Why CEOs shouldn't run countries - or the world

Apr 25, 2012
by Simon Kuper

Just before the United States invaded Iraq in 2003, I was debating the matter with a friend, a multi-millionaire entrepreneur.

"Of course we should invade," he said. "The Middle East can't get any worse, so if you change something, it's bound to get better."

I don't know what surprised me more: The weirdness of his argument or his certainty in expressing it. He was suffering from what I now know as the "CEO fallacy": The belief that if you have run a successful company, you can run a country.

Mr Mitt Romney's campaign for US President rests on the CEO fallacy. As he says: "Other people in this race have debated about the economy ... but I've actually been in it."

The CEO fallacy is a fallacy. To quote Mr Larry Summers, former adviser to President Barack Obama, now professor at Harvard's Kennedy School: "The idea that you can extrapolate from the one-business level to the national economy seems to me a profound confusion."

The CEO fallacy goes like this: Successful business people ran tight ships and made money. We, the country, want to run a tight ship and make money. Business types know how and so they should rule.

It's why early admirers of Mr George W Bush's administration called it "the CEO presidency". The UK government wouldn't have let a professor of mediaeval literature review the oil sector, but it got Mr John Browne, former head of BP, to review British higher education.

In the CEO fallacy, the chief executive typically presents a selective biography in which he pulled himself up by the bootstraps in a perfectly free market, something more people could do if only "government would get out of the way".

The CEO fallacy is relatively new. For centuries, soldiers and clergymen ran states.

Perhaps the shift began in 1974, when an obscure gathering of business types in Davos, the European Management Forum, first invited some politicians. Gradually, in the Reagan-Thatcher era, business became redefined as "the real world". Davos is now where CEOs tell politicians how to run the world.

But the politicians should be careful. A company isn't like an economy. Mr Stefan Szymanski, my economics guru at the University of Michigan, says: "Most economists would be pretty adamant that that is a poor analogy."

The analogy fails for many reasons but, above all, running an economy - let alone a country - is of a different order of complexity to running a firm. A CEO typically only has one target: To make a profit. A President has many targets.

Complexity researcher Vince Darley adds: "Running most companies, you are trying to do one thing extremely well. You've got one main product or one main customer base. An economy is much more intricate. You're looking to do hundreds of things, some of them conflicting."

Mr Darley notes that when businesses attempt multiple things, they often fail. That's why conglomerates went out of fashion. Many companies cannot even survive small changes in their one niche.

When Mr Romney ran companies, he cut costs. But as Mr Summers notes, that doesn't work for whole economies. If one firm cuts costs, it benefits. If all firms cut costs, the economy shrinks and nobody benefits.

Could CEOs make governments more efficient? Mr Darley replies: "Companies try to get the best deal, the best bang for the buck, but that's not really what being a President is about. He's the strategic force. Those efficiency skills would be great to have in the middle management of the federal bureaucracy."

Indeed, when successful peanut farmer Jimmy Carter brought his skills to the presidency, he ended up a feared micro-manager who even supervised the schedule for the White House tennis court.

The CEO fallacy is related to the "money fallacy": The notion that life is a race to make money and that rich people, therefore, possess special wisdom.

This was nicely expressed in an argument tossed around during Occupy Wall Street: People with time to protest must be losers whose views didn't matter.

The money fallacy has recently propelled various Goldman Sachs alumni to high public office, from Mr Mario Monti in Italy to Mr Mario Draghi at the European Central Bank and Mr Jon Corzine, the former New Jersey Governor. The collapse of Mr Corzine's MF Global Fund couldn't dent the money fallacy, just as the CEO fallacy has outlived former Prime Minister Silvio Berlusconi's reign in Italy.

In fact, both fallacies have become more popular as voters tire of professional politicians. Oddly, Mr Romney does have relevant experience for the presidency: He was a respected Governor of Massachusetts. But he cannot mention that because he introduced universal healthcare there. Still, given popular confusion, the CEO fallacy might carry him all the way. The Financial Times Limited

Simon Kuper is a columnist with the FT.

Euro-Crisis: Welfarism solution or problem.

To thrive, euro nations must cut welfare state
Apr 24, 2012
by Fredrik Erixon

Most criticism of government profligacy in Europe lately has focused on the obvious sinners, such as Greece. When it comes to overspending on social welfare though, Europe has no angels.

Even the "good" Scandinavians and governments that appeared to be in sound fiscal shape in 2008, but were then undone by unsustainable private-sector debts, were spending too much and will have to restructure.

The only question is whether this will be done gradually, or via shock therapy.

Take the four countries at the epicentre of the euro-area crisis: Greece, Ireland, Portugal and Spain. They are in many ways different but they have three important characteristics in common.

First, total debt in these countries expanded rapidly throughout the past decade - either because of increased government borrowing (Greece and Portugal) or through a rapid build-up of private debt (Ireland and Spain). Second, they all ran substantial current-account deficits in the years before the crisis. Third, government spending in those nations grew at remarkably high rates.

In Greece and Spain, nominal spending by the state increased 50 per cent to 55 per cent in the five years before the crisis started, according to my calculations based on government data. In Portugal, public expenditure rose 35 per cent; in Ireland, almost 75 per cent.

BUBBLE TROUBLE

Clearly, the welfare-state expansion in Greece and Portugal was part of the reason these two countries ended up as clients of Europe's bailout mechanisms. But Ireland and Spain had problems with the rapid expansion of the state too.

A big part of rising affluence during the boom years was generated by escalating real-estate bubbles which caused private debt to soar. They boosted the construction sectors and, more generally, pushed domestic consumption to the point where Spain had to borrow as much as 8 per cent of gross domestic product (GDP) every year to finance its current account deficit.

Like other bubbles, they spearheaded economic growth, which allowed governments to expand the state rapidly.

That growth vanished and gold turned to sand. Simply put, the bubble-fuelled prosperity wasn't sustainable. A record of solid fiscal surpluses was quickly turned into high structural deficits. Spain, for instance, entered 2008 with a budget surplus of slightly more than 2 per cent and ended 2009 with a structural deficit of 9 per cent.

RISING PENSION BILLS AND THE CRISIS

This has been a familiar story during the crisis. Yet surprisingly few people in Europe have bothered to understand the role that the welfare state played in creating it.

Take as an illustration the average Spanish pensioner. Until recently, he received a state pension that was more than 80 per cent of the average salary of current earners. So when the economy was growing strongly, salaries and, therefore, pensions did too. That might not be a problem if wages (and pensions) were to fall again when the economy shrank - but that doesn't usually happen.

Instead, the pension bill tends to remain at the same elevated levels even as economic growth and government revenue fall, creating an unaffordable ratchet effect.

Europe's crisis economies will now have to radically reduce their welfare states. State spending in Spain will have to shrink by at least a quarter; Greece should count itself lucky if the cut is less than a half of the pre-crisis expenditure level.

EXPECT CHANGES

The worse news is that this is likely to be only the first round of welfare-state corrections. The next decade will usher Europe into the age of ageing, when inevitably the cost of pensions will rise and providing healthcare for the elderly will be an even bigger cost driver.

This demographic shift will be felt everywhere, including in the Nordic group of countries that has been saved from the worst effects of the sovereign-debt crisis.

Germany, for example, still has an underfunded pension system. One study has projected that on current population- and spending-growth trends, healthcare expenditure would account for 15 per cent of Germany's GDP by 2025 and almost 26 per cent by 2050.

Europe's social systems will look very different 20 years from now. They will still be around, but benefit programmes will be far less generous and a greater part of social security will be organised privately. Welfare services, like healthcare, will be exposed to competition and, to a much greater degree, paid for out of pocket or by private insurance.

The big divide in Europe won't be between North and South or left and right. It will be between countries that diligently manage the transition away from the universal welfare state that has come to define the European social model and countries that will be forced by events to change the hard way. BLOOMBERG

Fredrik Erixon is director of the European Centre for International Political Economy, a research group in Brussels.

URL http://www.todayonline.com/Commentary/EDC120424-0000003/To-thrive,-euro-nations-must-cut-welfare-state



Social model is Europe's solution, not its problem
Apr 24, 2012
by Paul Fourier

In the wake of the financial crisis, Europe's leaders are calling the continent's social model into question - it is "done", according to European Central Bank (ECB) President Mario Draghi. That's a travesty.

The crisis is, above all, financial. Yet governments aren't addressing the malfunctions that caused this problem. Instead, they are forcing ordinary people to pay and attacking the social systems that support them.

Take the example of Greece. The country is being pushed to accept an austerity plan of unprecedented severity, predicated on reducing public spending and slashing salaries, pensions and social systems in the most brutal way. This has forced the country into an economic, social and political crisis that will last for many years.

These policies are initiated not by Greeks but by European Union officials in Brussels, at the ECB in Frankfurt, or in London, where the British government continues to block proposed measures to fund a recovery, such as a Europe-wide tax on financial transactions.

These ideas are modelled on the austerity plans that were imposed on the countries of Latin America in the 1970s and '80s - and they are suicidal.

IMPOVERISHING SOCIAL SYSTEMS

Labour unions in the European Trade Union Confederation take the opposite view of these choices. Union leaders believe austerity is pushing Europe - and many industrialised countries outside the region - into a recession, unemployment and poverty. Democracy, both political and social, has to be restored.

To start with, it is time to rethink the EU, which has become nothing more than a large market, without any consideration of social or fiscal harmonisation. The result has been to set Europe's citizens in competition with each other, as can be seen in the debate about how Germany has grown at the expense of its partners.

Wealth that is generated by the creation of a continent-wide market should benefit the citizens of the EU together. It should, above all, raise standards of living. But the effect has been the opposite.

As governments compete to attract companies by offering lower corporate tax rates and social contributions, the result has been to impoverish social systems and public finances and, therefore, workers and pensioners.

MAKE EMPLOYMENT PRIORITY

Priority has to be given to growth and employment, rather than pleasing the markets. We need new economic, social and monetary policies. We need to move towards a new distribution of wealth that favours income derived from labour over capital, wages and productive investments over financial investments and dividends.

Far from reducing the purchasing power of workers and retirees by undermining the pension and social-welfare systems, we need to boost these as a way of supporting internal growth that is much less dependent on external markets.

We need proactive employment policies that promote public-works projects and laws that discourage companies from cutting staff levels when profits are high.

All this is especially important for the young. Unemployment for the under-25s is now 23 per cent in France, more than 30 per cent in Greece and 50 per cent in Spain.

The argument so often put forward to justify reductions in labour costs - keeping companies competitive - doesn't stand up to scrutiny. What handicaps European businesses today is the lack of quality and innovation. To try to compete with Chinese businesses by lowering labour costs is a decoy. It does nothing but benefit short-term corporate profits, to the detriment of employees.

More of the wealth that companies produce should be used to increase salaries (with social-security payments), and to pay for training as well as research and development. Doing so would help companies to innovate and strengthen their position in the market.

Above all, we need to maintain employment in the public services, the quality of which benefits companies as well as individuals. Cutting public spending can only be done to the detriment of the very things that underpin the growth of large industrialised economies: Excellence in education, an effective health system and quality public services.

HEAVIEST BURDEN ON LEAST PROTECTED

Social-protection systems based on solidarity between the generations, between men and women, rich and poor, have to endure in their current form. To attack them is to cast onto the mercy of the marketplace our ability to maintain our health, to safeguard our pensions and to raise our children in good conditions. Invariably, this produces two-speed protections and weakens the poorest.

Leaders on Europe's political right are refusing to question the economic model they have been supporting for decades. The financial crisis has shown that this model, based on deregulation, privatisation and reduction of the state's role, is exhausted, if not bankrupt.

Either by error or ideological stubbornness, Europe's current leaders are imposing the heaviest burden of reform on those who are least protected. If Europe's governments continue on this path, they risk tipping their countries into new crises and reinforcing the nationalism and xenophobia that's already becoming all too evident. BLOOMBERG

Paul Fourier is a member of the executive board of the Confederation Generale du Travail, one of France's largest labour-union groups.

URL http://www.todayonline.com/Commentary/EDC120424-0000011/Social-model-is-Europes-solution,-not-its-problem

Copyright 2012 MediaCorp Pte Ltd | All Rights Reserved

America is a vetocracy, not a democracy

Apr 23, 2012

by Thomas L Friedman

Does America need an Arab Spring? That was the question on my mind when I called Dr Frank Fukuyama, Stanford professor and author of The End of History and the Last Man.

Dr Fukuyama has been working on a two-volume opus called The Origins of Political Order, and I could detect from his writings that his research was leading him to ask a very radical question about the United States' political order today, namely: Has America gone from a democracy to a "vetocracy" - from a system designed to prevent anyone in government from amassing too much power to a system in which no one can aggregate enough power to make important decisions at all?

"There is a crisis of authority, and we're not prepared to think about it in these terms," he said. "When Americans think about the problem of government, it is always about constraining the government and limiting its scope."

That dates back to our founding political culture. The rule of law, regular democratic rotations in power and human rights protections were put in place to create obstacles to overbearing, overly centralised government. "But we forget," Dr Fukuyama added, "that government was also created to act and make decisions."

That is being lost at the federal level.

A system with as many checks and balances built into it as ours assumes - and requires - a certain minimum level of cooperation on major issues between the two parties, despite ideological differences. Unfortunately, since the end of the Cold War, which was a hugely powerful force compelling compromise between the parties, several factors are combining to paralyse our whole system.

For starters, we've added more checks and balances to make decision-making even more difficult - such as senatorial holds now used to block any appointments by the executive branch, or the Senate filibuster rule, requiring a 60-vote majority to pass any major piece of legislation, rather than 51 votes.

Also, our political divisions have become more venomous than ever. As former Democratic Senator Russ Feingold once remarked, at the rate that polarisation is proceeding, partisans will soon be demanding that consumer products reflect their politics: "We're going to have Republican and Democrat toothpaste."

In addition, the Internet, the blogosphere and C-Span's coverage of the workings of the House and Senate have made every lawmaker more transparent - making back-room deals by lawmakers less possible and public posturing the 24/7 norm.

And, finally, the huge expansion of the federal government, and the increasing importance of money in politics, have hugely expanded the number of special-interest lobbies and their ability to influence and clog decision-making.

Indeed, the US increasingly looks like the society political scientist Mancur Olson wrote about in his 1982 classic The Rise and Decline of Nations. He warned that when a country amasses too many highly-focused special-interest lobbies - which have an inherent advantage over the broad majority, which is fixated on the well-being of the country as a whole - they can, like a multi-limbed octopus, choke the life out of a political system unless the majority truly mobilises against them.

To put it another way, says Dr Fukuyama, America's collection of minority special-interest groups is now bigger, more mobilised and richer than ever, while all the mechanisms to enforce the will of the majority are weaker than ever. The effect of this is either legislative paralysis or sub-optimal, Rube Goldberg-esque, patched-together compromises, often made in response to crises with no due diligence. That is our vetocracy.

The Financial Times columnist Ed Luce notes that if you believe the fantasy that America's economic success derives from having had a government that stayed out of the way, then gridlock and vetocracy are just fine with you.

But if you have a proper understanding of US history - so you know that the government played a vital role in generating growth by maintaining the rule of law, promulgating regulations that incentivise risk-taking and prevent recklessness, educating the work force, building infrastructure and funding scientific research - then a vetocracy becomes a very dangerous thing.

It undermines the secret of our success: A balanced public-private partnership.

"If we are to get out of our present paralysis, we need not only strong leadership but changes in institutional rules," argues Dr Fukuyama. These would include eliminating senatorial holds and the filibuster for routine legislation and having budgets drawn up by a much smaller super-committee of legislators - like those that handle military base closings - with "heavy technocratic input from a non-partisan agency like the Congressional Budget Office", insulated from interest-group pressures and put before Congress in a single, unamendable, up-or-down vote.

I know what you're thinking: "That will never happen." And do you know what I'm thinking? "Then we will never be a great a country again, no matter who is elected."

We cannot be great as long as we remain a vetocracy rather than a democracy. Our deformed political system - with a Congress that's become a forum for legalised bribery - is now truly holding us back. THE NEW YORK TIMES

Thomas L Friedman is a three-time Pulitzer Prize winner.

Would we give Al Qaeda the same say?

It's disturbing that the public combs over every word from Breivik, who should be treated as a terrorist

Apr 23, 2012

by Jonathan Freedland

Does Abu Qatada play World of Warcraft? Did he once, like Anders Behring Breivik, dedicate a sabbatical year to a "hardcore" playing of the game?

We don't know. Perhaps we will find out when Abu Qatada, often described as the spiritual leader of Al Qaeda in Europe, finally faces trial. But I wouldn't bet on it. For when alleged jihadists like Abu Qatada have been brought to trial, they don't quite get the treatment accorded to Breivik this past week.

If they are allowed to testify for five solid days, given an extended opportunity to expound their world view, then the world's press do not hang on their every word, reporting in tweet-sized nuggets the nuances of their philosophy. Nor are their personal life histories, their psychology and video game habits, probed and debated.

Of course comparisons are tricky, not least because those who have staged the most lethal acts of jihadist violence - in New York, Madrid or London - have rarely lived to stand trial. But take this contrast.

In Oslo, the court has been listening to a man who planted a bomb that killed eight and who went on to murder another 69 people, mostly teenagers, on the island of Utoya - a death spree Breivik described on Friday in terms that stop the heart.

There has been copious discussion of Breivik's psyche and especially his views, starting with his courtroom lament that Norway had become "a dumping ground for the surplus births of the Third World".

VASTLY DIFFERENT COVERAGE

Contrast that with the airline bomb plot of 2006, in which an Al Qaeda cell in Britain planned to blow seven transatlantic jets out of the sky.

News reports of that trial offered a scant few lines about the conspirators' individual motives, with most of the coverage focused on operational details, the mechanics and scale, of the planned attack.

My colleague Vikram Dodd, who covered that London trial, was struck when he heard a BBC Radio 5 live phone-in this week that was regularly interrupted by snippets from Breivik's statement. "The grammar of the coverage was as if this was the Chancellor giving his budget," says Mr Dodd.

More than one caller to that programme, while quick to insist they disagreed with Breivik's methods, did rather think the Norwegian had a point about multiculturalism run riot. "I can understand where this guy's coming from," said Mr Tom from Dover, south-east England.

Several readers of a Guardian article sought to post comments in the same vein, calling for "a complete stop of immigration from Muslim countries" and suchlike.

To listen to it, you'd think Breivik had simply wanted to start a debate, that he'd perhaps written a provocative pamphlet rather than commit an act of murderous cruelty.

TRIAL AS A STAGE TO THE WORLD

It was to avoid precisely this problem that the United States Congress acted to relocate the prospective trial of Khalid Sheikh Mohammed, the alleged principal architect of the 9/11 attacks, from federal court in Manhattan to a military tribunal at Guantanamo.

They did not want him enjoying the platform so gleefully exploited by Breivik. Perhaps they understood what the latter wrote in his 1,801-page manifesto, posted before the Utoya killings: "Your trial offers you a stage to the world."

The comparison is not so far-fetched. Breivik has expressed his admiration for Al Qaeda's willingness to "embrace" death and was keen to adopt the organisation's methods: His ultimate goal last July was to behead Norway's former Prime Minister and post the video online.

Like Al Qaeda, he believes in acts of spectacular violence as a first step to changing the world, seeks to purge his own people of those deemed weak in the face of the enemy, yearns for a pure, past golden age that never existed and dreams of apocalypse. Above all, he wants those he regards as his people to be unsullied by contact with inferior others.

In this, Breivik and Al Qaeda are kindred spirits.

IS THERE A RIGHT WAY?

What, then, is the right way to bring such people to justice, whether Breivik or Khalid Sheikh Mohammed?

The cost of the Norwegian approach is that, by treating Breivik like any other defendant, the courts have given him that global megaphone. That represents a perverse reward for his actions: He would never have got such a hearing had he confined himself to ranting on a blog.

More alarmingly, the Oslo trial has surely supplied an incentive to any would-be Breiviks: Kill as he killed and you too will get the attention of the world.

And yet, by trying Mohammed behind closed doors, the US too has handed the forces of terror a kind of victory. They have declared there are limits to the open society, that the rule of law is not strong enough to cope with every eventuality. In a small way, they have conceded ground to the terrorists' view of the world.

How much more appealing is the message of the Norwegian PM last summer, who declared his country would respond to Breivik with "more democracy, more openness and greater political participation".

ONE OF THEM Versus ONE OF US

Whichever approach we take to such crimes, Oslo's or Washington's, one duty is surely clear: We have to be consistent. We cannot apply different standards to terrorists depending on whether they are fanatics of the white supremacist or jihadist variety.

And yet we do just that.

Mr Scott Atran, an eminent anthropologist who has briefed American officials on the nature of terrorism, explains that we adopt radically different approaches depending on whether we believe the threat is from within or without.

Outside attackers, like the 9/11 hijackers, are treated only in terms of the impact and consequences of their actions; those who come from "our side", as the Norwegians see Breivik, are examined for their intentions, what made them act the way they did.

Witness the case of Robert Bales, the US soldier who murdered 16 civilians in Afghanistan. "When it all comes out, it will be a combination of stress, alcohol and domestic issues - he just snapped," said the US military spokesman. It was personal, not political.

Had it been an Afghan soldier killing Americans, it would have been the other way around.

It's clear why we might do this. We can unite against an outside enemy; if the threat is from within, we want to believe it amounts to no more than a single, lone madman. "People don't want to probe," says Mr Atran. "They want to be reassured."

But this division, instinctive as it might be, is not really defensible. Terrorist murder is terrorist murder and we need to treat it that way - even when the killer looks like us. THE GUARDIAN

Jonathan Freedland writes a weekly column for The Guardian.

Facing up to history

Apr 17, 2012
 commentary

Japan is not the only Asian country in need of more openness about its own past

By Clarissa Oon

A SINGAPORE history teacher's role-playing of a sword-wielding Japanese soldier, reported by this newspaper late last month, has sparked off a debate that shows Japanese brutality in World War II still touches a nerve here.

The debate began in The Straits Times Forum Page, when cultural studies scholar Liew Kai Khiun criticised teacher Malcolm Tan's creative teaching methods as 'one dimensional', symptomatic of a lack of 'more balanced and broader perspectives about the Japanese Occupation' in the history syllabus.

But his letter in turn sparked others slamming segments of Japanese society for infamously glossing over the military's wartime atrocities. One writer, gynaecologist Wong Mun Tat, compared the other World War II aggressor Germany's open teaching of the Holocaust in schools and widespread recognition of guilt with Japan's relative reticence on its war crimes.

'We can forgive, but not forget' was a line that came up repeatedly in these letters. They referred to harrowing crimes, such as the mass killing and rape of over 100,000 Chinese citizens in the 1937 Nanjing massacre, and closer to home, the Sook Ching massacre of thousands of Singapore Chinese during the Occupation.

And yet the 'good Germany, bad Japan' dichotomy also runs the risk of over-simplification, as irresistible as it seems, given German society's relentless parsing of guilt and responsibility for the killing of six million Jews in numerous museums, films and books - notably Bernhard Schlink's bestselling novel Der Vorleser that became a powerful Oscar-winning Hollywood film, The Reader (2008) - and the fact that Japanese society remains divided in its interpretations of the wartime past.

Confronting moral evil as a collective society is a complex process that is not merely psychological or ethical in nature. As researchers such as Washington University international studies professor Daniel Chirot and political journalist Ian Buruma have shown, geopolitics also has something to do with it.

Germany and Japan faced very different post-war geopolitical realities that influenced how far each country went beyond trying and punishing war criminals and making financial reparations. Geopolitical considerations are also reflected in the timing of official apologies for the atrocities.

West Germany, through its first chancellor Konrad Adenauer, accepted full responsibility for Nazi-era war crimes a few years after the war ended. Japan, however, acknowledged the wartime suffering it had caused South Korea and China only when formal diplomatic ties were established, respectively, in 1965 and 1972. Official recognition that the war was 'aggressive' on Japan's part and full apologies for its wartime conduct in Asia came only in the 1990s.

Basically, West Germany had pragmatic reasons to confront its wartime brutality in order to make nice with its neighbours, whereas Japan faced no such imperatives and could afford to remain in denial for much longer.

The threat of communist East Germany and Eastern Europe, as well as the need to ally itself with the Western European nations it had invaded during the war, forced an impoverished West Germany to ensure that it would never lapse back into its jingoistic ways, right down to educating its young differently.

Japan, however, had no such pressures in its own backyard. The United States, which occupied Japan briefly after the war and gave it liberal democracy as well as its current pacifist Constitution, allowed Emperor Hirohito - the architect of the Japanese war effort - to keep his position. The US needed Japan's help to fight the Korean War in the early 1950s, and so did not force the examination of wartime guilt in the wider Japanese society.

With China, the two Koreas and South-east Asia all distracted by domestic turmoil until the late 1970s, Japan had to account to its neighbours for its wartime atrocities only when the region became more economically interdependent.

As a result, there have always been right-wing Japanese politicians and intellectuals who have ignored the horrors committed by the military in Asia and even insisted that these invading armies were welcomed as liberators.

History textbooks which whitewash wartime abuses are currently used in less than 2 per cent of Japanese schools. Other textbooks do not hide but also do not stimulate debate and analysis of these disturbing events. This was found by Stanford University's Shorenstein Asia-Pacific Research Centre in an ongoing comparative study of history textbooks used in East Asian countries.

Critically, however, the study found that the history texts of China, South Korea and Taiwan were also far from objective and coloured by 'the politics of nationalism', as project director Shin Gi Wook told this newspaper in 2009.

The crux of the issue is this: While Japan's neighbours should continue to nudge it to face up more fully to its wartime abuses, these countries should also move towards more honest and open examination of their own histories.

The most egregious example is China, which has excised from history textbooks and public discourse all mention of the mass famine during the Great Leap Forward (1958-1960), the violent political campaign that was the Cultural Revolution (1966-1976) and suppression of pro-democracy protests at and near Tiananmen Square on June 4, 1989.

What also helps push Asian societies to come to terms with past abuses are years of campaigning by a critical mass of public intellectuals of good conscience.

Asia needs more heroes such as Yuan Tengfei and Saburo Ienaga. Yuan is a Chinese history teacher whose popular online videos discuss the Great Leap Forward famine that killed millions and criticises its architect Mao Zedong, braving house arrest for doing so. Ienaga is a Japanese history professor who fought three decades of legal battles against the whitewashing of the country's war crimes in history textbooks, paving the way for more objective Japanese textbooks.

Singaporeans should also cast a self-critical eye on biases and omissions in the telling of our own national history, even as we take a hard look at the narratives of other countries.

clare@sph.com.sg

Enact real change by keeping an open mind

Apr 14, 2012
 
MY THOUGHTS
By Priscilla Goy & Tan Wei Lie

OPTIMISTIC slogans such as 'the change is me' and 'vote for change' have been used in successful campaigns.

The first was the slogan for this year's National University of Singapore (NUS) admissions campaign, while the second was used in United States President Barack Obama's presidential campaign in 2008.

Whether the change effected turns out to be for better or worse depends on our intentions, as well as the contexts and the needs of the people affected by the change. One cannot assume that good intentions will translate to positive differences.

This year, one of NUS' University Scholars Programme (USP) modules will examine state-minority relations in mainland South-east Asia. The inter-disciplinary course includes a three-week field trip, where students will undertake field research on highland minority groups in Mae Hong Son, Thailand, and Luang Namtha in Laos.

This is the product of a summer trip that both of us, together with four other students and our professor Dr Peter Vail, embarked on last year.

Dr Vail actively involved us in the planning of the course and immersed us in real-world field situations. Conventional stereotypes of highland and minority peoples were dispelled through our first-hand interaction with them during our homestays at several villages.

The experiences of bathing in the river, eating bamboo shoots for weeks and interacting with Thai and Laotian government officials were all equally memorable.

It was during this trip that our idea of 'change' was redefined, and we hope to share it with prospective students looking for their desired education paths and what they expect out of them.

We often push for change in a unilateral, hopeful manner, unaware that such change can fall short of real impact.

For instance, in one of the villages we visited, we encountered a stairway apparently leading to nowhere. The villagers later told us that it was built by external companies who wanted to boost tourist revenues by creating a pathway to a waterfall.

Little did the external parties know that the waterfall was only seasonal.

Our trip was replete with such examples of one-sided hope for change.

Nevertheless, when the recipients of change were themselves involved, efficacy improved, people were more engaged and real change happened.

For example, the problem of restricted access to health care does not always have to be addressed by using medical aid from non-government organisations. It may be better addressed by awarding villagers their citizenship rights to free basic health care, or by building a proper road to connect villages to the nearest town hospital.

Having an academic module with a field trip component allowed us to learn about policy issues and social trends on the macro level, as well as the micro-level effects that these policies have on people. Some micro-level problems can be more easily solved with policies on the macro scale, and these policies should also be made with the people affected by them in mind.

Real change happens when we break out of our mental moulds and see that problems may not always take on the form we expect them to. In our case, not all rural people were cut off from communications. Education can be provided by installing televisions - for example, some Laotian children learn Thai from TV shows. Also, not all villagers prefer washing in bathrooms to bathing in the natural flowing water of rivers.

It was only when we took problems on their own terms and appreciated them in their real contexts that our trip culminated in something fruitful for our juniors and future entrants of this course.

The change is you - but only if you break out of your initial mindsets and stereotypes to face reality head-on with an open mind.

Priscilla Goy, 23, is a final-year economics student and Tan Wei Lie, 22, is a second-year sociology student at the National University of Singapore. Both are active in the University Scholars Programme.

[So true.]

Wage hike not cost-free: Swee Say

Apr 14, 2012

Labour chief warns that higher salaries without productivity gains could lead to job losses
 
By Lydia Lim

THE unionists who cheered an economist's proposal to raise wages at the bottom by 50 per cent over three years may not be aware of its potential costs, labour chief Lim Swee Say said yesterday.

On Tuesday, a union leader told The Straits Times that Professor Lim Chong Yah's plan to hike wages at the bottom and freeze those at the top was 'a real morale booster' and 'long overdue'.

Yesterday, Mr Lim, NTUC's secretary-general, cited this comment twice during an hour-long press conference. He said it was understandable that union leaders would support a plan to raise workers' wages if they believed it would be cost-free.

'If you can up the wages of workers by 50 per cent with zero downside, I think union leaders, of course, will welcome it. But I also think that there are many union leaders who understand that nothing comes free so there must be some downside,' Mr Lim said.

The labour chief himself was sceptical that wages could be raised in the manner proposed by Prof Lim without workers and consumers paying a price.

On Monday, Prof Lim outlined a radical plan to close Singapore's growing income gap by raising wages of workers who earn $1,500 or less by 50 per cent over three years, and freezing wages of those who earn $15,000 or more for the same period.

Yesterday, NTUC's Mr Lim said: 'This approach is very risky. What is at stake are jobs and structural unemployment. You can push up the wages of low-wage workers by 50 per cent in three years, but you cannot improve his skill, his productivity, his employability by 50 per cent in three years.'

After criticisms from other economists, Prof Lim mounted a defence of his proposal in an interview on Wednesday with The Straits Times.

Responding to worries that the plan would drive away foreign talent and raise unemployment, he said Singapore would remain attractive to talent, and that Singaporeans who lost their jobs could be retrained and re-employed, given the tight labour market.

He conceded his plan might raise prices but said it would be all right as long as Singapore kept its rate of inflation at about half the rate of the world's inflation.

Yesterday, the NTUC chief dwelt at length on why he doubted that Prof Lim's 'thought-provoking' proposal would be as cost-free as claimed.

The first Cabinet minister to comment on the wage shake-up plan, Mr Lim warned that if productivity gains did not match the 50 per cent hike in wages, workers would pay a price in the form of job losses and structural unemployment.

He also gave a rough estimate of the size of the wage bill that would result from Prof Lim's proposed wage hike for low-wage workers - $4.56 billion. To arrive at that figure, he assumed a base wage of $1,000 and a pool of 400,000 low-wage beneficiaries.

He warned that someone would have to foot the bill. If the low-wage workers were from domestic sectors such as cleaning, the hike would mean a higher cost of living for Singaporeans, in the form of higher service and conservancy charges, for example, he said.

If the workers were in the export sectors, their companies would have to bear higher costs, and if they should become less competitive as a result, the outcome would be job losses, he added.

At the press conference, Mr Lim stressed he was merely stating his position as labour chief, not issuing a rebuttal to Prof Lim or stating the Government's position.

Prof Lim, who was chairman of the National Wages Council from 1972 to 2001, also argued that Singapore's high-wage policy of 1979 was effective in driving up productivity.

Asked about that yesterday, the NTUC chief said there was no consensus that the policy was a success.

His own recollection was that Singapore came to the conclusion that the policy, which led to wages outstripping productivity, resulted in the 1985 recession.

That was why Singapore abandoned it in favour of a policy centred on productivity and innovation, which remains in place today, said Mr Lim.

He also said that in today's globalised world, jobs and manpower are far more mobile than they were 30 years ago. 'In the early days, I can make a mistake but if the world is less mobile, I can still get away with my mistake. But in a highly globalised world, a slight mistake can lead to serious repercussions.'

lydia@sph.com.sg

[This is a variant of the minimum wages proposal, except instead of a wage line, the proposal is an across the board increase without any justification. But like the minimum wage proposal, there is an attractiveness to this proposal. If we ignore the possible costs and knock-on effects.]