Despite the US’s economic success, income inequality remains breathtaking. But this is no glitch – it’s the system
The Chinese did rather well in the age of globalization. In 1990, 943 million people there lived on less than $3 a day measured in 2021 dollars – 83% of the population, according to the World Bank. By 2019, the number was brought down to zero. Unfortunately, the United States was not as successful. More than 4 million Americans – 1.25% of the population – must make ends meet with less than $3 a day, more than three times as many as 35 years ago.
The data is not super consistent with the narrative of the US’s inexorable success. Sure, American productivity has zoomed ahead of that of its European peers. Only a handful of countries manage to produce more stuff per hour of work. And artificial intelligence now promises to put the United States that much further ahead.
This is not to congratulate China for its authoritarian government, for its repression of minorities or for the iron fist it deploys against any form of dissent. But it merits pondering how this undemocratic government could successfully slash its poverty rate when the richest and oldest democracy in the world wouldn’t.
My favorite idea is that the Mainland regime – then under Deng – took their economic development ideas and business customs from Japan – including industrial espionage – and basically modified those for Chinese needs while addressing the problems which led to Japan’s later bubble burst by the late 80s. That local corporations were given first priority, with a lot of incentives, tax breaks, programs to increase productivity and cut away inhibitions, hire young people from the far provinces who are willing to work for less, anything to have the world buy cheap from China. So they treated business like warfare, as essential for national survival and prestige where by 2049 the world must look up to Mainland China, never to be humiliated again.
However, China in its current state has its younger generations in urban areas having to deal with overwork burnout (996工作制 or 996 working hour system for example) and so creating basically its own anti-work culture. That there are godawful displays of wealth by tuhao almost everyday, while most others complain how it’s so expensive to live in, say, Shanghai. I could try to go on, but I put it that it’s still not a happy place as long as there is class conflict.