Comments on new book “The Fourth Revolution: The Global Race To Reinvent The State”

Dear Mr Micklethwait and Mr Wooldridge,

I refer to the 16 Aug 2014 Straits Times review of your new book “The Fourth Revolution: The Global Race To Reinvent The State”.

Productive governance on leanest budget

According to Dr Goh Keng Swee, Singaporeans’ undisputed No. 1 most respected post independence leader, Singapore owes its productive governance on the leanest of budgets to our British colonial government. He wrote:

There are four reasons which enabled Singapore throughout her history as a British colony, and today as an independent republic, to survive and even prosper in the face of apparently insurmountable difficulties … The second reason must be ascribed … to Sir Stamford Raffles’ great vision of the island growing into a great emporium founded on the Victorian belief in the virtues of free trade. Successive colonial governors zealously nurtured the port, maintained lean and efficient administrators, and allowed merchants and bankers full scope for the exercise of their talents. In the modern idiom, the Victorians who governed Singapore established and maintained an infrastructure at minimum cost with maximum efficiency. The third reason derives from the second condition, the nurturing of the free enterprise system. In the absence of monopolies and privileged business interests, keen and free competition ensured efficient business … For well over a hundred years Singapore learnt to adapt her economy to changing circumstances. This ability to adapt which was won in the hard school of experience remains an asset which the government of independent Singapore decided to retain. It might have been politically expedient to rid ourselves of institutions and practices that bore the taint of colonial associations. Had we done so, we would have thrown away a priceless advantage.
[Goh Keng Swee, The Practice of Economic Growth, Chapter 1: Why Singapore succeeds, pages 6-7]

The so-called Singapore Fourth Revolution is merely the Victorian era Second Revolution that we inherited from the British.

Creating founding father

Singapore’s creating founding father was Sir Stamford Raffles, not Lee Kuan Yew. It was Sir Stamford Raffles who created this beautiful and prosperous port city when he founded Singapore in 1819. Lee Kuan Yew merely inherited Singapore and inheritance cannot be considered founding.

Greatest economic miracle

There are four East Asian economic miracles, not just one. There is no reason to overly praise Singapore for what is essentially a common East Asian success story that includes South Korea, Taiwan, Hong Kong, Singapore and many parts of China.

Between 1945 and 1959, Singapore recovered from the devastation of the war under the guiding hand of our British colonial government. To include those years as part of our supposed 70 years of greatest economic miracle would compel us to also thank and praise the British for their involvement in 20% of those 70 years.

But as far as data is available, the earliest comparison we can make is 1960 since that is the earliest year Singapore GDP figures are available in the Penn World tables. The table below constructed using data from the Penn World tables shows that besides Botswana and Equatorial Guinea which struck diamond and oil respectively, South Korea outgrew every other country from 1960 to 2011 and should be the undisputed No. 1 greatest economic miracle followed by arguably Taiwan which takes 2nd and 3rd place respectively for output and expenditure per capita GDP growth. Singapore takes 3rd place, a very good position but not good enough to be considered the greatest economic miracle.

Country 2011 over 1960 per capita real GDP (output) Country 2011 over 1960 per capita real GDP (expenditure)
Korea, Republic of 27.1 Equatorial Guinea 32.2
Botswana 22.1 Botswana 30.9
Equatorial Guinea 21.6 Korea, Republic of 25.6
Taiwan 14.7 Singapore 21.4
Malta 11.1 Taiwan 15.1
Romania 10.3 Hong Kong 11.6
Japan 9.8 Romania 10.6
Singapore 9.4 Cyprus 9.4
China 8.8 China 8.7
Cyprus 8.7 Egypt 8.6
Thailand 8.5 Thailand 8.6
Zimbabwe 7.7 Japan 7.8
Egypt 6.9 Malta 6.6
Ireland 6.9 Ireland 6.5
Hong Kong 6 Portugal 6.1

CPF

The CPF is fast becoming a farce as more and more Singaporeans realize their CPF won’t be able to see them through retirement. Instead of the “all-you-can-eat” buffet, we have the “eat-yourself” cannibalism.

China learnt from Singapore

China’s capitalism isn’t merely copied from Singapore but from South Korea, Japan, Hong Kong and Taiwan too. During Deng Xiaoping’s famous Southern tour in 1992, he called for China to learn from South Korea, to catch up with the four dragons, to build several Hong Kongs along the coast. In other words, China didn’t just copy from Singapore but from the rest of prospering East Asia as well. If China capitalism is predominantly a Singapore copy, how could they have such promising home grown technology firms as Lenovo, Xiaomi, Huawei or Baidu while we don’t (excluding the has been Creative)? The great many Taiwanese and Hong Kong firms that have invested in China probably left a larger footprint on China’s economy than Singapore did.

The copying of Singapore style social governance by communist countries like China or Russia is not something Singaporeans are particularly proud of. China president Xi Jinping recently espoused the wisdom that blind pursuit of GDP doesn’t equate to a nation’s success, a clear deviation from copying Singapore but learning from Singapore’s mistakes instead.

The First Revolution

We hardly have Hobbes’ First Revolution. Too many of our rights have been unfairly restrained. We can’t even walk in a group of five in the streets without risking being hauled to jail for illegal assembly. We don’t have a single independent newspaper. Too many of our politicians have been locked away without trial, one of them Chia Thye Poh for longer than Nelson Mandela had been. Too many of our politicians have been bankrupted or forced to leave Singapore for reasons any First World nation would deem ridiculous.

Yet on the other hand, we don’t get much protection for the sacrifices we make. Most of the old folks retiring today cannot depend on their CPF for retirement. An old folk honored by our prime minister during a recent National Day rally committed suicide because she didn’t want to burden her family with stupendous medical expenses. Many old folks are reduced to picking up old cardboard pieces to sell for a living. So correction please, Singapore, not created by Lee Kuan Yew but ruthlessly ran by him, has next to zero parts Hobbes.

Nordic big government

The following books show that both the Danish and Swedish crises were the result of financial market deregulation, not due to big welfare systems.

• IMF, World Economic Outlook – Crisis and recovery, April 2009, Chapter 3 “From recession to recovery: how soon and how strong?”, page 135

Financial crises

• Lessons from the Nordic Financial Crisis, Lars Jonung, Lund University Department of Economics, 29 Dec 2010

The Nordic crises have their roots in the process of financial liberalization … In the 1980s, the financial systems of Finland, Norway and Sweden underwent major deregulation. Financial liberalization set off a sustained lending boom, capital inflows, rising asset prices … The boom turned into a bust around 1990, with capital outflows, widespread bankruptcies … systemic banking crises … Eventually, the central banks of Finland, Norway and Sweden were forced o move to flexible rates in the fall of 1992 in order to avert the depression.

Conclusion

• Our so-called 4th revolution lean government is actually our 2nd revolution inheritance from the British.

• Lee Kuan Yew isn’t our creating founding father, Sir Stamford Raffles was. Lee Kuan Yew went to a school named after Raffles.

• Singapore isn’t the greatest economic miracle in the last 70 years. According to Penn World Tables, the greatest economic miracle since 1960 should be South Korea.

• China didn’t just learn from Singapore but from the rest of East Asia as well.

• Singaporeans sacrificed too much and got too little in return to be considered to be enjoying Hobbe’s First Revolution.

• The Nordic economic crises, as with most modern day crises, is financial sector triggered, not triggered by big government.

Assuming Straits Times’ review of your book is accurate, the chapter on Singapore contains critical falsehoods and misrepresentations that diminish the credibility of your book.

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One Response to “Comments on new book “The Fourth Revolution: The Global Race To Reinvent The State””

  1. Anonymous Says:

    Your stamina will be sorely tested in the lead-up to GE 2016. The torrent of books, op-ed pieces by chosen hacks with so-called academic credentials will flood the media, twisting and turning the facts to suit their purpose. This latest book shows how successful the powers that be are in projecting Singapore as a shining example to the world to foreigners who do not know better. Of course they are not interfering with local politics like the Rev. James Minchin. Keep up the good work.

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