«Inaugural-Dissertation zur Erlangung des Doktorgrades des Fachbereichs Wirtschaftswissenschaften der Johann-Wolfgang Goethe-Universität Frankfurt am ...»
element.654 Hence, ―the concepts of economic style and real type therefore refer not to absolute models of knowledge, but rather to explicative structures which are capable of measuring up to the development of history both because of their inner logical need and because of the peculiar type of relationship they have with external changes‖.655 A theory in Spiethoff‘s (but also Sombart‘s) sense has to be constructed by a combination of deduction and induction.656 The universality of economic theories and hence a ‗time-less economic‘ cannot exist within this theoretical framework. To the contrary, for the economic style concept, the relevance of economic theories necessarily varies with time and place according to how well their assumptions suit the actual economic circumstances and historical change. Rational theory, for instance, may not be suitable to describe the economies during feudalism, but has been developed parallel to the emergence of rational Capitalism.657 Economic styles are differentiated from economic systems like feudalism or capitalism in further differentiating them into various types of real economies.
Programmatically, a style can be understood as a concept of life, deeply anchored in society. An economic style describes an ideal type, but not in the sense of Max Weber, whose version can include details that do not exist in real economies, but is created to understand the essence of how an economy functions. In this sense it reflects realities of past and present. An economic style is not able to extrapolate possible future economic systems, but only explains concrete and intuitive differentiations of a known system. Insofar it also defines certain types.659 This approach also implies that it is highly dependent on the person of the researcher and his subjective views. He is, however, bound to a catalogue of attributes which Spiethoff mostly borrowed from Sombart. Spiethoff himself never defined a specific economic style.660 Spiethoff, 1971, p. 135.
Gioia, 1997, p. 181.
Gottschalk and Broyer, 2004, p. 48f.
Spiethoff, 1948, Schefold, 1995, p. 224f., 247, Meyer-Abich and Schefold, 1981, p. 113f.
Meyer-Abich and Schefold, 1981, p. 114.
Gottschalk and Broyer, 2004, p. 42ff., Meyer-Abich and Schefold, 1981, p. 116ff.
Schachtschabel, 1971b, p. 15f.
A style is not static, but dynamic in nature, and thus, it is of most interest how the change of a style occurs.661 Defining a ‚new‘ economic style requires the interaction of various disciplines, like sociology, political studies, history and economics to collaborate.662 Implying that a certain era is connected to a certain economic spirit does not mean that the economic actors were aware of their own attitude.663 The most common, but also the latest, elaboration of the economic style stems from Müller-Armack. He defined the ―social market economy‖ as an economic style of compromise between a liberal and a social state, balancing between the principles of the market and of redistribution. This overlapping of structural principles results into an individuality, a unique style.664 Müller-Armack defines a style as ―unity of expression and composure‖ of an epoch.665 He defines a modern (contrasting a medieval) economic style, which he does not like to call ‗Capitalism‘ due to the terminological difficulties associated with that term.666 Whereas the system approach is better suited for broad description of epochs but less to describe the qualitative change of an economy, as it is more abstract and general and looking for the unvarying element of a basic structure; the style concept can be applied to specific variations of the system. It indicates the transformation of an economy by describing the change of economic thought but rather from a long-term perspective. On the other hand, a style can also aim at different eras and indicates various systems within.667 It is a concept that is both highly subjective and applying relativism in creating a painting rather than a photograph of an economic era.
In creating types, the concept of the economic style can be said to be methodically not far away from the notion of the holistic pattern model, presented in the last chapter. Whereas the first concentrates more on past and present, searching for underlying fundamentals that often can be better detected with (spatio)temporal distance, the pattern models focuses more on continuous updates, therefore on the immediate present and seeks maximal closeness with its subject of analysis. However, of course they differ conceptually and methodologically, but both concentrate rather on qualitative rather than quantitative elements and thus can nevertheless reveal a rather accurate painting of the Chinese economic system in taking also social, political and cultural influences in account – without neglecting its deSchefold, 1994b, p. 26.
Schefold, 1994c, p. 69f.
Schefold, 1995, p. 237.
Schefold, 1994a, p. 80 and Meyer-Abich and Schefold, 1981, p. 118.
Müller-Armack, 1971, p. 156, my own translation.
Müller-Armack, 1971, S. 198.
Schefold, 1995, p. 245f., Schefold, 1994d, S. 81 velopment and transformation. In this work, these theoretical approaches will be further enhanced by the instruments of institutional change outlined in chapter 2.4.
5. Chinese development since 1978
5.1. The Chinese notion of development 5.1.1. Development – a definition The notion of what (economic) development is, can be or should be, varies widely in different schools of thought. The German Historical School, for example, had a specific idea of what economic development means, for them it also included ethical progress (please refer also to chapter 4.1.). Also the Marxists have their own ideas and for the neoclassical school it has often been treated as equivalent to economic growth (having disastrous consequences for developing countries especially during the time of the Washington Consensus).668 In this rather teleological view, the concept of development is associated with gradual unfolding of something often already existing hidden ‗in a nutshell‘. It therefore is often confused with growth because development is interpreted as a process of unwrapping something hitherto concealed that grows in size but also changes its structure. It is then seen as a transformation towards improvement and advancement. Although this in general is a positive tendency, it is also associated with a merely upward and forward movement.
In this notion development is conceived as deterministic process that leaves no space for ―agency and choice, conflict and contradiction, risk and uncertainty, and for creative invention and reinvention of the future as it unfolds‖. Hence, development is also regarded as similar to a concept of evolution which from this point of view can be defined as ―a theoretical model of dynamic historical change in which the passage of time is a causal force;
events and conditions are conceived as historically unique; and change, while driven by causes rather than pulled by effects, is intelligibly patterned‖ and comes about continuously and incrementally. Just as development, evolution is regarded as being linked to the concept of growth as it is also associated with a consecutive appearance of ever more complex structures. ―[E]volutionary theory can therefore serve as a model for a processual theory of social systems in which an explainable past and present are faced with an open Washington consensus labels a specific era of development aid. The term was coined by John Williamson in his article Williamson, 1990. He used this expression to describe the shared development goals constituting in policy advices of Washington-based institutions such as the IMF and the World Bank. The expression became the label for mainstream development theories that argued that best results could be achieved by stabilization measures and structural adjustment, resulting in economic liberalization and deregulation. The reforms‘ goals were a low inflation rate, lower state involvement and free trade. This type of policy advice had its heyday during the 1990s, now called the ‗lost decade‘ by development agencies. Today it is a largely contested theoretical frame. United Nations Development Programme (UNDP), 2010, p. 15, Williamson,
2008. A detailed discussion on the merits of various development theories can be found in Boyer, 2006.
future‖.669 Capitalist development can from this point of view be interpreted as an unfolding process that expands market relations and reproduction and exercises endogenous pressure for capital accumulation. It is a ―discontinuous sequence of subversion and restoration of order‖, shaped by competitive innovation‖.670 Hence, definitions vary considerably, even within development agencies. Superficially, a definition of development seems straightforward: development leads to poverty reduction and solves the problems of underdevelopment, satisfying ‗basic needs‘, often also including social and economic progress. However, the latter definition just exchanges one vague expression (development) with another (progress). Development has besides social and economic aspects also a cultural and political dimension and is thus not a synonym for economic growth. Hence, from one point of view Capitalism means development, from others it is the exact opposite. Even the question what exactly ‗basic needs‘ are, is contested. Some argue that this made the term development even more fuzzy, draining it from its meaning and leaving as its only function to bestow any interference with a higher-order authority.671 Cowen and Shenton claim that ―development defies definition…because of the difficulty in making the intent to develop consistent with immanent development‖.672 Twenty years ago, Amartya Sen broke new grounds with his capability approach that provided the philosophical and theoretical background for re-thinking human development.673 Out of his thoughts the Capability Poverty Measure was developed that assesses the possibility of a country to develop, in taking besides growth also nutrition, education and health, human rights, empowerment, democratic practices and good governance into account, thus also providing a ―clear yet open-ended ethical orientation‖.674 The capability approach also criticizes the notion of development equating economic growth that can be measured in GDP growth. It became a paradigm for the debate of development and inspired the creation of the Human Development Index675 (HDI) of the UN that also includes per-capita GDP, but also incorporates the ―average achievements in a country in three baStreeck, 2010b, p. 669-671, similar in Streeck, 2009b, p. 15-2.
Streeck, 2010b, p. 678.
Nuscheler, 2005, p. 225.
Cowen and Shenton, 1995, p. 43.
Sen, 1985, Sen, 1999.
United Nations Development Programme (UNDP), 2010, p. 16.
The HDI aims to measure the multidimensionality of human development, in also accounting for health and education. The statistic consists of data on life expectancy, education and per-capita GDP (as an indicator of standard of living). It is the geometric mean of normalized indices measuring achievements in each dimension of life expectancy at birth, mean years of schooling, expected years of schooling and gross national income (GNI) per capita. United Nations Development Programme (UNDP), 2010, p. 215ff., Nuscheler, 2005, p. 143ff., Reddy and Pogge, 2009.
sic dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living‖.676 China is among the ―top movers‖ of the HDI, meaning it developed rapidly in a very short time. However, it achieved this purely on the ground of high economic growth. Yet, it has been found that the correlation between GDP per capita growth and other nonmonetary development goals approaches zero.677 ―Take a revealing comparison between China—the world‘s fastest growing economy in the past 30 years—and Tunisia. In 1970 a baby girl born in Tunisia could expect to live 55 years; one born in China, 63 years. Since then, China‘s per capita GDP has grown at a breakneck pace of 8 percent annually, while Tunisia‘s has grown at 3 percent. But a girl born today in Tunisia can expect to live 76 years, a year longer than a girl born in China. And while only 52 percent of Tunisian children were enrolled in school in 1970, today‘s gross enrolment ratio is 78 percent, considerably higher than China‘s 68 percent―.678 The recent Human Development Report defines: ―Human development is the expansion of people‘s freedoms to live long, healthy and creative lives; to advance other goals they have reason to value; and to engage actively in shaping development equitably and sustainably on a shared planet. People are both the beneficiaries and the drivers of human development, as individuals and in groups‖.679 It includes as major objectives well-being, empowerment and agency as well as justice. It defines political freedoms, such as democracy and civil liberties to have an intrinsic value for development.680 Common to all definitions is that they are Western centered and even more so European centered, with the notion of a democratic, capitalist, bourgeois society in mind.681 Often, they are also associated with the notion of the all-knowing development expert, in Easterly‘s words the ―planner‖ (working for a development agency or NGO) who knows best how to develop an economy. Easterly also claims that planners usually act in a patronizing way in telling that ‗we‘ (meaning ‗we whites‘) know best what is good for everyone else.682 United Nations Development Programme (UNDP), 2010, p. 216.
Bourguignon, 2008, United Nations Development Programme (UNDP), 2010, p.23, 47.
United Nations Development Programme (UNDP), 2010, p. 47.
United Nations Development Programme (UNDP), 2010, p. 2. The 2010 edition is at the same time the 20th anniversary edition of the report. It gives a detailed overview of the improvements of the definitions, measures and concepts of development.
United Nations Development Programme (UNDP), 2010, p. 22f.
Nuscheler, 2005, p. 226f.