On Tuesday, in my regular weekly MINT column, I had asked whether the world could do without financial markets. I had argued that humans’ cognitive limitations meant that we were incapable of pricing long-term returns and risks. Mispricing of debt has led to excessive debt accumulation and mispricing of stocks had led to asset bubbles with all unpleasant consequences when they burst. A good friend had forwarded it to another friend who had said that political economy problems could not be solved with technical fixes. He has a point but I was not convinced. I was thinking about it as I walked from my home to a shopping mall that is not very close.
On the way back, I saw that the road had been boarded up quite extensively. An overhead walking bridge had been pulled down. I thought that some major work must be underway. I was right. I looked at the board and it said that the project was about building the new Marine Parade Metro Train Station (MRT – Mass Rapid Transit) and underground tunnels for the Thomson – East Coast line. That got me thinking about the issue even further.
I recalled that I had read earlier in the morning that the CEO of the ‘taxi ‘ company Uber had said that his driver’s license had expired and he had a BMW in his garage with an alternator broken and hence not in a driving condition. He was driving home a point, I guess. One did not have to own some of the things we used to, to avail of their services. I hope he was not lying about not renewing his driver’s license.
So, a major change in ownership culture and the prestige attached to brand name cars might be underway somewhat quietly. My friend had formed a company to rent DIY tools rather than having to buy them. We might be on our way to becoming a service economy from an ownership economy. Of course, it is not assured and nor is it likely to be quick. But, there is no doubt that a disruptive change is underway. If ownership mindset were considerably eroded (it is a big IF), then it would strike at the heart of capitalism. That change would have happened due to a technological disruption that brought about a cultural and psychological mindset shift and not due to a political economy revolution.
Singapore, after laying tracks to all parts of the island, and after having allowed all new car-ride companies to offer their services, can clearly make it (more) difficult, expensive and ultimately unnecessary to own cars. Expensive real estate – at least large parts of it – can be released from parking space to residential and other spaces.
Hence, sometimes, it is not only feasible but may also be smarter to achieve social change and outcomes through seemingly innocuous technical interventions rather than through political economy battles. That may sound grand and intellectual but may not always work. Disruptive technical change may be both effective and smarter compared to destructive political economy battles.
(p.s: It is a delightful irony interesting that a ‘disruptive’ company like Uber chose to accept the investment from a change-resistant society like Saudi Arabia or, put differently, it is interesting that a change-resistant Saudi Arabia embraced a ‘disruptive’ company like Uber. What does it tell both about Saudi Arabia and about Uber? Nothing great, according to this columnist.)