History does not repeat itself the same way each time, but certain trends and consequences are constants. If you do not know history, you think short term. If you know history, you think medium and long term.
To understand the present and anticipate the future, one must know enough of the past, enough to have a sense of the history of a people. One must appreciate not merely what took place, but, more especially, why it took place and in that particular way. This is true of individuals, as it is for nations. The personal experience of a person determines whether he likes or hates certain things, welcomes them or fears them when they recur. So it is with nations: it is the collective memory of a people, the composite learning from past events which led to successes or disasters that makes a people welcome or fear new events, because they recognize parts in new events which have similarities with past experience. Young people learn best from personal experience. The lessons their elders have learned at great pain and expense can add to the knowledge of the young and help them to cope with problems and dangers they had not faced before; but such learning, second hand, is never as vivid, as deep, or as durable as that which was personally experienced.
During the Vietnam War, the Americans found that their lack of historical depth of understanding of the people and the country was a serious disadvantage. American universities like Yale, Cornell, Stanford, and think tanks like the RAND Corporation quickly assembled top minds in cognate disciplines to develop this expertise. Had they done this before they were drawn into the Vietnam War, they might well have chosen not to draw the battle line in Vietnam, but Cambodia.
What I want to discuss is the importance of simple, clear, written English. This is not simple… Arthur Koestler rightly pointed out that if Hitler’s speeches had been written, not spoken, the Germans would never have gone to war… When you send me or send your minister a minute or a memo, or a draft that has to be published like the president’s address, do not try to impress by big words. Impress by the clarity of your ideas… I speak as a practitioner. If I had not been able to reduce complex ideas into simple words and project them vividly for mass understanding, I would not be here today.
Many of my propositions may be controversial, but where it is a choice between platitudes and personal convictions, I feel it is my duty to state my convictions vigorously, for one great obstacle to a rapid and orderly political development of Malaya has been, and still is, the Malayan habit of ignoring unpalatable facts and avoiding unpleasant controversy.
Only those count and matter who have the strength and courage of their convictions to stick up and stand up for what they believe in, for their people, for their country, regardless of what happens to them.
Civilizations emerge because human societies in a given condition respond to the challenge. Where the challenge is just about right… the human being flourishes.
There are three basic essentials for the success transformation of any society. First, a determined leadership… two, an administration which is efficient; and three, social discipline.
You have got to believe in something. You are not just building houses in order that people can procreate and fill these houses up… You do these things because you believe that, in the end, you will create a happy and healthy nation, a society in which people find fulfillment… If you treat human beings just like animals, you just feed them, keep them sleek, well-exercised, healthy like dogs or cats, I do not think that it will work. Nations have gone through tremendous privations and hardships in order to achieve specific goals which have inspired and fired their imagination.
One of the reasons why a privileged society based on the privilege of property and rank must give way to a society where people are rewarded according to their ability and their contribution to society is that it is only when people are encouraged to give the best that society progresses. No society has existed in history where all people were equal and obtained equal rewards.
Our test was: does it work? Does it bring benefits to the people?… The prevailing theory then was that multinationals were exploiters of cheap labor and cheap raw materials and would suck a country dry… Nobody else wanted to exploit the labor. So why not, if they want to exploit our labor? They are welcome to it… We were learning how to do a job from them, which we would never have learnt… We were part of the process that disproved the theory of the development economics school, that this was exploitation. We were in no position to be fussy about high-minded principles.
Kim Dae-jung wrote in Foreign Affairs that “democracy is our destiny.” They got him to write a counter article to my conversation with Fareed Zakaria, and they want me to reply. I do not think it is necessary. He makes assertive statements. Where are the concrete examples that these things are going to happen? If it is going to happen, why are they so excited about it?… The very fact that they are so vexed about it and try to demolish me shows a lack of faith in the inevitable outcome they predict… If history is on their side, that liberal democracy is inevitable, then just ignore me. Do not give me publicity. Right? I do not believe that because a theory sounds good, looks logical on paper, or is presented logically, therefore that is the way it will work out. The final test is life. What happens in real life, what happens with people working in a society.
A whole generation of Singaporeans, now all over 40 years old, was educated in a harsh political school… Our children have no memories of troubled times from reckless opposition. A younger generation of ministers also missed this experience. Firece combat made the old ministers what they are. Those amongst us who were weak, slow, or nervous became early casualties. Those present are survivors of a Darwinian process of natural selection. We have keen survival instincts.
What have I learned since 1973? Some more basic unchangeable about human beings and human societies, the ways in which they can be made to do better, and the ever-present danger of regression and even collapse… I realize how very fragile a civilized society is… I have also come to understand the insignificance of personal achievements. For at 60, more than at 50, comes the realization of the transient nature of all earthly glories and successes, and the ephemeral quality of sensory joys and pleasures, when compared to intellectual, moral, or spiritual satisfactions… I have wondered how much of what I am is nature and how much was nurtured? Would I have been a different person if I had not been tempered through the crucible of struggle?… Having taken life-and-death decisions and gone through one acute crisis after another, my perspectives, ambitions, and priorities have undergone a fundamental and, I believe, permanent, transformation. I may not have changed in my physical, mental, and emotional make-up, the hardware side. But the software side, my responses to God, glory, or gold, has been conditioned by my experiences. In other words, however capacious the hardware (nature), without the software (nurture), not much can be made of the hardware.
The final corroboration of logic and reasoning comes when they become practical realities.
The acid test is in performance, not promises. The millions of dispossessed in Asia care not and know not of theory. They want a better life. They want a more equal, just society.
Good sense and good economics require that we must always find practical, not doctrinaire, solutions to our problems of growth and development.
My life is not guided by philosophy or theories. I get things done and leave others to extract the principles from my successful solutions. I do not work on a theory.
One of the facts of life is that no two things are ever equal, either in smallness or bigness. Living things are never equal. Even in the case of identical twins, one comes out before the other and takes precedence over the other. So it is with human beings, so it is with tribes, and so it is with nations.
Human beings are not born equal. They are highly competitive. Systems like Soviet Union and Chinese communism have failed, because they tried to equalize benefits. Then nobody works hard enough, but everyone wants to get as much as, if not more than, the other person.
I started off believing all men and women are equal… I now know that that is the most unlikely thing ever to have been because millions of years have passed over evolution, people have scattered across the face of this earth, been isolated from each other, developed independently, had different intermixtures between races, peoples, climates, soils… This is something which I have read, and I tested against my observations. We read many things. The fact that it is in print and repeated by three, four authors does not make it true. They may be all wrong. But through my own experience… I concluded: yes, there is a difference.
In any given society, of the 1,000 babies born, there are so many percent near-geniuses, so many percent average, so many percent morons… It is the near-geniuses and the above-average who ultimately decide the shape of things to come… We want an equal society. We want to give everybody equal opportunities. But, in the back of our minds, we never deceive ourselves that two human beings are ever equal in their stamina, in their drive, in their education, in their innate ability. Hayek’s book The Fatal Conceit: Errors of Socialism expressed with clarity and authority what I had long felt but was unable to express, namely the unwisdom of powerful intellects, including Albert Einstein, when they believed that a powerful brain can devise a better system and bring about more “social justice” than what historical evolution, or economic Darwinism, has been able to work out over the centuries.
No single power, no single religion, no single ideology can conquer the world, or remake it in its own image. The world is too diverse. Different races, cultures, religions, languages, and histories require different paths to democracy and the free market. Societies in a globalized world - interconnected by satellite, television, Internet, and travel - will influence and affect each other. What social system best meets the need of a people at a particular stage in their development will be settled by social Darwinism.
My upbringing in a three-generation family made me an unconscious Confucianist. It seeps into you, the Confucianist belief that society works best when every man aims to be a gentleman. The ideal is a junzi, a gentleman… That means he does not do evil, he tries to do good, he is loyal to his father and mother, faithful to his wife, brings up his children well, treats his friends properly, and he is a good, loyal citizen to his emperor… The underlying philosophy is that for a society to work well, you must have the interests of the mass of the people, that society takes priority over the interests of the individual. This is the primary difference with the American principle, the primary rights of the individual.
When I travel… I am watching how a society, an administration, is functioning. Why are they good?… And the ideas come from not just reading. You can read about it, but it is irrelevant if you do not relate it to yourself… which I constantly do… You must not overlook the importance of discussions with knowledgeable people. I would say that is much more productive than absorbing or running through masses of documents.
I understood Deng Xiaoping when he said: if 200,000 students have to be shot, shoot them, because the alternative is China in chaos for another 100 years… Deng understood, and he released it stage by stage. Without Deng, China would have imploded.
The rule of law talks of habeas corpus, freedom, the right of association and expression, of assembly, of peaceful demonstration: nowhere in the world today are these rights allowed to be practiced without limitations, for blindly applied, these ideals can work toward the undoing of organized society. For the acid test of any legal system is not the greatness or the grandeur of its ideal concepts, but whether, in fact, it is able to produce order and justice in the relationships between person and person, and between person and the state. To maintain this order with the best degree of tolerance and humanity is a problem… In a settled and established society, law appears to be a precursor of order… But the hard realities of keeping the peace between person and person, and between authority and the individual, can be more accurately described if the phrase were inverted to “order and law,” for without order, the operation of law is impossible. Order having been established, and the rules having become enforceable in a settled society, only then it is possible to work out human relationships between subject and subject, and subject and the state in accordance with predetermined rules of law. And when a state of increasing disorder and defiance of authority cannot be checked by the rules then existing… drastic rules have to be forced to maintain order so that the law can continue to govern human relations. The alternative is to surrender order to chaos and anarchy.
All colonial territories that have gained their independence since the end of WW2 have equipped themselves with emergency laws… Good government does not depend upon the absence of these powers. It depends on the wise, judicious, and discriminate use of them by the representatives elected by and answerable to the people.
At the end of the day, the basic problem of fairness in society will need to be solved. But first, we have to create the wealth. To do that, we must be competitive and have a good dose of the “yang.” If we have too much of the “yin” and over-redistribute the incomes of the successful, then we will blunt their drive to excel and succeed, and may lose too many of our able, who will move to other countries where are not so heavily taxed. On the other hand, if too many at the lower end feel left out, then our society will become divisive and fractious, and cohesiveness will be lost. Communism has failed. The welfare state of Western democracies has also failed. There is a continual need to balance between a successful, competitive society, and a cohesive, compassionate one. That requires judgement, to strike a bargain or social contract. Each society must arrive at that golden optimum point for itself. Between the two ends, the highly competitive and the excessively equal, lies a golden mean. This point will move with time and changing values.
One person, one vote is a most difficult form of government. From time to time, the results can be erratic. People are sometimes fickle. They get bored with stable, steady improvements in life, and in a reckless moment, they vote for a change for change’s sake.
So long as you run this one person, one vote, the easiest of appeals that can be made to the ground are the simple, emotional ones, not economic development and progress and all these other things they do not understand, but simple things: pride in race, in language, in religion, in culture.
Parliamentary democracy of one person, one vote will work only if people choose rationally from the alternatives they are offered in an election. The ideal is never offered. The voter is faced with a limited choice of alternatives. He must reconcile his hopes and aspirations with the parties offered him. The democratic system breaks down if people make a choice which is irrational, as they did time after time in France after WW2 until de Gaulle swept aside the Fourth Republic. The system also fails if none of the parties contesting offers a rational choice, as in Indonesia between 1949 and 1959 until President Sukarno swept aside Parliament and installed himself as “guider” of democracy.
What are we all seeking? A form of government that will be comfortable because it meets our needs, is not oppressive, and maximizes our opportunities. And whether you have one person, one vote or some people, one vote, or other people, two votes, those are forms which should be worked out. I am not intellectually convinced that oner person, one vote is the best. We practice it because that is what the British bequeathed us, and we hav not really found a need to challenge that. But I am convinced, personally, that we would have a better system if we gave every person over the age of 40 who has a family two votes, because he or she is likely to be more careful, voting also for his or her children. He or she is more likely to vote in a serious way than a capricious young person under 30… At the same time, once a person gets beyond 65, then it is a problem. Between the age of 40 and 60 is ideal, and at 60 they should go back to one vote, but that will be difficult to arrange. One person, one vote, on the basis of the Western parliamentary democratic system… is workable within certain limitations. You have such things as fixed attitudes. Of what is right and what is wrong. Well, you population automatically responds to certain basic stimuli, but you let a free-for-all take place, and in every one of the newly emergent countries, they face trouble immediately after independence is won. That is one of the problems of an emergent society. Authority has got to be exercised. And when authority is not backed by position, prestige, or usage, then it has to defend actively against challenge.
Government, to be effective, must at least give the impression of enduring, and a government which is open to the vagaries of the ballot box - when the people who put their crosses in the ballot boxes are not illiterate but semi-literate, which is worse - is a government which is already weakened before it starts to govern.
My idea of popular government is that you do not have to be popular all the time when you are governing… There are moments when you have to be thoroughly unpopular. But at the end of your term, you should have brought about sufficient benefits so that the people realize what you did was necessary and will vote for you again. That is the basis on which I have governed. If you want to be popular all the time, you will misgovern.
I have never been over-concerned or obsessed with opinion polls or popularity polls. I think a leader who is, is a weak leader. If you are concerned with whether your rating will go up or down, then you are not a leader. You are just catching the wind… you will go where the wind is blowing… Between being loved and feared, I have always believed Machiavelli was right. If nobody is afraid of me, I am meaningless. When I say something… I have to be taken very seriously… What the crowd thinks of me from time to time, I consider totally irrelevant… The whole ground can be against, but if I know this is right, I set out to do it, and I am quite sure, given time, as events unfold, I will win over the ground… My job as a leader is to make sure that before the next elections, enough has developed and disclosed itself to the people to make it possible for me to swing them around.
A democratic society does not run itself automatically. It requires two things to succeed. First, there must be an interested and vigilant electorate to choose, and then to control by the force of public opinion, the politicians it elects to manage the country’s affairs. Second, a democratic society must have honest and able political parties to give it a choice of alternative leadership.
Whether Singapore succeeds as a thriving democracy with an honest administration, or sags into disrepair and drifts into dictatorship with an administration riddled with corruption, depends upon whether there are enough men and women with education and training prepared to come out to do their share rather than see the country go down.
In a democratic society, it is not enough just to sit back and watch the champions in the rings slog it out. Your unions, your officials, your members, and every one of you must take a stand, for by taking stand, you will make the battle less costly and less painful and success even more certain.
What is the role of government?
Only an efficient and effective government can provide the framework in which people can fulfill their needs. People cannot satisfy their fundamental needs by themselves. They need the support and organization of a tribe, or of government, to achieve this. Modern technology requires specialization in a wide range of disciplines. A high-tech society needs so much knowledge and so many skills.
The business of a government is to make firm decisions so that there can be certainty and stability in the affairs of the people.
The art of government is utilizing to the maximum the limited resources at the country’s disposal.
Our immediate task is to build up a society in which people will be rewarded not according to the amount of property they own, but according to their active contribution to society in physical or mental labor. From each according to his or her ability. To each according to his or her worth and contribution to society.
A good government is expected not only to carry on and maintain standards. It is expected to raise them. And it is ultimately in the sphere of economics that results must be achieved. More jobs must be created; more prosperity diffused amongst more people.
It is the business of government which has grown from the ground to keep its representatives on the ground, to ensure that long before a grievance or dissatisfaction reaches acuteness, remedies are put into motion. It is necessary to keep in constant touch with the people not only to know what their grievances are, but also to conduct and organize them and inculcate in them social qualities which will be useful in the building up of society.
Westerners have abandoned an ethical basis for society, believing that all problems are solvable by a good government… In the West, especially after WW2, the government came to be seen as so successful that it could fulfill all the obligations that in less modern societies are fulfilled by the family… In the East, we start with self-reliance. In the West today, it is the opposite. The government says give me a popular mandate and I will solve all society’s problems.
What is the role of a leader?
It is the duty of leaders to instill confidence in the people so that they will stand up to be counted… No army, however brave, can win when its generals are weak. Leaders must have the ability to plan and chart the way ahead, and the fortitude to stay the course… When they fight together against all odds and win, a bond will be forged between people and leaders, like the deep unshakeable feeling of trust between an army and its generals who have been in battle together.
Your job as a leader is to inspire and to galvanize, not to share your distraught thoughts. You make your people dispirited if you do so.
A corporate leader does not have to persuade his workers to follow him. There is a hierarchy in a corporation, and he drives his policies through the organization. His job is to satisfy his customers and his shareholders. A political leader, however, must paint his vision of their future to his people, then translate that vision into policies which he must convince the people are worth supporting, and finally galvanize them to help him in their implementation.
The test of leadership lies not merely in echoing fears and doubts, especially when these fears and doubts, however real, are capable of solution and of being rendered irrational and unfounded. As leaders of our various communities, we recognize the existence of these anxieties, but we have to take the lead in exorcising them. We cannot afford to passively let things drift. We have to take the lead in public thinking. After having drawn attention to the interests of our communities that require special protection, we must formulate solutions which will safeguard these interests and advance the common good.
Technology and globalization have created a more level playing field. Because goods and services can be manufactured or produced anywhere, this has reduced the traditional competitive advantages of geographic location, climate, and natural resources. All countries can harness information technology and air transportation and join the global trading community in goods and services. It helps to close the gap between advantaged and disadvantaged countries. But one “X” factor remains a key differentiator, especially for developing countries: that is ethical leadership. A clean, efficient, rational, and predictable government is a competitive advantage.
Globalization cannot be reversed, because the technologies that made globalization inevitable cannot be uninvented. In fact, better and cheaper transportation and communications will further advance the forces of globalization.
Will the international order collapse? Can it? Can the world afford to allow it to collapse and go into anarchy? This interconnected world is not going to become disconnected. The problems will become acute the other way: overpopulation, earth warming, and displacement of millions, maybe billions of people.
There is no viable alternative to global integration. Protectionism disguised as regionalism will sooner or later lead to conflicts and wars between the regional blocs as they compete for advantage in non-bloc areas, like the oil countries of the Gulf. Globalism is the only answer that is fair, acceptable, and will uphold world peace.
More important than technological capacities is the spirit of innovation an enterprise. In an area of startling technological change, it is the enterprising individuals, prepared to seize new opportunities, the creators of new ideas and business, who forge ahead. Ordinary businesspeople can make a living by being good followers, but the rich rewards go to innovators and entrepreneurs.
I am astonished to find that 55% of our workers still admit to the fear of being disliked by fellow workers for doing their job well. As long as this attitude persists, higher performance will be discouraged by the prevailing standards of mediocre workers. Better workers refrain from becoming pace-setters. This attitude is negative. Singaporeans must understand that their group interests will be advanced if each worker strives to achieve his best, and thus encourages his peers to do better, by his example. There is no better way than the personal example of managers and grass-root leaders to bring about this change of attitudes and values.
Unlike the workers in the repetitive, machine-based age, tomorrow’s workers must depend more on their own knowledge and skills. They have to manage their own control systems, supervise themselves, and take upon themselves the responsibility to upgrade. They must be disciplined enough to think on their own and to seek to excel without someone breathing down their neck. Workers in the new economy cannot be content with just problem solving and perfecting the known. They must be enterprising and innovative, always seeking new ways of doing the job, to create the extra value, the extra edge.
A people’s standard of living depends on a number of basic factors: first, the resources it has in relation to its population; second, its level of technological competence and standards of industrial development; third, its educational and training standards; and fourth, the culture, the discipline, and drive in the workforce.
Demography, not democracy, will be the most critical factor for security and growth in the 21st century. Countries that most welcome migrants have an economic advantage, but open immigration policies also carry risks. New waves of migrants will be ethically different, less educated, and sometimes unskilled. It will gradually dawn on governments that immigration alone cannot solve their demographic troubles and that much more active government involvement in encouraging or discouraging procreation may be necessary.
The quality of a nation’s manpower resources is the single most important factor determining national competitiveness. It is a people’s innovativeness, entrepreneurship, team work, and their work ethic that give them that sharp keen edge in competitiveness.
Three attributes are vital in this competition - entrepreneurship, innovation, and management. The first is the entrepreneurship to seek out new opportunities and to take calculated risks. Standing still is a sure way to extinction… The second attribute, innovation, is what creates new products and processes that add value… The third factor is good management. To grow, company managements have to open up new markets and create new distribution channels.
The economy is driven by new knowledge, new discoveries in science and technology, innovations that are taken to the market but entrepreneurs. So while the scholar is still the greatest factor in economic progress, he will be so only if he uses his brains - not in studying the great books, classical texts, and poetry, but in capturing and discovering new knowledge, applying himself in research and development, management and marketing, banking and finance, and the myriad of new subjects that need to be mastered. Those with good minds to be scholars should also become inventors, innovators, venture capitalists, and entrepreneurs; they must bring new products and services to the market to enrich the lives of people everywhere.
My definition of a Singapore is that we accept that whoever joins us is part of us. And that is an American concept. You can keep your name, Brzezinski, Berlusconi, whatever it is, you have come, join me, you are American. We need talent, we accept them. That must be our defining attribute.
When I started, the question was how Singapore can make a living against neighbors who have more natural resources, human resources, and bigger space. How did we differentiate ourselves from them? They are not clean systems; we run clean systems. Their rule of law is wonky; we stick to the law. Once we come to an agreement or make a decision, we stick to it. We become reliable and credible to investors. World-class infrastructure, world-class supporting staff, all educated in English. Good communications by air, by sea, by cable, by satellite, and now, over the Internet.
India has a stronger banking system and capital markets than China. India has stronger institutions, in particular, a well-developed legal system which should provide a better environment for the creation and protection of intellectual property.
India - with an average age of 26, compared to China’s 33, and with much faster population growth - will enjoy a bigger demographic dividend, but it will have to educate its people better, or else, the opportunity will turn into a burden.
India is a thicket of rules and regulations and bureaucracy that you have to find your way through.
India probably has three to five years to fix its infrastructure. If it does not, it risks losing out in the global economic sweepstakes.
To create jobs, the main thrust of reforms must be in manufacturing. That requires a change in labor laws to allow employers to retrench workers when business demand is down, streamlining the judicial processes, reducing the fiscal deficit, loosening up the bureaucracy, and most of all, improving infrastructure.
India cannot grow into a major economy on services alone. Since the industrial revolution, no country has become a major economy without becoming an industrial power.
I have no doubt that this generation wants a peaceful rise. But the grandchildren? They think they have already arrived, and if they begin to flex their muscles, we will have a very different China. Grandchildren never listen to grandfathers. The other problem is a more crucial one: if you start off with the belief that the world has been unkind to you, the world has exploited you, the imperialists have devastated you, looted Beijing, done all this to you… this is no good… You are not going back to the old China, when you were the only power in the world as far as you knew… Now, you are just one of many powers, many of them more innovative, inventive, and resilient… If I were America, Europe, or Japan, I would spend time to make sure that the mindset of the younger generation is not on of hostility, but one of acceptance and an understanding that you are now a stakeholder, which was Bob Zoellick’s very apt description of their role… Make them feel that they are stakeholders, and if this earth goes warm, they will be in as much trouble as anyone else.
If the US attempts to humiliate China, keep it down, it will assure itself an enemy. If instead it accepts China as a big, powerful, rising state and gives it a seat in the boardroom, China will take that place for the foreseeable future. So if I were an American, I would speak well of China, acknowledge it as a great power, applaud its return to its position of respect and restoration of its glorious past, and propose specific concrete ways to work together.
Why should the US take on China now when it knows that doing so will create an unnecessary adversary for a very long time - and one that will grow in strength and will treat it as an enemy? It is not necessary. The US should say: We will eventually be equal, and you may eventually be bigger than me, but we have to work together. Have a seat, and let us discuss the world’s problems.
This is the fundamental choice that the US has to make: to engage or to isolate China. You cannot have it both ways. You cannot say you will engage China on some issues and isolate her over others. You cannot mix your signals.
America’s greatest long-term influence on China comes from playing host to the thousands of students who come from China each year, some of the ablest of China scholars and scientists. They will be the most powerful agents for change in China.
The best way to quicken the pace and direction of political change in China is to increase her trade and investment links with the world. Then her prosperity will depend increasingly on the compatibility of her economic system with those of the major trading nations. And wide-ranging contacts will influence and modify her cultural values and moral standards.
Integrating China into the global system will build up strong vested interests in China to play by international rules. It will increase China’s interdependence for trade, services, investments, technology, and information. These interdependence links could increase to a point where to break them in a unilateral breach of international obligations would carry unbearable costs.
For America to be displaced, not in the world, but only in the western Pacific, by an Asian people long despised and dismissed with contempt as decadent, feeble, corrupt, and inept is emotionally very difficult to accept. The sense of cultural supremacy of the Americans will make this adjustment most difficult. Americans believe their ideas are universal - the supremacy of the individual and free, unfettered expression. But they are not - never were. In fact, American society was so successful for so long not because of these ideas and principles, but because of a certain geopolitical good fortune, an abundance of resources and immigrant energy, a generous flow of capital and technology from Europe, and two wide oceans that kept conflicts of the world away from American shores.
Instead, the US threatens to derail this process by cutting off most-favored-nation status. The State Department draws up its report on China’s human rights like a headmaster drawing up a pupil’s annual report for the parents. This may make Americans feel good and Chinese look small, but East Asians are uneasy over its long-term consequences.
The 21st century will be a contest for supremacy in the Pacific, because that is where the growth will be. That is where the bulk of the economic strength of the globe will come from. If the US does not hold its ground in the Pacific, it cannot be a world leader. To hold ground in the Pacific, the US must not let its fiscal deficits come to grief. If they come to grief and there is a run on the dollar for whatever reason… and the bankers and all the hedge funds and everybody come to the conclusion that the US is not going to tackle these deficits, and they begin to move their assets out, that would spell the real trouble… America’s debt is what worries me the most, because it will absolutely strike at the heart of America’s global leadership.
Long term for America, if you project another 100 years, 150 years into the 22nd century, whether you stay on top depends upon the kind of society you will be, because if the present trends continue, you will have a Hispanic element in your society that is about 30, 40%. So, the question is, do you make the Hispanic Anglo-Saxons in culture or do they make you more Latin American in culture? If they come in drips and drabs and you scatter them across America, then you will change their culture, but if they come in large numbers, like Miami, and they stay together, or in California, then their culture will continue, and they well affect the Anglo-Saxon culture around them. That is the real test.
If a people have lost faith completely in their democratic institutions because they cannot find people of caliber to run them, however good the system, it perishes. Ultimately, it is the people who run the system who make it come to life.
It is essential to rear a generation at the very top of the society that has all the qualities needed to lead and give the people the inspiration and the drive to make it succeed. In short, the elite… All those with the potential to blossom forth must do so. That is the spearhead in the society, on whom depends the pace of our progress.
There is no better way to run the country than the best person for the most difficult job.
Americans have a can-do approach to life: everything can be broken up, analyzed, and redefined. Whether it can or it cannot, Americans believe it can be solved, given enough money, research, and effort. Over the year, I have watched the Americans revise and restructure their economy, after they were going down in the 1980s, when Japan and Germany looked like they were eclipsing America, taking over all the manufacturing. Americans came roaring back. They have the superior system. It is more competitive.
What has made the US economy preeminent is its entrepreneurial culture. Entrepreneurs and investors alike see risk and failure as natural and necessary for success. When they fail, they pick themselves up and start afresh. The Europeans and the Japanese now have the task of adopting these practices to increase their efficiency and competitiveness. But many American practices go against the grain of the more comfortable and communitarian cultural systems of their own societies - the Japanese with life-long employment for their workers, the Germans with their unions having a say in management under co-determination, and the French with their government supporting the right of unions to pressure businesses from retrenching, by requiring large compensation to be paid to laid-off workers.
The US is a frontier society. There is a great urge to start new enterprises and create wealth. The US has been the most dynamic society in innovating, in starting up companies to commercialize new discoveries or inventions, thus creating new wealth. American society is always on the move and changing. For every successful entrepreneur in America, many have tried and failed. Quite a few tried repeatedly until they succeeded. Quite a few who succeeded continued to create and start up new companies as serial entrepreneurs. This is the spirit that generates a dynamic economy.
The American culture… is that we start from scratch and beat you. That is why I have confidence that the American economy will recover. They were going down against Japan and Germany in manufacturing. But they came up with the Internet, Microsoft and Bill Gates, and Dell… What kind of mindset do you need for that? It is part of their history. They went into an empty continent and made the best of it - killed the Red Indians and took over the land and the buffaloes. So this is how they ended up - you build a town here, you be the sheriff, I am the judge, you are the policeman, and you are the banker, let us start. And this culture has carried on until today. There is the belief that you can make it happen.
The Americans have succeeded against the Europeans and the Japanese because they have more extremes of random behavior. You have the mean, you have the bell curve, and you have two extreme ends. And the more you have of the extreme ends on the good side, the more creativity and inventiveness you have.
No. China is not going to become a liberal democracy; if it did, it would collapse. Of that, I am quite sure, and the Chinese intelligentsia also understand that. If you believe that there is going to be a revolution of some sort in China for democracy, you are wrong. Where are the students of Tiananmen now? They are irrelevant. The Chinese people want a revived China.
I do not believe you can impose on other countries standards which are alien and totally disconnected with their past. So to ask China to become a democracy, when in its 5,000 years of recorded history it never counted heads; all rulers ruled by right of being the emperor, and if you disagree, you chop off heads, not count heads.
The chances of it going wrong in China - if they have pragmatic, realistic leaders who are not ideologically blinkered - are about one in five. I would not say zero, because their problems are weighty ones: system change, business culture change, reducing corruption, and forming new mindsets.
The Chinese have figured out that if they stay with “peaceful rise” and just contest for first position economically and technologically, they cannot lose.
Straight-line extrapolations from such a remarkable record are not realistic. China has more handicaps going forward and more obstacles to overcome than most observers recognize. Chief among these are their problems of governance: the absence of the rule of law, which in today’s China is closer to the rule of the emperor; a huge country in which little emperors across a vast expanse exercise great local influence; cultural habits that limit imagination and creativity, rewarding conformity; a language that shapes thinking through epigrams and 4,000 years of texts that suggest everything worth saying has already been said, and said better buy earlier writers; a language that is exceedingly difficult for foreigners to learn sufficiently to embrace China and be embraced by its society; and severe constraints on its ability to attract and assimilate talent from other societies in the world.
The Chinese are in no hurry to displace the US as the number 1 power in the world and to carry the burden that is part and parcel of that position. For now, they are comfortable in being part of a larger group like the G20 where their views will be taken seriously and economic interests safeguarded, but the responsibility is shared amongst 20 member states.
In the security arena, the Chinese understand that the US has spent so much more and has built up such advantages that direct challenges would be futile. Not until China has overtaken the US in the development and application of technology can they envisage confronting the US militarily.
They expect Singaporeans to be more respectful of China as it grows more influential. They tell us that countries big or small are equal: we are not a hegemon. But when we do something that they do not like, they say you have made 1.3 billion people unhappy… So please know your place.
They must avoid the mistakes made by Germany and Japan. Their competition for power, influence, and resources led in the last century to two terrible wars. The Russian mistake was that they put too much into military expenditure and so little into civilian technology. So their economy collapsed. I believe the Chinese leadership has learnt that if you compete with American in armaments, you will lose. You will bankrupt yourself. So, avoid it, keep your head down, and smile, for 40 or 50 years.