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7 December 2012

Heresy of the week: Authoritarian libertarianism may be a contradiction in terms, but it works

Blogging at TheMoneyIllusion, Scott Sumner describes two very different modern societies – both of them in the developed world. See if you can name them:

Here’s the first example: 

  • "Free trade and investment. Medical care provided via HSAs, with very little government spending.  No unemployment compensation. Social security private accounts. A 20% top income tax rate, zero percent on capital gains. Income is slightly more unequal than in the US, which means far more unequal than the typical rich country. Far more millionaires per capita than any other country in the world—a true 'ownership society.' Lots of immigration. Rated second most free market economy in the world by the conservative Heritage Foundation."

Now, for the other one: 

  • "…80% of the population lives in… public housing projects that I mentioned… (from the outside) the home of someone making $30,000 per year looks almost the same as that of someone making $130,000/year. At best the richer family has a slightly bigger unit, and a nicer location… there are some poor people here and there, but no significant slums of the sort you see in America. 
  • "It has universal health care. It has very strong environmental laws such as congestion pricing and ultra high taxes on cars. As a result the middle class relies on the extensive system of mass transit… The rich pay a lot more in taxes than they use in public services… extremely restrictive land use policies." 

So what do you think, then? Hong Kong versus Norway? Chile versus Luxembourg?

Actually, you’ve been deceived. Scott Sumner wasn't contrasting two different countries,but exploring the contrasts within one country: Singapore – which is both libertarian and authoritarian at the same time.

According to Sumner this apparent dichotomy is more pleasing to some visitors than to others: 

  • "…when western academics come to Singapore, the leftists tend to love the place and the libertarians often go home in disgust." 

Well, one can understand why the libertarians might be disillusioned. Singapore provides the supreme example of the modestly sized, yet benevolently bossy state. But, the liberal left has no cause to celebrate either – not only is Singapore a culturally conservative society, it is living proof that cultural conservatism works.

The fact that Singapore so rarely features in the news headlines is testament to its success. We should, however, pay more attention. This is, after all, a miraculous nation. With few natural resources, a tropical climate, a colonial history and a far from homogenous population, Singapore should have been a basket case. Instead, from almost nothing, it has become one of richest countries on Earth.

That surely deserves some respect.


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