Personal values in a society, such as the levels of trust and hope, often determine the health of an economy more than government. That’s why it is worth watching as the world’s two largest economies, China and the United States, each appear to be adjusting the value norms that have sustained their prosperity.
In the US, according to polls, the American dream has shifted from the pursuit of individual opportunities to simply seeking economic stability. This means trying to hold down a job as well as hold down one’s debt.
Credit-card debt has fallen since 2010 and the virtue of savings has returned. The Great Recession reversed the idea that increasing one’s debt is a guaranteed ticket to the middle-class lifestyle. According to a new Allstate-National Journal survey, more than half of Americans say there is less “opportunity to get ahead.”
And a similar proportion doubt whether a college degree is worth taking on student loans. Only 51 percent of workers feel comfortable with their finances for retirement, down from 70 percent just six years ago, according to the Employee Benefit Research Institute.
Avoiding risk is apparently the new moral norm in the US. This downsizing of aspirations is a long way from the description of the American dream as first defined by historian James Truslow Adams in a 1931 book: “It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable.”
In China, the values upheaval is different. After decades of growth above 10 percent, the economy has slowed to about 7.7 percent and may stay near that level for a long time. Yet the gross domestic product per capita remains below $10,000. And people are fed up with rising income inequality, corruption, pollution, and unfairness in the job market.
Revitalizing and reforming the economy will be difficult. As a result, President Xi Jinping has tried to define a new set of economic values by coining the slogan “China dream” last fall. But he hasn’t been very specific about what he means other than to use phrases like “revitalization of the nation.” The new prime minister, Li Kequiang, only speaks of “equal opportunities for everyone.”
It is noteworthy that the official phrase is not “the Chinese dream,” meaning a dream for the individual Chinese. Instead, Mr. Xi has tied the interests of the Communist Party and the state – or “China” – to any hopes of the individual. Managing social stability remains the party’s key concern.
“We must meld together the country’s dream and the dream of the [Chinese] race with each individual’s dream,” stated the conservative Beijing Daily. Political freedoms and government accountability are not part of the official dream.
In both countries, an economic slowdown has forced a serious look at how individuals and their values contribute to the general welfare. Yet each is doing it differently. China’s approach is from the top down, or government driven; America’s changes are bottom up as individuals adjust. Either way, the world cannot ignore this transformation of values in two giant economies.