The topic of competition has recently attracted much academic vitriol as a result of its perceived role in societal dysfunction, widening income gaps, insecure employment and of course, skyrocketing stress levels.
In Singapore, the voices of people decrying competition as unfair, un-meritocratic and unfairly favoring the elite increases in decibel with every passing day. Admittedly, such assertions may be accurate to Singapore, if only due to the perverse nature of the local system.
Free competition is inherently productive and desirable. But government intrusion into both the economy and civil society has culminated into a form of competition based upon arbitrary terms determined by the State and not a free society.
In this article, the competition for ideas and the competition for retirement fund management will be discussed. Both areas of competition are stark examples of how the State plays a huge role in distorting free competition to its own ends.
Competition for ideas
According to World Press Freedom Index 2014, Singapore jostles with the likes of Congo and Philippines for a most unflattering 150th position out of 180. To see countries with questionable international reputations such as Afghanistan and Russia several notches above does a huge disservice to Singapore as a developed country boosting a highly educated citizenry.
Recent controversy surrounding the ban (now relocation) of select books by the NLB with the blessings of the State and heavy-handed regulation by MDA in prohibiting the screening of an apparently “self-serving” film led to uproars which subsided as quickly as they arose.
A liberal media and arts scene creates the foundation for a battle of ideas and viewpoints. State censorship and regulation simply results in a monopolization of ideas by those who control the State apparatus. Such monopolizations tend to be executed in the name of an arbitrary “public morality”, a favorite excuse by politicians in recent years.
By limiting what John Stuart Mill coined “the marketplace of ideas” through stringent media regulations and censorships, the only ideas that can thrive are those championed by the people in control of the State apparatus. Competition can hardly exist in such an environment.
The hallmark of any enlightened and discerning citizenry is that of a liberal and unregulated media. To reason and rationalize any involvement of the State is simply an admission of the individual’s incapacity to think. For instance, logically speaking, few would turn to communism upon watching the prohibited film To Singapore With Love, given the ideology’s tainted past.
A recent study by DBS, of which sovereign wealth fund Temasek Holdings directly and indirectly owns 29% of, found that Singaporeans are generally ill prepared for retirement. To quote the article directly, it says that the “majority of Singaporeans do not have a financial plan for retirement, are afraid of planning ahead and need more than they estimate to retire”.
To stay within topic, let’s for the moment not elaborate on why any individual who saves up to 37% (inclusive of employer contribution) of his monthly income still somehow finds himself unable to retire comfortably.
Instead, let us examine the competition, or lack thereof, for the provision of retirement plans amongst private insurance firms. Because CPF consumes the majority of plausible retirement savings, insurance firms in Singapore logically tend to cater mainly to supplementing CPF instead of replacing it.
Generally, it will be also highly improbable that a typical middle class employee would be able to afford more than a single retirement plan.
Consequently, the lack of demand leads to policies that tend to favor the insurer more than the insured. And all these due to the lack of competition as potential insurers find Singapore’s retirement insurance market both limited in scope and too small to operate.
With essentially stagnant wages and consumer prices that persistently increase or at best stagnate even with falling crude prices, expecting Singaporeans to sign up for retirement plans beyond a mandatory (yet seemingly insufficient) CPF only draws questions to the usefulness of CPF as a retirement scheme.
There is zero rationale for CPF’s existence if it is deemed insufficient for retirement. Even if CPF is deemed too valuable a conduit towards financing GIC’s headline-worthy purchase of properties overseas to abolish, we ought to remember the true purpose of CPF.
The vision of CPF, as stated on its webpage is to be “a world-class social security organization enabling Singaporeans to have a secure retirement”. Giving GIC a continuous stream of investment funds is not mentioned at all.
If CPF is considered both inadequate as a retirement scheme while ostensibly and unfairly competing with independent retirement schemes for private funds, its existence should be annulled immediately. It is henceforth disappointing that the overriding consensus is for the scheme to be tweaked instead of abolished.
Tackling the root of the problem
To see nothing being done to remedy such a sorry state of affairs is both depressing and disconcerting. Recent parliamentary meetings appear more concerned with issues involving grass-cutting, shisha banning, introducing unnecessary regulations for taxi applications and postal rate increases.
The dominant political party has indeed hijacked the general political intuition. The average voter now assumes they are either pro-PAP or pro-WP (or pro-opposition).
A cursory glance across the manifestos of local political parties merely differentiates the degree of which the said party would seek to control the country. Few, if any, champion a truly liberal society.
In truth, the political dichotomy is not about being pro-PAP (incumbent) or pro-WP (opposition). Instead, lines are better drawn between those who desire and seek independence against those who prefer living lives of dependency and subjugation.
That is, you are either pro-freedom or pro-government. In the former, individuals compete fairly in the “market place of ideas” for a dominant position. In the latter, the State decides the rules and changes them arbitrarily to suit its needs and beliefs.
It is indeed understandable that many have become disenchanted with the idea of purebred capitalism and meritocracy, both systems of which competition is the driving force. But the Singapore system has never truly exhibited pure capitalism and meritocracy.
Now that we have experienced how State management typically fails to succeed, perhaps we should give a laissez-faire society a chance to prosper.