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

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other, social structures were smashed and people were forced to work extremely hard and long hours, disciplined by the threat of corporal punishment. It was assumed that only an overworked and demoralized laborer would refrain from fighting for better working conditions. Justification of such maltreatment could be found even in the economic theory of the time. According for example to Ricardo, labor markets could be regulated by keeping wages on subsistence level, thus forcing workers to sell their labor. High wages were not considered as an incentive to work, probably because during the first decades of industrialization people would only work until their livelihood was secured. The appalling conditions in the factories required disciplinary action to force the workers into the ―iron cage‖.880 In Germany, the most brutal consequences of Capitalism were attenuated by the introduction of a social law that protected the rights of laborers and helping to create a „middle class― which served as a buffer between the proletarians and the upper class (see also chapter 8). For example, as early as in 1839, a law that restricted working hours for children was introduced, followed by the modern Social Security Acts, passed from 1883.881 To achieve disciplined long-term employment, bourgeois entrepreneurs started to establish occupational housing estates and health and pension schemes, and as a means of personal identification and motivation for the workers. These models of ‗corporate families‘ used traditional patterns of peasant family life to create a mixture of cultural and material identification.882 Thus, patterns based on ―kinship and community permeated the apparently impersonal factory‖.883 On the whole, the immense changes of family structures were long and painful due to rigid organizational structures. Unlike a factory, the family involves social and emotional characteristics and thus cannot simply adjust to external pressures by laying off family members or adding some more members. When put under pressure, family organization would often break instead of merely bend. The new social structures that emerged were more differentiated, and therefore better suited for a time of less stable institutions and permanent change.884 Polanyi, 1944, p. 164f.

Schröder, 2000, p. 190.

Kaschuba and Gall, 1990, p. 96.

Smelser, 1972, p. 191.

Smelser, 1972, p. 213 and 408.

As a result, during industrialization the family became less important, and social structures were increasingly oriented towards the economy. Factory work arranged lifestyle in new ways, emphasizing the role of co-workers over those of family members.885

5.3. The role of the family for economic development in China since 1978

–  –  –

5.3.1. Chinese family structures before the Cultural Revolution: the ‗obstacle view‘ In the Chinese social system families and kinship play an important role. Over time, it changed according to historical circumstances and is thus not a static structure. Family ties and kinship structures served specific functions depending on political and economic conditions. Its basic unit is the patriarchal clan which can be divided into several smaller households. The Chinese family system traditionally exhibits a high degree of social solidarity before the background of parental authority connected with obedience and respect of the children. Those values and rules can be derived from Confucian ethic which constitutes the most important guideline for Chinese behavioral patterns.

The Chinese kinship system is evaluated very differently in the literature. The older part of it states that the pre-revolutionary family structure posed many obstacles to rational entrepreneurial development.887 Max Weber as maybe the most prominent author among those described the negative role of the ―sib fetters of the economy‖ which prevents the economy from growing (see chapter 4).888 However, more recent research comes to another, positive conclusion which regards the Chinese family as an engine for economic growth. It has been recently summarized by Ha-Joon Chang: ―First, take the case of Confucianism. Today, many people argue that it is a culture that is inherently prodevelopmental. Indeed, if we highlighted its emphasis on education, its notion of ‗heavenly mandate‘ (which gives some important voice to the grassroots and justifies dynastic changes), its emphasis on frugality, and so on, you cannot have a better culture for economic development. However, if we emphasized its hierarchical nature (which is supposed to stifle creativity…), its penchant for bureaucracy, its detestation for craftsmen and merchants (engineers and businessmen in modern terms), we cannot have a worse culture for Weber - Kellermann, 1983, p. 174.

Yang, 1994, p. 112.

Weber, 1968, p. 86-97.

Weber, 1968, p. 95.

economic development. Indeed, until the 1950s, many people, including the East Asians themselves, argued that the East Asian countries were not developing because of Confucianism….More importantly, over the long term, ‗traditions‘ are not immutable. Cultures and institutions themselves change, often dramatically‖.889 In the time before 1949, the individual defined itself through the family, being bound to its kinship. In rural areas, those facts led to autarkic households, which would ask their neighbors for help only in emergencies. The household was self-sustaining, without the need of markets to be supplied with goods.890 In a way, solely relying on one‘s family shows economic rationality, especially taking into account that no well-ordered property rights existed. Also, the tax system was random and arbitrary and the state, including its officials, could not be relied on. Thus, family ties served as a buffer against social insecurity and family members were the only ones who could be trusted not to exploit and deceive.891 As precaution, Chinese families aspire toward having as many sons as possible to secure living in higher age. Therefore, an ideal-typical Chinese family was larger in size than the typical Western family. The self-sustaining family with several children was the answer to hard living conditions.892 On average, Chinese families consisted of up to five generations, which often included the family of the sons. However, also many small families existed, due to the fact that supporting several sons was costly. Women were expected to break with their own families after marriage and leave their families and often also villages to live with their families-inlaw. This meant that daughters were of less valuable for the family in terms of provision for old age. Much of the stability and strength of a family depended on how well the women could be dominated.893 The view that the Chinese family poses an obstacle to economic development is based on several claims. The tone is set by Max Weber emphasizing the ―sib fetters of the economy‖ already mentioned above.894 He considers Chinese families as constraint to the development of values and impersonal relationships that are necessary for the creation of modern enterprises.895 The reason for such an evaluation concerns mainly the defects of family run firms. He describes that the pattern of wealth acquisition was often given through family investment in the form of helping a scholarly member to obtain an educaChang, 2010, p. 19f.

Levy, 1949, p. 208f.

See Feuerwerker, 1984 for information on the tax system.

Fukuyama, 1995, p. 90f.

Wong, 1988, p. 145 and Huang, 1992, p. 37.

Weber, 1968, p. 95.

Fukuyama, 1995, p. 65.

tion, which later often resulted in a bureaucratic career. In turn, those officials could be used for favors, which in conclusion impeded the development of rational economic enterprises in the Western sense but is based on nepotism.896 This is for Weber also due to strong family loyalties being based on Confucian values.

The Confucian culture of authoritarianism, hierarchy, insularity and ethnocentrism fostered economic activity in the form of a family business rather than big independent corporations (see also chapter 4).897 The Chinese family possesses a high degree of collective solidarity but requires also strict obedience to parental authority, as filial piety is a central Chinese value.898 Family companies in comparison to modern corporations are regarded as an outdated mode of production more suited to an agrarian society. Due to their paternal structure they even impede the creation of independent industries. Although ―minor growth, innovation and technological change may occur‖, they exist in a ―traditional equilibrium‖ of the Chinese economy which prohibits ―break[ing] the rigid and inhibiting bonds‖ of social and economic institutions.899 As a result of these static traditional Confucian values, researchers claim, China failed to develop a capitalistic industrialized economy in the 19th century.900 In these analyses, the view on the inside dynamics of family businesses is often very negative. They describe that within these family enterprises, the individual family member is protected of outside discrimination. Resources are distributed according to the status within family, generating a lack of work discipline due to nepotism. In contrast, family members owe obedience to the father and head of the family firm. Enterprises cannot acquire labor from a free labor market, because family obligations make it necessary to fill open positions within the company with family members corresponding to their status within the family. Thus hiring, firing and promoting is not done according to one‘s skills but is owed to the position in the hierarchy of the family.901 Also, it is impossible for young people to make themselves available on the labor market, and so cannot fully utilize their own abilities and strengths. On the other hand, talented non-family members hardly have a chance to get into managerial positions. Furthermore, women are not considered as independent individuals, the individual in general appears only as part of a family as member of society, discouraging individualism and independence. Women mostly are not alWeber, 1968, Introduction, p. xxvi.

Zurndorfer, 2004, p. 17.

Parsons, 1967 [1937], p. 542.

Eckstein, 1960, p. 1.

Zurndorfer, 2004, p. 1. For a short analysis why China failed to develop Capitalism in the 19th century, please refer to chapter 4, fn 522.

Whyte, 1995p. 1001.

lowed to actively contribute to economic production. Female members of the family are further discriminated in being left illiterate and, to fulfill their ideal of beauty, having their feet bound. Even though the latter practice is outlawed in 1911, boys are still more commonly preferred.902 Through the lack of personal mobility the spread of ideas and technology is also slower if not non-existing at all. Beside the problem of nepotism described above, there is additionally the problem of growth and business size. Due to the fact that sons inherit equal shares of their father‘s company by tradition, it never manages to grow over a certain size.

As merchants traditionally have no good standing within the society, families try to get away from their merchant status as soon as they can.903 Once they have established efficient resources, they buy land and send their sons (not daughters!) away to train for bureaucratic careers. Those positions within the Mandarin904 system are held in high esteem.905 The family system also develops a self-governing administrative authority within the village, mainly through the kinship organization and the power of the elders.906 This despotic ‗officialism‘ with its ―uninterrupted continuity of the ruling class of Confucianschooled scholar-officials‖ leaves not much room for the development of a bourgeoisie and hence private enterprises. The purchase of land and buying sons into this officialdom absorbs all capital of the wealthy.907 For Weber these features taken together prohibit some sort of ―business confidence" to arise. The traditional customs and filial piety impede the rationalism typical for bourgeois Capitalism of the West to emerge in China".908 The risk-taking and innovation essential for such a system to work is not given in a conservative environment that values harmony and a static state structure.909 In the West, family businesses have been replaced by professionally run bureaucratic corporations which help Capitalism and the industrial revolution Whyte, 1996, p. 7 and Parsons, 1967 [1937], p. 539f.

Whyte, 1996, p. 7. Li Hsiu wrote in the 12th century: "They grasp their counting slips, their steelyards and their measures of capacity until they have amassed great grains, so that they may seek to own fields and houses, their principal wives be resplendent with hairpins and ear-rings, and their subsidiary wives pluck the strings of the zither. This is what merchants want". Shiba, Yoshinobu: Commerce and society in Sung China, transl. by Mark Elvin, Michigan, 1970, p. 251.

A Mandarin was a bureaucrat in imperial China who impersonated the scholar-official and was well acquainted with poetry, literature, and Confucian learning in addition to performing civil service duties. For around 1300 years from 605 to 1905, Mandarins were selected through the extremely rigorous imperial examination. The mandarins were the founders and core of the Chinese gentry. They were replaced by a modern civil service after the fall of the Qing Dynasty. Deng, 1999, p. 98ff.

Whyte, 1995, p. 1001-1003.

Weber, 1968, p. 97.

Balazs, 1977 [1964], p. 3ff, 34 and 66ff.

Weber, 1968, p.95.

Parsons, 1967 [1937],p. 547.

thrive. The same is predicted for China. Only if Chinese people free themselves from family obligations they can hope to establish rational, bureaucratic companies and compete with the West.910 In 1949, when the communists assumed control over the country, they were determined to get rid of the familism of the Chinese Society. They believed that the traditional patrilineal Chinese family constituted a thread to modernization and an obstacle to Chinese development, as also many Western writers like Max Weber did, although for other reasons.

They identified the family as antagonistic institution to the influence of ideology and nationalism.

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