The insight of Adam Smith was to find a path running the economy that aligned itself with human character but he had indeed first written a book that was published prior to 1776 that involved morals. Already in this age it was clear that human character is important for capitalism to work. Smith’s first book The Theory of Moral Sentiments from 1759 was considered by himself to be his magnum opus.
Greed and corruption is a problem in all economic systems and would not be a reason for dismissing the most natural way of driving an economy. One important issue is how meritocratic societies allocate their talent—in civil society or in the state. It will be very difficult to cooperate between the US and China if they differ in this way. The reason for allocating differently might be the degree to which people are willing to risk their wellbeing. The state or the party offers a more secure job.
Another important issue is the dignity involved in earning your keep and receiving redistributions. It is linked with where you find most of the competence in society. The Chinese might actually think that the state should establish companies and run the economy whereas this is most efficiently performed by civil society in the West. Could redistribution turn the need for human dignity around in China against the grain of normal psychology?
In Scandinavia redistributions are popular, relatively speaking. Part of the reason for this might be the Law of Jante which says that you should not try to stand out, stay in line, don’t think you are something from a society described by Aksel Sandemose in a book called En flykting korsar sitt spår. Inequality is bad, something that is making a splash internationally currently. The fact is that you say that Anglo-America with its relatively higher inequality is much worse than Scandinavia in this fashion. You would then claim that the culture of Anglo-America is worse than that if Scandinavia and that all British and Americans should become like the Swedes, Norwegians and the Danes. I’m not so sure.