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Comment by hackyhacky | Hacker News Reader

For all of your rah-rah capitalist boosterism, you failed to address the actual content of my argument, which is that the reason during the last 50 years that the China has had decreasing poverty, while the US has had increasing poverty, has nothing to do with capitalism, and everything to do with restrictions on capitalism (or their absence).

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As others have pointed out, that's a naïve and frankly incorrect reading of Chinese history, but it's also not something that can be addressed here.

It evidently can be addressed here, as you yourself mentioned. No one has yet pointed out to me why my reading is "naive and frankly incorrect," so feel free to be the first.

I listed the reforms upthread that you ignored.

All the reforms fit a capitalistic model, not just a free commerce model.

https://news.ycombinator.com/item?id=48231586

And of course, Mao's communism was very anti-capitalistic.

All well and good but you still haven't addressed my point which is that China's reduction of poverty is due to its central control of wages, construction, and capital.

https://news.ycombinator.com/item?id=48236489

An assertion made without evidence can be dismissed without evidence.

Here is evidence. https://www.worldfinance.com/strategy/china-the-land-of-less...

State owned enterprises != private companies. Even in the US, govt salaries for higher ups are asymptotically low compared to private companies.

> As of 2013, two-thirds of Chinese graduates set their sights on a government position or a role at a major state-owned firm,

They had "central control of wages, construction, and capital" to a much higher degree before they started becoming capitalistic in 1976 and the poverty levels were much much worse and not going down. They only started going down once they embraced capitalism and started allowing private companies.

That is consistent with my earlier statement: capitalism creates wealth, but you need another system to distribute it fairly. It's crazy to think that capitalism alone will "raise all boats" when this has been shown to be untrue.

Capitalism creates wealth only when people are able to keep a decent amount of what they make. As a thought experiment, if you tax people at close to 100% under capitalism and "distribute" it to people that don't work, what do you think will happen?

Surely there is a disincentive to working hard as taxes approach high levels while resources are increasingly provided for free if one doesn't work. The Laffer curve and all that.

If you keep increasing taxes and reward people that don't work by giving them free and easy wealth, the tax revenue will actually go down at some point instead of going up, leaving less to redistribute. It's like killing the goose that lays the golden egg.

https://fee.org/articles/the-laffer-curve-its-time-to-stop-l...

> Capitalism creates wealth only when people are able to keep a decent amount of what they make. As a thought experiment, if you tax people at close to 100% under capitalism and "distribute" it to people that don't work, what do you think will happen?

That's one approach, but not the only one, to eliminating capitalism.

> Surely there is a disincentive to working hard as taxes approach high levels while resources are increasingly provided for free if one doesn't work. The Laffer curve and all that.

So in the US in the 1950s and 1960s, when the highest marginal tax rate was around 90%, did people suddenly stop working? Or did the US enter its highest period of productivity and income equality?

https://taxfoundation.org/data/all/federal/taxes-on-the-rich...

This chart looks at the top 1%. This is intentionally deceptive. "The total national income share earned by the top 1% and top 0.1% in that era was far lower than it is now, and consequently, the income thresholds required for entry into the ranks of the top 1% or the top 0.1% were lower. By today’s standards, there were many fewer rich households in the 1950s than there are now—in fact, almost none. The rich people from the 1950s that Greenberg is comparing to the rich of today were what we would now call the upper middle class—thus, not an apples-to-apples comparison. Had there been any 2017-style rich people in those days, they would likely have faced an effective tax rate near that confiscatory statutory rate of 91%.... It’s not a coincidence that the rich are so much richer now than they were in the 50s: it’s precisely because effective tax rates on the rich have gone down so much that it’s worthwhile to become rich in the first place." [1]

Why is your article making claims that, while true, give a distorted view of 1950s tax policy? It's certainly possible that an organization called the "Tax Institute" has an agenda they are trying to push.

[1] https://rooseveltinstitute.org/blog/effective-progressive-ta...

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