Response to Lecture 2: Class and Inequalities

Given the choice between leaning towards capitalism or socialism, I would choose the latter. My opinion is probably heavily influenced by the fact that I grew up in Singapore, a country that embraces many elements of capitalism and free trade, but does not allow it to have full reign in its economy, encouraging certain types of businesses to stay whilst discouraging the setting up of other types. It is a country that has nationalized great portions of public utility industries (e.g. water, electricity, gas, transport) and has its hand in extensive foreign investments made by gigantic government-owned companies. It is regarded by foreign analysts and critics as having a government with many socialist traits, such as single-party political dominance and high amounts of government influence in many facets of public and private life.

Most importantly, Singapore is regarded by these same analysts as being an incredible success story. Though burdened with its own share of social problems (e.g. low birth rates, high cost of living, lack of nationalistic sentiment), its problems do not include the massive unemployment, abject poverty, and social chaos that exists in other post-colonialist states, something I attribute to Singapore having been the recipient of the full benefits of colonialism, with none of the detriments accrued by other post-colonialist territories such as Africa. Colonialists often made the choice to build infrastructures for the exploitation of resources in resource abundant colonies; Singapore had no significant natural resources, and to their advantage the British built up infrastructure for trade that laid the foundation for future developments.

I agree with the broad themes of the lecture, that the capitalist ideology works best to unleash individual drives for profit and success, and that the free markets it advocates lead to increased production and specialization globally. On the other hand, I am wary of the ignorance of externalities (factors unaccounted for by market demand e.g. environment pollution) fostered by capitalism, as well as the tendency for highly successful businesses to use their clout to manipulate smaller companies and even governments to an extent. I think that appropriate government guidance and control can curb the influence of MNCs, keep regard for the state of externalities, and bring stability and a standard of quality to key public utilities.

I believe that in the context of our society, income inequality will remain a serious issue for years to come. Being a small-sized, resource-lacking country, our economic policy has led us to pursue things such as foreign investment, high-skill services, and research and development of new technologies. There is somewhat of a technological bias in favor of people with high enough education and knowledge to work with and research new technologies. Many of the strong points of our country's economy (perhaps, with the exception of tourism) tend to favor people who undergo long lengths of education to attain the skills required to provide specialized services. This puts Singaporeans who do not choose, or do not have the opportunity, to pursue a higher education at somewhat of a disadvantage. Furthermore, jobs like manufacturing, which usually represent incomes for middle-class workers, take up a small proportion of the country's economy.

A point that illustrates this would be recent articles in the Straits times about the discontinuance of famous hawker food stalls. It was reported that many of the hawkers' children were unwilling to continue the family trade, instead opting to use their family's finances to pursue a 'higher' education and standard of living.

Still, it must always be kept in mind that an overwhelming proportion of Singaporeans enjoy a decent standard of living, well above the threat of poverty. However, the issue of constantly regulating the income gap, and making sure that the well-to-do in Singapore do not become ignorant or contemptuous of the plight of fellow citizens, will always be a critical issue to Singapore's continued well-being.

I am enthusiastic to find out more about income inequality in South Korea and Japan, after viewing Don Reeve's 'Poverty in a Global Economy' reading, where it was mentioned that South Korea and Japan had very low rates of income inequality. I'm doing some light reading about Japan now; it's suggested that persisting cultural values and social policies have had great influence on Japan's relatively small income gap up to this point.