This article first appeared in Forum, The Edge Malaysia Weekly on March 1, 2021 - March 7, 2021

2020 was a year of pandemic, protests, politics and failed policies. What went wrong and what can be done about it?

Political scientist Francis Fukuyama dissected these issues and concluded that American politics is “Rotten to the Core” (Foreign Affairs, January 2021). The deep and complex polarisation arose because the Democrat and Republican worldview and values have grown apart, even as the gulf between the US’ and China’s worldview and values have widened.

Harvard Business School strategist Michael Porter, who saw politics as a business of duopolistic competition, argued that “the opposing parties divide up the customers (voters) by ideological and partisan interests”, but “rather than working to bring citizens together to further the public interest, each party demonises the other parties’ supporters and their views”. Furthermore, “the politics industry is different from virtually all other industries in the economy because the participants, themselves, control the rules of competition”.

Political polarisation has become universal, applying equally not just to the US-China competition, but also politics in Malaysia, with collective action traps that seem to worsen over time.

Since the US has the best political science brains and think tanks, why isn’t it able to get out of this trap? Brandeis Professor Deborah Stone may have put her finger on the issue of policy paradoxes, which she defines as something that can’t be two different things at once.

Life is full of paradoxes and politics is the mechanism to resolve many of the conflicts between the different interest groups within the nation and even with foreigners. Such interests include religious, race, culture, financial and sectoral views. However, politicians are advised on policy by bureaucrats, and almost all policymakers, public administrators, lawyers and economists “aspire to make policy with rational, analytical and scientific methods”.

They assume that, because everyone learns logic and rational thinking in school, their expert, specialist and scientific policies must be right. So when policy is formulated on the basis of rational human beings, the politicians face a policy paradox — the paradox that they have a conflict between delivering the policy as recommended and being elected to power.

Stone has identified the key paradox we currently face. When current policies are not working, society is unhappy and deeply divided, and most politicians don’t know what to do except to stay in power. But the pandemic only came on top of what was not working anyway, so protests reflect the underlying mass unhappiness with not just what was promised, but what the elite has delivered for them. Plutocracy — rule by an elite that claims to be experts in politics, law, money, science and economics — is failing the masses.

Rational thinking makes the world simple and understandable, but wrong. Life is messy, erratic, inexplicable, foolish and often unpredictable. Politics is the art (not science) of compromise, finding common ground when views are disjointed, polarised and extreme. The healing starts when the leader understands the anger, the emotion, and then works slowly to rebuild the trust that was lost. It is never easy, and failure through further crises happens when the leader or the elite simply “does not get it”. You can’t solve a problem when you don’t understand that the failure is your own failure to understand or empathise. Trump failed because he could only understand anger.

Stone sees all policymakers having three models in their heads — a model of reasoning, of society and of policy-making. The theory-based training forgets a fundamental aspect of all policies — that they have to deliver good outcomes. This is the Aristotelian mistake of breaking a complex problem into parts to be studied in depth for the cause, assuming that once you find the cause, you have the solution. But very often, this reductionist analysis forgets to put the different parts together to see if the whole adds up. The PhD policymaker thinks his perfect policy paper is the end-product, rather than delivering an outcome that is a messy compromise but what the majority and minorities can live with.

Rational thinking comes from the Western model of linear, deductive, mechanical and monist/atomist thinking that has its roots in the Christian-Judaic worldview of one-God, which is perfection, and therefore, man must seek perfection. The world is made of atoms, and therefore, if human behaviour comprises a rational human agent as the basic building block working with perfect information, the system as a whole with free markets (zero transaction costs) will end up with a neoclassical economy that is stable and self-equilibrating. The perfect model is an ideal that all rational economists must seek.

But these assumptions are not realistic, because there is no such thing as perfect information and frictionless markets. All men are not equal, because everyone has different genes, culture, language and knowledge/wealth endowments. Some are rational and many are not. So the outcome will be non-linear, complex and organic in nature. Thus, those from the Indian and Chinese traditions of worldviews with multiple gods would not seek perfection, and their dualist view accepts that man is both good and bad at the same time.

Since men are not equal and cannot be made equal even by free markets, it requires government intervention, which gives rise to the modernist concept of policy formulation. Governments use a combination of social, monetary, fiscal, health and scientific policies to manage state affairs, and these policies are determined through politics.

We now come to the policy paradox. If everyone is trained to use the rational-thinking/science model, who is the big beneficiary? Let’s do a thought experiment. If I persuade everyone to wear rose-coloured glasses, I become the only one who can see reality and can therefore manipulate everyone’s behaviour. In the kingdom of the blind, the one-eyed man is king. Worse, for those who can only see in the light, my invention of night-vision glasses gives me an advantage over all in the dark. In other words, technology enables hegemony.

Furthermore, Western-rational analysis completely misses the emotionally charged politics of religion.

Of course, money is also a form of religion, where banks and exchanges are the temples of worship. Wall Street promoted the free market perspective because it is the big winner when everyone believes that you can’t beat the market, forgetting to mention that it is Wall Street that “makes the market” (liquidity) and pushes the momentum play.

The four or five key market makers or prime brokers/money managers see most of the transaction flows and have informational advantage over the retail followers, who believe in free and fair markets. These big firms make tons of money exploiting the system, but pay peanuts in terms of market fines or settlements, because none of them went to jail. Through money politics, Wall Street controls Main Street, which has revolted but has not figured out how to avoid being manipulated.

My point is that most populists sense but don’t understand how the system is rigged, in which the rational model keeps up the pretence that if the government were only to throw more money at the problem, it will go away. Theory is never reality. Reality is shaped by theory, but if the policy outcomes are not what was intended, it is the theory that is wrong, not the victims.

Economists and their theories are part of the problem, because their rational-based decision-making ignores the emotional side of humanity and the long-term impact of human behaviour on Mother Earth, namely, climate change. Media philosopher Marshall McLuhan is correct: “The medium is the message.” We have been so manipulated by the media that we see the world as the Murdochs, New York Times or Facebook wants us to see it so that our behaviour benefits them. Media has lost its fair and balanced educational function and become biased, self-interested and narcissistic, creating unsustainable, extreme and polarised communities, or rather, commodities to be exploited.

No wonder the world is in a mess. Getting out of the mess is not about knowledge, but about strategy. That is why policy is propaganda, and strategy is about awareness, anticipation and change.

Awareness is the first step. Policy is for followers. Strategy is how each person can get out of the present mess.

Tan Sri Andrew Sheng comments on global affairs. The views expressed are wholly his own.

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