Professor Mahbubani’s $50k homes are only a quick fix

In the midst of the controversy over the NLB it slipped my mind that I’d wanted to respond to Professor Mahbubani’s Big Idea on Saturday. But I came across a takedown of his article earlier today and that reminded me to write. The citations on that piece are excellent and I don’t have much data to add; instead, I wanted to focus on two things in Professor Mahbubani’s piece which may have slipped by a little less noticed.

The first is something on which we agree. There is no way Singapore will be as successful in the next 50 years as it’s been over the last 50. And although he exaggerates how special Singapore’s record is relative to other countries—and even though our median per-individual household income ($2247 monthly) is a far sight from our GDP per capita ($6710 monthly, according to his piece)—it’s true that living standards have improved. This progress is unlikely to be matched because the low-hanging policy fruit has already been harvested, so to speak—we’ve cleared our backlog of people to house, kids to educate and vaccinate, jobs to provide, sanitation to improve, and so on. This sort of unambiguously-good public policy is a thing of the past, and we’ll start to see more trade-offs appearing. Policies will have distributional consequences, favouring some segments of society over others (rich over poor, young over old, and so on). We’ll also begin to disagree on the desirability of policy outcomes (is having more people good or bad?) Because of this, there’s no way our public policies can attract the same sort of public consensus that they have had in the past. And if that’s the case, I believe it to be an argument for greater democratic contestation in Singapore.

The second is something I absolutely disagree with. Professor Mahbubani suggests that Singaporean property developers build cheap housing (homes priced at $50k) in neighbouring countries so that Singaporean families can enjoy space in their living arrangements. Nazi parallels aside (Lebensraum?), here’s why I think it’s a terrible idea:

It creates a rank of second-class citizens who cannot afford to live in their own country. This takes some explaining. We might actually think of two separate migration streams—one consisting of professionals and middle-income workers who can afford to live in Singapore but want to leave for quality-of-life reasons; the other of low-income workers for whom living in Singapore is a losing proposition. That is, they cannot earn enough in Singapore for it to make economic sense to live here and incur Singapore-level housing, food, and transport costs. The first stream is already happening, but Professor Mahbubani’s suggestion would institutionalise and legitimise the second stream. This is why it’s terrible.

But why, you might ask, should we worry about those “losers who can’t survive in Singapore,” as a friend once put it to me in conversation. Surely it’s their own fault if they can’t afford to live here? My answer comes in two parts: no it isn’t (more on that later), and that’s beside the point—they are Singaporean citizens too. Singapore makes onerous demands on its citizens: unlike people in most countries, we serve National Service. In return, it should also be particularly mindful that all citizens should share in the common life of the community—which is to say, we cannot allow any citizen to fall so behind that they live a separate existence from the rest of us, have different life experiences, and their children have different life chances from the rest of us. I think this last part (about the children) is particularly important: Singapore claims to be a meritocracy but that claim will sound hollow if more people find that because of the accident of birth, people from their family circumstances don’t have the chance to rise to the top.

Being Singaporean will carry no resonance to a Singaporean who has to live outside of Singapore, who does not experience Singaporean education, health services, policing, or public transport. This sort of overseas Singaporean will feel no compulsion to vote or serve in the interests of Singapore. And why should they? The Singapore that Professor Mahbubani posits is a two-speed Singapore that would not include them in the progress it promises its people; this Singapore would fail to protect their right to live in their own country.

Perhaps we should step back a bit from this crazy ‘rights’ language, which doesn’t go anywhere in Singapore. But we should also think about whether “it’s their own fault if they can’t afford to live here.” I don’t think it is. In short: technological change and globalisation—forces that are beyond any single individual’s control—are putting people out of jobs and making remaining ones insecure.

Though technological change is opening up new industries and transforming old ones, multiplying both productivity and the rewards to those workers who can stay ahead of the curve, it is also rendering many other workers’ skills obsolete. We also have economies of scale that global production and increased shipping volumes provide. In a post-industrial, globalised economy, we need fewer people to produce the same amount of goods and services; supply is surging ahead of demand. And because of this, what used to be thought of as the unbreakable link between effort/desert and reward will break down: some people who are absolutely willing to work will not be able to find work that can support them. They just won’t have the skills (or for older workers, the ability to acquire new skills) that they can earn a living on. As this commentary argues, workers affected are not ‘liberated’ to seek new job opportunities, as Australian PM Tony Abbott put it; rather, they are likely to be plunged into structural unemployment. (In Singapore, many of these left-behind workers end up driving taxis.) In turn, structural unemployment will put stress on social safety nets—some argue (and I agree) that heavy redistribution in the form of a basic income may one day be necessary to meet their needs.

In other words, the middle-class dream is receding out of reach (a fact that Professor Mahbubani’s $50k homes would sidestep). This is hard to stomach, particularly since we peg success to what our parents achieved, and progress to out-achieving them. From the perspective of the average worker, life will never be as easy as it was in their parents’ generation—the generation of people who grew up as Singapore was transforming, jobs were plentiful, their skills were relevant, and a factory or office job was already a key to middle-class status. For instance, an earlier generation of teachers was able to afford landed property and a car on two incomes; I doubt the average teacher-couple would be able to aspire to much more than a condo today. Many ordinary Singaporeans (especially those who don’t have the advantage of inheritance or credentials) will be spending years paying off their education, home, and car loans. It will feel like they’re running faster and faster just to be standing still. This will not look like progress, and politicians will be ever more hard-pressed to market it as such. On top of that, economic growth will inevitably slow down as we creep closer to fully utilising all our resources, making real progress harder to achieve. On the other hand, if we continue down our growth-at-all-costs strategy—particularly if we exert efforts to grow artificially through sectors like finance which generate little trickle-down or spill-over effects for the rest of the economy, and are good at overvaluing their actual contribution—rosy economic growth figures will continue to diverge from people’s experiences of progress (or lack thereof) in their lives. In other words, chasing growth will only serve to heighten discontent if people think the figures don’t reflect their reality. Selling people cheap homes in other countries might help some, but it will only be a quick fix.

Professor Mahbubani thinks strong social resilience is essential for Singapore (near the end of his piece). But this resilience is not going to emerge if Singapore exports its left-behind class to dormitories in neighbouring countries. In my view, it will have to involve recognising and communicating to workers the limitations of our economic structure, and retooling our social institutions so that we hold out the promise of, if not progress, at least dignity and the hope of a better life for their children.

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3 comments

  1. Build ten bridges across the Johore straits and build ten highways n house a few million citizens PRs work permit holders there cheaply. That will make Singapore cheaper n more competitive again. However, our govt needs to get along well w the sultan but it’s not happening.

    1. Hi Stuly, thanks for commenting. I think you may have skipped some of the crucial points in my piece, though. As I argued there, a government policy of housing citizens outside of Singapore creates “a two-speed Singapore that would not include them in the progress it promises its people.” Chasing economic competitiveness is ultimately meaningless (and harmful) if that economic competitiveness is compromising our citizens’ ability to live in our own country–that would be a sign that our institutions aren’t working.

      So I’m not sure if you were agreeing, disagreeing, or just providing a different point.

  2. If the govt don’t show they care for the citiZens to live in their country, it’s not a home. All the years of nation building will come to waste.

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