Posted on 04/04/2015 6:29:22 AM PDT by Kaslin
Lee Kuan Yew, the first prime minister of Singapore, died last week at age 91. Almost every obituary has remarked on the radical transition his leadership heralded. As John Fund wrote at National Review:
“By embracing free trade, capital formation, vigorous meritocratic education, low taxes, and a reliable judicial system, Lee raised the per capita income of his country from $500 a year to some $52,000 a year today. That’s 50 percent higher than that of Britain, the colonial power that ruled Singapore for 150 years. Its average annual growth rate has averaged 7 percent since the 1970s.”
Part of the reason for Singapore’s remarkable climb up the international income ladder is bread and butter capitalism. The Frasier institute’s Freedom of the World report lists Singapore as the second freest economy in the world -- right behind Hong Kong. As Frasier scholars have demonstrated year after year, economic growth and free markets go hand and hand.
But Singapore has done something even more remarkable than its economic accomplishments. It has built an alternative to the European style welfare state. Think of all the reasons why people turn to government in other developed countries: retirement income, housing, education, medical care etc. In Singapore people are required to save to take care of these needs themselves.
At times the forced saving rate has been as high as 50 percent of income. Today, employees under 50 years of age must set aside 20 percent of their wages and employers must contribute another 16 percent. These funds go into accounts where they grow through time until specific needs arise. For example, one of the uses for these savings is housing. About 90 percent of Singapore households are home owners – the highest rate of home ownership in the world.
In health care, Singapore started an extensive system of “Medisave Accounts” in 1984 – the very year that Richard Rahn and I proposed “Medical IRAs” for America in the Wall Street Journal. Today, 7 percentage points of Singapore’s 36 percent required savings rate is for health care and is deposited in a separate Medisave account for each employee. Individuals are also automatically enrolled in catastrophic health insurance, although they can opt out. When a Medisave account balance reaches about $34,100 (an amount equal to a little less than half of the median family income) any excess funds are rolled over into another account and may be used for non-health care purposes.
For many years, the only two scholars in the Western world who paid much attention to Singapore were Washington University economist Michael Sherraden and me. Michael approached the Singapore experience from a left-of-center perspective and I came from the opposite direction. We both ended in the same place: this is an alternative to the welfare state that works.
Lately, quite a number of other scholars have discovered Singapore, especially its health care system – again, with both right and left finding a lot to admire. It’s taken almost three decades, but Singapore is now the subject of a book by Brookings Institution, a whole slew of posts by Austin Frakt and Aaron Carroll, and a good overview by Tyler Cowen, with links to other studies and comments.
Sherraden recently summarized some of Singapore’s major social policy innovations as follows:
“Step by step, the Singapore state created a new social policy system that had asset building as its central structure…. In the world of social policy, it would be hard to overstate the exceptionality and the extent of this innovation…. During the past 25 years, Singapore policy has taken important steps toward lifelong asset building, beginning very early in life. These innovations include EduSave, the Baby Bonus, Child Development Accounts, and related asset-building incentives.”
For John Fund, Singapore’s most significant accomplishment is the avoidance of the mistakes of other countries:
“I believe that the least appreciated part of Lee Kwan Yew’s legacy is his method of ensuring that one generation won’t bankrupt future generations by selfishly living beyond its means. It’s a welfare state that works, and one he always said was available to any political leader with the courage to tell his people the truth about the limits of government’s power to pass out goodies.”
For my part, I would summarize the philosophy of Singapore as follows:
If the United States had adopted a similar approach to public policy, there would be no deficit problem in this country.
A heck of a lot closer to Conservatism than anything we have going on over here.
if we’re to have any welfare at all, it should be in the form of savings accounts that is allocated to to be used for those purposes only. An account for food, an account for health, an account for education only. This allow people to allocation resources more efficiently and no middle men at all and no large bureaucracy who takes 90% of it and give 10% out
It sure looks like it.
This probably will cause many people to call for roof repairs as many, both liberal and conservative, live on government checks coming in each month...so they’ll ‘go through the roof’ so to speak.
When you look at govt. retirement one sees NO WAY for it to sustain itself at such a high monthly amount and for a long period of time. Many have TWO retirements from govt. since the ages they need to get them are way too low and time employed is also too short.
Until we all see that we are at fault for the deficit, we are a failed country.
higher avg income then the US
low taxes == increased economic diversity == more opportunities == more companies == more jobs == lower crime == better life
this is not a news flash. what we have in the US is the result after decades of war with socialists/communists in our own country (a result of the cold war)
1. It is small. It's basically a city-state, and it's no coincidence that the two jurisdictions at the top of the economic freedom list -- Hong Kong and Singapore -- are identical in this way.
2. It is culturally homogenized. People in Singapore trust "the system" because these attitudes are ingrained in their culture.
3. Related to Point #2 ... there is a high level of trust of the government in Singapore. This is because Singapore is small enough and homogenized enough that their governing bodies don't function as a ruling class hell-bent on getting rich at the expense of taxpayers, the way most Western governments work.
If the author of the article used the Singapore example to make the case that any jurisdiction larger than 4-5 counties in the U.S. shouldn't exist as a nation, then he'd have a good point. But using Singapore as a model for a massive, modern super-state doesn't really make any sense.
Too bad that America has a substantial portion of the population that claim laziness and irresponsibility is a “disability” worthy of a lifetime of handouts. Planning my escape...
Liberal professors don't ignore the Singapore model because they're stupid, although that's part of it. Progressivism is about control.
Progressives can't abide human freedom. It's in their personalities.
They also don’t have a certain demographic which tends to drag us down.
There’s always someone around who will tell you very specifically why your ideas won’t work. You should listen politely. Then you should ignore them and try it anyway.
L
Yes. That demographic component in the US definitely makes it hard for our nation to succeed. Generations here have been trained in the thought that they don’t need to contribute anything, because everyone else (”the suckers”) owe it to the lazy to support them. And woe to the politician who suggests otherwise.
We were concerned about the vendor because it seemed to have higher than normal job turnover so part of my assignment was to check it out. It was an issue with us because, although they made top quality product, our orders were being delayed due to frequent changes in personnel.
It seemed like a really nice place to work and it was. A few of the employees drove to work but most were collected by company vans at the nearest bus and train stop for about a two mile shuttle to the plant.
They offered competitive pay, a nice meal plan and a wonderful working environment which even included enclosed air conditioned cabs with music for those who spent most of the day outdoors in forklifts and the like.
Finally, I asked the vendor point blank why their turnover was so high. He told me that, despite all their efforts to keep employees happy, this is was first or second job for most people. Almost all of them were taking night classes or doing something else to improve their upward mobility. Most wanted to work at a high profile company near Orchard Road and cut down on the commute which going to a company like theirs out in the sparsely populated industrial area required.
What is the average commute door to door at your plant, I asked.
His answer: about 20 minutes.
Imagine if there we no liberals and the Singaporeans ran our economy in such a way.
A quick peek at Wikipedia would have shown you that >1/3 of the countries in the world have smaller populations than Singapore.
2. It is culturally homogenized. People in Singapore trust "the system" because these attitudes are ingrained in their culture.
Similarly, a quick peek at Wikipedia would have shown you that this is false.
The country incorporates the three major distinct ethno-cultural groups of Asia outside the Near East, and they are most definitely not homogeneous, any more than Europe, the pre-Columbian Americas and Africa were homogeneous.
3. Related to Point #2 ... there is a high level of trust of the government in Singapore. This is because Singapore is small enough and homogenized enough that their governing bodies don't function as a ruling class hell-bent on getting rich at the expense of taxpayers, the way most Western governments work.
It's got nothing to do with trust. Asians are individualists whose sole altruistic focus extends to their families and friends. They don't believe in the greater good, which is why welfare systems get short shrift over there.
Singapore's wealth comes not from innovation but, like Switzerland, from being a tiny bastion where the rule of law, honest banking, and the British legal system still hold sway, attracting the capital of oligarchs from every direction. They prove that honesty makes you rich - a lesson Wall Street desperately needs to re-learn.
Singapore is a great place in many ways. Maybe the perfectly governed multi-cultural city-state. Rudy Giuliani's vision perfected. I always enjoy going there.
It's problem isn't so much a lack of political freedom or even the widely feared punishments for minor social offenses (overblown in the Western media - offenders are usually just fined) as it is the Confucian tactics they feel they have to use to keep the old hatreds in check. For example, they have brought in more than a million workers from China over the last few years. Keeping Singapore "Chinese" and avoiding being out-bred by Malays and Indians were more important goals to the government than the effect this mass immigration has had on the locals.
China has always admired Singapore as a model. It is not incorrect to say, as many commentators did after his death, that modern Chinese cities would not exist without Lee Kuan Yew's example. And Singapore is now being inexorably drawn into its "mother country's" orbit. They know they can't trust Obama or the US for defense help any more. If the relatively docile Malaysia and Indonesia eventually morph into jihadist states (and there are indications they might), Singapore knows it cannot count on the US Navy to do much to help. But the presence of the PLA might well scare the hell out of any ambitious would-be Southeast Asian caliphs.
Singapore's social system is thoroughly rooted in Confucian values. It would never work in the US. But if it continues to inform and inspire China's leadership, it will be doing a great enough service to the world.
Not true. See my post #9. While the Malays, on average, are nowhere near as ambitious as the ethnic Chinese majority, they are still overwhelmingly employed at low paying menial jobs which still provides stability. Singapore is no place for slackards and the cost of living can be pretty low if you aren't too fussy about where you live.
Their cousins on the Malaysian side of the straight are so envious that they are the major source of Singapore's illegal immigration problem.
Compared to us, illegal immigration is still laughably low, probably on a scale of nannies from Europe on a per capita basis. The reason is that Singapore actually enforces their laws and borders.
The slummy areas in Singapore are actually a cut or two above the working class areas of Brooklyn or Queens.
Another part of the Singapore success story is what the Left would call draconian enforcement, with corporal punishment, of law. Who would have thought that the promise of caning for the crimes which would bring community service or probationary sentences in the west, and short rope / long drop outcomes for activity that puts western criminals into the advanced anti-social degree programs we call “prisons” could work?
Confucian values = every man for himself. The average Asian is highly individualistic and his notion of altruism extends only to his family and friends. Confucius prized parochialism over all else and stated that in a conflict between the interests of the family and the state, the cultivated man should always take the side of his family. Asians get involved in politics only for personal gain - there's no concept of the greater good. Thus, in Singapore, there's no concept that people who want to be hippies have the right to grow their hair long - most of them don't care to do so and have no issue with the ruling party persecuting hippies.
i grew up outside of boston. i started working during the summers when i was 11. mowing lawns on the weekend while doing whatever job i could find for the summer. i worked farms, restaurants, fast food, gas stations, construction, grocery stores, whatever was available as it was all temporary and just the means to an end. for the most part, people transitioned through these types of jobs and that was expected. they were meant to push for a better job in an established career.
it wasn’t until i went to washdc that i started finding people that had been in these types of jobs for 10-20 years. they just never transitioned out. they got comfortable and stagnated. with no upward mobility, the dissatisfaction started to set in and employee moral was in obvious decline.
the country would definitely benefit from institutionalized meritocracy
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