Chinese Economic Development

20 Chinese Economic Developmentaction is to be taken on behalf of women, public policy should focus on the needsof working-class single women, rather than women as a whole.Inequalities between capital and labour (the main contributory factor to the Ginicoefficient in most societies) are defensible on functional grounds. 18 Rawls (1972)famously argued that inequality was justifiable in so far as (a) the inequalitypromoted growth (and thereby poverty reduction) and (b) the society in questionwas characterized by de facto equality of opportunity. Still more famously, Marx(1875: 213–15) argued that inequalities were necessary in the early stages ofcommunism, and only in the later stages could distribution be according to need:Here we are dealing with a communist society, not as it has developed fromfirst principles, but, on the contrary, just as it emerges from capitalist society,hence in every respect – economically, morally, intellectually – as it comesforth from the womb, it is stamped with the birthmarks of the old society. Theindividual producer retains proportionately, after deductions, exactly what heput into it. What he has put into it is a quantity of his individual labour … Ina higher phase of communist society, after the subjection of individuals to thedivision of labour, and thereby the antithesis between mental and physicallabour, has disappeared; after labour has become not only a means of life butlife’s prime want; after the productive forces have also increased with theall-round development of the individual, and all the springs of co-operativewealth flow more abundantly – only then can the narrow horizon of bourgeoisright be crossed in its entirety and society inscribe on its banner: From eachaccording to his ability, to each according to his needs!These sorts of arguments are of course the mainstay of neoliberal agendas:inequality is argued to be necessary to promote risk-taking and hence technicalprogress. One can go further and argue that even corruption can be growth-promoting(Khan and Jomo 2000; Rock and Bonnett 2004). Corruption does lead to adeadweight loss because resources are used up in the process of rent-seeking (suchas lobbying for government favours) which would be better used in promotinginnovation and accumulation. However, if corruption has the effect of transferringresources to a growth-promoting class – as it seems to have done in (say) SouthKorea – the net effect will be strongly positive. Or, to put this another way, everythingdepends on the use to which the rents from corruption are put. It is certainlyarguable that corruption in China is not growth-promoting, but the possibilitycannot be dismissed a priori.For all that, we need to recognize that the case for inequality on growth-promotinggrounds is far from unambiguous. For example, if there are diminishingreturns to investment in education, it follows that a redistribution of income fromthe rich to the poor will lead to a higher overall level of education and hence tomore rapid growth. In so far as low productivity in developing countries reflectsunder-nutrition, a redistribution of income to the poor will raise labour productivity(Dasgupta and Ray 1986). Thus Maoist redistribution of land in the early1950s may well have increased farm productivity by improving levels of human