$10 dollars carrot cake in proper perspective

Chan Jia Hui

Carrot cake or “Chye Tau Kuey”, the subject of Minister Chan Chun Sing’s analogy

By now, most of the readers have heard of Minister Chan Chun Sing’s famous “$10 XO sauce chye tau kuey” (carrot cake) analogy. Chan compared the $10 dollar XO sauce carrot cake at Peach Garden to one that is charged $1.50 by a hawker centre. Chan claims that one would be happy to part with $10 for a Peach Garden carrot cake because of service satisfaction and so on, whereas one would not want to eat the $1.50 carrot cake at a hawker centre if the quality is not good.

One may suspect Chan came up with that analogy to talk up his fellow ministerial colleagues that they are not in it for the money, but “to provide a better life” for the next generation. He qualified his statements stating that “Money should not be the one (factor) to attract them in. On the other hand, money should also not be the bugbear to deter them.” With the carrot cake analogy, the implication is that our current cabinet of ministers seems to be providing a satisfactory level of service to the electorate, if one didn’t read Chan wrongly.

For a graduate in the discipline of economics from none other than Cambridge University to come up with this analogy, it is worthwhile pondering on its economic rationale and consider if it is even an appropriate analogy at all.

I personally find one disconcerting thing though about the $10 carrot cake. It is not really the case of people being satisfied with the PAP’s service that ‘customers’ are willing to pay them highly. It is rather the case of PAP being a monopolistic entity. As we can learn from Economics 101, monopolies can arbitrarily raise the prices of their goods and services to maximise their profits. The hapless consumers have no choice but to suck it up and pay the extra sum of money. It is not difficult to see why. The PAP holds 81 seats out of 87 seats in parliament, and controls the entire ministerial cabinet. And, when it wanted a rise in ministerial salaries, it got what it wanted.

There is also another perspective, and something that Chan will be loathed to admit, the decline in PAP’s share of votes in 2006, which was 66.6% to 60.1% in 2011. This means that there is a drop in demand for the PAP, based on the percentages of the votes. In economics terms, if there is a drop in demand for a good or service, its price will naturally decrease. So, Chan should probably mention that the XO sauce carrot cake costs $12.00 in 2006, but its price dropped to $10.00 due to reduced demand for it.

There is one thing that Chan should realise though, a phrase that health economists like to use in relation to the impact of health-related policies – “bang for the buck”. It just means an expenditure undertaken by the government into a project reaps health benefits. The goal is of course to get the maximum bang out of the minimum buck. This “bang for the buck” mindset should be aptly applied on Chan and his ministerial colleagues.

In this context, the” bucks” we are talking about is the money that we are paying the entire ministerial cabinet. The “bang” refers to the outcome of their policies – improved health, education, income across all spectrums of the society, housing and standards of living. Let’s now ask this question of Chan – are Singaporeans as a whole getting any “bang for their buck”? Or are they better off with an alternative cabinet that are collectively paid less but can really deliver the “bang”?

Food is so ubiquitous in Singapore that they occupy a space in our hearts and our political sphere unsurprisingly. The unique thing about Chan’s analogy is that Singaporeans have the unique choice every five years to boycott the $10 carrot cake. Maybe, about time, since our political scene is growing diverse, just as our cuisine is diverse that maybe on that special day, we can opt for $2.00 chwee kueh for a change rather than $10 XO sauce “chye tau kueh”.

—

Photo courtesy of Steel Wool, Flickr Commons