
Originally Posted by
MrM
Singapore’s Lessons for an Unequal America
By JOSEPH E. STIGLITZ
The Great Divide is a series about inequality.
SINGAPORE
Singapore realized that an economy could not succeed if most of its citizens were not participating in its growth or if large segments lacked adequate housing, access to health care and retirement security. By insisting that individuals contribute significantly toward their own social welfare accounts, it avoided charges of being a nanny state. But by recognizing the different capacities of individuals to meet these needs, it created a more cohesive society. By understanding that children cannot choose their parents — and that all children should have the right to develop their innate capacities — it created a more dynamic society.
Some argue that all of this was possible only because Mr. Lee, who left office in 1990, was not firmly committed to democratic processes. It’s true that Singapore, a highly centralized state, has been ruled for decades by Mr. Lee’s People’s Action Party. Critics say it has authoritarian aspects: limitations on civil liberties; harsh criminal penalties; insufficient multiparty competition; and a judiciary that is not fully independent. But it’s also true that Singapore is routinely rated one of the world’s least corrupt and most transparent governments, and that its leaders have taken steps toward expanding democratic participation.
Democracy, we now recognize, involves more than periodic voting. Societies with a high level of economic inequality inevitably wind up with a high level of political inequality: the elites run the political system for their own interests, pursuing what economists call rent-seeking behavior, rather than the general public interest. The result is a most imperfect democracy. The Nordic democracies, in this sense, have achieved what most Americans aspire toward: a political system where the voice of ordinary citizens is fairly represented, where political traditions reinforce openness and transparency; where money does not dominate political decision-making; where government activities are transparent.
I believe the economic achievements of the Nordic countries are in large measure a result of the strongly democratic nature of these societies. There is a positive nexus not just between growth and equality, but between these two and democracy. (The flip side is that greater inequality not only weakens our economy, it also weakens our democracy.)