- 12 Mar 2018 04:12
#14895544
How Capitalist Is Singapore Really?
It's fascinating to hear certain right wing commentators hold up Singapore as a model of capitalism. The conservative Heritage Foundation’s Index of Economic Freedom ranks Singapore as the second most “economically free” country in the world (Hong Kong is #1).
And the state takes an interest in private enterprises as well, through the state-controlled sovereign wealth fund Temasek. Singapore's GLC's (Government-Linked Corporations) are the equivalent of China's state owned enterprises. Singapore Incorporated, as it's sometimes called, is a mixture of command and distributed (market) economics.
Much of the success of Singapore and China can be attribute to its successful resistance to the privatization wave that swept western economies. Perhaps reversal is a better word than resistance, considering its 90% land-ownership.
Which brings us to the question of Georgism. Singapore has effectively quashed land rents by holding the ownership of land in common, and managing its use for the public good. I've been more than skeptical of Georgism in the past, but the Singaporeans seem to have effectively utilized it (though I'm not sure if they would acknowledge Georgism as an influence).
Breunig poses a thought experiment for Westerners:
Imagine a national experiment in which we...
This reinforces my belief that capitalism is not actually an -ism; i.e., it's a descriptive rather prescriptive term. What we see is long-term evolution pruning away unsuccessful economic experiments. The next experiment to bite the dust will be (IMHO) US-style corporatism. It's fatal flaw is that the state in the West has become powerless to direct and organize the economy - indeed the very action of doing so is considered ideologically illegitimate.
It's fascinating to hear certain right wing commentators hold up Singapore as a model of capitalism. The conservative Heritage Foundation’s Index of Economic Freedom ranks Singapore as the second most “economically free” country in the world (Hong Kong is #1).
It is true of course that Singapore has a market economy. But it’s also true that in Singapore the state owns a huge amount of the means of production. In fact, depending on how you count it, the Singaporean government probably owns more capital than any other developed country in the world after Norway.
The Singaporean state owns 90 percent of the country’s land. Remarkably, this level of ownership was not present from the beginning. In 1949, the state owned just 31 percent of the country’s land. It got up to 90 percent land ownership through decades of forced sales, or what people in the US call eminent domain.
The Singaporean state does not merely own the land. They directly develop it, especially for residential purposes. Over 80 percent of Singapore’s population lives in housing constructed by the country’s public housing agency HDB. The Singaporean government claims that around 90 percent of people living in HDB units “own” their home. But the way it really works is that, when a new HDB unit is built, the government sells a transferable 99-year lease for it. The value of that lease slowly declines as it approaches the 99-year mark, after which point the lease expires and possession of the HDB unit reverts back to the state. Thus, Singapore is a land where almost everyone is a long-term public housing tenant.
And the state takes an interest in private enterprises as well, through the state-controlled sovereign wealth fund Temasek. Singapore's GLC's (Government-Linked Corporations) are the equivalent of China's state owned enterprises. Singapore Incorporated, as it's sometimes called, is a mixture of command and distributed (market) economics.
Much of the success of Singapore and China can be attribute to its successful resistance to the privatization wave that swept western economies. Perhaps reversal is a better word than resistance, considering its 90% land-ownership.
Which brings us to the question of Georgism. Singapore has effectively quashed land rents by holding the ownership of land in common, and managing its use for the public good. I've been more than skeptical of Georgism in the past, but the Singaporeans seem to have effectively utilized it (though I'm not sure if they would acknowledge Georgism as an influence).
Breunig poses a thought experiment for Westerners:
Imagine a national experiment in which we...
...expropriate nearly all of the land in the country, build virtually all of the housing in the country, move almost everyone into public housing leaseholds, become the largest shareholder of more than a third of the country’s publicly-traded companies (weighted by market capitalization), and build out a sovereign wealth fund that holds tens of trillions of dollars of corporate assets.
This reinforces my belief that capitalism is not actually an -ism; i.e., it's a descriptive rather prescriptive term. What we see is long-term evolution pruning away unsuccessful economic experiments. The next experiment to bite the dust will be (IMHO) US-style corporatism. It's fatal flaw is that the state in the West has become powerless to direct and organize the economy - indeed the very action of doing so is considered ideologically illegitimate.
The old world is dying, and the new world struggles to be born: now is the time of monsters. -Antonio Gramsci