Social policy must not undermine personal responsibility: DPM Tharman

SINGAPORE - Deputy Prime Minister Tharman Shanmugaratnam highlighted on Monday the important role of culture in building a good society, in a speech to more than 600 foreign service officers and members of the diplomatic corps at the annual S Rajaratnam Lecture.

Get the full story from The Straits Times.

Read an excerpt of his speech here:

"Why social culture matters

"The Government is playing a more active role in redistribution. We began tilting our policies in favour of the lower income group in 2007, and have expanded support for the middle income group in the last few years.

"But the most important question - and this is the main theme of my speech - is not how much we redistribute, but how we do so.

"How do we best intervene? In particular, how do we do so in a way that preserves the social culture and norms that enable Singapore to be a fair society without reducing its vim and energy? It is in every citizen's interests, and certainly our lower income folk and elder's interests, that we retain a vibrant economy, capable of supporting important social needs.

"How do we intervene in a way that preserves a sense of pride that comes from standing on one's own feet, the desire to improve and work hard for a better living? How does Government encourage, rather than stifle, the community initiatives and civic culture that makes us a better society? And critically, how we do sustain a social and political consensus that enables us to look well ahead, to ensure that what we do today to preserve equity can be sustained financially so that a fair and just society defines our children's Singapore?

"Social culture - the values and norms, and especially the willingness of individuals to take responsibility for themselves and their families, and to support others - this social culture matters in building the good society.

"But history has also taught us how social culture is not immutable, and how it changes in response to policies themselves. Communism reshaped social values and norms, leaving a legacy that has lasted well after it collapsed as an economic system. Free-market capitalism breeds its own social ethos, as individuals look out for themselves. And the social-democratic model, which arose especially in Western Europe in response to both communism and fascism, and which sought to temper capitalism through a welfare state, has itself seen quiet and unintended changes in values and behaviour take place as initially modest social entitlements were expanded over the decades.

"Societies that were known for their industriousness have, in ways not anticipated in the original social-democratic vision, seen a steady erosion of the work ethic, increased dependence on state support, and weakening of community bonds.

"Those who count themselves as socially progressive have to be deeply concerned about social culture, not just conservatives. The invisible hand of social culture is at least as powerful as the invisible hand of the market. Policies to redistribute resources and level up the poor can hence only succeed and be sustained if they are designed to encourage a culture of personal responsibility - in the family, in education and at work - and if they promote collective responsibility among everyone, to improve the lives of others and the community we live in.

"I believe there is this space for active government policies that level up those who start with less, in a way that reinforces the values and ethos needed to sustain a dynamic and fair society, one that all citizens contribute to and can be proud of. There is space for this true progressivism.

"To illustrate, I will talk about four areas where policy has to be concerned about social culture, so that we can better our chances of sustaining a fair and inclusive society.

"Sustaining Social Mobility

"The first issue concerns social mobility, which is a challenge all over the world. Efforts to keep mobility alive must remain at the core of our efforts to level up those who start off with less.

"In the US, the gap in standardised test scores between poor and rich children is about 40 per cent wider today compared to the 1980s. That's a very large increase. It has in fact happened while gaps in test scores have narrowed between black and white students.

"Family incomes now matter more than race in explaining test scores. But studies also point to a growing cultural divide. Better off parents are spending more time than ever before with their children from young, taking them to language and maths lessons, exposing them to sports and music, and finding every way to give them a head start.

"The divide has been accentuated by the educated marrying the educated. At the same time, social policies since the 1960s have accentuated trends where a lower income family is more likely than ever to be headed by a single parent, who is typically stretched for time.

"Another factor has been the social dynamics within communities. Studies done in the last couple of years by a group of economists at Harvard and UC Berkeley found wide divergences in mobility across different regions of the US, including areas with the same incomes. They looked for explanations. They found that traditional redistributive strategies, such as state-level tax credits for lower income families explained only a small portion of the differences in mobility, once other factors were taken into account.

"The more important factors were social. Upward mobility for the poor was stronger where they were living in mixed-income neighbourhoods compared to those with high poverty concentrations. It was also stronger when they live in areas with higher concentrations of two-parent families, better preschools and schools, and higher levels of civic engagement.

"These and other studies confirm why James Heckman, the Nobel laureate best known for his studies on education and mobility, has warned that it would be a mistake to think that just giving families more will improve their children's prospects.

"What happens at home, in school and in the community shape your aspirations, your confidence, the habits you pick up and the support you get as you grow up. Studies also point to the critical role played by the quality of parenting in the early years, before kids even go to preschool - although no society has found an easy way to influence that.

"We are intervening upstream, earlier in children's lives, to reduce the gaps in the starting points between children from poorer and better off backgrounds. We are investing in better quality pre-schooling, at affordable rates, and in detecting those with learning difficulties early. We have to find every way of reducing these gaps, these early gaps between kids of different social backgrounds, through both government and community initiatives.

"Our system of meritocracy too is evolving. We have moved away from excessive testing of pupils in the early primary years, which is not ideal for their development, and also works in favour of those with a head-start. We are also moving away from fine differentiations in PSLE scoring at the end of primary school, and providing many pathways to recognise students with different talents and interests and help them to develop their potential in secondary schools and beyond. It is becoming a broader meritocracy, not just focused on academic scores.

"We should avoid thinking that egalitarianism is best served by every child getting the same education in secondary schools. It has not worked out well in many countries. In France, for example, the insistence on a uniform education for all students in schools has led to manifestly non-egalitarian outcomes. The best students do well, with those at the top ending up in the elite Grand Écoles. But over a third of French students repeat a year in school by the time they are 15. One in five leaves secondary school with no qualification. It is an example of seemingly egalitarian means with non-egalitarian outcomes.

"We must continue to provide differentiated pathways to help every student discover his or her strengths, and help them achieve their aspirations. We are also investing heavily in continuous education for working adults. There must be bridges and ladders at every stage of life, so that the grades or qualifications you get in your youth do not settle things for life. There is much to learn too from some of the advanced countries, where the workplace culture is respectful of people in different vocations, and continuous investment in their skills has helped companies become global leaders in their own niches.

"Compact between personal and collective responsibility

"The second issue I will talk about has to do with the balance between individual and collective responsibility.

"We know we should avoid the extremes. We cannot take a free market or laissez-faire approach to inequality and social divergences. It will lead to widening income gaps, that will tend over time to reflect not only people's different abilities and efforts but the advantages and disadvantages of social backgrounds that people start with. It will sap the morale of our society. But we also know that too much dependence on the state eventually saps the energy of society.

"Finding the right balance between personal and collective responsibility is a vexing issue all over the world, and especially because social values and norms themselves change over time. The advanced societies offer lessons.

"The best way to illustrate the challenges is to look not at the societies that are failing, but at the more successful economies, like Sweden. The Swedes were well-known for an ethic that placed value on hard work and savings. They were a nation of small farmers at the end of the 19th century, and built up highly competitive industrial companies in the last century. Many of their companies remain global leaders, a remarkable achievement given Sweden's small size, with activities all around the globe. However, Sweden has also seen profound changes in social culture in the last 40 years. Surveys show that the attitudes of today's younger generation, towards work and society, are quite different from those born before or soon after the Second World War. Youth unemployment in Sweden is 24 per cent.

"The unemployment rate for the whole labour force is 8 per cent, but it is estimated to be 20 per cent or higher if we count those who are on long-term sick leave, transfer payment programmes, and those who live on disability benefits. Remarkably high rates of sick leave and disability benefits exist despite Sweden having one of the healthiest people in the world. New social norms have evolved, hand-in-hand with the expansion of welfare entitlements.

"In the US too, there has been a surge in the last decade in the number of people on disability benefits. Studies however show little evidence of an actual rise in disabilities, or that the health of Americans has deteriorated. Disability claims have therefore been described as a 'policy-driven epidemic': many of the long-term unemployed who face no prospect of regaining a job are reclassified as disabled so that they can get continuing and permanent benefits.

"Countries like Sweden, Denmark and the UK are undertaking important reforms to reprioritize and refocus benefits, and roll back the excesses of the welfare state. This is not the end of their welfare state, but they want to reprioritise and refocus. Denmark's Finance Minister Bjarne Corydon recently called for a change in welfare habits so that Denmark is able to compete with populations that work harder at a lower cost. The price of not changing, as he put it, would also be to create distrust within society. In the UK, there are efforts to go back to a culture of mutual contributions that underpinned the welfare system that William Beveridge had originally described. They want to move away from a culture of 'something for nothing', where you get benefits even if you make no contribution.

"However, reversing social norms takes time, and every democracy finds it more difficult to take something back from people once it is given.

"As we step up our social policies in Singapore, our approach must therefore be to encourage a compact between personal and collective responsibility, where each reinforces the other, rather than a zero sum game. We must do more to help the poor and sustain mobility in each new generation, but do it in a way that reinforces individual effort and responsibility for the family. This paradox of active government support for self-reliance has to run through all our social policies.

"An emphasis on self-reliance must therefore never be about leaving people to face life's problems and uncertainties on their own That is not our approach. It is about giving active government support, in education, at work and in housing, and in healthcare, but in ways that encourage individuals and families to take responsibility.

"We must also avoid at all costs an entitlement mentality amongst those who have succeeded. Succeeding through a meritocracy does not mean that you made it on your own. Those who succeed have a special responsibility of reaching out to others in the community, giving them the respect they deserve for the work they do, and helping those who start off with less in each new generation to do well through meritocracy.

"Nurturing a culture of innovation and risk-taking

"Let me turn now to my third issue on social culture, which concerns nurturing an innovative and risk-taking culture. It's what every society needs. We all need an innovative culture because that's where the rewards will be in the global economy and that's the way in which economies who have moved beyond middle incomes can succeed. Innovation, and greater room for risk-taking.

"But this is also a matter with no neat policy answer. In fact, the sources of risk-taking and entrepreneurship are not well-understood, and there is little consensus on them.

"We do know that some countries do better than others in innovation and risk-taking. The US does better than most. It has more of the early-stage entrepreneurial activity that many other countries, including ourselves, would like to develop. Silicon Valley, the Boston corridor, a few other locations. It has a combination of early-stage financing, close ties between universities and venture capitalists and entrepreneurs, and more lenient bankruptcy rules than most other countries. There are some things to be learnt from the US. But even in the US, the culture of Silicon Valley, that culture of risk-taking, is quite different from the main body of American society.

"However, the bigger questions lie in social culture, for which there are even fewer easy answers. What is it that will create more of an innovative and risk-taking culture in our societies?

"It probably starts from young. I would suggest three things. We need to engender amongst our young a strong sense of their own personality, and a stronger desire to do their own things. We need more people who grow up to be obsessive individuals, as many entrepreneurs are.

"Second, we should encourage more questioning, starting from a young age. This has to be in the culture of the classroom, of the home, and as they grow up, in society. Questioning from young, so that more people think in original ways.

"And third, it probably pays to provide more room for kids to do things outside the classroom, outside the academic - to provide a whole range of activities, as we are seeking to do as we broaden our education system.

"In all these regards, it is not so much about the state doing more, or schools devising a new curriculum or trying to teach more, as much as about providing space. In some respects, doing less, particularly in education.

"But we have to nurture this culture in a way that preserves a sense of cohesion and a common spirit in our society. This is a challenge that is greater for a very small country like ours than for a big one like the United States, where Silicon Valley and other risk-taking hotbeds can exist, while Middle America remains conservative.

"So I raise this third issue, the task of nuturing an innovative and risk-taking culture, in an open-ended way. There are no easy solutions. It is something that requires more discussion and thought. But we should be willing to open up new directions, starting from young, in the hope that we break new ground.

"Growing the Public Good: Quality Spaces and Civil Society

"My fourth and final issue is about growing the public good, and in particular the role of public spaces and a civil society. We cannot think about a fair and inclusive society purely in terms of incomes or redistribution. It is also about everyone having access to quality living in our neighbourhoods and public spaces, and about the sharing of ideas and active civic participation that can grow the public good.

"Our neighbourhoods are probably the most distinctive social feature of Singapore. The full span of HDB homes, from low income to upper-middle, and with private housing often in the same neighbourhood. A mix of races in every HDB precinct and block. We have avoided the disadvantaged neighbourhoods seen in many countries. We have disadvantaged families, but we must make sure we never have disadvantaged neighbourhoods, where social problems can reinforce themselves, get more knotty, and solutions become more difficult.

"We have built and must keep the consensus that enables us to invest in quality neighbourhoods all around the island that residents from all walks of life can enjoy. The latest URA Masterplan sets out our plans for the future. But it is not just about creating a beautiful and liveable island. It is also promoting the public good, and social equity.

"We are creating more green and blue spaces in the neighbourhoods, and more nature corridors that connect different parts of the island. Spaces where people can relax and unwind, engage in sports or treasure nature. And we are creating spaces for the arts, both downtown and in the neighbourhoods, that give us pride in our identity and allow artists to imagine and push our boundaries.

"We must also promote active civic participation and passion for the public good. This too is a challenge in many societies. Civil society and civic participation has diminished in almost every advanced democracy. In the UK, membership in almost every civic organisation, and even political parties, has declined. In many of the advanced welfare states, an active state has freed people from the bonds of family and the local community. Collectivism has in an unexpected way led to a new individualism.

"We have to promote an active exchange of ideas on how to make our society better, and beyond ideas, promote active civic participation and leadership. We have to promote Rajaratnam's 'democracy of deeds'.

"Conclusion

"Let me conclude. I've spoken on a number of areas where policies can support the social culture that will make for a vibrant and better society.

"We must also sustain as best as we can a political culture that looks at the long term - anticipating challenges on the horizon, and thinking hard about how we can sustain a fair and just society for our children's generation.

"Short political horizons are never helpful. That is a culture that we really have to avoid - the culture of short-term calculus, or extracting political gains for today and leaving someone else to solve the problem further down the road. We have to keep the popular narrative focused on the long term, even as we take care of today's generation.

"Our policies and even our thinking will of course evolve with the times. They must. As Rajaratnam himself put it in an interview in 1985, "I am quite sure that in the future, as circumstances change and as new environments emerge, as new attitudes develop, the practice of democratic socialism in Singapore must change…..In all dynamic political systems, there must be changes without end. When there is no change, you know you are dead."

"We are starting from a position of strength. I believe we can keep improving, changing, learning lessons from the rest of the world, and together build a better society.

"Thank you."