Tuesday, February 1, 2011

Social Unrest, Networking & the Economy

Is social unrest a reflection of the rise of social networking on the internet, or is it a reflection of a more fundamental flaw in society that demands a paradigm change?

Social unrest is nothing more than just a bunch of people who gather in a particular geographical space and time to demonstrate for a common cause. The communication of the mind and intention could be transmitted by way of smoke, paper, buns, or electronic signals. The medium doesn't really matter. What matters is that there are a sufficient number of people who are willing to risk their lives to make their views heard. The risk is worth taking presumably because they have nothing else to lose. Why?

It is very hard to imagine that comfortable working men and women will not got to work but instead take to the street to give vent to their emotions, unless those emotions are very strong and overwhelming their senses. Such a condition arise in human beings, as well as other creatures, I believe, when they are hungry and angry.

The problem with the stomach is very real. For the lucky ones, the stomach needs to be fed three times a day. For the unlucky ones, refill once a day seems like a luxury. When the refill is not forthcoming, anxiety arises. And when there are enough number of people who share the same traumatic experience, they will act. There is nothing for them to lose: they will die soon if they choose to do nothing. They choose to act as an act of survival.

In traditional society, the distribution of food is by way of rationing. I have more and you have less, because I have political power - that power being obtained by how many men and women one can employ to do one's bidding (pursuing one's agenda) by the degree of access to food resources.

In modern times, this power to access food resources is obtained by way of money or wealth. This access is usually thought by good people to be obtained through hard work by means of diligence and wit. Unscrupulous people can obtain access to food and other resources by way of quantitative easing, among others - which is just an economic jargon for the central banks to give cash to governments in returning for a simple IOU called government bonds. That extra cash is then distributed in the form of contracts for jobs for public works - the bigger public projects are, the bigger the leakage to the elite. One sure sign of troubles for the finances of a nation and eventually the economy is the spate of new public projects which are usually undertaken on the pretext of national pride, rather than economic necessity or pure business opportunity. With more public projects, real estate prices increase and while the elite feels justified that their is an increase in asset prices and hence asset value, rentals get pushed up for pay higher returns to property speculators, and retail prices soar. As new public projects are laboured by poor under-represented foreign semi-skilled labourers, the home grown fresh graduates, the semi-skilled and unskilled become left out of the mainstream of economic development. The graduates take to the streets to talk of justice, and the uneducated take to the streets as gangs to loot.

Things can be made worse by natural disasters which suddenly and unexpectedly put a dent in the national budget. This the Chinese have long called the Mandate from Heaven.

The underlying economic disaster is served its final straw when a stone is thrown to cause a ripple across the waters.


walla said...

Governing a country these days is a balancing act in which planners walk an economic tightrope.

When a country is young and underdeveloped, the path is easy. Just departmentalize and build. As the market develops and processes hum along, a certain steady state of equilibrium is soon reached which is based on more supply for a bigger demand of the same from a growing population.

Soon enough the country will reach a certain level of achievement where incremental improvements get increasingly more difficult to attain for the same quantum of resources and effort invested.

At that point in time when productivity truncates viability, the government if wise would have arrayed measures to breathe some new oxygen into the ecosystem so as to create a new wave of transformation that will bootstrap both society and economy for more exciting challenges ahead.

To do that, the government will invariably try to enthuse the captains of industry first simply because the group is small and it is easier to connect to them, especially when they have already parked their outposts within the ziggurats of the government. These deal-makers and literally earth-shakers sit at the apex of the pyramid.

However such an apparent efficiency hides a structural defect. If the apex of the pyramid does not work hard enough to percolate economic activity down the food chain to the base of the pyramid, then the masses at the bottom will get agitated and their magnitude of agitation will be directly proportional to the increase in cost of living aggravated by expectations of new activities to emanate from the top of the pyramid.

The size of the aggravation depends on things like perceived multipliers and inflationary pressures outcome of profiteering which leads to rampant price hikes.

It also depends on lack of work opportunities needed by those at the base in order to afford things that they have gotten used to before and the pain will increase further the moment they have families to support at which point hope takes flight leaving behind simmering despair.

walla said...


Work opportunities for the masses will be hard to come by if the masses are unskilled for the new opportunities. Especially if wealth creation in the country has persistently depicted only a few activities, namely build more houses, plant more trees, assemble more things, and do some general trading. These being activities not requiring any great value in skills or creative inputs, they will be given to low-waged foreign workers thus marginalizing the very locals who should have been the original targets to benefit from the transformation.

The crux then is whether the apex can transform itself first. They being coldeyed calculating machines, that would take some doing unless they can get some courage from the presence of an eveready middle-layer of the pyramid, those who can conceptualize, design, fabricate and turn new business models into operating profit units.

This country does not have that innovative middle layer of the pyramid. And where there is potential to develop it, the necessary incentives have been pared down and channeled away from them to be frittered off in numerous hair-brained schemes that have neither viable rhythm nor business reason.

Which brings us back to the base of the pyramid. Its agitation can be caused by a collective sense of economic and social injustice, especially when the masses see politicians and government officials living beyond their means and allowances. This is further catalyzed by the new phenomenon of modern-day mass communication - the wireless internet of texting and tweeting - which explodes into general society a cascade of emancipatory forces, especially from those underemployed youths who have received education but remain square pegs for the round holes of the job sector.

All of which says that economic transformations can only take real shape if and when contributing resources are already in place so that if they are not available locally, they will have to be imported. Which will of course create marginalization of the middle layer as well.

The end.