Stiglitz on the Singapore Miracle

Joseph Stiglitz writes an economic valentine to Singapore that is full of interesting facts and conclusions. In a nutshell: for the past few decades, Singapore has pursued a strong economy that is also concerned with equality from top to bottom. The piece is interesting throughout, especially for anyone whose mind still summons the words “chewing gum” as soon as the word Singapore appears. The piece is hard to excerpt — you should read the whole thing — because there are so many discrete points. But here are a few samples:

Singapore has had the distinction of having prioritized social and economic equity while achieving very high rates of growth over the past 30 years — an example par excellence that inequality is not just a matter of social justice but of economic performance. Societies with fewer economic disparities perform better — not just for those at the bottom or the middle, but over all.

And:

The government mandated that individuals save into a “provident fund” — 36 percent of the wages of young workers — to be used to pay for adequate health care, housing and retirement benefits. It provided universal education, sent some of its best students abroad, and did what it could to make sure they returned. (Some of my brightest students came from Singapore.)

And:

Some argue that all of this was possible only because Mr. Lee, who left office in 1990, was not firmly committed to democratic processes. It’s true that Singapore, a highly centralized state, has been ruled for decades by Mr. Lee’s People’s Action Party. Critics say it has authoritarian aspects: limitations on civil liberties; harsh criminal penalties; insufficient multiparty competition; and a judiciary that is not fully independent. But it’s also true that Singapore is routinely rated one of the world’s least corrupt and most transparent governments, and that its leaders have taken steps toward expanding democratic participation.

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  1. Jared says:

    Wouldn’t discrete points make the piece easier to excerpt?

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    • Enter your name... says:

      Discrete points are easier to excerpt so long as you only want one point, rather than a sense of the whole. Think about getting an excerpt from a long grocery list: the discrete point “eggs” doesn’t tell you as much as a summary statement like “lots of frozen foods and stuff for breakfast”.

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  2. Matt says:

    I researched the economic data and compared my results to Nobel laureate Joesph Stiglitz, so take it for what it is worth.
    The first thing i noticed is that while their business cycles mirror (For the most part) the United States, the cycles are much more violent. 2007-2008 their GDP shrunk by 9.84% the US by 5.44% in 2009 Singapore grew by 15.74% and the us by 6.55% over previous year. This means is far more open to risk than the US or there are outside forces accounting for the events. Because of their social agenda I can not believe it is because the government is less risk adverse than the US.

    This would mean that singapore is simply a developing market, and that the laws of diminishing marginal returns has not kicked in as of yet as it has in the United States.
    Another huge thing Singapore has going for it is despite being the 114 largest country in the world it exports the 6th most petroleum products per day.
    The end feeling I have is that the effect of the countries social policies is not showing up in the over all economy to the extent that it would in the US because it is not at the level as of yet, and its reliance on oilfield refinement has accounted for a large growth and not the countries economic policies. In other words Dr. Stiglitz has held everything constant “Cetribus Peribus” when in fact they are not constant, to assist him in proving an Keynesian economic theory that he is a fan of.

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  3. Raymond says:

    This article completely misrepresents what the Libertarian position is on the poor. We do not believe that all poverty stems from lack of effort. We just don’t want the government helping the poor since there is enough proof that it doesn’t work. Not to mention that there were tons of mutual aid societies in the US that helped communities including medical needs. The government shut them down. How is that good and how does that help people?

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    • Enter your name... says:

      There still are “tons of mutual aid societies in the US that helped communities including medical needs”. They were never shut down. Every hospital I’ve encountered has charities that provide or pay for free medical and quasi-medical care. Most towns, even small ones, have fraternal organizations that provide help to their members. Many churches and religious organizations do the same. I suggest that you find the person who told you that fairy tale about “the government shut them down” and see whether that person can name even a single one that was actually shut down by the government. Far from being shut down, they have been made tax-exempt as 501(c)(8) exempt organizations.

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  4. Eliza says:

    I seriously doubt Stiglitz has ever been to Singapore. I’m an Australian expat living here and he definitely misrepresents the situation. While I believe that Singapore does a lot of things right (the CPF system, low crime, transparent government, focus on self-reliance etc.) protecting the poor isn’t one of them. There is no minimum wage in Singapore, Singaporeans import a significant number of foreign workers to do the dirty work (you can have a live in maid working 6 days a week for $100 a week) and there is no safety net, as evident by all the elderly and disabled people clearing tables at hawker centers. At the same time, Singapore is one of the most expensive cities in the world and 17% of citizens are millionaires.

    I think the failure to look at Singapore’s policies towards to poor realistically is due to an overly US-centric perspective. Given the unique nature of Singapore, in particular the culture that takes it for granted the absolute authority of the government and small, export-orientated island, I don’t think there are many lessons from Singapore that can be applied to the US.

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    • Jo says:

      I agree with Eliza, I do not think Stiglistz has ever been to Singapore, the income gap in Singapore is getting way too wide and the inflation has gone way too crazy. If you look at the housing costs which will be shocking to most US citizens. The only resources that Singapore has it human resources and the government is now resorting to importing human resources in to compete directly with it’s own citizen to keep the cost of business down without taking into consideration of the social and cultural disparity. All in all, the current government is running the country like a big corporation that chase the bottom line and economic growth as the means to all ends.

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  5. Edward Boyce says:

    Singapore has slightly greater income inequality than the US. The CIA World Factbook gives a Gini coefficient of 0.48 for Singapore and 0.45 for the US. See
    https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html

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  6. Noah Carl says:

    Correct me if I’m wrong, but doesn’t Singapore have a higher Gini coefficient than the US?

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  7. tylerh says:

    Pursuing an egalitarian state is easy when you can export your working class across the causeway to Malaysia. Manhattan south of 110th street is surprisingly prosperous and egalitarian, too.

    Building an economy around import/export is not so hard when you sit at one of the worlds seven major naval “choke points” and the world’s naval super-power decides it suits its self-interest for your island statelet to not bother with paying for your own self-defense.

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