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3/11/2009

Growth for what and for who?

Eminnent professor of strategy at the Stephen M Ross School of Business at the University of Michigan in the USA is questioning the growth fetishism in Singapore. She is calling for a reexamination of what all the fuzz is about. And it takes someone from the distance, not our world class academia, to discuss such an important matter. Perhaps our brilliant people are all busy making money the best they could for themselves. Dr Linda Lim is a Singaporean based in Ann Arbor. She could see from the distance of things that we cannot see from inside the fish tank. The wide income gap and the high cost of living, and the way we bet big with our national savings are all things that demands a serious relook before they get bad. Where is the debate or concern in this little paradise of super talents, demigods and immortals? Maybe they have more important preoccupations like licensing bicycles or chasing pieces of gold medals in sports, or chasing foreign talents. Should we be pondering over the distribution of wealth and how to spread it around more instead of asking the hardlanders to ever keep on tightening their belts, or to make them pay more as every increase is carefully calculated to be affordable but leaving them with nothing for tomorrow? The ST devoted one page of its paper to Dr Linda Lim Today with 3 separate articles on her and what she had said about our economic growth and strategy.

7 comments:

Matilah_Singapura said...

I agree. Being fixated on 'economic growth' is a nonsense — an over hang from the Keynesian school, and later the Chicago school of economic ideas.

Also, a lot of the "Asian tiger-economy-miracle" was done the old Keysesian style of using money supply increase and bank credit — the very things which causes booms and crashes.

On the MAS website they claim to have policies to promote non-inflationary, sustainable growth, however having personally experienced a few crashes in S'pore already, one can reasonably conclude that the MAS is no different from any other central bank, and what they claim is total, utter, unendurable BULLSHIT.

So go ahead and criticise S'pore's 'fetishism' for economic unicorns and other mythical creatures. It won't make any difference.

Without Kenysian-style economics and Fabian-socialist policies, the government CANNOT control the political economy, and thus will have problems controlling the people. Without these economic controls the country will be filled with FREE individuals enjoying a high standard of personal liberty with a very tiny amount of government intervention in their lives.

They can't allow this to happen because otherwise the social engineering of a centrally-planned and heavily controlled society goes out the window.

There is no way the government will ever allow that to happen. Too much is at stake — especially if you're part of the elite.

Anonymous said...

Many Government's Department had been privatised and sold in the name of efficiency over the past decade. As these was important organs of a country, the lack of them are definetly detrimental to the function of our state. In it place, many companies and agencies were borned for these function. In order to get multiple imcomes for the executives, many more phantom companies are created. These could partly explain why this country have overtake New York, London, HK etc to become the 10 Most expensive country in the world Despite having no minimum Wages for it countryman. The cleaners have been tightening their belt with monthly wages of only $600. Further tightening may cut their waist into two and definetly solved the cleaner problem permanenly.

Anonymous said...

"Being fixated on 'economic growth' is a nonsense."

How so? Economic growth brings about higher standards of living... unless you're referring to the macro-statistics to measure economic growth e.g. GDP - which are useful in some ways, but by and large deceiving.

redbean said...

economic growth per se is a positive thing. but when growth leads to exceptional higher cost of living then we need to know if the people are really better off.

eg, a grad earning $3k in the early 70s was very comfortable, can afford car and house, not flats. today, a grad earning $5k will be struggling to own a car and a hdb flat.

and you need two income today versus one income then. thus, economic growth must be seen in the light of real wealth being to the people where the income and purchasing power are not eroded.

we are seeing a trend reversal today when people are feeling that the cost of living is eating into their well being and earning power.

Anonymous said...

Tigers,as far as I know,all tigers prosper due to greedy Uncle Sam's over consumption.

Of course the tigers whick made it have been polite and do not complain about Uncle Sam lack of discipline.

The great up and coming tiger,Communist China is the one heard complaining loudly that Uncle Sam has no financial discipline,but at the same time,their fat government finance people keep providing loans to bankrupt Uncle Sam,.whilst at the same time,their equally corrupted private red biz men keep borrow fr Jeweish bankers,last counts US$2.4 trillions in total.

Matilah_Singapura said...

anon 357

> Economic growth brings about higher standards of living <

No, you have the reasoning backwards.

The rising standard of living is a direct result of production, and productivity. Economic growth is a consequence, NOT THE CAUSE.

redbean:

> but when growth leads to exceptional higher cost of living <

Not necessarily. REAL growth increases the purchasing power and thus LOWERS the cost of living.

The cost of living results from INFLATIONARY growth — which is caused by applying Keynesian principles.

Alot of the "Asian miracle" was created by inflationary growth. That is why Asia has experienced recessions, currency crises etc, although reporting "spectacular" rates of economic growth.

Inflationary growth eventually leads to credit bubbles, asset-price inflation and eventual collapse.

Don't worry. Keynesian economics is still alive and well because it is the economic system of ideas best suited to social engineering and control.

Therefore, expect the same to continue for at least a few more decades — i.e. when your children's children are struggling in some periods and running around euphorically screaming "We're Rich! We're Free!" when the growth illusion caused by inflation boosts up stock markets and real estate.

redbean said...

of course growth doesn't necessary lead to high cost of living. and neither growth leads to higher standard of living but selective sector or people will benefit. now what so smart about telling such truism?

ok, ok, what we are having is self created inflation by deliberately pushing up cost and market pricing. pricing to how much people have in their cpf is a deadly policy. it empties the cpf as fast as it is being topup.

when inflation and depreciating values of money are not stopped or unstoppable, saving is a futile thing. asking people to save is also silly.

yes, do like the americans, spend and spend. otherwise the money will be valueless.