The Anti Neo-Democracy Theorist

Credits: Cebu Forums

Audrey Tan, the assistant money editor for the Straits Times, passionately pleas for Singaporeans to embrace globalisation (globalization) in her op-ed on the philosophy behind the latest budget. While I agree with her that the government has come up with significant policies to mitigate the worst of globalization on lower-income workers, I find her analysis surprising on some counts.

The reality is that neo-liberal globalization (opening of markets, increasing flow of human resources, free trade philosophy, even to some extent elements of social Darwinism) is very much the dominant rhetoric in most countries today, including Singapore. In these societies, concessions have to be made by the state to deal with problems that come with neo-liberal globalization. Feelings of racialized xenophobia and union marginalization are but two of these elements. In addition, relentless practicalization of the global education system since the 1980s has been adopted to deal with the challenges of neo-liberal globalization. Engineers, accountants, lawyers, technicians, factory workers, assembly plant coordinators, general managers are but products of either intensive technical education or undergraduate specialized education in engineering, accountancy, business and law.

The paradox arises then; in order to survive in a globalized world, we need creativity, passion and risk-taking endeavors to succeed. However to some extent, isn’t it true that by focusing on a particular specialization in your immediate post-secondary level of education somehow limits your creative vision and understanding on the very topic you are studying in? Do we reflect on the assumptions behind the fields we study and work in? Does your discipline of work and study encourage you to do so? Do your government and family encourage you to revisit the underpinnings of your understanding and faiths?

Let me explain. For example, Ms Tan argues that embracing globalization is based on sound economic theory. However, is such theory based solely on the prevailing neo-liberal economic discourses? Does she look beyond the “cognitive block” of neo-liberalism to examine alternative interpretations of a desired and ideal political economy? Do ordinary folks see globalization as a form of “neo-colonialism”? Do ordinary folks view “biting the bullet” as a “natural” extension of the effects of globalization? What are the tensions being played out in creating an orthodox ideology of “neo-liberalism” in our economy?

From a personal experience, I find that taking classes in the humanities such as philosophy, religion and history helps one to think and write critically; to challenge long held assumptions; and to constantly look inwards at one’s belief systems to examine our own analysis. It always fascinate me how some historians can embrace Foucault’s work, even though he is often “anti-history” in his analysis. I guess that attests to the notion that assumptions of humanities are often revisited and sometimes incorporated into the discipline. Models and structures are sometimes but “scaffolding” to our fuller understanding of people and their economies. A scaffolding analogy would suggest then that sometimes models and prevailing structures actually prevent us from seeing the bigger picture! Are we helmed in by our own structures of belief? Should we fit complex social reality into boxes of structures or in the case “globalization”?

I leave you with my Carleton’s professor’s view on the study of history:

I believe studying history is one of the most precious “diamonds” in the jewel box of liberal arts education: First and foremost, its emphasis on empathy with historical agents across time and space provides you with an ample chance to free yourself from the confines of your immediate experience and a fixed opinion. In other words, a historically minded person won’t be easily swayed by prevailing stereotypes and preconceptions in the world.

Secondly, you as a historian will develop better interpersonal skills with nuanced understanding of twists and turns, and even ironies of human existence. Finally, as those who are writing their comps (senior thesis) might have already experienced, historians would arrive at the “dark area” of an event (or a person) if they are diligent enough to have exhausted all the sources available, both primary and secondary. You know you can write an original piece of history at the very moment when you encounter this impassable spot over which you sense that there should be what you may call the truth of the matter you have been investigating. At the same time, however, we also know that we have to stop there because we, as historians, know that historical truth is not the same as the absolute truth.

How often do we realize that the more we study the intricacies of a historical moment, the less we know! Learning history has indeed made us humble. I believe that humility is our greatest asset to make this world livable.

-Professor Yoon

The Straits Times (Singapore)
February 16, 2007 Friday

S’pore will take globalisation head on; The alternative to this is protectionism and a slide towards economic oblivion
Audrey Tan, Assistant Money Editor

GLOBALISATION has become such a dirty word in so many parts of the world that it was almost refreshing to hear Second Finance Minister Tharman Shanmugaratnam give his unflinching endorsement of the phenomenon.

His message was simple and stark: Globalisation is working in Singapore’s favour, whatever the discontent it has created. Singapore’s response to globalisation’s shortfalls must be to deal with the challenges, rather than to retreat into protectionism and insularity.

It is in this context, then, that this year’s Budget is framed. If successful, the initiatives in this Budget will also go some way to answering a question some local economists have recently flagged: ‘Who is all this economic growth for?’

This question is one which will continue to plague Singapore, even as it looks forward to a fourth straight year of sterling economic growth. And it is a question that has been asked not just in Singapore, but in almost all countries grappling with the negative impact of globalisation.

In the United States, the rise of protectionism has been well documented, with China-bashing being the favourite theme of publicity-seeking politicians. Closer to home, demonstrations have also been held in South Korea and Malaysia over free-trade agreements and the World Trade Organisation (WTO) talks.

In perhaps the most telling sign that governments are in danger of succumbing to anti-globalisation lobby groups, the WTO talks to cut trade barriers collapsed last year amid much finger-pointing.

Back home, the term ‘widening income gap’ - which may have been politically sensitive in the past - is now a buzzword for both politicians and economists. If wages continue to stagnate at the lower end even as top earners continue to benefit from globalisation, there is a clear danger that a ‘dual economy’ could become entrenched, economists warned.

Some have also asked for a review of the foreign worker policy, as they point to how lower-wage workers are hit by the inflow of unskilled foreign labour. Others have also suggested that Singapore focus less on growth, and more on redistribution of incomes.

Singapore’s response, as was made clear by Mr Tharman, is that it will not turn its back on globalisation.

It will also not sacrifice faster growth, in the mistaken belief that slower growth will help narrow the income gap. Slower growth, as the minister explained, will hurt those at the bottom of the economic ladder the most. This policy response is rooted in both economic reality and sound economic theory.

Singapore is not a behemoth which can afford to turn inwards to its domestic markets for growth. It has traditionally been dependent on trade for growth, simply because of its economic and population size. Slower growth also means a smaller pie for everyone, with no guarantee that the income gap can be narrowed just because everyone is earning less.

Instead, yesterday’s Budget sent out a clear signal: Singapore will bite the bullet, embrace globalisation with open arms and deal with the problems as they come. Singapore will continue to attract investments and talent by cutting corporate taxes, with a further promise to monitor personal income-tax rates.

To do this, it has to broaden the tax base by increasing the goods and services tax (GST), even though the GST is a regressive tax that hurts the lower income most. It will spend more to build up its key strengths of a skilled workforce and world-class infrastructure, to ensure it remains attractive as both a business and lifestyle hub.

But it will also tackle head on the problems that have sunk globalisation in other countries. The Workfare Income Supplement will help low-wage workers who are most vulnerable to economic restructuring.

More significantly, linking Workfare to Central Provident Fund (CPF) contributions will help make these workers more employable by allowing employers to contribute less CPF for them. The scheme is a major policy shift, as the state is effectively adding to the wages the market will pay for these workers. The wage supplement also strikes a balance between helping to narrow the income gap and avoiding a slide into welfarism.

As the experience of many other countries showed, indiscriminate handouts invariably hurt the work ethic and result in inflexible labour markets which employers shun.

Embracing globalisation means dealing with all its complications, but the silver lining is that globalisation also allows Singapore to play to its strengths and bypass its weaknesses. Increasingly mobile companies looking for a stable base with a business-friendly government can find this an attractive location, as will top talent looking for the best place to work and live.

Local companies and talent can also seek opportunities in other parts of the world, as they are no longer constrained by the small domestic market. As Mr Tharman said: ‘This is what globalisation is about, and why it is working for Singapore.

‘Companies and enterprising individuals from around the world coming to Singapore, using Singapore to reach out to other parts of the world, and creating jobs for Singaporeans; and Singapore companies and talents going out to the world to compete and seize opportunities.’ What is clear, however, is that the problems of globalisation will not go away with time.

The wage supplement alone cannot fully rectify the income gap. Globalisation will continue to reward the talented and skilled, while putting pressure on the jobs and wages of the lower-skilled. Economic restructuring will be a continuous reality, which means jobs will be lost as some industries move to cheaper locations. Displaced workers may also find they are unsuitable for the new jobs being created.

The challenge for Singapore is helping its workers stay employed and aiding those who find they are worse off in a globalised world. To do this, ironically, it may have to rely on the returns from globalisation as new talent and investments boost its economy and tax returns.

As the forces of globalisation intensify, Singapore will necessarily have to walk a tightrope between harnessing its benefits and managing its problems.

The alternative is protectionism and a slide towards economic oblivion. Walking this tightrope is necessarily a fine balancing act, but one which Singapore has shown it is determined to get right.