Hong Kong: The Envy of Lee Kuan Yew By Bryan Caplan

In Lee Kuan Yew’s massive From the Third World to the First: The Singapore Story, 1965-2000, there is only one country that he positively seems to envy: Hong Kong. In his view, Hong Kong had a less favorable starting point than Singapore:

Hong Kong had a bleaker economic and political environment in 1949, totally dependent on the mainland’s restraint. China’s People’s Liberation Army could march in any time they were ordered to. But despite uncertainty and the fear of a disastrous tomorrow, or the day after, Hong Kong thrived. Singapore did not then face such dire prospects… Only in 1965, after we were asked to leave Malaysia, did we face as bleak a future. But unlike Hong Kong we did not have a million and a half refugees from the mainland.

Why was Hong Kong able to thrive despite these difficulties? Lee points to a virtuous cycle of better character and better policies:

People in Hong Kong depended not on the government but on themselves and their families… The drive to succeed was intense; family and extended family ties were strong. Long before Milton Friedman held up Hong Kong as a model of a free-enterprise economy, I had seen the advantage of having little or no safety net. It spurred Hong Kong’s people to strive to succeed. There was no social contract between the colonial government and them. Unlike Singaporeans, they could not and did not defend themselves or their collective interests. They were not a nation – indeed, were not allowed to become a nation…

During the 50s and early 60s, Lee basically saw himself as a nationalist. So you’d think that he’d see Hong Kong’s unnationhood as a big handicap. Wrong!

We had to become a nation or we would cease to exist. We had to subsidize education, health, and housing even though I tried to avoid the debilitating effects of welfarism. But the Singaporean cannot match the Hong Konger in drive and motivation. In Hong Kong when people fail, they blame themselves or their bad luck, pick themselves up, and try again… Singaporeans have different attitudes to government and to life. They prefer job security and freedom from worry. When they do not succeed they blame the government since they assume its duty is to ensure that their lives get better… Singaporeans vote for their MPs and ministers and expect them to distribute whatever prizes their are. (emphasis mine)

The government’s HDB

builds most of Singapore’s residential housing. It’s generally

seen as a big success – and at least compared to public housing in the

U.S., it is. But Lee doesn’t really argue that the HDB is superior to a free market in housing. His

main rationale for public housing seems to be that Singaporeans want a

nanny state, and that the best a democratic government can do is figure

out the least economically destructive way to pander to public opinion.

Reading between the lines, doesn’t it sound like Lee thinks that Singapore’s democratic constraints prevented it from following Hong Kong’s superior policies? Or am I trying too hard to put a Caplanian spin on all this?