The Great Illusion

Paul Krugman

So far, the international economic consequences of the war in the Caucasus have been fairly minor, despite Georgia’s role as a major corridor for oil shipments. But as I was reading the latest bad news, I found myself wondering whether this war is an omen — a sign that the second great age of globalization may share the fate of the first.

If you’re wondering what I’m talking about, here’s what you need to know: our grandfathers lived in a world of largely self-sufficient, inward-looking national economies — but our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment, a world destroyed by nationalism.

Writing in 1919, the great British economist John Maynard Keynes described the world economy as it was on the eve of World War I. “The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth ... he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world.”

And Keynes’s Londoner “regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement ... The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion ... appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.”

But then came three decades of war, revolution, political instability, depression and more war. By the end of World War II, the world was fragmented economically as well as politically. And it took a couple of generations to put it back together.

So, can things fall apart again? Yes, they can.

Consider how things have played out in the current food crisis. For years we were told that self-sufficiency was an outmoded concept, and that it was safe to rely on world markets for food supplies. But when the prices of wheat, rice and corn soared, Keynes’s “projects and politics” of “restrictions and exclusion” made a comeback: many governments rushed to protect domestic consumers by banning or limiting exports, leaving food-importing countries in dire straits.

And now comes “militarism and imperialism.” By itself, as I said, the war in Georgia isn’t that big a deal economically. But it does mark the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization.

Most obviously, Europe’s dependence on Russian energy, especially natural gas, now looks very dangerous — more dangerous, arguably, than its dependence on Middle Eastern oil. After all, Russia has already used gas as a weapon: in 2006, it cut off supplies to Ukraine amid a dispute over prices.

And if Russia is willing and able to use force to assert control over its self-declared sphere of influence, won’t others do the same? Just think about the global economic disruption that would follow if China — which is about to surpass the United States as the world’s largest manufacturing nation — were to forcibly assert its claim to Taiwan.

Some analysts tell us not to worry: global economic integration itself protects us against war, they argue, because successful trading economies won’t risk their prosperity by engaging in military adventurism. But this, too, raises unpleasant historical memories.

Shortly before World War I another British author, Norman Angell, published a famous book titled “The Great Illusion,” in which he argued that war had become obsolete, that in the modern industrial era even military victors lose far more than they gain. He was right — but wars kept happening anyway.

So are the foundations of the second global economy any more solid than those of the first? In some ways, yes. For example, war among the nations of Western Europe really does seem inconceivable now, not so much because of economic ties as because of shared democratic values.

Much of the world, however, including nations that play a key role in the global economy, doesn’t share those values. Most of us have proceeded on the belief that, at least as far as economics goes, this doesn’t matter — that we can count on world trade continuing to flow freely simply because it’s so profitable. But that’s not a safe assumption.

Angell was right to describe the belief that conquest pays as a great illusion. But the belief that economic rationality always prevents war is an equally great illusion. And today’s high degree of global economic interdependence, which can be sustained only if all major governments act sensibly, is more fragile than we imagine.

My Singapore News: Mr Redbean

The perpetual strawman for whacking

‘Only US can balance China’, why not ‘Only China can balance the US?’ Why is it necessary to keep the Americans interested in the Western Pacific to balance the influence of China and not keeping the Chinese interested to balance the influence of America?

The inherent biased of a WOG or a western biased viewpoint of international balance of power is obvious. China is the perpetual strawman for whacking.

‘You can take Japan, Korea, Asean, and even include Taiwan and India, but you cannot balance China. It is too big. Only with the US and its superior technology can you balance China.’ Why not, ‘You can take Japan, Korea, Asean, and even include Taiwan and India, but you cannot balance the US. It is too big. Only with China and its superior technology can you balance the US?’

This western view has always placed China as the rogue nation, or the nation that is dangerous and all out to bully the smaller nations. In reality, the rogue nation is always the US. Look at the wars and the bullying of smaller nations across the world map. Who is bullying the smaller countries?

But if one eats too many hamburgers and potatoes, one’s is gonna look at China like a potato or a hamburger, or think like a potato or hamburger.

Comment from a reader:

its not entirely true Mr Red bean.

Moving into the 21th century, the lines between nation states are not quite as stark as compared to the cold war era. To keep a complex story short, it is about a faction of the USA against another faction of the Chinese communist, with lots of sub-plot and self-interest thrown in, messy stuff. These factions may not speak for the whole country, therefore citizens of either one. Governments of the 21th century see a weakening of their power vis a vis the super wealthy elites, aka The real players behind the scene. They move governments! Scary.

My take is that China do not need to fight America...all they need to do is just cultivate the super rich Americans and they will eventually betray their own country and countrymen so as to preserved their wealth due to greed and align themselves with the right wing super rich of the chinese elite, and this in turn works for the interest of the chinese communist party. America will implode from within. Sad.

You know, we can say all the "bad things" about the western imperialist but the west was "naive" enough to believe in highfalutin ideals like democracy, one-man-one-vote, human rights, the rule of law, blah blah blah. Also, the fact that the western general public can move their government in a legit kind of way without having run over by T-72s speaks volume of the power balance equation, still giving a ray of hope in a rather pessimistic take of the 21th century.

Singapore - for a tiny red dot, we are at ground zero.

30 May 2011

真真假假, 假假真真

Ahmad in Taiwan: China misread Singapore model ( ? )

The original article can be found here

Retuning to Beijing from Singapore to observe the 2011 General Election, Chinese political academic Li Fan remarked: "The Chinese government's interpretation of the "Singapore model" (of governance) is wrong, they only see the surface and are ignorant of the fact that Singapore law also controls their ministers, allowing civil rights, and the right to form parties, including opposition parties."

Specializing in "election studies", Li Fan also found a mirror of reflection for China. The Director of the World and China Institute (WCI) made a trip from Beijing to Singapore specifically to observe the elections. He spent nine days in Singapore observing and comparing the election process to that in China.

On May 10, just before boarding the flight back to Beijing, he told Asia Weekly excitedly:

"I recognized that these Singapore elections will be especially important, and sensed that historic changes will take place. As an academic who studies China elections, I felt I should be part of the Singapore elections. And as expected, breakthrough changes did in fact take place, this trip was worth every cent."

For the past number of years, China has sent batch after batch of officials and academics to Singapore to observe and learn the "Singapore model" of governance. Li Fan explained that in the eyes of the Chinese government, the "Singapore model" meant continual economic development in a ideally harmonious society where the citizens could live in safety and find enjoyment in work; a clean government free of greed and corruption; no democracy where the ruling party rules with a monopoly on power, with the opposition never winning over governance of the country; Singapore's laws have effectively controlled society, and create an obedient populace.

China's leaders have taken a seemingly logical stance: "Look, it doesn't matter if a country has no democracy, so long as there is a comprehensive framework of law to control society, and control it with an iron fist. As long as the government is clean and there is continuous economic growth, the people will be happy, and it wouldn't matter if there is democracy or not".

Li Fan pointed out that besides the features pointed out above, the Chinese government has ignored an important aspect of the "Singapore model", where Singaporeans enjoy the basic civil rights, and have the right to form political parties and societies, including opposition parties. The Chinese don't understand that Singapore has so many opposition parties, where China has none. Singaporeans have the right of conscience, although it cannot be denied that the Singapore government still welds strict control over the media, its laws are not as the Chinese government sees it as only controlling the citizens, it also severely restricts its own officials. The very fact that the opposition could have this breakthrough, is due to the election rules which makes it hard for the incumbent to play dirty. The Chinese Communist Party's interpretation of the "Singapore model" is wrong.

Li Fan said: "(For China) to really learn from Singapore, the first thing is to give the citizens basic civil rights. China does not have the right to vote, freedom to form political parties, nor freedom of speech. Fortunately we still have the Internet in China, but it is not as free and open as that in Singapore. Although Singapore is lacking in democracy, society does not go into chaos even though the incumbent party has been ruling for so long, because the people have these basic civil rights."

Academics from China coming to Singapore to observe the elections include those from the Shanghai East China University of Political Science and Law, Shenzhen University Singapore Research Centre, and Shenzhen University School of Management, mostly by invitation of the NUS East Asian Institute. Some of the Chinese mainstream media, like the Nan Feng Chuang and China News, have also sent correspondents to Singapore for coverage. The following is an excerpt of Asia Weekly's interview with Li Fan:

After observing the most hotly-contested election in Singapore since independence, could you give us a summary of the main points of this election based on your observations?

I will summarize it in two main points. The first is the election breakthrough. The PAP have blocked the opposition from entering parliament for a long time, and the opposition parties have organized themselves very successfully in this election to achieve an important breakthrough with the Worker's Party winning a historical record of six seats.

A GRC requires that candidates form a group to contest a large constituency where winner takes all. The opposition Worker's Party consolidated their star candidates into one team with Secretary General Low Thia Kiang at the helm and won the Aljunied GRC. Since the introduction of the GRC system since 1998, this is the first time the opposition has won a GRC, and handed heavy losses to the PAP. Three ministers were unseated as a result of the loss of one constituency, which included Foreign Minister George Yeo.

But most importantly, one of the ruling party's young candidates who was slated to be a 4G future leader, also lost the election. To the ruling party, this must be the biggest loss of all. For decades, the opposition has finally made a breakthrough, and this is obvious for all to see.

And your second point?

The second point is very important, and is my personal observation. Singapore has made a great leap forward in terms of freedom, and at the core of it is the elevation of civil rights. I've attended multiple opposition rallies, and they constantly encourage the voters to vote bravely and not be afraid.

The voters were quite worried in the beginning, because the government made some changes in the election system for this election and added serial numbers to the voting slips. Actually, this change prevents election rigging and election fraud. But because there was a serial number there, voters were afraid that the government would be able to know who they voted for and give trouble to them. From an elections angle, the serial number is actually a good thing for the opposition. The opposition has also explained this, but there are still many voters who are worried. But the final results showed that voters still dared to exercise their rightful vote.

What is the significance of this?

The significance of this, is that people do not care about the repercussions (of voting opposition) any longer. Therefore, elections and the improvement of human rights goes hand-in- hand: human rights pushes elections forwards, and elections in turn enhances human rights. Overall, this gives more freedom to the people, and this is a major trend where democracy and human rights in Singapore move forward interchangeably.

What lessons will these Singapore elections bring to China?

In these Singapore elections, I've often heard the opposition say that they want to let the citizens voice be heard, and allow ordinary citizens to participate in policy making. If China wants to learn from the real Singapore, it should guarantee the basic rights of its citizens, then push for the development of democracy. This is the first point. Secondly, in the course of the elections, the ruling party expressed a wish to become more open and reform itself. It initiated changes to the elections system half a year ago, redrew the SMCs and GRCs, added serial numbers to the voting slip, and introduced a "Cooling Off Day" before Polling Day. These measures helped the opposition to win seats in the election. An example, besides the 87 parliamentary seats, there were a total of NCMP seats reserved, up from three previously, where the best losers from the opposition could enter parliament, albeit without voting rights.

Ruling party initiates reforms

Actually, this tells voters that the changes in the election system is advantageous to the opposition, and were initiated by the ruling party in order to better gauge voter sentiment. During the hustings, Lee Hsien Loong said that his father Lee Kuan Yew should keep his mouth shut, these incidents have allowed the opposition to make a historical breakthrough, and has major significance to China. Singapore can read change in the ground and hope itself up to reform and respond to the dissent in its citizens. If China is to move forward, it must do the same as well.

You mentioned Prime Minister Lee Hsien Loong. What is your impression of him?

Lee Hsien Loong is an exceptional man, who is brave enough to apologize to voters for things that had gone wrong. Since when has the PAP openly apologized for anything? How can the Communist Party of China possibly say "Sorry" to its citizens? Lee Hsien Loong reiterated that this election is a watershed for Singapore, and marks a point where politics in Singapore will enter a new age.

How did the Singapore media fare in these elections?

The Singapore media played a big role in allowing the opposition to score a breakthrough. In the past, the media only reported on the ruling party's views, and even though a large part of media coverage still centered on the ruling party, it started to report on the opposition in a large way. Also the effect of new media, the Internet, Facebook and Twitter, which the ruling party could not control, the majority of young people on the Internet supported the opposition.

In summary, how will these elections inspire China?

For China, firstly, the government must have an open attitude and allow citizens to have dissenting voices. In this modern age, it is impossible for the government to totally control society and its citizens, so it is better to maintain an open attitude. As Premier Wen Jia Bao recently said, "We must create the conditions to allow ordinary citizens to criticize the government."

Secondly, I believe the best way is to enter parliament to express dissent. The Singapore opposition only could criticize the government outside the system before, and finally have the chance to do so in within the system. The government should now be aware that if you let the populace scold you outside the system long enough, they will topple you one day when push comes to shove. '

Thirdly, give the citizens more civil rights, and allow them to organize themselves.

Fourthly, I hope the Chinese government will keep an open attitude towards the upcoming grassroots level elections, and allow grassroots voters to stand up and voice their real concerns. In the long run, China should concentrate on developing a civil society, and expand civil rights.

Also read - Diaspora And Development: A Chinese Take On Singapore

"... If a Chinese mainlander asks a Singaporean of ethnic Chinese descent “where are you from?” he is likely to hear: “Singapore.” Only then will the Singaporean explain – in a whisper – that his or her ancestors were from Chaozhou, Shantou, or Taisan. This is normal. What isn’t normal are those Chinese who have forgotten the fact that ethnically Chinese people in independent states are above all foreign citizens. For those foreigners, being Chinese is secondary. This is the key point that ought to be remembered in order to avoid potentially serious misunderstandings. It is certainly something China needs to take into account in terms of how it perceives Lee Kuan Yew in particular and Singapore in general. ..."

To a Chinese (from China) - i hope now you understand, we (chinese in Singapore) are NOT chinese !

To a Chinese Singaporean - i hope you see yourself as a Singaporean, with roots in Nanyang, rather than looking towards China (since all the talk is about a rising China) for allegiance.

23 may 2011

i am a commi bastard !

by Diary of a Singaporean Mind:

US National Debt : A lesson for all nations

Today the American Congress is debating whether to raise the debt ceiling of $14.294 trillion so that the govt can continue to spend. Not raising the debt ceiling will result in a payment default that will send, the US economy & govt straight into another crisis. So there is little choice but to raise the debt ceiling, borrow more money and "kick the can" further down the road.

I once had a conversation with an American who was furious at his govt for the national debt and he felt strongly that his govt should be forced to default on that debt and be taught a lesson on prudence. That was 1994! 17 years later the debt is even bigger and a default would be instant disaster because it will plunge the global economy into a crisis that will perhaps take decades to get out of.

Many people have the misconception that Western govts get into this type of trouble overspending on welfare. This is not true. The US national debt fell steadily until Ronald Regean became president. He cut welfare spending, increased military spending and cut taxes. His deputy George Bush senior and his son continued the tradition piling up more national debt and fighting wars in the middle east. In the 80s, when the national debt was low, the US had what many saw as an overly generous welfare system. One of Regean's achievement was to slaughter the "welfare queen"[Link] the sterotype of a lazy woman who did not work and lived on govt handouts. Research later showed the "welfare queen" was a myth[Link]. Regean proceeded to put US into a path of large budget deficits by spending on the military after cutting taxes. A one point, Regean decided cut govt funding for mental institutes  [Link] saying it was not the state responsibility to take care of these people sending thousands of mentally unsound individuals onto the streets. Whatever he saved by cutting welfare program, he spent on the military - he would later claim victory for the Cold War saying the Soviet Union bankrupted itself trying to keep up with the US in military spending. This again proved to be another myth [Link] and Gorbachev explained that the inefficiency in the Soviet economic system was what did them in not the Cold War.

Recently, the US debt ballooned due to the need to rescue the financial system with bailouts and the US economy had to be revived with massive govt spending. During the financial crisis, people like Jim Rogers suggested allowing the system to fail. reset the financial system and rebuild it to fix all the problems. That was not do-able politically as there would be too much pain for the populace to take in a major disruption of the system.

Today for every dollar the US govt spends, 40 cents is used to service its debts.[Link].

What got the US govt into this situation is not welfare spending but tax cuts, military spending and bankers who created the financial crisis.

Beware of govts that exercise extreme parsimony in social spending but love tax cuts, military spending and deregulating the activities of banks. You have to ask whether a govt that debate vigorously for a $1 per day increase in assistance should also have its defense budget scrutinised because a weak social infrastructure will make us just as vulnerable because we are counting on ordinary men to be willing to die for their country in battle.

They call me a commi bastard !?

17 May 2011

The Ties That Bind

by Chen Show Mao

There was an Al Jazeera video on the subject of Chinese Muslims posted on theonlinecitizen, a popular Singapore website.  One of its readers complained that the subject had no relevance for Singaporeans.

I feel differently.

To me one of Singapore's defining traits is its multi-culturalism.  It is an article of faith.  Indeed when Singaporeans give vent to their resentments of those newly among us, the complaint is often that the newcomers speak no English and keep to themselves.  In other words, they are not "multi-cultural" like us -- not Singaporean enough.  A Malay friend mentioned how he felt a stranger among the new Chinese immigrants in his HDB estate, who form a tight group among themselves and speak a different language.  All I could think of at the time was to remind him that it may well be part of the Singapore condition ("My neighbor is another language" -- Edwin Thumboo).

I wonder if my friend knows that China has a long history of engagement with Islam, which is welcome by Muslims inside and outside the country.  By some accounts the first Muslim envoy to China, led by Sa'dd ibn Abi Waqqas, the maternal uncle of the Prophet Mohammad, was received in 651A.D. by the emperor Gaozong of the Tang dynasty, who ordered the construction of a memorial mosque in Canton.  According to the Arab historian Tabari (deceased 923 A.D.),  al-Mansur (754-775 A.D.), the second of the Abbasid caliphs, had declared that in laying the foundations of Baghdad by the Tigris "there is no obstacle between us and China.  Everything on the sea can come to us."

Contributions by Chinese Muslims are felt everywhere in China, and as far as Singapore.  The first governor of the province of Yunnan, the first designer of the city that would be Beijing, eminent scholars of astronomy and mathematics,  important officials of finance and tax...  The Ming dynasty fleet that brought the first Chinese settlors to Malacca and visited Sumatra, Java and in all likelihood Singapore in the early fifteenth century was commanded by a Chinese Muslim, Hajji Mahmud Shams, better known as Admiral Cheng Ho, or Zheng He.  Nearer our own time, Baiderluden Omar, better known as General Bai Chongxi, was widely regarded as the best strategist in the Chinese army during the second world war.  And closer to home,  Mrs Chen was raised by her maternal grandmother in a Muslim household.

I will console my friend as follows.  This strange tongue that you sometimes hear around you, that makes you feel that part of your house is not your home, should remind you of the kind of people we are.  It celebrates what is best about us.  And though at first it may sound jarring, I hope you will not feel as estranged knowing that Allah is also praised and worshipped in this language.

09 May 2011