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Comment by RavlaAlvar | Hacker News Reader

Also, we shouldn't forget that since the economic reform of 1978, China has adopted the policy of intentionally escalating wealth inequality.

Please do not forget billions of worker/farmer in China still live in a third world condition, so that the upper 10% can live their bourgeois life.

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China has achieved poverty reduction unparalleled in human history. In 1981 around 88% of the Chinese population lived in extreme poverty. It has now declined into 2%. This happened parallel to the extreme increase of inequality. China has experienced a modest decline in inequality since 2008 as the economic growth has hit into trouble. 2/3 of the world poverty reduction between 1990 and 2005 was because of China.

Increase of inequality can't have increased poverty, but maybe you argue that it could have been reduced even faster and China didn't break records fast enough.

The way you framed it is a bit disingenuous. The reasoning behind the policy is that the government recognizes that China back then severely lacked any modern industrious knowledge. In order to quickly catch up, China decided to pour all its resources into a couple provinces that either had existing industrious base left over from foreign occupation or had strategic locations. As well as sending the best people over seas hoping to gain whatever knowledge necessary to kick start the economy. And it's not like the government simply forgot about the billions of farmers, one of the top priority for officials are poverty alleviation. It's a key kpi for any promotion within the government.

Now you could argue the implementation is not perfect, but given the situation back then I agree with this policy, and I'd be interested to hear how you would approach this differently.

I am not saying Deng's approach is bad. I am just trying say that we shouldn't forget that a huge truck of China GDP comes from the exploitation of the workers.

Now that the level of inequality has reached the moon, I am curious to see what they will do next. Especially in the age automation and increasing trade war tender, manufacturing WILL leave China. Many in the US blame the rise Trump on the lost blue collar jobs. Imagine the same situation in China, but with majority of population being blue collar worker.

Let's also not forget about corruption in China. It is true that elimination of porvery is an important goal set by the central state. But how the local official achieve their target KPI is abhorrent, e.g. forcing low income family out of the city, manipulate the definition of poverty etc.

Maybe you meant millions instead of billions?

So are you challenging trickle down economics? That's debatable.

I believe at least at the early stage capitalism trickle down economics works. However, without proper checks and balance system, corruption brought by power and wealth does stop the trickle down effect.

Therefore in China where corruption is an accepted norm, it's doomed to fail. That was not originally planned though.

Maybe that's also why recently the CCP has been trying so hard to abolish religions, to keep the people's moral standard low.

>Maybe that's also why recently the CCP has been trying so hard to abolish religions, to keep the people's moral standard low.

Is there any evidence that religion actually increases the 'moral standards'?

This paper[1] suggests not:

> Religious and nonreligious participants did not differ in the likelihood or quality of committed moral and immoral acts.

[1] Hofmann W. et al. (2014), Morality in everyday life, Science. https://www.ncbi.nlm.nih.gov/pubmed/25214626

> I believe at least at the early stage capitalism trickle down economics works.

What is the basis of your belief?

I hope you understand that there is no thing in economics called "trickle down economics" or "trickle-down theory". It was term invented by Will Rogers as a joke to mock tax reduction policies that benefit the rich. Conservative politicians and pundits adopted this non-existent theory meant to mock them and magically people started to believe that it's a real theory that exists.

Only evidence of tax cuts helping comes from tax cuts for the poor who spend the money and don't invest, thus increasing the economic activity. https://www.journals.uchicago.edu/doi/abs/10.1086/701424 Trickle down has no evidence or theory to support it.

There is related real concept called supply-side economics, but it's also widely discredited by economists, including those who worked for Reagan like Mankiw. I think only handful of economists support it today.

If the western economies were truly trickle down, the bucket at the top would be empty by now. However, the source of the trickle has become more sealed over time, and thus the inequality gap grows.

Seems you are one of the few who understands what I'm trying to say. Over time greed and corruption take over.

I live in Hong Kong, which is the most extreme example of this.

And I've also witnessed how this whole process is accelerated in China, since greed and corruption are more prevalent.

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