There is no record of the man’s divinity; to consider that Confucius, after his death, took his place amongst the pantheon of Taoist gods is spurious at best and erroneous otherwise. But over 2,000 years after Confucius took his final breath, an increasing number of religious Taoists – at least in Singapore – have gathered to not just pay respects to the founder of classical Chinese philosophy, but to seek divine favors from him as though he has the posthumous divine power to dole them.

To me, at least, all this demonstrates the incredible malleability of religion to suit the prevailing values and norms of the existing society. Buddhism and Taoism is fighting a losing battle against evangelical Christianity. Buddhism and especially animist Taoism command a level of devotion that requires extremely intricate and regularly-held rituals that the modern Singaporean will find extremely difficult in today’s stressful working world. There are fewer and fewer young Taoists taking over the priesthood from the older generation, leading to an increase in Taiwanese priests being hired by these temples.

Yet Christianity, especially new-age evangelism, is thriving. City Harvest Church, the biggest megachurch here, completed the purchase of a $300m investment stake in Suntec Convention Centre just last year; New Creation Church, another local megachurch, has a 22,000-strong membership today.

It seems that in the quest to win back the fair-weathered Taoist faithful, the temples have initiated a simplifying of rituals: my parents had to pay a grand total of $10 per person for the temple to settle all the required ritual steps for you. No more tricky burning of incense paper, or even placing different food offerings on a plate. All you have to do is turn up and burn and stick the requisite three joss sticks, and you’re done.

It also seems that borrowing the name of Confucius can be extremely useful: while the Goddess of Mercy, possibly the most popular divine being that is worshipped by religious Taoists here, may seem a little difficult to identify with in contemporary society (especially youngsters), Confucius’ identity needs no bolstering. Like the emcee of the birthday commemoration said today to a group of young students presumably in primary school, “Confucius was a very smart man… what do you pray to him for? You pray to him so that you can do well in school! You won’t get scolded or nagged by your parents!”

To sit through an hour of sutra-chanting is not the easiest thing to do for a group of hyperactive children, but perhaps for their results (and the expectations of the people around them), they might just give Confucius a chance. And, for the religious Taoist community who want to stem the decline of their faith, this might just be a useful solution.

His high-fives may have been awkward, but it would be wrong to suggest that they lost Mr Tan Kin Lian the election.

Disclaimer: While I did not vote for Mr Tan Kin Lian, I respected the way he qualified for and conducted his presidential campaign. As with articles on my blog, these are personal opinions and I do not in any way assert that they are concrete truth. 

The way he ended his Nomination Day speech was nothing short of awkward – he shouted “High five!” as he gave the gesture to every person in the supporters beside him on the rostrum – but to suggest that Mr Tan Kin Lian’s extremely poor showing in the recent Presidential Election was due to the high-fives that he gave to his supporters cannot be further from the truth. But this reason, as well as his “excessive blinking” while he was giving his speeches during the elections, were the main reasons that were given out of approximately a thousand responses on his blog on his defeat.

Throughout the hustings, Mr Tan repeatedly trumpeted the use of “the wisdom of crowds” – a term coined from James Surowiecki’s book of the same name – and even suggested that every idea he had come up with for his campaign had been derived, in one form or another, by the “people”. In an attempt to define who those “people” are, Mr Tan said they were just “ordinary people” on the street.

But the ordinary person is, well, ordinary. The ordinary Singaporean cared little about politics until, perhaps, in April 2011, when the General Elections came knocking. These are people who may not necessarily be equipped with sufficient information and knowledge to provide a proper review of the Mr Tan’s presidential campaign; in my humble opinion, the answers that were provided were certainly were not just shallow, but certainly incorrect.

If anything, it is the entire concept of the “voice of the people” that tripped Mr Tan’s campaign over. In a campaign where his rivals Dr Tony Tan, Dr Tan Cheng Bock and Mr Tan Jee Say had more or less definite positions as conservative, moderate, and liberal respectively, Mr Tan Kin Lian found himself wanting in trying to encompass the people’s moods and preferences. The problem with this idea, even though it sounds entirely noble and perhaps intuitively workable on paper is that the electorate needs to have a basic idea what he is getting into should the candidate get into office. Without a defined position on the political spectrum, this basic idea would not even be available for the electorate to consider; it would have been extremely difficult for any voter to want to choose him.

Mr Tan also said in the Face to Face debate organised by The Online Citizen that the five values that he adopted for the campaign – honesty, fairness, a positive attitude, courage, and public service – were selected from yet another survey. These were the values, he said, that were selected out of a “list” of values. One is left scratching his head by now: what exactly, then, does Mr Tan actually have a stand on?

The interesting point he then made is that he feels that his personal values were not important towards the presidential role, a point that perhaps alienated him from the rest of the population. It may well be fine to the populace that you have a confrontational character, or even a government-leaning character; at least the individual, depending on his leanings, will know who to give his support. But it is a lot more difficult to support a president whose character appears rather ambiguous – this lack of clarity on his character will surely have lost Mr Tan some votes.

Mr Tan, like a heartbroken man after a break-up, was searching for answers after his poor election showing. But the opinions that the people have provided him is only a surface interpretation of what truly went wrong in his campaign; it must surely be, literally, more than meets the eye: not mere high-fives and excessive blinking.

The feedback that Mr Tan received – he said he received almost a thousand responses in eight hours – only serves to demonstrate that the wisdom of the crowd can only be tapped on in a particular manner. An informal, open-ended survey like the one employed by Mr Tan already has two crucial flaws: first, it is open to influence by other comments (“Yes, I agree with John Tan who said…”); second, the sample of respondents were self-selected and prone to bias. The voices, then, that he is trying to aggregate might not merely be misrepresenting what the rest of the population thinks, but it could simply be incorrect.

Crowdsourcing, a concept based on the wisdom of crowds, employs the use of technology to tap on the crowd to make decisions. But successful crowdsourcing ideas have not depended on the crowd to make complicated, open-ended, and qualitative answers to questions; the key is to ask the crowd a simple, yes/no question, or just a quantitative question. “The people”, in short, are not able to handle complexity and ambiguity.

Mr Tan campaigned on the premise that he would a voice of “the people”; but judging from the results of his election, he might well have been better suited listening to a group of experts rather than attempting to make use of a rather flawed method in aggregating the opinions of a rather misinformed lay people.

I started off the elections with the thought of spoiling my vote. I had initially felt that the role of the President was almost completely ceremonial, and that none of the candidates looked particularly inspiring enough for me to choose them as a figurehead. Eventually, however, I decided to give one of them a chance – Dr Tan Cheng Bock.

Initially I adopted the Principle of Elimination to arrive at my decision, but there are several things that especially strengthen Dr Cheng Bock’s case, at least in my opinion, and distinguish him from the rest of the candidates; these factors make me even more comfortable at my decision to vote for him.

I go through below how I arrived at the decision. The scoring system works as in golf: The higher the score, the less I’ll choose to vote for you.

a) The understanding of, and respect for the Constitution

This is one of the key factors that I believe the President needs to have at least a decent understanding of. What can the President do, or not? It is a point, obviously, that was repeated ad nauseam by Dr Tony Tan: “The Constitution is very clear.” The fact is that the candidates are running for a job that is largely ceremonial except in the five key areas that encompass the access to past reserves, key appointments, and certain veto powers must be understood.

Meaning, you don’t get appointed as a director of the board and then say you want to conduct things like a CEO. Tan Jee Say continues to suggest that the Constitution can be “interpreted” in a different manner from how the rest of the Cabinet can interpret it. But the Constitution is not a subjective document; Janadas Devan highlighted this specifically to Jee Say when he spoke about the “moral power” that the President has in commenting to the public anything that he feels is being done wrong in Parliament. There is only one way of reading the Constitution – and to me I feel that he is either (1) choosing to ignore the Constitution, (2) did not read the Constitution, both of which are errors no Presidential candidate should commit.

Tan Kin Lian, at least, shows that he respects the Constitution. But the worrisome fact is that he has suggested several “changes to the Constitution” that he would like made when he is elected: for instance, he would like the death penalty authorisation to be signed by the Prime Minister, if he is unable to get veto power. These are not issues that the President – in his role – should consider, and is almost as if he is suggesting that he would want legislative power to accompany his Presidential role.

So the score so far – Tony Tan, Tan Cheng Bock: 0; Tan Jee Say, Tan Kin Lian: 1

b) Death penalty and clemency powers

Dr Tan Cheng Bock appears to be for the death penalty, which is disappointing: in fact, this is one of the things that disappoints me the most about him. Apart from Tony Tan, the rest of the candidates seem to be against the death penalty. So this one works against him. His saving grace, though, is the fact that he says he is willing to “examine” what the impact of clemency is.

Score so far: All tied at 1

c) Informing the public on policy

Only Tan Cheng Bock and Tan Jee Say will inform the public on decisions – for Jee Say, he will inform the public on possibly any issue, as long as he has already spoken to Parliament in private beforehand about his opinion. For Tan Cheng Bock, the public will be informed on any profligate behaviour of the government. I am not particularly inclined to see a confrontational President, although I feel that the President should act as a whistleblower in times of wrongdoing by government – hence in this circumstance I think Cheng Bock and Jee Say are right.

Score so far – Tan Cheng Bock, Tan Jee Say: 1; Tony Tan, Tan Kin Lian: 2

d) Homosexuality

Only Dr Tony Tan does not express anything against discrimination of homosexuals, so this is where I feel he loses out.

Score so far – Tan Cheng Bock, Tan Jee Say: 1, Tan Kin Lian: 2, Tony Tan: 3

e) Stand on economic policies and the reserves

This is where Tan Cheng Bock and Tan Jee Say again pull ahead from the rest of the pack. Tony Tan continues to trumpet the fact that he is a steady hand to guide the ship in the upcoming financial crisis – but you have to ask, why as the President? Like what one of the audience mentioned in The Online Citizen’s Face to Face talk, “Are you the second key (to the reserves) or the same key?”. It appears that Tony Tan seems to want to plan policies together with Parliament, which is again what I feel is a conflict of interest.

Both Cheng Bock and Jee Say seem to understand the custodial role well enough not to suggest any interventionist role in planning policies, it seems.

Tan Kin Lian then says he would like to “aggregate” the opinions of the citizens to decide what policies need to be planned. But I am unsure how (and how many of?) the citizens would be consulted. It is much preferable if he has a sound mind of his own on these issues, which he has thus far not reflected to me in what he said about the economy.

Score so far – Tan Cheng Bock, Tan Jee Say: 1; Tan Kin Lian: 3; Tony Tan: 4

So, after the preliminary elimination round, I find myself stuck with Dr Tan Cheng Bock and Tan Jee Say.

Let’s take a good hard look at their CVs now.

Tan Cheng Bock

In terms of his public service record, I’m pretty much convinced. True, Dr Tan may not be trained as a public policy planner, but he seems to have hit it right in where it mattered: free parking on Sundays and public holidays, voting against the Nominated MP scheme despite the Party Whip not being lifted, and enabling CPF to be used to pay for tertiary education.

As a non-executive chairman of Chuan Hup – a publicly listed company worth approximately $200m today in assets – he saw the company through ups and downs, including several financial crises. The company returned to profitability in 2010 after dramatic losses in 2009. He also sold the company’s marine operations for $486m in 2005.

A non-executive chairman has custodial duties, according to Wikipedia:

Non-executive directors are the custodians of the governance process. They are not involved in the day-to-day running of business but monitor the executive activity and contribute to the development of strategy.

Sounds almost as though the Presidential role was written with a non-executive directorial role in mind.

Tan Jee Say

Full disclosure: I am Hainanese and I will never be able to shake off the fact that I would love to see a Hainanese man in the top office on Singapore land. The rally speech (which I read in the papers) spoke about how his mother came to Singapore from Hainan Island as a washerwoman, and yet Jee Say managed to emerge from poverty as a scholar, a top civil servant, and then an investment advisor. I loved that story. It’s the type of inspirational story that I wished he spoke more about.

But once you pull away the starry looking curtains – Jee Say’s CV looks increasingly limited: Note that I will highlight his career as regional managing director of AIB Govett, which is the position that got him the Certificate of Eligibility in the first place.

AIB Govett suffered serious losses in the 1997 financial crisis – so huge and unprecedented, it seems, that when it was finally sold in 2003 for 21 million pounds (in those days, probably less than 5% of the assets it was managing in a 2001 report, since AIB Govett claimed to manage S$1.4 billion worth in assets). Govett’s sale to Gartmore (another investment group) in 2003 meant that it had to close down its Singapore operations. Not scale down, but close down.

You can call it the halo effect, but for me the CV matters. And when the crowning achievement is being the director of an investment group that eventually goes under, I have serious concerns indeed of his management ability.

And so my vote goes to Tan Cheng Bock. I don’t perfectly agree with him or align myself with him, but he looks credible, talks credible, and has a CV to match.

On Governance and Civil Liberties, page 11:

The office of Parliamentary Ombudsman should be established. Any citizen aggrieved by the action of any public servant may, instead of commencing an expensive law suit, lodge a complaint with this office. The Ombudsman will be empowered to investigate with full cooperation of the civil service, at nominal cost to the citizen, with powers to advise on corrective actions and recommend prosecutions. This process will enhance government accountability and give more options for citizen redress.

• Who will appoint this Parliamentary Ombudsman? Will he usurp the position of the head of the judiciary and the office of the President?

On Justice, Law and Order, page 14:

Mandatory sentences for capital offences should be removed as they take away the discretion of the judge to adjust a sentence to suit the individual case circumstances.

• What is the WP’s stand on the death penalty? Should the death penalty still remain an option or not?

On Economic Policy, page 20:

The number of government scholarships with service bonds awarded each year should be reduced. Instead, these scholarships should bond their recipients to only work in Singapore for a number of years, which could include setting up their own local companies. This will better spread local talent to the private sector.

• I think the objective of scholarships is to keep talented people in the civil service. If we don’t have a strong civil service, wouldn’t public policy and administration be affected, which might then cause any policy it is trying to implement be undermined by the power of the private sector?

On Population and Immigration, page 24:

There are over 12,000 abortions carried out each year in Singapore, with the majority performed on married women. There is a need to look into ways to encourage parents to keep their babies.

• I am a little troubled by this statement. Abortions are conducted for many reasons, and most of them are not as frivolous as they seem on the surface. The world is difficult and challenging to live in – to encourage parents to keep these children might not be beneficial to the parents, nor is it necessarily a good thing for these children to be born. Perhaps this sentence needs a bit more qualification. Unless it is guaranteed that such abortions were entirely for reasons that were unacceptable, I don’t think encouraging parents to keep their babies is the right thing to do.

Ibid, page 28:

More time should be set aside in the school curriculum to impart to students the joys and responsibilities of family, marriage and parenthood, so as to better prepare them to take on these responsibilities in the future.

• What is the WP’s stand on homosexuality? Can homosexuals also have a family? If so, then will homosexuality be taught in the school curriculum? Let me first qualify by saying that I am not a homosexual, but I believe in egalitarianism even in sexual orientation.

On Transport, page 43:

The National Transport Corporation should not be profit-oriented and should aim to provide public transportation service on the basis of cost and depreciation recovery.

• Would having a non-profit oriented public transport company lead to inefficiencies and a lag in adopting new transport technologies?

Thank you.

From a new voter,

Owen Tan

You will hear a similar reason being bandied about for most of of the paternalistic policies that are implemented in the city-state: that our citizens need this approach, that it is for the greater good. What I want to talk about, however, is something a little smaller – something, perhaps, that seems insignificant on the surface, but to me seems like a justified concern. I’m talking about jaywalking, an offence that carries (mostly) a $20 fine; but if one were to be a subsequent offender, one might be sentenced to up to six months in jail.

In a 2009 notice by the Singapore Police Force, it was noted that out of the 62 pedestrians who died on the road, 42 of them were jaywalkers. An average of 7000 summonses for jaywalkers is given every year (although the notice also suggested that there were fewer jaywalkers caught – 400 less, in fact). Subsequently, the 2009 statistics for road casualties suggested that there had been a dramatic decline in the number of pedestrians killed on the roads, dropping to 45 deaths.

Statistically speaking, a danger in reading numbers too much

Such statistics, however, do not demonstrate anything, in my opinion. First, after 2008, the proportion of jaywalkers to pedestrian deaths have not been published. Second, the numbers fluctuate randomly, mostly because the dynamics of an accident are complex and not merely based on the behaviour of just an individual. In 2007 and 2008, pedestrian deaths spiked to 58 and 62 respectively – but does that signify that there has been more irresponsible pedestrians?

For instance, one can say that blatant jaywalking behaviour is directly correlated with road accidents: but I hypothesise here that it may not be the case. Taking Little India as an example, where foreigners and locals alike walk as though the roads truly belonged to them, there hasn’t been a significant number of road accidents from what I know of.

The elderly should be targeted?

The majority of pedestrians killed in 2009 were elderly citizens (44.4% of them, according to the Singapore Police Force statistics), and the sizable majority of them were jaywalking then. Hence, the statistics seem to suggest that we should focus our efforts on elderly citizens to ensure that they made use of the available safe traffic crossings.

This may sound a little incredulous, but does it not make sense that it is more likely than not that elderly people are more likely to succumb to the injuries of a road accident? If this is an unfortunate, but unavoidable, statistic that is likely to repeat itself year after year, then perhaps we should be considering an alternative to simply punishing people for jaywalking.

How about just showing the elderly more respect on the roads? When I went to the United States and Canada on exchange, I marvelled at the manner in which drivers stopped for pedestrians to cross the road, even if they had the right of way. It is strange, come to think of it, that the roads are considered public goods – a shared good – but most Singaporeans consider the road to be solely “theirs” at a particular point in time, and somebody else’s at another point. It’s time to learn that the roads are not about the “right” of way, but rather the “need” of way.

All right, punishments… but for whom?

Based on the statistics, surely you would be seeing more traffic police taking on the elderly and making sure, if not to give them a stern warning, that they are fined for their troubles. But what we see is that the traffic police seem to be targeting the “hot spots” where most young people are. Recently they even took the trouble to come down to my university to catch students from making the short, 20-metre journey from one school building to the other.

Why target places like schools, I wonder? Are students like us so terrible at judging distances that we require a constable’s assistance to ensure that everybody makes it across the road safely? (Incidentally, the stretch of four lanes is a one-way street: one doesn’t even have to worry about his blind spot when crossing the road!)

The young should be the least of a policeman’s concerns, if he or she is concerned about jaywalking; after all, most of them are often fit and good enough to make a judgment on whether a road should be crossed or not, and they do not make up the majority of pedestrian deaths. Having a law that is enforced on the wrong audience is (apart from having no effect in reducing tragedies) like an insult to our intelligence.

Three things are wrong with the fact that we need to be punished for jaywalking: the statistics are almost certainly spurious, if not grievously incorrect; the elderly should be “targeted” in jaywalking campaigns; yet, the places where jaywalking patrols are set up seem to happen to be in the wrong locations, targeting the wrong groups of people. Why is that? We may not be having our democracy anytime soon, but at least I am hoping – as with what I suspect is the majority of citizens – that the jaywalking legislation should be reviewed, if not repealed.

In 2001, sixteen science academies from all over the world made a joint statement supporting the conclusion of the Intergovernmental Panel on Climate Change that they were “90% certain that temperatures will continue to rise”[1]. Global warming is widely acknowledged to be happening by the scientific community, but continues to attract remarkable controversy among the public. Jim Inhofe, the Senator of Oklahoma state in the United States, calls global warming a “hoax” even as his state’s summer temperatures hit record highs last year[2]. Some politicians, keen to seek an easy way out of the environmental problem, have tried to escape through redefining the problem altogether: George W. Bush, in 2007, said that he was “committed” to reducing global warming[3], but after calling the Kyoto Protocol “fatally flawed”, he remained in opposition to binding limits on carbon emissions.

Overstating the truth for a greater good?

I will not, however, be discussing on whether global warming is true or not, for like what Al Gore’s spokesperson mentioned, debating on whether global warming is true is like whether we should be “debating whether smoking causes cancer”[4]. The question is whether, in the state of urgency to save the environment that we currently find ourselves, if there is an incentive by environmental organisations to overstate the claims of global warming in order to incentivise people to take action on climate change.

Al Gore’s career after his controversial loss to Bush in 2000 would culminate in a movie, An Inconvenient Truth, that presents the phenomenon as real, frightening, but a problem that can be solved. Despite the mostly positive reviews about Gore’s presentation prowess and accuracy, the British High Court highlighted nine errors in the film that overstate the risks of global warming, including the fact asserted by Gore that sea levels will rise up to 20 feet in the foreseeable future. Judge Michael Burton’s reply was crisp: that it would only “take place over thousands of years”[5].

The utilitarian, obviously, will offer the maxim that there is a greater good for the community that can be derived by overstating the truth. Surely, to get people to save the environment to benefit the thousands of tribal communities living in vulnerable forests around the world, as well as making development sustainable for future generations, provides much greater benefit than simply providing conveniences to the current generation? The Kantian perspective would obviously be against this: lying is not a rule that one would want to be applied universally, and it is also exploiting a person rather than providing him with the autonomy to decide.

The key problem with utilitarianism, however, is with the quantifying of what constitutes “utility” for different groups of individuals: for instance, in the case of policymaking, a politician has to decide how to allocate a budget between the life sciences and the environment. Believing that the environment is in dire need of rescue, the politican allocates the majority of the budget to environmental causes. But if the status of the environment was more accurately reported, then perhaps the politician might have benefited through funding life sciences programs that can make future generations stronger and healthier. The constraint (labelled “imperfect information” in economics) results in the misallocation of resources that could have been better used to maximise happiness in the community.

Hypocrisy

What really makes Al Gore such an enigma is not so much the message as it is his actions: he has been criticised for staying in a house that consumes far more electricity than the average American, although he continually advocates cutting down on electrical use in his talks, including in his movie. What is interesting, however, is that even though he uses more power than the average household, he subscribes to the plan that maximises the use of clean energies such as wind and solar power[6]. Yet, one can argue that even that does not invalidate the argument that he might be a hypocrite, asking people to reduce power usage when in fact his household is not doing so.

Hypocrisy is, in essence, the violation of Kant’s first formulation of the categorical imperative: the principle of universality. It is also somewhat of a violation of the second formulation, the principle of humanity, since you are asking everybody else to take your share in committing an act when in fact you have no intention of doing so. This is what makes critics feel that Al Gore has not been a good role model in the case of saving the environment. The Kantian ethical perspective, though underused in an age where capitalism and the “free market” as dictated by Friedman rules the zeitgeist of the day, provides an important lesson to all wanting to preach about the environment: to do good, one must first individually do things right.

Starbucks – Being a good corporate citizen

Just as most of us feel uncomfortable that a person who may preach to us to do one thing but in fact is himself doing quite another, most of us will feel a sense of respect for the values (and actions) that Starbucks has identified itself with. Very early on in its business career, Starbucks had pledged to be a good corporate citizen, and believes in contributing to the environment which has provided it with profits.

Quite unlike the sportswear manufacturing industry that disgraced itself in the earlier decades that made profits through a “race to the bottom”, Starbucks wanted the entire industry to move forward through a “race to the top”, by only buying from the most sustainable, yet highest quality coffee growers. Even before the partnership with Conservation International, Starbucks had already given back to local communities to provide education and clean water supplies[7].

What makes reading Starbucks’ involvements in corporate social responsibility (CSR)  so pleasing is because of how it hasn’t shied away from the matter as firms often seek to do, but rather tackled the issue head on and really made it part of its philosophy instead of an afterthought. It has reaped enormous benefits for the company, with employees and consumers alike praising the contributions of Starbucks and making the company have one of the lowest employee turnover rates in the entire industry.

We can make use of the multitude of theories available in the presentation slides for an in-depth ethical analysis of what Starbucks did right, though I feel the most succinct would be to examine it from the Kantian point of view. Starbucks’ contributions make it a good corporate citizen by keeping to the principle of universality: first, it pays a premium for top-quality coffee beans, which is something that the farmers would do if the roles were reversed, for fairness. In the meantime, Starbucks’ CSR efforts have really benefited the lives of the local community through improving their education and health facilities; this is keeping in line with the principle of humanity – ensuring that there is no exploitation of any individual that goes against his autonomy.

All roads lead to Kant?

Like I mentioned in the previous paragraph, I adopt Occam’s razor by stating my belief that there is no need to make use of stakeholder, social contract, or even Rawls’ theory of justice as fairness in the analysis of Starbucks’ actions in corporate social responsibility, because Kant’s categorical imperative cuts through to the “bare bones” of environmental ethics, at least in determining what should be the ethical behaviour of a firm. The social contract theory, which states that there is an unspoken “contract” of values and morals that should be adhered to by the company, is to me merely an extension of Kantian theory.

Ultimately, Kantian theory allows us to articulate why we feel some parties are more ethical than others (especially when comparing between Al Gore and Starbucks), but is rather limited in determing who exactly should have what done to them in order to benefit the entire community. The categorical imperative is great in determining how to behave ethically, though it is the what that businesses like Starbucks are interested in. I believe that businesses should first take a good hard look at themselves through the Kantian perspective, and then make use of the stakeholder theory – which is where it comes in useful – to determine what exactly they have to do to contribute to the community at large.

Disclaimer: This paper is not so much about the death of Kevin Carter as it is about the contrast between ethical arguments. To reply a reader’s comment about “the point” of the article, it is essentially to compare the Rawls and Nozick theories with the use of an example.

A paper I submitted for Ethics.

An African girl, so skinny that the shape of her bones are clearly showing on her body, sits in the middle of what was once a huge savannah; the famine had wiped out the fertility of the land. She crawls slowly towards where she perceives is a United Nations aid camp, which is not within the line of sight, at least not for the viewer. Then the terrifying sight of a bird, its head bald and eyes expressionless, but with the body language of a beast ready for the kill, swoops down just behind the girl. The girl pauses, exhausted from the crawl – she has been crawling for days. Kevin Carter, a South African photographer, snaps a few photos and wonders quietly if the vulture will spread his wings for a more majestic shot.

A man who was just doing his job, perhaps? The photograph he eventually produced won the Pulitzer Prize in 1994 for feature photography – but Carter never stopped feeling guilty about the possibility that the girl might have survived should he have chosen to intervene after taking his award-winning photo. In a report by The New York Times he told an interviewer how he sat under a tree for a long time, “smoking cigarettes and crying”.  Carter ultimately killed himself, for a variety of reasons, soon after he was awarded.

But Robert Nozick would have told him that there was just original acquisition in this situation. The girl’s parents chose to stay in Sudan, chose to farm here, and hence should also inherit the nastiness of the situation in which they found themselves. Nozick’s theory extends also to the children: if the parents are destitute, the children are destitute and justly so. A Nozickian might have looked at the situation and not have understood why Carter felt so guilty when he was doing nothing wrong.

To me, using Nozick’s theory for ethical analysis strikes me as one that approaches (or is) a slippery slope: how do you decide how far to go in deciding if something is truly “justly” acquired or not? The remains of Troy and Ephesus has been unceremoniously dug up by German and British archaeologists, and both of them claim just original acquisition to its ruins. For that matter, can it be considered just that a large petrochemical company discovers fossil fuel in another country and then, because of their right of discovery, claim sovereignty to the billions of dollars they stand to gain from its sale? There is an inherent weakness of suggesting that just original acquisition can be used as a criterion for analysing if something is ethical or not. Nozick’s theory, aptly titled the “entitlement theory”, almost suggests that there is no need for charitable behaviour, since nobody is justifiably obligated to do so.

John Rawls’ rival theory of “justice as fairness” can be considered the opposite of Nozick’s entitlement theory: that there is a need to compensate individuals who find themselves at disadvantaged starting points in society. Justice, to Rawls, is about providing equality of opportunity – the first principle of his theory. That means that there needs to be a central authority that has the ability and legitimacy to distribute resources fairly and equally. Rawls’ theory, in sum, appeals for the importance of redistributing resources to ensure that the least advantaged in society have as equal an opportunity as the most advantaged as possible.

Carter found himself possessed, albeit only after he was far away from the Sudanese girl, by a Rawlsian view: he had a moral right to help the girl, from this point of view, but instead he had taken some photos and waited for a better shot rather than putting down his camera to save the girl from possibly a cruel death that was of no fault of her own. Carter, like the rest of us when we look at the photograph, was troubled not by the scene itself, but by the unresolved possibility that he, of all people, could have done something, yet chose not to.

The girl might have survived the famine, grown up to be a big and strong girl, perhaps a great politician, or even a photographer, for that matter. All that was needed, perhaps, was somebody to lend a helping hand at the most difficult time of her life. Instead, when Carter was provided an opportunity to do so, he decided to stick to taking his photographs and leave the situation completely up to fate.

Granted, not many of us are war photographers and are unlikely to face a situation so extreme in today’s world. But we do question many of the supposedly altruistic behaviour of profit-making institutions and wonder if these institutions are, apart from being somewhat hypocritical (a company like BP, for instance, talking about environmental sustainability after a massive oil spill), even obligated to participate in corporate social responsibility. Theories of the economy that are somewhat similar to Nozick’s entitlement theory include the (in)famous Milton “there-is-no-free-lunch” Friedman’s laissez-faire theory of capitalism, that the corporation is responsible for only the shareholders and to no one else, and hence should not spend the corporation’s money on purposes which do not directly line the pockets of its owners.

But if the corporation as a legal entity is considered a “being” – as the movie The Corporation (which Milton Friedman made a guest appearance in) defines – then doesn’t that make the corporation responsible for other human beings? Logically speaking, no; since individuals – in Singapore and many other countries – are not obligated to donate part of their salaries to charity, corporations should similarly not be obligated to donate part of their profits for other endeavours. But just as similarly as a Rawlsian would frown upon unaltruistic behaviour from an individual, he too would also be discontent with the unaltruistic behaviour shown by a corporation.

If Friedman had been the photographer, would he have saved the child? If the corporation bears no responsibility of saving individuals apart from their shareholders, then what rules do the individual follow? Do individuals bear no responsibility for other individuals apart from themselves? If this were true, then what Carter did (or, rather, did not do) must have been acceptable, from Friedman’s point of view. The generalisability of Friedman’s ethical theories into the individual landscape is rather doubtful indeed.

Nozick’s and Friedman’s theories, as well as other free-market theories, suggest that individual transactions and decisions are of ultimate importance. It seems to be rather hollow, however, to suggest that it is always ethical to behave in such a selfish, unaltruistic manner. A drug dealer would get away with harming others, since the money obtained from such a transaction, despite whatever detriment it deals to the individual who purchases it, must have been justly obtained. Nozick and Friedman only assume that the individual always makes the right decision and do no harm to others; but Rawls and Aristotle suggest that we should make decisions that are fair, equitable and have the ability to serve the public at large.

Aristotle, in fact, believed that being an ethical person involves being an excellent man – with a proper moral character, by toeing between the middle line of two extremes. In the days following his suicide, newspapers around the world spoke of the dichotomy that Carter faced: he could have either thrown down his camera and ran to the girl to save her, or he could continued doing what he did, taking photographs that depicted the horrors of the famine, and showing it to the world. Ultimately, he chose the latter – but could there perhaps, as Aristotle would have said, a middle line that he could have toed? Surely, he could have gotten aid to save the girl in need? These are questions that he never got to know and we will never get to find out, but are all dilemmas that face all of us when we wonder if corporations could have toed the middle line as well.

1. Write three articles for The Blue and Gold
2. Hand over exercise for The Blue and Gold
3. Get LLP in order.
4. Buy Football Manager 2011.
5. Finish reading WoT.
6. Go to KBox.
7. Preliminary research for senior thesis
8. More FM 2011.
9. L4D2.
10. Pool/snooker marathon.
11. Write a letter to JWH on Hodgson’s disaster.
12. Beer with Jeremy Foo

Damn. SMTDSLT.

The idea of stocks first cropped up among Dutch, British and French ships who were keen to explore territories beyond their homelands. With few explorers able to afford the exorbitant sums of money required to have an overseas trade voyage, companies were formed to raise money from investors (Ritchie, 2009). Since then, stocks have evolved dramatically: today the major stock markets in the world hold trillions of US dollars worth of capital (Bespoke Investment Group, 2008), and have the ability to determine who ends up on the cover of Forbes magazine or, just as often, in jail. Economists, however, have mostly struggled with the unpredictability of the markets, especially in recent times, where the subprime mortgage crisis has plunged the world into a severe financial crisis. Volatility continues to be the main topic of research amongst economists, even after years of analysis and big-money mistakes. In this paper, I attempt to use social network analysis to understand the phenomenon of stock market movements.

Stock market movements are defined by the aggregation of individual purchasing decisions of shares; this constitutes a sort of emergent property, where “large interacting ensembles exhibit collective behaviour that is very different from anything one may have expected from simply scaling up the behaviour of the individual units” (Krugman, 1996). Emergent properties are the underlying principle for the studying of complex disciplines, including economics and sociology: Anderson, in his landmark (1972) article on emergence, clearly (and rather humorously) explains that if there were no emergence, then perhaps the only people that would have a job would be people working on the most fundamental laws – “some astrophysicists, some elementary particle physicists, some logicians and other mathematicians, and a few others”. Indeed, emergent properties prove the fallacy of division, that any phenomenon can be broken down and explained by its most basic unit. While a quark is the building block of all life, there is little chance that it has the ability to explain economic self-interest. Looks like economists (like myself) deserve a job after all.

The emergent property of stock markets – that the aggregation of purchasing decisions result, most of the time, in roughly accurate valuations of companies in the markets – is beautiful, and is the highlight of another eloquent, and more eminent, emergent property expressed by Adam Smith (1776): the invisible hand. According to Smith, individual rational decisions often, on a collective, result in collective efficiency.

￭ Volatility

Unfortunately, stock markets exhibit a volatility that is not seen in other industries; equilibrium, the state at which the market “clears”, is an economic term that does not ever come into fruition where the market is concerned. This volatility is, in part, caused by a market failure: information asymmetry. Fundamental economic models typically make the assumption that there is no information asymmetry, when in the real world this is unrealistic. This asymmetry causes the people with the right information (typically the people who are closer to the companies) to make the better decisions, and others to make incorrect bets. Only the people who have access to the right information for a sustained period of time has the ability to make sustained earnings.

Watts (2003) explained in his book, however, that people do not form ties randomly: ties are formed preferentially, and the people with the right information tend to be limited to those who are closest to the centre of the network. In fact, out of the 8,000 directors that sit on the boards of Fortune 1000 companies, all of them were connected to another person, or more (Watts, 2003). These directors hence have a tendency to form a mutually beneficial in-group that has the clearest idea of where the market will move. The most powerful people, therefore, make the best decisions, while the average person will know little about which part of the market will be the most profitable.

￭ Bubble formation

Preferential attachment

A second emergent property, peak and trough formation, also happens in stock markets. Assuming that individual decisions are made independently, peak and trough formation should more or less be an impossible scenario; a quickly built-up period of boom time, followed by a bust. In the real world, however, the assumption that the individual makes independent decisions breaks down. Speculation – the unscientific or pseudoscientific manner by which a person judges the suitability of stock purchases - exacerbate the problem of preferential attachment to short-term stock winners.

An example of preferential attachment in the markets is the dot-com bubble of recent years. Economists have attempted to explain the causes of the bubble, which occurred between 1995 and 2000 (Ofek & Richardson, 2003; Shiller, 2000; Wang, 2007). Shiller’s arguments are well-trumpeted in the economic community; his book, Irrational Exuberance, argued that real world stock market bubbles “resemble Ponzi schemes in the sense that some ‘new era’ story becomes attached to the bubble and acquires increasing plausibility and investor enthusiasm as the market continues to achieve high returns” (Shiller, 2000, 2003). In recent years, empirical analyses from two different papers appear to demonstrate that the stock market operates in the scale-free network made prominent by Barabasi and Albert’s landmark (1999) paper (Kim, et al., 2002; Kullmann & Kertesz, 2001). Money follows money – till there isn’t any money left to make.

Centrality

The idea of centrality is also crucial in the understanding of how stock markets have such peaks and troughs. Ofek & Richardson (2003) argue that it was the mass expiration of “lockup agreements” – resulting in venture capitalists and shareholders able to sell off their ownership of the companies – that resulted in the subsequent bust. Venture capitalists (and impatient shareholders) were forced to keep their shares in the companies they owned in the dot-com bubble even though they would have preferred to sell. Ordinary stock buyers observed the money that was flowing into the dot-com markets and assumed its profitability even though the money was in there because the venture capitalists had an agreement in place to not take it out. These buyers assumed that since the stock market prices were high that the stocks were worth buying.

The months of December 1999 and January 2000 would spell the beginning of the end of the dot-com boom. In the two months, US $100 billion (a third of the total dollar value of the market capitalisation of dot-coms) was released from lockup agreements – and venture capitalists began selling to gain from the exuberance. The dot-com industry was finding the easy money that it had flowing away to other industries. A simplified model of the network in the dot-com industry is shown below: the venture capitalist is in the centre of the funding network in the dot-com industry. When the venture capitalist sells his shares he sends two signals: (1) a loss of confidence in the company that will trickle down the network, and (2) a signal for dot-coms to raise more capital to stem the bleed.

The centrality of the venture capitalist (VC), however, meant that it had the ability to propagate an epidemic at a much more powerful rate than any other node in the network. The dot-coms attempted initially to sell more shares, but found that the number of optimistic VCs diminished (Ofek & Richardson, 2003). Realising that the capital lost when the VCs withdrew their money was not going to be regained at the same level, rapid and huge volumes of insider trading commenced: In February 2000, insider trading accounted for over 50% of the amount of stocks sold (see diagram below).

At this point, both the VCs and dot-com firms were selling their shares away; the epidemic then spread to the normal shareholder. From March 10 to March 15, 2000, the NASDAQ (the technology-heavy stock index) fell by 9%, or over 500 points. The NASDAQ has never breached the levels of the dot-com bubble since.

￭ The 2008 global financial crisis

Preferential attachment and centrality have the ability to explain the causes of the dot-com bubble – but how about the global financial crisis? Financial institutions, attempting to capitalise from the easing of regulations, created unsustainable collateralised debt obligations (CDOs; in essence, funds made up of risky mortgage loans), and sold them to unknowing investors. When homeowners began to default on their mortgages, a domino effect occurred around the world. A simplistic model of the American economy, pre-financial crisis (left), might explain this clearer.

The chart shows an uncanny similarity to the hypothetical dot-com industry model that was shown previously. The financial institution, generalised as a “bank”, provides three critical functions: mortgage loans, “normal” everyday credit (for consumption), and investments.

Prices of homes in the US rose dramatically between 2005 to 2008, beyond any substantial reason – building costs had increased only slightly, and the population had increased in a smooth linear gradient. Home prices, however, had risen close to 80% compared to the 2000 levels (see chart below). A “speculative fever” had gripped the country; a third of the people sampled in a 2005 survey expected house prices to rise by 50% a year (Shiller, 2008, p. 45). These fantastical expectations fuelled a preferential attachment to housing purchases at an unprecedented rate, raising prices even more and resulting in the formation of the bubble.

When the mortgage departments collapsed because of loan defaults by subprime homeowners, the bank lost money. This should typically have been an isolated incident, but the investment arm of a bank now has a “shortcut” tie to the mortgage department, thanks to the creation of CDOs. The values of CDOs then fell as well because the funds, made up of the bad loans, became worthless. The laymen (the unfortunate pun to a now-defunct bank not intended) investors decided to cut their losses, terminating their fund ownership and defaulting on bank payments. Two sources of credit have essentially been eliminated; the credit crunch meant that banks had to protect their reserves or face bankruptcy. Credit went down dramatically in the 2008 crisis, but only because of the central roles that the financial institutions had in managing the crucial roles of the economy.

￭ Conclusion and Solutions

Emergent properties arise in volatility (in the short term) and bubble formation (in the long term) for the stock market. Volatility results from information asymmetry, while bubble formation is a problem that arises from the phenomena of preferential attachment and centrality. Crucially, to attempt to prevent similar crises from occurring, there has to be an attempt to stop the “key players” from imploding (Borgatti, 2003). In the case of the dot-com crisis, the “stockpiling” of lockup agreements caused an irrational speculative bubble to form; such speculation in an industry can be avoided if we target venture capitalists and their method of acquiring stakes in companies – lockup agreements should perhaps have reduced (and more variable) durations, allowing the bubble to deflate more smoothly.

In the case of the global financial crisis we now find ourselves entrenched in, the key players are the two arms of financial institutions that had dealt the most significant damage: the investing and mortgage arm. Deregulation in the 1980s under Reagan had caused these institutions to go overly creative (and, ironically, destructive) with designing funds and risky loans. There is a need to revamp institutional policies to ensure that the two key players do not collapse – and, perhaps, to minimise collateral damage to the entire network, keep the three arms separate to prevent “shortcuts” from causing a next financial crisis.

(1917 words)

Bibliography

Anderson, P. W. (1972). More is Different. Science, 177(4047), 393. doi: 10.1126/science.177.4047.393

Barabasi, A. L., & Albert, R. (1999). Emergence of scaling in random networks. Science, 286(5439), 509-512.

Bespoke Investment Group. (2008). World Equity Market Declines: -$25.9 Trillion. Retrieved November 7, 2010, from http://seekingalpha.com/article/99256-world-equity-market-declines-25-9-trillion

Borgatti, S. P. (2003). The Key Player Problem. In R. L. Breiger, K. M. Carley & P. Pattison (Eds.), Dynamic Social Network Modeling and Analysis: Workshop Summary and Papers. Washington, DC: The National Academies Press.

Kim, H.-J., Kim, I.-M., Lee, Y., & Kahng, B. (2002). Scale-Free Network in Stock Markets. Journal of the Korean Physical Society, 40(6), 1105-1108.

Krugman, P. (1996). The Self-Organizing Economy. Oxford: Blackwell (Basil).

Kullmann, L., & Kertesz, J. (2001). Preferential growth: solution and application to modeling stock market. Physica A, 299(1-2), 121-126.

Ofek, E., & Richardson, M. (2003). DotCom Mania: The Rise and Fall of Internet Stock Prices. The Journal of Finance, 58(3), 1113-1137.

Ritchie, J. (2009). The History of the Stock Market. Retrieved November 7, 2010, from http://www.mint.com/blog/investing/the-history-of-the-stock-market/

Shiller, R. J. (2000). Irrational exuberance. Princeton, NJ: Princeton University Press.

Shiller, R. J. (2003). From efficient markets theory to behavioral finance. Journal of Economic Perspectives, 17(1), 83-104.

Shiller, R. J. (2008). The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to Do about It: Princeton University Press.

Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. Dublin,: Whitestone.

Wang, Z. (2007). Technological innovation and market turbulence: The dot-com experience. [doi: DOI: 10.1016/j.red.2006.10.001]. Review of Economic Dynamics, 10(1), 78-105.

Watts, D. J. (2003). Six degrees : the science of a connected age (1st ed.). New York: Norton.

It was another boring day at the office, except for one thing: we had to process some claims for some companies that had been working with us for a while. I was pondering some road-surfacing company’s claims when Chris knocked on my door.

“Eh bro, please lah, you don’t have to knock my door to get permission to come in one,” I said.

“Boss… I don’t dare okay. Anyway, just got another bunch of claims that need your signature.”

“Damn, that’s a bloody big pile. Never mind, just leave it here, thanks.”

“Wah, the road-surfacing company just invoiced us for $500k. Just imagine if we were that company, man.”

“Haha… you trying to be funny is it?”

“Eh no leh, boss, you can set up your own company and then charge SLA for it!” Chris put down the files on the table and opened the office door to leave.

Something excited me about the idea. Set up your own company and then charge SLA for it… It sounded extremely interesting. And not just that… I know it was meant as a joke, but somehow it’s not so funny when you start thinking about the possibilities.

I picked up the phone and pressed some numbers. “Chris,” I looked at my watch. 15 minutes before lunch. “Can you come inside my office for a while? I’ve got an idea.”