Singapore has combined capitalism with pragmatic socialism in inventive ways Karl Marx could not foresee. The city state runs an interventionist economy and, among other things, gives Singaporeans access to high-quality owner-occupied public housing. Photo: Reuters
Opinion
The View
by Winston Mok
The View
by Winston Mok
Donald Trump’s warning against socialism is nonsense – just look at Hong Kong, Singapore and China
Socialism is a misleading label for the rhetoric emerging in the US. Democrats are just trying to rethink access to health care and education. Here, it may be instructive to consider freewheeling Hong Kong versus interventionist Singapore
In his State of the Union address, President Donald Trump warned the United States against the perils of socialism. Last year, the White House issued a report on the economic costs of socialism, which made no serious analysis, but consisted mostly of straw man arguments – intended for the domestic audience ahead of the 2020 presidential election, and directed at the likes of Bernie Sanders, who has more than 2 million online donors.
With the end of the cold war, capitalism had triumphed. One would be hard-pressed to find a believer in socialism in former socialist countries. The recent Trump-Kim summit in Hanoi was rich in symbolic significance. After experiencing first-hand the pains of a planned economy, the Vietnamese must be among capitalism’s most ardent supporters, perhaps more passionate than even the Chinese.
Yet, socialism is finding support in the long-time bastions of capitalism. In the developed world, the younger generation can hardly expect to better their parents’ standard of living. Millennials are struggling to afford homes. Among young Americans, positive views of capitalism are declining and socialism is seen more positively.
Still, the Democrats’ Green New Deal may be too ambitious, and is unlikely to progress far in the US legislative process. But the original New Deal was a watershed in US history. Against the backdrop of the Great Depression, the programme introduced social security benefits and set the stage for the US’ post-war economic boom and, arguably, the golden age of US capitalism. Today, faced with problems including unaffordable health care, crushing student debt and decaying infrastructure, Americans could use a new New Deal.
At a news conference in Washington on February 7, US Representative Alexandria Ocasio-Cortez (centre) and Senator Ed Markey (right) unveil a Green New Deal that proposes to eliminate US greenhouse gas emissions within a decade. Photo: Reuters
While the New Deal shifted the US towards government regulation of the economy, the rise of the New Right (and Ronald Reagan) switched the dial back to less government regulation. Under market fundamentalism, the economic divide has widened. Mega corporations and the super-rich are finding legal ways to pay lower taxes. Extra profits are shovelled into share buy-backs while workers are laid off. Americans are now reaping the bitter harvest of Reaganomics – the polarisation of society.
However, socialism is a misleading label for the rhetoric emerging in the US now. No serious politician in the US is thinking about nationalising companies or supplanting the market. Some Democrats are merely trying to find ways to make health care and higher education more accessible, like in Canada and the Nordic countries. In particular, while the Nordic model does not produce higher GDP per capita than the US, it delivers lower inequality and better well-being among citizens.
In his lifetime, Karl Marx wrote a lot more about the self-destructive tendencies of capitalism than how to make socialism work. If he were alive today, he would be appalled by the atrocities committed in his name. He would feel vindicated by the political impasse in the erstwhile industrial power where he did most of his research and writing, whose fragmented society is struggling to leave a free trade region.
He may reserve his sharpest critiques for the rising economic giant which embraces his ideology in ways that he cannot recognise. He would feel ambivalent about how his ideals remain the professed goals of a self-proclaimed follower of his, though parts of the country are still evolving from the kind of brute capitalism he experienced in Dickensian England. By some estimates, China has higher levels of income inequality than the US.
In Asia, Marx may feel proudest of a tiny city state where Trump and Kim Jong-un first met – a country which suppressed Marxists in its formative years, but which has combined capitalism with pragmatic socialism in inventive ways he could not foresee. In health care, education, housing and retirement, Singapore runs highly successful social programmes.
To refute the White House’s claims about socialism, look no further than the case of Hong Kong versus Singapore. Hong Kong is the quintessential laissez-faire economy, more purely capitalist than the US. Yet, by most measures, Hong Kong is performing less well than Singapore Inc, a highly interventionist economy.
Singapore has a much higher GDP per capita than Hong Kong. Through its industrial policy, Singapore has emerged as an innovative nation: it is the only Asian country in the top five in the latest Global Innovation Index, and it is ranked above the US. Hong Kong is 14th on the list, after South Korea (12th) and Japan (13th). More importantly, Singaporeans have access to high-quality owner-occupied public housing whereas the market-driven housing model in Hong Kong has created a struggle among young people.
Instead of forcing structural changes in China and pushing for the Chinese to adopt a version of market fundamentalism that is causing problems for its own people, the US should welcome a more socialist China. One with an expanding middle class, instead of the top 1 per cent getting richer. One with better social health care, so less money has to be saved for a rainy day. One where affordable housing may become accessible to more. One where more Chinese consumers are able to spend more – including on US goods and services.
Perhaps a more socialist China would narrow the trade gap with the US.
