Middleman Minority Nation: A New Conceptualisation of the State in Singapore

ABSTRACT

The Singaporean state is often conceptualised as neoliberal, but I argue that this conceptualisation is mistaken. While Singapore embraces the neoliberal ‘all you have is yourself’ ethos, I contend, the state does not apply this ethos to individuals and families, but to society as a whole: to the relation between Singapore and ‘the world’, rather than to the domestic realm within Singapore. That is, Singapore is a communalist and not an individualist society – a society in which the group is paramount, and in which the rights and responsibilities of individuals are subordinated to group interests. I introduce the term ‘middleman minority state’ (MM state) to capture this social phenomenon, whereby the state scales up the tactics of the classic middleman minority to the level of a small nation-state. I argue that the uniqueness of Singapore as a polity is not fully reflected in 20^th-century economists’ views on society and economics, which provide only a partial map of Singapore. Instead, we must look to Singapore’s history as a centre for middleman minorities, whose values and behaviour patterns were transformed into a successful state strategy as the country became an independent nation-state in the 1960s.

KEYWORDS:

• Middleman minority state (MM state)
• globalisation
• neoliberalism
• economic development
• the state
• Singapore

Singapore’s function, right from the time Raffles set foot here, has been that of the middleman, a collection and distribution centre (G. Raman, 1972).

In much recent scholarship, the Singaporean state has been conceptualised as a neoliberal state formation. ‘By urging Singaporeans to ground their relationship to the nation in values and practices of economic competitiveness, efficiency, and consumption’, Singh argues (2019, 171–172), ‘the government’s neoliberal rhetoric constructs an image of the nation as a corporation peopled by brave workers, satisfied shareholders, and eager customers’. Similarly, Dutta says (2020, 2), Singapore is ‘both a role model and pedagogue of extreme neoliberalism’, as the country ‘has continually experimented with and perfected the techniques of authoritarian repression, exploitation of labor, and accumulation of primitive capital’, and ‘has invented the statecraft of disciplining labor and silencing dissent as model governmentality, while turning itself into the Asian gateway for transnational capital’. Neoh (2020, 68), likewise, argues that the Singaporean government’s approach to policy – which holds that ‘[i]f a measure of social control is shown to contribute to economic growth, it is considered as necessary to Singapore’s survival’ – is neoliberal because it ‘stresses the importance of survival in the market place by emphasising citizens’ responsibility to self, fellow citizens, and the state, thereby shrinking the scope of state intervention and limiting citizens’ critical involvement in society’. Lastly, Harvey (2005, 86; see also Liow, 2012; Ong, 2006; Tan, 2012) suggests that Singapore has

combined neoliberalism in the marketplace with draconian coercive and authoritarian state power, while invoking moral solidarities based on the nationalist ideals of a beleaguered island state (after its ejection from the Malaysian federation), Confucian values, and, most recently, a distinctive form of the cosmopolitan ethic suited to its current position in the world of international trade.

This conceptualisation no doubt has its merits. In accordance with neoliberal theory, the Singaporean state has always taken ‘the market’ to be fundamental to both ‘society’ and ‘politics’, and has always sought to make the country as competitive as possible in economic terms. As such, the Singaporean state can easily be seen to epitomise what anthropologists Parry and Bloch (1989, 29) describe as a ‘remarkable conceptual revolution’ in capitalist ideology, according to which ‘the values of the short-term order’ – meaning the market – ‘have become elaborated into a theory of long-term reproduction’, such that

What our culture (like others) had previously made room for in a separate and subordinate domain [the market] has, in some quarters at least, been turned into a theory of the encompassing order – a theory in which it is only unalloyed private vice that can sustain the public benefit.

The market, on this understanding, is no longer a useful tool for achieving social ends; it is an end in and of itself, representing the encompassing order that society must embed itself within, and conform to, rather than the other way around.

In 2015, Singapore’s then Deputy Prime Minister Tharman Shanmugaratnam gave an interview with BBC journalist Stephen Sackur, in which he reflected on the economic success of Singapore:

We had every disadvantage you can think of for a nation, and we did not expect to survive, we were not expected to survive. But that, to Lee Kuan Yew and the pioneer team of leaders, was converted to advantage, because it forces you to realise that all you have is yourself. The world owes you nothing; your piece of granite rock […], not even the waterfall or mountains that allow you to have a bit of hydroelectric power – nothing! Just a group of people of different origins willing to work hard and […] to fend for themselves and make themselves relevant to the world. And that mindset – thinking of yourself as not having the advantage of size or history, and that you’ve got to create it for yourself – turns out to be a phenomenal advantage (St. Gallen Symposium, 2015).

At first sight, it is hard to imagine a more neoliberal national myth: ‘All you have is yourself’, ‘work hard’, ‘the world owes you nothing’, ‘you’ve got to create it for yourself’ – Milton Friedman or Friedrich Hayek could hardly have said it better! As I argue in this article, however, this conceptualisation of the Singaporean state is ultimately mistaken. While in Singapore the state shares with neoliberalism the basic ‘all you have is yourself’ ethos, the difference is that the Singaporean state does not apply this ethos to individuals and families, but to society as a whole: to the relation between Singapore and ‘the world’, rather than to the relation between individuals and families within Singapore. ‘[W]hat seems to result’, as one writer perceptively observes, ‘is a city-state that functions as an aggressive “individual”, as it were, within the global free market, but within the country, as a paternalistic, interventionist state, supported by bureaucratic technocracy’ (Wee, 1999, 350).

To capture this Janus-faced nature of the Singaporean state, this article introduces the term ‘middleman minority state’ (MM state). By this, I mean a state that scales up the tactics of the classic middleman minority to the level of a small nation-state. My argument is that, if we want to understand the uniqueness of Singapore as a polity, we cannot look primarily to the theoretical constructs of 20^th-century economists (mostly of the Austrian school, such as Hayek, von Mises, and Friedman). Instead, we must look to Singapore’s history as a centre for middleman minorities – primarily, but not exclusively, the overseas Chinese who migrated to Singapore for economic opportunity in the 19^th and 20^th centuries – whose values and behaviour patterns were transformed into a successful state strategy as Singapore became an independent nation-state in the 1960s.

In making this argument, my theoretical aim is ultimately to break the spell that the term ‘neoliberalism’ casts over so much academic analysis of contemporary global realities. In short, the ‘neoliberalism’ argument runs something like this: with the advent of globalisation, organised labour becomes less and less able to effectively compete with capital, as capital can move production to places where workers are not organised into strong unions. Hence, globalisation allows capital to divide and conquer, as workers in all nations are forced to compete with one another for capital investment, leading to a global ‘race to the bottom’ as capital rewards countries that have the fewest protections for workers, and punishes all others (see Amin, 1997; Patnaik, 2016). On this reading, neoliberalism is simply the necessary consequence of capitalist globalisation, as neoliberalism – i.e., the theory that ‘it is only unalloyed private vice that can sustain the public benefit’ – represents the ideological and material triumph of capital over labour.

Through the concept of the MM state, my aim is to think my way out of this deadlock. When we look at the history of middleman minorities, we find groups of people who have in various (but remarkably similar) ways managed to stake out their own destinies under conditions highly analogous to those that today seem to deny agency to nation-states, only writ small. Middleman minorities throughout the world have operated as small groups within larger economies over which they have little or no political power, but in which they have nevertheless managed to outperform the majority groups among whom they live. When we look at Singapore, in turn, I argue that we find the same process repeated, only writ large, as the history of Singapore’s economic development post-independence can be understood as a scaling up of the tactics of the classic middleman minorities to the level of a small nation-state surviving and thriving in the global market.

Before making this argument, let me stress that by describing Singapore as a MM state, I am not merely employing a metaphor or heuristic. That is, I am not just claiming that the Singaporean state is ‘like’ the classic middleman minority, in the way that one might say that a society is ‘like’ a human body, in that both are complex systems. Rather, I am making a stronger claim: I am arguing that the classic middleman minority and the MM state are both expressions of the same underlying phenomenon. At first, this may seem like an overextension of the concept. As I see it, however, my use of the term is not so different from its conventional usage in the context of ethnic minorities. No one, after all, claims that classic middleman minorities are self-consciously applying a ‘middleman minority tactic’ in their host societies, and that this is what accounts for their similarity. Rather, the claim is that they have all adapted to similar economic niches, and that their similarity is therefore the result of similar processes of cultural evolution (see Sowell, 2005b, 98ff). By calling Singapore a MM state, my argument is that Singapore’s economic success as a nation-state can be understood as the result of the same kind of tactic being employed at the scale of a small state operating within the global economy, rather than at the level of an ethnic minority operating within a host society.

Put another way, I am not claiming that the first generation of leaders in Singapore consciously set out to scale up the tactics of the classic middleman minority as they took on the project of building an independent nation-state. This is, in my view, what they effectively did – and given that Singapore has always been a centre for middleman minorities, I suspect that this is not a coincidence. Nevertheless, the term ‘middleman minority’ is not meant to describe a self-conscious identity or project among the Singaporean ruling elite, but to note the structural similarity between the classic middleman minority and the MM state.

In the first section of the article, I introduce the term ‘middleman minority’. In the second, I show how and why Singapore’s origin story as an independent nation-state can be understood as a typical middleman minority story. The third section describes how the values and behaviour patterns of the classic middleman minority have been scaled up in the Singaporean state, highlighting five key parallels. Lastly, I discuss why the concept of the MM state better captures the uniqueness of the Singaporean model than the term ‘neoliberalism’, and more generally, why the concept of ‘neoliberalism’ should not be used so liberally to explain any and all state formations that take ‘the market’ to be fundamental to ‘society’ and ‘politics’.

Middleman Minority

The term middleman minority was coined by Blalock (1967), and later developed by Bonacich (1973) and Sowell (1996; 2005b), to describe ethnic minority groups whose role in society is that of an intermediary, either ‘between producers and consumers, whether in the role of retailers or money-lenders’ (Sowell, 2005b, 66), or between different social and/or ethnic groups that prefer not to interact directly with one another. The paradigmatic example of a middleman minority is the Jews of Europe, but others include ‘the Armenians in the Ottoman Empire, Ibos in Nigeria, Marwaris in Burma, overseas Chinese in Southeast Asia, and Lebanese in a number of countries’ (Sowell, 2005a), not to mention the Parsis in India, all of whom have occupied similar roles in their host societies.

Apart from their role as middlemen, what most notably distinguishes middleman minorities from other ethnic minorities is the spectacular success that they have achieved in their host societies. ‘Again and again’, Sowell (2005b, 72) writes, ‘[…] the middleman minority has arrived on the scene as a destitute immigrant, owning virtually nothing and barely able to speak a few words of the language of the country’, only to work their way up to great fortunes within the span of a generation or two. Among their host societies, this entrepreneurialism of middleman minorities has often inspired admiration and celebration. Equally often, however, it has inspired a special kind of hostility, manifesting throughout history in ‘efforts to cut off their means of livelihood, riots and pogroms, exclusion movements and expulsion, removal to concentration camps, and “final solutions”’ (Bonacich, 1973, 589).

In part, this hostility is explained by the fact that the economic activities of middleman minorities ‘have long been regarded by the economically unsophisticated as not “really” adding anything to the economic well-being of a community’ (Sowell, 2005a), as middleman minorities ‘only’ act as intermediaries between producers and consumers – living off the difference in price between buying and selling, rather than engaging in production. In part, Sowell says, the hostility is because the success of middleman minorities depends on their ability to remain culturally distinct from their host society, while integrating economically into it, as this is what provides middleman minorities with a competitive advantage. As a result of this, middleman minorities have throughout history become easy targets for demagogues looking for scapegoats, as they are not only more successful than the majority, but also culturally different from them, thus providing ample ‘evidence’ that they ‘stick together’ and make money ‘at the expense’ (Sowell, 2005a, 90) of the majority:

How could middleman minorities rise from such [low] beginnings? Clearly, their values, their discipline, and their culture, had to be different. Moreover, if they wanted their children to succeed, they had to make sure to keep these intangible assets different. Accordingly, middleman minorities around the world have distanced themselves and their children from social involvement with the very different people around them – whose differences were the basis of their livelihood – and have therefore often been accused of being clannish […] Middleman minorities, struggling up from the bottom, could not afford to have their children absorb the values of the society around them. Clannishness was all but inevitable (Sowell, 2005b, 73).

‘A Heart without a Body’: Singapore’s Origin Story

When Singapore split from Malaysia in 1965, after having merged with the neighbouring country in 1963, hostility against the Chinese middleman minority in Singapore played an important, not to say decisive, role. In 1961, when the merger between Singapore and the Federation of Malaya was first proposed, Singapore’s economic advisor, Dutch UN economist Albert Winsemius, had voiced concern that such a union might not work, ‘mainly on account of the ethnic composition of the Singapore population (UNDP, 2015). I was completely sure at the time that [Singapore] would […] economically take the lead’, Winsemius recalled in a later interview. ‘A common market would mean free competition from Singapore throughout Malaysia. And Singapore, the average Singaporean is better than the average Malay. It’s as simple as that’. For this reason, Winsemius suspected that ‘a number of […] “Federation Politicians” would be afraid of Singapore. They would try to keep Singapore down economically as much as possible, which they did’ (cited in Tan, 1982, 95–96).

This provided the background for the struggle over ‘Malaysian Malaysia’, which ensued as soon as Singapore and Malaysia merged. Malaysian Malaysia was a term used by Singapore’s then Prime Minister Lee Kuan Yew to describe what he hoped would be an alternative to the bumiputra legislation that existed (and still exists) in Malaysia, according to which the native Malays are guaranteed a number of special rights and protections under the constitution, such as privileged access to employment, education, political office, and jobs (see Sowell, 2005b, 56ff). For Lee and the People’s Action Party (PAP), the goal of the merger was to transform Malaysia into ‘a modern state which would aim to deliver economic prosperity to the population, while moving inexorably towards the ideal of equality of status and opportunity for all of the population regardless of race’ (Barr, 1997, 4). For Malaysian leaders, however, the goal was the direct opposite: to get the productivity of the Singaporean trade-economy as part of the tax base, while making sure that the Chinese middleman minority, which lived throughout Malaysia but concentrated in Singapore, did not outcompete the Malay population, which the Malaysian leadership saw as its primary constituency (Barr, 1997, 4).

The most famous expression of the Malay viewpoint came in a book entitled The Malay Dilemma, written by Mahathir bin Mohamad and published five years after separation. When it was published, Mahathir was in the political wilderness after being voted out of office during the 1969 elections. During the merger, however, he had been one of the most important critics of Singapore and Lee Kuan Yew, and he was later a two-time prime minister of the country. Mahathir (2008, 48) observed how the Chinese in Malaysia ‘are the universal middlemen’, as they ‘not only sell the whole country the necessities of life and the luxuries, but […] often buy up the produce of their customers and dispose of it elsewhere’, noting how they are ‘an essential cog in the machinery of the Malaysian economy’. The problem, Mahathir added, was that the business methods of the Chinese were unfair, as the Chinese organise themselves around strong family loyalties, exclusive guilds, and exclusive chambers of commerce (Mahathir, 2008, 75), making it almost impossible for other groups to compete with them on equal terms. ‘The Malays’, Mahathir (2008, 72) wrote, ‘are as much as everyone else for a free enterprise system. But’, he added, ‘it is becoming more and more apparent that the competition which should be between individuals and business groups has developed into a competition between racial groups in which one group has an absolute advantage over the other’. In particular, Mahathir observed, because the Chinese tend to rely on unpaid family labour, they are able to maintain lower prices than other businesses:

The Chinese retail shop is invariably a family affair. As such, wages are unknown. The proprietor and all the members of his family work for the food that is provided and no more. The saving is tremendous, and the amount of goods sold and the size of the shop, as well as operational capital, increase very rapidly. There is no fixed price for anything, and most certainly the prices are not marked on the goods. This permits flexibility in price, but family loyalty ensures that any excess profit does not go to the salesman (Mahathir, 2008, 76).

To protect the native Malays from the Chinese middleman minority, Mahathir reasoned, free competition had to be ruled out, as it would over time reduce the Malays to second-class citizens in their own land. ‘With the Chinese’, he said (2008, 78), ‘every form of business […] is monopolised by them. Not even the crumbs are left to others’. However, ‘the Malays are the rightful owners of Malaya’, and so ‘if citizenship is conferred on races other than Malays, it is because the Malays consent to this. That consent is conditional’ (Mahathir, 2008, 161).

While Mahathir spoke in general terms about the economic interests of ‘the Chinese’ and ‘the Malays’, it should be emphasised that this did not mean that all Chinese people in Singapore and Malaysia could be put into the category of middleman minority, nor that all Malays had some general interest in common against the Chinese. At the time of independence, most of the people in Singapore were living in kampongs, making money in and through the informal economy; and rather than capitalism, most working-class Singaporeans were attracted to socialism, clearly at odds with the entrepreneurial ethos of the middleman minority (see Rodan, 1989). The point is that, to the extent that the Chinese have achieved greater economic success than other groups in Southeast Asia, they have done so by occupying the role of middleman minority within their host societies. ‘Although the Chinese had begun much poorer than the Malays’, Sowell writes, ‘their incomes rose over the years until they were earning more than double the average income of the Malays’, not because they enjoyed any special privileges but because ‘their frugality enabled them to begin to move out of the ranks of laborers by setting up small businesses, usually tiny retail shops’ (Sowell, 2005b, 57–58). Hence, when we say that ‘the Chinese’ in Singapore came into conflict with ‘the Malays’ in Malaysia, we are really talking about different strategies for acquiring wealth and power – one based on ethnic privilege, the other based on working your way up from the bottom – which, at a group level, are associated with these different ethnicities.

In this context, what is special about Singapore’s story is not this ethnic conflict, or that it was framed in racial-essentialist terms (wherever we find a middleman minority, we tend to also find this kind of thinking). What is special, instead, is how the conflict was resolved: not through segregation, ethnic cleansing, or genocide, but through ‘one of the most remarkable political decisions: Singapore was expelled from Malaysia in 1965 – one of the few times in history when a country has voluntarily divested itself of part of its own’ (Sowell, 2004, 59). As a consequence of this, Malaysia got to maintain its Malay majority, allowing the country to keep its bumiputra legislation in place – and with that, Malay political supremacy. Singapore, for its part, ended up in the rare position of having to transform a city that had previously been the centre of a middleman minority culture into an independent nation-state, in which the previous minority was now the majority.

On the one hand, this presented a serious problem for Singapore, as it was not clear how the country could survive as an independent unit without a hinterland – ‘a heart without a body’, as Lee Kuan Yew (2000, 1) would later put it. At the same time, the problems facing independent Singapore – primarily, how to survive as a small country with no natural resources, having to live on exports and trade – were remarkably analogous to the problems that had previously faced middleman minorities, who had similarly faced the challenge of surviving as small units within bigger economies over which they had little political power, and in which they had to survive on the basis of nothing but their willingness to work hard and save. When the first generation of Singaporean leaders went about the task of setting up an independent nation-state, they therefore did not have to start from scratch, as it were, but could (consciously or not) adopt many of the strategies and values that had already proved successful for the middleman minority – only now applied to the problem of state-making.

The result of this, I argue, was the world’s first and so far only MM state, meaning a small nation-state that operates in the global economy much like the classic middleman minority operates in a host society. Looked at in this way, the parallels are striking and numerous.

The MM State

The first and most obvious parallel between the classic middleman minority and the Singaporean state is the economic role of the middleman itself. For the classic middleman minority, this role is occupied within a host society, where the middleman minority inserts itself between producers and consumers, employers and employees, or different social groups. For the MM state, on the other hand, this role is occupied within the global economy, where the state inserts itself between multinational corporations and its own population, attracting the former by offering the latter for sale as (cheap and docile) labour power.

Because of this, the MM state has often been accused of the same kind of parasitism as the classic middleman minority, as the MM state does not ‘produce’ what it sells (the labour power of its population), but merely facilitates the process by which global capital can buy it, in exchange for which the MM state takes a cut of the resulting profits (see Caldwell, 1979). As Sowell notes, however, rather than a parasitic activity, this mediating function is precisely the value of the middleman, as the middleman provides the infrastructure through which parties who both have something to gain from mutual exchange can meet in a smooth and hassle-free way: ‘Consumers could, in theory, drive to factories to buy goods directly, but retailers make this time-consuming activity unnecessary, for a price’ (Sowell, 2005b, 81). Likewise, multinational corporations who invested in Singapore during its industrialisation could easily have found cheaper labour elsewhere (see Castells, 1988, 16–18). What made Singapore such an attractive place for investment was the fact that the state offered a total business environment – a labour ‘shop’ – in which multinational corporations were provided with not just relatively cheap labour (compared to the West) but also social and political stability, world class infrastructure, tax concessions, and other pro-business policies, all of which made Singapore preferable to other, cheaper places (see Castells, 1988, 9–20).

More recently, Singapore has become one of the world’s leading financial centres, which is also a classic middleman minority role. At the political level, the middleman role has been played by the ruling PAP, which as Singapore was gaining independence in the late 1950s presented itself as something of a political middleman between the local population and the British colonialists. As Lee said while he was a student at Cambridge:

We, the returned students, would be the type of leaders that the British would find relatively the more acceptable. For if the choice lies, as in fact it does, between a communist republic of Malaya, and a Malaya within the British Commonwealth, led by the people who despite their opposition to imperialism still share certain ideals in common with the Commonwealth, there is little doubt which alternative the British will find the lesser evil […] No class in Malaya is better equipped to lead a Malayan nationalist movement. The common man in Malaya rightly or wrongly associates intelligence and ability with an education in England, perhaps for the reason that such an education makes possible a greater and more rapid acquisition of wealth in a British Malaya (cited in Han et al., 2015, 110–111).

In other words, Lee believed that the PAP was suitable to lead independent Singapore because it could act as a middleman between the local population and the colonial power, rather than simply represent the interests of one against the other. Unsurprisingly, therefore, many of the political criticisms levied against the PAP have been strikingly like those levied against the classic middleman minority. In particular, some Marxist scholars have argued that the PAP’s role as political middleman was really a way for the Party to facilitate the exploitation of the local working class by global capital, rather than to achieve ‘true independence’. Caldwell, for instance, writes that Lee

perceived with unusual clarity that the transition to independence might entail social revolution, and therefore the demise of the class to which he belonged and of the economic formation – capitalism – which nurtured it, unless the colonial power and indigenous reactionaries succeeded in the delicate task of crushing genuine nationalist and socialist forces while persuading a portion of the people to accept neo-colonial status as true independence and a paternalism akin to fascism as ‘social democracy’ (Caldwell, 1979, 3).

Likewise, Luther (1978, 219) says that Singapore’s ‘economic miracle’ was achieved ‘for the benefit of foreign investors and at the expense of the Singapore working class’; and Glassman (2018, 591–592; see also Buchanan, 1972) suggests that ‘whether or not Singaporean workers’ standards of living rose – and clearly they did from the 1960s–80s – Lee was unambiguously subordinating them firmly to the prerogatives of capitalists and capitalist state planners’.

Bonacich (1973, 591) observes that classic middleman minorities have often been charged with having ‘dual loyalties’, and therefore with being untrustworthy. ‘In post-colonial societies’, she writes, ‘this distrust was probably exacerbated by the fact that middleman minorities tended to be allied with the colonial masters. Indeed, they have an interest in “law and order” for continued trade, hence tend to oppose disruptive political movements’ (Bonacich, 1973, 591). Likewise, the Marxist critique of the Singaporean state is that, by acting as a middleman between global capital and the local population, the state exploits the latter for the benefit of itself and the former. And in that pursuit, the MM state strongly opposes all ‘disruptive political movements’ (Bonacich, 1973, 591), such as ‘genuine nationalist and socialist forces’ (Caldwell, 1979, 3), which, according to the Marxist point of view, represent the true interests of the people.

The second parallel between the Singaporean state and the classic middleman minority is a shared focus on hard work combined with high levels of savings and investment. ‘The ability to save has played a key role in the rise of middleman minorities’, Sowell (2005b, 73) observes:

Because being a peddler or even a small storeowner does not require any large amount of capital, these are occupations open to innumerable people, so that widespread competition has been common – and that in turn means that profits cannot come easily without long hours of work and much attention to the business, as well as living within limited means (Sowell, 2005b, 76).

Likewise, Bonacich (1973, 585) talks about middleman minorities as having a ‘future time orientation’ – meaning, an exceptional willingness to delay gratification – which she contrasts with the social and cultural orientation of the majority populations among whom middleman minorities live, ‘who generally wish to live more rounded lives’. Similarly, because Singapore did not start out with any natural resources, or any other unearned advantages, it could only compete in the global market by working harder than other countries, while at the same time consuming less, and investing the difference productively. Like the classic middleman minority, therefore, the Singaporean state could only succeed by convincing its population that it was in their interest to delay gratification over a long period of time.

Unlike the classic middleman minority, however, the Singaporean state had to convince an entire nation that it was in their interest to delay gratification, not just a family or a clan. To instil the appropriate ‘future time orientation’ in the population, therefore, the state could not rely on cultural transmission alone, but also had to pass laws that institutionalised this orientation. The most important of these were three bills introduced in 1968: the Employment Act, the Industrial Relations (Amendment) Act, and the Central Provident Fund (Amendment) Act. The first two of these introduced changes to labour relations that were largely in favour of capital, among other things replacing the principle of ‘first in, last out’ – which had previously governed retrenchment decisions – with the principle of ‘least efficient, first out’, and increasing working hours while reducing paid holidays.

The Central Provident Fund (Amendment) Act, for its part, made two important changes to Singapore’s social security system, the Central Provident Fund. First, it gave the government the power to increase the monthly savings rate – which it did, incrementally, until the savings rate stood at 50 per cent in 1985 (split evenly between employer and employee). Second, the bill gave citizens the ability to use their savings to buy housing from the Housing and Development Board (HDB), a state-owned real-estate developer. At the time, most Singaporeans were living in so-called kampongs, or self-constructed and often unsanitary urban villages on the fringes of the city centre (similar to the favelas of Brazil). By moving people into modern high-rise apartments, the government’s immediate goal was to proletarianise the population, by getting people invested in housing and thereby getting them to work in the formal economy (see Tremewan, 1994). Beyond that, however, the government also wanted to create a strong and lasting bond between itself and the people, by giving the people a ‘stake in the country and its future’ in the form of housing.

Today, more than 80 per cent of the Singaporean population own their homes through the HDB. In his memoirs, Lee Kuan Yew (2000, 160) reflected on this issue:

I had seen the contrast between the blocks of low-cost rental flats, badly misused and poorly maintained, and those of house-proud owners, and was convinced that if every family owned its home, the country would be more stable […] I had seen how voters in capital cities always tended to vote against the government of the day and was determined that our householders should become homeowners, otherwise we would not have political stability.

Put in terms of our analysis, the three 1968 bills did not only institutionalise the middleman minority ethos of hard work and high savings. More importantly, they positioned the state as the (not so) metaphorical ‘patriarch’ of the national ‘family’ – a ‘benevolent dictator’ (Boo, 2015) or ‘good autocrat’ (Kaplan, 2011) whose job it is to force the national community to work hard and save well, and to invest any surplus back into the ‘family business’ (Barr, 2014, 108).

This leads us to the third parallel, which is the necessity of maintaining a social contract that in one way or another incentivises people to view their interests in terms of the multigenerational project of upward mobility. Specifically, because both middleman minorities and the MM state begin with virtually nothing, they both must maintain labour regimes that under different circumstances would be experienced as clear instances of worker exploitation, as this is initially the only source of surplus-value available to them. As Sowell notes (2005b, 76), ‘During the earlier rise of Chinese shopkeepers in Southeast Asia, sixteen-to-eighteen-hour days were […] common’:

Only those willing to endure such deprivations, and to put in long hours of work for the sake of the future, are likely to last long enough to begin to move up the economic ladder to the remarkable success which middleman minorities have eventually achieved in many societies (Sowell 2005b, 99).

Similarly, Bonacich (1973, 586) writes that:

The typical middleman minority business is a family store (or truck farm) resting heavily on the use of unpaid family labor. If wage labor is needed, members of the extended family or of regional associations are preferred, and are treated like kin, sometimes living with the family behind the store. Employees work excessively long hours for low or no wages and are loyal to the owners. In exchange they are likely to become partners or to receive training and aid in setting up their own business in the same line. The middleman firm is labor-intensive but able to cut labor costs drastically through ethnically-based paternalism and thrift.

In much the same way, when Singaporeans were mobilised into factory labour, they were told that they would have to accept hard work and high savings in exchange for a ‘stake in the country and its future’ in the form of investments in housing and the CPF. With this, the workers were given a strong reason to remain loyal to the ‘owners’ – i.e., the ruling party – even though what was asked of them in the short-to-medium term was often completely at odds with their economic interests (or what they would have understood to be their economic interests). Hence, like the classic middleman minority, the social contract forged in the MM state was one in which current exploitation – or what would most likely be experienced as exploitation under normal circumstances – was legitimised and accepted on the grounds that those doing the work would be made ‘partners’ in the state as a corporation.

The fourth and in my view most important parallel between the classic middleman minority and the Singaporean state is the need to maintain a cultural difference vis-à-vis the ‘host society’, while nevertheless benefitting from it economically. ‘For the overseas Chinese to allow their children to become part of the larger culture around them and absorb their values and behavior patterns’, Sowell (2005a) observes, ‘would have been to have the family commit economic suicide’, as it would rid them of their competitive edge. Similarly, Bonacich (1973, 593) observes that middleman minorities ‘keep themselves apart from the societies in which they dwell, engage in liquidable occupations, are thrifty and organized economically. Hence, they come into conflict with the surrounding society yet are bound to it by economic success’.

In Singapore, the most famous expression of this strategy is found in the notion of ‘capitalism with Asian values’ – i.e., the idea that while Singapore should fully embrace the Western economic model of capitalism, it must not become a fully Westernised society. As then President Wee Kim Wee said in 1989 when introducing the concept of ‘shared values’:

Singapore is wide open to external influences […] This openness has made us a cosmopolitan people, and put us in close touch with new ideas and technologies from abroad. But it has also exposed us to alien life-styles and values. Under this pressure, in less than a generation, attitudes and outlooks of Singaporeans, especially younger Singaporeans, have shifted […] If we are not to lose our bearings, we should preserve the cultural heritage of each of our communities, and uphold certain common values which capture the essence of being a Singaporean (cited in Parliament of Singapore, 1989).

Here, the year 1968 again stands out as a particularly important watershed moment in Singaporean history. As we have seen, this was when Singapore consolidated its class compromise through the passing of the two labour bills – the Industrial Relations (Amendment) Act and the Employment Act – together with the CPF Bill. Globally, by contrast, 1968 was a year of massive protests, during which students and workers filled the streets of major capitalist countries around the world, challenging the social-democratic politics of consensus and compromise that had previously dominated the Western world, demanding more radical change – be it feminist, anti-racist, post-colonial, ecological, anti-imperialist, or coming from any other branch of the ‘New Left’ (see Bertelsen & Rio, 2019; Vinen, 2018).

To Singapore’s leaders, these events and ideas provided clear evidence that the West could no longer be looked towards for inspiration, but instead had to be viewed as a cautionary tale. As Lee said in 1971:

If they are to develop, people in new countries cannot afford to imitate the fads and fetishes of the contemporary West. The strange behaviour of demonstration and violence-prone young men and women in wealthy America, seen on TV and the newspapers, are not relevant to the social and economic circumstances of new underdeveloped countries. The importance of education, the need of stability and work discipline […] these are vital factors for progress (cited in Barr, 2000, 319).

The most important break with these ‘fads and fetishes’ of the West came in 1976, when the PAP left the Socialist International, after the Dutch Labour Party (DLP) had presented a request to have the PAP expelled. The request primarily concerned the fact that many of Singapore’s leading labour unionists were still in jail, having been put there during the 1963 ‘Operation Coldstore’. However, the DLP also criticised Singapore for other issues, including its lack of press freedom, its lack of independent labour unions, its perceived anti-labour legislation, and its use of detention without trial against the political opposition. ‘Singapore’s “wonder economy”’, the DLP (1976, 250) wrote, ‘has been established by totalitarian policies and methods which have very little affinity with the principles of social democracy’. Hence, ‘the PAP’s continued membership in the Socialist International serves no other purpose than to give the PAP regime international respectability and to give cover to its totalitarian policies’ (DLP, 1976, 262).

In response to this, then secretary general of the National Trades Union Congress, Devan Nair, presented a 73-page rebuttal, in which he offered what he saw as clear refutations of each point of criticism. Most importantly, he drew attention to the fact that many of the writers whose views had been consulted by the DLP ‘belong to the so-called New Left group’ (Nair, 1976b, 19), including the above-mentioned Malcolm Caldwell. ‘It is important’, Nair (1976b, 19) said, ‘that social democrats in Western Europe, who we assume, do not desire to be taken in by communist propaganda relating to the Third World, should be made aware of the distinctly pro-communist credentials of this group’. In particular, he said, while social democratic parties in the West may have revised their position on collaborating with communists and other fellow travellers, this was not the case for the PAP, who still viewed communism as an existential threat to the project of social democracy:

If some West European socialists desire to play poker with their own communists, we sincerely wish them good luck. For we think that they will require lots of luck. But we beg to opt out […] We cannot and will not permit the lunatic liberal fringes of West European social democratic parties to make common cause with our communists and fellow-travellers, and to tell us how we ought to run our affairs. We must therefore part company with the Socialist International, and we propose to do so without so much as a farewell (Nair, 1976b, 70–71).

Later that year, Nair published a book, Socialism that Works: The Singapore Way, in which he and other Singaporean leaders set out to counter in more detail the arguments that the DLP had made. Nair (1976a, 97) argued that there exists ‘a fundamental fallacy in judging the third world on the basis of the standards, values, and achievements of the advanced industrial nations of the West’, since

neither the rulers nor the ruled in a developing society, if that society is to pull itself up by its own bootstraps as it were, can afford the looseness, the permissiveness, and the downright licence which increasingly pass for ‘freedom’ in the Western world (Nair, 1976a, 98).

Most importantly, Nair drew attention to what he saw as a fundamental hypocrisy of Western critics, who in his view tended to elevate and universalise Western liberal democracy as the only acceptable form of society, while at the same time forgetting about the ‘mire and the muck from which the rose of Western industrial civilisation has arisen’. In this ‘mire and muck’, Nair (1976a, 98) included ‘the cruel exploitation of the labour of men, women and children (and the even more cruel exploitation of the subject peoples of the colonies), […] which lie behind the material affluence and moral pretentions of the modern West’. He elaborated:

Also conveniently forgotten is the fact that large parts of the developing world still live with the technology of the pre-industrial Age. Nonetheless, they are expected to by-pass the mire and the muck in which the modern West had its origins, and to telescope within a decade or two the technological breakthrough which took Western Europe a leisurely two centuries or so of unparalleled mass exploitation, poverty, and squalor, to achieve (Nair, 1976a, 98).

For these reasons, Nair thought, Singapore’s status as a social democracy should not be evaluated based on what social democracies look like in the contemporary West, but based on what the conditions of possibility are for social democracy in a post-colonial society such as Singapore. ‘The brutal truth’, Nair (1976a, 98) wrote,

is that no developing country can hope to overcome the most daunting problems of social and ethnic inequalities, and of mass unemployment, poverty, and squalor, and make its way into the technological Age without individual and societal discipline, curbs on population growth, [and] accumulation of savings for investment whether by consent or by enforcement […].

Hence, he argued, while Western commentators may think that they are standing up for universal values when criticising Singapore, they are in fact condemning Singapore to an unrealistic choice between survival and (Western) morality, as there is no way for Singapore to do what is necessary economically while at the same time adhering to all the demands of Western critics. Rajaratnam (1976, 6) concurred: Singapore is ‘punished for being successful’ by Westerners who ‘persist in the belief that as Europeans it is [their] unquestionable responsibility to whip the heathens along the path of righteousness’ (Rajaratnam, 1976, 8).

Like the classic middleman minority, then, the concern that occupied the first generation of Singaporean leaders was how to make sure that economic development did not bring with it an adoption of the values and behaviour patterns of the ‘host society’. To that end, one of the most striking – and from the Western point of view, most problematic – features of Singaporean society has always been that it ‘has remained resolutely semi-authoritarian […] and shows few signs of greater democratization’ (Dalpino, 2001), despite having achieved remarkable economic success. In this, the MM state, like the classic middleman minority, has found it necessary to not only convince its own population of the need to remain different from the ‘host society’, but also convince the ‘host society’ that they have a right to be different. As Prime Minister Lee Hsien Loong said in an interview with the BBC, when asked what he would do ‘if the government of Britain were to make linkages between a trade deal and seeking guarantees about human rights, press freedoms, workers’ rights, demonstrators’ rights in [Singapore]’:

You look at the Americans. They don’t lack fervour in moral causes. They promote democracy, freedom of speech, women’s rights, gay rights, sometimes even transgender rights, but you don’t see them applying that universally across the world, with all their allies. Yes, they do it where the cost is low, and then you can take a high position. But you look at some of the most important oil producing countries in the world. Do they conform? Have they been pressured? You have to do business! The world is a diverse place. Nobody has a monopoly on virtue or wisdom. And unless we can accept that, and we prosper together, and cooperate together, accepting our differences – differences in values, differences in outlooks, differences even in what we see the goals of life to be – I think it becomes difficult (cited in BBC, 2017).

The fifth and last parallel between the classic middleman minority and the Singaporean state is an often-noticed aspect of both: namely, their educational achievements, in particular their shared dedication to a smaller set of ‘more difficult and rewarding fields, such as science, medicine, and law’ (Sowell, 2005b, 95). Among middleman minorities, the most obvious example of this is the outstanding academic performance of the Jews, who despite their small numbers have won more Nobel prizes than any other group, and who throughout history have been generally ‘over-represented among the leading figures in such fields as mathematics, the sciences, and philosophy’ (Sowell, 2005b, 109). The Jews, however, are by no means the only middleman minority to have distinguished themselves in this way, as scholars have noticed similar patterns among Asian-Americans (see Zhou & Lee, 2017), Nigerian-Americans (see Kitano, 1974; Stokes et al., 2015), and others.

According to Sowell, what explains this strong focus on education among middleman minorities is primarily that they have always been at risk of being expropriated by the majority groups among whom they live, and/or forced to flee. Due to ‘centuries of a history of being victims of spoliation and confiscation, as well as being forced by mob violence or official expulsion to flee and leave much of their wealth behind’, Sowell (2005b, 107–108) writes, middleman minorities have developed a ‘tendency to invest in highly mobile capital – intellectual skills being the ultimate in portability – rather than in fixtures that could not move’.

Similarly, because Singapore came into being as a nation after having separated from Malaysia, the nation’s most formative experience was literally one of being cut off from the land – having to survive on its own, without any natural resources. Like the classic middleman minority, therefore, Singapore’s leaders were forced to understand investments in education not just as a luxury to be paid for by the productive economy, but as a way ‘to develop Singapore’s only natural resource, its people’, as Lee Kuan Yew put it (cited in Yiannouka, 2015). To that end, the first generation of leaders in Singapore made sure that, as the country industrialised, large parts of the economic surplus were invested in education (Quah, 1977, 212–213). And like the classic middleman minority, they prioritised subjects such as mathematics, science, and engineering, as these were understood to give students ‘the knowledge and skills needed in an industrialising economy’ (Deng & Gopinathan, 2016, 454).

Today, Singapore’s education system consistently places at the top of international rankings, such as the OECD’s Programme for International Student Assessment (not surprisingly scoring the highest in mathematics). Its main university, Singapore National University, has for many years ranked as the top university in Asia, as well as in the top 10 universities in the world (QS World University Ranking, 2024). In addition, the state offers generous scholarships to talented students who wish to study abroad at prestigious universities. In return, these students must work a certain number of years for the state (two years for every year of study). As a result, Bellows (2009, 27) writes, ‘Elite in the Singapore context is concerned first with academic excellence and then job accomplishment […] All ministers hold university degrees. Two are medical doctors and two lawyers. Eighteen have earned degrees overseas’.

Another – less obvious, though in my view just as important – reason why middleman minorities and the MM state have both prioritised education is that education provides yet another avenue for instilling a sense of shared identity and belonging in the community. ‘As communities determined to maintain their own values and work ethic without allowing their children to be influenced by the very different values they often found in the societies around them’, Sowell (2005b, 92) writes, ‘middleman minorities have often had their own social institutions, including their own private schools’. Similarly, the Singaporean state understood early on that education was an important tool not just for teaching young people the skills needed to compete in the global economy, but also for teaching them the values of their own society. To that end, Singaporean students gather every morning in the courtyard to sing the national anthem and recite the national pledge; and in many classrooms, you will see the words ‘No one owes Singapore a living’ plastered on the walls in big letters. As Deng and Gopinathan (2016, 455) write:

[I]n response to heightened social tensions that accompanied massive socio-economic change, the government introduced civics and citizenship education to help students understand the purpose and importance of nation building, cultivate their civic responsibilities, and teach them to appreciate the desirable elements of both Eastern and Western traditions. The emphasis was on the responsibilities of citizenship – rather than citizen rights – and the promotion of a communitarian mind set.

In this way, education may be understood as not only an important tool of economic ascension, but more fundamentally as a mechanism for overcoming the main contradiction of the middleman minority strategy (parallel 4), as education serves to both integrate the community economically into the ‘host society’ and segregate them culturally and socially from it.

Conclusion

Based on the analysis presented in this article, we can see why Singapore is often portrayed as a neoliberal society, as Singaporean state ideology embodies many of the same values as neoliberal ideology – in particular the notions that ‘all you have is yourself’ and ‘no one owes you a living’. More importantly, however, we can also see why such a conceptualisation ultimately fails to provide a satisfactory account of Singapore as a polity. As a MM state, Singapore is neoliberal insofar as the global economic order into which the country integrates is neoliberal. But that is only one side of the MM state coin. The other side is the state’s insistence on remaining culturally segregated from the ‘host society’ while nevertheless integrating economically – meaning, to remain semi-authoritarian and communitarian in politics while embracing neoliberalism in economics. This, it seems, is precisely what Harvey (2005) observes when he writes that Singapore has ‘combined neoliberalism in the marketplace with draconian coercive and authoritarian state power’. The problem is that Harvey (and many with him) lacks the conceptual apparatus to account for the particular path that Singapore has chosen, as a neoliberal society might just as well – or indeed, more likely – combine economic neoliberalism with political liberalism, and not authoritarianism. Hence, if Singapore were to suddenly become a liberal democracy tomorrow, such a shift would not even register conceptually with Harvey, as Singapore would still qualify as neoliberal, only now without the awkward add-on that it (for some reason!) combines economic neoliberalism with political authoritarianism, and not liberalism.

I have proposed the concept of the MM state in an attempt to account for this apparent paradox of the Singaporean model as not a paradox at all, but a coherent state strategy: as a scaling up of the tactics of the classic middleman minority to the level of a nation-state. As such, the concept provides a meta-perspective that integrates two perspectives that have previously been in conflict: on the one hand, the perspective that sees Singapore’s economic success as a matter of its economic freedom and liberalism, and consequently sees its authoritarianism as a bug; on the other hand, the perspective that defines Singapore in terms of political authoritarianism, and consequently views the free-market story as a ‘myth’ (see Lim, 1983). Most importantly, the concept of the MM state views Singapore’s developmental path not as straying from an inevitable historical trajectory towards political liberalism, but as a natural extension of the past, as Singapore’s combination of economic liberalism with political authoritarianism represents a continuation and scaling up of the middleman minority culture that previously dominated the city.

Acknowledgements

I would like to thank Bjørn Enge Bertelssen, Knut Rio, Allen Chun, Elisabeth Schober, Don Kalb, Chua Beng Huat, Johan Gärdebo, Fathin Ungku, and Carl Truedsson for their helpful input at various stages of this manuscript. I would also like to extend my thanks to the two anonymous reviewers, whose helpful critiques and comments allowed me to improve and clarify my arguments, as well as to the editors at Asian Studies Review.

Disclosure Statement

No potential conflict of interest was reported by the author.