What do they consider economic growth? When I think of American economic growth I think of oligarchs and capitalists living more extravagantly as they exploit more labor for their purposes.
By the end of 2020, extreme poverty, defined as living on under a threshold of around $2 per day, had been eliminated in China. According to the World Bank, the Chinese government had spent $700 billion on poverty alleviation since 2014. https://www.nytimes.com/2020/12/31/world/asia/china-poverty-xi-jinping.html
China’s state-led economic development model and robust industrial policy has transformed it into what an influential European think tank calls “the world’s sole manufacturing superpower”, making up 35% of global gross production – more than the 9 next largest manufacturers combined.
https://geopoliticaleconomy.com/2024/01/31/china-world-manufacturing-superpower-production/
A lot of this covers economic growth that I don’t think is really covered in the US. People making $7.25 in 2009 can very well be making $7.25 today as the minimum wage hasn’t gone up. Healthcare, education, and housing aren’t more obtainable now yet they are absolutely crucial for a society.
But when I hear “the economy” being talked about it’s either low unemployment (which is really just a survey of Americans on if they’ve applied for a job) or about stock values (which are predominantly owned by the very wealthy) going up.
What good is an economy if you can’t afford the things you need?
I get the impression that a lot of people in the west fundamentally fail to understand what the purpose of an economy actually is. An economy is a model for allocating labour and resources in a way that meets the needs of the people in the country.
The original argument for capitalism was that market economy with private ownership is the most effective way to allocate labour and resources in a way that benefits everyone. Measures such as jobs creation, the stock market, and GDP were meant to act as proxies for measuring how well the economy was accomplishing its stated purpose, which is to improve the standard of living for everyone.
Understanding that these metrics are simply proxies has been lost today, and they’ve been turned into goals of themselves. People have started treating these metrics as the economy. This is why we’re seeing an increasing disconnect between the economy that people are experiencing in their daily lives and news reporting on how the economy is doing.
And why we see absurd articles like this one arguing that the recession people are experiencing isn’t real.
I get the impression that the difference in China is that the government does understand the purpose of an economy, and hence why we see different outcomes there.
What do they consider economic growth? When I think of American economic growth I think of oligarchs and capitalists living more extravagantly as they exploit more labor for their purposes.
I imagine stuff like this:
From 2010 to 2019 (the most recent period for which uninterrupted data is available), the income of the poorest 20% in China increased even as a share of total income. https://data.worldbank.org/indicator/SI.DST.FRST.20?end=2019&locations=CN&start=2008
By the end of 2020, extreme poverty, defined as living on under a threshold of around $2 per day, had been eliminated in China. According to the World Bank, the Chinese government had spent $700 billion on poverty alleviation since 2014. https://www.nytimes.com/2020/12/31/world/asia/china-poverty-xi-jinping.html
Over the past 40 years, the number of people in China with incomes below $1.90 per day – the International Poverty Line as defined by the World Bank to track global extreme poverty– has fallen by close to 800 million. https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience
China’s state-led economic development model and robust industrial policy has transformed it into what an influential European think tank calls “the world’s sole manufacturing superpower”, making up 35% of global gross production – more than the 9 next largest manufacturers combined. https://geopoliticaleconomy.com/2024/01/31/china-world-manufacturing-superpower-production/
A lot of this covers economic growth that I don’t think is really covered in the US. People making $7.25 in 2009 can very well be making $7.25 today as the minimum wage hasn’t gone up. Healthcare, education, and housing aren’t more obtainable now yet they are absolutely crucial for a society.
But when I hear “the economy” being talked about it’s either low unemployment (which is really just a survey of Americans on if they’ve applied for a job) or about stock values (which are predominantly owned by the very wealthy) going up.
What good is an economy if you can’t afford the things you need?
I get the impression that a lot of people in the west fundamentally fail to understand what the purpose of an economy actually is. An economy is a model for allocating labour and resources in a way that meets the needs of the people in the country.
The original argument for capitalism was that market economy with private ownership is the most effective way to allocate labour and resources in a way that benefits everyone. Measures such as jobs creation, the stock market, and GDP were meant to act as proxies for measuring how well the economy was accomplishing its stated purpose, which is to improve the standard of living for everyone.
Understanding that these metrics are simply proxies has been lost today, and they’ve been turned into goals of themselves. People have started treating these metrics as the economy. This is why we’re seeing an increasing disconnect between the economy that people are experiencing in their daily lives and news reporting on how the economy is doing.
And why we see absurd articles like this one arguing that the recession people are experiencing isn’t real.
https://www.wsj.com/economy/it-wont-be-a-recession-it-will-just-feel-like-one-1919267a
I get the impression that the difference in China is that the government does understand the purpose of an economy, and hence why we see different outcomes there.
Citations Needed podcast:
I’ll try to remember to listen to these but I get so scatter-brained I might forget. Thank you.