Saturday, 12 January 2013

Rethinking excesses of meritocracy

Meritocracy can create a new elite that disadvantages others. Two writers offer their views on how to boost social mobility and mitigate unintended effects of meritocracy.
By Soon Sze Meng, Published The Straits Times, 11 Jan 2013

SINGAPORE has grown its gross domestic product per capita more than fivefold in 30 years from $11,947 to $63,050, one of the highest in the world.

However, our Gini coefficient as a measure of income inequality was at around 0.45 to 0.47 for the past decade, again one of the highest in the world - a zero reading indicates perfect equality and 1 suggests complete inequality.

The relentless focus on meritocracy, market-driven policies and economic growth have resulted in Singapore topping the charts in both GDP per capita and income inequality.

Much has been said recently about the limits of meritocracy in Singapore, with critics pointing to the way winners in an academic meritocracy become the new elite who pass on their advantages to their offspring, giving them an advantage over others with fewer resources or different talents.

And yet, as Prime Minister Lee Hsien Loong reminded Singaporeans last week, meritocracy must remain a critical value. Meritocracy is, after all, the notion that performance should be the yardstick for rewards and advancement. Not many Singaporeans, I am sure, would want to argue that the alternative of promoting on the basis of birth and connections is superior.

In the next phase of Singapore's development, however, the excesses of meritocracy can be ameliorated. We need to refocus the objective of public policy back on to the basics and put social mobility and social cohesion at the heart of policies.

If we value social mobility, we will work harder at making sure each generation enjoys equality of opportunity.

To be sure, promoting social mobility is no panacea. Wealthier Singaporeans will continue to pay for costly pre-schools, pricey properties near popular primary schools to gain priority in admission as well as steep tuition fees for their children to excel in examinations. All the angst over education and exams will not disappear.

But if we consciously put social mobility as a goal in education policy, right up there with meritocracy, then we can get more nuanced decisions.

A narrow economic view of early childhood education may lead us to conclude that it is best as a private good provided by the private sector, paid for by families. This creates diversity and choice.

Injecting social mobility into the equation as a desired outcome changes the calculus significantly. Then a society is more likely to say pre-school education deserves state subsidies to help level up children from families with lower levels of financial or social capital.

The recent move to provide more after-school care centres in schools, rather than direct students to private and costly tuition centres, is an excellent step towards raising social mobility. It gives poorer students access to a conducive and supervised study environment after classes. This helps level the playing field so they can compete in the meritocratic race on more equal terms.

Singapore can also make social cohesion an explicit outcome of policy goals in education and social services.

Up to now, the country has enjoyed high economic growth but also seen high income inequality that erodes social cohesion.

For example, the easy availability of foreign workers drives growth, but has an impact on social cohesion - in depressing wages of lower-income Singaporeans, and creating a gulf between locals and foreign workers.

Integrating the large surge of foreigners with their different value systems and language backgrounds has not been easy.

If growth is pursued without effort to narrow income inequality, social distances result. This refers to the difference in lifestyles and experiences between the haves and have-nots, evident in different strata cocooned in increasingly separate living environments with limited opportunities to interact, thus fraying social cohesion.

Making social cohesion an explicit goal can result in different policy choices.

For example, it may be more administratively convenient for some secondary schools to offer only Express streams. But for the sake of social cohesion, it would be better for all secondary schools to offer classes in the Normal stream as well so students mix with others of different academic abilities. This allows impressionable teens to form a healthier view of, and respect for, the varieties of human talent and skills.

When students from the Express stream join Normal (Technical) students in a co-curricular activity in, say, the football club, the former may come to value psychomotor skills and not just academic ability.

Similarly, a purely economic lens will compel policymakers to tender out food centres to the highest bidders. And admission to public attractions will be priced at the market value, with high ticket prices.

But if social cohesion is a value, we may want public places to be accessible to all. We may want tickets to spanking new tourist attractions priced lower for residents. We should continue to have hawker centres run as social enterprises so stallholders can continue to sell food at affordable prices.

This way, the poor and rich can have more shared experiences and rub shoulders while having fun, waiting in line or eating in these public places.

A commitment to social mobility and social cohesion entails more than lip service. True commitment to these ideals requires Singapore to draw different conclusions about what is good policy.

Singapore's commitment to meritocracy as a way of life will be stronger - if it is tempered by the compassion and inclusivity that social mobility and social cohesion allow.

The writer, a Singaporean, works for a multinational corporation and is a board member of the non-profit Halogen Foundation.

A more 'equalised' system
By Donald Low, Published The Straits Times, 11 Jan 2013

WHILE we like meritocracy for rewarding hard work and recognising people's talent and abilities, we dislike the unequal outcomes it produces. Is this an inevitable trade-off?

If we want an efficient system that creates strong incentives for people to strive, must we also accept the highly unequal distribution of incomes and wealth that such a system produces?

One way to think about this question is to contrast two world views. The first, which might be termed "trickle-down meritocracy", sees the growth of the economy and the progress of society as driven by its elite, by its best and brightest.

A society organised along the lines of this world view channels a larger share of resources and opportunities to its high performers and talents. A trickle-down system is not concerned with equality of outcomes but with ensuring that its talents have the room to achieve and excel, and are not shackled by high taxation and excessive regulations.

In such a society, economic efficiency takes precedence over distributional concerns or considerations of social equity.

Indeed, this view contends that the poor are best served by providing the best and brightest with maximum opportunities to succeed as they are ones who create jobs for the rest. Holding the talented back by having onerous taxes or regulatory restraints on markets undermines growth and hurts the poor - the very people whom the advocates of social justice claim to help.

A trickle-down approach also means that government and society should be concerned more with growing the pie - through market-friendly and pro-talent policies - and less with how the pie is distributed.

In the last 20 years, Singapore society has probably become more of such a society. Income tax rates have been slashed, wealth taxes reduced - for example, the estate duty was abolished in a place that already does not tax capital gains - and public spending as a share of gross domestic product, or GDP, reduced.

The state has also not become more redistributive in the face of rising inequality. Even after taking into account taxes and transfers, inequality today is higher than it was a decade ago before government redistribution.

A second world view, which one might term "trickle-up meritocracy", sees government redistribution and fair outcomes as necessary corollaries to market-friendly, pro-capital policies and the meritocratic system.

According to this view, meritocracy is legitimate only if it benefits the bulk of society - not just in absolute terms but also in relative terms. This is because greater inequality reduces subjective well-being, social mobility and trust.

Meritocracy with high and rising inequality sows the seeds of its own demise. If we care about preserving meritocracy, it is incumbent on us to limit the rise in inequality.

Trickle-up meritocracy also differs from the trickle-down variant in at least two other ways.

First, it contends that ensuring equal opportunities is necessary but not sufficient. Because people start with differences in talent and resources, equalising resources at the start to some extent is justified on the grounds that this is necessary to ensure equal access to opportunities. Such a system is still meritocratic as the equalisation is done at the start of the competitive race and does not diminish incentives for everyone to run as fast as they can.

The race is competitive and meritocratic but the state has intervened to adjust starting positions and given those with fewer resources a head start.

Second, trickle-up meritocracy believes that instead of subsiding and extending tax breaks to the rich in the hope that they will create jobs and prosperity for the rest, fiscal policy should be focused on increasing the human capital of the rest, ensuring they can afford basic needs like housing and good health care, assuring them of retirement security and social protection against contingencies like involuntary unemployment, and reducing inequality.

In the long run, these measures also benefit corporations and those further up the income ladder.

Spending on these social goods, which is likely to require vigorous fiscal redistribution in the context of today's globalisation and rapid technological change, is necessary to save meritocracy from itself.

Indeed, without these redistributive measures, meritocracy rests on increasingly shaky and tenuous foundations.

The writer is Senior Fellow and Assistant Dean (Research Centres) at the Lee Kuan Yew School of Public Policy, National University of Singapore.

This is an excerpt from an article that appeared in the IPS Commons blog.

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