Friday, January 21, 2005


In medieval times, cosmology was dominated by two main influences: the teaching of the Catholic Church and the writings of the ancient Greek astronomer, Ptolemy. In the medieval conception, the sun and the stars revolve around the flat earth in their fixed spheres, moved by the minds of the angels, who themselves obey the will of God. Thus for instance we have the famous last line concluding Dante's 'Divina Commedia': 'l'amor che move l'sole e altre stelle' ( the Love that moves the sun and other stars).

All this was overthrown by the theories and discoveries of Copernicus, Tycho, Kepler, Galileo and Newton--i.e. the scientific revolution. And in the 20th century, our spacecraft blasted into space, without meeting any angels or smashing any heavenly 'sphere' that keeps the stars in their place, and the scientific cosmology of a cold and impersonal universe was established without question. Angels disappear from our science and our worldview. From being the delegated rulers and guardians of the universe, they go the way of gremlins and the bogeyman.

Angels of course survive in the minds of the religious. But the discredit of the cosmology of angels and the general assault of modern thought have put most of the faithful on the defensive. Justifying the existence of God is difficult enough, not to mention the swarms of heavenly beings that happen to float around and co-exist with us.

The numerous biblical accounts of angelic actions and visitations provide but tantalizing hints of their actions and operations. In any case, few Christians will pay much attention to angelic issues, regarding these as either too 'new age' or perhaps a distraction from God. Indeed while almost all Christians will believe in the idea of personal 'guardian angels', few will have anything at all to do with them. These poor guardians are quite simply ignored, often in the name of avoiding idolatry.

Yet Christians believe in God the Word, the infinite Energy who holds in himself the ultimate form of all divine qualities: Love, Power, Light, Wisdom, Peace etc. Human beings embody these divine qualities finitely and to different extents: some more wise, others more loving and some more inclined to power and rule etc. In our spiritual life, we are called to become more and more the 'temple of God', or in other words to bring forth the quality and gift that God wishes to manifest in us.

The angels can be understood as beings who are already the pristine vessels and mirrors of the Word, each of them clearly embodying some unique aspect and glory of Godhead. Thus the old medieval conception of the different choirs of angels, each choir being a group of angels specialising in some divine quality, e.g. cherubim as the wisest of angels, seraphims as the ones who burn most with love and so on.

Taking all this together, it takes no great leap of thought to see that our guardian angels are probably divine vessels that are akin to our potential selves, i.e. if we are meant to be cherubic folks with light and wisdom being our dominant gifts, then cherubic angels or even cherubims will be our guardians. The guardian serves as the spiritual inspiration and temple that channels the infinite energy of Christ in a way most suited to our potential development.

Thus instead of being irrelevant, angels serve as the instruments who bring close the Presence of God--and specifically to the very Aspect most attractive and relevant to us.

Singapore and Chinese Culture

This is a sequel to the earlier superpower exchange:

Hello X,

Just a short warm-up reply first. In any case, I doubt you need another huge torrent of words? =)

....Anyway, to summarize our last discussion, I think we are in general agreement about China and India, but differ a little about Europe, Japan and America. But in this mail, I will just write a little about something more modest: Singapore.

I can fully understand what you mean about the lack of historical and cultural monuments in Singapore. I definitely feel over-awed by the stuff I see in Europe, Japan and China. Nothing in Singapore can vaguely compare with the British Museum, the Parthenon, the Gothic cathedrals, the Japanese and Chinese Temples and ruins etc.

Yet while there is a lack of PHYSICAL cultural or historical monuments, the culture of Singapore is still significant and very much worth seeing. What do I mean? Even I did not realize this thing about Singapore until the last few years. But since then I have visited Shanghai and pondered about my trip to Hong Kong and different Chinatowns all over the world. I have also tried to fit Singapore, the world's largest Chinese community (predominantly Chinese to be exact) outside China, into the larger scheme of Chinese history.

To simplify things immensely, China seems to possess 2 'souls'. One is the northern, imperialistic, political and agricultural culture of northern China. This is the culture that is associated with Confucianism, (which disdains merchants) and has dominated China for most of the last 3000 years. This is also the soul associated with the pre-Deng Xiaoping era of Chinese communism (1949-1975).

But there is another side of Chinese culture--one associated especially with the coastal provinces of southern China. This soul is commercial, urban and sea-based. It is a merchant culture that is dynamic, outgoing and entrepreneurial. By contrast the Northern culture is conservative and disdains commerce.

There are only three periods in Chinese history where the southern soul is dominant: one is the southern Song dynasty (around 1000-1200) mentioned in the earlier e-mail, where an incredibly dynamic economy with almost modern features held sway. This is the one of the very rare periods where the national capital is based next to the sea (Hangzhou).

The next period was the Nationalist Chinese period (1911-1949). In this period, the chief metropolis of China was Shanghai, which alone generated half the GNP of the country. It is no surprise that Shanghai was one of the first targets of the Japanese during the 2nd Sino-Japanese war. By the way, its name literally means 'On-the-Sea' (Shang-Hai) and during its golden age, it is the very embodiment of capitalist prosperity, dynamism, evil and corruption, the very essence of the 'southern' Chinese soul.

The third period is quite simply today, where communist China tries to run a capitalist economy. Again the southern coast is the Gold Coast of China.

So what does all this have to do with Singapore? Simply this: during the heyday of Shanghai and after its fall to the communists in 1949, the southern Chinese culture continued in 3 places: Hong Kong (where a huge number of refugees from Mainland China arrived--including some of my own relatives), Taiwan, and of course, Singapore (almost all the Chinese in Singapore comes from only 2 southern provinces: Fujian and Guangdong). The overseas Chinese in these 3 places built up the richest and most advanced Chinese civilization ever known, while mainland China languish in poverty and oppression. Hong Kong and Singapore for instance have comparable GDP per capita to Japan and America--no mean feat for former third world nations.

Today China opens its doors, and contrary to what many people think, the biggest source of capital that is being poured into China is not from the West or Japan, but from Taiwan, Hong Kong and Singapore. The overseas Chinese have returned, and is building up China in their own image. This is the period of history when the 'southern' culture is having a tremendous renaissance. The future of China is no longer the ancient land based Northern culture, but the southern, entrepreneurial, sea-going and technological culture that has its origins in the Southern Song dynasty 800 years ago.

And the influence of the overseas Chinese extents beyond economics. Sun Yat-Sen, the Chinese revolutionary father is a southern Chinese (by contrast almost every Chinese emperor is of northern stock). And in the 21st century, it is Hong Kong and Singapore that have the most accountable legal and political systems and Taiwan with the most vibrant democracy. In terms of vibrancy in political, philosophical and religious debates and participation, these three places are also leaders (though Singapore is probably much less active).

In short, Taiwan, Singapore and Hong Kong are the pride of Chinese everywhere because they show how the Chinese race too can rise from their degeneration of the last 200 years, where swarms of invaders from the West and Japan trample them underfoot, and build a civilization comparable to the West and to Japan. It makes the Chinese able to believe in themselves again. Indeed when Deng Xiaoping announces his capitalistic reforms in the 1970s, his implicit model was the three countries. If China for instance is as rich as Hong Kong and Singapore, its economy will be 4 times the size of USA, and 10 times that of Japan. That of course is a far-off goal, but the inspiration is there. This is one up China has over India, for there are no comparable predominantly Indian city or nation that have achieved anything comparable to HK, Singapore or Taiwan.

In other words, what I am saying is that, do not look at Singapore as an isolated unit. See the Chinese community in Singapore--once called Nanyang or Southern-Sea by the Chinese--as one important node of the rich renaissance of southern Chinese culture that is now overtaking Chinese civilization--which as you say, would probably become a superpower. Cities like Singapore, Hong Kong, Shanghai and the nation of Taiwan, help you to envisage the future China--the free and prosperous China that was the dream of Dr Sun Yat-Sen.

These places are indeed lacking in ancient monuments, because as I have already explained, these are centers of a southern culture that held sway so rarely in Chinese history. They do not represent China's past, but her future. Therefore, if you visit Singapore, the best thing is to couple it with a trip to Hong Kong, Taiwan and Shanghai as well.

So there.

Very best,

PS. I can recognize some of your composers, but of course my preference is for the Baroque ones, as you recall correctly. Vivaldi and Bach esp.

Wednesday, January 12, 2005

Transhumanism and economics, with a long note on Artificial Intelligence

Elaborating on the thread mentioned in the earlier blog (short intellectual auto), I would ramble a bit on the relationship between the transhumanist technologies (artificial intelligence, cybernetics, genetic engineering, nanotechnology) and economics.

First a brief historical survey:

Adam Smith, the father of modern economics, lived at the dawn of the industrial era (the late 18th century), and many of his most salient observations--notably of course about the division of labor--can be traced directly to the practices of the early industrialists. Adam Smith's economics is the fountainhead of the 'classical' stream of economics. Based on their own economic milieus, Ricardo and Malthus will elaborate Smith's theory in different forms, while JS Mill will give it a supreme elevation somewhere in the middle of the 19th century.

In the 20th century, Alfred Marshall will incorporate the insights of the 'marginalists' (e.g. Jevons who came up with the theory of marginal utility) and earlier economists in a grand neo-classical synthesis. His student, JM Keynes will use this foundation to build up his General Theory in response to the greatest crisis in capitalism: the Great Depression, while in the later part of the 20th century, neo-classical economists like Milton Friedman will also derive crucial sustenance from Marshall's ideas to react to their inflationary era.

The economics of Adam Smith and his later disciples is fundamentally one based on the more or less free operation of the market (how free depends on the economist in question)--a market made so much larger and more all-encapsulating by the industrial revolution and its implications. It is also allied basically to a political view that accepts individual liberty, at least in questions of private property and market choice. It is thus usually congenial to democratic or social-democratic systems. The Fascist and Nazi experiments have not operated long enough (thankfully) for us to observe how well a market economy can function under such capitalist totalitarian regimes.

But there is of course a totally divergent form of economics: Marxist economics. Karl Marx worked in the 19th century, during the height of the industrial revolution, and his insights, like that of the classical economists is linked to the economic phenomena of the day. By contrast to the classical economists, Marx (among many other differences) gave much more emphasis to labor as the main factor of production, downgrading the status of capital and land. His downgrade of capital and capitalist practices naturally led him to favor a 'command economy', where the market mechanism is replaced more or less by State direction. This form of economics is supposed to culminate in a form of utopian anarchism, though the actual historical form it took was communist totalitarianism.

From this brief historical survey, one can see how economists usually work out their systems in response to the prevailing economic problems of the day. Different economic conditions and tensions in turn require, inspire and reinforce new systems of economics and politics.

And of course a key factor driving economic change is technological advancement. For instance, the massive productivity growth of the industrial revolution is made possible by technological innovations like the steam engine, railways, telecommunications, electricity and mass production. Hence we need not be surprised if our present day technological advancement leads us towards a revolution in our economy, and thus in our economics and politics.

Transhumanism and economic change:

We, like Marx and Adam Smith, lives in a revolutionary era--albeit in its earliest stages. Perhaps future historians will term the 21st and 22nd centuries not as the nuclear age, space age, genetic age or computer age, but simply the transhumanist or 'post-human' era. Industrial era technologies empower a vast increase in labor productivity through mass communications, transport, production and so on. It is dependent on a symbiotic relationship with machines--a relationship closer and more dependent than any hitherto seen.

Transhumanist technologies like genetic engineering, artificial intelligence and cybernetics, can accomplish this as well, but also exponentially more. Artificial intelligence for instance may eventually carry the industrial logic of higher production for less laborers to its finale: the production of work for zero laborers (I do not of course include the owners of land or capital). This represent a revolutionary change, completely unforeseen by Marx, the champion of labor, or indeed any present economic analysis.

This vast empowerment of capitalists and landlords over labor carries explosive socio-economic ramifications and produce many divergent scenarios. It opens up for instance the specter of a true free market society where all are capitalists, or perhaps a true command economy where one person or group of persons control the production of almost all goods and services. We look in other words at extreme egalitarianism or extreme totalitarianism, and no present economic theory incorporates such scenarios.

Some may of course argue that these transhumanist technologies may not be carried far enough for such dramatic socio-economic changes. But this is probably an ostrich reaction. Take the much maligned AI for instance. A lot have claimed that robots may never take over our labor force because human work is unique and irreplaceable etc. For one thing, the industrial revolution has shown how better and unique work by craftsmen have given way to standardisation and mass production by laborers specialising in merely one part of the whole work. Economics and mere cheapness can easily override the need for quality and the 'human touch'.

For another, the future dominance of AI can be ascertained with basically one question: Can human minds only function algorithmically? If yes, that's it. Computers too are algorithmic machines, and by all appearance, potentially much better ones. If not, much of our work are still fundamentally algorithmic and therefore AI-replaceable. We cannot so easily escape the specter of widespread human obsolescence. And our economic and political systems are simply not adequate to deal with such levels of unemployment. A super-welfare state where robots work and humans are the bosses and parasites perhaps? But is that really a satisfactory solution?

With genetic engineering, we open up the possiblity of vast inequality on the fundamental biological level (not merely socio-economic, as in AI). Since the service of genetic enhancement (whether at the foetal level or not) is an economic transaction, the question of wealth distribution becomes very pertinent. How do we make sure this enhancement is affordable to all? Or SHOULD we? Also, what about those who refuse enhancements for personal reasons, how should we deal with them? What about those less advanced nations? Will there be an insidious genetic gap? All these become pressing questions.

With cybernetics, i.e. the true systemic integration of man and machine, we face the same problems. In fact, it is probably even more revolutionary and difficult to manage than both AI and genetics, for essentially, it uses one to extends the other, i.e. AI technologies are used to further enhance genetic modified beings. We face certain insidious problems--the greatest of which is probably the simple definition of what constitute 'humanity' and the corresponding assaults on our 'intrinsic value'.

For cybernetics, once perfected, actually allows us the creation of a 'superior' and possibly inhuman or posthuman race (depending on how you look at it). Indeed, it is perhaps the general tendency of transhumanist technologies to be able to vastly exacerbate the inequalities of society. The owners of AI and capital will be powerful enough, but if genetic engineering can improve their DNA and biological capabilities, and cybernetics can turn them into 'supermen', the economic and political power of this elite will easily dwarf the social dominance of even the Nazi or Stalinist elites. A true and supreme aristocracy is thus a distinct transhumanist possiblity.

And how should this elite treats the lower ranks? As truly inferior beings? As being 'merely human'? Or could the whole of humanity ascend together in technological nirvana? Present social, political and economic conditions forbids it. And even if it truly could be done, is it necessarily a good thing?

Worsening the general stew, as Bill Joy wrote, AI, genetic engineering and nanotech (a key ingredient for all transhumanist techs) are KMD technologies (knowledge-enabled mass destruction), i.e. vast violence at a minimum of effort. Even laypeople could do it (witness the proliferation of computer viruses for instance). Such dangers in the hands of the masses gives a huge boost to a demand for a society that is safe at the cost of freedom. Hence again, the totalitarian scenarios. And even if mass terrorism and political repression can be averted, legitimate national states are endowed with unbelievable military and economic power by the transhumanist technologies. Could a simple arms race cause us to give up our humanity? We have done so for much less.

With all these specters in mind, it should be clear I think, to liberals, humanists and general religious that there is a total and extreme necessity for new forms of economic and political systems, should we wish to preserve some of our distinctly 'human' values in the coming era, where for the first time, we can modify the hitherto recalcitrant 'human nature'. There are far more questions than answers currently, but there is still time, for we are still in the earliest stages of the revolution.

After all nightmare scenarios are not the only possible outcomes of transhumanist technologies. As mentioned before, AI allows us to go to the extremes of egalitarianism or totalitarianism. It also frees humans from most physical drudgery and allows the possiblity of distinctly 'human' work (what this may be will be considered elsewhere). AI may also prove to be a superb addition to our general intellectual resources. Genetic engineering on the other hand allows us potentially to elevate the gene pool and biological functioning of the whole human race to a new plateau. It also allows us (in union with nanotech and ecology and maybe undeveloped systems sciences) to manage the biosphere and allow it to flourish in a way hitherto unseen. Even cybernetics (despite its countless dangers) can be turned to general economic and social benefit. All in all, transhumanism is also perhaps the main path towards enabling a true space-faring civilization. That alone can justify a lot.

The choices are not so much technological but political and economic. We should start thinking about them, and start now.

Monday, January 10, 2005

A short note on economics education

One of the most important concerns in a market economy is to ensure (as far as possible) an optimum allocation of resources by free economic players. How should producers use their capital to precisely and efficiently fulfil the demand of the consumer? How should savers, financial institutions and investors use their capital to effect the most profitable outcome? How should consumers use their resources to optimize consumption? And how should government frame their policies and measures to encourage producers (including state enterprises), consumers and investors to react most effectively and accurately to market signals?

The market works for better or for worse very much dependent on the quality of information available to producers, investors, government and consumers and how well they are able to use this information. Thus one key argument for providing high quality economics education to the masses is basically to facilitate both the provision and analysis of market and general economic information.

Why provision? Because the higher the number of financially literate (and interested) folks, the greater will be the demand for high quality financial information, and hence the incentives for services such as business newspapers, magazines etc.. The demand for quality is of course also ensured only by an informed and interested readership. And on the analytical portion, only an informed readership can analyse the information in question, and react intelligently and swiftly.

Sadly economics is so badly taught (in general) and made so boring that most people, even our college grads, are usually financially illiterate. I believe that a good indication of high national financial literacy is a low rate of gambling and vice versa. Should we surprised at Singapore's high rate of gambling 'investment' and low rates of private enterprise? Then again, I must say there is perhaps no population in the world which is truly financially literate. For now, this form of literacy is still the province of an elite.

Monday, January 03, 2005

Eternal damnation?

One of my friends, who is currently studying in a seminary, wrote this interesting reply to my denial of this doctrine. Some of the questions raised are indeed pertinent, especially the free choice of hell:

It was interesting also to see your comment that you find the teaching of eternal damnation difficult. It is something that certain Western minds find difficult also, including Christians. Maybe there is some underlying effect from how human nature is viewed. In those cultures where human nature is seen as essentially good, thinking to Socrates who thought "no-one does wrong knowingly", and today's liberalism thinking that no-one is responsible and everyone is good enough to go to heaven, no wonder some find it hard. This doesn't mean that the view of some Protestants of human nature being perverted is accurate or the answer to the problem. Human nature is essentially good, but is also affected by the fall and experiences an attraction towards evil. Freedom means that evil can be chosen, which leads to people becoming brutalised, e.g. Mel Gibson's film "The Passion of the Christ", where those doing the scourging and whipping took increasing pleasure in inflicting pain on the Lord. God can work miracles, but if someone has constantly chosen evil:

a) would he/she be able to stand heaven, with all those "do-gooders"?
b) would it not be a violation of freedom for God to in effect forcibly convert someone to becoming good after death?

I remember saying once to someone that when Satan fell the reason he isn't forgiven is because he doesn't want to be forgiven, not because of some restriction or inflexibleness of God. He has too much pride to admit he was wrong, and perhaps isn't sorry in the first place, despite having in effect made a mess of everything. We could say he is "the first pervert" in the sense that he has so perverted (i.e. strongly distored) himself from what he was, an angel of light. This process can begin to take place in man, although it never achieves such a completeness as in the devil. Can this not affect man to the point whereby once he reaches the judgement throne after death he rebels against God and freely chooses hell, never again to want to choose God?

I don't know. St. John Vianney though took the line that if you put a priest into hell to hear confessions they would all go to him so that they could get to heaven. Perhaps we are in fact entering a mystery here. Perhaps we lack some important pieces in the jigsaw puzzle. Hence why I at time see faith and understanding being a bit like a colouring-in book. Faith provides the outline, and as time goes by reasoning manages to produce the colour. However, you may never finish colouring in the picture, and your colouring. Always leaves something to desire.

Anyway, there's something for further discussion.

God bless,

A Christian view of money

The relationship between Christianity and money is a vexed one. Most seriously, in possibly the worst economic transaction of all time, Christ was betrayed by Judas Iscariot for 30 silver pieces. Then in Acts we have Simon the magician presuming to buy the gift of the Holy Spirit. Then we have all the different sayings and parables: 'You cannot serve God and Mammon', the parable of the rich man who stored up his wealth and gains while his life was going to end that very night, and in the magnificat of Mary we have the 'rich being sent away empty' and then we have St James condeming the rich and their rotting wealth in his epistle (of course Christ also compared the eternal treasures of heaven which are safe from thieves and moths to the impermanent riches of earth). Finally, Jesus himself was born in poverty and the 'inn has no place' for him.

On first perusal, these passages may indicate how Christianity has an extreme distaste for wealth and its temptations. And in one sense, this cannot be denied. For what Christ came to offer, that is, Himself, is far greater than any earthly riches. For those who are steeped in material attachment and whose heads are glued downwards to the earth, they clearly need to be told in no uncertain terms that earthly wealth and money are not permanent and cannot lead to true happiness. In addition, people need to be warned that the greed for money can also lead to grave evils (as in of course the betrayal of Christ). One can indeed 'gain the whole world but lose his own soul'.

But should we then swing to the other extreme? Elevating the narrow road of poverty and viewing wealth as the sure 'wide road' of perdition? Again, in a very real sense, we cannot deny how poverty (though of course, subsistence level is assumed. Anything below that is famine, not poverty) can often help a person focus his or her mind on eternal things. For example, the main reason why people do not pray more often is usually 'I do not have enough time'. It is indeed hard to conceive how a person who is dedicated to the rat race of career advancement and more money for its own sake can also be at the same time dedicated to the pursuit of God and his Spirit. A person is finite after all.

Freed from material attachments and the vexations of seeking wealth and its growth, the person can simply focus on the riches of God without undue distractions. Catholics may term it an attribute of the 'consecrated' life.

But there are several problems with this elevation of poverty. For one thing, given the practical state of our world, those who renounce riches and enagage only partially or not at all in the economic life usually require the others who are engaged in the economy to support them. This is of course a rather ironic situation. The second is that the external renunciation of wealth is useless without internal renunciation. That is, one may take a vow of poverty and all that, but if one actively seek for money in one's heart and act in accordance with this greed, one is still serving Mammon and not God.

A much bigger problem is this: there are only 3 main ways in which masses of men can be organised in collective action (probably I will elaborate more on this in another blog), through persuasion, money or force-violence. The very nature of human society requires employment of some combination of these three to effect almost anything that requires more than the strength of an individual. Force and violence is not an option for most people outside the rarefied circles of high government (where violence is usually legitimate and employed in the enforcement of laws through police and military forces) and the mafia. Persuasion by reason or spiritual force (Gandhi's satya-graha) can work, yes, but only to a limited extent and on limited numbers of people (not everyone listens to reason, or to your species of reason. Witness the proliferation of religions and philosophies). Persuasion by itself can only go so far without ANY financial or armed support.

So money is basically indispensable as a means of effective social organisation for the masses of men. Essentially, you can purchase the services of thousands of men by appealing to their self interest (ideally in the formation of a win-win situation where they provide you a service and you with them with money), and the goods needed for your profitable or non-profitable cause. Persuading these men that your cause is truly an ideal worth fighting and even dying for will be an additional help, and in some case, indispensable. Thus money and persuasion can work together to achieve supreme effectiveness.

Note also that such methods are far more efficient and civilised than say, the use of force to compel slave labor. Perhaps many do not recognise that the one main reason most governments are so much more civilised today as compared to olden days is the simple presence of an effective market and the greater power of money. I.e. If you can strike a deal with your workers, you do not need to send your goons to threaten them with starvation and death simply to get them to do what you want.

In short, to renounce money is to renounce, to a very large extent, effective social action. The other effective alternative normally available is to employ pure iron and blood backed with fanatic brainwashing (the essence of totalitarianism), and that, needless to say, is far worse. This, I think, is a dilemma recognised by many throughout history. Without engaging in an profitable economic life, you can still engage in a very intense but individual spiritual advancement, and write all sorts of good books, preach the most wonderful sermons, or produce the most sublime art--but ultimately, you fly with one wing. Typically, such contemplative sorts must find and persuade a patron with wealth and resources to even promulgate their ideas or works. Or they starve.

This is implicitly the solution accepted by many throughout the ages, Simply, the Christian community, the Church in some form, tries its best to keep away from the economic life, but relies on a less spiritually inclined laity to supply them with tithes and donations. Or they starve. To say the least, this is not a satisfactory solution, since you are doomed to condemn the hands that feeds you, and often to be seduced by its ways. The laity may also find it difficult to reconcile their economic behavior with their religious one. The dampening of religion is a common outcome.

I think in recent times, a more satisfactory movement towards the spiritualisation of the economic world is underway. This may be a movement more advanced in the Protestant denominations than the Catholic church (though post-Vatican Council II changes do take note of such things); not for nothing do we speak of a Protestant work ethic, where even mundane money-making work (not just the work of the religious) is seen as a way to glorify God. While one cannot deny how such lofty sentiments are typically muddied and compromised in the real economic world, it is still a very important ideal worth striving for.

After all, as stated before, it is ultimately the inner renunciation that counts in the eyes of God. Christ praised the old woman who 'put in all she has' to give to the Temple. Ultimately, all wealth and money belongs to God and should be used in accordance to His will. The world is in need, more than ever (given the increased power of the market--see earlier blog) of people who are willing to embrace this attitude sincerely, and be humble stewards of the wealth of God--'Your will be done on earth as it is in heaven'. The advancement of the kingdom of God cannot take place merely individually. Instead massive social organisation in the forms of the different churches and religious organisations, then the governments, corporations, charitable, educational and social organisations are needed. And such organisations require monetary investment and skilful management by people of great vision and wealth.

And in a more 'apocalyptic' and metaphysical sense, Christians must always remember that the old Enemy of man and God is not averse to using any means whatsoever of crushing the kingdom of freedom and peace. Mass abandonment of the economic realm by the people of God is equivalent to allowing Satan to seize this all important means of social organisation and wreck total havoc. During World War II, we remember it was fundamentally the economic might of the United States that allowed the Allied powers to far-outproduce Germany, Italy and Japan. It was the huge market, vast financial resources, industrial productivity and economic skills of the American people that sustained a deluge of tanks, aircrafts, ships and supplies that ultimately overwhelmed the dark and violent totalitarian states. Money and its skilful employment is indispensable in the practical state of our world to sustain an effective action against the forces of evil.

I conclude this preliminary discussion of religion and money here. Will look forward to comments on this highly controversial topic =).

Sunday, January 02, 2005

Humanity's quest

We are a species of finite consciousness and infinite dreams. This is our blessing and our curse. Lower than the angels and higher than the beast, partaking of heaven and born of the earth, our minds encompass the highest and lowest rungs of creation and our spirit exceeds even these. Indeed, the dignity of man lies in his capacity to aspire with his mind and heart, and to transform into the very thing which he loves.

The capacity to love is man's gift for finding the ideal and the transcendent. Love is the fire that propels us towards our dreams of perfection, whether the perfection of our material or social existence, our biological or mental natures, or simply the finding of perfect truth and beauty and joy. In the beloved, whether a person, a field of knowledge, a piece of art, an ideal, an angel or God Himself, we seek the charms of a mysterious beauty that calls us to its bliss.

For the very essence of love is to find ecstasy in the beloved. And in the quest for this ecstasy, humanity wanders in the grief of vanished beauty and trampled dreams, assailed by dark despair, partings and the siren songs of limited earth--but trudges on, in its pilgrimage for eternity and the ideal. In most moments, the ideal eludes us, the mundane is all there is. Yet in a piece of music perhaps, or a face, or in the silence of prayer or a dream, suddenly the bliss of love returns and we lift our faces from the earth.

The heart of God burns in those who loves, and those who love see with his eyes. Through love, men partake of the divine--for is not love the Spirit of God himself? Thus in love humanity slowly discovers how the means and the ends of his quest are in fact, one.

Saturday, January 01, 2005

Money and its growth: Part II

For those who DO seek higher returns, then well, as mentioned, their only hope to reduce risk and keep high returns is through knowledge. Hence come in the whole arcane art and science of fundamental and technical analysis in stocks and forex and commodities in general. Yet in equity investment, even without resorting to financial quantum physics, it may well pay for people to find out one simple fact: while individual stocks may fluctuate from heaven to oblivion, the GENERAL trend of the stocks for a growing economy is upwards. If you trace the whole US stock market for the post 1945 period, the trend is clearly a hill-like climb upwards which beats inflation significantly.

There is nothing esoteric or mysterious about this. Stock prices trace the net income (profits) of a company. Generally speaking, assuming healthy cash flow, growing net income over time, translates eventually into growing stock prices. In a growing economy, most publicly listed companies do grow their profits, notwithstanding spectacular annihilations here and there. A very simple and very safe (by equity standards) investment strategy is simply then to throw your money into index funds. These mutual funds buy every single stock in a major index, i.e. a list of certain stocks. These may be things like the S&P (Standard and Poor) listing of large capitalisation (500 of them), mid cap or small cap companies. The risk level and returns level are also typically lowest for large cap and highest for small caps. These indexes generally out-perform the overall stock market, which already outperform inflation.

The one big concern about such index funds is currency fluctuations (Singapore also has an index, but I suspect its gains are not very spectacular given our lack-luster GLCs). The falling US dollar for instance can do vast damage to your S&P fund investment. Again, in this era of vast American current account and budget deficits, cautious investors may want to look towards European indexes (though the concerns there are lower net-income growth). If only European companies just grow faster, or America clean up its finances, THEN investment will be so much more a cup of tea. Or for that matter, I look forward to the day when China has a reliable enough financial accounting system, or also India for that matter.

To return to the topic, it is important to know that most stock investors get burnt up because they treat the stock market like 4-D or Toto and keep on hoping for 'the right pick'. I have nothing against the 'right pick'--if properly done. After all Warren Buffett and all famous entreprenuers got rich by making the Right Pick (Dell picked his own company to put in his initial $1000, Buffett picked Coca Cola, Washington Post, Geico and others). But unlike the lottery, stocks of good profitable companies do not generally fly upwards overnight and allow you to collect your 'winnings' immediately. They take time to grow their profits consistently over many years, and their stock prices naturally gravitate with their performance. But instead, many amateur stock investors simply fly from flower to flower extracting what little nectar there is. Soon they stumble onto a Venus flytrap and that is the end of them.

The requirement for doing right picks is thus a very large dose of discipline and patience to wait for your pick to blossom. In addition, few actually have the patience to do the extensive research needed to build up a personal selection of stocks. This entail looking at company financial statements for the past years (meaning a modicum of accounting knowledge), researching into management and market trends (which is in turn conditioned by forex, political and technological trends). A normal college graduate should be able to perform all these, but risks remain (though if you diversify by buying 4-5 reliable stock ( a mixture of high risk small caps and low risk big caps may be a good idea) that you are confident of, you should expect general overall growth). The good thing about this investment strategy (as compared to an index fund) is of course you may actually pick a Microsoft, Dell or a Wal-Mart in their earlier stages (this is especially true for small-cap stocks) and see your investment increase by a hundred times or more. It is rare, but perfectly possible. Alternatively you may pick 3 Enrons. Higher risks, higher returns, remember?

Another high risk, high returns proposition is the ill-understood world of forex trading. In the past foreign exchange trading belongs firmly in the world of high finance. Millions of dollars are needed to profit from tiny forex fluctuations. But today, there are brokers who allow small-time investors to buy on extreme margin (on debt). That is it allows you to command $100 or so by investing $1 (you borrow the other $99). It is a very high risk proposition and such margin trading can only be considered speculation and not investment.

For small investors, the main type of forex investment you should consider is simply to factor in the indirect effects of forex trends on your other investments. For instance, buy European or bonds stocks to buy in on the Euro's long term rise. Or for that matter, put a little money into renminbi bank deposits to gain on the currency's eventual rise (assuming the Chinese government holds together). Some banks also offer forex-linked accounts that allow you to bet on the long term trends of some currency pairs. Generally speaking, the advice for all forex investments is the same for equities: research, research, research--forex trends are linked to certain economic and political conditions that must be known.

Final word

All in all, perhaps the best overall strategy for the average joe is probably not to merely put in loads of funds into either high risk or low risk asset classes. That is, do not put in 90% of your money into stocks and 10% into cash and bonds, or vice versa, but balance it out to create middling risks with middling returns. A Businessweek article has recommended a conservative allocation of 60% to stocks, 20% to bonds, and 20% to cash for an retirement account. Obviously you can vary the proportion to suit your own risk acceptance. Also remember even within stocks you can diversify between large, mid and small cap stocks to spread risk.

So there, some ramblings about money and its growth. Will welcome your comments.

Money and its growth: A thought

To begin with, to grow our money is not something that requires penetration of dark mysteries or the gift of gnostic enlightenment. The first key is simply to prevent ourselves from being blinded by simple human greed and/or an unhealthy emotional thrall to the power of money and/or the unthinking conformity to the economic behavior of friends/family--'The blind cannot lead the blind'. After detaching yourself and clearing matters up a little, it is then important to cultivate a genuine interest in money and its associated matters--especially matters related to investment. You must be positive about money and seek to clearly understand its nature, operations and powers. A lot of people seek more money, but how many care about its laws and properties? We idolise money, but we do not respect it enough to learn about it.

Financial knowledge is the key to wealth. No matter what your starting income base is or your regular monthly income ((though I assume you have at least some surplus above subsistence), the only way to even protect your money's value (not to mention grow it) is to learn about the basic arts of investment. For as most of you may know, money tends to lose its exchange value over time because of the inflation of prices. To keep up with inflation is the most basic justification of investment.

Another thing: to attain true financial literacy, one should never seek to follow financial gurus and rich dads blindly. The best policy to peruse the problem of money growth from all angles. One should compare and contrast the approaches of stock investors like say, Warren Buffett and Peter Lynch, with entreprenuers like Bill Gates and Michael Dell, with real estate giants like Li Ka-Shing and Donald Trump. Richer folks will also need to cast a glance at the world of forex and its intricacies (either for direct speculation or during foreign investments). Indeed, I genuinely wonder why no educational system in the world seems to provide an all-important course in financial literacy and let most of our students stumble along with the most primitive of economic beliefs. Perhaps it is a conspiracy to support Singapore Pools ? =)

Once you have obtained some basic financial and investment knowledge, the next step is of course to start applying them to investing some of your surplus wealth.

Among many tricks and guidelines, I think one should always remember an important law of investment: Returns are usually proportional to risk. Typically, if you want a fast buck, (i.e. higher returns over shorter time) you must risk losing more than someone who is willing to settle for a lower profits ceteris paribus. This is however NOT an absolute law. Knowledge of the market or the business/commodity in question can reduce risk without affecting returns. Institutional level investors may also attempt to make their knowledge certain by driving the market up and down with their resources or through illegal means. Regardless, the relationship between knowledge, risk and returns should be kept in mind, whether the investment in question is one's own business, public company equity, real estate or bonds. If one seek higher returns without higher risks, one must dramatically improve one's knowledge of the investment and the relevant market conditions. If that is not possible, as said before, one must simply be satisfied with lesser returns.

It is the standard Golden Goose teaching. Better one golden egg everyday instead of one dead goose. Thus the person in question can forgo risky options like setting up their own businesses or investing in equities (stocks). Instead he may put some into fixed deposits (which may keep up with inflation) of banks or insurance companies. A reasonably safe alternative is to buy government bonds (basically to lend money to governments) or to invest in a money market fund (such as Merrill Lynch's. These invest in bonds for you). These can also offer returns slightly above inflation-- though I am a little paranoid about the stability of the US government, which is the largest supplier of bonds (US Treasury Bonds). Personally, I will go for European or British bonds, though my knowledge of that is very limited as yet.

Yet the best 'safe' investment is probably real estate (though usually more unsafe than fixed deposits, bonds and money market funds). Perhaps a good majority of even the financially illiterate do make substantial gains from the house they live in, so long as the general economy is posing some moderate growth. That is of course you are not chasing a big bubble. In any case, unlike things like stocks or your own business, even if the price of the house drops precipitiously, you still have the house. Here it is wise to appreciate this wonderful economic concept of practical value VS. exchange value. Things like water and air have great practical value, i.e. they are very useful, but they are of very little exchange value, i.e. they can exchange for very little; put it another way, their price is very low.

A house retains its practical value even if (touch wood) its exchange value plunges into an abyss.
That alone more or less makes it much more 'safe' than equities or things like gold. Appreciate that gold is hardly very useful (very little practical value). Its value, like that of paper money, consists of exchange value. It plunges and that is the end of you. That, by the way, is another reason why hoarding cash in your piggy bank is a VERY bad idea.

Anyway, this blog is too long. I shall talk about higher risk investments in another blog.