The recent government intervention in the Hong Kong stock market will cause far deeper damages than what it did in 1998.
This month, the government said it had bought shares in HKEx, which owns the city's sole stock exchange, and had become the largest shareholder of it. That was the first time the government actively bought any Hong Kong-listed stock since the Asian Financial Crisis in 1998.
That year, the government, in a novel move, bought Hong Kong stocks and successfully defend its financial system. Years on, Hong Kong had left the turmoil behind and restored its reputation of a free market. In retrospect, the government intervention did no harm. How could the recent purchase of a single stock go wrong?
The difference is -- this time, the government chose.
Unlike last time when it bought all blue chips, of which the benchmark Hang Seng Index was composed, the government chose what to buy, when to buy, how many shares to buy. This discretion creates ambiguity. And ambiguity leads the power of coercion.
Now, the government intervention distracted corporate management from its focus on earnings. CEO of listed companies would ask: "What does the government like?" Will my company become the government's next target? Yes, every CEO, who takes his or her responsibility for optimizing shareholders' return seriously, ought to think about this question.
The next question the CEO should ask would be -- what could my company do to win the government's affection? Today, there are many cooperation opportunities between mainland China and Hong Kong. Stock and futures trading is one of them. Other possible arrangements could happen in infrastructure, utilities, transportation and technology. "What is the next big thing (for the government)?"
The corporate management would be busy developing businesses that they think the government would like. These businesses are not necessarily the most profitability or most efficient for the economy.
The distortion effort will multiply when investors join the guessing game. Investors would ask the same question: "What does the government like?" HKEx share price ended more than 20% higher on the day after the government's disclosure of its holding. They will buy stocks in anticipation of the government's action, rather than based on earnings prospects.
What does the government like? Somebody inside the government must have the answer. If not property regulated, that would create room for the government officials to give favoritism. Merely a public comment by government officials can move share prices up and down. That would create conflicts of interest between the public and private sectors.
This discretionary intervention would open the door for possible bailout for financial troubled corporations, especially those big ones with strong relationship with the government. All the government needs to justify a stock purchase is certain cooperation proposal between mainland China and Hong Kong, whether or not it will be realized in the future.
Therefore, the government holds the arbitrary power overshadowing the interest of investors and businesspeople, including incumbent industry players. Relationship with the government becomes more powerful than ever before.
Entrepreneurship will be compromised. Those start-up companies that experiment new products and services will not get financiers' attention they deserve. Being innovative and adventurous, those entrepreneurs cannot be the government's next pick. They cannot fairly compete with the incumbents that have maintained close relationship with the government.
If the government's intention mandates social activities, talents cannot contribute to the advancement of individual's living.
Hong Kong's success depends on entrepreneurship that enables its economy to transform flexibly from a trading harbor to a manufacturing base, to now a financial center. Hong Kong has long had favorable laws for business activities, for example low taxes and free ports. Above all, Hong Kong entrepreneurs are keen hunters for business opportunities. And a free market, without government intervention, is pivotal to allow investors to reward winners, and in turn encourage further newcomers and new ideas.
Should the government invested in a prominent local factory in the 1970's, when everyone believed that Hong Kong couldn't survive without manufacturing industry, Hong Kong could probably not be able to develop the financial industry as it is today.
In the future, will Hong Kong's success depend on some forms of bureaucratic alliance with mainland China? I don't know. But Hong Kong is destined to fail without entrepreneurship. The government's discretionary action is threatening the vitality of entrepreneurship.
Quam Copyright
2007/09/24
2007/06/29
他們才是上市委員?
富豪們有機會優先購入新股，毋須與散戶投資者一同抽籤以待分配合，如果該新股是熱門股，上市後藉著供不應供的關係，股價上升，認購落空的散戶唯有以較高的價錢買股，這樣，富豪們變相可以低於市價買股，做成不公平。蘋果日報今日的設計圖片真的可圈可點，以幾位富豪扮演電影「盜海豪情」的主角，是喻意他們一擲千金的豪情，還是指他們是盜賊? 茶怪無意作道德判斷，只是制度不健全，容許不公平發生。
茶怪想，這個優先認購安排最大的禍害，不是誰賺多少，而是富豪們竟然成為真正的上市審批委員，有權決定哪一家公司集資成功與否，通過港文所上市委員會評審的公司當然可以上市，但要集資成功，愈來愈需要幾位富豪們的認可，市場愈來愈依靠他們的指引，他們可能是投資有道的，但即使排除個人利益因素，單憑幾個人去決定一間公司的價值，當然不及市場集群眾智慧去決定的客觀，再者他們的買入價較一般投資者低，其實跨大了他們的投資信心。這樣，令市場無法有效反映公司的價值，亦阻礙了交易所作為有效集資渠道的功能。
2007/06/22
因人立言
今日信報程介明在其「何謂學術自由?」一文中借教院風波，說他對社會濫用學術自由的看法。「學術自由是針對學術的探索而言的。對於政府政策表示反對和不滿，一般是言論自由的範疇，不是因為發表這些言論的是學者，就一定屬於學術自由的範疇。除非學者作了一些研究，其結果足以證明政府政策的失誤，而政府又干預和禁止這些研究的進行，那才構成一個學術自由的問題。」
在社會保障學術自由重於保障言論自由的環境下，茶怪想，如果凡是出自學者口中的就是學術權威，可享學術自由，一般人的說話只能以言論自由保護之，學者就有了特權。例如，可以為自己的利益講說話，利益包括工作職位、研究資助，甚至個人股票權益(以學者身份在傳媒唱好自己手持的股份)。因人立言之風，麻麻地。
在社會保障學術自由重於保障言論自由的環境下，茶怪想，如果凡是出自學者口中的就是學術權威，可享學術自由，一般人的說話只能以言論自由保護之，學者就有了特權。例如，可以為自己的利益講說話，利益包括工作職位、研究資助，甚至個人股票權益(以學者身份在傳媒唱好自己手持的股份)。因人立言之風，麻麻地。
2007/06/20
紅眼症
用堅尼系數去推斷貧富懸殊有三個問題，早前的文章已說明其中兩個，一、人的一生制遇，年青時期是差不多，年紀愈大，差距愈遠，就像馬拉松長跑，首十公里，各跑手都相距不遠，到終點，一頭一尾可以相差幾個小時。香港的嬰兒潮的一代的馬拉松，就反映在堅尼系數上。二、堅尼系數算的，是結果，不是因由。一個自由社會，人有權選擇買誰的產品服務，有權選擇不買，每人的收入不一，成敗得失有好多因素，包括運氣，但結果有高低，不代表不公平。
這裡茶怪想說的是三，貧富懸殊擴大，顯示整個社會的經濟水平在移動中。因為經濟活動是由個體組成，當一個經濟擴張，一定先有一個行業或一批人受惠，將這個看成是問題的，大概是患了「紅眼症」。撇掉心理因素，先有一批人受惠，其實是好事，因為他們富起來，自然帶動其他行業的生產。如果沒有這批「好彩」的人，大家一齊冇運行。
澳門近年急速發展，人才需求一下子颷升，人人都加入賭場服務了，沒有人開公共車，沒有人去提供基本服務。很多人認為澳門今日經濟發展過快，可能導致失衡，學歷不高的年青人，只要跑進賭場工作，收入較大學畢業生還高，令到辛苦耕耘的人不高興。茶怪想，這種不滿情緒在香港也有。
茶怪想，一分耕，一分收獲這種理想烏托邦固然好，但在現實生活是不可能的，因為如果這樣，必須有一個無上權威去決定誰比誰「值得」賺得多，這個無上權威由誰做? 再者，如果規定小學畢業生永遠不能賺得比中學畢業生多，而中學畢業生的收入又永遠不能超過大學畢業生，這樣的社會又怎能令每個人奮發圖強呢? 說澳門發展需慢慢來，如果設身處地去想你是澳門人，你希望明日加人工，還是明年? 你想你的客人是有錢人還是窮人? 你想你的子女到賭場酒店工作，還是看士多賣鳥結糖?
這裡茶怪想說的是三，貧富懸殊擴大，顯示整個社會的經濟水平在移動中。因為經濟活動是由個體組成，當一個經濟擴張，一定先有一個行業或一批人受惠，將這個看成是問題的，大概是患了「紅眼症」。撇掉心理因素，先有一批人受惠，其實是好事，因為他們富起來，自然帶動其他行業的生產。如果沒有這批「好彩」的人，大家一齊冇運行。
澳門近年急速發展，人才需求一下子颷升，人人都加入賭場服務了，沒有人開公共車，沒有人去提供基本服務。很多人認為澳門今日經濟發展過快，可能導致失衡，學歷不高的年青人，只要跑進賭場工作，收入較大學畢業生還高，令到辛苦耕耘的人不高興。茶怪想，這種不滿情緒在香港也有。
茶怪想，一分耕，一分收獲這種理想烏托邦固然好，但在現實生活是不可能的，因為如果這樣，必須有一個無上權威去決定誰比誰「值得」賺得多，這個無上權威由誰做? 再者，如果規定小學畢業生永遠不能賺得比中學畢業生多，而中學畢業生的收入又永遠不能超過大學畢業生，這樣的社會又怎能令每個人奮發圖強呢? 說澳門發展需慢慢來，如果設身處地去想你是澳門人，你希望明日加人工，還是明年? 你想你的客人是有錢人還是窮人? 你想你的子女到賭場酒店工作，還是看士多賣鳥結糖?
2007/06/13
2007/05/22
HK won't raise another Jackie Chan
Apart from the brown tap water and the oil fish at home that might make me sick, i shouldn't worry about the society's polarization of income distribution that, skeptics said, affects the job opportunities. The phenomenon of so-called "M-shaped Society" is the mere consequence of the fact that people walk different paths of life. The older they get, the broader divergence of achievements it is possible. That actually happens in Hong Kong as the baby boomers who were born in 1950's and 1960's. The reason the skeptics blame the "M-shaped" phenomenon for the seemingly narrowed job opportunities is that, i believe, the "M-shaped" phenomenon emerged coincidently with the buoyancy of unemployment. The skeptics are barking up the wrong tree.
Yes, unemployment statistics has been disappointing although the economy has been expanded uninterruptedly for the past four years. The current jobless rate of 4.1% means that for every 1,000 people who are either working or waiting for jobs, 41 are now without job. The number considerably exceeds the average 37 over the past 25 years. In the heyday 1982 to 1997, only 25 people on average were jobless. The number hit a historic low of 11 in 1989. Now, at 4.1%, the unemployment rate has fallen significantly from the peak but the decline has flattened. Why?
Economic cycle cannot explain the prevailing unemployment. Is it structural? The government would be happy to agree and reiterates its old tale that Hong Kong has transformed from a manufacturing town to a service-oriented city. The government likes to say that workers who are laid off from factories remained unemployed and that has limited the decline of unemployment rate. The tale suggests that the prevailing unemployment is something irreversible, and the government can hardly do anything about it. However widely cited it is, the tale is false.
The chart on the right (Source: Hong Kong Government) nails the lie.
This chart shows the unemployment trend by age group since 1982. All lines go hand-in-hand, up and down together. The unemployment among workers aged between 50 and 59 has been high in recent years. But the fact is that all age groups, young and old, have soared. If it were structural unemployment that dictated the overall unemployment, one would expect to see the older people, the green line and the orange line, suffer and the others do not. If it were structural unemployment that causes the whole unemployment problem, the jobless rate among the younger people, represented by the red line and the light blue line, should be low. But that is not the case.
The highly consistent pattern across ages suggests that structural changes have played a minor role, if any, in explaining the whole employment problem. There must be some underlying force that affects all workers, young and old.
Apart from "M-shaped" phenomenon, Hong Kong's social welfare has risen coincidently with the rise of unemployment rate.
See the chart on the right (Source: Hong Kong Government) and you will find changes in jobless welfare ground-breaking.
The red line in the chart shows expenditure of Comprehensive Social Security Assistance (CSSA) Scheme since 1994. The black line shows the number of recipients. The expenditure fifth-folded to HK$17.6 billion in 2004, from HK$3.4 in 1994. The number of recipients increased to 542,000 from 140,000 during the same period. How large is the group of recipients? The number of recipients in 2004 was more than double the number of unemployed people.
How much does the scheme pay as compared with an employer? According to official statistics, an eligible family of three members on average received HK$7,700 a month in the year ended October 2005. A single-member family got HK$3,500 a month.
A cleaning worker earns about HK$3,000 to HK$5,000 after one whole month of hardship. He loses almost all his leisure time and probably spends most of his saving in medical expenses due to the infectious working environment.
The welfare system gives incentive for people not to work. i believe that is the major cause for the prevailing unemployment problem.
Unemployment driven by the welfare hurt the economy harder than cyclical and structural causes do because it tends to stay for a long period of time and affect all workers, young and old. Today's stagnant French economy is an example.
Taxpayers are worse-off. More importantly, the society loses a group of workforce. Small businesses cannot recruit unskilled workers. In the past, small businesses such as textile, jewelry and spectacle companies provided on-job training for young workers, giving rise to a group of innovative talents. For instance, the bosses of listed companies, Shenzhou (2313), Luk Fook (590) and Arts Optical (1120) started their careers as trainees. As trainees, they received minimal pays. All they can ask for were daily meals and the teaching of their "masters" in the hope that they would one day start their own businesses using the techniques taught by their masters.
School courses cannot replace on-job training because students in school aim to take course credits, not the mastering of certain tasks. Without such no-pay training system, there won't be any movie star Jackie Chan.
The welfare expenditure that kicked off in mid-1990's has destroyed the opportunities for on-job training and the innovation that would emerge. As Hong Kong has shown in the past, innovation, not government direction, is what an economy needs for it to go forward.
Next time, i will continue to explore the topic of opportunities.
Copyright Quam
Yes, unemployment statistics has been disappointing although the economy has been expanded uninterruptedly for the past four years. The current jobless rate of 4.1% means that for every 1,000 people who are either working or waiting for jobs, 41 are now without job. The number considerably exceeds the average 37 over the past 25 years. In the heyday 1982 to 1997, only 25 people on average were jobless. The number hit a historic low of 11 in 1989. Now, at 4.1%, the unemployment rate has fallen significantly from the peak but the decline has flattened. Why?
Economic cycle cannot explain the prevailing unemployment. Is it structural? The government would be happy to agree and reiterates its old tale that Hong Kong has transformed from a manufacturing town to a service-oriented city. The government likes to say that workers who are laid off from factories remained unemployed and that has limited the decline of unemployment rate. The tale suggests that the prevailing unemployment is something irreversible, and the government can hardly do anything about it. However widely cited it is, the tale is false.
The chart on the right (Source: Hong Kong Government) nails the lie.
This chart shows the unemployment trend by age group since 1982. All lines go hand-in-hand, up and down together. The unemployment among workers aged between 50 and 59 has been high in recent years. But the fact is that all age groups, young and old, have soared. If it were structural unemployment that dictated the overall unemployment, one would expect to see the older people, the green line and the orange line, suffer and the others do not. If it were structural unemployment that causes the whole unemployment problem, the jobless rate among the younger people, represented by the red line and the light blue line, should be low. But that is not the case.
The highly consistent pattern across ages suggests that structural changes have played a minor role, if any, in explaining the whole employment problem. There must be some underlying force that affects all workers, young and old.
Apart from "M-shaped" phenomenon, Hong Kong's social welfare has risen coincidently with the rise of unemployment rate.
See the chart on the right (Source: Hong Kong Government) and you will find changes in jobless welfare ground-breaking.
The red line in the chart shows expenditure of Comprehensive Social Security Assistance (CSSA) Scheme since 1994. The black line shows the number of recipients. The expenditure fifth-folded to HK$17.6 billion in 2004, from HK$3.4 in 1994. The number of recipients increased to 542,000 from 140,000 during the same period. How large is the group of recipients? The number of recipients in 2004 was more than double the number of unemployed people.
How much does the scheme pay as compared with an employer? According to official statistics, an eligible family of three members on average received HK$7,700 a month in the year ended October 2005. A single-member family got HK$3,500 a month.
A cleaning worker earns about HK$3,000 to HK$5,000 after one whole month of hardship. He loses almost all his leisure time and probably spends most of his saving in medical expenses due to the infectious working environment.
The welfare system gives incentive for people not to work. i believe that is the major cause for the prevailing unemployment problem.
Unemployment driven by the welfare hurt the economy harder than cyclical and structural causes do because it tends to stay for a long period of time and affect all workers, young and old. Today's stagnant French economy is an example.
Taxpayers are worse-off. More importantly, the society loses a group of workforce. Small businesses cannot recruit unskilled workers. In the past, small businesses such as textile, jewelry and spectacle companies provided on-job training for young workers, giving rise to a group of innovative talents. For instance, the bosses of listed companies, Shenzhou (2313), Luk Fook (590) and Arts Optical (1120) started their careers as trainees. As trainees, they received minimal pays. All they can ask for were daily meals and the teaching of their "masters" in the hope that they would one day start their own businesses using the techniques taught by their masters.
School courses cannot replace on-job training because students in school aim to take course credits, not the mastering of certain tasks. Without such no-pay training system, there won't be any movie star Jackie Chan.
The welfare expenditure that kicked off in mid-1990's has destroyed the opportunities for on-job training and the innovation that would emerge. As Hong Kong has shown in the past, innovation, not government direction, is what an economy needs for it to go forward.
Next time, i will continue to explore the topic of opportunities.
Copyright Quam
2007/04/19
Kurt Vonnegut
"The year was 2081, and everybody was finally equal..." This science fiction dated 1961 tells something about equality. The author Kurt Vonnegut died last week.
2007/04/17
M-shaped society: Inequality?
Living in a city like Hong Kong, i have endless reasons for getting paranoid. At home, i get brown tap water. My share of frozen oil fish still sits in the fridge since news reports said the fish could cause health problem. What more fearful takes place at work -- the fear of losing my job. Recent job statistics from the government seems to tell a spine-chilling story about my future -- "Get rich, or you have to be poor. There is no middle ground!"
In the so-called M-shaped society, the distribution of income has polarized. The number of people who earn monthly income of less than HK$6,000 increased by 17% during the decade from 1996 to 2006. Payrolls for more than HK$10,000 rose 21%. However, the group of people who earn between HK$6,000 and HK$10,000 contracted by 8%. Academics pulled out the jargon called Gini Coefficient and said that inequality in Hong Kong is now scoring high relative to other comparable cities in the world. The situation is getting worse year after year, they said. Social groups warned that the middle class is disappearing and the society is going out of balance. Some people must be taking advantages over others, they claimed.
Worse, the unemployment rate remains buoyant, above 4%, compared with 1-3% during the decade from 1986 to 1995. Even top financial official Henry Tang threw cold water on hopes that the job market could recover, saying the jobless rate won't come down to the heyday level until we die. Is the city losing jobs? Many people say yes. They pointed to cheap labors across the border for taking away low-paying jobs. The others blamed former chief Tung Chee-hwa for leading the economic development to nowhere.
Even well educated people cannot escape from the misery, it seems. The job market is getting increasingly competitive when university graduates are accepting salaries low enough to make their elder alumni laugh. An average high school graduate is doing much worse than that 30 years ago. Some people said it was a rat race for academic qualifications in which everyone is struggling but no one gains at all.
Are we coming to the end of the world? No. Far from it.
From this paragraph onward, i am going to cheer you up. i am going to tell you the truth behind the numbers. The M shape, jobless rate and even fresh graduate income are irrelevant as an indicator of inequality and job opportunities. None of them means anything miserable. Instead, they are the outcomes of natural progress of our society.
i am not going to bore you with number crunching and twisting. i just want to point out a simple fact -- people follow different paths along their lifetime.
Randomly take two fresh graduates from university. They would likely start with monthly income more or less the same, say HK$9,000. Ten years later, their income could be anywhere between HK$20,000 to HK$50,000. Another ten years later, one of them might possible become a successful businessman while the other might possibly have problem to earn a living. Further ten years later, the successful businessman could unfortunately go broke and the other catch a second wind to become a billionaire.
That's natural. In a marathon, ten athletes who start at the same line could end up miles apart. How does that relate to the M-shape situation?
A wave of new birth kicked in during the decade following the end of World War II. See the longest pair of bars, for men and women, in the following chart and you know the size of the so-called baby-boomers. Baby-boomers, men and women aged between 40 and 50, amounted to roughly 1.3 million in 2006.
In 1996, the baby-boomers of course were 10 years younger than now. See the following chart.
The widening of income distribution over the past decades was resulted from the fact that the baby-boomers were explored their fortune. Twenty years ago, they just started their career and received similar incomes. As time went by, some did better than the others. In their forties, in 2006, the baby-boomers made various levels of achievements. They are not necessarily going to extremes. There could be a lot of middle-range performers. Merely the dispersed spread of personal performance is enough to make the statistics take its present shape.
Compare two hypothetical societies -- one comprising mostly 20-year-old people and the other comprising mostly 40-year-old. Can we say that the younger society is more equal than the older one simply because the younger society has more evenly distributed income? No, we can't.
To make Hong Kong a better place to live, we must distinguish "inequality of outcomes" from "inequality of opportunities". The Gini Coefficient and any other measurement of income distribution measure the degree of "inequality of outcomes" only. We are barking the wrong tree if we focus on "inequality of outcomes". A communistic society has absolute equality of outcomes. Everyone earns the same level of income. Is it a utopia? Some people might say: "Yes, those poor people contribute to the society just as much as the rich. Let them share the fruit of the economic development." However, the road to hell is paved with good intentions. History tells us that, if we focus on equality of outcome, we won't help the poor at all. Instead, everyone would end up being in poverty.
"Inequality of opportunities" is more important than "inequality of outcomes". That is to ensure that everyone plays in level field.
i will try to assess the inequality of opportunities in Hong Kong in future entries. Before that, we would take a few more steps to clarify the general perceptions and confusions. Next time, i will continue to show why worries about the buoyant unemployment rate and the struggle of rat race are exaggerated.
Copyright Quam
In the so-called M-shaped society, the distribution of income has polarized. The number of people who earn monthly income of less than HK$6,000 increased by 17% during the decade from 1996 to 2006. Payrolls for more than HK$10,000 rose 21%. However, the group of people who earn between HK$6,000 and HK$10,000 contracted by 8%. Academics pulled out the jargon called Gini Coefficient and said that inequality in Hong Kong is now scoring high relative to other comparable cities in the world. The situation is getting worse year after year, they said. Social groups warned that the middle class is disappearing and the society is going out of balance. Some people must be taking advantages over others, they claimed.
Worse, the unemployment rate remains buoyant, above 4%, compared with 1-3% during the decade from 1986 to 1995. Even top financial official Henry Tang threw cold water on hopes that the job market could recover, saying the jobless rate won't come down to the heyday level until we die. Is the city losing jobs? Many people say yes. They pointed to cheap labors across the border for taking away low-paying jobs. The others blamed former chief Tung Chee-hwa for leading the economic development to nowhere.
Even well educated people cannot escape from the misery, it seems. The job market is getting increasingly competitive when university graduates are accepting salaries low enough to make their elder alumni laugh. An average high school graduate is doing much worse than that 30 years ago. Some people said it was a rat race for academic qualifications in which everyone is struggling but no one gains at all.
Are we coming to the end of the world? No. Far from it.
From this paragraph onward, i am going to cheer you up. i am going to tell you the truth behind the numbers. The M shape, jobless rate and even fresh graduate income are irrelevant as an indicator of inequality and job opportunities. None of them means anything miserable. Instead, they are the outcomes of natural progress of our society.
i am not going to bore you with number crunching and twisting. i just want to point out a simple fact -- people follow different paths along their lifetime.
Randomly take two fresh graduates from university. They would likely start with monthly income more or less the same, say HK$9,000. Ten years later, their income could be anywhere between HK$20,000 to HK$50,000. Another ten years later, one of them might possible become a successful businessman while the other might possibly have problem to earn a living. Further ten years later, the successful businessman could unfortunately go broke and the other catch a second wind to become a billionaire.
That's natural. In a marathon, ten athletes who start at the same line could end up miles apart. How does that relate to the M-shape situation?
A wave of new birth kicked in during the decade following the end of World War II. See the longest pair of bars, for men and women, in the following chart and you know the size of the so-called baby-boomers. Baby-boomers, men and women aged between 40 and 50, amounted to roughly 1.3 million in 2006.
In 1996, the baby-boomers of course were 10 years younger than now. See the following chart.
The widening of income distribution over the past decades was resulted from the fact that the baby-boomers were explored their fortune. Twenty years ago, they just started their career and received similar incomes. As time went by, some did better than the others. In their forties, in 2006, the baby-boomers made various levels of achievements. They are not necessarily going to extremes. There could be a lot of middle-range performers. Merely the dispersed spread of personal performance is enough to make the statistics take its present shape.
Compare two hypothetical societies -- one comprising mostly 20-year-old people and the other comprising mostly 40-year-old. Can we say that the younger society is more equal than the older one simply because the younger society has more evenly distributed income? No, we can't.
To make Hong Kong a better place to live, we must distinguish "inequality of outcomes" from "inequality of opportunities". The Gini Coefficient and any other measurement of income distribution measure the degree of "inequality of outcomes" only. We are barking the wrong tree if we focus on "inequality of outcomes". A communistic society has absolute equality of outcomes. Everyone earns the same level of income. Is it a utopia? Some people might say: "Yes, those poor people contribute to the society just as much as the rich. Let them share the fruit of the economic development." However, the road to hell is paved with good intentions. History tells us that, if we focus on equality of outcome, we won't help the poor at all. Instead, everyone would end up being in poverty.
"Inequality of opportunities" is more important than "inequality of outcomes". That is to ensure that everyone plays in level field.
i will try to assess the inequality of opportunities in Hong Kong in future entries. Before that, we would take a few more steps to clarify the general perceptions and confusions. Next time, i will continue to show why worries about the buoyant unemployment rate and the struggle of rat race are exaggerated.
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