Furthermore, in a culturalist perspective, premodern features of life are often seamlessly subsumed under modern concepts. Prematurely drawn parallels between the emperor and CCP leaders or between Confucianism and communism are in danger of lending too much weight to the power of tradition. There is a risk, then, of neglecting to take into account the fundamental crisis experienced by imperial China from the nineteenth century onward—triggered precisely by an increase in external influence—where many traditions, previously deemed sacrosanct, were called into question. Even if recourse was and is made to certain social cultural traditions, the priority was to tackle a radical modernization and thereby overcome traditional premodern forms (less successfully in the first half of the twentieth century, but in a sustained manner following the Maoist accession to power). Moreover, a fundamental shortcoming of culturalist approaches is a failure to embed the recent historical development of China (and East Asia) in the global capitalist order. “The problem with ‘Chineseness’ based explanations of Chinese capitalism is that they suppress the structural context within which this capitalism has arisen. Whatever resemblances it may have in particular to past practices, this capitalism has acquired an identity of its own only in the very recent past with the success of East and Southeast Asian societies, which has empowered the projection of this newfound identity upon the more remote past and its assertion against others, in particular Euro-American capitalism” (Dirlik 1997, 315–16).
Assumptions that only emphasize a continuity of cultural factors cannot sufficiently explain China’s transformation. In order not to encourage cultural determinism and exaggerated assumptions of inner-civilizational homogeneity, research must be done on the contradictory interaction between “cultures” that produced the interwoven forms of capitalist modernization.
Five Dimensions of Capitalism
To examine the proposition that the political economy of China can be understood within the scope of a broad analysis of capitalism, the research framework will now be set out more concretely on the basis of the ideas discussed so far. For this purpose, I distinguish five dimensions of capitalist systems in space and time.16 The different proportions of these basic ingredients found in all forms of capitalism give rise to different varieties of capitalism where the three key groups of actors (companies, state actors, and workers) each play an (unequal) role. Bearing this in mind, my intention here is to determine an overarching identity of capitalist driving forces and lines of action also and particularly with respect to the real historical diversity of different types of capitalism.17
THE HORIZONTAL AXIS OF CAPITALIST SOCIAL RELATIONS
The first dimension of capitalist systems concerns the unstable dynamics of markets and enterprises as well as the significance of competition-driven processes. In capitalist economies the competition between enterprises renders increased accumulation and innovation a necessity. This acts as a social sanctioning mechanism subjecting each individual capital to an imperative to accumulate with a failure to comply being punishable with the enterprise’s existence. In order not to let the concept of competition become too vague, it could be understood from an action theory perspective as the anticipation of a potential danger. In a field shaped by many actors, the potential exists for a competitor or new rival to participate in potential profits and/or to monopolize market segments. The relationship produces an imperative for continuous reinvestment and innovation of production processes, distribution networks, and so on.
Under conditions of competition-driven accumulation, the participating production units are coerced into selling in order to buy, buying in order to survive and reproduce, and ultimately to expand and innovate in order to at least maintain their economic position in relation to other production units (R. Brenner 2006). Under these conditions, it is necessary to produce goods for the market, rather than directly satisfy reproduction requirements and to accumulate capital, that is, to use the surplus product to expand production. The associated movement represents a specific feature of capitalism “because there is absolutely no way of measuring adequate valorization. [This] corresponds with the tendency to increase both the degree of valorization (i.e., increase in the profit rate …) as well as the size of capital to be valorized (i.e., the accumulation of the target profit, whether as investment in productive or in interest-bearing capital)” (Heinrich 2003, 314–15, my translation).
Moreover, capitalist market dynamics can be regulated only to a certain degree. At the same time, capitalist market economies are steered not only by market-based processes, but also through other coordination mechanisms: (company) hierarchies, networks or clans, associations, and state institutions. In this sense, the institutional preconditions and contexts under which the imperative to accumulate is effected determine the cooperative and competitive relations between enterprises. These can include different fractions of capital or business alliances, when specific interests of enterprises unite and become associated with one subjective interest.
THE VERTICAL AXIS OF CAPITALIST SOCIAL RELATIONS
The structure of labor relations, the associated forms of division of labor, as well as the emergence of corporatist industrial relations make up a further basic component of capitalism. The unstable dynamics of capitalist systems do not result solely from the horizontal relations between companies operating in markets. Social stratification and particularly the vertical “class polarization between those who possess wealth and those who do not and the structural social tension created by this” is a further “objective basic condition of capitalist dynamics” (Deutschmann 2009b, 38, my translation; see also Wright 1997). Capitalism as a social order rests on the particularistic appropriation of the goods produced, which, in turn, has no basis in any previously agreed social consensus.18 The dependency of (competing) blue-collar and white-collar workers on the demand for labor and the capital owners’ control over the means of utilizing labor power along with their right to appropriate the surplus product produced by the wage earners establish a specific character of dominance within the wage labor relation. This also limits the opportunities for participation in economic decision making, planning, and control processes with respect to production, distribution, and consumption.
Historically, institutional mechanisms have been established to try to moderate the polarization of the classes; these comprise diverse varieties of corporatism, that is, processes of coordination and negotiation between employers, workers, and the state. Associated with such mechanisms are prevailing, albeit contentious, norms and values (see Burawoy 1985; Wright 2000). On the other hand, class polarization can be a strong incentive for upward mobility and can foster the competition for innovation. This social tension translates into increased economic activity especially in a situation where the structural class-polarization appears to be individually surmountable (Deutschmann 2009b).
RELATIONSHIPS OF MONEY AND FINANCIAL SYSTEMS
Capitalist social orders rely on monetary and financial systems. Money mediates the exchange of goods. The circulation of industrial capital, for instance, gains its characteristic elasticity through the credit mechanism or the sale of shares. Money, however, not only mediates exchange processes, but can, in the form of financial capital, take on a life of its own (Marx 1986). Because the expansion of capital accumulation depends on credit, modern credit relationships include, in a sense, the commodification of the future. “Capitalism, in other words, is more dynamic than other economic systems because it has found ways to turn promises and expectations into presently available resources, enabling the economy at any point in time to invest and consume more than it has already produced. By creating binding obligations for individuals to devote long stretches of their future lives to working toward paying off their debts, the economy redeems the advances it continuously draws on its future production. While profit is the carrot of capitalist growth, debt is the stick” (Streeck 2010b, 25).
Additionally, in historical forms of capitalism, money, or money transformed into capital, is by no means restricted to playing an economic role; rather it embodies a source of utopian promise and can assume the function of representing the “unity” of society. “As already recognized by Simmel, money is the basis of modern, functionally differentiated association. Law, science, and politics are not possible without organizations; but organizations are not possible without money. And finally: by transforming personal dependencies into functional ones,