In my last article (“A ‘worldview’ portfolio approach to national resilience”, The Edge, June 1), I borrowed an idea from a podcast, Philosophers in Space — which, in turn, borrowed it from another podcast — that can be thought of as a “portfolio of worldviews”.
According to Holden Karnofsky, who discussed this idea on the Ezra Klein podcast, philanthropy should be guided by a “portfolio of worldviews”. Since it is often unclear which moral framework or “worldview” is best, we should allocate resources across several plausible worldviews.
I thought it would be neat to apply this “portfolio of worldviews” idea to public policy, particularly with the need to build national resilience. To start, it is worth repeating the appropriate definition of “worldview”, namely, a theory of change of how societies or nations coordinate resources, solve collective problems, and, ultimately, generate societal welfare. This may include moral philosophies, developmental theories and institutional preferences.
The general approach here is that while we can get lost in the weeds in debating which worldview is “right”, we start with, “What if we’re wrong?” In the event that any single worldview may turn out to be wrong, we should consider a portfolio of worldviews or theories of change instead. This idea is not too dissimilar to investing, after all — you could just put all your money into a single asset, or you could diversify your portfolio by investing across assets, though, given today’s equity markets, it seems nearly every incremental dollar invested in an index fund, which is supposedly diversified, is effectively a bet on the American artificial intelligence ecosystem.
Anyway, much like tools in a toolbox, different worldviews can be applied to different situations — we do not have to be a hammer looking for nails all the time. So, here are some ideas that we may experiment with and let the (cultural) evolutionary process figure out what might work best, bearing in mind that what succeeds in Environment A may not fare nearly as well if conditions shift dramatically and we find ourselves in Environment B.
Worldview I — Can we have a ‘free’, or at least a ‘freer’, market for ‘older’ industries?
As I mentioned in my previous article, Malaysia’s most common theory of change, at least when it comes to what is actually implemented versus what is said, is that state intervention is often necessary to generate “good” outcomes. Now, what if we are wrong? What if, because we liberalised some parts of the economy which, historically, have been somewhat protected, overall welfare improves? In particular, here, I am thinking about industries that have grown on the basis of decades of protectionist measures, of licences, of concessions and so on (for ease, let’s just call them “rents”). Natural monopolies are probably the exception, but do we need to protect rents in things such as power production, automobile production, commodity importing and property development? Much like how India’s economy grew significantly after the dismantling of the “Licence Raj” in 1991, maybe that can be us, too.
Worldview 2 — Having said that, I think there is room for a Developmental State
It is obvious from my previous articles — if you have read them, thanks! — that I am no market fundamentalist. I think that markets fail more often than we think, and in particularly important ways, too. I also think that if every country produced according to their comparative advantage, then poorer countries (low-cost labour as comparative advantage) would remain poor and richer countries (technology as comparative advantage) would remain rich. In that world, there would be little room for economic catch-up. Thus, in industries whose “moats” are based on intellectual property and networks and that have a chance to make us key players in a given supply chain, the developmental state is necessary. We therefore must be strategic about our allocation of resources — trim our allocation to the old and increase our allocation to the new. Be penny-wise about the old, but do not be pound-foolish on the new.
Worldview 3 — Maybe we should streamline education and healthcare to, one day, have only ‘public’ healthcare and education
Okay, before all the protests, let me say this — I think a healthcare system that is both public and private makes sense at present. And I am aware that many families turn to private education and healthcare providers because they find the existing systems inadequate, which, as we all can acknowledge, do continue to face difficult challenges. Thus, improving the status quo and having a public-private system seems sensible. But, coming back to the point of this exercise, what if we are wrong? What if, one day, the disparity between public and private services becomes so large that it further bifurcates social inequality? How is that, at all, a blueprint for a resilient economy? It should almost be an axiom that any resilient economy provides sufficient public goods for its constituents. And I am not saying shut down all private institutions, but maybe let us tax them a bit more and channel those taxes to, say, increasing the wages of all healthcare and education professionals in the public system. I do not know whether this idea works, but if we are going to experiment, I would rather experiment with a public goods system that really focuses on the “public” instead of the “goods”.
Worldview 4 — Can we move away from worrying about the ‘perfect’ targeting of cash handouts?
There will always be unintentional leakages. I once had an exchange on Twitter where someone asked me whether I was fine with the CEOs of all listed firms in Malaysia receiving a cash handout. And I said something like, “There are [at the time] 900-plus listed firms. I would rather 900-plus CEOs accidentally get a cash handout than have 830,000 households (10% of households) accidentally not receive the handout,” but in 140 characters. Let us just let it go and worry more about false exclusion than false inclusion.
Worldview 5 — So, how participative do we really want to be?
When people argue that price-setting in a given market is best done by market forces, as opposed to centrally controlled prices (maybe except in some extremely unique circumstances), it is because they believe that only from series after series of aggregated bottom-up exchanges can there be real price discovery. If you do not know the price of eggs or kangkung in the market, how can you set prices centrally? I wonder whether this should apply as well to public policy. It definitely makes sense for some things to be determined federally, but from the bottom up, more granularity in specific policies may be helpful. Tackling problems from the ground up helps build more resilient local communities; and aggregated across the country, those efforts may also help build a more resilient national community. It may very well be time for us to reconsider the re-introduction of local elections.
If I have written this properly, there should be disagreements with each of the worldviews I discussed and their applications thereof. But that is kind of the point of the exercise. Remember that “evolution is cleverer than you are”. We build resilience not by doubling down on one or two particular worldviews — the failure of those worldviews to hold in a volatile world (moving from A to B, let’s say) leaves us vulnerable like the Death Star — but by trying out different theories of change in different policies and seeing what seems to work. Doing so requires moving from “Your idea makes no sense” (true sometimes, of course!) to “What if we’re wrong?”