State & Markets

Bihar
Now for political enlightenment...

While reading about Bihar’s Recovery, it dawned on me the importance of basic government structures in an economy. This sort of realisation had come to me while I was reading about the Haiti crisis and I really think all students of Economics should remind ourselves of the government structures working in the background implied in what we call a ‘Free Market’.

As observed from the article on Bihar, which interestingly is where the Buddha gained enlightenment (according to historical records), the state’s investment in infrastructure, maintaining order, a culture that respect the rights of all citizens (that can only be created from top down) often influenced very much by the enforcement of laws, as well as giving people freedom to pursue the market activities.

When we argue about the importance of not having government interventions in markets, and that state presence should only emerge in the case of market failures, we often neglect the notion that a government is in place in the background to honour the legal tender and anarchy is not the ruling ideology of the day. Trust in the free market is also important and it is upheld by law and order, which once again, falls on the government. As we’ve seen from the earthquake in Haiti, more room for market and less state is not always a good thing. Yet after acknowledging the need for a state we want to combat its advancement into various aspects of society that are usually governed by culture or self-organizing.

Maybe working on the margins of that would help Bihar discover this balance of state and market spaces.

Life as a Proletariat

SAS Logo
Paradise for the Proles

Slightly less than three-quarter of a person’s lifespan nowadays is spent on work and so it is really important to love your work. And while internal motivation is important at sustaining you, the environment that you work in, the boss that you work for and the people you work with are all going to affect the way you see your work.

Of all these factors, your employers can mould quite a substantial portion of your experience. They might not control working culture but they have a great influence over it; they might not be able to dictate your life but they can create circumstances to urge you to do as they see fit. That makes choosing your employers important and the recent ranking published by Fortune Magazine is particularly valuable for that purpose.

SAS top that list of ‘2010 Best Companies To Work For’. You can see from the perks how the employer really ‘cares’ in the real sense (no sarcasm intended). Although the title of this entry is somewhat demeaning, I do believe that treating your worker well makes great business sense. In fact sometimes I think that there should be Human Resource Consultancies that help check companies’ books and then find out how to improve performance through treating workers better – the military around the world are in need of that. Maybe there’s already such firms and they probably borrow tricks from SAS as well.

So if you’re intrigued by Google and want to work for them, maybe you should consider SAS if you treasure job security above remuneration.

Con-nect-working

Social Networks
Start the Chatter

Social networks have been rising for some time now. And while they initially started out as mere toys for youngsters, there have been talks of higher degrees of commercialization, how these networks will change the lifestyle of people, and so on. Now that the change has taken place somewhat, it makes sense for The Economist to tabulate some of the impacts these networks have brought in.

To begin, these networks have definitely became an important way people communicate; however mundane or skimpy each little piece of content may be, they are viewed by many people within your network and it broadcasts bits of information about you that couldn’t have been captured in the yesteryears. This is true for the comments you cast, the status messages you post, the photos and videos you uploaded and all the social games that you play. Although online social networks remain essentially much like a bulletin board (except viewership ability of contents are more strictly controlled and with richer content) and thus does little to enrich people’s ability to do real networking, it does a wonderful job at augmenting our real relationships.

This strong link with the real world is a great strength for online social networks. Websites are viewed as corporate facades that give little information about the reality of the companies. On the other hand, the pages for these firms on social networking sites are viewed as better avenues for firms to communicates with their customers. Likewise, a corporate site announcement of a promotion the company is offering does less to boost sales compared to a tweet which might have much more followers.

That is the free advertising service that sites like Twitter and Facebook might offer, which brings us to the question of how money is being made on such networks. A peach of an opportunity, an article in The Economist special report on social networks gives us an idea what are the businesses that taps into the plumbing of social network connections and thriving. For all the talk about connecting with friends, being entertained by your online pets, or having a good laugh from the video your friend has shared, businesses might be the greatest benefactor of this trend.

Jobs’ Book

iPad
No need for Ctrl+Alt+Del...

My sister asked me if The Economist would publish an article on Apple whenever they introduce a new product. I told her that they would if they anticipate that the product Apple produces is sufficiently influential or even revolutionizing. And perhaps that should be the case for iPad, where The Economist thinks is an attempt at transforming 3 industries at one time.

Their full article on the iPad propels their point further, discussing how the product would have a profound impact on the way digital content and media is consumed in the market and how this would alter the economics of digitizing newspapers. While there are many limitations to this product, Apple have traditionally been quick to modify their products to suit the way users use them while incorporating more powerful functions. A quick review of the historical revisions of the iPod before it eventually become the current iPod Touch shows how Apple pulls off their innovation along with changes in consumer preferences while upgrading their product.

We know that something big will be happening when the iPad is available on the market but it’s still too early to decide what it is. For now, we wait.

Gardening in School – Education or Distraction?

Garden
Homework: Watering the plants

I chanced upon a very interesting article by Gloria Dawson on The Daily Green. This phenomenon is not so much seen in Singapore than in the United States, where gardening in schools was introduced and encouraged, in particular by US First Lady Michelle Obama, to raise students’ interests in gardening, nurture green thumbs as well as environmentalism and encourage healthy eating.

I thought such initiatives were pretty self-explanatory in terms of benefits, are pretty much non-political and non-debatable. Dawson had however found an article by a Caitlin Flanagan that expressed much disdain for school gardens, with the argument that “schools are taking kids out of the classroom” when they need to spend more time in the classroom to learn and be educated on the basics, and then eventually climb the educational system. It was something I never really thought about given Singapore’s higher-quality educational system, but in America where educational standards are dropping and schools struggle to keep students interested, school gardens may backfire in their intentions as well.

Statistics so far appear to indicate that school gardens have somehow helped boost grades and “understanding of lessons”, probably indirect effects of being involved in a garden. It might perhaps create interest in staying in school, or create opportunities to pick up skills such as organisation, leadership and responsibility which would be useful both in lessons and outside of lessons. Unfortunately, the school gardens initiative has caught on with political posturing and people are lambasting the educational system and those who implement the initiative. At least Flanagan’s arguments were not exactly without merit, but it appears that Dawson is implicitly pointing fingers at politicians who are blaming the school gardens initiative to their advantage.

There’s really plenty to learn from school gardens, in terms of skills and knowledge. Where your food comes from, how to eat healthily; children need to know given that they now live in a very much urban society where food is convenient and global and they do not know where their food comes from, what they should eat, how much they should eat and so on. Again, I am reminded of the book ‘The End of Food’ by Paul Roberts that I am currently reading about and will review in due time. Links to other articles about the school gardens argument are in The Daily Green article.

When Economics clashes with (Geo)politics

First published in The New York Times on Wednesday, Thomas Friedman writes about the low likelihood of a “benign 2010” given the economic and geopolitical conditions currently brewing. I read the reprinted article on mypaper on Thursday and was rather amused by his arguments.

He started off by saying that 2009 was a pleasant surprise for being a rather peaceful year for “the world’s biggest economies” to heal without any major wars or political / geopolitical disruptions, and then asserts that 2010 would probably not be as peaceful. I do not really agree with him about the “three major struggles” we face (the banks vs President Obama, China vs Google & Iran vs the world), but he has managed to make rather substantial arguments.

Struggle 1: The banks vs President Obama
I did not quite think that this was a significant issue, but that is probably because Singapore is / was pretty sheltered from the full force of the economic breakdown in the West. At least in Singapore, the banks appear to be in rather good shape. But Singapore still bore some brunt from the crisis, thanks to our open economy. I will not go into an argument about how globalized our economy should be (suffice to say that I am for globalization, but not the “free-for-all” some Republicans seem to want) but I must agree that banking regulations need to be stiffened. President Obama has a very tough job balancing giving free rein to the banks to operate and continually grow their wealth (and hence America’s economy too) and managing expectations that as president he should be concerned more about his people who are suffering as a result of the folly of these bankers (and hence should punish the bankers). Either way, this tough balancing act is going to take much more than just “change we can believe in” or “yes we can” as President Obama promised before becoming president. His actions will have direct or indirect impact on the WHOLE world.

Struggle 2: China vs Google
Again, I never thought of this as a huge issue too, but it must certainly be one of much concern to quite a few if columnists keep writing every day about the relations between China and America and whether the trough in relations they are going through marks a change in tact or just posturing. The G2 (Group of 2 – China & America) notion aside, the assault on Google was certainly daring and bellicose. I am more inclined to side with Google and America, but you must also take into consideration the views of millions (of Chinese netizens) that the Chinese government have to assuage and calm. Many of them see the China-bashing as unwarranted and colonial bullying that is behind the times given the ascendant status of China, so I do not foresee that China and America’s retaliatory actions are going to end at just sanctions. I sure hope they do things calmly though… recall the saying “when elephants fight, the grass gets trampled”.

Struggle 3: Iran vs the World
Now this is an issue that I think people do not believe is a sufficiently major problem. Iran’s nuclear proliferation will be very dangerous to America as well as the world, and it will derail all the economic efforts put in by the world’s major economies given the potential changes it will cause to the geopolitical arena. This I think would be the most difficult struggle to resolve, given the ramifications that could spillover into the economic and social spheres (e.g. war). Unfortunately, given all the other problems that America and the world is facing now, it is inevitable for the Iran issue to be placed on the back-burner. But there must be understanding that neglecting the Iran issue and letting it fester will not make it any easier to solve.

I echo Friedman’s wishes that “cooler heads prevail” this year. Or else, as he says, “fasten your seat belts”.

Eggs and Bacon

Eggs/Bacon
Breakfast Only...

I got this from a friend, who is passionate about Economics very much like me.

A hen and a pig are negotiating to solve the food shortage. The hen makes a suggestion: “I will supply the eggs if you will supply the bacon.” The pig ponders this for a moment and replies: “But yours is a contribution, mine is a total commitment.”

– Kofi Annan

The Polarity of the Internet

Magnets
Like Poles Agree...

In today’s The Straits Times, Rachel Chang comments about “the power of the Net to polarise”.

She cites the examples of how vocal people on Facebook and their blogs, who have publicised their political views or displayed their political affiliations, have been slammed and harasssed online to the point that one such blogger stopped writing. The empowering voice of the Internet appears to work like a double-edged sword, threatening to slit the throat of the person wielding it in the face of the majority or the powerful.

It scares me sometimes how polarised views on the Internet can get. There does not seem to be room for compromise or discourse, it is very much an “us against them” game in terms of opinion rather than the moderated views across the spectrum. Chang quotes Cass Sunstein of the White House Office of Information and Regulatory Affairs for his view that people who “interact with others who share the same views… tend to become more extreme”. Of course, “the opposite is also true”, but at least looking at some of the incidents Chang has had to cover for The Straits Times, it appears as if the former applies more than the latter.

I can very much feel for myself this polarity when I visit The Temasek Review. It is considered a source that is less influenced by the government (as opposed to The Straits Times, which some may deem to be a government propagandist body) but I am seeing quite a lot of critical anti-government writing. Ever since I started visiting this website, my rosy views about the govenrment have been somewhat tainted, not in a bad way. At very least, I feel as if I am considering other non-governmental viewpoints that might reallly be the voice of the people and not just what the government feeds to us via the press. It is scary, however, how netizens slam each other for their views, be it pro-PAP or anti-PAP. It is rather heartening that there is much debate about Singapore’s future, and by and large discussion there is rather measured. It can get disturbing when emotions are flared up, as I notice in this write-up. I dare not express my views on this website for fear of being flamed to death by both pro-PAP and anti-PAP netizens.

Democracy… certainly brings about a cacophony that needs to be understood and tolerated, for all in the society to benefit. Hopefully with all the debate online and offline, people will come to a better understanding of what they want for their society. And it must mean dangerous times if arguments on the Internet spill over into real life and disrupt society.

So in essence… take heed online.

And just like Chang, I must add the disclaimer that I expect people to “shoot me nasty, unsigned email messages after reading this column”, if only just to pre-empt comments considering the nature of my writing.

The Truth About Procrastination

To all my friends at EPRZ, I am back!

I have been intending to write this article for months, ever since I published my first in June 09. But why didn’t I write it? Because I have to practise what I preach. I have to do the things that I advise my readers to do. Today’s article discusses the benefits of good procrastination and there is no better way to validate its credibility than to use myself as the test subject. Here are the facts of my research.

As children, we were told by our parents to stop procrastinating and start working on our household chores. As students, we were told by our teachers to stop procrastinating and start working on our school assignments. And they would always use this popular saying, “the early bird catches the worm”, to support their argument. Fair enough. But what happens to the early worm? Doesn’t it get eaten? The truth of the matter is that procrastination can be good or bad depending on how you use it. So the important issue is not how you should avoid procrastination but how you should use procrastination to your advantage.

There are many activities that you could be doing now. All these activities are competing for your time and attention. How do you decide which activity to begin and which to postpone? Through objective evaluation, you will have to rate each activity in importance. After that, you will have to practice the principles of good procrastination- to learn when to do the right things and to postpone the wrong things. It means choosing to avoid lesser activities in favour of greater goals. If you have just been struck by a brilliant inspiration, for example, then you should work on that new idea and postpone the thought of running an errand for your parents. Learning to prioritise is, thus, the key to good procrastination.

During my absence from ERPZ, I have completed my National Service, organised several grassroots events, and earned my driving license among many other completed tasks. I have been using procrastination to my advantage by avoiding the less important activities to do the real work. And even though I have sacrificed the cleanliness of my room, the well-being of my stomach, and of course the welfare of the readers at ERPZ, I have accomplished much by practising good procrastination.

Most people will tell you that procrastination is bad and that you should avoid it or cure it. Their ill advice is predicated on the false belief that procrastination means doing absolutely nothing. Author Paul Graham writes that “there are three types of procrastination, depending on what you do instead of working on something: you could work on a) nothing, b) something less important, c) something more important.” The last type, good procrastination, is what you should strive for.

China’s Green Revolution

Green Leaf
Green Power

China, as an emerging superpower, is also said to be emerging as one of the biggest polluters of the environment. The industrialisation and modernisation of China in particular is of great concern for climate change / global warming, as China looks scheduled to overtake the United States as “the world’s biggest emitter of carbon dioxide”. Gary Dirks and David G Victor, in Newsweek’s Special Edition – Issues 2010, suggests that China is making attempts to go green, not just to allay global concerns but to allay domestic concerns as well.

China is concerned about its growth, not so much because it is bothered by how other countries (both developing and developed) perceive it. It is more because of the environmental problems that have plagued its growth that makes it realise the importance of being green. “Severe pollution and worries over dependence on fossil fuels” are just some problems of national security that concern the Chinese government, and it is doing what it can by enhancing energy-efficiency and attempting to move away from fossil fuels. It cannot probably move away entirely from coal because of its abundance and cheap price, but China is making efforts to make coal “less polluting”.

China is also investing in new technologies, such as clean renewable energy research, that could potentially open up a new market for such products as well as cement China’s position as an industrial leader in a new field that is yet untapped fully in most other countries. The Telegraph in an earlier article in May observes some changes to what China is doing in this new field. However, China would require the help of other developed countries in the West in managing its research and development.

All these will add up to “a massive impact on greenhouse-gas pollution”, and such efforts are certainly laudable and commendable. It is, however, important, for China to lead not just locally but globally. As a rising superpower, it is “ready to lead when it starts playing offense in climate talks as well as defense”, and China needs to prove that “it can cut emissions”, which will then assuage global concerns as well as debunk the West’s “excuse for doing nothing” because of “Chinese inaction”.

Other writers and newspapers have weighed it on China’s “Green Revolution”. The Guardian details some targets set by Chinese officials on adoption of renewable energy sources, while Thomas Friedman in The New York Times writes about how “red China” is becoming “green China”. There appears to be much regarding what China is doing for the environment, even if it might seem miniscule, so the United States should certainly do its part and contribute more than “business as usual”, given its current superpower status (which it might soon lose to China if it does nothing to stem the decline).