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Wednesday, May 15, 2013

Relating Bread Dough and Government Policy

WHEN Singapore became self- governing in 1959, the prevailing ideas of the British left influenced us. Both Dr Goh Keng Swee and Mr S. Rajaratnam had spent time in London and believed that all citizens should be given an "equal opportunity". Fortunately, to defeat the communists, the government demonstrated that it could be better at providing water pipes, health clinics, schools and public housing to improve the lives of the people at the very bottom. This deep and profound concern for the people at the very bottom reflected both an internal political imperative to "win the ground" as well as [a strong belief] that the best societies were those that helped the poor.

Then came the Reagan-Thatcher revolution. Both Reagan and Thatcher believed that policy should not favour the poor. Policy should communicate to the poor that the onus was upon them to make something of their lives. Those with the strength of spirit to pull themselves out of their circumstances prospered. Those without the same spirit did not prosper. As the prosperous prospered, the disadvantaged would be helped to prosper because...

(1) the disadvantaged knew that they could not free load... and therefore they were compelled to work harder

(2) the prosperous created jobs and provided leadership to the disadvantaged

... the Reagan-Thatcher revolution had convinced economists all over the world that [such government policies] would lift all boats. In short, when the rich got richer, the poor would get richer too. There can be absolutely no doubt that the bold economic reforms of then-Chinese premier Zhu Rongji and his team lifted hundreds of millions out of poverty in China. The same was equally true in India.

We now live in a time where it is becoming increasingly clear that the Reagan-Thatcher revolution has gone too far.... both the US and China face strong challenges of rising inequality. This global trend towards rising inequality has also swept Singapore... In the 1990s, we believed that all Singaporeans would benefit from [Reagan-Thatcherism]. In the 2010s, we know that this has not happened. 

Contrary to what the proponents of such [lift all boats policies] suggested, growth in the last decade has made Singapore more unequal. Hence, the time has come for all Singaporean policymakers to ask themselves a simple question: how many of the assumptions in our minds are still influenced by the Reagan-Thatcher revolution? And if we find some, how do we scrub them out?


The words in brown italics above were penned by Kishore Mahbubani here. I replaced some of his words and added a paragraph of my own in black non-italics above. Kishore Mahbubani is gently critiquing the wisdom of the Reagan-Thatcher mentality which Singaporean policy makers have adopted for 2 decades. I don't understand that many anti-establishment types have flamed the man for the piece he wrote.

In the above brown italics, I rather thought Kishore Mahbubani wrote on the side of many anti-establishment types. He certainly wasn't defending government policy makers. Instead, he was asking some hard questions to get them to think.

The Reagan-Thatcher mentality has been on my mind ever since I read about the champagne parties and fireworks celebrating the death of Margaret Thatcher. She was hated by those disadvantaged that she had refused to help. For Margaret Thatcher, if you were an inefficient industry you didn't deserve to survive. So die! If you were not willing to wrestle life and help yourself out of your poverty, then you deserved to starve. So starve! Yet Margaret Thatcher was loved by those who saw Britain attain greatness again... where industries had to shape up or die... where the whole country worked harder and got better.

So when I read Kishore Mahbubani's words above, it was as if something in my head clicked into place ... and I suddenly thought of ... the humble...

Bread Dough

Reagan-Thatcher type policies lift the top of the bread dough (or society). If the gluten is strong and well-formed (i.e., the society is cohesive) then the Reagan-Thatcher type policies lift top people who will in turn pull the bottom people up as well (via job creation... leadership... community outreach).

However, as seconds and minutes tick past (or years and decades flow past), the bottom dough is heavy and drops downwards by force of gravity. Over time, the gap widens between top dough (top echelons of society) and bottom dough (bottom echelons of society)... and if we wait longer, the top and bottom will separate into 2 different blobs of dough (communities). Such communities talk different, walk different and think different... but they're supposed to be the same country. The best example of such stark separations would be the aristocrat VS commoner distinction that lead to massive and violent populist revolutions in Russia and France. Another example is found in the different strata of people found in India today.

To prevent the separation from happening, the Reagan-Thatcher type policies need to be paired with policies that support the bottom dough (bottom echelons of society). In this way, the dough (country) stays together. See in the picture above the hand supporting the bottom of the dough.

For Reagan-Thatcher type policies to work (i.e., the top will also lift the bottom), the social fabric of the country (the gluten of the bread dough) must be strong. In the picture above, the gluten is barely formed. If you use the spoon to lift the top of the dough, the top dough will separate itself from the rest of the bottom dough ... fly up and prosper ... but the rest of the dough will stay resolutely at the bottom of the bowl.

The massive influx of people in recent years has turned Singapore back into a meeting place of peoples... not a country that shares a common set of values and vision. As much as LKY and his team forged a nation out of peoples, the past decade has seen this nation become a gathering of peoples again. With such a weak social fabric, lifting the top won't lift the bottom.

Those lucky enough to get the best education (in GEP and IP and whatnot) will earn themselves a better life. They will not help the bottom peoples because they have no ties... nothing to bind them to the bottom.

It does seem then that the Reagan-Thatcher ideology is useful and appropriate only when there...
(1) is a strong social fabric
(2) are concurrent attempts to lift the bottom

It would be a mistake to think that the Reagan-Thatcher ideology should be completely scrubbed out. If we do so, we would toggle to another extreme where there is no pull at the top. For the whole country to move forwards as a single entity, we need some bit of the Reagan-Thatcher ideology AND the push to the bottom as well. We need BOTH the pull at the top and the push at the bottom.

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