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Chee Soon JuanIn one of my books, To Be Free: Stories from Asia’s Struggle against Oppression, I wrote (only half in jest) that the only difference between communism and capitalism is that the communists have admitted that they were wrong.
Enterprise and communism are sworn enemies. Mark Zuckerberg would never have emerged from a system where society is organised around communes, and where conformity is prized over everything else.
But there is also much wrong with the free, capitalist system that enables a man to buy mansions—in some cases even whole islands—while another finds himself without shelter.
Between the extremes of collectivised farming where everyone is equally poor and the unregulated free market where the concentration of wealth in the hands of a few have wreaked economic havoc for the many, there is a middle way.
Singapore, especially in recent years, has been going full tilt towards the latter where, at times, it seems that all we care about is the glitz that money can buy.
The materialism zeitgeist did not come about by accident. It is, as I pointed out in Part 1, engendered by Lee Kuan Yew’s everything-I-earn-is-mine worldview which has created a society that encourages members to look out only for themselves, that nothing comes for free, and one that puts a price-tag on everything we do.
In such climes, we live yet we are dead—dead to the essence of life.
Sustainability—that is the question
We must care. Even if it is out of enlightened self-interest, we must care because what we have begotten is not only undesirable but also unsustainable—unsustainable because it has become a veritable ideology that success can be had by creating wealth in the shortest time and easiest manner possible: We don’t invest in our people, we bring in foreigners. We don’t foster innovation, we turn ourselves into a tax haven. We don’t believe in honest labour, we build casinos.
MIT economist Daron Acemoglu and Harvard political scientist James Robinson co-authored the critically acclaimed book Why Nations Fail. Over a period of 15 years, the researchers studied economies from ancient Peru during the Inca Empire to the Glorious Revolution in 17th-century Britain to latter-day Koreas. They expound, supported by breath-taking historical detail, why certain states succeed and others fail, why some economies are able to regenerate while others wither and die.
Acemoglu and Robinson demonstrate that political and economic institutions are key players in determining the fate of nations. Extractive political and economic institutions—ones that concentrate power in the hands of a few and extract resources from the many for the few—cause states to wilt.
Inclusive political and economic institutions, on the other hand—ones that practice plurality and encourage innovation—allow states to progress. They write that the ability of inclusive institutions to
harness the potential of inclusive markets, encourage technological innovation, invest in people, and mobilize the talents and skills of a large number of individuals is
critical for economic growth. (emphasis added)
So what kind of a system do we have in Singapore? Acemoglu says, in a presentation here (Singapore is mentioned at the 20-minute point of the video), that Singapore, like China, employs extractive institutions.
Our experience confirms such a view. Profits derived from public housing, healthcare, transportation, etc all add to the state’s wealth. Our debt-to-GDP ratio (one of the highest in the world) is another form of this extraction. Rather than borrow from external lenders, which other governments do, our Government issues debt against our reserves (mainly from the CPF). Indeed, ours is still very much a rentier economy.
Such extractive policies have caused the malformation of our economy. While South Korea manufactures Samsung, Hyundai and K-pop, Japan sells Toyota, and Taiwan exports Acer, we produce little that the world buys.
Instead, we rely on vice (prostitution is the fastest growing industry coming on the heels of the launch of the two casinos), money from tax avoidance/evasion, and influx of foreigners to augment our national income.
Criticism = innovation = progress
Politically, extractive institutions, by their nature, are intolerant of open criticism and dissenting views. The problem is that disagreement and dissent are elements necessary for creative destruction without which economies are prevented from reinvigorating themselves.
Ours is, unfortunately, a system that is averse to the ways of creative destruction. Steve Wozniak, the engineering wizard and the late Steve Jobs’ other half behind Apple (photo on left), said that Singapore could not produce a company like Apple because the system here has destroyed “creative elements” and non-conformist behaviour that give rise to innovative companies like Apple.
(Ironically, Wozniak was invited by the Workforce Development Agency and the National Trades Union Congress to give a motivational talk in Singapore in 2011.)
Surveying the vast expanse of economic antecedents, Acemoglu and Robinson come to the plain conclusion that “growth under extractive institutions will not be sustained”.
And yet, the PAP doesn’t see—or, more worryingly, refuses to see—how its extractive policies are driving our economy, once described in miraculous terms, aground. While our neighbours have been posting impressive growth over the last few years, we have struggled. In 2012, our economy grew by just 1.3% compared to an average of 6% in Indonesia, Malaysia, the Philippines, Thailand and Vietnam.
What can we do?
The answer to this question is deceptively simple: Care. We must care for the struggling family next door, for that woman working two jobs just to feed her family, for the retiree who doesn’t earn enough to pay for his cancer treatment.
A world without a system that cares will be humanity’s ultimate ruin. Capitalism, or more precisely market fundamentalism, that appeals to our sense of selfishness and greed results in horrendous consequences.
This heart-wrenching picture shows a couple in tight embrace before they died in the recent collapse of the building in Bangladesh that killed nearly 1,000 low-wage workers producing garments for billion-dollar Western companies. In the rush to boost their bottom-lines, manufacturers ignored the egregious breach of building safety codes, resulting in the calamity.
It is a poignant reminder that the poor cry, fear, love and hope just like the rich. Their lives are worth no less.
Just as important, our ability to care will lend courage needed to question authority and to build a capacity for collective reasoning and debate that will allow us to shape our future in ways that will fulfill our aspirations and happiness.
How we live in the future as a community, as a nation, will depend on the choices that we make today. The political and economic incentives and disincentives that we build into our system will determine whether we progress or stagnate.
Crucially, we must stop indoctrinating our children with shibboleths like “no one owes us a living”. Rather, we should inspire them to care for humanity by presenting them with role models starting with those at the very top—our national leaders. We should demonstrate to our young ones that by uplifting those around us, we ultimately uplift ourselves and our self-worth.
Chee Soon Juan is Secretary-General of the SDP.