Tharman Shanmugaratnam

DPM Tharman’s speech on CPF is not just economics but also politics

By Chris Kuan

I like to refer to Donald Low's post in which he wrote that he was puzzled by conceptual points raised by Deputy Prime Minister (DPM) Tharman Shanmugaratnam's speech on the Central Provident Fund (CPF) and social security at the Economic Society of Singapore (ESS) dinner.

Not going into the specifics here but I wish to raise a very important point - Mr. Tharman is not talking purely economics, he is also talking politics. As a politician, his speech will invariably be biased towards the ideology of the party he represents, hence Mr. Low's puzzlement of conceptual point and disagreement with what Mr. Tharman said. This came out most clearly (which I wrote about the other day) when Mr. Tharman claimed that CPF is comparable or superior to other pensions system once we unlocked the value in our houses. We should not delude ourselves that Mr. Tharman is neutral or that he is speaking dispassionately. No, he speaks with a very clear political bias as one would expect from a minister of the government.

Unless one is writing economic papers that see light of day only in peer reviews, economics is intensely political, much more so when ideas and strategies are pushed to be adopted as policies at various levels. The truth of the matter is that every economic issue, problem or conundrum can be approached from more than one angle.

One can say there is a conservative angle, i.e. the People's Action Party's (PAP)'s or a liberal angle, something that Mr. Low himself occasionally represent through his writing. There is no one and only definitive solution because every solution has positive and negative consequences. It is the politics of the day that decide whether the positives sufficiently outweighs the negative and which angle to adopt.

One can easily be tempted to say that Mr.Tharman like the other PAP leaders are playing with words to reframe or dress up a difficult issue in a favourable light. But this is a fundamental fact of democracy - politicians will always speak with a bias towards their party's ideological position. When issues are difficult they speak with a tendency to "give appearance of solidity to pure wind." to paraphrase Orwell.

We are naive if we think otherwise. Of course, all this means the present socio-political situation in which the PAP control the media and coopted much of academia etc, is extremely unhealthy because there are very few if any substantive debates of competing or alternative policy choices and economic trade-offs.