She argues that cities (more specifically, city-regions) are the most fundamental economic unit, and many of the problems that national economies encounter are a result of an imbalance created by tying together multiple city-region economies; and tying them together (and together with large rural areas) creates political problems (because their interests do not align). She also points to cities like Singapore & Hong Kong to show how separating a city-region politically and economically from other city-regions, and decoupling large, rural areas allows for optimal economic conditions for cities. She's not a trained economist, but as a city resident, her argument resonated pretty strongly with me -- though, as a practical matter, well, not at all practical.
An observant reader (or someone who lived in singapore or hong kong) would note that both Singapore and Hong Kong do not have true democratic governments.
Hong Kong currently has a parliament that is only one third elected by the people, one third elected by the government itself and one third elected by special interest groups. The executive (the head of state) is elected by 800 people representing private citizens and special interest groups. In practice however, these 800 people are all selected by the government itself. As a result, each year you see the same billionaires in the 800 group, always electing the candidate who has shaken the most hands with the PRC government.
There are a multitude of economic consequences as a result of this. Policies left over from decades ago include fixed electricity pricing, price floor on bus tickets, supermarket duopolies, tunnel operator monopolies, misplaced housing estates, local shopping center monopolies, are some problems the government is not willing to deal with. (Why would they, to lose support among 33% of voters who also happen to be most economically well-off and to be accused of "economic interference"?) These are all things that exacerbates income inequality. Income inequality is increasing not because the highest income people are producing more but because they're earning more from the inefficient market and political system geared towards them.
Everyone thinks Hong Kong has like the best economic system ever, but I'd like to point out that they don't.
Of course, things I've said here are very political and you might get different responses depending on who you're talking to...
The makeup of their government sounds a lot like the classical mixed republic, with elements of democracy, aristocracy, and monarchy combined into a single set of institutions.
Historically, the states that had this structure tended to encourage some of the most stable and prosperous societies, e.g. the Roman Republic and early modern England.
If Hong Kong is really organized like this, it's not surprising that they have such a strong economy. I suppose how long it will last depends on how long the PRC will maintain their hands-off policy and how long Hong Kong itself can stave off internal pressure to change their constitution to favor one faction or another.
I am not saying that the examples you cite are not problems, but would you prefer great income inequality in which the lowest-earners make X and the highest earners say 10X, or a very homogenous society in which the lowest earners earn 0.1X and the highest earners barely make X?
Income inequality is not a simple yes or no choice.
Comments
This reminds me of one of my unexpected favorite reads: Jane Jacob's "Cities & the Wealth of Nations" http://www.amazon.com/Cities-Wealth-Nations-Jane-Jacobs/dp/0...
She argues that cities (more specifically, city-regions) are the most fundamental economic unit, and many of the problems that national economies encounter are a result of an imbalance created by tying together multiple city-region economies; and tying them together (and together with large rural areas) creates political problems (because their interests do not align). She also points to cities like Singapore & Hong Kong to show how separating a city-region politically and economically from other city-regions, and decoupling large, rural areas allows for optimal economic conditions for cities. She's not a trained economist, but as a city resident, her argument resonated pretty strongly with me -- though, as a practical matter, well, not at all practical.
An observant reader (or someone who lived in singapore or hong kong) would note that both Singapore and Hong Kong do not have true democratic governments.
Hong Kong currently has a parliament that is only one third elected by the people, one third elected by the government itself and one third elected by special interest groups. The executive (the head of state) is elected by 800 people representing private citizens and special interest groups. In practice however, these 800 people are all selected by the government itself. As a result, each year you see the same billionaires in the 800 group, always electing the candidate who has shaken the most hands with the PRC government.
There are a multitude of economic consequences as a result of this. Policies left over from decades ago include fixed electricity pricing, price floor on bus tickets, supermarket duopolies, tunnel operator monopolies, misplaced housing estates, local shopping center monopolies, are some problems the government is not willing to deal with. (Why would they, to lose support among 33% of voters who also happen to be most economically well-off and to be accused of "economic interference"?) These are all things that exacerbates income inequality. Income inequality is increasing not because the highest income people are producing more but because they're earning more from the inefficient market and political system geared towards them.
Everyone thinks Hong Kong has like the best economic system ever, but I'd like to point out that they don't.
Of course, things I've said here are very political and you might get different responses depending on who you're talking to...
I didn't know that re Hong Kong's government.
The makeup of their government sounds a lot like the classical mixed republic, with elements of democracy, aristocracy, and monarchy combined into a single set of institutions.
Historically, the states that had this structure tended to encourage some of the most stable and prosperous societies, e.g. the Roman Republic and early modern England.
If Hong Kong is really organized like this, it's not surprising that they have such a strong economy. I suppose how long it will last depends on how long the PRC will maintain their hands-off policy and how long Hong Kong itself can stave off internal pressure to change their constitution to favor one faction or another.
I am not saying that the examples you cite are not problems, but would you prefer great income inequality in which the lowest-earners make X and the highest earners say 10X, or a very homogenous society in which the lowest earners earn 0.1X and the highest earners barely make X?
Income inequality is not a simple yes or no choice.
[edited: brevity]