In Defense of Instrumental Reason

In the wake of his death, LKY is summarily dismissed by many on the Left as authoritarian or lauded by many on the Right who describe him as a pragmatist. Both appellations, while probably true depending on where in his long career one looks – obscure the true nature of a worldview, a philosophic outlook, around which he built institutions in Singapore.

In his latest piece, the New York Times columnist Roger Cohen makes a passing mention to an email he received from Tommy Koh, Singapore’s former ambassador to the United Nations.  Koh writes that the passing of Lee Kuan Yew “will have no negative impact on the future of Singapore”.  In most countries, such boilerplate responses by bureaucrats are par for the course. But in the case of LKY and Singapore, it reveals what has usually come to be associated with that city-state: a cold calculus of cost and consequences of every event and policy program.  While LKY’s absence will be felt, undoubtedly, by his peers and friends, the fact that he leaves behind institutions that are expected to not just work but work better than most others in the world is a testament to his legacy, that while easy to praise, is hard to analyze and harder yet to replicate.

No greater tribute is possible for the Singapore that LKY built – an hyperconnected, quantitatively minded, financial powerhouse — than the verdict from the global bond markets.  As the news percolated that LKY was no more, the demand for the AAA rated (by Fitch) Singapore sovereign bond that matures in 2018 increased.  The yields on that asset dropped from 1.509% to 1.468%.  On the longer end, for the 10-year Singapore government bonds, the yields fell further from 2.445% to 2.318%. In of itself, such moves in yields aren’t reducible to a single event or news, but the fact that LKY’s death had little to no impact reveals that global capital markets see nothing to worry about Singapore’s ability to grow, tax citizens, and repay borrowers in the future.

In contrast, one can only imagine what a natural death or worse, of leaders like Vladimir Putin can do to the Russian economy.  In essence, when powerful leaders die, leaving behind an institutional framework that not just survives their own death but in fact inspires confidence in the days to come isn’t just hard but almost unprecedented.  The hollowing of institutions that followed Nehru’s death, the bloody catastrophes after Tito’s demise, the sclerotic economy that Mao left behind – each reveals how the legacies of long-lived, popular leaders quickly come undone after their time.

In the wake of his death, LKY is summarily dismissed by many on the Left as authoritarian or lauded by many on the Right who describe him as a pragmatist. Both appellations, while probably true depending on where in his long career one looks – obscure the true nature of a worldview, a philosophic outlook, around which he built institutions in Singapore.  It is a view that is essentially pessimistic about human nature and what men would do if left unimpeded by social constraints.  It sees humans as easily prone to material excess, as likely to grandstand at the expense of collective welfare, willing to indulge in emotionally satisfying rhetorical flourishes ignoring the truth of the evidence.  It is also, however, a view that is self-aware enough to recognize that all societies need ideological Godheads around which its institutions and identities can accrete.

Inescapably, the result of such Godheads is a class of high priests, interpreters, and clergy who invent elaborate vocabularies to perpetuate their power.  Faced with this recognition, the difficulty that faces every newly formed society is the choice of an organizing principle around which its institutions are then measured against.  Viewed thus, while India chose ‘secularism’, the US enshrined ‘freedom’, post-Trudeau Canada made ‘multiculturalism’ its metier, the Saudis made ‘Islam’ their lodestar, Pakistan made ‘non-Indianness’ its operating principle, Singapore decided to enshrine (instrumental) Reason as its central organizing principle.  Whatever gets the job done became the mantra.

Such guiding principles, understandably, rarely manifest in of themselves in an unsullied form in the real world.  But they offer a metric by which its institutions, judicial judgements, & processes are to be measured.  Such principles, however, don’t emerge in isolation.  They typically find legitimacy in a nation’s consciousness as a consequence of historical evolution and the contingencies of social pressures.  In Singapore’s case, it has historically been a trading port with a vibrant cultural tradition that is called the ‘Peranakan’.  It is a Malay word that means ‘locally born’, and thus referred to the Chinese (or Tamil, Indonesian for that matter) who arrived in Singapore in the 18th-19th century for reasons of trade, married local women, and gave birth to an in-between culture.

These trading communities brought along with them not just their customs from home countries, but also an entrepreneurial attitude that saw commercial activity and wealth creation as ideals worthy of pursuing in of itself.  Many countries have had such islets of pro-commerce spirits – the Islamilis in East Africa, the Nadars and Chettiars in Burma, the Marwaris in Kolkata etc. But in Singapore, this cultural makeup had an opportunity to cohere  and smuggle itself into a State under LKY.

The result was a culture that saw value in self-sustaining equilibriums that takes into account the microstructure of all parties involved in transactions.  It wasn’t always possible, but the force of the State could facilitate and sustain such contractual relationships.  The result was the institutionalizing and dominance of a certain kind of Reason that recognized the relationship between morality and social conditions.  It is an Enlightenment view that accords with Kant’s observation: “It takes more to be a good ordinary man than to be a good prince. If the former is not exceptionally bad, he is already good.” Material conditions then become the crucible through which the arc of man’s moral development is self-revealed. (Contrast this to Gandhi’s (or Mother Teresa’s) understanding of poverty and morality.)  Other possible ideational values – be it secularism, freedom, or religion – were inescapably seen as expendable handmaidens, who were useful to have as long as it didn’t upset the larger good.

LKY’s genius was to recognize that it was on this transactionary ethos, this trading mindset on which he would have to build a new country.  In the early decades of his country, he didn’t seek to remake its people, but instead sought to remake the space – economic and political – in which his people lived.  The people would then change on their own in two or three generations.  It is this recognition, this curious mixture of humility for the context and the self-belief in his own abilities that lay at the heart of LKY’s achievements.  Many a world leaders who profess to admire LKY these days (see here on authoritarians in Eastern Europe who wax about LKY) extol his self-confidence but rarely reflect on how much premium he lay on trying out new policies and fine-tuning it to account for human propensity to optimize on the margin.  Singapore, as the economist Tyler Cowen writes, took microeconomics seriously.

It was this self-awareness about the nature and possibilities contained within people he would lead that allowed LKY to move away from the Fabian socialism even while occasionally allying himself with the Malaysian Communist Party. Unlike Nehru who, in many ways, prided himself on being the “last Englishman to rule India”, LKY had a more subtle transition.  To Harold Wilson and others in the early years of Singapore when UK and its naval bases were still important, he was Harry Yew; to his voters in Tanjong Pagar and other constituencies he was Lee Kuan Yew.  As the years passed, with rising influence of China in the sphere, the identity of Harry Yew was abandoned for something more authentic, something more self-assured.

The consequence of this attitude that was that while other post-colonial leaders sought to build their African or Asian utopias, LKY spend early years worried about potential failures and social dissension. Race riots, poverty, and an agrarian base that had little to offer to the world is a constant theme in his substantive set of reflections of the early years called “From Third World to First”.  Like Kautilya, who wrote about it two millennia ago, LKY recognized that social failures are come in three vintages – governmental, market and moral.  Of the three, as he reiterates in an interview to Fareed Zakaria, it is the moral failure that is most pernicious in terms of consequences.  Entire generations can go to waste if correct values aren’t encouraged. (That is polite speak for ‘socially engineered’.)  But unlike many a heavy handed governments in the post colonial era that have relied on top-heavy messaging, nationalism, racial incitement, and historical resentment to instruct and inspire behavior of its citizens, LKY was subtler and thus more efficacious in his ambitions.

His “pragmatic” realization was that moral virtues – lack of corruption, cleanliness, the urge to self-improvement – can’t simply be drilled in through inflexible programs nor are they solely byproducts of markets, cultures, availability of choices, or even governmental programs.  It was, instead, his refusal to fetishize concepts like ‘freedom”, “capitalism” or “equality” but to realize that a creation of a climate that facilitated conditions for economic self-improvement for all was inextricably linked with improved likelihood of faith in common identities and recipe for social cohesion.

In reality, this meant preventing market failures through an interventionist State and its well paid bureaucracy that sought to prevent rent-seeking behavior.  The State and its mandarins were to be a sharp scalpel – toy with them at your peril – and less of the sledgehammer, as we have seen in India during the 1970s and 1980s, that distorted all economic incentives.  This microeconomic approach privileged a perspective that allowed for the evolution of societies, with the individual subject to competitive pressures, while still providing her with a carapace to grow within.

It is this approach – a judicious mixture of State and market in service of the individual – that has historically allowed for LKY’s People’s Action Party to make its case successfully, again and again, over the decades. Some dismiss this as a nanny state – confusing Singapore as an Oriental version of Qatar or Bahrain.  But, nothing could be farther from the truth.  Singapore is built over an originary trading and risk-management mindset that doesn’t confuse or romanticize between what is permissible, feasible and desirable.

While those Gulf states are fragile (in the way Nassim Taleb describes: vulnerable to volatility), Singapore has assiduously worked to make itself anti-fragile (benefits from volatility) by investing in its people .  It is this approach that has allowed Singapore’s education programs to hit the highs on the global education tests or why its very public hospitals (9 general, 8 community, 12 specialist) compete with each other while being marked by “private money, public provision”, a bureaucracy that obsesses over TFP (total factor productivity).  This approach has its critics. For some, Singapore’s education is all too “factual and procedural”, its health care is dominated by bureaucrats, its people among the unhappiest (despite being among the richest), inequality is on the rise (17% of citizens are millionaires, not counting Real Estate wealth) and so on.

The challenge for the present and future generation of leaders of Singapore is not really whether they can build on LKY’s legacy, but to recognize that just as he had built an industrial-democratic society over an agrarian-trading community, the present day Singapore is progressively different with each passing year as it changes demographically.  Some problems like declining fertility of women, rising discontent among the electronically connected young, the possibility of fully functional two-party political system – are well beyond simple technocratic fixes and often vindictive games of power-consolidation that LKY was a master at.

For outsiders, Singapore in the decades ahead will be an interesting place to observe and study. How to deal with aging population, what do island states do about global warming doesn’t, how are incentives aligned with self-interest, will there be an oligarchic elite who take over and so on are questions they’ll try to tackle and the world can benefit from their findings.

But, the most important lesson for non-Singaporeans is to be skeptical of their own political leaders who promise to create Singapores in their own countries and ask for powers that LKY enjoyed. It reveals, not just a lack of appreciation for LKY’s intellectual confidence and curiosity to keep tinkering till a policy program worked, or knowledge about scaling properties of systems, but also betrays laziness in their own thinking that fails to think through the consequences of transplanting projects and policies unmindful of context, financing consequences, and social upheaval. To promise blithely the creation of hundred Singapores would be to learn all the wrong lessons from LKY’s historic life that thought for itself irrespective of whether the findings were acceptable to the ideologues or intellectual fashions of the hour.