I’m not really asking about capital circulation. I’m interested specifically in the billionaires. So why the billionaires?
I can understand the logic of having a market-based economy. It’s a very effective means of achieving compound economic growth. But a market economy does not require billionaires. There are numerous more equitable models that China could have built its system around. For example, they could have built their market economy based entirely around worker-owned co-ops. Co-ops can compete just fine in markets. Or, they could have gone with the current structure, but put in place a wealth cap. That’s been proposed before even in the US.
Why couldn’t China build a market economy, but just have a hard rule of “no one is allowed to amass more than X amount?” Even if people couldn’t hoard more than say, $100 million, that still gives people plenty of incentive to start new businesses, get an education, work hard, etc.
I can’t actually answer why they don’t set a hard limit of how much they will let some one accumulate or as for why they didn’t use coops. Both of these are counterfactuals that would be difficult even if I knew all the internal discussions. For example, you’d have to look closely at Deng’s policies and the subsequent three represents during the early 2000s to see what the discussion around coops was. Hard to say what the thinking was that precluded coops from the discussion.
It’s easier to say what they are doing and the policies they are enacting. I believe they have a goal of reducing inequality with a goal of a Gini index of .35 by 2035. They are focusing on a common prosperity goal. This has led to increased donations and contributions from the wealthy to social causes. With the common prosperity project, they hope to increase the middle class and reduce the rural-urban divide as well. I think there are several other goals.
I don’t see setting a hard limit on whether or not one is a billionaire contributing to these goals and then runs the risk of creating resentment of a particular class that the party needs to grow their level of prosperity.
Edit: Prior to the 90s, there government supported state-owned and collective enterprises. But they weren’t growing quick enough to meet the needs of the CPC.
Meanwhile, the growing number of entrepreneurs were gaining power, but no access to representation. So the CPC decided to bring them in to the party. This would reduce the likeliness of a counter revolution.
Theoretically, coops struggled with massive, capital-intensive investments. They can’t scale or absorb risk because their capital is in the form of worker’s equity.
When coops fail, it can be doubly devastating. Workers lose their jobs and equity when the firm goes bankrupt. Just as bad, though, there can be a prolonged declined as the coops would go under they would slash their pay to keep the dying firm alive.
Coops seem great when the economic engine is humming along, but if you are looking for rapid growth, you need large capital investments and the ability to fail quickly or massively succeed.
I’m not really asking about capital circulation. I’m interested specifically in the billionaires. So why the billionaires?
I can understand the logic of having a market-based economy. It’s a very effective means of achieving compound economic growth. But a market economy does not require billionaires. There are numerous more equitable models that China could have built its system around. For example, they could have built their market economy based entirely around worker-owned co-ops. Co-ops can compete just fine in markets. Or, they could have gone with the current structure, but put in place a wealth cap. That’s been proposed before even in the US.
Why couldn’t China build a market economy, but just have a hard rule of “no one is allowed to amass more than X amount?” Even if people couldn’t hoard more than say, $100 million, that still gives people plenty of incentive to start new businesses, get an education, work hard, etc.
I can’t actually answer why they don’t set a hard limit of how much they will let some one accumulate or as for why they didn’t use coops. Both of these are counterfactuals that would be difficult even if I knew all the internal discussions. For example, you’d have to look closely at Deng’s policies and the subsequent three represents during the early 2000s to see what the discussion around coops was. Hard to say what the thinking was that precluded coops from the discussion.
It’s easier to say what they are doing and the policies they are enacting. I believe they have a goal of reducing inequality with a goal of a Gini index of .35 by 2035. They are focusing on a common prosperity goal. This has led to increased donations and contributions from the wealthy to social causes. With the common prosperity project, they hope to increase the middle class and reduce the rural-urban divide as well. I think there are several other goals.
I don’t see setting a hard limit on whether or not one is a billionaire contributing to these goals and then runs the risk of creating resentment of a particular class that the party needs to grow their level of prosperity.
Edit: Prior to the 90s, there government supported state-owned and collective enterprises. But they weren’t growing quick enough to meet the needs of the CPC.
Meanwhile, the growing number of entrepreneurs were gaining power, but no access to representation. So the CPC decided to bring them in to the party. This would reduce the likeliness of a counter revolution.
Theoretically, coops struggled with massive, capital-intensive investments. They can’t scale or absorb risk because their capital is in the form of worker’s equity.
When coops fail, it can be doubly devastating. Workers lose their jobs and equity when the firm goes bankrupt. Just as bad, though, there can be a prolonged declined as the coops would go under they would slash their pay to keep the dying firm alive.
Coops seem great when the economic engine is humming along, but if you are looking for rapid growth, you need large capital investments and the ability to fail quickly or massively succeed.