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«Inaugural-Dissertation zur Erlangung des Doktorgrades des Fachbereichs Wirtschaftswissenschaften der Johann-Wolfgang Goethe-Universität Frankfurt am ...»

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Thus, the spirit of Capitalism is either shaped by the traditional satisfaction of needs or by the rational-effective principle of acquisition; hence the behavior of economic actors is either individual or communal.489 The necessity to grow is another major condition for the success of a corporation in a capitalist system. Sombart regards the level of profits as the sole sensible objective of a capitalistic enterprise.490 For that, specific business principles are necessary that lead to an absolute rationality that helps to extinct the ―old bonds of tradition and morality that held capitalism in check in its earliest stages‖.491 The organization and growing bureaucratization of a profit-maximizing firm requires the separation of the sphere of business from that of the household, therefore also corporate from personal property.492 To achieve this kind of independence from ethic considerations the idea of ‗reckless acquisition‘ has to be established. This puts the value of acquisition above moral and aesthetic values which are not considered as relevant any more. In contrast, doing business becomes unscrupulous in the choice of its means and completely detached from any moral considerations.493 Moreover, Sombart argues that the emergence of Capitalism has caused extreme cultural changes, and thus he seems to express a certain sadness about a lost era.494 He affirms the need for Capitalism even in the knowledge of its costs. As a consequence, the traditional way of living in a static equilibrium would disappear and be replaced by the solitude and ―asphalt culture‖495 of urban life.496 Science and technology, in his opinion soulless, lead to a process of depersonalization. Capitalism ―took the inner quiet‖ of feudalism and ―alienated from nature‖ and thus created a proletariat that instead is bound to the entrepreneur in a slave-like relationship of dependence.497 Sombart, 1971 [1922], p. 383.

Appel, 1992, p. 104.

Sombart, 1909, p. 708.

Sombart, 1978 [1930], p. 357, similar p. 184.

Weber, 1976 [1922], p. 15.

Sombart, 1909, p. 708ff.; Sombart, 1978 [1930], p. 185.

Schacht, 1903, p. 548.

Sombart, 1987 [1908-1927], Vol II, 1, p. 190.

Lenger, 1995, p. 136f.

Sombart, 1903, p. 253f and 509.

Sombart divides Capitalism into three phases: Early, High and Late Capitalism.498 The latter two are differentiated from the earlier version by a new structure of enterprise management. This transition to High and also Late Capitalism was not immanent to the nature of Capitalism. Science and technology broke through the boundary of living nature in using inorganic substances for the first time.499 A worldly spirit emerged ―out of the European soul‖ destroyed ―old formations of nature (alte Naturgebilde), bondages and barriers‖ and reconstructed new ways of life in artificial functional forms (künstliche Zweckgebilde).

It forced people ―to the track of restless selfishness and self-determination‖.500 Sombart‘s analysis dissects the capitalistic structures in all existing institutions showing the whole margin of Capitalism from a historical perspective. Capitalism develops from its early stage where capital and manpower were the driving forces in a market environment of demand and supply. In a second stage the system rationalized and objectified. With objectification, Sombart does not mean a motivation that gives the essential impulses to develop a capitalistic economic. He rather means that there is an independent machinery of modern life which produces a competitive pressure. If an entrepreneur does not obey, the mechanism of this rational system he will be eliminated. He will also lose all sense for non-business matters like art, nature or family and will ―live his business‖.501 Finally, in the third and last phase of Capitalism, rationalization turns into spiritualization. Rationality is for Sombart a process including all economic activities, which through scientification, planning and risk aversion controls the economy. In this final stage, the competitive capitalistic economy tries to stabilize the business cycle, having lost all ‗adventurous‘ features. The entrepreneur becomes fully rational and exchanges the entrepreneurial talent through learnable skills.502 The entrepreneur is confined to his corporation, having only a few degrees of freedom left. The space for speculation is minimized due to cartelizing and organized workers, so the freedom of the high time of Capitalism fades in favor of a more bound, reasonable late capitalistic economic order.503 In sum, the three components of spirit, technology and order define which economic system an epoch constitutes. The spirit is thus a means to define economic phenomena in accordance with other theoretical elements of an economic system. It is not only an ethos of individual entrepreneurs but also becomes on objective principle. In Sombart‘s notion, it Sombart, 1987 [1908-1927], Vol I, 1, p. XII.

Sombart, 1987 [1908-1927], Vol, III, 1, p. 114 Sombart, 1987 [1908-1927], Vol. III,1, p. 114.

Prisching, 1996, p. 324.

Sombart, 1987 [1908-1927], Vol. III, 2, p. 588ff.

Appel, 1992, p. 74.

is thus not a psychological but more a sociological precept and in this sense a guideline for economic activities. 504

–  –  –

4.4.1. A brief summary of the main principles of Confucianism Confucianism is not a religion, but rather a very complex social philosophy and ethical doctrine including moral, social, political and philosophical thoughts.505 It is a this-worldly philosophical construct that stresses the importance of idealism and humanism, hence, personal relationships. It emphasizes ―the ideal of a society in which ‗right principles prevail‘‖.506 It is not oriented towards a transcendent, divine entity or towards the idea of faith connected to an afterlife as Christianity is. It is instead built upon a practical rationalitybased activity-orientation which seeks the mastery of life in the here and now.507 Ritual propriety in terms of graded degrees of kinship distance and levels of obligations are emphasized, as for example with the concept of Rénqíng (see chapter 6.1.2.). The concept of Confucian values like trustfulness, sincerity, loyalty and humaneness are today also used to link Confucianism to economic behavior favorable for development and the standing of Chinese business managers.508 Confucianism was developed from the teachings of the Chinese philosopher Confucius (ca. 551–479 BC, Kǒng Fūzǐ (the latter part of name being a respectful form of address, meaning old master). The name originates from the Latin translation of Jesuits in China;





the term itself exists in China only since the beginning of the 20th century).509 The most important source for Confucianism are the Confucian Analects (Lún Yǔ, 论语) and The Book of Rites (Lǐjì, 礼) which is one of the so-called Five Classics of the Confucian canon.510 It is believed that it also goes back to Confucius himself.511 Confucianism had an enormous impact on the structure of state and society. Traditionally being an agrarian state, China was based on the self-sufficient family household (jiā, 家).

Appel, 1992, p. 105.

Redding, 1993, p. 43ff.

Tang, 1991, p. 51.

Pohl, 2002, p. 113.

Zurndorfer, 2004, p. 3.

van Ess, 2003, p. 8.

Other main sources are The Mencius (孟子, Mengzi), the Doctrine of the Mean (中庸,zhōng yōng) and The Great Learning (大学, Dà Xué).

van Ess, 2003, 10ff.

As will be demonstrated in chapter 5 in more depth, the family served as shelter and insurance against disaster and was thus the fundament of society. A main component of Confucianism is the notion of self-cultivation and moral perfection and to obey the main moral values of rén and lǐ, emphasizing humanity and honesty with the goal of social harmony.

The three main elements of Confucianism are: rén (仁- humanity, goodwill), lǐ (礼- rituals, in the sense of moral order, ethics; in Chinese ―violating ritual‖ means ―having no decency‖) and yi (義, righteousness). Ritual, which also means the behavior in everyday life, and filial piety (xiao - 孝) are the rules of interaction, including the notion of reciprocity, as part of rén. Rén is not meant for individuals but can only be practiced between a minimum of two people and can only be reached through virtuous acts.512 Thus, Confucian culture is build upon harmony, consent and stability. In addition to the three main principles, the Confucian virtues of loyalty, brotherhood and trust are seen as the cultural roots of Guanxi.513 For the sake of the whole, the individual has to stand back. The individual is embedded into a network of personal connections. More than that, they are part of a social structure, which views individuals not ―as apart from their social positions‖.514 The position within the family defines the personal identity and thus the Chinese society is not based on discreet individuals but defined by interpersonal relationships.515 Thus, the social categories of ‗man‘ and ‗woman‘ are meaningless outside familial relationships. The main relationships (each connected with an appropriate tenor) for Confucianism are those of i (righteousness) between master and servant (or ruler and subject), ch‟eng (affection) between father and son, pieh (distinction) between husband and wife, hsu (order) between old and young and hsin (sincerity) between friends.516 The most important relation is between father and son and thus filial piety is considered as the virtue that matters the most. Children owe their parents absolute obedience, even when they are already grown up. This also means that they have to care for their parents once they are old; individualism is not supported.517 The emphasis on learning (学, xué) is closely related to that issue.518 Thus, everybody has his or her natural role to fulfill within society, with certain duties and norms to obey. Both society and personal relationships are structured as vertical hierarchies, being a culture of status.519 Interpersonal relationships therefore get rationalized, coincidence and Weggel, 1996, p. 21. Rén is also an important concept of Guanxi, see chapter 6.

Yang, 1994, p. 71.

Gold; Guthrie and Wank, 2008a, p. 5.

Gold; Guthrie and Wank, 2008a, p. 6.

Lo and Otis, 2003, p. 136.

Fukuyama, 1995, p. 94f.

Paul, 1990, p. 69.

Pohl, 2002, p. 115f.

spontaneity are eliminated. Hierarchy is legitimated through mutual debts, if one side of the relationship acts according to the given norms, the other part will act accordingly.

Those laws are unwritten, but follow the norm of modesty and morality. The vertical structure of society is not questioned and individual rights are barely of importance. The notion of law is not received as strict categorical norms, adjudicating rights to individuals, but always depending on interpersonal relationships, thus revealing a more particularistic culture.520 This is not only true among individuals but also for state leadership which is supposed to rule humanly and justly. The ruled owe their leader loyalty. The relationship between ruler and ruled is also part of the five bonds mentioned above. Filial piety also includes certain duties, also towards the ancestors and characterizes not only the relations to parents but all relationships mentioned before. Relationships and mutuality are thus central to Confucianism and every individual is supposed to know its place within the hierarchical order and accordingly ―treat each other differently depending on family background, place of origin, shared experiences, educational affiliation…with the nature of these affiliations determining the treatment received‖.521 4.4.2. Max Weber‘s assessment of the relation between Confucianism and Capitalism In his studies on Confucianism and Taoism, published in the first volume of the Collected Essays in the Sociology of Religion, named Religion of China in the English translation, Weber again attempts to prove the causal relation of Protestantism and Capitalism.

Whereas in The Protestant Ethic he argues that rationalization is the result of the 'spirit of Capitalism' derived from Calvinism, in The Religion of China he distinguishes that from the rationalization found in China which did not lead to the emergence of rational bourgeois Capitalism in the 19th century. He compares Confucianism with Calvinism to highlight the uniqueness of development in Western cultures in the 19th century and its differentiation, for that matter, of any other great civilization of the world.522 Weggel, 1996, p. 22.

van Ess, 2003, p. 15f., McNally, 2010, p. 6.

See Blaut, 2000. The reasons of why Capitalism did not emerge in China will not be discussed in this dissertation in depth as it is more concerned with the type of economic system arising after 1978. This chapter will give an overview on Weber‘s findings on China. It is important to note that it differentiates from recent research. As this work is also more concerned with tracing Weber‘s arguments, it will only point towards corresponding literature. There is a large body of literature of the still ongoing debate on the emergence of Capitalism. The discussion took place mainly in the Journal of Asian Studies in two rounds in 1991 and 2003, with basically the California School (Kenneth Pomeranz among others) against Eurocentrists.



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