Giving Money Cannot Narrow the Wealth Gap

How large is the wealth gap in Chinese society? It's large. Some people say that giving money to the poor is enough——is it really? If it were so simple but not done, are you the only smart one around? The money isn't coming from your own pocket anyway; borrowing from the national treasury to do good deeds can bring you a good reputation, so why not?

Clearly, things aren't that simple. Almost every country provides basic living allowances, and some developed countries have even piloted UBI (universal basic income with regular payments to everyone), but how much money are we talking about? It still has to match the country's minimum consumption standards——don't be fooled by some wealthy countries' payments that seem large when converted to RMB; measured against that country's actual cost of living for food, clothing, and shelter, the payments are just barely enough for minimal survival standards. Can this narrow the wealth gap? No, the only goal can be "survival."

Why not give more? Because this money comes from taxes, and to give more, you'd have to collect more taxes. These countries are already high-tax nations; increasing taxes further would drive away the elite. Once the elite leave, there's no tax base, the economy collapses——that's digging your own grave. Can you expect those crying for you to give them more money to be your source of tax revenue?

Over the past few decades, what truly raised ordinary people's "living floor" in China was technological innovation, expanding the pie, creating new value——definitely not some form of wealth redistribution. As for the growing wealth gap? Yes, but if you're comparing the richest people to the poorest, the wealth gap under the influence of technology will forever expand. Especially after the internet era, marginal costs have dropped dramatically, and they'll drop even faster in the AI age; capable people suddenly have the ability to do business globally, suddenly have numerous low-cost means at their disposal. They contribute the lion's share of new social value; of course the wealth gap continues to widen. Because the poorest people are basically negative contributors to society; it would be strange if the gap didn't keep expanding.

So you can't look at it this way. The wealth gap truly worth measuring is the gap between the secondary-wealthy group and the secondary-poor group——the secondary-wealthy group has far more people, they might be executives at Fortune 500 companies or small business owners, better off than the middle class but not super rich; while the secondary-poor group aren't idle welfare recipients waiting for handouts, they have a job close to minimum wage, they commute to work normally every day——narrowing the wealth gap between these two groups is what's truly meaningful.

And the way to narrow the wealth gap between these two groups is definitely not giving money, but helping the secondary-poor group achieve two upgrades: intellectual upgrade and value upgrade.

Let me ask you a question: what characteristics do all the cities with the strongest purchasing power share?

Almost without exception, they're all cities where the internet is particularly developed, the financial sector is particularly strong, where new technology always leads. These cities are filled with "super individuals"; the adoption rate of new technology is very high; people combine what they're good at or what resources they own with new technology to create unique value that belongs to them——this unique value becomes chips for income distribution. Meanwhile, those mediocre cities, no matter how high their total GDP is, as long as they're dominated by traditional manufacturing, they're finished. Because traditional manufacturing treats employees as identical tools, which means no matter how much the boss makes, even if profits reach global number one, employees can never get a slice because the boss doesn't need employees to have any unique value; the work is simple work, if you don't do it someone else is queued up to do it.

It's not about whether any particular industry boss is good or bad; it's determined by industry characteristics. So I say intelligent robots can't come soon enough, the more advanced AI gets the better, sweep all ordinary people with simple tool attributes out of the picture, because what they do essentially doesn't participate in value distribution anyway; might as well cut off those fantasies directly.

How to participate in value distribution? You must do work that qualifies you to participate in distribution——that is, build a barrier for yourself in some field, however you utilize tools, whether it's resources, information gaps, or skills, anyway you need to do something others can't do, or at least do it until the number of people like you in supply and demand stands at a level less than the market's demand for people like you.

In economics, this is called "raising ordinary people's productivity boundary." With this chip in hand, whether you're directly facing end consumers or you're an employee, you won't fear that society won't distribute value to you.

You must understand: expecting the state to allocate money to you is delusion. No country ever has, or will, directly give you a "dignified" life, because countries that try inevitably face "universal poverty" and get eliminated by history.

From the government's perspective, rather than listen to some nobodies asking for a drop-in-the-bucket handout for show, it's better to think about how to help ordinary people install the latest tools into their minds for free or at low cost, letting them figure out ways to create unique value worthy of income distribution for society——this is creating an environment. What governments should do is create a better environment and be a good referee, that's enough.

As for those who won't upgrade despite being given chances, let them be destitute; let them survive, because no matter how good the government is, it shouldn't pursue bringing "beautiful lives" to "every single person." #Gate13周年全球庆典