Fate of Chinese and American billionaires reveals divergences in fight against poverty

While the presidents of both countries have pledged to deal with growing inequities, the US’ capitalist ethos makes government intervention a hard sell
In contrast to the flamboyant space voyages of US billionaires, China’s wealthy have been put on notice

Peter T. C. Chang

Published: 1:30am, 1 Jan 2022

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It is a gross travesty of justice that the richest 10 per cent is taking home 52 per cent of global income, as revealed in the World Inequity Report 2022.

Both US President Joe Biden and Chinese President Xi Jinping have vowed to deal with the worsening inequities, but the divergent American and Chinese views of individualism are generating disparate outcomes.

In extolling the vision of a “community with a shared future for humankind”, Xi declared China’s commitment to establishing a new world order of peace and common prosperity. Biden countered with the Build Back Better World plan, promising to inject economic momentum into developing countries.

Sadly, there is no escaping the two superpowers’ jostling for primacy even in the fight against poverty. They are coming into this rivalry from opposite ends of the ideological spectrum.

In The Protestant Ethic and the Spirit of Capitalism, Max Weber argued that the Protestant doctrine of personal salvation led to a more autonomous conception of the individual, which in turn engendered a self-reliant, industrious way of life that fuelled the rise of capitalism in the West.

Then, in The Religion of China, Weber explained that in ancient China’s cosmology, the individual is integrally bound to the kinship clan, fostering a communitarian ethos. This ethos resonated with socialism.

Weber’s treatises unpacked the peculiar civilisational impulses that shaped the West and East’s distinct economic behaviour. This is evident in the present-day US and China’s contrasting approaches to combating the inequity crisis.

After declaring success in eradicating abject poverty, the next challenge, Xi announced, is to transform China into a “great modern socialist country”. Deng Xiaoping’s earlier call to “let some people get rich first” has been superseded by Xi’s focus on helping “all to get rich together”.

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Xi is, in effect, giving notice to the newly minted Chinese billionaires that, unlike the American dream, the Chinese dream is a national rather than an individual aspiration, and welfare of the country comes first.

To be sure, private entrepreneurship had helped power China’s decades-long “economic miracle”. But in Confucian China, the collective prevails over the individual. And for the commonwealth’s sake, the state has to restrain large corporations, even if it affects the country’s extraordinary progress.

With his Build Back Better agenda, Biden aims to rejuvenate the US with a socioeconomic programme akin to Franklin D. Roosevelt’s New Deal in the 1930s. But the related bill is fighting for its legislative life, underscoring a sustained resistance to big government.

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Indeed, the Protestant work ethic has, over time, imbued in the American psyche a disdain for the welfare state. Sure, the needy deserve help, but to root out poverty, government must inculcate self-reliance instead of abetting state dependency.

To “rob the rich and give to the poor” is to violate the quintessential American value: individual liberty to pursue happiness.

Truly, the sky is the limit for the American dream, when Amazon founder Jeff Bezos blasted off into space. In December, Elon Musk was named Time magazine’s person of the year, reasserting America’s adulation of the self-made man.

Thus, in lieu of big government spending, Americans have banked on the free market to create and redistribute wealth.

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Without question, private entrepreneurship has helped the US become the world’s richest country. And billionaire philanthropy from the likes of Bill Gates and Warren Buffett has done enormous public good.

But Adam Smith’s “invisible hand” never levelled the playing field. Many Americans were left behind, some due to no fault of their own, like those rust belt workers who have fallen victim to globalisation.

Feeling abandoned, the traditionally Democrat white working-class are turning to billionaire Donald Trump as their unlikely saviour.

Elon Musk on the cover of Time magazine’s December 27-Jan 3 double issue announcing him as their 2021 “Person of the Year”. Photo: Time via AP

China has become a convenient scapegoat, but blaming others negates Washington’s own culpability. Corporate USA has profited from free trade, yet chose to privatise the gains rather than reinvesting in middle America.

Mistrust in government and unbridled faith in the market economy has turned America, the land of plenty, into one of extreme disparity.

In record time, US scientists invented the world’s best vaccines against Covid-19. Biden promised to share them with the world but Washington’s vaccine diplomacy quickly became bogged down by corporate manoeuvring.

An illustrative example is the federal government’s ongoing legal dispute with Moderna over patent ownership, which will have serious repercussions for distribution rights.

Meanwhile, data from the Duke Global Health Innovation Centre shows that the US has shipped only 24 per cent of 1.1 billion Covid-19 vaccines it pledged to donate while China has shipped 60 per cent of the 113 million it pledged.

In addition, China has exported over a billion doses. Though not the most effective, China’s vaccines are the most widely used, especially in the global south.

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The coronavirus infects indiscriminately and has inflicted widespread economic damage. But the pandemic is not an economic equaliser – Big Tech and Big Pharma have recorded windfall profits.

Covid-19 has turned out to be a boon for the billionaire class, while the poor have become poorer. According to Oxfam, the combined wealth of the world’s 10 richest men during the pandemic rose by US$540 billion, enough to buy vaccines for all.

The contrasting fate of Chinese and American billionaires is a tale of the two countries’ divergent strategies to overcoming inequality.

In Confucian China, where the Chinese dream is a collective aspiration, the private must acquiesce to the public, and Beijing is reining in the corporate titans. Though risking a lower growth rate, China is likely to realise Xi’s vision of a “moderately prosperous” society and a “community with a shared future for humankind”.

By contrast, in Christian America, faith in the spirit of capitalism has failed to stop widening income inequality. In their pursuit of happiness, the fortunes of the wealthy elite continue to grow unabated.

Without modulating the hyper-individualised American dream and corporate America’s outsize dominance, Biden’s ambition to build back a better America and world could end abruptly.

Peter T.C. Chang is deputy director of the Institute of China Studies, University of Malaya, Kuala Lumpur, Malaysia