Equity and Equality

How can a society like Singapore’s further reduce income inequality and increase social mobility? Who should finance the social costs?

Singapore is a successful society partly because it has adopted capitalism as its economic model. Capitalism and economic fairness are always at odds with each other. The concept of personal wealth and possessions inevitably leaves some people worse off than others. The question is how to remove the worst of the inequality, while retaining the driving motivation of personal gain.

The options are [1] Government redistribution of wealth. This is notoriously inefficient and costly. [2] Personal generosity – but people are generous mostly when there is something in it for them. Inevitably there will be some of each method. Singapore will benefit most if the balance between capitalism and welfare is kept short of a fully-fledged welfare state. Incentives to personal generosity can be increased to maximise this still only partly tapped source of creating a fairer society.