What if countries acted more like companies?

Like Singapore does.

“Yet you don’t have any democratic machinery—voting, and so on?”

“Oh, no. Our people would be quite shocked by having to declare that one policy was completely right and another completely wrong.”

—Lost Horizon

Right now we have two forms of government: democracy (where everyone has a say in everything but that means we don’t agree on anything so we can’t really get anything done) and autocracy (where one authority can probably get a lot done but usually not in the best interest of their people). But I wonder if there’s a middle ground—if countries might have the benefit of both worlds if they acted more like companies. 

A company would never act like a democracy. If every single employee had a say in what direction the company should take, the company would never be profitable. Instead, an executive team is appointed and trusted to make decisions. They rely on the expertise of their teams and frequently consult them on big decisions, but they ultimately call the shots, making decisions for the best benefit of the company.

Similarly, a company would never act like an autocracy. If the CEO had total control over the company, they might act in their own self-interest, rather than in the best interest of the company. They might do things to line their own pockets at the expense of their employees or take unethical shortcuts. This is why a board of directors is installed to enforce their better behavior. The board can step in to course correct as necessary, and even fire CEOs or executive teams who err in judgment. 

In an ideal world, where capitalism functions this way in practice, this could be an interesting way to have leadership that is empowered to make decisions, but with enough of a checks and balances structure to avoid authoritarianism.

Actually, that’s kind of how Singapore works.

Not a democracy

“If there is anything about the United States today that Asians want to emulate, it is not Washington’s politics but Silicon Valley’s story of ‘managed innovation,’” Parag Khanna says in his book The Future is Asian. “No other nation in history, democracy or otherwise, has created such a high standard of living for 300 million people.” 

It is that very capitalist bent that Singapore strove to emulate when Lee Kuan Yew became prime minister. Once a floundering third-world country expelled from Malaysia, in 1959 Lee Kuan Yew took the helm, righted the ship, and realized his vision for a thriving economic city-state. By the time he died in 2015, Time Magazine hailed him a “philosopher king” who had effectively achieved the Plato ideal of “an educated and engaged citizenry and a wise ruling class: democracy combined with political aristocracy.” 

Barack Obama called him “a visionary who led his country from Singapore’s independence in 1965 to build one of the most prosperous countries in the world today, he was a devoted public servant and a remarkable leader.”

Today, Singapore is one of the wealthiest countries in the world, with the second-highest GDP per capita. It ranks 10th in the world for the highest average income, with citizens earning $64,010 annually, and ranks 12th on the human development index. Singapore provides healthcare for its citizens, enforces mandatory savings for retirement, and a robust housing program ensures 90 percent of the country owns its own home. It is also one of the safest countries in the world—ninth behind Iceland, New Zealand, and Denmark—with a close to zero percent crime rate. 

All of these things combined make Singapore the fifth most desirable place to live in the world. 

But Singapore is not quite a democracy—I’d even go so far as to say Lee could not have achieved what he did if it was. He needed carte blanche. He needed the authority to make decisions for the best benefit of his constituents, just like any CEO would, and he did. That’s probably why Lee wasn’t a fan of democracy, saying it’s “exuberance leads to undisciplined and disorderly conditions which are inimical to development… The ultimate test of the value of a political system is whether it helps… improve the standard of living for the majority of its people.”

Lee passed that test with flying colors. During his lifetime he was called The Father of Singapore, and according to Gallup research conducted in 2015, the year he died, “84 percent of people in Singapore indicate that they have confidence in the national government, one of the highest ratings in the world, and 85 percent express confidence in judicial systems and courts.” 

Singapore does hold elections for its 93 parliament seats, but the leader of whatever political party wins the majority of those seats becomes prime minister. Lee’s People’s Action Party (PAP) has won every election since the state’s inception, making it an unopposed one-party system. But that’s probably because that one party (and Lee’s position in it) held very high approval ratings—the government had been doing a great job. The people trusted Lee and the PAP to make the right decisions, and they wanted him to continue to do so. 

The opposite could just as easily have been true. So many Asian countries have tried to follow Singapore’s blueprint only to take it in an authoritarian direction. And that is not what Lee did. 

Not an autocracy

Lee made decisions, not based on ideology, but based on data. It is essentially the Moneyball of countries. 

If we remember, Moneyball was the book and movie documenting the first baseball team to introduce data into the game. Using statistical analysis, the Oakland A’s were able to determine that slugging percentage and on-base percentage were more valuable traits in a player than running speed, which was more highly valued by scouts at the time. Similarly, college graduates proved better players, statistically, than high school graduates.

By making decisions based, not on which players were favored by scouts, but on which players had the right statistical combination of skills to help the team win, the A’s were able to get players much more cheaply than their competitors, and outplay them. This changed sports forever, and business too. “Silicon Valley firms have been built largely on Moneyball principles,” Seth Stephens-Davidowitz says in his book Don’t Trust Your Gut. 

“Google, where I formerly worked as a data scientist, certainly believes in the power of data to make major decisions. A designer famously quit the company because it frequently ignored the intuition of trained designers in favor of data,” he says. “The final straw for the designer was an experiment that tested forty-one shades of blue in an ad link on Gmail to collect data on which one would lead to the most clicks. The designer may have been frustrated, but the data experiment netted Google an estimated $200 million per year in additional ad revenue and Google has never wavered on its belief in data as it built its $1.8 trillion company.”

Why would a company make a decision—even a small one like the shade of blue used for a hyperlink—based on the artistic whims of a designer, when instead, it could be based on sound data? And why should a country do the same? As a United States voter, I have been regularly asked to make voting decisions based on my own whims, rather than what has been statistically proven in other countries to work—even down to the minutiae. In 2020, Colorado asked residents whether the grey wolf should be reintroduced to the state. Why would the general population know the best decision that should be made concerning the wolf population? Shouldn’t that decision be made by ecologists who have working models that show the benefits and detriments of such a move?

That’s not to say we shouldn’t have a say, just that sometimes that say is based on emotion, not fact. “Voting by itself is therefore far from the best means of capturing popular sentiment on an ongoing basis,” Khanna says. “For that, we need data: qualitative data, such as demographic and economic trends. The combination of social and sensor data can be more comprehensive than election results, for it is broader in scope (covering the full spectrum of issues rather than being hijacked by hot-button topics) and fresher (collected more regularly than infrequent elections).”

That’s what Singapore does. Even if decisions are ultimately made by the prime minister and his party, they are making informed decisions based on what the data says, and what the people say. “From passport checks and public toilets at the airport to banks and university administration buildings, Singapore is populated with touch-screen tablets asking you to rate the service you’ve received,” Khanna says. And, “the government actually pays attention to the results… Parliamentary debates and budget hearings are open to the public and televised. Citizens comment vocally on everything from taxes to transportation to health care spending. If the national pension fund’s portfolio returns just 1 percent lower than expected, citizens start to howl.”

The country tracks all of the data they are gathering and transparently reports on them as if they were providing quarterly reports to shareholders. “The government sets reasonable key performance indicators (KPIs) that are tracked at regular intervals to assess progress,” Khanna says. “The government is also transparent about its own performance. The annual audit of all public and publicly financed institutions, from banks to universities, is an open naming and shaming exercise, putting online and on the front pages of the Straits Times any lapses in fiduciary or other standards.”

To facilitate this “listen to the ground” approach, the country has implemented several feedback channels for government projects, including their “long-term plan review.” In 2022, the government ran a campaign called “Space for our Dreams,” sharing the country’s 50-year planning ideas and allowing the public to participate in them. The government wanted to keep a pulse on public sentiment so they could build the city with the people, rather than for the people, reducing the risk that the government builds something that might not be in the public’s best interest.

And the country is quick to correct course based on feedback. “When rapid immigration overstressed the transport system, the public outcry led to significant immigration restrictions. When foreigners were allowed to invest in the public housing market, it caused price volatility that angered locals; the policy was changed overnight. Concern about adequate elder care for the rapidly aging population and the high cost of living has prompted substantial increases in welfare and social spending.”

Because of this focus on data, rather than ideology, Singapore is often referred to, not as a democracy or an autocracy, but as a technocracy. According to Wikipedia, a technocracy is “a form of government in which the decision-maker or makers are selected based on their expertise in a given area of responsibility, particularly with regard to scientific or technical knowledge. This system explicitly contrasts with representative democracy, the notion that elected representatives should be the primary decision-makers in government.”

That’s how companies work too.

A technocracy

At this point, It might be reasonable to assume that Singapore’s model only works because Lee was actually a good person—a philosopher king of the highest order. But what happens if the next leader isn’t so benevolent? What if they choose to not listen to the people anymore? What stops them from making a power grab and taking the whole thing in an authoritarian direction, as many other Asian countries have?

In Lee’s biography From Third World to First, he painstakingly documents what he went through to ensure Singapore’s success, from establishing an army to protect them from communism to creating an economy so they could overcome poverty to going back to school when he realized blind spots were preventing his country from being better. But he admits other leaders haven’t taken that approach. “My experience of developments in Asia has led me to conclude that we need good people to have good government,” he says. “However good the system of government, bad leaders will bring harm to their people.”

Lee wanted to ensure the leaders who came after him would look after his people just as prudently. That’s why, at 60 years old, Lee started thinking about his succession plan. “Several years before a CEO’s retirement,” Lee noticed, “he had to put before the board one or more candidates for them to choose one as his successor. I resolved that I must not be found wanting in this respect, and that I must place Singapore in competent hands before I retired.” 

Other members of his cabinet weren’t as on board—one member, Toh Chin Chye, commented that he didn’t think 60 was too old to continue. As a proof point, Lee pointed out that Toh used a space heater under his desk to warm his feet. It wasn’t just that he noticed these changes in others, he noticed them in himself. “I did not feel the same inexhaustible enthusiasm and zest to see and find out things for myself,” he said. He thought the people deserved someone who would give them their all.

Lee couldn’t find what he was looking for among existing party members, so Lee appointed one of his ministers, Hon Sui Sen, as the nation’s talent scout. He started searching the top echelons for men and women in their 30s and 40s who had proven themselves in their fields. Lee was looking for a specific set of qualifications: They had to have a disciplined mind—like PhDs, CEOs, professors, lawyers, and doctors; they couldn’t be an activist—someone who was just trying to get into the seat for a specific agenda; and they had to be battle-tested, in that when they were exposed to crisis they emerged as leaders. The search was international. “We set out to recruit the best into government,” Lee said. “I had only to remember that the best ministers in my early cabinets were not born in Singapore.” 

Still, Lee struggled to find someone with the right moral character to succeed him. That’s when, inspired by the American Oil company MNC, which employed 40 psychologists to recruit 40,000 employees; and their competitor Shell, which employed psychological testing as part of their recruiting methods, Lee met with the corporate teams to learn how he could take those methods in-house. He did—candidates underwent extensive IQ and psychological testing designed to prove their intellect, moral character, and emotional intelligence; and a psychologist and psychiatrist evaluated each one for those traits. Still not satisfied that these were the best and brightest, Lee assembled a panel of high-IQ’d, morally principled individuals to finalize PAP candidates for election.

Thus properly vetted, it went to the people to decide whether they should be elected. In the election of 1968, 18 of Lee’s new recruits took a seat. From there it was a matter of proving their mettle. “I compared the party to an army where there had to be constant recruitment,” Lee said. “Most would join as privates, some as officers. Some would not be more than sergeants. It did not follow that all who joined as officers would become generals. Those who proved their worth, whether or not they had university degrees, would be promoted.”

The idea that a world leader should be so thoroughly vetted is a foreign one to American politics, where no qualifications are required save that an individual garner enough hype to win votes. And our democracy is continuously threatened by media sensationalism, which inspires voting decisions made on sentiment rather than statistical analysis. But Singapore’s technocracy provides us with an alternative model—one in which leadership is qualified to make decisions, listens closely to the feedback provided to them by their citizens, and ultimately uses that data to make informed decisions in the best interest of the country—just as companies do. 

Lee was succeeded as prime minister by Goh Chok Tong and then his son Lee Hsien Loong, and approval ratings have remained high in their care. Led by wise and enlightened leaders who are continuously trying figure out how it can be better, the country has flourished. Still, there was an upset when, during the 2020 election, only 83 of the 93 parliament seats went to the PAP, and they only won the popular vote by only 61.24%. Most democracies would kill for those kind of approval ratings, but Singapore took them to heart, with the prime minister vowing to do better by his people. “We have a clear mandate, but the percentage of the popular vote is not as high as I had hoped for,” he said. “We’ll take this forward and work with Singapore to realize those plans and solve the problems which we have.”

Singapore isn’t the panacea—free speech and freedom of the press aren’t a thing, and many younger citizens would like to see greater progress when it comes to human rights issues and LGBTQ acceptance. Still, there are a lot of ways in which the city-state has proved successful, and that’s probably why they top so many of our best countries list. If there are still ways the country can continue to be better, there are also a lot of ways in which they are already pretty utopian—and that makes them worth studying in my book.

It certainly makes them an interesting model for the government in my utopian novel Oblivion. But more on that soon.

Thank you for reading my essays and novel chapters imagining a more beautiful future. And it’s so nice to meet all of you who joined me this week thanks to Substack’s feature!!!!!

Elle

Catch up on the series

This is another essay in a series I’ve been writing about ideal government. 

My previous essays imagine a world where we replace income tax with sales tax (so that everyone who lives in a place pays taxes to a place) and then we open the borders. 

Opening our borders will solve just about everything

In a world where borders are open, moving patterns would become a huge vote of confidence, or lack thereof, for countries around the world. Suddenly countries are competing for citizens, and every country is incentivized to become a utopia—or else sell to a neighboring utopian country and become utopian anyway.

What if countries had to compete for citizens?

In this world, utopian countries provide basic resources (military, education, healthcare, childcare, infrastructure, possibly even universal income) to their citizens so that everyone in the world has their basic needs met, but the bulk of government power is taken away from countries, even states, and given to cities. To communities. 

And that brings us here, to how exactly small governments can and should self-govern. Paid subscribers can also write their own essays on the subject and share them here (I will share these with my subscribers!)

You can catch up on the rest of my essays and novel chapters in my index for the project.