Exposing Faux Capitalism

On October 22, 2009, Charlie Rose conducted one of the most impressive interviews with any political leader I have ever seen. Former Prime Minister of Singapore, Lee Kuan Yew, who transformed the country from third-world status in 1965, to one of the “Asian tigers” and leading port city in the world, by 1990. His intelligence, focus, communication skills, and, in my estimation, impeccable and accurate insight, show how he accomplished what he did. I believe the U.S., Europe, and people from all around the world would do well to heed his words.

The major world changes currently taking place, and the 300-year recovery of India and China:

LEE KUAN YEW: I see in Iraq and Afghanistan as distractions. That is not going to change the world whatever happens in Iran or Afghanistan, because the major changes that are taking place is the recovery of China, and to a lesser extent of India, places occupied three centuries ago before western colonization blanketed them.

Three centuries ago, they were, between the two of them, 60 percent of the world GDP, just the population and the production they put out.

On when China will catch up to the U.S. economically:

LEE KUAN YEW: Even in three decades it won’t reach its full strength. In three decades its per capita is still about one-third of America.

CHARLIE ROSE: It’s gross domestic product.

LEE KUAN YEW: For it to reach America’s standard of living and standard of technology will take more than 100 years.

On India compared to China:

LEE KUAN YEW: (INAUDIBLE) . if India were as well-organized as China, it will go at a different speed, but it’s going at the speed it is because it is India. It’s not one nation. It’s many nations. It has 320 different languages and 32 official languages.

So no prime minister in Delhi can at any one time speak in a language and be understand throughout the country. You can do that in Beijing.

On Japan’s future demographic and financial challenges:

LEE KUAN YEW: I think the Japanese need an overhaul.

CHARLIE ROSE: In terms of their political system?

LEE KUAN YEW: Yes, and in terms of their acceptance of immigrants. Their birth rate — their fertility rate is just slightly higher than ours. We’re 1.29 and they’re 1.30. They are shrinking.

But Japan does not want immigrants, so they’re stuck. Today they have 3.2 working persons to support one adult. In 2055, they’ll have 1.2 persons to support one adult.

On the Chinese mindset:

LEE KUAN YEW: For the Americans, you have got to cease to think in terms of the Chinese as they are today. The Chinese as they are today are people who have been suffering for a very long time, especially under Mao, and who feel that the world is cruel to them. And therefore they’re very edgy.

They are — if you talk to Chinese leaders now, those over 60, they are with Russian as their second language. In 20, 25 years time, they’re going to meet a generation who are now in the lower ranks who have been to America and Britain and Europe and will be English-speaking and have different models in their minds.

And they will know that they’re not going to be the sole power in the world. Not ever again, because this is a globalized world, and they know that they’re dependent on the world for their growth. The resources that…

The importance of technological development to drive economic and social development:

CHARLIE ROSE: Can you make an argument that a country who leads in technology and science, it will go a long way in terms of their place in the world?

LEE KUAN YEW: Yes, of course. That’s why I think the U.S. will still be a very powerful and considerable inventor and creator of new products.

On the continued essential importance of the U.S. in world affairs:

LEE KUAN YEW: I think the U.S. could be a benign stabilizer of the of the world order.

CHARLIE ROSE: But you also say with the United States, it has to realize most problems need an American participation in order to be solved.

LEE KUAN YEW: Yes, absolutely. Absolutely.

On the 21st century:

LEE KUAN YEW: Two things. First, that the 21st century will be a contest for supremacy in the Pacific because that’s where the growth will be. That’s where the bulk of the economic strength of the globe will come from.

If you do not hold your ground in the Pacific you cannot be a world leader. A world leader must hold his ground in the Pacific. That’s number one.

Number two, to hold ground in the Pacific, you must not let your fiscal deficits and dollar come to grief. If it comes to grief in the short term and there’s a run on the dollar for whatever reason, because of deficits are too big and the world — the financial community and the bankers and all the hedge funds and everybody come to a conclusion that you’re not going tackle these deficits and they begin to move their assets out, that’s real trouble.

What surprised him:

LEE KUAN YEW: That the impossible can happen. I never thought the Soviet Union would implode so easily, and I never thought the Chinese would abandon the communist system and move into the free market so readily. It was unthinkable 20 years ago.

Both have happened. The world has changed.

Who China is and where it’s going:

LEE KUAN YEW: No, you don’t have to encourage them. You just have to understand that they are — look, they don’t want to be an honorary member of the west, unlike Russia. They’re quite happy to be Chinese and to remain as such.

So when you tell them you ought to do this or you ought to do that, they say yes, thank you. And in the back of their minds, we have lasted 5,000 years. Have you?

(LAUGHTER)

The Beijing Olympics if you watch it, what was the message?

CHARLIE ROSE: We’re back.

LEE KUAN YEW: No — 5,000 years, and don’t forget, we invented all these things, and we’re going to go ahead in the next 5,000 years. It’s the only country where a language has survived 5,000 years, the only country by the present generation shares the same basic thinking as the past. And they’re very proud of it.

You read Hu Jintao’s speech on the 60th anniversary, translated on the web — what is it? We have 5,000 years of civilization. We’re going to get there.

And it’s a rousing speech. It may take us a long time, we have to work very hard. We will do it. So you don’t have to encourage them.

The imperative social responsibility of a leading world power:

What you have to get them to understand is with it goes responsibility. Hungry Africans, hungry, sick other people. This is a global problem. You can’t just take copper and gold and take it. You have to have a responsibility for the people’s whose copper and gold you’re mining. It goes with the job, and they will have to learn that.

I think they are already beginning to learn that, so they’re giving something back.