Skip to content
Apr 13 / Keith Chan

Waiting for a job title is a procrastination

“Most of the time, a person sits down at her personal computer not to create, but to read, observe, study, explore, make cognitive connections, and ultimately come to an understanding. This person is not seeking to make her mark upon the world, but to rearrange her own neurons. The computer becomes a medium for asking questions, making comparisons, and drawing conclusions—that is, for learning”

from page 7 of Magic Ink: Information Software and the Graphical Interface


I have been having a false sense of productivity by spending most of my time reading from a computer or a book. I have been advocating learning but forget the goal is to have someone to finally take actions, not purely to learn and feel adequate. Like a mouse running on its wheel, I am trained to feel satisfied by rearranging my neurons in my seat for a whole day – because I am a student!
Perhaps if I had spent only 1/3 of the time reading, and 2/3 of the time doing, I would have already changed the world a bit for the past 3 years of my life (and would have learnt much more efficiently through doing).
But I have spent too much time waiting. It takes me 3 years to understand I don’t need a job title of any kind (a policymaker, a researcher, a professor, etc) to express my views on policies/business practice in public sphere. I waited for the authority; I waited for the approval from others; I waited for the future me as if the present me live helplessly — but I am actually waiting for the confidence to be alive.
Graduation should not be a permission to begin making a difference in the world, because studying here at EVMT is neither an obstacle to start — we can begin anytime in our life.
Set a short-term goal for yourself about making a difference in others/our society. We are still young so we don’t need a long-term goal to justify our short term goals (don’t be wrongfully paralyzed by the lack of a dream, because it will come to you by doing, not by thinking).
This is not an advertisement, but it is very helpful to read Envision Blog about what’s happening around the world, and formulate your short-term plan. To just write and express your views in Envision or SCMP already creates more impact than to sit back, read and sign. This is what any university student can do — and certainly we can do much more.
Thank you for spending time reading this reflection after my several years of studies. I hope this has made a more-than-short-term difference in you. If there is a sentence I want you to remember, it is — you do not need to wait to be alive. You need no permission as a university student to make your mark in the world. Think not ‘who you want to BE’, but ‘what you want to DO’, then you’ll discover you actually need no job title to start.

Dec 18 / Keith Chan

Resolving the Flame Case

Flame case

Secretary for Justice v. Flame Construction Co. Ltd. [2001] is an important case in the field of Water Pollution Control Ordinance in Hong Kong. However, it appears that the judgment is self-contradictory and confusing. In this article, I attempt to resolve the conflict by proposing the following:  in the judgment, the term “effect” has double meanings which are not clarified by the judge. Sometimes it means “potential effect”, and sometimes “actual effect”.



Hints from two precedent cases

It is wrong for the judge to claim that R. v. Eggar [unreported] and R. v. Dovermoss Limited [1995] are conflicting[1] with each other in their judging criteria. Let’s examine their judgments:

R. v. Eggar [unreported]: “The nature of the pollutant itself rather than on its actual effect on the waterway.”

R. v. Dovermoss Limited [1995]: “The likelihood or capability of causing harm, or of actually polluting the watercourse.”

Superficially, the Eggar case emphasizes on the nature on the pollutant itself, while the Dovermoss case emphasizes on the actual effect of the case. This is agreed by the judge[2]. However, I argue that “the likelihood or capability of causing harm” in the Dovermoss cases should be interpreted as “potential effect”, which is the key to resolving the conflict between the two judgments, and also the Flame case.

Inseparability of nature and effect

The judge himself argues that the nature of most water pollutants is defined by their effect: “The other three categories of prohibited matter are concerned in section 8(1)(a) and section 8(1A), that is polluting, noxious and poisonous matter, their nature as such is defined by their effect. Here the effect specifically refers to that defined by the dictionary: “Whether it is a substance, which has the intrinsic property of making other substances with which it is intermingled “physically impure, foul or filthy, dirty, stained, tainted or befouled””.

Notice that the judge is referring to the potential effect, because the term “intrinsic property” in the above quote clearly refers to the a priori knowledge of the substance’s “likelihood or capability of causing harm”. This is what he means by the inseparability of nature and effect – a matter is regarded as a pollutant by nature because it can pollute.

For example, in the Flame case, the imaginable polluting effect of the 73,000 mg/L of suspended solids is reasonably adequate for the judge to regard the muddy water discharged as a pollutant by nature. No empirical experiment is needed to study its actual effect to the waterway.  I therefore propose that, in my matrix, “nature” should be replaced by potential effect, and “effect” by actual effect. This can clarify the ambiguity of language.


Potential effect

No potential effect

Actual effect


Not exist

No actual effect


No conviction

Construction of the matrix

I argue that, based on the above two obita dictums set out by the judge, “nature” is equivalent to “potential effect”. The resultant matrix of arguments is shown above. The top right box does not exist, because if a matter has no potential polluting effect, how could it have any actual polluting effect? The top-left box and bottom-right bottom are self-evident.

As for ambiguous matter, I do not agree that another column should be set up, because no ambiguous matter can be regarded as a pollutant by nature without attaching with it the corresponding quantity. For example, we cannot just say suspended solid is a pollutant.  5 mg/L of suspended solid, which is the average level found in a natural stream in Hong Kong, can have no potential polluting effect; on the other hand, 73,000 mg/L of suspended solid has obvious potential polluting effect. This is in line with the obita dictum that “Some matter may be more ambiguous in its characteristics and be able to be established as poisonous or noxious or polluting in its nature only upon proof of further matters such as the quantity of matter involved.”

Therefore, depending on the corresponding quantity, ambiguous matter is placed either in the left column or the bottom-right box. The creation of the third column for “ambiguous matter” not only conflicts with the above obita dictum, but also render irrelevant the 1st ratio decidendi that “Matter may be polluting matter whether or not is consists of a natural or a man-made substance. Many natural substances are pollutants.” From my perspective, the judge wants to convey that 73,000 mg/L of suspended solid, based on its imaginable potential effect, is obviously a pollutant by nature, and there is no room for grey area, as will be depicted by the third column.

Clarification of the scope of WPCO

Back to the issue of the Flame case, the dispute as stated in paragraph 8 is “whether evidence was required, as a matter of law, when the substance complained of was a natural substance such as muddy water, as to the actual effect of that substance or matter on the protected water way.”

The 2nd ratio decidendi directly addresses this dispute: “The legislation in Hong Kong is constructed simply so as to prohibit certain sorts of matter being discharged into protected waterways. It does not, in its terms expressly require that the prohibited matter discharged be proven to have had in fact a polluting, poisonous or noxious effect.” I argue that the term “effect” here refers to “actual effect”, since it is used with the phrase “be proven”. As long as “potential effect”, i.e. the nature of the matter as pollutant, is established, no empirical experiment is needed to study its actual effect to the waterway, because the intent of WPCO is to prohibit the discharge of any potentially polluting matter into the protected water ways.

This is supplemented by the obita dictum that “Indeed it may be that the particular waterway is already so polluted and noxious that the additional polluting matter has no measurably adverse effect upon it. That does not matter … it is still the discharge of polluting matter.”

Based on the above arguments, I suggest that the clarification of the term “effect” used by the judge can help resolve the confusion of the Flame case judgment. As illustrated by the matrix, the seemingly contradictory judgment can turn out to be logical.

[1] Para 15: “A perhaps conflicting decision was referred to in the commentary to Dovermoss.”

[2] Para 16: “The emphasis in that judgment was on the nature of the pollutant itself rather than on its actual effect on the waterway.”

Dec 10 / Keith Chan

The Timid Tree

December of Eagle Rock should have been cold and dreary.

The tree had had no roots in the earth since the early part of its life,

its branches beautifully development by serendipity of life,

its aspirations humbly crystalized on the fallen leaves by its side.

But the sun dispelled the doubtful air stagnating the timid tree,

its fatherly warmth unconditionally coating the rootless tree,

its seasoned ray bestowing a flamboyant sky in place of the fallen leaves.

Not until then did the reassured tree nobly sprout.

Dec 5 / Keith Chan

The fundamental tension of humanity (2)

Third, while “reality” exposes the evil of our world, “abstraction” gives us hope. In the midst of the plague, Father Paneloux preaches: “We should go forward, groping our way through the darkness, stumbling perhaps at whiles, and try to do what good lay in our power. As for the rest, we must hold fast, trusting in the divine goodness[1]”. He abstracts the crowd away from the brutal reality, and shows them the artificially constructed bright side of life. He even attempts alter people’s perception of reality when he said: “The love of God is a hard love. It demands total self-surrender, disdain of our human personality. And yet it alone can reconcile us to suffering and the deaths of children, it alone can justify them, since we cannot understand them[2]”. A compromise with evil is made out of powerlessness. Similarly, instead of blaming her fate, Anne Frank questions: “Who has inflicted this upon us? Who has made us Jews different from all other people? Who has allowed us to suffer so terribly up till now? It is God that has made us as we are, but it will be God, too, who will raise us up again.”[3] The massive dehumanization of the Jews in reality is abstracted into the plan of God. This attitude of life might have saved Winston from immense torture who, having indulged in the reality of seeing four fingers initially, “became simply a mouth that uttered, a hand that signed whatever was demanded[4]”. Neither might Okonkwo have committed suicide had he been more detached from the humiliation of colonialism and tolerant of the intractable evil of the world. However, the drawback of abstraction is obvious to Anne Frank: “I don’t believe that the big men, the politicians and the capitalists alone, are guilty of the war. Oh no, the little man is just as guilty, otherwise the peoples of the world would have risen in revolt long ago![5]” But for the suffering of those who have fought against fate, our society would not have progressed. Nevertheless, abstraction, a haven from reality, gives us hope to move on with life.

In conclusion, the contradiction of humanity stems from the brutality of reality. On the one hand, “reality” acknowledges our natural instincts, feeds our sentiment of sympathy, and exposes us to the evils of the world. On the other hand, “abstraction” gives us a sense of nobility, relieves our pain, and gives us hope in facing the world. Do we want comfort or truth? How much should we live in the reality of our world? Comprehension is painful; but it is comprehension which makes our lives remarkable. Maybe the key to deal with such tension of humanity is to learn from Paul: “I often become so lost in the play of soft light and transparent shadow, that I almost fail to hear the commands. It is when one is alone that one begins to observe Nature and to love her.[6]” When life commands us to confront with its brutality, we might occasionally look at our surroundings and be grateful to the subtle gifts of life. Meanwhile, it is also true that “there can be no true goodness nor true love without the utmost clear-sightedness”[7]. We ought not to forget to occasionally return to reality, and embrace the brutality of life which sharpens our sense of beauty and gratitude. It is this never-ending battle between “abstraction” and “reality” which renders humanity a remarkable part of human lives.

[1] The Plague, pp.186

[2] The Plague, pp.186

[3] Diary of Anne Frank, pp.207

[4] Nineteen eighty-four, pp.254

[5] Diary of Anne Frank, pp.223

[6] All Quite on the Western Front, pp.188

[7] The Plague, pp. 110

Nov 30 / Keith Chan

The fundamental tension of humanity (1)

Humanity is contradiction. It is not a static ideal, but a dynamic tension. It is a never-ending battle among the contradictory natures inherent in humans. Among other antagonistic pairs of natures, the conflict between our propensity for “abstraction” and “reality” entails a considerable tension in this tug of war. Like others, we are endowed with cognitive capacity to perceive the reality; unlike others, we are endowed with rational capacity to conduct abstract reasoning. It is the latter that distinguishes humans from other sensible biological beings, and it is also the latter that poses the unique inner battle facing human beings. One such struggle of humanity is exemplified when Rambert said to Dr. Rieux: “But, damn it, doctor, can’t you see, it’s a matter of common human feeling? You’re using the language of reasons, not of the heart. You live in a world of abstractions”[1] The feeling is real, but the reason is equally convincing. Every day we are faced with situations when the heart disagrees with the head. When the latter gains the upper hand, we are prone to “a divorce from reality”[2]. Three pairs of antagonistic driving forces between our propensity for “abstraction” and “reality” are explored as below.

First, while “reality” acknowledges our natural instincts, “abstraction” gives us nobility. On the one hand, humans are born self-interested. The need for self-preservation is arguably our deepest natural instinct. On the other hand, humans are inherent social beings; to live in society underpins our ability to survive. The moral system is deeply implanted in our value system to keep functional our society. A self-respected person therefore desires to will and act morally, to secure his sense of nobility. Unfortunately, these two driving forces often conflict with each other in difficult situations. The moment abstraction is intact from the invasion of reality, “[Winston] thought: ‘If I could save Julia by doubling my own pain, would I do it? Yes, I would’ But that was merely an intellectual decision, taken because he know that he ought to take it”[3]. Certainly, it is by no means accepted by his conscience that he should betray his lover. Yet when confronted with his instinctual fear, the nobility of his intellectual decision is shattered: “Do it to Julia! Do it to Julia! Not me! Julia! I don’t care what you do to her. Tear her face off, strip her to the bones. Not me! Julia! Not me![4]”. Interestingly, when we are so “trained” to reject nobility, abstraction becomes our first priority. When the chinless man was tortured for attempting to feed a starving person, “the [other] prisoners sat very still, their hands crossed on their knees[5]”. Their self-interest has taught them to mind their own business, and to abstract away from injustice, though the noble act of the chinless man might perhaps be what the other prisoners secretly and fearfully desire. This distortion by abstraction is demonstrated by Winston when, having being tortured, “his sole concern is to find out what they want him to confess, and confess it quickly before the bullying started anew.[6]” His original insistence in being truthful to his human self is betrayed by the self-preserving nature of his animal self. “Under the spreading chestnut tree, I sold you and you sold me”[7]. Humans can only afford nobility when our basic needs are fulfilled.

Second, while “reality” feeds our sentiment of sympathy, “abstraction” relieves our pain. Foundational to our moral system is the sentiment of sympathy, without which we cannot “do unto others as you would have them do unto you”. It is a noble ideal to see and listen to our fellow beings receptively, and to share their joy and pain. Unfortunately, in a world so replete with suffering, who can blame one for selective sympathy? When the reality is so intractably brutal, how might we justify complete sympathy when it causes an unbearable amount of helpless emotional pain? Watching the innocent Russian prisoners, Paul faced the tension of humanity: “They ought to be put to threshing, reaping, and apple picking. They look just as kindly as our own peasants in Friesland … It is distressing to watch their movements, to see them begging for something to eat”[8]. What comes after his comprehension of the uncontrollable suffering is the impossibility of complete abstraction: “I know nothing of them except that they are prisoners; and that is exactly what troubles me[9]”. There is no way back to ignorance, but time can slowly erode away the sense of guilt and powerlessness. The moment Paul immersed himself into the guilt of killing, reality overpowers abstraction: “You were only an idea to me before, an abstraction that lived in my mind and called forth its appropriate response … but now, for the first time, I see you are a man like me … now I see your wide and your face and our fellowship”[10]; the moment Paul decides to move on with his life, reality retreats: “It was only because I had to lie there with him so long. After all, war is war”[11]. Sympathy is often selective and temporary in reality; sometimes, sympathy even has to be rationally controlled. After Kemmerich died crying on his bed, the orderly came and said: “We must take him away at once. We need the bed. Outside they are lying on the floor.[12]” Should time be allowed for some mourning at least? There is no purpose for pity, and no time for indulging in true feelings. Abstraction is a timely means to facilitate efficiency when resource is as scarce as human lives. Unfortunately, more often, we practice abstraction to deny reality: “One operation after another since five o’clock this morning. You know, today alone there have been sixteen deaths – yours is the seventeenth. There will probably be twenty altogether.”[13] What could the orderly have done if not treat the corpse of Kemmerich as just another item on an assembly line? How much pain should we demand the orderly to endure when all the excessive sufferings and deaths are but the fault of war? Human can only afford sympathy when not the entirety of reality has reared its ugly head.

[1] The Plague, pp. 73

[2] The Plague, pp. 75

[3] Nineteen eighty-four, pp.250

[4] Nineteen eighty-four, pp.300

[5] Nineteen eighty-four, pp.248

[6] Nineteen eighty-four, pp.254

[7] Nineteen eighty-four, pp.307

[8] All Quite on the Western Front, pp.190

[9] All Quite on the Western Front, pp.193

[10] All Quite on the Western Front, pp.223

[11] All Quite on the Western Front, pp.229

[12] All Quite on the Western Front, pp.32

[13] All Quite on the Western Front, pp.32

Nov 24 / Keith Chan

Principle of Justice (3): Economic arguments

Having considered arguments from the moral perspectives, it is demonstrated that “natural contingency” should be clarified as “natural “difference”, rather than a disadvantage to be compensated for. Without severe informal discrimination that may hinder the life prospects of certain individuals (which should be disapproved of), people need no compensation or special protection. On the other hand, addressing natural contingency lessens the autonomy of individuals to thrive with their innate talents. Instead of trying to maximize life prospects by proactively adapting to their own natural endowment, individuals seek compensation by comparing their weaknesses with others’ strengths, reducing their motivation to discover what they are born to do.. From an economic perspective, this is a denial of the principle of comparative advantage, and therefore Adam Smith’s idea of specialization. Although “each person possesses an inviolability founded on justice that even the welfare of society as a whole cannot override”, the unnecessary loss of social welfare due to self-denial, self-misunderstanding, or even lack of motivation to actualize one’s potentials, should be avoided. If hidden talents are untapped simply because of these reasons, the society as a whole suffer losses without benefiting or protecting anyone (in economics, this is called deadweight loss). Compensation thus should not be granted to address individual natural differences to incentivize self-discovery of comparative advantages.

Importantly, self-discovery should not be limited to that of innate talents; human are not instruments to be utilized for others’ benefits. While utilization of talents is only one means to enhance the welfare of society, the pursuit of innate passion a component as integral. Connected to the aforementioned moral arguments, the society does not use only one benchmark to determine individual outcomes. People are free to choose their plans of life after considering the potential costs (time and effort to be invested) and benefits (monetary and non-monetary returns). With that liberty, individual outcomes are often fair. For instance, suppose the market does not value poetry as much as financial service. A person born passionate for poetry but talented in finance can attain a fair outcome if he can make voluntary decisions on his career. If his self-generated sense of satisfaction in writing poetry is so large that it adequately compensates for the lower income, the rewards he receives by being a poet can be comparable to those by working in the financial industry. The acknowledgement of intrinsic rewards is therefore a key to resolving market “unfairness” to individual differences.

Here it has to be clarified that economics is about maximization of values within resource constraint, rather than sheer maximization of profit; money or market price is merely a means to partially represent the values behind certain goods. There are many values which could hardly be quantified, such as the intrinsic reward of writing poetry. When intrinsic reward is included in our calculation of social welfare, discovery of innate passion should be incentivized. Individual natural differences should therefore be acknowledged and embraced rather than “leveled off” by compensation.

In the forest, there are monkeys and fish. The two species are born with their unique talents. The life prospect of a fish is not defined by its ability to climb a tree with a monkey; it swims, and vice versa. It is when we use a single benchmark of tree climbing to judge a fish when we consider that its natural contingency is bring about a great disadvantage. Similarly, individuals with natural differences thrive in different areas; they need not deny their uniqueness. It is only when we look at them narrow-mindedly that we conclude there should be compensation for their “inherent unfairness”. From the moral perspectives, addressing natural contingency through social institutions is undesirable because of its negative impact on the symmetry of relationships among individuals and their self-respect; it is also unnecessary because the means to good life prospects in the society are readily diverse and accommodating to individual natural differences, so that individuals can thrive in different areas adapting to their natural differences. From the economic perspectives, as long as informal discrimination is controlled so people are treated fairly (social contingency), individuals need no compensation or special protection. Addressing natural contingency through social institutions weakens certain individuals’ autonomy to thrive in what they are born to do. This harms social welfare by reducing the incentives for individuals to discover their comparative advantages and pursue their passions. In conclusion, as Milton Friedman once wrote, “the heart of the liberal philosophy is a belief in the dignity of the individual, in his freedom to make the most of his capacities and opportunities according to his own lights, subject only to the provision that he not interfere with the freedom of other individuals to do the same.” It is a demonstration of human dignity to accept and fully utilize one’s endowed potentials. The representatives should therefore choose the principle of liberal equality, and embrace their natural endowment as a means to self-respect.

Nov 17 / Keith Chan

Principle of Justice (2): Moral arguments

Suppose there are two principles of justice before the representatives: one is the principle of liberal equality; the other is Rawls’ Difference Principle. By the principle of liberal equality, inequalities derived from being born into families with different wealth are controlled to produce fair opportunities for all, so that any social contingency is irrelevant to the success of individuals. In other words, individual outcomes are top depend on natural contingency as well as the investment of effort. On the other hand, by the Difference Principle, social and economic inequalities are allowed as long as the life prospects or expectation of acquiring primary goods of the least advantaged members is maximized. Offices and positions open to all who are equally talented and motivated. Since inequalities derived from both natural contingency and social contingency are compensated for, the investment of effort is ideally the only variable of individual outcomes. A main difference between the two principles lies in their treatment of natural contingency: the principle of liberal equality permits natural contingency to be part of the formula of success, while the Difference Principle reckons that the effect of natural contingency should be canceled out. It is this divergence that critically affects the decision of the representatives; as both principles aim to address social contingency, the justifiability of doing is not as determinant. This paper argues that the representatives will choose the principle of liberal equality rather than the Difference Principle, from both the moral and economic perspectives.

Natural differences in individuals are something to be embraced, not something to be compensated for. The former implies self-acceptance, while the latter implies self-rejection. Self-acceptance is of paramount importance because it is foundational to self-respect, one of the primary goods in society. A person who respects himself embraces both the strengths and weaknesses stemming from his natural endowment. He knows himself well, and feels peace with whom he is.  This does not mean he is unmotivated to improve himself, but there are characteristics so innate that no man can effectively alter without denying himself. Imagine a black man who covets white skin, or a Chinese who covets to be French. There is nothing wrong with being black or Chinese; demanding compensation for one’s identity-defining characteristics is not only a denial of one’s own identity, but also a “dwarfing” of one’s self-respect.

Critics may argue such natural contingency has to be compensated for because it brings disadvantages to certain individuals in society for achieving success. To address this critique, such “disadvantages” should first be properly named. The first “disadvantage” is informal discrimination (assuming the reason for eradicating formal discrimination is too obvious to be ignored by the representatives). It is prevalent in human history that gender, race, and sexuality has been an object of informal discrimination, though to different extent across time. A store in South America may refuse to employ a black person in fear of affecting its revenue, given realistic factors such as informal discrimination from customers. Similarly, a competent woman may be treated unfairly in workplace promotion due to realistic factors such as public confidence based on gender stereotype. Realistic as it is, informal discrimination should not, and cannot, be resolved by compensation.  First, compensation is equivalent to acquiescence in the inferiority of certain natural characteristics. However, in an equal society, the relationship between the man and the woman, the black and the white, or the homosexual and the heterosexual should be symmetrical. No compensation or apology is needed for being, for instance, black. Second, self-acceptance should be clearly distinguished from acceptance by others. No matter how serious the informal discrimination goes, the discriminated should not acknowledge an unequal status; they should keep respecting themselves and accept no formal “benevolence” of compensation. A proper solution should be the disapproval of discrimination, rather than disapproval of equal status through the bestowal of compensation.

The second “disadvantage” is what critics may call “natural disability”. It is a biological reality that individuals are born with different talents. For instance, some people are more talented in music, while others are less; to accentuate the effect of natural contingency, consider how difficult achievement in music means to deaf people (ignore Mozart). It is true that individuals with different level of talents or physical conditions tend to attain different level of success despite spending the same amount of effort. This counter-argument from the critics is valid only if it satisfies two conditions. First, individuals only have one single area of potentials to actualize. For instance, the only difference among individuals is their level of innate talents in composing music. If that is the case, it would be unfair to those born less talented in composing music, because they would have no alternatives but spend more effort than others on composing quality music or improving their composing skills; a difference would become a disability. Second, the society only has one single definition of success. For instance, individuals’ outcome in society can only be determined by their talents in composing music. If that is the case, the deaf will be forever disadvantaged with no alternatives; the choices of career path would also be too limited to respect individual natural differences. But these two conditions can hardly be fulfilled, so that what the critics claim to be “natural disability” is in fact an exemplification of natural differences. Given the liberty to choose among various career paths, individuals with different talents and physical conditions are able to thrive equally well in society, given that, they are willing to adapt to their innate weaknesses and persevere in developing their innate strengths. The success of Stephen Hawkings impressively exemplifies the virtue of self-acceptance and self-respect.

Nov 14 / Keith Chan

Principle of Justice (1): Why and Who to choose

The state is a political institution which monopolizes the legitimate use of coercive forces over a delimited territory. Without the state, individuals in the state-of-nature will enforce their self-defined rights through the use of coercive forces, leading to the undesirable chaos of “all against all”. Otherwise, having monopolized the legitimate use of coercive forces from its people, the state is obliged to set up a basic structure of society to govern its people and maintain its order. Notwithstanding the need for order, the coercion to abide by these social institutions cannot be deemed legitimate if the first virtue of justice is lacking. As John Rawls has pointed out, “each person possesses an inviolability founded on justice that even the welfare of society as a whole cannot override”; justice is thus an indispensable element to any social order. Given a just society is characterized by “the liberties of equal citizenship”, the state’s monopoly of coercive power to maintain order cannot claim legitimacy without resolving the issue of equality, particularly in the basic structure of society it establishes, while minimizing state intervention to individual liberties.

Resolving the issue of equality is far from equivalent to designing a basic structure of society that always generates equal outcome among individuals; rather, it demands addressing the sources of inequality in such a way that the resultant basic structure of society is not inherently discriminating against any groups of individuals. In other words, the end is not equal outcomes, but fair outcomes commensurate with the effort individuals invest; as importantly, the means is not elimination of individual differences, but appropriate compensation for the differences so that only individual effort is relevant to success. It is only through pure individual effort, in terms of physical labor, mental labor, or risk taking, when one can claim that one deserves or is entitled to a particular outcome. Other factors affecting the outcome, broadly categorized as natural contingency and social contingency, are thus morally arbitrary. In its simplest sense, natural contingency refers to natural endowment such as talent, physical strength, personal psychology, and attitudes toward risks; while social contingency refers to initial socioeconomic status such as inherited wealth and class position in society. These two moral arbitraries, along with individual effort and plans of life, are the three sources of inequality of outcome in a society.

How to address the two moral arbitraries, or more generally, what principle of justice should guide the basic structure of society, should be determined by no one but representatives fulfilling the following three criteria.  First, they should be disinterested individuals who have normal rational and moral capacities. Being moral, a person treats the advancement of the interest of society as an end while respecting the interests and rights of all individuals. Being rational, a person knows reasonably well the effective means to an end. Second, they should be behind the veil of ignorance, meaning they should be veiled from the knowledge of the natural and social contingency exerted on them at birth. Since the representatives are ignorant of moral arbitraries such as color, gender, class position, wealth, talent, and plans of life, they play safe by being considerate of what could happen to individuals both in the best-off and worst-off positions when choosing the principle of justice. Not able to choose the principle of justice to favor anyone’s particular condition, an impartial judgment can thus be made. Third, they should be at the original position, meaning they are making the decision at a hypothetic circumstance before the lottery of life has taken place. Without any pre-existing social contracts, this initial status quo allows symmetrical and fair relationships between free and equal representatives, providing the basis for public acceptance of the chosen principle. Once the representatives fulfill these three criteria, the principle of justice chosen will coincide with those autonomously assented by any free and equal persons under fair circumstances. The corresponding basic structure of society will therefore be essentially self-imposed by the individuals, and the state’s coercive enforcement legitimized.

Nov 10 / Keith Chan

Why individuals in state-of-nature would eventually establish a state with bureaucracy


The state is a political institution which monopolizes the legitimate use of coercive forces over a delimited territory. Individuals in the state-of-nature would want to be governed by a state primarily out of the need for self-preservation. Despite having agreed on some basic moral principles, individuals in the state-of-nature might indiscreetly transgress the rights of others. Each person, with the right to punish the transgressor with appropriate reparation and restraint, is prone to form protective associations with others to gain the strength needed for enforcing his right. Since people tend to overestimate the amount of harm or damage they have suffered, they tend to over-punish others. When such dispute arises within a protection association, it is inevitable to set up its own proper procedure to decide who is right and who is wrong; its members are also required to give up their rights to enforce their own rights so that order within the association can be maintained.

However, when such dispute arises among several protective associations, the incompatibility of the respective procedures of these protective associations becomes a problem. There are two possible scenarios. (1) Each protective association draws its geographic border within which its own procedure must be followed. With the monopoly of the legitimate use of coercive forces over a delimited territory, a protective association has become a state. (2) These protective associations join together to establish a federal system to which each association must submit its rights to use coercive power. As a result, these associations are combined into a dominant protective association. While the majority of people are bound by the rule of the federal system, the independent are free to enforce their rights upon their own judgment, potentially harming the members of the association. To reduce such risk and fear, the independent are absorbed into the dominant protective association. With every person within the territory submitting their rights to it, the dominant protective association has become a state. Therefore, as evident in either of the two scenarios, the need for self-preservation has driven individuals in the state-of-nature to be governed by a state.


Not only do individuals in the state-of-nature prefer to be governed by a state, but they also prefer a state with a bureaucracy primarily out of the need for self-preservation. In a state, officials are granted exclusive power to rule the state (Marx called them the ruling class).  The greatest threat to people in a state is the abuse of such exclusive power, which directly affects the interest and self-preservation of individuals in a state. On the other hand, in a bureaucratic system, the actions of officials are bound by rules and procedures rather than personal command from their superior. Officials become specialized instruments coordinated by internal rules and procedures to serve the state. The chance for officials to abuse their power for self-interest at the expense of people’s welfare is minimized, though not completely eliminated.

There are several critical features in bureaucracy which ensure the reduction of officials (the ruling class) into tools so that the interest of people in a state can be well-protected. First, bureaucrats have fixed and high salary. In the case of tax farmers, a fixed salary can lower the incentive to profit by charging people unreasonably high tax, compared with a salary directly proportional to the amount of tax collected. A high and stable salary also increases the opportunity cost of being found guilty of corruption, so that officials have less incentive to abuse their power. Bureaucrats are therefore encouraged to perform their duty stably and correctly, rather than to play tricks against the people. Second, bureaucrats rotate posts frequently. When an official stays at a work position for a long time, it is easy to build up personal relationships, owing to the need to interact with similar people to deliver his duty. Such personal relationships can easily bias his decision making and enforcement of rules and procedures. On the other hand, if an official has to change his post frequently, his delivery of duty can be more objective and impersonalized. The risk of abusing the ruling power to favor a particular group of people at the expense of others is minimized. Third, bureaucrats monitor one another. Upon commencing the duty of a new post, an official is supposed to check the book-keeping record of the former bureaucrat. The alert that their deeds will be examined someday can remind officials to deliver their duty correctly and satisfactorily lest fraud be discovered. The incentive to corrupt or to use their power improperly is again impaired. A state with bureaucracy can therefore largely protect the right of self-preservation for individuals in the state by minimizing the incentive of the ruling class to abuse their power for self-interest.


However, as mentioned earlier, the potential abuse of power cannot be completely eliminated solely by the setup of bureaucracy. Individuals in a state with bureaucracy would still want to propose some constraints to protect their right of self-preservation. First, there should be democracy in the state. If the ruled do not have a say in how they should be ruled, it is easy for a bureaucracy to harm its people while, at the same time, abiding by the internal rules and procedures.  People in a state should be granted the right not only to vote for their ruler, but also to vote for policies, whether through proportional representation or universal suffrage. With democracy, the ruler has greater incentive to please its people by serving their best interest, including their fundamental right of self-preservation.  Second, there should be separation of power in the state. If the ruling class monopolizes all three of legislative, administrative, and judicial power, it is likely favorable institutions including democracy and judicial review will not be properly enforced. In case some people in the state, even a minority of them, feel that they are treated unequally by the government administration, there should be a legitimized institution for these people to conduct judicial review.  In case bureaucrats are suspected of corruption, there can also be institution to investigate and adjudicate the cases. These institutions, which weaken the capacity of the bureaucrats to serve their self-interest, can hardly be enforced without separation of power. Third, there should be an appropriate amount of transparency in the bureaucracy. Even if people are granted the right to have a say in government decisions, without the capacity to monitor, people will lack the information and awareness to participate in public policy making. Most of the administration of the ruing class, if appropriate, should be disclosed to the people in a state for monitoring. This can help establish a trusting relationship between the ruler and the ruled. When the decisions and actions of the ruling class can be subject to the agreement and monitoring of people in a state, the exclusive power of the bureaucrats can gain legitimacy. Hence, individuals in a state with bureaucracy would want to propose democracy, separation of power, and transparency in the bureaucracy to better protect their fundamental right of self-preservation.

Nov 7 / Keith Chan

Hypothetical model for new age market competition

The fact that firms are laying off workers and replacing them by I.T. automation signals that the equilibrium of economies of scale has shifted backward. While firms are downsized to adjust themselves to the new equilibrium, people have less dependence on big firms, both as consumers and as workers. The short-run rise in unemployment can be resolved if the laid-off workers can organize themselves properly to engage in the sharing production economy in the long run. To develop my ideas on how a sharing economy can potentially drive the development towards perfect competition, I would like to propose the illustration below.
Original condition
Suppose there is a big firm A monopolizing the market. When we look into its factors of production, we find that A achieves economies of scale by 1 machinery (fixed cost) and 100 workers (variable cost).  Each worker receives a monthly salary of $100. Each month the machinery accounts for a cost of $2000, amortization and operating expense combined. Each month there is an output of 500 items of products. Therefore, assume there is no other production cost involved, the average production cost = (100*100+2000)/500 = $24. By its privilege of monopoly, A sells its product at an average price of $30, earning a monthly profit of $3000.
I.T. automation comes
Now, an information technology has emerged, effectively replacing 50 workers without compromise in output. The technology costs $2000 per month. The economic scale of yesterday has become diseconomic today. By laying off 50 workers, the average production cost can be lowered to (100*50+2000+2000)/500 = $18. The monthly profit of A boosts to $6000.
Co-operative production
Due to the lack of entrepreneurial skill, the 50 laid-off workers cannot form another big firm; rather, they form 10 small firms of 5 workers each. If each of the 10 small firms purchases its own machinery, the individual production capacity cannot even out the fixed cost enough to be competitive. However, by forming a co-operative, the 10 firms can share the machinery and the new information technology together. The co-operative’s overall cost of factors of production, as well as its output capacity, is virtually the same as the big firm A, except for one factor: the additional transaction cost of coordinating 10 individual small firms ($T). Therefore, the average production cost of the co-operative = $(18 + T/500)
New market competition
Suppose the 10 small firms produce differentiated products of the same perceived value. The critical factor of whether the co-operative can compete with A lies in how $T is offset. First, the co-operative can break the monopoly by charging a market price below $30. Though the profit margin is thinner, the previous monopoly of A provides room of price competition without killing all profits. This is a short-run solution. Second, the thriving of I.T. and the emergence of new digital technologies can play a big role in coordinating small firms. If such technologies can lower transaction cost $T, there is even more room for lowering market price. Third, individual small firms can adjust to the changing market condition quicker than the bureaucratic structure of A can do. Flexibility, rate of innovation, and even entrepreneurial familism (a socioeconomic concept proposed bu S.L. Wong) can be a competitive advantage for small firms in today’s highly fluctuating market. Fourth, tribalism can be a exclusive and competitive way of marketing for small firms. It is easier for small “firms” of 5-6 workers to build close customer relationships than the bureaucratic structure of A can do. Through the above 4 means of reducing $T or increasing revenue, the co-operative can be potentially competitive in the market.
Two stages of competitive cooperation
The previous monopoly of A is like a cartel of the 10 small firms setting the market price at $30 together, given the similarities of their production cost structures. However, such cartel is hypothetically difficult since each individual firm would want to pursue their own self-interest — they are producing differentiated products of the same product line. At the 1st stage, the 10 small firms co-operate to compete with their common “enemy” — A. They share the machinery to lower their fixed cost. At the 2nd stage, when the monopoly is broken and the market enters a new order, the 10 small firms compete among one another and with A. One step forward to a perfectly competitive market is made.
These are my reflections on how digital technologies permit the unprecedented competitiveness of a co-operative by lowering the transaction cost. A more competitive market can be attained when all firms catch up with the new (and shrunken) equilibrium of economic scale.