Category: Politics & government

Categories
Economics Politics & government

[2373] Speak plainly about the price hikes

Subsidy reduction has its pros and cons, even as on the net in the long run, it is beneficial to the economy as a whole. There is no need to soften the negative aspects by putting them in a little colorful box with ribbon on top.

The series of subsidy reduction leads to price hike and in the immediate time frame, it is burdensome. It is painful. With all the lags that exist, it is an intertemporal problem. The pain comes early, the benefits come only later.

A price hike is a price hike. It hurts in one way or another. Nobody likes to pay more no matter how small the increase is, even if the increase is justified. I myself do grudge a little about having to pay more than I used to, despite largely supportive of the subsidy reduction initiative, or some call it as the rationalization program in the spirit of euphemism.

Yet, we have apparatchiks and their agents writing and suggesting that the series of price hikes currently undertaken by the Najib administration will not burden the consumers.

These consumers are not kids. They are not kids visiting the family doctor, about to face the needle. The story of how the needle only stings like an ant is not for the mature audience.

Instead of trying to convince these consumers that the pain they feel is an illusion, those in the government and their supporters should really stick to the plainly true traditional rationale: it is wasteful. It is inefficient. It is distortionary.

Break the message down to bits and pieces that laypersons can understand (What we have instead is that these messengers misunderstand those very economic concepts themselves! They use big economic jargons without understanding the basic concepts. And these people fancy themselves as the economic planners of the country. Pfft!).

Just speak plainly.

I think the majority will appreciate it, even if it angers them.

To manipulate words and then say things that the consumers can affirmatively see, feel and conclusively disprove will compound the anger. I mean, something must have gone absolutely wrong when I, a supporter of liberalization, become angry reading these manipulated messages in the media.

Worst, these untruths will only erode any support for liberalization. These apparatchiks will have themselves to blame when everything fails.

Categories
Liberty Politics & government Society

[2370] Is longer national service the solution?

The Malaysian Defense Minister said that the national service might be extended.[1] He reportedly said that three months were too short a duration to develop noble character and sense of patriotism. The suggestion to extend the program is not new. The then Deputy Prime Minister Najib Razak himself suggested in 2007 that “one year is most ideal, but two years would be better.”

Implicitly, the effort by the government to extend the duration suggests that the program in its current form has failed.

When it was first introduced, it was described as if it was a panacea. But a panacea it is not.

After 18 years exposed to the Malaysian reality, it is hard to believe a 3-month make-belief, propagandistic summer camp will undo what some perceived as unwanted behaviors and worldview shaped by the society by much, never mind that the government itself partly contributes to the problem through the mangled education system. Those in the government know this. Else, they would not have wanted to extend the duration.

While there are reasons to believe by stretching the duration longer may make the program more effective for better or for worse — for me, it is the worse — it is easy to parallel this to the sunk cost fallacy. A program fails and somehow by investing more into it, it will work. If indeed a longer program will fail just as it has failed in its current form, that would mean more public money wasted. Already the program is costing more than RM500 million per year according Khairy Jamaluddin.[2]

If the extension would improve the program, I would still oppose it. I oppose the program on principle, not because of its duration or its general farce.

While the current Malaysian national service is a misnomer — especially when compared to proper program that exists in Singapore, Taiwan and South Korea that has militaristic aspects — the Malaysian version is still conscription. It is a draft. Extending the duration only makes the draft worse, never mind that for many, it is an interruption to their education plan.

Never mind the deaths associated with the program. Having a program that runs more than 3 months will increase the likelihood and the cases of death in the program. For a summer camp that is not really part of the national defense force, it is deadly farce.

The national service is unneeded. All of its objectives and modules — in its website, the four modules are physical training, nation-building,  character-building and community service[3] — can be done in schools. Or better, voluntarily in or outside of schools.

Did you not do all these things while in elementary and high schools? Oh wait, even if you did, it was within a largely Malay environment, a largely Chinese environment, etc. And the government is supporting that system.

The fact that the national service is considered necessary by the power that says something about the public education system: it is defective. One would expect the solution is to improve the system.

But no. To some, the solution is to introduce another compulsory program that has shown to fail.

A failed program to augment a defective education system.

What a policy.

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

[1] — KUALA LUMPUR, Malaysia – The National Service training programme’s three-month period may be extended, said Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi.

He added that the ministry was studying the possibility as three months was too short a time to develop noble characters and foster a sense of patriotism.

“The matter will be discussed at a meeting of the National Service Training Council,” he told reporters after the presentation of 2010 National Service Training Department Excellent Service awards at the ministry here yesterday. [NS term may be extended. The Star. May 27 2011]

[2] — Khairy sebelum ini meminta kerajaan mengurangkan pembelanjaan untuk program yang dikatakannya kurang berkesan dan menelan belanja yang besar contohnya Program Latihan Khidmat Negara (PLKN) yang memakan belanja RM560 juta setahun. [Tempoh Latihan PLKN Mungkin Dipanjangkan – Zahid. Bernama. May 26 2011]

[3] — See Training Module at Jabatan Latihan Khidmat Negara. Accessed May 28 2011

Categories
Politics & government WDYT

[2369] When will the Parliament dissolve?

When do you think will the PM dissolve the Parliament?

  • In the next few months (44%, 12 Votes)
  • By the end of 2011 (30%, 8 Votes)
  • 2012 (15%, 4 Votes)
  • 2013 (11%, 3 Votes)

Total Voters: 27

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Categories
Liberty Politics & government Society

[2365] Should action be taken against Utusan Malaysia? A libertarian perspective

Utusan Malaysia recently alleged that Malaysian Christian heads were conspiring to make Christianity the official religion of Malaysia. The conservative Malay daily cited two blogs of questionable credibility to back its front-page report. For a society highly conscious of  ethnicity and religion issues, the report caused uproar and tension between various communities.

Assuming the allegation is false which is likely the case, should action be taken against Utusan Malaysia for reporting it and in effect, spreading falsehood?

Our incentive system is imperfect to say the least. It is not at all surprising to have somebody spreading falsehood, lying or deceiving someone else to get what he or she wants in general. To complicate the matter, those acts might not by wrong all the times. There are times when those acts might be necessary to protect the innocents.

Even when those acts are wrong, unilateral public action through state authority might be out of the question with the principle of free speech in place, along with other typical individual rights.

Individual rights do not include the legitimization of fraud. Any action based on lies and falsehood that adversely affects individual rights cannot be condoned by the state or any authority invested with the powers to protect individual rights. It just cannot be let go off the hook.

One example is this: in a transaction, one party lies about the state of a good for sale to a person. If the person bought the good while supplied with false information, then the lying seller has obtained the money wrongly, with money being a private property of the purchaser. The right to private property is an individual right and the transaction based on deceit violates that right. The lying seller has to be punished by the state — unilaterally — since the prime rationale of the establishment of the state is the protection of individual rights according. The punishment is important not just for the sake of principle, but also for a very pragmatic reason. It is imposes a cost on such act and so discourages such fraud from recurring in the future.

Within the context of Utusan Malaysia and its recent controversial report, was there any violation of rights?

I cannot answer it in the affirmative. Therefore, I cannot to support unilateral state action against Utusan Malaysia. The best I can come up with is that the falsehood affects reputation. Yet, individual rights do not include reputation.

This of course does not mean individuals involved in the reporting — meaning the one reported involved the conspiracy — cannot seek redress against the Malay daily. Conflicts between private parties have always happened and a trustworthy third party can and has always been appointed to resolve the conflicts. The third party here is usually the state. The third party’s judgment then is enforced to resolve the conflict as civil as possible.

In the case of interest, the group accused by the Malay daily can bring their grouse to the courts. If Utusan Malaysia did spread falsehood and that the falsehood adversely affected the reputation of the group, then the daily should be compelled to compensate the group or be fined. The fate of the two bloggers should be the same as the Malay daily.

I like this route the best because it is clean. It makes the issue as a conflict between two private parties and makes the concern of unilateral state action against Utusan Malaysia merely academic if indeed Utusan Malaysia did spread falsehood (which, again, I do not doubt that is the case).

By making it private, it does not mean that there is no public interest in the case. There is but it is hard if not impossible to account for that interest and its very public effect without resorting to discretion.

If unilateral state action has to be taken — which I will contest its legitimacy — there may be a mechanism for that. Robert Nozick’s Anarchy, State and Utopia may have a mechanism that can be modified to justify unilateral state action against Utusan Malaysia. Be warned that I am taking the idea in a very restricted sense. Nozick is concerned with a much larger issue than that which I am focusing on now.

Early in the book, Nozick demonstrates how various insurance and compensation arrangements will address threats and actual transgressions of rights. Insurance and compensation arrangements here are simply different terms used for protection provided by an entity, which can be the state, a private security firm, a gangster group or other entities capable of provide that service. Meanwhile, threat is not simply some kind of warning or a menacing declaration that something will be done if something else is not done. Rather, it is the possibility of something bad happening. The chances of a pedestrian being hit accidentally by a car is one of such threats. The chances of a person makes good of his threat to break your leg is another example of such threats.

Nozick describes how a general open threat creates fear among the threatened. Depending on the credibility of threats and the level as well as the spread of fear the threats create, it will disrupt day-to-day activities of the person or even the society. In order words, there are costs imposed on society by the threats, regardless of realization of the threats.

I think this parallels concerns regarding lies and falsehood. It gives the qualification why some lies and falsehood should be punished. When lies and falsehood creates widespread public anxiety, then there is a case for unilateral state punishment. Under this line of thinking, the priority is fear minimization, or in the parlance of Malaysian political discourse, sedition or incitation of hatred. In the end, Utusan Malaysia clearly must be punished, if this method is adopted.

The question is how widespread before punitive unilateral state action should be taken?

This may require some kind of discretionary powers, which like any discretionary powers, are open to abuse.

The need of discretion is one reason why I do not like this method, on top of the fact it does not follow from the first principle aimed at the protection of individual rights.

Discretion tends to create dissatisfactory judgment. It will inevitably be inconsistent and in the end, ruin the reputation of the third party wielding the power to punish. Discretionary powers will lead to abuse.

The wielding and the exercise of the discretionary powers have caused troubles in the past. Some newspapers have been punished for publishing controversial material while others have been let go. Indeed, Utusan Malaysia has been let go off the hook by the government despite its controversial report of unverified truth. If reported by other newspapers less friendly to the government, that newspapers would have been punished.

So, long story short, no to unilateral state action against Utusan Malaysia but yes to making the case a private conflict between two parties involved.

Categories
Economics Politics & government

[2360] Competition Act is a farce

Competition puts a downward pressure on prices. It is one of the forces behind innovation. It enhances welfare. Therefore, initiatives aimed at creating a competitive market are worth supporting.

For those who truly believe in a free and competitive market, however, the Malaysian Competition Act passed last year deserves neither admiration nor respect. It is worthless.

How can one respect the Act when the government itself is unimpressed with the spirit of the Act?

This question is especially pertinent after the Najib administration recently granted Bernas with another 10-year monopoly over rice imports in Malaysia.

The Act will be enforced in 2012. One would expect any government that is sincere or serious about encouraging competition to prepare the ground. What we are seeing instead is business as usual. Instead, the government continues to grant monopoly power to a specific company without any regards for the Act.

Government-sanctioned monopoly is not a phenomenon exclusive to the rice market. In the sugar market, the government awards import quota to a limited number of sugar producers. Here is something that makes it even more interesting. Tradewinds effectively monopolizes the sugar market, and it is related to Bernas.

In Sarawak, there is CMS Berhad, which has a disproportionate access to government procurements and tenders. It is the grand monopoly of Sarawak and it is a prime target for a proper anti-trust law.

One must not forget the various government-linked companies. They are so large and so powerful that their ability to distort the market is not doubtable. What makes it worse is that, one would rightly expect these companies to sleep in the same bed as the government, at the expense of consumer welfare.

The government after all has an interest to see that these companies are profitable because the government is the shareholder. For companies that it only has an indirect relationship with, bad performance is just bad politics.

In the name of competition, a respectable anti-trust law must subject everybody under the same rules.

Yet, ”activities, directly or indirectly in the exercise of government authority” are excluded from the Act. Companies that obtain their monopoly power through a government authority like Bernas easily fit the bill. It is also easy to argue that GLCs will enjoy the exemption as well.

Even if that stated exemption does not cover those companies, the Competition Commission as established by the Act has wide discretionary powers to exempt anybody from the Act. With a perverse incentive system that exists within the government, selective prosecution will likely be the norm. Private firms that attain large market share through sheer ingenuity will be prosecuted in the name of competition while GLCs and companies like Bernas continue to be shielded from market forces by the government.

In short, not only does the Act not encourage competition, it is a tool to make the market less perfect.  This Competition Act is no anti-trust law. It is a discrimination law.

The truth is that competitiveness of the Malaysian market can be enhanced without this Act, which shamelessly masquerades as an anti-trust law.

Government policy created these monopolies and because of that, it is arguable that a proper anti-trust law is like taking a sledgehammer to a nut. Instead of expanding the role of government, a reduction can be just as effective as a proper anti-trust law. Such a retreat will definitely be more effective than the farce that is the Competition Act.

This is how a retreat should look like: The government to divest away from most GLCs, to institute an open and competitive process to most of its procurements and to stop granting monopoly powers to the likes of Bernas. Do all that and with a little luck, even a real anti-trust law might be redundant.

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 May 4 2011.