Introduction
The conventional wisdom that economic growth is the primary objective of government policy has come under increasing scrutiny as the fruits of growth have been distributed ever more unequally within and between nations. Rising inequality undermines social cohesion, erodes democratic institutions, and can itself become a drag on sustainable economic development. This essay argues that governments should indeed prioritise reducing inequality over promoting raw economic growth, because a more equitable distribution of resources is both a moral imperative and a prerequisite for long-term prosperity.
Extreme inequality undermines social cohesion and political stability, which are preconditions for sustainable development
Explain
When the gap between the richest and poorest citizens grows too wide, trust in institutions erodes, social unrest increases, and the democratic process is distorted by the concentration of economic power. Societies riven by inequality are more prone to populism, polarisation, and even violence, all of which impose severe economic costs that can negate the benefits of growth.
Example
The Arab Spring uprisings of 2011, which swept across Tunisia, Egypt, Libya, and Syria, were driven in large part by widespread resentment over economic inequality and lack of opportunity, despite these countries having experienced periods of GDP growth. In the United States, rising inequality has been linked to the surge in political polarisation and the erosion of trust in government, with a Pew Research Center survey in 2022 finding that 65% of Americans believe the economic system unfairly favours the powerful. Singapore has recognised this risk and proactively invested in social mobility and public housing to maintain the social compact, with Prime Minister Lee Hsien Loong warning in his 2013 National Day Rally that widening inequality could fracture society.
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The destabilising effects of inequality on social cohesion and political stability demonstrate that growth achieved at the cost of equity is ultimately self-defeating, supporting the argument that reducing inequality should be a government's foremost priority.
Inequality reduces economic efficiency by wasting human potential and suppressing aggregate demand
Explain
When large segments of the population lack access to quality education, healthcare, and opportunities, their productive potential is squandered, reducing the economy's overall output. Moreover, extreme inequality suppresses consumer spending because the wealthy save a larger proportion of their income than the poor, leading to insufficient demand, slower growth, and economic stagnation.
Example
A landmark 2014 study by the International Monetary Fund found that rising inequality is associated with lower and less durable economic growth, and that redistribution, when not excessive, does not harm growth and may even enhance it. In Latin America, countries such as Brazil that experienced high growth alongside extreme inequality in the 2000s subsequently suffered economic stagnation and social crisis, whereas nations like Uruguay, which prioritised redistribution alongside growth, achieved more stable and inclusive development. Singapore's Economic Development Board (EDB) has similarly emphasised the importance of inclusive growth, investing in workforce upgrading through SkillsFuture and the Continuing Education and Training ecosystem to ensure that all citizens can contribute to and benefit from economic progress.
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The evidence that inequality itself acts as a brake on economic growth by misallocating human capital and suppressing demand strengthens the case that reducing inequality should take precedence, as it is not merely a social good but an economic imperative.
GDP growth alone is an inadequate measure of societal welfare, and governments have a moral obligation to ensure that prosperity is shared
Explain
Aggregate economic growth can mask deep disparities in lived experience: a nation's GDP may rise while poverty persists, wages stagnate, and access to essential services deteriorates for the majority. Governments exist to serve all citizens, not merely to maximise headline economic figures, and prioritising equality reflects a deeper commitment to human dignity and social justice.
Example
India's GDP grew at an average rate of over 6% annually between 2010 and 2020, yet the country remained home to the largest number of people living in extreme poverty, with over 200 million citizens subsisting on less than $2.15 per day according to the World Bank. By contrast, Bhutan's Gross National Happiness index, which prioritises equitable development, health, and education over raw GDP, has inspired global conversations about redefining progress. In Singapore, the government has increasingly supplemented GDP metrics with broader indicators of well-being, including the introduction of the Singapore Well-being Index and the emphasis on social mobility in national policy discourse.
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The inadequacy of GDP growth as a measure of genuine societal progress underscores the moral and practical case for governments to prioritise reducing inequality, ensuring that economic development translates into improved quality of life for all citizens, not just those at the top.
Counter-Argument
Opponents argue that economic growth is the most effective means of reducing absolute poverty, citing China's lifting of over 800 million people out of extreme poverty since 1978 and Singapore's transformation from a GDP per capita of $500 at independence to over $80,000 today. They contend that growth expands the total resource base and that without it, redistribution becomes a zero-sum game.
Rebuttal
While growth is necessary, the claim that it should take priority over reducing inequality ignores mounting evidence that extreme inequality itself undermines growth. A landmark 2014 IMF study found that rising inequality is associated with lower and less durable economic growth, as it wastes human potential and suppresses aggregate demand. India's GDP grew at over 6 per cent annually between 2010 and 2020 yet remained home to over 200 million people in extreme poverty, demonstrating that growth without equitable distribution fails to translate into genuine improvements in the lives of the majority.
Conclusion
In conclusion, governments should prioritise reducing inequality because extreme disparities in income and wealth corrode the social fabric, undermine economic efficiency, and betray the fundamental purpose of governance, which is to advance the welfare of all citizens, not merely the most prosperous. A society that grows richer in aggregate while leaving its poorest behind is not truly progressing, and redirecting policy priorities towards equity is both morally right and economically sound.
Introduction
While inequality is a legitimate concern, the proposition that governments should prioritise its reduction over economic growth presents a false and potentially dangerous trade-off. Economic growth expands the total pool of resources available to society, lifting living standards, funding public services, and creating the very wealth that makes redistribution possible. This essay contends that governments should continue to prioritise economic growth, while implementing complementary policies to ensure that its benefits are widely shared, rather than sacrificing growth in pursuit of equality.
Economic growth is the most effective means of reducing absolute poverty and raising living standards for all
Explain
While inequality measures the relative gap between rich and poor, what matters most for the welfare of the poorest is their absolute standard of living. Economic growth expands the total resource base, creates jobs, raises wages, and generates the tax revenue needed to fund social programmes. Without growth, redistribution becomes a zero-sum game that cannot sustainably improve living standards.
Example
China's rapid economic growth since the market reforms of 1978 lifted over 800 million people out of extreme poverty, the largest poverty reduction in human history, according to the World Bank. While inequality also rose significantly during this period, the absolute living standards of even the poorest Chinese citizens improved dramatically in terms of life expectancy, nutrition, and access to education. Singapore's transformation from a low-income nation with a GDP per capita of approximately $500 at independence in 1965 to one of the world's wealthiest nations, with GDP per capita exceeding $80,000 in 2023, was driven by a deliberate strategy of prioritising economic growth, with redistribution following as a complement rather than a precondition.
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The unparalleled success of growth-oriented strategies in eliminating absolute poverty demonstrates that economic growth should remain the primary objective, with redistribution serving as an important but secondary complement rather than a replacement.
Aggressive redistribution can create perverse incentives that reduce productivity and deter investment
Explain
Policies designed to reduce inequality, such as very high marginal tax rates, extensive welfare benefits, and stringent labour market regulation, can discourage entrepreneurship, risk-taking, and hard work. If the rewards of effort and innovation are heavily taxed and redistributed, both individuals and businesses may reduce their productive activities, ultimately shrinking the economic pie that redistribution depends upon.
Example
France's introduction of a 75% top marginal income tax rate under President Hollande in 2012 was widely criticised for driving high-net-worth individuals and entrepreneurs abroad, with actor Gerard Depardieu famously relocating to Belgium. The tax raised far less revenue than projected and was abandoned in 2015. In Venezuela, aggressive redistribution under President Chavez, including price controls, nationalisations, and extensive social spending funded by oil revenues, initially reduced inequality but ultimately collapsed the economy, causing hyperinflation and a humanitarian crisis. Singapore has deliberately maintained a competitive tax regime, with a top personal income tax rate of 24% and a corporate rate of 17%, managed by the Inland Revenue Authority, attracting global talent and investment through Temasek and GIC while still funding significant social spending.
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These cautionary examples illustrate that prioritising inequality reduction at the expense of growth-friendly policies can backfire spectacularly, reducing the total wealth available and ultimately harming the very citizens redistribution aims to help.
Inclusive growth, rather than a binary choice between growth and equality, represents the optimal policy approach
Explain
The framing of growth versus equality as an either-or choice is a false dichotomy. The most successful economies pursue inclusive growth strategies that expand the economy while simultaneously broadening access to its benefits through education, infrastructure, and targeted social policies. This approach avoids the economic costs of aggressive redistribution while ensuring that growth translates into broadly shared prosperity.
Example
Singapore's economic model exemplifies inclusive growth: the government aggressively pursued export-led industrialisation and attracted multinational investment through the Economic Development Board, while simultaneously investing in universal education, public housing through the HDB, and healthcare subsidies. The Monetary Authority of Singapore (MAS) has maintained macroeconomic stability by managing the exchange rate to keep inflation in check, benefiting lower-income households for whom price increases are most burdensome. The result is a nation that has achieved both high growth and relatively high social mobility, with the government's Comcare and Silver Support schemes providing targeted assistance to those who need it most.
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Singapore's success with inclusive growth demonstrates that governments need not sacrifice economic expansion to address inequality, and that the most effective path forward is to pursue both objectives simultaneously rather than elevating one above the other.
Counter-Argument
Proponents of prioritising inequality reduction argue that extreme disparities corrode social cohesion and political stability, citing the Arab Spring uprisings driven by economic resentment despite periods of GDP growth. They point to the IMF's finding that inequality reduces economic efficiency by wasting human potential and suppressing consumer demand.
Rebuttal
However, aggressively prioritising redistribution over growth can backfire spectacularly, as France's 75 per cent top tax rate under President Hollande demonstrated when it drove high-net-worth individuals abroad and raised far less revenue than projected before being abandoned in 2015. Venezuela's experiment with socialist redistribution under Chavez initially reduced inequality but ultimately collapsed the economy into hyperinflation exceeding 1,000,000 per cent. Singapore's model of inclusive growth, combining competitive taxation with targeted social spending through ComCare and the Progressive Wage Model, shows that growth and equity need not be in opposition.
Conclusion
Ultimately, while governments must address inequality, they should not do so at the expense of economic growth, which remains the most powerful force for raising living standards and funding the public services that the most vulnerable depend upon. The wisest approach is not to choose between growth and equality but to pursue inclusive growth that expands opportunity for all, ensuring that the rising tide genuinely lifts all boats.