As a former left-wing-communist-dupe-type, I hadn’t realized, until reading Mary Anastasia O’Grady’s oped in this morning’s WSJ, that Hong Kong, apparently for several years now, stands at the very top of all countries (or city states, in its case, I suppose) in the annual Index of Economic Freedom published by the Journal and the Heritage Foundation. Silly me–I thought HK was now under the lock, at least to some extent, of Red China. But evidently the Chicoms themselves continue on their merry way toward relegating Marxism-Leninism-MaoTseTung-Thought to the memorabilia market. According to the WSJ: Notable gains were made by China; it is still a “mostly unfree” economy but moved up 16 places and is continuing a trend toward liberalization.
It’s obvious to see why, if you buy Ms. O’Grady’s concluding graph: Policy makers who pay lip service to fighting poverty would do well to grasp the link between economic freedom and prosperity. This year the Index finds that the freest economies have a per-capita income of $29,219, more than twice that of the “mostly free” at $12,839, and more than four times that of the “mostly unfree.” Put simply, misery has a cure and its name is economic freedom.
Of course, the elephant in the room is whether there is a correlation between economic freedom and social freedom. The presence of Hong Kong and Singapore as one-two at the top of the list would tend to make one skeptical. But I am not so sure. In the long run, the market seems to be rushing on and up–as is social freedom. Like the Dow and the Nasdaq.
PS: It will be interesting to watch the case of “miracle” Estonia, now number four. It is trying to join the EU where many of its freedoms will be restricted.
The problem in China is that it’s still not a country rule by law. They’ve mostly leave Hong Kong as it, hands off (economically speaking). But in China itself, there really isn’t much of protection of law, as cronyism dictate how much protection one can afford.
Of course, the elephant in the room is whether there is a correlation between economic freedom and social freedom. The presence of Hong Kong and Singapore as one-two at the top of the list would tend to make one skeptical.
Is Singapore really that bad? It seems to me, at the very least, to be a country that takes the rule of law seriously. There may be a lot of laws (although I wonder whether Singapore is actually any worse than, say, the typical public school or corporate workplace, thanks to our courts and the EEOC), but they aren’t kept a secret, people get fair trials, the secret police don’t invade homes at 2 am, etc.
SV Jim,
Rule of law is not synonymous with personal political freedom. We tend to associate those two with each other because we have both and because you probably can’t have political freedom without rule of law…
From what I’ve read (cf Fareed Zakaria), Singapore does indeed have strong rule of law, and people have great economic freedom. They just do not get much leeway politically.
It’s an unusual place.
HK has come through the PRC takeover pretty well. My understanding is that the real estate market took a bit of a hit and left some people below water on their mortgages. I think that had more to do with changes (improvements) in the Shenzhen SEZ than anything else, though.
It’s an unusual place.
Boy, there’s an understatement.
I like Singapore very much, and I’ve got to say that, at least during a long visit (weeks not months), it feels as free as anywhere. The people are cheerful, rich, and apparently happy, the food is freakin’ amazing, the town is clean in a way that even Frankfurt can’t compare to.
They have great night life, the shopping is amazing, you can buy books in English, Chinese, Japanese, Malay, Tagalog, German, French, and Spanish — probably more, but I remember seeing those — and just in general … well, it put me in mind of downtown Atlanta with lots of Asians and no slums.
And with the occasional Buddhist temple, Confucian whatever-they-call-them, or remnant of the old days, like the Raffles hotel. (BTW, Heinlein’s Tramp Royale, a travel book about the round-the-world trip he and Ginny took in the 50′s, gives a very interesting contrasting picture of Singapore before Lee Kwan Yew.) And there’s the Tiger Balm Gardens, which is sort of a Buddhist Coney Island boardwalk.
Political speech on a small scale seems pretty open too — I remember a teeshirt “Singapore: a Fine City” with a graphic of all the silly-ass little fines they have, like spitting, chewing gum, etc. The Straits Times is about as predictably pro-government as the New York Times is predictably pro-Democrat.
On the other hand, people who seriously criticise the ruling oligarchs can have real trouble. Even then, though, it’s not that they get beaten and/or shot; they get bankrupted by libel suits and such.
I suspect it’s about as politically free as machine Chicago or Kansas City, but they seem to be generally more polite about it — with the caveat that unlike Chicago or KC, you can’t really leave the city without leaving the country.
It’s kind of paternally authoritarian: it’s all obviously for your own good, and it’s a little hard to see the rough edges.
If you asked Mr Lee, I think he’d tell you that they needed a bit of paternalistic authoritarianism to move from the colonial third world to the first in 40 years; certainly it’s hard to complain about the results.
My own guess would be that when Lee dies (he’s 80) the test will be whether Singapore becomes more authoritarian, or less. Lee’s son Hsien Loong (little dragon? Hard to be sure without the Chinese characters, but that’s what it sounds like) — anyway, Lee Hsien Loong is going to be the next Prime Minister, but the guy who’s been PM for the last 13 years was from another family, so it’s hard to say if that’s a potential dynasty, or just a political dynasty like the Bushes and Kennedys. But there is a pleasant streak of anarchy among younger people in Singapore even now — I’d guess it’s going to become more liberal.
Everyone is confusing communism with Confuciusism (AKA Taoism). This 2,500 year year old philosophy emphasizes the good of the group over the good for the individual. It also envisions a humane leadership. Soros found out to his near ruination that when China was threatened with one of his currency raids the Chinese government “violated” market “rules” and defended their currency by simply attacking Soros with their national treasury. This was natural to the Confucian philosophy but it was not Communism. A free market to China is only OK if the common good is served. Nothing that isn’t in the common good will be allowed. Period. They will not allow themselves to be pulled into the pit as was Russia under Yeltsen (and I doubt if they will pay more than lip service to Putin). The dam at the Yanktsee is classic Confucius whereby they destroy their past for the common good today. They will never allow an oligarch to emerge, for long. The state will always decide what is in the common good. It has been that way for two or three thousand years and will be that way for a few thousand more. The ruthless Mao was an abberation. The regime will seek to become more and more humane so long as the common good is served.
Duke,
Your peaen to Chinese Confucian virtues stikes me as a bit naive. The family comes first, I believe, and this leads to nepotism and corruption. The Chinese can also bring forth bloody minded mobs as easily as any other nationality; Mao was not an abberration.
Charlie(C),
I enjoyed Tramp Royale also, from the food fight at the Captain’s table to the descriptions of Buenos Aires and South Africa. Heinlein was a personality as much as a writer and darn good company.
Bostonian,
I agree that the rule of law is not synonymous with personal political freedom, although I would contend that the rule of law is a necessary condition for personal political freedom.
What I was really trying to do was ask whether Singapore really still restricts personal political freedom. I know that there were issues with freedom of the press (if memory serves, the Wall Street Journal was banned about fifteen years ago). Are there still problems? Are there free elections? Is it safe to publish a newspaper article critical of the government? I’m not saying that Singapore doesn’t restrict personal political freedom, but I am asking whether anybody here can give recent (say, in the past five years) examples demonstrating that it does.
It is hard to maintain a repressive a regime in a country that allows free exchange of goods and services.
But this is a different culture and they may allow open and pulic debate like we do.
Not sure how “Confucian” the current Chinese leadership is. There was a recent article in the NYT about the confiscation of land being farmed by peasants…it was given to wealthy individuals.
I had the high privelige of being asked to leave the Bar at Raffles, along with my survey section and the four Brit grandmas with which we had traded broadsides of Guinness and gin & tonics. It was Trafalgar without the french. All very tactful and proper; the waiter chided us for encouraging the grand dames.
I spent a total of almost three weeks in Singapore, all back in the eighties. I spent two extremely informative nights on ride- a- longs with Mr. Singh and Mr. Singh of the Singapore Police. I found them as interested in “broken glass” policing as a means to public order as any Giuliani- minded cop anywhere in the world. They (the detectives) were very frank about how important recognizing what historical frictions might exist between the parties in a law enforcement situation but without any of the trappings of PC. You cross the line, you get treated exactly like anybody else in Singapore.
Do they have more restrictions on individual liberty than we do? Maybe – but they have arrived at a system that allows three major and easily a dozen minor ethnicities or religions to coexist and prosper.
Democracy scares people. The balance between individual freedoms, humans’ tendency to organize and respond to leadership as groups, and the tendency of most politicians to avoid failure in any form makes the critical importance of strong constitutions. Like ours.
Freedom doesn’t die in democracy. It dies when people elect leaders that kill it – because the voters decide to reject personal responsibility for their own lives. Take a half a world of people who’ve never been free at all and you’ve got a heck of a challenge.
I’m glad that Bush doesn’t govern by popularity. Grateful and glad.
I have a lot of questions as to what the study means by “freest economies”, considering the lack of rule of law, and civil liberties in China.
Nevertheless, one point the article makes is that The U.S., with its strong property rights, low inflation and competitive banking and finance laws, scores well in most. But worrying developments like Sarbanes-Oxley in the category of regulation and aggressive use of antidumping law in trade policy have kept it from keeping pace with the best performers in economic freedom.
Most alarming is the U.S.’s fiscal burden, which imposes high marginal tax rates for individuals and very high marginal corporate tax rates. In terms of corporate taxation as an element of economic freedom, the U.S. ranks a lowly 112th out of the 155 countries scored, and its top individual tax rate ranks only slightly better at 82nd. U.S. government expenditures as a share of GDP increased less in 2003 than in 2002, but the rise since 2001 is what explains the U.S.’s decline in score over the period.
Punitive taxes, protectionism, and excessive regulation are serious matters. I find them a lot more worrysome than the low dollar.
Jim, I think that’s very much the right question, and I can tell you that the answer is conditionally “yeah, sort of, somewhat, maybe.”
Here’s a story about Joshua Jeyaretnam, who has been effectively bankrupted by a libel suit. This kind of libel suit would not be possible in the US, because of the First Amendment, and I think would be pretty limited most places we consider “free” because of parliamentary (sp?) immunity.
Another story quotes Devan Nair, an ex-President of Singopore, as saying that in the 80′s:
So there’s no question that there are problems, but … well, there’s a big difference between libel laws and a bullet in the back of the head. Which is what you might have expected in machine towns or uniion elections.
Well, I read that article and thought: Jeez, is there a connection between economic freedom and math???
Singapore is always at the top of the TIMSS tests, and Finland (number 15 in the ‘free’ category) was at the top of the PISA scores this year . . . Canada does well, too, I think.
Sigh.
I suspect it’s less about the U.S. becoming “less” free than others becoming more (as we stagnate because we are stuck with industrial age assumptions about government effectiveness, efficiency, overhead and the beast’s demand, now birthright, of 25% of our GDP).
So this is great (to have competition). Innovative and hard working people will be able to choose to vote w/ their feet and pocketbook, and over time those societies that deliver the best return for their people and their peoples’ enterprises will win. e.g. Hard to believe given current automation and self-service seen in the private sector wouldn’t reduce government employment to 10% of current. To say nothing of writing laws and regulation in a form that enables automation and self-service (if not deferable entirely to private or voluntary civil society).
Government is just overhead in the economic equation. Necessary, but overhead just the same. Those who do best at reducing its cost to a minimum will win long term.
ìHere’s a story about Joshua Jeyaretnam, who has been effectively bankrupted by a libel suit.î
Never forget that book burner, John Kerry, attempted to do similar damage to our First Amendment rights. The Democratic presidential nominee disgraced himself regarding the Swift Boat book situation. I know that the election is over—but we should not overlook the disgraceful actions of Kerryís band of hooligans.
Catherine -
“Well, I read that article and thought: Jeez, is there a connection between economic freedom and math???”
My Shore Patrol station HQ on the beach in Singapore was an annex to the harbor water taxi/ferry office. They had a TV set on twentyfour hours a day.
I watched childrens’ programming where puppets and animations demonstrated plane geometry relationships and terms, followed closely by the properties of triangles and basic trigonometric relationships. I believe the language was Malaysian with Hindi subtitles.
At the time, I wondered if America would be a subsidiary of Toyota by the time I retired. It was emphatically not Sesame Street.
My kids are B students. They get “A”‘s on everything they turn in but are so bored they miss assignments and end up with “B”s. Grrrrr…..at least they both love to read, and Mrs. Tmj already has them by me on using computers.
“Of course, the elephant in the room is whether there is a correlation between economic freedom and social freedom. The presence of Hong Kong and Singapore as one-two at the top of the list would tend to make one skeptical. But I am not so sure.”
Actually, to be precise the question is whether there is a CAUSAL relationship, and if so are there any intervening variables. The correlation itself is clearly significant!