Will has a car. Really, his parents have a car, which is a big deal in Singapore. How big? Well, the government places a huge tax on cars (something close to 80% of the retail value of the vehicle), but that's not all. The government requires that you then buy a COE, Certificate of Entitlement (because your taxes only aren't enough to constitute any property claim over the roads), which can cost about the same amount for the vehicle. The COEs can be bought and sold on the open market and the government only issues new ones depending on the "economic need" for them, but that's not all. As you drive around Singapore, every car must have a receiver that is attached to the car and costs you a few dollars every time that you pass under one of the government's terminals. You see a lot of fancy cars in Singapore, but that comes down to: if you are going to buy a car in Singapore, you might as well go all out. Obviously, privatized roads would be an easy and better solution, but let's not get hung up on economic theory. Again, for a country that is so capitalistic, or claims to be, it surely is horrifically socialist.
Anyway, Will took us around the city. I got to quiz him on different aspects of Singaporean politics, behavior, and lifestyle. It's true that most Singaporeans don't have clothe machine dryers. Instead, they hang their clothes out to dry from poles that they can suspend from their apartments. I was told that during the rainy season, people just expect that the clothes might get a little wet again. I know that people here seem to accept that, but when I quizzed a little further, I was told that machine dryers would be more convenient for working professionals. Well, if "working professionals" doesn't constitute most of Singapore, I don't know what does.
The People's Action Party controls Singapore and operates almost as a one-party dictatorship. Lee Kaun Yew managed significant personal control. Will said that he was 8 when they banned gum. Essentially, I have been told that whenever you go to China (note: not Singapore), one ought to expect the 3 S's: staring, smoking, and spitting. Everyone will stare at you. While rude in Western cultures, this is considered mere curiosity in China. Well, in Singapore, we got stared at, but that was more because we were a bunch of Americans in an area that was clearly residential Singapore, and they really stared at Will, wondering what this Singaporean was doing with so many gringos. The 2nd S, smoking, happens everywhere in China, but this is true of most of the world. It's like the world's favorite drug. In Singapore, lots of people smoke, but the government will hit you hard with a fine if you do it in the wrong place or if you leave a butt on the ground. All of the National University of Singapore's campus is non-smoking, and it's been somewhat traumatic to watch as Justin desperately attempts to sneak a drag every ten minutes. Finally, spitting, it's gross. Even nice little old ladies in China will get a loogie going. Lee Kaun Yew was apparently as disgusted as I was, but with more power. So, he taxed spitting on the sidewalk and he banned the sale of gum in Singapore. Free Trade Agreements have allowed gum with a doctor's permission in the case of smoking, and many Singaporeans will cross the border into Malaya in order to a pack of gum; however, Lee was very effective in reducing the incidence of chewing gum (and thus spitting).
People pay for everything in Singapore. I'm not really opposed to the idea, since the idea that the user ought to pay for the services rendered to him as a basic economic and justice appeal; however, the hidden taxes are really quite absurd. Will was unwilling to say this out loud, but the People's Action Party (PAP) is sometimes called the Pay And Pay party.
Another thing, people are afraid to criticize the government. You definitely do not enjoy the same "political" and "civil" liberties here that you would find common in many other Western countries. To me, freedom is not something that you can divide. If I cannot say what I want, then I cannot use my property how I want, then I cannot enter into transactions that I want. Therefore, economic, political, and civil liberties are all intricately tied. What was strange, was that Will was very reticent when asked about politics in public and showed clear signs of agitation when I would ask critical questions in public. However, once in private, he would open up more. I will have to keep this in mind. It reminds me quite a bit of my first taxi cab ride here.
A Trip to the Economic Development Board (EDB)
I know I seem rather weird, but these are the things that interest me about coming to a country: it's culture, the modes of operation, the hopes, aspirations, philosophy of the people. Yesterday, we went to the Economic Development Board of Singapore, which existed before Singapore was even an independent country. According to the governments statistics (which Will would later scoff at when we recalled them to him), the EDB accounts for something like 40% of Singapore's GDP. Now, in visiting the EDB, we actually met with a group called "Contact Singapore".
Contact Singapore told us all about the wonderful life you can live if you move to Singapore, about the low-cost healthcare, the wonderful dining and shopping, the low taxes, and the high wages (i.e., those things that come from a free market). The purpose of Contact Singapore is to recruit global talent and encourage global investment in Singapore. The meeting was pretty much a recruiting film for us to come to Singapore and little was actually said about what the EDB did and how it operated. People attempted to ask questions, but it was difficult in that everyone was unclear on what this forum was for. I think even the professors noticed, but we all made of the best of it. In the end, I had to ask the question of why does Contact Singapore even exist. If Singapore has all these attractive features for investment, why wouldn't companies naturally come to Singapore, why couldn't the private sector do what they did?
They responded in the usual government way. They claimed that private companies don't have an incentive to operate in such a way that they would have to recruit people who might end up with their competitors and that, as the government, they would be able to leverage higher economies of scale. They even seemed to acknowledge that head-hunter agencies do just that, but contended that what they did was somehow different. I'm really not sure how. Companies often work in tandem with their competitors to attract talent (it's called a job fair), organizations often arise to deal with transaction costs of recruiting (head-hunters, job placement groups, etc), and scale can be leveraged and all a manner of different ways. They even admitted that they don't do placement and that job hunter agencies are the ones who actually do that. In other words, they are probably a wonderful case study in what is seen and what is unseen.
The Port of Singapore Authority (PSA)
Today, our company visit was to PSA. Now, while they were originally the Port of Singapore Authority, they are no longer. They won't tell us what PSA stands for anymore, if anything, but they have been "corporatized" which means that they are owned entirely by Temasek Holdings, which is the government sovereign wealth fund. So, they were a government agency, now they are just owned by the government. Eventually, they will be "privatized", which means that 50% of the shares will be sold to Singaporeans so that the government can "share the wealth". Hardly privatization.
PSA is an impressive organization as it operates over 28 ports in several different countries in the world. They are careful, selective, and relatively efficient in the way they go about things. They do operate largely as a private company, but obviously, their initial investment came from the government. Hopefully, as liberalization goes further, they will become more private and wealth will flow into the hands most capable, but the socialization of these different aspects is worrisome. Again, they like to laud the success of several of these firms, but they cherry-pick the most successful ones to show, which are largely private, and they are completely ignorant of Bastiat's warnings against what is seen and what is unseen in economic affairs.
Larger Picture
So, in many ways, Singapore is a schizophrenic country. That's why I can seem to praise one part and then criticize it again. One one part, prices are free to move and people can purchase a wide variety of goods and services. Taxes are low (kinda), regulation is low (kinda), and transfer payments are low. However, it then has these Government Linked Corporations which took massive amounts of money from the public in an initial investment to which the public will never see the money until they once again have to pay double when those companies have their stock offered on the open market. Regulation of private life and political control are well within the governments power. My observation thus far is: Singapore is too socialist and it invades and violates the personal dignity of its citizens and others; however, it terms of many things that it does, it is better than most governments around the world.
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