Monthly Archives: July 2011

Post Museum Election Perspectives: A Critique of the Yawning Bread Article*

A few nights ago I ran into Alex Au at the US Independence Day reception and at last had a chance, somewhat belatedly, to discuss his article which appeared on the 16th May 2011. In particular I took exception to the diagram on the left and the description of the Reform Party as “libertarian.” His response was that he had done this to court controversy and because the RP had advocated free-market economic solutions for many of Singapore’s problems while the other Opposition parties took a much more unashamedly populist stance. This may be true in that we are the only party that is led by an economist. The RP is certainly “liberal” in the sense that we believe in democratic values and incline towards individualism rather than communitarianism. That does not make us libertarian.

Since the word is often bandied about in Singapore, usually pejoratively, I propose to start with a definition of libertarianism and some acerbic comments from Francis Fukuyama in his latest book** about the ideal libertarian state. Then I contrast this with the actual philosophy of the RP. Finally I will compare the RP with the other main parties in Singapore on the basis of their published manifestos.

The problem with any definition is that there are as many different types of libertarianism as there are shades of political thought. Wikipedia*** defines it as:

Libertarianism is a political philosophy that upholds individual liberty, especially freedom of expression and action.[1] Libertarianism includes diverse beliefs and organizations, all advocating minimization of the state and sharing the goal of maximizing individual liberty and freedom.

While commonly associated with the right, there are also “left libertarians” who believe in individual freedom but support some form of income redistribution or social justice. Noam Chomsky would describe himself as a “libertarian socialist”. It would probably be fair to describe the founder of the Reform Party, JBJ, as being in many ways close to the left libertarian position, particularly in his support for the views of John Ruskin.

Francis Fukuyama rather amusingly exposes the inconsistencies of the right-wing libertarian position thus:

“Indeed, the kinds of minimal or no-government societies envisioned by dreamers of the Left and Right are not fantasies: they actually exist in the contemporary developing world. Many parts of sub-Saharan Africa are a libertarian’s paradise. The region as a whole is a low-tax utopia, with governments often unable to collect more than about 10% of GDP in taxes, compared to more than 30% in the US and 50% in parts of Europe. Rather than unleashing private entrepreneurship, this low rate of taxation means that basic public services like health, education…are starved of funding. The physical infrastructure on which a modern economy rests, like roads, court systems, and police, are missing. In Somalia, where a strong central government has not existed since the late 1980s, individuals may own not just assault rifles but also rocket-propelled grenades, antiaircraft missiles, and tanks. People are free to protect their families, and indeed are forced to do so.”

 

While the example is a bit of a straw man, in that even the most right-wing libertarian state would require an executive strong enough to enforce contracts and property rights, it shows that the Reform Party is definitely not libertarian in this sense of the term.

We have always described ourselves as liberal free-market Keynesian. While believing that a free market economy is normally the best form of economic organisation in terms of efficiency and providing incentives for growth and investment, there are notable cases of market failure. An example of this is the current situation the global economy finds itself in.  An overhang of debt from the housing bubble and the (in my view, misplaced) fear of increasing the debt burden has led many Western governments to focus on reducing debt rather than growing the economy. In this situation, my Keynesian economics training inclines me to the view that the government has a major role to play in getting the economy out of an unsatisfactory equilibrium of slow growth and high unemployment through deficit spending or quantitative easing designed to reduce the real burden of debt.

Also we believe that the state has a role to play in mitigating the effects of unequal endowments and levelling the playing field to provide genuine equality of opportunity. In our election manifesto we said we wanted to introduce free education for everyone including the disabled children who are now effectively excluded. We also wanted a minimum wage (or else much tighter curbs on foreign labour), universal health insurance, a basic old-age pension and income support for lower-income families with children, as opposed to the current Workfare system. However where we can, we wish to promote individual freedom, economic freedom being an integral part of that. Thus, our proposals to privatize large chunks of Singapore’s state-corporatist economy, introduce more competition or more effective regulation into the provision of essential services such as public transport, to allow HDB leaseholders to buy out their freeholds, to end the compulsory forced-savings scheme that is CPF, to give citizens a stake in our SWFs and to keep the burden of taxation low (which incidentally was a pledge in the 1994 WP Manifesto produced under JBJ’s leadership with my assistance) are all aimed at promoting economic freedom. At the same time our proposals to remove restrictions on freedom of expression and association, reduce the length of National Service and abolish many of the laws which have been used wrongly to curtail our fundamental liberties, such as the ISA and the Criminal Law (Temporary Provisions) Act, are aimed at enhancing individual freedom.

While there are elements that we have in common with some strands of libertarianism it is probably more correct to describe the Reform Party as being firmly in the mainstream of the Liberal tradition. We place a high priority on human rights and individual liberty. The SDP is similar in this regard but they have more of a redistributionist agenda and are less radical than the RP in wanting to free Singaporeans from the economic constraints and controls coupled with indirect state ownership of much of the economy.

The Workers’ Party manifesto has some good points to make in the area of constitutional reform and strengthening the rights of the individual against the executive but a lot of this pre-dates the present leadership and can be traced back to the 1994 manifesto which was considerably more daring. They call for a Freedom of Information Act in their 2011 manifesto but this is predated by a similar call in the RP manifesto we issued in 2009. In economic policy they have, if anything gone backward with calls for nationalization of the public transport network without understanding that the public transport system is still effectively nationalized despite the corporatization that has been the government’s fashion. If it is merely a call for lower transport fares to be subsidized by the taxpayer then that is likely to lead to both under-investment and inefficiency. I would prefer to see more competition where possible or else independent and intelligent regulation that controls the level of profit that can be earned by what is effectively a monopoly while at the same time rewarding efficiency gains and other performance targets.

The PAP is sometimes labelled as “libertarian” but I feel this is a misnomer. They do believe in a social Darwinism, particularly for those at the bottom of the income distribution, which is why they have introduced an open-door immigration policy without a social safety net. Taxes are low (though the lower income earners have to save a high proportion of their income or spend it on government-supplied housing through the CPF scheme) but the state controls much of the economy and owns most of the land. Civil liberties have a low priority and many of our constitutional rights have been abrogated. Fukuyama describes how the necessary conditions for economic growth were fulfilled by the imperial Chinese state in the form of “good enough” property rights (though still subject to arbitrary confiscation by the emperor) and a level of taxation that was well below the theoretical maximum. This was despite there being no rule of law or political accountability. However economic growth was held back by a fundamental complacency on the part of its inhabitants. In Singapore we have achieved something very similar to “good enough” property rights (though the bulk of the population live in flats with 99 year leaseholds whose renewal is dependent upon government goodwill and the government has acquired the bulk of Singapore’s land without paying anywhere close to market value). China and Singapore today exemplify this model of economic development which can be called “East Asian Authoritarian”. Historically the challenge for absolutist states was to avoid the re-emergence of patrimonialism and the replacement of meritocracy by a rent-seeking elite. In the absence of accountability and the rule of law past absolutist states were not able to prevent this and it is not at all clear how the new authoritarian models can avoid this in future.

In Singapore the interests of the government are only weakly aligned with those of the citizens. Interest in building a strong state as measured by GDP, the size of the reserves (including the SWFs), and increasing our population through the import of foreigners take precedence over the raising of living standards for the bulk of existing inhabitants. While the recent election may have made the government pay more lip service to the demands of native-born Singaporeans, it is not clear that much has changed. At the US reception I chatted briefly to an American energy policy analyst who said he had observed that Singapore’s aggressive recruitment of foreign talent in his area was far beyond the needs or capacity of the domestic economy at present. What amazes me is that foreigners continue to be surprised when they discover evidence that the government is not acting in the economic interests of its own citizens.

To conclude, the Reform Party is a Liberal rather than a Libertarian party. While the authoritarian model may continue to enjoy a few more years of success in the longer term it is hard to see how states lacking accountability and the rule of law can compete with those which have it. The Reform Party’s message of economic and political freedom is one that will be increasingly attractive to Singaporeans and will also prove to be the most successful at raising living standards.

 

*http://yawningbread.wordpress.com/2011/05/16/talk-at-the-post-museum-election-perspectives/

**The Origins of Political Power, Francis Fukuyama, Profile Books 2011.

***http://en.wikipedia.org/wiki/Libertarianism#cite_note-0

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