Is Singapore A Socialist Or Capitalist Country?

Singapore is a small island state that is located in Southeast Asia. This small country is also a place that continues to show the world how socialism and capitalism can mix.

TOP 10 ATTRACTIONS IN SINGAPORE | S...
TOP 10 ATTRACTIONS IN SINGAPORE | Scott and Yanling

Singapore has characteristics of both a socialist and capitalist country, so they have a mixed economic system. They are also ranked number one in the world for freedom. Singapore has been an extremely prosperous country that is not just considered to be economically free but also very wealthy.

Singapore Ranked No. 1 In World For Freedom

Singapore is considered a mixed economy, which shows both capitalist and socialist characteristics in their economy.

Singapore is also ranked no 1 in the world for freedom by the Heritage Foundation’s Index of Economic Freedom. In comparison, the United States ranks 25th for freedom.

In looking at the freedom index, the heritage foundation will look at several things, which include: 

  • Rule of Law – The rule of law includes property rights, judicial effectiveness, and government integrity.
  • Government Size – The government size factor includes tax burden, government spending, and fiscal health.
  • Regulatory Efficiency – The regulatory efficiency factors include business freedom, labor freedom, and monetary freedom.
  • Open Markets – Open market factors include trade freedom, investment freedom, and financial freedom.

According to the Heritage Foundations Index of Economic Freedom, Singapore ranks much higher than the United States in all these factors.

Recently Singapore was ranked No 2 after Hong Kong, but with the many issues Hong Kong has been having, Hong Kong has slipped off the rankings, while this tiny island of Singapore has proudly taken the No. 1 spot.

Behind Singapore, ranking out of the top ten for freedom by the Heritage Foundation Index of Economic Freedom, is Switzerland, Ireland, New Zealand, Luxembourg, Taiwan, and Estonia. America did not make the top 10, much less the top 20 nations, for economic freedom.

This is surprising since the United States, like Singapore, is considered a mixed economic system and shows characteristics of both capitalism and socialism. Yet, Singapore consistently ranks higher than the United States for financial freedom and how well they handle global trade and other issues.

Many people feel like Singapore has shown the world that you can have a mixed economy between Socialism and Capitalism and have your freedoms not just survive but also thrive. That is what this tiny nation of Singapore has quietly been doing for years.

Singapore Has A Mixed Economic System

The Heritage rankings in freedom do not mean Singapore is a fully Capitalist country; many people feel capitalism means complete freedom but that is not always true. Like many places around the world, including the United States, Singapore is a mixed economy.

Having a mixed economy is defined as the following by Investopedia:

“A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.”

INVESTOPEDIA

Singapore is a relatively small country with just about five million people. This island nation is unique because it has a tiny landmass and few natural resources.

Yet today, it is one of the wealthiest countries in the world and is a center for global trade’ this makes Singapore a unique island nation.

Singapore’s Mix Between Capitalism And Socialism

If you look at Singapore in terms of Capitalism and Socialism, it is a country that many do not consider to have many capitalist ideals regarding land ownership.

As was quoted in a British online magazine called Unheard, they said this about Singapore and its land ownership.

“The Singaporean state owns 90 percent of the country’s land. Remarkably, this level of ownership was not present from the beginning. In 1949, the state owned just 31 percent of the country’s land. It got up to 90 percent land ownership through decades of forced sales, or what people in the US call eminent domain.

“The Singaporean state does not merely own the land. They directly develop it, especially for residential purposes. Over 80 percent of Singapore’s population lives in housing constructed by the country’s public housing agency HDB.

Unherd

The fact that the state owns so much of the land in Singapore automatically means that Singapore cannot be defined as a pure capitalist society and would have to be called a country with characteristics of socialism.

Yet Singapore is also considered one of the most accessible countries globally. This shows that having capitalism and socialism or a mixed economy does not mean a country is free; in fact, Singapore has shown us quite the opposite.

The government owns a lot of stakes and shares in many of Singapore’s major businesses. The Unheard magazine also pointed this out about the Singapore government and their investments in the business sector of this island nation:

“…there are the state-owned enterprises, which they euphemistically call Government-linked Companies (GLCs). Through its sovereign wealth fund Temasek, the Singaporean government owns a large share (20% or more) of 20 companies (2012 figure). Together these companies make up 37% of the market capitalization of the Singaporean stock market.”

Unherd

The government owns not just the land but also many enterprises; Singapore is an economy mixed between socialism and capitalism.

The Case Of Singapore’s Economy Explained

The mix between capitalism and socialism does not mean there is a lack of freedom for Singaporean citizens. Singapore has shown us that quite the opposite is true.

The People’s Policy Project talks about what they call the ”case of Singapore” when they say:

The case of Singapore … raises an interesting question about what it is people care about when it comes to “capitalism” and “socialism.” Is capitalism primarily about markets or private ownership? Relatedly, is socialism primarily about ending markets or promoting collective ownership? Often these things are bundled together, but they are logically and practically separable. Singapore (and Norway, among others) shows that it is quite possible to collectively own the means of production while also using price systems to assist in the allocation of productive factors. This is what market socialists have been saying for a hundred years.

People’s POlicy Project

We can see that the case of Singapore shows us that a country can have a mixed economy and be successful. They can even have what many calls a market socialist nation that will look to own mean of production for the public good while at the same time allowing a high degree of personal freedom. Singapore has shown the world this is possible.

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Anita L Hummel

Hi, I live in Hanoi, Vietnam but spend time traveling the region. I love to share with you things I see and learn through my travels.

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Is Singapore A Socialist Or Capitalist Country?