A level Economics: Starting Fair and Dealing with Luck: Comparing Monopoly and Real Economies

 ChatGPT

Think about Monopoly, the game where you buy properties and compete to win. Now, let's compare it with how the real world works when it comes to money, businesses, and luck.

In Monopoly, every player starts with the same amount of money. This makes sure that nobody gets an advantage right away. It's like starting a race with everyone on the same line. This makes the game about skills and strategy.

But in real life, things can be different. Some people start with more money or better chances. It's like some players in Monopoly starting ahead with better properties. This isn't fair, and it's how it is in the real world sometimes.

In Monopoly, luck comes into play with the roll of dice and the cards you draw. Sometimes you land on good spots, and sometimes not. Luck can make a big difference in the game. Similarly, real life has surprises too. New inventions, what people want to buy, and unexpected events can change how well businesses and people do.

But here's where they're not the same. In Monopoly, luck only matters during the game. In real life, luck is just one piece of the puzzle. Real life is more complicated. It's not just about luck – it's about how things are made, what people like, and rules set by governments. All of these things make the real world much harder to predict than a game.

So, in Monopoly, luck follows the game's rules. In real life, luck mixes with many other things, making it more complex. The comparison between Monopoly and real life reminds us that the real world is unfair and trickier.

Pakistan's Panamagate - I told you so!

Irfan Husain in The Dawn

IN a nation of some 200 million, I doubt if a handful could pinpoint Panama’s location. And yet, this tiny Central American state has dominated Pakistan’s political discourse for the last year to the point of tedium.

Finally, after nearly two months of hearings before a Supreme Court bench, the verdict is here. And, as I had predicted to friends a few weeks ago, it is a cop-out that has both sides declaring victory.

For me, the abiding image is of the Sharif brothers, Nawaz and Shahbaz, embracing and beaming at each other. In the PTI camp, we watched Imran Khan and senior party members pass sweetmeats around.

For the SC, the verdict gave the impression of balance and fairness, with something for both sides to cheer about. Imran Khan had a lot of praise for the two dissenting judges who declared the prime minister ineligible to rule because he didn’t meet the criteria of honesty and integrity laid down in the Constitution.

The ruling PML-N is gloating over a verdict that, for the time being, has let their leader off the hook. As far as the party is concerned, it has every chance of hanging on to power until the 2018 election. Here, according to opinion polls, it is most likely to win a majority. So who’s the real winner in the verdict?

When the Panama brouhaha began a year ago, I had suggested that the Sharif brothers were masters of kicking the can down the road, and would drag matters out indefinitely. Now, with a joint investigative team (JIT) being set up, expect more of the same.

Even though the SC has required the JIT to submit fortnightly progress reports, the fact remains that members of this committee will all be serving members of the civil and military bureaucracy. To expect them all to perform their tasks independently is a rather big ask.

Then there is the problem of the team having to obtain and verify information in different jurisdictions. Will they be able to force banks and government departments in Dubai and Qatar to hand over documents? And all this in two months? Forgive my scepticism, but having first-hand knowledge of the pace at which our bureaucracy works, I have some doubts.
No wonder that Imran Khan is demanding the PM’s resignation. He knows how difficult it will be to get a group of civil servants to report against a sitting PM. But he’s right in underlining Nawaz Sharif’s loss of moral authority to rule.

Irrespective of the legal rights and wrongs of the case, it is clear that the daily drip-drip-drip of corrosive evidence against Sharif and his family has done much to strip away the aura of decency he had tried to project. And his disqualification by the two dissenting judges on the bench has reinforced the impression of corrupt practices at the heart of the Sharif empire.

With supreme irony, Asif Zardari has also demanded Nawaz Sharif’s resignation, and asked if he would be taken to the local police station for questioning, or would the JIT go the PM House? The reference here was to his own vicious treatment over a decade of incarceration.

Indeed, the PPP has good reason to be aggrieved at what has often appeared to be its targeting by the judiciary, starting with Zulfikar Ali Bhutto’s judicial murder to the sacking of another elected PM, Yousuf Raza Gilani. In many other cases, the judiciary has displayed an apparent animus against the PPP.

And yet, despite demands for his resignation from the opposition, Nawaz Sharif isn’t going anywhere. He didn’t get to where he is by being sensitive to corruption charges. Throughout his political career, he has shown himself to be tough and opportunistic.

Imran Khan has given examples from other countries where leaders tainted by the Panama Papers have either provided full disclosure (David Cameron), or resigned (Iceland’s Sigmundur Gunnlaugsson). However, members of Putin’s and Bashar al-Assad’s inner circle have not even bothered denying the allegations against them contained in the leaks.

As we know, there is no tradition of resignations in Pakistan. Even in Israel, Bibi Netanyahu is mired in corruption charges, but is refusing to step down. But in Israel, the police are far more independent than they are in Pakistan, and have investigated similar charges against presidents and prime ministers before.

Whatever happens next, Panama is a name that will continue to resound on our TV chat shows for some time to come. But will the verdict reduce corruption? I doubt it. But it will force crooked politicians to be more careful about their bookkeeping.

A final factoid: the verdict triggered our stock exchange’s biggest bull run, with the index shooting up by 1,800 points in a single session. Do investors know something we don’t?



----The background of the case to those who don't know by Husain Haqqani



Pakistan’s Supreme Court is an arena for politics, not an avenue for resolution of legal disputes. Unlike other countries where the apex court serves as the court of last appeal, Pakistan’s Supreme Court often entertains direct applications from political actors and generates high-profile media noise. In that tradition its judgment in the so-called Panama Papers case is a classic political balancing act. It raises questions about Prime Minister Nawaz Sharif’s property in London, but does not remove him from office.

Opposition politician Imran Khan, currently a favourite of Pakistan’s establishment, initiated the case after Mr. Sharif’s name appeared in leaked documents about owners of offshore companies worldwide. The documents indicated that the Sharif family had borrowed money against four flats they own in London’s posh Mayfair district.

Show them the money

Having an offshore account is not in itself a violation of Pakistani law, but transferring money from Pakistan illegally is. Hence the case decided on Thursday revolved around the provenance of the money with which the Sharifs became owners of the property in London. In hearings that began in January, the petitioners insisted that the Sharif family’s ownership of this particular property could not have been possible without their possession of undeclared wealth or illegal transfers of money from Pakistan.

Instead of insisting on the time-honoured principle that accusers must prove their allegation beyond a shadow of a doubt and that investigations must precede judicial hearings, the Supreme Court acted politically. It asked the Sharifs to explain the source of money used to buy property abroad, forcing the Sharif family’s lawyers to offer various (sometimes contradictory) explanations at sensational hearings.

One of these explanations comprised a letter from a member of the Qatari royal family who said that he had transferred $8 million to the Sharif family as return on investments made in cash by the Prime Minister’s deceased father, Mian Muhammad Sharif, in the Qatari family’s real estate business in 1980.

The Qatar letter did not settle the matter because the Sharif family members had, at different times, given different explanations for the source of their funds. Moreover, the timelines of the acquisition of the London properties, the formation of the offshore company that was used to buy them and the apparent cash dealings in Qatar did not always align. In any case, a Qatari royal might be willing to send a letter for his friends, the Sharifs, but could not be expected to testify in person in Pakistan and submit himself to cross-examination, something that would be needed if the case ever went to proper trial.

The Supreme Court’s final verdict was split 3-2 among the five-judge bench, with two ruling that Prime Minister Sharif should be disqualified from holding office for failing to explain the source of money for his property. The majority said there was insufficient evidence for such a drastic step and instead announced the formation of a Joint Investigation Team (JIT) comprising five members.

These would include appointees from the Federal Investigation Agency, the National Accountability Bureau, the State Bank of Pakistan, the Securities & Exchange Commission of Pakistan and one representative each from the Inter-Services Intelligence (ISI) and Military Intelligence (MI).

The fallout

The Prime Minister’s side breathed a sigh of relief that the court did not disqualify him from holding office, a decision it has given in the past for the removal of elected civilian Prime Ministers. Imran Khan, who wanted disqualification, declared victory even with the JIT’s creation. He and other opponents of the government are hoping that Nawaz Sharif will now bleed politically from the thousand cuts that are likely to be inflicted on him through reports emanating from the JIT.

Mr. Sharif has won elections before notwithstanding allegations of personal financial wrongdoing, but a new wave of charges could make things difficult for him in Punjab’s urban centres when Pakistan goes to the polls in 2018.

Ironically, the Supreme Court’s nearly 549-page judgment begins not by invoking some eminent jurist, but with a reference to Mario Puzo’s novel The Godfather, citing Balzac’s well-known words, “Behind every great fortune there is a crime.” But then most Pakistanis, including judges and military officers, have known for years that the fortunes of Pakistan’s uber-wealthy families come from bending or breaking laws or using political connections for private advantage. Why go looking into the origins of wealth now?

The creation of the JIT, and including two military intelligence service members who are not trained in matters relating to business and finance, says more about Pakistan’s judicial and political system than it says about the merits of this particular case. The issue in Pakistan is never corruption or failing to explain the source of funds for property. It is where someone fits into the permanent state’s scheme of things.

Nawaz Sharif was fine when he was picked up by General Zia-ul-Haq as leader of a military-backed Punjabi political elite after the coup of 1977. Courts and investigators seldom found anything wrong with the phenomenal expansion of his family’s wealth until he decided to start questioning Pakistan’s military establishment and, in recent years, even assert himself in core policy areas. Politicians can make money as long as they do not seek a role in policymaking. When Benazir Bhutto stood for a different paradigm for Pakistan, she and her husband were subjected to long-drawn legal proceedings over corruption. Asif Ali Zardari might have fewer problems on that score now after he is content to parrot the establishment’s views on national security and foreign policy. Nawaz Sharif is being put through the wringer to become more like Mr. Zardari and less like Bhutto.

As for the Pakistani Supreme Court, it intervenes to swing politics one way or another by favouring the country’s establishment against politicians or vice versa, to justify patently unconstitutional military takeovers and occasionally to embarrass one party against another. Unlike elsewhere in the world, its function is not just to determine the constitutionality and legality of judgments already given by lower courts.

As a victim of one such Commission (ironically, created on Mr. Sharif’s petition) in the so-called Memogate Case, I know that the principal damage inflicted by its proceedings is to public image. The Memogate Commission’s findings never led to criminal charges, not even an FIR, against me for any crime as none was actually committed. But its proceedings and comments created sufficient political noise for some Pakistanis to still think I am a fugitive from Pakistani law.

Signal from the deep state?

Generating smoke without fire against persons deemed difficult or uncontrollable by Pakistan’s permanent state establishment, the deep state, is often the greatest accomplishment of inquiries created by the Supreme Court on direct petitions like the one over the Panama Papers.

The JIT might still find nothing definitive for prosecution but Mr. Sharif is on notice. And that is how Pakistan’s system is designed to work.

Only successful people can afford a CV of failure

Sonia Sodha in The Guardian

A Princeton professor’s frankness hides the grim reality about work for many young people

 

Students at Princeton University. Photograph: Mel Evans/AP



‘One of the most strangely inspirational things I’ve ever read.” “This is a beautiful thing.” These aren’t plaudits about the latest Booker shortlist, but some of the praise directed at a “CV of failure” published by Princeton professor Johannes Haushofer. I have to confess that when I heard about the failure CV, I too thought it was a lovely idea. But when I read it, while it’s clearly very well intentioned, it made me feel a little uncomfortable. Professor Haushofer explains at the top of his CV that most of what he tries fails, but people only see the success, which “sometimes gives others the impression that most things work out for me”. The failures he lists include not getting into postgraduate programmes at Cambridge or Stanford, not getting a Harvard professorship and failing to secure a Fulbright scholarship.

I’m sure this was aimed at a small group of his students, to demonstrate that even successful professors get papers rejected by academic journals, but I suspect that the overwhelmingly positive reaction the CV has received in academic circles and on social media tells us more about our idealised view of success than the reality.

Those who are most successful have an understandable interest in emphasising that they got there through old-fashioned grit, persevering in the face of failure, never letting setbacks beat them down. Quite frankly, it’s a far more attractive way to package success than sharing a story of how it just happened to fall in your lap or how your innate abilities are so brilliant that they effortlessly propelled you to the top. Our favourite success story goes: sure, I may have some natural advantages, but I’m essentially like you, I just worked really hard to get where I am.

This also has the advantage of fitting the narrative that we want young people to buy. Work hard, keep plugging away and success will be round the corner. If you don’t put the effort in you won’t get there. It’s supported by the theory of success documented by Malcolm Gladwell in his book Outliers: people with exceptional expertise have invariably invested at least 10,000 hours of practice.

Of course, this is an important life lesson. We don’t want young people thinking that success is a matter of luck, otherwise they might feel like packing up and going home rather than slogging their guts out at school. There’s no question that effort is often correlated with success. but there there’s a serious danger that in patting ourselves on the back in sharing lessons about failure, we miss out some hard truths about the world. It’s much easier to talk about failure from the vantage of success. Oh yes, I know I get to write columns for a newspaper, but did I tell you about failing my driving test three times?

Sure, that’s a little flippant but there are lots of times when failure doesn’t end in success, and those stories contain as many important truths about how the world works. Those stories are much harder to share: like most people, I’d find it much more painful and difficult to be open about failures in those areas of my life that I don’t consider a triumph than those that I do.

Taken to the extreme, the risk is that telling ourselves these nice stories of success in terms of trying, failing, learning and trying again makes us too complacent that that’s the way the world really works. Sometimes, it does. But not always. Recent research has discredited Gladwell’s 10,000-hour rule, suggesting that practice accounts for just 12% of skill mastery and success. Buying too much into this myth in the face of the evidence undermines our understanding of a depressing and universal truth: the world is stacked against some young people before they’re even born.

 

Professor Johannes Haushofer said he had been judged by his successes. Photograph: Princeton University

I think it would be more useful for successful people to write a “CV of good fortune” than a “CV of failure”. A sort of: I’ve had much luck in my life: being born into a middle-class family and having any natural ability nurtured by my parents and then by the education system. It’s not to say that I can’t take any credit for any successes I might have had, but I think my own good fortune CV would contain more hard truths about how the world works than my failure CV.

Of course, good fortune CVs would send the wrong message to young people, who we want to be brimming with determination and resilience even when the world is stacked against them. We’ll never be able to eliminate the role that good fortune plays, but the flipside of encouraging young people to try, fail and try again is that we need to do much more to lessen its influence and to increase the relationship between effort and success.

Today’s labour market is tough enough for young people. Recession has hit their pay packets the hardest and it is not uncommon to find graduates working in a bar on a zero hours contract. Even while businesses complain about young people lacking employability skills, there is evidence that they are underinvesting in young people’s skills. On-the-job training has fallen in recent years and too many businesses have diverted government training subsidies for apprenticeships towards training that they would have been delivering anyway.
It’s only going to get tougher for some groups of young people. Yes, there will be new and exciting jobs in highly skilled careers we haven’t even dreamed of. But some growth sectors will be of a distinctly less glamorous sort, such as caring for our growing older population. These are currently low-skill, low-paid jobs, done mostly by women, held in low esteem. Yet there is a dearth of thinking about how we can make these jobs more fulfilling, better paid and more respected. It’s almost as if we’re hoping that the jobs at new frontiers of artificial intelligence will create enough trickle-down excitement to soften the blow for the young people who won’t get to do them.

Learning from failure is important but so is being able to get a job in which you’re invested in, supported to learn from your failures, and encouraged to progress. Yet we are reluctant to talk about the fact that, for too many young people, those jobs simply don’t yet exist when they reach the end of their education. It’s hard to see what good a failure CV will do them.

Tony Blair: the former PM for hire

Randeep Ramesh in The Guardian


Emails show oil firm questioned complex structure of Blair’s company, and reveal his closeness to Chinese leadership


 

Tony Blair meets China’s then vice-premier, now premier, Li Keqiang in Beijing in 2011. Photograph: Rex/Shutterstock



When Jonathan Powell, the gatekeeper to the corporate empire of Tony Blair, sat down to lunch with the former Saudi intelligence chief Prince Faisal Al Turki in June 2010 he could not have known how lucrative it would turn out to be for the former British prime minister.

As the high-profile mediator of the stuttering peace process in the Israeli-Palestinian conflict, Blair had to be careful not to mix business with pleasure. However, one of those lunching with Powell at the annual “global mediator’s retreat”, organised by the Norwegian Ministry of Foreign Affairs, was looking to make a deal.
--------

Bird and Fortune on Blair's socialism

-----

Nawaf Obaid, a security analyst who accompanied Prince Faisal, emailed Powell a week later, according to documents seen by the Guardian, with a suggestion to work with his brother Tarek’s company, PetroSaudi, which he “co-founded and co-owns with Prince Turki bin Abdullah, son of King Abdullah”.

“They have several projects that [they] are working [on] and I think it would [give] a very interesting perspective to see if we could establish a strategic partnership with former PM Tony Blair and yourself,” he wrote.

 

Tarek Obaid

Tarek Obaid was a former banker who styled himself as an adviser to members of the Saudi royal family and a director of a joint venture with Malaysia’s multibillion-dollar development fund, 1MDB. This fund had put $300m through PetroSaudi and as the latter’s chief executive, Obaid was on the lookout for deals.

On paper PetroSaudi looked impressive: its chief investment officer was a former Goldman Sachs banker, Patrick Mahony. The chief operating officer was listed as Rick Haythornthwaite, a City insider who was also chairman of Network Rail and MasterCard.

Blair’s team sold the former prime minister as someone who could help “unlock situations which might otherwise be blocked by political factors” in places such as China and Africa. PetroSaudi was interested in Beijing’s appetite for oil and how Blair’s firm could help.

The role assumed by Blair shows his influence in one of the most important areas of global economic cooperation this century: between the oil sands of the Middle East and hydrocarbon-hungry China.

While in office, Blair oversaw the handover of Hong Kong to China, but visited the latter just five times. His sixth visit in 2007 – when he earned £200,000 for a speech in the industrial city of Dongguan – marked a turning point in how he viewed the rising power.

Since then Blair has been back two dozen times and has built a reputation for befriending the rising stars of Chinese politics. In March 2010 he secured a meeting with Li Keqiang, now China’s premier.

PetroSaudi signed up Blair’s team to lobby Beijing in the summer of 2010 and internal PetroSaudi correspondence reveals there were questions raised about the apparently opaque nature of Blair’s businesses and the role he could play.

Tony Blair courted Chinese leaders for Saudi prince's oil firm



PetroSaudi executives warned in early September 2010 that they had “no contractual nexus with TB” and were anxious about “the lack of apparent employment or other involvement of TB in the corporate structure”.

To convince PetroSaudi that if it paid it would get Blair, his executives revealed for the first time how his complex web of companies worked. Blair’s businesses are split into two wings: Firerush, which was governed by the then City regulator the Financial Services Authority, and Windrush, which was not.

What bothered PetroSaudi was that it was paying roughly $55,000 to Firerush and about $10,000 to Windrush. Both firms trade as Tony Blair Associates (TBA).

From early on in their relationship PetroSaudi executives admitted they knew “very little” about Blair’s firms. In an email in August 2010, the company’s executives said they “would like to understand more about the structure and the relationship between Firerush, TB Associates and TB. In particular, the engagement letter mentions the provision of services by employees of Firerush which seems, like a number of concepts in the engagement letter, inappropriate given we are only looking to engage with TB.”

To allay concerns in November 2010, Varun Chandra, a former Lehman Brothers banker and director of TBA, told PetroSaudi that Blair was the “ultimate owner of all this and owns all the share capital” of all the companies. He told PetroSaudi it was not relevant which company got paid “given where the cash ultimately ends up”.
Chandra explained that Firerush executives handled the day-to-day conversations about “specific opportunities and making the arrangements to drive negotiations forward. Tony, procured by Windrush, is involved at higher level but on an ongoing basis, meeting with senior political leadership and business heads in order to discuss PetroSaudi at a strategic level and to speak highly of your management.”

PetroSaudi, he said, had already seen the benefit as “the man in charge of China’s economic policy is now supportive of working with PetroSaudi, and … he has spoken with CNPC [China National Petroleum Corporation] to ensure a proper working dialogue”.

By November 2010 TBA was hired and, according to the documents, Blair had found time to put PetroSaudi’s case to Lou Jiwei, the then chairman of the China Investment Corporation and now the nation’s finance minister.

 Lou Jiwei, centre, arrives for a G20 finance ministers’ and central bank governors’ meeting at the IMF on 15 April. Photograph: Mandel Ngan/AFP/Getty Images

Questions could be raised about why Blair was allowed to promote the interests of the son of the then ruler of Saudi Arabia in China while also working as the Middle East peace envoy for the Quartet – the US, UN, EU and Russia. Blair had also faced criticism for halting a Serious Fraud Office inquiry in 2006, while prime minister, into alleged corruption over a multibillion-pound arms deal with Saudi Arabia. He denies any conflict of interest.

PetroSaudi had made it clear it wanted to hire Blair. In an internal 2010 document entitled “story for Blair”, PetroSaudi sold itself as a “vehicle of the Saudi royal family” that could count on the “full support from the kingdom’s diplomatic corps” and was set up by Prince Turki bin Abdullah and Obaid, who hailed from a “prominent business family”.

PetroSaudi’s pitch in the document was that it claimed “many countries will get a company in but then bully it around once it is there and has sunk billions of dollars in the ground. This will not happen with [PetroSaudi] because these nations do not want to get on the wrong side of the Saudi royal family.”

But access to the legendary Blair contacts book does not come cheap. In July TBA’s then chief operating officer, Mark Labovitch, emailed Mahony to say he had “discussed your strategy and objectives with Tony and believe strongly that we can add value to PetroSaudi’s business development … We would propose a retainer fee of $100,000 per month.”

The documents reveal that even before Blair’s company was hired, he was already promoting the oil firm. In late July 2010 Blair was in Shanghai to celebrate the planting of 1m trees in north-west China to combat climate change. A few days later, Labovitch emailed the London-based oil firm to say: “Tony has just been in China and informally sounded out a number of people.”

Tarek Obaid and Blair did meet privately in early July 2010, and apparently discussed a working relationship. A month later Blair’s company was on a retainer fee of $65,000 and a “success fee equal to 2%” of any deal that TBA brought to the company – which PetroSaudi admitted could “potentially be a very large sum”.

In the following months a picture emerges of corporate bonhomie underwritten by spiky internal exchanges over the cost of hiring the former prime minister, his apparent obsession with privacy and a whirl of phone calls with global leaders.

By August 2010, according to documents, PetroSaudi raised concerns internally that TBA’s proposed contract was “more appropriate to an investment bank (eg they can record our phone calls)”. In an email, Mahony described the contract offered by Blair’s lieutenants as “a very aggressive first draft with almost total limitation of liability for TB”. He wrote: “I should note that the aggressive starting position of his engagement letter most probably is cynically reliant on counterparties taking a passive approach to secure his services.”

But at the end of the month Blair was in the Chinese capital for the signing of a partnership agreement between Peking University and his Faith Foundation, and managed to squeeze in some time with the Chinese oil giants CNPC and China National Offshore Oil Corporation, as well as China’s supreme economic council, the National Development and Reform Commission.

Tony Blair gives a speech at Peking University in Beijing in 2012. Photograph: China Daily/Reuters

“The latter effectively ‘blessed’ your engagement with Chinese companies, and the former were both very keen to meet you and work out how you might collaborate,” Blair’s then chief operating officer told PetroSaudi. “We clearly articulated the benefits of partnership with you to them, which they grasped immediately.”

In November, Blair was back in Beijing to give a speech for his Faith Foundation. He also had a meeting with China’s vice-premier, Wang Qishan, who Blair’s firm told PetroSaudi was “crucial – inter alia in order to highlight the wider benefits of a partnership with PetroSaudi in terms of putting Chinese companies in pole position for Saudi infrastructure tenders”. Wang is now a member of the Chinese Communist party’s politbureau, the country’s highest decision-making body.

Blair’s relationship with PetroSaudi appeared to give him access to the Saudi elite. In December 2010 an executive of PetroSaudi said the company could arrange a dinner for Blair with Prince Turki. Blair’s office say this never took place.

The next month Blair’s office emailed PetroSaudi because he was keen to meet the King of Saudi Arabia and Prince Bandar, the secretary general of the country’s national security council, before the February 2011 Quartet meeting to discuss Middle East peace after the Egyptian revolution.

We're All Poor Now