View source for Brief:What China Learned From U.S. Capitalism’s Development

China has learned from the development of United States capitalism, taking note of both its successes and failures. Historically, U.S. capitalism effectively managed the capitalist-worker class struggle and found a way to organize its imperial rule without overt colonialism. However, in recent decades, it has struggled to manage class struggles and reverse the decline in its informal imperialism.

In contrast, Chinese leaders have organized their employer-employee relationships and international linkages differently, leading to the ascending Chinese economy while the U.S. economy is descending. U.S. capitalism performed well from 1820 to the 1970s, employing a growing number of workers and paying them real wages that increased over time. This performance, combined with a culture that emphasized consumption, blunted criticism of capitalism until the 1930s.

However, the 1929 stock market crash and the Great Depression exposed the weaknesses of U.S. capitalism. An alliance was formed between employers and employees to save the system, resulting in the New Deal and reduced income and wealth inequality. But after World War II, the U.S. employer class failed to recognize the left’s role in saving capitalism and aimed to undo the New Deal and weaken the left. As a result, U.S. capitalism’s trajectory shifted, leading to increasing income and wealth inequalities.

China observed U.S. capitalism’s weaknesses, including the impact of deregulation and the lack of national health insurance, and learned the importance of coordinating and focusing public and private resources to achieve social goals. China's economic system, which mixes private and public enterprises under strong central control, has led to impressive GDP growth rates and rising real wages.

China’s economic success compared to the U.S. has convinced its policymakers to continue their policy of coordination and focus. As capitalism reaches its fullest potential in its various forms, China’s system may prepare the way for a transition beyond capitalism.

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