Professor Wei Jie of Tsinghua University: How to correctly understand the income gap

Mondo Health Updated on 2024-02-19

1. Why people can't tolerate income disparity

In real socio-economic life, we can often see that people are much less critical of the egalitarian "big pot" than they are about income disparity. In other words, people tend to tolerate egalitarianism, but they have a strong resistance to income disparities. For example, the most important feature of China's traditional economic system is the egalitarian "big pot rice", and its negative impact on China's economic development is obvious to all, and the income gap, especially the appropriate income gap, has a positive effect on economic development, and China's practice since the reform and opening up has fully proved this point. But why are people able to tolerate egalitarianism while rebelling against income disparity? I think there are five main reasons.

First, there are non-personal causes of income disparity, such as the income disparity caused by power-for-money trading, so people have a rebellious attitude towards income disparity. This income gap is an illegitimate income gap, and people are right to criticize and oppose it. We must not only resolutely oppose this income disparity, but also severely punish it by law. The non-ability income gap of power-for-money trading not only does not have a good effect on social and economic development, but also has a powerful destructive effect on social and economic development.

Second, the idea of equalizing the wealth and the poor is serious, believing that people should all have the same income and there should be no gap, so they have a kind of jealousy for people with high incomes and strongly oppose income disparity. This kind of rebellion against the income gap is not right, because under the conditions of the market economy, the principle implemented by the market economy is the principle of competition and efficiency, and people's competitiveness and efficiency determine people's income, and people's competitiveness and efficiency are very different, so this determines that there must be an income gap between people, so although the society should make appropriate adjustments to the income gap, in fact it is impossible to be rich and poor.

Third, the income gap is too large, which has triggered people's rebellion against the income gap. It is normal for people to have a rebellious mentality towards the income gap because the income gap is too large, because under the conditions of the market economy, although the income gap must be recognized, the income gap cannot be too large, and it is not okay for the income gap to be too large. Here, the key is to grasp the extent of the income disparity, which is neither too large nor too small.

Fourth, it does not recognize that there is a gap in people's abilities, and believes that all people's abilities should be the same, so it does not recognize the income gap caused by the ability gap. This argument against income disparity is incorrect, because there are large differences in ability between people, and differences in ability inevitably lead to income disparities between people. The income gap determined by the ability gap is reasonable and normal. We must acknowledge that the income gap caused by the capacity gap has a huge impact on social and economic development.

Fifth, they misunderstand humanism, thinking that humanism means that people should all have the same income, so they believe that to adhere to humanism, it is necessary to achieve income equality, so they have a rebellious mentality towards the income gap. This reason for opposing income disparity is also incorrect, because humanism does not mean that all people are the same in terms of income, the essence of humanism is to respect human rights, and anyone's human rights should be respected, and the abilities of all people should be respected, for example, if a person's ability is strong, then his personal income should be higher, which is respect for this person, and at the same time, if a person's ability is relatively poor, then this person's income should be less, which is also respect for this person. Thus, humanism refers to respect for the human rights of all people, i.e. the right to income according to ability, and does not mean that all people should have the same income.

From the above analysis, it can be seen that people's reasons for opposing income disparity are not necessarily right, and the existence of some income disparities is wrong or even illegal, but the existence of some income disparities is reasonable, for example, the existence of the ability income gap is inevitable, and we should not oppose the ability income gap. Therefore, income inequality cannot be criticized in general, and income inequality in particular cannot be regarded as the cause of social unrest, and we should acknowledge that income disparities are caused by ability. In order to recognize the ability income gap, it is necessary to conduct an in-depth analysis of the capacity income gap, and we must not casually deny the capacity income gap.

2. Capacity gaps will inevitably lead to income gaps

For example, some people's ability exists as human capital, but some people's ability is very poor, and some are even so poor that it is difficult to survive on their own ability, so that social relief is needed, so we should recognize the ability gap between people. Under the current socio-economic conditions, differences in ability inevitably lead to differences in people's income levels. Since there are large differences in ability, the income difference determined by the difference in ability must also be very large, so it is normal for income to vary widely, and it is abnormal to have no difference. The president of an investment bank told me that he was willing to hire a high-ability person for a high salary of 50,000 yuan a month, rather than a low-ability person for 1,000 yuan. It can be seen that the difference in ability and the income gap determined by the difference in ability is very large. We must now acknowledge this income gap caused by the ability gap. Although we will also make some adjustments in terms of taxation from the perspective of fairness, we must fundamentally admit it. If we do not admit it, the result of engaging in the "big pot rice" of egalitarianism will inevitably be that the economy will not be able to develop rapidly, and it will be more difficult to pursue fairness on a larger scale, that is, it will not be able to continuously improve people's lives, and this has been proved by the practice of more than 50 years since the founding of the People's Republic of China from both positive and negative aspects.

In the eyes of these people, even after China's reform and opening up, the rich are all bad people and immoral people, and only the poor are the embodiment of justice and morality. I have read the literature of a writer who in all his works describing the era of reform and opening up, the rich are basically bad, and only the poor are good people with a sense of justice. The writer does not see the industrious side, the side of contribution to society, of those who have become rich by their own ability, but thinks that they must be immoral just because they are rich. In fact, in a social environment of fair play, the amount of wealth that is possessed does not determine people's moral likes and dislikes. Therefore, we should recognize the income disparities caused by differences in human abilities.

3. Scarcity of capacity and income gap

In fact, whether people's ability differences can cause income gaps, or whether people with strong abilities can obtain high incomes, depends on a precondition, which is the scarcity of ability. If a person with a strong ability has an ability that is scarce in society, then his ability has the highest position, and thus his income will be very high; On the contrary, the ability of a person with strong ability is not scarce in society, but belongs to the ability of oversupply, then his ability will not have the best position, and his ability is not necessarily high income, for example, the general workers on the construction site now, because of the serious oversupply, so although their work is very hard, very tired, but the income is very small, on the contrary, the skilled workers urgently needed by the society now have a high income because of scarcity. Therefore, whether a person's ability can be recognized by society, and whether society can pay a higher income for his ability, depends to a large extent on the degree of scarcity of the ability that the person possesses.

It can be seen that a person who works very hard cannot blindly ask the society to give him a high income, but must consider a question, that is: whether his ability is scarce, if there is no scarcity, even if it is very hard, but not necessarily a higher income. Therefore, the difference in the scarcity of ability will also lead to the difference in people's income. The essence of a market economy is to affirm scarcity, and the more scarce something is, the more valuable it is. Therefore, in the process of increasing their abilities, people should pay attention to the scarcity of abilities, choose their own learning direction and increase their abilities according to the principle of scarcity. The evaluation criterion for the transformation of a person's ability into income is the principle of scarcity in the market economy.

4. Ability evaluation criteria and income gap

Whether or not a person's ability can be converted into income, or how much income it can be converted into, often depends on the criteria by which society evaluates a person's ability. There are two criteria for social evaluation of human ability: one is the administrative standard and the other is the market standard, and these two different criteria will make people with the same ability have different incomes. For example, if a professor works in a university and his salary is several thousand yuan a month, but when he is invited to give a lecture by a company, he may work for several hours for several thousand yuan, why is there such a big difference? Because the former is an administrative evaluation standard, while the latter is a market evaluation standard. The market evaluation criterion is entirely determined by the person's ability, while the administrative evaluation criterion also includes factors such as the income balance between people. Therefore, whether the disparity in human ability can be truly transformed into an income gap depends on what the criteria for evaluating ability are. Differences in the criteria for evaluating people's abilities can also lead to differences in people's incomes.

It should be said that the best criteria for evaluating human ability should be the market standard, and therefore the market-oriented trend of the evaluation standard for human ability should be emphasized. In China's reform, the criteria for evaluating people in private enterprises have basically been marketized, that is, people with strong ability have high incomes, while state-owned enterprises have not yet been completely marketized, and the egalitarian "big pot rice" is still relatively serious, so the same person has different incomes in private enterprises and state-owned enterprises. Because of this, those with strong ability are willing to work in private enterprises, while those with poor ability are willing to eat "big pot rice" in state-owned enterprises, which leads to the inefficiency of state-owned enterprises. It can be seen from this that an important part of our reform is to implement the market-oriented criteria for evaluating people's abilities, so that people's abilities can be evaluated by the market, so as to promote the development of high social and economic efficiency.

5. Opportunity choice and income gap

Whether or not human capacity can be translated into income, or how much, is an extremely important issue to be discussed, and that is the courage of people to choose opportunities. If some people have a strong courage to choose opportunities, and some people do not have a strong ability to choose opportunities, then the same ability will be converted into different incomes, so the courage to choose opportunities is also an important reason for the income gap between them. For example, two operators of a state-owned enterprise with similar abilities, one of whom felt that his ability was restricted in the state-owned enterprise, went to the sea in the early 80s to set up his own business, and now has a family fortune of 10 million; The other person did not have the courage to go to the sea to start a business, and still worked in the original enterprise, but because the business was sluggish, he was laid off. Why do two people with basically similar abilities have different incomes? The important reason is that there is a big difference in the choice of opportunities between the two people. Therefore, differences in the ability to choose opportunities can also lead to differences in people's income. At this time, the key issue is the choice between income and risk, and people who are willing to take risks generally have a stronger ability to choose opportunities, so the risk income is higher.

In short, we should fully recognize that capacity disparities and the factors associated with them can lead to income disparities among people. This is because only by acknowledging this difference can we mobilize people's enthusiasm and thus promote the rapid development of the social economy. We cannot blindly emphasize fairness, but emphasize fairness on the basis of respecting efficiency, and any fairness cannot be achieved in isolation from efficiency, and only with efficiency can we finally achieve universal fairness, that is, economic development, so that people's lives can be improved.

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