Crack-Up Capitalism Chapter 3: The Singapore Solution
Everyone loves to point at Singapore. Margaret Thatcher wanted Britain to become one. China sent over twenty thousand officials to study it. After Brexit, British politicians literally said “let Singapore be our model.” But what is Singapore, really? And why does every free-market thinker keep going back to this tiny city-state the size of Greater London?
That is what Chapter 3 of Crack-Up Capitalism by Quinn Slobodian (ISBN: 9781250753908) is about.
A City-State That Should Not Exist
Singapore is weird by modern standards. It is a city-state, a form of government that was popular in the Middle Ages. It sits on less than 0.1 percent of China’s landmass. Yet it has a seat in the UN, its own military, and one of the highest GDPs per capita in the world.
Here’s the thing: when you say “Singapore model,” nobody agrees on what that means. Is it a welfare state with public housing for 80 percent of its people? A laissez-faire paradise for corporations? A surveillance state? A triumph of state planning? A green utopia? All of the above, somehow.
Singapore and Hong Kong sit together on top of those “economic freedom” indexes. But they are not the same. Hong Kong was shaped by private interests. Singapore is the opposite. The state built industrial estates, reclaimed land from the sea, owned the biggest companies, and ran sovereign wealth funds.
Milton Friedman visited in 1963 and mocked Singapore’s planning. He came back in 1980 to a boomtown growing at 10 percent a year. He ate his words, sort of. He still claimed Singapore succeeded “despite” its government. Slobodian says that gets it backwards.
How Singapore Plugged Into the World
Singapore’s strategy was simple but bold. Foreign Affairs Minister S. Rajaratnam laid it out in 1972: plug into multinational corporations, skip decades of development, bring in technology from abroad. “Our port makes the world our hinterland,” he said.
The old idea of a nation was that you feed your own people from your own land. Singapore flipped that. Why do you need your own mines and farms if you can tap into global markets? Small size was actually an advantage. You can pivot faster when the economy shifts.
But here’s the part Rajaratnam left out: foreign workers. Singapore treated them like a tap. Turn it on when you need labor, turn it off when you don’t. By the mid-1970s, about 200,000 foreign workers lived in the city. By 2017, foreigners made up nearly 40 percent of the population. They have no citizen rights. When the economy drops, they get fired and deported. Citizens get savings accounts, health care, public housing. Foreign workers get nothing.
One Man, One Party, No Real Opposition
The same party has been in power since Singapore’s independence. One man, Lee Kuan Yew, ran the country from 1959 to 1991. Opposition politicians were sued, jailed, or forced into exile. Newspapers had to renew their licenses regularly, and those that said the wrong things were shut down. Freedom indexes have always ranked Singapore as only “partly free.”
Lee justified all this with “Asian values.” He said Confucian culture puts the family and the community above the individual. Democracy was something the British tried to “export all over the place.” He believed a country needs discipline more than democracy.
Here’s what is funny about Lee being the voice of Confucian values: he was educated at the London School of Economics and Cambridge. He grew up speaking English. He only learned Chinese as a third language. As a young man he said he was baffled by “the peculiar workings of the Chinese mind.” But by middle age, he was the world’s biggest promoter of Asian cultural exceptionalism.
Slobodian points out that “Asian values” did double duty for Lee. They explained Singapore’s success as something cultural that other countries could not copy. And they gave him a ready-made excuse for crushing civil freedoms.
China’s Favorite Model
After Tiananmen Square in 1989, China had a problem. They crushed the democracy movement, but they needed a story for what kind of society they were building. It could not look like American freedom or Soviet glasnost. Singapore offered a third option: economic openness with political control.
Deng Xiaoping visited Singapore in 1992 and praised its “good public order.” Four hundred Chinese delegations traveled there the same year. China started cloning Singapore inside its own borders: a Hi-Tech Innovation Park in Chengdu, a Knowledge City in Guangzhou, and a massive industrial park in Suzhou designed as a copy of Singapore’s Jurong district.
Instead of admitting they were abandoning socialism, China could call it “Confucian capitalism” or capitalism “with Chinese characteristics.” It made the whole shift feel like a return to tradition rather than a Western import.
Singapore-on-Thames: The Brexit Fantasy
Back in Britain, Thatcher was Singapore’s biggest fan. She praised it constantly, comparing it to the “moribund” Europe that Britain was stuck with. She bought Lee’s Asian values talk completely, calling the Chinese “natural capitalists” and “born traders.”
After the 2016 Brexit vote, “Singapore-on-Thames” became the buzzword. The idea was that Britain outside the EU could become a regulation-light, tax-light economy, open for business like never before. Boris Johnson announced “Singapore-style freeports” along the British coast. Liz Truss promised a “Big Bang 2.0” of deregulation.
But here’s the problem: the Brexiteers were cherry-picking. Singapore’s success came from massive state planning. The government expropriated almost all the land and built public housing so fast they finished a new unit every forty-five minutes. By 1977, 60 percent of Singaporeans lived in public housing. Later it hit 80 percent. Housing complexes were racially integrated on purpose, with quotas. The opposite of how British cities work.
So Britain got stuck between two Singapores. One is the free port fantasy of low taxes. The other is the reality of a state that plans everything from the top.
The Contradictions Nobody Wants to Talk About
Slobodian ends the chapter by pointing out what Singapore fans keep ignoring.
First, climate change. Singapore is one degree above the equator, massively dependent on air conditioning and imported water. It literally sucks sand from poorer neighboring countries to build more land for real estate. Rising seas and extreme weather put the whole project at risk.
Second, the people problem. Economist Paul Krugman argued Singapore’s growth was not about efficiency. Like the Soviet Union in its boom years, it was just throwing more fuel into the engine: more money, more materials, more workers. Foreign workers from South Asia and Southeast Asia do construction and domestic work. They live in segregated dormitories behind fences. In 2013, the death of an Indian construction worker sparked Singapore’s first major riot in fifty years.
And third, the demographic trap. Singapore faces the same problem as every rich country: an aging population that wants to protect its benefits but resents the new workers needed to keep things running. In 2011, the ruling party got its lowest election results ever because of immigration backlash. Sound familiar? That is exactly what drove Brexit.
Singapore, among wealthy territories, has inequality second only to Hong Kong. A bestselling book there was called “This Is What Inequality Looks Like.”
Slobodian wraps up with a line that sticks: Singapore is not an island. It is everywhere. Its contradictions are the contradictions of global capitalism itself.
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