Industrial restructuring and the reconstitution of class relations in Singapore

Industrial restructuring and the reconstitution of class relations in Singapore

Yun, A H

While the role of the state has been central to the development of Singaporean capitalism, state policies have gone through different transformations as the relationship of Singapore with other states and with multi-national capital changed. Moreover, a number of problems and social divisions have emerged in the process. In contrast to theorists who have seen only state dominance, the potential that these developments have for breaking the hegemony of the state over large sections of the population, in both middle and working classes, is illustrated and analysed.


DESPITE A WESTERN INTELLECTUAL RETREAT from classical Marxist theory and the disillusionment of many radicals, it is heartening to note that doubts cast on the analytical value of classical Marxist canon (of which class analysis of social change remains a major component) have recently given way to robust debates and energetic attempts to rethink/consolidate Marxist analysis (Carter, 1995; Ahmad, 1994; Berberoglu, 1995). By contrast, decades of growing affluence have gone by without reducing/dispelling the potency of Marxist analysis, judging from the continued enforcement of nasty prohibitions against left wing thinking in staunchly anti-communist regimes of developing Asia.1 Paradoxically, only a handful of works on class analysis can be uncovered in the growing genre of NIE studies now largely constituted by `how to do it manuals’ in wild variety (World Bank, 1993), and works based broadly on the post-Marxist approach of the state developmentalist school (Hewison et al, 1993). While class analysis is implicitly recognized and considered incidental by the statist school, their key concerns deal with the politics of economic transformation, to include the classical thesis of economic development-democratisation, focusing on problematising state autonomy and more specifically, looking at middle class pressures on the perpetuation of authoritarian rule (Koo,1991).

State developmentalists have done a service in drawing our attention to the significance of state control (which is after all, empirically obvious for all to see and proudly touted as Confucianist). But in the long term, detailed unravelling of the power apparatus sometimes read like a prolonged whinge about weapons of coercion and changing forms of control and state gimmickry, quite disarticulated from questions of the basic structure of ownership and production relations central to capitalist accumulation (Rodan, 1993; Tremewan, 1994). Not only is such a view far too pessimistic, it simply assumes that the interests of the powerful, and all pervasive, are automatically secured. It also neglects the struggles that have gone on throughout the development process, and so tends to reify power relations as somehow beyond the control of human agency. By way of contrast, a Marxist analysis of classes, while granting relevance to relations of authority and subordination in the determination of class, will have as its major reference point the connection of these relationships to ownership of the means of production. This material base and the production of, and conflict over, surplus generate fundamental issues and processes of social transformation. By focusing on the movement of capitalism, Marxist analysis is more dynamic, showing the changing forms taken by capital-labour relations and their role in social transformation.

This paper hopes to make a small contribution in this direction. Asia’s dynamic economic growth has given rise to an urgent need to ask from which standpoint one should critically evaluate the enormous transformations that have taken place. A ‘strong’ Marxist version of class theory (Holton and Turner, 1994) investigating the production and appropriation of surplus would allow for an assessment that can begin to challenge some misleading claims arising from selective use of development statistics. In emphasizing particular processes, in and through which surplus labour is performed and appropriated, the Marxist approach, compared to stratification and occupational studies (Quah, 1991), provides a focus for evaluating crises in the dialectics of subordination/insubordination (Holloway,1995) and the capacity for collective political action. By presenting an empirical analysis of classes in an apparently very successful NIE, Singapore, it is hoped this work can contribute to the small but growing number of discerning and revealing accounts of NIE development (Bello and Rosenfeld, 1990; Tanter and Young, 1990).

Historical Context

Singapore’s strategic location at the heart of Southeast Asia was the main factor inspiring its establishment as a British trading post in 1819. For these reasons, trade-the China trade and the spice trade, tin and rubber, and more recently, petroleum was and has always been a key pillar supporting the economy. The gains from these activities must have been enormous, judging from British sources showing Malaya-Singapore as the largest contributors to the imperial war chest (Li, 1995). The mercantile nature of Singapore’s economy was thus explicit from the start, enhanced by Singapore’s role as regional headquarters of British military force. Weak attempts were made in the 1930s to initiate the industrialization process as a counterweight to trade but these efforts came to naught, ensuring that Singapore remained a captive market for British manufactures under the Imperial Preference System (Wong, 1978).

The authoritarian state of modern Singapore represents the culmination of a violent and brutal process of capitalist penetration starting with British colonial rule. Building a complex apparatus of control made incontrovertible sense from gunboat diplomacy to initiate capitalist production and consumption, to a sophisticated web of counterinsurgency measures to prevent the overturning of the capitalist mode (Stenson, 1970; Short,1975). Despite the vast technological gap between communist/nationalist dissidents and the colonial state apparatus, war continued to be a condition of existence under colonial oppression. Nonetheless, World War II brought great changes. It acted as a medium for modernization and provided the conditions for national awakening. It gave birth to the national collective working class and shaped its capacity to organise mass revolts. Additionally, the working class was galvanised by the anti-Japanese war in China which lent the left wing revolt its moral and chauvinistic flavour. Small independent producers, long antagonistic to dominance of powerful British companies, became their natural allies.

The middle class, by contrast, were culturally affiliated to the state, located, as they were, mostly within the state apparatus and the modern sector of large foreign firms which were primarily British owned (Puthucheary, 1960). Imbued with belief in the supremacy of reason and the Western intellectual legacy of the Enlightenment, the English-educated middle class remained convinced that building a modern society would entail reining in the less educated, unruly masses and independent producers. The development of Singapore’s authoritarian state could in part be explained by what Hill termed the bourgeois aim to create ‘a new pattern of social discipline’ (1958: 231). Opting politically, culturally and economically for the British model of development almost guaranteed them British support when the reins of power were transferred to locals in 1965.

The Transition to Industrial Capitalism

Ever since its establishment, the volatility of Singapore’s makler economy (overdevelopment of market/intermediary: Lash and Urry, 1991) notwithstanding, its strategic position had enabled it to provide sustenance to hordes of poverty stricken immigrants converging from China, India and the Southeast Asia region. The aftermath of World War II, however, saw Singapore’s makler economy in danger of shuddering to a sudden halt. The American hegemonic project to build Southeast Asia as a supportive hinterland for the rebuilding of Japan, and the destabilization of colonial regimes in the region, represent two main ingredients forcing an urgent need for massive restructuring of the economy. The nationalist ambitions of the surrounding region were threatening Singapore’s historic role as middleman serving this vast, rich and sprawling hinterland. More to the point, confrontation with Indonesia (1963-65), ethnic rioting (1964), Singapore’s ejection from the Malaysian Federation (1965), and high unemployment, exaggerated further by withdrawal of British military base at around the same time, all combined to force cultivation of a new basis for making a living.

Instead of siphoning off the flows of surplus produced in the surrounding hinterland and passing through its borders, Singapore had now to learn to immobilize capital (Holloway, 1994: 33) for a longer period in order to create surplus within its own borders. In this bid to position itself as a production centre, it chose to rely on large-scale foreign capital. Some economists have claimed that the enormity of the task of acquiring investments huge enough to create 80,000 jobs to stave off immediate social unrest, combined with a total absence of an industrial tradition, meant that there was no alternative but to rely on self-financing foreign capital ie. foreign direct investments (Lee, 1973; Lee, 1995a: 58). As it turned out, the choice of strategy was a fortuitous one due to the coalescence of particular historical circumstances. The maturing of the American economy and general worldwide decline in the rate of profit (Hill,1979) had fuelled investment flows into Asia driven by sympathetic US trade and fiscal policies (Hersh, 1993). It is no mere coincidence that frontline countries, which acted as instruments in the war to contain Russian/Chinese influence, today collectively form the Asian miracle economies. In Singapore, the push to industrial transformation was underpinned by US multinationals in the oil and electronic sectors. Industrial take off was speeded up by the timely occurrence of the Vietnam war, just as the Japanese post war recovery drew strength from the demands of the Korean war. Singapore was also fortunate in that it faced little competition as foreign direct investment (FDI) was a burning ideological issue for most developing countries at that time. Foreign investments were regarded as a threat to their sovereignty. The remarkable ‘success’ of the strategy for Singapore was indicated by a record jump in productive activities and signalled an upward march in real GDP growth figures from a mere 7.1 per cent between 1961-67 to 13 per cent over 1967-1973. (See Table 1 for breakdown of sectors.)

Contemporary Industrial Restructuring

Three decades on since political independence, Singapore’s economy has evolved at an astonishing speed that averaged more than 8-9 per cent per annum. A rich array of buoyant statistics-such as the World Bank ranking as the 9th richest people in the world (Daily Mail 8/1/95) earning an average 13,122 per annum with 87 per cent home ownership, 31 per cent car ownership, 95 per cent with phone access, 81 per cent with washing machines and 75 per cent videocassette recorders -has been touted to remind people how fortunate they are. More to the point, it is essential to note that basic gains have indeed been widespread, as underlined by more socially relevant statistics like infant mortality rate of 4 per 1000 live births which is even better than that attained by the EC. Propelled by the dynamism of the region, Singapore’s economy will expand considerably faster than the two to three per cent a year global average over the next few years.

Unfortunately for Singapore, countries around the region, faced with diminishing returns after a decade of import substitution, started deregulating their economies. In consequence, competition for foreign direct investment had started to intensify. Restructuring in the US, followed by Europe, had also begun fuelling a parallel process in the region. Subsidiaries had to merge, down-size and/or relocate to cheaper sites. Increasingly, by 1990, as manufacturing activities came under heightened pressure from declining comparative cost disadvantage, Singapore found itself reassuming its role as middleman as the rest of Asia experienced huge investment inflows (encouraged by the stronger yen) and exploding market conditions. Comparative growth rates show this emerging trend will likely accentuate over the years, boosted by heady real estate speculation. Manufacturing’s contribution to GDP which started at a low 11.9 per cent in 1960 quickly peaked in the 1970s. In contrast, the financial sector, while having started from a lower level of 7.1 per cent in 1960, caught up with manufacturing by the 1980s and is now steaming ahead with diversification of firms’ functions fed by the region’s booming economies. Today, despite state insistence to boost the growth of manufacturing, high land prices and shortage of labour have both acted to drag down performance. The social impact of this transformation of the industrial structure is yet unclear.

With the recession of 1985, Singapore’s industrial capitalism reached a turning point. When pitted against the agile world of innovation and international competition, the ‘grafted’, superficial industrial sector failed the test. Whereas between 1981-88 capital outflow had stabilised around $1,677.7 to $2,993.9 million, in 1989 it registered a huge jump to $5,288.7 million and thence to $7,473.8 million in 1990 (Singapore’s Investment Abroad, various years). These figures are indicative not only of the fall in the rate of profit. The directions of these flows, chiefly to Malaysia, tell us that part of the reason why profitability became a problem was precisely because other countries in the region have shaped themselves up to become more `investor-friendly’.

Particularly disturbing was the suddenness and accelerated high volume of these out-flows, meaning that multi-national corporations (MNCs) were not moving out alone but tagging along their suppliers. Ground level observations disclose that, due to the high dependency of suppliers on primary customers, staying behind would lead to such drastic loss in business as to threaten the survival of these mostly locallyowned small to medium sized firms. Besides, restructuring of MNCs in source countries has also resulted in similar moves taken by their local subsidiaries: mergers, acquisitions, downsizing (sometimes even despite healthy profits shown by their local operations), re-engineering and even downright closure, have harmed all levels of the workforce and signal a new era of job insecurity, work intensification, and costly lifetime retraining to avert obsolescence. The state and the National Trade Union Congress (NTUC) have issued constant reminders to workers that job cuts will become more extensive in the future.

Industrial capitalism is currently undergoing a remarkable process of transformation. New investments corralled in by attractive incentives (more precisely, `welfare schemes’ for companies) are highly capital intensive with minimal labour inputs. Instead of manufacturing, they are now more concerned with provision of industrial services. Though industrial growth is still spurred by the petroleum and electronics sectors, there is drastic recomposition of subsectors within. Most importantly is the spiralling demand for educated labour which, because it is in such short supply in Singapore (when compared to its NIE competitors), has caused wages to increase year after year. Hence the state’s frenetic efforts to democratise education and begin addressing problems faced by children of the poor.

The state in Singapore has one major objective in the long haul-to maintain its territory as the world’s premier profit centre. The most easily available and immediately successful strategy was to adhere to the new Darwinism of restructuring towards the lean and the mean. The result is the increase in labour regulation and discipline, so well chronicled in Anantaraman (1990). Labour disciplinary techniques include executive control over key issues in industrial relations: wage setting by a tripartite body, the National Wages Council; general state ‘direction’ of the NTUC; manipulation of labour supply through detailed regulation of immigration policies; and most crucially, the threat of detention without trial under the ISA (Internal Security Act). Of the recurrent government expenditure, defence, justice and police absorb the largest share (Yearbook of Statistics, various years). Unfortunately, chroniclers of state repression have failed to link the rise of an all powerful state to the emergence of neofascism as a response to a new wave of long term, large scale capitalist development (Petras, 1981).

The bases of accumulation diversify and deepen

Against the backdrop of serious labour shortfalls starting from early 1970s and becoming endemic with time, initial steps were taken toward restructuring the economy by shifting from absolute to relative surplus labour extraction, even to the extent of instituting a wage correction policy from 1979-81, which, unfortunately, aggravated the effects of the recession brought on by the oil shock. In any case, the recession of 197475, followed by the 1985/86 downturn, brought quite momentous consequences (Low et al,1993). It revealed starkly the folly of overdependence on MNCs which during a crisis quickly shed labour without hesitation (eg. over 60,000 retrenched in 1985) while local companies at the same time created 20,000 jobs. The recession also aroused greater efforts to restructure in order to shore sagging profit figures, for the rate of return had come increasingly under threat due to `rising business costs’. Part of this decline could be attributed to labour’s capacity to push to improve their lot. However, despite a whole range of very generous incentives, industry was slow on the uptake until the second half of the 1980s: so much for the talk on state-led development.

In the sphere of industrial relations, maintaining competitiveness through productivity-linked wage increments, reduced range of salary scales, and cuts in benefits (eg. retrenchment and medical benefits) are touted as key to survival. Other reforms to make Singapore more competitive and investor-friendly include reduction of the base wage and the institution of a flexi-wage system, the reform of shift benefits and retirement age,and improved provisions for parttime work. The aim is to cut accumulated costs (which actually represent workers’ right to employment and pay security) and forestall declining local labour supply. Thus has the state mediated between capital and labour to temper the steady rise in living standards. On the other hand, uprooting workers and scattering them into new job positions has thrown union membership into disarray, thus hurting the state goal to embrace workers under the corporatist umbrella, the better to mobilize them.

While no effort has been spared to keep costs down for the reproduction of capital, the same cannot be said for the cost of reproducing labour. Despite state assurance that inflation is below two per cent, this constitutes the main worry of Singaporeans. Savings as a percentage of GNP in Singapore are ranked third after Japan and Switzerland. Yet, the level of saving of the working class is dismal. A 1992 study of metal workers shows that forty-four per cent have no savings (SILS, 1992). Tragically, the cost of living increase has been partially offset by the host of cheap services provided by large numbers of low wage immigrant labour like maids, cleaners and construction workers. The levy on employers of foreign workers extracted by the state is considerable (more than $1 billion annually, with the rate per month per worker varying, depending on industry and size of foreign labour force used), and ranges roughly between $250-$450 per worker per month (Investor’s Guide to the Economic Climate of Singapore, 1995). This has resulted in the build up of a considerable surplus which then allowed the state to be more generous to its own national constituents who benefit from the multiplicity of schemes put up to assist them. The presence of foreigners however has also put a damper on spiralling wage rises and perhaps further increases in the standard of living that would have occurred given the stunning performance of the economy.

Up until recently, much of the state’s legitimacy had come from the ability to deliver economic gains. Yet today, amid unmistakable signs of continued growth and prosperity, votes for the ruling party continued their downward climb. Not surprisingly, incredulous political leaders expressed amazement when a recent survey showed half those polled felt their lives had not become better over the past five years (Straits Times Weekly 18/2/95: 1). Lamented the Deputy Prime Minister (DPM), `This finding was amazing. It ran counter to the fact that the country had experienced unprecedented high growth in the past few years which had benefited all segments of society’.2 Perhaps these results are not that surprising. For in the same breath, the DPM had outlined the long term issues facing the nation-ensuring social cohesion, keeping the nation’s vigour and handling high expectations. If all had benefitted like one big family, problems of social cohesion and alienation would have been minimized. In fact, the UNDP’s Human Development Report (1993) ranked Singapore 43 (on the HDI-Human Development Index), a position far behind its GNP ranking of 26. Oil rich feudal societies achieved a similar pattern of disparity (Brunei 44:19; Qutar 55:22; Kuwait 43:26; Bahrain 58:32) Not surprisingly, former socialist countries outpaced Singapore on HDI, achieving a converse pattern of human development ranking far in advance of their GNP attainment (Czechoslovakia 26:49; Hungary 28:52; Lithuania 29:51; Estonia 34:42). In contrast, Singapore’s NIE competitors boast more balanced ratios between HDI and GNP. Hong Kong had a HDI,GNP ratio of 24:24, and S. Korea 33:37. The HDI performance of both countries has outpaced that of Singapore. Moreover, Singapore’s expenditure on education as a percentage of public expenditure (11.5%) is lower than that for Korea (22.4%) and Hong Kong (15.9%) for the period 1988-90. And even then, Singapore spends the largest proportion on higher education (31%) when compared to Hong Kong (25%) and Korea (7%); and the lowest percentage on primary plus secondary education (65%) compared to Hong Kong’s 70% and Korea’s 78%.3

This fossilised elitist and hierarchy-bound approach to human resource development could erode its competitive advantage. The model company in the fast paced markets of the 1990s, we are informed, `is irreverent about hierarchy and it even tolerates some organizational unruliness’ (Business Week 12/12/94: 47). The model post-job worker is selfdirected, empowerable and vendor minded, thinking of her/himself as an independent business person (Fortune September, 1994: 49).

Economic realism has forced a change in tack such that the Strategic Economic Plan now even recommends that ‘a partnership model may be more viable than a purely communitarian model’ (1991: 36). In the same vein, Minister of Education Y.S. Lee announced recently that `Singapore’s education system will move away from the current emphasis on mastery of contents to one that will give students more opportunities to acquire thinking and learning skills’ (Straits Times 1/6/95). The assumption now is that everyone of its citizens can think and thus can be trained to be innovative. The logical conclusion that will follow can only be the enhancement of fledgling democracy.

Classes in Singapore

Class refers to social relations rooted in the social organisation of production in which production of commodities necessarily entails a relationship between the class who own and control, and wage workers who are forced to the labour market in order to survive (Carter, 1995). Sharpening competition in contemporary world capitalism appears to have transformed the nature and composition of labour and capital (Sayer and Walker, 1992; Heydebrand, 1989). The hierarchical structure of capitalism has, however, persisted. A small number of capitalists are still drawing their surplus from the substantial band of dependent waged workers. Consequently, despite coercive measures curbing institutionalized forms of struggle, the working class continues to engage in struggle to defend and advance its interest despite setbacks (Piven and Cloward, 1970).

As well as national and transnational capitalists, and leading state officials who identify with them, on the one hand, and a gendered and ethnically divided workforce on the other, significance is also given here to the rise of the new middle class. The sheer growth in the size and spatial dispersion of companies has given rise to the engagement of large numbers of managerial personnel to help in the surveillance function (Carchedi, 1977). This alone entails their registration as a class quite separate from that of wage workers but in a position rather homologous with that of the skilled/educated whose remuneration includes some component of surplus value paid out of revenue. Armed with the relevant cultural capital (Bourdieu, 1984), they could speedily advance to where exploitation of others become a distinctive possibility undergirding their own livelihood.

The traditional middle class lose ground

Before the War, the makler foundation of Singapore’s economy was adequate in sustaining the ebb and flow of immigrant streams. In fact, Singapore’s role as intermediary in the circulation of regional and international surplus flows had provided its people with a level of living way beyond that of the surrounding region. Many were the opportunities available for autonomous living without having to resort to the sale of labour in the market.

The changing geopolitics after World War II abruptly led to the pulverising of this comfortable arrangement, forcing Singapore to shift its base to direct production and the immobilization of capital on a longer term basis. The first result of this repositioning was the constriction of opportunities for autonomous petty bourgeoisie whose numbers fast dwindled to 7.7 per cent in 1993 from 23.9 per cent in 1945. This period kicked off the most rapid progress on the road to capitalist transition dramatised by an equally radical transformation of class processes.

While regional/international politics dictated the necessity of change in the basis of economic sustenance,the state rushed in to put in place its vision of the modern Singapore economy. The Land Acquisition Act 1966 was passed empowering large scale requisition of land `at the compensation rate which is much lower than the market values’ (Lim C.Y. et al, 1988: 98). This helped dramatically to boost state ownership to 76.2 per cent in 1985 from 31 per cent in 1949. By this stroke, the state was effectively turned into the largest landlord with a grid hold on the most precious resource on a small island of only 621 sq kilometres. At the same time, petty producers were deprived of the means for independent living. Meticulous development of industrial estates rationalised the organization of production on the one hand, but, on the other, it also disadvantaged small producers, unable to afford the price for more sophisticated and systematically organised facilities. As far as plans for industrialization goes, the class of petty bourgeoisie had been dismissed as small fries. Instead, the thrust of incentives was aimed at large multinationals. Suffering from looming threats to their reproduction, most had to turn to the market to sell their labour.

The unprecedented growth of the economy after 1985 has generated new opportunities for a rebirth of this class. Following strict IMF initiatives for restructuring, new opportunities have opened for Singapore as intermediary in this most promising regional market for aircraft, cars, and construction equipment (Fortune 31/10/94: 42) and what the Asian Development Bank estimated as US$1 trillion worth of infrastructure contracts to build the new Asia (Business Week 28/11/94: 41). Skilled and experienced workers who have spent years working in MNCs may just try their luck starting a new venture after the bitterness of being laid off during a regular downturn. These are likely to form the new breed of educated petty bourgeoisie. With the change in state policy, a whole range of incentives has been offered (Singapore International Chamber of Commerce, 1995) to now breed `home grown’ entrepreneurs, the rare success have been nurtured and feted by the state as a star to be emulated.

Against the background of lusty economic growth, a few professionals have even managed to move upwards to the employer class (see Table 2 over page). Figures from Table 3 reflect this change, as the declining proportion of indigenous owners has stabilized and crept slowly up from the nadir of 64.2 per cent in 1980 to 69.9 per cent in 1992. However, local companies still claim a declining share of gross fixed assets, from 15.9 per cent in 1980 to 10.7 per cent in 1990 (Table 4 and 5). Considering that government linked companies and statutory boards have reached about 419 (Directory of government-linked companies, 1991), the share going to private local companies must be minimal.

However, the more likely story in the development of local enterprises could be one of many start-ups and just as many countless failures, judging by steadily declining figures describing the none too robust state of this class. A JETRO report (1992) attributed the continued inflow of Japanese subcontractors into Singapore to the infancy of indigenous supporting industries despite state incentives favouring their development. By contrast, the remarkable growth of the working class belies the difficult problem of maintaining constant and close control over them. The point is that up until now, the working class origins of the petty bourgeoisie has enhanced the chances of the two classes closing ranks especially in a business environment where `as a policy objective, labour’s share of wealth appears to be subservient to policies to encourage MNC investment, just as the indigenous share of income is defacto eroded, … through the relative neglect of local firms in pursuit of foreign investments’ (Lim, 1988: 67) What is more, at the start of the rationalization process, `compulsory urban resettlement provided the PAP (ruling party) with the opportunity of breaking up established and potential opposition electoral communities for resettlement in dispersed locations’ (Lim, 1989: 183). Needless to say, the destruction of livelihood of semi-rural people helped forge violent resistance.

Working class expansion and differentiation

Just as the traditional petty bourgeoisie has contracted as a class due to thinning opportunities, its converse is seen in the rapid enlargement of the working class. Despite its technological edge, the British state implant could not under its own steam quell the anarchy and violence that labour had deployed after World War II to undermine the continuation of capitalist production organisation. But in concert with the new ruling elite of independent Singapore, capitalist dominance soon achieved stability. Through a slew of legislation and mass arrests, the working class became radically transformed into a relatively disciplined and passive mass where once all had been chaos and turbulence. Internal peace could also not have been achieved without opportune threats from the Indonesian Confrontation and withdrawal of the British military base which constituted one firm pillar of support for the economy. Thus was the working class turned into Singapore’s principal instrument in the construction of the new industrial economy. Arguably, internecine struggle with communists had represented the most pertinent factor dispelling investor confidence which also contributed to raising the unemployment rate to about 15 per cent at that time.

The change in working class behaviour has therefore been simply dazzling. A coalition of Chinese intellectuals, traditional bourgeoisie and workers had combined to produce wave after wave of savage strikes which virtually disappeared as a form of protest after 1968. Through skilful tactics of coercion and hegemony, the then Prime Minister was able to do more than breathe new life into the moribund state of capitalism that was Singapore before 1968. This is the base from which state developmentalists portray an overwhelmingly powerful state and a working class largely passive and silent in the face of a thoroughly repressive regime. While it cannot be denied that the regime is bent on suppressing diversity and individuality in favour of homogeneity and conformity, care must be taken despite appearances to avoid reducing society to a unified whole governed by a centre. By totalising history, we contribute to the myth underlying state ideology-that its subjects can only be constituted and shaped rather than act as active agents in constituting consciousness. The dominant view of the working class as reverent and conforming does a disservice to working class politics because it contributes to reify the view of the state exercising brute force on a totally powerless people.

The very rapid transformations that have engulfed the economy and jolted the whole society have actually left people quite mesmerised and breathless, still groping to understand what is the nature of the changes that have overtaken them. Curiously, based on our own observations, despite the hegemony of norms and political technologies and the shaping of body and soul so vividly projected by state developmentalists and post modernists (Foucault, 1980), the indomitable will of people to escape and to avoid being ensnared has led to the invention of new modes of survival to ensure their own progress. It would be appropriate at this juncture to now examine the characteristics of this working class and then to relate this to the crafting of new modes for survival in an increasing harsh economic and regulatory environment. Class formation, de-formation, and reformation (Therborn, 1983) are after all, open-ended processes requiring empirical scrutiny to observe their actual trajectory.

First and above all, an almost homogeneously male workforce was fragmented at the initial phases by a strategy of industrialization that created cheap and plentiful jobs quickly snapped up by female labour in the textile and electronics sectors. The phenomenal increase of women in the workforce was registered by growing participation rates which rose from 37.1 (78.4 for males) in 1974 to 50.9 (79.6 for men) in 1994 (Labour Force Survey, various years). Growing legitimation of women’s problems has fuelled demands countering gender discrimination eg. increasing penalties for rape and molestation have caused mounting tension between the sexes. In the meanwhile, younger males, especially those from less well endowed families are socialised to ‘naturally’ take on domestic roles as parents battle in the workplace to keep family integrity and economy intact.

Second, cheaper immigrant labour stands today as the indispensable starting point of any study of the workforce. With depletion of the female Singaporean pool of relatively cheaper labour, a systematic and tightly regulated flow of foreign workers was allowed in. Today, there are 300,000 foreign workers (Straits Times 5/4/95) forming 18 per cent of the work force. A careful study of the impact of this large alien force (a polarised group of underclass and highly paid executives of MNCs) is needed to understand their role in cementing overall class differences to exaggerated claims of identity linked to citizenship and nationalistic chauvinism. Generally though, the existence of a new lower stratum of immigrants changes the worker’s perception of his own position in society (Castles and Kosack,1972: 17), especially in one that is beginning to ‘colonise’ scattered pockets of industrial zones spanning the emerging economies of Asia.

What is more, decimation of the traditional middle class has been followed by a process differentiating wage workers into ever finer divisions, with multiplication of new occupations and economic sectors. With a majority of the workforce employed in small companies (about 70% of manufacturing workers are in enterprises employing less than 50 workers and making only 0.5% of the operating surplus Census of Industrial Production, 1992) even the government intent on the success of corporatism has run out of ideas as to how they can assist unions combat the problem of declining membership following the onset of restructuring. Upward mobility and wage inflation have led the state to once again raise the legal limit to unionisation for workers earning $1,500 and less to $1,600 starting from October 1995. Even executives are today ‘encouraged’ to join unions.

Thirdly, the maturing of capitalism has generated other minor fissures within the workforce. Foremost is contemporary restructuring which has stirred up the work scene, throwing up distinct groups of disposables and undesirables. Numbers retrenched increased for instance, from 4,900 in 1991 to 9,400 in 1994. `Half of the retrenchment last year ( 1994) was attributed to firms restructuring and reorganising themselves. Another one-fifth was due to firms relocating offshore. However, due to the net increase of 71,200 jobs in 1994, half of the retrenched took only three weeks to find new jobs.’ Unfortunately and more crucially, `more restructuring is expected for the future and finding a job for retrenched workers will not necessarily be equally straight forward. .. when growth may be slower, more of those who leave jobs may be older, and fewer low-skilled jobs may be left’ (Deputy Prime Minister Lee 7/4/95).

The regeneration of ‘submissive’ workers and resistance to new modes of valorisation

The past three decades have witnessed a progressive improvement in the occupational structure of Singapore (Table 7). Indeed, as figures in Table 8 show, median gross monthly income is related to education attained. Without doubt, this lived experience has reinforced the belief in meritocracy so ardently propounded by the state hegemonic apparatus. So, even though the level of expenditure on education has remained rather elitist, the poorer classes tend to blame themselves for their problems. However, there are some encouraging changes planned on this front. Due to the low level of education generally attained by the workforce,4 technical education has been upgraded to draw in more students (at least 70 per cent) who would normally have dropped out after primary school (Law, 1995). Perhaps year on year increase in juvenile offences (under 16 years) from 1990, despite the tough stand on law and order, has forced a more concerted attention on this potential source of instability. Indeed, a recent report revealing that the typical repeat juvenile offender has a family income of $1,000-$1,500 per month, may reinforce worries about the subversive potential of the poor (Straits Times 6/10/95). In addition, current limitations to future unrestrained growth-labour shortage and space constraints of a small island- have pushed the state to begin restructuring meritocracy as a discourse legitimating income disparity. It was suggested (by Acting Minister for Community Development Abdullah Tarmugi) that tertiary institutions can help temper students’ expectations before graduation (9 April 1995). In the same vein, the Prime Minister had asserted `Otherwise, years of continuous growth may lull them into believing that the good life is their divine right’ (Goh, 1995).

Cut away the confusing pulls from centrifugal and centripetal forces and all would agree that state hegemonic processes of displacement (Therborn, 1983: 44) have succeeded in promoting a new nationalism combining a unique Singaporean mixture of totalitarianism and selected strands of internationalism. This could perhaps explain why a majority of Singaporean workers would distance themselves from their foreign counterparts when specific issues have been couched in terms of naked appeals to domestic interests, national loyalty and patriotism. For instance, only about one-third of respondents polled (N= 100, non-random sample) were averse to the government’s denial of an appeal by a Filipino maid accused of murdering an employer. It also makes clear why the less-educated who are most attached to patriotism, tradition and culture are more likely to support state aid for small and medium-sized industries which are not particularly known for their love of the working class. The remarkable speed of industrialisation could explain the persistent and continuous attraction to feudal bonds and acceptance of authoritarian relationships by a substantial portion of the population. Mak and Leong’s study mapping the middle class in Singapore (1994) using an amended version of Goldthorpe’s system of classification is revealing in this respect. Compared to other classes, the working class in this study registered the highest proportion of responses agreeing that income received was `more than fair’. Conversely, they had the lowest percentage complaining that income received was `less than fair’ (Table 9). Hegemonic processes notwithstanding, working class relations seem messy, wobbly and multidirectional, and there is, more crucially, a consistent trend towards growing anti-establishment feelings regularly displayed in outbursts of scorn and outrage. It is extraordinary that, with average growth pushing past 8 per cent over the past two decades, votes going to the ruling party has registered a steady decline. From 1968-80, the ruling party held between 69 to 84 per cent of the votes cast enabling them to control all parliamentary seats. Since the 1981 by-election when the first opposition member gained entry into Parliament, votes for the opposition had gained steadily. A subtle but sure trend of reduced support for the ruling party is revealed in votes cast over the years:- 1984: 67.5 per cent; 1988: 61.8 per cent; 1991: 61 per cent. Many observers read a further slide when the ‘official’ candidate for the 1993 presidential election gained only 59 per cent of the votes polled.

These trends are a reflection of the experiences of workers. Indeed, lower-level workers seem to be bearing the brunt of wave after wave of restructuring, down-sizing and reengineering in both the private and public sectors. Compared to those with higher income (S$5000 and above), those earning less tended to work more days per week: 44 per cent of those earning below S$5,000 worked six days or more a week compared to 26 per cent of the high income group. At the same time, a higher portion of the low income households said they would work longer for more pay relative to the high income households (Table 10). After a long period in the shadows of state hegemonic processes that are constituted by suppression, submission and displacement, the labour movement has yet to re-emerge as a national political collectivity. Instead, a labour process collectivity based on limited experience of shop floor exploitation is gaining ground despite the conspicuous absence of strikes (Therborn, 1983).

Evidence for this emergence is as yet uneven and episodic, but nevertheless exists. A recent salvo fired at SIA (Singapore Airlines) employees by Senior Minister Lee, however, is telling. He had warned that because wages have moved up to 70 to 80 per cent of that of BA and Quantas, `SIA now faces competition from airlines of low wage countries… I worry for SIA’s employees. Once SIA is in the red, its finished’ (Lee K.Y., 1995a). This example was selected for mention because `we see so much of its troubles reported in the press’ (ibid). However, accelerated competition, market saturation and restructuring have indeed led to work intensification, new work patterns, flexi-pay, retrenchments, climbing prices, bringing in turn a sense of general disquiet, insecurities and confusion.

As the state braces itself to embrace the free market spirit of recent years, deregulation of several state monopolies, such as Singapore Telecom, produced confusion and uncertainty amongst the workforces. In one pioneering case of privatisation, secrecy and information hoarding generated rumours which in turn fuelled turnover rates, lowered morale and reduced productivity. In another case, prior to privatisation, preparatory measures such as rapid expansion of services to capture markets without a parallel increase in staff, brought on mass MCs (sick leave /legal absenteeism) and mass resignation especially at the time of peak demand. In one branch, workers took MC en masse before and after the festive period forcing the higher level staff to take over their work despite putting in place incentives from higher profits achieved. The burden of work intensification was just intolerable. Matching outbursts expressing resentment against work stretching have also been registered in the private sector where downsizing has caused work to pile up for those left behind. In one instance, ten bar tenders, unhappy over work enlargement, simultaneously tendered their MCs which were rejected because they were sourced from unauthorised doctors. The result was mass rampage of the lounge of the prestigious hotel which employed them. Of course they were all severely chastised by the Labour Minister, `Like naughty children’, according to one union informant.

Going high tech to pare down costs has by no means hampered expressions of workforce discontent. Indeed, the peculiarities of high tech industries have spawned their own varied forms of industrial sabotage. Adding salt to expensive machinery can immediately immobilize it, while inadvertently adding the wrong chemical can wreck a whole batch of products. In other instances, eg. a fragile chip making process, a gentle shake is enough to ruin the whole production run.

In a hierarchy-bound Asian society like that of Singapore where ‘face’ is paramount in the conduct of daily life, low level workers (who do not have much ‘face’ to lose due to their low status), have turned this cultural feature to good use. Large organisations which are part of a conglomerate are particularly vulnerable to this form of sabotage. Workers have stumbled upon the magic secret of bosses dependent on HQ approval. Mass departures of workers after the start of the annual company dinner in the presence of gaping dignitaries have been honed to such a fine art that it has brought immediate concessions. In one case, perpetrators succeeded in winning a quarterly bonus and better prizes for lucky draws immediately after the dinner fiasco. Done spontaneously, such acts of dissent are difficult to prosecute. It may not be so successful however if such activities are carried out as part of a union’s organised action. In the case of a union which made the decision to boycott the ceremony celebrating the delivery of a new aircraft, the boycott had to be aborted two hours later, after a warning call from the Registrar of Trade Unions. Although representing a popular form of `silent protest’, dinner boycotts do not work in smaller companies where the Chief Executive Officer is also the owner and where ‘image’ is not yet capital. The boss in one case simply retorted that he would not host another dinner the next year.

Besides boycott of gala events, tactics based on ‘face’ include withdrawal of support for the nation’s major annual charity event (Community Chest) where workers’ contributions are matched dollar by dollar by the company. Threats of withdrawal by workers of a company which ranked among the top contributors to the Chest was enough to get the company to capitulate to their demands.

Service companies holding a high regard for image are also vulnerable to another aspect of the ‘face’ problem. Taking advantage of the Chinese aversion to the inauspicious colour black, which signifies death and bad luck, front line workers have found that wearing black armbands has a surprisingly disconcerting effect on employers, who, fearing to tread on the superstitions of their customers, have often conceded to their demands.

Unlike the service sector, which is based more on personal relations, the manufacturing sector which has to keep to tight delivery schedules, has been buffeted more by go-slow action. Slow delivery in intensely competitive markets may lead to drastic consequences such as the loss of market shares. One company conceded defeat to demands to air-condition the restructured plant after its workers used only one hand to work because the other hand was occupied ‘fanning’ themselves. Having a `negative attitude’ (uncooperative) can also slow down work. For instance, defining work in a rigid and narrow sense or refusing to work overtime. In one case, it took three months of `negative attitude’ to get a company to generalise its incentive pay system. Another company had finally agreed to reimburse the workers for a six-month delay in signing a collective agreement because the `negative attitude’ was biting into its production goals.

Even in industries employing large numbers of workers quite powerless to launch any counter-offensive to redress their grievances (eg. immigrant workers in shipyards), contradictions of capital have themselves led to improvements in working conditions. For instance, in 1994, responding to an alarming increase in the rate of fatal accidents occurring in shipyards (forced to take stringent cost cutting measures to maintain their competitive position), the state instituted compulsory auditing of safety systems by external bodies which successfully cut down the rate of fatal accidents from a high of 15 in 1994 (highest ever reached since 1978) to 9 in 1995. Corresponding to this, the number of man days lost per million man-hours worked, which had shot up to 2174 in 1994 from 1498 in 1993, dropped drastically to 689 in 1995. Similarly, for the case of sewage workers, who are twice as likely to be infected with hepatitis A virus than the average Singaporean, a $40,000 vaccination program was put in place to protect them against the disease. The tight labour market makes it costly to replace even the cheap immigrant workforce.

Despite the supply of foreign workers, today’s tight labour market has given young workers the edge in the struggle against their employers. This is true regardless of economic sectors. Part of the problem, say employers, is that young workers are cheaper, more versatile and energetic. To the chagrin of employers, these same young workers are at the same time highly mobile and ‘impatient’. They leave at the slightest excuse. With the passing of time, the market advantage of youth will be available to a smaller proportion of the work force. The median age of the economically active has been advancing, for instance, from 30.1 in 1983 to 34.7 years by 1993 (Labour Force Survey, 1993).

In direct contrast, however, the old (over 40 years) are most vulnerable to employer abuse due to their reduced market value. Their cumulative seniority wages make them unappealing in today’s cost conscious enterprises. Acceptance of lowered pension contributions for older workers and repeated targeting of the old as a group requiring training have exposed the State as reinforcing the anti-old tendency of capitalism. At the same time, it unashamedly up-holds the filial piety principle in Confucianism when it comes to chiding the populace against the ills of Western democracy and liberalism. This contradictory stance of the state towards the old and disposable is clearly reflected, for instance, in the thinking of leaders like the National Trade Union manager for productivity and skills development. He said that these people should strive to upgrade their skills. Yet, he revealed that `they need to do a lot of overtime to supplement their basic monthly wage of about S$700. If overtime is not available, they moonlight as security guards, taxi drivers and cleaners.’ (Wong, 1995). In coupling restructuring/retrenchment with age and lack of education, the government has ignored the fact that `of the 9, 444 unemployed retrenched workers as at June 1994, 51 percent had more than Secondary education. In terms of age, those over 40 also came to 51 per cent of the 9, 444′ (Straits Times 1/4/95). Whether education and training be the panacea for Singapore’s economic and social problems is still unclear.

The knowledge workers/new middle class solution?

True to their Western educational background, leading elites in the state hold tightly to the central belief of post industrial analyses (Bell, 1973; Touraine, 1971)-that knowledge is the source of innovation/productivity; that their custodians (professionals) would become the key social group and that its institutions would supersede that of the business firms. In aiming to become a `scientific utopia’, Singapore has not been able to avert feelings of alienation and the relentless struggle that come with profit maximization and competition. Recently, in response to questions about impending elections, Prime Minister Goh said that elections are not on the cards yet as the government has to tackle two priorities this year. The government has to `make sure that we can shift more attention from ownership of cars, private vehicles, to delivering quicker mobility for most Singaporeans through the public transport system’ (Straits Times 29/4/95). As for the long queue for public housing, he said, ‘I do not think it is possible to cut down the housing needs of Singaporeans.’ More importantly is the advice of Teo C.H., Minister for the Environment, that `newly married couples need to temper their expectations …they should apply for flats that can match their immediate budgets.’ He gave this advice in response to the lament that Housing Development Board (state subsidised) flat prices had risen significantly and young couples had found it difficult to afford them. Cars in Singapore carry the highest price tag worldwide. Anxieties over these two most important symbols of middle class status are a sure sign that meritocracy is becoming less effective as a tool for placating the impatience of the upwardly aspiring new middle class.

The imminent collapse of meritocracy as an explanatory variable of income differences has come about from several developments. Restructuring to a high tech industrialisation program has forced the state to spend more to expand accessibility to education facilities. Consequently, since the emergence of the Strategic Economic Plan (1991), much more emphasis has been laid on training and lower-level education. Figures in Table 6 reflect the acceleration of this trend. Of course, the drawback is in the difficulty of managing middle class discontent and frustration due to their inability to greater distance themselves from the surging common masses (Elias, 1994: 502).

Apart from domestic production, the pool of educated has also been increased through overseas recruitment to counter the escalation of spiralling wages, to save on expenses of having to nurture them from young and also to introduce a constant stream of freshly trained minds from all over the world. In terms of proportion, this class has therefore experienced robust growth constituting 29.5 per cent of the workforce in 1992 whereas they only numbered 11 per cent in 1970 (Table 7).

The thrust of state policy to draw in hi-tech investments will ensure ample supply of jobs for the new middle class. The new high-tech firm encouraged to set up here by a wide range of subsidies will be like Schering-Plough Corporation (American Pharmaceutical) which recently invested S$300 million in a plant that would only employ 150 staff. Managing Director Yeung said the company was attracted by Singapore’s highly trained workforce and was not deterred by high labour cost. Nonetheless, given brutal competition in both product and labour markets, the new middle class are not insured against retrenchment. In fact, they will be the first to go when companies merge and downsize. A recent plan for merger of five independent corporations to form two companies, for instance, reported that the first casualty will be thirty managers out of a total of about 3,000 workforce. It has become clear to some of this class that education is only a temporary palliative, a bargaining chip which can so easily be made obsolete in future cycles of production.

Recently, the SNEF’s (Singapore National Employer’s Federation) feedback from 70 chief executives disclosed that problems of the mid-life middle manager constitute one problem area facing companies today. Companies wanted assistance to prepare for possible new careers and change facing their managers. SNEF executive director Koh had reported that `about 3,000 middle managers, professionals and executives were affected by restructuring in companies last year (1994). This is roughly 30 per cent of the 10,000 workers retrenched. About three years ago, based on the same percentage, this number was about 1,800′. Koh went on to declare that in the coming years, companies faced with two increasing trends will be forced even more to restructure. In large companies, the relentless force of technology will shift more decision-making responsibilities to the workers directly, making middle managers redundant as supervisors and processors of information. Market demands that force companies to reconfigure their businesses to respond faster to the market place may also displace some middle managers. On the other hand, medium sized companies that resite operations out of Singapore to take advantage of cheaper labour elsewhere will need fewer managers here. Additionally, there would be managers who could/would not take up regional jobs when companies regionalise their operations.

Acknowledging that delayering was v ery real, Koh had admitted that SNEF had been approached by middle managers and companies for help in job placements. Echoing the opinion of others, Koh asserted that `Even in a tight labour market, they find it difficult to look for new jobs with pay matching their last drawn ones. Their wages are at the higher end of pay scales because of years of service. Employers are found to prefer younger people who do the same job at a lower pay.’ Reflecting this troublesome trend were the findings of SNEF’s own survey of wages (1994) which showed that the recent rapid growth of salaries seemed to be plateauing, although manufacturing companies are still paying wages that make up 40 to 50 per cent of business costs. Employers believe that wages cannot be pushed up further (Straits Times 27/5/95).

Furthermore, observed Koh The global, wired workplace, where work will go to any part in the world where talent is most affordable (eg. Walt Disney cartoonists in the Philippines and software development in Bangalore), will become increasingly uncertain… many may feel concerned, stressed and sometimes, disengaged.’ Added a human resource manager `there is this credibility gap with employees now. If they are laid off in this tight market… they do not see the pain… But they don’t realise that, even if they are not laid off, with companies cutting work to respond faster to customers and replacing men with machines they may have to accept retraining and redevelopment… the word is no longer job security but greater employability’.

Notwithstanding the bashing suffered by the middle class during current cycles of restructuring, some have found solace in the booming real estate market. During the early stages of development, the construction sector was used as an instrument to pull the economy upwards. A massive housing program was then launched by the Housing Development Board (HDB). Today, the HDB provides a limited form of ownership (99 year lease with re-sale and tenancy under strict state control) to about 85 per cent of the population. It was also the state’s intentional policy to stabilize the workforce by propagating a property owning democracy. After all, mortgages and family life both help to circumscribe working class behaviour. In the current phase, a subsidised refurbishing scheme (as part of asset enhancement) has been instituted with the aim of increasing the value of homes.5 The huge disparity in income has only recently become a cause for concern-the Prime Minister earns nearly S$1 million a year; senior managers in Singapore are paid 11% more than those in Paris, and 50% more than in London, while the gross monthly median wage is S$1,234 (PHP Institute, 1995). `Asset enhancement schemes’ have been launched `to maintain social cohesion’ (Finance Minister Hu, 1995). To highlight how asset enhancement schemes have been effective, the Prime Minister gave details of house price appreciation for a 27 year old housing estate Kim Keat. He said that the original price of a unit was S$7,800 in 1968. Prior to the announcement of upgrading, the same unit could fetch S$36,000 between August 1989 to July 1990. And, before voting for upgrading took place, the price had escalated to $80,000 in March 1992 and went on to reach S$160,000 in 1995. Yet, few have sold out (Straits Times Weekly, 28/1/95).

Since the units referred to are smaller lower class housing units, they have not appreciated enough to lead to mass resale. After all, sellers would then also require large sums to purchase new flats. An equivalent sized unit probably in a far flung area could be priced around S$200,000. By way of contrast, appreciation of middle class housing has proceeded more dramatically. For instance, a five-room `executive flat’ bought eight years ago costing S$140,000 would today fetch about S$500,000. A medium sized four-room flat costing $50,000 in the late 1980s would sell at $145,000 in 1992 and $240,000 (1995).

In addition to the cultural capital possessed by the middle class, capital gains (at least for this generation of new middle class) facilitate their migration. Thus the perennial concern of the state to `provide close substitutes to give Singaporeans a high quality of life’ (DPM Lee,1994). Lee had argued that HDB estates with the right ambience and amenities were an alternative to private housing. In the case of cars, Lee suggested that good public transport network would be the answer to the expensive Certificates of Entitlement which are required to purchase a car. The price of these certificates is determined regularly by auction and in May 1995 they cost between S$23,704 to S$74,243, depending on capacity (Straits Times 14/5/95). The possibility of middle class migration has forced the state to make the quality of life in Singapore `close to what people of equivalent income could enjoy elsewhere.’ (Lee H.L., 1994)

Failed expectations of the middle class have exasperated state leaders because they have been translated into reduced votes and criticisms of state inadequacies which invariably feed back to reinforce working class disquiet. It is becoming more difficult to maintain ideological despotism intact by continuing to be dismissive of middle class criticism. Apart from media campaign to moderate expectations, challenges from those with cultural capital have sometimes been met with a hard knock.6 Even the august committee members of the Law Society have not been spared harsh treatment by the Internal Security Department (Seow, 1994). However, the enthusiasm of most highfliers has hardly been dented by sharp criticism of a selected few as they continue to splurge and engage in property and art auctions (Straits Times 26/4/95). Like the middle class of Veblen’s time (1934) the booming economy still allows the new middle class of Singapore to continue in their role as ambivalent status-seekers deeply susceptible to cooptation.

Recent admonition from the Attorney General that the Law Society should speak up to support the state’s stand on the law, and denigration of the opposition for not siding with the country when it was ‘maligned’ by foreigners, indicate the increasing slant towards totalitarianism that seeks to embrace all levels of society. With spiralling inflation, the middle class may even be in danger of losing the escape route through the pleasure of consumption.

The dominant class

The leadership of Singapore’s activist state has managed to project itself as the ruling class (Scott, 1991) whose action is fateful for the character and development of Singapore society. This claim is not totally borne out by closer examination of some economic facts.

First, the withdrawal of the British state presence at independence was compensated by the entry of British MNCs which have remained amongst the country’s top three investors up until today although their ranking was overtaken by that of the American MNCs which reigned supreme until they in their turn were dislodged by the Japanese in the late 1980s (See Table 11).

Second, as shown in Table 4, in terms of ownership and control of factors of production, 89.3 per cent of gross fixed assets of today’s firms are held in foreign hands. This has come about because of a third factor-the whole slant of Singapore’s economic policies are oriented almost exclusively towards the generation of a high rate of investments, through offering one of the world’s highest rate of return to investment. The EDB proudly reprinted the US Commerce Department’s finding that American manufacturing investments in Singapore had secured between 1987-89, a 33 per cent rate of return, the highest worldwide compared to 30 per cent from Malaysia and 25 per cent from Taiwan (EDB Annual Report, 1989/90: 25).

Despite policies oriented towards serving MNCs, top state bureaucrats nonetheless comprise a substantial and dominant segment of the ruling elites. Most importantly, the state has overall control over the largest spread of land mass in Singapore. The HDB in its 1993/94 Annual Report stated that it made a capital gain of S$1.285 billion, up from S$568 million in 1992/93. Indeed, the state has put its position as Singapore’s chief landlord to good use in the generation of record surplus while its control over workers’ compulsory pension funds also provides easy access to a source of cheap capital. Over the years, the state has built up a considerable portfolio of companies (Low, 1991) whose total strength can only be guessed at. The tight circle that comprises the leading figures in state management is described in Thynne as `the interlocking effect of multiple positions long held by a relatively small group of top officials and government appointees’ (1989: 31). According to him, `considerable emphasis has been put on the development and maintenance of strong inter-organizational connections and of centrally directed policies and administrative integration’. Even then, Senior Minister K.Y. Lee has called recently for `new ways to twine the political and trade union leadership’. The Prime Minister, commenting on Lee’s suggestion, remarked that government scholars and administrators sent to the NTUC to help workers could be asked to serve short stints in the government as part of the `criss-crossing’ of top people from both sides (Straits Times 8/5/95).

By a combination of coercion and clever machination, the state was able, through the NTUC to shape working class leadership and to incorporate them into the decision making system. State bureaucrats were parachuted into unions in order to ‘advise’ bureaucratize/rationalize/modernize the labour movement. Even as the state incorporates the union in ever closer embrace, the better to regulate its members, at the same time it is distancing its interests from them as displayed in Singapore’s ranking at the bottom of the altruism index constructed by the World Economic Forum at Davos. The Prime Minister earns fifty-six times (US$812,858) what the average manufacturing worker earned (US$14,459), whereas the figure of America’s president was six times and that of Russia was double.

Capital recomposition

State/MNC intimacy appeared less convincing when in 1979, sensing that the economy could no longer continue to be sustained on the basis of labour intensive/low pay production, the state moved to push industries up the technological ladder by forcing through a wage correction policy. Companies were unimpressed and the policy contributed to hasten the looming recession of 1985-6 as Singapore experienced its first serious investment outflow and massive retrenchment. These difficult times planted the seeds for a realignment of segments within the ruling group.

It must be said that the conversion of China to capitalism also contributed to the realignment of local class relations. Cashing in on China’s demand for capital and personnel experienced in the ways of capitalism, Singapore made a frenzied U-turn to cultivate its Chineseness despite a history of vitriolic attacks against Chinese communism. Other factors have contributed towards cultural commodification. Active use of asset inflation to satisfy spiralling expectations has put the manufacturing sector in grave danger. Over the past two years, real estate prices have risen as much as 60 to 70 per cent (Straits Times 28/5/95). Clearly, profits from real estate and financial speculation have completely overtaken profits from other forms of business.7 Rising business costs resulting from rentier profits have thus forced a diversification of sources of accumulation and capital flight to low cost countries like China. Determined to get to grips with massive capital inflows into China, Singapore has re-engineered its ethnic identity to better play the role of middleman for Western investments into China (eg. for German SME’s).

It would be instructive here to compare the migration of manufacturing activity from New York (Fitch, 1994) and its fate after being overtaken by speculative financial and real estate activities. Despite staunch support by the Singapore state for manufacturing by provision of generous subsidy schemes, the state has only recently realised that asset inflation is threatening the stability of manufacturing.8 The most recent unpublished results of a survey (1993) by the Japanese Chamber of Commerce discloses that 40 per cent of companies have already moved off-shore while another 34 per cent reported their intention to re-locate. The Japanese rank first amongst Singapore’s foreign investors. Perhaps, precisely because the state was itself heavily involved in gaining from the process of real estate inflation, it had allowed spiralling prices to go practically unchecked (until recently, when a committee was set up to study the issue). In 1994-95, according to the Report of the Auditor General, receipts from sale of land increased by $3.25 billion over the previous year to become the biggest single source of money for the government, to reach $8.73 billion, overtaking income tax revenue which totalled $8.3 billion.

Unfortunately, the ascendance of finance capital and hot money can only bring uncertainty to the future life of workers. It also means that the economy and thus politics will be prised out of government control. The collapse of Barings is a case in point. The governor of the Bank of England had blamed the collapse on the failure of regulators/auditors including those from Singapore and Tokyo, to detect problems of Barings internal management (Straits Times 31/3/95). In competing with Hong Kong and Tokyo to become Asia’s primary financial centre, Singapore may increasingly feel the pressure to reduce financial controls to facilitate profit making.9

While asset inflation has generated huge gains for powerful players including the state, smaller parties like the petite bourgeoisie will experience quite serious problems, a result of escalating prices. When the HDB started selling shops to sitting tenants at discounted rates in June 1992, it started a process of squeezing out less efficient shop owners and traders operating with low margins. Competition from the in-flow of large-scale slick operators combined with higher overheads incurred by monthly mortgage payments for loans (which could be two to three times the monthly rental of S$1,500-S$2,000) have forced some (six per cent) shop keepers to resell their property, perhaps to cream off profits on the resale market. Since 1995, loud complaints have been heard from shopkeepers. Those who have yet to buy their shops (sold in phases) fear they would not be able to afford them when these are put up for sale. National Development Minister Lim had remarked that prices of HDB shops sold to tenants have gone up by more than 40 per cent over the last two years. (Straits Times 3/6/95). Small companies too will have a more difficult time regenerating themselves through relocation. If they do not own land that can be used as collateral against which capital can be borrowed for relocation (requiring a minimum of S$750,000), foreclosure and return to the status of wage labour seems the only alternative.

If any conclusion can be drawn from movements of various capital segments, it is one of a more differentiated mode of surplus appropriation. Foreign non-manufacturing companies are now in the process of establishing their presence, driven by the booming economies of the surrounding countries. For instance, according to Ikeda of Sakura Bank (formerly Japan’s largest until the merge of Mitsubishi Bank and the Bank of Tokyo), its merchant banking operations will be expanded to tap the Asian market for project financing activities. Its staff strength for the unit will increase from four to fifteen. Sakura Bank is financing about US$2 billion worth of development and infrastructure projects in South Asia, excluding China (Straits Times 25/4/95). In the meantime, MNCs with long established operations have cashed in on their property assets over the last two years. Says one foreign stock broking analyst There has been so much price appreciation that it just doesn’t make sense to have 10 to 20 to 30 million dollars tied up in real estate… if you can redirect it into your core business . Others are selling because of financial pressure at home to realise their foreign assets and make a good profit. McIntyre (1991), in observing the trend of MNCs shifting from the position of direct exploiter to subsumed class (from being an employer of commodityproducing wage labour to a provider of conditions of existence to other capitalists) since 1950s said that regulations by various states and the desire to reduce uncertainty were among the reasons for effecting such a transition.

In Singapore, a government subsidy encouraging outgoing firms to retain some of their operations in Singapore has encouraged companies to, for instance, use Singapore as a procurement centre while shifting manufacturing operations to lower cost neighbouring countries. As we have observed previously, firms have also diversified their activities to take advantage of the booming property and infrastructural markets. In such a volatile and increasingly harsh competitive situation, concentration on projects with long gestation period may not be the best strategy for survival. Firms must hedge their bets in various sectors to cover/even out the odds. Singapore appears to be returning to its role as middleman of the region. Such incessant moves by firms repositioning themselves to avert erosion of their profits and to regain competitiveness can only increase the state’s incapacity to regulate them.


In common parlance, Singapore has long been equated with its authoritarian government. Even as the labour movement was recast under the masterful hand of the state to serve the creation of the new industrial order, wage workers have not remained inert, but have gone on to produce new modes of surviving under hostile and repressive structures.

In highlighting the dynamic character and ability of humans to re-create themselves under changing socioeconomic and political conditions, this paper has argued that statists’ view of an overwhelmingly powerful state may have contributed to denying the power of the working class to respond to structures of valorisation. It may also be the case that obstacles preventing the study of everyday life of working peoples in a totalitarian state have bred ignorance about this dynamic aspect of Singapore’s development, thus resulting in a one-sided published image of Singapore society, deeply enmeshed by the all powerful monolithic state.

By focusing on the dimension of labour activities at various sites of production, we show how workers have continued to struggle vigorously against new measures of surplus extraction which form part of the process of contemporary restructuring. Such behaviours should not merely be labelled `weapons of the weak’ (Scott, 1985). Though they may appear to have limited economistic objectives, they are `inextricably bound up with the very logic of profitability’ (Cohen, 1987: 37). Additionally, shared disaffection and limited mobilization, when diffused wide enough have been known to take on larger political goals. These `struggles of resistance’, confined to the wage-effort bargain, may be physically focused, but they have an important socialization role and may change the relations of production via `struggles for transformation’ (Thompson, 1986).

Recent economic restructuring, triggered by falling rate of return (return to manufacturing investment had fallen from 33 per cent in 1980 to 16.5 per cent in 1984 which is marginally higher than the OECD average of 16 per cent), has spawned problems for all-admittedly for some more than others. Indeed for capital, restructuring measures have succeeded in reversing the trend of falling rates of return, eg. to 30.98 per cent for US manufacturing companies against a world average of 10.01 per cent for the period 1991-3. On the side of labour however, the results are not so clear and simple.

Fortunately for the state, appeals to nationalism and technocratic/meritocratic/pragmatic bases of legitimation (Mann, 1995: 53) have succeeded in mobilising substantial numbers during the labour intensive phase of capitalist development precisely because all have attained a better standard of living. The initial development of industrial capitalism saw the state adept at managing labour demands, no doubt helped by its monopolistic hold over land in Singapore which allowed it to subsidize housing cost for the masses and thus hold wage to GDP at a low level (Table 12), in fact, the lowest amongst the NIEs.

Forced to shift to a new basis of accumulation (high-tech economy), the Singapore state is already grappling with serious problems of control and legitimation. First, the financial sector has gained hegemony (income tax figures for 1994 disclose that the top ten income earners are all from the financial sector: six stock brokers and four fund managers/bankers), state reservations notwithstanding, implying difficulties for regulation and instabilities, besides the erosion of the ideology of meritocracy and hard work. Second, the increased production of educated workers to support the new economy has demeaned middle class status. Resentments, growing numbers well able to articulate their interests, disillusionment with meritocracy, the search for new basis of ideological mobilization and the colonization of new middle class positions in other emerging economies, all reflect problems of resecuring the support of this class, long held to be loyal clients for its creator, the state.

Additionally, with fierce competition, the new middle class are also subjected to the dictates of work efficiency and continuous evaluation. A study of 252 workers (non-random sample) by the author finds that nearly 40 per cent of the new middle class share with the working class the experience of work overload and long hours. The emphasis on house ownership has also got everyone into a gridlock of debts. Debt to income ratio has risen from 56 per cent four years ago to 68 per cent (Straits Times 24/3/96).

State initiated measures to remove ‘rigidities’ of customary labour practices have focused workers’ frustration on itself. While draconian coercive instruments have up until now succeeded in pre-empting large-scale mobilisation of the labouring classes, feelings of dissent have partly been diverted into negative votes for the ruling party. By sanctioning political leaders in this manner, Singaporeans have been able to move the state a bit more to be like what they want it to be. For the majority of the young, what the state is, is just not enough. A recent study of young voters between 21-30 years found that 51 per cent said its quite important to have an opposition and 26 per cent said its very important (Straits Times 12/7/96). In fact, the rising number of schemes currently churned up for the benefit of the poor (albeit giving only minimal and grudging assistance) indicate the state being forced to bend to fill some of the needs of the working classes. Surrounded by thick wads of anti-welfare rhetoric,10 people continue to assign government the chief role of caring for them.11

Wherever they are, people are active trying to make life better for themselves. They are not overly ambitious, they do not aim for systemic change. Yet, combining pressure from the changing economy and peoples’ resilient stand, some parts of society’s structures have been forced to change (in some cases even just cosmetically) to fit the needs of wage workers. Whether these improvements are coming fast enough is another question. What is important is that people do not automatically allow hostile political and economic constraints to engulf them.

As for the state, far from being dismantled, it has spawned ever more sophisticated institutions and agents to ensure that rates of profit are sustained in the face of fierce global competition and regionalisation.It is quite paradoxical that while nimbleness and agility are required to combat competitive pressures and volatile markets, the state can respond the only way it knows how, and that is, to further organise and expand its capacity.

Acknowledgment The author would like to thank Bob Carter and David Harvie for editorial assistance in trhe preparation of this article.


1. See for instance, `Indonesia-Cold War Bogey “Marxist Label remains a convenient weapon to stigmatize trouble makers”‘, in Far Eastern Economic Review 2/1/95: 22.

2. Deputy Prime Minister at forum held in Nangyang Technological University, February 1995.

3. FEER Sept 2 1994 featuring skilled labour in Asia showed Singapore’s secondary school enrolment as falling below that of S.Korea, Sri Lanka, Hong Kong and the Philippines.

4. 61 per cent of the non-student population has an education level of Primary 6 or below compared with the better developed countries, where 90 per cent or more of their population have completed 10 years of education’ (Strategic Economic Plan 1991).

5. In addition to the housing strategy, the state has also topped up pension funds to enable Singaporeans to buy discounted shares on privatisation of public monopolies.

6. Only very recently Senior Minister K.Y. Lee was featured as saying quite emphatically ‘…if you set out to block me, I will take a bulldozer and clear the obstruction’. Interview with New Paper (4/2/95). This was in reference to the celebrated and very mild criticism of the upward revision of salaries of top civil servants by writer Catherine Lim which brought a similar response from Prime Minister Goh who asserted that those who try to undermine the authority of the government through snide remarks and mockery must expect a ‘very, very hard blow from the government in return’ (Straits Times 2811195).

7, In response to government request for feedback on productivity, the German Business Group was emphatic in stressing the problem of real estate inflation. `Industrial development and real estate speculation are actually contradictory because industrial development depends on constancy in land prices. The huge influx of capital here has led to speculation in real estate that has become an unfavourable influence on investment. When even a state owned body like the Jurong Town Corporation is asking up to S$400 to S$500 for a square metre of land, it becomes impossible for industry to cope with such prices. Rent increases by government bodies of 20 to 30 per cent and even more are being imposed-even during tax relief incentive periods which seem to cast doubt on the government’s stated policy of fighting inflation’ 19/7/82.

8. Referring to the quarter point reduction interest rate, a Straits Times report said that ‘banks have borne in mind the government’s concern over asset inflation earlier this year’ (2/6/95).

9. Finance Minister Hu, when interviewed regarding whether introduction of tougher new procedures by the Singapore International Monetary Exchange (after the Barings collapse) would deter clients from opening accounts in Singapore in favour of centres like London where rules are less onerous said ‘We will monitor this, because, if it is indeed true that such activities are actually driving people away, then we have to look at it again’ (Straits Times 7/11/95).

10. The most recent example of state attack on welfarism came from Senior Minister Lee (Straits Times 26/2/96). When recounting his experience in Britain as a student he alleged that `with the introduction of the welfare state and the need to look after everybody from cradle to grave, taxes had

gone up to such an exorbitant level that the British had lost the motivation to work hard’.

11. A survey by Times Research reported that 87 per cent agreed that the government should care for the poor and 56 per cent said the state is not doing enough for the poor. In addition, 79 per cent feel that Family Service Centres should be run by the government while 70 per cent want the elderly to live in retirement villages (as opposed to the state’s desire to privatise this cost of labour reproduction to individual families).(Straits Times 26/1/96, 5/2/96)


Addullah, Tarmugi (1995) Speech at Dinner and Dance, Faculty of Arts and Social Sciences, National University of Singapore. Ahmad, Aijaz (1994) ‘Reconciling Derrida: “Spectres of Marx” and

Deconstructive Politics’, in New Left Review 208, Nov-Dec: 88-106. Anantaraman, V. (1990) Singapore Industrial Relations System. Singapore Institute of Management. Singapore.

Bell, D. (1973) The Coming of Post-Industrial Society. Basic Books: New York. Bello, W., and S. Rosenfeld (1990) Dragons in Distress: Asia’s Miracle Economies in Crisis. San Fransisco Institution for Foundation and Development Policy.

Berberoglu, B. (1995) ‘The Persistence of Class and the Continuing Relevance of Class Analysis in Contemporary Capitalist Society’ in Sociological Inquiry 65, 3/4:309-312.

Bourdieau, P. (1984) Distinctions. Routledge & Kegan Paul, London. Business Week, McGraw Hill Inc., Netherlands. Carchedi, G. (1977) On the Economic Identification of Social Classes.

Routledge & Kegan Paul, London.

Carter, Bob ( 1995) ‘A Growing Divide: Marxist Class Analysis and the Labour Process’ in Capital&Class 55, Spring: 33-72.

Castles, S., and G. Kosack (1972) ‘The Function of Labour Immigration in

Western European Capitalism’ in New Left Review 73: 3-21. Census of Industrial Production, various years, EDB, Singapore. Cohen, S. (1987) ‘A Labour Process to Nowhere’ in New Left Review 165: 34-50.

Daily Mail, London.

EDB (Economic Development Board) Yearbook 1989/90, Singapore. EDB Annual Report 1993/94, Singapore.

Elias, N. (1994 ) The Civilizing Process. Basil Blackwell, Oxford. Far Eastern Economics Review

Fitch, Robert (1994) `Explaining New York City’s Aberrant Economy’ in New

Left Review 207, Sept-Oct: 17-48. Fortune. Time Inc., Switzerland.

Foucault, M. (1980) Power and Knowledge. Harvester Press, Sussex. Goh, C.T. (1995) Speech, Opening of Raffles Girls’ School, 4 March. Hersh, J. (1993) The USA and the Rise of East Asia since 1945. St. Martin’s Press, London.

Hewison, K., R. Robison and G. Rodan (1993) Southeast Asia in the 1990s: Authoritarianism, Democracy and Capitalism. Allen & Unwin, St. Leonards, Australia.

Heydebrand, W. (1989) ‘New Organizational Forms’ in Work and Occupations 16,3: 323-357.

Hill, C. (1958) Puritanism and Revolution. Secker & Warburg, London. Hill, T.P. (1979) Profits and rates of return. OCED, Paris. Holloway, J. (1994) ‘Global Capital and the National State’ in Capital&Class 52: 23-49.

(1995) `Capital Moves’ in Capital&Class 57:136-144 Holton, R., and B. Turner (1994) `Debate and Pseudo-debate in Class

Analysis’ in Sociology Vol.28, 3: 211-229. Housing Development Board Annual Report 1993/94. Hu, R. (1995) Speech, Annual Dinner NTUC celebrating May Day (May). Human Development Report 1993 (1993) Oxford University Press for United

Nations Development, New York.

JETRO (1992) The State of Activities of Japanese Enterprises in NIEs and ASEAN. Tokyo.

Koo, H. (1991) `Middle Class, Democratization, and Class Formation’, in

Theory and Society 20: 485-509.

Labour Force Survey, Report on, Ministry of Labour, Singapore. Lash, S., and J. Urry (1991) The End of Organised Capitalism, Polity Press, Cambridge.

Law, S.S (1995) (CEO, Institute of Education) Interview, Straits Times 28 April.

Lee, H.L. (1994) Speech, Dinner with Food, Drinks and Allied Workers Union, November.

(1995) Speech, Institute of Management 30th Anniversary dinner and dance, April.

Lee, K.Y. (1995a) Interview, National Trade Union Congress News Weekly: May Day. Special, 61.

(1995b) Interview, National Trade Union Congress News Weekly. 6 May.

Lee, SA. (1973) The Industrialisation of Singapore. Longman, Camberwell. Li, DJ. (1955) British Malaya: An Economic Analysis. New York. Lim, BH. ( 1995) Speech NTUC May Day Family Celebrations, May. Lim, CY. et al ( 1988) Policy Options for the Singapore Economy. McGraw Hill Book Co. Singapore.

Lim, L. (1989) `Social Welfare’ in KS. Sandu and P. Wheatley (eds.) Management of success: The Moulding of Modern Singapore Singapore. Institute of Asian Studies: 171-97.

Low, L. (1991) The Political Economy of Privatisation in Singapore. McGraw Hill Book Co. Singapore.

Low, L. et al (1993) Challenge and Response. Times Academic Press,


Mak, LF. and CH. Leong ( 1994) The Singapore Middle Class (Unpublished). Mann, M. (1995) `Sources of Variation in Working-Class movements in Twentieth Century Europe’ in New Left Review 212: 4-54.

McIntyre, R. (1991) `The Political Economy and Class Analytics of International Capital Flows: US Industrial Capital in the 1970s and 1980s’ in Capital&Class 43, 179-201. New Paper, Singapore.

Petras, J. (1981) Class, State & Power in the Third World. Zed Press, London. Piven, FF. and R. Cloward (1970) Poor People’s Movements. Vintage Books,

New York.

PHP Institute (1995) Intersect Japan-Asia. June. Puthucheary, JJ. (1960) Ownership and Control in the Malayan Economy.

Eastern University Press, Singapore.

Quah, S. (1991) Social class in Singapore. Times Academic Press, Singapore. Rodan, G. (ed.) (1993) Singapore Changes Guard. St. Martin’s Press, New York. Sayer, A., and R. Walker (1992) The New Social Economy. Blackwell, Oxford. Scott, JC. (1985) Weapons of the Weak. Yale University Press, New Haven.

(1991) Who Rules Britain. Polity Press, Cambridge. Seow, F. (1994) To Catch a Tartar: a dissident in Lee Kuan Yew’s Prison. Yale Southeast Asia Studies.

Short, A. (1975) Communist Insurrection in Malaya. 1948-1960. Muller, London.

SILS (Singapore Institute of Labour Studies) (1992) Report on the Income and

Expenditure Survey of Workers in the Metal Industry. Singapore. Singapore International Chamber of Commerce (1995) Investor’s Guide to the Economic Climate of Singapore. Singapore.

Statistical Highlights Singapore 1993 ( 1994) Department of Statistics. Stenson, M. (1970) Industrial Conflict in Malaya, prelude to the Communist

Revolt of 1948. Oxford University Press, London. Straits Times, Singapore.

Tanter, R., and K. Young (1990) The Politics of Middle Class Indonesia.

Monash University for Southeast Asian Studies: Australia. The Strategic Economic Plan (1991 ) Economic Planning Committee, Ministry of Trade & Industry, Singapore.

Teo, CH. (1995) Dialogue at Bukit Panjang, April. Therborn, G. (1983) `Why some classes are more successful than others’ in

New Left Review 38,37-55.

Thompson, P. (1986) ‘Crawling from the Wreckage: The Labour Process and the Politics of Production’ 4th Aston/UMIST Conference on Organization and Control of the Labour Process, April.

Thynne, Ian (1989) ‘The Administrative state in Transition’ in I. Thynne and M. Ariff, Privatisation: Singapore’s Experience in Perspective. Longman, Singapore,19-58.

Touraine, A. (1971) The Post-Industrial Society. Random House, New York. Tremewan, C. (1994) The Political Economy of Social Control in Singapore.

Macmillan, Basingstoke.

Veblen, T. (1934) The Theory of the Leisure Class. Modern Library, New York. World Bank (1993) The East Asian Miracle. Washington DC. Wong, LK. (1978) `Singapore: Its Growth as an Entreport Port, 1819-1941′ in

Journal of Southeast Asian Studies ix, 1: 50-84. Wong, TW (1995) NTUC May Day AnnuaL National Trade Union Congress, Singapore.

Copyright Conference of Socialist Economists Summer 1997

Provided by ProQuest Information and Learning Company. All rights Reserved