Bryan Caplan  

Hong Kong: The Envy of Lee Kuan Yew

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In Lee Kuan Yew's massive From the Third World to the First: The Singapore Story, 1965-2000, there is only one country that he positively seems to envy: Hong Kong.  In his view, Hong Kong had a less favorable starting point than Singapore:
Hong Kong had a bleaker economic and political environment in 1949, totally dependent on the mainland's restraint.  China's People's Liberation Army could march in any time they were ordered to.  But despite uncertainty and the fear of a disastrous tomorrow, or the day after, Hong Kong thrived.

Singapore did not then face such dire prospects... Only in 1965, after we were asked to leave Malaysia, did we face as bleak a future.  But unlike Hong Kong we did not have a million and a half refugees from the mainland.
Why was Hong Kong able to thrive despite these difficulties?  Lee points to a virtuous cycle of better character and better policies:
People in Hong Kong depended not on the government but on themselves and their families... The drive to succeed was intense; family and extended family ties were strong.  Long before Milton Friedman held up Hong Kong as a model of a free-enterprise economy, I had seen the advantage of having little or no safety net.  It spurred Hong Kong's people to strive to succeed.  There was no social contract between the colonial government and them.  Unlike Singaporeans, they could not and did not defend themselves or their collective interests.  They were not a nation - indeed, were not allowed to become a nation...
During the 50s and early 60s, Lee basically saw himself as a nationalist.  So you'd think that he'd see Hong Kong's unnationhood as a big handicap.  Wrong!
We had to become a nation or we would cease to exist.  We had to subsidize education, health, and housing even though I tried to avoid the debilitating effects of welfarism.  But the Singaporean cannot match the Hong Konger in drive and motivation.  In Hong Kong when people fail, they blame themselves or their bad luck, pick themselves up, and try again... Singaporeans have different attitudes to government and to life.  They prefer job security and freedom from worry.  When they do not succeed they blame the government since they assume its duty is to ensure that their lives get better... Singaporeans vote for their MPs and ministers and expect them to distribute whatever prizes their are. (emphasis mine)
The government's HDB builds most of Singapore's residential housing.  It's generally seen as a big success - and at least compared to public housing in the U.S., it is.  But Lee doesn't really argue that the HDB is superior to a free market in housing.  His main rationale for public housing seems to be that Singaporeans want a nanny state, and that the best a democratic government can do is figure out the least economically destructive way to pander to public opinion.

Reading between the lines, doesn't it sound like Lee thinks that Singapore's democratic constraints prevented it from following Hong Kong's superior policies?  Or am I trying too hard to put a Caplanian spin on all this?

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COMMENTS (8 to date)
Mpg writes:

Is there a history of Hong Kong you recommend?

Dan Hill writes:

Just an interesting aside: the HDB is so much a part of Singaporean society, that a common way for a young man to propose is to ask a young lady if they should register with the HDB (since housing is only available to married couples).

AC writes:

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Winton Bates writes:

Very interesting.

I had no idea that Lee Kwan Yew would hold such views. I have always thought of him as a statist.

I think your interpretation of what he is saying is right. But I suspect that democracy was less of an obstacle to a more market oriented approach that was Lee Kwan Yew's own desire to be seen to be in control (despite the views expressed above). I wonder what Singaporians think.

Steve Sailer writes:

The essential difference between Hong Kong and Singapore is that Singapore is a multi-racial polity. As Lee Kwan Yew says: "In multiracial societies, you don't vote in accordance with your economic interests and social interests, you vote in accordance with race and religion."

Zac writes:

Steve Sailer wrote: "In multiracial societies, you don't vote in accordance with your economic interests and social interests, you vote in accordance with race and religion."

Sounds like xenophobic nonsense to me, but if you are right, you should be able to prove it. Economic freedom (and prosperity) should correlate strongly with how "uniracial" a democratic polity is. I haven't done the regression but I have some intuition that you're wrong. Care to make a wager that you are right?

@Mpg- Several months ago I was looking for a history of Hong Kong and received no suggestions. I ended up checking out A History of Hong Kong (1998, by Frank Welsh) from my local library, and I liked it.

VangelV writes:

I think that you need to read the book Zac. It is very difficult to compare Singapore to most other democracies because the People's Action Party has created a system that permits it to dominate elections without the use of direct fraud as no other party anywhere else. During the last election the PAP took 82 out of 84 seats. In almost half of the voting jurisdictions there was no opposition candidate.

In a way Singapore is the conservatives' dream set-up because it has a system that uses a fiscally prudent, free trade, free market approach that imposes many social rules on citizens. That is probably why the Chinese government is looking to Singapore as a model in which people increase their standard of living but the party gets to stay in power and call the shots as long as it governs effectively.

And for the record, Lee does not think that democracy leads to good government any more than America's Founding Fathers did. But instead of setting up a republic with a limited government and plenty of checks and balances, as the Founding Fathers did, Lee decided to use a parliamentary system which will probably not hold up very well as it moves towards being more democratic.

"With few exceptions, democracy has not brought good government to new developing countries...What Asians value may not necessarily be what Americans or Europeans value. Westerners value the freedoms and liberties of the individual. As an Asian of Chinese cultural backround, my values are for a government which is honest, effective and efficient." - Lee Kuan Yew, from 1992 Tokyo speech, 'Democracy, Human Rights and the Realities'

David J. Balan writes:

I don't know much about either of these countries, but I will point out that there are an awful lot of countries that have no safety net but are still basket cases.

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