The caboose discovered in America, readily recognized in China
Sunday, October 2, 2005 at 6:14AM ■"The Hallmark of the Underclass: What Katrina uncovered was not poverty," op-ed by Charles Murray, Wall Street Journal, 29 September 2005, p. A18.
■"Beijing's Blueprint to Tackle Gap Between Rich, Poor," by Kathy Chen, Wall Street Journal, 30 September 2005, p. A9.
Charles Murray is a controversial thinker who nonetheless makes a lot of interesting, undeniable points in his analysis. His point on Katrina: what was exposed was not simply poverty but America's persistent (and growing) underclass of people who are basically disconnected from economic opportunity in the U.S.
It's definitely true that you can be connected to the economy in that nickel-and-dimed sort of way and still be lower class, but at least you're functioning in that scenario. What Murray is talking about with an underclass are those who are disconnected from economic activity for a variety of reasons, some of them involving their own volition or choices. When disaster strikes, these people suffer most because their lack of connectivity translates into a lack of options, support networks, etc., and so their trapped status is revealed: the Gap within the Core.
The same harsh realities apply here as they apply to the Gap: just throwing money at the problem will accomplish little. If people aren't "socialized," to use Murray's term, for economic connectivity (i.e., they see it as a worthy goal around which they organize their lives). Shrinking the Gap is not a money thing, it's a connectivity thing. The private sector will generate that connectivity if it sees enough of a potential return on investment to justify the risk, so we're talking thresholds here, not ideal types or ideal situations, and the most important threshold is: does the population in question want the connectivity and is it ready to make use of it? No amount of aid or federal spending or debt relief or anything else can create that which is not there in these Gap situations: the non-zero sum mindset, a key attribute of the underclass view of the world ("there is only so much wealth in this world, and we can't get any because others already control it").
China is grappling with their disconnected underclass, located overwhelmingly in the rural areas, which get more disconnected, in many ways, as the ambitious young leave for the city, making the rural increasingly made up of those who have neither the ambition or skills or sheer wherewithal to make a similarly ambitious journey. Beijing needs to provide enough connectivity to these regions to avoid a dangerous political disconnect that could prove explosive if not checked.
So China's new "five-year blueprint" (no longer a "plan" because Beijing no longer controls a planned economy) focuses much attention on increasingly access to education and healthcare in rural regions, an effort that will end up making FDR's panoply of similar efforts in the Great Depression look tiny in comparison. But make this effort China must, because it's "Tennessee Valley" or "Appalachia" holds upwards of 1 billion.
Economists said a main theme of the five-year plan [notice how our journalist can't break the habit of calling it a "plan"!] will be a "scientific approach to development"-focusing on improving people's livelihoods, not just growth; seeking efficient and sustainable development, not blind growth; and ensuring that the benefits of growth are divided among the people, such as through higher taxation of wealthier areas."
It's interesting to me that America's individual taxation began around the time that we went majority urban in the early years of the 20th century, a time in which we can locate much of China's current socio-economic development. In 20 years time, most of us will be amazed to see how similar China's political system becomes to our own.
