The government has delivered the stick, now it will have to offer the carrot. At some point, Chief Executive Carrie Lam Cheng Yuet-ngor will have to move past the national security law . I suggest she has no choice but to reform and upgrade all social entitlement programmes from housing to education to placate an exhausted and frustrated public. At a time when interest rates are returning to the low levels after the last global financial crisis, the government may consider deficit financing to pay for it. This is to pre-empt the excuse that the government’s long-term reserves are being depleted and its current surpluses becoming deficits . From the 1960s onwards but especially after the 1967 riots, the colonial government switched from “benign neglect” to a much more active entitlement regime mirroring the post-war welfare state of Britain. The false image that colonial Hong Kong was all free enterprise and anti-welfarism was propagated by the likes of the US Heritage Foundation, Milton Friedman, the local business oligarchy and, to an extent, the colonial government. But it sounded like welfarism when the colonial government had an explicit policy that guaranteed no one should live without a roof over their head, without primary and junior secondary education, and without welfare if they didn’t have a cent in their pocket. All our current entitlement programmes are built on the old colonial systems but have, appropriately, considerably expanded. For example, we now have heavily subsidised kindergarten and university education, while primary and secondary schooling is practically free. This is why we consistently rank high in international social and human development indexes. By some measures, Hong Kong’s welfare systems rival those of many Western countries, yet we manage to maintain a low-tax regime and a huge reserve surplus, greatly because we have turned land into an inflated commodity and revenue, both direct and indirect, for the government, just like oil in a country such as Saudi Arabia. Of course, we don’t have a natural “resource curse”, rather a real estate curse, but that’s a well-known story. After the unprecedented social unrest of last year, the government will have to deliver on the livelihood front if it can’t deliver on democracy. This means investing and upgrading entitlements such as radically shortening queues for public housing, and general and specialist medical services. This is the least Lam can do for Hong Kong and for her own legacy.