Crime-free society – A utopian dystopia



(This guest post was written by my close friend, Edward Tanoto. Having spent some years in one of Singapore’s top high schools on a government scholarship, he has learned many lessons – easy and hard – about studying, life, friendships, and contemplating about the future. Admiringly, he’s also a serious thinker.)


And the LORD God commanded the man, ‘You are free to eat from any tree in the garden; but you must not eat from the tree of the knowledge of good and evil, for when you eat from it you will certainly die.’”

Genesis 2: 16 – 17 

Thus was the first rule of law – the only law in the Garden of Eden. Alas, it did not take long for Adam and Eve to break it. The consequence of their disobedience has since been passed to us – their posterity. This is the “sin” we must bear, the “sin” that distances us from the LORD God… or so it was told.

After spending 4 years of my life in both Methodist and Anglican schools in Singapore, I have come to familiarize myself with the Bible. Being a Buddhist by birth, the teachings of Buddha had already been ingrained early in my mind. As an Indonesian, it did not take long for me to inquire and learn more about Islam – the common religion of my birthplace. Sharing a room with a Hindu Balinese, I also managed to shed some light on the many festivals and prayers they indulge in. In my exposure, I discover several recurring themes in every belief – benevolence, compassion and humility.

Virtue is not an alien or novel concept. History has recorded people perceived as virtuous since the days of yore. Jesus Christ, Muhammad The Prophet, Florence Nightingale, Mother Theresa, Dalai Lama, Pope Francis, and many other inspiring figures are all hailed as role models in religious, historical and even societal contexts. Virtue has become a highly lauded principle that projects the very notion of humanity. Indeed, most of us are encouraged to be the best of ourselves even from a very young age. After all, morals and goodwill make the world go around…right?

In an ideal world, this may hold true. However, do remember that we are living in the real – and imperfect – world. In the real world, crimes reside alongside virtues. Arson, kidnapping, murder and prostitution are just few examples of our everyday problem. Every country struggles with it, every citizens loathe it and every newspaper anticipates it. The question here is will it ever end? Thankfully, it will not. Let me repeat. Thankfully, it will not.

I am, first and foremost, not a proponent of criminal activities. I firmly believe in the need to constantly keep lawbreakers in check. School shootings, terrorism, embezzlement and the like have cost us billions – or take another example (highlighting dilemmas of our own technological marvels): cybercrime itself has cost the global economy $400 billion annually. However, I do not concur that eradicating crimes is the way out. Simply put, and from a utilitarian point of view (ironically), we need offences and felonies. Criminal offences have become an integral part of our society and is one of the driving forces of the economy.

Consider these points as follow:

  1. Many parts of our economy are dependent on crimes.

This is a seemingly ludicrous irony in our society. Considering our disdain toward crime, we expect ourselves to not be involved in (much less depend on) crime. It is almost a hypocrisy to let our economic gear run at the mercy of criminal offences. However, looking around, we see various industries that tap on the profitable prospect of crimes – court houses, police stations, incarcerations just to name a few. Many of us also depend on various crimes to make a living. Committing a crime doesn’t necessarily entail murders, robberies, or other acts of terrorism. Take the most ‘light’ examples, say, copyright infringement, or even downloading illegally from the Internet (we don’t have to be hypocrites, but that’s what many of us still do). The entire judicial system (police, lawyers and judges) are dependent on breach of law. The military (SAF, ABRI, Bundeswehr, etc.) is founded to deter enemies both foreign and domestic. Government monitoring bodies (NSA, CIA, KPK, etc.) are working around the clock to uncover more novel crimes and combat corrupt practices. When you think about it, they all revolve around crime. To take away crime is equivalent to taking away their very existence. This means that without crime, we may have to replace many of the law enforcers to other occupations. With 830,000 people employed as police in the United States itself, the figure is not looking good.

  1. Criminal activities are necessary to help make ends meet.

This is especially apparent in developing countries. Many third-world countries are safe haven for criminal organizations and lucrative unscrupulous businesses. The reasons may vary – corrupt bureaucratic practice, weak judicial system or political turbulence. However, the underlying purpose is always the same – to survive. These “ends” may include political agenda or livelihood crisis. Drug smuggling is rampant in developing countries simply because there are limited employment opportunities, and everyone has to survive. People then resort to the underworld business to subsist themselves. In countries or states with strong mob influence such as Mexico, bribes and compensations are needed to maintain “peace” for the people. In these cases, crime may help bring order in the society, albeit a fragile one.

  1. Crimes may open our eyes to an underlying issue.

Many of the crimes that arise may help point to a flaw in the law or societal lifestyle. School shooting incidents point to the danger of gun laws in the US, hacking incidents raise questions over the safety of our personal information in the cyber world and domestic terrorism may signal increasing extremism. Without crimes, these problems may never come to light. Crimes help us to critically think of the consequence of our law and lifestyle. As our lifestyle keep changing, so will crime. It is these crimes that will illuminate the aspects that can be improved on.

A world without crime is indeed tempting. It is the dream of modern civilisation and the pinnacle of justice. Yet, it remains an illusion even to this day. We do not wish for it to go unchecked – but at the same time, it is not wise to completely erase it from the face of the world. For better or worse, crimes have been part of us since mankind walked through the Earth. The one guaranteed future of crime is disappointing but important – crimes will continue to exist and evolve alongside us. Even what one considers a crime or a sin today may no longer be considered so in the future; its definitions remain fluid as societies constantly change. It all boils down to how we choose to treat it – as a vice or as a lesson. The bottom line, a crime-free society, remains by itself a distant utopian dystopia.

So, the next time you read about a crime, it may be intriguing to think about it on both sides of the coin. As for me, that is why I like being a free thinker!



More articles from Edward to be published in the future.

A tale of caution to Hong Kong?

hk 3d map

Nobody really knows, as a tautological premise, whether history exactly repeats itself (despite the seemingly obvious repetitive patterns if one looks at various cases). While I caution to maintain objectivity – to some degree, this case study, while not necessarily meaning there existed parallels between what happened in Venice and what currently is taking place in Hong Kong, carries directions which may possibly lead to a convergence. Nobody really knows what will really happen in the future, but studying from the case of Venice, one should sense some sort of alert.

The story of Venice was one part of a chapter (Chapter 6 – “Drifting Apart”) in ‘Why Nations Fail’, written by MIT economist Daron Acemoglu and Harvard political scientist James A. Robinson. Basically, this historical case study highlighted how an inclusive government institution, if not supervised carefully, can become an extractive one instead, which ends up inhibiting, rather than stimulating, development in a society.

And here the story goes.

Remark: the case study is entirely written by Acemoglu and Robinson.



The group of islands that form Venice lie at the far north of the Adriatic Sea. In the Middle Ages, Venice was possibly the richest place in the world, with the most advanced set of inclusive economic institutions underpinned by nascent political inclusiveness. It gained its independence in AD 810, at what turned out to be a fortuitous time. The economy of Europe was recovering from the decline it had suffered as the Roman Empire collapsed, and kings such as Charlemagne were reconstituting strong central political power. This led to stability, greater security, and an expansion of trade, which Venice was in a unique position to take advantage of. It was a nation of seafarers, placed right in the middle of the Mediterranean. From the East came spices, Byzantine-manufactured goods, and slaves. Venice became rich. By 1050, when Venice had already been expanding economically for at least a century, it had a population of 45,000 people. This increased by more than 50 percent, to 70,000, by 1200. By 1330 the population had again increased by another 50 percent, to 110,000; Venice was then as big as Paris, and probably three times the size of London.

One of the key bases for the economic expansion of Venice was a series of contractual innovations making economic institutions much more inclusive. The most famous was the commenda, a rudimentary type of joint stock company, which formed only for the duration of a single trading mission. A commenda involved two partners, a “sedentary” one who stayed in Venice and one who traveled. The sedentary partner put capital into the venture, while the traveling partner accompanied the cargo. Typically, the sedentary partner put in the lion’s share of the capital. Young entrepreneurs who did not have wealth themselves could then go into the trading business by traveling with the merchandise. It was a key channel of upward social mobility. Any losses in the voyage were shared according to the amount of capital the partners had put in. If the voyage made money, profits were based on two types of commenda contracts. If the commenda was unilateral, then the sedentary merchant provided 100 percent of the capital and received 75 percent of the profits. If it was bilateral, the sedentary merchant provided 67 percent of the capital and received 50 percent of the profits. Studying official documents, one sees how powerful a force the commenda was in fostering upward social mobility: these documents are full of new names, people who had previously not been among the Venetian elite. In government documents of AD 960, 971, and 982, the number of new names comprise 69 percent, 81 percent, and 65 percent, respectively, of those recorded.

This economic inclusiveness and the rise of new families through trade forced the political system to become even more open. The doge, who governed Venice, was selected for life by the General Assembly. Though a general gathering of all citizens, in practice the General Assembly was dominated by a core group of powerful families. Though the doge was very powerful, his power was gradually reduced over time by changes in political institutions. After 1032 the doge was elected along with a newly created Ducal Council, whose job was also to ensure that the doge did not acquire absolute power. The first doge hemmed in by this council, Domenico Flabianco, was a wealthy silk merchant from a family that had not previously held high office. This institutional change was followed by a huge expansion of Venetian mercantile and naval power. In 1082 Venice was granted extensive trade privileges in Constantinople, and a Venetian Quarter was created in that city. It soon housed ten thousand Venetians. Here we see inclusive economic and political institutions beginning to work in tandem.

The economic expansion of Venice, which created more pressure for political change, exploded after the changes in political and economic institutions that followed the murder of the doge in 1171. The first important innovation was the creation of a Great Council, which was to be the ultimate source of political power in Venice from this point on. The council was made up of officeholders of the Venetian state, such as judges, and was dominated by aristocrats. In addition to these officeholders, each year a hundred new members were nominated to the council by a nominating committee whose four members were chosen by lot from the existing council. The council also subsequently chose the members for two subcouncils, the Senate and the Council of Forty, which had various legislative and executive tasks. The Great Council also chose the Ducal Council, which was expanded from two to six members. The second innovation was the creation of yet another council, chosen by the Great Council by lot, to nominate the doge. Though the choice had to be ratified by the General Assembly, since they nominated only one person, this effectively gave the choice of doge to the council. The third innovation was that a new doge had to swear an oath of office that circumscribed ducal power. Over time these constraints were continually expanded so that subsequent doges had to obey magistrates, then have all their decisions approved by the Ducal Council. The Ducal Council also took on the role of ensuring that the doge obeyed all decisions of the Great Council.

These political reforms led to a further series of institutional variations: in law, the creation of independent magistrates, courts, a court of appeals, and new private contract and bankruptcy laws. These new Venetian economic institutions allowed the creation of new legal business forms and new types of contracts. There was rapid financial innovation, and we see the beginnings of modern banking around this time in Venice. The dynamic moving Venice toward fully inclusive institutions looked unstoppable.

But there was a tension in all this. Economic growth supported by the inclusive Venetian institutions was accompanied by creative destruction. Each new wave of enterprising young men who became rich via the commenda or other similar economic institutions tended to reduce the profits and economic success of established elites. And they did not just reduce their profits; they also challenged their political power. Thus there was always a temptation, if they could get away with it, for the existing elites sitting in the Great Council to close down the system to these new people.

At the Great Council’s inception, membership was determined each year. As we saw, at the end of the year, four electors were randomly chosen to nominate a hundred members for the next year, who were automatically selected. On October 3, 1286, a proposal was made to the Great Council that the rules be amended so that nominations had to be confirmed by a majority in the Council of Forty, which was tightly controlled by elite families. This would have given the elite veto power over new nominations to the council, something they previously had not had. The proposal was defeated. On October 5, 1286, another proposal was put forth; this time it passed. From then on there was to be automatic confirmation of a person if his father and grandfathers had served on the council. Otherwise, confirmation was required by the Ducal Council. On October 17 another change in the rules was passed stipulating that an appointment to the Great Council must be approved by the Council of Forty, the doge, and the Ducal Council.

The debates and constitutional amendments of 1286 presaged La Serrata (“The Closure”) of Venice. In February 1297, it was decided that if you had been a member of the Great Council in the previous four years, you received automatic nomination and approval. New nominations now had to be approved by the Council of Forty, but with only twelve votes. After September 11, 1298, current members and their families no longer needed confirmation. The Great Council was now effectively sealed to outsiders, and the initial incumbents had become a hereditary aristocracy. The seal on this came in 1315, with the Libro d’Oro, or “Gold Book”, which was an official registry of the Venetian nobility.

Those outside the nascent nobility did not let their powers erode without a struggle. Political tensions mounted steadily in Venice between 1297 and 1315. The Great Council partially responded by making itself bigger. In an attempt to co-opt its most vocal opponents, it grew from 450 to 1,500. This expansion was complemented by repression. A police force was introduced for the first time in 1310, and there was a steady growth in domestic coercion, undoubtedly as a way of solidifying the new political order.

Having implemented a political Serrata, the Great Council then moved to adopt an economic Serrata. The switch toward extractive political institutions was now being followed by a move toward extractive economic institutions. Most important, they banned the use of commenda contracts, one of the great institutional innovations that had made Venice rich. This shouldn’t be a surprise: the commenda benefited new merchants, and now the established elite was trying to exclude them. This was just one step toward more extractive economic institutions. Another step came when, starting in 1314, the Venetian state began to take over and nationalize trade. It organized state galleys to engage in trade and, from 1324 on, began to charge individuals high levels of taxes if they wanted to engage in trade. Long-distance trade became the preserve of the nobility. This was the beginning of the end of Venetian prosperity. With the main lines of business monopolized by the increasingly narrow elite, the decline was under way. Venice appeared to have been on the brink of becoming the world’s first inclusive society, but it fell to a coup. Political and economic institutions became more extractive, and Venice began to experience economic decline. By 1500 the population had shrunk to one hundred thousand. Between 1650 and 1800, when the population of Europe rapidly expanded, that of Venice contracted.

Today the only economy Venice has, apart from a bit of fishing, is tourism. Instead of pioneering trade routes and economic institutions, Venetians make pizza and ice cream and blow colored glass for hordes of foreigners. The tourists came to see the pre-Serrata wonders of Venice, such as the Doge’s Palace and the horses of St. Mark’s Cathedral, which were looted from Byzantium when Venice ruled the Mediterranean. Venice went from economic powerhouse to museum.



Where faith sees best in the dark



The believer humanly comprehends how heavy the suffering is, but in faith’s wonder that it is beneficial to him, he devoutly says: It is light. Humanly he says: It is impossible, but he says it again in faith’s wonder that what he humanly cannot understand is beneficial to him. In other words, when sagacity is able to perceive the beneficialness, then faith cannot see God; but when in the dark night of suffering sagacity cannot see a handbreadth ahead of it, then faith can see God, since faith sees best in the dark. 

Søren Kierkegaard


This quote is for a close friend of mine whose mother has recently passed away.


Much ado about love

being single


It’s the first time in this blog I want to discuss about romantic relationships. A temporary break from serious discussions firsthand.

Awkward posting? Potentially yes. I’ve never truly fallen in love with someone else.

Wait, what? Fallen in love? Love at the first sight? Is that even a correct definition?

Truth be told, back as a child, I used to believe – thanks to all these lovey-dovey dramas – that there was always this possibility of ‘love at first sight’. An attractive, shy-pretense (or just snobbishly cool) guy got into some minor war of mouth with a fair-skinned, big-eyed, and long-haired girl (okay, this makes me somewhat like Nabokov), before in what we can call as economists’ ‘theory of luck’, unexpectedly meet in an unexpected event at an unexpected place, and the first signs of affection became slowly inevitable among the two, and they fall in love ever since. Ceteris paribus.

Probably the boy (or the girl) has to move somewhere else to work, or to pursue further studies. Or that something’s wrong with economic conditions that the boy can hardly get the girl to go for a date. Or that the girl or the boy can barely stand up with the other’s family members due to conflicting life principles, habits, and social values. Or even something catastrophic happens, say, in many dramas, either one of them contacts a deadly disease, a war happens, or simply, a sudden, unexplained, Murakami-esque breakup. Well, too many maybes.

After all, love, just like acing As in exams, is itself a hard work and an uneasy commitment. In my point of view, if you love someone, that means you really do love that person. A person is completely different from an item; an item can depreciate in terms of values, but not with the loving partner! It takes commitment, perseverance, faith, and sometimes, sighing all the while, some conflicts. As human beings, we all are entitled to different values and ideas, and stemming from these differences, oftentimes we can barely avoid conflicts. Nonetheless, for all the unpopularity, it is from those conflicts that we can obtain better understanding of each other, and we have to admit that no couples are perfect.

Too often we are drawn into Facebook posts, or Instagram pictures, of lovely couples posing with numerous cute-looking postures, or sometimes with these quotes, say: “My baby is so handsome, don’t you see? (wink-wink)”, or “You are always in my heart forever <3 <3”, or just anything in the social media that you can figure out. From the perspective of a single person like me, yes, to be honest, that makes some of us jealous, or even envious of how they can have such ‘loving’ relationships.

In such a world of randomness, some of these people indeed have enduring relationships. Others, not so much, or they simply call it quits at some time. Believe me, we have seen so many of such pictures and make-believe love statements of one and the other, and almost similarly many do we ever hear stories of their breakups, their private fights, or that either one of them cheats the other. A-ha! Lesson learned: a relationship belongs to only two persons, not to 500 Instagram followers or 1,000 Facebook friends. But, again, even switching our relationship mode to private doesn’t guarantee a relationship will last longer: we do still hear stories of how people simply end their relationships.

What are the secrets to everlasting love, then? As someone who has yet to have a relationship partner, I don’t have much to offer. But I can learn some things from my parents: they dated for 7 years, only once, and got married afterwards. What do I learn from their relationship? Well, honestly speaking, way a lot. Patience, compromise (even though it’s uneasy), agree-to-disagree motion, understanding of each other, open acceptance, long-term outlook on anything, and most difficult one, willingness to sacrifice. That’s what my parents (and myself) have always advised me. If you indeed love someone, it is, indeed, inevitable that some sacrifices have to be made, say, investing extra time for your partner, or some portions of your money to ensure that both of you remain happy.

And, again and again, I’m sort of unready to implement my own advice pieces. Indeed, it will take me quite some time to learn loving someone as time goes by.

This is my ’embarrassing’ confession: I told my parents that I already fell in love with someone, and I did that repeatedly. As kids mostly had no ideas about ‘serious love’, I simply called ‘being attracted to someone’ as ‘being in love at first sight’. I couldn’t remember how many girls I had “fallen in love” with, but probably the figure was 3, 4, or, well, just forget about it.

I had my first crush, nonetheless, in my high school. Indeed, it happened two times. Each of them lasted not beyond one semester, as, you know, the lesson that ‘I have yet to learn so much from it’. I tried to declare my love on one of them, and I was rejected.

In university life, things were completely different. As we are no longer pure teenagers (heading towards adulthood, yes), definitions about love – and romance – also need to change, subsequently. Not outdone with my prior failures, I again tried my luck (well, that’s ironic) on three other friends of mine, but again, each of these efforts lasted not more than one semester. One of these efforts even almost jeopardized our friendship.

I learned my lessons in the long run: I hardly matured up myself while attracted to someone, and I spied on them. It took some time off to reflect on my mistakes, and, well, these were my hard-earned lessons in at least trying to show that if I like someone, I also have to respect her. Now that I have my sixth crush, which to be honestly speaking has lasted over a year, I am still learning from past mistakes (I won’t describe in details about the sixth person I have been pursuing in the last year). I am still hardly ready to be engaged in a relationship, because I know one main requirement I want to emphasize on myself: once you love someone, you should really show that you love her, no matter what. For me, this will really take some more time.

Well, much ado about love.

Reality check: economy of China


First thing first: no countries can grow at a double-digit pace forever.

China, the world’s second largest economic power, seemed to (probably) have learned hard lessons from the recent stock crash that is taking place in the last two months: there are no expected circumstances. No matter how many trillions of dollars the government has been pumping in to support the ailing stock market indices, the money is still lost. And now, more than 5 trillion US$ (pretty much the annual output of Japan’s economy) have all but evaporated from the country’s stock markets in Shanghai and Shenzhen.

The recent crash sparked numerous discussions worldwide about the real situation happening in China’s economy. Google ‘China economy’, and most likely the keywords are overwhelmingly negative; many users even question if the economy is none other than a ‘gigantic Ponzi scheme’. And what makes economic risks in 2015 particularly very distinct – and also unprecedented – from the previous crises in 1998 and 2008 are that the problems are three-fold:

  1. There is uncertainty among US Federal Reserve whether to increase interest rates or not – the first time since 2006. Given that the central bank has pumped more than 4 trillion US$ from 2008 up to the end of 2013 into global financial markets, US economic recovery gradually reverses the quantitative-easing policy, posing countries with massive short-term capital inflows at significant risks.
  2. China’s economic slowing-down ‘exacerbates’ the matter. As the world and China increasingly co-depend on each other – especially in international trade, any economic problems inside the country will translate as bigger problems for global economy as well. If, in case, US Federal Reserve decides to increase the interest rates, this will impose increasing burdens for, plainly speaking, a whole lot of people worldwide – especially companies with bonds and debts denominated in US dollars.
  3. The slowing global economy also pushes commodity prices to unprecedentedly low levels; oil prices continue to linger between 38 and 40 US$ per barrel, the lowest since 2009. Dozens of currencies depending on oil incomes have seen their values significantly decline (Nigerian naira, Saudi Arabian riyal, Malaysian ringgit, Zambian kwacha being the biggest casualties), and in fact, most of the currencies whose commodity exports depend on China’s economy are actually plummeting in values.

Given the tendencies for mass media to make any stories overblown, let us do some reality checks on what is actually happening with Chinese economy in brief points below. Some are indeed alarming, but others may be more soothing, so a delicate balance of views has to be considered. These are the things we need to know:

Soothing: China is different from Greece, and its manufacturing output remains huge

With the country expected to have domestic output at over 11 trillion US$ this year, industry-related sectors account for approximately 45% of the GDP composition, slightly larger than those provided by services-related economies. Even though labor costs are increasing very rapidly in recent years (hint: GDP per capita was already 7,500 US$ last year), China’s manufacturing output remains huge, particularly in coastal regions. Initially, there were worries that Greece’s rejection of financial bailouts would result in a blow on Euro values, and therefore spell a trouble in global economy, until China’s stock market crash took its turn as another headline.

Alarming: China has a bad-debt problem

On paper, and on most statistics offered by CIA World Databook, IMF, and World Bank, China’s external debt and public level debts stand at approximately 25-35% of total GDP. But there is one huge caution: debts generated through ‘shadow banking’ (financial institutions that are not listed in the government records) are not counted in the process, and that is an alarming sign. In fact, much of this debt, whether clean or not, is mostly used to fund projects that turn out to resemble more like ‘white elephants’, say, ghost cities. While estimates provide that the actual debt-to-GDP level for China is more than 280% (which may be true), we truly have no idea how much debt the country has accumulated since the beginning of economic reforms in the last almost four decades.

Alarming-soothing: Some portions of these ‘bad-debt’ amount are actually overwritten

Accounting, no matter how tedious it is, sometimes can have its own magicians. This is particularly the case for Chinese state-owned enterprises that build numerous projects overseas – and end up losing money. The question is, do they actually lose the money, or does the money go ‘somewhere else’? Another controversy is overstating debt amount in order to reduce taxes paid, or even to avoid paying taxes at all. While there has been little research about this area, more works need to be done in the future to understand further about such accounting magic tricks.

Still, we don’t actually know how much China owes the world, and most importantly, its own people.

Soothing: Even at an annualized growth rate of 7% this year, China already ‘grows pretty fast’

Even both President Xi Jinping and Prime Minister Li Keqiang acknowledge that fact. The premier, in particular, emphasized that the economy has entered a new normal, and the world has to accept the reality that China, indeed, can not grow at an astronomical pace forever. With increasing labor costs, China will have to move its factories, one by one, to other emerging markets, and upgrade its economic composition to be based more on services and domestic consumption. China’s appetite for natural resources is also gradually declining, and indeed, the slowing economic growth should be a positive thing to celebrate for environmentalists: they are doing really hard to reduce emissions of carbon dioxide, one side effect resulting from the country’s rapid-fire growth in the last 30 years.

Furthermore, with growth rate at 7% this year, China actually still increases 700-800 billion US$ to its annual output, and that quadruples the amount of real GDP produced by India in 2015, for the first time ever the fastest-growing economy in Asia (with an annualized growth rate at 7.5%).

Alarming: Nobody really knows how the government measures economic growth rate

On theory, economic growth is measured through increase in inflation-adjusted market value of the goods and services produced within a certain time period (usually one year). The real problem here, nonetheless, is not about the definition, but WHAT classifies (or constitutes) as the components of growth by the government. Building buildings is one thing, but do they house people? That’s another thing worth concerning about.

Alarming-number two: China’s gross fixed capital formation is actually increasing, not declining

To get you acquainted with this economic term, gross fixed capital formation is, in simple terms, ‘investment’. Something that requires us to spend money in building fixed assets, such as factories, houses, equipment, infrastructure, or anything that can’t be moved (but destructible). While it is necessary to increase the percentage of gross fixed investment at times of rapid economic growth, no economies can incrementally add up the figures forever. There is always laws of diminishing returns: if you invest too much, you end up losing money. And that is what China is actually experiencing.

In 2008, during the height of global financial crisis, China’s GFCI was already approximately 40% of the country’s GDP, among the world’s highest. The almost 600-billion-dollar stimulus package introduced in 2009, intended to boost domestic consumption to support economic growth, was ironically channeled to numerous investment projects instead, many of which are simply unprofitable. That’s why one sees empty cities, little-used highways, and losses-generating projects overseas, when in fact many people in China are still struggling to gain access to basic infrastructure, particularly in hinterland areas. By 2012, the gross fixed investment was already 46%, and it is estimated that by this year, the rate is approaching 50%, an increasingly unhealthy level.

Soothing: ‘stock market crash’ may be an overblown title

Even until mid-2014, the average indices for Shanghai Stock Exchange remained below 2,000. It was only after Chinese government decided to allow financial liberalization that tens of millions of investors, many of whom used financial loans, placed them on companies’ stock prices. In less than one year, the scores shot up to more than 5,500, an astronomical pace so markedly Chinese form of ‘rapid-fire growth’, that when it dropped starting from June, it dropped catastrophically.

Yes, the stock indices are now below 3,000, but honestly speaking, that is still significantly more than the indices were last year. While government intervention was, admittedly, very heavy, including ‘persuading’ (or forcing?) managers of companies and state-owned enterprises to buy up stocks to withhold the drop in stock prices, that couldn’t do much to reduce the impact. After all, stock index is one unpredictable thing by its own. If the government is committed to financial liberalization, the government should regulate investors so as not to excessively use loans to buy stocks, but not to withhold the drop in stock prices.

Alarming: China’s currency depreciation is not going to help its exports

Shortly after the ‘stock market crash’ and the resulting free-fall of currencies worldwide, China’s central bank took an unexpected turn it has barely done since early 2010s: devaluating the yuan at over 3%. It sends even further shrills to currencies worldwide, delivering a dramatic drop for currencies whose exports increasingly rely on China’s economic strength, such as Taiwanese dollar, South Korean won, Indonesian rupiah, and South African rand.

Even the bank’s recipe-as-usual policy to reduce currency values to boost export is already an outdated move given the changing face of global economy today: China has had more trade agreements in 2015 than it was back in 2008, when their trade policies back then were largely protectionist. While it will increase its export volume, it will not be significant. The most important thing, instead, is to focus on its own 1.4 billion people as potential consumers, and that is where Chinese government needs to pay attention to.

Furthermore, China also ‘suffers another blow’ after surrendering the ‘fastest-growing economy in Asia’ title to India: it now relinquishes the ‘world’s largest trade-surplus’ title to Germany; while China records the volume a little above 200 billion US$ in 2014, Germany put in more than 270 billion US$ in the same year. German model of capitalism, which focuses on ‘hidden champions’ and mittelstand, is slowly winning.


BONUS: Oliver Wyman, a respected consultancy firm, has previously forecast that a ‘2015 financial disaster’ will occur back in 2011, and now, what currently happens largely echoes what the analysts had predicted 4 years earlier. Read the full report, and understand things better, by clicking on the link here.

Everyone is afraid of the future, and why it’s a good thing



“I’m so afraid I can’t cope up with the lessons.”

“I don’t know if I can survive such a tough university life.”

These are the sentences that my juniors, and also my friends, told me on Facebook. And, yes, honestly speaking, these were pretty much the same things that I once asked my own seniors before I came to university as well. As the first person in my family to study overseas, there are of course tremendous expectations, and also unexpected circumstances, those that one can anticipate, and those that one can hardly hope.

Well, it is so a humane thing to have fear on anything, especially on something that may be existing in our own ‘uncharted territories’. Reminiscing myself two years earlier, I was back then a half-excited, and a half-nervous, soon-to-be university student. Being half an optimist, but at the same time overtly a skeptic, these are the very feelings that I could describe days before coming to the university. My parents were university graduates, but they studied in the same hometown I was born and raised; I would be the first to leave, and to experience, a bigger perspective of the outside world. Meeting new people with completely different cultural values and social norms, yes, I got that uneasy, initial feeling, too; life became split into two possibilities, all in the presence of the unexpected. First, it leads you to rediscovering yourself, or second, you fail to cope with the changes that you just ‘withdraw’ yourself from the existing reality. Thinking of the fact that I have to do laundry myself, get in to surrounding places by my own, organize stuff through my own planning, and to be completely independent in the absence of my family (but I am grateful that my aunt, uncle, and cousin helped me so much in transiting to university life) were the fears I always thought of in the future.

Back then, it was 2013; flash forward to 2015, I’m already on my halfway. I am utterly grateful that I can complete the transition phase fairly well, and truth be told, I am now more open-minded than I was two years earlier. Stereotyping still lingers in my mind, but now in a rather controlled setting. I’ve met a lot of new people from various countries and backgrounds (well, not all of them had my positive impressions), but pretty much I learned to understand their values and their own stances towards certain areas that may not be suitable to our own cultural notions. Yes, I do my best to tolerate them.

Still, it can’t stop me from fear of the future. With Indonesia’s currency values dropping over 40% in the last two years, of course it keeps me worried about my chances of getting into higher, postgraduate education. Or whether in spite of my (relatively) good grades, I can afford to get a stable job in the future. Excluding my random thoughts about any ‘plausible’ (but not necessarily possible) scenarios in the very distant future (perhaps things befalling the elder me or my future generations). It is as though my mindset were set in a constant, survivalist mode.

Fear itself doesn’t have to be a paranoia-inducing idea; you don’t have to kill someone off just to eliminate it, because truth be told, we can’t eliminate fear. It is one of the most powerful legacies that evolution has ‘bestowed’ us within millions of years; fear, if stimulated into a controlled setting, can actually be a good thing by itself. I am not a psychologist, but I would rather derive the benefits from my own understanding and common sense.

One: fear enables us to outline contingency plans

Simply speaking, don’t put all eggs in one basket.

Two: fear conditions us (most of us) to value the present moment

Nothing in this physical universe is destined to last forever; the only constant is change, oftentimes unexpected. I don’t believe in the ideal of ‘benevolent universe’, so much so as I believe in that of a savage one; we see everything, from both sides and the extremes, taking place simultaneously. The universe is just damn indifferent, after all. So, for all the best and the worst, enjoy this moment now.

Three: fear stimulates us to learn something new we have never learned before

We can’t completely anticipate the unexpected, but learning new skills and things beyond our usual passions and expertise can actually help us cope with circumstances much better than having none. Simply speaking, just because we don’t precisely know what will happen in the future.

Four: fear prepares us to adjust to new realities much more easily

There are things we can avoid, and there are things we can’t help avoiding but slowly adapt. Nostalgia is a good thing, but too much reminiscing into the past will not make any adjustment into the future much better. Understanding the impermanence of the present, no matter how difficult or painful it will be (more often than not it is), helps us better in adjusting to new, and constantly changing, circumstances.

Five: fear enhances responsibility

Specifically, our own responsibilities as family members, friends, group members, or wherever any positions we are in charge of. It ‘forces’ us to put out all our efforts to accomplish a goal.

Anyway, not all, or not even any, of my advice is inherently useful. Too little fear induces arrogance, our propensity to underestimate all possibilities, or even a sense of superiority. We have seen enough how conflicts, wars, and other disasters have taken place, oftentimes out of the ignorance resulting from such ‘too little fear’, but too much thinking about them also unnecessarily robs the happiness out of us, making us closer to asylums than to happily living our lives. A balanced dose of fear is necessary, and even beneficial, if one can apply it in a careful, wise approach.

I am just writing as a student, not yet deeply experienced in any real-world stuff by the age of 20. Realizing the day-to-day fear that soldiers, doctors, surgeons, firefighters, police, scientists, entrepreneurs, parents, or even refugees have to face all the time (and almost all occupations inclusive), they surely have more to tell, and much more to share, than I do.

Bonus: some of the world’s best and most serious thinkers do even share their fears of what will happen to human civilization up to 50 million years to come (some exaggeration intended).

Academics and journalists: a difficult relationship

academics vs journalists

Over a year after working in two social science research projects – one focuses on China-Africa economic relations and the other, more recently, about democratic development in countries around the world – I undeniably realize the importance of not solely relying on what the media, in general, will inform us. Already reading dozens and dozens of research papers (I can’t count how many Hong Kong dollars I’ve spent this year), I manage to retrieve information, oftentimes very fascinating and real, but which the media frequently fails to capture.

An ideal world where academics and journalists can work together is this: the former posits a hypothesis, experiments it, and suppose it works (repeatedly), submits the outcomes through papers and articles to journals, and the journalists, in their most embodied responsibility to disseminate the outcomes – already repackaged into news highlights – to the whole society, summarize in brief what the academics have accomplished beforehand.

How much more peace such symbiosis can bring to the world!

The reality is not as fascinating as meets the eye, we must confess. Ezra Klein, one of a handful of ‘brand-new’ journalists, struck the point precisely in this Bloomberg View op-ed about the existing ‘disconnection’ between the two supposedly mutually-reinforcing occupations. The point is: albeit we are living in a world where information is growing at an exponential pace, why does such phenomenon still occur? Why, oftentimes, is the information conveyed by journalists almost completely different from what the scientists, or academics, inform?

There is simply too much data in the world. And as we have to be frankly honest, we don’t yet know how to store the entire mammoth of such capacity in recent times; that could explain why big data industry is still largely on its infancy stage. This is also inevitable in the academic world, when researchers actively post the papers into tons and tons of journals. One simply has to go to SCIMAGO Journal Ranking (among countless websites offering almost limitless archives of journals), and voila!: more than 22,000 journals (from the most prestigious to those good ones you barely heard of to those completely obscure) are readily available in one single click. Narrow down further, say, to ‘Political Science and International Relations‘, you are pampered with over 390 selections. Each of the journals (depending on whether they are completely open-access or subscription-based) could be traced back, say, in between 20, 30, 50 years, or even close to a century. I bet you can’t ever finish, in your lifetime, just to simply read and critically summarize each of the articles having been published in one single journal. It is something unthinkable, even as far as a decade ago. If an academic journal sounded like a lavish item to as close as our parents, Internet has rendered such phenomenon largely obsolescent, in a blink or seconds.

data growth


Taken from a presentation slide in Slideshare.

Which brings us to a new issue that Ezra Klein raised further in the op-ed: how to synchronize academics and journalists altogether? At one point, academics lament that they feel ignored by the journalists, while simultaneously, the journalists also complain that it is still difficult to gain access to their work. What the heck is wrong then?

Subscription fees (some journals charge you with exorbitant fees, say, 25 US$ for one 16-page research paper) are a secondary concern; the real concern, nonetheless, is what shapes the academic integrity of these papers themselves: the rigorous (sometimes notorious) peer-review process. When a researcher wants to publish a paper in a journal, it is inevitable, totally, that their pre-published work has to be reviewed by a panel of anonymous experts. While that is certainly a good thing to reduce the probability of scientists creating something out of a pipe dream, there is one major consequence, however: peer-reviewing process takes an extremely long time, and given the fact that information, as well as numerous scientific breakthroughs – no matter how minor or major they are, can happen in months. When a paper is published, it could have been ‘4 or 8 months, or maybe even a year or more backward’ compared to the real milestones achieved in the present moment. And we know journalists will never put them on the newspaper main cover for your tomorrow’s breakfast.

Actually that is not the worst thing, though. What academics will most certainly denounce, we have to be honest, is that some journalists have the tendency to ‘sensationalize’. Which brings us to the differing perceptions between the two occupations: the former will force you to use your logic, and the latter, done in part by some people driven by numerous agendas, tickles with your emotions and responses. Thus comes the major conflict: with over millions and millions of papers published every year, why does the whole world only pay to attention to, say, 5-10 shocking events that journalists like to cover, or most likely, only a few, very best, selected papers? Let’s say, why do people still believe that Chinese companies only bring Chinese workers and resources to Africa? Does the emergence of middle-class really spark the birth of democracy, or simply because the middle-class wants to replace a regime with a technocratic one, while granting so much freedom? Or even how many people in the world really know that Nigeria actually beat Ebola?

Perhaps journalists and academics need to have a joint consensus. Or more likely, maybe, to become both.

Which is why I am gradually distancing myself from mainstream media, now maintaining an equilibrium between reading academic journals, think-tank papers, and alternative media sources (Vice News, Vox, Quartz, Big Think, AJ+, or some other Youtube channels of popular thinkers). To make long short, just balance out anything that you read.