See No Fortune, Hear No Fortune

Evan Osnos’ Letter from China at The New Yorker accuses authorities of “papering over” enormous and growing inequality, rather than taking serious steps to address it.

A couple of months ago, the Beijing municipal agency in charge of billboards imposed a ban on outdoor ads that promote “hedonism, lavishness” and “aristocratic lifestyles.” Last August, the coastal city of Wenling barred any funeral “extravagance and waste,” specifically limiting the number of cars and wreaths that could be mustered to show off family prosperity.

The bans—not the first time Beijing has tried—were intended to paper over the awkward fact that China was facing the fastest inflation in two years, at a time when a hundred and fifty million people still live on less than $1 a day …. The Party knows that this is not an abstract problem. In 2001, then-Premier Zhu Rongji was asked if he worried that the deepening divide could cause social unrest. “Not yet,” Zhu said, and pointed to the measurement of income disparity known as the Gini coefficient. China was fine, he said, as long as it did not reach a “danger level” of 0.4. A decade later, it has soared past that point and officially reached a level of almost 0.5 (though Li Shi, a prominent economist at Beijing Normal University, believes it is even higher—0.53—because the surveys undercount rural migrants.) …

What’s the solution? Definitely not a return to China’s days of patently false egalitarianism. But banning the sight of a gross misallocation of resources rather than attacking the roots of it—by, say, reforming regressive indirect taxation, and putting a levy on capital gains and inheritance—is a political self-delusion as disconcerting as when Chinese officials used to show each other bogus bumper harvests.

June 17, 2011 2:37 PM
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