Angry Doctor

Tuesday, March 14, 2006

Comparative Advantage 2

Mr Koo, whose letter I featured in a previous entry, has made a comment on this blog. Now this is probably off the usual scope of the blog, but he argues his case well and I thought I should reproduce it here:


Hi.

I am zhixuan. I am stimulated by some of the arguments you've made against mine. Many are very relevant (or perhaps over-used) arguments that are present today against globalisation as a whole.

First and foremost, I am not one who supports globalisation or cross-border trading of goods and services without restraint. I believe there should be a certain amount of regulation. The consequences of not doing so would be disastrous (the point you made of the rich getting richer and the poor being poorer). As it is in Kofi Anan's opinion, 'Globalisation is not an objective reality, but an ideology of predatory capitalism'. I believe this sums up your arguments against the outsourcing of the radiology profession. And this is absolutely true in the world today. The breakdown of the Cancun trade talks in 2003 allowed the world to finally understand the frustration felt by Third World countries

But to see these obstacles and cease taking this path is suicide. In fact, my reply to Dr Low's comments should not be seen as an idealistic advocation for greater liberalisation of free trade in all industries. My reply is simply an attempt to rationalise what I've observed in the real world today. That is to say, while we are still here debating and bickering about what should or should not be 'globalised', millions are already embracing this revolution. Not just the rich, but the poor are beginning to come to terms with it as well. Globalisation, in my opinion, is no longer an ideal concept, but a prevalent phenomenon that will continue to impact all industries and professions. How much we progress will not be determined by whether we accept the realities of globalisation, but how we employ them to our advantage.

The cost of the Industrial Revolution was more than the costs of buying and maintaining machines. There was also exploitation of the workers in the forms of child labour, hazardous work conditions, and poor or absent benefits. Even today many workers in factories in Developing Countires work under such conditions. We may be beneficiaries, but let's not forget there are also victims when we 'move forward'

A gentle reminder would be that the exploitation of workers is an act of injustice prevalent since the birth of commerce. No doubt that before, during and after the revolution, the exploitation of workers was always an issue. Even today, it can be found in the most closed up regimes (North Korea etc). Similarly, it can also be found in socities promoting the free market economy (USA, UK etc). Yet it is in the very process of moving forward, opening up to other countries that these injustices can be brought to light and be condemned by the international community.

Perhaps not explicitly explained in my original post, the people whom i claimed obstinately opposed the Industrial Revolution were simply using the 'costs of buying and maintaining machines' as an excuse. These were workers who couldn't accept the fact that they had lost their jobs to machines, which could perform the same duties so much more cheaper and efficiently. Instead of accepting the change and finding out how they can adapt and be valuable to the new economy, they went around committing acts of terror, i.e. setting fire to factories, killing industrialists. Forgive my impudence, but if you scale their actions down a few times, they would very clearly resemble those who are against the outsourcing of radiology today.

...If a poor man who has only 20 cents wants to buy the last loaf of bread from a baker to feed his family, would you offer the baker 50 cents for that loaf of bread just because you don't want to spend a dollar getting it from your usual baker?

The answer is yes. In the free market, I, as a consumer, am obliged to choose the lowest available price for any given good/service. (To the hyprocrites who say no, i suggest you stop wearing clothes and consuming food imported from foreign countries. For I can assure you that many people 'suffer' too for every new Giordano T-shirt you put on, every bite of that MacDonald's burger in your capitalistic hands). I understand, however, that in giving this baker 50 cents, I will be making him richer than if he had sold that loaf of bread to the poor man. And with this 50 cents, the baker will turn around and look at the poor people around him. He sees the poor man who wanted to buy his loaf for 20 cents and decides to use the 50 cents to buy the vegetables the poor man sells for a living. Not out of compassion, but because this baker wants and can now afford to eat vegetables. This poor man is now 50 cents richer. He might not have the bread he originally wanted, but using the 70 cents he now rightfully possess, he realises he is able to feed his family much more sufficiently than he had been before.

If you have read economics, you wouldn't look at the above as idealism, but a classic analogy of the multiplier effect of macroeconomics. Perhaps we are all, at times, guilty of the mistake of putting ourselves above economic mechanisms (The engines of which are the assumptions of consumer rationality and individual rights). Perhaps it is time to start trusting the Invisible Hand, and instead of interrupting a win-win situation by our self-imposed moral high ground, we should allow the market to take its own course. When 2 parties are willing to come together to trade, allow them! Who are we to put a halt to this? As Adam Smith so aptly concluded, 'It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest'.

I wonder how happy Mr Koo will be when the day comes that Singapore becomes a successful medical industry exporter and when all our best and brightest doctors have been exported to work in Developed Countires, and Singaporeans themselves cannot get adequate or timely healthcare. Import cheaper doctors from overseas? Well, why would them want to work for you when there are obviously higher bidders who have already bought your doctors?

The problem with many Singaporeans today with regards to the issue of globalisation is the failure to have a paradigm shift. Many see globalisation as a threat to a small country like Singapore. Considering our size, what future would there be for us if we open up and allow billions of foreigners to compete for our jobs? Instead of fearing that 6 billion would want to squeeze and compete with 4 million, I would choose to see the opportunities that can be reaped when 4 million are brrought to a market of 6 billion. If this isn't your perspective, you have certainly not understood the problems facing our economy today-which is one reaching saturation point; graduates are having difficulties getting the jobs they want; the government urging us to expand abroard; the government's desperation in signing Free-Trade Agreements (to that extent that they can support imperalism-US' war against Iraq) etc etc. Perhaps before worrying about emptying our supply of local doctors in the event where we export all of them (an unrealistic presumption by the way, just look at the ratio of number of people applying for medicine vs number of people studying medicine. Once again, trust the market forces! If Singapore would become such a powerful medical hub, the number of medical students will definitely increase proportionately!), we should worry instead that if we allow the medical profession to be immune to the forces of globalisation, so too will the other professions and the industries want to follow suit. And if you do not think others have a case like yours, the next time you meet a retrenched plumber, try explaining to him that he deserve to lose his job to cheaper foreign workers but not doctors because doctors are more important than he is in serving the local population.

Back to my first point regarding the Cancun trade talks, the poor aren't against globalisation as we might so think. They are against double standards set by the developed countries. For example, when they follow the rules set by WTO by allowing firms of developed countries to build factories on their land to exploit cheap labour, they feel betrayed when these countries erect tariffs as a form of protectionism against their relatively cheap exports. It is not globalisation that harms the poor, but the denial of the advantages they rightfully deserve to enjoy. Ban the outsourcing of radiology, ban the takeover of US ports by Dubai-based firms, you will safeguard the jobs and income of the local population, but do not, DO NOT expect those of the Third World countries to be grateful.

If you want to know more of where I stand, you might consider reading Thomas Friedman's 'The World is Flat' and Richard Florida's 'The Flight of the Creative Class'.

Thanks for allowing my article to appear on your blog. I am honoured. All the best to you! :)


Thank you, zhixuan.

Understanding that capitalism can be 'predatory' and that globalisation may not always be fair to all parties involved does not mean that one automatically has to reject capitalism and globalisation. This is a false dichotomy. As you have said, it is not the concept of globalisation that is wrong, but the way it is being practised. Globalisation can be more than just exploitation of a poorer nation's labour or resources, it can also be tempered with regard for the needs of other nations.

We, as consumers, are not helpless victims in a grand scheme that is inexorable or irreversible. We make our voice heard every time we excercise our choice and vote with our wallet. We are not 'obliged' to go for the cheapest or fastest goods or services. We can pick the ones that come from a business where workers are treated fairly, or that which harms the planet less. We may spend more, or have to put up with less efficiency, but we have a choice.

What I am advocating is an awareness that efficiency do not always equate to happiness, and that profit do not always equate to good.

Labels:

24 Comments:

  • Boy you're one heck of an angry Doctor. All your thoughts are need to be corrected, I recommend a visit to my blog :

    http://happycitizen.blogspot.com

    Learn to be happy, it is an acquired skill. If you find it difficult to be happy, read the Straits Times especially articles written by Chua Mui Hoong and Chua Lee Hoong.

    Yes I agree with your excellent point that consumers can vote with their wallets - they figure which products exploit workers and which harms the environment. Yes, it is written all over the product. Yes the average consumer will spend his time to figure out how his iPod is made and whether exploited workers are used. I'm so impressed with that concept - that consumers can be so conscious of exploitation to be willing to pay more for their products.

    Yes I the milk I drank this morning tasted like the cow has been exploited, so I better stop drink that brand. I got a feeling my car was made by exploited workers in Korea looks like I have to switch to a Mercedes which hires strongly unionised workers. I cancelled my SIA tickets because I remember the union got bashed up by MM Lee - I guess they must be exploiting the pilots. I heard that coffee grown in vietnam has flooded the market from Vietnam resulting in price collapse causing misery in Brazil and other south american countries. I have to stop drinking coffee to stop the misery.....

    Yes consumers can be very conscious how each and every product they use is made and produced...it will help them to prevent the ill effects of globalisation ....

    By Blogger LuckySingaporean, At March 14, 2006 9:35 pm  

  • There are those who boycott Walmart in US. There are also those who shop there and gives the savings away. There are also those who shop there and keep the savings.

    Who is right?
    U decide

    By Anonymous Ang Yee, Gary, At March 14, 2006 10:30 pm  

  • Frankly the word globalisation is a misnomer.

    The world will never truly be global as long as there are individual countries,individual states, individual people, looking after their own interests.

    Are humans selfish by nature? I seem to think that's they way it is at the moment.

    So until we can find a reason to unify all humans across the globe, one global united nation, I think the word globalisation still contains many capitalistic innuendoes.

    Face it, at the end of the day most of us all tune to radio station WIIFM. "What's in it for me?"

    By Blogger Dr Oz bloke, At March 15, 2006 10:18 am  

  • not me...
    i became a doctor to help the people around me in need... to make a difference... if i thought about myself i would be a lawyer today

    By Anonymous happy mo, At March 15, 2006 12:12 pm  

  • Well happy MO, good that you're not "most of us".

    keep up the good work.

    Cheers!

    By Blogger Dr Oz bloke, At March 15, 2006 12:14 pm  

  • That remark is uncalled for.

    There are lawyers out there who fight cases for the poor free of charge. Are they thinking of themselves only?

    Again as long as yr aim is to help those who are in need, does it matter if u are a doctor, lawyer, minister?

    Is one profession more morally upright than another?

    By Anonymous Ang Yee, Gary, At March 15, 2006 12:45 pm  

  • U decide whether lawyers work for themselves or for the community.

    For the Community
    The Society protects the public by setting rules of conduct and practice to ensure the standards of the profession continue to be high. The Society carries out its regulatory role through efficient and fair inquiry into complaints of misconduct and/or inadequate professional services against lawyers.
    Through its law awareness programmes which this year focused on 'Youth Crime', the Society helped educate teachers and secondary school students on criminal law and procedure. By the administration of its Criminal Legal Aid Scheme ('CLAS') the Society has helped ensure over the last 20 years, equal access to the justice system to any person who is poor and charged with and claims trial to a criminal offence under one of 13 statutes covered by the Society's scheme. The means test for CLAS was reviewed upwards this year from 1 September 2005 and also from that date, CLAS extended legal aid to poor accused persons who plead guilty to offences if they are persons who suffer from a mental disability or illness as the Society saw a need to provide legal protection to accused persons with such disabilities.

    'Project Law Help' which started as a pilot project in the middle of last year was launched in July 2005 as the Society's second permanent legal aid programme. This project offers free advice to voluntary welfare organisations ('VWOs') who are in need of legal advice and who cannot afford the same by matching voluntary law practices with such VWOs.

    The law awareness and legal aid work of lawyers have made a huge difference in the lives of the poor and socially disadvantaged and such work has been undertaken by the legal profession for a long time with little public visibility. The Society's programmes have given such selfless work undertaken by the profession public recognition.

    For the year under review the Society's law reform work focused on criminal law practice reform. August 2005 saw the completion of a written report by the Society which would be submitted to the Minister for Law for consideration, outlining the need for a system of criminal law discovery and access to counsel after arrest to improve both the administration as well as the efficiency of Singapore's criminal justice system.

    By Anonymous Ang Yee, Gary, At March 15, 2006 12:51 pm  

  • seriously... u just quote stuff from websites which is meant to impress the public. u think they are going to say they are in the profession for themselves? u're just kidding yourself.

    By Anonymous Anonymous, At March 15, 2006 1:42 pm  

  • To be truly happy or naive, believe for once that there are people out there who wants to help others in need. So what if these people are rich and powerful. Does that prevent them from helping others or does the fact that they are rich and powerful help them in helping more people.

    Having money does not change u.
    If u are a bad person, having a million dollar will just make u a bad millionaire.
    On the other hand, poverty can indeed turn u to a person u never dream of becoming.

    By Anonymous Ang Yee, Gary, At March 15, 2006 2:45 pm  

  • gary you are just justifying your pursuits. The truth is, too rich one will be corrupted, too poor one will driven by desperation to do unimaginable atrocities.

    Durai is a good example of how someone with good intent turn to the dark side. :) Of course you can argue he was dark from the beginning ;)

    Power tends to corrupt. absolute power corrupts absolutely :)

    LORD ACTON

    Forgive me for being a skeptic but all those donations by the rich looks more like a show to look good. Don't need no fanfare for good deeds.

    BTW Angry sorry for posting irrelevant stuff on your blog. If you don't like too many offtopics please make known, so that I would not clutter your blog with unrelated postings.

    This place is almost transforming to angrydr.forums.com. The place to vent your frustrations on healthcare professionals. We provide you with a platform for all to hurl incendiary remarks at each other based on unhappy encounters :)hahaha. I am almost certain this was not angrydoc's intent :)

    Thank you for your patience. Though the debates here are entertaining I just like to hear from you that it is not bothering you. the anonymous me will not post anything off topic :)

    Cheers.

    By Anonymous Anonymous, At March 15, 2006 4:02 pm  

  • Yeah angry doc, sorry for the blog hogging.

    Would like to hear your views about all these off tangent discussions that go on.

    You bothered? Can't be bothered?

    It is your blog after all so it's good you let us know how you feel about it.

    I would think you would prefer not to have this sort of thing going on.

    Cheers!

    By Blogger Dr Oz bloke, At March 15, 2006 4:25 pm  

  • Thanks, guys.

    I'll let you guys know when I am bothered.

    By Blogger angry doc, At March 15, 2006 5:57 pm  

  • Actually it's rather depressing reading your blog and the comments. Everything seems to be going to the shits man. haha..

    By Blogger minimana, At March 15, 2006 11:12 pm  

  • hi i'm a med student who has taken studied econs b4. thou its really been YEARS since i last saw the words "comparative advantage", i just had to say something regarding the posts by the writer who advocated "comparative advantage" in the case of teleradiology. what i'm going to say doesnt refer to teleradiology only. its abit more general la...

    the writer has made is point about how important CA is to the modern economy(so i'm not gonna harp on that), but he has chosen to leave out CA(or any economic concept for that matter) only works "ceteris paribus" (ie: if there are no other influencing/external factors invloved).

    in this case, "ceteris paribus" would face issues like accountability that have been brought up in the other article.

    in my 2 years of economics, one of the things that i learnt was that economics is very much theoretical and the real world doesnt really operate on economics alone (think politics etc).

    in an ideal world where CA flourishes, there will be no pri/sec schs for kids. the govt doesnt have to subsidise C class wards and you can get legal bubblegum your neighborhood minimart. no need to go malaysia. hey we wont even have saf. we will just outsource defence too! (defence gets like big % of budget. outsource la!)

    but why isnt that happening? because "real" economics is very much different from "theoretical" economics. not everyone can afford necessities and others have to step in. countries HAVE to protect certain industries and they ARE doing it. if everything was as nice as supply and demand curves being allowed to adjust as the market dictates, just think of what will happen to those who cannot measure up. left to die because you aint a productive worker? not good right?

    try explaining CA to the French farmer for him to understand why govt have to withdraw subsidies because CA dictates china farmer has cheaper cows, after that go and tell him in the face that he has to retrain to move up the value chain or move to china to rear cows. you go n see if he stick his pitchfork up ur ass after voting u out of office anot. the REAL world, unlike the IDEAL world of CA ceteris paribus, has barriers and boundaries. people speak differently/different cultures/not perfectly mobile etc etc. that's the real world and thats why your cancun talks(or any wto talk for that matter) have never been carried out smoothly.

    economics is essentially the endless allocating of scarce resources in the most efficient way possible. while adam smith n his invisible hand can qualify as one of the grand daddys of modern econs and CA really does benefit both countries mutually(yes, made in china ipods), there are some industries/services that should not be outsourced because CA does have limits in the REAL WORLD.

    economics is both a science and art as ppl use it as a framework to solve problems in the real world. so pls pls dont think that CA is a cure-all for everything. it isnt. and at times, it may even cause problems.

    my 2cents

    By Anonymous compare simi advantage, At March 18, 2006 12:16 am  

  • Dear Compare simi advantage,

    That was a very good 2 cents!

    By Blogger Dr Oz bloke, At March 18, 2006 9:37 am  

  • A similar topic about the effects of outsourcing from Warren Buffett.
    If u read the whole thing. u may now understand the problems facing by an compassionate boss, to relocate his factory and sack the workers or to go bankrupt resulting in everyone including himself to lose his rice bowl.

    In July we decided to close our textile operation, and by
    yearend this unpleasant job was largely completed. The history
    of this business is instructive.

    When Buffett Partnership, Ltd., an investment partnership of
    which I was general partner, bought control of Berkshire Hathaway 21 years ago, it had an accounting net worth of $22 million, all devoted to the textile business. The company’s intrinsic business value, however, was considerably less because the
    textile assets were unable to earn returns commensurate with
    their accounting value. Indeed, during the previous nine years
    (the period in which Berkshire and Hathaway operated as a merged
    company) aggregate sales of $530 million had produced an
    aggregate loss of $10 million. Profits had been reported from
    time to time but the net effect was always one step forward, two
    steps back.

    At the time we made our purchase, southern textile plants -
    largely non-union - were believed to have an important competitive advantage. Most northern textile operations had closed and many people thought we would liquidate our business as well.

    We felt, however, that the business would be run much better
    by a long-time employee whom. we immediately selected to be
    president, Ken Chace. In this respect we were 100% correct: Ken
    and his recent successor, Garry Morrison, have been excellent
    managers, every bit the equal of managers at our more profitable
    businesses.

    In early 1967 cash generated by the textile operation was
    used to fund our entry into insurance via the purchase of
    National Indemnity Company. Some of the money came from earnings
    and some from reduced investment in textile inventories, receivables, and fixed assets. This pullback proved wise:
    although much improved by Ken’s management, the textile business
    never became a good earner, not even in cyclical upturns.

    Further diversification for Berkshire followed, and
    gradually the textile operation’s depressing effect on our
    overall return diminished as the business became a progressively
    smaller portion of the corporation. We remained in the business for reasons that I stated in the 1978 annual report (and
    summarized at other times also): “(average modest cash returns 1) our textile businesses are very important employers in their communities, (2) management has been straightforward in reporting on problems and energetic in attacking them, (3) labor has been cooperative and understanding in facing our common problems, and (4) the business should relative to investment.” I further said, “As long as these conditions prevail - and we expect that they will - we intend to continue to support our textile business despite more attractive alternative uses for capital.”

    It turned out that I was very wrong about (4). Though 1979
    was moderately profitable, the business thereafter consumed major
    amounts of cash. By mid-1985 it became clear, even to me, that
    this condition was almost sure to continue. Could we have found
    a buyer who would continue operations, I would have certainly
    preferred to sell the business rather than liquidate it, even if
    that meant somewhat lower proceeds for us. But the economics
    that were finally obvious to me were also obvious to others, and
    interest was nil.

    I won’t close down businesses of sub-normal profitability
    merely to add a fraction of a point to our corporate rate of
    return. However, I also feel it inappropriate for even an
    exceptionally profitable company to fund an operation once it
    appears to have unending losses in prospect. Adam Smith would
    disagree with my first proposition, and Karl Marx would disagree with my second; the middle ground is the only position that leaves me comfortable.

    I should reemphasize that Ken and Garry have been resourceful, energetic and imaginative in attempting to make our textile operation a success. Trying to achieve sustainable profitability, they reworked product lines, machinery configurations and distribution arrangements. We also made a major acquisition, Waumbec Mills, with the expectation of important synergy (a term widely used in business to explain an acquisition that otherwise makes no sense). But in the end nothing worked and I should be faulted for not quitting sooner. A recent Business Week article stated that 250 textile mills have closed since 1980. Their owners were not privy to any
    information that was unknown to me; they simply processed it more
    objectively. I ignored Comte’s advice - “the intellect should be
    the servant of the heart, but not its slave” - and believed what
    I preferred to believe.

    The domestic textile industry operates in a commodity business, competing in a world market in which substantial excess
    capacity exists. Much of the trouble we experienced was
    attributable, both directly and indirectly, to competition from
    foreign countries whose workers are paid a small fraction of the
    U.S. minimum wage. But that in no way means that our labor force
    deserves any blame for our closing. In fact, in comparison with employees of American industry generally, our workers were poorly paid, as has been the case throughout the textile business. In contract negotiations, union leaders and members were sensitive to our disadvantageous cost position and did not push for unrealistic wage increases or unproductive work practices. To the contrary, they tried just as hard as we did to keep us competitive. Even during our liquidation period they performed superbly. (Ironically, we would have been better off financially if our union had behaved unreasonably some years ago; we then would have recognized the impossible future that we faced, promptly closed down, and avoided significant future losses.)

    Over the years, we had the option of making large capital
    expenditures in the textile operation that would have allowed us to somewhat reduce variable costs. Each proposal to do so looked like an immediate winner. Measured by standard return-on-
    investment tests, in fact, these proposals usually promised
    greater economic benefits than would have resulted from
    comparable expenditures in our highly-profitable candy and
    newspaper businesses.

    But the promised benefits from these textile investments
    were illusory. Many of our competitors, both domestic and
    foreign, were stepping up to the same kind of expenditures and,
    once enough companies did so, their reduced costs became the
    baseline for reduced prices industrywide. Viewed individually, each company’s capital investment decision appeared cost-effective and rational; viewed collectively, the decisions neutralized each other and were irrational (just as happens when each person watching a parade decides he can see a little better if he stands on tiptoes). After each round of investment, all the players had more money in the game and returns remained anemic.

    Thus, we faced a miserable choice: huge capital investment
    would have helped to keep our textile business alive, but would
    have left us with terrible returns on ever-growing amounts of
    capital. After the investment, moreover, the foreign competition
    would still have retained a major, continuing advantage in labor
    costs. A refusal to invest, however, would make us increasingly non-competitive, even measured against domestic textile
    manufacturers. I always thought myself in the position described
    by Woody Allen in one of his movies: “More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray we have the wisdom to choose correctly.”

    For an understanding of how the to-invest-or-not-to-invest
    dilemma plays out in a commodity business, it is instructive to
    look at Burlington Industries, by far the largest U.S. textile
    company both 21 years ago and now. In 1964 Burlington had sales
    of $1.2 billion against our $50 million. It had strengths in
    both distribution and production that we could never hope to
    match and also, of course, had an earnings record far superior to
    ours. Its stock sold at 60 at the end of 1964; ours was 13.

    Burlington made a decision to stick to the textile business,
    and in 1985 had sales of about $2.8 billion. During the 1964-85
    period, the company made capital expenditures of about $3
    billion, far more than any other U.S. textile company and more
    than $200-per-share on that $60 stock. A very large part of the
    expenditures, I am sure, was devoted to cost improvement and
    expansion. Given Burlington’s basic commitment to stay in
    textiles, I would also surmise that the company’s capital
    decisions were quite rational.

    Nevertheless, Burlington has lost sales volume in real
    dollars and has far lower returns on sales and equity now than 20
    years ago. Split 2-for-1 in 1965, the stock now sells at 34 --
    on an adjusted basis, just a little over its $60 price in 1964.
    Meanwhile, the CPI has more than tripled. Therefore, each share
    commands about one-third the purchasing power it did at the end
    of 1964. Regular dividends have been paid but they, too, have
    shrunk significantly in purchasing power.

    This devastating outcome for the shareholders indicates what
    can happen when much brain power and energy are applied to a
    faulty premise. The situation is suggestive of Samuel Johnson’s
    horse: “A horse that can count to ten is a remarkable horse - not
    a remarkable mathematician.” Likewise, a textile company that
    allocates capital brilliantly within its industry is a remarkable textile company - but not a remarkable business.

    My conclusion from my own experiences and from much
    observation of other businesses is that a good managerial record
    (measured by economic returns) is far more a function of what
    business boat you get into than it is of how effectively you row
    (though intelligence and effort help considerably, of course, in
    any business, good or bad). Some years ago I wrote: “When a
    management with a reputation for brilliance tackles a business
    with a reputation for poor fundamental economics, it is the
    reputation of the business that remains intact.” Nothing has
    since changed my point of view on that matter. Should you find
    yourself in a chronically-leaking boat, energy devoted to
    changing vessels is likely to be more productive than energy
    devoted to patching leaks.

    By Blogger game1980, At March 18, 2006 1:34 pm  

  • It seems to me that zhixuan's reply has utterly failed to engage angry doc'c comments. His reply is entirely academic (and admirably so), but absoutely trite and utterly pointless.

    For starters, his argument is entirely inconsistent in its view towards globalisation; whether it is simply a tool to be taken exploited, a force of human advancement, liberation and free speech, or an objective reality to be faced.

    He fails in his entire essay to address the specifics of the situation discussed OR to engage angry doc's concerns over quality of service and the costs to the poor.

    He quotes kofi annan but fails utterly to understand or even read the words he types:

    "As it is in Kofi Anan's opinion, 'Globalisation is not an OBJECTIVE REALITY, but an ideology of predatory capitalism'."

    Having managed to quote the UN secretary general in this, he goes on to claim that:

    "millions are already embracing this revolution. Not just the rich, but the poor are beginning to come to terms with it as well. Globalisation, in my opinion, is no longer an ideal concept, but a PREVELANT PHENOMENON that will continue to impact all industries and professions. "

    He does himself no favours by quoting a famous
    person in his essay and then proceeding to directly contradict this person without bothering to further elaborate his own point.

    He then has the gall to suggest that the blogger in question has no understanding of economics:

    "If you have read economics, you wouldn't look at the above as idealism, but a classic analogy of the multiplier effect of macroeconomics."

    Not only is this entirely an unsubstantiated statement that reeks of self superiority, but it suggests to the viewer that (the viewer) has indeed NOT read economics. Seeing as how economics is read as an A level subject at a mere junior college level in singapore, that suggestion is unfortunately, entirely imprudent.

    What capacity he is commenting on indeed, remains completely doubtful. If Mr Koo, is indeed an expert on the subject, no doubt we would all like to know the qualifications he holds w.r.t the matter.

    He makes woefully illogical comparisons between the industrial revolution and outsourcing of radiology AND the actions of the opponents of each: ("Forgive my impudence, but if you scale their actions down a few times, they would very clearly resemble those who are against the outsourcing of radiology today.") and then fails to justify his comparisons or even attempt to draw any relevant parallels between the 2.

    He then goes on to suggest that the exploitation of workers in the industrial revolution is merely a part of an age old occurence that has begun with the birth of commerce (never mind that he fails to define "birth of commerce") and that it is prevalent today in "NORTH KOREA etc" (never mind that "etc" is obviously not a country). This is an obvious fallacy. The exploitation of workers in every age and in every situation are entirely different creatures, as evidenced in the differences in their origins, their situations and their respective solutions. To suggest that slavery in the roman empire, exploitation during the industrial revolution, and starvation and poverty in modern day north korea are one and the same entity, and an unavoidable side effect in the inexorable flow of history, is not just callous, but totally ignorant.

    He very rightly qualifies himself as a person who is "not one who supports globalisation or cross-border trading of goods and services without restraint." failing to see that that is INDEED the point. We are ALL not people who propose globalisation without restraint. The reason being that we are all people who (ultimately) act in our own interests.

    Let's face facts. Singapore promotes and supports "globalisation" in its current form simply because it is in our interests to do so. We're an affluent, well-connected, port city with some of the world's highest literary rates that thrives on commerce, not a land bound, poorly educated, agriculture based economy. But note that even OUR support for globalisation is largely an ala carte one, a clear example being singapore's rather strict currency controls.

    A critical individual would then recognise that in the world in which we live, there is no such thing as globalisation for the greater good, there's only such a thing as globalisation for MY good. It is utterly and entirely a self driven impulse. Hence,reductionism of our understanding of reality to "comparative advantage" and economical theory just doesn't work, simply because there are clear aspects of human existance that are clearly seperate from the concept of self advancement to the exclusion of all else.

    Perhaps Mr Koo, would like to be reminded of the amount that he is subsidised each time he is admitted to hospital, or the real cost of the HDB flats that 80% of singapore's population lives in. Perhaps he has not yet understood the protectoinism that he is covered in from head to toe. Whatever the case is, i would like to remind him that these theories of Thomas Friedmen and Richard Florida that he so dearly embraces, are simply theories. Theories proposed by rich, admittedly intelligent white men, who stand to have everything to gain from globalisation from its current form.

    By all means, continue to shamelessly promote the advantages of free trade. But do so with a critical mind that understands WHY singapore and its government chooses to do so. And while he expounds the theories of economics, the rest of us will read and applaud, "but do not, DO NOT expect those of the Third World countries to be grateful."

    By Anonymous Enjoy your comparative advantage., At March 24, 2006 4:24 am  

  • oh and to "luckysingaporean" whose blog address is happycitizen.blogspot.com. I have no doubt that your nickname and blog address amply demonstrate your greatly inspired intellectual capability. I suggest that you further excercise that said capability by working on your english grammar.

    By Anonymous Enjoy your comparitive advantage, At March 24, 2006 4:35 am  

  • My apologies to mr lucky singaporean. I actually did visit your site. Am suitably impressed. Lol.

    By Anonymous Enjoy your comparitive advantage, At March 24, 2006 4:49 am  

  • It is strange that a writer who criticizes my intellectual honesty and my failure to responsibly expand on certain arguments i made (It is but a 'comment'. how much should i be expected to elaborate?!) with so much angst and convictions should decide to stop short in revealing his/her identity for me to know at least to whom I shoud be replying to.

    I am inclined to consider such 'hit and run' responses unworthy of attention but it's alright. I understand that these are just perspectives, and we can agree to disagree. And at the end of day it's how much we learn from one another which matters, not just on the subject we are debating about, but most importantly, on how to respectfully engage people with differing views. :)

    To whom this might concern:

    1. There is certainly no intended malice when i wrote "If you have read economics, you wouldn't look at the above as idealism, but a classic analogy of the multiplier effect of macroeconomics" . And looking at this sentence once more, I still do not understand how it should 'reek of my self superiority'. But if it has so unfortunately hurt any kind soul, I sincerely apologize. I do respect all disciplines but having studied economics in greater detail, I felt obliged to promote its concepts with greater intensity. And no, I do not see a need to reveal my qualifications. In an intellectual discussion, there is no place for discrimination based on paper qualifications. Shouldn't there be a greater sense of objectivity? If I am right to claim the example as an analogy of macroeconomics, let it be. If it is wrong, even if I should claim to have earned a PhD in Economics, I deserve to be corrected. Such is the freedom and respect we enjoy in a democracy.

    2. I believe I have more than adequately addressed the issues brought up by the blogger (quality of service and the costs to the poor) in both comments which were posted on this blog. If it has to put really bluntly to benefit some who are still confused of my proposition.. it is 'TRUST THE MARKET FORCES'. This is in fact, not a revelation, but a reminder. As social creatures, each of us put our trust in the 'market' everytime we buy and sell (Why do you trust that a $2 plate of chicken rice is rightfully priced at $2?), our only difference being the extent of which we trust it. In understanding the above, I am advocating that perhaps, with the outsourcing of radiology only at its initial stages, we should put down our guard and have greater faith in beliving in the goodness of this mutual trading. By all means, supervise it with numerous pairs of eyes, and step in to regulate when it goes out of hand (the concerns of the blogger), but surely not at its initial stages. Not when patients in Singapore are entitled to a truly competitive price. Not when we are creating jobs for the Indians. Not when the other industries in Singapore will find it diplomatically easier to expand in one of the largest markets in the world. There are alarmists in our midst today who would point to such news and declare 'Look! From tomorrow onwards all the local radiologists will be unemployed! And the day after tomorrow all our doctors are going to be shipped away!!'. Nothing can be further from the truth, and thus I felt compelled to comment.

    3. I do not understand how globalisation not being an 'objective reality' contradicts my opinion that globalisation is a 'prevalent phenomenon'. That is as good as claiming that 'mutton stinks' contradicts 'there are plenty of sheep around'.

    4. I have never for once hold to the notion that the exploitation of workers is unavoidable and thus should be ignored. All I am trying to assert, in the context of this discussion (IMPORTANT point here!), is that we shouldn't buy this argument from alaramists who stand to gain in preventing this trade, we shouldn't use this as an excuse to cease moving forward. If one is to sit down and think of every possible fear and negative implication of one's every action, one might reach infinity. It is only rightful that when one weighs the legitimateness of each of these and realise they do not outweigh the benefits to be reaped of one's intended action, one decides to implement the action anyway. [cost-benefit analysis]

    5. The similarities of an 18th century terrorist who oppose the Industrial Revolution and an alarmist today who spreads exagerrated and negative comments about the outsourcing are:
    (i) Both stand to gain in preventing the society in moving forward.
    (ii) Both fail to understand the choice made in changing our economy.
    (iii) Both are selfishly, but perhaps unknowingly, harming the general population.

    6. Theories proposed by rich, admittedly intelligent white men, who stand to have everything to gain from globalisation from its current form. To the person who came out with this statement, I have but just one simple question: Have you EVER read these 2 books? If the answer is yes, then I must congratulate you for being such a sharp and accomplished critic in observing that whatever these two men wrote were simply to benefit themselves, for no other critic of these books have come out with such an enlightening conclusion. If the answer is no, then with all due respect I must direct this comment to the viewers of this blog: Learn from this mistake, and never repeat such stupidity and insolence in an intellectual discussion. Do not comment on the works of others if you have not bothered to read them. Both Mr Friedman and Mr Florida have admirably done extensive research in not just globalisation from an American perspective but also from the rest of the world. To suggest that just because an author benefits from globalisation and thus his views on it are not credible is as equivalent as suggesting that Chinese teachers should not be teaching 'China's History' since as Chinese, they will be compelled to brag about it! Interesting perspective? Perhaps. Logical? Relevant? I doubt so.

    7. To understand that the reason we trade is due to the promotion of our self-interest is important, as I have quoted from Adam Smith. However, to stop at this axiom alone is a recipe for disaster. We have to understand and appreciate too the benefits that the other party can reap in trading with us. And this isn't altruism or worse still, hypocrisy! I find it disturbing that many young Singaporeans today cannot differentiate between altruism and CONSIDERATENESS. When I encounter people who 'shamelessly promote free trade', arguing that 'there's only such a thing as globalisation for MY good' and then discredit economic theories which try to objectively observe the benefits of free trade to both parties, I finally understand the fury of the third world countries. Why should I sit down in a meeting with you where all you care and KNOW about is how to benefit yourself with no consideration at all at how I can stand to gain too? Why can't we sit at a table to respectfully and considerately discuss and negotiate on how we can both benefit from a single deal? Cannot politics be used FOR ONCE, instead of harming another party, to benefit both parties? Has God made this world too small to allow 2 different parties to simultaneously benefit? I am exasperated. So much conflict and sufferings have originated the classic scenario of one party feeling that the other is not being considerate towards it. And here we are, blatantly promoting that we can ignore the concerns of another as long as we get rich. I shall not elaborate further. I believe the mature viewers of this blog have the wisdom to understand how dangerous such a view is. My thesis is clear... do not exaggerate the problems faced in advocating globalisation, but neither should we ignore them because it is another party's problems.

    I would like to thank the blogger once again for initiating this interesting discussion and the rest of the positive contributors to it. I have certainly learnt a lot from all of you. It reminds me of the good old days when I was still attending 'S' Econs lessons in college. It is indeed my privilege. :)

    Take Care!
    ZhiXuan

    By Blogger ~[z][x]~, At March 24, 2006 10:22 pm  

  • Apologies once again to angry doc for the occupation of blog space.

    To ZX:
    My post was not intended as a "hit and run" as you so suggest, as clearly evidenced by the fact that i've bothered to monitor and reply.

    The post was written with more malice then intended. For that I apologise, but the angst that you detect in my essay is exactly what you describe when you indicate that you "finally understand the fury of the third world countries." This fury is exactly what i'm trying to point out to you, as i hoped the nickname i chose would have indicated to you.

    Perhaps being buried in all that angst as it were, i should make the salient point of my reply more clear: Your failure to engage was not with regard to the benefits of globalisation as an academic discussion, but with the anger and concerns of the individuals who deem themselves put at risk by it. If you truly do wish to dissuade the alarmists that you speak of so often, then it is THEY that you wish to address; A group of individuals that the quality and tonality of your essay would only have served to further inflame rather than pacify.

    Your sincerely,

    (and since you wish it, though it not being my habit to leave my name lying about on the realm of the internet, and frankly, i would dissuade you from doing so either)

    Shing Yip

    PS: Hardly my wish for this to be reduced to a tit for tat exchange, but in reply:

    1. Qualifications are always relevant. Opinions are always judged based on the related track record, experience and relative success of the person who made them. That is how you know to trust theories suggested by Thomas Friedman. That is how i know to trust you if you make a certain assertion.

    2. Yes, i do agree with you that certainly we should trust market forces. My point is simply that there is a scope of things that market forces have no concern for and it is these things that we have a responsibility to uphold albeit sometimes in the face of market forces.

    3. Global phenomenon and objective reality are more or less the same thing no? Why quote kofi annan's opinion that it is NOT an objective reality if you intend to suggest that it is?

    4. No, i dont agree with the alarmists either, i am simply pointing out that your essay is rahter careless with regard to this aspect of worker exploitation.

    5. I believe my point stands. Your comparison remains a poor one.

    6. I apologise for my "stupid and insolent comments". Incidentally, i HAVE read thomas friedman. My point here is related to the point above, which is that in reading ANY work, one must consider not only the qualifications of the author, but also his/her socio-econmic/cultural context. Yes, incidentally a chinese teacher's view of world history may well be biased. (in fact very likely to be biased, especially if you consider that the word for china in chinese is "Middle" kingdom, or "centre of the world") However deep, extensive and apparently objective one's research, it is not feasible to escape a given individual's upbringing and circumstances. Take a medical paper on HER-2NEU receptors for example. It is by itself a purely objective point, but HER 2 NEU receptors ( ahot topic in cancer therapy in the developed world) and its few percentage point increase and cancer survival are not things that you will find relevant to say a doctor in nepal struggling with bloody flux. That is to say that its objective truth is essentially correct, given the appropriate circumstances, but its subjective truth may be entirely inapplicable.

    7. Yes certainly two parties can sit down and discuss an agreement of mutual benefit. But it is most often also true that it is not the intention of mutual benefit that drives 2 parties to a discussion table.

    By Anonymous Enjoy your comparative afvantage, At March 27, 2006 3:07 pm  

  • Addenum:

    With regard to point 6. A better comparison illustrating contextual truth and how one must alway judge the truth of what we read by the circumstances of the person who writes it, is perhaps with regard to medical textbooks. If Robbins Basic Pathology 7th edition states that the most common histology of nasopharyngeal carcinoma is of the undifferentiated type, no doubt Robbins is correct,and the authors, Kotran Kumar and Robbins are highly experienced and well qualified; But regardless, their statement only remains true with regard to the specific population they are writing for; Which is, after all, the only relevant population where the authors are concerned.

    By Anonymous SY, At March 27, 2006 4:04 pm  

  • omg who is going to read that? get your own blog ok

    By Anonymous happy mo, At March 27, 2006 4:33 pm  

  • Dear Shing Yip,

    Thanks for replying. And yes, this shldn't be a 'tit-for-tat' exchange. I am here to learn, I have learnt a lot from u and I appreciate it. With that, I must say I still do not agree with many points you've made, perhaps as you've suggested, is due to the difference in 'a given individual's upbringing and circumstances'. Some interesting points I felt you might want to consider:

    - Usually, the alarmists are not synonymous with those who would genuinely suffer from globalisation. Do take note of that. I do admit i've made a big assumption here that alarmists are people who are capable of changing but refuse to simply because of their financial comfort in the current situation. To those who are truly put at risk by globalisation, there are measures to aid them ('compassionate flatism' if you agree with Thomas) but i think that's too big an issue for me to cover.

    - Objective reality refers to an underlying reality that exists independent of our perception and consciousness. Technically speaking, for me to subjectively observe that globalisation is a 'global phenomenon' proves Kofi Anan's subjective judgement that globalisation is 'Not an objective reality'! To be honest, to claim anything as not being an 'objective reality' is truism at best, for such a claim is in itself a subjective opinion. Having said that, I think Mr Anan used this term quite appropriately although not technically right to decry capitalists who are ridiculing the poorer nations for not accepting their form of globalisation.

    - Yes I agree that there is a significant difference in contextual truths and objective truths. Thus the solution would be to upgrade oneself with different 'contextual truths' and through the process, formulate a 'subjective truth' as 'objective truth'. I think this can get rather philosophical with 'what is truth?', 'what is objectivity?' so i rather not dwell on it...

    - Again i never meant for 'mutual benefit' to be the motivation to drive both parties to a discussion table. Of course each comes with the motivation of 'self benefit'. But with this motivation, I propose that it is still possible to understand and consider that the other party has a similar motivation as well. When everyone around the discussion table can think like that, 'mutual benefit' will thus arise. Not as an initial goal, but as a positive consequence.

    haha, it is interesting how a debate regarding the outsourcing of radiology can evolve to be as such. But i enjoyed it. Have a good day. :)

    Zhi Xuan

    By Blogger ~[z][x]~, At March 28, 2006 12:06 pm  

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