Institutional Variety in East Asia
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Institutional Variety in East Asia

Formal and Informal Patterns of Coordination

Edited by Werner Pascha, Cornelia Storz and Markus Taube

This illuminating book broadly addresses the emerging field of ‘diversity of capitalism’ from a comparative institutional approach. It explores the varied patterns for achieving coordination in different economic systems, applying them specifically to China, Japan and South Korea. These countries are of particular interest due to the fact that they are often considered to have developed their own peculiar blend of models of capitalism.
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Chapter 8: A Different Capitalism for China? The Role of Guanxi and the Family for Chinese Economic Development

Susanne Rühle


Susanne Rühle 8.1 INTRODUCTION The emergence of capitalism is said to always lead to extreme changes in the structure of a society. Modern capitalism developed during the eighteenth century in Europe, in the wake of the Industrial Revolution, with severe consequences for society. It eliminated many of the existing socio-cultural structures, which had been specifically developed for a feudal economy and were only able to function in the framework of this social environment. New institutions had to evolve before capitalistic production based on factory work could be prosperous. Authors like Max Weber assumed that it is the nature – or spirit – of modern capitalism to impose a unique institutional structure on the existing traditional society to develop. It replaced obsolescent cultural idiosyncrasies, affecting family structures in particular. The traditional rural self-sufficient household had integrated business and personal life, but in the capitalistic economy the rationality of companies and business contrasted with the ‘sentimentality of the family’ (Brunner 1956: 42). As a result, in the course of the evolution of capitalism the old institutions vanished and human beings became ‘fictitious commodities’ (Polanyi 1944: 68ff.) traded on (labour) markets, thus obliterating the old ‘oikos’. Capitalism in the Weberian sense with a separation of business and house was created and the family as production unit increasingly disappeared from working life and retreated to the privacy of the home. Industrialization therefore fuelled its own motor of development and propelled German society – serving in this paper as an example – from feudalism to capitalism. With this,...

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