Good and evil

The unresolved debate over the nature of human beings dates back to more than two thousand years ago in Asia. In around 300 B.C., Mencius developed a theory which brings to a conclusion that human nature is fundamentally good. Xun Zi opposed it with a theory which concludes that human nature is fundamentally bad. A stream of other schools of thought followed either of the two theories. In the warring states period, states had an incentive to develop more competitive ruling systems than those of others and, to do so, needed to appreciate whether people are born to be good or bad. It was because a good understanding of human nature would facilitate determining, for example, the size of costly judicial and security systems, which is a function of the amount of good and evil realized in the society. Philosophers (ruling system designers) viewed human nature as a proxy of the amount of good and evil observed in the society.

Their views, however I believe, were incomplete at best. The amount of realized good and evil is rather a function of how national systems (ruling systems then under the monarchy) are established and operated, not a function of how people are born to be. It has been well documented by several research that crime rates and suicide rates historically rose in years of a Republican in the White House and dropped in years of a Democrat. The former’s policies which involved corporate tax cuts and easier layoffs raised unemployment rate, and nation-wide depression caused by high unemployment resulted in a hike in crime rates and suicide rates. This is an example of how poorly-managed national systems increase the amount of good and evils observed in the society, among others. Nevertheless, we often see some politicians attribute realized bad social outcomes to national character or traits – which belong to a battery of human nature – while they are outcomes of the national systems the politicians design and run.

Arguably putting an end to the long-lived debate, democracy forms a surprising innovation. It enables people to determine and control the relative proportions of observed good and evil in the society. Precisely, in modern societies where democratic systems are installed (which are assumed to function as designed in this writing), the wedge between good and evil converts from the matter of human nature to the matter of choice. That is, the choice between a pair of certain short-term benefits and uncertain long-term losses expected from the practice of evil and a pair of uncertain long-term benefits and certain short-term losses expected from the practice of good. Or, in even simpler words, the problem of incentives.

Given the representative political system, it is now possible to pull up the proportion of observed good by delegating the right to operate and amend democratic – administration, legislation, and judicature – systems to those who are willing and able to do so in the following directions. The ways that reduce costs (and uncertainty) as to implementation of good and merits (and certainty) as to implementation of evil and that raise merits (and certainty) as to implementation of good and cost (and uncertainty) as to implementation of evil. That is, the extent to which democratic systems incentivize, as described above, each member of the society drives the relative proportions of observed good and evil.

Timely look

It’s been a year back in academia, spending a growing amount of time in this small, isolated, windowless, corner cubicle. Wish I now have a more nerd-like look. It’s time to dedicate myself to building up knowledge base my future research will build on, and how I look may showcase how successful I am in that. But, I will need to spare a growing amount of time to level up my oral communication skills at later stages of my education, at the expense of my time to do research. A distinct feature of business professors is that they teach MBA students and so are expected to be a good communicator as much as they are expected to be a good researcher, which are oftentimes conflicting missions. A timely look is always of the best quick-and-dirty proxies of where one stands.

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Those who have less are often the ones who give more, not necessarily because they are nicer ones but because they tend to suffer hardship of similar types. To them, economic difficulties are what they also deal with as part of their day-to-day lives, rather than knowledge learned indirectly by reading books or media, which is often the case for the haves. This is why constituents must be extremely careful in giving their votes to those from the upper class. They might be nice enough persons personally but are likely to share few grounds from which they could truly understand how lives go at the bottom or in the middle.

Corporate tax subsidy and investment

Corporate tax policy in Korea lacks, if doesn’t ignore, basic understanding of the nature of firms. In corporate finance theory, large firms are characterized by low investment opportunities and high cash flow and small firms are characterized by high investment opportunities and low cash flow. What is needed to foster investment and thus growth is then to tax large firms more to reduce over-investment cost and small firms less to reduce under-investment cost. If done reversely, the obvious consequence is an increase in cash reserve, perquisites, and tunneling through related-party transactions (in case of family firms), as large firms are short of investment opportunities to exploit. If the government forces them to increase investment, things will get worse. The tax subsidy to large firms will flow to increase their pies within industry, stifling small firms – which are primary sources of growth and employment in the economy – rather than increase the size of pies to share. Even so, the previous and current administrations have continued to cut (effective) tax rates more for large firms – which already have cash in hand but nowhere to invest – and now turn to blame the large firms for not making investment and lay the current economic distress to their charge. Is this a lie or a joke?

Share to grow

Income, or wealth, inequality harms both the rich and the poor by limiting the spectrum of lives to which they are exposed to each extreme. Assume a society that involves persons R and P who are equally talented and passionate but from, respectively, rich (top 20%) and poor (bottom 20%) families; and that every single person in the society desires only to climb up, never down, social as well as economic ladders. Then, the life spectrum one ever experiences is limited to 20% for R and 80% for P if they never interact and 80% for both if they fully interact as R learns from P indirectly lives of the middle 60%. The merits of exposure to a wider spectrum of lives is obvious. For R to sell products as a businessman or win votes as a politician, for example, she must understand what the bottom 80% care or concern about and suffer from. Hence, the more the interaction between R and P, the wider the spectrum to which R and P are exposed, the more the value created by R and P, the richer the society. As the income or wealth equality narrows the distance between R and P, and the wealth of the society is a function of the interaction between R and P, which in turn is a function of the income or wealth equality, it is straightforward to conclude that the less inequal the income or wealth is, the richer the people are in this stylized society.

Takeaways from this society setup include 1) the importance of lessened inequality, which generates more within-society interaction between the rich and the poor, for economic growth; 2) the importance of indirect learning of lives from different economic classes through reading classics and extracurricular activities at school; 3) the risk of firms hiring talents from rich families having a record of little contact with the bottom 80%.

Early bird

One of the habits I got into since my late 20s is to begin a day early. It might be rather called an obsession over the earliest opening time of a coffee shop or so. Here at Chapel Hill (2014-), I wake up at 5am and take the first seat at Starbucks at 5:30am to start a day, unless I otherwise choose to work from home, my office, or the library. Back in Singapore (2011-2014), I used to wake up at 5am, read on my way to work, lift weights starting 6am at a fitness club one floor below, and work on personal projects at Coffee Bean near my office from 7:30am to 9am. Apparently, doing so hasn’t always led to efficiency or productivity of a desired level, yet has been of much help especially when I was off the rail without curriculum or timelines to play on.

In my early 20s, I was a night owl. The difference between a day-opener and a day-closer even between the same hard-working persons was clear to me, and I was eager to become the former, who lives on a self-constructed timeline and thus maintains evenly high productivity throughout a day, rather than the latter, who follows a given timelines and hence produces most near the end of a day or deadlines. To become the day-opener was just not as easy as I initially imagined. Whenever I tried to do so, I immediately experienced productivity loss and had to return to a life cycle of the latter as deadlines to meet approached. The result was that I continued to be a hard worker but of a latter type, being awake until around 5am most days, when I was at State College (2007-2008), Stony Brook (2007), and Suwon (2005-2006).

It was only when I got fully off the rail going neither school nor work that I was able to turn to the former, the early bird. In 2011 I failed to enter into academia and was seeking for an industry position to take on for a couple of years before reapplying to PhD programs. On top of the uncertainty coming out of my homeless status for several years, I had to deal with additional dimensions of uncertainty. Only by putting more and more structure on my days – including the early-bird habit – was I able to overcome growing anxiety during the period. As a result, my days turned tightly planned, organized, and regular more than ever before.

My reply to my mother’s then saying may well describe circumstances having faced me and my general attitudes against them. She once said that I should visit her place more often – while I was jobless as well as homeless – and listed other expectations she had on me; I seemed, not only to my mother, out of touch with society and was supposed to have no urgent things to do. There were clearly more than what was literally meant in her words. She worried about me possibly being in distress and wanted me to take a rest in her arms. I yet responded that I was managing to have my days more regular than anybody else, beginning my days earlier and ending later than the employed, and asked back how an unemployed one could ever be employed living days less organized and making lesser efforts than the employed.

Thanks to repeated exposures to high uncertainty including the one described above, I was able to turn to the former as I had long hoped, be hired to work from Singapore, and be admitted to a dreamed doctoral program in finance.

Approval rating

Certainly an oversimplification, but the approval rating of 70% or more amounts to populism promised or implemented at the expense of next generations, and the approval rating of 30% or below implies firm, but short-of-strategy pursuit of principles, if not incompetence. Just around 50% is, I assume, arguably an optimum in highly-divided societies with an ever-increasing conflict of interests amongst constituents. To achieve the “ideal” rating, what is needed is to compromise policies of lower priority, at least temporarily, not to lose ground and make things work at times with the rating below 50% and push forward policies of higher priority at time with the rating above 50%.

It is yet a balance that is hard to achieve. One reason is that the balance builds on leaders armed with both strategy and philosophy, who are surprisingly rare to be found or elected to take important seats. They belong to either a representative of the privileged, who is short of philosophy, or an advocate of the havenots and the middle class, who is short of strategy. This is, however, the problem that is not of individual leaders but of democracy per se as a system. The more the economy grows as a result of the pursuit of self-interests in a democratic society, the more divided the society is and the harder It is to have a balanced leader serve people. As such, only the countries – particularly between more advanced, so more divided, ones – that retain thick the middle class from which common senses are generated possibly have such a balanced leader seated at key posts and take steps forward.

Guilty conscience

Since I moved to the United States last summer, I have suffered a guilty conscience for my mere presence abroad whenever I read about Korea. What are addressed in news articles have been those with a direct and immediate impact on my family and friends and few of them have been transient. They have been about social justice destroyed and growth potential undermined at the huge expense of generations to come. Of the reasons I am here is to help my country move forward by means of independent, long-term research. But, I am already afraid of a rising possibility that my lifetime role for my country is limited to a recovery rather than an advance. Another thing is that to follow current issues in Korea, which has been unavoidable for years given their consequence and my role as a social scientist, has brought about a substantial loss in my productivity. It wouldn’t be, I presume, different for other overseas Koreans. Another big expense we Koreans all together are bearing.

First soccer championship at Chapel Hill

Last Saturday I and my classmates formed a team and won the 6-on-6 tournament hosted by the Orange County Adult Soccer League. Eight teams signed up for the tournament and played four 40-minute games each – the first three games in two groups and the last game against teams paired by the ranking within each group. It was the second time to play formally at Chapel Hill; I played intramural soccer last fall with UNC economics PhD students where our performance wasn’t as good as we initially expected. On top of the intramural soccer, there are off-campus opportunities to play soccer at Chapel Hill. This small city has three adult soccer leagues including the OCASL, the fact that surprised me and most other new comers. It offers me rich opportunities to run with guys who I work with. I am really grateful for that.



One winter day at Davis,, grateful for days allowed for me to make steps forward in the way I have long aimed for in academia, although even more demanding than before joining in. This may surprise those who are aware of how my life was in past years. Wish my days here begin to reward me in five to ten years time to help improve societies to become places where everyone can do so if one wants and works hard.

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