Is there real wealth or just fake “wealth” in Singapore?

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Can Singapore Survive well beyond the 21st century?

America is just barely clinging on to the pole position of the wealthiest and technological advanced country in the world, but if history is any guide China may well surpass her very soon. The rot is beginning to show; both the US and the EU are finding it harder to script the narrative of how they would like to see the world – in short, their influence is frittering away in the way camphor gives itself slowly to the atmosphere.

I can go on and on for 10 pages and still not scratch the surface of the veneer what may possibly account for this lamentable state of affairs.

But don’t get me wrong; I am not saying Europe and North America who still produce two-thirds of the world’s GDP, spend more than two-thirds of its R&D dollars, and own almost all the nuclear weapons on this planet are going to go back to the cottage industry and a diet of mud cakes. Only when we talk about power in the context of geo-politics which equates to the capacity to influence and shape events; these days both the US and EU look like ships marooned in the Saharan desert. Recently when President Obama—leader of the richest, most inventive, and best-armed country in history—visited Seoul he could not even convince the leaders of the 19 next-biggest economies to follow his plans for global finance. They just cold shouldered him – that’s how bad things have got. 

This should prompt us to ask how did a country like the US which was once the creche of the American dream end up as a glorified bag man pushing a trolley full of knick knacks?

There is no shortage of theories – why or how the shift in power migrated from West to East, blaming everyone from incompetent politicians, partisan politics, lack of moral rectitude to even malevolent currency manipulators. But the real explanation goes much deeper – it all boils down to plain and simple arrogance. 
                
Winston Churchill once famously said,

“The farther backward you can look, the farther forward you are likely to see.”

To paraphrase, history repeats itself. To make sense of the forces that continues to shape our world, we have to look deeper into the past and winnow out the lessons of how arrogance can even be an undoing of nations. When we do this, the first thing that reveals itself is we begin to see that the upheavals of our own age are ongoing phases that has coursed throughout history – to the perceptive reader; when I use the term “arrogance” here, it goes beyond just the dictionary meaning of the word – when a word is deployed in this context, it encapsulates a whole range of motifs ambivalence towards the poor; a calcified mentality that is so set in its ways, that it can produce nothing except maybe perpetuate the status quo ante; misplaced assumptions that if good is to be had then it has to come to at an exorbitant cost like closing one eye to income inequality and worst still holding on to the idea, that success and endemic poverty are one of the same realities i.e you cannot have the good without bearing with the bad; or it’s inevitable, its our karma and there is nothing we can do about it – in this respect, the term arrogance refers to a ritualized way of thinking that is premised on a litany of false assumptions is based on only one rationale: if we decamp from the tried and tested yellow brick road, the ceiling will just come crashing down! – and here we would do well to press the pause button and ask ourselves – can Singapore survive well into and beyond the 21st century; it would appear this question should turn on only a few considerations: how much money can a nation make in an allotted span of time; or which political party is able to recruit the best candidates to steer us successfully to the next port of call – to me, these are just side dishes; the deepest force of all that accounts for the rot of any nation that hollows out real wealth not only Singapore but elsewhere is when the custodians in power narrow and define the idea of wealth to only the lowest level of what it could possibly be; when its debased to only money and cents terms. When that happens, they commit a travesty of reason to conceive the possibility other metrics may even acquire the agency to be an equivalent of this base standard of wealth; perhaps even better than what they have already decided upon – that’s also when they take the wrong turn, keel over and die. 

This underscores why I strongly believe it makes little sense to chase GDP and wealth creation on a macro-economic level without first considering the idea: how can wealth percolate downward in the way fertilizer nourishes the soil and makes possible a bountiful harvest – not only do I consider this omission a gross dereliction of duty, but it underscores what I’ve said earlier – its none other than unmitigated arrogance. I suspect one reason why corseting the idea of wealth creation to only standard metrics such as GDP and GNP remains the preferred strategy in Singapore is because it manages to encapsulate all the appearances of wealth neatly. In reality that’s at best a chimera, at worst a Pyhric victory- wonder no more why Rome, Greece and contemporary China all advanced like a maglev train once upon a time only to return back to the ubiquitous dust of nothingness – my point is these civilizations at one time, were not so different from the monoliths of power that we see today in the shape and form of the US and EU – infact, Rome was so wealthy; by the age of Augusta; most of Romans didn’t even know the front and rear end of a sword; why should they when their wealth made it possible to inure the ranks of their legions with mercenaries? That same vein of arrogance coursed through ancient China; when the Mandarins suffered a failure of imagination to broaden the idea of wealth which perpetuated their highly ritualized style of statecraft without ever once bothering to revivify it with new technology the West could have offered. In contrast Japan went the other way and it hardly requires any elaboration why they are closer to the ideal of real wealth creation than we will ever be. 

My point is simply this; it pays naught to narrow the idea of wealth creation to the lowest denomination of money & cents – and it pays even less to emulate countries which are so fixated on ONLY money such as the Swiss – that despite the immensity of their largesse; their only contribution to mankind was a cuckoo clock  - real wealth needs to take a full sweep of the political, economic, social and technological set pieces; not only at the front end where education plays a role; but also the tail, where we need to craft a way not only to alleviate the submerged classes, but if possible elicit the latent power in them by forcing firms to move up the value chain – the issue at hand is not whether we should do this; but can we afford not to take a holistic view of a wealth of a nation and remain fixed in our ways to only interpret it in blinkered monetary terms? In my book, that’s akin to replicating the disastrous effects that transpired in Easter Island; when a once vibrant community cut down every single tree just to fashion stone Moais a la cookie factory fashion – eventually the logic was taken to so far that the island became a dustbowl and all of them ended up in the dodo hall of fame.

To understand why “arrogance,” in whatever form or shape it might take in policy formulation is closer to perdition than salvation – one needs to first understand that its possible for a country to be wealthy yet poor at the same time – just as its possible to win every battle and still manage to lose the war; and the reason is simple: real wealth can only be generated and shared by all if it circulates in the local economy and most importantly when it is invested in people (here I don’t refer to skill upgrading, but the conditions that makes this proposition economically viable by creating incentives for firms to move up the value chain) if that same wealth i.e money is sited somewhere else or invested in a Swiss banks where autocratic dictators usually hide their nefarious gains – or plonked in some bank in Wall Street where bankers were once so cavalier as to juggle hand grenades just to turn a quick buck that triggered the sub-prime crisis and plunge the world into a financial quicksand – it doesn’t take a rocket scientist to figure out – that country is just wealthy in name; but poor in real terms, as when the idea of wealth is just a computer print out it might as well be encased in a bullet proof glass as it fails to circulate within the local economy like lubrication oil to stimulate the entrepenuerial spirit that creates opportunities for the masses in the local economy – that’s no good, it just doesn’t come around - as a consequence, the submerged classes will always remain in the gyre of hopelessness while only a select few will reap the benefits of conditions that entrench income inequality.

Neither does it profit a nation to believe that by just pursuing what I call patch policies (which is really like trying to fix stuff with superglue, rubber band and duct tape) we can magically formulate a prescriptive cure for the the chronic problems of our age – I don’t doubt, many of the problems we face may well be an accretion of globalization; but the arrogance here is when we fail to consider how ill policies have also exacerbated these problems such as unbridled immigration and the misplaced belief the root cause of income equality can be magically wished away with perpetual retooling, training and enrichment courses – in my book that sort of arrogance discounts the reality of the laws of diminishing returns i.e no amount of training or skill upgrading is going to solve the intractable problem when existing conditions encourage firms to create sweat shops – when we ask the question; Why does income equality continue to widen in one of the richest per capita nations on this planet. 

It can only be a pithy summary of how theory has failed to past successfully into the realm of theory. And this begs the question: do we reinforce failure? Or shift gears?

If you really want to know the truth; income inequality has little to do with the skill quotient of a workforce. Just as one cannot expect to make progress by putting the cart before a horse – it has to begin with employers. As the “conditions” that militates against the average worker finding a means to emancipate himself from the poverty gyre has to involve firms – if the job scope just involves putting two screws into vibrating toys that bring joy to lonely spinsters, then pray tell what is the relevance of skill upgrading?

To exacerbate matters the arrogance of the custodians of power to pursue a cut-the-cake-and-eat-it policy – where its even conceivable they are addicted to low cost manufacturing simply means there can be no impetus to upgrade their processes so as to make possible pay raises – that in turn creates disincentives to cajole enterprises to upgrade their process thus keeping the status quo ante – so what we have created is a vicious cycle; one that promises ever decreasing circles- and those conditions can only work against Ah Kow, Muthu, Ahmad and De Souza as he watches helplessly when the purchasing power of his dollar shrinks with the chastening passage of time - 

What beggars the imagination is why is there a failure of imagination to even consider experimenting with the idea of minimum wage? What accounts for the bovine indifference to even craft a coherent plan to provide sufficient incentives for firms to move up the value chain, they by allowing the average Joe a means to get out of the poverty trap? – instead in the recent Parliamentary debate all I see are automatons rain dancing by placing all the onus for income inequality on the failure of the workforce to upgrade their skills –  when the root of the problem resides in their failure to perceive the wisdom of  weening ourselves from our addiction to low cost nasty labor intensive manufacturing and failing to incentivizing firms to automate and migrate upwards in the value chain.

For all their best efforts; these custodians of power may have created the perfect conditions for sweatshops to fester and exacerbated the already depressing conditions for the average Joe.

To paraphrase; we are the wealthiest nation in the nation; yet ironically the poorest as well.

Darkness 2011 

“Understand this apprentice! Forget what those derelict academics taught you in Yale…..let me tell you the story of the empire of the bones and how it came about. The Americans and Europeans took a wrong turn in the eighties; some idiot thought it was a good idea to pack up all their factories like a traveling circus and move it to low cost producing countries like China, Vietnam and Mexico – many others saw that it too made sense, so they did the same – I don’t disagree in the short term; the cost of a shovel or toaster went right down and it would seem  as if it was a boon to the average American as his dollar can be stretched further – but what they didn’t realize is these days when you take a look at even a Harley Davison, that iconic symbol of Americana; the head lamp is made in Xiamen, the drive train in Taiwan and all the average American worker is good for is just applying glue to a Harley-Davison badge – things are so bad these days; when you ask an average American shop floor worker to hand you a No.9 monkey wrench, he gives you a ticket to the zoo – there are no more skilled artisans; only kids sitting before a computer designing virtual bikes – and that is what happens when a factory is turned into a stock market. Worst of all they have lost the very one thing that makes possible for real sustainable wealth – say what you like about protectionism and xenophobia, but I think the Germans got it right. Today if you go to Munich; you can see the benefits of what I call real wealth creation – when you walk around the BMW plant you will have very little doubt that what I am saying is so true, you don’t know this because your lecturers in Yale have never ever rolled up their sleeves and got their hands dirty before. I’ve worked in a factory, followed a shift even when I could have held down a decent 9 to 5 job in an air-conditioned cave. At that time, all my friends said, “look at Darkness, he is a wash out! He’s got a Masters of Science that nearly broke his balls and what does he do with it? He becomes a grease monkey!” But these same people today have no idea where to even begin valuing a factory or when one of those serious men ask them: is this a good place to plonk my money, all they can do is run to me – do you now see my young apprentice, they never once invested in the real! Just like the Americans who traded in their factories for warehouses; they lost the ball; but look at how the Germans nourished the one thing those dumb Americans threw away; they kept the real, they fertilized the real and so they are the only race on this planet who know how to build real cars from the ground up, to turn a metal sheet into a car bonnet that sort of technology and let me tell you another thing, they do it cheaper than the Chinese – now you know why the Hasidic Jews control the diamond industry; they keep all 300 designs right up here. Learn from the Jews, they know what is real – do you see those wise men outsourcing their black arts to China for a quick buck? So don’t tell me that Wall-Mart is heaven; it is the hottest place in Hell!”