Angus Deaton, winner of last year’s Nobel Prize in Economics, has been bewildered by the high savings rate in Taiwan. Deaton has explored the link between Confucianism and savings rates by examining Taiwan and South Korea, two nations influenced by Confucianism, and found that Taiwanese still save more.
The Taiwanese seeming addiction to saving money has over the years contributed to a high national savings rate. While this is a good capital source for government and private investment, Deaton does not know whether the high savings rate is the result of a pervasive feeling of insecurity and uncertainty about the future among Taiwanese. Meanwhile, the government has been funded by the public, but it has done little in return: incompetent and narrow-minded, the government is in fact the reason the general public have been pinching every penny to be able to fend for themselves.
Just take a look at the very different work conditions, benefits and pensions of people in different jobs. The government has apparently been helping to maintain an unjust social hierarchy as the nation’s wealth gap widens. This biased system not only affects financially disadvantaged individuals, but also how their offspring will be able to afford and finance tuition fees.
On the other hand, the government has been encouraging the general public to save money since it moved to Taiwan in 1949. Back then, a high savings rate allowed the government access to ample foreign exchange reserves and sufficient money in state-run banks to lend to businesses during a time of political turmoil.
However, that has given big corporations an unfair advantage, as they not only make a lot of money, but also enjoy low tax rates and sometimes manage to evade taxes by transferring their funds abroad. In turn, their privileges have given them power to influence government policy and legislation.
In contrast, the general public, particularly the working class, are increasingly impoverished, struggling on low wages and years without pay raises. This state of affairs has astonished even visiting foreign academics, including a former chairman of the US Federal Reserve.
In addition, the government has shown a lack of commitment to protecting workers’ rights, which still lag behind the US and many European nations. In Taiwan, where the general public and workers are treated like disposable chopsticks, if a person is not born into a wealthy family, they will have no means to ensure financial stability other than by saving up as much money as possible.
The savings rate is an indicator of whether a nation is in a normal, stable state, and it is particularly helpful in measuring social justice. When generation after generation of people in a nation are obsessed with saving money out of fear of unemployment, vocational hazards or changing government policy, it shows that the government has done a poor job in protecting the public from being exploited.
The Taiwanese habit of excessive saving — as if preparing to pay their way into the netherworld — has reached the point where they cannot get married or have children until they have carefully calculated and evaluated their savings.
That the public are so emotionally reliant on their savings, yet at the same time so anxious about the future, is certainly an indicator of their disapproval of the government.
Chang Hsun-ching is a political commentator.
Translated by Tu Yu-an
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