G, Gini, and a libertarian Lee
Yawning Bread wrote about human rights and political apathy the other day, and there’s a little something there which I’d like to comment on.
He quotes Straits Times of 27 June 2005:
The rising index bears watching as a harbinger of future social unrest, experts warn. When Mao and the communist party started the peasant revolution in the 1920s, the Gini index was at 0.51.
I think the Straits Times got it wrong as a matter of reasoning. The Gini index is a fundamentally useless measure of standard of living. The question that we must ask ourselves, is not whether X is paid more than Y, but rather, are X and Y better off than they were when comparing between now and before.
For China in the 1920s, the real cause of discontentment amongst the poor is not the income disparity, but the CAUSE of the income disparity. The poor were poor, not because the rich were paid more, but because the poor had no security in property rights, and were often dispossesed and preyed upon by the rich.
Furthermore, there are statistical problems with comparing Gini indexes between different countries and different time periods. More information can be gleaned here. The point is that such comparisons offer little in terms of understanding changes in standard of living or income inequality.
The gist of it is that the Straits Times stuffed it up again.
The really interesting part is that the phrase ‘Gini index’ is often found together with the word ‘redistribution’, which basically forms the foundation of socialist policies. And we all know socialism means Big Government. If there’s anything else we know in life to be true, it is the fact that the Big G is not your friend. And the most amazing thing is, somebody in the upper echelons of power here in Singapore seems to get it.
From Weekend Today, July 2, 2005:
“The best way is to shrink the Government and have the Government do less,” Mr Lee quipped, during the 15-minute question-and-answer session with 450 delegates from American and Pacific Rim universities, at the closing dinner of a roundtable meet held here.
Never would I have thought that I would hear those words uttered in Singapore during my lifetime, much less by the Prime Minister of Singapore.
Should I be surprised? Well, considering that our PM Lee was educated at Cambridge, and then Harvard, and that he is an intellectually curious man, he would’ve at least read Hayek, Nozick, Friedman (Milton), and maybe even Mises.
He is a mathematician. So presumably, logical reasoning should be his forte. That said, how can anyone read The Road to Serfdom and not be convinced? How about Anarchy, State and Utopia? Surely Free to Choose would’ve made an impact on him?
I think there is a gradual realisation that ‘freedom’ cannot be discretely and distinctly separated into the ‘economic’ and the ’social’. Freedom is a continuum, along which all the different ‘types’ are mashed into an unrecognisable heap. If at any point a wall is erected, all the points along the continuum would be severely diminished.
As a case in point, the excessive machinations of a nanny state has already been keenly felt in our economic front [The Business Times, 02 July 2005]:
However, the over-confidence displayed by Singaporeans was not translated into their risk attitudes. The survey found they are the most risk-averse when it comes to scenarios that present them with potential gains. And when facing losses, they are most willing to take risks.
The double whammy is that Singaporeans are stupidly overconfident when it comes to the ‘been-there-done-that’ decisions because they think they know it all (think Sim Wong Hoo and Creative Tech), but dare not to try anything that is new and unproven.
This mentality can be traced directly to the culture built up by, to quote Yawning Bread, ‘40 years of such over-powerful government’, that no one is willing to take risks, nothing changes, and yet everyone thinks that they know best, simply because our Gahmen says we are the best.
How do we change this? PM Lee has provided us with the answer. Shrink the goverment. Let people make decisions for themselves. Success or failure, it is only through decentralised decision-making and uncoordinated self-organisation that market information can be accurately disseminated and analysed. It is only through the actions of individuals that institutions of self-help and autonomous wealth creation can arise.
Of course, no one is suggesting that the PAP is suddenly ideologically committed to the libertarian cause of a night-watchman state. That would most likely be political suicide, given that even our ‘opposition’ calls for socialist welfare policies and seem to garner quite abit of support for them.
I strongly believe however, that if our generation is truly that technologically literate and savvy, then it is inevitable that this generation would be libertarian in outlook. If the PAP builds a foundation for a future renewal that is based upon classical liberalism, then the reins of power would be theirs for years to come. If they do not… then more would just leave for freer shores.
Yawning Bread - Privacy rights and heads in the sand
Gini coefficient - Wikipedia, the free encyclopedia
TodayOnline Weekend, July 2, 2005 - ‘Shrink Government’ to promote risk taking
Night watchman state - Wikipedia, the free encyclopedia
Minarchism - Wikipedia, the free encyclopedia
AsiaOne - S’poreans over-confident but risk-averse, says study
