Category Archives: International Affairs

How the Market Is Betraying Advanced Economies

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April 16,2016

How the Market Is Betraying Advanced Economies

Diane Coyle
coyle6_Michel StoupakNurPhoto via Getty Images_yellow vests

As lifestyles in the world’s developing economies improve drastically, many in the advanced economies are seeing their well being deteriorate – a trend that automation will only exacerbate. Without fundamental change in the framework of public policymaking, it is difficult to imagine a prosperous future in these societies.

 

CAMBRIDGE – Despite ever-improving conditions for millions of people around the world – documented by entities like the University of Oxford’s Our World in Data and highlighted by scholars like Steven Pinker – popular discontent is on the rise in many places. The reason is simple: whereas the first trend is being driven by low- and middle-income countries, the second is concentrated in high-income countries.

Apr 9, 2019 Joseph E. Stiglitz thinks it’s his attacks on the truth-seeking institutions that underpin economic prosperity.

Throughout the developed world, conditions for many workers are deteriorating, with no recovery in sight. Income inequality is near historic highs, wealth inequality is even higher, and economic insecurity is widespread.As the United Kingdom tears itself apart politically and constitutionally over Brexit, many of its citizens struggle with low-quality jobs, inadequate housing, and poverty so severe that they rely on food banks. France’s Yellow Vest protests have been hijacked by violent extremists, but they reflect real grievances about the growing challenge of maintaining living standards. In the United States, the Economic Report of the President touts the supposed elimination of poverty, but life expectancy does not decline in a prosperous country.In short, the post-World War II social contract in many of today’s developed economies is breaking down. And even more uncertainty and insecurity are on the way, as new technologies such as artificial intelligence and robotics take root.Though the pace and scope of the next wave of automation is impossible to predict with precision, the impact will be profound. Like other digital technologies, AI and robotics will boost the value of some skills while reducing the value of others. And, by , extensive algorithmic decision-making risks amplifying existing inequalities further.It is impossible to uninvent technology. But we should not fall into the trap of technological determinism. The forces that drive structural economic change are always refracted through policy decisions, which can help ensure that technological innovations contribute to a more prosperous future.

Given the depth of the transformation ahead, however, it is not just the policies themselves that must change, but the very framework on which they are based. This means abandoning the idea – which has shaped public policy for more than a generation – that the “market” must be the organizing principle for collective decision-making.

The market, in this sense, is an abstraction – one that has little to do with actual markets, which are social institutions as varied and multitudinous as Leo Tolstoy’s unhappy families. It embodies the assumption that, overall, we secure the best economic outcomes if producers compete to respond to the desires of individual consumers (in line with their purchasing power). And its performance is measured according to the number of contemporaneous exchanges taking place.This is to be the best metric. For one thing, it does not account for the depreciation of assets, from houses in California destroyed by wildfires to insect species at risk of extinction. It also fails to account for the fact that a growing proportion of exchanges in the digital economy involve “public goods,” consumption of which is non-rivalrous (the good can be shared by any number of people without being depleted).But there is an even more fundamental problem with assessing an economy’s welfare according to the satisfaction of individual choices. As the late William Baumol pointed out, if you assume that economic agents are independent, you will conclude that independent choices maximize their well being. This is circular reasoning.In fact, economic agents are not as independent as the conventional wisdom would have us believe. People’s consumption preferences are not discovered through introspection and then upheld permanently; they are shaped socially and change over time. In the age of social media “influencers,” this may be truer than ever, with turbocharged network effects amplifying the impact of one individual’s choices on others.Likewise, in production, there is far-reaching potential for economies of scope and scale – potential that grows even larger in high-tech domains. This means that one firm’s production decisions affect production by others in the same market.The conceptual underpinnings of policymaking need to be updated to reflect this economic reality. For starters, governments need to recognize that their decisions shape the structure of production, and develop strategies to support particular strengths in production (through innovation policies or procurement frameworks) or to address weaknesses (in areas such as skills). Economists like Dani Rodrik and have led the way in proposing ways to think about modern industrial strategy.Governments must also improve the opportunities available to those left behind in today’s fast-changing economy. This means ensuring that all citizens have access to quality public education, public transportation and broadband infrastructure, adequate health care, and decent housing. Such basic services are more important than income subsidies, because they are public goods, which the market – where decisions are made by aggregating individual demand – will not provide.The organization of millions of interdependent individuals in a technologically complex society will always be difficult to manage. With productivity flat-lining and public anger growing, it is clear that existing policies are not up to the challenge. Without a new approach, it is difficult to imagine a prosperous future for Western societies.

 

  • WmC Mantis  

    Is Diane Coyle trying to tell us that economic policymakers should be doing more to ensure a continually rising mean household quality of life? If so, she could have done it in fewer words.

 

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Who understands our times, Bernie or The Donald?

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April 13, 2019

Who understands our times, Bernie or The Donald?

by Fareed Zakaria.com

https://fareedzakaria.com/columns/2019/4/11/who-understands-our-times-bernie-or-the-donald

There are many explanations for Benjamin Netanyahu’s victory in this week’s election that have to do with Israel’s particular situation — its economic boom, stable security climate and the prime minister’s political talent. But he is also part of a much larger phenomenon: the continued strength of populist nationalism around the world — and the continued inability of left-of-center parties to respond to it.

Image result for BERNIE AND TRUMP

 

The case for populist nationalism goes something like this. It’s a nasty world out there. People are trying to take our jobs, undermine our security, move into our country. The cosmopolitan urban elites don’t care; they benefit from these forces. So we need a tough guy who will stand up for the nation and against the liberals in our midst.

In some variant or another, this is the argument made by Netanyahu, Vladimir Putin, Recep Tayyip Erdogan, Narendra Modi, Viktor Orban, Jaroslaw Kaczynski, Jair Bolsonaro, the Brexiteers — and, of course, President Trump.

In 1972, the philosopher Isaiah Berlin wrote that nationalism “expresses the inflamed desire of the insufficiently regarded to count for something among the cultures of the world.” He placed the roots of modern nationalism in Germany, a country obsessed with finding its place in the sun. But the sentiment — a kind of victim mentality — can be found in almost all modern variations, even among rich and powerful nations.

Look at Putin’s claim that Russia has been pushed around by the West since the Cold War, the Chinese obsession with their humiliation since the opium wars, the Israeli right’s complaint that the world is biased against Israel and Trump’s constant refrain that all foreigners — from Mexicans to Chinese to Europeans — take advantage of the United States. These leaders promise to rectify the situation and restore their countries’ proper standing in the world.

Trump’s embrace of the word “nationalism” illustrates the simultaneous attacks on domestic elites (with their politically correct language) and on perfidious foreigners. “We’re not supposed to use that word,” Trump said in October. “You know what I am? I’m a nationalist, okay? I’m a nationalist. Nationalist. Nothing wrong. Use that word. Use that word.”

When asked the next day what he meant by the term, Trump responded, “I love our country. And our country has taken second fiddle. . . . We’re giving all of our wealth, all of our money, to other countries. And then they don’t treat us properly.”

Netanyahu, for his part, has long argued that Israel deserves a much better “place among the nations,” a phrase that was the title of his 1993 book that argued for a robust Israeli nationalism that is aggressive and unapologetic. Though Israel’s strength and security have grown immeasurably, as its historical enemies — Saudi Arabia and Syria, among others — have either become buddies or basket cases, the argument that the world is against it has somehow persisted.

In fact, despite the pose of victim hood adopted by most of these populists, nationalism is probably the most widely held ideology in the world today. Which American politician today does not speak up for the United States? The real debate is whether nationalism should be informed and influenced by other values such as liberty and equality and, if these two sets of values conflict, which one should be preferred. That’s why the most ardent capitalists — from Friedrich Hayek to Milton Friedman — have always been in favor of globalization and economic freedom above nationalist protections and controls.

The danger for liberals is that they underestimate the power of these raw, emotional appeals. For centuries, liberals have assumed that nationalism was a kind of irrational attachment that would grow weaker as people became more rational, connected and worldly. In fact, Berlin wrote, like a twig that is bent in one direction and has to snap back, as globalization grew in its reach, nationalism would be the predictable backlash.

Populist nationalists understand the core appeal of their ideology. I recently asked a Bolsonaro supporter whether the Brazilian president’s economic policies (which are free-market-oriented and reformist) or his cultural nationalism was the key to his appeal. The supporter’s answer: Nationalism is the party’s core; the economics is simply about efficiency and growth.

Meanwhile, liberals in the United States still don’t seem to get it. The Democratic Party continues to think the solution to its woes is to keep moving leftward economically. This week, Sen. Bernie Sanders (I-Vt.) revealed his new Medicare-for-all plan, which was immediately co-sponsored by four other presidential candidates. The plan will probably require an additional $2 trillion to $3 trillion in annual tax revenue.At the same time, Trump tweets about the Democrats’ love of “open borders” and insists he will protect the country and enforce its laws. What if Trump understands the mood of our times better than Sanders?

(c) 2019, Washington Post Writers Group

 

History:When facts of the Cambodian tragedy get distorted by the US

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February 8, 2019

History:When facts of the Cambodian tragedy get distorted by the US

By Thomas Fowler
ttps://www.khmertimeskh.com/50575270/when-facts-of-the-cambodian-tragedy-get-distorted-by-the-us/

Lon Nol with U.S. Vice President Spiro Agnew in Phnom Penh, 1970. wikimedia/CC BY-SA 3.0

Historical negationism or denialism is an illegitimate distortion of the historical record which the US Embassy in Phnom Penh has resorted to when it publicly stated in social media that Washington was not involved in the March 18, 1970 coup led by Lon Nol, argues Thomas Fowler.

Last Thursday, January 31, the US Embassy in Phnom Penh released a statement that claimed, “We would like to highlight that the US was not involved in the coup leading to Lon Nol coming to power. Up to now, there has not been any evidence proving the US was involved.” Unfortunately, this is nothing more contrary to the truth. We are faced with what historians call negationism – the illegitimate distortion of historical records.

There is a long history of fatal relations between Cambodia and the US. During the two decades following independence, while Prince Norodom Sihanouk was in power, Washington denied the many attempts to overthrow and even assassinate him.

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Based on a strange US concept which is named “plausible deniability”, senior officials are able to deny knowledge of or responsibility for any damnable actions committed by others in an organisational hierarchy. In the case that illegal or otherwise disreputable and unpopular activities become public, high-ranking officials may deny any awareness of such acts to insulate themselves. The expression “plausibly deniable” was first used publicly by CIA director Allen Dulles.

In 1956, the US National Security Council decided to support with money, arms and ammunitions the Khmer Serei, an extreme right militia based in South Vietnam and Thailand led by Son Ngoc Thanh and opposed to then Prince Norodom Sihanouk. But in the same year, Washington vehemently denied any support to these rebels.

In 1959, there were three attempts to overthrow Prince Norodom Sihanouk and even assassinate him. Traitors like Son Ngoc Thanh, Dap Chhuon and Sam Sary, all against Prince Sihanouk’s principle of neutrality and all passionate supporters of the US, were CIA operatives as has been proven by archival material. But in 1959, the Americans denied that Washington was involved in the plots for a regime change.

In 1963, the Khmer Serei’s activities increased dramatically as they were integrated partly in the Special Forces under US command. But in 1963, yet again, the State Department informed Cambodia’s Ambassador in the US that there was no evidence of American involvement with the Khmer Serei.

Since the archives of the CIA and the National Security Council for this period have been opened to researchers, we know all the details of these attempts. We even know that they were hidden from President John F Kennedy who was only informed a few days before his assassination in November 1963.

Image result for sirik matak letter

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Similarly, it was not until William Clinton’s Presidency that we learnt the truth about the bombings of a country that had not declared war on anyone: 2,756,941 tons of bombs were dropped on Cambodia from October 4, 1965 to August 15, 1973 through 230,516 bomber missions which destroyed 115,273 targets. Until then, the Pentagon recognised “only” 539,129 tons, which still represents three times the tonnage of bombs dumped on Hiroshima and Nagasaki between 1942 and 1945.

The March 18, 1970 coup led by Lon Nol and Sirik Matak, joined soon by Son Ngoc Thanh, was coordinated by the CIA station and US military intelligence in Saigon, with the involvement of the US embassies in Phnom Penh and Saigon.

By supporting staged rallies against Prince Sihanouk, Khmer Serei forces were transferred step-by-step though the months by the CIA from South Vietnam to Phnom Penh with the order to organise deadly anti-Vietnamese demonstrations in the capital city. Of course, then US president Nixon and then state secretary Henry Kissinger denied their involvement in this regime change. As does the US embassy today in Phnom Penh. And Mr Kissinger is still alive.

These are the facts and they are indisputable. In 1993, all the details of US involvement were described to me by Douglas E Pike in a discussion we had while he was the director of the Indochina Archives at the University of Berkeley. As Foreign Service officer, he had been stationed at the US embassy in Saigon in the 1960s and in 1973-1974.

Until March 1970, with the exception of the neighboring provinces of Vietnam, Cambodia was considered an “oasis of peace”. Even if he had on his own side opponents to his policy of neutrality, Prince Norodom Sihanouk’s power was disputed only by two political movements: the Khmer Serei with bases in the two neighboring countries and as we have seen receiving US military assistance and, on the other side of the political spectrum, the Communists, who were subjected to fierce repression and were reduced to a militia not exceeding 3,000 men.

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With the coup of March 18, 1970, Cambodia as a whole became an extension of the Vietnamese battlefield. What some still call a civil war was actually one of the theaters of the global conflict between the West and Communist world – a situation that, for fifteen years, Prince Sihanouk had tried to avoid defending the neutrality of his country.

Most historians agree today that the coup and extreme violence of the US bombings offered the Khmer Rouge the opportunity to develop and build up their cadres – to the point that their numbers reached 120,000 five years later, at the time of their victory.

There were 7.3 million Cambodians in 1970. In 1979, just before the country was liberated from the tyranny of Pol Pot, the population was decimated to 4.8 million. This is the US legacy in Cambodia.

From 1970 to 1975, Cambodia was a victim of foreign interferences and Cambodians became mere instruments in a proxy war. This story would be repeated between 1979 and 1991, and each time it has been proven that the US had a role in inflicting pain and suffering among the Khmer people.

Thomas Fowler is a Phnom Penh-based Cambodia watcher.

 

 

The deafening silence of PH leaders after defeat in Cameron Highlands

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February 4, 2019

The deafening silence of PH leaders after defeat in Cameron Highlands

by TK Chua

https://www.freemalaysiatoday.com/category/opinion/2019/02/03/the-deafening-silence-of-ph-leaders/

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Malaysia must continue to speak up on issues such as moderation, good governance, people’s livelihood, sound policies and progressiveness.

But Pakatan Harapan’s victory has now given us another problem.

PH politicians who used to champion moderation, economic wellbeing, good governance and the environment have become silent.

Umno, as an opposition, does not even know how to advocate these issues and continues to harp on Malay supremacy and privileges to stay relevant.

Similarly for PAS. Their preoccupation with religiosity and obsession with Muslim leadership regardless of competency and integrity.

It would have been more tolerable and palatable if UMNO and PAS, despite their racial and religious orientation, have fought more for “livelihood issues” by articulating better policies and economic management.

But it is not to be. They have essentially used race and religion as conduits to power rather than to build a better Malaysia.

As for PH, they have largely forgotten where they came from.

The smarter ones among PH have become frontbenchers. Hence, they don’t provide checks and balances anymore. In fact, they are even afraid of being criticised now.

The back benchers among PH, except for a few, have also become silent or disinterested. I have got an inkling that many of them are just trying to be nice guys – you know, don’t rock the boat and wait for their turn.

Who then is fighting for Malaysia today? Who has pointed out the drastic increase in vehicle insurance premiums lately?

Image result for Defeat in Cameron Highlands

Who is studying whether the proposed increases in water tariff is justified? Who is following up on whether the current toll rates and electricity tariffs are “overpriced”? Who is looking at Lynas now? Who is concerned with continued environmental degradation and encroachment of our forests and catchment areas?

Who is monitoring the many construction mishaps and accidents in the country? Who is tracking inflation, cost of living, unemployment and wages?

Who is taking an interest in death in custody and unjustified use of certain draconian laws? Who is highlighting and criticising some of the ill-conceived policies being proposed and implemented by PH?

When BN was in power, we had no shortage of criticisms of government’s shortcomings and misdeeds. We justifiably highlighted many malfeasance and bad policies. Today, how many politicians do the same? Former Prime Minister Najib Razak has pointed out a few shortcomings here and there but he lacks credibility.

Image result for foreign minister saifuddin abdullah

The Quiet Foreign Minister of Malaysia has  gone cold when our voice on pressing global issues needs to be clearly articulated.

As I see it, many of the present politicians don’t even want to take an interest to know what is going on, much less to evaluate and criticize.

Image result for mat sabu in RMAF In K uantan

Malaysia’s Defense Minister Mat Sabu takes to the skies.

Many said May 9 was a watershed for genuine change and a new Malaysia.

Unfortunately, many are now telling me May 9 was not a watershed for change but an indication that we, as a nation, cannot really , or unwilling to, change. It is as if we are a handicapped country forever caught in the quagmire of political elitism, vested interest, cronyism, race and religion.

Food for thought, did Zimbabwe change after Robert Mugabe?

TK Chua is a FMT reader.

The views expressed are those of the author and do not necessarily reflect those of FMT.

How Deng and his heirs misunderstood Singapore

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February 3, 2019

How Deng and his heirs misunderstood Singapore

Mark R Thompson – 01 Feb, 2019

 

How Deng and his heirs misunderstood Singapore

 

Image result for deng xiaoping and lee kuan yew

As official China celebrates the four decades of “reform and opening” that began in late 1978 to early 1979, it is instructive to recall the role Singapore played in this process. The fulsome eulogies for Lee Kuan Yew offered by Chinese officials in 2015, beginning with Xi Jinping himself (who has been noticeably less enthusiastic in his praise for Deng Xiaoping given China’s top leader’s “family feud” over who deserves the most credit for the reforms), are just the most obvious indication that Lee and the “Singapore model” more generally have played (quite literally) an oversized role in China’s rapid transition from Maoism to “Market-Leninism”. Appropriately, Lee was honoured late last year as one of the foreigners who helped China most in its reform process.

Image result for deng xiaoping and lee kuan yew

Ezra Vogel’s his monumental 2011 biography of Deng

In November 1978 Deng, newly installed as China’s paramount leader, visited Singapore. Ostensibly the trip was part of a diplomatic campaign by China against what it considered a growing threat from Soviet-backed Vietnam. But in Singapore, Deng instead became obsessed with the city-state’s purported transformation from a backwater fishing village to a leading global city under Lee Kuan Yew and his People’s Action Party’s (PAP) rule.

Image result for deng xiaoping deng's biography by ezra vogel

In his welcoming remarks, Lee stressed that Singapore’s ethnic Chinese citizens were the sons and daughters of uneducated, landless peasants from Southern China, leading Lee to suggest, as former Foreign minister George Yeo has recently phrased it, if Singapore with its “poorly-educated coolies could make good, how much better mainland China could be if the right policies were adopted.” Deng showed great respect for Lee (going so far as to not smoke in the presence of the fastidious Lee despite the Singapore leader providing him with a spittoon in a well-ventilated room) as he had inherited a broken system that he was quickly trying to fix. In his comments Deng endorsed the (exaggerated) story of Singapore’s miraculous metamorphosis.

Crucially, Deng and Lee developed a special relationship during Deng’s short visit. Both were anti-colonial leaders at the forefront of their countries’ revolutionary movements and committed to political order over chaos. Ezra Vogel, in his monumental 2011 biography of Deng, comments that:

“Deng admired what Lee had accomplished in Singapore, and Lee admired how Deng was dealing with problems in China. Before Deng’s visit to Singapore, the Chinese press had referred to Singaporeans as the ‘running dogs of American imperialism.’ A few weeks after Deng visited Singapore, however, this description of Singapore disappeared from the Chinese press. Instead, Singapore was described as a place worth studying .…. Deng found orderly Singapore an appealing model for reform, and he was ready to send people there to learn about city planning, public management, and controlling corruption.”

Unlike other Chinese party leaders and academics who, as Kai Yang and Stephan Ortmann have shown, were looking at a variety of potential models such as Sweden (seen then to represent a “‘third way’ between Communism and capitalism” and symbolising “the ideals of social equity and harmony”), Deng was single-mindedly focused on Singapore, a fascination that was initially quite idiosyncratic. He was searching for a model that both legitimated party rule and was adaptable to the country’s rapid industrialisation. Deng’s articulation of the “Four Cardinal Principles” in 1979 showed that he still adhered to party orthodoxy in regard to repressing political dissent and reaffirming the party’s monopoly on power. But Deng was also concerned with how the party could guide China through state-led capitalist growth. In this regard, Deng left little doubt his thinking was closer to Lee’s than Karl Marx’s.

Yet the example of Singapore became central to the Chinese regime’s efforts to legitimise authoritarian rule only after collapse of the Soviet Union and its Eastern European state socialist satellite states and the Tiananmen Square massacre. Deng’s endorsement of Singapore as a model during his early 1992 “southern tour”, undertaken to restart the reform process, led to an outbreak of “Singapore fever” and an obsession with learning from Singapore among Chinese governing elite and academics. In quick follow up to Deng’s praise, a high level Chinese Communist Party (CCP) delegation was sent to Singapore, which quickly produced by book about the city-state that was distributed to all party branches. Hundreds of official trips followed, with Singapore setting up various programs to accommodate the influx of Chinese visitors such as the “Mayor’s Class” at Nanyang Technological University, attended by thousands of mid-level mainland officials.

An authoritarian path to modernity

It has been difficult for China to find examples of a successful combination of centralised authoritarian rule with effective and corruption-free government in a modern society anywhere else in today’s world besides Singapore. Besides the tiny sultanate of Brunei, Singapore is the only high-income country with a non-democratic regime in East Asia and arguably the only clear case globally, as oil-dependent absolute monarchies are rich but not “modern” in most understandings of the term. China’s observers also tend to see Singapore as “Chinese” and Confucian-influenced (ignoring its distinctive national identity and multi-ethnic character), making it seem more culturally appropriate for emulation.

Although Singapore remains a stand-alone example of high income, non-petroleum reliant “authoritarian modernism”, there is historical precedent for the attempt to remain authoritarian while successfully modernising in East Asia. Framed this way, Singapore is much less a “lonely” example of authoritarian modernity than it is a continuation of a historical trend. The “Prussian path” of German authoritarian-led development was followed by Meiji reformers and this model was later diffused throughout East Asia. Singapore is a particularly important example of this phenomenon not only because it wanted to “learn from Japan” (a government campaign in the early 1980s in which Japan had served as an ideological device used to maintain political control and manage social change that accompanied the upgrading of the country’s economy) and constructed a reactionary culturalist discourse (the “Asian values” debate of the 1990s) to help justify continued electoral authoritarian rule, but also because it became the chief model for Deng’s post-Maoist developmentalist leadership.

 

The chief “lesson” Chinese experts have derived from Singapore’s fight against corruption is the importance of a committed leadership. But this analysis ignores the significance of the rule of law in Singapore, despite its being a tool to “constrain dissent” and increase the PAP’s “discretionary political power”. Theoretically, the PAP is not above the law, while the CCP claims primacy over any laws (euphemistically called “rule by law”), with China’s top judge recently denouncing judicial independence as a “false Western ideal”. By viewing determined leadership as the main lesson from Singapore, while at the same time rejecting an effective and independent legal system which was key to the city-state’s success in combating corruption, the Chinese leadership has picked “lessons” that confirm their own policy style while ignoring others that could potentially raise critical questions about it.

In many important ways, from country size to political “DNA” (i.e. the legacies of totalitarianism in post-Mao China compared to Westminster-style parliamentary institutions in Singapore), the two nations are simply too different to allow for any meaningful policy transfer. Moreover, Chinese observers have largely seen what they want to see: a one-party state ruled by wise leaders and built on Confucian principles which is successful and legitimate.

Rather, the key significance of the Singapore model for China has been primarily as a form of ideological confirmation, as it has provided an alternative telos for China as it modernises. Singapore shows what China can become: a highly modern but still one-party state undertaking carefully calibrated reforms. Thus, small though it is, Singapore has played an outsized role in reinforcing the CCP’s leadership’s belief that it can avoid the “modernisation trap” and remain resiliently authoritarian during modernisation and even after it successfully modernises.

Growing out of the “Singapore model”

But more recently China seems to have moved away from adopting Singapore’s “soft authoritarian” style of rule. A recent book by David Shambaugh claims that gradualist political reforms by Xi Jinping’s predecessors Jiang Zemin and Hu Jintao, albeit within a continued authoritarian framework, were “intended to open up the system with carefully limited political reforms,” seeking to “manage political change rather than resist it.” By contrast, Xi’s recent widespread crackdown on dissent has undermining hopes of further, however constrained, political liberalisation. Shambaugh regrets that Singapore’s semi-competitive system, with a dominant party legitimised through limited but significant popular participation, and whose power is constrained by the rule of law, is no longer considered relevant by the Chinese leadership.

Thus, China seems to be moving further away from rather than toward the Singapore model. At the same time, as China takes a more aggressive stance in its foreign policy, particularly the South China Sea, and becomes more confident of its own political and developmental success, its interest in Singapore, which has staked out an independent foreign policy that has sometimes angered the mainland, has declined. After many years in which  officials offered a codified version of the “Singapore story” to Chinese observers, Singapore Prime Minister Lee Hsien Loong recently described the island state as little more than a “bonsai tree model of what China is” that might be “intriguing to scrutinise” but from which is hard for a gigantic country like China to draw lessons. Seemingly consigned to a historical period of conservative reformism in China, the “Singapore model” now appears to represent a path not taken by the mainland’s hard-line leadership.

This essay draws extensively from the author’s Authoritarian Modernism in East Asia (Palgrave 2019)

 

This is What Inequality Looks Like

REVIEWER: Serina Rahman

Ethos Books, Singapore, 2018
13 Dec, 2018

Europe in Disarray

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December 15, 2018

Europe in Disarray

Richard N. Haass

In what by historical standards constitutes an instant, the future of democracy, prosperity, and peace in Europe has become uncertain. And with the US under President Donald Trump treating its allies like enemies, the continent must confront the growing threats it faces largely on its own.

 

NEW YORK – It was not all that long ago – just a few years, as hard as that it is to believe – that Europe appeared to be the part of the world most closely resembling the end-of-history idyll depicted by Francis Fukuyama at the end of the Cold War. Democracy, prosperity, and peace all seemed firmly entrenched.

 Not anymore. Parts of Paris are literally burning. The United Kingdom is consumed and divided by Brexit. Italy is led by an unwieldy left-right coalition that is resisting EU budget rules. Germany is contending with a political realignment and in the early phases of a transition to a new leader. Hungary and Poland have embraced the illiberalism seen across much of the world. Spain is confronting Catalan nationalism. And Russia is committing new acts of aggression against Ukraine.

In what by historical standards constitutes an instant, the future of democracy, prosperity, and peace in Europe has become uncertain. Much of what had been widely assumed to be settled is not. NATO’s rapid demobilization after the Cold War looks premature and precipitous.

There is no single explanation for these developments. What we are seeing in France is populism of the left, the result of people having difficulty making ends meet and rejecting new taxes, whatever the justification for them. This is different from what has fueled the rise of the far right across Europe: cultural defensiveness amid local and global challenges, above all immigration.

The European Union, for its part, has gradually lost its hold on the public imagination. It has been too remote, too bureaucratic, and too elite-driven for too long. Meanwhile, renewed Russian aggression may simply reflect President Vladimir Putin’s judgment that, having realized large political returns on his previous military “investments” in Ukraine and Syria, he had little to fear or lose from further actions.

Europe’s political class deserves its share of responsibility for today’s growing disarray. The EU introduced a common currency without a fiscal or banking union, making it all but impossible to conduct a coherent economic policy. The decision to put the UK’s continued EU membership to a popular vote, while allowing a simple majority to decide the issue and failing to spell out the terms of departure, was misguided.

Likewise, opening Germany’s borders to a flood of refugees, however pure Chancellor Angela Merkel’s motives, was sure to trigger a backlash. Most recently, French President Emmanuel Macron did himself no favors by backing down to the “Yellow Vest” protesters and offering compromises more likely to fuel additional demonstrations and exacerbate his country’s budget predicament.

We should not assume things will get better. It is only a matter of time before France’s far-right National Rally (formerly the National Front) and political parties across Europe figure out how to combine economic and cultural populism and threaten the post-World War II political order. Italy’s hybrid populist government is a version of just that.

The UK will remain torn over its relationship (or lack thereof) with the EU no matter what comes of Brexit; and it is entirely possible that a post-Brexit UK might come under serious strain itself, given renewed calls for Irish unity and Scottish independence. There is no formula for dividing power between Brussels and capitals that would be acceptable to both the EU and national governments. Meanwhile, it is far from certain that Putin is content or done with his aggression against Ukraine or conceivably others.

Moreover, in a world of increasing inequality, violence within and between countries, and climate change, the pressures posed by immigration are more likely to worsen than fade away. And economic dislocation is bound to intensify in a world of global competition and new technologies that will eliminate millions of existing jobs.

Why this matters should be obvious. Europe still represents a quarter of the world’s economy. It is the largest constellation of democratic countries. The last century demonstrated more than once the cost of a breakdown of order on the continent.

Alas, just as there is no single cause that explains Europe’s increasing disarray, there is no single solution either. To be precise, there is no solution of any sort. There is, however, a set of policies that, if adopted, would help leaders manage the challenges.

A comprehensive immigration strategy that balances security, human rights, and economic competitiveness is one such policy. A defense effort that focuses more on how money is spent than on how much is needed would go a considerable way in buttressing Europe’s security. Moreover, deterrence should be strengthened by bolstering NATO and further arming Ukraine. Weaning Europe from Russian natural gas makes sense as well, which implies halting the Nord Stream II pipeline that is meant to bring gas directly from Russia to Germany, bypassing Ukraine. And additional retraining programs are needed for workers whose jobs will disappear as a result of globalization and automation.

Much of this agenda would benefit from American involvement and support. It would help if the United States stopped viewing the EU as an enemy and NATO allies as free-riders. Europe includes the countries most prepared to work with the US to deter Russian aggression; integrate China into global trade and investment frameworks on terms consistent with Western interests; mitigate and, where necessary, adapt to climate change; and set rules of the road for cyberspace.

Alas, such an approach is unlikely to be forthcoming from Donald Trump any time soon. That leaves Europe with no choice but to confront its disarray mostly on its own.