Chin Peng’s Farewell: A Letter to Comrades and Compatriots

My dear comrades, my dear compatriots,

When you read this letter, I am no more in this world.It was my original intention to pass away quietly and let my relatives handle the funeral matters in private. However, the repercussions of erroneous media reports of me in critical condition during October 2011, had persuaded me that leaving behind such a letter is desirable.

Ever since I joined the Communist Party of Malaya and eventually became its secretary-general, I have given both my spiritual and physical self in the service of the cause that my party represented, that is, to fight for a fairer and better society based on socialist ideals. Now with my passing away, it is time that my body be returned to my family.

I draw immense comfort in the fact that my two children are willing to take care of me, a father who could not give them family love, warmth and protection ever since their birth. I could only return my love to them after I had relinquished my political and public duties, ironically only at a time when I have no more life left to give to them as a father.

It was regrettable that I had to be introduced to them well advanced in their adulthood as a stranger. I have no right to ask them to understand, nor to forgive. They have no choice but to face this harsh reality. Like families of many martyrs and comrades, they too have to endure hardship and suffering not out of their own doing, but out of a consequence of our decision to challenge the cruel forces in the society which we sought to change.

It is most unfortunate that I couldn’t, after all, pay my last respects to my parents buried in hometown of Sitiawan (in Perak), nor could I set foot on the beloved motherland that my comrades and I had fought so hard for against the aggressors and colonialists.

My comrades and I had dedicated our lives to a political cause that we believed in and had to pay whatever price there was as a result. Whatever consequences on ourselves, our family and the society, we would accept with serenity.

In the final analysis, I wish to be remembered simply as a good man who could tell the world that he had dared to spend his entire life in pursuit of his own ideals to create a better world for his people.

It is irrelevant whether I succeeded or failed, at least I did what I did. Hopefully the path I had walked on would be followed and improved upon by the young after me. It is my conviction that the flames of social justice and humanity will never die. – September 21, 2013.

* Chin Peng died at hospital in Bangkok on Malaysia Day, September 16, 2013 at the age of 89. This is his final letter to his comrades and compatriots published in his memorial booklet.

- Sources:  http://www.themalaysianinsider.com

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.

MY COMMENT: My views on the status of the late Chin Peng are well known. I think his remains should be brought home and his wish to be interred with his parents should be granted. It is not being magnanimous but about honouring our treaty obligations. 

I therefore compliment the former Inspector-General of Police Tan Sri Rahim Noor for standing up for the rights of Chin Peng under the 1989 Hatyai Peace Agreement between the Malaysian Government and the Communist Party of Malaya (CPM). On the other hand, former Prime Minister Tun Dr. Mahathir under whose administration the peace deal was signed did not make any comment on the Chin Peng matter. I suppose it is convenient for him not speak on this issue since his son, Dato Mukhriz, has entered the race for UMNO Vice Presidency.

 

Now that Chin Peng is dead, his cremated remains should be brought home to be buried beside his parents. This is not about politics. It is the most honorable and decent thing to do. We must also learn to accept our history, and recognise that Chin Peng fought the Japanese and British imperialists, although we may not accept his ideology and methods. More importantly, when our government signed that peace treaty, we accepted him and his comrades as non-combatants and partners in peace.

 

Yes, many lives were lost during the Emergency (1948-1960). Armed conflicts cost lives. The United States lost 55,000 soldiers and Vietnam many times more. But once the Americans and the Vietnamese signed the Paris Peace agreement,  they began the process of rebuilding their relations, and today both former combatants are working together to advance their common interests. Reconciliation is possible only if we can come to terms with our past and learn the lessons of our history.–Din Merican

Related posts:

Time to leave the CPM era behind; Chin Peng, CPM no longer Enemy No. 1 

Chin Peng, a hero or zero? 

Chin Peng's remains couldn't be interred in his Sitiawan hometown to be cremated in Bangkok instead 

Time to leave the CPM era behind; Chin Peng, CPM no longer Enemy No. 1

The death of Chin Peng has created a buzz about the relevance of the Red spectre in Malaysia, especially among Malaysian Gen Yers. 

IT has been an educational week for finance manager Rita Wong* as she tried to find the answers for her 10-year-old son’s questions.

“He’s always curious and this week it has been all about Chin Peng,” Wong relates. “‘Who is he, mum; why can’t he come home; why do we have to be scared of his ashes?’”

Wong, a 40-something working mother, says she has had to recall her history lessons in school but even then “most of the answers he is asking for are hard to give as I don’t really understand it myself.”

Chin Peng, the Malayan-born guerilla who led a fierce Communist insurgency against the British in the peninsula after World War Two, and later against the government after independence, died early last week after living in exile in Thailand for more than two decades. He had fought alongside the British during the Japanese military occupation, but had started a fight to establish an independent Communist state here in 1948.

Thousands were reportedly killed during the insurgency, tagged by the British administration as the Malayan Emergency, that lasted until 1960.

Hence, even in death, his name still evokes much bitterness in Malaysia, as seen during the week in the media and social media network.

“I can never forgive him because the Communists killed my grandfathers and uncles,” says a marketing manager in his 30s.

But for over 80% of the Malaysian population aged below 55 (some 25,610,000 Malaysians) who would have been in their diapers or not born when the Emergency ended, Chin Peng remains a distant grandfather story or, at the most, an answer to an examination question.

With his death, many are saying it’s time to also put the CPM ghost to rest, as can be seen in the comments in cyber space.

“Does Chin Peng’s death really matter?” writes secondary school student Tianqian Tong. “I thought he had died for years actually...”

Like many young people, Tong does not see Chin Peng and communism as a security threat any more.

“Chin Peng and the CPM are in the past, not in the present, neither will they be in the future. We are now free and independent,” notes Tong.

“Anyway, history is a lesson for the future – every single thing will be remembered. It will be good for us to learn that ‘In the practice of tolerance, one’s enemy is the best teacher’.”

A number of the comments in cyber space are also quite light-hearted and related to a topic that’s very popular among Gen Yers these days.

“His ashes could spread around the country and invade the body of every Malaysian. This could be worse than an alien invasion ...” says one in a long line of zombie jokes about the “Chin Peng ashes – to return or not to return” debate.

A budding entrepreneur who only wants to be known as Amin admits that he finds the issue a tad confusing. “We all now want to ‘make friends’ with communist China and break into their market,” he observes.

Chin Peng and the CPM have not been a valid bogeyman for a long time, local theatre director and lecturer Mark Teh says.

“Bogeymen are ghosts or phantoms. The reason we have them is to create an irrational fear in people,” he opines.

For many young people, the Emergency and communists are lumped together with the Japanese Occupation and fight for indepen­dence under the topic of “War in History”, Teh points out.

“Many do not know the difference. But it is not completely their fault that they are confused. It’s because the history books present it in a sketchy manner. It is presented in a linear way that does not add up sometimes and discussions are not encouraged.”

This may have led to a thirst for information on communism among some, but not to the point where they want to stage a revolution, he adds.

“They are intrigued by it because of the gaps in history but I don’t think they are interested in the ideology or to embrace communism.”

Teh, who used to teach Culture and Society in Malaysia, had organised an “Emergency Festival” with a loose collective of young artists in 2008 to mark the 60th anniversary of the insurgency.

It was an attempt to re-examine the documents, images and narratives of the Malaysian Emergency from the younger generation’s perspective, he explains.

“We saw many students participate because they wanted to create alternative spaces for themselves and answer the questions they have about this part of Malaysian history.”

Teh feels this is the underlying issue in the debate on Chin Peng and the CPM’s role in the struggle for independence.

“The argument is contemporary because it is really about people fighting for their own version of Malaysia now – and they are reclaiming a past, whether it includes the CPM, Chin Peng or a past that excludes their contribution or labels them only as terrorist,” he says.

Writer Zedeck Siew, in his 20s, agrees, saying that any interest in communism among the young is mainly due to the suppression of communism’s place in history.

“In the classroom, we had the impression of the communist as an evil, grimacing Chinese fellow creeping through the jungle, killing cops and citizens. People have realised that this is not a complete picture.

“Those who want to learn about the CPM and Chin Peng are merely trying to find out more about the country’s past,” he reasons.

Crucially, interest does not equal participation, he stresses. “Frankly, I just can’t see my peers leaving their iPad, artisanal cupcakes and comfortable suburban warrens to join a people’s Armed Struggle and subsist on rations.”

Women rights activist Smita E concurs, saying that young people now seem to be largely anti-ideological. “I base this statement on my observation that people don’t read enough and don’t have time to read big books and think big thoughts.”

What is true, however, is that young people are starved for local histories, she adds. “It’s about alternative histories, not communism per se.”

Postgraduate student Ahmad Z also feels ideology rarely survives these days. “The grand narrative is history, though I believe young people see communism as a symbolic representation of change.

“If there is a resurgence in interest, it is a romantic interest of communism in Malaysia but not in the sense that people are trying to revive it and to suddenly pick up arms,” he says.

Putting the academic input into the issue, Boon Kia Meng believes that for many young people, the communist armed struggle belongs in the annals of history now.

“As Chin Peng mentioned in his memoirs, he was a man of his time and circumstances, where the world, in the immediate aftermath of the Japanese occupation, was overtaken by nationalist and anti-colonial movements and liberation struggles,” explains the academic.

“The armed resistance of the CPM was conditioned by those wars and the realistic options before them, in the context of British detention of firstly the Malay anti-colonial Left (a thousand were detained before the Emergency) and the crackdown on labour unions and political groups. The Emergency in 1948 was the culmination of British desire to secure their economic and geopolitical interests in the region.

“The CPM, rightly or wrongly, decided on armed struggle in the face of such challenges.”

Today, conditions are very different, says Boon. “A measure of formal democratic institutions has prevailed, and capitalism is triumphant globally, including in so-called communist China. As such, the bogeyman of communist terror in Malaysia is no longer a plausible claim.”

In fact, he highlights, most left-wing political movements today are democratic grassroots movements or parties.

“Just look at the elected governments of Bolivia, Venezuela and Ecuador, or even the growing popularity of the Greek radical left, Syriza (a likely winner in the next Greek elections) and the Occupy Wall Street movement. They are all non-violent, popular struggles.”

Ironically, even Chin Peng had noted the change of the times. Writing in his 2003 memoir My Side of History, he said: “A revolution based on violence has no application in modern Malaysia or Singapore... The youths who have known only stable governments and live in an independent age of affluence will find the choices I made as a teenager deeply puzzling... I was young in a different age that demanded very different approaches.”

He also stated that one of his final wishes was to “exchange views with young Malaysians nowadays to understand how history is shaped, exchanging ideas about how things move the world.”

Open dialogue and ­reconciliation

For many young people, an open dialogue on Chin Peng and communism is something they hope will happen now.

Student Nik Zurin Nik Rashid says it might be difficult for them to feel the victims’ experience but it will not hamper them from empathising.

“To ask the current generation that live in ignorance of such an experience is like asking a Malaysian what it feels like to be at Auschwitz: they can’t answer, and neither should they,” says the 19-year-old who is currently an undergraduate in a university in Texas.

The fact is that in the modern context, any way you look at it, the CPM is no longer around, she says.

“The CPM is no longer the enemy for the simple fact that it does not, for all intents and purposes, exist as a cohesive force that mobilises the masses since it signed the armistice with our government in 1989. By that alone, they are no longer the “Number One Enemy” as much as the Russian Federation is no longer a de facto enemy to Nato or the US since the Soviet Union collapsed.”

Nevertheless, she does not believe the CPM deserves any form of pardon.

“If Hitler is still unforgiven for his crimes, then I don’t see why Chin Peng needs to be forgiven for his Red Terror campaigns during the Emergency.

“To many, Chin Peng and his Commies will not be forgiven, and that is understandable.”

Alternative musician A. Nair feels that an open dialogue will help reconcile our nation with its painful past.

“If we try to be politically correct all the time, we will not get any idea across. If the older generation gets upset about us not caring or being insensitive about what they went through, it is something we need to learn to understand.

“But they also need to understand that it is not relevant to us now. We are moving towards a developed society, so we need to be more open and less sensitive.”

- Stories Contributed by HARIATI AZIZAN  sunday@thestar.com.my/Asia News Network

CPM: No longer Enemy No.1 

No going back: For many young people, the communist armed struggle belongs in the annals of history now. — Filepic 

The Star’s teen and youth pullout Stuff@school readers have their say on Facebook. Some comments had to be edited.

Tan Kar Can, 20, Brickfields Asia College

Compared with communist countries like China, the term communism is not even feared by most people in the world in this era. Chin Peng’s death has caused many people to have negative opinions about whether communism still exists in the country or not.

Communism has already been eradicated in our country and we should not fear communism any more. Instead, why not focus on eliminating corruption and gangsters which recently became the fear of the nation?

Shelbie Diana, 18, St Joseph Private Secondary School

Frankly speaking, I do not think that the party is a threat to our nation building right now. Media and national portrayal of the party wasn’t in the Sejarah syllabus. The young are simply taught communism is a game of violence and it stops at that.

The CPM that Chin Peng spearheaded was once a symbol that the nation demonised and derided but if learned methodically, this party’s downfall could be a lesson for the future.

Chin Peng died as a man in exile, wildly reviled in his lifetime. I believe he has paid the price for his political rebellion against the nation. The crime sure is heinous, but the stone that the builder refused will always be the head cornerstone. One has to clearly know he did contribute to free Tanah Melayu from the Japanese back then. We were taught to forgive.

Arivaran Ravichantar, 20, cadet pilot

Basically, the CPM fought for independence for our country and their motive was to set a Communist country. They would have succeeded if the British hadn’t given us our first election to make way for independence.

Their methods may have not been the best and may have hurt a lot of people, but nobody can deny that the CPM played a role in chasing out the Japanese in a short period of time. They may be also an indirect reason for the British to give us independence.

Na Yi Lun, 19, SMK Dato’ Penggawa Barat

Unlike some countries like North Korea, we do not have to worry about communism in our country. The CPM was established to drive out invaders from our land. During WWII, that was the Japanese. If not for their efforts, independence for our country would probably be delayed or we may still be under British rule till today.

In war, it is difficult to differentiate the enemy and the innocent. Humans are prone to mistakes, and in war, people make many mistakes.

Xina Ter, 17, SMK Sungai Ara

In my opinion, the CPM shouldn’t be considered No.1 enemy now. The party has long been inactive. I think the most dangerous thing to us now is racism and corruption. I think if we are united, regardless of race, we will be able to achieve almost anything. But when we are divided, even though we have the best leader in the universe, we will still be unable to achieve much.

Seet Rui Xi, 17, SMK Canossa Convent

The CPM is no longer a threat to our country. Are they the people gunning down innocent civilians in broad daylight? No. Are they causing discord, division and disharmony in society? No. Are they putting our independence at stake? No.

People who do not have the best interests of Malaysia at heart and people who do not consider national harmony a priority, people who are consumed with fulfilling their selfish agendas without considering how they will affect Malaysia’s future, and people who politicise every single thing possible are bigger threats to Malaysia.

Chin Peng’s wake a low-key affair

 

 Gen Kitti (right) and Gen Pisarn paying their last respects to Chin Peng at Wat That Thong temple in Bangkok.

BANGKOK: It was a calm and low-key affair as the body of the late Chin Peng was brought into a prayer hall at Bangkok’s Wat That Thong temple.

Some 30 people, mainly comrades of his outlawed Communist Party of Malaya and relatives, were present to pay their last respects at his wake yesterday.

Chin Peng’s two children, believed to be in their 60s, were said to be absent from the ceremony but a white and yellow wreath bearing their names stood next to the casket.

The note on the wreath, written in Chinese, reads: “In loving memory (of) our dear father. Your children.”

Also present were several DAP members, who said they came here on their own accord.

Klang MP Charles Santiago said he came for a meeting with non-governmental organisations and dropped by at the temple after his business ended.

He was seen kneeling and holding a joss stick at a floral dais inside the air-conditioned hall, where the sealed casket bearing Chin Peng’s remains was placed.

Santiago was accompanied by Selangor DAP committee member S. Ramakrishnan, a former senator, and Aliran exco member Sarajun Hoda.

Prior to their arrival, Kuala Selangor district council member Kwi Ai Mei was spotted paying her respects to Chin Peng.

Others who came to pay their last respects were former Thai military commanders Gen Pisarn Wattanawongkiri and Gen Datuk Kitti Ratanachaya.

Taking a prominent place among the many wreaths for the late communist leader was one bearing the symbol of Princess Chulabhorn, the youngest daughter of Thai King Bhumibol Adulyadej.

More well-wishers joined the funeral service in the evening, which was carried out according to Buddhist rites.

Chin Peng is scheduled to be cremated here on Monday evening.

- Contributed by LEE YEN MUN  yenmun@thestar.com.my

Related posts:

Chin Peng, a hero or zero? 

Chin Peng's remains couldn't be interred in his Sitiawan hometown to be cremated in Bangkok instead 

Lessons from Marx to market

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 Perhaps his views on capitalism could be considered to right what's wrong

WHAT ARE WE TO DO By TAN SRI LIN SEE-YAN

TODAY we still face not just about the worst recession since the 1930s, but a challenge to the rich West's economic order. The poverty of orthodox economics is now exposed. It showed up capitalism as fundamentally flawed. Karl Marx had contentiously labelled capitalism as inherently unstable. Sure, some of Marx's predictions had failed: no dictatorship of the proletariat; nor has the state withered away. Even among Americans, just 50% surveyed was positive on capitalism; 40% not. Young people are markedly more disillusioned.

So, recent vogue for Marx should not surprise now that the euro stands on the precipice of collapse; and Jeffrey Sach's The Price of Civilisation pointed to US poverty levels not seen since 1929. Indeed, the Vatican's L'Osservatore Romano recently praised Marx's diagnosis of income inequality. Brazil elected a former Marxist guerrilla, Dihma Rousseff, as President in 2010. Marx may still be misguided, but his written pieces can be shockingly perceptive.

Marx and global disorder

Examine the daily European headlines: there is the spectre of a possible Greek default, an impending explosive bank-made disaster, the imminent collapse of the euro all reflecting a bewildering mixture of denial, misdiagnosis and bickering undermining European policy response.

As Mohamed El-Erian (CEO of Pimco, the world's largest bond dealer) observed: “Rather than proceeding in an orderly manner, today's global changes are being driven by disorderly forces ...” We see a crisis that has shaken the foundations of the prevailing international economic order.

It is remarkable that in Das Kapital Marx diagnosed capitalism's instability at a time when his contemporaries and predecessors (Adam Smith and John Stuart Mill) were mostly enthralled by its ability to serve human wants. George Magnus (UBS Investment Bank) wrote: “today's global economy bears some uncanny resemblances” to what Marx foresaw.

Marx had predicted that enterprises would need fewer workers as productivity rose, creating an “industrial reserve army” of unemployed whose very presence exerts downward pressure on wages.

Reality comes home readily with US unemployment still at 8.5% (13.3 million jobless). Nearly 5.6 million Americans have been out of work for at least six months; 3.9 million of them for a year or more. Last September, US Census Bureau data showed that median income (adjusted for inflation) in the US fell from 1973 to 2010 for full-time male workers aged 15 and above. True, the condition of blue-collar US workers is still a far cry from the subsistence wage and “accumulation of misery” that Marx figured. Again, French economist Jean-Baptiste Say had postulated that markets will always match supply and demand hence, gluts don't arise.

Against this conventional wisdom, Marx argued that over-production is endemic to capitalism simply because the proletariat isn't paid enough to buy up the supply capitalists produce. Recent experience showed that the only way middle-America managed to maintain consumption in the last 10 years was to over-borrow. When the housing market collapsed, consumers were left with crippling debt they can't service. The resulting default is still being played out.

Marx also predicted capitalism sows the seeds of its own destruction. Unbridled capitalism tends towards wild excesses. The 2007/08 Wall Street crisis had demonstrated how reckless deregulation (for example, in allowing banking leverage to rise unabatedly) proved disastrous for the financial system, attracting extensive moral hazard in massive bailouts.

“The Republican Party is en route to destroy capitalism,” radical geographer Prof David Harvey says, “and they may do a better job of it than the working class could.”

Now once again, we see unbridled capitalism threatening to undermine itself. European banks financially weak but politically powerful, are putting on the pressure to rescue their balance sheets. We see the same in the United States as home-owners struggle to stay afloat while renegotiating their mortgages. Similarly, creditor nations (e.g. Germany and China) are trying to shift the pain of rebalancing onto debtor nations, even though squeezing them threatens to be counter-productive and eventually, cause economic disaster.

Even so, prolonged economic weakness is contributing to rethinking on the value of capitalism. Countries scraping for scarce demand are now resorting to currency wars. America's senate has turned protectionist. Within Europe, the crisis turmoil is encouraging ugly nationalists, some racist. Their extremism is mild against the wrecking horrors of Nazism. Even so, it's unacceptable.



Unbalanced times ahead

The outlook for 2012 is dismal (my column 2011: Annus Horribilis dated Dec 31, 2011): recession in Europe, anaemic growth at best in the United States and a significant slowdown in emerging nations. We also know the world is far from decoupled. Export economies in Asia (South Korea, Taiwan and China) and commodity exporters (Indonesia, Malaysia and Brazil) are already feeling the pain.

What's going to happen in Europe is critical. The eurozone is already in recession. Germany's economy contracted in 4Q 2011 at a time the region is looking to its biggest economy to give the zone a lift. Add to this, continuing credit crunch, sovereign debt problems, lack of competitiveness and intensifying fiscal austerity we have a serious downturn ahead.

Downside risks in the United States can be as serious fiscal drag, ongoing financial unwinding among households in the face of stagnant incomes, weak job creation, losses on wealth, rising inequality and political gridlock. In Japan, weak governance will show-up soon enough. Rising inequality is impacting domestic demand big time! This is also fuelling popular protests around the world, bringing with it social and political instability adding further risks to economic performance. Turmoil in the Middle-east gathers geopolitical risks of its own making persistent high oil prices will constrain growth. On present course, conditions will get worse before they get any better.

Policymakers are running out of options. Monetary policy is already less effective and ineffective where problems stem from insolvency (as in Europe) rather than liquidity. Fiscal policy is now well constrained. Whatever central bankers do, they cannot resolve problems best fixed by politicians such as the United States' incoherent deficit politics or Europe's fractured institutions and crucially, its lack of political will to act firmly.

Eventually, papering over solvency problems and reform issues will give way to more painful and disorderly restructurings, including exit from the euro. History teaches that financial crises are followed by years of weakness and stress. But some of the pain is self-inflected. Clarity on eurozone's future needs strong political leadership. There is really no excuse for the United States' fiscal paralysis as politicians bicker and dawdle. Indeed, even deeper austerity is quite unnecessary; it brings a vicious circle of decline, squeezing demand and raising unemployment, thereby hurting revenues, sustaining large deficits and draining away confidence.

Lessons from Japan

Japan has been experiencing the West's current woes for 20 years. Will Europe and United States suffer a similar “Japanese” future? There are important lessons.

First, get out of denial: admit past mistakes and take-on new challenges for the future. Japan had refused to admit its economic model has since failed. Similarly, Europeans are not ready to give up their welfare safety net even though already buried in huge debt. The United States, in preserving “free markets”, wouldn't build badly needed infrastructure because of aversion to state intervention. Let's face it: new realities need new ideas.

Second, recognise problems are really structural. Japanese politicians continue to rely on orthodox pump priming in the face of excessive regulations (which stymied competition) and belief its high savings will finance it. All it did was to pile up more debt up to 200% of GDP. The United States and Europe are now in a similar boat. Continuing Fed stimuli missed tackling underlying problems need smarter approaches to resolve the mortgage quagmire, and to extensively re-train misfit unemployed. Euro-zone needs reforms for a more integrated Europe to spur growth. Instead, governments bury their heads in the sand of Tobin taxes (a small financial transactions tax to discourage speculation) and other such diversions.

Third, embrace globalisation which Japan has yet to seriously acknowledge, while the rest of Asia had become more integrated. The United States is still “fighting” globalisation harbours an anti-trade mentality in the face of deficit politics. Similarly, Europe indulges too intensely in intra-regional trade; needs to build a competitive multilateral non-European network.

Finally, firm political leadership is critical. Psychologist and Nobel laureate Danial Kahneman pointed to behavioural economics showing people are “influenced by all sorts of superficial things in decision making” and so they procrastinate. Japan personifies procrastination. Likewise, political gridlock gripping United States and Europe led to more “kicking the can down the road,” instead of seriously changing national policy. Japan's history teaches political will as vital in instigating change without it, the West will likely turn “Japanese.” Ignore it and history may well repeat itself.

Middle class on the rise

The growing irrelevance and mistrust of politicians and governments are the result of massive economic slowdown and wasteful public spending. Emerging markets in contrast, have kept growth consistently going while keeping fiscal affairs well under control.

The political woes in China and India and even Malaysia (and possibly in Brazil and Indonesia) reflect, in my view, the early stirrings of political demands by the growing emerging middle class.

The World Bank estimated the middle class (people earning between US$60 and US$400 a month) trebled to 1.5 billion between 1990 and 2005 in developing Asia, and by one-third to 362 million in Latin America. Estimates by Asian and African Development Banks showed similar trends in Africa, Latin America and China in 2008.

As Marx said: “Historically, the bourgeoisie played a most revolutionary part” in Europe. As I see it, in emerging markets, that same but softer revolution is now on hand. Middle-class values are distinctive.

Surveys showed the middle classes consistently are concerned with free speech and fair elections; with opportunities and corruption. Success of Hazare's campaign against graft in India, and of street protests in Dalian and Xiamen in China over environmental abuses and the crash by high speed trains are some cases in point. Unlike unrest in Middle-east, middle class activism in India, China, Brazil and Chile is not aimed at bringing governments down. Rather, an attempt to reform government, not to replace it so far, at least, aimed against unaccountable, untransparent and undemocratic politics.

What to do?

Recession made plain the need for smarter government and highlighted weaknesses in designing policy to address issues on fairness and burden sharing. There are lots to learn and much to put right. I see an extraordinarily uncomfortable year ahead, with a wide range of possible outcomes, many unpleasant.

The euro-zone casts the darkest shadow. The US outlook is darkened by political uncertainty. The West is now being challenged to deliver not just growth (while necessary, is insufficient given high unemployment, and income and wealth inequalities) but “inclusive growth” for greater social justice. There is a deep sense that capitalism has become unfair. Calls for a fairer system will not go away. As Marx would insist, they will spread and grow louder.

Ironically, unlike emerging economies, the West is not equipped to deal with structural and secular changes after all, their recent history has been predominantly cyclical. Grasping the ways in which Marx was right marks the first step towards making things acceptable. The longer they fail to adjust, the higher the risks. So expect more volatility, unusual strains and even odd outcomes. But looking at the cup as half-full, the global paradigm shifts when they do come, will also present opportunities, not just risks. That can help ease the agony. But it won't make up for politicians' mistakes. Welcome to 2012!

Former banker, Dr Lin is a Harvard educated economist and a British Chartered Scientist who now spends time writing, teaching & promoting the public interest. Feedback is most welcome; email: starbizweek@thestar.com.my

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• Was Marx Right? Some Capitalists are re-visiting his ideas (pakos.me)

Only Capitalists Can Save Capitalism

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Maggie Starvish

If capitalism was a stock, the market would appear rather bearish on its future.

Bank failures, economic crises, and middle-class riots across the globe appear symptomatic of large systemic weaknesses in the market system, highlighted by the 2008 global financial meltdown. Income inequality separating corporate leaders from their rank-and-file workers has become a hot-button issue in the upcoming presidential election. And in public opinion polls, business moguls are cushioned from the bottom of the reputation scale only by members of Congress. Fixes so far have largely eluded elected officials, government regulators, and tent city activists.

But there is one group of citizens with the power to make a difference: business leaders themselves, say Harvard Business School Professors Joseph L. Bower, Herman B. "Dutch" Leonard, and Lynn S. Paine, authors of Capitalism at Risk: Rethinking the Role of Business.

"Our book argues that if we don't begin to address, in a systemic way, the issues and problems and the negative outcomes and challenges [of market capitalism], then we are likely to see a lot more movements like Occupy Wall Street," says Leonard.

Capitalism at Risk grew out of preparations for Harvard Business School's centennial celebration in 2008. Bower, Leonard, and Paine felt it important to identify key issues that HBS should focus on going into its next 100 years, so they organized a series of forums on four continents with top business leaders, many of whom were HBS alums. "We set up the forums as opportunities for candid discussion among peers," says Paine.

The principal question asked of each participant was this: "If we stipulate that the system of market capitalism has been the source of remarkable economic growth, what are the prospects for continuing growth in the future? What aspects of the system at the level of firms, industries, nations, or multilateral institutions might cause serious difficulties?"



The principal response is summed in the book: "Market capitalism has proven to be a golden goose providing historically unimaginable economic benefits to many, and if we don't look out, we may kill it."

From prediction to fruition

Problems that forum participants cited included environmental degradation, trade breakdowns, and failure of the rule of law. Concerns over the lack of transparency into and oversight of the financial system were voiced by many. In all, 10 potential disruptors of the global market system were identified.

"One of the things we were told even before the economic crisis was that the financial system had grown to such a scale and was functioning in such a way that it was no longer necessarily lined up with the needs of the industrial system, or the way society wanted it to function," says Bower. "And lo and behold, we now have a crisis that illustrates what they were concerned about."

"If you believe that the problems ahead are likely to be very serious, and neither government nor business can address them, that doesn't leave you with many options."
—Lynn Paine

"Perhaps we should credit the participants in our forums for their prescience," notes Paine, reflecting on an e-mail she received recently from a participant on how much the world had changed since 2007. "The question now is whether we can mobilize business leadership on a sufficient scale to make a difference."

"Our view is the system could go, if companies don't step up," says Bower. "It's companies that have the skill sets necessary to go from a vision to making something a reality."

Considering the number of corporations whose annual revenue is larger than the GDP of many small countries, the proposition makes sense. The authors argue that the problems are systemic, and who better to attack huge issues than people who run small, medium, and huge organizations.

Bower, Leonard, and Paine are prepared to have their views challenged. Even some of the forum participants, says Leonard, "didn't think what we are calling for is either appropriate for or likely to come from business and business leaders." And while Leonard agrees that some of the criticisms are valid, "the alternative of having business sit this one out is too risky."

Adds Paine: "Of course we recognize that there are serious obstacles to the view we recommend," including a lack of structure, tools, and incentives within businesses to do the sort of work that's needed, and a lack of skills and incentive on the part of business leaders to operate on the global political front. "But we see those as challenges to be overcome rather than fatal flaws in the idea. If you believe that the problems ahead are likely to be very serious, and if you believe that neither government nor business can address them, that doesn't leave you with many options."

"There is clearly political content to what we are suggesting," says Bower. "We talk about the need for leaders of companies to develop skill sets that they might not have—a lot of our business leaders have not been brought up to be comfortable in dealing with politicians. So part of what we're talking about is learning how to operate in the public arena without getting into trouble. It's hard."

Addressing the problems

HBS has made significant strides in preparing students to be the kind of leaders that the book calls for, says Leonard, noting as one example the required first-year MBA course Leadership and Corporate Accountability. "Where I think we still have far to go is in teaching the skills for operating in the high-conflict, low-authority zone outside your own firm. Most of what we teach is about how to optimize within your firm, where you tend to have a high level of authority and where there is general agreement on goals.

"Where I think we still have far to go is in teaching the skills for operating in the high-conflict, low-authority zone outside your own firm."
—Dutch Leonard

"By contrast," Leonard continues, "when our book calls on business leaders to exercise leadership outside their firms, we are inviting them to operate in a domain where they have little authority and where there is great conflict over what the most important goals are. The skills to do this involve what we might call small 'p' political skills—and we don't teach nearly as much of that as we could and should, nor do we have many cases about business leaders operating in that high-conflict, low-authority domain."

Giving students a broader perspective outside the HBS classroom is another possibility, such as pairing B-school students with other Harvard students who are studying similar big problems, says Paine, who cofounded and served for five years as course head of Leadership and Corporate Accountability.

"For example, I have in mind a course that would bring together students from HBS, Harvard Law School, and the Kennedy School to explore, as board members and as leadership teams of companies, what could be done … both through innovative business strategies and through innovative institutional arrangements."

According to Paine, many HBS students share the concerns voiced in the book and aspire to the type of entrepreneurial leadership needed for reform. "It's critical that we harness the energy and ideas our students bring to these challenges, and that we as a faculty help them develop the skills and capabilities needed to practice this kind of leadership."

So even as the market system has created threats to its own sustainability, it can also reward enterprising companies of any size that can turn these problems into opportunities. The book provides examples of business efforts that promote social good without sacrificing profit: a mobile communications rollout in rural China that "extended the benefits of participating in the market system to millions of people" while increasing profits and growth at the country's largest telecommunications firm; "a boutique asset-management firm that invests in companies whose business models are aligned with the needs of a sustainable global economy."

But Capitalism at Risk leaves a lot of the heavy lifting in the hands of business leaders. "We're pretty clear that we don't have all the answers," says Bower, "but we're also pretty clear that we need action."

The form that action takes remains to be seen. But it's worth noting that while members of the "Occupy" movements may be retreating for the winter, the problems they have highlighted are likely to remain with us for some time.

About the author:Maggie Starvish is a writer based in Somerville, Massachusetts.

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We need to talk about capitalism, say CEOs

How Capitalist is America?

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The Rules Of The Game  COMMENT By MARK ROE

IF capitalism's border is with socialism, we know why the world properly sees the United States as strongly capitalist. State ownership is low, and is viewed as aberrational when it occurs (such as the government takeovers of General Motors (GM) and Chrysler in recent years, from which officials are rushing to exit). The government intervenes in the economy less than in most advanced nations, and major social programmes like universal healthcare are not as deeply embedded in the United States as elsewhere.

But these are not the only dimensions to consider in judging how capitalist the United States really is. Consider the extent to which capital that is, shareholders rules in large businesses: if a conflict arises between capital's goals and those of managers, who wins?

Looked at in this way, America's capitalism becomes more ambiguous. American law gives more authority to managers and corporate directors than to shareholders. If shareholders want to tell directors what to do say, borrow more money and expand the business, or close off the money-losing factory well, they just can't. The law is clear: the corporation's board of directors, not its shareholders, runs the business.

Someone naive in the ways of US corporations might say that these rules are paper-thin, because shareholders can just elect new directors if the incumbents are recalcitrant. As long as they can elect the directors, one might think, shareholders rule the firm. That would be plausible if American corporate ownership were concentrated and powerful, with major shareholders owning, say, 25% of a company's stock a structure common in most other advanced countries, where families, foundations, or financial institutions more often have that kind of authority inside large firms.

Diffused ownership

But that is neither how US firms are owned, nor how US corporate elections work. Ownership in large American firms is diffuse, with block-holding shareholders scarce, even today. Hedge funds with big blocks of stock are news, not the norm.

Corporate elections for the directors who run American firms are expensive. Incumbent directors typically nominate themselves, and the company pays their election expenses (for soliciting votes from distant and dispersed shareholders, producing voting materials, submitting legal filings, and, when an election is contested, paying for high-priced US litigation). If a shareholder dislikes, say, how GM's directors are running the company (and, in the 1980's and 1990's, they were running it into the ground), she is free to nominate new directors, but she must pay their hefty elections costs, and should expect that no one, particularly not GM, will ever reimburse her. If she owns 100 shares, or 1,000, or even 100,000, challenging the incumbents is just not worthwhile.

Hence, contested elections are few, incumbents win the few that occur, and they remain in control. Firms and their managers are subject to competitive markets and other constraints, but not to shareholder authority.



In lieu of an election that could remove recalcitrant directors, an outside company might try to buy the firm and all of its stock. But the rules of the US corporate game heavily influenced by directors and their lobbying organisations usually allow directors to spurn outside offers, and even to block shareholders from selling to the outsider. Directors lacked that power in the early 1980's, when a wave of such hostile takeovers took place; but by the end of the decade, directors had the rules changed in their favor, to allow them to reject offers for nearly any reason. It is now enough to reject the outsider's price offer (even if no one else would pay more).

Corporate elections

American corporate-law reformers have long had their eyes on corporate elections. About a decade ago, after the Enron and WorldCom scandals, America's stock-market regulator, the Securities and Exchange Commission (SEC), considered requiring that companies allow qualified shareholders to put their director nominees on the company-paid election ballot. The actual proposal was anodyne, as it would allow only a few directors not enough to change a board's majority to be nominated, and voted on, at the company's expense.

Fierce lobbying

Nevertheless, the directors' lobbying organisations such as the Business Roundtable and the Chamber of Commerce (and their lawyers) attacked the SEC's initiative. Lobbying was fierce, and is said to have reached into the White House. Business interests sought to replace SEC commissioners who wanted the rule, and their lawyers threatened to sue the SEC if it moved forward. It worked: America's corporate insiders repeatedly pushed the proposal off of the SEC agenda in the ensuing decade.

Then, in the summer of 2010, after a relevant election and a financial crisis that weakened incumbents' credibility, the SEC promulgated election rules that would give qualified shareholders free access to company-paid election ballots. As soon as it did, the US managerial establishment sued the SEC, and government officials felt compelled to suspend the new rules before they ever took effect. The litigation is now in America's courts.

Less capitalist

The lesson is that the United States is less capitalist than it is “managerialist.” Managers, not owners, get the final say in corporate decisions.

Perhaps this is good. Even some capital-oriented thinking says that shareholders are better off if managers make all major decisions. And often the interests of shareholders and managers are aligned.

But there is considerable evidence that when managers are at odds with shareholders, managerial discretion in American firms is excessive and weakens companies. Managers of established firms continue money-losing ventures for too long, pay themselves too much relative to their and the company's performance, and too often fail to act aggressively enough to enter new but risky markets.

When it comes to capitalism vs. socialism, we know which side the United States is on. But when it's managers vs. capital-owners, the United States is managerialist, not capitalist. - Project Syndicate

Mark Roe is a professor of law at Harvard Law School.