Let them have their fun

This piece is being written on the day of the budget speech, but is not about it. The reason is purely logistical. As I write, the budget is being presented to the cabinet. Once approved, the finance minister will present it in the National Assembly. Until that deed is done, everything in the press is unproven hearsay. And by the time the speech is over, my deadline will have passed. Retrospective analysis is fair game, since the Economic Survey is already out, but we wrote on them as they broke.

There are bigger stories which make our local budgetary concerns almost irrelevant. When I read a story about our cash-starved government doling out two point three five trillion rupees in tax exemptions, my reaction is exactly like that of Ford Prefect to Arthur Dent when he hears his house is being knocked down in The Hitchhiker's Guide to the Galaxy. Let them have their fun. Why? Because the planet itself is about to be demolished within seconds, and these two are the likely escapees.

This is what I tell myself whenever a clerk makes life hell. Within a few years, their jobs will be taken by artificial intelligence. You can tell yourself that too whenever your employer hires someone with less experience on a wage an order of magnitude higher than your almost redundant salary. When the ship goes down, you will remember you can swim and the rest cannot. Now to the much bigger story making all this noise redundant. Consider the stock market launch of SpaceX, aiming for a staggering worth of one point seven five trillion dollars. To secure this mountain of wealth without winning over thousands of wary buyers, Wall Street has worked a dark trick, laid bare by the American outlet "More Perfect Union". It lobbied the gatekeepers of the big stock market lists, such as the Nasdaq, to rewrite their rulebooks. Now a huge company can be fast-tracked onto the index within fifteen days of going public, with no need to show steady earnings.

The trick uses the retirement savings of ordinary working people as guaranteed buyers. Pension schemes and passive index funds are bound by strict rules to buy a slice of every company on those lists, at whatever price is asked. The working class provides the exit cash that lets the billionaires sell their private shares and walk away rich. If the company's worth later falls, the billionaires keep their money and the pension funds soak up the losses. The workers are left holding the bag.

This is a stark lesson in corporate greed, and it will all end in tears. It shows how the unmaking of the middle class, as Kurt Andersen rightly points out in his book, Evil Geniuses, is not a tragic accident of new tools or global trade. It is a wilful drive by the wealthy to rewrite the rules of the game in their favour. Daron Acemoglu and Simon Johnson in their book, Power and Progress, call this the vision oligarchy. They show that technical leaps rarely help the working class on their own. Instead, technology and financial plumbing are bent to serve the elite few unless the state steps in.

This brings us to Thomas Piketty and his famous warning. Piketty showed that when the rate of return on capital is greater than the rate of economic growth (r > g), society becomes dominated by inherited wealth. But Piketty was writing about a world of steady, single-digit returns. With tech monopolies and boundless artificial intelligence, we have moved far beyond his r > g. We now live in a strange new age where r is much greater than g (r >> g). When billionaires become trillionaires and a single chipmaker like Nvidia outgrows the economy of India, the return on capital has broken the scale. The tech explosion has become the great unequaliser.

I have had my own debates with Pakistani billionaires over national champions versus open competition. The debate is often framed around shielding local jobs and homegrown businesses, but such shielding makes it easy for these national champions to become unchecked oligarchs.

Look abroad to see where this path leads. Russia, which gave us the word oligarchs, is not in great shape. India, which doubled down on national champions like the Ambanis and Adanis, is a tricky case. We were long told the Indian prime minister was under heavy American pressure because Gautam Adani's case was in the American courts. But the underlying issue turned out to be Adani's contacts with Mamata Banerjee. Over in India, she was suddenly out of power, and over in America, his case was settled and charges dropped. So who really calls the shots in India today, the billionaires, the deep state, or the prime minister himself?

However, by cutting Jack Ma down to his proper size, China has proven it remains the only country that knows how to handle such matters. When oligarchs grow stronger than states, when a single man is worth a trillion dollars and one tech firm holds more wealth than a massive nation, you need stronger states and stiffer rules to rein them in.

It follows that if the war for the future of humanity is to be fought on economic and technological turfs, every nation's intelligence community ought to be geared to those matters. The Financial Times reports the National Security Agency is deploying Anthropic's Claude Mythos model for offensive cyber operations. Here you see a tragic flaw of open democracies. America uses active measures against its rivals but drops its guard for allies. It is a dog-eat-dog world out there, so caution is mandatory.

One man instinctively knows the weight of this blending of spheres. President Donald Trump has realised that economic affairs matter more than anything else in espionage too. Upon the departure of Tulsi Gabbard, he first tapped Bill Pulte for the job of Director of National Intelligence. But for some reason the Indian influence network in America exploded into action, and Congress restrained him. Now he has chosen an even more fitting candidate, Jay Clayton, former chairman of the Securities and Exchange Commission.

It is good to see states waking up to the realities of today. The battles of tomorrow will not be fought with tanks or guns but with algorithmic trading, artificial intelligence exploits and index fund manipulations. But until one side wins this hidden war, humanity has both won and lost. We are like Schrodinger's cat, shut in a box of our own making, alive and dead at the same time.

So these small tax exemptions in the budget mean nothing for now. We are definitely not paying attention to the real news.

For you and me, dear reader, a line from another Acemoglu book holds true. In The Narrow Corridor, he and Robinson cite the famous Congolese joke about "Article 15", a clause found in no constitution yet always in force. It says "Debrouillez-vous", fend for yourself.