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Brexit & Trump = Capitalism & Meritocracy at a Crossroad

At first glance, readers would likely think that I have missed something. Isn’t democracy (also) at a crossroad?

Definitely not.

The campaigning/electioneering and voting went like clockwork, only more exciting than usual. Protests against both outcomes further confirmed that democracy lives! Weren’t the protesters dumb? Really, were the outcomes different, would they accept if those who voted otherwise demanded a re-vote? Ahh, never mind. Bremain’ and ‘Not My President’ were just free people throwing a tantrum. They say what democracy is much about…let’s just hope non-violence prevails.

Friends who engaged me pre-Brexit knew that I supported Brexit. But with Trump, while I didn’t buy his message or method, I wished him to win. I expected neither to win but am glad to be proven wrong!

Here’s why.

CAPITALISM
Experts point to 14th century agrarian Britain as the origins of capitalism. It got a spurt from “16th century merchants and small urban workshops“(Marx). Then it went “international” with “the geographic exploration of the foreign lands by merchant traders, especially from England” in the 18th century. The Industrial Revolution then gave it further impetus with assembly lines and mass production. Today, modern capitalism birthed us a web of Free Trade Agreements and globalization that have touched almost every corner of the inhabited earth.

The history and evolving characteristics of capitalism are complex. At the risk of oversimplification, I discuss only 2 key features.

First, renowned Hungarian economist, Dr János Kornai makes the obvious but seldom highlighted observation that, vis-a-vis socialism, the distinctive “virtue of capitalism is its innovative and dynamic nature”. In a list of more than 100 “revolutionary innovations” (the criterion being its “relevance for large groups of users, well-known to the majority of people, and not only to small groups of experts”) only one product, surprise!, synthetic rubber, was a Russian innovation. The rest; from Band-aid in 1921 to ballpoint pen to black box (for airplane) to microprocessor to the Walkman to e-commerce and to Youtube in 2005 all originated from capitalist countries. (Dynamism, Rivalry & The Surplus Economy 2013 and Innovation & Dynamism)

Capitalism’s dynamism brings with it a surplus in goods and services. To illustrate; when the Berlin Wall fell in Nov 1989, Dr Kornai, even as a professor, had to wait 6 years for his Skoda. But not American Joe Everyman; he could casually walk into a showroom, flashed his cash and drove off his Ford (sorry, Singapore Ah Tan could only dream about it in whether in 1989 or 2016). Surplus along with credit availability under capitalism imply affordability if not low prices, benefiting all.

Second, Thomas Piketty’s “Capital in the 21st Century” sparked a “broad and energetic debate on…: the outlook for global inequality“. Piketty documents and analyses how wealth has waxed and waned from the 18th century, its concentration or distribution being disrupted by the 2 World Wars. With copious data, he demonstrates that wealth is reasserting itself – with globalization and tech innovation as the backdrop. Oxfam’s research makes a similar but startling observation: the wealth of 1% is more than the other 99% of us. Likewise, Forbes 400 richest owned only US$93 bil in 1982 but topped US$2.3 tril in 2014 (+2473%) even as median household income rose a meagre +180%.

Piketty warns the soaring wealth inequality will mean instability down the road. Apposing that with Kornai’s capitalistic surplus, the world saw the rise of Occupy Wall Street (OWS) movement. Why should we be surprised then by Brexit & Trump? Without diminishing the impact of other issues (immigration, security etc), Brexit and Trump built on the momentum of OWS’ cries of dissatisfaction and disaffection in a world gone not right. The rich are getting disproportionally richer while the middle and low incomers are given a raw deal with growing FTAs and globalization.

That message could only have been heard with a true democracy in action.

So, despite leading humanity’s progress with innovations, the Brits and Americans are telling their ruling elites – and the world – STOP!

Why? Meritocracy, perhaps?

MERITOCRACY
Meritocracy emerged with China’s system of government in 6th century BC. Whilst some form of meritocracy was practised in government appointments in US from 1883, modern 20th-century meritocracy was signposted by Michael Young who coined the term.

With meritocracy widely practised in government, business and academia particularly in the last 50 years, the meritocratic elites running the show are quick to claim credit for the good in today’s world while disclaiming any responsibility for the ills or malfunctions therefrom. They either tacitly or ostentatiously assert that “all those not on TV only have themselves to blame”. Should that surprise us?

Chris Hayes, in “Twilight of The Elites – America After Meritocracy”, observes how meritocracy over the decades in America is failing her people:-

  • Institutions designed to reward merit are being gamed by the privileged, who create a self-perpetuating elite. The most familiar example concerns admission to prestigious schools via admissions tests…a level playing field. (But) thanks to test prep, the rich get lots of time to practice on it, while even smart poor kids don’t.
  • More broadly, inequality begets more inequality. “Those who climb up the ladder will always find a way to pull it up after them, or to selectively lower it down to allow their friends, allies and kin to scramble up.” Thus the astonishingly outsized gains seen at the very top of American society.
  • The intense competition inherent in meritocracy creates powerful incentives to cheat, and encourages the attitude that whatever you do in pursuit of dominance is fine as long as you profit or win. (Hence) Enron traders who broke the law weren’t punished if they were making money. And in Major League Baseball, everyone pretended that steroids weren’t around.
  • When elites break the rules they aren’t punished like regular people. They’re bailed out of trouble, or spared criminal prosecution for their lawlessness.
  • There is too much social distance separating the people in charge with the folks subject to their decisions. Thus (meritocracy produced) Catholic bishops who sympathized more with molesting priests than their victims, Senators who send men from a class they rarely encounter to fight the wars they approve, and the disaster planners who couldn’t conceive of how the timing of Hurricane Katrina at the end of the month would affect the ability of poor residents to evacuate.(The above abridged summary is from The Atlantic. Sounds familiar to the Singapore story?)

Meritocracy, at its most basic, believes it can and seeks to rank “intelligent people in order from most to least smart, and that the right person for a job is always the one deemed smartest.” But Hayes argues that “while smartness is necessary for competent elites, it is far from sufficient: wisdom, judgment, empathy, and ethical rigor are all as important, even if those traits are far less valued.”

Hence, we see the elites’ solutions to the 2008 financial crisis producing outcomes mostly favouring the elites’ own and their cheque-writers – never mind that none of those responsible for the crisis were “bailed out or spared criminal prosecution for their lawlessness.

CONCLUSION
Puttng together Kornai’s, Piketty’s and Hayes’ key observations, we get the picture of a world created by the meritocratic elites who have “grabbed all they can, canned all they grabbed, sat on the can” and for those not on TV, well, in Singapore lingo, “you die your business”.

With capitalism globalized, other than fresh oxygen in shorter supply, almost everything else is in surplus capacity and supply. Yet, Mr Everyman v.2016 is struggling to meet mortgage payments, banks circle like vultures ever ready to pounce on repossession while the threat of losing his job hangs over him like a cold dark cloud that he can never rise above.

So, in effect, the less rich British and Americans gifted us Brexit and Trump.

I support Brexit and Trump’s election also because both countries probably have the best institutional checks and balances in place such that doomsday scenarios of detractors will be just that, scenarios. Both, too, have the people in place to force a more meaningful discussion to address and redress the excesses of meritocracy and capitalism.

But while I think that Brexit and Trump bring us to a crossroad, that merely gives us pause to join in the needed conversation. Changes will be small, slow, sashaying and slaloming.

Still, it’s an opportunity.

So, raise your countenance. Speak up – right here in Singapore! Vote wisely the next GE.

No, take a stand at the next Presidential Election 2017.

Law Kim Hwee

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Ministerial Promotions: What Lee Kuan Yew Preached vs How Lee Hsien Loong Practises

I never cease to be amazed at how fast novice PAP MPs are appointed ministers and their promotions confirmed. A whatsapp message sums it up, ‘Do nothing and can get promotion. I oso want .’

PAP’s leadership renewal is conspicuously planned so ‘that Singapore…continue to have honest and capable leaders’ (Lee Hsien Loong) or ‘the best people in government’ (Goh Chok Tong). Or leaders who will not ‘succumb to corruption’ (LKY).

Carrie Gracie, BBC, reports, ‘to steel its…members against temptation‘ or corruption, Xi JinPing (by LKY’s assessment, ‘a man of great breathe…in the Nelson Mandela class of persons‘) started revolutionary tours for its key cadres. The PAP, however, prefer a shortcut, paying the highest salaries of any government worldwide.

Here’s how LKY sold to Singaporeans the key intent for the high salaries:

So it was an unending quest for the right man to put in the job. It takes years for a person to be tried and tested as a minister, and to develop the judgement and touch……

Let me point out how long it takes to get a MP to learn to be a minister and have the public recognise him as such, especially when he is not a natural crowd puller or a mobiliser. There are two kinds…of ministers in Singapore – the doer and the mobiliser…..

People need time to gauge and assess who has what qualities and is best suited for what jobs that can make Singapore grow and thrive…..LKY, 30/6/2000, Parliament

How do fresh-face Ong & Ng along with Chan Chun Sing and Tan Chuan-Jin – all entered parliament under the coattails GRC system, without ever having to fight man-to-man for their seats, let alone suitability for high office – measure up under LKY’s need for developing time-tested, ‘people-gauged/assessed’ ministers?

Well, someone who had a ringside view already drew a conclusion about the effectiveness of high pay policy.

“…it started going downhill when we started to raise ministers’ salaries, not even pegging them to the national salary but aligning them with the top 10…” Ngiam Tong Dow, ex-civil servant.

Let’s not take Ngiam’s word for it. Let’s look closer at the evidence before us.

Chan Chun Sing
Can anyone name one policy that Chan enacted in all the 4 ministries he helmed since May 2011, namely; Community Development, Youth & Sports, Defence (2nd minister), Social and Family Development, sec-gen of NTUC & minister in PMO that has had a measurable positive impact on our lives?

To be fair, my search into the current article making the rounds about ‘105,000 households get little food’ finds no such study. The ‘105,000 households earning S$1500/month’ is taken from Singstats’ ‘Key Household Income Trends 2012’ but not linked to they ‘getting little food’.

Be that as it may, Chan’s catchy ‘kuih lapis’ policy of tackling poverty has been 3 years in its execution (since Nov 2013).

The result? No one knows. No one knows because despite the government’s complete access to data plain refuses to publicly engage us, feigning ignorance. Or is it because the results do not measure up to expectations?

Truth is, Chan’s boss set no quantifiable goals to speak of in the first place.

Nonetheless, Chan keeps ascending the cabinet ladder – without any measurable achievements to show for.

Tan Chuan-Jin
Same question. What’s one policy that Tan enacted or helped implement since making minister at MOM and, currently, Ministry of Social & Family Development?

As manpower minister, Tan gave us the Fair Consideration Framework (FCF) (公平考量框架). Anyone remember what the FCF is about? If you have the time, read link.

Any quantifiable outcomes since implementing FCF and JobsBank in Aug 2014 with much fanfare? Yes! an increase in PMETs unemployed and for longer periods, too – while evermore foreigners slipped through on EP & S-Passes!

It’s gotten so bad that in a recent 3-4 days, 4 ministers, PM Lee included, came out to loud-speak that there are 70,000 vacancies with 30,000 more in healthcare alone in the next 5 years. And PM’s lame ‘we are pursuing all the right strategies, and I am confident that, given time, they will work’.

Similarly, Tan’s boss set no numbers for him to be gauged/assessed under the FCF. After spending 369 days at MOM and pocketing S$1.3mil, he moves to a new ministry – all without having any measurable achievements to show for.

Ong Ye Kung
Same question, any policy or change he enacted as education minister since 1 Oct 2015 to show for?

The man makes grand-sounding speeches. His maiden parliamentary speech is about ‘faster legs, stronger hearts, wiser minds‘. He secured that speaking opportunity only because he couldn’t get into parliament against the Workers’ Party in Aljunied and had to be sundered therefrom to another safer PAP GRC. Ong slipped into parliament under Shanmugan’s coattail.

How does his speech meet LKY’s “do not try to impress by big words – impress by the clarity of your ideas. Then I am impressed”?

His speech is long on the big markets of China, India and Africa but short on originality and practicality. He proclaims, ‘Today China drives the value chain. We must look at China now as a tremendous business and consumer market, and learn to tap into it.’

Yeah, sure.

I knew that from visiting China in 1996. Tried to interest my Swiss bosses, subsequently, my Dutch ones to invest in a production plant (both no go), then ‘downgraded’ to a more palatable central warehouse (succeeded). Workable, specific ideas. Not the hifalutin strategy spout by a still wet-behind-the-ear acting minister. Judging by the wrath we now face from China re the South China Sea, was his boss listening?

So, what did Ong achieve (not merely do) in measurable KPIs the 395 days he ‘acted’ as education minister (high edu & skills) with his S$1.3mil pay?

Ng Chee Meng
Final same question, any single policy or change he enacted as education minister (schools) since 1 Oct 2015?

Zilch.

As a father of 2 sons, I couldn’t fathom the pathetic parliamentary statement he made to explain young Benjamin Lim’s death after his police interrogation. What if it had happened to one of his own daughters?

Ng took the same chicken parliamentary route as all his other ministerial-material 4G colleagues, behind the coattail of another minister. I often wonder what other ASEAN ministers and MPs think about him – and of Singapore. Here, Singapore’s Chief of Defence Force, a lieutenant-general who boasted about the SAF’s ‘one-shot-one-kill’ capability but too chicken to battle one-on-one with an opposition candidate! Then after 395 days of speeches, his boss made him full minister!

But Singaporeans should be even more worried: Ng batted not an eyelid when he claimed his entering politics is ‘giving back to society’, paying back his ‘indebtedness’.

Yeah, sure.

Giving back to society = giving up S$300k-S$400k SAF job and taking up PAP-guaranteed’s 3-4X higher S$1.3 mil minister’s salary apid by taxpayers? Perhaps, we peasants understand not the math behind the brains of a president scholar and top general. But he’s setting a fine example on how to give back to society for our youth, indeed.

So, what did Ng achieve (not merely do) in measurable KPIs the 395 days he ‘acted’ as education minister (schools) on his S$1.3mil pay (excl bonus)?

Conclusion
Have Singaporeans been given the time to gauge, assess Ah Chan, Ah Tan, Ah Ong & Ah Ng against LKY’s time-testing aim, ‘it takes years for a person to be tried and tested as a minister…people need time to gauge and assess who has what qualities and is best suited for what jobs that can make Singapore grow and thrive’?

Did PM Lee do a thorough job assessing, gauging them – against LKY’s timeline and standards?

Rather obvious, isn’t it?

Sadly, we observe a pattern of leadership behaviour, a habit; the love for shortcuts, taking the easy, fastest way out. Refusing to grow our own timber. With GDP, PM Lee is addicted to the shortcut of importing Foreign Talents (carrying on from Goh Chok Tong’s legacy) and adding labour instead of being a doer or a mobilizer to convince, coerce our local SMEs – and our GLCs+TLCs – to increase productivity the last 20, 30 years.

Likewise, instead of fulfilling his promise of ‘leadership succession will be one of my top priorities‘ when swearing in as PM#3 on 13/8/2004, he’s rushing a shortcut to give the false impression of offering enough candidates to succeed him. He’s denied others even half the 20-year apprenticeship he enjoyed.

But even more worrisome is a trend shaping up underneath the surface of these fast-track, undeserved promotions. If the 4 ministers’ career trajectories are an indication, then Singaporeans must begin to be afraid. Be very afraid.

It may mean that the high salary system that LKY has instituted are attracting unproven politicians who are guaranteed salary increases of up to 4 times or more of their last drawn salary. Singaporeans already have a taste of something similar at NOL, SMRT, Singapore Police, LTA, Temasek Holdings etc.

Beside the salary, it’s a surefire career choice where your promotion is guaranteed without the need to show measurable KPIs.

Even more, it’s an iron-rice-bowl job – doesn’t matter if a world’s most dangerous terrorist escape or 8 Singaporeans die illegally of Hep C infection under your watch, your job is secured and salary intact!

All you need is unfailing party loyalty.

Is Samuel Huntington right after all, “The honesty and efficiency that Senior Minister Lee has brought to Singapore are likely to follow him to his grave“? We may not perceive that yet, being too close to the unfolding but very subtle deterioration.

Or will LKY have the last word?

Time will prove that I am right that Ministers should be paid 2/3 of their private sector counterparts’ salaries of two years ago. This is the way to ensure that our government and system stay clean and honest, with able and dedicated men, who can stay in office for several terms…..

If salaries pegged to the market do not work, then not much will be lost, except a few million dollars. Singapore can always go back to the old system of paying Ministers much lower than the market rate, and hoping for the best.” LKY. 19 July 96

…but only if Singaporeans heed his advice to jettison the system. Regardless, don’t hold your breath. 69.9% voters (now, minus Dr Lee Wei Lin) think things are honky dory under PAP & Lee Hsien Loong.

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If you happen to be one of the children of any of the 4 ministers reading this, please ask your pa if he ever search his heart as each day departs.

Law Kim Hwee