Worldly Wisdom from Lee Kuan Yew: 9 Lessons You Can Learn from LKY

lessons from Lee Kuan Yew LKYFriends, today is a sad day.

One of the greatest men of the 20th (and 21st) century, a political genius, died today: Lee Kuan Yew.

He became 91 years old, and remained sharp as a tack to his last breath.

Who was Lee Kuan Yew?

Everyone knows about Nelson Mandela, Gandhi, or Deng Xiaoping. Few know (enough) about Lee Kuan Yew.

–LKY, as I will refer to him from now on, was the ‘founder’ of Singapore.

Most far-reaching changes in the world are accomplished by organizations, companies, or large groups of people. It is exceedingly rare for one man to single-handedly put a dent in the universe.

LKY did just that–he changed the world.

He took Singapore from a small, poor, port town (originally founded by the East India Company in 1819) to. . .

. . .an economy with one of the highest GDP per capita in the world, having outgrown its neighboring countries by a factor of 5,5-31,6!

GDP per capita (in $) comparison 2013: Singapore vs neighbor countries

  • Singapore: $55,182
  • Malaysia: $10,538
  • Thailand: $5,779
  • Indonesia: $3,475
  • Vietnam: $1,910
  • Burma: $1,740

Singapore has also become the country with the second highest number of entrepreneurs per capita (the U.S is number one).

Why am I interested in Lee Kuan Yew?

–I first found out about LKY through Charlie Munger, who advises that every serious student of success should make a thorough case study of LKY and and his governance over Singapore.

Munger hails Singapore as the greatest political (and economical) success in history, and says that LKY is to Singapore what Warren Buffett is to Berkshire Hathaway.

The work has been heavily concentrated in one mind, Warren Buffett. Sure, others have had input, but Berkshire enormously reflects the contributions of one great single mind.

This is not how we normally live: in a democracy, everyone takes turns. But if you really want a lot of wisdom, it’s better to concentrate decisions and process in one person.

It’s no accident that Singapore has a much better record, given where it started, than the United States. There, power was concentrated in one enormously talented person, Lee Kuan Yew, who was the Warren Buffett of Singapore.

–Charlie Munger, Berkshire’s Hathaway’s annual meeting in 2007

As Munger hints at, the best leaders are philosopher kings, and the best form of (governmental) rule is enlightened despotism.

LKY was a benevolent dictator–probably the best one since the times of Ancient Rome, under the successive rule of Nerva, Trajan, Hadrian, Antoninus Pius, and Marcus Aurelius.

China can thank Deng Xiaoping (who converted China from a backwater socialist nation into a flourishing capitalist society) for its rocket-like growth.

Deng Xiaoping, in turn, was friends with LKY–and ‘stole’ many of his great ideas from him. Therefore, indirectly, China owes a great deal of its success to the brilliant mind of LKY.

But if that is the best way of doing things, then why is it that so few countries and organizations are run that way?

–Because it is extraordinarily difficult. Here are a few reasons why:

  • 1) Most (political) leaders are too self-serving and power-hungry (and even if they don’t start out that way, the winner effect has a tendency to warp their brains over time). That may be what happened to Napoleon.
  • 2) Few people have the raw intelligence and rational ability required.
  • 3) How many people have the strength of character to give up their entire lives to building a corporation or a country?
  • 4) Most countries are too culturally and ideologically messed-up by popular opinion to accept the notion of a benevolent dictatorship.
  • 5) Most (larger) countries have too many vested interests of different sorts, and corruption already runs too deep.

9 Lessons in Wordly Wisdom to Learn from LKY

[Note: all quotes are from Lee Kuan Yew, unless stated otherwise.]

#1 The Importance of incentives

Putting the right incentives in place is THE single most important factor determining the long-term success of an organization, corporation, or a country. It is the leadership’s role to assume that people will game the system ruthlessly, and therefore make it as hard as humanly possible to do that.

Unlike many other countries–such as Sweden, where most politicians are incompetent–LKY, like Napoleon, Caesar, and the Founding Fathers, understood that government must be meritocratic.

Dumb people must be kept out of important positions. How can this be done?

Simple, just raise the incentives (money, status, power) and you will automatically attract the best individuals. The dumb ones will be kept out by virtue of their own incompetence.

singapore payment -- lessons from Lee Kuan yew LKY

Singapore (at #2 in the top) pays its politicians properly. By doing so they have been able to minimize corruption and attract the best individuals. Sorry about the outdated numbers — I couldn’t find a more recent image!

Singapore’s current Prime Minister, Lee Hsien Loong (LKY’s son) earns ca $3,9 M per year. That’s roughly what  6-7 of the biggest countries’ leaders get paid, combined.

Is that too much?

No.

Better to have a competent man–with integrity–than a half wit (like George Bush) or someone who is morally corrupt, and takes bribes (like Spiro Agnew).

LKY saw what had happened in countries like England and used it as a cautionary example:

In Britain, if you look at the First Class Honours list of Oxford or Cambridge and trace their careers, you will find that these people end up not in politics, but in banking, finance and the professions.

To attract the best people you must compensate them adequately. If you don’t, you can’t expect them not to use their power to make that money in some other, less ethical, way. That’s just human nature.

#2 The importance of prevention: Be ruthless in stomping out B.S

I think that Singapore’s stepping hard on things that will grow like cancer, is the correct way to govern a country.

–Charlie Munger

LKY, like Munger and many other of the world’s smartest people, understood the importance of prevention.

Mistakes should never have to be fixed, they should be prevented.

Most problems stem from incompetence or negative psychology (bad habits and lack of discipline), and as such they have a strong tendency to repeat themselves. . .

. . .especially on a countrywide level. It is nearly impossible to fix a problem once it has become culturally rooted.

Someone should have told the European and American politicians about this before the 2008 financial crisis. Oh wait, someone did. It was Warren Buffett, and no one listened.

The problem is that most people are not able to think long-term and deal with incremental change.

Instead, they make the mistake of allowing problems to grow like cancer, until they cannot be stopped. Only then does the media start reporting on it–in a not-so-constructive way, asking: “Who is to blame!?”

Playing the blame game is for children.

Grown-ups think in terms of prevention.

#3 The importance of public perception

Not only did LKY put in the right financial incentives, thereby attracting the most competent ministers, but he also increased the respect and status by which the Singaporean politicians and statesmen are treated with.

LKY set a strict policy of non-acceptance against satire, crude jokes, or caricatures of himself and the leadership:

If you keep on mocking your leader, poking fun at him, everyday, and he has no right to reply, it is very difficult for him to command your respect.

lky lessons

A leader who gets ridiculed and caricatured is not a feared leader, and. . .

#4 The most efficient leader is a feared leader

LKY was not a power-hungry megalomaniac. He was a ‘dictator’ by necessity, and he understood the importance that authority plays in ruling a country:

Between being loved and being feared, I have always believed Machiavelli was right. If nobody is afraid of me, I’m meaningless.

Intelligent, rational and hard-working people can govern themselves perfectly fine. But unfortunately, only a small amount of the world population fit that description.

Intelligent, rational and hard-working people can be reasoned with through arguments. But most people only listen to those who have authority (or entertainment value).

Hence, the leader must have authority.

The leader must also, out of necessity, incite fear into his opponents; so that he is able to devote himself wholeheartedly to ruling, and does not have to worry about being attacked or slandered.

I say something and I mean it. If you’re willing to cross swords with me you’re going to get stabbed. That’s that. . . If I think that it’s going to be necessary to do, and you set out to fight me, then we fight. But to avoid a fight I make quite sure that you understand that I will fight. Simple as that. I am not interested in being loved. What’s the profit in it?

Enemies, opposition, and fools must be squashed before they gain sufficient strength to become a threat (remember, prevention).

It’s not about being ‘right’ or ‘wrong’, ‘good’ or ‘evil’; it’s a matter of saving time, being efficient, and getting things done.

#5 Human beings are not equal–and never will be!

Only a person with a strong character can speak the truth, especially when his position in life depends on it. Fortunately, LKY was such an individual, and he dared to dish out ‘harsh truths’:

The human being is an unequal creature. This is a fact. . .

. . All great religions, all great movements, all great political ideologies start off saying ‘let’s make the human being as equal as possible’. In fact, he is NOT equal–never will be.

True to his word, in an interview during 2013 at Shell’s 120th anniversary, LKY was asked “what is the meaning of life?”, and answered the following:

Life is what you make of it. You’re dealt a pack of cards, your DNA is fixed by your mother and your father. . . Your job is to do the best of the cards you were dealt.

What can you do well? What can you not do well? What are you worst at?

If you ask me to make my living as an artist, I’ll starve. Because I just can’t draw. It wasn’t in my father or my mother or my great grandfathers and grandmothers.

But if you ask me to do mathematical questions, or to argue and point out, I’ll get by. Those are the cards I was dealt–and I make use of them.

Don’t try to do something you were not favored by nature to do.

Countries such as Sweden (where the notion of ‘equality’ has become some kind of strange religion for dumb people) would do well to learn this.

Play your hand to the best of your abilities.

#6  The importance of knowing what you don’t know: Staying inside your circle of competence

Success in all areas of life is based on understanding the underlying reality, and not deluding yourself about what you can do. It is often more important to know what you cannot do–your limitations–than knowing what you can do.

That also goes for running a company or a country:

Male reporter: Finland has produced Nokia, and Sweden IKEA… These are companies that seem to punch way above what the country’s physical size seems to suggest?

LKY: Alright, Sweden IKEA. . . Do we want to go into [retail and furniture]–have we got the wood and designers? The Swedes are good designers. Nokia was one of these flukes in history, from a communist–a controlled–society, overshadowed by the Soviet Union that they broke through.

But, they are about what? 7-8 million? Can they keep up with the competition from Korea? From Japan? Watch it in the long-term.

How many bright fellows have you got? With inventive and creative minds?

Female reporter: You are making us all very depressed [said semi-jokingly].

LKY: No. I am not depressed–I am realistic. I say: these are our capabilities, this is the competition we face, and given what we have–our assets and capabilities–we can still make a good living, provided that we are realistic.

Harsh Truths to Keep Singapore Going

Know thyself.

Don’t stray outside of your circle of competence. Keep to your core competence–or go under.

#7  The importance of genes and being rational in choosing a partner

LKY did not believe in love at first sight:

I don’t believe in love at first sight. I think it’s a grave mistake. You’re attracted by physical characteristics and you will regret it.

Does it sound like LKY might have been an emotionless and unhappy man?

Well, he wasn’t. He was happily married to his wife Kwa Geok Choo for 60 years. Without her help, it is unlikely that he would have been able to do what he did. She was a remarkable woman in her own right.

Kwa Geook Choo was the only student that was smarter than LKY in law school.

Kwa Geok Choo was the only student that was smarter than LKY in law school.

In his autobiography, The Singapore Story, LKY writes that he was confident that Geok Choo “could be a sole breadwinner and bring up the children”, thereby giving him an “insurance policy” so that he could enter politics, unimpeded by financial concerns or parental responsibilities.

LKY picked Kwa Geok Choo as his partner not just based on physical attraction, but based on her intelligence and apparent genetic potential:

There are many sons of doctors who have married doctors. Those who married spouses who are not as bright are tearing their hair out because their children can’t make it. I have lived long enough to see all this play out.

So when the graduate man does not want to marry a graduate woman, I tell him he’s a fool, stupid. You marry a non-graduate, you’re going to have problems, some children bright, some not bright. You’ll be tearing your hair out.

#8 Avoid the mainstream media, popular culture, and set your own course

I have come to believe that, so far as the foreign press is concerned, no news is good news.

LKY exercised rigorous restrictions on the mainstream media–in particular from the U.S–inside of Singapore.

We only allow the U.S papers into Singapore so that we can figure out what the U.S write about us. And what their perception of us is. We cannot allow them to assume a role in Singapore that the American media plays in America: That of invigilator, adversary, and inquisitor of the administration.

Obviously he did this for political reasons, but I would like to hope that he also did it out of benevolence: to protect people from idiotic ideas of popular culture, gossip, and shock-and-awe.

I have never been overconcerned or obsessed with opinion polls or popularity polls. I think a leader who is, is a weak leader.

In many countries, like the U.S, elections are based on polling and popular media. It’s called populism. Politics has become similar to entertainment TV and reality shows. LKY wouldn’t have that, and (rightly so) put his foot down.

Besides, opinion polls and focus groups are not to be trusted. People lie or answer under a pretense of political correctness.

#9 Be a life-long learner, copy the greatest ideas you can find, and be pragmatic in their implementation

If there was one formula for success, it was that we were constantly studying how to make things work, or how to make them work better. I was never a prisoner of any theory. What guided me were reason and reality. The acid test I applied to every theory or scheme was, would it work?

Charlie Munger explained how LKY made Singapore into such an attractive country to invest in:

He figured out what he wanted to attract, then he made the situation very user-friendly for those people.

‘Those people’ were wealthy investors, world leaders, and other big shots around the world. And what did they want? Stability.

To this end, LKY focused his efforts on making Singapore as safe as possible: Eliminating corruption, minimizing taxes, and weakening unions.

A few examples:

  • Drug-dealing is punishable by death.
  • Chewing gum has been banned.
  • Littering is fined with thousands of dollars, and if you do it three times you are forced to wear a badge that says “I am a litter lout

Two other tricky problems that LKY solved in a crafty way:

#1 Malaria:

There was a problem with malaria.

LKY found the root problem: a nearby swamp.

He drained the entire swamp, without regard for the protests of some squeamish environmentalists.

Who cares if some strange fish species goes extinct? Human lives are at stake.

#2 Ethnic diversity issues:

Singapore consists of something like 70 % Chinese people, 20 % Malai, and a bunch of other ethnicities. There is a tradition among the Chinese to consider themselves the ‘superior’ Singaporeans.

To foster stability, and do away with ethnical disputes, LKY passed a law prohibiting people to mention their ethnic backgrounds. Problem solved. Cost? A slight infringement on freedom of speech.

Worth it? Yes.

On pragmatism:

What are our priorities? First, the welfare, the survival of the people. Then, democratic norms and processes which from time to time we have to suspend.

On the necessity of making tough decisions:

I am often accused of interfering in the private lives of citizens. Yes, if I did not, had I not done that, we wouldn’t be here today. And I say without the slightest remorse, that we wouldn’t be here, we would not have made economic progress, if we had not intervened on very personal matters – who your neighbor is, how you live, the noise you make, how you spit, or what language you use. We decide what is right. Never mind what the people think.

On why democracy is problematic and short-sighted:

If I were in authority in Singapore indefinitely, without having to ask those who are governing whether they like what is being done, then I have not the slightest doubt that I could govern much more effectively in their own interests.

On why voting is problematic:

 One-man-one-vote is a most difficult form of government.. Results can be erratic.

On populism (another problem with voting):

Amazingly, throughout most of the contemporary Western world leaders in government require no special training or qualification. Many get elected because they sound and look good on television. The results have been unhappy for their voters.

On sincerity:

I always tried to be correct, not politically correct.

On India vs China:

Charlie Rose: Will India have an advantage over China, as some argue, because it’s a democracy and China is not?

LKY: Let me put it this way. If India was as well-organized as China is, it would go at a different speed. But it is going at the speed it is because it’s India. . . It’s not one nation, it’s many nations. It has 320 different languages, and 32 official languages. So, no Prime Minister in Deli can at any one time speak in a language and be understood throughout the country. You can do that in Beijing.

On the danger of complacency:

What I fear is complacency. When things always become better, people tend to want more for less work.

And:

The ones [in Singapore] under 30, who’ve just grown up in stability and growth year by year, I think they think that I’m selling them a line just to make them work harder–but they are wrong.

On autonomy of mind and internal motivation:

Life is not just eating, drinking, television and cinema…The human mind must be creative, must be self-generating; it cannot depend on just gadgets to amuse itself.

On not being a confused consumer:

“I’m not interested in changing either my suit or my car or whatever with every change in fashion. That’s irrelevant. I don’t judge myself or my friends by their fashions. Of course, I don’t approve of people who are sloppy and unnecessarily shabby or disheveled… But I’m not impressed by a $5,000 or $10,000 Armani suit.

On using one’s youth well:

By the time you are past 30 your character is formed. You will not change.

On pragmatism (and not believing in B.S):

Question: Do you believe in Feng Shui and astrology? A lot of Singaporeans suspect that you do.

LKY: I don’t believe in any of that rubbish. I am a pragmatic fellow.

On his reading habits:

Usually, I read biographies of interesting people. I am not attracted to novels – make-believe, or recreations of what people think life should be.

(Check out some good book recommendations here and here.)

On being slightly dyslexic:

I read more slowly, but I read it only once, and it sticks.

And:

I should’ve known something was wrong when I failed that speed-reading course, I mean, I am not stupid.

On meditation:

I started meditation about 1992 when my friend, who was speaker of Parliament, retired, and was dying of lung cancer…I found my breathing slows down and I think my heartbeat goes down and my blood pressure goes down. So, I use that as a kind of escape from stress.

On avoiding downward spirals due to poor sleep:

You know Shakespeare, ‘Give me men that sleep well of nights’. That is what he said. I think it right. Men who worry, you know, read all this, and they start shouting all this they get worried themselves, night time comes, they can’t sleep. Next morning they wake up, mind befuddled, wrong decisions, more trouble!

On the importance of free markets:

I believe Hayek was a very clear thinker and that he hit upon the eternal truth, explaining that the free market is necessary to get the economy right.

On inequality and genetics:

I started off believing all men were equal. I now know that’s the most unlikely thing ever to have been, because millions of years have passed over evolution, people have scattered across the face of this earth, been isolated from each other, developed independently, had different intermixtures between races, peoples, climates, soils… I didn’t start off with that knowledge. But by observation, reading, watching, arguing, asking, that is the conclusion I’ve come to.

The Man & His Ideas

On Israelis, Jews and genetics:

The Israelis are very smart… the rabbi in any Jewish society was often the most intelligent and well-read, most learned of all…the rabbi’s children are much sought-after by successful Jews to bring good genes into the family. That’s how they multiply, the bright ones multiply. That sums it up.

On trouble integrating Muslims:

I have to speak candidly to be of value, but I do not want to offend the Muslim community… I think we were progressing very nicely until the surge of Islam came, and if you asked me for my observations, the other communities have easier integration – friends, inter-marriages and so on – than Muslims… I would say, today, we can integrate all religions and races, except Islam.

On leaving a legacy:

What they think of me a generation after I’m dead will be determined by researchers who have PhDs, who write papers on me. So there will be lots of revisionism. I’ve lived long enough to realize that you might be idolized in life but reviled after you’re dead.

Reflecting on his life achievements:

“In the end what have I got? A successful Singapore. What have I given? My life.”

He paid the price.

He left a legacy behind and will not be forgotten:

Whoever governs Singapore must have that iron in him. Or give it up. This is not a game of cards. This is your life and mine. I’ve spent a whole lifetime building this and as long as I’m in charge, nobody is going to knock it down.

Not long ago, in an interview, LKY said that:

People believe that what has been achieved is always secure. I don’t believe that is so. I believe that once you have weak and ineffective government, the whole progress you have made will spiral downwards. But the majority of people believe it is secure for them.

Let us hope for Singapore’s sake, that LKY’s system–his legacy–turns out to be antifragile, and does not collapse like a house of cards, but only gets stronger with time.

Rest in peace Lee Kuan Yew.

-- lessons from Lee Kuan yew -- LKY

 


P.S

At the latest Berkshire Hathaway meeting, in April 1th 2015, Munger said this about LKY’s death:

I’m going to commit a bust somewhere of Lee Kuan Yew, and stick it somewhere important. That is the most important governmental leader, that is the most important nation-builder that ever existed in the history of the world. There is no other record equal to Lee Kuan Yew’s. Unbelievable achievement. . . . There’s never been a career like Lee Kuan Yew’s.

 

Resources on LKY

 

LKY autobiographies:

 

Further readings on LKY:

 

Best videos on LKY:

 

A short summary video

 

A funny video

Munger on LKY

 

My favorite political system, in terms of being adapted to its particular circumstances–successfully-is Singapore. I think Singapore is the single most successful governmental system that exists in the world. They’ve taken a small swamp from nowhere to a very credible place. They’re doing the Lord’s work in a number of very important ways. I’m sorry they’re bringing in derivatives trading–even heaven makes mistakes.

–Charlie Munger

Hard truths to keep Singapore going

 

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Comments

  1. Singaporean under 30 says

    Amazingly good read! Thanks for the article! I’ve been reading the article and its comments (and contributed a few replies myself) for the past hour or two.

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