China, Socialism & Consumer Behavior: Richer, but not happier
Studies are backing up some of the suspicions I (and many other people who live here): At American Public Media’s Marketplace, Kai Ryssdal and Rob Schmitz discuss a recent study from the University of Southern California which suggested that rising incomes in China are failing to bring greater happiness to broad swathes of the population. Rising prices and growing income inequality appear to be undermining any expected gains, and may be sowing the seeds of social unrest.
Ryssdal: … Somebody’s making money.
Schmitz: Right. Developers are obviously making a lot of money. And of course the government of China itself is getting rich and that’s something that irks a lot of the people I spoke to. In the past five years, much of China’s economic growth has come from building infrastructure. The party has spent hundreds of billions of dollars on this and most of these contracts have gone to state-owned companies. So in other words, the government is giving money to itself. So one man I spoke to was really frustrated with this.
Ryssdal: “Nothing’s OK,” right? Everything is not all right.
Schmitz: Nothing is OK. So he’s saying that the Communist party originated from the poor, but now has basically left the poor behind. He’s a security guard who makes $5 a day and he lives in a 30-square-foot apartment with his wife and his daughter and he isn’t happy at all. So I asked him. I said how could the government improve the situation in China. And so get this, he said that China should start a war.
Ryssdal: No, come on. Really?
Schmitz: Yeah. And I said with whom and he said it doesn’t matter.
The Los Angeles Times reported the study’s release last week, and described China’s use by economists as “a real-life laboratory to study how money, inequality and change are tied to our satisfaction with life”.
Easterlin and his fellow economists based their findings on six surveys on life satisfaction inChina, most of them conducted by Western firms. The fall and rise of happiness levels in Chinamirror the trends seen in Russia and other European countries transitioning from communism, Easterlin said.
But what makes China especially interesting is that happiness levels dipped and rose while incomes were soaring, showing that joblessness can drag happiness levels down even as national wealth is on the rise. The results echo earlier studies that have found that growing wealth does not tend to increase happiness because expectations rise along with it. People also tend to compare their wealth with others’.
“If somebody got a higher salary this year than last, he might not be happy,” Jiaotong University professor Wang Fanghua told The Times last year. “But if his income is better than his friends’, then he will be happy.”