by Mitch Kokai
Senior Political Analyst, John Locke Foundation
In the time before internal combustion engines, farm labor was backbreaking for man and beast. Moving to the industrial cities offered better jobs and more opportunity, but still far below what we have today.
Though it took another century to build the middle-class America of quarter-acre castles in suburbs, U.S. cities filled up before World War I. Many of the inhabitants were from Europe and lacked education, but urban public school systems stretched to accommodate and educate their children. Skills and productivity increased with each generation.
After World War II, millions of urban Americans could afford life in the dispersed suburbs, with their shopping centers, strip malls, and subdivisions built privately for private interest.
Though maligned still (“little boxes made of ticky-tacky” or “instant slums”), the Levittowns and their imitators from coast to coast fulfilled an American dream.
What America did in 250 years, China has tried to do in 30, with the same sort of dreaming. The Chinese experience had to be more urgent, in large part because the country already had four times as many people as the U.S. The movement of 500 million peasants to factory work since 1985 left no time for market solutions, according to the quasi-capitalist Chinese philosophy.
Once China turned to profit, although it lacks the key capitalist elements of liberty and personal rights, it unchained peasants from the low productivity of stoop-labor agriculture, taught them new assembly-line skills, and raised their wages to let them dream. …
… In China, the state drives investment, not consumption. Unlike the welfare states in the West, the Chinese state does not pay benefits that people can live on. As a consequence, the gross savings rate in China approaches 50% of gross domestic product and savings are 30% of disposable income.
Shanghai is the largest and wealthiest city in China, but its per capita income and wealth are still poor fractions of the living standards that some Americans and their leaders describe as the failure of the American dream.