September 6, 2009
How Did Economists Get It So Wrong?
By PAUL KRUGMAN
I. MISTAKING BEAUTY FOR TRUTH
It’s hard to believe now, but not long ago economists were congratulating themselves over the success of their field. Those successes — or so they believed — were both theoretical and practical, leading to a golden era for the profession. On the theoretical side, they thought that they had resolved their internal disputes. Thus, in a 2008 paper titled “The State of Macro” (that is, macroeconomics, the study of big-picture issues like recessions), Olivier Blanchard of M.I.T., now the chief economist at the International Monetary Fund, declared that “the state of macro is good.” The battles of yesteryear, he said, were over, and there had been a “broad convergence of vision.” And in the real world, economists believed they had things under control: the “central problem of depression-prevention has been solved,” declared Robert Lucas of the University of Chicago in his 2003 presidential address to the American Economic Association. In 2004, Ben Bernanke, a former Princeton professor who is now the chairman of the Federal Reserve Board, celebrated the Great Moderation in economic performance over the previous two decades, which he attributed in part to improved economic policy making.
Last year, everything came apart.
Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy. During the golden years, financial economists came to believe that markets were inherently stable — indeed, that stocks and other assets were always priced just right. There was nothing in the prevailing models suggesting the possibility of the kind of collapse that happened last year. Meanwhile, macroeconomists were divided in their views. But the main division was between those who insisted that free-market economies never go astray and those who believed that economies may stray now and then but that any major deviations from the path of prosperity could and would be corrected by the all-powerful Fed. Neither side was prepared to cope with an economy that went off the rails despite the Fed’s best efforts.
And in the wake of the crisis, the fault lines in the economics profession have yawned wider than ever. Lucas says the Obama administration’s stimulus plans are “schlock economics,” and his Chicago colleague John Cochrane says they’re based on discredited “fairy tales.” In response, Brad DeLong of the University of California, Berkeley, writes of the “intellectual collapse” of the Chicago School, and I myself have written that comments from Chicago economists are the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten.
What happened to the economics profession? And where does it go from here?
As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations. The renewed romance with the idealized market was, to be sure, partly a response to shifting political winds, partly a response to financial incentives. But while sabbaticals at the Hoover Institution and job opportunities on Wall Street are nothing to sneeze at, the central cause of the profession’s failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess.
Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of markets — especially financial markets — that can cause the economy’s operating system to undergo sudden, unpredictable crashes; and to the dangers created when regulators don’t believe in regulation.
It’s much harder to say where the economics profession goes from here. But what’s almost certain is that economists will have to learn to live with messiness. That is, they will have to acknowledge the importance of irrational and often unpredictable behavior, face up to the often idiosyncratic imperfections of markets and accept that an elegant economic “theory of everything” is a long way off. In practical terms, this will translate into more cautious policy advice — and a reduced willingness to dismantle economic safeguards in the faith that markets will solve all problems.
II. FROM SMITH TO KEYNES AND BACK
The birth of economics as a discipline is usually credited to Adam Smith, who published “The Wealth of Nations” in 1776. Over the next 160 years an extensive body of economic theory was developed, whose central message was: Trust the market. Yes, economists admitted that there were cases in which markets might fail, of which the most important was the case of “externalities” — costs that people impose on others without paying the price, like traffic congestion or pollution. But the basic presumption of “neoclassical” economics (named after the late-19th-century theorists who elaborated on the concepts of their “classical” predecessors) was that we should have faith in the market system.
This faith was, however, shattered by the Great Depression. Actually, even in the face of total collapse some economists insisted that whatever happens in a market economy must be right: “Depressions are not simply evils,” declared Joseph Schumpeter in 1934 — 1934! They are, he added, “forms of something which has to be done.” But many, and eventually most, economists turned to the insights of John Maynard Keynes for both an explanation of what had happened and a solution to future depressions.
Keynes did not, despite what you may have heard, want the government to run the economy. He described his analysis in his 1936 masterwork, “The General Theory of Employment, Interest and Money,” as “moderately conservative in its implications.” He wanted to fix capitalism, not replace it. But he did challenge the notion that free-market economies can function without a minder, expressing particular contempt for financial markets, which he viewed as being dominated by short-term speculation with little regard for fundamentals. And he called for active government intervention — printing more money and, if necessary, spending heavily on public works — to fight unemployment during slumps.
It’s important to understand that Keynes did much more than make bold assertions. “The General Theory” is a work of profound, deep analysis — analysis that persuaded the best young economists of the day. Yet the story of economics over the past half century is, to a large degree, the story of a retreat from Keynesianism and a return to neoclassicism. The neoclassical revival was initially led by Milton Friedman of the University of Chicago, who asserted as early as 1953 that neoclassical economics works well enough as a description of the way the economy actually functions to be “both extremely fruitful and deserving of much confidence.” But what about depressions?
Friedman’s counterattack against Keynes began with the doctrine known as monetarism. Monetarists didn’t disagree in principle with the idea that a market economy needs deliberate stabilization. “We are all Keynesians now,” Friedman once said, although he later claimed he was quoted out of context. Monetarists asserted, however, that a very limited, circumscribed form of government intervention — namely, instructing central banks to keep the nation’s money supply, the sum of cash in circulation and bank deposits, growing on a steady path — is all that’s required to prevent depressions. Famously, Friedman and his collaborator, Anna Schwartz, argued that if the Federal Reserve had done its job properly, the Great Depression would not have happened. Later, Friedman made a compelling case against any deliberate effort by government to push unemployment below its “natural” level (currently thought to be about 4.8 percent in the United States): excessively expansionary policies, he predicted, would lead to a combination of inflation and high unemployment — a prediction that was borne out by the stagflation of the 1970s, which greatly advanced the credibility of the anti-Keynesian movement.
Eventually, however, the anti-Keynesian counterrevolution went far beyond Friedman’s position, which came to seem relatively moderate compared with what his successors were saying. Among financial economists, Keynes’s disparaging vision of financial markets as a “casino” was replaced by “efficient market” theory, which asserted that financial markets always get asset prices right given the available information. Meanwhile, many macroeconomists completely rejected Keynes’s framework for understanding economic slumps. Some returned to the view of Schumpeter and other apologists for the Great Depression, viewing recessions as a good thing, part of the economy’s adjustment to change. And even those not willing to go that far argued that any attempt to fight an economic slump would do more harm than good.
Not all macroeconomists were willing to go down this road: many became self-described New Keynesians, who continued to believe in an active role for the government. Yet even they mostly accepted the notion that investors and consumers are rational and that markets generally get it right.
Of course, there were exceptions to these trends: a few economists challenged the assumption of rational behavior, questioned the belief that financial markets can be trusted and pointed to the long history of financial crises that had devastating economic consequences. But they were swimming against the tide, unable to make much headway against a pervasive and, in retrospect, foolish complacency.
III. PANGLOSSIAN FINANCE
In the 1930s, financial markets, for obvious reasons, didn’t get much respect. Keynes compared them to “those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those that he thinks likeliest to catch the fancy of the other competitors.”
And Keynes considered it a very bad idea to let such markets, in which speculators spent their time chasing one another’s tails, dictate important business decisions: “When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.”
By 1970 or so, however, the study of financial markets seemed to have been taken over by Voltaire’s Dr. Pangloss, who insisted that we live in the best of all possible worlds. Discussion of investor irrationality, of bubbles, of destructive speculation had virtually disappeared from academic discourse. The field was dominated by the “efficient-market hypothesis,” promulgated by Eugene Fama of the University of Chicago, which claims that financial markets price assets precisely at their intrinsic worth given all publicly available information. (The price of a company’s stock, for example, always accurately reflects the company’s value given the information available on the company’s earnings, its business prospects and so on.) And by the 1980s, finance economists, notably Michael Jensen of the Harvard Business School, were arguing that because financial markets always get prices right, the best thing corporate chieftains can do, not just for themselves but for the sake of the economy, is to maximize their stock prices. In other words, finance economists believed that we should put the capital development of the nation in the hands of what Keynes had called a “casino.”
It’s hard to argue that this transformation in the profession was driven by events. True, the memory of 1929 was gradually receding, but there continued to be bull markets, with widespread tales of speculative excess, followed by bear markets. In 1973-4, for example, stocks lost 48 percent of their value. And the 1987 stock crash, in which the Dow plunged nearly 23 percent in a day for no clear reason, should have raised at least a few doubts about market rationality.
These events, however, which Keynes would have considered evidence of the unreliability of markets, did little to blunt the force of a beautiful idea. The theoretical model that finance economists developed by assuming that every investor rationally balances risk against reward — the so-called Capital Asset Pricing Model, or CAPM (pronounced cap-em) — is wonderfully elegant. And if you accept its premises it’s also extremely useful. CAPM not only tells you how to choose your portfolio — even more important from the financial industry’s point of view, it tells you how to put a price on financial derivatives, claims on claims. The elegance and apparent usefulness of the new theory led to a string of Nobel prizes for its creators, and many of the theory’s adepts also received more mundane rewards: Armed with their new models and formidable math skills — the more arcane uses of CAPM require physicist-level computations — mild-mannered business-school professors could and did become Wall Street rocket scientists, earning Wall Street paychecks.
To be fair, finance theorists didn’t accept the efficient-market hypothesis merely because it was elegant, convenient and lucrative. They also produced a great deal of statistical evidence, which at first seemed strongly supportive. But this evidence was of an oddly limited form. Finance economists rarely asked the seemingly obvious (though not easily answered) question of whether asset prices made sense given real-world fundamentals like earnings. Instead, they asked only whether asset prices made sense given other asset prices. Larry Summers, now the top economic adviser in the Obama administration, once mocked finance professors with a parable about “ketchup economists” who “have shown that two-quart bottles of ketchup invariably sell for exactly twice as much as one-quart bottles of ketchup,” and conclude from this that the ketchup market is perfectly efficient.
But neither this mockery nor more polite critiques from economists like Robert Shiller of Yale had much effect. Finance theorists continued to believe that their models were essentially right, and so did many people making real-world decisions. Not least among these was Alan Greenspan, who was then the Fed chairman and a long-time supporter of financial deregulation whose rejection of calls to rein in subprime lending or address the ever-inflating housing bubble rested in large part on the belief that modern financial economics had everything under control. There was a telling moment in 2005, at a conference held to honor Greenspan’s tenure at the Fed. One brave attendee, Raghuram Rajan (of the University of Chicago, surprisingly), presented a paper warning that the financial system was taking on potentially dangerous levels of risk. He was mocked by almost all present — including, by the way, Larry Summers, who dismissed his warnings as “misguided.”
By October of last year, however, Greenspan was admitting that he was in a state of “shocked disbelief,” because “the whole intellectual edifice” had “collapsed.” Since this collapse of the intellectual edifice was also a collapse of real-world markets, the result was a severe recession — the worst, by many measures, since the Great Depression. What should policy makers do? Unfortunately, macroeconomics, which should have been providing clear guidance about how to address the slumping economy, was in its own state of disarray.
IV. THE TROUBLE WITH MACRO
“We have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time — perhaps for a long time.” So wrote John Maynard Keynes in an essay titled “The Great Slump of 1930,” in which he tried to explain the catastrophe then overtaking the world. And the world’s possibilities of wealth did indeed run to waste for a long time; it took World War II to bring the Great Depression to a definitive end.
Why was Keynes’s diagnosis of the Great Depression as a “colossal muddle” so compelling at first? And why did economics, circa 1975, divide into opposing camps over the value of Keynes’s views?
I like to explain the essence of Keynesian economics with a true story that also serves as a parable, a small-scale version of the messes that can afflict entire economies. Consider the travails of the Capitol Hill Baby-Sitting Co-op.
This co-op, whose problems were recounted in a 1977 article in The Journal of Money, Credit and Banking, was an association of about 150 young couples who agreed to help one another by baby-sitting for one another’s children when parents wanted a night out. To ensure that every couple did its fair share of baby-sitting, the co-op introduced a form of scrip: coupons made out of heavy pieces of paper, each entitling the bearer to one half-hour of sitting time. Initially, members received 20 coupons on joining and were required to return the same amount on departing the group.
Unfortunately, it turned out that the co-op’s members, on average, wanted to hold a reserve of more than 20 coupons, perhaps, in case they should want to go out several times in a row. As a result, relatively few people wanted to spend their scrip and go out, while many wanted to baby-sit so they could add to their hoard. But since baby-sitting opportunities arise only when someone goes out for the night, this meant that baby-sitting jobs were hard to find, which made members of the co-op even more reluctant to go out, making baby-sitting jobs even scarcer. . . .
In short, the co-op fell into a recession.
O.K., what do you think of this story? Don’t dismiss it as silly and trivial: economists have used small-scale examples to shed light on big questions ever since Adam Smith saw the roots of economic progress in a pin factory, and they’re right to do so. The question is whether this particular example, in which a recession is a problem of inadequate demand — there isn’t enough demand for baby-sitting to provide jobs for everyone who wants one — gets at the essence of what happens in a recession.
Forty years ago most economists would have agreed with this interpretation. But since then macroeconomics has divided into two great factions: “saltwater” economists (mainly in coastal U.S. universities), who have a more or less Keynesian vision of what recessions are all about; and “freshwater” economists (mainly at inland schools), who consider that vision nonsense.
Freshwater economists are, essentially, neoclassical purists. They believe that all worthwhile economic analysis starts from the premise that people are rational and markets work, a premise violated by the story of the baby-sitting co-op. As they see it, a general lack of sufficient demand isn’t possible, because prices always move to match supply with demand. If people want more baby-sitting coupons, the value of those coupons will rise, so that they’re worth, say, 40 minutes of baby-sitting rather than half an hour — or, equivalently, the cost of an hours’ baby-sitting would fall from 2 coupons to 1.5. And that would solve the problem: the purchasing power of the coupons in circulation would have risen, so that people would feel no need to hoard more, and there would be no recession.
But don’t recessions look like periods in which there just isn’t enough demand to employ everyone willing to work? Appearances can be deceiving, say the freshwater theorists. Sound economics, in their view, says that overall failures of demand can’t happen — and that means that they don’t. Keynesian economics has been “proved false,” Cochrane, of the University of Chicago, says.
Yet recessions do happen. Why? In the 1970s the leading freshwater macroeconomist, the Nobel laureate Robert Lucas, argued that recessions were caused by temporary confusion: workers and companies had trouble distinguishing overall changes in the level of prices because of inflation or deflation from changes in their own particular business situation. And Lucas warned that any attempt to fight the business cycle would be counterproductive: activist policies, he argued, would just add to the confusion.
By the 1980s, however, even this severely limited acceptance of the idea that recessions are bad things had been rejected by many freshwater economists. Instead, the new leaders of the movement, especially Edward Prescott, who was then at the University of Minnesota (you can see where the freshwater moniker comes from), argued that price fluctuations and changes in demand actually had nothing to do with the business cycle. Rather, the business cycle reflects fluctuations in the rate of technological progress, which are amplified by the rational response of workers, who voluntarily work more when the environment is favorable and less when it’s unfavorable. Unemployment is a deliberate decision by workers to take time off.
Put baldly like that, this theory sounds foolish — was the Great Depression really the Great Vacation? And to be honest, I think it really is silly. But the basic premise of Prescott’s “real business cycle” theory was embedded in ingeniously constructed mathematical models, which were mapped onto real data using sophisticated statistical techniques, and the theory came to dominate the teaching of macroeconomics in many university departments. In 2004, reflecting the theory’s influence, Prescott shared a Nobel with Finn Kydland of Carnegie Mellon University.
Meanwhile, saltwater economists balked. Where the freshwater economists were purists, saltwater economists were pragmatists. While economists like N. Gregory Mankiw at Harvard, Olivier Blanchard at M.I.T. and David Romer at the University of California, Berkeley, acknowledged that it was hard to reconcile a Keynesian demand-side view of recessions with neoclassical theory, they found the evidence that recessions are, in fact, demand-driven too compelling to reject. So they were willing to deviate from the assumption of perfect markets or perfect rationality, or both, adding enough imperfections to accommodate a more or less Keynesian view of recessions. And in the saltwater view, active policy to fight recessions remained desirable.
But the self-described New Keynesian economists weren’t immune to the charms of rational individuals and perfect markets. They tried to keep their deviations from neoclassical orthodoxy as limited as possible. This meant that there was no room in the prevailing models for such things as bubbles and banking-system collapse. The fact that such things continued to happen in the real world — there was a terrible financial and macroeconomic crisis in much of Asia in 1997-8 and a depression-level slump in Argentina in 2002 — wasn’t reflected in the mainstream of New Keynesian thinking.
Even so, you might have thought that the differing worldviews of freshwater and saltwater economists would have put them constantly at loggerheads over economic policy. Somewhat surprisingly, however, between around 1985 and 2007 the disputes between freshwater and saltwater economists were mainly about theory, not action. The reason, I believe, is that New Keynesians, unlike the original Keynesians, didn’t think fiscal policy — changes in government spending or taxes — was needed to fight recessions. They believed that monetary policy, administered by the technocrats at the Fed, could provide whatever remedies the economy needed. At a 90th birthday celebration for Milton Friedman, Ben Bernanke, formerly a more or less New Keynesian professor at Princeton, and by then a member of the Fed’s governing board, declared of the Great Depression: “You’re right. We did it. We’re very sorry. But thanks to you, it won’t happen again.” The clear message was that all you need to avoid depressions is a smarter Fed.
And as long as macroeconomic policy was left in the hands of the maestro Greenspan, without Keynesian-type stimulus programs, freshwater economists found little to complain about. (They didn’t believe that monetary policy did any good, but they didn’t believe it did any harm, either.)
It would take a crisis to reveal both how little common ground there was and how Panglossian even New Keynesian economics had become.
V. NOBODY COULD HAVE PREDICTED . . .
In recent, rueful economics discussions, an all-purpose punch line has become “nobody could have predicted. . . .” It’s what you say with regard to disasters that could have been predicted, should have been predicted and actually were predicted by a few economists who were scoffed at for their pains.
Take, for example, the precipitous rise and fall of housing prices. Some economists, notably Robert Shiller, did identify the bubble and warn of painful consequences if it were to burst. Yet key policy makers failed to see the obvious. In 2004, Alan Greenspan dismissed talk of a housing bubble: “a national severe price distortion,” he declared, was “most unlikely.” Home-price increases, Ben Bernanke said in 2005, “largely reflect strong economic fundamentals.”
How did they miss the bubble? To be fair, interest rates were unusually low, possibly explaining part of the price rise. It may be that Greenspan and Bernanke also wanted to celebrate the Fed’s success in pulling the economy out of the 2001 recession; conceding that much of that success rested on the creation of a monstrous bubble would have placed a damper on the festivities.
But there was something else going on: a general belief that bubbles just don’t happen. What’s striking, when you reread Greenspan’s assurances, is that they weren’t based on evidence — they were based on the a priori assertion that there simply can’t be a bubble in housing. And the finance theorists were even more adamant on this point. In a 2007 interview, Eugene Fama, the father of the efficient-market hypothesis, declared that “the word ‘bubble’ drives me nuts,” and went on to explain why we can trust the housing market: “Housing markets are less liquid, but people are very careful when they buy houses. It’s typically the biggest investment they’re going to make, so they look around very carefully and they compare prices. The bidding process is very detailed.”
Indeed, home buyers generally do carefully compare prices — that is, they compare the price of their potential purchase with the prices of other houses. But this says nothing about whether the overall price of houses is justified. It’s ketchup economics, again: because a two-quart bottle of ketchup costs twice as much as a one-quart bottle, finance theorists declare that the price of ketchup must be right.
In short, the belief in efficient financial markets blinded many if not most economists to the emergence of the biggest financial bubble in history. And efficient-market theory also played a significant role in inflating that bubble in the first place.
Now that the undiagnosed bubble has burst, the true riskiness of supposedly safe assets has been revealed and the financial system has demonstrated its fragility. U.S. households have seen $13 trillion in wealth evaporate. More than six million jobs have been lost, and the unemployment rate appears headed for its highest level since 1940. So what guidance does modern economics have to offer in our current predicament? And should we trust it?
VI. THE STIMULUS SQUABBLE
Between 1985 and 2007 a false peace settled over the field of macroeconomics. There hadn’t been any real convergence of views between the saltwater and freshwater factions. But these were the years of the Great Moderation — an extended period during which inflation was subdued and recessions were relatively mild. Saltwater economists believed that the Federal Reserve had everything under control. Freshwater economists didn’t think the Fed’s actions were actually beneficial, but they were willing to let matters lie.
But the crisis ended the phony peace. Suddenly the narrow, technocratic policies both sides were willing to accept were no longer sufficient — and the need for a broader policy response brought the old conflicts out into the open, fiercer than ever.
Why weren’t those narrow, technocratic policies sufficient? The answer, in a word, is zero.
During a normal recession, the Fed responds by buying Treasury bills — short-term government debt — from banks. This drives interest rates on government debt down; investors seeking a higher rate of return move into other assets, driving other interest rates down as well; and normally these lower interest rates eventually lead to an economic bounceback. The Fed dealt with the recession that began in 1990 by driving short-term interest rates from 9 percent down to 3 percent. It dealt with the recession that began in 2001 by driving rates from 6.5 percent to 1 percent. And it tried to deal with the current recession by driving rates down from 5.25 percent to zero.
But zero, it turned out, isn’t low enough to end this recession. And the Fed can’t push rates below zero, since at near-zero rates investors simply hoard cash rather than lending it out. So by late 2008, with interest rates basically at what macroeconomists call the “zero lower bound” even as the recession continued to deepen, conventional monetary policy had lost all traction.
Now what? This is the second time America has been up against the zero lower bound, the previous occasion being the Great Depression. And it was precisely the observation that there’s a lower bound to interest rates that led Keynes to advocate higher government spending: when monetary policy is ineffective and the private sector can’t be persuaded to spend more, the public sector must take its place in supporting the economy. Fiscal stimulus is the Keynesian answer to the kind of depression-type economic situation we’re currently in.
Such Keynesian thinking underlies the Obama administration’s economic policies — and the freshwater economists are furious. For 25 or so years they tolerated the Fed’s efforts to manage the economy, but a full-blown Keynesian resurgence was something entirely different. Back in 1980, Lucas, of the University of Chicago, wrote that Keynesian economics was so ludicrous that “at research seminars, people don’t take Keynesian theorizing seriously anymore; the audience starts to whisper and giggle to one another.” Admitting that Keynes was largely right, after all, would be too humiliating a comedown.
And so Chicago’s Cochrane, outraged at the idea that government spending could mitigate the latest recession, declared: “It’s not part of what anybody has taught graduate students since the 1960s. They [Keynesian ideas] are fairy tales that have been proved false. It is very comforting in times of stress to go back to the fairy tales we heard as children, but it doesn’t make them less false.” (It’s a mark of how deep the division between saltwater and freshwater runs that Cochrane doesn’t believe that “anybody” teaches ideas that are, in fact, taught in places like Princeton, M.I.T. and Harvard.)
Meanwhile, saltwater economists, who had comforted themselves with the belief that the great divide in macroeconomics was narrowing, were shocked to realize that freshwater economists hadn’t been listening at all. Freshwater economists who inveighed against the stimulus didn’t sound like scholars who had weighed Keynesian arguments and found them wanting. Rather, they sounded like people who had no idea what Keynesian economics was about, who were resurrecting pre-1930 fallacies in the belief that they were saying something new and profound.
And it wasn’t just Keynes whose ideas seemed to have been forgotten. As Brad DeLong of the University of California, Berkeley, has pointed out in his laments about the Chicago school’s “intellectual collapse,” the school’s current stance amounts to a wholesale rejection of Milton Friedman’s ideas, as well. Friedman believed that Fed policy rather than changes in government spending should be used to stabilize the economy, but he never asserted that an increase in government spending cannot, under any circumstances, increase employment. In fact, rereading Friedman’s 1970 summary of his ideas, “A Theoretical Framework for Monetary Analysis,” what’s striking is how Keynesian it seems.
And Friedman certainly never bought into the idea that mass unemployment represents a voluntary reduction in work effort or the idea that recessions are actually good for the economy. Yet the current generation of freshwater economists has been making both arguments. Thus Chicago’s Casey Mulligan suggests that unemployment is so high because many workers are choosing not to take jobs: “Employees face financial incentives that encourage them not to work . . . decreased employment is explained more by reductions in the supply of labor (the willingness of people to work) and less by the demand for labor (the number of workers that employers need to hire).” Mulligan has suggested, in particular, that workers are choosing to remain unemployed because that improves their odds of receiving mortgage relief. And Cochrane declares that high unemployment is actually good: “We should have a recession. People who spend their lives pounding nails in Nevada need something else to do.”
Personally, I think this is crazy. Why should it take mass unemployment across the whole nation to get carpenters to move out of Nevada? Can anyone seriously claim that we’ve lost 6.7 million jobs because fewer Americans want to work? But it was inevitable that freshwater economists would find themselves trapped in this cul-de-sac: if you start from the assumption that people are perfectly rational and markets are perfectly efficient, you have to conclude that unemployment is voluntary and recessions are desirable.
Yet if the crisis has pushed freshwater economists into absurdity, it has also created a lot of soul-searching among saltwater economists. Their framework, unlike that of the Chicago School, both allows for the possibility of involuntary unemployment and considers it a bad thing. But the New Keynesian models that have come to dominate teaching and research assume that people are perfectly rational and financial markets are perfectly efficient. To get anything like the current slump into their models, New Keynesians are forced to introduce some kind of fudge factor that for reasons unspecified temporarily depresses private spending. (I’ve done exactly that in some of my own work.) And if the analysis of where we are now rests on this fudge factor, how much confidence can we have in the models’ predictions about where we are going?
The state of macro, in short, is not good. So where does the profession go from here?
VII. FLAWS AND FRICTIONS
Economics, as a field, got in trouble because economists were seduced by the vision of a perfect, frictionless market system. If the profession is to redeem itself, it will have to reconcile itself to a less alluring vision — that of a market economy that has many virtues but that is also shot through with flaws and frictions. The good news is that we don’t have to start from scratch. Even during the heyday of perfect-market economics, there was a lot of work done on the ways in which the real economy deviated from the theoretical ideal. What’s probably going to happen now — in fact, it’s already happening — is that flaws-and-frictions economics will move from the periphery of economic analysis to its center.
There’s already a fairly well developed example of the kind of economics I have in mind: the school of thought known as behavioral finance. Practitioners of this approach emphasize two things. First, many real-world investors bear little resemblance to the cool calculators of efficient-market theory: they’re all too subject to herd behavior, to bouts of irrational exuberance and unwarranted panic. Second, even those who try to base their decisions on cool calculation often find that they can’t, that problems of trust, credibility and limited collateral force them to run with the herd.
On the first point: even during the heyday of the efficient-market hypothesis, it seemed obvious that many real-world investors aren’t as rational as the prevailing models assumed. Larry Summers once began a paper on finance by declaring: “THERE ARE IDIOTS. Look around.” But what kind of idiots (the preferred term in the academic literature, actually, is “noise traders”) are we talking about? Behavioral finance, drawing on the broader movement known as behavioral economics, tries to answer that question by relating the apparent irrationality of investors to known biases in human cognition, like the tendency to care more about small losses than small gains or the tendency to extrapolate too readily from small samples (e.g., assuming that because home prices rose in the past few years, they’ll keep on rising).
Until the crisis, efficient-market advocates like Eugene Fama dismissed the evidence produced on behalf of behavioral finance as a collection of “curiosity items” of no real importance. That’s a much harder position to maintain now that the collapse of a vast bubble — a bubble correctly diagnosed by behavioral economists like Robert Shiller of Yale, who related it to past episodes of “irrational exuberance” — has brought the world economy to its knees.
On the second point: suppose that there are, indeed, idiots. How much do they matter? Not much, argued Milton Friedman in an influential 1953 paper: smart investors will make money by buying when the idiots sell and selling when they buy and will stabilize markets in the process. But the second strand of behavioral finance says that Friedman was wrong, that financial markets are sometimes highly unstable, and right now that view seems hard to reject.
Probably the most influential paper in this vein was a 1997 publication by Andrei Shleifer of Harvard and Robert Vishny of Chicago, which amounted to a formalization of the old line that “the market can stay irrational longer than you can stay solvent.” As they pointed out, arbitrageurs — the people who are supposed to buy low and sell high — need capital to do their jobs. And a severe plunge in asset prices, even if it makes no sense in terms of fundamentals, tends to deplete that capital. As a result, the smart money is forced out of the market, and prices may go into a downward spiral.
The spread of the current financial crisis seemed almost like an object lesson in the perils of financial instability. And the general ideas underlying models of financial instability have proved highly relevant to economic policy: a focus on the depleted capital of financial institutions helped guide policy actions taken after the fall of Lehman, and it looks (cross your fingers) as if these actions successfully headed off an even bigger financial collapse.
Meanwhile, what about macroeconomics? Recent events have pretty decisively refuted the idea that recessions are an optimal response to fluctuations in the rate of technological progress; a more or less Keynesian view is the only plausible game in town. Yet standard New Keynesian models left no room for a crisis like the one we’re having, because those models generally accepted the efficient-market view of the financial sector.
There were some exceptions. One line of work, pioneered by none other than Ben Bernanke working with Mark Gertler of New York University, emphasized the way the lack of sufficient collateral can hinder the ability of businesses to raise funds and pursue investment opportunities. A related line of work, largely established by my Princeton colleague Nobuhiro Kiyotaki and John Moore of the London School of Economics, argued that prices of assets such as real estate can suffer self-reinforcing plunges that in turn depress the economy as a whole. But until now the impact of dysfunctional finance hasn’t been at the core even of Keynesian economics. Clearly, that has to change.
VIII. RE-EMBRACING KEYNES
So here’s what I think economists have to do. First, they have to face up to the inconvenient reality that financial markets fall far short of perfection, that they are subject to extraordinary delusions and the madness of crowds. Second, they have to admit — and this will be very hard for the people who giggled and whispered over Keynes — that Keynesian economics remains the best framework we have for making sense of recessions and depressions. Third, they’ll have to do their best to incorporate the realities of finance into macroeconomics.
Many economists will find these changes deeply disturbing. It will be a long time, if ever, before the new, more realistic approaches to finance and macroeconomics offer the same kind of clarity, completeness and sheer beauty that characterizes the full neoclassical approach. To some economists that will be a reason to cling to neoclassicism, despite its utter failure to make sense of the greatest economic crisis in three generations. This seems, however, like a good time to recall the words of H. L. Mencken: “There is always an easy solution to every human problem — neat, plausible and wrong.”
When it comes to the all-too-human problem of recessions and depressions, economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly. The vision that emerges as the profession rethinks its foundations may not be all that clear; it certainly won’t be neat; but we can hope that it will have the virtue of being at least partly right.
Paul Krugman is a Times Op-Ed columnist and winner of the 2008 Nobel Memorial Prize in Economic Science. His latest book is “The Return of Depression Economics and the Crisis of 2008.”
This article has been revised to reflect the following correction:
Correction: September 6, 2009 Because of an editing error, an article on Page 36 this weekend about the failure of economists to anticipate the latest recession misquotes the economist John Maynard Keynes, who compared the financial markets of the 1930s to newspaper beauty contests in which readers tried to correctly pick all six eventual winners. Keynes noted that a competitor did not have to pick “those faces which he himself finds prettiest, but those that he thinks likeliest to catch the fancy of the other competitors.” He did not say, “nor even those that he thinks likeliest to catch the fancy of other competitors.”
Dr Ismail Aby Jamal
Born in Batu 10, Kg Lubok Bandan, Jementah, Segamat, Johor
Thursday, January 7, 2010
Monday, January 4, 2010
Enhancing the Role of Private Sector in Education
Enhancing the Role of Private Sector in Education - Last of 6 Parts
GUEST COLUMNISTS
Monday, 04 January 2010 adminK
The Malaysian government tried to loosen its stranglehold on our public universities through the exercise of “corporatization” in the hope of freeing them from the tight leash of ministry bureaucrats. The result? Nothing much has changed despite the costs, flurry of paperwork, and legal maneuverings. The reason is that the same people with the same mentality remain in charge, only their titles are changed.
By M. Bakri Musa
[In the preceding essays, I discussed the rationale and benefits of enhancing private sector participation in education, surveyed the various models in the rest of world, and summarized the current state of affairs in Malaysia. This last piece is my prescription for private sector participation at the tertiary level.]
As with schools, opportunities for private sector participation at the post-secondary level are also endless. At one end would be the completely independent proprietary universities free of governmental control except those that govern any private enterprise. At the other would be the various public-private partnerships.
The advantage of being independent is just that. As Thomas Kealey, head of the only independent private university in Britain, the University of Buckingham, observed, “Every other university … works solely to government targets. The government gives them money, and therefore they do whatever the government wants. …. [O]ur economic success is determined by our students’ satisfaction. The other universities’ success is determined by how much they please the government.”
Kealey’s assertion reveals something else, and that is the basic philosophy of any commercial enterprise: Give your customers (in this case, students) what they want, not what they need. It is not my purpose to challenge the legitimacy of such a viewpoint, or support the traditional view of the university as a community of teachers and scholars concerned only with the pursuit of knowledge and truth. In reality, we need both types of institutions.
Just because a college is private and free from governmental funding does not mean that the government can abrogate its responsibilities to regulate these institutions. They too must be regulated, like other private providers of services like hospitals and restaurants.
The purpose of regulatory oversight is to prevent and weed out fraudulent operators and institutions; that is, to protect the public and the industry. Our students must be assured that when they enroll in a private college and part with their parent’s hard-earned cash to pay for the tuition, they are indeed getting an education and not be the victim of a degree mill. Of course there is no way any regulator could prevent a shady character with money and eager to burnish his qualification from getting a fake degree from one of the many fraudulent purveyors.
Such regulations would also protect the industry. If it were to be infested with shady operators and degree mills, then the industry as a whole would suffer. The value and marketability of the genuine providers would decline. This applies to providers of education as well as purveyors of Gucci leather goods.
This oversight function gets complicated in these days of “non-traditional” learning. The line between a degree mill and legitimate “non-traditional” on-line degree program can be blurry. A “dissertation” can be nothing more than a few pages of your “life experiences,” and heavily coached at that, or even ghost written. That these fraudulent operators are becoming more sophisticated is reason to remain vigilant.
One way to achieve this would be to have strict definitions of terms and clear criteria to qualify. Just as private doctors and lawyers must have certain qualifications and experience before they hang out their shingle, so too private colleges and universities must meet certain published and transparent standards.
Thus before any institution could grant a degree or diploma, it must satisfy certain academic and non-academic criteria. The former would include the qualifications of its key faculty and academic leaders, entry requirements, and quality of courses. The non-academic criteria relate to the facilities, financial soundness, and the posting of a performance bonds.
As for the quality of the academic offerings, these institutions would have to acquire accreditation from recognized foreign bodies. Alternatively they could seek accreditation from Lembaga Akreditasi Negara (LAN).
Unfortunately LAN is not an independent agency; it is just another government bureaucracy. Further, it accredits only private institutions, not public ones. We need an independent agency staffed not by civil servants but relevant professionals from both the public and private sectors. That is the only way to enhance LAN’s credibility.
Once the regulatory requirements are met, any entity, foreign or local, should be able to set up a private college using whatever language of instruction it chooses.
Private, Non-Profit Post-Secondary Institutions
As indicated earlier, there is no model of a successful truly private or proprietary university anywhere in the world. Hence I suggest we adopt the American model of private but non-profit universities.
Like America, we should grant our private non-profit universities tax-free status; free from paying income, property and other taxes. Additionally, donations to these institutions should be tax deductible. The government should also treat the students attending these private institutions no differently from those of public ones in terms of eligibility for scholarships and student loans. Likewise, the government should not discriminate the granting of research funds between public and private universities; those should be given to those most competent to conduct the study. These universities should also have access to government-guaranteed loans so they could lower their funding costs for capital projects.
Additionally the government should give direct financial grants to these non-profit universities. After all it has done that to foreign universities, like Ohio University (US), the Royal College of Surgeons (Ireland), and Cambridge.
In return for those privileges, these universities would have to agree to some mutually agreed and beneficial goals, like having their faculty and domestic student body broadly reflect Malaysian society. However, there would not be any rigid quota. The university should recognize that diversity in the classroom enhances the learning experience. It would also be a wonderful and effective way of preparing your students for the diverse global marketplace.
In short, these non-profit private universities would be like my proposed charter schools.
My concept could be extended to technical and vocational institutes. I envisage a consortium of construction companies banding together to set up a vocational institute to produce electricians, plumbers and carpenters. Another would be a group of major hotel operators establishing a school training chefs, tour guides, and hotel workers.
In America, there are many bridges between private and public institutions so students could seamless move from one system to the other at many levels with minimal loss of academic credit. This is particularly useful during this time of economic crisis when many parents find their priories have shifted and they can no longer afford private universities.
On an administrative level, I would not put these universities and institutions under the jurisdiction of the Ministry of Higher Education (MOHE) as that would impose significant conflict of interest. Those folks at MOHE see themselves first and foremost as looking after the interests of public universities. They would see these private universities as unwelcome challenges to the growth of public universities.
Instead these private tertiary educational institutions should be under the Ministry Of Trade and Industry (MITI). After all the initial idea of having them was essentially economic – to save and earn foreign exchange – the same mission of the ministry. Besides, there is precedent for this, with the International Islamic University under MITI. That was a sneaky maneuver to overcome the government’s prohibition on the use of English in public universities. By having IIU under MITI, the university is considered under the law as a commercial enterprise rather than an educational institution, and hence could use English without incurring the wrath of the language nationalists. Brilliant!
Apart from establishing these non-profit universities, there are other avenues for public-private partnership involving our public universities. On many American campuses, the food, housing, and many other non-academic services are run not by the university but by private entities, relieving the university of the financial, human, and other strains of running such ancillary services.
Another would be for public universities to employ practitioners from the private sector as adjunct faculty members. That would not only supplement the teaching staff but also bring a much needed practical perspective to the curriculum.
Like everything else, such private-public partnerships can go too far as to undermine the universities core academic mission. A major concern on American academia today is to what extent these collaborations with private for-profit entities would compromise the intellectual and academic integrity of the research and the institution. In many instances especially in medical research, the findings are often tainted because key investigators are too generously funded by interested commercial parties.
Such conflicts are experienced even on such hallowed campuses as Harvard. Recognition of the problem is the first step towards solving or even preventing it.
The Malaysian government tried to loosen its stranglehold on our public universities through the exercise of “corporatization” in the hope of freeing them from the tight leash of ministry bureaucrats. The result? Nothing much has changed despite the costs, flurry of paperwork, and legal maneuverings. The reason is that the same people with the same mentality remain in charge, only their titles are changed.
Take one example. A few years ago the newly corporatized University of Malaya went into partnership with a private entity to develop part of the campus. Unfortunately it was not to build a new laboratory, convention center, or student residence, but an exclusive gated community! Not even under the most generous interpretation would such an arrangement be viewed as advancing the university’s mission. The units were so luxurious that that they were beyond the reach of the faculty members! Such one-sided arrangement is not the sort of PPP I envisage.
My criticism is not directed at corporatization, rather how it was done, again illustrating my earlier point about a sound policy having flawed implementation. My proposals as outlined here would entail first of all a change in mindset of those in charge.
A vigorous private sector involvement in higher education would lead to greater competition for our public universities. That could lead to their improvement. We already see this. The recent decision by many public universities to improve the English proficiency of their students is directly the consequence of the competition from private universities. Employers (other than the government) are preferring graduates of private institutions over those from public ones. Consequently public universities have to respond to this challenge.
Such is the consequence of competition. That alone is a good enough reason for the government to engage the private sector.
GUEST COLUMNISTS
Monday, 04 January 2010 adminK
The Malaysian government tried to loosen its stranglehold on our public universities through the exercise of “corporatization” in the hope of freeing them from the tight leash of ministry bureaucrats. The result? Nothing much has changed despite the costs, flurry of paperwork, and legal maneuverings. The reason is that the same people with the same mentality remain in charge, only their titles are changed.
By M. Bakri Musa
[In the preceding essays, I discussed the rationale and benefits of enhancing private sector participation in education, surveyed the various models in the rest of world, and summarized the current state of affairs in Malaysia. This last piece is my prescription for private sector participation at the tertiary level.]
As with schools, opportunities for private sector participation at the post-secondary level are also endless. At one end would be the completely independent proprietary universities free of governmental control except those that govern any private enterprise. At the other would be the various public-private partnerships.
The advantage of being independent is just that. As Thomas Kealey, head of the only independent private university in Britain, the University of Buckingham, observed, “Every other university … works solely to government targets. The government gives them money, and therefore they do whatever the government wants. …. [O]ur economic success is determined by our students’ satisfaction. The other universities’ success is determined by how much they please the government.”
Kealey’s assertion reveals something else, and that is the basic philosophy of any commercial enterprise: Give your customers (in this case, students) what they want, not what they need. It is not my purpose to challenge the legitimacy of such a viewpoint, or support the traditional view of the university as a community of teachers and scholars concerned only with the pursuit of knowledge and truth. In reality, we need both types of institutions.
Just because a college is private and free from governmental funding does not mean that the government can abrogate its responsibilities to regulate these institutions. They too must be regulated, like other private providers of services like hospitals and restaurants.
The purpose of regulatory oversight is to prevent and weed out fraudulent operators and institutions; that is, to protect the public and the industry. Our students must be assured that when they enroll in a private college and part with their parent’s hard-earned cash to pay for the tuition, they are indeed getting an education and not be the victim of a degree mill. Of course there is no way any regulator could prevent a shady character with money and eager to burnish his qualification from getting a fake degree from one of the many fraudulent purveyors.
Such regulations would also protect the industry. If it were to be infested with shady operators and degree mills, then the industry as a whole would suffer. The value and marketability of the genuine providers would decline. This applies to providers of education as well as purveyors of Gucci leather goods.
This oversight function gets complicated in these days of “non-traditional” learning. The line between a degree mill and legitimate “non-traditional” on-line degree program can be blurry. A “dissertation” can be nothing more than a few pages of your “life experiences,” and heavily coached at that, or even ghost written. That these fraudulent operators are becoming more sophisticated is reason to remain vigilant.
One way to achieve this would be to have strict definitions of terms and clear criteria to qualify. Just as private doctors and lawyers must have certain qualifications and experience before they hang out their shingle, so too private colleges and universities must meet certain published and transparent standards.
Thus before any institution could grant a degree or diploma, it must satisfy certain academic and non-academic criteria. The former would include the qualifications of its key faculty and academic leaders, entry requirements, and quality of courses. The non-academic criteria relate to the facilities, financial soundness, and the posting of a performance bonds.
As for the quality of the academic offerings, these institutions would have to acquire accreditation from recognized foreign bodies. Alternatively they could seek accreditation from Lembaga Akreditasi Negara (LAN).
Unfortunately LAN is not an independent agency; it is just another government bureaucracy. Further, it accredits only private institutions, not public ones. We need an independent agency staffed not by civil servants but relevant professionals from both the public and private sectors. That is the only way to enhance LAN’s credibility.
Once the regulatory requirements are met, any entity, foreign or local, should be able to set up a private college using whatever language of instruction it chooses.
Private, Non-Profit Post-Secondary Institutions
As indicated earlier, there is no model of a successful truly private or proprietary university anywhere in the world. Hence I suggest we adopt the American model of private but non-profit universities.
Like America, we should grant our private non-profit universities tax-free status; free from paying income, property and other taxes. Additionally, donations to these institutions should be tax deductible. The government should also treat the students attending these private institutions no differently from those of public ones in terms of eligibility for scholarships and student loans. Likewise, the government should not discriminate the granting of research funds between public and private universities; those should be given to those most competent to conduct the study. These universities should also have access to government-guaranteed loans so they could lower their funding costs for capital projects.
Additionally the government should give direct financial grants to these non-profit universities. After all it has done that to foreign universities, like Ohio University (US), the Royal College of Surgeons (Ireland), and Cambridge.
In return for those privileges, these universities would have to agree to some mutually agreed and beneficial goals, like having their faculty and domestic student body broadly reflect Malaysian society. However, there would not be any rigid quota. The university should recognize that diversity in the classroom enhances the learning experience. It would also be a wonderful and effective way of preparing your students for the diverse global marketplace.
In short, these non-profit private universities would be like my proposed charter schools.
My concept could be extended to technical and vocational institutes. I envisage a consortium of construction companies banding together to set up a vocational institute to produce electricians, plumbers and carpenters. Another would be a group of major hotel operators establishing a school training chefs, tour guides, and hotel workers.
In America, there are many bridges between private and public institutions so students could seamless move from one system to the other at many levels with minimal loss of academic credit. This is particularly useful during this time of economic crisis when many parents find their priories have shifted and they can no longer afford private universities.
On an administrative level, I would not put these universities and institutions under the jurisdiction of the Ministry of Higher Education (MOHE) as that would impose significant conflict of interest. Those folks at MOHE see themselves first and foremost as looking after the interests of public universities. They would see these private universities as unwelcome challenges to the growth of public universities.
Instead these private tertiary educational institutions should be under the Ministry Of Trade and Industry (MITI). After all the initial idea of having them was essentially economic – to save and earn foreign exchange – the same mission of the ministry. Besides, there is precedent for this, with the International Islamic University under MITI. That was a sneaky maneuver to overcome the government’s prohibition on the use of English in public universities. By having IIU under MITI, the university is considered under the law as a commercial enterprise rather than an educational institution, and hence could use English without incurring the wrath of the language nationalists. Brilliant!
Apart from establishing these non-profit universities, there are other avenues for public-private partnership involving our public universities. On many American campuses, the food, housing, and many other non-academic services are run not by the university but by private entities, relieving the university of the financial, human, and other strains of running such ancillary services.
Another would be for public universities to employ practitioners from the private sector as adjunct faculty members. That would not only supplement the teaching staff but also bring a much needed practical perspective to the curriculum.
Like everything else, such private-public partnerships can go too far as to undermine the universities core academic mission. A major concern on American academia today is to what extent these collaborations with private for-profit entities would compromise the intellectual and academic integrity of the research and the institution. In many instances especially in medical research, the findings are often tainted because key investigators are too generously funded by interested commercial parties.
Such conflicts are experienced even on such hallowed campuses as Harvard. Recognition of the problem is the first step towards solving or even preventing it.
The Malaysian government tried to loosen its stranglehold on our public universities through the exercise of “corporatization” in the hope of freeing them from the tight leash of ministry bureaucrats. The result? Nothing much has changed despite the costs, flurry of paperwork, and legal maneuverings. The reason is that the same people with the same mentality remain in charge, only their titles are changed.
Take one example. A few years ago the newly corporatized University of Malaya went into partnership with a private entity to develop part of the campus. Unfortunately it was not to build a new laboratory, convention center, or student residence, but an exclusive gated community! Not even under the most generous interpretation would such an arrangement be viewed as advancing the university’s mission. The units were so luxurious that that they were beyond the reach of the faculty members! Such one-sided arrangement is not the sort of PPP I envisage.
My criticism is not directed at corporatization, rather how it was done, again illustrating my earlier point about a sound policy having flawed implementation. My proposals as outlined here would entail first of all a change in mindset of those in charge.
A vigorous private sector involvement in higher education would lead to greater competition for our public universities. That could lead to their improvement. We already see this. The recent decision by many public universities to improve the English proficiency of their students is directly the consequence of the competition from private universities. Employers (other than the government) are preferring graduates of private institutions over those from public ones. Consequently public universities have to respond to this challenge.
Such is the consequence of competition. That alone is a good enough reason for the government to engage the private sector.
Wanted: More help for Malay pupils in Singapore
Wanted: More help for Malay pupils in Singapore
GUEST COLUMNISTS
Thursday, 31 December 2009 admin-s
When Mendaki staff asked parents why they did not want to enrol their children, some said their children were busy on weekends. Others said they took pity on their children, who already had a tough time in school.
By Zakir Hussain (The Straits Times)
Forty years ago, six-year-old Zuraidah Abdullah came home from school with her mid-year exam result for mathematics inked in red in her report book: 20 marks out of 100.
Fortunately, her mother, who juggled various jobs to help top up her bus driver husband's income, knew where to get help even though she had not been to school.
She asked around for someone who could do maths, and found an older student in their Ulu Pandan kampung to help her daughter.
The young man instructed the young Zuraidah to buy a pack of peanuts and borrow a pack of playing cards.
Over several sessions, the Primary 1 pupil learnt how to add, subtract, multiply and divide, and each time she answered a question right, she got a peanut.
The next semester, she aced her exam and scored 80 marks out of 100.
Fast forward 12 years, when Zuraidah was an undergraduate at the then-Nanyang Technological Institute. Her mother roped her in to tutor young neighbours and relatives in their Clementi HDB estate.
She agreed, on one condition: they had to turn up for all her sessions. Like the young Zuraidah, they too managed to pass their maths exams.
She leaves Mendaki tomorrow after serving as chief executive officer for three years with the strong conviction that having more such help on the ground will lift Malay students' grades which have dipped, especially in mathematics.
The self-help group is working out how to encourage more people to come forward to help weaker students, on top of existing community schemes, she says.
Last week, an Education Ministry report on how different ethnic groups fared in national examinations showed that the proportion of Malay pupils who passed maths in the Primary School Leaving Examination (PSLE) dipped from 63.4 per cent in 1999 to 56.3 per cent last year. Nationally, passes average 83.1 per cent.
The downtrend was flagged earlier in the month by Minister-in-charge of Muslim Affairs Yaacob Ibrahim.
Zuraidah is under no illusion that doing well in maths takes hard work and practice. But it is also important for children to get a sound grounding in basic skills from an early age.
This, she explains, was why Mendaki introduced a programme called Tiga M in 2004 to give kindergarten-age children and their parents a head start in understanding maths concepts, like how her neighbour helped her with the cards.
But Zuraidah says the effort will take time to yield results, as only 2,000 children have participated in the past five years. Community groups are working to enrol more families.
She outlines a host of other efforts being made by Mendaki and community groups to tackle stagnating maths grades. The majority of pupils who take part in these projects have seen their grades rise.
Since 2006, a one-day seminar has been held to motivate Primary 6 pupils and introduce them to exam strategies. Over 2,700 pupils took part this year and Mendaki plans to target 5,000 next year.
Maths workshops were held for Primary 5 students from 2007, and intensive PSLE maths sessions were started last year to help a select group of weak pupils.
This is where the usually calm CEO begins to lament the attitudes of some parents.
There are some 8,000 Malay pupils in an average Primary 1 cohort, she notes, but this year only about 400 enrolled in Mendaki's tuition scheme and another 300 attended classes where Mendaki paid part of the fees.
This low participation is barely enough to make an impact on the overall pass rate, she says with disappointment.
When Mendaki staff asked parents why they did not want to enrol their children, some said their children were busy on weekends. Others said they took pity on their children, who already had a tough time in school.
And when Mendaki invited 200 pupils who failed a pre-tuition test to join intensive maths classes for free, only 39 accepted. Out came excuses from those who turned down the offer: they felt sorry for their children, the children were tired.
“They have to prioritise,” Zuraidah says with exasperation. “They are depriving the child of opportunities!”
A similar sense of irritation was expressed by Yaacob, who is also Mendaki's chairman, when he lamented the plight of dysfunctional families in the community earlier this month.
There are an estimated 7,500 dysfunctional families in Singapore with no skills and jobs. One parent is often absent too, and a disproportionately large number of these families are Malay.
Zuraidah says her time at the helm of Mendaki has made her more convinced that the key strategy to help troubled families lies in making sure the children stay in school and enjoy learning.
“I thought I'd seen everything,” she says, referring to her 22 years with the police. “But every time I go on the ground, I'm surprised,” she adds, referring to the occasional visits Mendaki staff and volunteers make to areas where many needy Malay-Muslim families live to make sure no one falls through the cracks.
She speaks of homes with huge television sets but the family is unable to hold down a job and the children skip school.
What gives her hope is that there are also homes where the living room is stripped of furniture but young children are doing their homework on the floor while their single parents are out at work.
She believes there is no quick fix for broken families, and persistence is key.
Zuraidah reveals that when Mendaki and various community groups came up with a system to identify troubled families and provide them with comprehensive help two years ago, she thought the families could get back on their feet within three years.
After all, volunteer befrienders would visit them to offer support, and alert family service centres should issues arise.
But social workers told her the deep- seated nature of the problems facing such families meant it would take at least four to seven years before they could get back on their feet.
“I've come to realise that you cannot deal with one family the same way you deal with another,” she says.
Mendaki alone cannot do everything, she stresses. “We must work with others, and we do better by working with others. This is where we leverage on national resources, work with other agencies to get families all the help they need.”
It will take time, she says. But what if the family refuses to be helped?
Then it is high time that others step in and intervene, she replies matter-of-factly.
She relates how a school principal rang her in desperation last year as she was at her wits' end over a student who failed to turn up for classes.
For a whole month, the boy's teacher had been going to his flat to accompany him to school. On the 31st day, he assumed the boy would know what to do. But he did not show up for class.
The teacher turned up at his door at 9.30am, and the boy's parents were watching TV with him. They told the teacher he did not want to go to school, and they could not do anything about it.
“The teacher was disappointed, the principal threw in the towel. I said: You have already done a lot, let us try to help the family,” recalls Zuraidah.
She got two Mendaki officers to visit the boy's home right away. They gave the parents a shelling.
“The teacher was not Malay, but because we were a self-help group, our staff lectured the parents and told them off for not doing their duty.
“The parents were bo chap (Hokkien for couldn't care less),” she says.
Later the boy came up to the Mendaki staff and thanked them, saying he now realised his teacher just wanted him to succeed. The next day, he went to school.
That episode, Zuraidah says, shows that if parents refuse to be helped, the community has a duty to reach out to the child and empower him or her.
“If I am the neighbour or the relative, I should be the one hectoring the parents. Can we have more of that kind of pressure or persuasion?” she asks.
She also feels that the community needs to provide mentors for such children “because most of the time, the kids cannot rely on their parents”.
“They need a role model,” she says. She points to a five-year-old community programme, Youth-in-Action, in which volunteers organise activities for teenagers who are in danger of quitting school and mentor them to stay on and excel.
While many see them as youth at risk, Zuraidah prefers to call them youth on the brink of success, a term some agencies in the United States adopt.
The term makes a world of difference to the confidence of youth, she says, as they feel they are part of the community and want to make a contribution.
Mendaki is training volunteers to help youths by nurturing their strengths.
It has also started an empowerment programme to build the confidence of secondary Normal stream students by getting them to interact and even shadow Malay-Muslim women professionals.
Citing the growing pool of young professionals in the community as a plus, Zuraidah says Mendaki has invited some 80 of them from various fields to brainstorm ways to improve students' grades and tackle the problem of dysfunctional families.
The price of inaction could not seem less stark as the police officer in her takes over: “If you don't help them, they get in trouble with the law down the road.”
Comments (15)
...written by popuri, January 04, 2010 08:39:59
Singapore, my salutations to you. This is what I call educationist. What we have here are brainwashers.
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...written by strifus, December 31, 2009 18:06:20
The situation really hasnt changed since I was in Malaysia over 20 years ago. I was in a fairly prestigeous school in Penang, Getting in was no mean feat. Everyone there, except for a percentage of Malay students who were boarding there, had to score very well in their, at the time Standard 5 (i dont know what they call it now), test. In the 3 years that I was there, one main observation is definately obvious, and that is that the bulk of Malays score at the bottom half of the population of any year. Of course my friends in school were a mixture of Malay, Chinese and Indian boys. When someone asked a question of me about something, I would answer or in this case, teach/tutor. Now what amazes me is that of the Malays, of which there are only a handful, the ones that do well are the ones who have educated parents (ones that have been overseas to study). I myself studied in Australia and I know that most Malays who come here are actually good students. So, to say that any Malay child you might see in Malaysia isnt capable of doing better for themself is definately false. So, what is the main difference between say the Chinese student (who generally scores well in exams) and the Malay student? I think the answer is clear enough just by reading the article above. After 50+ years of spoonfeeding, it is the Malays who are still lagging behind in terms of education. I know that there are more educated Malays out there right now but if this article is to be believed, thimgs are just the same as they were 20+ years ago. I mean, Malaysia isnt like Australia or the UK, where a child can either live with his parents or not. Most children here start working for an income as early as 14-15 years old. Some, like the students from cattle stations, spend most of the year away from their families but yet still do well enough to get themselves into the university course of their choice or trade of their choice. One main thing is clear. If things are to change for the better for more Malays, they have to look towards the future. They cant just hide their heads in the ground and expect that the governement will always be there to dig them out of a spot. I learnt that the hard way. Its time that the Malays learn it too.
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...written by temenggong, December 31, 2009 17:07:49
A dedication to academic excellence is not (yet) a part of malay culture, as in the case of all muslim countries generally. This weakness contributes to general weakness in all areas leading to mediocrity. A pre-requisite for excellence is a free society and a culture of free enquiry, which is constricted by islam. That is the barrier to academic excellence. The problem will continue until all yokes are abandoned. Once they are able to question their religion and prophet, and seek answers elsewhere, the ascension to academic excellence would have begun. It is not happening as of now.
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...written by Navigator, December 31, 2009 15:56:26
This shows the Singapore government is more earnest about helping the Malays than the Malaysian Government. Why did our government not discover this weakness in the link? After all, they claim to be helping the Malays to make it. I think the government wants to have the constant excuse for the poor performance of the Malays. They only pay lip service to helping their community. All they really want is to make money out of them.
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...written by CoolMama54, December 31, 2009 15:30:04
Vertigo Cure, You take one excerpt and just turn it into a racist comment. Are you looking forward to the downfall of the Malays? What is your objective in saying those things? Was it supposed to inspire change and hundreds of thousands of Malays will suddenly wake up, especially with that tone and attitude? What if the Malays, who are actually against racism, suddenly wake up and realize that when they actually make it on their own, idiots like you will never ever give them any credit, and instead will be vengeful? Does that make you feel better? You do realize that the article is not about racism, but like Amzek said "good community spirit", right? Or is your poor command of English still failing you? I thought I told you to get some good English lessons...
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...written by Vertigo Cure, December 31, 2009 14:29:24
when Mendaki invited 200 pupils who failed a pre-tuition test to join intensive maths classes for free, only 39 accepted. Out came excuses from those who turned down the offer: they felt sorry for their children, the children were tired.
This sums up the attitude of many Malays in general. Of course, not all Malays are not progressive but as you can see only about 20% are more serious about doing well in schools. I can bet you that if that is offered to the Chinese, at least 80% will take up the classes. Not only the Chinese are serious about education, the other Asian nations like the Koreans and the Japanese are probably even more serious about education. And the results show... When statistics show that Malays are not doing well in education as compared with the other races, those idiot ultra Malays in Bolehland will start screaming that Malays are marginalized in Singapore. They are just like the parents in the above article watching TV with the child rather than sending him to school. If you are non progressive and expect free lunches, then don't blame others for your own failures. Worst still, the boleh gomen is using this weakness and other discriminatory racist policies to advance their political agenda. The sad thing is that there are too many ultra Malays, stupid and corrupted Non Malays in Bolehland to support the BN/Umno agenda.
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...written by sydput, December 31, 2009 14:20:08
Malays don't need maths to be succesful. All they need is a guitar and a drum set. Unfortunately, the talibans ban them from performing live and music is not a curriculum in the ducation system, so they cannot make a living in music. End of the day, race motorcycles as no surf beach in the country. If they were born in UK, they would be millionaires in music or football.
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...written by Amzek, December 31, 2009 12:38:24
This article is from a Singapore paper la....not NST! sheesh...dont ppl even read and understand the articles first before commenting?
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...written by bambooman, December 31, 2009 11:56:12
well the govt has made up its mind.....they ( umno and its NGOs ) have decided to keep to its bahasa melayu in science and maths.........so that they can keep their malays at bay!!!!......let them be happy then.......we look elsewhere for development!!!!!........keep it simple and smart!!!!
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...written by wongnoball, December 31, 2009 11:53:13
NSTP...UTUSAN..BErita...Nanyang...STAR...Seng Chiew.....All Jambanlist first and foremost...I am beginning to get weary of their Psychological War Games they are playing on Malaysian. This is how I expose them... #1 Start with Heart wrenching story (that is to hook you in) #2 Then Focus on the Racist Race in question to show how hapless, weak, dumb, stupid, tidak apa (this is to tell you more MORE MORE help is needed and only UMNO racist can deliver...ala NEP Forever) #3 Then another good example of Islam linked to this Hapless race and Wah-lah ...success cometh when religion linked to race and the whole Lembu episode, Hina Islam, Ketuanan and their No shame -No Maruah claim of their stolen bumiputera status from Orang Asli come to play like Magic. #4 Then start their Social Justice Crap in Pakatan states that people are Neglected and they regim Ganas Kejam UMNO-BN are the ones to look after ALL. That is why if there is Fireworks near their Printing Sites and there is smoke......Malaysian will not be worst off.. All MS write and report Jambanlist material......all thinks 2010 is like 1910......think again...disrupt disrupt disrupt all UMNO Tolls....Be a great Mat Kilau!!
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...written by Amzek, December 31, 2009 11:52:09
Dont read the article as about the Malays in SIngapore. It is actually about good community spirit. This scenario exists everywhere - Malaysia, India, Europe even USA. I would like to imagine that the same spirit is alive and perpetuating everywhere in Malaysia.
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...written by rpk020608, December 31, 2009 11:32:28
A tale of 2 countries. Started at the same time One country – did not care about race and wanting to an individual to success not based on religion, race and social economic standing. With the full backing of their education minister and Minister-in-charge of Muslim Affairs En Yaacob Ibrahim. The other we all know too well as a Malaysian. The final results has shown itself and proven ... with the education we leave our children with will be determine the future and success of the country. I have known many smart Malaysian at the age of 15 years old (given ASEAN scholarships to go Singapore) and never came back to Malaysia … that was 20 years ago. today most of them are top CEO, Managers in the world. Still not too late to change how we educate our children in Malaysia.
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...written by SiHangChai, December 31, 2009 11:24:53
Dear Zakir, STOP propanganda such education issue to fish sympathy for Malays. This is happening globally. What Spore did is a matter of survival for its citizens. Unlikely Malaysia who is still spoon feeding and spoiling with free and subsidies to Malays, do you think the rich Malays especially in UMNO in Malaysia really care about the poor Malays? When will the mentality of our people going to change on relying self-dependency than govt 100%? I hope our Malay friends dont be like katak di bawah tempurung and still at their comfort zone. The western investors are going to eaten us up soon under poor Najib's administration. You want to fight, fight strategically and not 100% on govt assistance.
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...written by Ken Liew, December 31, 2009 11:16:06
Study hard... u will get the mark in return. You must work for your effort to show good marks. It is an era of BRAIN POWER... Previously u can use your strength to work. Now, u need a BRAIN. While Malaysia education is going backwards. Have not EVOLVE at all. As some of the mini-sir, you dont need a good brain to sit the seat. Ya, They want the future generation to be as stupid as themselves are. so that they wont be out-clever then the young people.
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...written by batsman, December 31, 2009 10:49:57
It is a multi-facetted problem - even in Britain, it has been found that working class families have little or no chance of social mobility even after many generations. Such a problem cannot be solved by giving bumiputra privileges. In fact bumiputra privileges will tend to sabotage the hard core poor even as it gives excessive and wasteful opportunities to middle class families. All this is a waste of human and financial resources of the country. The problem of social mobility is a long term problem and corruption and waste will only make it worse.
GUEST COLUMNISTS
Thursday, 31 December 2009 admin-s
When Mendaki staff asked parents why they did not want to enrol their children, some said their children were busy on weekends. Others said they took pity on their children, who already had a tough time in school.
By Zakir Hussain (The Straits Times)
Forty years ago, six-year-old Zuraidah Abdullah came home from school with her mid-year exam result for mathematics inked in red in her report book: 20 marks out of 100.
Fortunately, her mother, who juggled various jobs to help top up her bus driver husband's income, knew where to get help even though she had not been to school.
She asked around for someone who could do maths, and found an older student in their Ulu Pandan kampung to help her daughter.
The young man instructed the young Zuraidah to buy a pack of peanuts and borrow a pack of playing cards.
Over several sessions, the Primary 1 pupil learnt how to add, subtract, multiply and divide, and each time she answered a question right, she got a peanut.
The next semester, she aced her exam and scored 80 marks out of 100.
Fast forward 12 years, when Zuraidah was an undergraduate at the then-Nanyang Technological Institute. Her mother roped her in to tutor young neighbours and relatives in their Clementi HDB estate.
She agreed, on one condition: they had to turn up for all her sessions. Like the young Zuraidah, they too managed to pass their maths exams.
She leaves Mendaki tomorrow after serving as chief executive officer for three years with the strong conviction that having more such help on the ground will lift Malay students' grades which have dipped, especially in mathematics.
The self-help group is working out how to encourage more people to come forward to help weaker students, on top of existing community schemes, she says.
Last week, an Education Ministry report on how different ethnic groups fared in national examinations showed that the proportion of Malay pupils who passed maths in the Primary School Leaving Examination (PSLE) dipped from 63.4 per cent in 1999 to 56.3 per cent last year. Nationally, passes average 83.1 per cent.
The downtrend was flagged earlier in the month by Minister-in-charge of Muslim Affairs Yaacob Ibrahim.
Zuraidah is under no illusion that doing well in maths takes hard work and practice. But it is also important for children to get a sound grounding in basic skills from an early age.
This, she explains, was why Mendaki introduced a programme called Tiga M in 2004 to give kindergarten-age children and their parents a head start in understanding maths concepts, like how her neighbour helped her with the cards.
But Zuraidah says the effort will take time to yield results, as only 2,000 children have participated in the past five years. Community groups are working to enrol more families.
She outlines a host of other efforts being made by Mendaki and community groups to tackle stagnating maths grades. The majority of pupils who take part in these projects have seen their grades rise.
Since 2006, a one-day seminar has been held to motivate Primary 6 pupils and introduce them to exam strategies. Over 2,700 pupils took part this year and Mendaki plans to target 5,000 next year.
Maths workshops were held for Primary 5 students from 2007, and intensive PSLE maths sessions were started last year to help a select group of weak pupils.
This is where the usually calm CEO begins to lament the attitudes of some parents.
There are some 8,000 Malay pupils in an average Primary 1 cohort, she notes, but this year only about 400 enrolled in Mendaki's tuition scheme and another 300 attended classes where Mendaki paid part of the fees.
This low participation is barely enough to make an impact on the overall pass rate, she says with disappointment.
When Mendaki staff asked parents why they did not want to enrol their children, some said their children were busy on weekends. Others said they took pity on their children, who already had a tough time in school.
And when Mendaki invited 200 pupils who failed a pre-tuition test to join intensive maths classes for free, only 39 accepted. Out came excuses from those who turned down the offer: they felt sorry for their children, the children were tired.
“They have to prioritise,” Zuraidah says with exasperation. “They are depriving the child of opportunities!”
A similar sense of irritation was expressed by Yaacob, who is also Mendaki's chairman, when he lamented the plight of dysfunctional families in the community earlier this month.
There are an estimated 7,500 dysfunctional families in Singapore with no skills and jobs. One parent is often absent too, and a disproportionately large number of these families are Malay.
Zuraidah says her time at the helm of Mendaki has made her more convinced that the key strategy to help troubled families lies in making sure the children stay in school and enjoy learning.
“I thought I'd seen everything,” she says, referring to her 22 years with the police. “But every time I go on the ground, I'm surprised,” she adds, referring to the occasional visits Mendaki staff and volunteers make to areas where many needy Malay-Muslim families live to make sure no one falls through the cracks.
She speaks of homes with huge television sets but the family is unable to hold down a job and the children skip school.
What gives her hope is that there are also homes where the living room is stripped of furniture but young children are doing their homework on the floor while their single parents are out at work.
She believes there is no quick fix for broken families, and persistence is key.
Zuraidah reveals that when Mendaki and various community groups came up with a system to identify troubled families and provide them with comprehensive help two years ago, she thought the families could get back on their feet within three years.
After all, volunteer befrienders would visit them to offer support, and alert family service centres should issues arise.
But social workers told her the deep- seated nature of the problems facing such families meant it would take at least four to seven years before they could get back on their feet.
“I've come to realise that you cannot deal with one family the same way you deal with another,” she says.
Mendaki alone cannot do everything, she stresses. “We must work with others, and we do better by working with others. This is where we leverage on national resources, work with other agencies to get families all the help they need.”
It will take time, she says. But what if the family refuses to be helped?
Then it is high time that others step in and intervene, she replies matter-of-factly.
She relates how a school principal rang her in desperation last year as she was at her wits' end over a student who failed to turn up for classes.
For a whole month, the boy's teacher had been going to his flat to accompany him to school. On the 31st day, he assumed the boy would know what to do. But he did not show up for class.
The teacher turned up at his door at 9.30am, and the boy's parents were watching TV with him. They told the teacher he did not want to go to school, and they could not do anything about it.
“The teacher was disappointed, the principal threw in the towel. I said: You have already done a lot, let us try to help the family,” recalls Zuraidah.
She got two Mendaki officers to visit the boy's home right away. They gave the parents a shelling.
“The teacher was not Malay, but because we were a self-help group, our staff lectured the parents and told them off for not doing their duty.
“The parents were bo chap (Hokkien for couldn't care less),” she says.
Later the boy came up to the Mendaki staff and thanked them, saying he now realised his teacher just wanted him to succeed. The next day, he went to school.
That episode, Zuraidah says, shows that if parents refuse to be helped, the community has a duty to reach out to the child and empower him or her.
“If I am the neighbour or the relative, I should be the one hectoring the parents. Can we have more of that kind of pressure or persuasion?” she asks.
She also feels that the community needs to provide mentors for such children “because most of the time, the kids cannot rely on their parents”.
“They need a role model,” she says. She points to a five-year-old community programme, Youth-in-Action, in which volunteers organise activities for teenagers who are in danger of quitting school and mentor them to stay on and excel.
While many see them as youth at risk, Zuraidah prefers to call them youth on the brink of success, a term some agencies in the United States adopt.
The term makes a world of difference to the confidence of youth, she says, as they feel they are part of the community and want to make a contribution.
Mendaki is training volunteers to help youths by nurturing their strengths.
It has also started an empowerment programme to build the confidence of secondary Normal stream students by getting them to interact and even shadow Malay-Muslim women professionals.
Citing the growing pool of young professionals in the community as a plus, Zuraidah says Mendaki has invited some 80 of them from various fields to brainstorm ways to improve students' grades and tackle the problem of dysfunctional families.
The price of inaction could not seem less stark as the police officer in her takes over: “If you don't help them, they get in trouble with the law down the road.”
Comments (15)
...written by popuri, January 04, 2010 08:39:59
Singapore, my salutations to you. This is what I call educationist. What we have here are brainwashers.
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...written by strifus, December 31, 2009 18:06:20
The situation really hasnt changed since I was in Malaysia over 20 years ago. I was in a fairly prestigeous school in Penang, Getting in was no mean feat. Everyone there, except for a percentage of Malay students who were boarding there, had to score very well in their, at the time Standard 5 (i dont know what they call it now), test. In the 3 years that I was there, one main observation is definately obvious, and that is that the bulk of Malays score at the bottom half of the population of any year. Of course my friends in school were a mixture of Malay, Chinese and Indian boys. When someone asked a question of me about something, I would answer or in this case, teach/tutor. Now what amazes me is that of the Malays, of which there are only a handful, the ones that do well are the ones who have educated parents (ones that have been overseas to study). I myself studied in Australia and I know that most Malays who come here are actually good students. So, to say that any Malay child you might see in Malaysia isnt capable of doing better for themself is definately false. So, what is the main difference between say the Chinese student (who generally scores well in exams) and the Malay student? I think the answer is clear enough just by reading the article above. After 50+ years of spoonfeeding, it is the Malays who are still lagging behind in terms of education. I know that there are more educated Malays out there right now but if this article is to be believed, thimgs are just the same as they were 20+ years ago. I mean, Malaysia isnt like Australia or the UK, where a child can either live with his parents or not. Most children here start working for an income as early as 14-15 years old. Some, like the students from cattle stations, spend most of the year away from their families but yet still do well enough to get themselves into the university course of their choice or trade of their choice. One main thing is clear. If things are to change for the better for more Malays, they have to look towards the future. They cant just hide their heads in the ground and expect that the governement will always be there to dig them out of a spot. I learnt that the hard way. Its time that the Malays learn it too.
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...written by temenggong, December 31, 2009 17:07:49
A dedication to academic excellence is not (yet) a part of malay culture, as in the case of all muslim countries generally. This weakness contributes to general weakness in all areas leading to mediocrity. A pre-requisite for excellence is a free society and a culture of free enquiry, which is constricted by islam. That is the barrier to academic excellence. The problem will continue until all yokes are abandoned. Once they are able to question their religion and prophet, and seek answers elsewhere, the ascension to academic excellence would have begun. It is not happening as of now.
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...written by Navigator, December 31, 2009 15:56:26
This shows the Singapore government is more earnest about helping the Malays than the Malaysian Government. Why did our government not discover this weakness in the link? After all, they claim to be helping the Malays to make it. I think the government wants to have the constant excuse for the poor performance of the Malays. They only pay lip service to helping their community. All they really want is to make money out of them.
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...written by CoolMama54, December 31, 2009 15:30:04
Vertigo Cure, You take one excerpt and just turn it into a racist comment. Are you looking forward to the downfall of the Malays? What is your objective in saying those things? Was it supposed to inspire change and hundreds of thousands of Malays will suddenly wake up, especially with that tone and attitude? What if the Malays, who are actually against racism, suddenly wake up and realize that when they actually make it on their own, idiots like you will never ever give them any credit, and instead will be vengeful? Does that make you feel better? You do realize that the article is not about racism, but like Amzek said "good community spirit", right? Or is your poor command of English still failing you? I thought I told you to get some good English lessons...
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...written by Vertigo Cure, December 31, 2009 14:29:24
when Mendaki invited 200 pupils who failed a pre-tuition test to join intensive maths classes for free, only 39 accepted. Out came excuses from those who turned down the offer: they felt sorry for their children, the children were tired.
This sums up the attitude of many Malays in general. Of course, not all Malays are not progressive but as you can see only about 20% are more serious about doing well in schools. I can bet you that if that is offered to the Chinese, at least 80% will take up the classes. Not only the Chinese are serious about education, the other Asian nations like the Koreans and the Japanese are probably even more serious about education. And the results show... When statistics show that Malays are not doing well in education as compared with the other races, those idiot ultra Malays in Bolehland will start screaming that Malays are marginalized in Singapore. They are just like the parents in the above article watching TV with the child rather than sending him to school. If you are non progressive and expect free lunches, then don't blame others for your own failures. Worst still, the boleh gomen is using this weakness and other discriminatory racist policies to advance their political agenda. The sad thing is that there are too many ultra Malays, stupid and corrupted Non Malays in Bolehland to support the BN/Umno agenda.
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...written by sydput, December 31, 2009 14:20:08
Malays don't need maths to be succesful. All they need is a guitar and a drum set. Unfortunately, the talibans ban them from performing live and music is not a curriculum in the ducation system, so they cannot make a living in music. End of the day, race motorcycles as no surf beach in the country. If they were born in UK, they would be millionaires in music or football.
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...written by Amzek, December 31, 2009 12:38:24
This article is from a Singapore paper la....not NST! sheesh...dont ppl even read and understand the articles first before commenting?
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...written by bambooman, December 31, 2009 11:56:12
well the govt has made up its mind.....they ( umno and its NGOs ) have decided to keep to its bahasa melayu in science and maths.........so that they can keep their malays at bay!!!!......let them be happy then.......we look elsewhere for development!!!!!........keep it simple and smart!!!!
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...written by wongnoball, December 31, 2009 11:53:13
NSTP...UTUSAN..BErita...Nanyang...STAR...Seng Chiew.....All Jambanlist first and foremost...I am beginning to get weary of their Psychological War Games they are playing on Malaysian. This is how I expose them... #1 Start with Heart wrenching story (that is to hook you in) #2 Then Focus on the Racist Race in question to show how hapless, weak, dumb, stupid, tidak apa (this is to tell you more MORE MORE help is needed and only UMNO racist can deliver...ala NEP Forever) #3 Then another good example of Islam linked to this Hapless race and Wah-lah ...success cometh when religion linked to race and the whole Lembu episode, Hina Islam, Ketuanan and their No shame -No Maruah claim of their stolen bumiputera status from Orang Asli come to play like Magic. #4 Then start their Social Justice Crap in Pakatan states that people are Neglected and they regim Ganas Kejam UMNO-BN are the ones to look after ALL. That is why if there is Fireworks near their Printing Sites and there is smoke......Malaysian will not be worst off.. All MS write and report Jambanlist material......all thinks 2010 is like 1910......think again...disrupt disrupt disrupt all UMNO Tolls....Be a great Mat Kilau!!
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...written by Amzek, December 31, 2009 11:52:09
Dont read the article as about the Malays in SIngapore. It is actually about good community spirit. This scenario exists everywhere - Malaysia, India, Europe even USA. I would like to imagine that the same spirit is alive and perpetuating everywhere in Malaysia.
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...written by rpk020608, December 31, 2009 11:32:28
A tale of 2 countries. Started at the same time One country – did not care about race and wanting to an individual to success not based on religion, race and social economic standing. With the full backing of their education minister and Minister-in-charge of Muslim Affairs En Yaacob Ibrahim. The other we all know too well as a Malaysian. The final results has shown itself and proven ... with the education we leave our children with will be determine the future and success of the country. I have known many smart Malaysian at the age of 15 years old (given ASEAN scholarships to go Singapore) and never came back to Malaysia … that was 20 years ago. today most of them are top CEO, Managers in the world. Still not too late to change how we educate our children in Malaysia.
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...written by SiHangChai, December 31, 2009 11:24:53
Dear Zakir, STOP propanganda such education issue to fish sympathy for Malays. This is happening globally. What Spore did is a matter of survival for its citizens. Unlikely Malaysia who is still spoon feeding and spoiling with free and subsidies to Malays, do you think the rich Malays especially in UMNO in Malaysia really care about the poor Malays? When will the mentality of our people going to change on relying self-dependency than govt 100%? I hope our Malay friends dont be like katak di bawah tempurung and still at their comfort zone. The western investors are going to eaten us up soon under poor Najib's administration. You want to fight, fight strategically and not 100% on govt assistance.
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...written by Ken Liew, December 31, 2009 11:16:06
Study hard... u will get the mark in return. You must work for your effort to show good marks. It is an era of BRAIN POWER... Previously u can use your strength to work. Now, u need a BRAIN. While Malaysia education is going backwards. Have not EVOLVE at all. As some of the mini-sir, you dont need a good brain to sit the seat. Ya, They want the future generation to be as stupid as themselves are. so that they wont be out-clever then the young people.
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...written by batsman, December 31, 2009 10:49:57
It is a multi-facetted problem - even in Britain, it has been found that working class families have little or no chance of social mobility even after many generations. Such a problem cannot be solved by giving bumiputra privileges. In fact bumiputra privileges will tend to sabotage the hard core poor even as it gives excessive and wasteful opportunities to middle class families. All this is a waste of human and financial resources of the country. The problem of social mobility is a long term problem and corruption and waste will only make it worse.
Reasons for Japan’s Success in 20th Century (post-war Period)
Reasons for Japan’s Success in 20th Century (post-war Period)
by admin on January 4, 2010
Reasons for Japan’s Success in 20th Century (post-war period) Japan was on the losing side in the Second World War. This circumstance, however, did not prevent it from scoring spectacular success in the post-war period. Japan’s economic recovery and its advance to the forefront of global economic development have bee hailed as a miracle. This miracle is nevertheless rooted in important factors that spearheaded the nation’s progress.
One of the factors was Japan’s commitment to export-oriented manufacturing that would provide the world with high-quality goods. The export drive had “humble beginnings” in the Meiji Era (1868-1912) when “raw silk was a major foreign-exchange earner” . This progress continued with the manufacturing of textiles, and at this point Japanese goods were notable for low added value and a perception of low quality. This perception disappeared after the war as Japanese enterprises “churned out a dazzling array of consumer and industrial products” that won a reputation for low incidence of defects, easiness in use, incorporation of cutting-edge technologies, and moderate prices .
In particular the introduction of advanced research and progressive technologies made Japan one of the leading producers of hi-tech goods and consumer durables including all kinds of electronic appliances and electronic components such as semiconductors. Recently, Japan has become a pioneer in the production of digital products and today’s best-sellers including “flat-panel TVs, cell phones, digital cameras and DVDs” . Japanese goods that rely on advanced technologies allow the nation to include high added value in its products and to sell goods in a variety of markets, despite high labor costs .
Another reason why Japan was able to become one of the leaders in the industrialised world is the traditionally high savings rate of the nation. Thus, in 1987, according to the data from Bank of Japan Comparative International Statistics 1989, the Japanese savings rate was 15. 1% in comparison to the US rate of only 6. 6% . Private savings created a stream of funds for financing business ventures, which Japanese capitalists were able to transform into business projects. Most analysts would agree that “private savings, which banks and other financial institutions in turn lend to expanding businesses, are extremely important for economic growth” . The Japanese are also hard workers, a fact that has contributed to economic growth. On this, they outstrip even Americans, traditionally assumed to be among the world’s most industrious nations. Thus, according to the 1987 report from Japanese Ministry of Labor, an average worker in a Japanese plant spends 2168 hours annually in the workplace as opposed to the US average of 1949 hours . Willingness to work hard and to put in extra hours has contributed to the high output of Japanese factories.
The development of the capitalist state in Japan and rebuilding of the economy in the post-war era was greatly assisted by the blending of state and government institutions. In Japan, the tradition of margining government and free-market structures dates back to the 1870s when the government, in an effort to resist the advent of the Western large business, undertook a more decisive role in “determining what is produced and allocates capital through control of the financial system” . Rejecting the laissez-faire capitalism of the West, the Japanese, earlier than in the Western states, adopted strong government regulation of the economy.
This regulation to a great degree determined the strategic development of the nation. The Japanese government, for instance, targeted economic development at a few key areas that received great state assistance, helping the nation lead the world in the production of aluminum, ship building, and rayon . The practice of favoring certain industries before others continued in the post-war times, giving Japanese companies competitive advantage over others, whose governments did not seek to promote these industries. The promotional policies were combined with strong protectionist trends that shielded domestic industries from foreign competitors, including tariff and non-tariff barriers including environmental or consumer legal regulations . The political stability that was caused by the continuous election of the members of the Liberal Democratic Party in the years accompanying the recovery contributed to political stability that helped growth .
Close involvement of the state in economic development allowed Japan to prepare a highly skilled pool of bureaucratic employees who could exercise power with authority and competence. This skilful pool of educated administrative workers allowed the nation to hone in policies to the changing environmental conditions. In most market economies, for instance, in the US relatively low-paid public service fails to attract a pool of talented applicants, while most talented people go to the private sector. In contrast, in Japan, officials of the elite economic ministries and agencies are vested with prestige and authority . As a result, “these official agencies attract the most talented graduates of the best universities in the country, and the positions of higher-level officials in these ministries have been and still are the most prestigious in the society” .
Japan did not only seek to promote its position by relying on high-profile knowledge workers and bureaucrats to advance the most sophisticated industries. It also became prominent as modern industrialized society that relies on fast and efficient mass production of standardized goods. This was partly made possible by the Japanese culture that promotes cooperation in output of fast and reliable goods. Since the 19th century, the national school system “was built up to foster highly patient and cooperative people with minimal originality and creativity, perfectly suited for working in standardized mass-production industries” . Tokyo became the hub for research and development activities as well as information sharing, while these developments were quickly transported to the provinces where they were translated in large-scale mass production projects . Efficient flow of information secured the production of products to virtually identical standards across the nation . In the production of automobiles and electric appliances, Japan was able to achieve unprecedented efficiency.
The success of Japan was also aided by the favourable demographic situation that supplied Japanese employers with a supply of well-trained young workers in the 1950s-1960s. High growth rates in Japan’s farm population that accounted for half of the nation’s population created a surplus of farm workers willing to relocate to urban environments and find employment in factories. High education level at Japanese schools ensured adequate preparation level of these high school graduates. One more factor in the success of the Japanese economy is the national practice of Idokotori, which means “to take or copy what is best for one (without hesitation)” . The Japanese haws always been alert to whatever achievements appeared in other nations and willing to copycat those achievements, transplanting them into the Japanese soil. An example can be the automotive industry that was born in the West and then was adopted in Japan and developed to a point where the Japanese are nearly global leaders in auto production . Idokotori was a mindset that allowed the Japanese to propel their economy in a short while.
In conclusion, the Japanese economy made significant advances in the twentieth century. The nation became a leader in many technological, advanced industries, leading the world in electronics, high-tech industries, production of home appliances and auto making. Although at the moment, the Japanese economy is in a state of decline, peculiarities of the national mindset and sound economic base can help Japan make a comeback.
Produced by ProfEssays ( www. professays. com ) – professional custom essay writing service: custom essays, custom term papers, custom academic papers, custom research papers, compositions, book reports, case study. No plagiarism, high quality, prompt delivery.
by admin on January 4, 2010
Reasons for Japan’s Success in 20th Century (post-war period) Japan was on the losing side in the Second World War. This circumstance, however, did not prevent it from scoring spectacular success in the post-war period. Japan’s economic recovery and its advance to the forefront of global economic development have bee hailed as a miracle. This miracle is nevertheless rooted in important factors that spearheaded the nation’s progress.
One of the factors was Japan’s commitment to export-oriented manufacturing that would provide the world with high-quality goods. The export drive had “humble beginnings” in the Meiji Era (1868-1912) when “raw silk was a major foreign-exchange earner” . This progress continued with the manufacturing of textiles, and at this point Japanese goods were notable for low added value and a perception of low quality. This perception disappeared after the war as Japanese enterprises “churned out a dazzling array of consumer and industrial products” that won a reputation for low incidence of defects, easiness in use, incorporation of cutting-edge technologies, and moderate prices .
In particular the introduction of advanced research and progressive technologies made Japan one of the leading producers of hi-tech goods and consumer durables including all kinds of electronic appliances and electronic components such as semiconductors. Recently, Japan has become a pioneer in the production of digital products and today’s best-sellers including “flat-panel TVs, cell phones, digital cameras and DVDs” . Japanese goods that rely on advanced technologies allow the nation to include high added value in its products and to sell goods in a variety of markets, despite high labor costs .
Another reason why Japan was able to become one of the leaders in the industrialised world is the traditionally high savings rate of the nation. Thus, in 1987, according to the data from Bank of Japan Comparative International Statistics 1989, the Japanese savings rate was 15. 1% in comparison to the US rate of only 6. 6% . Private savings created a stream of funds for financing business ventures, which Japanese capitalists were able to transform into business projects. Most analysts would agree that “private savings, which banks and other financial institutions in turn lend to expanding businesses, are extremely important for economic growth” . The Japanese are also hard workers, a fact that has contributed to economic growth. On this, they outstrip even Americans, traditionally assumed to be among the world’s most industrious nations. Thus, according to the 1987 report from Japanese Ministry of Labor, an average worker in a Japanese plant spends 2168 hours annually in the workplace as opposed to the US average of 1949 hours . Willingness to work hard and to put in extra hours has contributed to the high output of Japanese factories.
The development of the capitalist state in Japan and rebuilding of the economy in the post-war era was greatly assisted by the blending of state and government institutions. In Japan, the tradition of margining government and free-market structures dates back to the 1870s when the government, in an effort to resist the advent of the Western large business, undertook a more decisive role in “determining what is produced and allocates capital through control of the financial system” . Rejecting the laissez-faire capitalism of the West, the Japanese, earlier than in the Western states, adopted strong government regulation of the economy.
This regulation to a great degree determined the strategic development of the nation. The Japanese government, for instance, targeted economic development at a few key areas that received great state assistance, helping the nation lead the world in the production of aluminum, ship building, and rayon . The practice of favoring certain industries before others continued in the post-war times, giving Japanese companies competitive advantage over others, whose governments did not seek to promote these industries. The promotional policies were combined with strong protectionist trends that shielded domestic industries from foreign competitors, including tariff and non-tariff barriers including environmental or consumer legal regulations . The political stability that was caused by the continuous election of the members of the Liberal Democratic Party in the years accompanying the recovery contributed to political stability that helped growth .
Close involvement of the state in economic development allowed Japan to prepare a highly skilled pool of bureaucratic employees who could exercise power with authority and competence. This skilful pool of educated administrative workers allowed the nation to hone in policies to the changing environmental conditions. In most market economies, for instance, in the US relatively low-paid public service fails to attract a pool of talented applicants, while most talented people go to the private sector. In contrast, in Japan, officials of the elite economic ministries and agencies are vested with prestige and authority . As a result, “these official agencies attract the most talented graduates of the best universities in the country, and the positions of higher-level officials in these ministries have been and still are the most prestigious in the society” .
Japan did not only seek to promote its position by relying on high-profile knowledge workers and bureaucrats to advance the most sophisticated industries. It also became prominent as modern industrialized society that relies on fast and efficient mass production of standardized goods. This was partly made possible by the Japanese culture that promotes cooperation in output of fast and reliable goods. Since the 19th century, the national school system “was built up to foster highly patient and cooperative people with minimal originality and creativity, perfectly suited for working in standardized mass-production industries” . Tokyo became the hub for research and development activities as well as information sharing, while these developments were quickly transported to the provinces where they were translated in large-scale mass production projects . Efficient flow of information secured the production of products to virtually identical standards across the nation . In the production of automobiles and electric appliances, Japan was able to achieve unprecedented efficiency.
The success of Japan was also aided by the favourable demographic situation that supplied Japanese employers with a supply of well-trained young workers in the 1950s-1960s. High growth rates in Japan’s farm population that accounted for half of the nation’s population created a surplus of farm workers willing to relocate to urban environments and find employment in factories. High education level at Japanese schools ensured adequate preparation level of these high school graduates. One more factor in the success of the Japanese economy is the national practice of Idokotori, which means “to take or copy what is best for one (without hesitation)” . The Japanese haws always been alert to whatever achievements appeared in other nations and willing to copycat those achievements, transplanting them into the Japanese soil. An example can be the automotive industry that was born in the West and then was adopted in Japan and developed to a point where the Japanese are nearly global leaders in auto production . Idokotori was a mindset that allowed the Japanese to propel their economy in a short while.
In conclusion, the Japanese economy made significant advances in the twentieth century. The nation became a leader in many technological, advanced industries, leading the world in electronics, high-tech industries, production of home appliances and auto making. Although at the moment, the Japanese economy is in a state of decline, peculiarities of the national mindset and sound economic base can help Japan make a comeback.
Produced by ProfEssays ( www. professays. com ) – professional custom essay writing service: custom essays, custom term papers, custom academic papers, custom research papers, compositions, book reports, case study. No plagiarism, high quality, prompt delivery.
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