Tuesday, August 16, 2011

Of Op-Eds

Recently, Ravikiran blogged after a long time. Reading his post took me to the days about 4-5 years back when I had just started blogging, and the 'Indian blogosphere' (or at least the part of it that I engaged with) was a virile, juvenile and occasionally illuminating virtual space that had not yet been neutered by Facebook, Twitter, work and maturity. Out of nostalgia, I browsed some of his older posts. Among the most recent ones was a link to an editorial by Shruti Rajagopalan. It caught my eye due to the recent controversy over the sponsorship of the London Olympics by Dow Chemicals, the company acquired Union Carbide, which was responsible for modern India's worst industrial disaster.

It's a piece worth discussing for two reasons. One, it is very well written, concisely argued, compact yet forceful. Two, and more importantly, it is an excellent demonstration of the sheer futility of the op-ed as a non-fiction form of great merit.

Shruti argues that by preventing American tort lawyers from doing their customary ambulance-chasing out of an intuitive, paternalistic yet misguided and ill-informed sense of protecting the Bhopas Gas Tragedy victims from exploitation, the Indian government actually ended up causing them (the victims) more harm. The civil lawsuit was settled for the presumably low sum of $470 Mn; the criminal charges took more than two decades to process and ended in ridiculously lenient sentences.

Ravikiran talks about strict liability and judicial reform in his post linking to that piece. I don't have any good conceptual framework to analyse strict liability, so I won't go there. The need for judicial reform in India is a no-brainer, so I won't go there either. But the specific claim that Shruti discusses at length in her op-ed, the value of the civil settlement, is worth discussing. For this discussion, please bear in mind that Shruti's argument is explicitly utilitarian in a rather precise sense - she is making the claim that the Bhopal Gas tragedy victims were stiffed of just compensation, monetarily.

Shruti mentions that American tort lawyers typically charge one-third as commission fees from any legal settlement. Thus, a $470 Million pay-out would have needed to be $705 Million or above for the America-tort-lawyer way to be more successful than the Indian-government way. (Losses due to the leaks in the government distribution mechanism can be assumed to be the same in either case, and so are not material to this analysis).

So what would have made the payout $705 Million or more? Shruti claims that bureaucrats underestimated the fatality and injury rate, partially because of incompetence, partially because their incentives were not aligned with correctly estimating the right numbers. She does not charge (or even insinuate) outright corruption, but one may well imagine that to be a third source of error and manipulation. Hence, Shruti concludes that the Bhopal Gas victims were stiffed.

But wait, wasn't that conclusion contingent on the American tort lawyers being able to extract $705 Million or more? Do we have any evidence on whether that would have been achieved? We have some clue - she mentions that estimates of the death toll range from 4000 to 15000 (though she doesn't mention the sources of those estimates - if the bureaucratic estimate was 3000, the range should have been 3000 to 15000, at the very least). If it is 15,000 and the government was off by 5x, $470 million is rather obviously a prima-facie rip-off. If it is 4000, then maybe not, because the pay-out also includes injuries etc.

So what is the convincing evidence in the op-ed that the American tort lawyers would have been able to extract $705 million? None, actually. And that is the fundamental problem with a policy op-ed. Even the best ones are arguing from assertion, at some level or the other. Some are more nuanced than others, take longer time to figure out, but they all suffer from this same fatal flaw. Shruti believes (more or less correctly) that the bureaucrats' incentives are not properly aligned, and this leads her to believe and argue the result of their actions was necessarily sub-market-optimal. She doesn't feel the need to investigate the evidence required to go from the premise to the conclusion, or at the very least, doesn't feel the need to present it.

Data-based argumentation in policy is difficult. There is only one history. There are way too many variables to consider. There isn't enough data. You can't set up Monte Carlo simulations. You're not even sure if those would be useful at all. And in any case, if you were pursuing any of the above for writing something, that would be a PhD paper, not an op-ed. Shruti could have tried to collect data or evidence on the average pay-outs in cases argued by private tort lawyers in the US vs those argued by government counsel. Or in some comparable legal systems. But would she have found comparable or useful data? Would she have been able to draw any meaningful patterns? Most importantly, was it worth her time to do any of this for a thousand word essay?

And that's the thing about op-eds. They leave your posterior belief distribution almost exactly where your prior was. If you agreed more or less with Shruti's point of view, you would have found yourself nodding along, relishing the forceful prose, being appalled by the sheer injustice of government action and inaction. If you didn't and thought hard enough, the sheer lack of facts being used to argue her case (as opposed to simply the facts of the case) would become apparent. And you would dismiss the article as yet another speciously argued anti-government piece.

And if you were sitting somewhere on the fence, like I was, you would swing from this view to the other. Many times. And then wonder about the futility of the op-ed.

1 comment:

avataram said...

Shruti´s article was written on June 13, 2010. Ravikiran´s post was a couple of days later. Your post comes more than a year later....

Still, your post is worth reading for just one sentence: "They leave your posterior belief distribution almost exactly where your prior was".

The UCC share price movements make Shruti´s point for her. UCC shares fell 30% after the tragedy. They remained there till the Government passed the "Bhopal Gas Leak Disaster act" in March 1985. Then, they rose back to the previous level and beyond.

Compare that to BP, TEPCO or other similar disasters.