LITMIR.BIZ

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in global economic, global political, and other intersocietal relationships. Limiting observations to national territory is insufficient. Instead, we need to examine how national, international, and transnational mechanisms overlap and engage with one another. As emphasized below, even advanced neo-institutionalist China research often fails to factor in global or macroregional economic conditions. The result is a one-sided explanation of the successful rise of the PRC, which is described as the result of inner-societal innovation and regulatory capacity (McMillan and Naughton 1996; see also the overview of China research by Perry 2007, which excludes international influences almost entirely).

      (4) The unstable dynamics of capitalist social orders, specifically those in newly industrialized countries, can be explained by the notion of uneven, combined and interconnected development (Rosenberg 2006; Selwyn 2011; ten Brink 2014b). This refers, inter alia, to the combining of old and new, premodern and modern forms, and intra- and intersocietal developments, which lead to unexpected consequences, particularly in late-developing societies (Gerschenkron 1966). The fact that economic development from the late 1970s, specifically in China, would trigger such a true “leap forward,” beyond the level of development determined by modernization theory, could not really have been predicted. To help overcome its backwardness, the Chinese economy was able to profit from the development advances in dominant economies: through the transfer of technological and organizational expertise, or against the backdrop of the slowdown in growth in the old centers, fueled by foreign direct investment (FDI). Also, the selective adoption of elements of advanced countries led to a combination with autochthonous structures and historical traditions, resulting in a distinctive new type of society.

      (5) I also use another research assumption from economic sociologists, who explain that the reproduction of capitalist markets and the companies operating on those markets rely on noneconomic preconditions and mechanisms of cooperation (Aspers and Beckert 2008). Modern societies are coconstituted through the interaction between market-mediated and nonmarket social relationships. As social and political institutions have some capacity to reduce market uncertainties, they need to be included in the analysis of socioeconomic development (Fligstein 2001).

      Markets themselves are permeated by a series of nonmarket coordination mechanisms (see Lütz 2003; Thompson et al. 1991). In addition to market-based coordination, the economy is also made up of other governance types such as company hierarchies, networks, associations, and bureaucracy. The production and distribution of goods and services is not merely the product of competition and price mechanisms but is also facilitated by hierarchical regulatory mechanisms (Beckert, Diaz-Bone, and Ganßmann 2007). Trust also acts as a foundation for economic action. “Only after trust has been created, are the necessarily complex transactions possible. In particular, access to capital can be eased, as illustrated by the rotating credit associations among Chinese entrepreneurial families” (Deutschmann 2009b, 21, my translation). Moreover, as with any other form of societal embedding located between market and hierarchy, we must be careful not to underestimate power as a factor in market relationships. These include the network as a form of coordination and, extending on this, communities shaped by solidarity evolving over the course of history or clans. Because of the fact that the various types of coordination can be combined in a number of ways, we must assume that many different forms of capitalism exist (Bradach and Eccles 1991; Stark 1996).

      (6) The modern state represents the most important nonmarket-based institution, and not only in China. In contrast to other organizational forms, the modern state can generally rely on support from the legitimate monopoly on the use of force. It should be noted that, unlike in precapitalist societies, where the economically dominant classes normally had to resort to direct force to appropriate surplus product, in capitalist systems free contractual relationships regulated by what is at least formally an independent authority are required in both production and market activity. The state, in defining property rights, creates the main prerequisites for market activity (Bidet 1991). Any economic analysis must therefore always include politics. Without a relatively autonomous political authority with a monopoly on the use of force, establishing successful capital accumulation will prove difficult in the long term. As an ensemble of contradictory relationships, the state guarantees integration and adaptation, making the continuation of capitalist socialization possible in the first place—“they include the pacification of social life (stressed by Elias), the overall rationalization of social rules and norms (central to Weber’s analyses of bureaucratization), and the institutionalization of controls needed to ensure the maintenance of legal order” (Arnason 2005, 33; see also Brand 2006; Jessop 2007; Leibfried and Zürn 2006; Mann 1998; Offe 2006). With regard to economic policy, moreover, it it possible to distinguish between market-creating, market-regulating, and market-restricting measures.

      State power can be analyzed as the product of processes mediated by both institutions and discourse within shifting societal power constellations. The objective is therefore to disaggregate the state and examine the characteristics of local government apparatuses, for instance. At the same time, the reliance of the modern “tax state” on material income results in a link between political and economic institutions. Various approaches fail to take sufficient account of the close link between the state and the economy in capitalist-driven societies, and this applies not only to the case of China. State institutions may be based on reproduction criteria that differ from those of modern companies. The latter have to assert their financial strength and hence profitability, while the state has to assert its dominance toward the populace and other countries. Generally speaking, however, the state and the economy form a nexus characterized by structural interdependencies. The paradigm of structural interdependencies “insists … that state action always plays a major role in constituting economies, so that it is not useful to posit states as lying outside of the economic activity” (Block 1994, 696).¹³ Often seen as an “external” force, the government must therefore be viewed as a fundamental component of capitalist systems—despite the fact that state institutions have been able to achieve greater independence in the past than these hypotheses would initially lead us to believe.¹⁴ The overlapping areas of responsibility of the state and its sedimented institutional properties form distinct political systems—such as liberal democracy or, in the case of China, the party-state. In a capitalist system, the state does not necessarily have to follow representative democratic principles.

      (7) The contradictory development dynamics of capitalist-driven societies should also be seen as the result of the struggle between market forces or processes of commodification and the desire for social security as well as legal, political, and social recognition that continually arises in the social lifeworlds of the subordinated. According to Polanyi, capitalist dynamics as anonymously linked trade systems (“satanic mills”) destroy permanent social connections and constitute a fundamental contradiction between capitalist development and the requirements for an intact lifeworld (Polanyi 2001). Should the market—in an expanded sense the production relationships—encroach on the foundations of social reproduction, this would inevitably trigger the mobilization of social forces of self-protection, either covert or open. In the capitalist-driven modern era, this self-protection is characteristically expressed as social and political struggles within (and about the politics of) the state and in attempts to institutionalize class conflict (Wright 1997).

      Consequently, in contrast to a perception of political processes in nonliberal democratic societies exclusively as a result of functional problem solving dictated from above, the present work aims to illustrate how social power structures and class conflicts played a central role also in China’s past development. Class conflict, for example, could bring about market-limiting measures and improvements in labor and social standards. This illustrates the importance of examining mobilizing, societal actors here. In the case of China, a number of such phenomena can be identified. Arguments are being postulated, however, that, because of the fact that its values contradicted those of the Christian countries of Europe, Chinese history lacks the concepts of autonomy that would form the basis required for a struggle for “fair” wages or social security, for example.

      As the next section shows, my research framework requires a definition of institutions that factors in the level of targeted human action over and above mere structuralism.¹⁵

      Institutions, Historical Change, and the Sociocultural Embedding of Capitalism

      The

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