Will Trump run America like a business? Comparing Trump to Lee Kuan Yew’s ‘Singapore Inc.’

trump-1
President-elect of the US, Donald Trump. Photo Credit: http://www.hayatimagazine.com

According to the New York City Board of Elections, Trump has changed his party affiliation five times since registering as a Republican in 1987 (including a protracted period registered as a Democrat from 2001 to 2009. His rhetoric has proven to be inconsistent during his campaign and his views on issues have at times been in direct opposition with previous statements he made over the years.

Throughout his adult life, Trump has never convincingly demonstrated such ideological consistency. Barack Obama, outgoing President of the US, when speaking about the President-elect Donald Trump, argued that Trump is not an ideologue. Rather, he is a pragmatist, willing to change his opinion rather than stick blindly to dogma.

Trump prides himself on being a mogul, a business man, a deal maker. It’s not personal (or ideological) with Mr. Trump;  he insists it’s just business. Trump has argued that he will bring his business acumen to bear on Washington DC and his corporate pragmatism will drive the daily workings of the White House, showing flexibility in the face of changing circumstances.

Speaking at the grand opening of his Washington DC hotel in September 2016, the then Republican Presidential candidate contended that his commercial successes will portend his political successes. Alluding to the way he would run the government, Trump said that his newly unveiled hotel was “Under budget and ahead of schedule. So important”. He railed against the status quo in Washington DC, “We don’t hear the words [under budget and ahead of schedule] too often in government, but you will.

ribbon
Trump and wife Melania cutting the ribbon of the Washington DC hotel. Photo Credit: http://www.gettyimages.com

Despite his checkered track record, Trump’s pro-business rhetoric embodies the idea that the model of the corporation is the ideal manner in which to organise not only economic affairs, but also social and political processes. The question is therefore: will Trump eschew unwavering commitment to an ideology (be it conservative-Republican or ethno-nationalist) in order to operate the US like one of his business endeavours? Could Trump encourage Democrats and Republicans on both sides of the aisle to put aside party loyalties and ideological differences to collaborate together and run the country like a highly efficient, performance-oriented enterprise?

 

Singapore Inc – a country run like a business

We can look to Singapore as an example of a country that endeavoured to abandon politicking and competition between different factions that often characterises most other countries’ power structures. Instead, they aimed to run the country like a business. Often, the state of Singapore is referred to as ‘Singapore Inc.’ Rather than appeal to symbolic, philosophical or ideological grounds, Lee Kuan Yew, the ‘founding father of Singapore’, built his legitimacy by prioritising economic performance and stability as the greatest goals of the state.

 

History of the “Singapore model” of development

lee-kuan-yew-1990_3241721b
Lee Kuan Yew (centre) Former Prime Minister of Singapore. Photo credit: http://www.telegraph.co.uk

Over fifty years ago, Singapore was effectively ejected from the Malaysian federation. Singapore had been a part of the Malay Archipelago under British colonialism for centuries. When the British ended its rule and gave power back to Malaysia, the Malaysian government severed ties with Singapore, as they feared that the concentration of Chinese immigrants in Singapore would cause the indigenous Malay people to become a minority in their own country.

On August 9 1965, Singapore was granted its independence. There was no seminal book or ideological tract justifying the establishment of Singapore or highlighting the ideological purity of the party in power. A nascent state with no natural resources, a high level of unemployment and average per capita income of around $300, the Singaporean people elected the People’s Action Party (PAP) to power with their platform of ensuring domestic stability. As Singapore’s first prime minister from 1959, Lee was tasked with the job of building the state. Rather than colour himself in an ideological mantle, he devised the ‘Singapore Model‘ of development, regarding it as the best way to revolutionise the poor port (perceived on the international stage as a ‘backwater‘) into a successful and sovereign state.

At the heart of the Singapore model is a pragmatic bargain, a ‘social contract‘ between the government and its people. Effectively, in exchange for accepting undemocratic government control and relinquishing various individual rights, Lee’s government would deliver to the average Singaporean prosperity and a better quality of life via aggressive economic growth.

For PAP, liberalism and deliberative democracy were regarded as luxuries in which a fledgling country could not indulge. Rather, the government saw it as their job to intervene in the daily economic activities, advertise the country as open for business and defend its people from the “threat of ineffective liberal models of governance” (Bloom, 2016). Pragmatic governance, with a focus on economic output, was the main goal of the technocratic government, more akin to a board of directors rather than a cabinet of elected ministers.

Can Trump run America Inc.?

A core function of many businesses is to prioritise profit and productivity over other considerations in order to enhance their financial bottom lines. Such a model of governance imported into a state administration, with emphasis on efficiency over democracy and deliberation, would place it in the sphere of authoritarianism. Corporations are inherently not democratic institutions. Rather, they are controlled in a top-down and unilateral manner in ways which the board of directors see as optimal. To run government this way ultimately relegates core democratic ideals of equality, participation and community to the periphery.

Therefore, one issue that could preclude Trump following in the footsteps of Lee to develop America Inc. is the inescapable issue of the US being a liberal democracy that affords its citizens inalienable individual liberties and freedom of expression. Lee was vocal in his opposition to many aspects of liberal, pluralistic democracy which feature in American political life. PAP engineered a system, categorised by observers as a “electoral authoritarianism”, based on the Westminster model inherited from British colonial rule, but with changes to the first-past-the-post system in order to prevent any viable opposition party gaining a foothold. In the 2015 general election for example, PAP won 83 out of a total 89 parliamentary seats (93% of all seats), despite only winning 69% of the popular vote.

Unlike Lee, Donald Trump has been elected in a Presidential system, with a time-bound mandate, operating within the constitutional framework of liberal democratic rules and norms, with checks and balances from the legislative branch. Unfortunately for a businessman like Mr Trump, democracy is far from efficient. When the wishes over 300 million citizens need to be considered, the government must reckon with the fact that not everything that is profitable is of social value and not everything of social value is profitable. As Obama said at a talksaid at a talk to Silicon Valley executives,

“Government will never run the way Silicon Valley runs because, by definition, democracy is messy. This is a big, diverse country with a lot of interests and a lot of disparate points of view. And part of government’s job, by the way, is dealing with problems that nobody else wants to deal with.”

Meritocracy, not Democracy 

Singapore’s electoral authoritarianism system cultivated a culture of meritocracy over democracy. Effectively, aptitude was valued in government officials over their political position or their favourability with the public. Government officials have their incomes benchmarked to their counterparts in the private sector. As such, the Singapore government has been criticised for fostering a culture of elitism, in which people are not treated equally. Those who face institutional inequality receive no assistance or protection by the state.

Lee led an illiberal democracy that faced much criticism for its restrictions on individual civil liberties such as freedom of expression, the right to public protests or strikes. The criminal justice system in Singapore is regarded by many as being disproportionately severe, with harsh penalties for offenders, including the corporal punishment and the death penalty for crimes such as certain drug offences. Homosexuality is illegal in the country. Furthermore, Lee was often accused of strangling independent media and free speech in the country. Viewing them as obstacles to stability, he once stated: “one value that does not fit Singapore is the theory that the press is the fourth estate”. For Lee, anything that risked upsetting social cohesion in the country would not be tolerated.

None of these actions could be enacted into America without widespread opposition via various media channels. CEO Trump of America Inc. would not be able to make decisions that focus on the most efficient or most profitable outcomes without invoking a response from communities. All individuals have constitutionally protected abilities to protest and oppose, as well as full franchise to vote whom they see represent their interests. Trump would not have the same scope as Lee with regard to ignoring ‘disruptive’ dissent.

 

Location, location, location

Various fortuitous factors precipitated the rise of Singapore; for one, it is a tiny city –state. At roughly 700 square kilometers, it is about three times the size of Washington DC and its small size lends itself to have economic and social policies micro-managed by the government. Due to its location at the southern tip of continental Asia,  through which an estimated 40% of world’s sea trade passes, it has attracted much foreign investment.

Conversely, the US is the world’s third largest country in size and nearly the third largest in terms of population. The country boasts a highly diverse geography and demography, as well as one of the world’s largest and most complex economies. The scale is non-comparable: the US would not be able to intimately involve itself at the same level in every facet of commerce and social life in the way that is feasible for tiny Singapore.

singapore
Singapore skyline. Photo Credit: http://www.changiairport.com

 

Singapore Inc. open for business. America Inc. closed to the world?

One other major way in which Lee and Trump fundamentally diverge is attitudes to globalisation. Throughout his campaign, Trump favoured dismantling international trade deals, imposing tariffs on foreign imports and hindering the movement of labour into the US. His prescriptions for economic growth echo neo-mercantilist tones, a perspective which was dominant during the 16th to the 18th century across Europe. This view of international trade promoted governmental regulation of a nation’s economy for the purpose of augmenting state power at the expense of rival national powers. For example, Trump takes great issue with America’s trade deficit with China reaching $366 billion in 2015. According to Trump, this makes America the biggest loser: “Our trade deficit with China is like having a business that continues to lose money every single year,” Mr. Trump told The Daily News last year. “Who would do business like that?” For Trump, as it was for the mercantilists in Elizabethan England, international trade is regarded as a zero-sum game in which countries lose by paying for imports.

Effectively, Trump’s anti-globalisation perspective breaks with the orthodoxy of the US position throughout the 20th century and particularly in the post-World War Two model projecting liberalism and globalism on the international stage. And it puts it at odds with the strategy of Singapore Inc. From its early days, Singapore, as a city-state with effectively zero natural resources, embraced globalisation. Lee admired Israel and how it leaped over their Arab neighbours who were boycotted the newly formed state. Instead, Israel embraced trade with Europe and America. Lee’s government made it a central tenet of their rule to attract multinational firms by offering them tax breaks, low operating and labour costs to foreign investors.

It would be difficult to advertise America Inc. abroad if CEO Trump insists on putting up trade barriers and tearing up trade agreements.

 

Company profit = national GDP?

Through his lifetime, Lee witnessed Singapore’s GDP per capita rising from $400 to an estimated $40,000. According to this metric, Singapore is a very successful enterprise. However, focusing on achieving GDP and not worrying about how it achieves this GDP figure, may have long term consequences.

Over-reliance on trading partners such as the US and Europe highlights faults in Singapore’s dependence on international trade when global economic recessions batter the highly exposed economy. Sluggish commodity market prices leave many companies in treacherous financial straits. Over US$12 billion of Singapore company bonds have been falling and banks are increasingly growing wary of lending to sectors that rely on global trading. It is clear Singapore’s recipe for success over the past five decades is now in need of adjustment, which will require difficult government decisions and a shift away from hyperfocus on GDP growth alone. If Singapore can no longer deliver on its side of the bargain in its “social contract” and ensure continual rise in Singaporeans’ standard of living, it may need to consider making concession in other areas, such opening the democratic process to allow more voices to be heard.

Today the average Singaporean does not have the same concerns as Singaporeans after independence in 1960s. Nowadays, a growing middle class is increasingly calling on the government to boost spending on social services, reduce income and wealth inequality, make housing more affordable and allow for greater electoral competition.

 

GDP indicators do not capture the health of a society

A government has a much more diverse list of responsibilities than a corporation. In fact, achieving a robust GDP may involve neglecting those who don’t help along the way. While this may be regarded as astute or necessary business strategy for a corporation, for a country, this may result in neglecting citizens. Singapore has no welfare system. Those who cannot contribute to the economy may not be able to leave the country in the way that an aggrieved employee can leave a job.

 

Trump is soon to be the President of one of the world’s largest and most established industrialised countries in the world. Despite Trump’s jealousy of China’s 7% GDP growth figure, it would be erroneous and untenable for the US to strive for GDP growth figures at in the realm of 7%. The marginal rate of return on GDP growth diminishes in developed economies compared to fledgling countries such as China and Singapore, both of whom developed rapidly from poor, pre-industrial economies in the late 20th century. It should no longer be the gospel according to GDP and such figures cannot serve as a proxy for corporate profit for Trump to chase. He must take into account the will, the voices and welfare of all the people in the country, not just focus all attention on economic indicators

 

Nepotism – keeping it within the Lee (and Trump) family

Lee was often accused by foreign media of nepotism. The incumbent prime minister of Singapore is his son, Lee Hsien Loong. His second son, Lee Hsien Yang is the chairman of the Civil Aviation Authority of Singapore and was previously the CEO of Singapore’s telecom company SingTel. And his daughter-in-law, Ho Ching is the CEO of Temasek Holdings, the investment company owned by the Singapore government, which has total assets amounting to $223bn

Here is one striking similarity between Trump and Lee. Since his election, Donald Trump has received criticisms concerning the strong involvement of his children in his political cabinet decisions. He promised to leave his business endeavours in a “blind trust” … which he will give to his children to manage … and they will not discuss with him. Not many people are convinced by his promises. Ivanka Trump, his oldest daughter, was present at the meeting between the President-elect and Shinto Abe, the Prime Minister of Japan. Trump has put his son-in-law, Jared Kushner in charge of the Trump transition team and asked for him to receive full security clearance. Many people are arguing that this level of insider information to individuals whom will be in charge of Donald Trump’s business affairs is a blatant conflict of interest.

js113989421-reuters-abe-ivanka-trump-large_transek9vkm18v_rkiph9w2gmnvl_bi2rexisic6cxmluk94
Ivanka Trump at the meeting between President-elect Trump and Japanese Prime Minister Abe raises questions. Photo credit: http://www.telegraph.co.u

 

In conclusion, despite Trump’s promises that he will run the US like one of his businesses, the reality is that ruling the fifty states of America, the largest military in the world, the largest and one of the most diverse economies in the world, a 300 million strong population of diverging ethnicities, regional issues and individual needs is more complicated than a real estate enterprise. Could Trump eschew political ideology and encourage Democrats and Republicans on both sides of the aisle to collaborate to develop America Inc. and develop performance-based legitimacy that LKY enjoyed? The outlook appears bleak.

To run the US like a corporation, Trump would need to guarantee a ‘social contract’ with the US population: if he is free to pursue economic growth, unencumbered by full public deliberation, he would make the proverbial pie bigger for all citizens of the US to enjoy. This is unlikely as the popular vote favoured Hilary Clinton, his favourability ratings are the lowest for any President-elect in decades and there have been protests around the country in opposition to his election. He will probably not receive the support to forge ahead with unpopular policies that will only reap economic success in the long term. Additionally, the elusive quest for GDP growth could be misguided as GDP has been argued by many to be a poor proxy for economic well-being in a country.Furthermore, this social contract entails giving more power to the government. For Singapore, this involved micro-managing the country’s economic affairs, involving itself at various levels of society and controlling numerous state-owned enterprises. A Republican Congress under Paul Ryan has been very vocally in favour limiting government rather than handing over the reins of the economy to President Trump.

To run the US like a corporation, Trump would need to embrace globalisation. This appears unlikely as his Presidential campaign platform has been labelled as isolationist, anti-globalisation and inward looking.

To run the US like a corporation, and create a meritocratic government, Trump would need to surround himself with the best of the best in the US and benchmark their salary to the private sector. This appears unlikely as there are strict laws concerning remuneration in public office. And due to the divisive rhetoric of his Presidential campaign, his inexperience in politics, and his penchant for rewarding loyalty above all else, may result in many of the most experienced individuals in the country not filling the top political positions in a Trump administration.

Finally to run the US like a corporation, Trump would need to be blind to colour, ethnicity and race. He would need to garner his legitimacy from successful economic performance. This appears unlikely as Donald Trump’s campaign platform for the US Presidency, as a whole, fell broadly into the category of ideology that appeals to white nationalists, fostering antagonistic attitudes to immigrants and propounding an “America First” message. His choice of Vice President, Mike Pence (believes LGBT individuals can successfully undergo “conversion therapy”), as well as recent cabinet appointments – Steve Bannon (CEO of controversial Breitbart News), Jim Sessions (the second ever candidate for federal judge rejected by the approval committee for racism) and Mike Flynn (argues that fear of Muslims is rational) – have cemented this ideological position of ethno-nationalism and arch conservatism.

Trump shares some similarities with Lee – a penchant for nepotism and a distaste of the media. However, those two factors that connect the two individuals put them in the same category of other authoritarian leaders around the world. They are not, however, the factors you would immediately associate with running a successful business. And do we even want government to be run like a business? The government is the institution in which we trust to advocate for the country’s welfare: the fact is that not everything that is profitable is of social value and not everything of social value is profitable. Try telling that to a CEO.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s