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Authoritarianism, capitalism and institutional interdependencies in the Chinese economy: implications for governance and innovation

Rutten, Koen (2013) Authoritarianism, capitalism and institutional interdependencies in the Chinese economy: implications for governance and innovation. PhD thesis, The London School of Economics and Political Science (LSE).

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Abstract

Recently, the field of comparative political economy has turned to the Chinese economy. Coherent interpretation of the drivers and fundamental institutions of China’s economic system had been frustrated by the coexistence of, on the one hand, continuously developing capitalist institutions and a burgeoning market economy, and on the other, the persisting and proliferating authoritarian system of economic administration. Therefore, commonplace dichotomous frameworks of capitalism/ socialism, or coordinated/market economies are but of little avail. Building on concepts from regulation theory, this thesis argues that the current system is one wherein state and market institutions support a distinctively industrialist orientation. The Leninist apparatus of bureaucratic controls has come to instill a dynamic wherein economic performance begets political influence, and political stature commands control of capital. Financial markets complement industrial demands for capital, while the ostensibly ‘liberalist’ reorganization of the public sector and welfare system have attenuated the financial pressures on enterprise exerted by labor. As a result of the common interest of political actors and industrialists in the continuous expansion of productive capital, growth has occurred predominantly through investments in fixed capital. Stringent limitations exist which undermine achievement of long-term sustainability of the current state-industrialist nexus. Lack of compensatory mechanisms for disenfranchised constituents and the dearth of indigenous innovation are pertinent problems, and moreover, mutually reinforcing. On the one hand, without a continuous increase in relative surplus value (i.e. output per worker) a more egalitarian distribution of income seems unlikely, while on the other, the lack of individual purchasing power subverts intentions to transition towards a model of growth premised on domestic consumption. Indeed, exceptions exist (for example within the telecommunications industry, but ultimately growth in upstream sectors requires commensurate growth in downstream industries. The Chinese ‘variety of capitalism’ is indeed an idiosyncratic one, but seems to have exhausted its potential.

Item Type: Thesis (PhD)
Additional Information: © 2013 Koen Rutten
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
J Political Science > JQ Political institutions Asia
Sets: Departments > Management
Supervisor: Liebenau, Jonathan
URI: http://etheses.lse.ac.uk/id/eprint/827

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