Privileged Socialism

In my last post I noted that I had left the glass industry and was in the process of leaving China.  Well, I haven’t left yet and, as a good friend noted, you don’t have to be doing something to have been something.  Fair enough.  For the time being, therefore, I will continue to post about issues that truly stir my emotions.  Here is one such issue.


It seems that during every presidential election cycle we get into a verbal battle of the ‘isms’ – socialism, free market capitalism, etc. This election cycle is no different. Perhaps the verbal sparring is even more intense this time around.

And, perhaps, it has never meant less. As an eight-year resident of China I see little difference between socialism with Chinese characteristics, as the Chinese government refers to their method of economic management, and the free market capitalism with American characteristics I see in the U.S. today. Only the methods are different.

In the U.S. politicians want to frame the discussion as one of government regulation. That, however, can be very misleading as there are many forms of regulation, both visible and invisible; both intentional and purportedly coincidental.

In China, the government controls the economy largely through the State-Owned-Enterprises that dominate key industries such as banking and energy. In the U.S. the government uses the U.S. Tax Code, tolerance of special interest lobbyists, and outright subsidies and grants awarded in the name of national defense and health. Government economic control is a question of government money flows, not the existence of bureaus or state ownership.

If we look solely at outcomes it’s hard to argue that the U.S. has not become a socialist state. Only it has not become a true socialist state in the likeness of the countries of Scandinavia, which score the best in the world in terms of perceptions of corruption and the general satisfaction with the quality of life of the citizenry.

I would call the U.S. version privileged socialism. Against the ideal it is a distorted state of socialism that favors the few rather than the many. Big banks, wealthy donors, and industries with powerful lobbyists, rather than the average American are the beneficiaries. In China, by contrast, the government has raised 300 million people out of poverty in just one generation.

Conservative politicians like to frame their defense of the status quo in terms of equal opportunity versus equal outcome, the latter suggesting the simple reallocation of wealth from the hard working to the less motivated. This assumes, however, that equal opportunity is even achievable, much less the current reality.

In major tourist attractions around the U.S. today you can now avoid waiting in line if you have the money to pay a premium on your ticket. In theory one can argue that everyone has the same opportunity to pay the ‘privilege’ premium. The very existence of a market for such a privilege, however, would argue that is simply not true in practice. If it were, there would be no market for such a product.

The plight of Hispanic and African-American minorities, for whom the quality of life has changed little in decades (There are, of course, exceptions.) is further evidence of the inequity in opportunity that remains the real backbone of the U.S. economy. In terms of pure capitalist theory it is the poorest among us who has the greatest incentive to seize the opportunity of a better life. They know firsthand the hardships of poverty.

And in China that is what I have witnessed. The children of the privileged generally lead lives of privilege. It is the children of the poor, who drive their children to work the hardest at school, however, who seize the opportunity to sit at the table of privilege when a chair opens up.

I am not advocating one system over the other. I am not, in any way, suggesting that socialism with Chinese characteristics is the perfect socialism. I am, however, advocating an open and frank discussion of the issues. Within the scope of the U.S. presidential election, at least, that seems to be nowhere in sight.

No one in America should be more aware of the dangers of the hoax of free market capitalism than the so-called 1%. As history has shown us again and again there will eventually be pitchforks in the streets if the current polarization of wealth is not arrested.

As a brilliant friend recently noted, however, the pitchforks are already out. They are just pointing them at each other because no one has been able to figure out who is to blame.

That is the problem with ‘isms’ that are not transparent or whose core beneficiaries advocate them to be something they are not.

Eventually, however, the 99% will figure it out. Because if history has taught us anything else, the 1% inevitably underestimate how insightful the 99% really are and how false the foundation of the current structure really is.


Some early praise for the author’s latest book, “Understanding China – There is reason for the difference”

“An insightful, compelling introduction to the intricacies of Chinese business and life.” – Kirkus Review

To see the full review from this prestigious literary company, please click on this direct link:

“Understanding China is a “must-read” for anyone interested in culture, working with Asian businesses, visiting China or simply if you enjoy a well-written book! I worked in China in the 90’s and while I eventually understood the differences, I never understood “why” until now. Moreau does a great job explaining the “why”. Well done!!”

(Not a relative!)

“Having done business and gone on personal journeys through the Asia Pacific region, I wish I’d read a book like this first. The premise is that being happy and effective in China requires more than just learning how things operate and working within the established system. This will bring frustration and leave you ineffective because you, the Westerner, will still be looking at these cultural differences as irrational. Mr. Moreau contends that only by understanding why things are the way they are in China and in the West can a Westerner actually influence outcome in China.

The author proceeds to explain the differences with very engaging writing that made me say, “Of, of course! It all makes sense now.”

(Also not a relative!)


Copyright © 2016 Gary Moreau

Note: The views expressed in this post are strictly those of the writer acting in a personal capacity.

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