The Gini Is Out Of The Bottle: Did China "Outcapitalism" The US, Or Did America "Outcommunism" China?

Tyler Durden's picture

In several days, the ornate theatrical spectacle that is the Chinese Communist Party's 18th Congress (captioned here) will come to a triumphal end, with a new leader, Vice President Xi Jinping, carefully hand-picked after the Bo Xilai fiasco, from among the equal of equals, with just one thing on his mind. No, not how to transfer $5 billion from that Swiss bank account to Singapore without being noticed.

The patriotic thing preoccupying the lucky successor to President Hu Juntao will be a simple one: how to promote well-being and equality among the people. After all, caring about the people is the primary preoccupation of any good communist country. As such, key concern for the new leader and his government, at least as has been televised, will be the income distribution inequalities and corruption among the Chinese population, something outgoing leader Hu himself stressed. Indeed, as the most recent Chinese Gini coefficient (the measurement of inequality of income in a given society) reading shows, in China this has risen from 0.42 in 2007 to 0.48 in 2009.

It is this reason why the Chinese society will have to engage in far more effective wealth redistribution because the last thing the country with no real social safety net can afford is social unrest and upheaval in a time of declining economic growth.

So far so good.

Where there does arise some confusion, is when juxtaposing Chinese social inequality with that of the US. Recall that China is a de facto communist country, whose society is, at least on paper, equal. One wonders, then, how it happened that US society now has a Gini coefficient that is lower than that of China: did communist China "outcapitalism" the US, or has the US simply, and quite successfully, "outcommunism" China?

We expect to find out soon, just as we expect to see what happens if either China or the US fails to address this rather stunning divergence away from propaganda ("China is a communist country"; "The US is capitalist") and into reality.

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CPL's picture

You got Marx in my Keynes...


No I got Keynes in your Marx.

Gully Foyle's picture

Biden 2016 Born in the USA

IPsecurityinIT's picture

With questions like this the one in the title of this article who needs answers to what the real problem is?

(yes I am mad but it makes me so happy... hope I don't seem as strange as knulckles)


Fredo Corleone's picture

On a more attractive note ( Gini coefficients notwithstanding ), Mr. Jinping's wife is a celebrated recording artist and performer in their native land...

MillionDollarBogus_'s picture

Gully, I gave you a down vote, just because....

economics9698's picture

The simplest way to help the peasants is to pay them in silver, hard currency.  Getting paid in real money that cannot be stolen by theft through inflation would be the biggest wealth transfer from the rich to the poor that any country could do.

I think China realizes this and are on the world’s biggest gold buying spree ever.  I think the Chinese transfer to gold will “kill two birds with one stone:

1.  End the dollar dominance as a world currency.

2.  Eliminate inflation for the 1.3 billion peasants.

NidStyles's picture

You mistakenly think that the people that run and do the planning in China give two shits about their cheap labor.

economics9698's picture

I don’t think you grasp the precarious position the Chinese leadership is in, communist, fascist, capitalist, socialist, when there are 1.3 billion peasants running around looking to survive.  The leadership is one bad month of inflation and food shortages away from revolution.  Imagine 500,000 pissed off starving peasants in Beijing looking for some food.  That is what the Chinese leadership deals with everyday.

Second China is a mercantile economy.  It only makes sense they would want gold for their labor and not paper.

Going to hard money eliminates two problems at the same time.

fonzannoon's picture

well what are they waiting for. They should get on with it already.

blunderdog's picture

How much difference could it make?

Virtually every penny these folks are paid is back in the hands of the government and party wonks before morning, anyway.  Just like we do it in the US, except we have the "private market" perform the same function.

Sam Clemons's picture

Both examples of "growth" were mostly just credit bubbles pulling forward demand and wasting resources.  


 "Fuk Yu."

"No - I Fuk Yu last night. "

" I kill you - Fuk Yu my wife ! "

" Oh. I fuck up - so sorry. " 

Chinese version above, American version below.


" Honey, where are the popsicle sticks and tape ? Tonight's our special night, y'know. "

" I checked with the HMO again - they say this IS the only version of Viagra that they prescribe on the new medical plan. "


A Lunatic's picture

Please make an appointment with the nearest mental health professional asap.

old naughty's picture

Is it my eyesight, the two bars are almost identical in length?

So what's these -ism thinge? The 60-ish is rising, the 230-ish is falling. Both facing prospects of unrest, failing.

Does either have WHAT IT TAKES to make it through? I wonder...

El Tuco's picture

Chinese husband says to wife "I want 69"

Chinese wife says " why you want broccoli and beef"

I am more equal than others's picture

Having just spent a couple of weeks in China - Canton Fair, etc. and far western country side... at the street level and everyday life - they are communist in name only.  Capitalism is alive and well in China.  So many little shops in the countless 12 to 30 story apartment buildings.  Some one posted that they live on less than $2 per day - bullshit.  Saw a Lamborgini dealership there and hundreds of upscale cars on the streets that would make Hollywood look cheap by comparison.  Rents at some of the apartments I visited are equal to the rents for similar space in the US. 

The hot and spicy girls and food in western China were amazing.  Smog is a problem in the big cities.  Dali was amazing.  Communist have put themselves in a bad position. To constrain the people will result in massive turmoil.  They are wise to let it go and make the masses consumers.  Its taking place in the countryside now.  watch out, when they really start consuming, the US will have to get its goods from someplace else.

Things that go bump's picture

Shortly after that we will be the cheap labor making goods for China.  

q99x2's picture

They called off 2016 in this release of reality. It all ends when nuclear armed groups of humans are pushed to shove. They just want to know the outcome before finalizing the next version. All the photographs and videos of the UFOs that look like colored lights are the last patches to the existing code. Sorry no Biden in the next release.

resurger's picture

2.5bn people make less than $2/day.

Why those Central Planers dont just STFU!


"Better Living through Lending"

How the World Bank is Fighting Poverty

At the heart of the Bank’s work is its focus on poverty reduction and improving opportunities for the poor. Poverty causes hunger and malnutrition, and makes people vulnerable to shocks, such as the global economic crisis, climate change and natural disasters. The World Bank contributes to reduce poverty by supporting the design and implementation of country poverty-reduction strategies through a variety of analytical and lending instruments. It aims to expand growth opportunities, reduce vulnerability to shocks, and improve poor people’s access to basic services.,,cont...


Are those analysis true?




LawsofPhysics's picture

I know many people who would lend, if they would get a reasonable return. What you are suggesting is that banks should be just banks again and not a den of casio thieves. How novel.

AGuy's picture

"2.5bn people make less than $2/day."

The US has much much higher standard planned for our future: 300 Million Americans making $2 Billion a Day, yet unable to afford a cup of Coffee.

 "Terrible Living through Printing!"

Lets not forget the plan to load up every young person with 6 figures in student loan debt.

Inignort's picture

To paraphrase Russell Ziskey, "The U.S. hasn't out communism China. But, we're willing to learn."

Motorhead's picture

They're just still bitter about the Opium Wars and shit.

resurger's picture

It's all fucked up anyway, ill just go to Brazil!!

akak's picture

Did China economically blob-up the US, or did the US outcitizenism China?

Make me laugh!

lakecity55's picture

haha. we should move to China, they will have rampant capitalism soon.

usa will go Foward on the Long March in search of o-phones.

centerline's picture

Where the hell is Anon when we need him most?

Ricky Bobby's picture

He is working extra shifts at Foxconn since so many of his fellow workers have hit the ground unexpectedly.

nmewn's picture

Ha! Made me laugh, Chinese Ginism coefficients are eternal!!!

Now lets run one on indoor toilets per thousand ;-)

TheFourthStooge-ing's picture

The mettle, the mettle is the primary factor here, the matteringest part, the crustiest bit.

fonzannoon's picture

Inaguration speech "We are floating the Yuan and dumping treasuries en masse, gold bitchez"

never happen right?



ekm's picture

I replied to your question on that previous post.

fonzannoon's picture

Hey you mean from last night? I did see the answer, thanks. I was not too surprised. I could have phrased it a bit better. What I was wondering as well was...was there a contingent of people that had the ability to secure things like precious metals that made it (relatively speaking) easier to get through that time?

Basically what we see people on here doing in prep for a dollar devaluation, was there a similar group of people back then over there? If so how did it work out for them?

ekm's picture

Hm, good question.

I don't know about the rest of eastern europe, but in Albania holding gold was forbidden during communism, except for rings and necklaces. My grandfather had it under the ground in this backyard for 45 years, from 1945 until 1990 when communism fell.

Many family businesses started and became successful due to that quite large amount of gold. I know for a fact that real gold does not corrode, I have 3 of those coins with Napoleon's head.


fonzannoon's picture

Thanks for the info EKM. I really appreciate the insight.

ekm's picture

I have a suspicion that you guys took my post yesterday about 25% working for the 75% and made it something bigger.


And yes, USA is out-communisming China, not by force, just by use of free will of the people.


I call it 'massive stupidity'. Whereas Nietzche formulates it differently:

"In individuals, insanity is rare; but in groups, parties, nations and epochs it is the rule" – Nietzsche


centerline's picture

A friend of mine part jokingly used to talk about writing a book about his Theory of Stupidity.  This of course would under the chapter related to group stupidity... multi-nodal stupidity.  lol.

nmewn's picture

"I have a suspicion that you guys took my post yesterday about 25% working for the 75% and made it something bigger."

Not all of us ekm...not all of us.

BlackholeDivestment's picture

 What gave it away? Was it really the numbers? ...or The Great Wal Mart of China Suicide Vampire Squid Vote 2 Party 666 Sucker Suite on their dusty ass?

Most Favorite Nation status, rike a Citizen's United GMO Peanut Butter Cup, just because it's cheap, tastes good, it does not mean it's not addicting, deadly, and you have not been tempted. MMMMM Muppets...

Waterfallsparkles's picture

Too funny but it is true.  China is becoming Capitalist and America is becoming Communist.

Yet, what do you expect when all Chinese people work and only 50% of American people work.

news printer's picture

People 'UnlikinG' Romney on Facebook

On Friday Mitt Romney page was losing 593 likes an hour.
By Saturday, the exodus was up to 847 likes an hour.

Essential Nexus's picture

Debt in context: Halo 4 first day sales: $200 million dollars.  National deficit/day: 3.1 Billion dollars.  If microsoft gave every dollar of revenue it generated from Halo 4 on the first day, it would pay for 6.5% of the deficit for the day.

Uskatex's picture

Long ginicologists, bitchez!

blunderdog's picture

"Gini coefficient" is as valuable a figure for comparison as GDP.

In theory, the more capitalist the society, the higher the Gini coefficient should be, but since every single variable about how the country is run affects the calculation, pretending it's a useful comparison is disingenuous at best.

rhinoblitzing's picture

Gini????  WTF r u talkin about...

Barabra Eden over Mary Ann anyday...

as andrew dice clay said, " if you stood close enough to the tube, you could see bush "


buzzsaw99's picture

This has happened because small segments of China work that damn much harder than the rest. Just like execs of failed companies in the usa they earned every penny by working a bazillion times harder. Let the great kleptocracies roll!