Friday, October 11, 2013

Singapore, China, and the 21st Century

For the past several centuries, most of what mattered to the world was happening in Europe or European derived societies such as the U.S. The first big exception was Japan, which, somewhat over a hundred years ago, began developing into a modern society. It was followed by Taiwan, South Korea, Hong Kong, and Singapore, all of which now have standards of living and economies comparable to those of western Europe.

I have thought for some time that one of the interesting things about the 21st century will be seeing what happens as more of the old civilizations come back online, become serious participants in the modern world. We can expect the result to be interestingly different from the versions of modern civilization we are familiar with, similar technologies, perhaps similar economies, but different cultures and, probably, different legal and political structures. The two big ones, pretty obviously, will be India and China, with Iran another likely candidate.

I was reminded of this issue by a piece I just read describing Singapore. Judging by that description, it is the society that would be produced by a ruler who shared my views of economics but without either my prejudice in favor of individual freedom or the egalitarian prejudices common among other members of the society I live in. The system is interventionist but not dirigiste, objectives chosen by the state but achieved through market mechanisms.

In at least one case, Singapore is doing something that I proposed more than forty years ago, controlling traffic congestion using modern technology to charge drivers according to where they drive, when they drive, and how congested the roads are. I proposed it for roads run by a private firm, they are doing it for roads run by the government.

Judged by the article, the government of Singapore does a more competent job of intervening to achieve its objectives than the governments I am familiar with, but it still makes mistakes. The biggest one was population policy. The rulers of Singapore, like those of mainland China, apparently bought into the population hysteria popular some fifty years ago, according to which overpopulation was a terrible threat to the welfare of the world and required stern measures to deal with it, the 1960's equivalent of the current global warming scare. They responded with policies designed to penalize families that had lots of children, a much milder version of China's one child policy. Whether as a result of that policy or other changes happening in the society, the growth rate of population dropped well below replacement and they have now reversed course, are using economic incentives to encourage families to have more children instead of fewer.

It is logically possible that they were right both times—for all I know, that is what those responsible believe—but I doubt it. Back when population was a hot topic, I did a simple calculation—population per square mile for different countries. According to the then dominant view, I should have found that the most densely populated countries were the poorest. In fact, of the five most densely populated countries in the world, two were rich western European countries (Belgium and the Netherlands), three third world countries in the process of getting rich (Taiwan, South Korea, and Singapore). 

Singapore was the mostly densely populated of the lot, but Hong Kong, which did not go on my list because it was not a country, had a population density (by memory--I haven't gone back and checked the figures) about ten times that of Singapore. Singapore introduced strict population control policies, Hong Kong did not, and both prospered, with per capita income in Hong Kong passing that of the U.K. some decades ago. So my guess is that if the rulers of Singapore had ignored the western voices warning of population catastrophe they would have done at least as well for themselves as they did, would be ruling a larger but not poorer society, and would have less reason now to intervene in the opposite direction.

A different point that struck me in the article on Singapore was that, for a range of criminal violations, the punishment is not imprisonment but flogging with a rattan stick of specified dimensions. That is interesting for two quite different reasons. On the one hand, it is the sort of punishment a cold blooded economic analysis might suggest, since it imposes a cost on the offender at a much lower cost to the state than imprisonment, making it a relatively efficient punishment. Readers interested in the case for and against efficient punishments will find it discussed in an old article of mine; readers who don't have access to that source and don't want to pay for it can find a shorter version of the discussion near the end of a chapter of my Law's Order webbed on my site.

The other interesting thing about that punishment was that I had encountered it before—in the legal system of Imperial China, where flogging with a stick of specified size was a common punishment for  low level offenses. That brings me back to the point I started this essay with. Singapore is a very modern society, arguably more modern than the U.S. But its choice of punishments is in part a result of its origin in one of the world's oldest civilizations. One might even argue that the competence of its government has a similar source, since China had a sophisticated system of bureaucratic government for a very long time. It can even be argued that the Chinese civil service system, which allocated people to high status government offices on the basis of their performance on an exam testing intellectual rather than practical skills, resulted in selective breeding for intelligence since, in a polygynous society, high status correlated with reproductive success. Perhaps Singapore today should consider itself the beneficiary of a thousand plus year program of selective breeding for smart rulers.

And perhaps Singapore today gives us a rough picture of what China will be like in another few decades, when it finishes shaking off the remnants of its recent communist past.


Tibor said...

I liked some parts of the system there, disliked a lot of others (some a lot, such as the population politics or draconic drug prohibition), but it definitely is interesting. I've read your book (well, the draft) about legal systems very different from ours and I think a lot of people who believe the system we now have in Europe, North America and some other places is the best that there can be and that all those in the past were primitive and worse in every whay. Unfortunatelly, there are a lot of people like that. What is even worse, quite a few people in my country sometimes make arguments such as "France has passed this law, France is western Europe, therefore more civilized/educated/cultural/democratic than us, therefore we should adopt the same law". And a lot of people simply look down upon any non-European based society. I remmember seeing the world that way too...when I was about 18...and gradually rejected it to a point that (with some exaggeration) it almost seems to me that today it actually the other way around.

What I really liked about the book by the way is that sometimes rules that seem to be insane and would be dismissed as something "uncivilized" and "primitive" by a not very careful reader, usually have a very sensible (at least from the standpoint of the rulers) and often clever core. And also the comparison of God given law and constitutions made me thinking. I would have never come to see it that way on my own, I guess, but once it is pointed out to you, there is a lot in common...especially in the way people try to figure out ways around. Also, the part about the Amish was wonderful. I had a lot of misconceptions about them (I also thought they see modern technology simply as sinful for example) and I have to say that although they are pretty strange, I've really got to like them quite a bit after reading that chapter on them. Anyway, I'm looking forward to the final version :)

Jonathan said...

From my point of view, the world is already overpopulated, and I'd love to see the population figures dropping worldwide. It's not a matter of prosperity, it's a matter of pollution. The more people there are, the more pollution they produce, the more traffic jams you find on the roads, the more tourists clutter up every place you want to visit, the faster we use up non-renewable resources, and so on and so forth. Furthermore, huddled masses just don't appeal to me. I like to live with wide open spaces.

This may not seem such a problem to Americans, who live in a country that still has a relatively low population density.

RJM said...

Seems like I have to read the full article, but on a first glance it seems to fall in a common trap.

I agree that Singapore's success is remarkable and there is something to learn from them, including their government. However, I challenge the view that Singapore's overall economic performance is a good benchmark for the performance of the government.

Fun fact: a large part (60%) of the GDP is owned by or linked to the government. To that degree (and regarding the small size) we are not looking on a modern state but rather a corporation.

The board of the Singapore Corporation, however, sometimes enforces regulations a usual corporation cannot enforce. Whenever this happens things can get quite ridiculous. David, you mention their population growth policy; other examples:

* A recent reduction of the foreign workers quota (for "popular" reasons as far es I know)
* A huge amount of rules and regulations including significant fees on certain smaller offenses that are, however, never actually enforced
* The war on drugs and high rate of executions
* Huge investments in status symbols (such as the new Marina Bay Sands resort) with dubious return on investments (probably due to corruption and moral hazard in the context of 'public spending')

The economic development of Singapore underwent an industrialization - nothing special there. Just give the people hammers and productivity increases.

My hypothesis would rather be: Singapore is successful to the degree the government does not act as a government but with economic ratio. As anecdotal evidence: I know Singaporeans who complain how things have changed to a degree that the Singaporean government nowadays micromanages the city just like an aquarium and this is, in fact, how life there feels.

RJM said...

Ok, there was no surprise in the article. The author stays largely on a superficial level. This is something westener believes about Singapore, and is straight wrong:

"As you enter each remarkably clean subway station, you are warned that the penalty for eating or drinking is $500, the penalty for smoking is $1,000 and the penalty for taking flammable liquid or gas onto the subway is $5,000."

In reality there is no tight link between the cleanliness of the public places and the fines. The fines are never enforced. If you drink water in the subway they tell you to put it away. They are not equipped to collect 500 SGD. And the reason why it is so clean is most likely that there are thousands not-so-well-paid workers cleaning up the streets day and night.

It's kind of said to see how journalists simply adopt this belief that the reason behind order is law enforcement. Well, David surely is the expert there. :)

I wrote about that in more detail here (sorry German):

RJM said...

Just one last thing: I was quite enthusiastic about Singapore before I went there, maybe for the same reasons as you, David.

There certainly is an interesting dynamic going on in Asian economies. The Singaporean government did not provide me the answers, however.

David Friedman said...

I wouldn't say I was enthusiastic about Singapore--the system seems attractive in some ways, unattractive in others. My point was, first, that it was interesting, and second that it suggested what a developed society based on Chinese culture might look like.

Anonymous said...

The selection breeding of rulers of the current China is based on guanxi. Money and whether or not your parent was one of Mao's revolutionaries.