How to respond to China’s challenges – Thomas Piketty

As the Chinese Communist Party (CCP) celebrates its 100th anniversary, Western countries are struggling to define their attitude towards the Beijing regime. Let’s say it clearly: we should stop with Western arrogance and promote a new horizon of emancipation and equality at the world level, through a new form of democratic and participatory, ecological and postcolonial socialism. If, on the other hand, Western countries continue to feel superior and defend an exasperated and timeless model of capitalism, they will find it difficult to respond to the Chinese challenge.

The Beijing regime has many weaknesses. According to the Global Times, a newspaper linked to the CCP, democracy in the Chinese version would be superior to the Western electoral supermarket because it entrusts the destiny of the country to a motivated and determined avant-garde, at the same time selected and representative of society (the CCP has 90 million enrolled, 10 percent of the population), and therefore more committed to serving the general interest than the fickle and influential Western voter.

In fact, however, the regime is getting closer and closer to a digital dictatorship, so perfect that no one wants to be like it. The model of government within the party is even less convincing given that it leaves no trace outside, while everyone can observe the generalized surveillance system active on social networks, the repression of dissidents and minorities, the distortion of the electoral process in Hong Kong and threats against Taiwan.

To all this we must add the strong growth of inequalities, and the feeling of social injustice cannot always be resolved with some targeted elimination. But, despite these weaknesses, Beijing has strengths: when climate disasters arrive, it can easily underline the responsibilities of the old powers, which represent a small part of the world population but have produced almost 80 percent of accumulated carbon dioxide emissions. from the beginning of the industrial era.

Furthermore, China recalls that it industrialized itself without resorting to slavery and colonialism, from which it suffered the consequences. It does not have the eternal arrogance of Western countries, always ready to give lessons to the world in matters of justice and democracy but unable to deal with inequality and discrimination, and willing to compromise with the oligarchs. From an economic and financial point of view, the Chinese state has considerable resources, much higher than its debts, which allows it to have an ambitious policy both domestically and internationally, in particular on investments in infrastructure and in the energy transition.

Public power currently has 30 per cent of everything that can be owned in China (it controls 10 per cent of the real estate sector and 50 per cent of the companies), which corresponds to a mixed economy structure not far from those seen. in the West during the years of the economic boom, between 1945 and 1975. On the contrary, it is incredible to note that the main Western states find themselves today with almost zero capital resources or even in debt. Unable to make ends meet (a greater tax burden on the richest taxpayers was needed), these countries became increasingly indebted and sold a growing portion of public resources.

Let’s clarify one point: rich countries are rich in the sense that private assets have never been so large, but states are poor. And if they continue like this, they will have increasingly reduced public assets, and the owners of public securities will have not only the equivalent of all public goods (buildings, schools, hospitals, infrastructures, etc.), but also the right to withdraw an increasing share of the taxes of future taxpayers. On the contrary, it could be done as it was done in the postwar period, reduce public debt rapidly by increasing taxes on larger private assets, giving the state some leeway. Only at this price will it be possible to carry out an ambitious investment policy in education, health, the environment and development.

Furthermore, it is necessary to remove the copyright on vaccines, share the income of multinationals with the countries of the southern hemisphere and put digital platforms at the service of the general interest. We need to promote a new economic model based on the sharing of knowledge and power at all levels. Neoliberalism, by leaving power to the richest and weakening the public powers, has done nothing but strengthen the Chinese model. It’s time to move on to something different.

(Translation by Andrea De Ritis)