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Weewawa @lemm.ee

Why aren’t any government making wealth inequality and property supply focused policies?

Why can’t any government in the world aim to tax ultra rich more whilst making easier for small to medium large businesses to thrive. And policies on property supply rather than property buyers like all sorts of first time buyers programs.

Why are only same old policies keep being peddled when the world is still going to shit?

That doesn’t involve reducing the government size and budget entirely or subscribing to any extreme left or right?

59 comments

  • That's literally China's policies. The problem is most westerners are lied to about China's model and it is just painted it as if Deng Xiaoping was an uber capitalist lover and turned China into a free market economy and that was the end of history.

    The reality is that Deng Xiaoping was a classical Marxist so he wanted China to follow the development path of classical Marxism (grasping the large, letting go of the small) and not the revision of Marxism by Stalin (nationalizing everything), because Marxian theory is about formulating a scientific theory of socioeconomic development, so if they want to develop as rapidly as possible they needed to adhere more closely to Marxian economics.

    Deng also knew the people would revolt if the country remained poor for very long, so they should hyper-focus on economic development first-of-foremost at all costs for a short period of time. Such a hyper-focus on development he had foresight to predict would lead to a lot of problems: environmental degradation, rising wealth inequality, etc. So he argued that this should be a two-step development model. There would be an initial stage of rapid development, followed by a second stage of shifting to a model that has more of a focus on high quality development to tackle the problems of the previous stage once they're a lot wealthier.

    The first stage went from Deng Xiaoping to Jiang Zemin, and then they announced they were entering the second phase under Hu Jintao and this has carried onto the Xi Jinping administration. Western media decried Xi an "abandonment of Deng" because western media is just pure propaganda when in reality this was Deng's vision. China has switched to a model that no longer prioritizes rapid growth but prioritizes high quality growth.

    One of the policies for this period has been to tackle the wealth inequality that has arisen during the first period. They have done this through various methods but one major one is huge poverty alleviation initiatives which the wealthy have been required to fund. Tencent for example "donated" an amount worth 3/4th of its whole yearly profits to government poverty alleviation initiatives. China does tax the rich but they have a system of unofficial "taxation" as well where they discretely take over a company through a combination of party cells and becoming a major shareholder with the golden share system and then make that company "donate" its profits back to the state. As a result China's wealth inequality has been gradually falling since 2010 and they've become the #1 funder of green energy initiatives in the entire world.

    The reason you don't see this in western countries is because they are capitalist. Most westerners have an mindset that laws work like magic spells, you can just write down on a piece of paper whatever economic system you want and this is like casting a spell to create that system as if by magic, and so if you just craft the language perfectly to get the perfect spell then you will create the perfect system.

    The Chinese understand this is not how reality works, economic systems are real physical machines that continually transform nature into goods and services for human conception, and so whatever laws you write can only meaningfully be implemented in reality if there is a physical basis for them.

    The physical basis for political power ultimately rests in production relations, that is to say, ownership and control over the means of production, and thus the ability to appropriate all wealth. The wealth appropriation in countries like the USA is entirely in the hands of the capitalist class, and so they use that immense wealth, and thus political power, to capture the state and subvert it to their own interests, and thus corrupt the state to favor those very same capital interests rather than to control them.

    The Chinese understand that if you want the state to remain an independent force that is not captured by the wealth appropriators, then the state must have its own material foundations. That is to say, the state must directly control its own means of production, it must have its own basis in economic production as well, so it can act as an independent economic force and not wholly dependent upon the capitalists for its material existence.

    Furthermore, its economic basis must be far larger and thus more economically powerful than any other capitalist. Even if it owns some basis, if that basis is too small it would still become subverted by capitalist oligarchs. The Chinese state directly owns and controls the majority of all its largest enterprises as well as has indirect control of the majority of the minority of those large enterprises it doesn't directly control. This makes the state itself by far the largest producer of wealth in the whole country, producing 40% of the entire GDP, no singular other enterprise in China even comes close to that.

    The absolute enormous control over production allows for the state to control non-state actors and not the other way around. In a capitalist country the non-state actors, these being the wealth bourgeois class who own the large enterprises, instead captures the state and controls it for its own interests and it does not genuinely act as an independent body with its own independent interests, but only as the accumulation of the average interests of the average capitalist.

    No law you write that is unfriendly to capitalists under such a system will be sustainable, and often are entirely non-enforceable, because in capitalist societies there is no material basis for them. The US is a great example of this. It's technically illegal to do insider trading, but everyone in US Congress openly does insider trading, openly talks about it, and the records of them getting rich from insider training is pretty openly public knowledge. But nobody ever gets arrested for it because the law is not enforceable because the material basis of US society is production relations that give control of the commanding heights of the economy to the capitalist class, and so the capitalists just buy off the state for their own interests and there is no meaningfully competing power dynamic against that in US society.

  • These are separate questions, so I'll answer them in order.

    Why aren't any governments focusing on wealth inequality and property supply-centered policies?

    There are governments that focus on reducing wealth inequality and increasing the overall property supply. Socialist countries, like the PRC, Cuba, Vietnam, etc. They still have some lesser degree of inequality, of course, as well as their own struggles and issues from standing against the broader Capitalist hegemony, but there is a concerted effort in Socialist countries to address the needs of the working class through their structures, reflected in improved metrics in areas sensitive to their Working Class, such as China's directed and planned efforts at successfully eliminating extreme poverty at a breakneck pace, or Cuba's advanced healthcare system. China in particular does focus on supply a lot, that's why they are endlessly building new cities to anticipate future necessity, the famous "ghost cities" that in reality are sound planning and help increase employment. They also have some of the most advanced automation and manufacturing, their strategy in the long run depends on rapidly increasing the productive forces.

    As for small and medium-sized businesses, these disappear over time in favor of larger firms, and either grow or fail to be capable of influencing the system like the large firms do. In all countries, regardless of economic model, as long as markets persist there will be a gradual increase in proportion of production held by large firms compared to smaller firms, as competition forces growth and centralization. This is actually one of Marx's most important observations, and forms the basis of Marxism's scientific view of Socialism compared to earlier Utopian Socialist types like Robert Owen and Saint-Simon. The earlier Utopian Socialists thought that if you could picture in your head a good society, you could implement it directly, through fiat, simply by convincing others to follow suit. This ended up being wrong, of course.

    Why can’t any government in the world aim to tax ultra rich more whilst making easier for small to medium large businesses to thrive? And policies on property supply rather than property buyers like all sorts of first time buyers programs?

    The "ultra rich," in Capitalist countries, control the government through mechanisms such as lobbying. In order to truly tax the rich and provide large safety nets, the working class needs to have control of the State. This is far easier said than done, however, even Capitalist democracies aren't genuinely democratic. If you look at US policy polling, systems like Single Payer healthcare are extremely popular across the board, yet that isn't seen as a genuine possibility despite being proven in many other countries in various forms. Revolution is necessary, and this requires working class organization.

    The Nordic Countries that, on the surface, seem to have the best of all worlds in this respect on the outside hide that they fund these nets through international usury, large IMF loans and the like. They function as landlords in country form, essentially, so their working class is just as exploited internally, yet bribed using much larger exploitation globally. The US, of course, is the largest Empire and consequently its Imperialism is on a far larger scale, but that doesn't mean the Nordic model would "work" for the US, as the profits of Imperialism to a greater extent go to the US bourgeoisie as compared to the Nordics, where comparatively stronger labor organizing gives the Nordic working class more of a bargaining edge. Perhaps temporarily, but Capitalists in the US hold enourmous power and organization of labor is weak, ergo this is certainly an uphill battle to begin with and still leaves open the necessity of overcoming US Imperialism.

    Why are only same old policies keep being peddled when the world is still going to shit?

    Old policies rise as the contradictions within Capitalism, ie wealth inequality, concentration of Capital into fewer and fewer hands, and so forth, sharpen. Fascism in particular is like a self-defense system for Capitalism against rising Leftist organization, generally. As Gramsci said, "The old world is dying, and the new world struggles to be born; now is the time of monsters."

    Look to Socialist countries to see where new ground is being tread. It isn't all sunshine and roses, but progress is coming steadily. The CPC describes its process as "crossing the river by feeling for the stones," you test for footing and pivot direction if it doesn't work, gradually, and iteratively and continuously focus on refinement and improvement.

    That doesn’t involve reducing the government size and budget entirely or subscribing to any extreme left or right?

    The policies you ask for aren't extreme anything, really. They are easy to think of, and easy to question why they aren't seen as a priority. The part where this shifts dramatically to the Left, is translating those ideas into reality. Just like you cannot simply ask a banker to give you free money, Capitalist systems will not let you simply take from the dragon's hoard, regardless of how that hoard was gained. The "right-wing," liberal Capitalist answer is Imperialism in order to implement Social Democracy a la the Nordics, while the Left-wing answer is Socialism, as seen in previously mentioned countries like Cuba, the PRC, Vietnam, etc.

    Being "extreme" in the sense of being a solution outside the overton window doesn't mean the stance is wrong, either. Socialism is correct, despite being outside of the status quo in Western countries.

    If you're interested more in analysis along these lines, I keep an introductory Marxist-Leninist reading list oriented towards absolute beginners to political theory.

  • Isn't China taking some of these actions?

    • Yes. The property supply is a big one for them, that's where the "ghost cities" narrative comes from, they intentionally build rapidly in anticipation for future demand. They do have wealth inequality, but they seem to be focusing more on directly combatting underdevelopment and poverty than making a point to punish their wealthiest, as they are wary of repeating some of the more dogmatic consequences of the Cultural Revolution, putting Class Struggle above the other foundations of Marxism, rather than alongside. Ie, you can't just kill Capitalists or sieze their assets to turn a largely underdeveloped economy into a developed and complex publicly owned one, you have to develop into one, and that requires a more methodical approach that analyzes which firms are large or small, and which industries or sectors hold power over others.

      If Marxism's key observations of markets are "correct," then centralization of markets are an almost assured bet, and as that happens, more and more industry can be publicly owned and planned directly, so the wealth inequality problem is one that almost fixes itself as long as the CPC continues to place a large emphasis on combatting corruption (which used to be a much bigger issue in the past) and directly appealing to the people via large programs like the Extreme Poverty Eradication Program.

  • It's really easy to convince a huge number of poor people that the elites are the only ones defending them from poor people they aren't personally familiar with. This trick has worked for 10,000 years at least.

  • There are plenty of governments that do that. Cuba, China, Vietnam, Korea, the late Soviet Union.

    While Stalinist ultraleft economic policies were not so generous to small businesses, the new Chinese model (which has been adopted by most Socialist states, bar Korea, which hews still to the failed Stalinist model) focuses on nationalization of heavy industry (steel, aggregate, resource extraction, refinery) while allowing consumer goods and small-scale retail to remain in the hands of business owners.

    The reason this doesn't happen in the West or its neocolonies is that it hampers the wealth and resource extraction of the international finance capital class.

    • Reading another comment. China doesnt tax the ultra rich, like the Post was asking for.

      I also wonder if its a good solution to do. But reading that comment, reveals that taxing the ultra rich wont make the problem go away.

      In Germany we have a party called "Die Linke" which wants to tax the ultra rich. But slowly I feel like thats a stupid idea when looking how China works.

      • China does tax the rich but they also have an additional system of "voluntary donations." For example, Tencent "volunteered" to give up an amount that is about 3/4th worth of its yearly profits to social programs.

        I say "voluntary" because it's obviously not very voluntary. China's government has a party cell inside of Tencent as well as a "golden share" that allows it to act as a major shareholder. It basically has control over the company. These "donations" also go directly to government programs like poverty alleviation and not to a private charity group.

      • For clarity, China does tax the ultra-rich, they just don't try to solve the conditions that give rise to wealth inequality through taxation alone like the Nordic Countries do, but through vast and rapid development of the productive forces. The former method, if exclusively focused on, can end up lengthening the process, whereas it is through development of the productive forces that the conditions that give rise to wealth inequality can be truly ended for good.

        Essentially, if 1 hour of labor in China can produce more on average than 1 hour of labor in, say, the US, then it becomes easier to fulfill the needs of all, while simultaneously preparing the ground for increasing the ratio of production in the public sector (which works best with large, massive firms, rather than smaller firms, which work best with markets). This is why Marx says markets erase their own foundations as they develop.

  • because that goes against the concerns of the elites. the rich, who pay for the campaigns of most politicians (surely they pay for all of those who have a chance to win the post of president or prime minister), will try to squeeze every dime they can from everyone else, specially from the poor.

    small to medium business won't thrive because that would be another entrant in the market to split profits with the larger, more established business. they have already large advantages because they purchase raw materials and utilities in bulk, hence they can get a lower price and larger profit margins than the smaller, newer entrants to the market. still, they want to be sure that everything remains like that and therefore have politicians to keep things that way. the idea that new business will make a difference in well-established markets is an illusion.

    as for property supply, well, land in our system is not a resource, but a commodity. take the real estate market for example: investors are buying property to serve as a financial asset, they buy houses when they're cheap, rent them and sell for a profit when the market conditions are good for that. they don't think of housing as something that should serve their primary purpose - as the place of living for families. they don't want to lose value on their properties, and that's why they have politicians to represent their interests and keep things the way they are. same logic applies in big cities where investors buy commercial buildings and don't want to see them not valued enough - by not having people actually working on them. that's why they're so radically against remote jobs.

  • Brazil is currently fighting to increase the income tax of the top earners. I don't expect it to pass because congress and senate are, by and large, protector of the interests of the wealthy.

  • You know who has the government's ear? Ultra rich people. And they feed the legislators the horror scenario that higher taxes would mean they take their money and all their business and all the jobs attached to those to somewhere with lower taxes. And then they won't get more in tax revenue while at the same time increasing benefits spending. It's the billionaires' lose/lose scenario. It's a powerful narrative. The only way to fix this is to have all countries adopt similar tax codes. And that is about as likely as Putin getting the Nobel Peace Prize.

    • getting the Nobel Peace Prize.

      No one familiar with the Nobel Peace Prize would use this analogy[1][2].

    • Well, Putin is indeed very unlikely to get the Nobel Peace Price but not because war or not, Obama got it despite waging something like 13 wars including few blatant full-scale invasions.

      Maybe he should try to bomb the Nobel comittee itself, who knows, maybe that would impress them.

      • Obama benefited from being barely in office in 2009 when he got the prize. I imagine the committee in Oslo regretted their decision later.

    • It's not really that powerful, nor is it likely what billionaires are peddling to the politicians. Where would the billionaires go with lower taxes and yet the same secure standard of living? What's to stop the politicians from raising taxes to 0.1% lower than these mythical low-tax countries with the stability and infrastructure to support their companies? That's just the bullshit story that is fed to the public.

      In reality it's just what Elon is doing, but historically has been done more privately. "Prop up my business with low taxes, lax regulations, and tasty government contracts or I'll spend $100M supporting a primary opponent." And the politicians say "Ok give my wife spouse a board position or something and we can deal."

      • I would say the powerfulness of the narrative remains strong. The big corporations find ways to the cheapest way of doing business like most rivers find the sea. It doesn't have to be switching from a developed country with socialist tax code going to a developing country where labor is cheap. You can see it in the microcosm of the EU. The Republic of Ireland has favorable taxes and a less harsh data security watchdog so big tech companies headquarter there. Amazon sits in Luxembourg for similar reasons. Wages are cheaper in the East so manufacturing jobs tend to move there (or, sadly, the workforce moves west and gets paid cents on the Euro working in Central and Western Europe). If a government increases labor costs by demanding more benefits for workers, you reach a tipping point where companies pack up and move. Not all at once but after a while the creek becomes a river. That's the spectre haunting Europe these days. It's not just about a billionaire wealth tax, it's also about the levies in employment, etc. They all need to be similar in the tax codes for the equal playing field the EU apparatus idealizes. When they're not you move the mountain range out of the way for the river to find the sea more directly.

        Trump's terrific tariffs are supposed to create a pull effect, making the US attractive to manufacturing jobs. I think he will fail because be will drive up the cost of living so much that market demand will not rise along with his expectations, making investing in factories in the US ultimately not enticing enough. Never mind the fact that corporations fear uncertainty more than the Beelzebub.

59 comments