a bad thing as far as US foreign policy towards Pakistan, China and the Philippines is concerned.

Mr Trump’s remarks to Nawaz Sharif appear more like the polite comments tourists make to their hosts regardless of the reality they observe. If he really meant what he said, then Pakistanis need to be worried right after they get over the surprise and puzzlement. Whoever believes that India should be concerned, less consider them unwelcome, is living in the 1990s. Analysts who believe that New Delhi is vying with Islamabad to court Washington’s favour must enlarge their frame of reference to the Indo-Pacific region, and set their watches to the present.

What about China? Hasn’t Mr Trump provoked the People’s Republic of China by exposing Beijing’s most dearly held—and most forcefully enforced—myth that the Republic of China on Taiwan does not exist as a normal state? Yes, and that’s not a bad thing at all. Perhaps due to the Western perception of its supposed exoticness, Beijing has usually had its way by pressing foreign governments to ‘respect its sensitivities’ over the Taiwan, the Dalai Lama, Xinjiang and the various territorial disputes it has with its neighbours. When the United States yields to this coercion, the rest of the world follows. If the United States were to be less inclined to ‘respect China’s sensitivities’, others are more likely to follow suit.

Beijing is quite likely to retaliate, but then, it has taken sharp foreign policy positions over the past decade without provocation. Let Beijing decide how long it wishes to play tit-for-tat with a much more powerful adversary. It remains to be seen if Mr Trump has the stomach for such a game.

It makes good sense for Mr Trump to reach out to Mr Duterte: at worst, it will confuse the Philippines establishment as it explores alignments with China and Russia. At best, it can cause Mr Duterte to execute a wild swing back towards Washington. To argue that Mr Trump must shun or punish Mr Duterte merely because the latter insulted President Obama would be to trade in foreign policy realism for soap opera sentimentalism. There is no evidence that the latter outperforms the former as a basis for pursuing a state’s interests.

For all his bluster, Mr Trump is out of his depth on matters of statecraft. He’s likely to learn on the job. Regardless of the value judgements we place on their content, it would be incorrect to take the fantastic man’s telephone conversations as indicators of his future administration’s real foreign policy positions.

Currency transfusion and political cyni-, er, realism

Have Indians proved the cynics among them wrong?

A few years ago, a cynic postulated two laws of policy realism in India.

The first law of policy realism
A policy that relies on the Indian citizen to act in selfless public interest will not work. In fact, a policy that expects an Indian citizen to act in anything but self-interest and relative gain will not work.

The second law of policy realism
A policy that expects Indian citizens to adhere to a process—any process—will not work as intended, because people will ignore, work around or actively undermine the process. [Two laws of policy realism]

While these statements hold up almost in all cases, the Modi government’s currency transfusion (‘demonetisation’) appears to be different. Even considering that most people are conflating their personal opinion of Prime Minister Modi and of his currency policy, and despite almost every person undergoing inconvenience and hardship (to various extents), the policy is largely popular. So isn’t this a violation of the first law? Aren’t people acting in selfless public interest?

Not quite. First, the actions of the citizens are not voluntary, but enforced. They have no choice but to act in a manner prescribed by the government. Second, as I wrote in the explanation of the first law, “the citizen must feel s/he will get more out of it compared to others”. In this case, most citizens feel the cost they are incurring is a lot less than the cost others—those with unaccounted money—will incur. For the moment at least, intangible schadenfreude is outweighing tangible personal losses. The emotional support for the policy derives from the relatively higher value people are currently attaching to schadenfreude. This is consistent with the first law. If the inconvenience persists for longer than people’s endurance (which is different for different people), then it might begin to outweigh schadenfreude.

What of the second law? From the numerous announcements the Finance Ministry and the Reserve Bank of India are making with respect to the acceptance of old currency, conditions for exchange and withdrawal limits, it is clear that there is a cat-and-mouse game going one between those making rules and those finding loopholes. The second law holds too.