The Independent Institute


Lee Kuan Yew and Singapore’s Transformation from Poor to Prosperous

Lee Kuan Yew, Singapore’s legendary statesman, who died last month at the age of 91, posed a challenge to those of us who believe in political and economic freedom (and all other freedoms). His combination of authoritarianism and economic freedom, of social engineering and self-reliance, worked. The result was a society that is more prosperous than most others, but free only in some respects.

For years, the best examples one could come up with to show that the marriage of economic and political liberty could work were the liberal democracies of the developed world, whose achievements originated in centuries past and different circumstances.

Lee Kuan Yew’s credentials became strong as many countries that also gained independence in the 1950s or 1960s opted for a mix of nativism and collectivism that kept them poor while tiny Singapore, with no natural resources, emerged as an economic powerhouse. While Mao, Ho Chi Minh, and Castro—not to cite Mobutu, Idi Amin Dada, and others—destroyed the chances of a decent life for many generations, Lee Kuan Yew created the conditions for a 124-fold increase in Singapore’s per capita income in half a century.

His mix of low taxes, simple regulations, free trade, and strong property rights generated sustained levels of private investment, as one would expect. His insistence on peaceful coexistence among ethnic groups helped spare Singaporeans the violence and divisions that many neighbors experienced. His repressive political methods sustained a dictatorship under the People’s Action Party; the absence of free speech, a multiparty democracy, and free elections were the price for social cohesion and stability.

His belief in the public provision of major services, particularly housing, healthcare and education, avoided the deficit-ridden, inflationary policies that other countries suffered because it came hand in hand with an equally powerful belief in self-reliance. He forced his people to save, and the accumulated capital was later used by Singaporeans to pay for those services—particularly housing.

Various reasons have been offered as to why Lee Kuan Yew was able to avoid the calamities brought by dictatorship on other societies. They are all in some respects true: Singapore’s expulsion from the federation of Malaysia in 1965 and the need to fend off by itself; the fact that Singapore was a small island located in the Strait of Malacca, a major shipping lane, with a colonial tradition of commerce; the entrepreneurial and commercial penchant of the Chinese people, the dominant group; and Lee Kuan Yew’s personal virtue and the moral convictions of those who governed with him.

But one could come up with examples of small, strategically located countries whose people had an entrepreneurial tradition but became an economic, political, and moral disaster under autocratic rule. Or examples of countries where authoritarianism has placed stifling constraints on the exercise of economic freedom, even as the regime has supposedly embraced free enterprise.

Singapore’s case is exceptional, which makes it a tough challenge for those of us who think freedom is best served by not carving it up. My belief is that Singapore has been able to preserve its curious mix because of the absence of prosperous liberal democracies around it. But its model is based on globalization, and it’s therefore porous to good ideas.

In a world in which more countries, including Asian ones, end up successfully embracing democracy under the rule of law as well as free trade, it will be impossible for the city-state to avoid the comparison and the contagion. It is one thing to preserve an authoritarian model because your neighbors espouse a less successful one, and quite another to perpetuate it in the face of equally or even more successful societies that espouse a freer model.

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