Balloon Economies (Part 1)

What do you see here? Three work in progress paper mache projects? I see that too, but I also see something more. I see the balloon pasted paper mache as a metaphors that explain economic booms and busts and economic policies.

While I do not know why the artist (who uploaded this picture) wanted big paper mache domes, I do know why politicians want big economies. Big economies empower countries, bolster support, and provide better livelihoods. Especially on the last point, whether motivated by love, duty, power, or pride, politicians strive to improve their countrymen’s economic well-being. Some may say that the pie is big enough and society needs more re-distributive policies to address inequalities. However, given the high political cost and the economic inefficiencies, I believe politicians still see making the economic pie bigger as the simpler policy choice.

As a result, no different from the artist who used the balloon to prop up the paper mache dome, politicians also look for ways to build the economy as big and as quickly as possible. In the picture’s case, the third largest balloon allows the economy to have the biggest GDP and its people the highest GDP per capita. In this scenario, people’s material wealth increases, the government fulfills its promises, and everyone is happy. Here, politicians and entrepreneurs are lionized as geniuses and saviors.

However, the paper mache dome and the economy dome comparison now ends here. While the artist has complete control over when to lift the solidified dome off the balloon or even burst the balloon intentionally to remove the dome, the government does not. The government did not know whether the San Francisco economy is able to wean itself off the dependence on the Tech bubble. The government did not know whether the US economy could hold up if the housing bubble burst. In the end, the ordinary folks who the government sought to help in the beginning are hurt the most. Seemingly overnight, 401Ks are reduced, home equity are halved, and entire departments are laid off. The US economy went through this bubble bursting in 2008. Seven years later, the economy is now finally starting to pick up.

Quick Lesson from LKY's Passing

With the passing of Lee Kuan Yew, the world has been extra critical in debating his legacy. No one disputes Singapore’s economic progress achieved under his 31 years of PM rule. However, many also see him as a ruthless autocrat who cracked down on free speech and political opposition senselessly. Lee Kuan Yew is well aware of these criticisms. He believes there is no freedom without order and people value economic freedom more than political freedom.

Seeing himself as Singapore’s father who knows what people need best, he says “you take a poll of any people. What is it they want? The right to write an editorial as you like? They want homes, medicine, jobs, schools.” As a result, he has made his utmost effort in building Singapore’s prosperity, not democracy.

Now, I am not here to debate whether Lee Kuan Yew is right. I am here to talk about cultural understanding. For the most part, Westerners are more critical of the political repression while Easterners are more forgiving of such human costs. Having grown up in the East and West, I understand the historical vestiges, the government agendas, and the family upbringing that contribute to this different interpretation of Lee. However, for most of the world, people grow up with one dominant value system. As a result, cultural misunderstandings are bound to happen right? I disagree.

The pace of globalization post the fall of the Iron Curtain has caught the world by surprise. It seemed like just yesterday when people still used point cards to dial internationally. (I vividly remember my parents dialing a million digits just to have a ten minute conversation with family abroad.) Now, internet, smartphones, apps have bridged all gaps, except cultural ones. Now on to the final frontier, how do we overcome cultural differences? I believe replacing heuristics with common sense is all we need.

When one uses heuristics, judgement shortcuts, to approach another culture, one is bound to pigeonhole the said culture to either end of the extreme. Cultures are never inherently exotic or common; it all depends on the frame of reference. Just because another culture’s food seems exotic does not make the said culture’s values alien. Just because another culture’s life style is western does not make the said culture’s beliefs western. Heuristics that simplify a culture’s complexity down to a simple transitive equation are inadequate for today’s society. The walls have come down, but the neighborhoods are still divided. Cultural sensitivity issues, most analogous to the left over barb wires from the torn down walls, scare people away. However, there is nothing to be afraid of. Common sense over heuristics is all one needs to understand other cultures. Like most things in the world, the truth is always somewhere in the middle so book that flight, sign up for that exchange program, follow that blog, and explore all that the world has to offer.