(This essay was published in South China Morning Post on 19 November 2014.)


The views of some of the student leaders of the occupation movement and the pan-democrat politicians in Hong Kong are quite similar to the commentaries found in rich developed nations.


For example, as in Hong Kong, the Occupy Wall Street movement bemoaned rising inequality, the growth of government-business cronyism, and the inability of the political system to arrest these developments and correct them.


Many pan-democrats and occupation supporters here believe that at the very minimum, a more democratic political system in Hong Kong will be better able to tackle these social ailments.


It is not difficult to understand the source of these sentiments. In both the U.S. and Hong Kong, labor productivity has continued to rise over time but real median household incomes have become stagnant (see Figures 1 and 2).



This phenomenon leads to rising economic inequality and sinking middle income classes over time. There are multiple causes behind it.


First, technological change has created demand for highly skilled manpower. This has increased wage gaps between the more educated and lesser educated workers.


Second, investments in education have lagged behind the demand for skilled manpower, exacerbating the shortage of this labor.


Third, highly regulated schooling systems and the unionization of teachers have stunted incentives to innovate in schools, making learning less effective, especially for underprivileged students. In Hong Kong, there has been barely any growth in tertiary education investments since the 1990s.


Fourth, rising divorce rates have negatively impacted the learning and work habits of children. Hong Kong’s divorce rates are among the top ten in the world. The situation is particularly severe among low-income classes living in public housing estates.


Fifth, high-income families invest heavily in their children at very early ages, giving them cognitive, learning and health advantages for a lifetime of competition.


Sixth, the rich income classes are able to invest in financial and physical assets that preserve and enhance their wealth. Property prices in Hong Kong have risen enormously in the past two decades, creating sharp inequalities between those who own property and benefit from higher prices, and those who do not.


Seventh, politics in the rich and developed nations have not alleviated these problems because the time horizons of politicians in democratic societies are often too short to formulate and implement significant policies, and most societies in the West are configured to make state governing institutions weak.


This has left a legacy in which the governance systems of rich developed nations are unable to arrest rising inequality, halt growing government-business cronyism, overcome the tyranny of minorities, or end political gridlock. Society is beset with growing distrust and remains in the grip of well-organized narrow special interests that are not limited to business alone.


An increasing number of scholars and intellectuals in the West have been reexamining their own political democracies in search of a fix. They remain committed to liberal democracy and the principles of equality and fairness, but they also accept that their democratic systems have deep flaws.


Hong Kong does not yet have democracy. But if American, European and Japanese democracies have not resolved their social ailments, why expect a similar form of democracy to solve the same ailments here? Hong Kong’s problems need more than a political solution.


I am not questioning the superiority of democracy, but as a political arrangement for safeguarding and promoting competing public interests, there is much room for improvement. As Winston Churchill famously said in 1947, “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.”


If we fail to end political gridlock, then Hong Kong will not arrive at democracy through compromise and rational discourse. Democracy will not be attained through peaceful means. Violence certainly will not bring democracy; it can only bring tyranny.

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