Monthly Archives: June 2020

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Summary

Equity option margin requirements in the U.S. markets are usually determined by either a Regulation T rule for regular customer accounts, covering most retail customers, or by Customer Portfolio Margin covering more sophisticated option portfolios.

The result is a fragmented, inconsistent options margining framework in the U.S. that needs an overhaul, recommendations for which are provided at the end.

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The Good Life Compass

We have learned about the Purusarthas with the different activity spheres represented by Dharma, Artha, Kama and Moksa.  We have read many texts with stories of characters navigating each of these.  We now need to design our “Good Life Compass” incorporating these along with a description on how to use it. The word “compass” however is be taken figuratively and not literally as it could represent some other form of a device or guide.

To design a compass, we need to first understand if all these spheres should be included.  We have seen constructs of just dharma, artha and kama with moksa either on top of them or off to the side with some form of connection.  In the texts we do notice that there is a lack of theorization of the group of 3 or 4, but focus on each one individually. Scholars offer varying opinion on this.  Halbfass1, says “..[all four of ]the puruṣārthas are simultaneously essential attributes and constituents of humanity. It is in the nature of humanity to be an arthin [a being with goals].”  In the text themselves, we see in MDhŚ2 it says that  “…the established teaching is that the triple path is the best”, leaving moksha aside.

Is moksa even an activity sphere at all? Moksa is understood to be the cessation of suffering, the attainment of bliss, release from the cycle of rebirth, etc. and thus devoid of actual activity as understood by the other 3 activity spheres.  Even Yudhiṣṭhira in the MBh3 says of moksa. “One cannot attain moksa by doing any deed. Know that what is going to be all comes to be. Even he who lacks some of the group of three finds moksa”

This suggests it should stand on its own.  Malamoud4  says “…it is always possible to make dharma, artha or kdma into the + 1 that encompasses the two other terms in the list, and the moksa to boot..”  and continues to say  “..in the usual interpretation, it cannot encompass the other purusarthas, specially artha and kama, as not only does it transcend them, but, also negates them. Their functioning may be taken as a positive sign of the fact that not only has moksa not yet been achieved, but that it is not even being striven for.” This suggests that moksa is mutually exclusive to the others in a way.

To determine how to incorporate moksa into our compass, I prefer to look at it from a contemporary life perspective, as after all, we are trying to define a good life compass for our life now.  In our pragmatic good life compass, instead of looking at moksa as a practice to lead one to an “ultimate felicity” such as nirvāṇa or think of this activity sphere as a form of renouncement for  achieving liberation from suffering in the cycle of rebirths, I prefer to look at it as a sense of freedom and lack of attachment. Not freedom within the socio-political world, but freedom from the strivings that generate and sustain agents in this world. Freedom from strivings and the great sense of power that this creates in oneself.

With this context, in the construct of the compass, I choose to have all the 4 together.  This is also suggested by Professor K. J. Shah5, in which he says that the purusarthas as goals of human life should be treated as interactional in character, and says, “We must realize that artha will not be a purusartha unless it is in accord with kama, dharma and moksa’, kama in turn will not be kama, unless it is in accord with dharma and moksa; and dharma will not be dharma, unless it too is in accord with moksa. Equally moksa will not be moksa without the content of dharma; dharma will not be dharma without the content of kama and artha. The four goals, therefore, constitute one single goal, though in the lives of individuals the elements may get varying emphasis for various reasons.”

So now we have our construct. But any good compass or guidance system requires, by definition, some objective measures.  These measures inform the compass and the user when something is out of balance, when one measure too large or too small – and these objective measures work together by way of a set of rules and logic.

Does such objectivity exist when it comes to the activity spheres in our compass, so that our compass knows how to guide us into living a good life?  There are certain qualities of objective measure, e.g. hierarchy in order to define the logic and exactly what defines balance. In additional a good guidance system will have achievable metrics and goals and “next steps” based on these. Do the components of our compass have such hierarchy, measure, metrics, rules etc.  We turn to the texts now to look for these.

First let us look at dharma. From the MDhŚ2 we see that dharma is about who you are (as a member of a corporate group) and where you are in your phase of life. It is broad and capacious and thus very context sensitive. From the Ramayana we see several scenes in which dharma seems highly subjective and open to individual justification, such as the killing of Valin by Rama or the treatment of Soorpanaka by Rama and Lakshman.

In the Mahabharata, even with the clearly adharmic treatment of Draupadi, Bhiṣṃa can only say that, “As dharma is subtle, my dear, I fail to resolve your question in the proper way”
In addition, there is the plurality of authority in dharma with sva-dharma and sadharana dharma as we see when Bhima challenges Yudhishtra’s view when in the forest or when Arjun puts down his bow at the beginning of the Bhagawad Gita.

Throughout the texts we see little or no evidence of a measure or objectivity of dharma, in fact we even see the need to forsake dharma for the sake of dharma. This leaves us with a picture of dharma that is highly subjective, context sensitive, open to justification and very subtle – making it difficult to put into an instrument like a compass.

Now to look at artha, which is described as the means of life, and includes material prosperity, security and health of oneself and those one feels responsible for. The thriving of humans requires artha – that is, economic activity, wealth and its creation, worldly success, profit, political success and all that is necessary for human existence. Thus, it seems that artha should be measurable.  However, referring to the texts, once again we see no mention of a measure of prosperity or success.  In fact in the first chapter of the Panchatantra6 it says Earning the money when you don ‘t have it, guarding what you have earned, increasing it as you guard it, and then giving it away to worthy people when it has increased- that is the way to live in this world” implying that having the wealth based on ones own needs and not the accumulation of wealth is one of the essence of artha. 

But Kautilya in the MR7 shows us that besides the instrumentality of artha there is a non-instrumental artha and for the sake of artha it could be required to put aside artha.

We also see that artha, like dharma, is justifiable and not always objective, as in the Panchatantra6 when Damanaka justifies having Pingalaka kill Sanjivaka because of what he considers bad policy.

Is there a hierarchy of dharma and artha?  In the MBh3 we are alerted to the dangers of setting aside Dharma for Artha as it leads to pretty much the destruction of the world, caused by Duryodhana who believed, “…the way of kings differs from the way of the world, and that therefore the king should endeavor always to think of his own profit (artha).”  The MBh3 suggests without maintaining Dharma, nothing is held together, pursue Artha, violate Dharma, and see, everything will fall apart.

But then we see episodes in the Ramayana of Rama forsaking his dharma when he banishes Sita in order to please the polity, thus for the sake of artha. In the MBh3 We see several incidents of deception, such as the killing of Drona, in which even Krishna says “…. we must put aside dharma and resort to stratagem to conquer him..”

So once again we come away with little objectivity and no clear metrics for even the artha activity sphere as well as no clear hierarchy between dharma and artha and their juxtaposition being highly contextual.

Turning to Kama, which means desire, wish or longing. While often used to refer to sexual desire, it largely refers to any sensory enjoyment, emotional attraction and aesthetic pleasure such as from arts, dance, music, painting, sculpture and nature.  In the MBh3, Bhima says Without Kāma, there cannot be any striving on any activity sphere. Seeking Dharma and Artha are entirely dependent upon Kāma. Even the seers were joined to Kāma when they were intent upon their asceticism…”.

Throughout the texts, there seems to continuous push and pull of extolling the virtues of kama with warnings of the dangers of kama. In the MBh3every imaginable form of uncontrolled kama and its consequences is depicted. Shantanu’s inability to control his longing for Satyavati.  Karna’s yearning for recognition and lust for status resulted in possibly unhealthy attachments. In the Gita, Krishna praised Kama but warned us against it too. So long as Kama is under your control, it is divine. When it goes haywire, it turns demoniac, which he advised Arjuna to renounce.
So once again we are left with little to no objectivity on the extent of kama as an activity.

The hierarchy between all the purusarthas has been the continuous subject of discussion and debate. Even in the Mahabharata, Yudhisthira, the four brothers and Vidura all have very different views on the relative position and importance of each.

Given the distinctive nature of each of the purusarthas and the lack of a prescriptive hierarchy,  the good life compass is highly context sensitive to each of us individually. Thus, it is clear that we can’t design an objective measuring instrument like a compass or a gyroscope or a FitBit to guide us to a good life. However, is there something than can still be designed? It is possible that our compass is purely informational, with no judgement, no recommendation, no guidance or advice.  Possibly a place where we can record our activities and it informs us of whether we are been more focused or involved in one or there (or several). This would then let us rebalance our activities and not let any one get out of hand or destroy the others. This seems like it would be a useful device or say app.

But then, I would venture to say, after the realization and use of such and app, one should simply throw it away.  Let this become innate to us, in our minds, hearts and souls, such that we don’t need something to tell us that we may be out of balance, but we know and sense that from within.  So, when you get too busy in the rat race at work, you reflect on this and take time for your spouse, kids and some enjoyment. When you are out hanging out with buddies and playing poker too often, you remember your obligations as a provider to your family.   Then the compass becomes within us and is always helping guide us in these spheres of human activity, maintaining balance and harmony and leading us through this life as a good life.

  • References
  • 1. Wilhelm Halbfass India and Europe. An Essay in Understanding.
  • 2. MDhS: Manavadharmasastrs, Manu’s Code of Law
  • 3. Mbh:  The Mahabharata
  • 4.Charles Malamoud, On the rhetoric and semantics of purusartha
  • 5.Daya Krishna. Indian Philosophy, a counter perspective
  • 6. Patrick Olivelle, Panchatantra, The book of India’s Folk Wisdom
  • 7. Mudrarakshasa