Hong Kong, Paris and Santiago are relatively rich but restive. A development economist explains why
I’m rivetted by Jeffrey Sachs’ analysis of why rich cities rebel. Paris, Hong Kong and Santiago, he recently pointed out, have been unquiet, mutinous places this year mostly because they’re burdened by “a sense of unfairness”.
How and why is this the case?
According to Professor Sachs, who teaches sustainable development at Columbia University, the three cities have a lot in common. They are rich and restive.
They are “paragons of economic success,” he writes, by the traditional metric of GDP per capita. In Hong Kong, per capita income is around $40,000; in Paris, more than $60,000, and in Santiago, one of the wealthiest cities in Latin America, roughly $18,000. Professor Sachs cites the 2019 Global Competitiveness Report issued by the World Economic Forum. It ranks Hong Kong third, France 15th, and Chile 33rd (the best in Latin America by a wide margin). And yet, he says, “while these countries are quite rich and competitive by conventional standards, their populations are dissatisfied with key aspects of their lives. According to the 2019 World Happiness Report, the citizens of Hong Kong, France, and Chile feel that their lives are stuck in important ways.”
China might have a problem with Professor Sachs’ description of Hong Kong as a country, but other than that, it’s worth taking a look at his argument.
It is simple but not necessarily easily apparent, if that doesn’t sound too paradoxical.
The basic thrust appears to be that the authorities in Hong Kong, Paris and Santiago “were blindsided by the protests” because they had “lost touch with public sentiment”. Accordingly, Professor Sachs writes, “they failed to anticipate that a seemingly modest policy action (Hong Kong’s extradition bill, France’s fuel-tax increase, and higher metro prices in Chile) would trigger a massive social explosion.”
The second half of Professor Sachs’ argument rests on the idea that “traditional economic measures of wellbeing are wholly insufficient to gauge the public’s real sentiments.”
In other words, GDP per capita tells us little or nothing beyond an economy’s average income. It doesn’t give us any idea about income distribution, people’s perceptions of fairness or injustice, their sense of being financially vulnerable, or their own faith in their government.
We knew that before, but Professor Sachs reiterates the importance of moving “beyond traditional indicators such as GDP growth and per capita income, to a much richer set of objectives, including social fairness, trust, and environmental sustainability”.
Professor Sachs should know. He’s director of the UN Sustainable Development Solutions Network, and watches such issues carefully. Accordingly, he refers to the idea of sustainable development, as reflected in the 17 Sustainable Development Goals adopted by the world’s governments in 2015. They “draw specific attention not only to income inequality (SDG 10), but also to broader measures of wellbeing (SDG 3),” he writes.
Professor Sachs suggests that the authorities should “ask the public directly about their life satisfaction, sense of personal freedom, trust in government and compatriots, and about other dimensions of social life that bear heavily on life quality and therefore on the prospects of social upheaval.”
If that sounds like he’s recommending regular opinion polls, he is. And possibly common sense among our leaders too.
The Professor speaks approving of “the approach taken by Gallup’s annual surveys on wellbeing”. Policy-making must take into account social trust, social equality (and the perception thereof), as well as the sense of social justice and fairness (or lack thereof).