The era of dollar billionaires is celebrated in the West because it generates individual symbols of how genius is translated into material accumulation. Anyone can become rich, so the story goes, and this is proven by the fact that there are billionaires who grew up in poverty and rose to their position through a combination of hard work and happenstance. Some world-famous billionaires enhanced the wellbeing and happiness of humankind in ways that appear to justify their splendid wealth. Think Steve Jobs, Bill Gates, Mark Zuckerberg and Oprah Winfrey. Who would not want to be super-rich and admired like them?

However, when experts research the condition of the poorest half of humanity, the contrast between their penury and the personal wealth of the world's 500 richest individuals never fails to shock. As far back as 1996, the United Nations Development Report showed that the richest 358 people in the world possessed assets which exceeded the combined income of countries accounting for 45 percent of the world's population. In the last 16 years this global inequality has continued to spiral.

Back in 1985, the pop star Bob Geldof co-organized the Live Aid charity concert, during which he made a desperate appeal for mankind to save the people of Ethiopia from starvation. "People are dying now. Give us the money now. Give me the money now," he exhorted. Geldof became the world's greatest symbol of the how the rich, when they have a conscience, can fight for the poor. The occasional spectacle of pop concerts to raise money for the forgotten starvelings of the earth and individual philanthropic crusades by the super-rich cannot, however, conceal the importance of one of the most fundamental structural questions of our era: How much money should we allow individuals to have?

This question seems to cause an outcry whenever and wherever it is posed. Instead of engaging in a rational discussion as to what constitutes justifiable inequality, you'll be asked: "Are you a Communist?" You'll then be told: "It will never work because humans are greedy by nature." So, capitalism is supposed to be the best possible system because it corresponds to human greed.

Of course in China there is a slightly different dynamic to the discussion. Unlike most countries, China has experienced a huge rise in inequality and a simultaneous rise in the living standards and human development of the overwhelming majority. This is in direct contrast to general global trends.

However, sensitivity about inequality is different in China, and the questions asked regarding it are different to those which are asked in the West. In China, if someone drives a Ferrari or wears a $25,000 watch on their wrist, people assume that they acquired their property through corrupt relations to powerful officials. No Communist-led state can remain stable where power is perceived to be riddled with corruption and nepotistic.

In 1986 Deng Xiaoping famously said: "According to Marxism, communist society is based on material abundance. Only when there is material abundance can the principle of a communist society - that is, 'from each according to his ability, to each according to his needs' - be applied. Socialism is the first stage of communism. Of course, it covers a very long historical period."

This recognition of the need for inequality in the period of modernization also means that the state inevitably fulfills two contradictory functions. It must protect public property and advance general prosperity, and simultaneously recognize the inevitable inequality that will exist during the transitional era. Leon Trotsky wrote: "Even when we understand the historic necessity of inequality for a prolonged period, questions remain open about its admissible limits and its social expediency in each concrete case."

In 1917, Lenin argued that an income disparity between workers and specialists should not exceed a ratio of 1:4. At that time he assumed that revolutionary change would bring material assistance from wealthy Western European socialist countries in order to help overcome backwardness without fostering more inequality. But by 1924 urban wage differentials in the USSR exceeded 1:20 and regional income disparities were far greater. However, by the 1960s and 1970s, Soviet disparities were sharply reduced, although they were nepotistically entrenched by bureaucratic officialdom. This nepotistic system of power enabled small but powerful interest groups to manipulate democratic change between 1986 and 1992. They transformed democratic reforms into a social counter-revolution establishing a system of capitalism based on the appropriation of privatized property by a handful of oligarchs. The results were catastrophic for the majority of people, and the economy, society and nation collapsed.

Deng Xiaoping said: "So to get rich is no sin. However, what we mean by getting rich is different from what you (in the West) mean. Wealth in a socialist society belongs to the people. To get rich in a socialist society means prosperity for the entire people. The principles of socialism are: First, development of production and second, common prosperity. We permit some people and some regions to become prosperous first, for the purpose of achieving common prosperity faster. That is why our policy will not lead to polarization, to a situation where the rich get richer while the poor get poorer."

At that time there were a handful of millionaires in China and wage differentials in State Owned Enterprises were rarely more than 2:1. Everyone recognizes that there has been a qualitative leap in inequality since that time, for example, expenditure on jewelry in China grew 47 percent in 2010, indicating that too much money is in too few hands and is being wasted on luxury consumption. According to the Hurun Research Institute, China had 960,000 millionaires holding more than 10 million yuan ($1.58 million) in personal wealth in 2010. Inequality now presents a clear and present danger to Chinese society.

Professor Victor Shih of Northwestern University in the US believes that capital flight poses the greatest danger to the Chinese economy. He predicts that as much as $1 trillion in personal capital could disappear from the country in a short space of time. If a few thousand people can suddenly and negatively impact the economy and society in this way, then surely polarization has gone too far. This can be dealt with by a windfall tax, or the imposition of strict controls on capital movement and bank withdrawals. Thus, the most imminent dangers posed by wealth polarization can be rapidly and painlessly dealt with.

President Hu Jintao calls for "inclusive growth" so that regional inequalities - generated and reinforced during the reform era - are ameliorated by a national growth focus towards the center and west of China. Recent big wage hikes and the extension and improvements made to welfare, security and pension rights are also part of this strategy to alleviate social tensions fostered by inequality.

I believe that bold measures to eliminate extreme wealth should be implemented to send out a global message on inequality. Whilst businesses and institutions require large capital allocations in order to function, I see no reason why any individual should be permitted more than US$10 million in personal wealth. This sum is more than enough to live on in luxury but too little to engage in any widespread corruption of power.

The author is a columnist with China.org.cn. For more information please visit:

http://www.china.org.cn/opinion/heikokhoo.htm

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

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