Charlie Munger on Lee Kuan Yew

Charlie Munger is not a fan of India. In February of 2017, the then 93-year old vice chairman of Berkshire Hathaway said this about India in a speech. Anyone who cares about India, and understands what India is, will find his view hard to take. But Munger accurate in his assessment. Here’s a bit from his speech:

“Now you turn to India. And I would say, I’d rather work with a bunch of Chinese than I would the Indian civilization mired down, caste system, over-population, assimilated the worst stupidities of the democratic system, which by the way Lee Kuan Yew avoided, it’s hard to get anything done in India. And the bribes are just awful. So, all I can say is, it’s not going to be easy for India to follow the example of Lee Kuan Yew. I think that India will move ahead. But it is so defective as a get-ahead…the Indians I know are fabulous people. They’re just as talented as the Chinese, I’m speaking about the Indian populace. But the system and the poverty and the corruption and the crazy democratic thing where you let anybody who screams stop all progress? It mires India with problems that Lee Kuan Yew didn’t have. And I don’t think those Indian problems are always easy to fix. Let me give you an example.

“The Korean steel company, POSCO, invented a new way of creating steel out of lousy iron ore and lousy coal. And there’s some province in India that has lots of lousy iron ore and lot of lousy coal. Which is there’s not much use for. And this one process would take their lousy iron ore and the coal and make a lot of steel. And they got a lot of cheap labor. So POSCO and India were made for each other. And they made a deal with the province to get together and use the POSCO knowhow and the India lousy iron ore and lousy coal. And 8 or 9 or 10 years later with everybody screaming and objecting and farmers lying down in the road, or whatever’s going on, they canceled the whole thing. In China they would have just done it.

“Lee Kuan Yew would have done it in (Singapore). India is grossly defective because they’ve taken the worst aspects of our culture, allowing a whole bunch of idiots to scream and stop everything. And they copied it! And so they have taken the worst aspects of democracy and they forged their own chains and put them on themselves. And so no I do not like the prospects of India compared to the prospects of…and I don’t think India’s going to do as well as Lee Kuan Yew.”

Munger is a big fan of Lee Kuan Yew. So am I. Like me, Munger understands that India’s greatest enemy is its government. So do I. Munger is a huge fan of Costco. So am I. I tell you, great minds think alike. But seriously, every problem that India faces is due to the misgovernance.

Good governance can work miracles. Lee Kuan Yew demonstrated that. Bad governance can reduce a very capable nation to destitution. Nearly every government that India has had since 1947 has demonstrated that.

It is hard to avoid blaming Indians for the lousy leaders they elect. First, they are not very keen on understanding the problem. And when they are faced with hard truths, too many are too ready to find excuses to deny the reality.

I came across a bunch of comments from Indians about Charlie’s remarks in a blog (which I will not link to.) Screen shot of the comments:

The comments reveal a lot. “… May be with the Chinese system, this progress could have been greater, but that is the price of freedom.” That’s exactly wrong. Freedom does not impose a penalty on those who have it. Instead, the reward of freedom is prosperity.

The biggest misconception one can have about India is that Indians have freedom. Indians are no more free under the Indian governments than they were under the British colonial government.

“Everything is not about money.” That’s an idiotic way of understanding the world. Go tell a poor, starving person that everything is not about money. Only stupid people with money living comfortably can harbor the idiotic notion that money doesn’t matter.

Time to bring this to a close. Here’s some advice from Buffett and Munger.

Be well, do good work and keep in touch.

 

Author: Atanu Dey

Economist.

8 thoughts on “Charlie Munger on Lee Kuan Yew”

  1. Of course Charlie Munger is right about Indian governance system. The most shocking thing I find is that even highly educated Indian people don’t realize that its in China’s interest to continue Mao-ist and Naxal movements. If POSCO project had moved forward Chinese steel would have had a major blow.
    But stupid people in India seriously believe that Maoist and others who were agitating against POSCO project had legitimate grievances. Either too stupid or sold out to China.
    The other idiotic thing Indian people believe in is Supreme Court. Everything must be decided by the somehow super enlightened judges of Supreme Court.
    Charlie M and Warren B are treasures. Charlie’s commentary is always most incisive.

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    1. In my humble view India has now turned towards the right direction. India’s government is trying to get itself out of state-owned enterprises. Which is a great first step. Although the problem of ‘loudest-person’s-veto” exists and first step to cure is to have strong government who arent scared of getting re-elected (this process already underway)

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      1. I would refine your statement to say “very slightly in the right direction”. Modi surely fares better than the rest of the polity regarding free-market. But Modi’s main motto is winning elections (like any politician should). Hence Modi or any other political leader cannot do much regarding free markets till we-the-people change our stance. And we-the-people changing our thinking is such a difficult task! Hence I was asking Atanu about a practical alternative.

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      1. I meant an alternative to the current system that is causing the dismal outcome you and Munger have talked about.
        I meant practical in the sense that it cannot be “teach the majority of citizens about free-market efficiency so that they elect properly aligned policymakers”.
        I remember you talking about some voluntary voters collective many years back.

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  2. Charlie Munger has not said anything unusual. It is a lived experience of most Indians.

    Forget about opening a steel plant. When my father passed away, we had no use for our BSNL landline phone. The phone was in our family since 1995. For the last 1 year it had not worked. It’s uptime was around 5% at max. We relied on Jio for internet and Airtel for calls.

    Cancelling a phone connection became a project for me. With several trips to BSNL office ( during which I refused to pay the bills unless the phone is disconnected) this what they demanded.

    A filled up disconnection form which had multiple versions and the one on their website was older. I had to collect a physical form.
    Death certificate of my father.
    My birth certificate indicating that I am the son.
    Of course Aadhaar card of my father and me (which I do not have).
    Passport size photos of me and my father.
    Photocopy of my butt crack. (No I made that up)

    Normally I would just ask the company to sod off. But here I was curious to see how long this drama stretches. Mind you, none of this was online or via phone. I had to personally go and visit some godforesaken office on a hill.

    After gathering all this, I thought I was done. So when I went to the office one last time, the clerk said “everything looks good”, I was relieved for a moment and then clerk said “but where is the phone ? ”

    “What phone? ” I asked.

    “The phone we gave you when you got the connection. It is BSNL property, it needs to be returned. ” he said.

    This phone was given to us in 1995 ! broke in first few months. I said I can not bring it, nor I have patience left to comply with any more demands. Either disconnect it now or forget the whole thing. By this time I owed around INR 2000 to BSNL.

    The clerk threatened that unless I pay the bill the phone might get disconnected. (The phone that had not worked in last 14 months).

    I told him politely that I have no intentions of paying the bill nor filling up any forms. The only way BSNL can end this matter if they send me a finalized bill, ask me to pay online and cancel the line for good. The clerk said he had not seen a such thing happening, if I don’t cancel I will continue to incur charges which will pile up and later BSNL might sue me and all that.

    I told him the level of inefficiency with BSNL is so much that by the time they decide to sue me 7 years would have passed, they will be suing a dead person for their debts for an amount less than it might take them to do court’s paperwork.

    I was right. 3 years have passed since. BSNL sent me few more bills and then they cancelled the connection on their own. They even stopped sending me bills after some time.

    I am not upset with BSNL or the clerk. It is not his fault. He is getting paid to do that sort of job. I am upset that vast majority of Indians appear to put up with this shit .

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