Asian Successes and Hamilton’s America
A similar story of transformation played out in Lee Kuan Yew’s Singapore, Park Chung-hee’s South Korea and Deng Xiaoping’s China. They used different approaches, but the end outcomes were the same: their people prospered. Singapore, a tiny island, is one of the richest nations today. South Korea is an economic machine. China is one of the biggest economic success stories in the past 50 years. And yet, at one time, they were all poor nations. Their leaders set their nations on irreversible paths to economic growth and prosperity. Their success was not a foregone conclusion. If anything, most nations struggle to lift people out of poverty. India failed, even as Singapore, South Korea and China succeeded.
Another remarkable success story from more than 200 years ago is America. While the contributions of George Washington, James Madison, Thomas Jefferson and Benjamin Franklin are more well-known, the leader who laid the foundation for its economic success was Alexander Hamilton, America’s first Treasury Secretary. His story is beautifully told in Ron Chernow’s book and its adaptation as a Broadway play (now available for viewing on Disney+Hotstar).
Fortune wrote about the importance of Hamilton’s contributions:
Hamilton, a New Yorker, thought differently: that liberty could spring from the city as well as the countryside, and that prosperous market economies needed big pushes to get themselves going. And so Hamilton pushed the United States into a pro-industrialization, high-tariff, pro-finance, big-infrastructure political economy, and that push set in motion a self-sustaining process.
…After Hamilton, the U.S. economy was different. It was a bet on manufacturing, technologies, infrastructure, commerce, corporations, finance, and government support of innovation. That turned out to be good for more than just farmers and the bosses and workers: it turned out to be good for the country as a whole.
Urban commercial prosperity was essential for a good and a free society. A desperately poor urban population could not be supporters of liberty. And a rural society—even a frugally prosperous one—that lacked a critical manufacturing capability could not defend itself against empire building by Britain, France, the Netherlands, or Spain.
Leaders can make nations. We have seen how the right decisions by leaders can transform their nations. At the same time, leaders can unmake nations. Wrong decisions can put their countries on a perilous path that perpetuates poverty and from where it becomes very difficult to rise. Independent India had the misfortune of exactly this kind of leadership.
Tomorrow: Part 8