The Oil Paradox and Global Inequality

Since I will be taking a module on sociology of inequality this semester, I thought I’d write down some of my thoughts on inequality based on a limited knowledge of the recent oil crash after reading 2 articles from the straits times “A year to take advantage of cheap oil” and “Understanding the oil crash”.

On 7th January 2015, Brent crude oil yesterday fell below US$50 (S$67) a barrel for the first time since May 2009. I was rather perplexed by this phenomenon because the reactions seem rather mixed. I then realised that this was because the plunge of oil prices have different impacts on producers and consumers.

The plunge in oil prices is mainly caused by the shale revolution in America, which enables America to extract shale oil and gas which were untapped on previously. This has increased the supply of oil significantly. However, oil companies in Saudi Arabia do not wish to decrease their supply as they would want to drive out their American counterparts by lowering their profits further.

At the same time, the fall in oil prices is also worrying as it signifies that the demand for oil is low and that economic growth is slowing down. Developing countries such as China are not growing as much as they were.

For oil importers and consumers, especially developing countries such as China, a fall in oil prices indicate lower cost of production for industries, lower inflation and stimulate the economy.

On the other hand, for oil exporters and producers, especially countries such as Saudi Arabia and America, lower oil prices will indicate a fall in profits. In the past, a fall in oil prices might have been a good thing for industries in America, but the rapid growth of oil companies also mean that they make up a larger part of the economy and have a greater impact on the stocks in the market, thus leading to a plunge in stocks in America. (The plunge in stocks can also be attributed to other reasons such as a weakening Euro caused by political instability in Greece. This has raised fears and uncertainties about the eurozone and the global economy.)

This made me recall a statement my Integrated Humanities teacher made in class. He said, “When someone becomes richer, it must be that money is taken away someone else. When someone becomes poorer, it must be that money is taken away from him and given to someone else.” In that sense, the world economy acts like a zero sum game, whereby one person’s gain is equivalent to another person’s loss.

When I was young, I used to think that one will become richer by his own effort. If he is poor, he must get a job and work harder to earn more money. (I believe this is the effect of meritocracy in Singapore’s education.) It is only when I grew up and learnt more about economics that I realised that our personal wealth is not just controlled by our own efforts.

If any global phenomenon, such as the plunge in oil prices definitely mean that some countries will gain in some aspects, while others will lose, does that mean the global equality can never be reached?

Then, I started realising that perhaps, if we choose to define equality simply in the monetary sense, we have to accept that equality can never be achieved. Well, we even had different natural endowments in the first place. For example, Singapore didn’t have an abundance of natural resources, but we are well endowed with a strategic location and a relative lack of natural disasters.

However, if we redefine our definition of equality and broaden it to include other aspects such as a stable society, beautiful sceneries and a general satisfaction of life, it could be possible that different countries in the world is not unequal, but merely different.

Once, a friend of mine, embarked on trip to India for a mission trip. She returned sharing about how the people there are rather satisfied with their lives and even strive to share whatever they have in their house with their guests. They needed no sympathy, even though they are “poor”. This is because, they are only poor by our standards. This is typical of ethnocentrism, whereby people of a culture judge people of another culture by their own culture’s yardstick and standards.

A food for thought before I take my first lecture on sociology of inequality in school this week.

Sources:
1. A year to take advantage of cheap oil: http://www.straitstimes.com/news/opinion/more-opinion-stories/story/year-take-advantage-cheap-oil-20150106
2. Understanding the oil crash: http://www.straitstimes.com/news/opinion/more-opinion-stories/story/understanding-the-oil-crash-20141205
3. Alarm bells ring as oil dips below US$50: http://www.onenewspage.com/n/Asia-Pacific/754uw3q7n/Alarm-bells-ring-as-oil-dips-below-US.htm

Thoughts on National Identity in Conjunction with SG50

In a straits times article published on 2nd january, written by William Wan (http://www.straitstimes.com/news/opinion/more-opinion-stories/story/pink-ic-and-red-passport-not-enough-make-you-singaporean-201), William Wan reflects upon what it means to be a Singaporean. He notes how “cultural identity can be a source of division, focused as it is on the differences between communities, including race, practices, food and socio-economic status”. Hence, Singaporeans have to recognise and accept that “Singaporeans have to find a delicate balance…We have to foster an identity that is embedded in our cultures, yet not over-emphasise differences that inherently exist among the different communities.”

This is exceptionally true and it could be the reason why Singapore clings on to our identity as a country that is multi-cultural and multi-racial, even though they may not be true in some aspects. While tolerance is seemed as an unsatisfying and imperfect solution to our diversity, assimilation is seen as a naive approach for a country with a presence of such distinctly different cultures. Forcing citizens to abandon their cultural roots for a unified identity may only incite mistrust among races and religions because it raises the question of: Who has the power to decide what identity Singapore should take?

The government has often taken a top-down approach in addressing the issue of nation building. On national day, the narrative of how Singapore grew from a fishing village to a modern metropolis is presented to Singaporeans time and again, as an attempt to remind us where we came from. As William Wan writes, “The default solution, almost inevitably is to present a medley of Mandarin, Malay and Tamil songs that we sing in school on Racial Harmony Day and at the National Day Parade Celebrations.” These narratives are almost seen as commercialised especially when they are used to publicise Singapore’s culture in the aspect of tourism. It is questionable if these narratives and ethnic songs are truly representative of the Singapore Spirit.

Admittedly, a lot of what Singapore is today is created under the Lee Kuan Yew regime. This ranges from housing, economy to ideologies. Singapore is also often described as a miracle. “A mere 50 years ago, Singapore didn’t even exist as an independent state. We were Malaysian then and, before that, subjects of the British Crown. Before the more recent waves of immigrants, fewer than half of us could claim that our parents were born here. ” While this is a miracle that many Singaporeans are proud of, it shows why the problem of culture is such a difficult question for us. Apart from a geographically strategic position on the world map and a successful port, we do not have natural resources and land. As a result, a lot of Singapore’s success relies on policies and opportunities that are created with the vision of the government. The economy was a priority back then, anything related to identity and culture could wait. Ironically, this pursuit of economic progress was exactly a factor that attracted a large influx of immigrants in the past, which also contributed to the current problems of culture and national identity in Singapore.

However, as a nation matures, it is important for Singapore to find its own identity, from a bottom-up approach.

In sociology class, one definition of “culture” appealed most to me. Culture is defined broadly as “all the ideas, practices, and material objects that people create to deal with real-life problems”. Perhaps this is why instead of characteristics like multi-cultural or multi-racial, Singaporeans identify themselves more with attributes such as hardworking, kiasu or practical. This is because they are the attributes which have helped us overcome daily problems or crises such as the 2009 economic crisis or Severe Acute Respiratory Syndrome (SARS) in 2003.

I like this definition of culture, because it suggests that perhaps National Identity is something that just is, not something we have to consciously find or even create. It is something that is embedded in our daily lives as we solve problems, no matter how big or small they are. When citizens of two races meet at the lift each day, they are once again reminded of their distinct differences through the colour of their skin, and the language they speak. However, the conscious decision to accept each other’s presence each day, regardless of whether it is merely tolerance, or true assimilation of the races, is what makes Singaporeans uniquely Singaporean. When the economy is down, and Singaporeans become more aware of their finances, it is how they will go the extra mile to seek for discounts in supermarkets or shopping malls that depict the Singaporean Spirit of kiasuism (fear of losing out).

In the last part of his article, Willam Wan provides his opinion on what National Identity means to him. “The only thing that matters, the only thing that should matter, is that one makes the decision to be Singaporean, to call this island home, and to contribute to making it our best and only home.” In recent years, blogposts such as a letter written in 2012 by a Singaporean blogger, Zing, about leaving Singapore and another article, “Why I’m leaving Singapore” written in 2013 by another blogger, Danny Dover, reflects the trend of young Singaporeans leaving Singapore for other countries with supposed better prospects.

While individual choices ought to be respected, my personal opinion leans toward William’s opinion. I believe that while identity is becoming a fluid concept because of globalisation, what makes Singapore uniquely Singapore is how Singaporeans learn to take ownership of the problems we observe in this place we call home. It is my hope that we will choose to stay even when things get rough, and not simply leave when things do not go our way. After all, the grass is greener where you water it.

Making a Mountain out of a Molehill

In the book “The Art of Thinking Clearly”, Rolf Dobelli wrote about the Confirmation Bias. It refers to human’s nature to seek a certain pattern and form theories about it. However, our theories may be wrong, and there may not even be a pattern in the first place.

A quote from Warren Buffet goes “What the human being is best at doing, is interpreting all new information so that their prior conclusions remain intact. ”

This may be a dangerous practice because it can paint a grossly inaccurate picture of the world. People stay in their comfort zones and are contented with selective understanding of the world which adheres to what they already assume of the world.

One thing I tend to do is to over extrapolate from a single incident and relate it to past incidents and knowledge. For example, I make sweeping assumptions such as “The frail uncle that cleans the trays at the hawker centre must be poor and live in a one-room flat like many elderly in Singapore these days. ” and immediately start to feel bad about the plight of elderly in Singapore.

Indeed, I have learnt in sociology classes that one should always practise the sociological imagination, so as the old uncle start to clear my table for me, I ought to ponder about elderly issues in Singapore, how the dependency ratio has decreased significantly, how birth rate continues to fall etc. However, I never realised that doing so could well be committing a mistake of over analysing. In any case, the old uncle could just be someone who has children that are willing to provide for him, but he wishes to earn extra income for himself. Thinking otherwise is a result of myself trying to find evidences to suit a certain preconception.

One useful tip to prevent the confirmation bias as stated by Rolf Dobelli is to seek for counter-arguments instead of evidences to proof a theory. Showing that a theory is strong enough to stand alone, and can defend all the counter evidences, is better than simply searching for evidences to prove one’s own point. An important point to note for the rest of my academic journey ahead.

Beginnings

This blog is an attempt to challenge myself to think broader and deeper about the world around me. It includes my thoughts about issues both personal and general. It is my wish to learn something new everyday and to track my changes in thoughts as I embark on this journey. 🙂