GP Resources
By Kevin
More to Write now...
Besides General Paper by the GP tutor from VJC, there's actually other blogs featuring GP resources such as While I Read, I Write and "General Paper Essays". Whether it's by teachers or students, it is always great to have someone point out resources available for your studying so you don't have to go into so much trouble with finding them. It is also good to see the works that other people are sharing just to get inspired if not as a model for your own writing.
There's also a GP Wiki and for people who needs extra help for Economics, there's actually a Economics Wiki for you too. Of course, when you need the variety of different subjects and a focal point for academic and intellectual resources, you should still be here at ERPZ.
Bad to be good
By Kevin
Right amount of selfish and selfless
Recent studies showed that people are not only irritated by selfish people, but also those who are exceptionally selfless. In a recent paper published by Craig Parks and Asako Stone titled, "The Desire to Expel Unselfish Members From the Group", being selfless doesn't make you any more popular than selfish people. The Economist explains this idea of too much virtue becoming a vice in the eyes of people.
People are a fussy lot. It's hard to please them. They like those who are like them but a little nicer and prettier and quietly despise those people who are a little meaner and less beautiful than them though the process fuels their own ego and makes them secretly happy as well. But they think the extremely selfish and mean people are irritating and want to be away from them; now we all know they do that to those who are extremely selfless and nice as well. People care about comparisons, they care about relative positions. I've long ago wrote about 'Reference Anxiety' and I explained the dilemma between happiness and equality.
Everyone likes the idea that others are also human, and large deviations from what they themselves are, or have, or experienced, is just unhumanly. That's why it's okay to cheat on your Xbox games and those gamer-saints can just remain holy.
Behavioural Economists
By Kevin
Get Reading...
Someone recently asked me about books to read on Behavioural Economics and I told him he's lucky because if it was a couple of years back, the subject hasn't exactly attracted that much attention so there's not much books and they're probably pretty hard to find. I thought I'd share with readers of ERPZ who might be keen to explore this blooming area in the field of Economics & Psychology.
Recommending books is a tricky affair because people have a variety of tastes for books; non-fiction books are not as much a social affair as fiction so it isn't always that enjoyable to follow the crowd. Nonetheless, I'm attempting this tricky activity here:
Nudge by Richard Thaler
Stumbling on Happiness by Daniel Gilbert
Predictably Irrational & The Upside of Irrationality by Dan Ariely
Create Your Own Economy by Tyler Cowen
Now, the fact is that I haven't actually finish all of the books above, but here are my reasons for the recommendations:
Richard Thaler have got his research on behavioural economics cited by lots of different writers of popular economics books and you can be sure that he's an expert on the subject; I've looked through the first chapters of 'Nudge' and while it doesn't exemplify brilliant, engaging writing, the ideas are interesting and implications enormous (which means people should know about them and try to steer them correctly).
I've read Dan Gilbert and watched him speak. He's brilliant.
Dan Ariely's Predictably Irrational basically has some fan club and I've watched him speak at TED.
I've read Tyler Cowen's 'Discover Your Inner Economist' and while he keeps distracting readers in his writings, he eventually does bring his points across. And on the way, you would have picked up much other tidbits. So I'm pretty sure his new book would also be an enjoyable read.
ERPZ.net Survey
By Kevin
Thanks for everyone's support of ERPZ.net so far. Our visits have risen substantially in the past couple of months. We're hoping to improve the site experience and the materials on ERPZ.net. We've prepared a survey to gather feedback on what needs to be improved and hope visitors could just spend some time completing this short survey for us.
Your responses would contribute to the future development of ERPZ.net.
Fun Theory
By Kevin
I guess I'm a little slow but Volkswagen had this really interesting initiative last year called 'The Fun Theory'. They did quite a couple of interesting things to change the behaviours of people by injecting fun into mundane activities. The idea probably stemmed from schools where fun element in injected into teaching and learning to make uptake of new information more comfortable for the kids and less boring. Yet even as we grow up, the desire for fun haven't quite diminished as much as our capacity for it.
The winning entry for their contest, which features a 'Speed Camera Lottery' appears pretty brilliant. The implication though, is that the rewards to abiding by the speed limit from the lottery is proportional (somewhat) to the number of those not abiding by it. Therefore, people's desire to win the lottery would only serve to drive down their rewards. An equilibrium will emerge at the point where there is sort of a market price for traveling slightly above the speed limit where some people won't mind paying and fine and care nothing about the lottery while others would be keen to earn the meagre sum that has been collected from that 'some people'.
Of course, to know what'll happen, you'd really have to test it out.
Lessons from Australia’s election
By Wei Seng
A concern for Australia's voters
I tend to follow elections in major Western countries closely, if not because of my usual interest in the politics of these countries, then because the publications that I read such as The Economist and (to a lesser extent) The Straits Times have rather heavy coverage of the election, before, during and after. My platoon mate gets very excited about such elections and will often keep reminding me about the election day. But there are several factors that make the Australian election (that took place yesterday) so special this time round and also worth covering here on Erpz.net.
Firstly, the nature of which the current Australian Prime Minister Julia Gillard attained power was rather unique. According to John McTernan in the Financial Times, the current ruling party Labour decided to "depose" ex-PM Kevin Rudd because of dips in popularity that were perceived as threatening to the party's cling onto power, a lesson learnt from Britain's Labour Party which held on to Gordon Brown despite his record-low popularity and ended up suffering in defeat during the elections. Gillard wanted a mandate for herself to rule, in view of the seemingly undemocractic circumstances in which she came to power, as well as her popularity just after she was selected as the new PM.
Her popularity dipped with time, however, as she stumbled and flip-flopped over the initiatives she wanted to push forward and her stand on various issues plaguing the country. Now that the election results are partially out, the initial lead over her rival Liberal party has whittled to the extent that the two parties have split the vote, with Liberal having one more seat than Labour but none with any majority significant enough to form a government. So ironically, the lesson that they learnt from Britain's Labour party appeared to be a wrong lesson. Maybe it was not time to depose Kevin Rudd yet.
The main harbinger of this Australian election for future Western elections is the hot topics that were thrown up during the election. Presiding over economic growth in a period where the world experienced a bad recession did not seem to benefit Labour at all. What was on the voters' radars, as McTernan suggested, were the environment, immigration and Australia's position on the global arena, topics which could highly likely be of significant influence in future elections in the West.
The most important topic was on the environment, and the importance of this will undeniably increase with time as the effects of climate change are unleashed upon the world. Rudd's popularity was supposedly a result of his green stance, from the signing of the Kyoto Protocol to his proposal for an Emissions Trading Scheme (ETS) for Australia. His popularity was thought to have declined when he climbed down on climate change initiatives such as the ETS. When Rudd was deposed, he was the probably the first leader in the West to be unseated because of environmental issues, which seemed to indicate the growing importance of environmental issues amongst the populace.
What strikes me as weird, however, is how Tony Abbott, the climate change skeptic and leader of the Liberal coalition, actually fared better in the election despite his stand on the environment. This would seem to contradict the lesson learnt that the environment is becoming an issue politicians cannot neglect. This would very much be perhaps a failure on Gillard's part, as she has also been waffling with regard to environmental issues. McKernan claims that Abbott "mined middle Australia’s often conflicted feelings" about the environment, which resulted in his better showing at the polls. This certainly would be quite a terrible lesson to take home though, if politicians were to see being climate change skeptics as vote-grabbing.
Then there's migration and the concept of Big Australia. Voters were uncomfortable with Rudd's plans to expand Australia's population, as much as migration generally has been beneficial for Australia and Australia is very much a country made up of migrants. Australians are generally satisfied with their standard of living and they worry about whether Australia can cope with an increased population, especially one that is a result of immigration. This could also be seen as environment-related, since after all sustainable development needs to be built upon sustainable population growth and certainly an expanding population would place greater stress on the environment. The issue regarding migration that many Australians are most unhappy about, however, is the inflow of refugees to the country. Migration and refugees are issues that would become more significant with time as globalisation opens up access for more and more countries in the developing world to developed countries, and as climate change unleashes its wrath on impoverished populations that would flock to other countries for shelter and a living.
Lastly, the concern about what Australia is to the world. Australians seemed uncomfortable about taking the lead in the region or in the world. Rudd championed several initiatives Pacific-wide that would put Australia at or near the heart of policy and decision making, which made some countries and organisations in the Asia-Pacific uncomfortable at attempts to take away its influence (mainly ASEAN and countries in the region). The country's realignment closer to Asia and further away from its friends in the West (especially America and Britain) seemed to make some Australians uncomfortable as well, especially as rising power China taps into Australia's mineral wealth and has attempted takeover attempts of several Australian mining giants in the process.
So what lessons are there to learn, really? I quote this huge chunk which captures nicely how this election could be a harbinger for future Western elections: "The desire to enjoy growth while defending our lifestyles against outsiders, accepting climate change intellectually while rejecting its implications for our behaviour, and a nagging concern about the rise of China – all are issues which will quickly move up the agenda in Europe and North America".
The Special Case
By Kevin
Gotta Come Down
For those students of A Levels Economics who still have no idea how asset bubbles form and why the classical theory of economics suggests that bubbles are unlikely might like to read the recent Buttonwood. A Special Case highlights why the properties of goods that are classified as assets are fundamentally different from the rest of the goods in the economy. This is not only about financial assets but those other goods that are treated as assets. During the tulip mania, the tulips were treated as assets briefly before the entire frenzy collapsed.
When price information feeds back into the demand of a good, the Law of Demand no longer applies and the demand curve of the goods starts sloping upwards. We never seen this sort of analysis done mathematically because it is an imprecise analysis and the equilibrium found is not meaningful (think about 2 positive gradient curves intersecting). George A. Akerlof and Robert J. Shiller brings in various other explanations for the emergence of depressions from disciplines like psychology in their Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism I just manage to borrow it from the library and hopefully I'll be able to finish and review it soon.
Essay Writing
By Kevin
Get Cracking!
ERPZ comes up with advice about writing now and then; earlier I looked into my writing styles following advice from The Economist. Kwang Guan did a piece on adjectives, and for advice on writing Personal Statement, it's also helpful to look out for stuff applicable for normal writing as well.
For my friends who're going back to university and trying to write good, generic essays, here's some key points about essay writing that's really important. Hopefully, it'll be useful especially to the boys who are entering university only after two years of National Service and feeling dumber.
1) Cut down on needless adjectives
2) Vary sentence lengths
3) Focus on the topic at hand, don't allow yourself to stray
Yup, writing is that simple.
Problems of an Elite Education
By Wei Seng
Through the hallowed gates of Yale... to a poorer future?
My friend posted a link on Facebook to an article titled 'The Disadvantages of an Elite Education' by William Deresiewicz. I decided to click and take a look at the article and it certainly did not disappoint, perhaps justifying why my friend just had to share the very long article on Facebook. I found many of the ideas communicated in the article quite pertinent to me, given that I was technically in an 'elite' school for the last 6 years of my education.
"The first disadvantage of an elite education": you become unable to talk to people who are not quite like yourself. The writer starts with an anecdote about how he was unable to talk to the plumber in his kitchen, someone presumably with a background totally different from the writer's. I can empathise, because I have encountered this same problem in camp. However while in Singapore the gap between the elite and non-elite is not as wide, that in America is much wider given that elitism not just self-perpetuates in the hallowed campuses of Boston and Ivy League colleges, there is a sense of contempt that is bred by the elite system.
Intelligence, as the writer discovers, is not just about the booksmart kind or the academic or analytic kind that is recognised in the elite education system. Intelligence could be in the form of social intelligence and emotional intelligence, and excellent performance in sports and other non-academic aspects appear to be not as recognised in the elite system.
"The second disadvantage of an elite education": inculcating a false sense of self worth. All the excellent SAT scores and A-level grades only indicate the ability to take tests and perhaps a measure of knowledge, but that does not reflect very much on how far one can succeed in life. Sure, life is a series of tests, but not of the paper-and-pen kind that one can score highly at by mugging away. I take pride in what I know and my academic performance, which the writer acknowledges is something worth being proud of, but so what? Sometimes I lament that I do not know things that many people of my age who went through a mainstream education know, such as cooking (which secondary school students pick up in Home Economics) and fixing of basic electronic devices.
After that feeling of smugness and self-back-patting, there's the idea that "measures of intelligence and academic achievement are measures of value in some moral or metaphysical sense". But humans are all equal, the worth of someone from an elite school is not more than that of someone who was not. As the writer illustrates, "Their pain does not hurt more. Their souls do not weigh more".
And there's the privileges of being in an elite school, that those not from an elite school might not get: exposure to "visiting power brokers" and "foreign dignitaries", scholarships and stipends, opportunities to travel overseas for various reasons ranging from community involvement to research symposiums. I have been very thankful for all the opportunities that my school gave me, and I often wonder what I would have become without all these opportunities. The uneven playing field becomes even less level.
The claims by the writer become more audacious, but echo horrifyingly. Those from elite schools are being pampered for the world they are poised to enter: plenty of opportunity to climb, freedom to pursue one's interests, high-flying careers and social lives. Those not from the elite schools then might be destined for a life of "few second chances, no extensions, little support, narrow opportunity—lives of subordination, supervision, and control, lives of deadlines, not guidelines". All these apply to Singapore quite strongly. But the next few allegations may or may not apply as evidently to Singapore, where the writer suggests that while the system is meritocratic to the point of entry into the elite system, once one gets in it is almost impossible for him to be kicked out for any misdemeanour.
And from there on the allegations lobbed against the elite education system become a bit less applicable to Singapore, though not any less irrelevant or banal. Those who come out from the elite education system may out of 'face' (I use a very Asian concept though the American concept would be pride) not want to pursue anything less than a high-paying job in a comfortable office, though that may not be one's true calling or passion in life. There's the fear of failure, and an obsession with failure even in the banal context of a class test in school. At least in my opinion, there are those from the elite education system who have taken risks and trodded the road less travelled to success (albeit measured in very material manners such as wealth and influence): Bill Gates and Mark Zuckerberg, founder of Microsoft and Facebook respectively who both came from Harvard. But regarding the obsession with failure I must claim to be the epitome of this idea because I am so afraid of failure or losing at anything that I tend to restrict myself to doing things that I do well or that I would win, which certainly is not good for my personal development.
The most damning disadvantage of an elite education, the writer accuses after all the disadvantages trickle through, is that "it is profoundly anti-intellectual". I think I shall leave you to go read the article yourself to find out why the writer says this, despite the fact that the elite education is supposed to nurture intellectuals to their fullest potential.
I welcome some rebuttals from all, not just those from the "elite" schools.
The Rising State
By Kevin
Which would you pick?
After countless years of experimentation, consensus on economic policies have not been quite useful in application because of acknowledgement of vast differences between individual economies and the fact that different cultures would have an influence on the reaction of the economy to a government policy.
Industrial policy usually seems pretty attractive as a means of guiding the growth of an economy. Singapore is an attractive example and our success too often is related to some sort of plan, policy or programme by the government that we almost forgot that the economy and people plays a huge part as well. The Economist is not exactly in favour of industrial policy. In the article, it highlights the trouble with industrial policy, and how the success claimed by it relied heavily on privatization and the free market.
Nevertheless, we must acknowledge that government does play a part in helping to brand the giants and create the necessary initial conditions and connections that the industries need to thrive subsequently. The industrial policy, is thus about giving the right industry the right aid or initiating the right investments and then moving out at the right time. In this aspect, Singapore has often done exceptionally well, recognizing when to deregulate a market, and also introducing competition.
The Economist highlighted an important point in its conclusion about industrial policy though:
[...] rather than the failed policy of picking winners, governments should encourage winners to emerge by themselves, for example through the sort of incentive prizes that are growing increasingly popular.
Another article elaborates more on the core arguments about industrial policy. Indeed, the industrial policy should not be able 'picking winners, saving losers'; it should be designing an incentive structure that will lure winners to emerge. That is the power of the market and the government should help out with this rather than interfere with the incentive system.