[Marxism] To build harmony, Hu says goodbye to Adam Smith

["Charles Brown" <charlesb@xxxxxxxxxxxxxxxxxxxxx>]

China Daily (10/20/07)

To build harmony, Hu says goodbye to Adam Smith

BEN JOHNSON

Communist Party of China General Secretary Hu Jintao's commitment on 
Monday to "increase transfer payments, intensify the regulation of 
incomes through taxation, break business monopolies, create equal 
opportunities and overhaul income distribution practices with a view to

gradually reversing the growing income disparity" was like music to the

ears.

This departure from the West's growing faith in Adam Smith's invisible

hand to serve all people best, when in fact unbridled the market tries

to commodify them, is the best path for the world's most populous
country.

Over the past 30 years, a less compassionate neoliberal orthodoxy has 
prevailed among economists after the social justice traditions of the 
United States' New Deal and Great Society governments were scuttled by

the former US President Ronald Reagan's low-taxing, 
deregulation-privatization formula in the wake of the post-war golden
age.

After great social upheaval in the 1960s, the US arguably shirked the 
provision of comprehensive state-funded social programs needed to 
improve the plight of its poor - especially the country's newly 
enfranchised and once enslaved African-Americans. By portraying the
poor 
as "welfare leeches", conservatives hoodwinked the have-nots into
voting 
for low tax, small-government Republicans on the promise that the 
"crumbs" of prosperity would fall off the table for all to enjoy.

Almost 30 years later, American CEOs earn about 431 times more than 
their employees and the top 10 percent of income earners own 70 percent

of the wealth.

Chinese CEOs earn only a fraction of what their US counterparts do, and

10 percent of families own 40 percent of the wealth. But worryingly 
China's Gini coefficient, a widely accepted statistical income gap 
measure, is roughly the same as the US after increasing markedly in the

past 25 years.

But the growing divide between the haves and have-nots in the West is 
made even more egregious by the fact that company bosses, beholden to 
shareholder interests like dogs to chains, are lauded and rewarded for

affecting workforce efficiencies - lay offs, outsourcing, denying 
employee benefits, etc - while contributing to untold social 
disharmonies no more manifest than in the dissolution of the nuclear
family.

American carmaker General Motors, for example, laid off 34,000 workers

in one fell swoop last year, and now about 120 million Chinese workers

employed in private enterprise, with this figure growing by 11 million

annually, are exposed to the same profit-first orthodoxy.

In a salutary lesson for developing economies, a backlash to the 
excesses of pro-market policies is now gaining momentum. The Democrat's

success at last year's congressional elections in part reflects growing

concerns over inequality while the US military-industrial complex's 
chimerical hand in a massacre of Iraqis by a privatized army could well

be the nail in the right's coffin.

Income disparity irks people more than ever in the 21st century because

advanced communication media allow us to see how the other half lives.

China is taking action to ease tax burdens on the rural poor and the 
social assistance system. As Hu's report touched on this week, policies

promoting fairer income distribution, welfare and access to education 
are vital to Chinese socialism in the years ahead.

After all, the principles of supply and demand will only slowly 
alleviate poverty and make the futures of private sector employees as 
tenuous as they will be prosperous.

The author is a copy editor for China Daily



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