This is most obvious in the case of Fascism. The Fascists and National Socialists did not expect inferior classes, or races, or individuals to understand or sympathise with their own goals; their inferior was innate, ineradicable, since it was due to blood, or race, or some other irremovable characteristic; any attempt on the part of such creatures to pretend to equality with their masters, or even to comprehension of their ideals, was regarded as arrogant or presumptuous. Caliban was considered incapable of lifting his face to the sky and catching even a glimpse if, let alone sharing, the ideals of Prospero. The business of slaves is to obey; hat gives their masters their right to trample on them is precisely the alleged fact — which Aristotle asserted — that some men are slaves by nature, and have not enough human quality to give orders themselves, or understand why they are being forced to do what they do.
If Fascism is the extreme expression of their attitude, all nationalism is infected by it to some degree. Nationalism is not consciousness of the reality of national character, nor pride in it. It is a belief in the unique mission of a nation, as being intrinsically superior to the goals or attributes of whatever is outside of it; so that if there is a confliction between my nation and other men, I am obliged to fight for my nation no matter at what cost to other men; and if the others resist, that is no more than one would expect from beings brought up in an inferior culture, educated by, or born of, inferior persons, who cannot ex hypothesi understand the ideals that animate my nation and me. My gods are in conflict whit those of others, my values with those of strangers, and there exists no higher authority — certainly no absolute and universal tribunal — by which the claims of these rival divinities can be adjudicated. That is why war, between nations or individuals, must be the only solution.
We think, for the most part, in words. But all words belong to specific languages, the products of specific cultures. As there is no universal human language, so there exists no universal human law or authority, else these laws, his authority, would be sovereign over the earth; but this , for nationalists, is neither possible nor desirable; a universal law is not true law: cosmopolitan culture is a sham and a delusion; international law is only called law by a precarious analogy — a hollow courtesy intended to conceal the violent break with the universalism of the past.
This assumption is less obvious with the cases of Marxism, which in theory, at least, is internationalist. But Marxism is a nineteenth-century ideology, and has not escaped the all-pervasive separatism of its time. Marxism is founded on reason; that is to say, it claims that its propositions are intelligible, and their truth can be ”˜demonstrated’ to any rational being in possession of the relevant facts. It offers salvation to all men; anyone can, in principle, see the light, and denies it at his own peril.
In practice, however, this is not so. Theory of economic base and ideological superstructure of which Marxist sociology is founded teaches that the ideas in men’s heads are conditioned by the position occupied by them, or by their economic class, in the productive system. This fact may be disguised from individual persons by all kinds of self-delusions and rationalisations, but ”˜scientific’ analysis will always reveal that the vast majority of any given class believe only that which favours the interests of that class — interest which the social scientists can determine by objective historical analysis — whatever reasons they may choose, however sincerely, to give for their beliefs; and conversely they disbelieve, reject, misunderstand, distort, try and escape form, ideas belief in which would weaken the position of their class.
All men are to be found, as it were, on one of two moving stairs; I belong to a class which, owning to its relationship to the forces of production, is either moving upwards towards triumph, or downwards towards ruin. In either case my beliefs and outlook — the legal, moral, social, intellectual, religious, aesthetic ideas — in which I feel at home, will reflect the interests of the class to which I belong. If I belong to a class moving towards victory, I shall hold a realistic set of beliefs, for I am not afraid of what I see; I am moving with the tide, knowledge of the truth can only give me confidence; if I belong to ta doomed class, my inability to gaze upon the fatal facts — for few men are able to recognise that they are destined to perish — will falsify my calculations, and render me deaf and blind to the truths too painful for me to face. It follows that it must be useless for members of the rising class to try to convince members of the falling order that the only way in which they can save themselves is by understanding the necessities of history and therefore transferring themselves, if they can, to the steep stair that is moving upwards, from that which runs so easily to destruction. It is useless, because ex hypothesi members of a doomed class are conditioned to see everything through a falsifying lens: the plainest symptoms of approaching death will seem to them evidence of health and progress; they suffer from optimistic hallucinations, and must systematically misunderstand the warnings that persons who belong to a different economic class, in their charity, may try to give them; such delusions are themselves the inevitable by-product of clinging to an order which history has condemned. It is idle for the progressives to try to save their reactionary brothers from defeat: the doomed men cannot hear them, and their destruction is certain. All men will not be saved: the proletariat, justly intent upon its own salvation, had best ignore the fate of their oppressors; even if they wish to return good for evil, they cannot save their enemies from ”˜liquidation’. They are ”˜expendable’ — their destruction can be neither averted nor regretted by a rational being, for it is the price that mankind must pay for the progress of reason itself: the road to the gates of Paradise is necessarily strewn with corpses. [Isaiah Berlin. European Unity and its Vicissitudes. 1959]
Joseph Stigliz argues that the Trans-Pacific Partnership (TPP) will disrupt pre-existing efficient Asian supply chain.[1] That essentially suggests that the TPP creates trade diversion away from non-TPP Asian countries. While this argument is true if it stands in isolation, it is not applicable for Malaysia.
This is because Malaysia already maintains free trade deals with major Asian economies. Either through bilateral means or through Asean, Malaysia has free trade agreement with China, India, Korea and Japan among others (also, Australia), never mind that Malaysia is also a part of Asean Free Trade Area. Combined, they are Malaysia’s major Asian trade partners. Other Asian export destinations are small compared to the combined exports to the aforementioned countries. Major trading Asian countries also have multiple free trade agreements among themselves.
At the same time, Malaysia does not have an FTA with the US. With the TPP, Malaysia will.
So if anything, it is these Asian FTAs that Malaysia maintains which are creating trade diversion away from Malaysia-US trade, contrary to Stigliz’s assertion that the TPP will create diversion away from intra-Asian trade.
That means, if agreed upon and implemented later, the TPP will help in neutralizing some of the trade diversion Malaysia-US trade is suffering from. TPP makes diversion less of a factor and creation, more.
I am unsure what to think about the recent move by Bank Negara Malaysia (BNM) to tighten lending on the non-bank side of the lending system. While the statistics in that sector is scary when compared to the banks, the non-bank sector does provide financial services to the low-income earners. The financial services provided here are not the fancy derivative kinds but rather, it is pretty much bread and butter things: giving out vanilla loans for a lot of stuff.
Without these institutions, these low income groups would probably lack access to financial services that they are enjoying now. That in some way has to mean improved welfare because these loans have to be used for something, either investment or consumption. And investment is simply deferred consumption anyway, which improves welfare eventually.
I have to admit that there are some problems with lending in non-bank financial institutions (NBFI). There is an explosion of personal financing granted by NBFI but in the grand scheme of things, it is small compared to the safer banking sector. Still, in the personal financing sector, more than 50% of loans were granted by NBFI according to BNM in its 2012 Financial Stability and Payment Systems Report. What makes it more worrying is that NBFI has looser requirements compared to the banks. Also, average amount for personal financing given out by NBFIs in 2012 was RM68,000 per person while most of the borrowers are civil servants who do not make much. (Still, impaired loans ratio in 2012 was extraordinarily low in spite of looser requirements. That has to do with a government deduction program. While the program is useful in keeping the ratio low, one wonders what the disposable income level of these borrowers is given that the borrowers are mostly government servants who do not earn too much).
Nevertheless, what would happen if these finance services were restricted? Or tightened?
Some might not go to the banks because they would likely be unqualified to obtain loans. If you cannot qualify for loans from NBFIs, what are the chances of getting loans from a sector with tighter regulation?
Others might not borrow at all, which is probably the ideal outcome for advocates of tighter lending requirements. For those who used the loose requirement to buy unnecessary stuff like buying an iPhone, a widescreen television or an expensive laptop to show-off, then the non-borrowing outcome is good.
But if they borrowed money for education, for food or essentially for smoothing their basic consumption, tightening will make them worse off. In their case, those loans give them a chance to build their life. These loans give them a leg up. Making it costlier for them sounds exceedingly cruel.
The worst outcome is probably if they go to the shadowy part of the economy and that quite possibly means going to the loan sharks. Having borrowers migrating to the least regulated (or even unregulated) sector of the economy cannot be considered a success of regulation. Protection in the underground economy is not as robust in the ”upper ground” economy. There is no bankruptcy law there. Here, not only one increases the systemic risk rather than reducing it through regulation, there will like be human cost — that is costlier than being condemned to bankruptcy — by becoming victims of crime.
That said, the restrictions by BNM are not drastic and those regulations, while it may reduce lending by NBFI, it is unlikely to cause mass exodus from NBFI to elsewhere. So, it is hard to imagine if BNM’s move increases systemic risk at all.
Yet, a small group of individuals will probably do just that and this group may be worse off.
Here is the point I want to stress. There is human cost to the tightening and that has been ignored while the mass media praises the tightening.
I have previously highlighted the cost of Malaysia not participating in the Trans-Pacific Partnership, which is a proposed free trade agreement among 12 countries across the Pacific. The cost comes in the form of trade diversion. I have only mentioned the qualitative aspect however. While it is good to know that, having quantitative assessment of the TPP will provide a greater case for joining, or not joining for that matter. Indeed, Pakatan Rakyat as well as the anti-TPP camp are demanding the goverment to release a cost-benefit analysis of the TPP. I think that is fair.
Well, they and all of us are in luck.
Inkyo Cheong of Asian Development Bank Institute recently published a working paper that comes close to a CBA. In the paper, the author does provide the impact on GDP of various countries:[1]
For Malaysia in particular, the implementation of the TPP is projected to increase the GDP by 0.7% (see the TPP12 column). As you can see, Malaysia is expected to be one of the biggest winners of the TPP.
Malaysian exports continue to take a hit. This time, it contracted by close to 6% in May. Imports also decreased. Those domestic cylinders better get going.
