Communist in Name Only: China’s Rising Inequality
by Benjamin Studebaker
The official name is the People’s Republic of China, in case you might forget. You’d be forgiven of course–today’s China does not look much like a “people’s” anything. Increasingly socially and economically stratified, China’s one-party system is about the full extent of its communist or socialist leanings. Or at least, so it seems if you believe a new study out from a Chinese university in Chengdu, which puts China’s Gini coefficient at an utterly ridiculous 0.61.
The Gini coefficient is a complex mathematical formula used to measure wealth inequality. For a little flavour of what precisely constitutes a high or a low Gini coefficient, here’s a map of the world’s Gini’s:
Gini coefficients greater than 0.5 are thought to be significantly socially destabilising. Research compiled in The Spirit Level: Why Greater Equality Makes Societies Stronger has found that the countries with the lowest Gini coefficients (most of which are in Europe) are associated with the best scores in a variety of social categories, including but not limited to:
- Social alienation
- Drug use
- Mental Illness
- Life Expectancy
- Teen Pregnancy
- Social Mobility
If you will permit the digression, when gun rights advocates emphasise the need to deal with mental illness, alienation, and other psychological problems that can lead to violence, one of the most statistically effective ways to combat these various things is to reduce economic inequality, which often means big states, redistribution, and lots of other things gun rights advocates in the US tend to be opposed to. It is a lose-lose for the American right on gun violence–on the one hand, it can submit to the argument that guns lead to gun violence; on the other hand, it can admit the need for more redistribution of wealth and social spending. But again, I digress.
What we can see here is that China is running a level of wealth inequality to rival only a few African countries in its totality. The research suggests that, eventually, this will lead to social problems in China. China’s high inequality is quite new–a mere decade ago, China was running a figure between .4 and .5, and further back in history the rates were lower still. This extremely high rate of inequality is a new feature of Chinese society, one whose consequences have yet to bear out.
We can, however, make some educated speculative hypotheses as to what might transpire in China by looking back to our own history. When were Western Gini coefficients comparable to China’s, and what happened in those societies then?
I had to go wandering around the internet for quite a while to find a Western Gini coefficient as high as modern China’s, but at last I was able to do it–France in 1780. French inequality peaked out at around .6, when the French Revolution happened. The French tore down the corrupt aristocratic state and replaced with the revolutionary governments–the First Republic and the First Empire. After Napoleon‘s reign was extinguished in 1815 and the kings restored, inequality once again took off during the industrial revolution, increasing again up until around the middle of the 19th century when, once again a revolution occurred, this time the 1848 Revolution, which installed a Second Republic followed by a Second Empire under the bumbling Napoleon III followed by a Third Republic. From mid-century on, French inequality steadily declined, and it would never again reach Chinese levels.
Now, you might well see where this is going–if inequality was a decisive factor in sparking the French revolutions (and it is hard to argue against that point–the slogan of revolutionary was “liberty, equality, fraternity”, the French tri-colour flag is meant to represent each of these three, so it’s clear the revolutionaries though equality important and essential), then it follows from there that China might experience a similar revolution. This is just one of many possibilities, however. The French got a revolution in no small part because France’s government had failed France in other areas in which the Chinese government has, to this point, remained competent. The French government lost the Seven Years War, bankrupted the state, and failed to deliver consistently on economic growth. The Chinese government has so far managed each of these things quite well. Perhaps China will not have a similar experience to France, but will instead have a similar experience to Britain.
Britain ran a Gini coefficient just below China’s (around .59) in the late 1700’s. However, because Britain’s government successfully accomplished its economic and foreign policy objectives, its people cut it more slack. Instead of seeing a violent revolution, the British government saw the rise of the trade union movement and the Fabian socialist movement to agitate for a more equal society. However, Britain was again different from China in an important respect–it permitted outlets for dissent and opted to gradually include the trade unions in the political process rather than exclude them. China’s system is more closed to those kinds of inputs.
The likely outcome probably falls somewhere in between Britain’s peaceful evolution from a severely stratified industrial society to a more equal one and France’s violent, extreme back and forth. Much will depend on the Chinese government’s performance going forward in continuing to deliver a higher quality of life for its people and its decision whether to embrace labour movements or squelch them.
The early symptoms of a 19th century inequality clash are already present–China has begun to see more industrial action, more strikes, more riots. Just a couple months ago, work was stopped at Apple’s Foxconn plant due to rioting workers agitating for reduced hours, higher pay, and better treatment.
It will be extremely interesting in the coming years, to see how much the Chinese people learn from the example of 19th century Europe, and how much history nonetheless repeats itself. For those of us with a keen interest in how our societies made the transition from the stratified, semi-feudal world of the 18th century to the progressive, relatively enlightened 20th century model, China represents a time machine into the past our own nations’ histories. Ironically, the country that claims to be a people’s republic run by a communist party may very well find itself grappling with the same problems very, very capitalist governments had with communist and socialist insurrection not so very long ago.
And yet, we in the west must not just sit back and eat popcorn–the outcome of coming showdown will determine what kind of state China eventually becomes. Not every industrial society resolved the conflict by becoming a Britain or a France. In Germany, the Reichs prevailed, both second and third, to drive the world into war twice. And then there were those Bolsheviks in Russia. China could emerge a relatively friendly, amiable, equitable state, or something quite a bit darker, and every one of us has a stake in the outcome.