An Example of a Society that made itself Wealthy: Singapore

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prosperity

Amidst all the recent news of societies foolishly impoverishing and destroying themselves with socialism, it is always good to point to societies that transformed themselves from poverty to abundance.

The country of Singapore was a 3rd world country just two generations ago. Most of its population had no running water and no electricity. Life expectancy was short and malnutrition was common. Pollution and environmental degradation was the norm.

But “[b]y embracing free trade, capital formation, vigorous meritocratic education, low taxes, and a reliable judicial system, [Singapore] raised [its] per capita income from $500 a year to some $52,000 a year today. That’s 50 percent higher than that of Britain, the colonial power that ruled Singapore for 150 years. Its average annual growth rate has averaged 7 percent since the 1970s.”

The people of Singapore were toothless savages in the beginning; but they refused to listen to voices telling them to follow other societies toward government control and redistribution.

Today the Frasier institute’s Freedom of the World report lists Singapore as the second freest economy in the world — right behind Hong Kong. As Frasier scholars have demonstrated year after year, economic growth and free markets go hand and hand.

As John C. Goodman writes, Singapore “has built an alternative to the European style welfare state.” “About 90 percent of Singapore households are home owners – the highest rate of home ownership in the world.”

And Singapore has a sort-of individual Roth IRA system for health care. Private accounts rather than public, single-payer medicine:

In health care, Singapore started an extensive system of “Medisave Accounts” in 1984 – the very year that Richard Rahn and I proposed “Medical IRAs” for America in the Wall Street Journal. Today, 7 percentage points of Singapore’s 36 percent required savings rate is for health care and is deposited in a separate Medisave account for each employee. Individuals are also automatically enrolled in catastrophic health insurance, although they can opt out. When a Medisave account balance reaches about $34,100 (an amount equal to a little less than half of the median family income) any excess funds are rolled over into another account and may be used for non-health care purposes.

Goodman’s article is here.

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