An independent Singapore was never given a chance – Britain should learn from it

An independent Singapore was never given a chance – Britain should learn from it

In the National Museum of Singapore they play footage of the country’s first democratically elected leader, Lee Kuan Yew, breaking down in tears following the island’s decision to breakaway from their much larger neighbour, Malaysia, in 1965.

One of the reasons given for this very public display of dolour was that Singapore was just too small. It needed its larger neighbour to help navigate the choppy currents of world trade. In the end, one key factor in the breakup of the two countries was the protectionist tendencies of the larger nation rubbing up against the free-trading spirit of the Singaporeans.

In 1965, Malaysia’s GDP per capita was 310 USD; Singapore’s was 516 USD. Britain’s was 1850 USD.

But the city-state’s free-trading past was established nearly 150 years before its secession from Malaysia. When Sir Stamford Raffles landed in Singapore in 1819, he wanted to put in place a tariff-free port in order to compete against established Dutch and Portuguese posts in the region. Three decades later when the Governor General of British India arrived, a monument was erected, which,

‘emphatically recognised the wisdom of liberating commerce from all restraints, under which enlightened policy [Singapore] has rapidly attained its present rank… and with which its future prosperity must ever be identified.’

What, then, was the source of anguish for Lee Kuan Yew’s emotional public meltdown? Surely Singapore could simply rediscover its voracious free-trading past? What now is the source of today’s anguish and obstinacy among those Remainers who refuse to be bold and rediscover old ways in a new future? Surely a country like Britain can look to the future with confidence and optimism?

In my mind there are clear policy decisions that will ensure we can be confident about our future, such as wholeheartedly embracing free-trade; others remain consumed by fear, and are not seriously engaging with the real opportunities Brexit provides.

Psychology often provides some answers to these divisions, and in particular the Remainer recalcitrance, since the referendum.

Daniel Kahneman’s magisterial book, Thinking, Fast and Slow, is a tour de force of the way in which humans make decisions, and how we can improve the quality of our decision-making process.

There are two systems: 1 and 2. System 1 is quick and involuntary; system 2 is slower, thoughtful, and cerebral. The truth is that we all like to associate ourselves with system 2 – only, as Kahnamen says, system 1 is the ‘hero’ of the book.

The reason for this is that system 2 is lazy. Moreover, system 2 mostly validates and rationalises what system 1 has already produced (our initial thoughts). We like to think of ourselves as rational Kantian agents, yet all our brain is ever really doing is giving coherence to our gut instincts. David Hume might have got there before anyone else over 200-hundred years ago, but it has only been in recent decades that this theory has become uncontroversial.

Coherence is absolutely key. Our mind is looking for a coherent story when it is making complicated decisions, rather than vigorously pursuing the best possible outcomes. This is a consequence of system 2. It’s loss averse, and so it exaggerates risk. Moreover, when system 2 is forced to work harder it merely creates more detailed scenarios of its already preconceived opinion, which attempts to make the original position look more plausible and more valid. Kahneman says,

‘the illusion of valid predication remains intact, a fact that is exploited by people whose business is prediction – not only financial experts, but pundits in business and politics, too.’

Almost all respected forecasting institutions have been wrong about how the UK’s economy would perform post-referendum. Indeed, many of the same institutions continue to provide the Remain camp with an illusion of validity.

Kahneman’s theory of what you see is all there is (WYSIATI) explains well why Remainers refuse to countenance life outside the single market and customs union. Membership of the EU is what we see; our status outside the EU still remains subject of negotiation and is necessarily uncertain.

Therefore: no need to look at technological advances around the globe which have made border-crossing freight pass through customs in under a minute – we have the EU; no need to have unilateral zero-tariffs post-Brexit in order to make food, clothing and footwear cheaper – we have the EU; no need regulate our businesses in the way we want to – we have the EU. WYSIATI.

At what point do those who are resisting the government’s settled position of leaving the customs union and single market start to think, like the Singaporeans, how do we make the best of it? When will the Remain system 2 override system 1, and side with the British public?

We have 150 years of data showing that free-trade works, this is evidence – not forecast. Not graphs which wrongly predict the future, and intensify and entrench people’s worse fears about leaving the EU. The presentation of forecast as fact ought to alarm everyone.

Importantly, Kahnamen says that ‘worthless information should not be treated differently from a complete lack of information,’ but, ‘system 1 will automatically process the information as if it were true.’

Forecasting has been completely wrong since the referendum, so to that end surely we must not continue to add so much weight to the risks posed by leaving the single market and customs union. But we do. The risks were well-played out during the referendum, so the vote necessarily factored in those risks – which have not materialised. Again, when will the Remain system 2 override system 1, and side with the British public?

The public factored in the risks, and believes that experts were overweighting them. Experts were wrong; the public was right. This is because the public, ‘has a richer conception of risks than experts do,’ as psychologist Paul Slovic has shown during his career.

Kahneman says that no one knows more about the peculiarities of human judgment of risk than Slovic. Both Slovic and Kahneman agree that the reason the public is better at calculating risk is because, the individual, or expert, ‘who acquires more knowledge develops an enhanced illusion of her skill, and becomes unrealistically overconfident.’

What is clear is that democracy works. People know better. Politicians ought to be thinking of maximizing the benefits, not using their system 2 to thwart it. Using their system 2 to think of innovative ways to leave the customs union and single market.

So, psychology may explain some of the reasons why our politics is hopelessly divided over Brexit. But free-trade and independence help explain why Malaysia’s GDP per capita is now 11,000 USD, and Singapore’s is 52,600 USD.

Lee Kuan Yew gives us hope. Despite thinking Singaporean secession was going to be disastrous, he embraced the independence and made the island an Asian Tiger.

And the UK’s GDP per capita today: 41,600 USD. To paraphrase Kipling, Brexit is ours to loose or bar:


Hail, mother! East and West must seek my aid
Ere the spent gear may dare the ports afar.
The second doorway of the world’s trade
Is mine to loose or bar

– Rudyard Kipling