Interpretation of Normative Wealth Accumulation Mechanisms
The 20th National Congress of the Communist Party of China was held triumphantly from October 16 to 22, 2022. This conference is an important meeting held at a critical moment when the whole party and people of all nationalities are embarking on a new journey of building a modern socialist country and marching towards the second century goal. The report made by General Secretary Xi Jinping on behalf of the 19th Central Committee is magnificent, rich in content, profound in thought and inspiring.
The report of the 20th Party Congress interpreted the distribution system as follows: " the distribution system should be improved, adhering to the principle of distribution according to labor and the co-existence of various distribution methods, insisting on more work and more pay, encouraging hard work to get rich, promoting fair opportunities, increasing the income of low-income people, expanding the middle-income group, regulating the order of income distribution, and regulating the wealth accumulation mechanism". Among them, "regulating the wealth accumulation mechanism" is proposed for the first time, which means that the common wealth not only emphasizes the income distribution of the flow, but also emphasizes the accumulation of the stock of wealth, and this theory is of great theoretical significance to improve the socialist distribution system.
During the 40 years of reform and opening up, China's residents have accumulated wealth at a rapid pace, but the gap in wealth distribution has also been widening, challenging the development goal of common prosperity. For this reason, the new concept of "regulating the wealth accumulation mechanism", which is in line with the current stage of China's economic development, was proposed for the first time in the report of the 20th Party Congress. To achieve the long-term development goal of common prosperity, regulating the order of income distribution and regulating the wealth accumulation mechanism are indispensable. In particular, the order of income distribution refers to the form of distribution, the principle of distribution, the means of distribution and the results presented by the subjects of income distribution. Wealth accumulation mechanism refers to the mechanism through which wealth is obtained, by which means it is realized and in which way it is accumulated, and through which policy means the rate of wealth accumulation is regulated, so that wealth accumulation is reasonable and legitimate. Regulating the order of income distribution and regulating the mechanism of wealth accumulation is of great guiding significance to achieve the long-term goal of common prosperity.
To correctly understand the important assertion of "regulating the mechanism of wealth accumulation", there are five aspects we need to grasp.
(1) Proper recognition of the natural differences between labor and capital in the accumulation of wealth. Labor and capital are the main forms of wealth creation, but there are natural differences between labor and capital in the process of wealth accumulation. Compared with labor, capital tends to take higher risks and the owners of capital often have intellectual capital that is difficult to replace, which leads to natural differences in the rewards obtained by the owners of labor and capital. In addition, from the perspective of intergenerational transmission of factors of production, capital can be continued through intergenerational transmission, while labor can only be accomplished through the current efforts of workers and is difficult to be transmitted. In other words, the wealth accumulated through capital leads to a naturally different initial endowment for the next generation. Distributive justice requires recognizing the differences in natural endowments of human beings, but at the same time observing the principles of reasonable difference and equal opportunity, compensating the disadvantaged by "treating the different unequally" and ensuring that opportunities are open to everyone equally.
(2) Proper understanding of the essential difference between legitimate and illegitimate income in wealth accumulation. The Party and the State have long insisted on "protecting legal income, regulating excessive income, and outlawing illegal income". As different forms of income are essentially different in wealth accumulation, the first step to regulate the wealth accumulation mechanism is to make the way of wealth accumulation more legal, compliant and reasonable. Protecting legal income is to consolidate and develop the basic economic system and the basic distribution system; regulating excessive income is conducive to the fair flow of social resources again to a certain extent; outlawing illegal income is to adhere to the rule of law and avoid the social harm of illegal income.
(3) Proper understanding of the different positioning of the market and the government in wealth accumulation. The report of the 20th Party Congress states that "the decisive role of the market in resource allocation should be given full play, and the role of the government should be given better play". Specifically, the initial distribution follows the principle of efficiency, in which the market mechanism plays a fundamental role in the process of everyone's acquisition of legal property, while the government provides institutional guarantees for it; the redistribution follows the principle of equity, in order to smooth out the problems of fairness and justice in the initial distribution, which relies on the government's tax system and social security system to achieve; the third distribution follows the principle of morality, which is a useful complement to the initial distribution and redistribution. Complementing this, the government should encourage individual or corporate charitable giving behavior, while being wary of excessive intervention. By clarifying the different positions of the market and the government in regulating the wealth accumulation mechanism, it is not only conducive to wealth creation and wealth accumulation, but also to narrowing the gap between the rich and the poor, reducing polarization, and achieving common prosperity.
(4) Proper understanding of the functional nativity of the real economy and the virtual economy. The report of the 20th Party Congress points out that "the focus of economic development should be placed on the real economy and new industrialization should be promoted". In particular, the real economy is the fundamental focus of economic development and the core of wealth creation, while the virtual economy creates wealth by serving the real economy and scientific and technological innovation activities. Therefore, the real economy and the virtual economy should adhere to their respective functions and make positive contributions to promoting high-quality economic development, building a new development pattern and constructing a modern economic system. The virtual economy, in particular, should clarify its important function of serving the real economy, make it a central task to promote economic restructuring and development mode transformation, and promote the sustainable and healthy development of the real economy, so as to achieve the coordinated development of the real economy and the virtual economy.
(5) Proper understanding of the dialectical relationship between individual prosperity and common prosperity. Common prosperity, on the one hand, is not the prosperity of a few, but the "prosperity of the whole people". Capitalism scientifically reveals that "accumulation of capital" and "accumulation of poverty" will lead to serious polarization, which will lead to economic crisis and social conflict. On the other hand, common prosperity is not the equalization of the wealth of each individual. It has been proven that egalitarianism does not lead people to "common wealth", but from "average private ownership" to "common poverty". Individual prosperity is the precondition for common prosperity, and common prosperity is the guarantee for individual prosperity. Thus, the individual wealth of each social class will grow with the great achievements of the Chinese economy, while the common wealth of the whole people will make the pace of China's economic development advance and further increase the wealth of each individual.