CSAD: Interview with Charles Horner

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Charles Horner is a Senior Fellow at the Hudson Institute, specializing in China and its relationship with the increasingly globalized world. Formerly of the Reagan and first Bush administrations, he is the author of Rising China and Its Postmodern Fatewhich was nominated for the Joseph Levenson Prize of the Association of Asian Studies. He is also the father of David Horner ’91, one of the original founders of the Observer.

TKO: Is economic inequality a problem?

CH: Many people in many places in many eras have certainly thought so – though neither the Old and New Testaments, nor the Analects of Confucius, nor the Buddhist canon, nor the Quran use that particular term. Closer to our own time, politics in many places has been convulsed, sometimes violently so, by a conviction that the rich have too much and the poor too little, and that societies need to be put right.

TKO: To what extent can/should the government be involved in addressing economic inequality?

CH: Government is always involved. The degree of its involvement will depend on how much of the wealth and income gaps it wishes to close. In 1950s China, for example, Mao’s regime sought, both for ideological and for political control reasons, to intervene in a massive way to establish and maintain economic leveling – except, of course, for the privileged members of the ruling Communist Party, not a very large number of people. The main result was a massive Communist Party-manufactured famine which caused tens of millions of needless deaths–the greatest single crime in the history of the world.

There have also been other similarly motivated state political interventions but not quite as bad as this–although Stalin’s collectivization campaigns in Soviet Russia, which were one of Mao’s inspirations, were of comparable destructiveness.  Your readers need to read James Scott’s book, Seeing Like A State. Scott discusses why interventions of this sort, even on a smaller scale, invariably come to grief. It happens when “society” is too weak effectively to resist fantastical visions that “the state” wishes to impose on everybody else.

TKO: What effect does/will economic inequality have on Chinese society?

CH: It is already having a major effect. First of all, as you might imagine, it offends the sense of justice that derives not only from China’s philosophical and religious traditions, but also from modern “socialism” which, after all, is supposed to direct the government’s policies. Yet the income and wealth gaps in “socialist” China are the widest of any of the world’s major economies. This is more than an embarrassment to Beijing’s Communist regime; these gaps are fueling social unrest and sporadic violence,  Moreover, much of the these gap is rooted in regional variation; inland provinces are far worse off than coastal ones. In regions like Muslim  Xinjiang and Buddhist Tibet, the severe ethnic tensions caused by the government’s policy of coerced sinification are made even worse by the truly staggering wealth and income gaps in those places. China’s rich, fearing a “correction,” are smuggling huge amounts of capital outside the country and sending family members to reside abroad. Corruption is endemic and confidence in the regime is falling. These are major political problems.

TKO: How has economic inequality affected China and the United States differently?

CH: China and the U.S. are polar opposites when it comes to their political systems. Communist China is a one-party police state; the U.S. is a long-established constitutional democracy. The U.S. is also a lot richer than China; per capita income in the U.S. is about eight times that of China. Though there has been a  lot of talk in the U.S. about declining social mobility, an American’s prospects for rising are much greater than that of a citizen of China. All these things make for big differences in how “inequality” plays out as a political and social concern. In particular, the Chinese government intervenes massively in the economy to support activities and projects, no matter how “uneconomic,” if they make it easier for the regime to maintain its control. Everyone who lives in China knows this. The regime is not seen as one that intervenes very much on behalf of the interests of people in general, because people in general have no say in how the one-party dictatorship is run.

TKO: Can a country experience rapid growth without exacerbating economic inequality? How or why not?

CH: Probably not, and certainly not for a goodly while. As far as I know, it hasn’t happened yet.

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