WHY COMMON PROSPERITY IS GOOD FOR SOCIALISM AND FOR CHINA'S ECONOMY

Abstract

"Common prosperity" is entirely based in Marxism yet is an outstandingly original solution to the problem of inequality in an economy in which there is a socialist state, and in which the state sector of the economy is dominant, but there is also the private sector. This is crucial as it was the social structure envisaged by Marx from the Communist Manifesto onwards for the primary stage of socialism. When there was a 100% state-owned economy, as in the USSR after 1929, or China by 1978, the problem of inequality was not very significant, but this economic structure was not efficient for long-term economic development-in some cases leading to the erroneous concept that socialism was "sharing out poverty/a low living standard." Equally erroneous was the concept that capital should be allowed to develop in an unchecked fashion. "Common prosperity" solves this problem in strict conformity with Marx's analysis in the second volume of Capital. Income for capital during the initial stage of socialism can be used either for investment, which aids production, is positive, and is to be protected, or for luxury consumption which is economically and socially negative and to be opposed and regarded as negative.