GDP or GNH (The Bhutan Way)?


March 24, 2017

GDP or GNH (The Bhutan Way)–Maybe it’s Time to screw the  Economists and start looking at alternative ways to measure what makes life worthwhile

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Listen to this TED presentation by Chip Conley and reflect. I enjoyed it and wonder why we continue to measure only the measurable (the tangibles) and ignore the intangibles. As  someone who is trained in Economics (and does being taught this academic discipline make a economist?), I am wonder how it is that  I can be so misled and still have not abandoned GDP as a measurement of national wealth if I know it is misleading when intangibles matter more today. Maybe it is a force of habit. Should be I Aristotelian or Maslowian?  Let me know what you think.–Din Merican

 

Geo-Politics of Environment


March 19, 2017

The Geopolitics of Environment

by Giulio Boccaletti

https://www.project-syndicate.org/commentary/environment-economic-and-geopolitical-challenges-by-giulio-boccaletti-2017-03

Much of the world seems to be on edge. The West’s relationship with Russia, the future of NATO, the Syrian civil war and refugees, rising right-wing populism, the impact of automation, and the United Kingdom’s impending departure from the European Union: all of these topics – and more – have roiled public debate worldwide. But one issue – one might say the most significant of them all – is being ignored or pushed aside: the environment.

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That was the case at this year’s annual meeting of the World Economic Forum at Davos, Switzerland. Beyond a mention of the Paris climate agreement by Chinese President Xi Jinping, topics like climate change and sustainable development didn’t even make it to the main stage. Instead, they were relegated to side meetings that rarely seemed to intersect with current political and economic events.

Allowing environmental issues to fall by the wayside at this time of geopolitical and social instability is a mistake, and not just because this happens to be a critical moment in the fight to manage climate change. Environmental degradation and natural-resource insecurity are undermining our ability to tackle some of the biggest global issues we face.

Environmental insecurity is a major, though often underestimated, contributor to global instability. The UN High Commission on Refugees reports that natural disasters have displaced more than 26 million people per year since 2008 – almost a third of the total number of forcibly displaced people in this time period.

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Even the current refugee crisis has an environmental element. In the years leading up to the war, Syria experienced its most extreme drought in recorded history. That drought, together with unsustainable agricultural practices and poor resource management, contributed to the internal displacement of 1.5 million Syrians and catalyzed political unrest ahead of the 2011 uprising.

The link between environmental and agricultural pressures extends far beyond Syria. Over-reliance on specific geographies for agriculture means that food production can exacerbate environmental problems, or even create new ones. This can pit global consumer interests against local citizen interests, as it has along the Mississippi River, where fertilizer runoff from one of the world’s breadbaskets is contributing to concerns about water quality.

The connection goes both ways, with environmental conditions also shaping agricultural production – and, in turn, the prices of agricultural commodities, which represent about 10% of traded goods worldwide. For example, rising temperatures and altered precipitation patterns are already driving up the price of coffee. With the global land area suitable for growing coffee set to contract by up to half by 2050, price pressures will only intensify.

A sudden shift toward trade protectionism could drive up agricultural commodity prices further. Such an increase would affect farm-level household income, favoring some farmers while harming others. End consumers, particularly the poor and vulnerable, would also suffer.

Another reason why the environment should be at the center of economic debates is its role as the world’s single largest employer. Almost a billion people, just under 20% of the world’s labor force, are formally employed in agriculture. Another billion or so are engaged in subsistence farming, and therefore don’t register in formal wage statistics.

Any initiatives to support economic development must support this population’s transition toward higher-productivity activities. This is particularly important at a time when increasingly sophisticated and integrated technology threatens to leapfrog an entire generation of workers in some countries. Efforts to benefit this huge population must focus not only on training and education, but also on new models that allow countries to capitalize on their natural capital – the landscapes, watersheds, and seascapes – without depleting it.

Just as natural-resource insecurity can cause displacement and vulnerability, effective natural-resource management can support conflict resolution and sustainable economic development. On this front, efforts to achieve environmental remediation, to boost the resilience of rural communities, to advance sustainable agricultural production, and to support community-based environmental stewardship have all shown promising results.

Consider the Northern Rangelands Trust, an organization focused on creating community conservancies to enable sustainable and equitable land use in Kenya. NRT has helped pastoralist communities establish effective governance mechanisms for the environment on which they depend, reducing conflict over grazing rights, especially in times of drought.

For many communities, members’ relationship with the landscape in which they live is an integral part of their identity. With effective governance and planning, open dialogue, resource-sharing frameworks, and sufficient investment, including in skills training, these communities can translate this relationship into effective environmental stewardship – and build healthier and more secure societies.

The crises engulfing the modern world are complex. But one thing is clear: the environment is connected to all of them. Solutions will mean little without a healthy world in which to implement them.

 

Gauging The Hudud Thing in Malaysia


March 14, 2017

Gauging The Hudud Thing in Malaysia–Political Islamism out of UMNO’s desperation

by Rashaad Ali

http://www.eastasiaforum.org/2017/03/08/gauging-support-for-islamic-law-in-malaysia/

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The Desperate Godfathers of Hududism in Malaysia–UMNO’s Najib Razak and PAS’Hadi Awang

The 18 February 2017 rallies both for and against the bill to amend the 1965 Criminal Jurisdiction Act, known as RUU 355, have opened yet another political and social schism in Malaysian society. RUU 355 began as a private member’s bill by the Pan-Malaysian Islamic Party’s (PAS) President Hadi Awang and seeks to raise the penalties for certain crimes that fall under the jurisdiction of sharia courts in Malaysia.

Public opinion appears divided on the issue, as the continued politicisation of religion takes precedence over authentic religious debate on the matter. Some see the bill as a facade for the eventual entry of hudud — Islamic — laws into the country. PAS held the rally in support of the bill, which drew a reported 20,000 people, while the counter rally was organised by the non-governmental organisation Bebas and drew a much more modest crowd of around 200.

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Hudud –The  Political Hypocrisy of  It All

Support for the bill is significant enough. Various surveys, including one conducted recently amongst university students, indicate Malay-Muslim support for the amendment and for the implementation of Islamic laws. The pro-RUU 355 rally emphasises this and the numbers indicate some level of moderate success for PAS — mobilising 20,000 odd people for a rally is no small feat.

But as the subject of this bill is central to the party’s aims, larger numbers could have been expected. This suggests a difficulty in appealing to urban folk and that mobilised supporters from other, more remote parts of the country account for the majority of the turnout.

Image result for zaid ibrahim dapThis Guy does not  know where he is coming or going in Malaysian Politics–UMNO to PKR to DAP and what next?

The counter rally, held at the same time but at a different location to the PAS gathering, better demonstrates the mood regarding the bill. While the opposition Democratic Action Party (DAP) was critical of the bill when it was first announced, it eventually distanced itself from the counter rally completely. The only DAP name who attended was Zaid Ibrahim, and that was in his individual capacity rather than as a party member.

The DAP’s absence is unsurprising as the issue puts it in a difficult position: the DAP may not support the bill, but attending the counter rally would cement the perception that they are an anti-Malay and anti-Muslim party. The discourse surrounding this issue has been very black and white; support for the bill is seen as a Muslim’s religious duty, while opposition to it is deemed vehemently anti-Islamic.

The general public’s low attendance at the counter rally suggests that the issue was not significant enough to take to the streets in numbers. For Malay-Muslims, the fear of reprisal for attending a rally seen as anti-Islamic is a significant factor in keeping people away. It appears easier for the pro-RU 355 rally to draw Malays, as the narrative is more populist, keeps with a conservative Islamic position and is supported by major Malay parties like the United Malays National Organisation (UMNO) and PAS.

As for non-Muslim participation, it appears this issue is neither relevant nor attractive enough to drag would-be participants out of bed in the morning. They can hardly be blamed as many voices from the pro-RU 355 camp constantly state that the amendment will not affect non-Muslims.

Although this amendment does not mean that non-Muslims are suddenly going to be tried under sharia law, having two legal systems for two different groups of people brings the notion of equality before the law into question. For a multicultural country that should seek to be inclusive instead of exclusive, these amendments are not helpful, especially when considering the knock-on effect it will have on the country as a whole.

Past cases of overlapping jurisdiction between sharia and civil courts, such as conversion cases or burial rights of non-Muslims indicate that the separation of the courts is not clearly defined. While the bill aims to raise the penalties for certain crimes under sharia law such as murder and theft, some constitutional experts argue that these crimes fall strictly under the purview of federal, not sharia, law. This bill exacerbates an already highly polarised society divided along racial and religious lines.

It is also another episode in the overall Islamisation trend happening in Malaysia that directly and indirectly affects all groups in society. Various incidents in the past few years point to how religious relations in the country can easily sour. A church was forced to take down its cross display in 2015, there have been recent issues with the usage and distribution of paint brushes containing pig bristles and there is now moral policing of dress code at government buildings.

The issue is complicated further because it is primarily for political rather than religious purposes. Putting aside PAS’ ambition to see this through, the bill is an obvious affirmation of the party’s own religious credentials. In the current climate, this helps to regain the trust of its core supporters, which also explains why the UMNO has jumped on the bill’s bandwagon. It helps the UMNO bolster its image at a time when the administration has suffered a dip in popularity. The timing of this issue is also convenient, as elections are due to be held by 2018.

As it stands, it would not be surprising if the bill passes next month when it comes to parliament. Opposition members who oppose the bill are likely to be absent from the vote for fear of being branded anti-Islamic. If the amendment passes, the biggest concern is whether it will worsen existing racial and religious polarisation in the country. Given the political dimension of the bill and the looming general election, a more inclusive Malaysia is not yet on the horizon.

Rashaad Ali is a research analyst with the Malaysia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

This article was first published here on RSIS.

 

 

Malaysia: We’re not pro- or anti-government, says Chief Justice


March 14, 2017

Malaysia: We’re not pro- or anti-government, says Chief Justice

 Ok as long as the Judiciary is really independent, not Pro-Najib Razak like our Attorney-General
Chief Justice Arifin Zakaria does not think that today’s judicial colloquium on the sharing of good practices on international human rights law, organised by the Asean Intergovernmental Commission on Human Rights (AICHR), is part of an effort against the government.

 

Justice Arifin said the event – which began today and ends on Wednesday – is to provide a platform for dialogues among the judiciary, AICHR and the civil society.

Stressing that it is for the good of the people of Asean, he said the commission would like to develop jurisprudence, so that a common jurisprudence on what is meant by rights can be determined.

“This is indeed the first time we are having this kind of dialogue.It doesn’t mean we are against the government or are pro-government. The Judiciary, as I always mention, will always remain independent, not only of government, but also of other bodies, civil societies too.We have to be independent. Integrity has to be maintained at all time,” Justice Arifin said at a press conference during the event today.

However, he explained, this did not mean that the Judiciary was in favour of human rights to the extent that everything in relation to human rights would be upheld.

“We have to go and consider the law and the principle of human rights. Most importantly, it’s our own law. Whatever is ratified by the government, if it is not implemented in Malaysia, through our own Act in Parliament, (then) of course we can use this convention and declarations on human rights as an aid to the interpretation of our laws,” he said.

Meanwhile, Malaysia’s representative to AICHR, human rights lawyer Edmund Bon said the event was an effort to link human rights protection with the Judiciary, pointing out how Asean’s work had always been with the executive sector.

“A lot of the senior Asean officials have meetings with the governments. They come from the governments, but we have not had sufficient links with the judiciary. Malaysia, together with Laos and Thailand, have conceptualised this colloquium, so that all Asean judges can come together and try to explore certain commonalities in the region,” Bon said, citing that all the countries have signed the relevant human rights declarations and conventions.

The three-day programme will involve panel discussions as well as working group sessions on the role of the judiciary in the promotion and protection of human rights, among others.

The Foreign Ministry, which is part of the organising team for the programme, said in a statement today the colloquium involves more than 100 participants, including 20 senior judges from the highest judicial branches of Asean member states, representatives of the council of Asean chief justices, international judges and AICHR representatives.

Gearing-up for the Mardi Gras–March 4, 2017


March 4, 2017

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Gearing-up for the Mardi Gras

by Dean Johns@www.malaysiakini.com

Today, March 4, 12,000 people from Australia and around the world identifying as lesbian, gay, bisexual, transgender, intersex or queer (LGBTIQ) will be proudly participating in the Sydney Gay and Lesbian Mardi Gras street parade.

And like millions of Sydneysiders of other sexual persuasions I’ll be watching them with a mixture of particular pleasure and pride.

Pleasure in the fun the marchers will be having showing off the fabulous floats and costumes they traditionally create to dress – or undress – in for the occasion, and pride in being part of a community that doesn’t just tolerate individual difference, but outright celebrates it.

And then there’s the feeling of achievement that comes from seeing that society can change for the better, recalling as I so vividly do that the Australia in which I grew up was so disrespectful of difference that when the Sydney Gay Mardi Gras started in 1978 it was a march of protest against the homophobia that was rampant back then.

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Not, of course, that homo- or other phobias are entirely extinct in even this comparatively enlightened year of 2017, or in this comparatively enlightened country of Australia.

As recognised by the theme of this year’s Gay and Lesbian Mardi Gras, ‘Creating Equality’, there is still a very long way to go before we achiever the organisers’ stated aim of ensuring that “everyone is treated fairly and equally – and no-one is discriminated against for their sexuality, sex, gender identity, race, beliefs, age or abilities.”

Many of my fellow Australians are as bigoted, racist, sexist and religionist as ever.

In fact the most extreme example of this deplorable reality is the subject of a story in yesterday’s Sydney Morning Herald.

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Neil Prakash, Australia’s most infamous Islamic State recruit

“Neil Prakash, Australia’s most infamous Islamic State recruit,” the story begins, “strode the streets of the Iraqi city of Mosul with four bodyguards and acted as supervisor for the terror group’s medieval punishments.”

Punishments overseen by Prakash, the Melbourne-born son of Fijian and Cambodian parents, reportedly included public beheadings, stoning and whippings conducted in Mosul’s main Bab al-Toub Square, and the throwing of people accused of homosexuality from the top of the 10-storey Orizdy building on one side of the square.

Anathema to the vast majority

Such atrocities are, of course, as anathema to the vast majority of Muslims as to the adherents of other religions or to agnostics like myself.

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Hudud –The Barbaric System of Justice

As also, I imagine, or at least hope, are such attitudes as that expressed by state executive councillor Mohamed Fadzli Hassan of Kelantan in his recent announcement of his government’s intention to stage a public-caning demonstration in support of the PAS – or, as I think of it, PUS – party’s push for hudud in Malaysia.

Lest I start to appear unfairly islamophobic here, however, let me make the point that I’m strongly if not violently opposed to all religions whose ‘believers’ consider that as long as they pray to some divinity or another they have a right to prey on other people.

As witnessed in the shocking numbers of Catholic and other Christian clergy that have been revealed as predators on the children in their congregations, and other self-styled ‘conservative’ Christians in right-wing racist, religionist political organisations like Australia’s One Nation and the Christian Democratic Party.

Founder and leader of the Christian Democratic Party, the Reverend Fred Nile, is as ferocious an opponent of homosexuality and thus of the Sydney Mardi Gras as almost any mufti or other berobed cleric of any religion could possibly be.

An observation that brings me to the point that it’s impossible to avoid noticing that clerics of all major religions and significant numbers of the participants in the Gay and Lesbian Mardi Gras have in common – cross-dressing.

But, paradoxically, priests, monks, muftis, mullahs, archbishops, popes and whatever try and dignify the fact that they’re decked-out in dresses by trying to pass them off as robes, habits, cassocks, vestments or other such euphemisms, most seem opposed, if not outright frocking hostile, to good, honest trannies and others who cross-dress for fun.

Just one more reason why, if I had the choice between watching or joining some religious procession in support or praise of some alleged divinity, or grooving along with the gang at the Sydney Gay and Lesbian Mardi Gras, I’d go for the latter, any day.


DEAN JOHNS, after many years in Asia, currently lives with his Malaysian-born wife and daughter in Sydney, where he coaches and mentors writers and authors and practises as a writing therapist. Published books of his columns for Malaysiakini include ‘Mad about Malaysia’, ‘Even Madder about Malaysia’, ‘Missing Malaysia’, ‘1Malaysia.con’ and ‘Malaysia Mania’.

Unveiling Donald J. Trump – the Revolt against the Establishment


February 25, 2017

The HUFFINGTON POST.

 

Unveiling Donald J. Trump – the Revolt against the Establishment

Joergen Oerstroem Moeller, Visiting Senior Fellow, ISEAS-Yusof Ishak Institute, Singapore

http://www.huffingtonpost.com/entry/unveiling-trump-the-revolt-against-the-establishment_us_58accad3e4b0598627a55e1a

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Why are people turning their backs on the ‘Western’ model? The Reason: Donald J Trump making America Great Again

Why are people turning their back on the ‘Western’ model? How could it happen and even more so in such a short time span? While most of us associate the recent string of events to failed regimes or fictional story plots, it now haunts the U.S. – playing out like a reality show except the consequences are real and cannot be tuned out by a press on the remote control – however tempting that might be[1].

The elite has cut the link to the people, who retaliate by turning against the elite. A revolt!

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Conceptually industrialization was anchored in enlightenment, science, rationality, and logic. Ethically a higher degree of decency followed. The nexus was check and balances, which not only framed economic prosperity, rising equality and fairness, but also opened the door for the majority of people to influence political decision making.

Now, negative side-effects start to overrule the positive side of the model. Polls show that a majority of people in industrialized countries feel that their children will NOT live in a better world. Consensus and coalition building – the mainstay of the check and balances system – is no longer the plinth of our world order – world view, weltanschaung. Political correctness emphasizing tolerance and respect and crafted to block a repetition of 1914 to 1945 is now rejected yes ridiculed and cast aside. It is legitimate, in some places even laudable to vilify other people and advocate discrimination on the basis of ethnicity and religion.

Subjectivity has replaced objectivity blurring the difference between truth and non-truth. Between facts and made up figures. Today any viewpoint is legitimate. ‘My point of view is as good as yours!’ No insistence on evidence.

Industrialization.

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Adam Smith’s ‘The Wealth of Nations’ gave birth to economic theory explaining capital formation conducive to growth. The market – economic thinking and behavior – precipitated change and dynamics after centuries of near stagnation. Concomitantly economic policy started to guide the political system (liberal representative democracy) in its endeavors to control the economy and distribute wealth between capitalists and non-capitalists.

It was not a global model, but build around the notion of rich (insiders) and poor (outsiders). Countries could be ‘relegated’ (as was the case for Argentina one hundred years ago), but not promoted. Sometimes around 1975 the outsiders challenged the insiders. Promotion, incompatible with the model, started. The result quickly became competition for jobs, welfare, and resources on a global scale. The industrial age edifice began to crack.

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Philosopher  of the Enlightenment– John Locke

http://www.sparknotes.com/history/european/enlightenment/terms.html

Capitalism is a marvelous growth machine especially combined with globalization, but aberrations, distortions and negative side-effects must be kept under control. The challenge from the socialist/communist model did precisely that. When that challenge disappeared in 1991, the self-imposed barriers for egoistic behavior melted away. The dominating perspective became short-term profit defined by pure market economy disregarding potential or real negative societal side-effects – what an economist would label external diseconomies on a societal level/scale.

Globalization introduced economies of scale which:

– Generated enormous profits for multinational companies.

– Opened the door for minimizing tax by shuffling revenue and profits around among countries.

– Suppressed the wage share of Gross Domestic Product (GDP) in rich countries destabilizing and impoverishing their middle class.

– Dislocated manufacturing in rich countries; small-scale plants in local communities disappeared and people felt abandoned, desperate, and without hope.

The upside – enormously important – was that hundreds of millions of people in poor countries were lifted out of poverty.

The political problem gradually suffusing the agenda was that the negative side-effects were mainly, almost exclusively felt in rich and industrialized countries with the upside blessing Emerging Markets and Developing Economies (EMDE). Suddenly the dichotomy between ‘haves’ and ‘have nots’ changed dramatically – a complete reversal of roles.

Technology introduced the skills factor to determine distribution of income. Three groups of “workers” emerged. Those having the skills in demand asked for and got a premium. A thin layer. Those doing repetitive functions, the middle class, were squeezed. Those in lower paid service jobs were forced to accept lower wages under pressure from the middle class above them in the social strata now competing for their jobs and immigrants in social strata below them. In the U.S. wage differentials and inequality was falling 1920 to 1940, stable until the 1970s where after inequality started to explode – almost exactly at the time when Information and Communication Technology (ICT) plus globalization began to put its mark on the economy.

Social losers tried to be heard by voting for the opposition, but the opposition fared no better than the government because there was no answer. In reality government and opposition was the same side of two coins!

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University of Manchester Economics students aim to tear up free-market syllabus

And who are the losers? They are broadly speaking people unable or unwilling to cope with change – not necessarily unemployed or poor. In Europe and the U.S. many of them are found among the middle class being eradicated, disappearing as the stabilizing factor. Year 2000 US, Europe, and Japan accounted for 2/3 of global middle class. prognosis tells that year 2020 it will be about half and year 2050 about 15%. The privileged status built up over the industrial as skilled workers – the hero of industrialization and its main beneficiary – was suddenly taken away from them; other social groups or ethnicities fare better. Since 2007 close to ten million new jobs have been created in the U.S., but whites have lost one million jobs. This discloses the losers as white Anglo-Saxon protestant males powerful during the industrial age fighting almost literally to maintain their privileges.

They constitute a large segment of the population, but they are not the ‘people’. Did the British people vote for Brexit? No. Figuring in the turn out 38% of the electorate did. We read that the American people elected Donald Trump. Wrong. Hillary Clinton got almost 3 million more votes. Figuring in the turn out approx. 26% of the Americans voted for Trump. The depressing interpretation is that a large and growing share of the population does not find it worthwhile to operate inside the system. The system is not theirs! They vote against the system or stay away. The silver lining is that if the system – the establishment – can get the act together and deliver, those people may return. The game is not lost.

The future.

It is fascinating to reflect on how things will turn out, but foolhardy to put forward a picture of the world order to come. Mankind might cut the link to nature and live in a totally artificial environment – mankind may choose the opposite and opt for a return to stronger human relations while respecting the cycle of nature, as our ancestors actually did – or be so confused and bemused under the onslaught of globalization and technology that we end up with some kind of superstition like in the middle ages.

What we can do is to search for some fundamental trends controlling the future development; intercept them to build a system/model strong enough to keep the ship steady until the fog has cleared and a better view of where we are going beckons.

If civilization is a work in progress, we should mobilize discipline and self-discipline to rally people to a common purpose aiming at:

– Societies as a whole instead of egoistic behavior.

– Long term thinking/behavior instead of short-term effects.

– Sustainability instead of throw away consumption.

– A new kind of self-esteem among human beings with people feeling they are a spoke in the wheel contributing to society and receiving something in return.

– Mutual respects leaders – people instead of mutual disrespect and distrust.

The future main thread is common and shared values gradually crowding out economics as the main motivating force. The objective is a new social contract. The vehicle is communication via social networks. The playing field for communication becomes level instead of top/down or down/top or passive only (radio/TV). The social networks should belong to the people and used by the people. Neither commercialized nor allow concentration of knowledge opening for abuse of power.

Political system.

Power distance separates politicians’ values from voters’ values. In many countries, barely 2/3 of the electorate turns up signaling indifference. Membership of political parties tells the same story.

A lower power distance can be sought through roll back of centralization and concentration to lower power distance. Turn local communities into yes LOCAL and small communities; reject increasing returns borrowed from economics for public services. Look for solutions to combine social networks with human contacts. The service provider – welfare, education, and health – must be close to people to cater for their basic needs and not perceived as business.

There are innumerable challenges and opportunities embedded in social networks. In principle, they ‘should rally people to a common purpose’. In reality the opposite happens: Segmentation of public opinion through vociferous and importunate persons/groups hijacking the agenda. Social networks become divisive, disruptive, and increase power distance. Human contacts so vital a glue for unity and coherence fade away.

Segmentation/fragmentation comes into play as people communicate more, but with like-minded people. Those who contact us have analogous opinions. We search, maybe unconsciously, for opinions & views similar to our own ones. A closed-circuit network appears with people reinforcing one another in already held opinions eschewing contradictory information. It is no wonder that extremists’ views have established themselves and got a grip on the political agenda simultaneously with the explosion of social networks.

Using social networks anybody can try to set the agenda. If the message resonates with the public the cascade effect guarantees success irrespective of facts, objectivity, and merit. The ‘newcomers’ are proactive, offensive, snippy, aggressive, using rude/disparaging vocabulary, and dispense with objectivity, facts, and the truth. The establishment appears as reactive, defensive, even boring with politically correct vocabulary which does not strike a chord with the public – and do care about objectivity, facts, and the truth. Studies show that many, maybe most people decide in the split of a second based on instinct, intuition, own experiences and background. We live in a world dominated by a pressure of impression: Catch attention every day and use simple language. The attention span is short so select your audience and appear to be like them. Our ‘self’ is the template for judging others. This opens the door for tailor-made interference in people’s decision making. Recently Alexander Nix, CEO of Cambridge Analytica was quoted saying ‘we have a massive database of 4-5,000 data points on every adult in America’. Allegedly the company helped Trump to win.

The establishment can also use this model! And doesn’t because it has severed the links to the people.

Economic model.

Economics has always loved the idea of general equilibrium, but for the economic system only. Now a kind of societal equilibrium could be the objective.

Short term profits from a purely economic point of view distort the social fabric. Many people look – in vain – for stability and security – human security, economic security, and social security. After disruptive and explosive change over the preceding half century – a burst of activity rarely seen in history – there is a growing preference for calm down, digest, and find out how to use technology and globalization – instead of letting these two big forces, disruptive at that, steer where we go.

Relative prices reflect market perspectives rewarding short-term profit regardless of potentially negative societal effects (inequality, unfairness, and low social mobility), pollution, and depletion of resources. Incorporating societal effects other than economics the scoreboard in its entirety may not be profitable for economic operators – business. So it is not done.

Therefore, they should be changed to reflect these societal aspects. Making it expensive to use resources, punish pollution, and put a price on activities beneficial for society for example care for the elderly and couching children. The immediate objection is that such policies interfere in the market mechanism – the reply is: Yes, that is also the purpose. The market mechanism may have served us well, but can it continue to do so under different conditions? Can the market handle ‘less’ in a socially acceptable way? Doubtful.

Relative factor prices favor technology and robotics. Economically that makes sense. But not for those people losing their jobs. We cannot and should not stop technology and robotics, but provide jobs in labor intensive areas – among other things societal purposes – by remunerating such work.

The theory of the firm dating back to the 1930s explains why it is profitable – short term market economy profitability – to organize production within the firm (concentration and standardization/ uniformization) rather than relying on a multitude of contracts (de-concentration and diversification). Transaction costs become lower. Main advantage is to have the workforce inside the company – figuratively under one roof.

Information and Communication Technology (ICT) has shot that theory down. Now transaction costs outside the firm is cheaper than inside the firm mainly because of savings in overhead costs. Part time work and one person companies are going up – in some cases selling the product to firms instead of doing it inside the firm. It’s odd to read every month about employment and unemployment not taking into account how many people have left companies to do the same work outside companies.

The paradox is that the number of people employed by firms in rich countries goes down while at the same time concentration of finance and knowledge goes up not only shaking the established relationship between workforce and the company, but cutting the bond between firm and workforce, which was the core of the industrial age social contract. They are no longer indispensable for each other.

Conclusion.

The golden days of economic growth and distribution of wealth will not return. The creeping dehumanization and denaturalization is being questioned – is this really what we want? The shift to non-economic values cannot be integrated in the existing political system and economic model.

The challenge now is to keep societies together under burden sharing and adapt to stability and human security. Groups as an alternative framework for organization of societies enter the picture. The risk is that values and social networking break societies into a small number of groups with limited inter-group mobility – are you with us or against us? A kind of social immobility. The group serves as service provider – you cannot live outside the group. ISIL is an illustration of this as was the communist party. You belong to us forever.

The key is a social contract embodying

– The shift in preferences from economics as the dominant element to reflect societal values.

– A reinstatement of confidence and trust between politicians and voters.

– Building a bridge over the rising gap between interests of firms (owners and management) and interests of the workforce.

– Make the service provider visible in daily life, close to the people and increasingly delivering stability, security and peace at mind.

Joergen Oerstroem Moeller is Visiting Senior Fellow, ISEAS Yusof Ishak Institute, Singapore and Adjunct Professor Singapore Management University & Copenhagen Business School. Honorary Alumni, University of Copenhagen.

[1] ‘The Veil of Circumstance’ [ISEAS PUBLISHING, November 2016] offers a deeper analysis of the transformation our societies is undergoing.

(2). ISEAS –Yusof Ishak Institute. PERSPECTIVE. ISSUE: 2017 No. 11 ISSN 335 667

SINGAPORE 21. FEBRUARY 2017.

 “Trump and Brexit:  Some Lessons for Southeast Asia” by Joergen Oerstroem Moeller @ https://www.iseas.edu.sg/images/pdf/ISEAS_Perspective_2017_11.pdf.

Executive Summary

  • Donald Trump’s victory and Brexit illustrate that a considerable share of the population in the U.S. and Britain feel left behind, side-lined and neglected by recent globalising trends.
  • Despite their revolt, the establishment and the existing political systems have a chance to stage a comeback, especially if President Trump fails to live up to expectations of those who voted for him.
  • A surge in migration over the last 15 years in the US and Britain has also put the question of identity on the agenda. Although most countries can assimilate migrants over the longer term, a huge inflow of migrants in a short time span tends to generate serious negative opposition.
  • Rising unemployment in small towns in these countries has reinforced the identity problem, and initiated emigration to cities, undermining what were once stable societies and dilapidating their towns.

    Southeast Asian countries have lessons to learn from this development and should be aware of the risks involved as urbanisation in the region continues unabated.

End of summary.