I'm back from Bangkok and it was a fun-filled trip! Put on a full 3kg, but I'll lose it in no time in sunny Singapore. I know I was supposed to be scribing my Thanksgiving entry, or even about Bangkok, but there's something that's running through my head that I wanna get it out.

I'm gonna put it here for now. Someday in the future, as I become more experienced and knowledgable, perhaps I'll read back and see how much truth I have, if any.

We all know money makes the world go round. We absolutely cannot live without money. After the trip to Bangkok, and to Saigon earlier this year, I've been exposed to something which is largely absent in Singapore. Poverty. Actually, it is alot more evident in other countries, like China and even Australia too, where there are alot more homeless people there than in Singapore. Poverty is caused by different reasons, in China and Thailand I would expect it to be the developing economies and the relative lack of wealth compared to the developed nations. In countries like Australia and USA it might be due to social security/welfare payments which allow poverty to be a viable option, economically, and thus to be a possibly lifestyle.

At any rate, I was just thinking that if the King of Thailand could somehow give money to the poor, then wouldn't it be alot better? It struck me how poor people could be in Thailand and yet still adore their King. Compare that to Singapore, where Lee Kuan Yew continues to be opposed despite what he's done for us, and seeing how people seek to vote against him just to provide some opposition. Well, politics, and leave that to the older generation who's been through the tough times and seen more than just propaganda. I'm talking about economics.

At his height, Bill Gates was the richest person in the world with a net worth of $54billion USD. He donated half of that to charities, a whopping US$27billion. It would be so easy to wish that the rich, whom we all know consist of 10% of the population owning 90% of the wealth, to just give to the poor. But that is hardly an acceptable solutuion, if you think about it carefully. It all boils down to meritocracy. In a free economy, we are all rewarded for merits of talents, innovation and hard work. This reward comes in the form of money. That's how the rich got to where they are: by either working hard, working smart or being good at what they do.

Imagine if the rich were expected, or even regulated, to give to the poor. Now, making a simplistic assumption, we assume that the rich deserve their wealth and the poor deserve their poverty. Giving money to the poor devalues money, because money is in this case a measure of meritocracy. So if such an expectation were to ensue, we would then realize that there exists less incentives to be good, creative and diligent, because there isn't sufficient reward for that.

Now, that sounds alot like one of the best example in history about how ideals are best left to be ideals: communism. Trying to make everyone equal when they are not is never going to work. People aren't equal. You can give them equal sex, talents, physical attributes and what not, and they will still vary in work ethics, probably due to the free choice that humans possess. They would have to be robots to be equal. So, if you think that rich giving the money to the poor is the solution to poverty, then you are thinking the same way Lenin did.

But wait, there is a catch. The rich do give to the poor, and many may argue that they reap benefits from doing so, hence it is a form of investment. Because if money is a pure and unbiased estimator and indicator of merits, any such donations would have an impact on the economy, probably push inflation rates up. I'm far from being well-read, but I don't think significant donations are significantly correlated with inflation rates. So what's the problem then? We all know that the rich get richer. Why's that? Because money is in itself a biased indicator of merits. While it does measure, and is the best reward for merits, it isn't unbiased at all.

Some people don't really deserve to be rich (think inheritance), while others don't deserve to be poor (think disabilities), and this extends to countries as well (think oil producing countries). Society does not allocate money, a vital resource, that efficiently. Portfoilo managers make more than most brain surgeons. Why's that? Brain surgeons probably bring more benefits to the society. The thing is, money has an incremental effect. As you get richer, you make more money. Hence the saying the rich get richer. Money has magnitude.

Now, imagine a planned economy where money, or perhaps some other resource, but we'll use money, is to be an unbiased indicator and reward for merits. To achieve such a scenario, money must not have any time value at all. A dollar today should be worth a dollar in 20 years. But that would defeat the purpose of forgoing consumption all together, and people will just spend as much as they can right away, wouldn't it? No, imagine a real risk-free rate of return of 0%. The risk-free interest rate would be offset by inflation, and thus the resulting real risk-free rate is 0%, meaning that there is no return to holding money. Of course, money could be invested to earn a return better than risk-free, but it would be risky, and the expected return should be zero for any form of investment. To be even more radical, imagine money being controlled in a way that no investment is possible, that a single monopoly controls all flow of money, that any consumption will be made through this monopoly, a government, perhaps. That means that this government will sell you everything you wish to buy, houses, cars, food, shares, etc. Regulation will be in place to ensure that wealth cannot be transferred between individuals easily, except to ensure that only consumption is possible. This is alittle too radical, and I'm sure an experienced economist would be better equipped to mull over this. Just think of CHOAM in Dune or perhaps Comstar in Mechwarrior.

Where am I leading to with all these? I'm not too sure. All I'm saying is that if there was a way to make sure that money was not worth money in itself, that you were rewarded for your efforts with money that you cannot invest to earn more money, then perhaps poverty may be eliminated. Well, not eliminated, but justified; someone who is poor may probably deserve it. And that means welfare payments will be eliminated. Maybe this will cause the poor to more actively seek employment to fend for themselves. Of course, this has to be tempered with the humanitarian side of things: the disabled have to be cared for as a pure survival of the fittest rule will mean sacrificing our humanity.

I really wish I would read more, but right now all I can do is to make vague references to novels like Brave New World, where governments had alot more control over the economy than they do now. Those are drastically radical and I would expect requires alot of circumspect analysis to even reconcile. All I know is that perhaps economics is maligned for being saturated or impractical, that its effects are far-reaching and outlive any human, and thus it is definitely deeper than it seems. The only thing I can safely conclude is this: perhaps money is not the best medium to be using if we seek to achieve an efficient economy. Seeing how a truly free market can cause societal problems too, perhaps what all economists should be doing is to establish a better unit for measurement of resource allocation.

I know this inspiration is only gonna last a day before I get bored and move on, but hey, it was fun just entertaining this thought and writing it out.