Categories
Economics

[2041] Of …actually, it might last longer than initially thought

Remember the immediate previous post about deflation in Malaysia and how it was expected to succumb to inflation later in the year?

Yesterday, being a centrally-planned economy that Malaysia is, the Cabinet decided against a hike.

KUALA LUMPUR, July 22 — Malaysia’s government today vetoed price hikes for electricity and natural gas, fearing a repeat of anti-government protests that saw its popularity slump in 2008.

Under proposals discussed by the cabinet today, the country’s influential Economic Planning Unit had suggested a 24.6 per cent rise in the price of natural gas and a 4.9 per cent hike in electricity prices from Aug. 1 to reflect the rising cost of energy. [Malaysia government rejects energy price hikes. Bernama via The Malaysian Insider. July 22 2009]

I am not sure if inflation will come back as soon as analysts predicted earlier. I know, I know, they based the return on the expected hike of taxi and bus fare hike. But I think this decision can potentially affect inflation expectation in a way that prolongs the deflation.

Categories
Economics

[2040] Of a temporary respite to an outdated model

Ah, do we not all wish to return to a time when economics was much simpler, when it was thought that there was a simple trade-off between inflation rate and unemployment rates, when the original Phillips curve worked well, when stagflation had yet to be coined and experienced, when non-accelarating inflation rate of unemployment was unheard of and the days when Keynesian economics reigned before it was blown into pieces by the 1970s crisis?

Well, it is back!

Finally, a return to the good old undergraduate textbook economics problem!

KUALA LUMPUR, July 21 — Malaysia’s consumer price index (CPI) is likely to have fallen in June from a year earlier by 1.35 per cent, the first annual decline in two decades… [Malaysia CPI set for first fall since 1986. Bernama via The Malaysian Insider. July 21 2009]

The original Phillips curve states that there is a inverse relationship between unemployment rate and inflation rate. The unemployment was at 4.0% in the first quarter of the year, much higher than the previous quarter (3.1%).[1] Given that the unemployment rate for 2008 was 3.3%, it is not hard to show that 4.0% is a stark increase even on year-on-year basis. And so, when deflation occurs, along with heightened unemployment rate, the environment fits into the original Phillips curve.

Anyway, enjoy it while it lasts because…

…although a period of deflation is expected to be short lived. [Malaysia CPI set for first fall since 1986. Bernama via The Malaysian Insider. July 21 2009]

Yup. The celebration for the original Phillips curve will not last long. Thank heavens for Edmund Phelps and Milton Friedman’s works!

Phelps, winning the Prize in Economics because of it, introduced and expected-augmented Phillips curve. It basically says that while the inverse relationship between inflation and unemployment rates still hold in the future, when inflation expectation change, the whole curve will shift. Or, in other words, inflation (or rather, monetary policy) does not affect the real economy in the long run.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — Please refer to the following table:

Employment
2008 3rd Quarter
2008 4th Quarter

2008
2009 1st Quarter
Total Labour Force
(‘000)
11,123.4
11,170.8
11,028.1
11,208.5
Employed (‘000)
10,779.7
10,819.8
10,659.6
10,757.8
Unemployed (‘000)
343.7
351.0
368.5
450.7
Unemployed Rate
(% of Labour Force)
3.1
3.1
3.3
4.0

[Employment (Updated 30 June 2009). Department of Statistics of Malaysia. Accessed July 21 2009]

Categories
Personal Society

[2039] Of ghost unseen in a cold Sydney

While I am excited to see the constellations above my head change yet again, I had some consternation about living in Australia for an extended period. Weeks prior to actually first setting my feet Down Under and even days after my arrival, allegations of Australian racism and xenophobia constantly kept my enthusiasm in check.

I would like to think that my reaction is only natural after Indian students not too long ago alleged that they were victims of racism in Australia. Who would not feel so especially if one is unfamiliar with Australian society?

For those who kept abreast with news aboard, they would surely be aware that Indian students in Australia several weeks ago organised several protests — with the largest in Sydney — to highlight what they felt as racially motivated attacks against the Indian community. It was so well highlighted that the whole issue amounted to a minor diplomatic row between Australia and India. It was big enough a brouhaha that the prime ministers of both countries contacted each other, with Kevin Rudd trying to assure Manmohan Singh of the safety of Indian students.

With respect to the protests, the Rudd administration said all the right things and it was a comfortable thing to here. Yet, that is mere politics and it may not necessarily reflect the reality on the ground. As a Malaysian who has lived through one of the most disappointing administrations in Malaysian history, it is easy for me to be sceptical of the words of any government; that attitude only doubles whatever scepticism against the state I have that stems from libertarian tradition.

To be fair, the issue faced by Indian students may be slightly more complex than a simple case of racism. Considerable number of Indians stayed in unsafe areas and this probably contributed to the occurrence of crime that they suffered. There is plethora of other factors too but all of it seems to be specific to the Indian community. And so, I thought, perhaps it was best that I should not be overly worried about the matter.

Yet, anecdotes from friends forced me to rethink about my concern.

During one of those late-nights meet-up with what now to me yet again feels like food served in heaven meant for the gods on our tables, a Malaysian friend of Chinese ethnicity complained how Australia is unbelievably racist. Undergoing his undergraduate studies in the United States, it was the summer holidays and he spent his time visiting his sister in Australia. While I do think he enjoyed his visit, he was clearly disturbed by what he believed was the worst racial abuse he had ever received. A six-year old Australian called him a chink.

Or as he vividly put it, ”A six-year old! Imagine that!” with arms in the air.

He went on to warn me to prepare myself. Among friends in a familiar environment, which was one of Kuala Lumpur’s popular suburbs, I could afford to laugh it off. Now that I find myself in the middle of Sydney and strangers, I am beginning to think it was not as funny as I found it first to be.

Perhaps, it is gross generalisation but a new friend of mine that I met in Sydney suggested that Australians have issues with Chinese from China in particular. He stated that the unfriendly attitude that that Chinese Malaysian friend of mine suffered in Australia was probably due to the inability of Australians to differentiate between overseas Chinese and Chinese from China. I am quite unsure why some Australians have issues with Chinese citizens but I will surely learn more about it later.

Amid that, it calls to mind a racially motivated riot in Cronulla that occurred in 2005 when I was an undergraduate student in the United States. And then, there is Pauline Hanson in the 1990s, a politician who perhaps symbolises not just racism but xenophobia at large in Australia.

All that was enough to convince me to keep my guard up the minute I stepped out of Sydney Airport.

I suppose my current path is similar to the one I took back in 2001 when I found myself adjusting to life in the US with the Sept 11 attacks in the background. Many Malaysians warned me to be careful but while the concern was legitimate, and profiling at airports did occur, time spent in the US was the happiest in my life so far. Rather than suffering xenophobic abuse, I found the US a welcoming place where I enjoyed the greatest freedom I have ever had in my life.

I am beginning to feel confident that my same experience in the US will repeat itself in Australia. I am confident because in spite of my fear of becoming a victim of racism or xenophobia in general, I am happy to state that I have not to suffer any racial abuse so far. People have generally been friendly and helpful. New friends, especially, who I have made are warm enough that I think fighting the winter in Sydney will be a walk in the park.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

First published in The Malaysian Insider on July 20 2009.

Categories
Liberty Personal

[2038] Of oppressive public opinion, as described by Mill

I had trouble writing not too long ago. This is one of few reasons why my column at The Malaysian Insider was published late after Monday in the past few weeks. I constantly found myself writing several paragraphs only to delete it, deciding that I wanted to write something else instead. At first, I figured it was just typical writer’s block.

As I typically do when I find myself in that situation, I took time off to clear my head; in place of writing, I will turn to reading.

I had been trying to finish On Liberty by John Stuart Mill. I had spent too much time on it. Despite being a short piece, despite the fact that I am familiar with his ideas and despite that many of his ideas are the basis of my ideals, his style of writing proves difficult to follow. It requires a kind of concentration that casual reading just will not do.

If I sound as if I am complaining, please rest assured that I am not doing so. On the contrary, the effort demanded bore fruition for me for four reasons: it clarifies Mill’s idea for me, it strengthens my belief in individual liberty, it clarifies my own thought on the limits of government as I prepare to read Robert Nozick’s Anarchy, State and Utopia and it answers why I had trouble writing.

What I suffered was not writer’s block at all. The problem was fear of reprisal from readers and individuals whom I have come acquainted with, be they friends, activists or politicians. Even since I become a columnist at the popular The Malaysian Insider, relatively, I have become more widely read. Forgive me if I am blowing my own trumpet but the following has to be written to provide context to my problem because being relatively widely read means I get the opportunity to meet more persons than I would otherwise.

I most treasure those relationships. With this in mind, I tend moderate my opinion so that whatever I say or write does not overly affect any good relationship I have.

At first, this was a small problem but it gradually, and unexpectedly, grew in weight that it began to adversely affect my ability, or rather, my willingness to write, offering criticism or simply different perspective. I did not realize that until I came around a chapter in On Liberty which touches on the effect of public opinion on individuality.

Opinions of these acquaintances have become what Mill calls public opinion. This public opinion quietly had suppressed my opinion simply because I care too much about what these people think of me. I, uncharacteristically, was afraid of becoming different.

Furthermore, the greater audience, compared to the one I had when I was simply writing for my blog, had caused me to be cautious about the issue that I chose to touch on. For instance, I have not written anything about religion for a very long time now. I know that my opinion on religion can get me into trouble, since I maintain an irreverent position with regards to it; Many among the Malaysian society are conservative when it comes to religion; their opinion too can be identified as what Mill calls public opinion.

These fears unconsciously encouraged me to commit to self-censorship, allowing the so-called public opinion to prevail over what I consider as better opinion in the public arena. The so-call public opinion then win the battle not because it is the best of all arguments, but because of numbers. There is only one me and there are countless of them,

The following from Mill’s On Liberty woke me up from falling into the trap of conformity:

There is one characteristic of the present direction of public opinion, peculiarly calculated to make it intolerant of any marked demonstration of individuality. The general average of mankind are not only moderate in intellect, but also of moderate in inclinations: they have no tastes or wishes strong enough to incline them to do anything unusual, and they consequently do not understand those who have, and class all such with the wild and the intemperate whom they are accustomed to look down upon. Now, in addition to this fact which is general, we have only to suppose that a strong movement has set in towards the improvement of morals, and it is evident what we have to expect. In these days such a movement has set in; much has actually been effected in the way of increased regularity of conduct, and discouragement of excesses; and there is a philanthropic spirit abroad, for the exercise of which there is no more inviting field than the moral and prudential improvement of our fellow creatures. These tendencies of the times cause the public to be more disposed than at most former periods to prescribe general rules of conducts, and endeavour to make every one conform to the approved standard. And that standard, express or tacit, is to desire nothing strongly. Its ideal of character is to be without any marked character; to maim by compression, like a Chinese lady’s foot, every part of human nature which stands out prominently, and tends to make the person markedly dissimilar in outline to commonplace humanity.

As is usually the case with ideals which exclude one-half of what is desirable, the present standard of approbation produces only an inferior imitation of the other half. Instead of great energies guided by vigorous reason, and strong feelings strongly controlled by a conscientious will, its result is weak feelings and weak energies, which therefore can be kept in outward conformity to rule without any strength either of will or of reason. Already energetic characters on any large scale are becoming merely traditional”¦ [John Stuart Mill. Chapter IV: Of the Limits to the Authority of Society Over the Individual. On Liberty. 1859

Those fears of mine threaten to suppress my individuality. I will not tolerate that.

Categories
Photography

[2037] Of Main Quadrangle at the University of Sydney

Yet another photo from Sydney. This time, it is a building on campus ground.

Some right reserved.

This is the Main Quadrangle, the oldest part of the University.