The universe is 14 Billion years old. That is 14 followed by nine zeroes if you were wondering. And it is massive. Mathematically, we can say how large it is, but we cannot comprehend it, at least I can’t. The observable universe is around 93 Billion Light years. It basically means, it would take light 93 Billion years to reach from one end of the universe to the other. For reference, it takes light only around 8 minutes to reach the earth from the sun.

Our home, the earth was formed around 4.5 billion years ago, almost 9 billion years after the universe was formed. Water was formed 4.3 billion years ago, microbial life 3.5 billion years ago, land animals 300 million years ago and humans 300 thousand years ago. The universe was already there before we came, and it will continue to be there in its grandeur long after we perish.

“ Carl Sagan on Pale Blue Dot”

“Look again at that dot. That’s here. That’s home. That’s us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every “superstar,” every “supreme leader,” every saint and sinner in the history of our species lived there-on a mote of dust suspended in a sunbeam.”

That is exactly what we are.

Now all this background will eventually set us up for one question. Well not exactly one, but questions of this particular nature: Why? What is the point of all this? Why are we here?

Technically we are all just collection of atoms, star dust if you please, floating around. Once there were stars that exploded and the matter in the stars formed planets, and land and water and us and everything there is. We are  insignificant, a fleeting anomaly in an unfeeling universe. The cosmos stretches endlessly, stars indifferent to our mere existence. Within this, riches and rags, fights and troubles and love and desires play, ultimately leading nowhere. There seems no purpose, no grand design – just the hollow echo of our existence against the backdrop of cosmic indifference.

There are fundamentally two school of thoughts that attempts to explain the futility of life. One is straight forward and tells us that this life of ours is nothing but pointless suffering of randomness and there is no explicit meaning while the other gets around the same point with an essential twist at the end. It says that even if this life of ours is a pointless suffering, finding a purpose will lead to meaning and help bear this lifelong suffering. The former one is called Nihilism, and the latter Existentialism.

I personally do not think and would not like to believe that our life has no purpose or we are not able to give a meaning to our life, or anything we do will eventually do no good. I outright reject Nihilism for what its worth. On the other hand, I am a firm believer that as long as we are here and living, we have to strive to bear some responsibility for the good, have a hierarchy of values, create a purpose for life and live to achieve it. Only then we can give meaning to our lives.

“Is there something that you could do whose value is so high that  the fact of your existence is mortal, vulnerable and prone to inescapable suffering, you would find them not only acceptable but desirable? You might say that you would even pay the price.”

This is a excerpt from one of Jordan Peterson’s podcasts (Listen to this guy, says some useful stuff). The existentialist principle of life is so precisely put together in these three lines. Until and unless we don’t work towards something of value (to us and to other around us), or we do not carry that load of responsibility on our shoulder voluntarily, we will always struggle to find meaning in our lives. And that will only lead to darker days. Nihilism will always lead to darker days.

So the question now remains, how do we move ahead with this clinging feeling that universe is vast  and when our existence is just a fleeting anomaly in this abyss.

In this abyss, there’s a canvas for you to paint your own meaning. The universe might not care, but you can choose to. The connections you make, the experiences you gather, the passions you pursue, the responsibilities you bear – they’re the brushstrokes that can add significance to this existential void. Meaning might be a personal creation, but it’s a powerful one. It’s your rebellion against the void, your way of making a mark, no matter how small, you can make a mark in this fabric of reality. Just as you feel a swell of wonder when you look up at the night sky, remember that the universe is equally vast within you. The intricate dance of cells and molecules, the symphony of thoughts and emotions, all interconnected and bound by the same threads that weave the cosmos. So, let yourself feel both the smallness and the greatness, for you are a reflection of the universe itself – a beautiful paradox in this tapestry of life.

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Democracy in its fundamental nature has the feature of people agreeing to select a person for the representation of their voice, perspective, and desires on a political level. Special structures of democracy also allow a person to try to become a representative irrespective of people’s choice or involvement in a political party’s hierarchy. This is called an independent candidacy. To step up as a leading candidate on your own without people’s choice or a political party sounds counterintuitive but that is what democracy is, to provide a platform and an equal degree of freedom for expression.

Nepal’s democracy is sadly hijacked. With corrupt hierarchies and syndicates, the system is hollow from the inside and looks disgusting from the outside as well. In the case of our democracy, I am not a cynic but a sceptic. People who have hardship managing two meals a day have always been used as vote banks. These people do not care who gets to the top, or who rules them and rightly so.

Also, we Nepalese are innately programmed to deduce everything happening to and around us to fate. Our polity has no strategy because anything that happens to an individual, a family, or a society, is credited to fate. The burden of responsibility is rarely shared by the system, that is the government. We readily accept it. The paternal dependency, the inner faith that one day someone will arrive and make everything right, and to put things in order right now is not in our hands our responsibility, is ingrained within our consciousness which is fundamentally troublesome.

“ This paternal dependency could readily lead to the development of a polity which is essentially antagonistic to the genuine interests of the people because it is supportive of various forms of authoritarianism and of the cumbersome form of government by a bureaucracy that has currently evolved.”  (DB. Bista, Fatalism and Development)

The betrayal that has been piling up elections after elections, leaders after leaders, from the same old faces to the same old promises, the same pre-election flattery to the same post-election robbery has exhausted all of us of our energy to practice our democratic rights. Honestly, at this moment in time, we just want some novelty because we have no other way out.

We have seen the recent rise of new non-veteran faces in the circle of politics. We saw in the last local elections, how Ranju Darshana got an unexpected yet substantial number of votes. This time it’s Balen. Ranju however, had a party behind her, is a strong activist, and is politically more mature than Balen.The experts in the Democratic system of governance have always called out the selection of a popular, non-political face as a leader. Bringing in a non-experienced person from the outside is a sure shot recipe for failure or misuse. It is both the case for being a failure to run a government or being misused by others to become a tyrant puppet.

“If a charismatic outsider emerges on the scene, gaining popularity as he challenges the old order, it is tempting for establishment politicians who feel their control is unravelling to try to co-opt him”. ( Daniel Ziblatt and Steven Levitsky,  How Democracies Die).

Despite all this, the scenes unravelling here are quite interesting. We can see quite a bit of the Pro-Balen movement on social media right now. The younger generation, maybe because of the influence of his music/rap background, has welcomed him with his decision to fight for the Mayor’s position in Kathmandu Metropolitan. The former generation’s failure to produce a true leader or leadership has caused the younger generation to be convinced of any new face. I think there is a substantial number of young voters who will vote for any new candidate other than the same old corrupted faces.

To dismiss or ignore this surge to vote for Balen by labelling it as ‘ignorant kids’ or ‘it is just a populist stunt’ would be an underestimate. The underlying engine that has given the power to this kind of trend should be studied very carefully. In my opinion, like I already mentioned, it is the exhaustion, our democratic history, and the betrayals: an ugly cocktail, that fuels movements like this.

Our ‘chiya guff’ has always been centered around the empowerment of youth, the involvement of young energy, and the replacement of inefficient corrupt systems and their members. But in reality, when someone tries to change it by asking permission to get inside the system, we collectively dismiss the attempt and then complain again. Are we really scared to allow a new face to take charge, be it Ranju, Balen, Sunita Dangol or Prajwal Sharma? It is clear that the present political scenario of new faces is the result of the failures of previous generations. I too believe that people with no prior experience in politics cannot take charge of such immense positions but maybe I am wrong. Maybe, it finally deserves a shot. And if it fails, it fails. It’s been failing forever anyways.

Working full time at construction site away from home, family and friends is a unique experience on its own and can be quite challenging. Usually, the nature of work is physically demanding, has longer working hours and almost no weekends, which does not mean it is a career not worth pursuing. While working in these tough conditions, you can feel out of touch with yourself and experience some kind of void in your everyday life. Here are 6 ways you can live a fuller life even while working remotely at Construction sites:

1. Be Conscious about your Physical Well Being

   Working in a construction site automatically ensures a certain level of physical activity. Besides that, you can take up any kind of light to heavy workouts regularly. Even better is to play any kind of sports day in day out to ensure your overall fitness.

   ‘Routine sets you free.’ It seems counterintuitive, but in terms of taking care of your physical health, the routine can do wonders by bringing in expected changes and setting aside more freedom in terms of time.
   You are what you eat. It is very inconvenient to establish a healthy eating habit at the site. First, the food you eat is prepared for a large number of people, where quantity compromises quality. A little bit of extra effort and you can set aside healthy food for yourself. Second, alcohol intake. Yes, I am being as direct as possible. You have to keep that to a bare minimum. As underrated as it is, one of the most important parts of your day is sleep which is responsible for regulating and maintaining so much of your bodily functions. Sleep re-energizes you, balances important hormones, improves cognitive ability and so much more. Get in bed on time and give yourself just enough sleep.

2. Take care of your Mental Health

   Working on-site is extremely stressful. Sometimes nothing goes as planned, the schedule slips out of your hand, the level of contingency is so high it takes a direct toll on your mental state. Being mindful of everything that’s around you and trying to live in the present can reduce a lot of stress. Taking daily journals including your work activities, personal agendas and some gratitude writing can work miracles to keep your head out of the water. Meditation

   I cannot stress enough. Every single one of all successful hard-working people meditates in some way every day. I still have not figured out to keep up the consistency with meditation but I have been trying and you should too. We all should be clear that our mental health is as important as our physical health.

3. Know your Limit and avoid Burnout

   Working in adverse conditions can make you feel burned out. Burnout is a state of physical and emotional exhaustion felt after working under stress for prolonged periods. When you start to feel as such regularly, you should realize that you need a break. It is time for a time-out. Fill in that leave application, get out of there, take your time, and come back revitalized. One way to avoid burnout is to space out your holidays. The number of days you can take as leaves should be spaced in almost equal intervals to ensure proper rest days. Also, talk to people about how you are feeling, with colleagues and with management.

4. Read and Write

   You should never abandon reading and reading will never abandon you. Construction sites have fewer creative spaces as compared to other working areas. Some of you have so much creative energy inside that it needs to be poured out. Reading and writing can help a lot doing that. Read books, articles, papers, or whatever you like,  let those ideas incubate and let those readings help you hatch newer ideas into real-life practices. Books can be your friends, remember that. Reading and writing have helped me a lot to channel my thoughts, I am sure it can do the same to you as well. While you are here, you can follow me on Goodreads, to connect and share what we read.

5. Connect more

   When you work at remote construction sites, you are physically disconnected from your friends and family. At worse, you can’t even connect to them via the mobile network. If you are like me and tend to forget to call your family or friends, set aside a schedule. A schedule to call and talk to important people in your life. This way you can keep up with the lives of your people and they can know what’s up with you as well. Use social media in moderation, use it only to connect and not to consume. Remember it is more fulfilling to be social than to be in social media.

6. Escape monotonic Routine

   I found this hack to live a more fulfilling life even while having monotonous work life. Just try to do one difficult thing every day. Work a little towards that thing you had postponed every day because it was difficult. This way you can remember each passing day distinctively and get rid of the feeling of days overlapping. The feeling that every day is the same can be reduced using that one trick. Other ways to avoid monotonous feelings in your work are to take new responsibilities, swap duties with colleagues, and change working hours.

If you are an engineer or an aspiring engineer, or you simply want to know how worn out the road to engineering is here in Nepal, you should listen to what I am about to say. I am going to tell you a story about an engineer, this might turn out to be a rant, maybe an emotional one.

This is about an engineer who was never forced to become one, it was his own career of choice. This is about his experience, a story about the road to becoming an engineer, about a kid.

He was a curious kid. He had this desire to know about things. About machines, about technology, about everything. Why and how were his two favourite questions. Whenever his grandpa used to take his tools out to repair something in the house he was always there, beside him, handing him tools, watching closely, he loved it. He was fascinated by how doors worked, how water from the tank reached his sink, how brakes on his bike worked, and he loved opening things up, sometimes with his old man and sometimes alone. He made rainbows by dipping a mirror into a bowl of water, he made parachutes for his action figures, magnets, magnets were his absolute favourite. Aren’t magnets amazing? Ever wondered? He did a lot. In school, he loved math, because there was problem-solving. He loved science because it taught him things like how clouds made rain, and that was amazing. How could he not love science, it answered almost all of his dumb questions.

A child’s mind is incomparably curious. Every day is an experiment. Maybe he didn’t know what it was like to be an engineer then, but he sure had the hunger. Capability? Maybe? Maybe not? But the desire to know, I am sure as hell he had it. He had an engineer inside him. And that continued. He persevered enough to be admitted into a fine institution to continue his never-ending curious journey. Hungry, confused and curious ‘to be engineer’ kid reached university. He thought he made it. This was ‘the Dream’. But who knew the antagonist in the story would be his university itself. While he looked forward to nurturing and sculpting the engineer inside him, his university killed the engineer.

This is not about a single college, a single professor, or a single incident. As a matter of fact, it is about the system. Sounds dramatic, but a murderous system. The system is not built to reinforce creative, analytical, critical and/or rational mindsets. The engineer inside a student does not die but is pinned down, suffocated and murdered in the system. Bear with me and I will try my best to make you understand what is happening? How the curious kid inside an engineering student dies? and what can be done about it?

A brief structure of the University: 4 years. 8 semesters. 50+ subjects, exams, viva, tutorials, useful, useless, important, not everything, a package. One semester has six months and 6 subjects (on average) to study. The first month no one cares, the student, the faculty, no one. Now you have 5 months. If you take into account all the internal exams, viva, lab, backlogs, holidays and the finals ( which lasts for an entire month), we have got three months to study.Now when the system attacks you with all there is in the syllabus to be covered in so little time, with maxed out effort and incapable faculty, you are bound to look for options.

And the option is of course last-minute preparation. Who cares about learning, when you have solutions to all the probable questions that can come in your exams, in a pocket-size book that costs hardly Rs. 300. No one wants to learn the fundamentals. No one wants to think.Page by page, hour by hour you turn it up and churn up all the answers and store them in your head, all you have to do is vomit it out on the paper during exams.

That is how you pass, that is how you move ‘forward’ in the University.

In my personal experience and many engineers can attest to this, some of the most important characteristics/skills required to become a capable engineer on the field are problem-solving attitude, creativity, teamwork, command, quick on the feet thinking and ethics.The university has no structure to reinforce any of those skills. The credibility of the whole university syllabus for developing these skills into a student is non-existent.As cliché as it sounds, the whole system is flawed. Six month’s learning is judged in one single semester examination (at least 80%). There are internal exams, assignments, attendance and vivas that are marked. Yes, they are. But here’s the truth, assignments are copied, internal exams are formality and attendance is forced.

Now here’s the point. The students are all willing to take these shortcuts in assignments, exams and attendance because they feel there is nothing to learn. It’s just a game of how many marks do you score and not of how much you actually learn. Students are not to blame for this, it is the course, the whole structure. The university has romanticized failing for god’s sake. Yes, people fail and it has to be normalized for there is a ‘try again’ option. But to romanticize failing is dangerous. ‘Back Lagnu’ has become so normal that we don’t even care, and we put no effort into changing it.

Projects. Yes, projects. Projects are so underappreciated it blows my mind. There’s one major project in the last year and even those are copied by most of the students. Because the learning system has made them so thick-headed that they do not see how significant project works are and what skills do they reinforce into them. They are discouraged to take up new ideas for projects and everyone selects the same old boring projects every year. This is a major issue. Do not get me started about the research part. Underfunded and no one cares.

Everyone comes into the college with an enthusiasm to conquer the world and when the system engulfs them, the only thing they think during the ‘university life’ is to get the hell out of there as quickly as they can, with minimum damage and with a degree (of course). Thank god he had friends there. They helped each other survive.

I feel so terrible thinking about how he spent his time during his University days. He was made to. There was zero creative space. It was just a process of coming in, getting a degree and getting out. Well the degree helps him, for sure, but here’s the thing, he had more inside him, they were individually and as a team more than what they thought of themselves in that system. We lost an engineer in him, and too many others along with him. The worst thing is there is very little hope to make real, significant changes that tips towards bringing out the real engineers in students. What can be done to make things take the right way? How do you think we can turn things around?

I heard about Marcus Aurelius a while ago. He was a ‘Roman Emperor’, a very noble man, a follower, and a preacher of stoic philosophy. His book ‘Meditations’, which is supposedly filled with timeless life lessons on life and its multiple aspects, has been on my to-read list for some time now. But today something else happened. I came across this quote by him and it has been stuck in my head like a leech since the first time I read it.

“In the life of man, his time is but a moment, his being an incessant flux, his senses a dim rushlight, his body a prey of worms, his soul an unquiet eddy, his fortune dark, and his fame doubtful. In short, all that is of the body is as coursing waters, all that is of the soul as dreams and vapors; life a warfare, a brief sojourning in an alien land; and after repute, oblivion. Where, then, can man find the power to guide and guard his steps? In one thing and one alone: the love of knowledge.”

— Marcus Aurelius

Tell me if you have not at times wondered ‘What is the point of all this?’, What is it that makes us keep going?

Well, I tend to think about these questions more often than I should and usually get pushed around explanations, theories, and philosophers trying to impart answers. Sometimes I agree with them, sometimes I do not and sometimes I don’t know what to feel.

So, when I happened to come across this quote by Aurelius, it felt like Marcus woke me up, hit on my head, and handed me a note with that quote on it. It felt like I had finally found my answers. The more I think about it, the more it aligns with my school of thought.

“Aren’t we all here just for a speck of a moment in comparison to all that has happened and all that is to happen in the universe?” he asks. Our senses, bodies, soul (if there is one), everything we possess or think we own, has a minuscule existence and a tiny significance. We are born, we struggle, we try to make sense of this obscure world around us, and then, just like that, we are gone, disappearing into oblivion. Marcus, however, does not necessarily insist that everyone should feel that way. What he deeply wants to convey is, even with all those conditions in a man’s life, there is something that is so profound and emerges above everything. And that is the ‘love of knowledge’. The desire to know something, the never-ending aspiration to learn. This exact quality in a man inspires him to wake up, and go through whatever he goes through in his day and his life. The beauty of existence is only flowered when there is an inclination towards absorbing knowledge, about himself, his true nature, and about everything around. Only the love of knowledge makes him live a life of contentment and meaning. Come to think of it, human’s affinity towards learning and mustering knowledge throughout history has one of the most eminent roles in bringing human life into the present state. Everything we did, we have or we had to overcome is a result of our love of knowledge.

I think that quote by Marcus Aurelius perfectly explains the purpose of life as well as the way to attain it. We must straighten out our priorities if we wish to live a life filled with purpose. We should always remain hungry for knowledge, learning, unlearning, and relearning if required. The love of knowledge should always exist deep inside us because the rest of it all is just an ‘incessant flux’.

“….it is not possible to give an adequate idea of the higher feelings of wonder, admiration, and devotion which fill and elevate the mind. I well remember my conviction that there is more in man than the breath of his body”

-Darwin-in his journal while standing in the midst of a Brazilian forest.

It was the Winter of 2019, when I and my friends went on a trip to Australian Base Camp in Pokhara, an hour of hiking and Mt. Machhapuchhre was right in front of us with its grandeur, facing us. We stopped, took a deep breath and just stared, AWESTRUCK.

I have always wondered, where does this feeling come from, or why do we feel the way we feel watching the mountains or the stars or anything vast beyond our comprehension. Fast forward to 2021, I happened to read this book called ‘The Righteous Mind: Why Good People are Divided by Politics and Religion.’ by Jonathan Haidt. I started reading this book with different intentions, with some other questions, but there Haidt introduced me to this hypothesis called the ‘HIVE Hypothesis’. And the pages that followed somewhat satisfied my curiosity. Haidt claims that humans are conditional hive creatures. A hive creature basically means an organism that requires a group, cohesion and cooperation to function at its best. Like bees in a beehive. A super-organism. Looking through the evolutionary lens, humans have cooperated and functioned as a group to overcome other groups in terms of food and resources and have excelled forward. Although, individual competition like ‘alpha male’ existed in primates (our evolutionary forefathers), according to Tomasello, human cognition veered away from that of other primates when our ancestors developed shared intentionality. That means, cognitively we opted out of the primate linage when we started working as a group, sharing our visions and intentions.

This brings us to Haidt’s other term ‘hive switch’. The hive switch refers to a functional system made from neural circuits that activates the feeling of a group and eases us out of individual desires and ego. It is an adapted evolutionary trait because that’s what helped humans survive 600 thousand years ago. The hive switch is an adaptation for making groups more cohesive, and therefore more successful in competition with other group. It is the ability to transcend from self-interest (the realm of profane) and lose ourselves in something larger than ourselves (the realm of sacred). Basically, hive switches make show us that there’s more to life than our menial concerns about wealth and reputation as an individual.

One of the ways to flip the Hive switch is by being in nature, existing there, in awe of it. Here’s where my question was answered. Ralph Waldo Emerson once said, “Standing on the bare ground, — my head bathed by the blithe air and uplifted into infinite space, — all mean egotism vanishes. I become a transparent eye-ball; I am nothing; I see all; the currents of the Universal Being circulate through me”. It was exactly during moments like these, when awestruck by nature, our neural networks switch the hive behaviour and we lose ourselves, we let go of individual profanity and enter into the realm of collectivism. It was an amazing realization when I found out that it was a significant evolutionary trait. Nature can trigger the hive switch and shut down the self, making you feel that you are simply a part of a whole.

Hive Hypothesis is a really intelligent idea to explain the functioning of groups and tribes. Also, a stepping stone for the possibility of group-level selection theories. Whenever you are in nature trying to comprehend its vastness and feel transcendental, remember, the hive switch just turned on inside your head.

Book Review: How Democracies Die

Grab its wrist, check the pulse, is it dead? Or is it alive? Or is it dying, slowly, crumbling, piece by piece, unnoticed, your democracy!!

The modern world needs democracy, we all do. But are we well enough to know if it is really standing healthy or is it being attacked from inside out and is on the verge of death? The death of our democracy?

Daniel Ziblatt and Steven Levitsky, in their 2018 hit book ‘How Democracies Die?’ teaches the readers about the existence, health and future of democracies, however, focused on the United States democracy, it very well guides the readers to contextualize democracies of their own countries.

In this book, we are given a set of questions to check whether our democracy is headed towards a downward spiral or not. While explaining the process of how democracies go down the gutter (in the modern world it dismantles piece by piece and not by a sudden blow) we are provided with enough examples of history, the countries that made the wrong moves, the people instated in power and their inclination towards authoritarian regimes.

Except for things going south all the time for democracies, in this book Levitsky and Ziblatt also call out the measures that can be taken to save and strengthen democracies. We may say that history cannot be repeated, but it sure does rhyme. This is why young democracies should rather sit down, turn up the pages of history and insightfully learn from others in the past, what wrong did history do to sabotage their democracies.

I am going to ask you some questions, the ones this book has taught me to check the health of the democracy in which you are living. In the following questions the word ‘they’ refers to a political party or an executive leader in power (such as a Prime minister or the President).

1. Do they reject (or show weak commitment) the democratic rules of the game? Specifically, bypassing constitutional laws, endorsing extra-constitutional arrangements, or undermining the legitimacy of the election.
2. Do they blatantly call out their opponents as a threat to the nation, foreign-influenced, illegitimate, criminals and such?
3. Do they tolerate or even encourage acts of violence in the name of certain special groups, mobs, specifically related to religion, culture or ethnicity?
4. Do they actively engage in cutting out civil liberties, defame individuals or groups, influence or ban the media, slam lawsuits against critics, or even praise any other government doing so in other countries?

If you happen to get only one ‘yes’ then mind you, the democracy in your country is in danger, never mind all yes-s. These are such simple yet such profound questions to ask and to discuss. All the moves mentioned in those questions point towards a to be- authoritarian government. These government despise democracy, people’s voice and have a toxic affinity towards power. This book is packed with examples where similar patterns have been seen that ended up murdering their democracies, from Chavez in Venezuela to Hitler in Germany to Mussolini in Italy.

Along with all the indicators to determine the status of democracy, Ziblatt and Levitsky also write in detail about how the government in power subvert democracies, their classic moves to weaken the foundation of democracies. This book also entails how democracies can be saved, how has the US done it ‘till now’ and what practices and structure should be strengthened to build and grow democracies. The chapters are in such flow, readers with minimum political knowledge can learn a lot from this book.

I learnt quite a bit from this book, and I hope anyone who picks it up does the same and more. Also, I hope your democracy is safe.

LONG LIVE DEMOCRACY!!!

|Bankruptcy is the fate of an inept company in a free market.

A free market is an economic system in which prices are determined by unrestricted competition between businesses. Resource utilization in the most efficient way by the most efficient entity is the cornerstone of the free market. The market is balanced when resources are distributed and used competitively. A free market always advocates for a model where prices always work for the benefit of the customers, which is true to some extent.

Now, imagine a world where there is a limited supply of flour. And there are 5 individuals bidding for the flour in order to make bread for the world. So, if the most efficient (that is low production cost, high quality) bread maker gets the hold of most of the limited amount of flour, the customers can get the best value for the bread with the best quality. This is because most of the limited resource available was used efficiently.

To understand why bankruptcy is essential in the free market model of the economy, let us assume the free market is right and always works on the side of customers and stakeholders. We should also be clear on the fact that the products we consume from the market are a result of work done on raw materials. That is, resources (the flour) are bought by entities (the bread makers) who are responsible to turn the raw resource into a usable product (the bread). Usually, different brands of products are supplied to the market by different suppliers and buyers pay the price for the products which they find reasonable in terms of price and quality. There’s a competition between the suppliers to provide product/service to the users within the most reasonable price and acceptable quality. The existence of competition between the suppliers guides the market towards better pricing and increased customer satisfaction.

Scenario 1: The resources (the flour) for production are neither distributed nor guided by the market or the competition. An inefficient company (bread maker) gets hold of most of the resources; production moves forward with higher production cost, inadequate management system, and misdirected visions of the board members. As a result, when the product (the bread) reaches the market, the price will be set high. A customer now has to pay more for the bread. If a customer spends more on bread, he will have less budget to spend on other products. This will affect the sales of other products in the market, which in turn will unsettle the price regulation system of the market. As a result of the unreasonable high prices in the market, the purchasing power of the money will plummet. This will result in a lower standard of living and inflation. Precisely the opposite of what “the free market” advocated.

Scenario 2: Resources are distributed by a healthy market competition where all the suppliers have the right to compete. The resources are efficiently used; the cost price is controlled; management plans efficiently in order to stay competitive in the market. Products are sent to the market and the customers pay the most reasonable price of the product. Users get the best value for money.

This is where bankruptcy asserts its significance. When companies like those in Scenario 1 start producing products, the results on the market could be devastating. In a free market, however, companies like these will collapse due to their unreasonably extravagant production costs, i.e. they go bankrupt. When this happens, the resources they were using will now be distributed amongst the more efficient ones. This encourages the companies to be more efficient and push forward this vision to provide the users with the best value for their money. Basically, bankruptcy will stop companies from using resources in an inefficient way. An alternative precept to be realized is that the government should not salvage the companies which are unabl e to exist in the competitive market. There are other ‘welfare plans’ government should be spending on for its people. To rescue such fallible entities by chipping in funds collected from the taxpayers’ money is nothing short of a crime.

Bankruptcy is the fate of an inept company in a free market. The fate that knocks it off the market when it becomes inefficient in utilizing the resources, when the company is stubborn in changing their values for the greater good, when short term visions blur the bigger picture and when companies get hold of resources by unhealthy means heading towards monopoly.

This week, the market showed something that had never happened in history. Oil Prices (CRUDE OIL) in the U.S. fell below $0, -$37 / barrel as of now. How can price, something that we pay to get something in return, fall below zero? Does a negative price mean the sellers are paying us in return when we buy goods from them? These are all valid questions, and to understand what is happening points us to Economics-101. Price.

First, we need to understand how Price works in a ‘free market’. Price is an intrinsic parameter that floats on the huge vicinity of the market and is responsive to many factors. For now, just to understand how prices work, we are going to take into account two major parameters: Supply, and Demand. Here’s a basic graph showing how a commodity is priced in a market.

Basically the price of a commodity in a market is determined when the demand curve meets the supply curve, somewhere. That is, people wish to have more demand when the prices are low and people wish to supply more when the prices are high. The free market price is always controlled by scarcity. For example, if there are enough eggs supplied to the market and there doesn’t exist as much demand, then the price would automatically come down to make customers buy the eggs, because as we know if the prices are low, the demand seems to increase. And then when the supply is adjusted as per the demand, the prices regulate itself accordingly, in-par to how much the customer wants to pay. This is how prices are set (remember we are keeping all other factors constant).

Things are a little bit different in the case of oil prices. First of all, the prices in the oil industries are set in reference to the future. ‘Future contract’ is a tool that allows investors to bet on the prices of oil in the future by speculating the market. It basically means that suppliers of crude oil contractually agree in the present to deliver an agreed amount of crude oil in the future. So, the crude oil suppliers should pump out oil in their wells in reference to the future. And now enters the supply-demand framework hit severely by the pandemic, COVID-19. As we are very much aware of how the world is halted, businesses are shut and transportation is close to null, the demands for oil as of now is near to zero (as compared to normal times). But the pumps have been pumping on (for future contracts), to control the supply by immediately slowing down the pumps is not technically feasible. Also there is a significant role played by OPEC (Organization of the Petroleum Exporting Countries), a topic for a different day. So we are now clear on the fact there exists a huge crater of incongruity between the supply and demand of crude oil.

Now for the buyers to buy the crude oil is a technical problem. Since the demand is very low they ought to store the oil that is to be brought in the future as per their contracts, remember. So, they are being sold out to those who own storage spaces for oil. People are actually giving out crude oil (contracts) and paying the buyers to take the oil away. THERE’S NO STORAGE. This takes us to the question, ‘If oil price dropped below $0, why aren’t we getting gas for free? Its gasoline we use for vehicles and price that went collapsing was of crude oil, so the production cost for the refineries and distribution infrastructure costs add up to the price we are paying right now which is also exceptionally low.

For now the prices seem to be toppling down and are predicted to go down even more as the shut down of the world continues. But, there is interesting speculation of the extreme price hike of oil in the near future. Because, when the world re-opens, the demand would increase in a flash, but with suppliers that went bankrupt today, and the ones who slowed the supplies just to exist in the market will not be able to meet the demand. So, the market would automatically readjust the price high enough to distribute the oil as per market requirements. Oh the wonders of free-market!!