I’ve just finished up a week of teaching at Northeastern University in Shenyang, China.
I also gave a lecture on comparative economics and looked at nations that converged or diverged over several decades. And this lecture included some material on China’s impressive (but still incomplete) reforms and subsequent growth.
But one thing I noticed in the class discussions is that students were under the impression that capitalism was mostly for the benefit of the rich.
I tried to preemptively deal with that question by recycling my charts showing how poverty fell dramatically after China shifted toward free markets.
That’s very compelling data, as far as I’m concerned, but I’m not overly confident the students were similarly impressed.
So in future years, I think I’m going to steal some data from Professor Ken Schoolland, who was also part of the faculty.
It’s from a xerox, so the resolution isn’t the best, but this data showing changes in income distribution between 1980 and 2008 is very powerful.
As you can see, almost everybody was very poor back in 1980, which was about when China began liberalizing its economy.
By 1995, a significant share of the population climbed out of poverty.
And the 2008 numbers show that a majority of the population was middle class or above.
Very impressive. It seems a rising tide does lift all boats.
But you don’t need perfection. Chinese data confirms that partial reforms (what I call giving an economy “breathing room“) can generate significant benefits.
Source: International Libery